Know The Loans

MORTGAGES FOR MILLENNIALS- YOUNG BUYERS FINALLY SAYING YOLO! Millennials, all 80 million of them, might finally be taking the plunge and stop renting and start buying. This vast group of consumers, those born between 1980 and 2000, has recently overtaken the so-called Baby Boomers as the largest generation as the Boomers are riding into the sunset. What has kept the millennial generation on the home buying sidelines and why might they be changing their collective minds? Millennials entered their young adult years very near the beginning of the Great Recession when foreclosures were all the rage. Banks failed, at least the smaller ones, and it was plain to them that should the economy ever �go south� then they could lose their homes, ruin their credit and be unable to sell the home should they get into financial straits because home values plummeted. �No thanks, not me!� they said. This group, around 36 and younger, has now reached an age where their jobs are more secure, pay checks pay...

WHAT IS A CLOSING DISCLOSURE AND WHY IS IT IMPORTANT? A Closing Disclosure is a five page form required by the Consumer Financial Protection Bureau, or CFPB when consumers apply for a mortgage and fully complete the mortgage loan application. The form itself is a five page document that includes the terms of the loan including your interest rate, when and if the rate can ever change, the term of the loan, monthly payments as well as an estimated list of closing costs. The form is required by statute to be provided to borrowers three business days prior to the scheduled closing. When you review the form, it might seem a bit overwhelming at first but if you take it one section at a time and talk it over with your loan officer it�s really very simple. Your job is to compare what was originally disclosed to you regarding loan fees as well as things like the spelling of your name, the property address and the loan amount. Three days after you submitted a completed loan application your loan...

ADJUSTING TO LIFE WITH BOOMERANG CHILDREN And you thought you moved them out of the house for the last time, right? You sent them off to college, they graduated and they got a job and got their own place. And they did. But now they�re back. They�re boomerang children and it�s a relatively new phenomena as adult children seek the shelter, safety and most important, the financial advantages of moving back into their old bedroom. If this is you, here are some tips to avoid conflict. First, remember that even though they�re still your �kids� they think and act like adults. Because they are adults. At least chronologically speaking. When your child wants to move back home temporarily, set some ground rules first that both of you can agree on. But the most important is to remind them its� your home, not theirs. Late night parties and friends over all the time need to be limited. It�s not college any longer. Next, understand they�re probably not all that thrilled about moving back home. This ...

CONVERTING YOUR HOME TO A RENTAL- THE BENEFITS AND CHALLENGES Thinking of selling your home soon? Time to take some of that equity, turn it into cash and buy a new place to live? Have you thought about renting it out instead? Some owners discover the real estate market isn�t all that strong and the list price your agent suggested was much lower than it might have been just a couple of years ago. But a soft market isn�t the only reason to think about renting instead of selling. Sometimes it makes perfect financial sense. But there are some challenges as well. Take a look at your monthly payment and then add in a monthly allotment for property taxes and insurance. This PITI, or principal and interest, taxes and insurance, is the minimum the monthly rent should cover. Yet don�t just look at the minimum. Instead, look for monthly cash flow as well. For example, your PITI is $3,000 per month and market rent for your home is $3,500. Not only will your tenants be paying your mortgage for you ...

You�re Officially a College Graduate�Now What? Wait. You�ve graduated. It�s all downhill from here, right? I mean, you�ve already done the hard part putting in your four or five years, studied, partied and passed your exams. So now it�s time to coast, right? Um, well, not exactly. In fact, you�ll look back on your college days and wish you could return. You were your own boss, set your own schedule and decided whether or not to spend that extra money on a pizza or go out with your buddies. Getting your degree was just the starting point. Now it�s time to do the grown-up things and if you follow these tips, one thing you won�t have to worry about is your financial future. How�s your savings account looking? You need to have a money cushion for unexpected events. Experts suggest having enough money in a savings account that could take care of your living expenses for six months. Add up your rent, your food bill, entertainment and mobile phone bill and multiply that by six. That�s your go...

