Tips & Advice

/Tips & Advice
10 04, 2018

Programs for Ohio First-Time Homebuyers

April 10th, 2018|Buying a home, Tips & Advice|

The state of Ohio works with mortgage companies, lenders and credit unions to offer home loans to people with low and moderate incomes, including first-time home buyers.

The Ohio Housing Finance Agency (OHFA) helps low- and moderate-income borrowers get 30-year, fixed-rate conventional, Federal Housing Administration, Veterans Affairs and U.S. Department of Agriculture Rural Development mortgages with relaxed income and purchase price limits. OHFA also has a number of programs that assist first-time buyers and others buying a home. Benefits include lower mortgage rates, down payment assistance, tax credits and combined financing for buying and renovating a home. Besides basic eligibility rules, each program may have additional requirements.

About OHFA and eligibility requirements

  • A free homebuyer education course is required after borrowers submit a mortgage application
  • Down payment assistance is available for first-time home buyers and is forgiven after seven years unless the home is sold or refinanced during that time
  • There are limits on purchase price and borrowers’ incomes, which vary by county and the number of people in a family
  • A minimum credit score is 640 for conventional mortgages and USDA, VA, and FHA 203(k) home loans
  • A minimum credit score is 660 for other FHA loans
  • Each type of loan has its own debt-to-income requirements
  • Veterans who’ve been honorably discharged are eligible for VA loans. They do not have to be first-time home buyers.
  • Eligible property types for these programs include existing single-family homes, duplexes, triplexes, fourplexes and condominiums; one-unit existing modular homes; and newly built single-family homes.

4 04, 2018

Home Buying Help: Should I Lock in a Rate on My Mortgage?

April 4th, 2018|Buying a home, Mortgage 101, Tips & Advice|

Mortgage rates change daily, making it difficult to spot the perfect moment to lock in a mortgage rate. To simplify the decision, keep these things in mind:

  1. Timing is everything.
  2. Have a few options to compare.

What is a Mortgage Rate Lock?

It’s an agreement the lender will deliver a specific combination of interest rate and points if the mortgage closes by a certain date. A point is a fee or rebate equal to 1 percent of the loan amount. Often times, rate locks last for 30, 45 or 60 days, but they can be shorter or longer. A rate lock protects the borrower from rate fluctuations during the lock period.

To begin, find out when your loan is expected to close and work backward to determine when to lock the rate. If you think you need 45 days to close your loan, find out what the interest rate would be if you locked it for a 60-day period.

Find the Best Combination For You

Look for the sweet spot when pricing out a rate lock. The sweet spot is the combination of interest rate, term, and cost you need to acquire the best deal. Most lenders won’t lock-in your rate for less than 30 days. An exception would be if you’re ready to close and offer the same rate for a 15- and 45-day period. There are different lock periods between 15 and 60 days. Anything longer than 60 days gets pricey, so it might be smarter to wait until you get closer to the closing date and check rates again.

When is the best time to lock in your rate?

For most homebuyers, it makes sense to sign a purchase […]

15 12, 2016

Buying in 2017: Be Prepared

December 15th, 2016|Blog, Buying a home, Home Finances, Tips & Advice|

Are you planning to buy a home in 2017? If so, you have probably already taken a couple steps to prepare. If you haven’t, that is okay too! We are going to discuss a few things that you can be doing now to get ready to buy a home. There is plenty to do to keep busy!

  1. Check your credit score. A credit score is a number that represents your credit report. FICO scores range from 300 to 850 and the higher the score the better. The better the credit score, the better the chances are that you will get a lower mortgage rate. If you credit score is not where you would like it to be, then start repairing it. Pay bills on time, limit unnecessary purchases, do anything you can financially to make sure you pay your credit card bill on time or even over pay it.
  2. Don’t open new credit cards. The holidays are tempting time for credit card holders. Almost every time you step up to check out at a store, someone is offering you a credit card. The savings sound great, but opening more accounts create more lines of credit. That credit line and what is borrowed, can change the application numbers and jeopardize your application. Also, don’t over spend during the holiday season and rack up more credit card debt.
  3. Suggest financial gifts. You are going to need to prepare for the down payment and also the closing costs and moving costs that are associated with buying a home. You should also consider setting aside money for unexpected repairs and costs. So instead of getting gifts this holiday season, ask your family to give you cash towards your potential new home. It will help in the long […]
2 09, 2016

Tips for Pet Owners when purchasing a home

September 2nd, 2016|Blog, Buying a home, Tips & Advice|

Buying a home as a pet ownerIf you have any pets you would probably agree, they are part of the family. You couldn’t imagine your life without them, so your new home is no exception. It is important to think about a few things when you are buying a home as a pet owner because let’s face it they might be spending more time in the home than you will be.

