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Category Archives: Home Mortgage Tips

The 10-year Mortgage: Why a Shorter Amortization Period Can Be Your Best Option

The 10-year Mortgage: Why a Shorter Amortization Period Can Be Your Best OptionFrom ‘down payment’ to ‘adjustable rate’ to ‘debt-to-income’ ratio, there are so many terms involved in the mortgage process that it can be hard to learn them all and keep them straight. However, whether or not you’ve heard it, the term ‘amortization period’ might be one of the most important ones associated with your financial well-being. If you’re currently considering the period of loan you should choose, here are some things to think about before taking on a term.

What Is Amortization?

Used to refer to the length of time it takes to pay off your mortgage loan, a typical amortization period is 25 years. However, there are many periods over which homebuyers can choose to pay off their mortgage. While many homeowners opt for what works best for them, it can be the case that a shorter mortgage period will actually be more financially beneficial in the long run. It may not only mean lower overall costs, it may also mean financial freedom from a loan much sooner than originally anticipated.

The ‘Principal’ Of The Matter

It’s important to have a monthly mortgage payment amount that’s sustainable, but a shorter amortization period means that you will be paying a higher amount on the principal and paying more on the actual loan amount. While a longer amortization period will add up to more interest payments and less paid on the loan cost each month, a shorter period can end up costing you less for your home when all’s said and done.

Considering Your Loan Period

It goes without saying that a shorter amortization period will pay down the principal sooner and cost less over time, but that doesn’t mean that it’s the best choice for you. Because your monthly payment will be taking a sizeable chunk out of your salary, it may be difficult to swing a higher payment in order to pay off your loan in 10 years. If it’s doable without compromising your quality of life, you may want to choose this option, but if there’s too much sacrifice you may want to opt for a longer loan period.

Everyone has a choice in the amortization period that works for them, but it’s important to make your decision based on what works for you and will be beneficial for your finances. If you’re currently getting prepared to invest in a home, contact your trusted real estate professional for more information.

 
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Posted by on June 21, 2017 in Home Mortgage Tips

 

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3 Classic Credit Mistakes to Avoid If You’re Trying to Secure a Mortgage Loan

3 Classic Credit Mistakes to Avoid If You're Trying to Secure a Mortgage LoanThe mortgage application process can be fraught with a lot of stress on its own, but if you’ve experienced issues with your credit in the past it can be even more taxing. While there may be a lot of things you may not be aware of when it comes to their impact on your credit, here are some things to watch out for if you’re planning on purchasing a home in the short-term future.

Applying For Extra Credit

Whether you’ve just been offered a great new deal by a department store or you’re not even thinking about it, new credit cards can pop up with deals that are quite enticing in the moment. Unfortunately, applying for new credit can actually signal to lenders that you’ve run out of credit on your other cards. Not only that, it will also have an adverse impact on your credit score each time you apply for new credit. If you’re considering a mortgage in the near future, it’s a good idea to hold off on any additions to your wallet.

Not Paying Your Bills

It may seem straightforward enough that not paying your bills is going to land you in hot water with your credit score, but many people think paying the minimum at any time will do. The truth is that if you want to keep your credit in line and improve your odds, it’s important to pay your minimum before the due date and always pay your bills. The only thing deferring payments will do is add marks against your credit, and this will be damaging come application time.

Don’t Avoid Your Credit Report

Many people who have a poor credit history are aware of the situation, but they’re also unwilling to address it. While it may be difficult to approach your credit report if you’ve had some hiccups in the past, it’s important to know what point you’re working forward from so you can move beyond it. Instead of ignoring it, get a copy of your credit report and review the numbers. Not only will this enable you to address any errors, it means you’ll be facing your issues head on.

There are a number of factors that can adversely affect your mortgage application, but by avoiding new credit and paying your bills on time you can have a positive impact on the result. If you’re currently in the market for a new home, contact your trusted real estate professional for more information.

 
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Posted by on June 14, 2017 in Home Mortgage Tips

 

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Dealing With a Tight Housing Market? 3 Tips to Ensure You Get the Mortgage You Need

Dealing With a Tight Housing Market? 3 Tips to Ensure You Get the Mortgage You NeedIn many cities around the country, real estate prices are on the rise and potential buyers are working hard to find a home they can feel good about. However, finding the right home in a tight market can be even more of a challenge when it comes to striking the right balance. If you’re hedging around the market in the hopes of finding the perfect home, here are some things you should do to ensure you don’t miss out on a good opportunity.

