Buying a home is a very exciting and rewarding experience, however it can at the same time become a little overwhelming. Hearing all of these strange terms can be a lot to grasp; such as escrow, property disclosures, pre-paid items, points, closing costs, title insurance, prepayment penalties, LTV (Loan to Value), DTI (Debt to Income Ratio), appraised value vs assessed value, fico scores, conforming, conventional, FHA, VA, seller concession, piggyback mortgage, etc... There are many advantages to owning your own home versus renting a home. When you own a home, it is your home and yours to do what you want with it. Owning your own home means no more apartments, no more neighbors living directly above, next to or below you, no more dealing with all of the noise from loud apartment tenants. Owing a home means you can knock down walls, remodel rooms, add walls and do any other home improvements that your hear desires. This is your home to make as comfy, cozy, and comfortable to your needs as possible. Another advantage of home-ownership is the tax advantage a home gives you with the ability to write off your mortgage interest, property taxes and points paid along with some other closing costs. Please give me a call toll free at 1-888-418-4467 to discuss all of the advantages of home-ownership and to see how much of a home you can qualify for today.Buying a home with no money out of pocket - You can buy a home without needing any money for a down payment. Buying a home without needing a down payment is actually becoming very popular and the percentage of people buying a home this way is increasing each year. There are even ways to buy a home with no money down and no money out of your pocket for closing costs also. Consult a mortgage professional to find out if you qualify and to discuss your options.
One way to buy a home with no money out of pocket is through seller concessions. With a seller concession offers for part of his proceeds to be used to help with the buyer's closing costs. Seller concessions of 1%-6% of the sales price are most common. Check with your mortgage broker to see if a seller concession can help you buy a home with no money down.
Purchasing a home with less than perfect credit - It is possible to buy a home with credit that is not perfect. It is even possible to buy a home with flawed credit or below average credit and put little to no money down. Millions of homeowners have bought homes while having credit that is somewhat flawed or below average. Consult a mortgage broker to find out how much of a home you qualify for, how much of a down payment may be needed and what types of home loan programs are available with your exact credit scores.
Obtaining a new mortgage is a great opportunity to build a strong credit history and higher credit scores. After 2 or 3 years of on time payments marginal credit scores can really see an increase. To take full advantage of this opportunity you must make every payment on time and try not to acquire any new debt.
Many people believe their credit score will be worse than it actually is. Others believe they have good credit, but their credit score is actually low. So, the first step is to have your mortgage professional run a credit report on you and review it with you. Then he can gather some information from you and present you with some financing options based on your specific situation.
No Point No Fee Loan - A No Point No Fee loan can be extremely cost effective if you plan to sell or refinance your home with-in five years.
Sometimes a no point, no fee loan may seem like a good idea, however it may also carry a much higher interest rate to make up for the lack of closing costs and fees. Loans with no closing costs and fees associated with them are usually a good idea for people who are looking to stay in their homes for only a short while. For borrowers thinking they will be in their homes for a very long time, they should weigh their options very carefully to see which option presents them with the best financing.
Free Mortgage Interest Rate Quote - If you are currently shopping for a new mortgage to purchase a home, or to refinance your existing home, you can receive a free mortgage interest rate quote by emailing me at dave@gofirstsecurity.com.
But first there are some things you should know about receiving mortgage interest rate quotes!
The more information your provide to your mortgage company the more accurate your interest rate quote will be. At the minimum you need to know your middle credit score, monthly income, monthly liabilities (includeing car payments, credit card payments, personal loan payments, etc) and requested loan amount. IF you do not know this information then a rate quote will be meaningless. Rather than shopping for a rate, start your shopping for a trustworthy mortgage agent.
Interest rates change daily and all throughout the day. With this in mind, you should try and obtain all of your mortgage interest rate quotes around the same time, and definitely within the same day. If you receive mortgage quotes at different times of the month or spread out over the course of a couple of months you will most likely receive very different rate quotes among the different lenders due to the rates changing constantly. Spreading your quotes out over time may not provide you with the best interest rates or allow you to compare rates amongst the different lenders very accurately.
Unless I have taken a complete mortgage loan application and know the specifics of your qualifications, the interest rate quote is more general information than a specific quote tailored to your situation. As mentioned, the rate quoted will only be accurate if you decide to move forward and the rate is locked that day. Shopping for a mortgage by getting numerous rate quotes can be quite frustrating. Most borrowers have found that rates vary only slightly from one lender to another. Most have found it is better to pick a mortgage agent to work with based on their professionalism and experience rather than who can shout the lowest rate.
When you get a rate quote, you should also get a Good Faith Estimate (GFE). This disclosure will break down all of the costs associated with the closing of your loan. Sometimes a great rate can come with high fees. In the end, it may be cheaper to go with a higher interest rate with lower fees.
