25
Nov
By support
Home Mortgage Tips

Buying a Home with a Mortgage? A Quick Guide to Closing Costs and What to Expect

Buying a Home with a Mortgage? A Quick Guide to Closing Costs and What to ExpectWhether you’re just starting to shop for a new home or you’ve already found the perfect new house and you’re ready to submit an offer, if you’re taking out a mortgage loan to cover some of the home’s purchase price you should be aware of the various closing costs you may encounter.

In today’s blog post we’ll share a quick guide to closing costs and what you can expect to pay when you buy a new home.

What Closing Costs Do Buyers Typically Pay?

As you move forward in the home purchase process you’ll incur a variety of fees that cover document preparation, inspections and other services that are required to fully process your mortgage. Your application and processing fees cover the cost of preparing your loan application and submitting it to your lender. Your credit report fee covers the cost of pulling a credit report which is used to assess your suitability for a mortgage and whether your loan is worth the risk.

You’ll likely pay an appraisal fee as you’ll need a proper appraisal of the home’s value, and you may need to pay a flood certification or survey fee depending on where the home is physically located. Additional fees that you may incur include wire transfer fees, commitment fees, courier fees and private mortgage insurance application fees.

Finally you’ll also encounter a number of closing costs that aren’t directly related to your mortgage, including insurance costs, attorney fees, property taxes, government filing or recording fees and more.

Consider Negotiating with the Seller

It may be worth asking the seller to pay some – or all – of your closing costs, depending on the offer that you’ve submitted and how strong of a negotiating position you’re working from. Trust in your real estate agent’s advice in this regard as you’ll want to avoid spooking the seller by asking them to cover costs that they didn’t anticipate.

As you can see, there are a number of different closing costs that you may encounter when you purchase a new home. An experienced mortgage professional will help you to better understand these costs and can show you areas where you may be able to find some additional savings. When you’re ready to buy your next home, contact your local mortgage professional and they’ll be happy to share some advice.

21
Nov
By support
Home Mortgage Tips

USDA Mortgages: Take Advantage of These Low-Rate Mortgage Loans to Buy a New Home

USDA Mortgages: Take Advantage of These Low-rate Mortgage Loans to Buy a New HomeAre you thinking about buying a home in a rural or suburban area? If so, you’ll want to take a look at the United States Department of Agriculture’s mortgage programs as you may qualify for them.

In today’s blog post we’ll introduce the USDA Rural Development Single Family Housing Guaranteed Loan Program, explain the benefits of this mortgage program and how to determine if you qualify.

What is a USDA Mortgage Loan?

The USDA mortgage program is one of a number of programs in which the federal government will guarantee a mortgage loan as long as the recipient meets certain criteria. The intent of this program is to provide a boost to residents of rural or suburban areas who are struggling to obtain a traditional mortgage.

USDA mortgage loans are an ideal solution for those who are looking for 15 or 30-year amortization periods as they tend to have lower interest rates than mortgages offered by banks and other lenders.

USDA Mortgage Loan Benefits

There are numerous benefits to USDA mortgages that make this an enticing option compared to a mortgage from a traditional lender. As these loans offer full 100 percent financing you won’t have to place a large down payment when buying the home. The USDA offers very competitive 15 and 30-year fixed interest rates, something you won’t find from many banks or other mortgage lenders.There’s also no maximum home purchase price with USDA mortgages, however note that you’ll still be limited by your risk and your ability to manage the monthly mortgage payment.

USDA Mortgage Loan Requirements

The USDA mortgage program is open to all homebuyers that meet a number of initial requirements. The home you intend to purchase has to be located in a rural area (as determined by the USDA) and it cannot be a vacation home or investment property. As with any mortgage, you’ll need a relatively clean credit history. Finally, note that your annual income will also be assessed and you’ll need to prove that you’re within 115 percent of the region’s median income.

As you can see, the USDA Rural Development Mortgage program can be an excellent option if you’re planning on buying a home in a rural or suburban area. Contact your local mortgage advisor today and they can explain the USDA home loan program and answer any questions that you might have.

19
Nov
By support
Home Mortgage Tips

Three Key Tips to Help Ensure Your Mortgage Pre-Approval Isn’t Declined

Three Key Tips to Help Ensure Your Mortgage Pre-Approval Isn't DeclinedIf you’re thinking about buying a new home and using a mortgage to help cover some of the purchase costs, it’s a good idea to get an initial pre-approval from your lender before putting in an offer.

In today’s blog post we’ll share three quick tips that can help to ensure that your mortgage pre-approval isn’t declined.

Demonstrate Your Income and Good Credit

A mortgage is a major financial transaction and one that carries a certain amount of risk for the lender. It’s your goal to help them see that you have the ability to make your monthly payments and that there is very little risk in approving your mortgage. Be ready to demonstrate all of your sources of income and that your credit rating is clean.

It may be worth paying for your credit report before starting the pre-approval process so you can clean up any black marks or false reports and so that you can see what the lender will see when they check your credit history.

Choose the Right Property at the Right Price

As the home you’re buying will be used as collateral to back the mortgage, the lender will need to see that there is enough value in the home to cover the cost of the mortgage should you fail to pay it back. The “loan to value” or LTV ratio is the amount of your mortgage divided by the value of the home. For example, if you’re borrowing $150,000 to buy a home valued at $200,000, you’ll have a LTV ratio of 75 percent. Keep in mind that each lender will have their own target LTV that they prefer to work with, so you may need to shop around a bit.

Start the Process with Multiple Lenders

Finally, if you feel that your income or credit history isn’t perfect you may want to consider visiting a couple of different mortgage lenders to see what they can offer you. There are dozens of different mortgage products on the market today, and each lender has their own set of qualification criteria that they will use to assess risk and whether they feel that you can afford to pay the mortgage back. Getting a second opinion may help you to discover a more suitable mortgage or one with a better interest rate.

As you can see, there are a number of ways that you can work to ensure that your mortgage pre-approval passes without a hitch. For more information about pre-approvals and to get the process started, contact a local mortgage professional today. After you’re approved it’s only a matter of time before you’ll be moving in to your new home.