Trying to Save on Your Closing Costs? Here Are Three Tips That Can Help Lower Them

Posted on November 17, 2021November 17, 2021 by webmaster

Trying to Save on Your Closing Costs? Here Are Three Tips That Can Help Lower Them Whether you’re about to close on a lovely new house for your growing family or a stylish beachfront condo so you can retire close to the ocean, one thing is certain: you’re going to face a variety of closing costs. Insurance, taxes, financing fees, title fees, attorney fees and other costs will need to be paid, and if you’re a savvy buyer you’ll do everything you can to save on them.

In today’s post we’ll share three quick tips that can help you reduce your closing costs when you buy your next home.

Tip #1: Include Closing Costs in Your Negotiations with the Seller

As closing costs are a part of the real estate transaction they’re an excellent item to include in your negotiations with the seller.

For example, if you consider that closing costs might be 3 or 4 percent of the home’s value you can try to bring the seller’s asking price down to get those costs included. Or, you may be able to entice the seller with the prospect of a quick sale if they are willing to pay your closing costs in order to get you to sign on the dotted line.

Tip #2: Compare All of Your Mortgage Options

If you’re using mortgage financing to cover some of the up-front purchase cost of your home you’ll have other closing costs to pay including lender fees, mortgage insurance and more. Be sure to compare all of your options with your trusted mortgage advisor to ensure that you’re getting the best possible deal and paying the least amount in fees and interest.

You may also be able to save a bit on your closing costs by choosing a “no points” mortgage. In this type of mortgage you’ll end up saving on closing costs but you’ll be left paying a higher interest rate. Spend a bit of time doing the math to determine the best course of action.

Tip #3: Ask About Every Fee You’re Required to Pay

Finally don’t forget that you’re the customer and that you have the right to know about each one of your closing costs and why you’re expected to pay them. Being informed about all of the various items in your transaction will help ensure that you’re not paying something you could have avoided.

There you have it – three excellent tips for reducing your closing costs when you purchase your next home. For more information and advice about mortgage closing costs and how to best manage them, be sure to get in touch with your local mortgage professional.

Recent College Grad? Learn How to Successfully Juggle Student Loans and a New Mortgage

Posted on November 10, 2021November 10, 2021 by webmaster

Recent College Grad? Learn How to Successfully Juggle Student Loans and a New Mortgage If you recently graduated from college and are about to become a homeowner, you’re in a somewhat unique position. You’re about to embark on a great journey, but at the same time, you’re also taking on an awful lot of debt. That said, it is possible to successfully manage a high debt load if you’re careful.

So how can you make sure you can pay your mortgage, your student loans, and your mortgage expenses – all without losing your mind? Here’s what you need to know.

Make Sure You Have An Emergency Fund

Managing a high debt load isn’t necessarily a challenge if you have a consistent income stream. But if interest rates rise on your floating mortgage, if your portfolio doesn’t do as well as expected, or if you lose your job, you may find yourself unable to pay your expenses without dipping into your savings. That’s why you’ll want to establish an emergency fund – a spare supply of cash you can live on for 6 months or longer, if necessary.

Extra Cash At The End Of The Month? Attack High-Interest Debt

Mortgage rates are still at a historical low right now, which makes now a great time to become a homeowner – but if you’re going to carry a mortgage and student loans, you’ll need to be smart about how you repay your debts. High interest rates can quickly add up and eventually crush you, which is why your debt with the highest interest rate should be your primary priority. This is most likely your student loan – so if you have some extra money left over at the end of every month, put it toward your student loan first.

Never Roll Student Loans Into A Mortgage

Some young people seem to think that getting a mortgage is the answer to student debt. By rolling your student loans into a mortgage, you can worry about just one monthly payment instead of two. The problem with this thinking, though, is that your student loan is probably the size of the principal on a mortgage – and you’ll have to stretch your loan term out farther in order to afford the monthly payments.

This means that you’ll pay more money in interest over the long term. Your mortgage loan is also a loan with more severe consequences for missing a payment. If you miss a mortgage payment, you can get evicted from your home – but if you miss a student loan payment, they’ll just take your tax return.

