13
Dec
By Fred Gruber
Home Mortgage Tips

4 Ways to Help Your Mortgage Transaction Close On Time

When you’ve finally found the home you’re looking for at the right price, it’s easy to think that the hard part is over; however, there’s still a lot to do in order to ensure your purchase goes through without a hitch. If you’re tying up the loose ends on your home purchase, here are some things you should do to avoid any unnecessary delays.

Hire A Legal Professional

However much research you may have done in regards to buying a home, there’s still a lot of legal jargon in the closing documents that can be difficult for most people to understand. Instead of doing guesswork, you may want to use an attorney who will take the difficulty out of the documents for you so there will be no holdups with the paperwork.

Arrange A Home Inspection

A home inspection is a necessary step before the sale of a home, but this is an important one to get out of the way because it can seriously impact your home purchase. Because major problems can often be discovered during inspection, getting this out of the way and deciding if an item should be fixed or the total price knocked down will ensure there are no delays at the last minute.

Acquire Title Insurance

In order to make sure your property really belongs to you, it’s a good idea to have a title search completed to see if there are any claims to your future property that could invalidate your purchase. As this is a legal safeguard for your claim to your home, it will help you avoid unnecessary issues in the event of an unknown property claim.

Determine The Closing Costs

An escrow company is responsible for holding the funds until all aspects of a home sale are complete, but there are fees that go along with this service. Before you get to the end of the process, determine what exactly the company will be charging so that you can be prepared for the final total. While fees are legitimate, if you see a higher tally than expected, you may want to negotiate for a reduced cost.

Purchasing a home is a significant investment full of hurdles you might not be aware of, but by acquiring title insurance and having a legal professional look through your documents, you can make your home purchase go a little smoother. 

08
Dec
By Fred Gruber
Home Mortgage Tips

Understanding the Jumbo Mortgage and Why Refinancing is Different

The contemporary trend towards expansive dimensions is palpable in various aspects of modern life. Oversized soft drinks, large fast-food meals, and expansive smartphones have become ubiquitous. However, one unlikely sector experiencing a similar trend is the realm of mortgages.

Delving into the specifics, what exactly constitutes a jumbo mortgage? How does it differ from its conventional counterpart, and what implications does it hold for potential refinancing? Here’s a comprehensive overview.

Jumbo Mortgages

As the name suggests, the primary distinguishing factor of jumbo mortgages lies in the loan limit. Fannie Mae and Freddie Mac administer mortgage limits nationwide, contingent upon the cost of living in individual states. In scenarios involving high-value real estate, such as luxury properties and commercial holdings, standard mortgages may prove insufficient, thus necessitating the flexibility afforded by jumbo mortgages.

Jumbo mortgages are particularly prevalent in regions characterized by elevated living costs, where real estate values routinely exceed the standard loan limits applicable to high-cost areas.

Qualifying for a Jumbo Mortgage 

Given the higher financial stakes, eligibility requirements for jumbo mortgages are markedly more stringent than those for traditional mortgages. Notably, jumbo mortgages do not fall under private insurance coverage, resulting in a substantially larger down payment compared to standard mortgages. Prospective applicants must convincingly demonstrate to lenders their financial capacity to meet the obligations associated with a jumbo mortgage.

Additionally, a higher credit score is imperative for those seeking a jumbo mortgage. While a credit score of 660 or higher suffices for conventional mortgages, a minimum score of 700 is typically required for consideration by most lenders when applying for a jumbo mortgage.

Jumbo mortgage lenders may mandate that borrowers set aside a minimum of six months’ worth of payments in a dedicated bank account at the time of closing, a requirement that typically stands at two months for standard mortgages. Applicants must also prove to their lenders that their debt-to-income ratio is below 45 percent to qualify for a jumbo mortgage.

Refinancing Complexities

Refinancing a jumbo mortgage introduces heightened complexities compared to standard mortgages. Considerable home equity is a prerequisite for refinancing, and individuals looking to include Home Equity Line of Credit (HELOC) debt in the refinancing plan must adhere to stringent conditions, including the absence of any deductions against home equity in the preceding 12 months.

Specific lenders may impose additional requisites for refinancing jumbo mortgages. For example, homeowners with less than a year of ownership may be directed toward a Freddie Mac or Fannie Mae loan. Regardless of the fair market value at the time of mortgage filing, properties owned for less than a year are typically assessed at their original purchase price.

While jumbo mortgages provide an avenue for acquiring luxury residences or commercial properties, securing one demands meticulous adherence to a stringent set of prerequisites. Prospective applicants are advised to seek guidance from professional advisors to navigate the intricate qualification process successfully.

For those contemplating a jumbo mortgage, engaging with a seasoned mortgage professional is crucial to gaining insights into refinancing alternatives and understanding the qualification criteria. Reach out to your trusted mortgage professional to explore refinancing options and ascertain your eligibility for a jumbo mortgage.

06
Dec
By Fred Gruber
Home Mortgage Tips

You Ask, We Answer: What Are the Pros and Cons of Private Mortgage Insurance?

It’s easy to get Private Mortgage Insurance (PMI) confused with homeowners’ insurance, but PMI is an entirely different thing that may or may not be necessary when it comes to your home purchase. If you’re going to be investing in a home in the near future and are wondering what PMI may mean for you, here are some things to consider regarding this type of insurance.

Your Down Payment Amount

If you’ve been perusing the housing market for a while, you’ve probably heard that 20% is the ideal amount to put down when investing in a home; however, you might not realize why. The truth is that 20% down is the suggested amount because this will enable you to avoid having to pay PMI on the purchase of your home. In this regard, PMI is a protective measure for lenders since they may be taking on more financial risk with those who have less equity built up in their homes.

Getting Into The Market

For those who want to get into the real estate market right away and only have 10-15% to put down, PMI can be a means of being able to invest before mortgage rates increase. While buying a home when you want can certainly be a benefit, it’s also worth realizing that PMI is an additional fee and will impact the total cost of your home loan. It may be a risk worth taking if you want to buy now, but if it’s the total cost you’re considering, it may be better to save more before buying.

Getting Money Back

Whether you’re a homeowner or not, most people don’t look forward to tax time no matter how much money they get back. However, if you have PMI for your home, you’ll not only be able to get a variety of tax deductions, but you will also be able to get back some of the money that you invested into your private mortgage insurance. It may not be enough of a deduction to compete with saving up, but if you’ve found the perfect home the deductions can serve as an added incentive.

While you’ll only be required to pay PMI if you put down less than 20%, it can be a benefit if you’re looking to purchase a home right away. If you’re currently pursuing your options on the real estate market, reach out to one of our mortgage professionals for more information.