“The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.” — Maya Angelou
If you’re considering applying for a mortgage in the near future, now is the time to pull a copy of your credit report. Since it can sometimes take months to clear up inaccuracies and work with companies to remove negative reports, you may need several months to work through this process before you’re ready to get a mortgage.
Wondering how much you’ll need for a down payment when you’re buying a home? This can vary widely from 20% all the way down to 3% (or sometimes even lower). Factors that influence the down payment include the type of loan, the amount you want to borrow, your credit history, and more.
The term "mortgage" actually means "dead pledge." Derived from the old French term, "mort gage" a home mortgage is so named because of the way a property is purchased. In fact, early French laws were among the first to use the mortgage as a way to encourage home ownership.
Veterans Administration loans (or VA loans) aren’t actually from the VA. Instead, the terms of these loans are set by the VA (including who qualifies), and the loans are insured by the VA. The goal is to help veterans in purchasing a home.
The Federal Home Loan Mortgage Corporation (Freddie Mac) was created in 1970 to increase the amount of financial capital available to lenders.
Certain types of mortgages (like those with an initial loan-to-value percentage that’s more than 80%) will require mortgage insurance as part of the terms of the loan. This protects the lender in case you stop making payments. This amount is usually added to your monthly mortgage payments.
If you’re self-employed and hunting for a home, be prepared. Many mortgage lenders will ask for additional financial information such as the past few years of federal tax returns in order to confirm your earning potential.
Preapproval on mortgage loans requires a large amount of paperwork, so assemble it early. Pay stubs, two years of W-2s and federal tax returns, bank statements and a full credit report are all required.
Remember, a mortgage brings you one step closer to home.
Obtaining a home loan with a low credit score is possible, but sometimes it is better to wait for the credit score to recover. Refinancing a home after the credit score has improved can also reduce the interest rate.
• To a mortgage underwriter, what is the most important piece of information submitted by people seeking loans? If you guessed combined assets, guess again. Mortgage underwriters are particularly interested in an applicant's debt to income ratio.
We realize that not every homebuyer will necessarily be able to afford a full 20% down payment on their new home. Remember, putting down anything less than 20% could mean paying a higher rate on your mortgage and getting hit with private mortgage insurance (PMI) from your lender.
Don’t forget closing costs! When purchasing a home, the closing costs could range between about three to seven percent of the total loan amount.
• How long have people been entering into mortgage loan agreements that did not leave the property in the hands of the lender until the debt was paid? Although there's some dispute among historians, we do know the practice was well established in England by 1481.
Perhaps the true beauty of obtaining a mortgage preapproval before house hunting is that you never have to worry about whether you can afford your dream home. Remember, knowing how much house you can afford upfront can keep you from wandering into those gorgeous homes well outside your budget.
One of the main reasons to look into refinancing your mortgage is that rates are lower than they have been in many years. Even if you’ve bought your home recently, we may be able to help you refinance the loan and save a lot of money in the long run.
Choosing a mortgage is important. You know that you need it for the house of your dreams to become reality, but you really don’t want to pay unnecessary fees. The best mortgage companies will be able to help you make sure that you don’t.
It’s important to remember that there isn’t a single mortgage refinance strategy that works well for every homeowner. Whether you’re looking to slash your interest rate, put out your equity or lower your payments, we’ve got you covered.
Keep in mind that there will be caps or limits set with an adjustable rate mortgage to determine how high your interest rate can go over the life of the loan and how much it may change with each adjustment. An interim or periodic cap will dictate how much it can rise per adjustment, while a lifetime cap will specify how much it can rise over the life of the loan.
While ARM mortgages are considered much riskier than fixed rate mortgages, they do offer certain benefits. Primarily, ARMs offer a lower initial interest rate than fixed rate mortgages, which translates to lower initial payments that can mean the difference between you getting into a home or not.
• If you're looking for a real estate loan, you may check the rates at a local commercial bank. Care to guess the annual revenue of the commercial banking industry in the U.S.? If you guessed $553 billion, you're right.
Did you know that at the time the modern mortgage first came into being, only 4 in 10 households actually owned their home? At the time, loan terms were not friendly, demanding high down payments and short terms for the loan.
Check your credit score before you apply for the mortgage. You might find mistakes that need to be addressed before moving forward in the process.
Mortgages are something few of us understand completely. The fine print is not always easy to comprehend, and there’s a lot of it. That’s why a good mortgage specialist is so important.
Besides the pride that comes with home ownership, there are also many other reasons why owning rather than renting is a good idea. For example, there are tax benefits to owning a home, as well as the good possibility that the home will go up in value.
• As a financial transaction, the mortgage has been around for a long time. The word mortgage comes to us from the old French words "mort" and "gage," which, together, literally mean "dead pledge."
