With a 15 year mortgage the payments are more than that of a 30 year mortgage which means that you are paying down more of the principle balance, and in most cases the interest rate is lower on that payment.Read More
I believe there are still some key benefits in owning a home. The focus for home buyers and home owners will most likely turn to learning more about some of those benefits like:
Building equity monthly - not an option as a renter
Creating cash flow with residential real estate investments - more on that later
Appreciation and future value of the property
Capital Gains - a tax exemption that may be available with the sale of a property that has been occupied by the owner for 2 out of the last 5 years
The tax bracket are the rates at which individuals are taxed in the U.S. Currently, there are still 7 tax brackets; however, according to the CPAjournal.com, the individual tax rates have been reduced with the reduction of the brackets from 10% - 39.6% previously, to 10% - 37% in 2018.Read More
When you own your power, you are able to own your experiences and make them meaningful. This allows you to be a force at your jobs, be a dynamic partner in your relationships, and attract the right people into your life.Read More
Just starting with the basics, the a credit review gives a lender, like myself, an idea of what type of products are available to the family applying for financing. Using the middle FICO score we can begin to determine if qualification is even possible. Mortgage companies use the middle score for qualification, so the top score is great, but it's the middle score that will be used throughout the process.Read More
Conventional loans tend to be the most desirable loan type - not including USDA or VA which allow for 100% financing. So, the question is, why? If both FHA and Conventional loans are good how could one be more advantageous and fiscally beneficial?Read More
It is very easy to create your "home buying team" with the help of family and friends who may be in the business, or by seeking home financing through the firm where you currently do your banking. On the other hand, when it comes to the biggest purchase and the largest investment you're likely to make in your life, convenience and relationships should not be the only factors that weigh in on your decision.Read More
When it comes to financing a home, credit plays a huge role. On a larger scale, when it comes to building wealth and creating financial freedom, having good credit is invaluable.
Focusing specifically on home financing, your credit reflects your ability to responsibly handle credit or your "credit worthiness." Lenders use this information to help determine the type of financing that can be offered and the rate that will be charged to borrow the funds.
If you have limited credit or no credit at all, you may be subject to paying higher rates and fees when seeking financing for homes or cars. Additionally, you may find that your applications for credit may often be denied.
There is good news. There are some fairly easy ways that credit can be built or expanded. Building and repairing credit can often take longer than the time it takes to damage it, but over time and with consistent responsible you can develop credit that will assist you on the road to financial success.
Here are 3 ways to build credit:
Apply for a secured credit card: Secured cards usually require a deposit in order to open the account. Be sure that the secured card for which you apply reports to the credit bureaus. With responsible usage you could see a boost in your score in as little as 6 months.
Become an Authorized User: Leverage the age and credit health of someone else's account. Age of credit accounts is a factor considered by bureaus when scoring credit. This tactic is helpful if you already have credit in your name. This strategy should not be used with an American Express card because they use the date the user was added as the open date.
Apply for a Retail Card: Credit cards from retail stores can help build credit when used responsibly; however, they tend to have much higher fees and rates, so "user be ware."
Nicole Rivers Moore
I am a Certified Mortgage Planning Specialist and Loan Officer with Jersey Mortgage. I educate and empower Home Buyers and Investors so that they can make decisions about home ownership that support their overall financial goals. Servicing NJ, PA, CT, FL, NY. NMLS: 1150526
With today's increased housing demand and the low supply of housing inventory in places like New Jersey, New York, and Pennsylvania (housing supply is averaging about 2-3 months), now may be a good time to consider selling your house.Read More
As the real estate market continues to be strong and housing prices rise in there there has been a quiet re- emergence of 100% financing or "no money down" mortgages in the mortgage market.
Some lenders are feeling more confident in the market and believe that housing prices will continue to rise and are willing to take on the bigger risk that comes with completely financing a home for a borrower who has no "skin in the game" or no equitable interest in the property.Read More
Have you been thinking about making the leap from renter to home owner? Here are some expenses that as a renter, you may never have given thought to, but as a home owner you will want to be very familiar with.
April marks the tip off for the Spring Market for home buyers, and if you're planning to give your landlord the boot it's important to understand the true benefits (i.e. equity, tax deductions), of ownership along with some of the costs. While the benefits of home ownership may outweigh the costs for many making the transition from renting, depending on individual circumstances, often times former renters are surprised not only by the costs during the financing process, but the on going expenses that come with maintenance. Here's a list of some of the costs, beyond the down payment, that you'll want to explore:
The appraisal is required for any future home owners who are seeking home financing in order to purchase their home. Lenders want to ensure that the property being purchased is worth at least the purchase price being paid by the borrower. The cost of the appraisal can range anywhere from $400 - 600, in some areas those costs could be slightly higher The appraisal is usually paid by the borrower prior to closing as part of the loan process. Banks and lenders have different steps when it comes to processing, so check with your loan officer for specifics related to your loan.
2. Home Inspection
The home inspection is not required but is highly recommended by most real estate professionals - especially for first time home buyers. A home inspection, helps to familiarize the potential buyer with the property. The inspection report will highlight needed repairs, structural issues, and other potential problems with the property. During the inspection, the inspector usually educates the prospective home buyers on how to use appliances and systems in the home for example, the heating and cooling system. Pricing for home inspections can start as low as $200.00 for condos and increase for larger properties.
As a renter, the repairs to your living space are usually handled by the landlord or super, but once you've kicked your landlord to the curb, the issues with your property are yours to resolve. With the freedom of doing what you want in a space that you own, comes the responsibility of doing what is required in the space that you own. Since houses range in age and maintenance varies based on the habits of previous owners, there really is no way to estimate these costs; on the other hand, if you own property, you can assume that at some point, someday, something will break or no longer function properly. It's advisable to have savings set aside, separate and apart from any savings for other financial goals, to be used to tackle these issues when they arise.
