themarycoxteam.wordpress.com - Loan

Show Them You’re Serious

June and July are the busiest home sale months of the year. When inventory is in short supply and you may be competing with other offers, it is important to show the seller you’re serious. Make your offer look as good as possible because you may not get the chance to make or accept a counter-offer.

Put yourself in the seller’s shoes. Your home has just gone on the market. There is lots of activity and suddenly, there is more than one offer to purchase. The seller’s first consideration may be to accept the highest offer but there are many other things to consider like closing dates, closing costs, possible repairs, contingencies and of course, the ability of the borrower to get a loan.

Offer a fair price for the property in your initial purchase…

553 Views, 0 Comments

One Loan for Purchase & Renovations

The FNMA HomeStyle conventional mortgage allows a buyer to purchase a home that needs renovations and include them in the financing. This facilitates the purchase of the home and the renovations in one loan rather than getting a separate second mortgage or home equity line of credit.The combination of these loans should save closing costs as well as interest rates which would typically be higher on a home improvement loan.

The borrower will need to have an itemized, written bid from a contractor covering the scope of the improvements. Any type of renovation or repair is eligible if it is a permanent part of the property. Improvements must be completed within 12 months from the date the mortgage loan is delivered.

• 15 and 30-year fixed rate and…

551 Views, 0 Comments

Auto Pay Your Mortgage Payment

In the time that it takes to write one check, you can set it up with your bank and never have to do it again. You won’t have to write checks, envelopes or buy stamps anymore. You’ll save time, money and benefit in other ways too.

1. Never be late … avoid late fees and protect your credit
2. Schedule additional principal contributions monthly to save interest, build equity and shorten the mortgage term.
   An extra $200 a month applied to the principal on a $200,000 mortgage at 4.5% for 30 years will result in shortening the loan by 8.5 years. If the loan was paid to term, it would save $52,977 in interest. Use the Equity Accelerator to see how much you can save.
3. It’s convenient … by doing it online with your bank, you’ll have a centralized history…

637 Views, 0 Comments

More Than Just an Address

For a short time after the housing crisis a decade ago, some homeowners thought the value of home is a place to live rather than an investment. A home certainly has an appeal as a place to call your own, raise your family, share with your friends and feel safe and secure. It can be more than an address; it can also be one of the largest investments homeowners have.

Most mortgages apply a portion of the payment toward the principal amount owed in order to pay off the loan by the end of the term. This acts like a forced savings for the homeowner because as the loan is reduced, the equity grows which increases their net worth.

The other contributor to equity is appreciation. Most homeowners don’t realize the increase in value until they sell the…

1035 Views, 0 Comments

Depends If You Can Afford It

Affordability, stability and flexibility are the three reasons homebuyers overwhelmingly choose a 30-year term. The payments are lower, easier to qualify for the mortgage and they can always make additional principal contributions.

However, for those who can afford a higher payment and commit to the 15-year term, there are three additional reasons: lower mortgage interest rate, build equity faster and retire the debt sooner.

The 30-year, fixed-rate mortgage is the loan of choice for first-time buyers who are more likely to use a minimum down payment and are concerned with affordable payments. For a more experienced buyer who doesn’t mind and can qualify making larger payments, there are some advantages.

Consider a $200,000 mortgage at 30 year…

731 Views, 0 Comments

Is a Home Equity Loan an Option?

Here's the scenario: you have a project and need to borrow some money, but you want to do it in the most economic manner. You've got a low rate on your existing first mortgage and don't want to do a cash-out refinance and pay a higher rate. Is a home equity loan an option?

Prior to 2018, homeowners could have up to $100,000 of home equity debt and deduct the interest on their personal tax return. The Tax Cuts and Jobs Act of 2017 eliminated the home equity deduction unless the money is used for capital improvements.

Regardless of the deductibility, lenders will still loan money to owners who have equity in their home and good credit. The most common reasons people borrow against their home equity are:

• Consolidate debt with higher interest…

668 Views, 0 Comments

Eliminate FHA Mortgage Insurance

Mortgage insurance premium can add almost $200 to the payment on a $265,000 FHA mortgage. The decision to get an FHA loan may have been the lower down payment requirement or the lower credit score levels, but now that you have the loan, is it possible to eliminate it?

Mortgage Insurance Premium protects lenders in case of a borrower's default and is required on FHA loans. The Up-Front MIP is currently 1.75% of the base loan amount and paid at the time of closing. Annual MIP for loans with greater than 95% loan-to-value is .85% per year.

For loans with FHA case numbers assigned before June 3, 2013, when the loan is paid down to 78% of the original loan amount, the MIP can be cancelled. The borrower may need to contact the current servicer.

…

627 Views, 0 Comments

HELOCs Becoming More Expensive

In September, the Federal Reserve raised interest rates for the third time in 2018 and they’re expected to go up one more time this year and three times next year. If you have a Home Equity Line of Credit, HELOC, you’re paying more to use that money and it is going to become more expensive.

It may make sense to refinance your home and consolidate the balance of your HELOC to lock in a lower mortgage rate. Most lenders require that the combination of these loans should not exceed 80% of the home’s fair market value and that you have good credit and adequate income to support the payment.

A HELOC is a first or second mortgage that allows the borrower to withdraw money as needed, up to the line of credit provided by the lender. A draw period is…

725 Views, 0 Comments

Mortgage Free

It may be an all too common belief that a person will have a house payment and a car payment for the rest of their lives. However, with a plan and some determination, you can be mortgage free.

Planning for retirement is obviously important and many times, an activity plagued by procrastination. Some homeowners’ goal is to have their home paid for by retirement, so they won’t have payments. It makes sense to eliminate a sizable recurring expense before they quit working.

By making regular principal contributions in addition to the payments, the debt can be eliminated by the target retirement date.

Assume a homeowner refinanced their $300,000 mortgage at 4% last year for 30 years with the first payment due on May 1, 2017. With normal…

767 Views, 0 Comments

Rising Rates Affect the Cost Too

Mortgage rates have risen 0.5% in 2018 on 30-year and 15-year fixed rate mortgages and experts expect them to continue to increase. Buyers paying attention to the market understand the relationship that inventory has on pricing; when the supply is low, the price usually goes up. Rising interest rates can affect the cost of homes also.

When interest rates go up, fewer people can afford homes. Lower numbers of buyers can affect the demand, which could cause prices of homes to come down. The question is how much do the interest rates have to go up to affect demand?

As the rates gradually go up, the affect may not be noticeable at all except for the fact that the payments for the buyer have increased.

A ½% change in interest is approximately equal to…

828 Views, 0 Comments