COULD AN FHA LOAN BE YOUR BEST OPTION? FHA loans were first originated back in 1934 and over the years have developed into one of the most competitive mortgage programs in today�s market and especially so for first time home buyers. What makes an FHA a good option to finance a home and why do borrowers like them? FHA loans are one of the three primary government-backed mortgages, the other two are VA and USDA loans. VA loans are the best choice for those who qualify and want a zero down loan program and USDA mortgages also provide a zero down option but are limited to certain areas and the borrowers� income cannot exceed specific limits. FHA loans have no such restrictions and can be used by a first time home buyer just as easily as someone buying a retirement home. While FHA loans don�t have a zero down payment feature they�re awfully close. FHA loans ask for just a down payment of 3.5% of the sales price of the property. On a $250,000 home that�s just $8,750. Compare that amount to a...

WHAT IS A CASH OUT REFINANCE? A cash out refinance is a transaction where the borrowers take out equity in the form of cash while refinancing an existing mortgage. Homeowners who financed their homes have the opportunity to refinance an existing mortgage for a variety of reasons and it�s not only because interest rates are lower than the one they currently have but for most, that is the primary driver. There is no reason to not refinance to a lower rate should a lower rate become available and the process of refinancing is very much like taking out the original loan. Say that a borrower has an interest rate of 5.00% on a 30 year note and rates have fallen to 4.00%. By refinancing to the lower rate, the borrower saves on interest. Or, the borrower could elect to change from a 30 year note to a shorter term loan. Doing so saves on long term interest and the loan is paid down at a quicker pace. And refinancing from an adjustable rate loan or a hybrid is also a good option for many borrowe...

How Do Low Credit Scores Affect Mortgage Loans? While good credit is a requirement for most every mortgage loan, credit doesn�t necessarily have to be pristine. In fact, those with �perfect� credit who have a credit score approaching 850 are very, very hard to find. Credit scores will range from 300 to 850 and while all three major credit repositories of Equifax, Experian and TransUnion provide these scores to a mortgage company when borrowers submit a loan application, those three scores will be different but close to one another. A borrower might have a credit score of 720, 723 and 729 for example. The lender then ignores the lowest and the highest number and uses the middle one when evaluating a loan application. But how does a low credit score affect your mortgage loan? That depends upon the type of loan program as well as the amount of initial down payment. Generally speaking, lenders can approve a conventional mortgage loan with a credit score of as low as 620 and with certain ex...

4 THINGS TO KNOW ABOUT CARING FOR SUCCULENTS Let�s face it- there are succulent people and those that would rather have a more flowery plant either indoors or in a garden. For those that are succulent fans, they can be found browsing new and exotic succulents to bring home. Yet for the novice, those succulents can soon shrivel up and die, even though succulents are known to thrive and survive in a dry, arid environment. For succulent success, here are four tips you need to know about caring for succulents. 1: More Water, Less Often Too much water is bad for succulents, but not enough will starve them. Yet �more� is a relative term, isn�t it? Most problems as it relates to watering aren�t how much but how often.  Completely soak the soil but then let it dry out completely before re-watering. Keeping the soil constantly moist will hurt the plant. And the thicker the leaves on the plant, the less water it needs. 2: Good Drainage. Make sure the plant is in soil that drains well. A thic...

STARTING A BUSINESS? CONSIDER CASHING IN ON YOUR HOME EQUITY Depending upon which report you review, somewhere around 10 to 15 percent of Americans own their own business while a majority of those polled indicate they�d like to start their own business but for any variety of reasons they instead stay put, seeking the stability of a regular paycheck. Yet for those entrepreneurs who do want to get out of the 8-5 routine, starting a business can be a very exciting prospect. But it does take time, planning and of course money. Let�s say you�ve been an accountant at a company downtown but have long yearned to start your own firm. You put a business plan together, show the bank how you will make money and how and when you can pay back the loan. A common choice is a Small Business Administration, or SBA loan. Yet while such loans can be found at most any bank or lending institution, they take time to process and some find they�re difficult to qualify for. Yet perhaps the easiest, least expens...

NEW VA GUIDELINES COMING - BUY OR REFINANCE NOW Unless you�ve been in the mortgage business for say twenty years or so, you may not be aware that during the height of the housing bubble, approved VA lenders never swayed from existing guidelines when approving a VA loan application. Even though the VA loans require no money down, something some pundits claim helped create a rash of foreclosures, the VA program held true and didn�t participate in the subprime or �alternative� lending business. It might also surprise you that in light of requiring nothing down, it was the VA loan program that had the lowest foreclosure rate of any program on the market and still makes that claim today. That said, the VA mortgage program has some new guidelines coming next year. And these changes might just mean you�d better take out that VA loan now in case the lending guidelines become more strict than they are today. For those who qualify for the VA mortgage loan program seeking the best loan with no mo...