Ensuring local ordinances, regulations and neighborhood environment in regards to pets will affect how your pet acclimates to your new home and how much room they have for activities.

Let’s take a look at a few tips:

1) Check Local Requirements

For any potential home purchase, whether you have pets or not, you have probably familiarized yourself with the city. As a pet owner, it will be helpful to familiarize yourself with city and county ordinances. These include leash laws, and other common sense rules such as cleaning up after your pet in public places. Noncompliance can result in a fine. Many communities are striving to create and maintain environmentally friendly and pet-friendly parks. Information on pet parks and playgrounds exist in the area of a potential home should be available from local parks and recreation departments.

2) Ask for apartment or HOA rules

If you are buying a single-family home, this will most likely give your pet the most freedom. For you, a condo or town house might be more in your budget. For these options, check the rules and regulations in regards to pets. Homeowners associations (HOAs) typically govern these with rules for what is allowed and what is not. It will all vary on the location that you choose.

3) Assess the home layout

You love your pet; you want them to be comfortable inside and outside of […]

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, […]
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 […]

4 03, 2016

What tax Season means for Homeowners

March 4th, 2016|Home Finances, Mortgage 101, Tips & Advice|

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Tax season is upon us! Whether you already own a home or are looking to buy in the near future this is important information. For being a homeowner, there are many deductions you could receive when filing your taxes. Let’s check out a few:

  1. Mortgage Interest. When buying a home the interest payments can be pretty expensive but there is a silver lining to the situation. Interest that you pay on your mortgage is tax deductible, within limits. If you are married and filing jointly, you can deduct all your interest payments on a maximum of $1 million in mortgage debt secured by a first or second home.
  2. Points. There will be various fees when you first buy your home, one of which is called, “points.” One point is equal to 1% of the loan principal. One to three points are common on home loans, which can easily add up to thousands of dollars. You can fully deduct points associated with a home purchase mortgage. Refinanced mortgage points are also deductible, but only over the life of the loan, not all at once. Homeowners who refinance can immediately write off the balance of the old points and begin to amortize the new.
  3. Equity Loan Interest. You may be able to deduct some of the interest you pay on a home equity loan or a line of credit. However, the IRS places a limit on the amount of debt you can treat as “home equity” for this deduction. Your total is limited to the smaller of:
  • $100,000 (or $50,00 for each member of a married couple if they file separately), or
  • The total of your home’s fair market value – this is, what you’d get for your house on the open market – minus certain other outstanding debts against […]
25 02, 2016

Tips for buying a home this spring

February 25th, 2016|Blog, Buying a home, Home Finances, Tips & Advice|

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It is not a secret that spring is a great time to put your home on the market. Prospective homebuyers can look at homes and condos without having to worry about trudging through snow or bad weather. Plus families search for homes during this time so they can move in the summer without disrupting the school year.

A seller’s market means that buyers have to be smart and prepared if they want to get the right house at the right price. Agents suggest that prospective buyers start by looking at home online, narrowing down neighborhood choices and deciding between must-have and preferred features.

Here are tips for buying a home this spring:

• Get mortgage prequalification or preapproval before you start looking. As with any purchase, you need to know what you can afford. If you do this before you start shopping it will help narrow down your options and makes your offer more competitive.
• Do your research. Use the internet and different apps to research neighborhood and asking prices for the type of home you want.
• Have the documents ready. In order to obtain a mortgage you will need documentation to complete the qualification process. Check out the full list of what is needed on our website: http://firstohiohome.com/purchase-home/mortgage-checklists/
• Be ready to move fast. A well-located house in good condition and priced right will sell quickly; it can even be the first day it goes on the market. A buyer needs to be ready to commit if they find a home they like because they risk the chance of losing it if they don’t. One of the things First Ohio Home Finance is known for is how quickly they work for their customers.
• Understand that no house is perfect. Making your offer contingent on a home […]

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