When comparing interest rate quotes from different companies, be sure to compare the same products. Pay attention to loan specifics such as fixed rate or adjustable rate, length of loan term, full doc, stated income, or no doc, prepayment period, rate lock period, etc.
80/20 mortgage - 80/20 mortgages are also called zero down loans and/or no money down loans. These types of loans are increasingly popular throughout the nation. An 80/20 loan is actually 2 mortgage loans, a 1st mortgage (at 80% of the value of the home) and a 2nd mortgage (at 20% of the value of the home.) Theses loans eliminate the need to pay Private Mortgage Insurance (also known as PMI) and also generally provide considerably lower rates than other types of 100% financing. This type of financing helps to keep your payments low and gives you the freedom of not having to put any money down.
Example of how this works:
You want to buy a $300,000 home on a 30 year mtg with 80/20 option
240,000 1st mtg: 6.25% rate = $1477.72 Principal & interest payment
60,000 2nd mtg: 7.75% rate = $ 429.85 Principal & interest payment
An alternative to 80/20 mortgage is a 100% loan. To avoid paying for the Private Mortgage Insurance (PMI), look for a lender that offers LPMI (Lender paid PMI). This type of loans is comparable to an 80/20 loan. The advantage is that the borrower pays for only one mortgage. The disadvantage is that the interest rate is always higher than the loans with PMI. Consult with your licensed mortgage professional to find out more about the 100% loan with LPMI.
An 80/20 can also be accomplished by way of a seller carry back for 20% of the purchase price. This helps borrowers who otherwise might not be able to qualify for the 20% of the purchase price normally finance with a traditional loan, by a traditional bank.
This mortgage program is designed to allow customers not to put money down on the purchase price. This is where the term zero down comes from, you however need to be aware that there are closing costs associated with the purchase of your home. An easy way of utilizing the 80/20 loan program to its fullest would be to have the sellers pay closing costs. This will get you the entire purchase price and closing costs without having to pay money at the closing.
An 80/20 mortgage is also a good option to consider for those who plan to put either 5% or 10% down. If you compare the difference in the payment of doing an 80/20 loan as opposed to putting down 5% the difference in payment is not much and some borrowers will prefer to keep the 5% as reserves for an emergency.
80/20 mortgages allow you to purchase with no down payment. As you build equity in your home, you can refinance the 20% second mortgage to get cash out. Or once the balance on your two mortgages is equal to 80% or less of the value of your home, you can refinance and pay off both with 1 single mortgage, usually at a significantly better rate.
Borrowing online - In today’s internet age it is possible to apply for a mortgage 24 hours a day and 7 days a week. There are advantages and disadvantages to applying online. Some advantages to applying online are convenience; you have the ability to get multiple quotes from the comfort of your home.
When choosing a mortgage professional online, send him or her an email asking a specific question. See how long it takes to get a specific response. Call his or her phone number. See if you reach a live person or how quickly a return call is made.
During this stage mortgage professionals are trying to impress you to win your business. If they are slow returning calls or answering emails now, it will probably not get better later on when you have questions about the progress of your loan.
Always work only with websites owned and operated by a licensed mortgage broker or a direct lender. Avoid websites that claim to have "four or more lenders competing for your business". That is an obvious sign that the website's business model is not to finance home loans, but to sell and re-sell your information to outside mortgage professionals. Home buyers giving out information on these "lead generating" websites often find themselves being bombarded with endless phone calls for months and years to come. Therefore, when applying for mortgage online, apply only from a website where it will be the licensed company that actually work on your loan process.
Be leery of interest rates you may see posted online. Many times these rates are very old - even as old as when the site was originally built, and they have never been changed. If you see a rate that is far outside of the current area of rates for the loan you are looking for, be cautious.
If you are trying to use the internet to receive mortgage quotes, be sure that you do not give out any personal information (mainly your SSN). In today's world with identity theft, you need to be cautious as to which companies you give your personal info too.
When applying online make sure the website is a secure website if you intend on giving personal information such as your social security number, date of birth, investment or income info, etc... It will have a little gold colored padlock at the bottom of your browser if it is. If you are just filling out your name, phone number and some very basic info, the site does not necessarily have to be secure; however, you should research the company a little before divulging any information about yourself.
In today's busy world online applications are the way to go. You can do a mortgage with out leaving your home.
Use caution when applying online! Most states allow you to verify the licensing status of brokers and lenders online. Before providing any personal information review the company privacy policy and make sure the site is secure. Many online mortgage shoppers unknowingly provide their information to companies that resell the information. This often results in a barrage of telephone calls from mortgage companies that buy the leads. Protect your personal information and provide it only to legitimate licensed mortgage companies.
Once you find a loan consultant you are comfortable with, it will be important to disclose information regarding your income, credit and living status. This will help you mortgage consultant measure which loan product will be suitable for you and your goals.
