Tips To Pay Off Your Loan Faster

Tips to Pay off Your Loan Faster 

For generations, homeowners would buy a home for life. Working over the years to make the payments and celebrating the end of the 30-year mortgage were great milestones in the family. Today, few homebuyers expect to be in their homes for longer than 7 years on average. Paying off a 30-year mortgage seems like an impossible task. Fortunately, there are great ways to pay off your loan which do not involve time. Here are a few tips for paying off your mortgage loan faster. 

•  Biweekly Payments – Work with your lender to determine how they handle biweekly payments. If processed immediately, you can save 8 years of payments on a 30-year loan. 

• Extra Payments – By making just one extra payment each year, you can pay off your loan 11 years earlier. 

• Refinance to 15 years – There are great interest rates available for mortgage loans. Consider a 15-year mortgage. 

•  Principal Reduction – Watch for ways to add to your monthly payment a little at a time. 

When possible, increase the principal payment you make. Paying off your mortgage builds wealth. Consider your life goals, including retirement. A 30-year loan taken out at 37 years old will not be complete until 67 – retirement age. The loan needs to be part of the overall financial plan from the beginning and making a payoff a priority with a few simple steps can add up to huge savings in interest which can then be used for better investments.

Your Home - Your Neighborhood - My Priority

Down payments Explained

A down payment is the amount of cash a home buyer puts toward the price of a new home. It accomplishes a few things; first it reduces the amount of money you need to borrow and it reduces the risk the lender takes in loaning the money. By reducing the risk, the borrower will typically get a better interest rate on the loan and increase the amount of home they can buy.

 How Large a Down Payment Do You Need?
 The amount of down payment needed depends on the type of the loan, the lender and the property price itself. While most of the 0% down home loans of the last decade are gone, Veterans can still purchase a home loan with no down payment. Other programs include FHA loans with as little as 3.5% down. With a government backed loan like a FHA mortgage needing the minimum 3.5% for a $200,000 home, you will need to save $7,000. Conventional loans typically require at least 5% down payment, but some can be as low as 3.5%. If you decide on a Conventional loan say you are buying a home for $200,000, in this case you will need $10,000 to secure a home loan. The USDA also has a zero-down payment loan guarantee program for specific rural areas. 

 Is it Better to Make a Larger Down Payment?

 In addition to the down payment, buying a home also requires cash for closing costs and some reserve savings to guard against unexpected financial concerns. One thing to remember though is that any financing with less than 20% down will require private mortgage insurance – a monthly payment which protects the lender in the event of default. The best amount of down payment should be determined in consultation with your lender and your tax or financial advisor, but the quick answer is “it depends.” By working with a trusted lender, explore your options and you will make the best decision for your needs.

How is a down payment on a home calculated? 

The down payment is a portion of the total sales price of your home, which you give to the home's seller. The rest of the payment to the seller comes from your mortgage. Down payments are expressed as percentages. The main reason some down payments can be so expensive is because lenders typically require them before giving approval for the loan. The larger the down payment, the lower your monthly mortgage payment will be.

It is important to check around to make sure you are getting the best rate available for you. Contact me to help you start the process, I can get you in touch with exceptional lenders that will go the extra mile to help you buy the home you've always wanted. 

Streamlining the Lending Process

Streamlining the Lnding Process

If you are starting a search for a new home, most likely you’ll need to get a home loan. The process might seem overwhelming if you haven’t obtained a loan in a long time; even more so for first time home buyers. The lending process doesn’t need to be difficult and by being prepared, you can streamline the process and ensure you are able to get the best loan for your needs.  

Choose a Lender
 The first step is to find a lender. You might start at your personal bank or credit union. Another good source for referrals is your agent or family and friends. The lender should have access to a variety of programs as well as the government options: VA and FHA programs.  

Be Prepared
Before you meet with the lender, gather the information you will need. Generally, you will need to provide current pay stubs, W2s, bank account statements and the last 2 years of your tax returns. If you have been divorced and/or have child support obligations, bring the final court document with you as well. 

 Understand Your Limits
 Typically, you will be able to borrow up to 31% of your gross monthly income. In addition, the lender will require that you have no more than a total monthly debt of 36% of your gross income. Be prepared to disclose all your debt, even if it does not appear on your credit report. Your loan officer is your advocate and there to help you succeed. 

