Forget About the Bank of Mom and Dad — Here’s How You Can Save Your Own Down Payment

Forget About the Bank of Mom and Dad -- Here's How You Can Save Your Own Down PaymentAre you considering buying a home for the first time? For some, it can seem nearly impossible to come up with the funds for the down payment. Fortunately, there are a few ways that you can save a little over time and not have to borrow from the “Bank of Mom and Dad”. If you’re looking to invest in a home in the short-term and are looking for solutions to save up, here are some tips on how to get to your down payment amount more quickly.

Create A Budget

Most people don’t like the idea of a budget, but few things are going to help you reach your financial goals like having one. Instead of sticking your head in the sand, add the numbers up and see approximately how much you’re spending each month. It may not seem like it, but getting a sense of what your monthly costs are can help you get a good idea of your overall financial picture and how much you really should be spending.

Get An Extra Job

Whether you want to do a freelance job on the side or get some part-time work, there are few things that are going to help you achieve your goal of home ownership like a little extra money. It may seem like a drag to go to a part-time gig from your full-time job, but it can be well worth it when you begin to see your bank account fill up. It’s just important that your part-time gig pays enough that it’s going to make up for the extra time you’ll be giving up.

Trim The Excess Costs

Now that you’ve got some extra money coming in and you’ve crafted a budget, you’re certainly on the right track. However, indulging in life’s little luxuries can eat away at your savings. While you’ll want to keep a little aside for meals out or entertainment, if you have other sizeable costs you’ll want to eliminate these in order to save for your greater goal.

It can take some time to save up for a down payment, but you may be able to avoid borrowing money if you bring in more each month and get rid of excess costs. For more information, contact your trusted mortgage professional and we’ll be happy to help.

Mortgage Tips: Answers to 4 Common Questions About Reverse Mortgages

Mortgage Tips: Answers to 4 Common Questions About Reverse MortgagesThere are many mortgage products on the market that work for all different kinds of homebuyers, but many people have not heard about reverse mortgages and how they can benefit their situation. If you’re curious about this type of mortgage and want to know more, here are some questions that will get you on the road to understanding the ins-and-outs of this product.

What’s A Reverse Mortgage?

The reverse mortgage was created in the wake of the 2008 recession and is commonly known as HECM, the Home Equity Conversion Mortgage for Purchase. While this mortgage option is beneficial for those who want to use the equity in their home and defer their monthly payments, it’s not a good choice for those who are planning to move in the short-term future.

Who Can Qualify?

Since a reverse mortgage allows the homeowner to tap into the equity that they’ve already accumulated in their home, they need to have a high amount of their mortgage paid off. They must also be 62 years of age or older in order to qualify. In addition, they should have a solid financial history so lenders will be assured they have the ability to pay insurance and property taxes.

What’s Required To Apply?

Like all mortgage products, a reverse mortgage is a type of loan so you’ll need to apply for it. In order to do this, you’ll need proper identification, address verification and proof that you’ve met with a professional to ensure this is the right choice for you. In addition, you’ll need to prove that you can make the monthly insurance and property tax payments and you’ll have to provide financial documentation to ensure that you’re a good credit risk.

Should I Choose A Reverse Mortgage?

A reverse mortgage can be beneficial if you want to forego monthly payments, but it’s worth knowing that this mortgage will be payable in the event that you decide to sell the home or pass away. It’s also important to be aware that interest can accrue on the home since you’ll be deferring monthly payments. While this may work for you, it’s important to talk with a mortgage professional before making a final decision.

A reverse mortgage can be an option for those older than 62, but it’s important to be aware of what it entails and what it can do for you before choosing this product. If you’re currently considering your mortgage options, contact your trusted mortgage professionals for more information.

Recently Lost Your Job? 3 Tips for Managing Your Mortgage When You’re Out of Work

Recently Lose Your Job? 3 Tips for Managing Your Mortgage When You're Out of WorkThe financial responsibility of a monthly mortgage payment can be stressful on its own, but you may be even more concerned about your home investment if you’ve recently lost your job. Fortunately, there are some things you can do and places you can turn if you’re not yet certain where your next paycheck will come from. If you’re struggling with newfound unemployment, here are some important steps to take.

Shake The Piggy Bank

Most people struggle to save and that means they don’t necessarily want to dip into savings when it comes to financial difficulties. Unfortunately, if a job does not appear quickly, you may have to rely on the money you’ve accrued to help you out. It’s important to take a look at how much savings you have and determine how long it will last. Instead of just calculating your monthly payment and leaving it at that, be realistic and include all of your applicable living expenses to see how much leeway you have.

