Monthly Archives: April 2016

//April
21 04, 2016

Components of a Mortgage Payment

April 21st, 2016|Home Finances, Mortgage 101|

Mortgage concept. isolated on white background 3d

Before you dive into buying a home, it is important to know what your money is going to each month. Your monthly mortgage payments are commonly referred to as a “PITI” or principal, interest, taxes and insurance. PMI and homeowner’s association dues may also make up a portion of your total payment.

Principal: The original amount of the loan.

Interest: Just like with any other loan, this is the amount that you are charged for borrowing money. The amount of interest for the month is calculated based on the outstanding principal balance as well as the interest rate of your loan. As the term of the mortgage proceeds, the ratio between the principal and interest amounts shifts in each payment.

Taxes: The property assessment collected by your local government. Lenders typically collect a portion of these taxes in every mortgage payment and hold the funds in an account called an esgrow account until they are due.

Insurance: This offers financial protection from risk. Like property taxes, these are typically held in an escrow account and paid on your behalf to the insurance company. There are two main types of insurance that are typically included in your mortgage payment: homeowners insurance and mortgage insurance. Homeowners insurance is required financial protection you must maintain in case your property is damaged by fire, wind, theft or other hazards. Mortgage insurance protects your lender in case you fail to repay your mortgage.

Overall there are several factors that determine how much your monthly mortgage payment will be. Two examples are the amount you pay for a down payment and the mortgage program you choose.

It is important to take all four factors into consideration when determining what house you can afford. Use our mortgage calculator http://firstohiohome.com/home-finance-mortgage-calculators/ […]

14 04, 2016

Is Refinancing Right for you?

April 14th, 2016|Refinance|

Refinancing

It is no question that mortgage rates are low right now, the real question is how long are they going to stay like this? Well unfortunately there is no exact answer for this but rates are looking to increase by this time next year. So would this be the right time for you to refinance? Let’s start with the basics.

What is refinancing? Refinancing is the process of obtaining a new mortgage in an effort to reduce monthly payments, lower your interest rates, take cash out of your home for large purchases or change mortgage companies. The reasons for refinancing are explained further below:

Securing a Lower Interest Rate

With rates being as low as they are now, refinancing might have crossed your mind. This is one of the most common reasons people refinance. The rule of thumb used to be that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, some believe that even 1% savings is enough of an incentive. Reducing your interest rate will lower your monthly payments and also increases the rate at which you build equity in your home.

Shortening the Loan’s Term

When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another loan that has a shorter term. If you currently have a 30-year fixed-rate mortgage, this could be a great chance to switch to shorter term mortgage. If you can afford a slightly higher monthly payment, it will be worth the change because you will save money on interest in the long run.

Converting between Adjustable-Rate and Fixed-Rate Mortgage

While ARMs start out offering lower rates than fixed-rate mortgages, ARMs are not locked into certain rates like Fixed-Rate Mortgages are, so therefore it is likely their […]

1 04, 2016

Tips for a Quick Closing

April 1st, 2016|Blog, Buying a home, Home Finances|

iStock_000009315285XSmallIf you look at our reviews or testimonials, you’ll notice that so many of our customers have stated how happy they were with the timeline of their experience working with First Ohio Home Finance. The customer’s timeline is always a number one priority, it is important to be upfront with your Loan Officer about your timeline, it is also helpful to be realistic.

Current mortgage rates remain below 4 percent. Mortgage rates are so low, that many people are back to the “should I buy or should I rent” debate. Rent prices  are rising quickly and mortgage rates are not. The widespread availability of low down payment loans plus rising approval rates but today’s low mortgage rates have created a buyer’s market.

To help you compete in the fast-paced buying market, we have created a couple tips for closing on-time:

  • Get your purchase loan approved quickly: Typically the longest part of the process is exchanging documentation. As a home buyer, you can be prepared for the lender’s request by having your documentation ready to go. The complete list of documentation needed can be found here: http://firstohiohome.com/purchase-home/mortgage-checklists/. If you have those documents ready, that will reduce the numbers of days required to get your approval. Just like with most other things in life, it is important to be prepared.
  • Be open with your lender: Honesty is the best policy, the loan approval is no exception. If you are going on a trip or a big life event might be happening during the process, it is crucial to let your loan officer know that. If you are going to be out of contact they are going to need to know that. If there are any financial circumstances that are going on, you need to tell your Loan […]
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