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So far First Ohio has created 136 blog entries.
5 08, 2016

Things Every Home Buyer Should Pay Attention to This Time of Year

August 5th, 2016|Blog, Buying a home|

Sold House

There are many things for the buyer to take into consideration when purchasing a home especially during the summer months when the market seems to be favoring sellers over buyers. Every buyer will have things that are especially important to them but might not be a top priority for others. Let’s take a look at what every buyer can agree on that they need to pay attention to.

The Interest Rates

Interest rates extremely low right now, check out the latest information. The average 30-year fixed mortgage rate is at 3.43%, the lowest it has been in months which is great news for buyers. The Federal Reserve has not yet determined when they are forecasting interest rates to rise (hint: they think it might be soon) but they have not officially raised them yet. So it is crucial for buyers to understand that rates are not going to be this low forever and it might be time, sooner rather than later to think about taking advantage of them.

The Home Loan

Here at First Ohio Home Finance, our Loan Officers are dedicated to finding the right loan for everyone’s needs. Whether you can put down the recommended 20% down payment or not, they will find a loan for every person’s current financial situation. Head over to our Types of Loan page to explore the different options.

Timeline

As the buyer, your timeline is just important to us as it is to you. If you need to be settled into a new home by a certain point that is something we want to know right from the beginning. Also if you are planning a trip away during the buying process, that is something to communicate as well so we know if you won’t be reached […]

22 07, 2016

Everything you need to know about Escrow

July 22nd, 2016|Blog, Buying a home, General, Home Finances|

A house with an in escrow sign.

What is Escrow? Recently first time home buyers have joked about either not knowing what Escrow is or being thrilled with themselves for finally learning about it. It is your lucky day, if you are unfamiliar with escrow; you are going to learn now. If you don’t remember anything from this article, remember the concept of the impartial third party – someone with nothing to lose or gain from your real estate transaction.

Now let’s dive further into it. Escrow is not a term we hear every day. The term gets confusing because it has several different meanings in the real estate world.

  1. Weeks ago when you made an offer on your new home, you wrote a check that has to be placed in “escrow” which meant it was to be given to an impartial third party while you and the seller negotiated a purchase contract. A real estate agent probably took care of creating the escrow.
  2. Now your lender is talking about creating an “escrow” account, also called a “reserve” or “impound” account, where money for property taxes and homeowner’s insurance will be held.
  3. To throw more words into the mix, there is such thing as the “closing of Escrow”, which is described by someone called an escrow officer.

All three listed above are accurate uses of the word. An escrow is something of value such as your earnest money check, or documents such as your purchase and sales agreement, that are given to an impartial third party to hold until specific conditions are met. When everything is finished – everybody paid and the deed recorded with the county, the escrow will close.

They will also juggle all incoming paperwork and money from buyers, sellers, agents, lenders and anyone […]

5 07, 2016

Home Inspection vs. Home Appraisal

July 5th, 2016|Blog, General, Mortgage 101|

House and key shaped paper cutout, calculator and magnifier on wooden table.

Some future home buyers may be confused about the difference between a home inspection and a home appraisal. While they sound like they are the same thing, they are very different in reality. The two serve different purposes. A home inspection is optional; while an appraisal is required by a mortgage lender. An appraiser is more concerned with the value or a property, and a home inspector is more concerned with the condition of the property. Here is a closer look at the differences between the two.

Home Inspection

It is the inspector’s job to take a more in-depth look at the home than the appraisers do. Home inspectors are optional. Everything from the foundation to the roof will be thoroughly evaluated to make sure the buyer knows exactly what they are getting. Unlike an appraiser, home inspectors do not place a value on the home. Inspectors create a report that lets the buyer know the overall condition of the home. They inspect things that you do not necessarily see in a walk-through of the property. They will check the plumbing (pipes), radon, possible lead paint exposure, any signs of structural issues, ventilation, heating, air conditioning, electrical, drainage, etc. Inspectors will also advise you to contact a professional, such as a structural engineer, plumber or electrician if they feel there are any major issues to be addressed. The inspector will provide you with a clear understanding of what is going on with the home and if they foresee any future problems.

Home Appraisal

An appraisal is an evaluation of a property’s value based on its condition, features, and similar home sales in the area. Appraisals are conducted by trained, certified professionals who are licensed to […]

28 06, 2016

Jumbo Loans 101

June 28th, 2016|Blog, Buying a home, Home Finances, Mortgage 101|

Rhinebeck, NY, USA - November 5, 2007: Elegant private residence located in Rhinebeck; This area is in the Hudson Valley area of Upstate New York.

