Posts Tagged ‘Mortgage’

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Buying a Home With a Mortgage? Here’s What You Can Expect at Your Closing Meeting

April 6, 2017

Buying a Home With a Mortgage? Here's What You Can Expect at Your Closing MeetingIf you’ve decided to invest and have finally found your ideal home, it’s probably an exciting time for you and your family. But before the deal is sealed, there will be a closing meeting so that all of the loose ends can be tied up. If you want to be ready for closing and are curious what the final meeting will entail, here are a few things to be prepared for.

The Last Walk Through

The initial home inspection may have already occurred prior to your closing meeting, but a final walk through should also be granted in the event that anything has happened to the house since it occurred. If problems have been made note of and a price or repair has been negotiated, you won’t need to worry, but the final walk through is a good opportunity to cover off any additional maintenance issues.

Discussion Of The Details

It’s a good idea to bring any paperwork you have regarding your mortgage along to the closing meeting as this will enable you to follow up on any outstanding questions and go through the specifics of the home sale. In all likelihood, you’ll be going through items like the closing costs, escrow payments, the settlement costs related to the home sale and the deed of trust to secure your mortgage, so ensure you understand all of the documents and are prepared to sign on the dotted line.

All The Appropriate Parties

You may expect the closing meeting to be rather informal after the offer has been accepted, but there are many parties that will be present in order to transfer the ownership of your new home. In addition to the home seller, yourself and your respective real estate agents, there will also be any attorneys present, a closing agent, and the lender. While it can be overwhelming to have so many people present, it is generally a formality so that the proceedings can take place without a hitch.

If you’ve determined that the home you’ve made an offer on is right for you, the closing meeting will likely be a seamless experience. However, it’s important to ensure you’ve done your final walk through and looked over all the applicable documents to avoid any issues related to the purchase of your home. If you’re getting prepared to buy a home, contact your trusted mortgage professionals for more information.

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Your Debt-To-Income Ratio and How It Affects Your Mortgage

April 5, 2017

Your Debt-To-Income Ratio and How It Affects Your MortgageWhen you’re delving into the market in the hopes of finding your dream home, it’s likely you’ll come across the term debt-to-income ratio. This may not seem important at first, but your DTI is the key to determining the amount of money you can put into your home and just how much you should spend on a monthly basis. If you’re curious about what this means for you, here’s how to calculate it and how it can impact your mortgage.

What’s Your DTI Ratio?

One of the best ways to determine whether or not a home is affordable for you is to first calculate your DTI ratio. To get this amount, add up all of your monthly payments including any credit card, loan and mortgage payments, and divide this amount by your gross monthly income. The amount you get is your DTI percentage and this will help to determine how much your monthly payment should be.

What Does Your DTI Mean?

Your DTI percentage helps to determine the amount of house you can afford on a monthly basis, and this is why it can be such a good way to help you find the right home. While a DTI of 25% or less is ideal, a DTI that rises above 43% may be hard to get financing for since there will be little room for error. When it comes to a higher debt load, approval may come down to what your credit history says about your financial health.

The Amount Of Home You Can Afford

It’s easy to be convinced that your dream home is for you, and worth the splurge, but investing in too much home on a consistent basis can lead to future financial difficulties. If you’re set on a home that has a high monthly payment, you may want to hold off until you’ve saved a larger down payment or revamp your budget so that you can make the investment work for you. It may also be worth continuing the housing search so that you have more flexibility to invest in education, travel or other things down the road.

Your DTI ratio may be unfamiliar now, but this can be a great save when it comes to determining how much home you can afford and what will stretch your limits. If you’re currently looking into your housing options and are curious about what’s available to you, contact your trusted mortgage professionals for more information.

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Understanding Mortgage Amortizations and Why Longer Periods Can Cost More

April 4, 2017

Understanding Mortgage Amortizations and Why Longer Periods Can Cost MoreBuying a home is one of the largest investments you will make in your life, and that’s why so many people have longer mortgage amortization periods to pay down the principal. While it may seem appealing to have a longer amortization period, here’s why an extended loan term can end up costing you more and may be less financially beneficial when it comes right down to it.

About Mortgage Amortization

Generally speaking, a 25-year mortgage amortization period can be typical, but there are many loan periods that a homebuyer can choose for amortization. While a longer-loan period may seem enticing because it will mean a smaller monthly payment, a shorter amortization will enable you to own your investment sooner, which can be a great boon for many people. It’s worth being aware of what works best for you as this will depend on your financial situation.

