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Category: Buying a Home

How much cash do I need to buy a house?

by Benchmark

One of the first questions potential home buyers ask is “how much cash do I need to buy a house?” Most of the time, some cash will be needed for a down payment and closing costs. The exact amount of cash will depend on several factors, including the type of loan.

Conventional loans

A conventional loan is made by a bank, mortgage company, or another type of financial institution without government insurance. Conventional loans typically require a down payment in the 5% – 20% range, depending on location and specific loan structure. For some people, this will price them out of using this loan product. However, the ability to put down a large amount of cash brings certain advantages with it. 20% down will usually eliminate the need for Private Mortgage Insurance. A large down payment means a smaller mortgage payment giving you less overhead on a monthly basis.

VA Loans

VA loans are administered by the Veterans Administration. This program was originally created to help veterans purchase a home by providing loans with low down payments and low interest rates. Because VA loans are guaranteed by the federal government, it is still possible to buy a home with up to 100% financing. Other benefits of VA loans are that no PMI is required and loans are usually a little bit easier to qualify. Although the loans are administered by the VA, they are made through a private lender.

FHA Loans

Loans obtained under the guidance of the Federal Housing Administration carry low down payments, usually 3.5% or less. For a $100,000 home, then, a person would need about $3,500 down. One advantage to FHA loans is that the down payment can actually come in the form of a gift. This means it could be a gift from parents or another relative. It will be necessary, though, to document that the funds are available and that the donor intends to provide them as a gift. Every situation is different so be sure to address your goals with your loan officer and Realtor so they can advise the best program for you.

Other Type Loans

Other type loans are available, such as those for investment property. Additionally, down payments are sometimes provided through governmental assistance and charities. More information can be shared by contacting your Benchmark loan officer and discussing how much cash you will need to buy a house.

house and money

first time home buyer tips from mortgage pros

First Time Homebuyer Tips from 7 Top Mortgage Professionals

by Benchmark

Purchasing your first home will be one of the most exciting times of your life. It will most likely be the largest investment that you ever make. It is where you will entertain friends and family, and it is where you will go to rest and relax each evening. With so much at stake, it is easy to see why most people are nervous throughout the process.

While purchasing a home can be a little nerve wracking, it is also worth the trouble. In an effort to reduce the stress associated with purchasing your first home, we have gathered top advice from seven leading mortgage professionals.

Top Tips For First-Time Home Buyers

1. Scott Schubert (NMLS #523812):

“It is advisable that as soon as you decide to purchase a home you meet with a mortgage professional to create a game plan. It can be one year or one month out from the actual purchase time, but it is still important. A lot of times potential buyers have one financial plan in order, such as paying down debt, when they really need to be saving for a down payment. Working with a mortgage professional first will help them to discover the best way to get approved for a loan.”

2.Wade Byers (NMLS #197143):

“You need to make a realistic budget before looking for a home. Decide what you are comfortable with paying each month on a loan and stick to your budget. In reality, I can most likely get you qualified for a higher loan amount, allowing you to purchase a larger home. However, this is not necessarily in your best interest. Stick to a budget and I will work with you to discover what price range of home will meet these guidelines.”

3. Scott Wallace Layden (NMLS #164302):

“Make sure that you use professional and trustworthy realtor to protect your interests during the entire sale process. This same thought process should be applied to your mortgage professional as well.”

4. Melody Kennedy (NMLS #448262):

“Always work with a realtor and mortgage professional that will explain everything to you in great detail. First-time home buyers are often unfamiliar with specific terms and processes and this can lead to disappointment and confusion.”

5. Valerie Barnett Springer (NMLS #198479):

“Talk to your mortgage professional about interest rates and what makes them change. If they cannot give you a logical answer, move on to another mortgage professional. You cannot expect this person to provide you with the best interest rates if they do not understand how they work.”

6. Chris Young (NMLS #111276):

“Most first-time home buyers were previous renters. They are unaware of tax deductions that are offered to home owners. There are many ways that home ownership can reduce your tax burden. By using the tax calculators on the IRS website to determine your tax burden, you can adjust your withholding tax to allow you to bring home more money each week to offset new home expenses while not having to worry about paying extra at the end of the year.”

7. Stacey Jordan (NMLS #23542):

“Your credit, income, assets and employment history is very critical to the approval process for a mortgage. However, communication with your mortgage professional is also very important. By working openly with your mortgage professional, you will ensure that you find the loan that fits your needs.”

