23 07, 2018

What is a USDA Loan?

2021-09-28T16:53:22+00:00July 23rd, 2018|Mortgage 101|

Officially known as the Section 502 Single Family Housing Guaranteed Loan Program, the USDA loan is a $0 down mortgage option available to rural and suburban homebuyers in the United States. USDA loans are issued by qualified lenders and guaranteed by the U.S. Department of Agriculture (USDA).

The purpose of a USDA loan is to provide low-to-moderate income households with the opportunity to own a home in eligible rural areas. In addition, each USDA loan is against default. This guarantee allows for benefits, such as zero down payment, low rates and lenient credit requirements.

3 USDA Home Loan Programs

Loan Guarantees

The USDA guarantees a mortgage issued by a participating local lender, similar to an FHA loan and VA-backed loans, allowing you to get low mortgage interest rates, even without a down payment. However, if you put little or no money down, you will have to pay a mortgage insurance premium.

Direct Loans

Issued by the USDA, these mortgages are for low- and very low-income applicants. Income thresholds vary by region. With subsidies, interest rates can be as low as 1%.

Home Improvement Loans and Grants

These loans permit homeowners to repair or upgrade their homes. Packages can also combine a loan and a grant, providing up to $27,500 in assistance.

Advantages of USDA Loans

USDA guaranteed loans aren’t right for every buyer. But, any first-time or repeat buyer looking for homes outside of major cities should check their eligibility for the program.

  • Lower down payment than conventional or FHA financing
  • Lower mortgage insurance than conventional or FHA loans
  • More lenient credit score requirements than for conventional loans
  • Unlike VA loans, there is no military service requirement
10 07, 2018

3 Ways To Refinance Your Mortgage

2021-09-28T16:53:26+00:00July 10th, 2018|Refinance|

Before you begin, it’s important to consider why you want to refinance your home loan in the first place. That guides the mortgage refinance process from the very beginning. Learn more about the different options you have when refinancing.

Home Refinance Loans or Rate and Term Refinance

This is a traditional refinance of a conventional loan or an FHA loan into a conventional. This type of refinance loan will lower your interest rate and monthly payment. Many people who have an FHA loan will choose to refinance into a conventional loan in order to drop mortgage insurance. Those with traditional 30-year fixed mortgages may choose to refinance to a 15-year term, to save interest and total payback. Others needing cash flow to pay for their kids’ college, retirement, etc. may choose to refinance with a longer term to decrease their monthly mortgage payment.

Cash-Out Refinance or Bill Consolidation

A cash-out refinance is where you refinance your mortgage and get cash out using the equity in your home. You will have just one monthly mortgage payment and the rates are lower than they typically are with a home equity loan. 

Streamline Refinance

Government home loans such as FHA, VA, and USDA also offer a refinance program. FHA streamline refinance is a quick and easy way to refinance your FHA loan into a new lower rate. The great thing about streamline refinances is that they do not require a credit check or income verification. The process is streamlined and requires much less paperwork than a traditional refinance.

Contact First Ohio Home Finance today to learn about your refinance options!

5 07, 2018

5 Reasons to Buy Rather Than Rent

2021-09-28T16:53:29+00:00July 5th, 2018|Buying a home|

For many people, owning a home makes more sense financially and from a lifestyle perspective than renting a home. If you’ve been renting a home and thought that you can’t afford to buy a home, you might be wrong. Below are the top reasons people buy instead of rent.

1. You Can Do Whatever You Want to The Property

Owning your home means you can paint your dining room whatever color you want, you can change tile to hardwood, and you can put a new hanging light in the foyer without asking a landlord for permission. Sometimes making these home improvements will increase the value of your property.

2. Investment Benefits

Owning a home is an investment many people can understand rather than buying stocks, because they get the daily lifestyle benefit of living in their investment, their home. But the financial benefits are also significant and can be more substantial than stock investing. As the home value increases, it accrues faster than a stock might because you get the appreciation on the entire home’s value, not just the gain your down payment cash invested.

3. Tax Advantages

Homeowners can deduct mortgage interest and property taxes when they file tax returns each year. Using the example of $300,000 home purchase with 10 percent down, a mortgage calculator shows a total monthly housing cost of about $1,731, with $1,231 in principal and interest (using a rate of 3.625 percent), $300 in property taxes, insurance of $67, and mortgage insurance (required when putting less than 20 percent down) of $133. The tax deductions homeowners get for mortgage interest and property taxes save $335 per month in taxes, so subtract this from total monthly housing cost of $1,731 to get an after-tax housing cost of $1,396. This significant savings […]