Keep An Open Mind

When wading into the real estate market, it can be very easy to get so enamored with the kind of house you want that you don’t see what’s in front of you. However, not paying attention to the potential of a particular house can mean a missed opportunity that will end up costing you down the road. Instead of waiting around for your dream home, make sure you take a look at homes you might not have thought about as they may end up being a welcome surprise.

Be Confident, But Not Too Confident

Since many homeowners have history with their home, they want a homebuyer who’s going to be just as invested in their property as they were. On the other hand, though, it’s important not to be too excited about a home as the seller may use your interest to get a higher offer. Instead of playing on opposite poles, show your interest and get into the game with a respectable offer, but be willing to back off if the seller isn’t interested.

Don’t Demand Too Much

Many potential homebuyers have been told to be aware during the home inspection and ensure they get the repairs they’re requesting, but in a tight market you may want to let a few things slip. While ignoring certain items like foundation or roof issues can be a major misstep, letting small things like a broken doorknob or peeling paint slide may be something you can easily remedy that won’t push you out of the game.

It can be complicated to get into the real estate market as a new buyer in a competitive market, but by letting the small stuff slide and being open-minded, you may just find the home you’re looking for. If you’re currently getting prepared to dive into the real estate market, contact your trusted real estate professional for more information.

 
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Posted by on June 7, 2017 in Home Mortgage Tips

 

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3 Ways to Earn Some Spare Cash to Help Pay Your Mortgage Down Faster

3 Ways to Earn Some Spare Cash to Help Pay Your Mortgage Down FasterA mortgage is one of the most expensive purchases you’ll make in your life, and for many, the idea of being indebted to it for years can seem like quite a burden. However, while you won’t necessarily be able to pay off your home with instant savings, there are ways that you can pay it down more quickly. If you’re wondering how to drum up some extra money for your mortgage, you may want to consider the following options.

Refinance Your Mortgage

One of the best ways to get a hold of extra funds is by lowering the amount you owe, and refinancing can be a way to do this. Since the interest rate on your mortgage adds up to additional money spent over time, getting a lower rate can easily minimize your monthly mortgage payment. It’s just important to be aware of all the costs associated with refinancing beforehand so that you can be sure the choice will result in money saved and an improved financial outlook.

Review Your Budget

Budget may be a dirty word for many people, but when it comes to scrimping for your home, it may be one of the best weapons you have in paying down your mortgage. Instead of looking elsewhere, sit down and review your budget to ensure your expenditures aren’t out of line with your income. It may seem too good to be true but, in all likelihood, you’ll be able to find a few places you can cut back for a little extra money each month.

Get A Second Job

It may not be the best option if you’re already working hard at your day job, but getting a job on the side can end up being a great way to find extra cash without limiting your lifestyle. Whether you decide to work in a restaurant or pick up a freelance gig on the side, there are plenty of options that may quickly add up to a more-rapidly reduced principal. You may even want to find something you already enjoy so it feels less like work.

The idea of paying down your home more quickly may seem out of reach, but by re-considering your budget and considering other employment, you may be able to hustle up some additional funds for your investment. If you’re preparing for home ownership, contact your trusted real estate professional for more information.

 
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Posted by on June 1, 2017 in Home Mortgage Tips

 

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Til’ Debt Do Us Part: How to Get a Mortgage If One Spouse Has A Poor Credit Score

Til' Debt Do Us Part: How to Get a Mortgage If One Spouse Has A Terrible Credit ScoreA poor credit history is a reality for many people, but it can be particularly daunting when it comes to investing in a house. Fortunately, simply because you or yours have experienced bad credit doesn’t mean that you should be penalized in the future. If your spouse has struggled with bad credit in the past but you’re both preparing to move forward and invest in a home, here are some tips for getting it together financially.

Face The Music

Many people who have bad credit are too scared to take a look at their credit report and broach it honestly, but it’s important to come to terms with the problem so that it can be fixed. Instead of ignoring it, get a copy of the credit report and review it for any errors so that you can update these if needed and be aware of the issues impacting your credit score. While there may not be any inaccuracies on the report, knowing what you’re dealing with will give you a point to start from.

Make Your Payments

At some point, most people have missed a credit card or bill payment, but the first step involved in improving your finances and your credit is ensuring your spouse is paying their bills on time. While this won’t require paying the complete balance each month, it’s important to pay the minimum balance before the due date, and stick with it! It may seem like a small step, but over time it will improve credit and say a lot to mortgage lenders!

