Homeownership Archives - Page 3 of 11

Home Loans Come in All Shapes and Sizes

Posted on September 7, 2013 by Jen

After selling my condo at a hefty profit last month, I have to say that it’s quite a liberating feeling to not have a mortgage hanging over my head right now. While it wasn’t ever a problem for me to pay the monthly payments (plus extra!), there was always a part of me that hated the idea of toting around a six-figure debt load thanks to the mortgage. That being said, a mortgage is a reality that I’ll be revisiting once I decide where/when to purchase my next property.

A few years ago when I decided to buy my condo and began to think about all of the different types of home loans available out there, I was surprised to learn about the various nuances that each kind of loan entails. It’s easy to think of the standard first-time buyer and refinancing loans, but what about those for investment properties, renovations, and bridging gaps between your current home and your next home’s purchase? The more I read and learned, the more I realized that there are virtually hundreds of options to finance homeownership needs.

First-Time Buyer Loans

Purchasing your first home can be a daunting task filled with many decisions and plenty of confusion. But it’s also an exciting time and one that can be quite enjoyable if you do your research before deciding on what type of mortgage you’ll apply for.

Before you submit a single home loan application, make sure you’ve thoroughly researched your options, have calculated all of the costs of your new home (including insurance and taxes!), and have money in the bank for a down payment.

Next Home Loans

If you’re looking to upgrade (or even downsize), you have the benefit of experience on your side. Use what you learned during your first home-buying process to ensure you’re making even better decisions the second or third time you buy a home.

Shop around for the best rates, find the terms that work for your unique situation, and use whatever equity you might have in your current home to your advantage. If you’ll have overlapping timelines for when your next house and old house close and you’re short on cash, you could always consider a bridge loan to cover any expenses in the interim.

Refinancing

I refinanced my mortgage last year, and I was fortunate enough to lock in a great rate, reduce my monthly payment, and recoup every penny of the closing costs in less than a year. Refinancing makes sense if you have built some equity, have excellent credit scores, and can live in your home long enough for the reduced monthly payments to payback any closing costs associated with the new loan.

It’s a great way to reduce your monthly payments, shorten the life of your loan, save boatloads on interest in the long run, and even consolidate debt.

Investment Properties

Before I decided to sell my home, I was considering the purchase of an investment property. While I decided to shelve that idea for now, I do see myself owning multiple properties as an income-generating option in the future. Once I have a new home, I’ll need to take out a special loan for any investment properties I purchase. While the process is fairly straightforward like that of a primary residence loan, there are requirements that are more strict such as a larger down payment (usually 25% or more) to take into consideration.

Regardless of which type of loan you eventually take out, never sign on the dotted line until you’re certain that you understand 100% of the terms and conditions of the loan. Look for hidden fees and any penalties that could be imposed, investigate traditional and non-traditional financing options, and choose a lender that you’re comfortable with!

What experience do you have with the various types of home loans?

4 Helpful Mortgage Tips

Posted on September 7, 2013 by Jen

Although there are pros to renting, renting is often compared to flushing money down the toilet. You don’t earn equity when you rent, and for the most part, landlords don’t permit too many property changes. This can create problems if the landlord’s style doesn’t match with your own.

Additionally, renting doesn’t offer much stability. The landlord can sell the house or cancel your lease, leaving you to look for another home.

However, buying a house doesn’t have to be a far off dream. Many families use mortgage lenders to make their dream a reality. And while getting a home loan is harder nowadays, lenders are eager to help you find the right loan program for your circumstances.

But with any type of loan, there are a few things to keep in mind:

Shop Around for the Best Loan

The biggest mistake you can make is putting your trust in a single lender. Maybe you feel comfortable with your personal bank. However, your bank may not offer the cheapest home loan rate. Shopping around can be a bit tedious, and it’s not the most exciting aspect of shopping for a home. But if you can score a cheaper interest rate, this reduces how much you pay over the life of the loan.

Pay off Your Home Loan Sooner

Don’t think that a 30-year term is your only option. And don’t think that a 15-year mortgage will double your home loan payment. In most cases, choosing a 15-year term will only increase your home loan payment by 1/3 – give or take.

Of course, everyone can’t do this. But if you have disposable cash, and you like the idea of paying off your home loan in less time, go with this option. You will build equity faster, plus a shorter term can help you snag a better rate.

Avoid Financial Changes

Being approved for a mortgage loan doesn’t mean that you’re guaranteed to close on the house. Here’s the thing, the lender will check your credit score again on the day of closing. They’ll also verify that your income hasn’t changed.

If your credit score drops before closing, or if you lose your job, this can affect whether you’re able to finalize the loan. Understandably, you can’t control all aspects of your finances. But don’t make any big purchases or change employers until after you’ve signed the loan documents and obtained your keys.

Go with the Highest Down Payment

Lenders are reasonable with regards to down payments, and you’re not required to put down 20 percent. But just because a lender only requires 3.5% or 5% down doesn’t mean you shouldn’t put down more. In fact, it’s beneficial to increase your down payment to 20%, if doable. This can help you negotiate a better rate, plus you will avoid private mortgage insurance and have instant equity in your house.

