by Jeff Pittman | Jul 15, 2014 | Buyers
Before you get a mortgage loan you need to know the basics of what it actually is, that’s why we put together this crash course in the anatomy of a mortgage loan. We’re going to cover the basic definitions of some common terms you’ll run into, the actual break down of what you pay each month for your mortgage and then go into some of the most popular types of mortgages for homebuyers. Terms and Definitions When you are trying to secure a mortgage loan from a lender these are the mortgage components you’ll need to know about: Interest rates – An interest rate is the percentage of your loan amount the lender charges you to borrow the money to buy your house. Interest rates are based on: market conditions, your credit score, the size of your down payment and the type of mortgage you get. Appraisal – This is a written report by an expert that pin points a value for your property based on comparable homes in the area, and it’s characteristics. You will need to get an appraisal on your new home that will determine whether or not your property is worth the amount of the loan you’re trying to get from the bank. Discount points –One point equals 1% of your mortgage amount. If you qualify then you have the option to pay one or more points in order to lower your interest rate. These points are commonly tax deductable. Debt–to-income ratio – A formula lenders use to determine the loan amount you qualify for. How much income you have vs. how much you’re already paying in current debts...
by Jeff Pittman | Jul 12, 2014 | Weekly Quote
“It’s never too late to become what you might have been.” – George Eliot
by Jeff Pittman | Jul 7, 2014 | Buyers
If you’re a first-time home buyer then one of big decisions (and the first) you will need to make is what kind of mortgage you want. Before choosing things like fixed-rates or ARMs, you need to decide if you will get a conventional or FHA loan. What’s the difference? Well let’s break it down for you. What is an FHA Loan? An FHA loan is a mortgage loan that is backed or insured by the FHA (Federal Housing Administration) which is a government agency. The way it works is the federal government insures loans for approved lenders to reduce the risk of loss if a homeowner/ borrower defaults on their mortgage. FHA loans are easier to get than other loans because they are available for buyers with less than perfect credit and there are low down payment options. What is a Conventional Loan? A conventional loan is everything else. A conventional loan is not insured by the federal government and also known as a conforming mortgage. These mortgages adhere to the guidelines set by Fannie Mae and Freddie Mac and can have either a fixed or adjustable rate. Conventional home loans typically require a larger down payment however they differ from lender to lender. Recently there have been regulation changes geared at helping first-time buyers more easily obtain mortgages as well which is good news for buyers interested in conventional loans. Renee Wiginton, experienced financial advisor with First Team, helped put together this helpful chart for home buyers and their agents to better understand the differences in price between FHA and conventional loans. Renee works with real estate agents and their buyers...
by Jeff Pittman | Jul 5, 2014 | Weekly Quote
“No person was ever honored for what he received. Honor has been the reward for what he gave.” – Calvin Coolidge
by Jeff Pittman | Jul 3, 2014 | Buyers
Financing your home purchase is the most important part of buying a home. The mortgage you decide on will influence your financial life for many years to come. Before looking into your mortgaging options, assess your finances. How much can you put down as a deposit? How much can you afford to pay monthly? Take into consideration job stability, taxes, insurance, and utilities. Work with your agent to make sure you are taking a realistic approach toward your finances. Once you know your budget, it’s time to decide on a mortgage that works with you. Below are 6 common mortgage plans for home buyers. 1. Fixed Rate Mortgage This mortgage is the most popular among home buyers because of its predictability. You have the option of 10-, 15-, 20-, or 30-year fixed rate mortgages, and sometimes even longer, with 30 years being the most common time frame. A fixed rate mortgage is ideal for home buyers with unchanging incomes. This mortgage can become frustrating when interest drop lower than the fixed rate but can feel very gratifying when they spike higher than the fixed rate. 2. Federal Housing Administration Loan Commonly known as an FHA loan, this mortgage option is ideal for first time home buyers because it only requires a 3.5% down payment. The loan is insured through mortgage insurance by the government and is therefore the application is more forgiving of past credit mistakes than other mortgage options. Most people will qualify for this loan. The only downside of the loan is that it is not very attractive to sellers because of the low down payment. 3....
