21 01, 2020

VA Home Loan Limit Increases

2020-01-21T19:33:45+00:00January 21st, 2020|Blog, Buying a home, Loan Products|

2020 brings big changes to anyone looking to utilize a VA loan. A law passed by president Trump last year increased the amount in a home loan that Veteran’s may borrow before they require a down payment, even in areas with high housing costs where veterans have historically been required to make a 25% down payment. However, the higher limits come with more fees for borrowers.

Loan Amount Increases

The VA’s maximum loan guarantee amount is calculated as a percentage of the Federal Home Loan Mortgage Corporation Act, or Freddie Mac, limit, which is $484,350 for most counties. Since the VA’s guaranty of a loan is 25%, the maximum allowable amount for a loan was capped at the Freddie Mac limit. If a veteran wanted to buy a more expensive home, they were required to pay 25% of the difference or not use the VA program. The new law eliminates the Freddie Mac link to VA loans and instead will make the maximum guaranty 25% of the loan amount.

The removal of loan limits doesn’t mean unlimited borrowing power without a down payment. The borrower will still need to have sufficient income and meet a lender’s credit requirements to qualify for the loan amount.

Increase in Funding Fees

The VA funding fee the borrower pays will depend on the down payment amount and whether it’s a “first use” loan or a “subsequent loan.” If the borrower has never had a VA loan, it’s a first use and if they have, it’s a subsequent use loan. The borrower can pay the fee upfront or roll the cost into the loan.

The fee for first-use, zero-down loans is 2.3% of the loan amount in 2020, which was 2.15% in 2019. The fee for subsequent use loans will be 3.6% of the loan amount in 2020, which was 3.3% […]

15 01, 2020

Tips to Buying a Home with Less Than Perfect Credit

2021-09-28T16:50:14+00:00January 15th, 2020|Blog, Buying a home, Home Finances, Tips & Advice|

Let’s talk about buying a home with low credit. If you’re tired of paying rent every month or you’re ready to settle down and need more space to do so, buying a home would seem to be the next step. If your credit is less than perfect, is this still an option? Depending on your score, it may be. However, there are a few things to keep in mind.

A good credit score can vary. According to Experian, anything under 670 is less than desirable. You can still get a loan but there may be some things to keep in mind when looking to buy a home with a score under 670.

Know Your Credit Score

First, know what your credit score really is. Typically, you have three credit scores, Equifax, Experian, and TransUnion, the major credit reporting agencies. Find out all three. You can get your FICO score from some credit card companies or banks, but you are also able to request a free copy of your credit report once a year with no penalty. Along with knowing your credit score, be prepared to check and dispute errors. If your credit report has errors, that can lower your score and you should dispute them with the creditor.

Know You May Pay Higher Interest

A lower credit score is not the end of the world. You can still get approved for a loan but there may be some stipulations like a higher interest rate. A higher interest rate means a higher monthly payment but there’s a chance you will increase your score and be able to refinance for a lower interest rate in the future.

Consider Other Loan Types

An FHA loan is insured by the Federal Housing Administration and comes with a lower credit requirement. You can qualify for an FHA-insured mortgage […]

10 01, 2020

Refinancing Opportunities

2021-09-28T16:50:17+00:00January 10th, 2020|Blog, Refinance, Tips & Advice|

What opportunities does refinancing your home mortgage provide? We’ve decided to highlight some of the best reasons to refinance.

Lower Interest Rates

The most common reason to refinance is to get a lower interest rate. If mortgage rates have lowered or your credit has improved, you may want to refinance to have less interest accrue over time.

Lower Monthly Payments

If your new mortgage has the same payoff date as your old mortgage and you refinance for a lower interest rate, your monthly payment may become lower too. A lower payment can also come from extending your payoff date which results in paying less in principle each month.

Pay Your Loan Off Sooner

If you started out with a 30-year loan and you’re refinancing to a 15-year loan, you can end up paying off the balance sooner. Not only are the interest rates on 15-year mortgages typically lower than a 30-year, but you may not have much more of a monthly payment and will save tons on interest.

Remove a Person from the Mortgage

If two people are on a mortgage together and one wishes to be free of the financial responsibility, refinancing can allow that. For example, if two people go through a divorce or a co-signer is no longer needed, refinancing can free the party of the responsibility.

Cancel Mortgage Insurance on the Loan

If you have paid off 20 percent of your loan and wish to get rid of Mortgage Insurance, refinancing is a good option. Also, FHA loans that require Mortgage Insurance throughout the life of the loan can be refinanced to another type of loan that the borrower may be able to apply for.

Before you make any decisions about refinancing, consult with a professional who will make sure you are making the best decision for your financial future.

9 01, 2020

How Millennials Have Changed the Path to Starter Homes

2020-01-09T21:19:43+00:00January 9th, 2020|Blog, Buying a home, General|

In the past, it was common for people in their 20s to buy smaller, less expensive homes that typically needed updates and as they grew their families, increased income or finished remodels that added value to their homes, they would sell them and move on to a larger home.

The average age for home ownership has increased, showing that millennials are saving more money to put down and buying larger, more expensive and luxurious homes. Studies show that millennials are renting longer and buying homes later in life and this process has pretty much ruled out the idea of “starter homes” for an entire generation.

There are multiple factors that contribute to the change in home ownership. The increasing price of real estate, increase of student loan debt and lower wages for full-time employment have been noted as the main reasons to put off buying a home for people ages 25-34.

While the number of homes owned by millennials may be less than in the past, they are saving more for down payments and buying more expensive homes which is a different path than older first-time home buyers.

If you’re wondering whether buying a home would be a good choice for your future, contact one of our loan officers to see what options they can provide for you. If you’re looking for an idea on what the rate your mortgage would be based on your down payment, try our home mortgage calculator.