Paying off a student loan and a mortgage at the same time is a daunting task, but it is possible. Talk to a mortgage professional near you for more repayment strategies that work.

Reverse Mortgages 101: How This Unique Financial Product Can Make Your Life Easier

Posted on November 3, 2021November 3, 2021 by webmaster

Reverse Mortgages 101: How This Unique Financial Product Can Make Your Life Easier If you’ve been in your home for a while and have considered other loan options, you may have heard the term reverse mortgage without being aware of how this product can benefit you. While this type of mortgage works for those who have a high amount of equity in their home, here are the details on reverse mortgages and how this product may work for you.

What’s A Reverse Mortgage?

The reverse mortgage was created in 2009 as the Home Equity Conversion Mortgage for Purchase (HECM) and is something that can be used by those who are older than 62. As this type of mortgage does not require the homeowner to pay monthly mortgage payments, it enables those who use it to repay their loan after they move out or pass on. If the cost of maintaining your home is manageable and you don’t plan on moving, this can be a useful option.

The Requirements For Reverse Mortgages

Beyond the age requirement, those who want to utilize this product need to own their current property or have a high amount of equity in it. They must have the ability to pay any insurance and property tax on the home, and they must comply with the standards that are set by the Federal House Administration (FHA). This means that applicants may require documentation like bank statements to confirm their financial security, or even pay stubs if they are still receiving a monthly income.

The Pros And Cons

A reverse mortgage can be an option for those who don’t want to make a regular monthly payment on their home and would like to turn it into a source of additional funds while still owning it. While this can be an option to for those who want to stabilize their monthly expenditures, it’s also important to be aware that there can be higher costs associated with a reverse mortgage. In addition to a higher interest rate, reverse mortgages incur a higher overall interest payment since monthly payments are deferred until the loan is paid in full.

There are many types of mortgage products out there on the market, but you may not be aware that a reverse mortgage or the Home Equity Conversion Mortgage for Purchase (HECM) can be a useful option for many seniors. If you are wondering if this option is right for you, contact your trusted mortgage professional for more information.

Refinancing Your Mortgage? Know These Key Terms Before You Sign Your Paperwork

Posted on October 27, 2021October 27, 2021 by webmaster

Refinancing Your Mortgage? Know These Key Terms Before You Sign Your Paperwork When it comes to your mortgage, there are a lot of key terms that are important for every homebuyer to know, and this is no less true than when it comes to refinancing your most important investment. Instead of leaving what’s unknown up to chance, it’s important to be aware of exactly what you’re looking at so you can get the best mortgage product available. If you’re currently considering refinancing and don’t want to get snared by unknown terminology, here are some terms you’ll need to watch out for.

Cash-Out Refinance

This type of refinance is a transaction where the home’s mortgage amount is higher than the existing mortgage amount, and cash-out refers to the extraction of equity from the homeowner’s home. While this type of refinancing can be a means of tapping into extra cash to help you with monthly expenses, it also means that the cash you take out of your equity will be added to the balance you already owe on your home.

Rate-and-Term Refinance

This type of mortgage transaction involves the refinancing of an existing mortgage so that you can take advantage of a different interest rate. While this type of change will not alter the amount of your home loan, it will adjust the interest which means that your monthly payments may be lowered and your may have a shorter amortization period due to overall reduced costs. These types of loans can often come with lower interest rates than cash-out refinances.

Streamline Refinancing

This type of refinancing is offered by the Federal Housing Administration (FHA) and the Department of Veterans Affairs, and it is also offered by certain financial institutions. While this type of refinancing has its own set of stipulations, it is directed at those who want to take advantage of low interest rates or get out of an adjustable rate mortgage (ARM). While you may need to have a financial appraisal done in order to qualify for this option, it’s also possible that this will not be required to qualify.

There are a lot of key terms that go along with having a mortgage and refinancing it, but if you’re considering your options it’s very important to know what all of them mean so you can be sure you’re making the best decision. If you’re currently considering refinancing your home and need helpful advice, contact your trusted mortgage professional for more information.

