13
May
By support
Home Mortgage Tips

Saving Up for Your Down Payment? Try These Money-saving Tips to Speed Things Up

Saving Up for Your Down Payment? Try These Money-saving Tips to Speed Things UpOne of the most significant challenges that many people face when preparing to buy a first home relates to saving money for a down payment. While there are many different loan programs with varying down payment requirements, the fact is that it can still be difficult to save up a large sum of money. Some programs may require you to save as much as 10 percent or 20 percent of the sales price of the home.

You can employ a few different tips and techniques to save money for a down payment more quickly, and these are some of the options that others have successfully used to save money for their home purchase.

Make Saving Automatic

One idea that works well for many people is to make saving for your new home automatic. This may be as simple as scheduling a regular draft or transfer from your checking account when your paycheck is deposited into your savings account. Some employers may even facilitate this process by contributing some of your funds into a savings account on your behalf. With this option, the money would go directly into your savings account without you having a chance to spend it.

Take Advantage of Retirement Accounts

If your employer provides you with the option of investing in an employer-sponsored retirement account, you should take advantage of this option. Many will offer a dollar-for-dollar matching program, and this may essentially double the amount of money that is saved in the account.

More than that, the funds from many retirement accounts may be withdrawn without penalty if they are used for a first-time home purchase. There are some rules and regulations regarding this, so you should research this option more thoroughly.

These are among the two best options for saving money for a down payment for your first home purchase. There are other ideas that you can consider as well. For example, you may borrow from a whole life insurance policy, obtain a gift from a family member or even sell some of your personal belongings that you no longer need or use.

When you combine many of these ideas together, you may be surprised how quickly your down payment fund can grow. You can also speak with a mortgage professional to learn more about the actual amount of money that you may need for the down payment and closing costs.

12
May
By support
Home Mortgage Tips

Mortgage 101: the Basics of How Mortgage Refinancing Works

Mortgage 101: the Basics of How Mortgage Refinancing WorksRefinancing your home mortgage can be beneficial for you for a number of reasons. As a homeowner, you may have spoken with some of your friends and neighbors who have already refinanced, and you may have heard about some of the different benefits associated with refinancing your mortgage. For example, refinancing can result in a lower mortgage payment, the ability to pay your mortgage off more quickly, reduced interest charges and other benefits. If you have never gone through this process yourself, however, you may not know what to expect with the refinancing process.

Determining if Refinancing Will Benefit You

The actual benefits that you would receive by refinancing will be unique to your situation. Refinancing is a process that results in replacing your existing mortgage with a new mortgage. This will establish your home financing with a new interest rate, a new term and a different mortgage payment. In some cases, the new loan amount that you qualify for will be higher than the amount that you owe, and you may be able to obtain cash out of the refinancing process because of this. One of the best ways to determine what the specific benefits are for refinancing your mortgage is to speak with a mortgage professional directly.

How to Get Started

Refinancing a home mortgage is very similar to applying for the original home mortgage when you purchased the home. However, additional information will be requested regarding your current mortgage, and some information may also be requested about the original purchase. You generally will need to provide tax returns, bank statements and other related financial information to complete the process.

However, initially, you may only be required to fill out a loan application and to agree to have your credit report pulled. This initial step will help a mortgage professional to determine if you may qualify for a refinance mortgage and what the estimated loan terms may be. Generally, this process can be completed quickly.

When you close on your refinance mortgage, the closing will typically take place in a title agency or another similar venue. The title or escrow agent will facilitate the process of using the funds from the new mortgage to pay off the balance on the existing mortgage and to complete any other required steps on your behalf. While there are some steps that need to be taken for you to refinance your mortgage, the process is typically rather easy when you work with the right mortgage professional. You can request more information about refinancing your mortgage when you speak with a loan specialist.

07
May
By support
Home Mortgage Tips

Understanding Lower FHA Mortgage Insurance Premiums and How They May Help You Save Money

Understanding Lower FHA Mortgage Insurance Premiums and How They May Help You Save Money FHA loans are designed to help individuals take advantage of the benefits of home ownership, and these loans have low down payment requirements. However, for borrowers who choose to make a down payment that is less than 20 percent of the sales price, the borrower will be required to pay a mortgage insurance premium with the monthly mortgage payment.

This premium is in place to minimize the risk that the lender takes when making a low down payment loan, but it does result in a higher monthly mortgage payment for the homeowner. Recently, the FHA has announced a lower rate for FHA mortgage insurance premiums, and this can help home buyers save money.

A Closer Look At The Reduced Premium

In January 2015, the FHA announced that the FHA premium rate would decline from a current level of 1.35 percent of the loan value to 0.85 percent. This has the potential to save home buyers hundreds of dollars per year in reduced mortgage payments, making home ownership more affordable. In fact, the FHA stated that it believes this reduction will help as many as 250,000 home buyers who currently do not qualify for a mortgage to purchase a home.

Calculating the Savings For You

The mortgage insurance premium is in place on low down payment loans until the home equity has accrued to at least 20 percent of the home’s value. This equity is essentially built up between principal reduction with regular monthly payments and increasing property values, but homeowners typically will need to prove that the equity is present before the mortgage insurance premium can be removed from the monthly payment.

As a home buyer, it is important to know that you may be responsible for the mortgage insurance premium for several years or longer. Therefore, this reduced premium can result in considerable savings for you over time. You can use an online calculator to determine your actual savings and to calculate your monthly payment based on the new rate.

If you have not qualified for a mortgage in the past due to the addition of a mortgage insurance premium, you may consider contacting a mortgage representative about your current options. The reduction in the premium rate will help many to qualify for the loan amount that they need, and you can speak with a representative about your financing needs and to request an estimate for your mortgage payment.