How to Finance A New Home Before Selling Your Present Home

07.18.16 by

How to Finance A New Home Before Selling Your Present Home

financing

Obtaining financing while owning a home can be tricky; however, there are some options to consider before simply giving up and potentially losing a chance at your new dream home. Stuart, FL (and other area) buyers have several options for balancing the sale and purchase of a home and understanding how those options might help you seal the deal.

Open a Home Equity Line

Tapping the equity in a currently owned home can be a fast and inexpensive way to gather the funds needed for a new purchase.

HELOC (Home Equity Line of Credit) benefits can include:

  • Interest only payments for the amount borrowed.
  • Competitive HELOC rates with good credit.
  • Nominal fee (sometimes free) to open the line.
  • Typically no penalty for closing a line early when the property is sold.

Buyers will need to qualify for a new mortgage with the total debt of the existing mortgages and proposed mortgage payment.

Borrowing from a 401K

Borrowing a down payment from a 401k can be a great way to obtain financing; however, while it’s acceptable to make mention of a 401k loan, its best to suggest speaking with a financial expert and HR representative about the advantages and disadvantages of self-financed down payments.

Apply for a Bridge Loan

Bridge loans bridge the gap between the current home and the purchase of a new home. The loan allows home buyers to tap equity for use as a down payment.

Some bridge loan facts:

  • The cost for a bridge financing is more expensive than a line of credit.
  • Applicants must qualify for both mortgages.
  • Payments may not be required for several months; however, interest will continue to accrue.

Lending guidelines will vary from lender to lender and it’s best to point your clients in the direction of a knowledgeable mortgage professional who can determine the most appropriate financial option.  If you’re looking for options here in Martin County, give me a call and I can recommend some potential folks that can help you.

 

New Wrinkles for Self-Employed Persons Getting a Loan

04.16.15 by

 

 

 

  New Wrinkles for Self-Employed Persons Getting a Loan

You don’t have to tell anyone who is self-employed that there are extra costs that go with the benefits. In addition to the long hours and weight of responsibility that come with the job description, getting a home loan has always added special challenges. Now that we are into the new Dodd-Frank era of federal oversight, some of the changes warrant an early heads-up.

self employedThe 2010 legislation that went into effect on January 10 created the Consumer Financial Protection Bureau, with the function of tightening the rules lenders follow in order to discourage the issuing of mortgages that borrowers can’t be reasonably expected to be able to repay. To deliver on that worthy purpose, more proof and more paperwork will be required to support the income claimed on loan applications (here you might well be hearing an imaginary smacking sound from self-employed persons reading this and whacking their foreheads—paperwork is the bane of the self-employed).

If you are your own boss and getting a loan in Florida’s Treasure Coast is on your horizon, take heart! Just because it may be more difficult to apply for home loan doesn’t mean it’s impossible.

The new lending rules describe eight specific factors lenders should verify and document before advancing home loans. They includes the borrower’s assets, credit history, employment status and other debt obligations. The penalty for lenders who fail to do so adequately is that they may be legally liable if a borrower proves unable to repay.self employed

For the self-employed, the extra burden can come with the requirement that borrowers be able to show consistent income (hear that forehead-smacking sound again?) The general rule is that borrowers be able to provide at least two years’ worth of personal tax returns. Since self-employed people getting a loan in Florida’s Treasure Coast often have perfectly valid reasons for fluctuating annual incomes, it’s vital to talk with a broker and lender as early as possible to establish the taxable income level needed to qualify for a loan.

That talk should cover other areas. For instance, self-employed people have greater flexibility than most when it comes to reporting deductible expenses on their income tax forms. Since those same deductions result in lower net incomes, that can be problematical when it comes to getting a loan. One way to counter that problem is to demonstrate that the expenses incurred were used to buy things that will improve their business in the long term. Another approach is demonstrate that similar expenses are not likely to re-occur (particularly apt when a business is just starting up).

If you are among the self-employed—and plan on getting a loan—planning is key. Get your ducks in a row now so the loan process doesn’t derail you later. It’s never too early to call me as an early resource before we get to move on to the fun stuff—your Florida’s Treasure Coast home search!

 

 

 

 

 

 

 

 

 

 

 

 

6 Mortgage Shopping Myths

01.27.11 by

Mortgage shoppers hear many strange tales about the home loan-shopping process. Here are 6 common myths about shopping for a mortgage and the facts you should know:

Myth: Shopping for a mortgage loan will hurt your credit score.

Fact: Credit scoring companies know most people want to shop around for a mortgage or car loan. That’s why their formulas allow a window of time during which multiple inquiries about your credit will be counted as only one inquiry. If you stay within that window, you don’t have to worry about shopping for a loan from multiple lenders.

Myth: All lenders sell your personal information to telemarketers.

Fact: When you apply for a loan and the lender checks your credit history, the credit reporting company may sell your name and telephone number to other lenders. These names and telephone numbers are known as “trigger leads.”