 Don’t Make Any Credit Changes
 Once you’ve started the loan process, it’s critical that you make no changes to your credit. Postpone any big purchase, do not apply for new credit of any kind and do not pay off any credit cards. It’s also important not to change jobs during the approval process, even if it’s for more money. Before you do anything, talk to your lender.  Getting a home loan is not as difficult as it was a few years ago, but it’s important to plan early and do the right things. Once you make the decision to buy a home, speak to a lender immediately and then follow their advice and you’ll find the loan process simple to manage.

Currently, interest rates are running to the lowest levels in nearly two years. It's been another awesome week for rates. 
Home Mortgage Rates are now all sitting below 4%, Two weeks in a row in fact. If you have been waiting to own a home while locking in at a low rate now is the time to think about calling your lender and your agent. 

Questions about rates, home sales, home buying or relocation send me a message and I'll be happy to assist in way I can. 

How To Lower Closing Costs

How To Lower Closing Costs

Closing costs help facilitate the sale of a home and both buyers and sellers pitch in. Some closing costs can be paid before the home is officially sold and others are paid at the end. 

 However, closing costs aren’t set into stone and they can be negotiable. You can ask your real estate agent or lender with help in estimating your actual closing costs. Look over everything to make sure all the numbers are right and then you plan accordingly in how you’re going to lower them.  

Loyalty Programs
  Some banks offer assistance to buyers when they use them to help pay for the purchase. It’s a way for a bank to reward loyal customers. 

 Closing at the End of the Month
 Schedule your closing at the end of the month so you don’t have to pay the per diem interest for so many days.  Get Multiple Quotes Get estimates from different lenders because you’re looking for the best package of closing costs and interest rates. There might be something better out there.  

Junk Fees
There may be some fees a lender charges that may be negotiable, such as origination fee, processing fee, or application fee. Make sure to ask if what you are being quoted is the best they can offer.  

Title Costs 
Sometimes title insurance and settlement are bundled together. You may be able to find a title and settlement company that is less expensive. 

 Negotiate With the Seller
You can try to negotiate with the seller in paying for some of your closing costs. Buyers can ask for credit or to cover lender expenses during the offer and negotiation process

Pre-Qualified Versus Pre-Approved

The Difference Between a Pre-Qualification vs. Pre Approval

 There is plenty of real estate terms used in transactions. Needless-to-say it can be confusing for both buyers and sellers trying to navigate the process. The home loan process might feel overwhelming and difficult to understand. Both buyers and sellers find terms like “PreQualification” and “Pre-Approval” used interchangeably, it’s no wonder they find themselves wondering how to proceed. 

 Pre-Qualification-The first step in obtaining a home loan is to meet with a lender and discussing their financial situation. The lender will discuss income, job stability, debt and credit. Once they have performed a basic review of the qualifications and run credit, they will issue a Pre-Qualification Letter to the potential buyer. This letter will identify the maximum sales price, down payment requirement and basic terms of the loan, such as interest rate.  The Pre-Qualification letter is used to provide evidence that the buyer has been reviewed by a lender who is vouching for their ability to obtain a loan. Because it's a quick procedure - and based only on the information you provide to the lender - your pre-qualified amount is not a sure thing; it's just the amount for which you might expect to be approved. As a result, being a prequalified buyer doesn't carry the same weight as being a pre-approved buyer, who has been more thoroughly investigated.  

Pre-Approval- A Pre-Approval is quite different. Getting pre-approved is the next step, sand it tends to be much more involved. A pre-qualification should be a good indication of credit and the ability to borrow, but a pre-approval is the definitive word. In this case, the lender collects all the necessary information and proof of eligibility and has it reviewed by the lender underwriter for approval. A PreApproval letter is almost like shopping with cash, the only remaining piece of the puzzle is the property they are buying.

Finding the right agent and mortgage lender is key to getting the correct information and starting your home buying process a lot smoother. Contact me to find out more or if you have questions. 

Tips To Raise Your Credit Score

TIPS TO RAISING YOUR CREDIT SCORE

We are coming into a new year and a new year bring new Dreams! To achieve those dreams you first need to have steps to achieve it. If that dream this year is purchasing a new home? Then setting goals early on can help you achieve your dream, even if you are not planning on hitting the mark until later in the new year. 

