Home Financing Tips Category
Many homeowners are struggling to keep up with their mortgage payments on a monthly basis, and it can often seem like there are limited options for remedying the situation. If you haven’t heard of HARP refinancing and you’re a homeowner who’s looking for a lower interest rate, this may be the right solution to your payment woes. Instead of letting the opportunity blow by, here’s all you need to know before this option ends in 2016.
The Details On HARP Refinancing
Known as HARP, the Home Affordable Refinance Program was created in 2009 following the economic crash that was brought on by the housing crisis. In the wake of hard economic times, the program was devised as a means of streamlining the process for those who couldn’t refinance their mortgage. Instead of reliable homeowners being stuck with a rate because they don’t qualify for refinancing, HARP enables them to acquire lower interest rates.
Some Of The Requirements For HARP
In order for you to be able to apply for a HARP refinancing, you must have a mortgage owned by Fannie Mae or Freddie Mac that was provided to you on or before May 21, 2009. While you’ll want to check with your mortgage holder to determine if you are eligible for this refinancing option, you’ll have to be up-to-date on your mortgage payments with a loan-to-value ratio that is above 80%. For more information on a HARP refinancing, you can visit their website for all the details.
Carefully Consider The Closing Costs
While refinancing your mortgage and acquiring a lower interest rate may sound like instant money savings, it’s important to find a lender that can offer HARP without any closing costs, or at least costs low enough they’ll balance out in your favor. HARP refinancing can certainly be an option worth serious consideration, but if you have lowered interest rates and a high closing cost, it’s possible that you will not be able to re-coup the extra money you’re paying.
HARP refinancing is set to end in 2016, but if you’re a homeowner who is looking to refinance you may want to look into this program for saving money on your mortgage. By familiarizing yourself with the requirements and determining if the closing costs balance out, you may have an easier monthly payment on your hands. If you are paying off your home but are interested in what’s available on the market, you may want to contact your local mortgage professional for more information.
Getting the best mortgage financing for your new home can sometimes be a complicated process and, unfortunately, things can go wrong. Using a licensed and trusted mortgage loan specialist can help alleviate many of these challenges.
There are certain mistakes that many homebuyers make when applying for their mortgages that can seriously damage their chances of being approved. If you are aware of the most common mortgage issues, you will be better able to prevent them when applying for your own mortgage.
Make sure that you keep the following tips in mind when applying for a mortgage:
Making Large Purchases Before Closing On The Mortgage
Many homebuyers think that they are in the clear once the mortgage deal is approved and they move forward on another large purchase such as a car or home furnishings. However, it is best to hold off on all major purchases until the mortgage is finalized, as additional debt will change your “debt-to-income ratio” which could mean that you no longer qualify for the loan.
Many lenders pull your credit information right before funding, so avoid any big-ticket items until you have signed on the dotted line.
Switching Jobs During The Mortgage Loan Process
When deciding whether or not to approve your loan, the lender will look at your salary and your job stability. If you make a career move during the process of applying for the loan, this could make your income seem unstable and could cause the bank to decline your loan.
Stay in your job through your home closing date to reassure the bank that you have a stable income; you can always switch careers later.
Having No Credit Card
You might think that the fact that you have gotten by without a credit card for this long would be a positive thing in the mind of lenders. However, having no credit history at all makes lenders nervous, as they don’t know how you will handle credit when you have it.
Instead, get a credit card that you repay in full every month, which will help to show them you can manage your credit responsibly.
These are just a few examples of major mistakes that home buyers make when applying for a mortgage. If you can avoid these issues, you will find it much easier to buy a Boulder home.
As always, call your trusted real estate professional today to discuss your personal situation and get the best advice on your upcoming home purchase!
What if you could accelerate the mortgage payment on your home so that you own your property several years earlier than your 15 or 30 year term?
Making your final mortgage payment and owning your house is an incredibly good feeling and there is a simple way that you can bring about that rewarding day much sooner.
By making one extra mortgage payment every year, you will be able to pay off your mortgage years earlier without putting a lot of stress on your present day finances. Although it might not seem like a lot, just one extra payment per year can help you to significantly reduce the length of your mortgage.
For example, if you have a 30 year mortgage with a fixed rate, it could be possible to pay off your loan in 25 years instead of 30 when you make an extra payment per year. You will also very likely be able to save thousands of dollars over the years in interest charges.
How to Fit the Extra Payment Into Your Budget
If you think that your budget is too tight to squeeze in the extra yearly payment, it’s time to start thinking about what adjustments you can make. With a bit of clever budgeting, you can find the extra cash needed.
First of all, break the extra payment down by dividing it by 12. For example, if your monthly mortgage payment is $1600, you will need to save an extra $133 per month to be able to make a full extra payment every year. Or, you could think of it as $33 per week or $4.75 per day.
Surely you can survive on $4.75 per day less than you are spending right now, right?
There are many ways that you could find this extra money. It’s the difference between eating at a restaurant or cooking at home once or twice per week, bringing home-brewed coffee to work in a thermos rather than going to the expensive coffee shop, or cancelling a cable TV package that you never watch. Take a look at your budget so that you can determine where you can cut your expenses.
Once you make your goal of an extra payment every year, not only will you see that the savings program was easier than you thought it would be, but you might decide to accelerate even more so that it will be even sooner when you have the satisfaction of owning your home.
For more information about the optimal plan for the mortgage on your Boulder home, feel free to contact me by phone or email.
Imagine that you’ve found the perfect home and are ready to apply for financing. Your home loan approval amount comes back lower than you would have expected and at an interest rate significantly above what you have heard is available on the market.
This could be because you have an average to poor credit score.
Mortgage lenders base interest rates on many things, but your credit score plays a large part. Anything between 720 and 850 will typically qualify for better interest rates. A mediocre score is usually between 660 and 719, and a low score is 659 and under.
If you have a lower score than you’d like, below are a few traits for you to follow of people who possess higher credit scores and secure the best home financing.
They don’t max out their cards.
It’s better to keep a low revolving balance on a few cards than to spend every dime allotted on one. The ratio of credit card balance to your credit limit is called credit utilization. The higher your credit utilization, the larger affect it can have one your credit score.
They make payments on time.
This is very likely the most important tip for your credit health. If you miss a payment on a term loan, credit card account or monthly home bill, then you could be turned over to collections, which will affect your score negatively. You will almost surely be reported as late to the credit bureaus, which will in turn drop your credit score precipitously. Absolutely make all of your payments before their due date.
They stay with one card.
Don’t close and open credit card accounts frequently. Each time you make a change to your line of credit, it affects your score. Even if you don’t want to be tempted to use a credit card, keep the account open and leave the card at home. According to the Fair Isaac Corporation (FICO), high credit achievers have accounts that are usually at least 11 years old.
Excellent credit could qualify you for a better interest rate, which might save you thousands of dollars over the life of the loan. So stay on top of your monthly credit bills and keep a low balance on just a few cards to watch your score steadily increase.
If you’re ready to learn more about your ability to purchase a Broomfield home, call your trusted home financing professional today.