Reach Out To Your Lender

It may seem like mortgage lenders will not be concerned with your plight, but it can be to your benefit to reach out as soon as you think there might be a lapse in payment. It’s possible your lender may be able to offer you some type of payment plan if they’re provided with a timeframe for payment. Plus, they will be impressed with your honesty and quick communication. If you have a solid credit history and have made all of your payments on time, contacting your lender may buy you a bit more time.

Contact Your Government Agency

If you’ve used a government agency to secure your mortgage, there’s a good chance there may be a program available that will assist you in getting through this financial time. Whether you’ve worked directly with the Federal Housing Administration (FHA) or Fannie Mae and Freddie Mac, you may be able to find an opportunity in your unemployment that will cover your loan amount for you. It’s just important to be aware of any financial consequences once you’re back on your feet.

It can be very stressful to pay down your mortgage while you’re out of work, but you may be able to get through it by being aware of your financial picture and communicating with your lender. If you’re currently struggling with your mortgage, your trusted mortgage professionals for more information.

Understanding Your FICO Score and Why Small Credit Mistakes Can Cause Huge Headaches

Understanding Your FICO Score and Why Small Credit Mistakes Can Cause Huge HeadachesMany people all over the world are dealing with issues involving debt or poor credit history, but most aren’t necessarily aware of what exactly makes up their credit score. Unfortunately, it might seem like it’s the big stuff that counts when it comes to credit, but little things can have a significant impact on your financial health. If you’re looking to improve your understanding and your finances, here’s what you need to know about small mistakes and your FICO score.

Making Late Payments

The due date on your bills might seem like an advisory, but whether we’re talking about a student loan, a credit card payment or your telephone bill, late payments can add up. Your payment history constitutes 35% of your total FICO score, which means that even a couple of late payments can have a marked impact on your overall credit. Instead of leaving this to chance, set aside a day each month before your bills are due to ensure they’re all paid off.

Applying For New Credit

It’s often the case that a store will offer special deals if you sign up for their own in-house credit card, but this can cost you big since the amounts you owe make up 30% of your credit score. Also, because lenders will often assume that you’ve run out of credit if you apply for a new card, applying for new credit can be a red mark against your FICO score. It’s also important to realize that closing off an old, unused credit card can actually bump up your balance so you may want to keep them active temporarily.

Forgetting Credit Altogether

It might seem like the best possible option for avoiding credit issues is to avoid using credit altogether, but your credit history constitutes 15% of your FICO score. This means that you should have at least one credit card in your possession so that you can use it to build a history of lending success. While you won’t want to use more than 30% of your credit limit, it’s important to show proven experience in paying back your lenders.

Many people think that bad credit is the result of overspending and huge debt amounts, but your FICO score is largely determined by your payment history and your available credit. If you’re trying to improve your financial outlook in preparation for buying a home, contact one of our mortgage professionals for more information.

With Mortgage Rates This Low, Should You Dive In? 3 Reasons Why Now Might Be the Time

With Mortgage Rates This Low, Should You Lock In? 3 Reasons Why Now Might Be the TimeWhether you’ve just finished school or are about to start a family, investing in a home can be one of the biggest financial decisions of your life. But as you’ll soon discover, there are a number of considerations you’ll need to make. It can be difficult to know whether to get a short-term or long-term mortgage, or how long of an amortization period you’ll need. Read on below for three questions that will help you to make your decision, as now is the best time to dive into the market.

Do You Have A Down Payment?

There are a lot of numbers mentioned when it comes to the down payment, from 5% to cash only offers, but 20% is the ideal percentage to put down when it comes to buying a home. Because putting 20% down will enable you to avoid having to pay Private Mortgage Insurance (PMI), you’ll be able to lower your costs of home ownership over time. While 20% isn’t the be-all-end-all if you’re really ready to hit the market, it’s worth re-tooling your budget to save up.

Will You Struggle To Make Ends Meet?

Lower mortgage rates can certainly improve your overall outlook for investing in a home, but buying a home can be financially debilitating for many people. While you’ll be required to make your monthly mortgage payment, there will also be insurance costs, property taxes, home maintenance and other associated fees that add up. If you feel it’s going to be a huge financial risk to sustain home ownership, it may be worth sitting down with a mortgage professional to go over the numbers.

Are You Ready For Ownership?

Home ownership is often considered a rite of passage as one gets older, but it’s important to determine how a new home will fit into your current lifestyle. The costs of home ownership are usually higher than renting and you’ll have to take care of things like the yard and general home maintenance yourself. It might not be the best time if a home strongly imposes on your lifestyle, but if you’re looking forward to domestic duties, it can be a step in the right direction.

Mortgage rates have been hovering relatively low for a few years, but it’s important to know that home ownership is right for you before moving forward. If you’re currently contemplating a home in your area, contact your trusted mortgage professional for more information.

