Nov 28, 2014 | Home Mortgage Tips
Whether 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.
Nov 14, 2014 | Home Mortgage Tips
Are you thinking about using a mortgage to buy a new home? Buying your own piece of local real estate is a major financial investment and one that can require some pretty complex math to fully understand.
In this blog post we’ll discuss mortgage calculators and how to use one of these tools to determine your monthly mortgage payments, interest charges, amortization periods and more.
Determining Your Principal and Down Payment Amounts
To get started with a mortgage calculator you’ll need to know how the price of the home and how much you intend to contribute as a down payment. Generally speaking you’ll want to place a down payment of at least 20 percent in order to avoid having to pay for private mortgage insurance and to give you access to better interest rates.
Choosing Your Interest Rate and Amortization Period
Now that you have an idea of the amount of mortgage financing you’ll need, the next step is to choose your interest rate and amortization period. Different lenders will offer different interest rates for every one of their mortgage products, so again you’ll want to play around with these numbers and run the calculation to see which combination of mortgage financing, interest rate and amortization period gives you a monthly payment that suits your budget.
Using a Mortgage Calculator for Refinancing
If you’re thinking about refinancing your current mortgage you can also use a mortgage calculator to help make the math a bit easier. Simply use your outstanding mortgage balance as the principal amount and then choose an amortization schedule that fits your financial goals. Be sure to keep an eye on your interest payments, as you may find that by refinancing to a longer amortization period your monthly payments go down but your total interest paid is quite a bit higher.
Don’t Forget the Closing Costs
Finally, don’t forget that there are numerous “closing costs” – fees, taxes and more – which you’ll need to factor in to your overall calculation. Closing costs will include everything from home appraisal fees to government filing fees and property taxes, and will vary depending on the home and the city or community you’re buying in.
While online mortgage calculators can handle the tricky math to determine monthly payments and interest costs you may still find that you have questions about your mortgage or some aspect of the process. For more information, contact your local mortgage professional and they’ll be happy to share their advice and expertise.
Nov 7, 2014 | Home Mortgage Tips
If you’ve had some trouble getting approved for a mortgage recently, you’re not alone. Many individuals face mortgage challenges due to past blemishes on their credit reports or a personal financial crisis that resulted in bills not being paid on time.
In this post we’ll share three quick tips for sprucing up your personal credit before reapplying for a mortgage. With a bit of luck and hard work you can be on your way to purchasing that new dream home.
Pay Off Your Credit Cards And Lines Of Credit
The easiest way to improve your credit score and prove that you can afford your mortgage payments is to eliminate other forms of debt from your monthly budget. If you have outstanding credit card, student loan or other debts, get them paid off as quickly as possible.
You’ll also want to avoid taking on any new loans while you’re trying to get your mortgage approved as these are likely to show up on your credit report and can hurt your chances at approval.
Pull Your Credit Report And Look For Errors
If you haven’t seen your credit report recently, it might be worth investing in a copy so you can see exactly what your lender sees when they are evaluating you for a mortgage. You may discover that there are errors or inaccuracies that can be cleared off with a quick phone call, such as a past loan that was fully paid or a missed car payment that was reported in error. Every credit report error that you can fix will bring you one step closer to your mortgage approval, so spend a few minutes combing through your report.
Pay All Of Your Bills On Time
Did you know that every overdue bill can leave a negative mark on your credit report? With so many bills to juggle – credit cards, cell phones, utilities and more – it can be tough to keep them all organized and paid before the due date. However, if you’re working to secure a mortgage you must keep your bills paid to avoid being reported as a late or overdue payment.
If you’ve had some trouble getting approved for a mortgage in the past, take a moment to give me a call. I can put you in contact with some of the finest, professional and qualified loan officers in the area. My office represents hundreds of local and national mortgage lenders. I am certain I can find the right professional to assist you today.
David – 978-728-5104.
davidr@thebestclosings.com
Oct 31, 2014 | Home Mortgage Tips
Are you thinking about buying a new house or condo? If so, you’ve likely given some thought to your mortgage and as to how you can pay as little as possible in order to own your new home.
Below we’ll share four easy steps that you can take to ensure you start out with an affordable monthly mortgage payment.
Make A Large Down Payment On Your Home
The easiest way to reduce your monthly payment is to invest as much as possible in your down payment. The less you have to borrow, the less you’ll be required to pay back.
