04
Jun
By support
Home Mortgage Tips

Which is Better: Bi-weekly or Monthly Mortgage Payments? Let’s Take a Look

Which is Better: Bi-weekly or Monthly Mortgage Payments? Let's Take a Look When you apply for a new mortgage, your lender may ask if you want to set up monthly payments or bi-weekly payments. At one time, monthly payments were common, but bi-weekly payments are increasing in popularity. This is because they break a large expense up into two smaller and seemingly more manageable payments. In addition, you can also make what equates to a full extra payment on the mortgage each year with a bi-weekly payment structure. Before you decide which is best for you, consider a few factors.

Your Personal Budget

Many people may believe that if they get paid every two weeks, a bi-weekly mortgage payment is a better option than a monthly mortgage payment. This is not always the case. You should consider other sources of income and how much your payment is in relation to your paychecks. In addition, consider which part of the month your other regular bills are due. This is critical to establishing the best payment plan for you.

Control Over the Payments

You can still enjoy the benefit of making an extra payment per year with a monthly mortgage payment schedule. For example, you would simply need to pay $100 per month more each payment to realize the same results. When you establish a bi-weekly payment plan, this extra payment is automatic. This may be ideal if you do not think you would stick with paying more per month on your own. However, if you want more control over your monthly payment amount and when you make the extra payment, it may be best to choose a monthly mortgage payment.

The Financial Obligation

A final factor to consider is the financial obligation. When you set up bi-weekly payments, your total amount paid per month will be higher. This means that your total financial obligation will be higher than if you had a monthly payment plan. This financial obligation may impact your ability to qualify for other loans or to achieve other goals.

If you want to pay your mortgage off early, you can choose to make an extra small payment with each monthly payment or set up a bi-weekly payment plan. While each will give you the same overall result over the course of the long term, one option may be preferred for your financial situation. Consider the pros and cons of each option carefully to make a better decision for your financial circumstances.

02
Jun
By support
Home Mortgage Tips

An Insider’s Guide to Fannie Mae’s HomePath Program and Closing Cost Assistance

An Insider's Guide to Fannie Mae's HomePath Program and Closing Cost AssistanceHome buyers today may be concerned about finding the perfect home to purchase, but they are also often concerned with the process of applying for a mortgage. The loan application process itself may seem daunting, but many are concerned about finding a great deal on their mortgage. This may include getting a great interest rate and finding a program with low closing costs. The Fannie Mae HomePath program and closing cost assistance program is a beneficial option for many, and you may benefit from learning more about it.

What Is This Program?

The Fannie Mae loan program has been around for many years, and it is designed to provide borrowers with a lower interest rate than some of the other programs available. It also has easier underwriting guidelines than some of the other options.

However, the HomePath program started in 2009 in response to the rising number of foreclosures at that time. This program gives buyers a great opportunity to find homes that were financed through Fannie Mae and that were foreclosed on. The goal was to help Fannie Mae sell some of the homes they had foreclosed on more quickly by providing buyers with easier underwriting requirements and closing cost assistance than they otherwise would have access to.

What to Expect From This Program

If you are not familiar with this program, you may consider exploring it in more detail. The program’s website has many listings for foreclosed properties, and this makes it easy for you to find a great deal on a property in your area.

You should be aware that there are essentially two programs under the HomePath umbrella. One is designed to resemble a traditional mortgage program with closing cost assistance and easier underwriting requirements. The other is designed for properties in need of renovations, and with this program, you may be able to borrower more than the current value or sales price of the house.

While you may want to find the perfect home and get it at a great price, you also want to set up affordable financing. When a traditional buying and mortgage experience is not right for you, the HomePath program offered by Fannie Mae is a great option to consider. You can spend time exploring the foreclosed properties on the website today, and you can also work with your trusted mortgage broker to learn more about the HomePath financing options that are available to you.

28
May
By support
Home Mortgage Tips

Did You Know: Reverse Mortgage Requirements Are Changing – Here’s How

Did You Know: Reverse Mortgage Requirements Are Changing - Here's HowMany seniors have taken advantage of reverse mortgages in recent years. These unique mortgages allow seniors who are existing homeowners to tap into their home equity without taking on a mortgage payment. This can be a true benefit to seniors who are on a tight budget or who want to take advantage of their home equity without giving up ownership of their home.

However, with new rules and requirements in place regarding reverse mortgages, the fact is that some of the benefits associated with reverse mortgages may be limited. In addition, some who may have qualified in the past may no longer qualify for a reverse mortgage.

Merging Two Reverse Mortgage Programs

One of the major changes related to reverse mortgage programs is tied to merging the Saver and Standard programs together. This change is already in effect, and the result essentially means that borrowers may qualify for as much as 15 percent less in loan proceeds than with the Standard program than they previously would have qualified for.

Additionally, this merger has resulted in some borrowers being charged higher fees. One reason for this change related to a drop in housing prices in recent years. Because borrowers are guaranteed to never be upside down in their reverse mortgage, some changes were necessary to compensate for declining home values.

The Amount of Loan Proceeds Available

Another important change in reverse mortgages relates to how much money the borrowers can draw on their loan initially. At one time, borrowers were able to pull up to 100 percent of the loan proceeds out on the loan as soon as the loan closed. However, some borrowers were not using their proceeds wisely and wound up in a more dire financial situation after spending most or all of their loan proceeds very quickly.

To prevent this from happening, a new regulation is now in place that limits the amount of funds that can be drawn from the loan to 60 percent within the first year after the loan closes. This is designed to prevent the borrower from going into default by not keeping up with property taxes and premiums on homeowners insurance.

While there are some changes that have been implemented recently regarding reverse mortgages, it is important to note that many homeowners will still benefit from tapping into their home equity in this way. You can learn more about some of the different requirements in place for home equity loans and begin the loan application process when you contact your trusted mortgage professional.