If you’re shopping for a loan and don’t want to become a trigger lead, you can submit a form online at OptOutPrescreen.com. This will help to keep your information private and ensure the credit bureaus won’t sell your information as a trigger lead.

Myth: Everyone can qualify for the low-interest rates advertised on television.

Fact: Advertised interest rates may require that you have a very high credit score or pay a lot of upfront fees that add to the cost of your loan.

The best way to find out exactly what interest rates you’ll qualify for is to shop around and compare loan offers from multiple lenders. The rates you’ll be offered will depend on your credit score, the type of loan you want and your down payment (or the equity in your home) as a percentage of the amount you want to borrow.

Myth: If the Federal Reserve raises interest rates, mortgage interest rates will go up.

Fact: The Federal Reserve sets bank interest rates, not mortgage interest rates. While the Fed doesn’t directly control long-term interest rates for mortgages, auto loans, credit cards or other types of consumer loans, the interest rates on those types of loans can be affected by the Fed’s decisions, actions and statements. But keep in mind that if you have a fixed-rate loan, the rate won’t change no matter what the Fed does. If you have an adjustable-rate loan, the adjusted rates may be indirectly affected by the Fed’s actions. (For more information read: How the Fed affects mortgage rates.)

Myth: The loan that has the lowest interest rate or lowest monthly payment is always the best loan.

Fact: Mortgage loans are not all alike. Some have a fixed interest rate while others have an adjustable rate. It’s important to compare more than just the interest rate and monthly payment when shopping for a mortgage. Be sure to look at the loan’s costs and fees, as well as the terms of the loan. For example, some mortgages may offer a low initial monthly payment but require a balloon payment. Or a loan may have an interest-only period, after which your monthly payment will rise dramatically. And some have less expensive costs and fees, which may make sense for your situation.

Myth: I may be required to pay a large sum of money upfront to guarantee my loan approval.

Fact: The federal government has warned borrowers to be aware of so-called “advance fee loan scams,” in which a lender guarantees that the borrower will be approved for a loan after the borrower pays a hefty upfront fee. Be wary if a lender asks for you to send or wire a large upfront payment to “guarantee” your loan approval. This may be a sign of a scam.

Reputable lenders may charge modest fees to review your credit report and conduct an appraisal during the loan approval process, but they typically won’t approve a loan until they’ve reviewed your financial situation.

For more information about advance fee scams, visit the FTC’s Facts for Consumers.

For more information, visit our website or call us at (772) 888-2885.
Our market reports are here!

Courtesy of Claudine Porikos and Kim Davis, Group One Mortgage

What’s the Best Home Loan for You?

01.05.11 by

There are many different kinds of home loans, each with its own features and advantages. This section describes some of the major types.

Depending on your credit history, your income, how much you need to borrow, and what you plan to use the money for, you may find that you qualify for all of them or only a few of them. Chances are that whatever your circumstances, the experts at Group One Mortgage can help you find the financing you need.

Why talk to a mortgage expert?

The information you’ll find on our website – or anyone else’s website (or brochure or newspaper ad or billboard) – is based on averages. There’s no other way to report it.

But your situation is unique, and your mortgage should be, too. Call Claudine at Group One Mortgage now at 561-745-1205 for a thorough analysis of your circumstances and our recommendations for which home loans will work best for you.

Types of Home Mortgage Loan

Loan Type

Loan Description

Fixed Rate Refinance

Refinancing to a fixed-rate mortgage is a good idea if interest rates are significantly lower now…

Adjustable Rate Refinance

ARMs are attractive to some homeowners because they traditionally have a lower initial interest rate than fixed-rate loans.

FHA Refinance

The Federal Housing Administration offers a number of federally insured mortgage programs to American citizens wanting to purchase or refinance a home.

Cash Out Refinance

Cash-out refinance mortgages involve getting a new, larger mortgage to get extra cash to pay off debt…

No Closing Cost Refinance

No-Closing Cost Refinance loans usually require the borrower to pay less in upfront fees relative to the other refinancing options

DU Refi Plus™

DU Refi Plus™ was designed to reignite the mortgage industry by simplifying the refinance process for millions of Americans

Home Mortgage Loans

Loan Type

Loan Description

Fixed Rate Mortgage

A fixed-rate mortgage is a loan in which the interest rate on the note remains constant throughout the life of the loan…

FHA Mortgage Loans

FHA Mortgage programs are great options for those borrowers who can’t meet some of the strict lending criteria of conventional loans…

Jumbo Mortgage Loans

Cash-out refinance mortgages involve getting a new, larger mortgage to get extra cash to pay off debt…

Adjustable Rate Mortgage

An adjustable rate mortgage (ARM) has an interest rate that is fixed for the first several years of the loan…

*Information courtesy of Kim Davis and Claudine Porikos, Group One Mortgage, Jupiter Florida

For more information, visit our website or call us at (772) 888-2885.
Our market reports are here!