MARKET UPDATE: Our economy, while strengthening, really should be rolling along a lot better than it currently is. The Fed has kept interest rates effectively near zero and the last interest rate increase was nearly a decade ago. So what can we expect heading into the final quarter of 2016? Is it time to lock in that rate or maybe waiting to see if rates will move down even further? The possibility of the Fed lowering rates one more time is highly unlikely at this stage. If there is any move at all, it will be to gradually increase rates over time yet each time Wall Street gets wind of any rate hike rumor, stocks get hit as investors sell, fearing a rate hike will hurt the economy. That�s somewhat odd in that historically when there is good news on the economic front, stocks rally with hopes for better times yet recently when there is good news, stocks turn around the other direction. And it�s not just here in the States as markets overseas act in much the same fashion. That could indi...

HAVING DIFFICULTIES IN THE PAST GETTING A MORTGAGE? IT�S TIME TO TRY AGAIN Just over a decade ago, getting a mortgage loan approved was about as difficult as changing a light bulb. Most anyone who could sign a loan application found there were mortgage companies eager to approve a loan, any loan, regardless of credit or even the ability to prove the borrowers could handle the mortgage payments. After all, if the borrowers ever found they couldn�t make the payment they could always sell the home for a profit as the housing bubble continued. Yet we all know what happened next. Lenders ran out of borrowers and people stopped buying homes. Those with poor credit or undocumented income found they had no one to sell to. Then the foreclosure wave hit. Banks and mortgage companies went out of business in droves. Soon thereafter, remaining mortgage companies did a complete �180� and made it so difficult to qualify for a loan, it seemed nearly impossible to get a mortgage loan approved. All of t...

5 FINANCIAL MOVES TO MAKE BEFORE YOU�RE 30 If you�re just now out of college or starting your very first �real� job and you�re in your 20�s, you�ll soon find out what it�s really like to have that sort of independence. There are no more finals to study for, no more classes to take and fewer people telling you what to do and when. But you�ll get very little advice on what you need to do to secure your financial future and become stress-free as it relates to money. Here are five things you can do to get into a healthy money routine. It�s a New World. While you have had the ability to choose when and where to go out for dinner and when to see a movie, now you�ll be needing your nightly sleep and having a brand new routine. You�ll soon see that going out for a pizza or a movie every other night is simply too tiring. Make sure you pull back your entertainment expenses and limit discretionary spending. Pay Yourself First. What does that mean? You�re already getting a regular pay check, so wh...

5 KEY QUESTIONS TO ASK YOUR MORTGAGE LENDER There is no shortage of banks and mortgage companies who want your business. Go ahead, just log on or tap your smartphone and do a search for mortgage rates and you�ll see what we mean. While the internet will provide a wealth of information, most borrowers use someone local or a mortgage company referred by family or friends. The point is there is no shortage of where to send your mortgage loan application. But with so many options available, how do you know the lender you ultimately select is the right one? Here are five key questions to ask a potential mortgage lender. Are you a lender or broker? While most mortgage companies in today�s environment offer the same or at least very similar suite of mortgage loans, there is a difference on how the loan is originated. A mortgage broker is a company that accepts your mortgage loan application and then sends it to the ultimate lender who will process and approve your loan. A mortgage banker orig...

WHY GET A MORTGAGE IF YOU CAN PAY CASH? That�s a good question. Why not pay cash instead of financing a home purchase over say 15, 20 or even 30 years? For many, that might not be much of an option. Many of us just don�t have a couple of hundred thousand dollars sitting in a bank account. Or, there are funds sitting in a bank or investment account to be used for retirement or other financial goal. Such funds can also be inherited. Cash purchases really aren�t that uncommon at all and depending upon the current market, anywhere from 30-40-50% of real estate transactions do not involve a mortgage. Yet whatever the source of funds or purpose, is it a good idea to pay cash instead of financing a home? Lenders make money by charging interest on the loan. You can borrow $40,000 for an automobile but the lender will want you to pay interest on the amount borrowed for the privilege of loaning you the money. Credit keeps cash flowing through our economy. And while you may have cash in the bank ...

