Tips & Advice

/Tips & Advice
5 06, 2018

3 Things to Know About Getting a VA Loan

June 5th, 2018|Buying a home, Mortgage 101, Tips & Advice|

Veterans Affairs mortgages, better known as VA loans, make it easier for veterans to get financing to buy a home. VA loans do not always require a down payment and are available to military veterans and active military members. These home loans are made through private lenders and are guaranteed by the Department of Veterans Affairs, so they do not require mortgage insurance. There’s no minimum credit score requirement.

 

The VA loan remains one of the few mortgage options for borrowers who don’t have the money for a down payment. VA loans are somewhat easier to qualify for than conventional mortgages. The U.S. Department of Veterans Affairs is not a direct lender. The loan is made through a private lender and partially guaranteed by the VA, as long as guidelines are met.

If you think you may be eligible for a VA loan, here are some things you must know about the program.

Qualifications For A VA Loan

Most members of the regular military, veterans, reservists and National Guard are eligible to apply for a VA loan. Spouses of military members who died while on active duty or as a result of a service-connected disability also can apply. Active-duty military personnel generally qualify after about six months of service. Reservists and members of the National Guard must wait six years to apply, but if they are called to active duty before that, they gain eligibility after 181 days of service.

Associated Costs

Although the costs of getting a VA loan are usually lower than they are for other types of mortgages, they still carry a one-time funding fee that varies, depending on the down payment and the type of veteran. […]

10 05, 2018

How To Buy a House With Student Loan Debt

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

For many consumers, buying a house is a major financial and life milestone. However, student loan debt is preventing some millennials from making home purchases.

Having student loans won’t keep you from buying a house, although you should be comfortable with the idea of taking on a large amount of debt while still dealing with your student loans. Carefully consider your options, and decide what makes sense for your own financial situation.

You can still get a mortgage

If you’re bogged down in student debt, that doesn’t mean you can’t get a mortgage. You just have to be aware of your options. Improving your financial profile is one key step to getting there. For example, paying down that high-interest credit card balance is a great place to start. Or, if you don’t have the cash to pay down a big chunk of your debt, consider refinancing or consolidating your other debt to reduce the amount you have to pay every month.

Consider government help

If you have federal student loans, you may want to explore an income-driven repayment plan. With this option, your monthly payments can be reduced to a percentage of your discretionary income. This can be a huge help for those whose income is absorbed by high loan payments. Lower monthly student loan payments can help improve that important debt-to-income ratio.

In April 2017, Fannie Mae introduced three new policies aimed at helping homeownership become more achievable for those with student debt. The policies are:

  • Student Loan Cash-Out Refinance: Offers homeowners the flexibility to pay off high-interest student debt while potentially refinancing to a lower mortgage rate.
  • Debt Paid […]
2 05, 2018

How to Set a Budget For Home Renovations

May 2nd, 2018|Tips & Advice|

If you don’t plan your renovation budget appropriately the process can become stressful and unpleasant. So before you start envisioning your dream space, determine how much you can afford to spend, and then breaking it down into sections so that you can figure out how much of your money needs to go into each part of the project. Then you can determine the quality of the finishes you can put in the finished space.

Estimate home renovation costs

As a general rule, you should not spend more on each room than the value of that room as a percentage of your overall house value. For example, a kitchen generally accounts for 10 to 15 percent of the property value, so spend no more than this on kitchen renovation costs. If your home is worth $300,000, for example, you’ll want to spend $45,000 or less.

Figure Out How Much You Have to Spend

Once you’ve decided on a project, the next question is whether you have the money. If you’re paying cash, that’s easy. But if you’re borrowing, you need to assess how much a bank will lend you and what that loan will add to your monthly expenses.

There are three basic types of loan options:

  1. A cash-out refinance
  2. A home equity loan
  3. A home equity line of credit (HELOC)

For most homeowners, the best way to borrow for a home improvement is a home equity line of credit. A HELOC is a loan that’s secured by your home equity, which means that it qualifies for a lower rate than other loan types, and you can deduct the interest on your taxes. Since a HELOC is […]

23 04, 2018

How To Consolidate Debt To Qualify For A Mortgage

April 23rd, 2018|Home Finances, Tips & Advice|

Use debt consolidation to qualify for a mortgage carefully

Consider the use of debt consolidation to qualify for a mortgage very, very carefully. Follow these tips to avoid being one of the 85 percent who fails debt consolidation.

Debt consolidation can lower your debt payments, allowing you to qualify for a larger mortgage

  1. Debt consolidation can be a home equity loan, debt management plan, or unsecured financings like personal loans or balance transfer credit cards
  2. Consolidating your debts can extend your repayment and increase your costs
  3. Debt consolidation works for a small percentage (about 15%) of those who try it. Be careful out there.

Debt-to-income ratios

Lenders are very concerned about debt. Typical guidelines say that as much as 43% of your gross income can be used to repay monthly debts like your housing, credit card, and auto payments.

Dividing these bills by your monthly income determines your debt-to-income ratio or DTI. If you have a household income of $7,000 a month, 43% equals $3,010. That’s your limit for housing plus other account payments. But not living expenses like food and utilities.

If you have two car loans at $500 each, $400 a month in student debt, and $200 for credit cards, that’s $1,600 a month, leaving just $1,410 a month for mortgage principal, mortgage interest, property taxes, and property insurance.

In a lot of markets, that leaves less than $1,000 a month for the mortgage itself. At 4.5% over 30 years, a borrower qualifies for about $200,000 in financing.

How debt consolidation works

If you already own a home, a home equity loan for debt consolidation is probably […]

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 […]

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