It is important to remember when it comes to your credit score it can be said it is often like losing weight; it takes time and there is no easy quick fix to correct it. It is always best to manage your credit score responsibly over time. 

Buying a new home is an exciting time. It can also be stressful if you are unsure about your credit or know that your credit is not as high as you’d like it to be. Your credit score is one of the biggest factors in how much of a home loan you can qualify for and the interest rate you’ll pay. The good news is there are easy ways to increase your credit score.

 By following a few tips, you can make sure your report accurately reflects your use of credit and create a plan to improve your scores if necessary.

• Check for Errors - Errors on a credit report is very common. Make sure that everything is current and accurate. A report from the Federal Trade Commission stated in 2012 that one in five consumers had at least one error on one of their credit reports. You are entitled to one free credit report a year, start off the new year getting the report and checking over it to make sure there isn't anything that is a mistake. 

 • Pay Down Credit Card Debt – One of the easiest ways to boost your score is to lower your credit card balances. Aim to have no more than 50% of available credit in use.

 • Remove Negative Accounts – If you have old collections or bad debt, negotiate with the creditor to pay some/all of the debt in exchange for removing the record. Remember though that by paying off a collection debt doesn't mean it will automatically be taken off your credit score. It can remain on your report for up to 7 years. 

 • Keep Old Accounts Open – About 15% of your score has to do with how long you’ve had credit accounts. Do not close any accounts trying to find a quick fix way to correct debt. Doing so may backfire and hurt your credit score. 


It is easy to get started but as our busy lives begin it can easily be put in the back of our minds when life and bills begin to come in. There are some helpful tools available to help you stay on task with your New Years Goal! 

By setting up payment reminders - Making your payment on time is crucial step in maintaining the perfect correct history. Often banks can set up alerts for you to remind you of upcoming payment due dates. You could set up auto pay monthly with your payments being automatically taken out of your budget each month at a set time. 

With these steps it can be a starting point to achieve the credit score you are wanting to get the best rate and mortgage payment on your new home. 

Create a budget plan and stick to it. With out a plan in place achieving a goal can get hard. Don't give up! Like I mentioned earlier it takes time and anything worth while can. So create a plan this new year and picture yourself achieving home ownership.
 Contact me or your local mortgage lender to help you achieve this goal in 2019. We are here to help and give you the right tools to make purchasing a home easy. 

Happy New Year! 

Down Payment-How Much Will You Need?

DOWN PAYMENT-HOW MUCH WILL YOU NEED?

    Gone are the days when anyone could buy a home with just a promise and signature. No documentation loans allowed virtually anyone to buy a house with no money down with just a simple credit check. After the mortgage meltdown, this all changed. Lenders tightened guidelines and down payments were back. 

But how much do you actually need? Must you always find 20% down? The answer might surprise you; there are many ways to buy a home with less than 20% down payment.

  

 0% Down – There are still two loan programs which allow one to buy a home for no down payment; the VA loan and the USDA loan.

 -The VA loan requires the borrower to be a qualified service person or veteran and the USDA loan is for certain areas under the Department of Agriculture.  

 5% Down – Conventional loans with loan limits can allow one to buy a home with as little as 5% down. These loans do have PMI (Private mortgage insurance) which can be eliminated when the loan amount falls below the 20% threshold.  

3 ½ % Down – FHA offers first time home buyers a good home loan for only 3.5% down payment. Again these loans have loan limits and PMI but offer a faster entry into the housing market.  

It's important to know that if you are buying a home with less money down, know that your mortgage payment will be higher than if you put more money down. The three drivers that inflate a mortgage payment are:

1.Interest Rate

2.Larger Loan Size

3.Private Mortgage Insurance (PMI)

Buying a home doesn’t always mean 20% loan. Although many lenders like 20% down payments but most first-time buyers put down much less. Just keep your eye on the fees. The down payment is not the only upfront money you have to deal with. There are loan closing costs and earnest money to consider as well. (we will get into more detail about earnest money in next weeks blog post)

It is tempting to go with the lowest all-in upfront charges when trying to buy a home. But the key to building net worth is to buy smart, especially when it comes to such a large purchase as a house. 

Lenders are required to disclose all fees and it's always a good idea to shop around with multiple mortgage providers in your area to get your best deal. Plus, the more you explore your options, the more you'll learn about the process. 

 If you’re considering buying a new home, talk to myself or your lender about your options.