4. Closing Costs
While some buyers may be able to negotiate a Seller's Concession as part of the purchase price, concessions are not guaranteed and may put you at a disadvantage in Seller's Markets where there are multiple offers from prospective buyers who will make offers and pay their own closing costs. Closing Costs range from an estimated 3-5% of the purchase price of the property, and include things like attorney fees, title, and the cost to register the deed.
5. Home Owner's Insurance
As a renter, you may have opted to invest in Renter's Insurance to protect your personal property from theft or damage, but as a home owner you will be required to have Home Owner's Insurance by the lender in order to get mortgage approval. The cost of Home Owner's insurance varies depending on property type, location, age of the property, etc. Your lender will require payment of 1 year of Home Owner's Insurance at or before closing.
6. Home Owner's Association Fees
Considering the convenience of condo or town home living? Then, you may have to account for the expense of HOA (Home Owner's Association) fees. Many condo and town homes are managed by Associations that make decisions regarding the maintenance of the property, and insuring the property. Owners are usually responsible for the repair and maintenance of their units from "the walls inside" leaving outdoor and common area maintenance to be managed by vendors hired by the association or the management company selected by the association. The dues paid to the Association are allocated to repairs, regular maintenance, and other expenses related to the entire condo or town home community.
Included in the monthly mortgage payment for home owners are property taxes. As a renter you are more than likely paying the taxes on behalf of the landlord, but not reaping the benefits, since portions of the property taxes paid can be deducted at tax time (speak to your tax preparer or CPA for details).
Unless you've previously rented an entire home, you've probably only been responsible for a portion of the utilities as a renter. On the contrary, home owners are responsible for payment of all utilities including, heat, hot water, gas, oil, electric.
Have you made the jump from renting to owning? Share your experience. Comment below.
As the 2017 Spring Market heats up (according to Zillow the best day of the year to list a home on average is May 9th), borrowers may be wondering about some of the pros and cons of purchasing as a couple or with a co-borrower who will also occupy the property.
For the most part the pre-qualification and mortgage process are similar to that of a single borrower, but with an additional borrower questions do arise regarding the effects credit, income calculations, and savings may have.
Let's explore some of the most FAQs that couples often have when contemplating a mortgage:
My partner/spouse doesn't have good credit. Can we still apply?
Yes. Unless the exact FICO scores for each borrower are known, it doesn't hurt for both borrowers to get pre-qualified. Your loan officer will pull credit for each borrower and determine based on the scores if both borrowers meet the credit qualifications. If both borrowers are very much aware of their scores it might be less advantageous for both potential borrower to apply - especially if the individual with the blemished credit is in the midst of credit repair.
My partner/spouse has lower FICO scores than I do. Does that matter?
Yes. When lenders pull credit they pull the scores from all three credit bureaus and use the middle score to qualify the borrower based on the loan type. When there are multiple borrowers the lowest, middle score of all borrowers is used to not only used to qualify all the borrowers, but also used to price out the interest rate and depending on the loan - the mortgage insurance.
If my partner/spouse is not applying for mortgage can he/she be on the deed?
Yes. For married couples in some states, the spouse is automatically added to the deed because of 'marital asset state laws' that apply. Your loan officer or attorney will be able to advise you on the laws in your state. None married couples or single borrowers can add individuals to the deed as desired either during the mortgage process or after by visiting the Municipal Offices where the deed is registered.
My partner/spouse is not going on the mortgage can I still use their income to qualify?
No. If a partner or spouse is not going on the mortgage - meaning that individuals credit, and debts have not been included and evaluated as part of the application and qualification process, the monthly income of that individual may not be used to help the main borrower qualify for the mortgage.
Can my spouse/partner and I use funds in our joint bank accounts for the down payment and closing costs even if we both aren't able to qualify for the mortgage?
Yes. As long as both individuals give written permission allowing both borrowers access to the funds. Please note, the guidelines regarding large deposits and sourcing of gift funds associated with the loan type, would still apply.
Does my spouse/partner need to be employed in order to be a co-borrower on the mortgage?
No. As long as one borrower has income that can be used to qualify for the mortgage. An additional borrower who has qualifying credit, but no or limited income, can be added on to the loan.
Please Note: This article is provided for illustrative purposes only. It is not an offer or commitment to lend money, and it is not an advertisement for a specific mortgage or a specific interest rate. Contact me to run the numbers for your situation.
You've found the perfect home for you and your family, you've worked with your realtor to negotiate a great deal. Now, with the property under contract and your lender working diligently on your loan, you can just sit back, relax, and wait, right?
While your loan officer is responsible for preparing, processing and ensuring your loan is reviewed and meets conditions for approval, the participation and cooperation of the borrower is imperative to getting an approved loan to the closing table.
Delays in closings are sometimes a result of delays on the part of the borrower and/or the lender. As the borrower, here are 3 things you can do to help keep your loan on track:
Check Your Email / Mail Daily - while a lender is may call you to give you a heads up about the need for additional documentation or action to be taken by the borrower, email is another way a loan officer may send documents or update you on the status of your loan. Speak to you lender in the early stages about how they communicate status reports, and requests, and how your preferred method of of communication, so that you and your lender are on the same page in regards to communication.
Gather All Pertinent Documents Early - Gather and keep on hand all pertinent documents related to the mortgage. This will not only help you stay organized but allow you to retain records of what has already been submitted and reviewed by the lender.
Quickly Submit Requests - throughout the mortgage process, your loan officer will ask for specific documentation or supplemental information to satisfy requests of the underwriter. A lot of time can be saved if these requests are not only received quickly (see #1), but are responded to quickly as well. Leisurely responses to lender requests can lead to closing delays.