Since this is a 101 about jumbo loans and when you should use one, let’s start with the basics. A jumbo loan can also be referred to as a non-conforming mortgage. This is a loan that does not conform to the guidelines of Frannie Mae and Freddie Mac. Created by Congress in 1938 and 1970 respectively, Frannie Mae and Freddie Mac provide stability and affordability to the mortgage market by buying “conforming” mortgages from lenders, giving lenders liquidity to make more mortgages.

Frannie Mae and Freddie Mac only buy mortgages meeting their guidelines for down payment, credit score, post-closing reserves and loan amount. As of 2016, the conforming loan size limit for a one-unity home is $417,000 with exceptions as high as $625,500 in certain high-priced markets.

When should you use a jumbo mortgage?

You would use a jumbo mortgage when you are seeking a loan amount that is greater than the conforming loan limit in your area. In most of the country, that means you will take out a jumbo loan if the amount of the loan is greater than $417,000. In certain areas that are deemed high cost, the conforming loan limit goes above $417,000. You can look up your area’s loan limited here: http://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx.

Qualifying for a Jumbo Mortgage

Jumbo mortgages have the same overall qualifying methodology as a conforming loan. Lenders will look at your credit score, down payment size,  total monthly debt obligations relative to income (called your debt-to-income ratio), and money left over after closing.

  • Credit score requirements are about the same for conforming and jumbo.
  • Money left after closing – This is often called reserves or […]
17 06, 2016

Smart Moves for First-Time Home Buyers

June 17th, 2016|Home Finances, Mortgage 101, Tips & Advice|

Shot of a couple moving into their new homehttp://195.154.178.81/DATA/i_collage/pu/shoots/805830.jpg

First-time home buyers, are you ready to buy? It is a seller’s market right now so we are here to prepare you with tips before entering the market. Your biggest challenge is that you are probably bringing less cash to the table, which makes it harder to compete with more season buyers. What YOU do have is flexibility-you’re not counting on selling your current place to fund the deal. Which means that you are a perfect answer for sellers who want to stay put until they land their next place.

  1. Lock up your financials. It is time to clean up your credit and save for a bigger down payment so that you’ll qualify for a better mortgage rate and avoid costly fees. Start paying down credit cards so your balance is less than 30% of the limit and avoid late payments. It is so important to pay your bills on time, even student loan payments. Student loans will not hinder your chance of getting a loan, as long as you are making the payments on time. Next, 20% is the golden number for down payments. Putting down 20% helps you avoid costly private mortgage insurance and can help you to beat competing offers. If you aren’t there yet, either change your spending habits to save up more or start looking at cheaper homes.
  2. Check Alternative Mortgage Options. If you can’t get close to that 20% down payment or your credit score is not where you would like it to be, that is okay too! FHA loans (read more about them here) let you put just 3.5% down, and offer better rates for those with less-than-pristine credit. It is important to know the tradeoff though, […]
10 06, 2016

Mortgage Rates Update

June 10th, 2016|Blog, Latest News|

Chalk graph

Unfortunately May brought a disappointing jobs report for the U.S. and a speech by the Federal Reserve Chair Janet Yellen that seemed to take a June rate hike by the Fed’s rate-setting committee off the table, for now. This created a worrisome week for the U.S economy which led to lower rates for home loans.

Here is where the mortgage rates stand this week:

  • The benchmark 30-year fixed-rate mortgage fell to 3.74% from 3.81%. The rate this week is 0.23 percentage points lower than the 52-week average.
  • The benchmark 15-year fixed-rate mortgage fell to 3% from 3.05%.
  • The benchmark 5/1 adjustable-rate mortgage fell to 3.13% from 3.22%.
  • The benchmark 30-year fixed-rate jumbo mortgage fell to 3.71% from 3.76%.

Timing of Fed hike is less clear

As a result of the speech on Monday, the timing of when the Federal Reserve will decide to raise rates is still not clear. Yellen said the Fed would probably need to raise the federal funds rate gradually over time. That appeared to retract what was said in the speech 3 days earlier in which she said it would probably be appropriate to raise the funds rate “in a couple months”. The Federal Reserve will raise rates after our current uncertainties unfold.