These tips should help when considering to purchase your first home. If you need more help and would like to get started, contact us today.

first time home buyer tips from mortgage pros

what is a mortgage payment

What is a Mortgage Payment?

by bmadmin

One of the best long-term decisions that a person can make is purchasing a new home. While the value of a home may go up and down over a short period of time, home values have always increased over the long-term and have proven to be a great way to build personal equity. To purchase a home, most people will have to take out a mortgage to finance the majority of the purchase price. When getting a new mortgage, many people can be confused as to what their mortgage payment is and what it covers.

If you are wondering what your mortgage payment is, the first thing to understand is what impacts your mortgage payment.

The three factors that impact your mortgage payment is the amount of money that you are going to borrow, the interest rate that you are charged, and the amortization rate that you receive. The amount of money that you will borrow depends on the purchase price and the down payment you put forth. The interest rate that you receive is typically assigned by the bank or mortgage lender. Most borrowers choose a 30 year amortization, but there are plenty of other options to pay your mortgage off sooner than that. The longer your amortization is, the lower your payments will be, but the longer it will take to pay off the loan.

For those that are asking what a mortgage payment is, here’s what the typical mortgage payment covers:

First, it will cover your principle and interest payments. Interest is the amount of money that goes to the bank each month for providing you the loan. The principle payment is that amount of money that goes to the bank to pay down the loan balance. Each month, a little bit more money goes towards principle and a little less goes towards interest. Reduction of principle is what allows you to build equity over time.

Depending on your loan agreement, your monthly mortgage payment may also cover your tax and insurance payments. Many lenders require you to pay into real estate tax and insurance escrows every month. Then, when your tax or insurance payments are due, they mortgage lender will send the money due to the taxing authority and insurance companies. This will ensure that you don’t miss a payment and stay covered.

Feel free to reach out if you have any specific questions about what a mortgage is and what’s covered by your monthly mortgage payment.

Homeownership Is Still The American Dream

Survey Shows Homeownership Is Still The American Dream

by bmadmin

It seems that Americans are continuing to dream of homeownership, at least according to JPMorgan Chase’s recent survey.

A total of 87% of those surveyed said owning a home is something they dream about.

“Owning a home is at the heart of most Americans’ dreams,” said Kevin Watters, CEO of mortgage banking at JPMorgan Chase. “And people are saving as much as possible to achieve homeownership.”

Of those surveyed, 66% believe housing is a good financial investment and 75% see it as a crucial part of raising a family.

“Owning a home will not only give my husband and me pride and roots, but it will also bring pride in my children and respect from my friends and family,” said one respondent.

Compared to six months ago, nearly two times as many potential first-time homebuyers are optimistic about being able to put money down on a home over the next six months.

Overall, 56% of consumers believe their finances will improve over the next six months, while only 8% believe they will worsen.

“First-time home buyers are crucial to the housing market and the overall economy – and to their communities,” Watters said. “As families buy their first home, they are investing in their communities and enable other families to move up. That will eventually spur more new construction, generating additional jobs.”

Original post at http://www.housingwire.com/fastnews/2013/03/15/survey-shows-homeownership-still-american-dream.

Americans confident they can be home owners

More Americans Confident They Can Get Mortgages

by bmadmin

The housing slowdown may have been accompanied by an inability for potential homeowners to obtain mortgages, but the latest Fannie Mae National Housing Survey shows movement on the mortgage consumption-front.

For the month of November, 51% of survey respondents said it would now be easier to obtain a mortgage. This larger vote of confidence suggests tighter lending standards may be easing enough to grant more credit access.

Overall confidence in housing is up somewhat, with 14% of those interviewed believing home prices will go up in the next 12 months, a four-percentage point hike from the previous month. Twenty-three percent of survey respondents believe it’s a good time to sell a home, up 5-percentage points from October.

This is the highest rating of confidence since the survey’s inception more than a year earlier, the GSE said. In addition, 67% of the survey respondents said they would buy if they had to move in the near future.

The Fannie Mae November survey, which is the result of 1,001 interviews with Americans, concluded that consumer attitudes towards the economy and housing market are improving.

Doug Duncan, senior vice president and chief economist of Fannie Mae, noted that 11 of the national housing survey indicators evaluated by Fannie Mae are “at or near their two-and-a-half-year highs.”

About 44% of Americans believe the economy is now on the right track, and only 50% say it’s on the wrong track, which is 25-percentage point decline over the past year. The small gap between those two indicators suggests more improvement in overall economic confidence.

The number of survey respondents who foresee an increase in mortgage rates jumped 4 percentage points to 41%.

Respondents expecting home prices to fall over the next year rose by 4 percentage points to 14% over the previous month, while the number who expect home prices to go up over the next 12 months edged up to 37%.

Americans also seem more confident in their own financial situations, but remain worried the fiscal cliff will put them in worse shape next year. 18%, up 5 percentage points, felt that their personal financial situation would get worse over the next 12 months.