Save Up For Down Payment

20% is the amount that’s often suggested when it comes to a down payment, but if your spouse has terrible credit, it may be worth your while to save up more. It goes without saying that having good credit for both yourself and your spouse is important in getting approved for a mortgage, but by having extra for your down payment and paying your bills on time, you may be successful at convincing lenders you’re a solid bet.

It can be a lot more difficult to get your mortgage approved if your spouse has bad credit, but there are steps you can take to improve your financial outlook and give lenders a better impression. If you’re planning on investing in a home in the near future, contact your local real estate professionals for more information.

 
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Posted by on May 5, 2017 in Home Mortgage Tips

 

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Are You ‘Mortgage Pre-approval Worthy’? Learn How to Assess Your Finances in 10 Minutes

Are You 'Mortgage Pre-approval Worthy'? Learn How to Assess Your Finances in 10 MinutesFinding the right home and the right mortgage can take a lot of time and energy, so it’s important to consider whether you’ll be prepared for approval before diving into the process. Whether you’ve had some financial setbacks or you just want to have an idea ahead of time, here are some ways to quickly determine if you’ll be pre-approved for a mortgage.

Do You Have A Down Payment?

You may have heard that the ideal down payment amount is 20% of the cost of the home, but this doesn’t mean you have to have this amount. However, it is important that you have a significant chunk of change put away so that it can signal to the lender that you’re financially sound and will be able to come up with your monthly payment. A down payment will not only minimize the amount of money you owe the lender each month, it will also show that you know how to save and can be trusted with a significant financial investment.

Determine Your Credit History

Many potential homebuyers have financial hiccups in their history, but it’s how they’re dealt with that determines the future. While you may have considerable issues getting a mortgage approved if you’re not paying your minimum payments on time and have debt, by making this change, you can have a positive impact on your credit history in a matter of months. You may also want to get a copy of your credit report to ensure there are no errors that have adversely impacted your score.

Do You Have A Solid Employment History?

It’s very important to have a solid work history in the event that you’re applying for a mortgage, as this will signal to the lender that you have the funds to make your monthly payment. Keep in mind that it’s good to have at least 2 years of solid employment under your belt, and you’ll need to provide paystubs. If you’re self-employed or your recent job opportunities have been sporadic, this can cause issues with getting pre-approved.

It can take a lot of time to find the right house and the right lender, but if you have a solid history of employment and a sizeable down payment you’re well on your way to pre-approval. If you’re preparing for purchasing a home and would like to learn more, contact your trusted real estate professional for more information.

 
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Posted by on April 26, 2017 in Home Mortgage Tips

 

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Your Debt-To-Income Ratio and How It Affects Your Mortgage

Your Debt-To-Income Ratio and How It Affects Your MortgageWhen you’re delving into the market in the hopes of finding your dream home, it’s likely you’ll come across the term debt-to-income ratio. This may not seem important at first, but your DTI is the key to determining the amount of money you can put into your home and just how much you should spend on a monthly basis. If you’re curious about what this means for you, here’s how to calculate it and how it can impact your mortgage.

What’s Your DTI Ratio?

One of the best ways to determine whether or not a home is affordable for you is to first calculate your DTI ratio. To get this amount, add up all of your monthly payments including any credit card, loan and mortgage payments, and divide this amount by your gross monthly income. The amount you get is your DTI percentage and this will help to determine how much your monthly payment should be.

What Does Your DTI Mean?

Your DTI percentage helps to determine the amount of house you can afford on a monthly basis, and this is why it can be such a good way to help you find the right home. While a DTI of 25% or less is ideal, a DTI that rises above 43% may be hard to get financing for since there will be little room for error. When it comes to a higher debt load, approval may come down to what your credit history says about your financial health.

The Amount Of Home You Can Afford

It’s easy to be convinced that your dream home is for you, and worth the splurge, but investing in too much home on a consistent basis can lead to future financial difficulties. If you’re set on a home that has a high monthly payment, you may want to hold off until you’ve saved a larger down payment or revamp your budget so that you can make the investment work for you. It may also be worth continuing the housing search so that you have more flexibility to invest in education, travel or other things down the road.

Your DTI ratio may be unfamiliar now, but this can be a great save when it comes to determining how much home you can afford and what will stretch your limits.

 
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Posted by on April 21, 2017 in Home Mortgage Tips

 

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