Are you ready to take the plunge? Yes, it can be scary – and if you’re a first time homebuyer, the process might be overwhelming. However, your lender and realtor are ready to assist and hold your hand through the process.

Five Ways to Save on Household Expenses

Posted on August 30, 2013 by Jen

Both owning a house and renting can have its ups and downs. Having somewhere to live that is warm, cozy and filled with your very own belongings is of course an asset; however, monthly bills, mortgage repayments and decorating costs are a huge yet necessary expenditure.

Although running a household is expensive at the best of times, there are a number of factors to consider if you wish to minimize costs.

Combine Your Services

If you’re currently paying separate providers for the likes of internet, phone and cable services, you could in actual fact be paying a great deal more than you need to. By combining the three and choosing just the one provider, you may save up to £20 per month on these bills.

It’s also a systematic way to control what’s going in and out of your account, as bills from the same provider will go out at the same time, whilst bills from another may leave your account at various times throughout the month. This can become confusing and when you think your bank account is looking healthy, it may only be a matter of days before you’re in the red again.

Alter Contracts

If you’ve been with the same phone, internet or television package for many years now, it may be wise to look elsewhere. A number of companies will often offer promotional deals, especially to new customers and you may find that other providers boast a better deal to that of what you are already paying.

Cut Back On Extras

If you’re trying to save a little money, it’s time to ask yourself whether or not you need that TV package that boasts every channel under the sun or that monthly magazine subscription that you never quite get a chance to read. All of these little costs add up and cutting down on unnecessary extras can save a great deal per month.

Collect Coupons

Magazines, newspapers and local supermarkets will often issue coupons to readers and regular clients. Such coupons can be used in conjunction with your weekly shop, which will in turn save you a great deal in the long run, especially if you have many hungry mouths to feed.

Cut Your Insurance Premiums

Insurance is an important policy to have but it can also be extremely costly. This is where scouring the market comes into play. There are a number of providers out there and unless you look you may miss out on the best deals.

If you are struggling with household bills, you may find lending options at websites such as www.everyday-loans.co.uk. But always remember that you should be able to afford your repayments!

Lessons for First Time Home Buyers

Posted on August 15, 2013 by Jen

Two recently married friends had barely unpacked the bags from their honeymoon trip when they were ankle deep in the throes of home shopping. There are things that people don’t tell first-time homebuyers, things that save money but common sense stuff too. For starters, no one tells a first-time home buyer that the home they think is the home of their dreams might slip from their grasp due to a higher bid from a cash buyer.

The lesson is not to get attached to every property you see. My friends are about to close escrow on a home just a few miles away, so in the end you do find the right home for you. You’ll learn a whole lot more of these little lessons during the buying process, but I’ll try to save you some first time blues.

Foreclosure Does Not Mean “Deal”

It could be conditioning, but there is a misguided connection between the word’s “foreclosure” and “deal.” It’s true that you can find foreclosures that are offered below market value, in an area you may want to live in. There are a lot of variables in that statement that should raise flags about the viability of foreclosures as a good buy. Basically, if the property meets your standards you should buy it. First-time homebuyers also have other options to save money on a home purchase that should be enough to enable you to shop for the home you want.

Saving more of your income as a down payment and cleaning up your credit will help you more.

Pre-Approval is a Must

According to Boston Pads, a leading authority on rentals and relocation, the biggest asset you have on your side is a pre-approval. If you need to relocate to another city, pre-approval will help you shop for properties without hassle. You may not be able to make a serious offer without pre-approval either, as the first question out of an agent’s mouth is usually about how much you’re approved for.

Talk to your bank about getting pre-qualified and pre-approved for a loan. It will help you negotiate for rates at closing time, and know exactly how much to shop for.

Negotiate over Fixing Costs

DIY is always an option to improve your home, but you will need contractors for the important labor like air conditioning and electrical. Aside from negotiations during the purchase process, you can work directly with contractors to get deals. You might not have been able to knock a new paint job off the cost of the house, but make some comparison calls for estimates on the job.

Before you let someone in your home, take exact measurements and visit a hardware store. Talk to some of the regulars there (bring donuts or coffee if you really want to attract) and see what they offer as a baseline. Collect business cards, write down their offers and you might find a better deal.

Acquire a Trustworthy Agent

A real estate agent isn’t someone you hire on a whim. Your agent should be knowledgeable about your situation. Make sure your agent knows how to deal with Homepath and FHA loans and how to navigate the various state laws. Their cost is also part of the closing cost. You should not pay them for their time, but you may have to pay an administrative fee during the closing of escrow.

Sellers may pay for additional marketing to sell a home, but agents make most of their money on the sale of a home. Whenever possible, speak with previous clients to get a feel for the agent or review the National Association of Realtors website for lists of individuals with accolades in the field.

The Web is also a great resource for first time home buyers to shop for rates on home insurance and mortgages. Once you’re pre-approved, you’re free to shop. Don’t be discouraged if an offer isn’t accepted, the right home is waiting for you.

The Happy Homeowner

Living a Healthy, Balanced Life One Cent at a Time…

Category Archives: Homeownership