Budgeting 101: How to Plan Your Budget Around Your Monthly Mortgage Payments

Budgeting 101: How to Plan Your Budget Around Your Monthly Mortgage PaymentsIf you’ve decided to invest in a home, you might be wondering how to make all of the expenses work. From the groceries to your mode of transportation, all of those little things can quickly add up. Fortunately, it’s easy enough to ensure you have the money each month by carefully calculating your expenses and ensuring there’s a little wiggle room in case of leaner times. Here are the details on how to begin with your mortgage budgeting plan.

Calculate Your Monthly Payment

Whether you’ve just purchased a home or are trying to determine if your dream home is right for you, it’s very important to establish approximately what your monthly payment will be. It’s critical to have a mortgage cost that is sustainable, so add up your mortgage payment, home insurance, property taxes and any other required payments. While this should give you a ballpark figure, you’ll want to ensure you add a bit of extra room in case your taxes or interest rate should rise.

Determine Your Necessary Expenses

It’s easy to be idealistic and assume that you’ll be able to come up with the money for your dream home, but it’s very important to keep your feet on the ground and be realistic about your budget. Once you’ve determined your payment, calculate the average amount for your utilities, transportation costs and any debt you have. You’ll also want to add in groceries, toiletries, and extras like gym passes, meals or entertainment. By adding up your monthly payment and your expenses, you should be able to determine if a house is realistic for you.

Leave A Little Extra

If your expenses and your home costs add up to balance out, that’s great, but don’t forget to leave a little extra room in your budget for the other things you’ll need. While you’ll want to ensure you’re saving money for the future, if you have any short-term life goals like a travel destination or going back to school you’ll need to save for those. Also, the unexpected can occur at any time so you’ll want to have some cash stashed away for the times when the car breaks down or there’s a medical issue.

When investing in a home, you’ll need to feel confident that you can make your monthly mortgage payment and still have enough left over to pay your expenses and savings for down the road. If you’re currently preparing to buy, contact your trusted mortgage professionals for more information.

A Quick Look at Reverse Mortgages: The Golden Ticket to Enjoying Your Golden Years

A Quick Look at Reverse Mortgages: The Golden Ticket to Enjoying Your Golden YearsWith a high volume of millennials set to enter the real estate market this year, it may seem like all the available options out there were created to snag new home buyers. However, there are products available on the market that cater to those who are in their golden years too. If you’re older than 62 and are currently weighing the options with your mortgage, here are the basics on reverse mortgages and why they might positively benefit you.

The Scoop On Reverse Mortgages

It may seem like this mortgage option hasn’t been around that long, but it was actually created in 2009 following the recession. Known as the Home Equity Conversion Mortgage for Purchase (HECM), this product is specifically directed at those who are retired or close to retirement that want to tap into the equity in their home. This option is only beneficial for those who plan on staying in their home long term, the loan is paid off at the time the homeowner moves out or passes on.

What Are The Requirements?

Because a reverse mortgage enables the homeowner to tap into the equity they’ve already paid into their home, there are many requirements involved in using this type of mortgage product. In addition to being 62 or older, the homeowner will have to have a high amount of equity in their home. They will also have to prove that they have the financial ability to make their monthly payments, in addition to being able to pay the insurance and property taxes on the property. The homeowner will also have to comply with the requirements set out by the Federal Housing Administration.

Is It The Right Choice?

Like any mortgage product, it’s important to determine before choosing this mortgage product that it’s right for you. While a reverse mortgage gives the benefit of providing access to cash and allows you to put your money elsewhere, it can end up costing more down the road since interest will continue to accrue on the principal amount owing. Before diving in, ensure that you do the calculations and consult with a professional to ensure it’s going to be a financial benefit in the end.

A reverse mortgage can be a great means of accessing cash for homeowners who are 62 or older, but it’s important to weigh all the financial aspects before making a final decision. If you’re currently looking into your mortgage options, contact your trusted mortgage professionals for more information.

Want a Quick Mortgage Approval? Come Prepared With These 5 Key Items

Want a Quick Mortgage Approval? Come Prepared With These 5 Key ItemsWhether you’re finally prepared to get into the real estate market or you want to know how you can make a deal quick, there are a few necessary documents you’ll need to prove your reliability to a mortgage lender. If you’re wondering what will be involved in getting the application approval you’re looking for, here are the documents you’ll want to have on hand when the time comes.

Previous Tax Returns

In order to ensure the earnings information you’ve provided to the lender, you’ll have to have your tax returns for the two years prior to your mortgage application. In addition, you may also be required to provide your W-2s as backup documentation.

Bank Statements

To make sure you’re a solid bet who will be able to make your down payment, you’ll need to present bank statements to ensure you have a cushion in the case that interest rates increase. If you do get money gifted to you for your down payment, you’ll need a letter to prove you’re not indebted to the provider.

