Coming up with a down payment in today’s economy can be difficult.  In most cases the down payment is expected to be 20% of the purchase price, and in some markets where housing prices are high that can be nearly impossible for the average person to save.  So are there ways to get around this?  Can you buy a home even if you don’t have the down payment?  There are a few ways to get into a home in spite of lacking the required 20%. The 80/20 Loan Also known as a piggyback mortgage, an 80/20 loan is a simple way to get a home without a down payment, but it can be a bit more expensive-or a lot more.  Basically, you take out a separate loan for the 20% portion of the purchase price.  You are financing your down payment.  You then take out a larger loan for the remaining 80%.  The interest rate on the 20% loan is usually a lot higher than the larger loan, so the best bet for any homeowner is to pay it off as quickly as possible. The 20% portion of the loan is usually on a shorter term than the larger portion […]
Read More
Looking to buy your first home, but having trouble coming up with the down payment? Typically you need to have between 5-50% of the purchase price of your home, so here are a few tips to help you save your down payment faster! Save Your Tax Refund—Doing this alone for a few years may add up to a considerable amount to contribute to a down payment, especially if both you and your spouse commit to contributing the full amount. Set Up A Savings Plan—This is a great way to make a regular contribution to your down payment fund, and with accounts that allow you to round up all your purchases and automatically deposit them into your savings account, this can be an easy way to save money quickly. Sell Unwanted Items—This can add a considerable sum to your down payment fund, and is also a great way to get rid of unwanted items before your move. Check Out Government Programs—There are a number of government programs available, depending on your area, that can assist you in saving for a home, especially if you are a first time buyer. Dip Into Your Retirement Fund—Be sure that you consult a financial advisor […]
Read More
Congratulations! Now that you have found the perfect home, all that’s left is getting the perfect mortgage. In order to do that, you will have to know what your lender needs from you in order to get your loan application approved. Property Description When applying for a home loan, you will need to provide the lender with detailed information regarding the property that you intend to purchase, including a physical address, what type of loan you are requesting and how you obtained the funds to be used as a down payment. Borrower & Co-Borrower Information All persons named on a home loan must be able to provide their name, date of birth, current address, former address (if within the last two years), marital status, current and former employment information, telephone number and social security number. Most lenders require tax returns for the two years preceding the loan application, along with current paystubs or, if self-employed, a year-to-date profit/loss statement. Current Mortgage Expenses An important part of every home loan is affordability, which is why your lender will need to know how much of your income is available to pay for a new home. If you have a current mortgage, be […]
Read More
The decision to purchase a home can be an exciting but sometimes confusing undertaking. When beginning your search for the perfect home, there are a number of factors that you will want to consider. Whether you are a first time buyer or already own a home and want to move up, getting pre-approval for your mortgage is a necessary and time saving step. Here are some of the benefits of getting pre-approved! Know Your Budget! Getting pre-approved means that you will have a clear picture of the credit you have available to you to purchase your new home, as well as your price range. This will prevent you from spending time looking at homes that may be out of your budget and perhaps getting attached to a home that you cannot afford. It means that if you find the home that is right for you, it can more easily become yours! Close Quickly Getting pre-approved for your mortgage means that you can act more quickly once you find the home that is right for you. The process of getting the mortgage approved is generally the longest and most complicated process in any home purchase. It requires verification of your income […]
Read More
Finding your credit rating can be an intimidating task, but for anyone hoping to purchase a home it is a necessary step. Your credit rating has a huge effect on the process of purchasing a home, from the types of lenders you will approach, to the type of loan you will get, to the interest rate you will be offered. So how can you find your credit rating, and how do you evaluate it? Finding Your Credit Score There are three major credit companies in the United States that offer you free access to your credit score—Experian, TransUnion, and Equifax. These companies can give you a detailed breakdown of your credit situation; however, don’t assume that each report will be identical. Since these reports are free, it is in your best interest to get all three to be sure that you are getting the complete picture. Understanding Your Credit Score When obtaining your credit report be sure that you request a consumer report. These reports are simplified and designed for the average consumer, and are less confusing than the reports which are sent to lenders. Your credit report will likely contain four sections, including personal information, credit history, public records, […]
Read More
If you are in the market for a new home, or are looking to refinance your mortgage, there are an ever increasing number of lending options that exist for you as a homeowner. Here are some of the potential lenders you can choose from to get your mortgage, as well as some of the pros and cons for each choice. Mortgage Brokers A huge number of real estate loans are made through mortgage brokers, and as they are essentially a middle-person between you and a lender, choosing a broker can save you time in shopping around for the best fit. Be sure to ask about the variety of products offered by a specific broker, as they will vary and are dependent on the broker’s number of working relationships. Banks Commercial banks offer a wide variety of financial services, and mortgages are definitely one such option. Banks can usually offer competitive rates and are a safe mortgage option for most potential homeowners, but their choices are usually limited. If you already have an existing relationship with the bank you choose to deal with, you may qualify for certain discounts or incentives. Savings & Loan Associations Savings and Loan Associates do most […]
Read More