If you want to apply to either buy or refinance, start the application today! https://www.myloanform.com/?action=access.login&m=47

25 05, 2016

Buying a Home with Student Loans

May 25th, 2016|Blog, Buying a home, Home Finances, Mortgage 101, Tips & Advice|

 

Young couple meeting financial consultant for credit loan

The housing market has been waiting for millennials to settle down and start buying homes instead of renting or remaining in their parent’s home for a few years now. If you ask any millennials, many of them will say these decisions are being prolonged due to the amount of student debt haunting them. The average Class of 2016 graduate has $37,172 in student debt, up six percent from last year according to https://studentloanhero.com/student-loan-debt-statistics-2016/. This is a huge financial burden to be facing, but we are here to tell you how you can still buy a home even with student loans.

Shop for a Home you can afford

This should be a rule of thumb for any purchase in life, if you can’t afford it, you probably should not be buying it. Home shopping can be tempting. You may be looking at multiple car garages, completely new appliances, high ceilings and much more. It is important not to get carried away. If you are a first-time home buyer, you may have to go with a starter home instead of your dream home but that will come with time.

Minimize Debt from Credit Cards and Car Loans

When applying for a loan these are the main factors taken into consideration:

  1. Income.
  2. Savings.
  3. Credit Score.
  4. Monthly debt-to-income ratio.

Your debt-to-income ratio shows the lender your total financial obligations including car payments, credit card debt and student loans in comparison to your income. To keep yours low, keep off as much debt as possible before applying for a mortgage.

Lower your monthly student loan payments

Even if you do not have any other types of debt, having a high student loan monthly payment could give you a high debt-to-income ratio. To lower that ratio […]

17 05, 2016

Renters: Are You Ready to Buy a Home?

May 17th, 2016|Blog, Buying a home, Tips & Advice|

House icon and keys on wooden background

Most renters are planning to buy a home at some point. If so, they are probably saving up for the down payment right about now. Besides that obviously step, here are four more advanced steps towards moving out your rental and into a dream home of your own.

Understanding the full cost of homeownership

As a renter, you are used to writing a check to your landlord and that covering your monthly housing payment. As a future homeowner, make sure you are familiar with the four components of a mortgage payment that are listed below, otherwise known as P.I.T.I:
Principal: Money that is going towards the remaining amount of your loan.
Interest: This is the amount of the payment that is going towards the interest on your loan. For a while at the beginning of owning your home, a large majority of your mortgage payment with be going towards the interest on the loan.
Taxes: Refers to property taxes, which are assessed by the county that you live in. They average 1.2% of your home’s value each year.
Insurance: This will be paid to a homeowner’s insurance company of your choice; this is required when you have a mortgage. Lenders require that your insurance cover the cost of rebuilding the home if it is ruined by fire or other disaster. This “replacement cost” is determined by your insurer, and must be agreed to by your lender. Insurance will typically cost $700 to $1,200 per year for a single family home.

Know your homeowner tax benefits

Mortgage interest and property taxes are deductible when you file your annual tax returns, and reduce taxable income. These deductions significantly lower your cost of homeownership. For example, for a $300,000 home with 20 percent down and a 30-year fixed mortgage […]

3 05, 2016

Down Payment: How much you should save to buy a home

May 3rd, 2016|Blog, Mortgage 101, Tips & Advice|

Horizontal view of marriage analyzing the bills

Is buying a home on the horizon for you? Have you started to save up for the down payment? Let’s first start with the basics of what a down payment is. A down payment is the amount of money you will spend upfront to purchase a home and is typically combined with a home loan to fulfill the total purchase price of a home.

How much do I need to save for my down payment?

The higher your down payment is, the lower your monthly mortgage payments will be. This will also depend on what type of loan that you get. Different loans require different amounts for the down payment. Typically you will need to save 5 to 20 percent of the sale price in cash in order to qualify for a conventional loan (30-year fixed mortgage). Down payments for jumbo loans can be as low as 5%. If you put down less than 20 perfect on a conventional loan, you will most likely have to pay mortgage insurance.

Low down payment financing options

Saving for a 20 percent down payment might be too difficult or take too long for many first-time home buyers or borrowers with lower household incomes. Other loan programs offer as low as zero to 3.5 percent down payment option, although a zero down-payment option is more difficult to get. The most common programs for the lower down payment mortgages come from the Federal Housing Administration (FHA) Most FHA loans require a minimum 3.5 percent down a decent credit score in order to qualify. Additionally, these types of loans are federally insured to reduce the risk of loss if a borrower defaults on their mortgage payments.

If you meet the eligibility guidelines, you may be able to qualify […]

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/ […]

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