Applying for a Mortgage? 3 Easy Ways to Make the Process Easier — and Reduce Your Stress

Posted on October 22, 2021October 22, 2021 by webmaster

Applying for a Mortgage? 3 Easy Ways to Make the Process Easier -- and Reduce Your Stress There are more than enough details involved in getting a mortgage and moving into your own home that you’ll want to know how to make the process as seamless as possible beforehand. However, there’s a chance you might not be aware of the things you can do to make it a little easier on yourself. If you’re currently looking for a home and are wondering how to streamline the approval process, here are some things to do before applying to minimize mortgage-related stress.

Get Electronic Documentation

In order to get approved for your mortgage application, you’ll need to provide documentation that will likely include bank statements, federal tax returns and recent paystubs, but providing or acquiring all of these documents in paper form can require a lot of drudgery. Instead of paper, get your documentation together and ensure it’s in electronic form so it can be easily accessed or sent from anywhere. This means you’ll have it on hand as soon as it’s needed.

Choose A House You Can Afford

As a potential homebuyer on the market, it’s easy to be swayed by your dream home, but if your dream home doesn’t come with an acceptable price tag, it’s important to move on to the next best opportunity. It can be very easy to be invested enough in a particular home that you can convince yourself you’ll budget for it, but the market can shift and this can push your monthly payment from difficult to not-doable. Choosing a home at an affordable cost will not only improve your chances of approval, it will also minimize your stress after the move-in date.

Have Your Down Payment Ready

It may be all well and good to know that your down payment money is in the bank, but it’s important that it’s in the appropriate account at least 3 months prior to your application submission so you can ensure you’ll be seen as financially sound. While it’s great to have money held in investments and RRSPs, it’s important that this down payment money is kept in an easily accessible account where it can be withdrawn without any time delays or financial losses.

There are many different steps and small details associated with obtaining a mortgage, but by having your electronic documentation and down payment ready, you’ll be well on your way to an approval. If you’re currently on the market for a home, contact your trusted mortgage professional for more information.

Baby on the Way? Helpful Advice for Managing a Mortgage With Only One Parent Working

Posted on October 8, 2021October 8, 2021 by webmaster

Baby on the Way? Helpful Advice for Managing a Mortgage With Only One Parent Working If you’re dealing with paying off your mortgage and going down to a one-income family, it can be complicated to determine how to financially swing it. However, becoming a parent and managing a mortgage are quite common nowadays with maternity leave and the modern family. While managing a mortgage on just one salary can be a challenge, there are a few simple things you can do to make it work.

Buy The House You Can Afford

It may sound much too simple, but many people get so wrapped up in the concept of a dream home that they forget about what makes the cost of it manageable from month to month. While affordability is important, it becomes even more important when you’re dealing with one income, so ensure you have a monthly payment that you can pay off with one salary. Even if interest rates shift or an emergency comes up, you’ll still be able to handle your monthly payment.

Create A Budget

Budget may very well be the dreaded ‘b’ word when it comes to finances, but there is nothing that’s going to be a better friend to you in managing a one-income mortgage than sticking to it. Instead of leaving your expenses to chance, make sure that you’ve set aside the appropriate funds for your mortgage, groceries, car payments or transportation, necessities and any extras that go along with living. Keep in mind that while starting a budget is good, you may want to schedule weekly meetings to ensure you’re sticking to it.

Maintain An Emergency Fund

Since it may be a struggle to pay off your mortgage and pay for day-to-day life on one salary, it’s important that you’re prepared for any emergencies that come up. Because these will be the things that arise that can sink your budget, like your car breaking down or a window needing to be replaced, you should be setting aside money each month to cover the incidentals. Tossing aside your budget for an emergency can have serious financial implications, so be prepared for what can arise.

It goes without saying that managing a mortgage on one income can be a challenge in this day and age, but this is a situation that many families find themselves in when they decide to have children. If you’re currently trying to determine how you’ll be able to manage your mortgage on one income, contact your trusted mortgage professionals for more information.

