10
Feb
By First Rate Financial Group
Mortgage Tips

An Overview Of Electronic And Smart Locks

AAn Overview Of Electronic And Smart Lockslmost everyone has been locked out of their home before. If you do not have a hidden key or someone else with a key, it can be stressful to wait for a locksmith to come and open the door. Fortunately, there are ways homeowners can address this issue, and one of the options is to get a smart lock or an electronic lock instead. 

How Smart Locks And Electronic Locks Work

Every smart lock is different; however, they have a few themes. Basic electronic locks have a combination that someone has to enter before the door unlocks. Other electronic locks use fingerprints, RFID, or Bluetooth recognition to allow someone to enter. Many smart locks also allow the owner to give out digital keys that allow friends, children, and other people to come and go. The combinations are stored and act as a digital log of who has entered the home. 

The Benefits Of Using Smart Locks And Electronic Locks

There are a number of benefits that come with using smart and electronic locks for homes. First, homeowners never have to worry about getting locked out of the house, as they don’t have to worry about losing manual keys. Second, homeowners can keep track of people, including their children, as they come and go. Finally, smart locks do not necessarily have to be rekeyed or replaced. Homeowners can change the combination when they feel it is nessesary..

Choosing The Right Electronic Lock

Even though smart locks and electronic locks have a variety of benefits, it is important for homeowners to think carefully about which option is best for them. Homeowners need to make sure whatever lock they choose is compatible with their phone. They also need to select locks that have security measures in place that prevent people from cracking the code or getting through the keypad. Finally, take a look at how many combinations the lock can handle. Sometimes, homeowners like to assign people specific codes so they know exactly who is coming and going. Some locks can even be customized so that certain combinations only work on certain days. This can be helpful if there is a maid or tutor who comes from time to time. 

11
Jan
By First Rate Financial Group
Mortgage Tips

Understanding How Home Equity Works and Why Buying a Home Can Be Your Best Investment

Understanding How Home Equity Works and Why Buying a Home Can Be Your Best InvestmentWhen delving into the world of real estate and investment property, there are many terms that will come up that require further explanation. Whether you’ve never heard the phrase ‘home equity’ before or you have a little familiarity, here are the ins and out of what it means and how this asset can help your financial outlook.

All About Home Equity

Essentially, home equity refers to your portion of the value of your home, and the amount of this figure is important because it is included among your assets when determining your net worth. If this sounds confusing, think of it this way: if you have completely paid off the cost of your home, the value of your home equity is this total amount. Of course, because most people seek a lender to borrow money from when they purchase a home, their home equity would consist of their down payment and whatever amount they’ve paid down on the mortgage since purchase.

An Example Of Home Equity

To provide further clarification, let’s use the example of a house that has been purchased for $300,000. In the case that a down payment of 20% has been provided at the time of purchase, the equity in the home would be $60,000. Since this amount is the percentage and cost of the house that’s been paid down, this is the amount of the house that is actually owned and this will be figured among an individual’s assets.

How Home Equity Works

As you pay the amount that you owe on your home each month, you are paying off your total debt and thereby increasing your equity. Since this amount of money is considered an asset that belongs to you, it can be used down the road to buy another home or invest in other important things like education or retirement. While paying off the amount owed on a home is a considerable investment, if the value of your home increases, this means that you’ll still owe the same on it but your home equity will have automatically increased.

As an asset that is part of your financial net worth and can be used down the road to fund other investments, home equity is a very useful term to know when it comes to purchasing a home. If you’re on the market for a home and are considering your options, you may want to contact one of our local real estate professionals for more information.

22
Dec
By First Rate Financial Group
Mortgage Tips

The ‘Debt to Income’ Ratio and How It Affects Your Home Purchase

Real Estate Terms: The 'Debt to Income' Ratio and How It Affects Your Home PurchaseThe real estate market is rife with terminology that can make a home purchase seem more than a little complicated. If you’re currently looking for a home and are considering your loan options, you may have even heard the term ‘Debt to Income’ ratio. In the interest of simplifying things, here are some insights on what this term means and how it can impact your home investment.

Determining Your ‘Debt to Income’ Ratio

It’s important to consider what exactly your DTI ratio is before your home purchase as this will quickly determine how much home you can actually afford. To calculate this number, take your monthly debt payments – including any credit card, loan and mortgage payments – and divide them by your monthly gross income to get a percentage. In the event that your monthly debt is $700 and you make $2800 in income, your DTI is 25%.

What Your DTI Means To The Bank

The DTI is a very important number when it comes to a home loan because it enables the bank to determine your financial situation. A DTI of 25% leaves some wiggle room, as most banks will allow a DTI percentage that runs between 36-43%. In the case of the above example, this means that the most debt this person could take on per month is about $1200. While banks vary on this percentage, credit history plays an important part in the DTI that will be allowed.

Paying Down Your Debt Or Purchasing A Home

In the event that you have a DTI ratio that exceeds what your bank will allow, you will need to consider your debts before moving on to investing in a home. If you’re planning on purchasing a home in the next year, it’s a good idea to tackle high-interest debt first. However, if you happen to have a chunk of money saved up that you’re planning on putting into a down payment, it’s worth considering that putting more than 20% down may slightly increase the DTI percentage your bank will accept.

There are many fancy terms that go along with the world of real estate, but it’s important to understand what they mean so you can make them work in your favor. If you’re calculating your DTI ratio and are planning a home purchase down the road, you may want to contact your trusted mortgage professionals for more information.