If you can put a sizeable amount down on your home you’ll find that your monthly payments are going to be very manageable. You’ll also save a lot of money in interest.
Maintain A High Credit Score
When a lender assesses your financial history they’ll take an in-depth look at your credit score in order to determine how much risk you present to them. If you’ve kept a clean credit rating and have a high score, it’s likely that you will qualify for a lower interest rate than someone with a lower credit score – even if you both have the same monthly income.
Buy A Smaller, More Efficient Home
When you’ve made your short list of homes and you’re scheduling your viewings, ask yourself – do you need a home this big, or this expensive? If you can do with a smaller, more efficient home you can reduce the amount of mortgage financing that you require and this will in turn reduce the amount that you need to pay each month.
Consider A Longer Mortgage Term
Finally, if you need to reduce your monthly payment at any cost you can stretch out your mortgage repayment period by a few years. Note that while this can reduce your payment amount it will actually increase the total amount that you end up paying back as you’ll pay more in interest.
While the above are general tips for reducing your mortgage payment, it’s likely that there are other strategies that are unique to your financial situation. Contact your local mortgage professional at your convenience and they’ll be able to share insights that are relevant to your income, your credit and the price range you’re looking to buy into.
Oct 8, 2014 | Home Mortgage Tips
Buying a home is a major financial transaction, especially if you’re going to need mortgage financing to help cover the purchase cost.
The only way to know if you’re getting the best deal on a mortgage is to shop around, but with so many different lenders vying for your business it can be very tough to choose which mortgage is the best fit for your own situation.
In this post we’ll share how you can compare mortgages from different lenders or underwriters so that you can get the best possible deal on your mortgage loan.
Start By Comparing Interest Rates
The most important factor in your mortgage is the interest rate that you’ll be required to pay so this should be your starting point.
While most lenders will keep their rates competitive with one another, you may find that there are discounts available based on your credit or financial history. You might also find that some lenders are willing to adjust the rate based on how long of a mortgage term you’ll need, and how much you’re investing in your down payment.
Get An Estimate Of Your Total Closing Costs
While the number that you’re likely focused on is the total monthly payment that you’ll be making for the next few years, you’ll also want to find out how much in fees and closing costs you will have to pay in order to take out the mortgage.
Every lender charges different fees and the amounts can vary wildly, so be sure to get an estimate on these costs to find out how they’ll affect your home purchase.
Watch Out For Early Payment Penalties
Finally, you’ll want to keep an eye out for early repayment penalties as these can cause you a headache later on if you decide you want to pay your mortgage off a bit faster. The ideal mortgage is one that allows you to repay the principal amount at any time without facing a penalty, but depending on the other terms that you require you might need to shop around a bit before you find a mortgage like this.
Oct 3, 2014 | Home Mortgage Tips
Whether you’re buying a home for the first time or you’ve decided it’s about time that you upgraded to a larger, more expansive house, if you’re making a real estate purchase you’ll need to be aware of how much you can reasonably afford to borrow in a mortgage. In today’s post we’ll take a look at a few ways that you can analyze your financial situation to help decide how much mortgage you can truly afford.
Prepare An Honest Monthly Budget
The first step in understanding how much of a monthly payment you can afford is to create an honest monthly budget which includes all of your family’s income and spending. Although you won’t have to pay them every month, it’s also important that you include costs that show up irregularly like car repairs, Christmas gifts or tuition bills as these still need to be paid. The more information you can place in your budget, the more accurate your financial picture will be.
Your Down Payment Plays A Huge Role
As you might imagine, the amount you can invest in your down payment plays a significant role in how much mortgage financing you will need. Every dollar that you can place in your down payment today is one less dollar that you’ll need to borrow and pay interest on over the amortization period of your mortgage. Take some time to consider how much you can put down, and see if there’s any way you can bump this figure a bit higher.
What Interest Rate Will You End Up Paying?
Small changes to your mortgage interest rate can have significant impacts on how much you are required to pay back over the life of your mortgage. As you’re shopping around, be sure to consider how long your interest rates are valid for and try to determine the lowest rate you might qualify for. You may also find it helpful to use an online mortgage calculator which can help you to understand how your interest rate impacts your monthly payments.