Recent Paystubs

It can be much more difficult to get approved for a mortgage if you have a patchy work history or happen to be self-employed, so you’ll need 2 months of recent pay stubs to prove consistent employment. The paystubs provided should also be an accurate reflection of the salary you’ve provided on your application to ensure no discrepancies.

Investment Statements

It’s certainly a good sign to the lender if you have a healthy balance in your checking and savings accounts, but you’ll also need to provide any statements for mutual funds and other investments. While they may not be necessary to prove financial soundness, they will help with approval if you have a lot of money squirreled away.

A Listing Of Debts

While it may be the least popular of the pile, a lender will also want to know about any outstanding debts like auto loans, credit card payments or student loans. It may be tempting to forego these documents, but it will give the lender a good sense of your honesty and your ability to manage your mortgage.

Mortgage approval may seem like a time-consuming process with no certain end, but by having the appropriate documentation and being upfront about your debts, you may be able to speed up the timeframe. If you’re currently perusing your mortgage options, contact one of our mortgage professionals for the inside scoop.

Understanding How Mortgage Calculators Work and When to Make Use of One

Understanding How Mortgage Calculators Work and When to Make Use of OneInvesting in a home is a big financial decision, and along with the decision to buy is the question of how much mortgage you’ll be able to afford. While your debt-to-income ratio can be helpful in determining the range for your mortgage amount, a mortgage calculator can be a beneficial tool in coming to a potential price. If you’re curious about how and if this financial tool can benefit you, here are the details about using a mortgage calculator.

What Does It Do?

It’s very important to ensure that you can afford your mortgage before signing on the dotted line, and a mortgage calculator can assist with this. Most calculators utilize the principal amount of the loan, the interest rate and the amortization period in order to find a monthly payment that is foreseeable for you. While a debt-to-income ratio and the advice of a mortgage professional can be helpful, a calculator can be a quick determination of the overall cost involved.

How Accurate Is It?

Some mortgage calculators can utilize a pretty simple formula to come up with an estimate, but some are more complex and can calculate PMI, home insurance, and even property tax to arrive at a sum. The most accurate calculators will utilize the principal, interest, taxes and home insurance in order to determine an estimate that is feasible for you. However, it’s important to understand that you’ll need to enter the information accurately and leave out as little as possible, as this can have a dramatic impact on the calculation’s reliability.

Should You Use One?

A mortgage calculator can be beneficial in providing you with an estimate, but it should not be the be-all-end-all when it comes to making the final decision. It’s important to consider your current lifestyle and your future plans to ensure that your monthly payment will remain do-able down the road. While a calculator is a good place to begin, it’s worth consulting with a lender to get an idea of how much home you can afford. Since they’ll be required to provide a GFE with the fees disclosed, this will be the best means of understanding the costs.

A mortgage calculator can be a good means of estimating your house-buying ability, but it’s important to get the advice of a lender before making the big decision. If you’re currently in the market for a new home, contact your trusted mortgage professionals for more information.

3 Ways to Earn Some Spare Cash to Help Pay Your Mortgage Down Faster

3 Ways to Earn Some Spare Cash to Help Pay Your Mortgage Down FasterA mortgage is one of the most expensive purchases you’ll make in your life, and for many, the idea of being indebted to it for years can seem like quite a burden. However, while you won’t necessarily be able to pay off your home with instant savings, there are ways that you can pay it down more quickly. If you’re wondering how to drum up some extra money for your mortgage, you may want to consider the following options.

Refinance Your Mortgage

One of the best ways to get a hold of extra funds is by lowering the amount you owe, and refinancing can be a way to do this. Since the interest rate on your mortgage adds up to additional money spent over time, getting a lower rate can easily minimize your monthly mortgage payment. It’s just important to be aware of all the costs associated with refinancing beforehand so that you can be sure the choice will result in money saved and an improved financial outlook.

Review Your Budget

Budget may be a dirty word for many people, but when it comes to scrimping for your home, it may be one of the best weapons you have in paying down your mortgage. Instead of looking elsewhere, sit down and review your budget to ensure your expenditures aren’t out of line with your income. It may seem too good to be true but, in all likelihood, you’ll be able to find a few places you can cut back for a little extra money each month.

Get A Second Job

It may not be the best option if you’re already working hard at your day job, but getting a job on the side can end up being a great way to find extra cash without limiting your lifestyle. Whether you decide to work in a restaurant or pick up a freelance gig on the side, there are plenty of options that may quickly add up to a more-rapidly reduced principal. You may even want to find something you already enjoy so it feels less like work.

The idea of paying down your home more quickly may seem out of reach, but by re-considering your budget and considering other employment, you may be able to hustle up some additional funds for your investment. If you’re preparing for home ownership and are considering your mortgage options, contact one of our mortgage professionals for more information.