A TREND TOWARDS DUAL-PRIMARY HOMES
You've heard of second homes, but have you heard of dual-primary homes? It's like having two primary homes instead of one primary and a secondary one. What's the difference? Nothing in terms of financing. One home will still be categorized as a primary residence. The difference is in how people perceive and use those two homes. Because of COVID, many of us are able to work from home. Some people, especially those who live in large cities, are choosing to buy another home in an alternative location and then move there for part of the year (rather than simply vacationing there). Contact us today, if you or someone you know is interested and want to see if you qualify!
Depending on the amount of the mortgage, there are different mortgage amounts available to you. For example, FHA loans (that have a lower down payment), have a limit for how high they will go, and jumbo mortgages apply to loans above a certain amount.
Home sales can fall through without mortgage preapproval. In a competitive market, many sellers won’t wait on a customer to get approved if they have another offer in hand.
After you’ve been in your home for a number of years, you may wonder whether the great rate you got at the time of purchase is still considered a good deal. If you want to learn more about mortgage refinance options, we’re always happy to discuss it with you.
Before you can receive a reverse mortgage loan, you must by law speak with a HUD-approved loan counselor. The counselor will answer questions and help you explore the pros, cons and options so you can determine if the program is right for you.
VA loans offer assistance for veterans who are unable to make their monthly payments. This assistance can be in the form of negotiation on interest and late payments.
Every mortgage application will generate a hard inquiry on credit, which can have a small negative effect on your credit score. Research your lenders carefully before applying for many different loans.
While every lender has its own standards for mortgage loans, certain basics are fairly common. Your income must be sufficient to cover the anticipated monthly payments, total debt is less than 36% of your gross income and you have a credit score of 580 or better.
The Stats are in!
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BRENT.NVSREALESTATE.COM
The Stats are in!!!
Try to avoid any hard inquiries on your credit before buying a home and pay down as much debt as possible to minimize the debt to income ratio.
Although you may not hear from us daily after applying for your mortgage, there’s a lot going on behind the scenes to bring it all together. If you’re ever curious about the status of your mortgage between our updates, feel free to ask.
Not all mortgage lenders charge an application fee for homebuyers who opt to go through the loan preapproval process, but many do. While rates can vary greatly, the typical lender charges between $300 and $500.
It’s important to remember that having good credit isn’t always enough to qualify for the mortgage you want. If you have an uncommon financial situation, we’ll have to work together to provide the income verification documentation underwriting needs.
Did you know that your debt-to-income ratio (DTI) is based on your gross income, not your net income, or take-home pay? This means it’s based off the total amount on your pay stub prior to taxes and other deductions.
Getting a second mortgage is essentially the same process as getting a first mortgage. You must complete all of the financial paperwork, personal information, get a home appraisal, and give the new lender all of the necessary information for them to determine if the loan can be financed or not.
Before you begin house hunting, get organized. Collect your personal and financial records, so you can quickly put your hands on information such as W2s, bank statements, asset statements and outstanding debt, which you will need for mortgage preapproval and loan applications.
Experts agree that balloon mortgages work best for people who like the stability of fixed payments but can’t afford a long-term mortgage. This is also a good option for those who plan to sell their home within a given time frame (before the balloon payment is due).
According to the National Association of Realtors, 88 percent of buyers take out a mortgage to pay for their home. Most buyers pay a 10 percent down payment.
• According to many financial experts, what percentage of your monthly budget, or net monthly income, can you likely afford as a mortgage payment? If you guessed 27 percent, you're right.
Your monthly housing payment shouldn’t take up more than 28 percent of your pre-tax income. This is called the housing ratio.
Conventional mortgages allow the borrowers to remove mortgage insurance. This mortgage type is best for prospective homebuyers with strong credit scores who will be making large down payments.
• According to many financial experts, what percentage of your monthly budget, or net monthly income, can you likely afford as a mortgage payment? If you guessed 27 percent, you're right.
The typical GFE (good faith estimate) provided by most mortgage lenders includes key details regarding a potential loan. It will state the maximum loan amount, specify loan type (fixed rate, adjustable, etc.), identify the projected interest rate and detail closing costs.
VA loans work because they are fully backed by the federal government! It means that home buyers do not have to worry about paying the private monthly mortgage fees associated with some conventional loans and lenders.
Your monthly housing payment shouldn’t take up more than 28 percent of your pre-tax income. This is called the housing ratio.
Conventional mortgages allow the borrowers to remove mortgage insurance. This mortgage type is best for prospective homebuyers with strong credit scores who will be making large down payments.
• According to many financial experts, what percentage of your monthly budget, or net monthly income, can you likely afford as a mortgage payment? If you guessed 27 percent, you're right.