Paying Off The Principal

For those who have a high monthly payment, a longer mortgage period can seem like a benefit. However, while this will lower your monthly payment, it also means that you will be paying less on the principal over time and this can cost you when it comes to interest. A shorter loan period, on the other hand, may force you to re-do your budget to make the monthly payment, but you’ll be paying more on the principal each month and less on interest over time. A 25-year term may sound good at first, but a shorter term may be more financially lucrative in the long run.

What Works Best For You?

It may seem like a shorter loan period is the right financial decision, but there are a lot of factors that go into determining what will work best for you. If your interest rate is low and you’re struggling to make your monthly payment as it is, a longer loan period may be for the best. However, if you have the money in the bank and you can still live your life while saving a little bit extra, a shorter loan period may be an option that saves money in the end.

On the surface, a longer loan period and a shorter monthly payment may seem optimal, but it’s important to weigh all of the variables before deciding on your mortgage amortization. If you’re currently getting prepared to invest in a home, you may want to contact one of our mortgage professionals for more information.

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Trim Your Mortgage Closing Costs by Following This Easy 3 Step Guide

March 30, 2017

Trim Your Mortgage Closing Costs by Following This Easy 3 Step GuideYou may be so busy with determining your debt-to-income ratio and deciding what kind of offer to make that closing costs have gotten lost in the mix, but it’s important to remember that finalizing your mortgage will cost you extra. While there’s no way to get around paying money to solidify your mortgage, there are a few steps you can take in order to make it more economical for you.

Shop Around For A Lender

Many people go with the lender that is offered to them, but it’s a good idea to do the research so you can find the deal that’s right for you. Instead of sticking with one option, look into the closing costs for a handful of well-reviewed lenders that have been on the market for at least a few years. While it takes more than a list of fees to make the right decision, it will give you a good sense of the true cost of your mortgage and can help you make a more informed choice.

Be Prepared To Negotiate

There are people who are comfortable with negotiation and those who are not, but if you want a better deal it’s worth discussing it with your lender. While there are a number of third-party fees that are non-negotiable, many of the fees that lenders charge can be so you’ll want to get a list of what they charge and what they might be willing to budge on. It’s unlikely you’ll get everything you ask for, but it doesn’t hurt to ask in the event that it leads to substantial savings.

Review Your Loan Estimate

You have the ability to call off your mortgage at any time up until you’ve signed on the dotted line, so ensure you’ve read through the paperwork and understand your closing costs clearly. If there’s anything you’re uncertain about or any cost you weren’t made aware of, it’s imperative to address it with the lender before signing. This will be the last chance you’ll have to negotiate and go over everything so the lender may be a little more flexible on any final hesitation.

There are a number of costs associated with home ownership, but it’s important not to forget about the final closing costs as these can greatly impact the total cost of your home. If you’re currently getting prepared to purchase a home, you may want to contact one of our mortgage professionals for more information.

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Is It Still Possible to Get a Mortgage With Zero Down? Yes – and Here’s How

March 23, 2017

Is It Still Possible to Get a Mortgage With Zero Down? Yes - and Here's HowWhen it comes to investing in a mortgage, the down payment is key in making your investment a reality and proving to lenders that you’re a safe bet. However, while most opportunities for putting zero down on a home have disappeared since the recession, there are still a few ways to buy without putting money down. If you’re currently weighing your options, here’s what you need to know if you don’t have a down payment ready.

Loan Programs With No Down Payment

There are still a number of zero down loan programs for those who qualify. Veterans and families of veterans can often qualify for a VA loan if they prove military service. The United States Department of Agriculture also offers the USDA Rural Development Housing loan, which is designed primarily for low-income buyers looking at homes in rural locations.

What Are The Requirements?

The requirements to get a zero-down loan vary, but because they involve a more significant financial risk for the lender, there are often many restrictions. In many cases, the homebuyer will be required to prove that they have the money to re-pay their loan and they will also have to have a good credit history. As well, because of the convenience of no money down, the homebuyer will likely be paying a higher interest rate than they would if they provided a down payment.

Should You Invest In Zero Down?