56% of respondents expect their household expenses to remain the same when compared to a year earlier.

Originally posted at HousingWire.com.

Is Now the “Perfect Storm” for Home Buyers?

by bmadmin

Barry Habib with Mortgage Market Guide was a guest on the CNBC show Squawk Box yesterday and shared some great insight on why now is the “perfect storm” for homebuyers.

He points to three big reasons all renters should jump into homeownership:

1. Rent rates are increasing in some markets. It is becoming increasingly more affordable to own a home versus renting a similar home.

2. Interest rates have basically bottomed out. Could rates go lower? Yes they could with the announcement of QE3. But money is so cheap to buy a home that it makes sense to buy right now.

3. Tax benefits. On top of the really cheap mortgage money available today you also have several tax benefits of homeownership. The IRS Publication 530 details what can and cannot be deducted.

Watch the video below and leave a comment on your thoughts about the current housing market:

Don’t Miss This “I Wish I Had” Moment

by bmadmin

When I was a kid every once and a while I would hear a grown up say “I wish I had….” It might have been buy that Microsoft stock when my friend told me about it or that piece of land that looked like a dump and was dirt cheap but now has a booming shopping center on it.

Now that I’m an adult I’ve even had a few “I wish I had” thoughts.

Today in America we are living in one of those “I wish I had” moments when it comes to real estate. Over the last few years, real estate markets all over the US have had a tough time. The slow economy has caused millions of homes to be foreclosed upon and property values have suffered nationwide.

While this is obviously not a good thing, it has created a golden opportunity or an “I wish I had” moment.

Everybody likes a good deal. Everyone likes to buy things when they are on sale.

In the US today homes are on sale!

According to data from the United States Census Bureau, the average home’s sales price fell from $329,400 in August of 2007 to $242,300 in October of 2011. This is a decline of over 26% in just 50 months.

When was the last time you that you thought 26% off of anything wasn’t a good deal? But it gets even better!

According to Freddie Mac the average mortgage interest rate on 30 year fixed rate loan fell to the lowest level it has been since they began tracking it in 1971. This means not only are you getting a house that is on sale, you are borrowing the money to buy that house as cheap as it has ever been available.

This is an opportunity that won’t last much longer as home values are starting to recover. According to the National Association of Realtors home sales continue to improve.

The real estate market has hit the bottom and is heading back up.

If you do not currently own your own home or been thinking about upgrading your current one now is the time to do it.

If you don’t you may look back ten years from now and say “I wish I had…”

Brad Hacker is a Certified Mortgage Planner for Benchmark Mortgage in Lexington KY. His primary focus is helping people achieve the dream of homeownership and assisting them on the road to financial freedom. Brad specializes in helping his Lexington mortgage clients integrate their home into their long and short term financial goals. 

Five Money Saving Tips for Potential Homeowners

by bmadmin

Before you begin the process of looking for a new home, as a potential home buyer, you will want to carefully inspect your financial situation. Home buyers should be certain their current income and monthly expenses can support a healthy mortgage payment. There are several ways would-be home buyers can maximize the income they have and make certain they can afford a mortgage.

By following these few simple money saving tips, those wanting to purchase a home can make that dream a reality.

Tips for Saving Money:

1. Create a Budget – By determining your fixed and discretionary expenses, families can focus where they have some flexibility in their budget. Keeping a log of expenses will also help families understand how their money is spent each month and can assist them in making necessary changes.

2. Write Down Goals – When goals are written down they tend to become more real. Once goals are in writing, families are more likely to work towards those written goals. Keeping these goals in a plain view will provide the family with a constant reminder as to the purpose of their sacrifices. Consider hanging your goals on the refrigerator.

3. Eat at Home – One of the easiest ways to save money is to eat at home. Eat breakfast at home, and take a sack lunch to work. Preparing dinner at home will not only save money but provide the opportunity for family time as well. Are you currently eating out or cooking at home?

4. Make a Grocery List – Before going to the grocery store, families should have a list of ingredients they need for the week’s meals. This will curb impulse shopping and prevent unnecessary purchases which simply go to waste. Eating something before you go grocery shopping will prevent the “hunger buys” also.

5. Build in Treats – Living on a budget should not mean never eating out, getting a coffee, or going to a movie. Depriving the family of these special treats will make it impossible to stick to a budget. While going out to a movie every weekend or buying a coffee every morning may not be the best money saving ideas, building in opportunities for these occasional treats is crucial.

Mortgage lenders recommend that families seeking to buy a home first consider their financial situation and how this may affect their ability to obtain a mortgage.

We can work with you to create a plan of homeownership that is best for your long term goals. By adopting the above money saving tips, families can ensure their financial priorities are in order.