Monthly Archives: May 2014

30 05, 2014

3 Mortgage options that require little or no money down

May 30th, 2014|Blog|

Coming up with a down payment can be challenging, especially for first time home buyers. The good news is, there are ways for qualified borrowers to get a mortgage with a small down payment, or even no down payment at all. Here’s a look at some mortgage options that require little or no money down.

 

FHA Loan: 3.5% Down

FHA loans are popular options for first-time home buyers because of the relatively small down payment, attractive mortgage rates and favorable credit requirements. An FHA loan is a mortgage that is insured by the Federal Housing Administration. The actual loan is funded by a private lender, which is then insured by the FHA. FHA-insured loans are less risky for lenders, allowing them to offer mortgage loans at a low interest rate with as little as 3.5% down. Learn more about FHA loans here.

 

VA Loan: No Money Down

The Veterans Affairs (VA) home loan is a no money down program available to veterans, active-duty personnel, members of the National Guard and Reserves, and eligible surviving spouses. For those you qualify, a VA loan is the best deal around when it comes to home financing. Guaranteed by the Department of Veterans Affairs, VA loans require zero down payment and no mortgage insurance at all. The interest rate also tends to be lower than on conventional loans, because the government is taking on part of the risk.  Learn more about VA loan here.

 

USDA Loan: 100% Financing

If you don’t qualify for a VA loan, the next best thing is a USDA loan. Many people aren’t aware of this mortgage product. Insured by the U.S. Department of Agriculture’s Office of Rural Development, these […]

23 05, 2014

Down Payment Saving Strategies

May 23rd, 2014|Blog|

certificate-of-deposit2

Coming up with a down payment can be the one of the biggest obstacle when buying a home, especially for first time home buyers. No matter what type of loan you choose, you will likely have to put some amount of money down. Saving up for a down payment can seem like a daunting task, but with the right planning and budgeting you can reach your savings goals faster than you think. Here are a few strategies that can help you save for a down payment:

 

 1.     Know how much you need to save

The first step is to determine how much you will need for a down payment. Since you won’t know the exact amount of your down payment until you find a house, estimate how much you will need by looking at average home prices in your area. Depending on the loan type and lender, down payments usually range from 3.5% to 20% of the purchase price. Talk to a lender early on in the process and get pre-qualified. If you know how much you can potential be approved to borrow, you will have a better idea of how much you need to save for a down payment.

 

 2.     Create a budget and cut spending

Examine your spending habits and determine where your money is being spent. Make a list of all of your monthly expenses, such as car payments, insurance, rent, utilities, groceries, gym memberships, going out to dinner, shopping, entertainment, travel etc.  Take a close look at the list and determine what expenses you can reduce or eliminate to meet you savings goal. By making a plan to lower your monthly spending and setting and sticking to a budget, you can reach your down payment savings goals and be ready to buy […]

16 05, 2014

VA Loans: What are they? Who is eligible? What are the advantages?

May 16th, 2014|Blog|

What are VA loans?

Veterans Affairs (VA) home loans are mortgages that are guaranteed by the U.S. Department of Veterans Affairs.   VA loans became available in 1944 as part of the Serviceman’s Readjustment act, also known as the GI Bill. Qualifying veterans have the opportunity to purchase a home without putting any money down, through the VA home loan program. Borrowers must obtain a VA Loan through a participating private lenders. The VA doesn’t loan any money; they insure a portion of the mortgage which allows lenders to offer more favorable rates and terms to veterans who qualify.

 

Who is Eligible for a VA Loan?

Veterans, active-duty personnel, members of the National Guard and Reserves, and eligible surviving spouses may qualify for VA home loans. Eligibility is based on length and type of military service and discharge conditions. In order to apply for a VA loan, borrowers will need to obtain a Certificate of Eligibility (COE) through the Veterans Administration. While the COE allows an eligible individual to apply for a VA loan, it does not guarantee loan approval. More information on how to apply for a COE and eligibility requirements can be found here: http://benefits.va.gov/HOMELOANS/purchaseco_eligibility.asp.

 

What are the Advantages of a VA Loan?

Some of the advantages of a VA home loan include:

  • No down payment – Borrowers can finance up to 100% of the purchase or appraised value, whichever is less
  • No private mortgage insurance (PMI) – VA borrowers don’t have to pay PMI because the loan is backed by the federal government
  • Competitive interest rates –Lenders are often able to offer lower interest rates on VA loans
  • Easier to qualify for – VA loans have more favorable income, debt and credit qualifications
  • Lower closing costs – The VA limits what fees and costs veterans can pay at the time of closing
  • Its’ not a one-time benefit […]
9 05, 2014

Mortgage 101: Closing costs and fees explained

May 9th, 2014|Blog, Mortgage 101|

down-payment-money-house-keys

Many borrowers are surprised by the additional costs involved in buying a home. On top of the down payment, the buyer is also required to pay a variety of closing costs to finalize the purchase of a home. You should factor these costs into your home buying budget to ensure you have enough money saved up when it’s time to sign on the dotted line.

 

What are closing costs?

Closing costs are fees related to services that must be performed to complete a home loan. These costs are over and above the amount you borrow for a mortgage and the down payment. When you close on a mortgage you will also owe the lender and third parties closing costs. Typically, the home buyer is responsible for paying closing costs, but there are exceptions on some loans. For instance, with a Veterans Affairs (VA) loan, the sellers pays some of the closing costs.

 

What charges go into your total closing costs?

Closing costs typically include things such as:

  • A fee for obtaining a credit report
  • A Loan origination fee – the amount the lender charges for processing loan paperwork
  • Legal fees
  • Charges for home inspections
  • Appraisal fee
  • Survey fee – the cost to verify property lines
  • Title insurance – this protects the lender if the title isn’t clean
  • Title search fee – the cost for a background check on the title to make sure there aren’t unpaid mortgages or tax liens on the property
  • An escrow deposit
  • A recording fee – The cost to record the transaction in the city or county’s records
  • Underwriting fee – covers the cost of evaluating the loan application

 

How much will you pay in closing costs?

Typically, total closing costs range from 2 – 5% of a home’s purchase price, although this can vary based on where you live and the property you buy. […]

2 05, 2014

Mortgage 101: 5 Tips For First-Time Home Buyers

May 2nd, 2014|Blog, Buying a home, Mortgage 101, Tips & Advice|

With the spring home buying season in full swing, we thought it would be a great time to offer some tips for first-time home buyers. Buying a home can be exciting and intimidating at the same time, especially for first-time home buyers. Here are five tips to help make the process go more smoothly.

 

Determine what you can afford

One of the first things you should do is figure out how much you can afford to spend on a home. Meet with a lender and go over your finances to get an estimate of how much the lender thinks you could be eligible to borrow. This will help you determine a realistic price range when you start looking for a home. Knowing how much you can afford before you start shopping for a home will make the entire process a lot smoother.

 

Check your credit

Your credit score has a big impact when it comes to qualifying for a mortgage. Before you start looking for a home, it’s a good idea to check your credit and get a sense of where it stands.  Checking your credit report before you start the mortgage process will give you an idea of what lenders will see, and will also give you an opportunity to correct any mistakes and make improvements to your score. Take a look at our post on tips to improve your credit score before you apply for a mortgage loan, for more information about credit and how it can impact your mortgage.

 

Organize your documents

There is a lot of paperwork involved in buying your first home. Knowing what documents you need and where to find them can save you a lot of time when you are ready […]

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