Understanding the Reverse Mortgage and How to Best Use This Unique Financial Tool

Posted on October 1, 2021October 1, 2021 by webmaster

Understanding the Reverse Mortgage and How to Best Use This Unique Financial Tool If you’ve studied the real estate market recently, you’ve probably heard about the reverse mortgage. This unique tool is a financial arrangement designed for senior citizens who have limited incomes and want to use the equity in their homes to meet their everyday expenses. And although it’s becoming increasingly popular, few homeowners truly understand it.

So how does a reverse mortgage work, and when is it appropriate for a homeowner to get one? Here’s what you need to know.

What is a Reverse Mortgage?

A reverse mortgage is a loan that uses your home equity as collateral – essentially, you borrow money against the value of your home. But unlike home equity loans, you don’t have to repay a reverse mortgage until you sell your home or are no longer able to meet the terms of the reverse mortgage. If you’ve paid off your home in full, a reverse mortgage can be a great source of income if you don’t have other income streams to rely on.

However, there are tight restrictions around who can quality for a reverse mortgage. To receive a reverse mortgage, you must be at least 62 years old and you must use the property in question as your primary residence. You also need to have equity in your home – you can’t owe more on the property than it’s worth.

The Benefits and Risks of This Arrangement

A reverse mortgage is a fast and easy way to access funds. The most popular kind – a Home Equity Conversion Mortgage – is a federally insured reverse mortgage that offers strong borrower protection. Most reverse mortgages don’t have any income requirements or monthly payments, and they can provide elderly seniors with a much-needed supplemental income.

Reverse mortgages can be risky. The processing fees can be high as 5% of your home’s value. If you spend the funds irresponsibly and miss property tax or homeowners insurance payments, your reverse mortgage may come due.

How to Make a Reverse Mortgage Work for You

The best way to use a reverse mortgage is to take it in the form of a variable-rate line of credit. And according to the AARP, longer loan terms are better – especially if you may need long-term care.

A reverse mortgage can be a great tool for meeting your expenses if you’re beyond your working years. But it also carries some risks, which is why you’ll want to make sure you have a thorough plan for how you’ll use the funds. Contact your trusted mortgage professional to learn more about reverse mortgages and if they will work for you.

Worried About Mortgage Rates Going Up? 3 Steps to Prepare Yourself Financially

Posted on September 22, 2021September 22, 2021 by webmaster

Worried About Mortgage Rates Going Up? 3 Steps to Prepare Yourself Financially Mortgage rates have been at record lows for quite some time, making it easy for new homebuyers to finance their dream homes. But what comes down will eventually go back up, and with the world economy expected to rebound in 2016, we’re about to start seeing more expensive mortgages.

So what can you do to prepare yourself before mortgage rates start to rise? Here are three strategies that will keep you ahead of the game.

Start Saving More Money Now

If you have a variable rate mortgage, you’ve benefitted from great interest rates that this world won’t see again for quite some time. Hopefully, you’ve taken advantage of this low-interest period to save up some cash. If so, you’re going to be in a great position for when interest rates rise – and if not, you’ll want to start saving as much as you can now to ensure you can weather the storm.

It’s far easier to save money now, with interest rates low, than it will be when your mortgage payment starts to rise. So start squirreling away as much of your paycheck as you can.

Pay Down as Much of Your Principal as Possible

Another great way to prepare for the rise in interest rates is to pay down your principal amount. The total amount of interest you’ll pay goes up when rates go up, but by paying down your principal, you can take a big bite out of your debt before it has a chance to snowball. So pay down as much of your principal as you can afford – it’s easier to pay down interest on a smaller principal amount.

Switch to a Fixed Rate Mortgage

One of the best ways to take advantage of low rates and ensure you get a great deal is to switch your floating rate mortgage to a fixed rate mortgage. Locking in your low interest rate with a fixed rate mortgage means you’ll pay less interest over the term of the loan, but it also means you’ll only have a set amount of time to pay your mortgage in full. If you’re in a position to predict when you can pay back your mortgage, you’ll save a lot of money by locking in your low rate.