WANT A MORTGAGE? HOW TO GET YOUR CREDIT IN SHAPE Thinking of buying your first home? It�s a big step but one that nearly seven out of 10 consumers take at some point but it�s not exactly like renting. When you buy a home, it�s yours. You can�t return it with your receipt in hand. That also means lenders will scrutinize your credit much more than a landlord might. Here are five things you can do to get and keep your credit in shape. Check It. If you want to get your credit in shape you need to know where you stand right now. That means getting a copy of your credit report and look for errors. Unfortunately, credit reports are notorious for containing mistakes, so make sure there are none and if there are, document the error and have your lender fix it for you. Limit Accounts. Make sure you don�t go overboard. There are those who get their very first credit card and suddenly feel empowered and able to buy things and pay for them over time instead of making a cash payment. Limit the numbe...

TECHNOLOGY HACKS WHEN BUYING OR SELLING A HOME Go ahead and speak to any mortgage loan officer or real estate agent that has been in business for more than 20 years or so. You�ll hear how mortgage companies used typewriters to complete mortgage loan document requests and how real estate agents literally kept listings on 3X5 index cards. Seriously. That happened. But today, it really is a whole other world. Today, the consumer is in the driver�s seat as information about a particular property, rates or the markets in general is really just a few keystrokes away. Here are some tech tips buyers and sellers can use. Real Estate Portals. Go ahead, start your search. If you�re selling a property and want to get some idea of what your home might sell for before contacting any real estate agent, there is no shortage of real estate portals that can provide a list of homes for sale in the area you want to live. Your local real estate association keeps its own multiple listing service that is ope...

WHAT IS MORTGAGE INSURANCE? What, exactly, is mortgage insurance? Well, first let�s tell you what it�s not. It�s not an insurance policy that pays the mortgage if someone becomes disabled, ill or unemployed and can no longer make the monthly payments. Instead, mortgage insurance is a policy that pays the lender a certain amount should the loan ever go into default. Here�s how mortgage insurance works and where it came from. Conventional mortgage loans from banks for the longest time required a down payment of at least 20 percent before issuing a loan approval. Unlike government-backed loans such as VA, FHA and USDA programs, if the home went into foreclosure there was no compensation to the lender for the loss. Instead, the bank had to take back the home and sell it once again and encountering costly legal and settlement fees. Yet coming up with a large down payment was difficult for most and it took borrowers longer to save up enough money for a down payment plus closing costs. In 195...

4 EASY WAYS TO BUILD EQUITY IN YOUR HOME One of the primary advantages owning has over renting is the accumulation of wealth over time. While real estate values can have up and down periods, historically home owner equity increases the longer the individual owns the home. When the home is sold, the owner receives the difference between the sales price and the outstanding loan amount less closing costs. That means the more equity grows, the more the owner will gain. Here are four ways to help build equity. The simplest way to increase homeowner equity is to make extra payments, that widens the spread between current value and the amount owed. Loans today don�t carry prepayment penalties so there should be no concern there. You can make one lump sum payment or you can make smaller and routine extra payments each month which will increase homeowner equity. Are there any additions to the home that will increase the value? Some additions provide a better return on investment than others but...

CAN I REMOVE MY MORTGAGE INSURANCE? If your mortgage insurance has served its purpose and allowed you to make a down payment less than 20 percent of the sales price using a conventional loan, it might be time to remove that mortgage insurance policy. When you went to your initial closing and you needed a mortgage insurance policy, the lender provided you with a document that showed when your mortgage insurance policy would automatically drop without you doing anything. When the mortgage loan amortized down to 78 percent of the original sales price of the home, the lender removed the policy and your overall monthly payments were reduced. Note that FHA loans, which are not conventional mortgages but government-backed, have monthly PMI but cannot be removed throughout the life of the loan. Getting to the 78 percent threshold however takes a while. Like 11 years or so. That�s a lot of monthly mortgage insurance payments. Here are some ways to get that policy removed sooner rather than havi...