The three main factors that will help the small business qualify for a loan—aside from a successful track record—are good cash flow, a favorable debt-equity ratio, and carefully prepared documentation.
The typical GFE (good faith estimate) provided by most mortgage lenders includes key details regarding a potential loan. It will state the maximum loan amount, specify loan type (fixed rate, adjustable, etc.), identify the projected interest rate and detail closing costs.
VA loans work because they are fully backed by the federal government! It means that home buyers do not have to worry about paying the private monthly mortgage fees associated with some conventional loans and lenders.
Your monthly housing payment shouldn’t take up more than 28 percent of your pre-tax income. This is called the housing ratio.
Conventional mortgages allow the borrowers to remove mortgage insurance. This mortgage type is best for prospective homebuyers with strong credit scores who will be making large down payments.
We recognize that no one wants to discover the house they’re in love with comes with too high of a monthly mortgage payment to manage. Let’s talk about how getting a mortgage preapproval can spare you from this heartbreaking experience.
A mortgage application will ask for any outstanding debt and bill obligations like car payments or child support and will carefully review your credit history to determine ability to repay the loan.
The three main factors that will help the small business qualify for a loan—aside from a successful track record—are good cash flow, a favorable debt-equity ratio, and carefully prepared documentation.
The typical GFE (good faith estimate) provided by most mortgage lenders includes key details regarding a potential loan. It will state the maximum loan amount, specify loan type (fixed rate, adjustable, etc.), identify the projected interest rate and detail closing costs.
VA loans work because they are fully backed by the federal government! It means that home buyers do not have to worry about paying the private monthly mortgage fees associated with some conventional loans and lenders.
Your monthly housing payment shouldn’t take up more than 28 percent of your pre-tax income. This is called the housing ratio.
With adjustable-rate mortgages, the adjustment period will vary according to the type of ARM. You can identify the initial rate period by the first number and the adjustment frequency by the second number. For instance, a 3/1 ARM means you have the same initial rate for three years and an annual adjustment every year after that.
We recognize that no one wants to discover the house they’re in love with comes with too high of a monthly mortgage payment to manage. Let’s talk about how getting a mortgage preapproval can spare you from this heartbreaking experience.
A mortgage application will ask for any outstanding debt and bill obligations like car payments or child support and will carefully review your credit history to determine ability to repay the loan.
The three main factors that will help the small business qualify for a loan—aside from a successful track record—are good cash flow, a favorable debt-equity ratio, and carefully prepared documentation.
The typical GFE (good faith estimate) provided by most mortgage lenders includes key details regarding a potential loan. It will state the maximum loan amount, specify loan type (fixed rate, adjustable, etc.), identify the projected interest rate and detail closing costs.
Unfortunately, what you don’t know about your credit can have a major impact on your ability to buy the home you want. Even if you’re still in the early stages of home shopping, it’s a good idea to start the mortgage process, so you’ll have time to work through any credit challenges.
• Can a lender sell your loan to another bank? If you guessed no, guess again. It is sometimes in the best interest of a lender to sell some of its loans to other entities. This does not impact your mortgage amount, but can change some minor details of your agreement.
With adjustable-rate mortgages, the adjustment period will vary according to the type of ARM. You can identify the initial rate period by the first number and the adjustment frequency by the second number. For instance, a 3/1 ARM means you have the same initial rate for three years and an annual adjustment every year after that.
We recognize that no one wants to discover the house they’re in love with comes with too high of a monthly mortgage payment to manage. Let’s talk about how getting a mortgage preapproval can spare you from this heartbreaking experience.
A mortgage application will ask for any outstanding debt and bill obligations like car payments or child support and will carefully review your credit history to determine ability to repay the loan.
For veterans, there is a loan program available that’s guaranteed by the federal government, which means that the VA will reimburse the lender for any losses that might result from borrower default. The primary advantage here is that borrowers can secure a mortgage with zero down payment.
Unfortunately, what you don’t know about your credit can have a major impact on your ability to buy the home you want. Even if you’re still in the early stages of home shopping, it’s a good idea to start the mortgage process, so you’ll have time to work through any credit challenges.
• Can a lender sell your loan to another bank? If you guessed no, guess again. It is sometimes in the best interest of a lender to sell some of its loans to other entities. This does not impact your mortgage amount, but can change some minor details of your agreement.
With adjustable-rate mortgages, the adjustment period will vary according to the type of ARM. You can identify the initial rate period by the first number and the adjustment frequency by the second number. For instance, a 3/1 ARM means you have the same initial rate for three years and an annual adjustment every year after that.
We recognize that no one wants to discover the house they’re in love with comes with too high of a monthly mortgage payment to manage. Let’s talk about how getting a mortgage preapproval can spare you from this heartbreaking experience.