Mortgage rates haven’t been this low in a long time, and likely won’t be this low again for many years to come. That’s why, if you’re a homeowner, you’ll want to do everything you can to prepare for higher interest rates before they get here. Contact your trusted mortgage advisor to learn more about how to manage interest rates and make sure you have the right mortgage for your situation.

What Are The Requirements To Sell A Home Using An FHA Loan?

Posted on September 15, 2021September 15, 2021 by webmaster

What Are The Requirements To Sell A Home Using An FHA Loan? Before an owner can market a property to buyers that want to use a FHA loan, he will want to familiarize himself with the FHA’s standards. FHA won’t insure loans on just any property.

While their standards aren’t as stringent as they used to be, a home needs to be in relatively good condition to qualify for FHA financing.

Location And Lot

To qualify for FHA financing, the property has to be located on a road or easement that lets the owner freely enter and exit.

The access also has to be paved with a surface that will work all year a long dirt driveway that washes out in spring won’t qualify.

The FHA also wants the lot to be safe and free of pollution, radiation and other hazards. For that matter, it also needs to provide adequate drainage to keep water away from the house.

Property Exterior

The FHA’s requirements for making a loan start with the home’s roof. To pass muster, the house must have a watertight roof with some future life left. In addition, if the roof has three or more layers of old shingles, they must all be torn off as part of the replacement process.

The property’s exterior has to be free of chipped or damaged paint if the home has any risk of having lead paint. Its foundation should also be free of signs of exterior (and interior) damage. It also needs full exterior walls.

Property Interior

The property’s interior also needs to be inspected. FHA standards require that the home’s major systems be in good working order.

Bedrooms should have egress routes for fire safety and the attic and basement should be free of signs of water or mold damage.

The bottom line is that the FHA wants to make loans on homes that borrowers can occupy. This doesn’t mean that a home has to be in perfect condition to be sold to an FHA mortgage-using borrower. It just needs to be a place that they can live.

The Pros and Cons of Paying Your Mortgage off Biweekly Versus Monthly

Posted on September 9, 2021September 9, 2021 by webmaster

The Pros and Cons of Paying Your Mortgage off Biweekly Versus Monthly If you have a mortgage, you’re probably looking for the best option to pay it off. Monthly mortgage payments are an easy-to-manage way to pay for your house – in fact, they’re the most common form of mortgage payment but now, many homeowners are discovering that biweekly payments offer them better results.

So is a biweekly payment the better option for you? Which payment strategy best fits your individual circumstances? Here’s what you need to know.

Biweekly Payments: Pay Off Your Mortgage Faster and Save on Interest

Biweekly payments are becoming increasingly popular for a variety of reasons. With a biweekly payment, you’ll pay less money in total interest payments over the course of the whole mortgage, and you’ll pay your mortgage off faster. Biweekly payments also make it easier to budget for your mortgage because they coincide with your paycheck, and the biweekly payment system forces you to make extra payments toward your principal.

That said, biweekly payments also have some disadvantages. If you’ve bought a home at the very top tier of what you can afford, you might not have the budget flexibility for extra payments. Your lender may also force you to pay a $300 setup fee or a processing fee for each payment.

Monthly Payments: Easier to Afford for Large Homes

Paying your mortgage off on a monthly basis has long been the standard, for a variety of reasons – for instance, most homeowners are typically more comfortable with monthly payments as they were the norm during the owner’s years as a renter. It may also be easier to manage monthly payments if you work as an independent contractor and don’t always get paid every two weeks.

Monthly mortgage payments are more affordable for owners of larger homes, which typically come with larger mortgages. A monthly payment schedule also means you make one less payment per year, and for those on a strict budget, this can help to make the daily necessities of life more affordable.

Monthly mortgage payments were once the expected norm, but now, a lot of homeowners are choosing to make biweekly payments in order to pay off their mortgages faster and better budget their money. Monthly payments still remain popular, though, for a variety of reasons.

So which one is better for you? A qualified mortgage advisor can help you determine your best course of action. Call your local mortgage professional to learn more about your mortgage payment options.