The idea of not having to put money down can be very enticing for many homebuyers, but this means that you will be paying a higher monthly payment and have no equity in your home to start out. If you are set on buying a home in the near future but don’t have the money for a down payment, you may want to look into these or other low down payment loan programs. It may also be worth holding off until you’ve saved up as this can be a more financially sound decision for your future.

There are a number of benefits to not putting money down on your home and getting into the real estate market more quickly, but it’s important to consider what’s financially beneficial for you before choosing a zero-down option. If you’re currently on the market for a home, contact one of our mortgage professionals for more information.

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Buying a New Home? Three Major Mortgage Missteps That You’ll Want to Avoid

March 21, 2017

Buying a New Home? Three Major Mortgage Missteps That You'll Want to AvoidBuying a home is one of the biggest financial investments you’ll make in your life, and it’s important to make sure that you’re doing what will be right for you down the road. If you’re trying to avoid buyer’s remorse and are wondering what major missteps to avoid when diving into the market, here are a few things you may want to watch out for.

Buying Too Much Home

It’s often the case that a homebuyer will get so excited about a home they see that they need to have it, but putting all of your money into one investment can be difficult to sustain over time. Instead of deciding to budget and buckle down on your expenditures, ensure that your monthly budget still leaves room in the event of other expenses or financial setbacks. This will ensure that your home stays as something you can enjoy that won’t become a burden.

Not Saving Up Enough

Many people want to invest in the market right away and get into a home, but it can often be worth the wait to save up so that you have at least 20% for a down payment. Putting 20% down on a house means that you won’t have to pay the added costs for Private Mortgage Insurance (PMI). Not only can this lead to smaller mortgage payments on a monthly basis, it also means that you’ll be able to pay off your mortgage loan that much more quickly.

Forgetting All The Associated Costs

It’s easy to be wooed by the cost of the monthly payment and think that it’s less expensive than you thought, but it’s important not to forget about all the other costs that go into owning a home. In addition to the closing costs of home ownership, there will also be property taxes, homeowner’s insurance and the maintenance fees required for home upkeep. If the monthly mortgage payment is already pushing it, costs like these can make your overall mortgage costs unmanageable.

There are many mistakes that can be made when it comes to purchasing a home, but by being aware of all of the costs of home ownership and taking the time to save up, you’ll be well on your way to owning a home that’s affordable and sustainable. If you’re getting prepared to delve into the real estate market, contact your trusted mortgage professionals for more information.

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Mortgage 101: Five Key Mortgage Terms You Need to Understand

March 15, 2017

Mortgage 101: Five Key Mortgage Terms You Need to UnderstandFrom putting your home on the market to finding the lender with the best rates, there are so many things involved in buying a home that the terminology is just one more thing to add to the list. While there may be quite a few words you’ll hear that may be unclear, here are a few you’ll want to watch out for so you’ll be prepared for home ownership.

Adjustable-Rate Mortgage

Often known as ARM, an adjustable-rate mortgage corresponds to the conditions of the market. This means that your interest rate will shift from day to day along with the market, and the amount of your monthly mortgage payment will fluctuate along with it.

Fixed-Rate Mortgage

Unlike an ARM mortgage, a fixed-rate mortgage will offer a predictable monthly interest rate that you can rely on. While this can be comforting for many homeowners who are market-weary, it can also end up costing more than an adjustable-rate mortgage by the end of the loan term.

Down Payment

Down payment is one of the most familiar mortgage terms out there, and refers to the amount of money you put down on your home to secure it. While putting 20% down will enable you to avoid having to pay private mortgage insurance, the amount that is required varies from lender to lender.

Private Mortgage Insurance

Often known as PMI, this type of insurance can often be confused with homeowner’s insurance, which protects your home in the event of fires, floods and other damage. PMI, however, is the type of insurance that is required for those who do not put 20% down and is there to protect the lender in case of loan default. For homebuyers who can put down 20% or more, PMI will not be an issue.

The Principal

With the costs involved in interest, insurance and the down payment, it can be confusing to keep all the mortgage fees straight. However, the principal is different from all of these things and is the total loan that you borrow to make your home purchase. When you hear the phrase “paying down the principal”, it refers to the total amount of your loan, without any interest.

There are many terms that may not be familiar to the layman, but there are a few that will be important to know when you’re hitting the real estate market. If you’re currently getting ready to purchase a home, contact one of our mortgage professionals for more information.