Category Archives: Mortgage

Boost your Credit Score

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Check out these 5 (Totally Legal) Tricks to Boost Your Credit Score Fast

So, you’ve decided next year is the year you’re finally going to buy a house. Congrats! But now you’re a little panicked because your credit score isn’t exactly going to make lenders swoon.  You’re not alone. The national average credit score is 695, while only half of consumers fall in the desired 700-plus range. Although you certainly can get a mortgage with that score, you’ll need a 740 or higher to get the best rates. And that point is not lost on potential home buyers, 45% of whom wait for their credit scores to improve before applying for a mortgage.  While credit history isn’t built (or, for that matter, destroyed) overnight, there are still some things you can do right now to boost your credit score—fast. Here are some sneaky yet totally legit ways you can improve that all-important three-digit number in record time.

Paying down your debt is the thing you can do that could have the biggest—and fastest—impact on your credit. Credit utilization (or the amount you can borrow versus the amount of debt you’re carrying) accounts for 30% of your credit score. And the more available credit you have, the better.

If you have the cash on hand, try to time your payments so you’re reaping the credit-reporting benefits.

“The easiest way to optimize your utilization is to use a credit card and pay your balance down to 1% of your credit limit right before your bank reports to the credit bureaus,” says Liran Amrany, founder and CEO of Debitize, a financial technology company that automates better money and credit habits. “You want to have positive utilization so it’s clear you are using the card, but otherwise want to be as low as possible,”

Not sure when your creditor reports? You could call them up and ask, or you can check your credit report. According to Amrany, you want to pay before the date last reported.

Estimated time for improvement: One month

2. Get your bills current

You hopefully already know that you have to pay your bills on time to get a good score. If you’re already late on a payment, pay that puppy ASAP for a quick credit boost.

“Because paying bills on time is the most important factor in a credit score, going from paying one or more bills late each month to paying all on time could show an improvement in one to two months,” says Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network.

Bonus: If you’re less than 30 days late and you can make the payment today, do it! Creditors don’t typically report until after the 30-day mark.

Estimated time for improvement: One to two months

3. Open a new account

Opening a new credit account can help in two ways.

First: “If you open up a new card, which increases your total outstanding credit line, your utilization should improve,” Amrany says.

Second: If you have only one type of credit card or a small loan, opening another type (like a store card) can help your “credit mix,” a term the credit bureaus use to indicate whether a person can handle different kinds of accounts.

But don’t go nuts—try opening just one new account, at least at first. If you apply for a card every time you’re asked whether you want 10% off your purchase today, you’ll take a hit on the number of recent inquiries . And that won’t look good.

Estimated time for improvement: One to six weeks, based on processing and reporting your new account

4. Become an authorized user

Have a responsible partner or family member? Becoming an authorized user on one of their accounts will let you piggyback onto their good credit history.

“The full history of the other account shows up on your credit report immediately,” Gallegos says. “And when this older, established credit account is added to your credit history, it results in an increase in the average age of accounts you’ve ‘managed’ (which also increases your credit score).”

Just be careful to make sure the person you choose actually pays his bills on time and keeps the debts low—just like good credit history, bad history will show up, too.

Estimated time for improvement: Immediately

5. Don’t bother with additional payment histories

A popular credit-boosting myth says you can add to your credit history (and improve your score) by calling your other providers—like your wireless provider or utility company—and asking them to report your payment history to your credit report. It sounded like a pretty good deal, so we asked the experts about it.

But alas…

“Each of the major credit-reporting agencies is making some changes to include more bill payments, albeit slowly. In general, though, most of the time, these types of payments only appear on credit reports when they are delinquent,” Gallegos says.

So, that one probably won’t work in your favor, but there are still plenty of things you can do now. House, here you come!

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 | Nov 22, 2016

Angela Colley writes about real estate and all things renting and moving for realtor.com. Her work has appeared in outlets including TheStreet, MSN, and Yahoo.

 

How to Buy a Home Without a 20% Down Payment

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But if you don’t happen to have that kind of cash on hand, you’re not alone. Quicken Loans Vice President of Capital Markets Bill Banfield notes that the most common barrier to homeownership isn’t being able to afford the monthly mortgage payment—it’s being able to save the down payment.

Thankfully, there are other ways to go about buying a home that don’t require you to put 20% down, like the following:

The Federal Housing Administration requires a down payment of only 3.5%. Compared to 20%, that’s pretty sweet—but these government-backed mortgages aren’t for everyone. To be eligible, you’ll need a decent credit score, of at least 580. Scores as low as 500 may qualify, but then you’ll need to put 10% down.

Another stipulation is that you’ll have to pay mortgage insurance, an extra fee that’s required on home loans where less than 20% has been put down. There are also limits on how much money you can borrow, with a minimum and maximum between 65% and 115% of the median home price in an area—on average between $271,050 and $625,000. Still, in spite of these restrictions, these loans are plentiful and a boon to home buyers, particularly those who are entering the housing market for the first time.

VA loans

If you or your spouse has served in the military, Uncle Sam has your back! You may quality for a Veterans Affairs loan, which requires 0% down and, unlike FHA loans, no mortgage insurance, since

To get a VA loan, you’ll need to present a certificate of eligibility, proving one of the following requirements:

  • 90 consecutive days of active duty during wartime (including from Aug. 2, 1990, to the present; see other qualifying dates), or 181 days during peacetime.
  • six years in the National Guard member or reserves.
  • You were wounded in service, even if you served for less than the specified time.
  • You’re a widow or widowers of a member of the military forces who died in action or from injuries suffered while on duty.

USDA rural development loans

The United States Department of Agriculture also offers 0% money-down loans to home buyers who qualify as having low or moderate income. And the threshold for “moderate” can be quite high depending on where you live; in San Francisco, it amounts to $141,000 for an individual.

And while eligible properties are typically in rural regions where space isn’t at a premium, this doesn’t necessarily relegate you to the sticks. A full 97% of the United States is covered under USDA loans; check whether any address or area is covered at USDA.gov.

State and local home buyer programs

The federal government isn’t the only one offering down payment assistance. In fact, there are 2,290 down payment programs across the country that offer financial assistance, kicking in an average of $17,766, according to one study.

Generally, these programs have income limitations and require you to take a home-buyer class. Find programs in your area on the National Council of State Housing Agencies website, or at the Down Payment Resource, which offers a calculator that can show you what you may be eligible for.

For information on our local Brevard County Downpayment Assistance program, follow this link to a previous post: 

First Time HomeBuyer Downpayment Assistance is BACK!- Atlantic RE Brokerage

Credit unions

You may be able to get a mortgage with no down payment or a limited down payment from a credit union—a nonprofit banking cooperative whose members can typically borrow at lower rates.

In order to qualify, you will probably have to meet limited income requirements—such as a maximum of 80% of the median area income. You’ll also need a decent credit score. But the policies can vary widely, so check. For instance, the San Francisco Federal Credit Union recently offered 100% financing for up to $2 million to borrowers with an average credit score of 747 and $219,000 income.

How to find down payment help in your area

Start by talking with a lender, mortgage broker, or your Realtor to determine not only what home you can afford, but also what programs and financial assistance you might be eligible for. You can also see how much home you can afford by punching your numbers into realtor.com’s mortgage calculator.

For information on our programs that offer less then 20% downpayment check out our previous post: 

4 Tips to Determine How Much Mortgage You Can Afford


Author:   | Sep 26, 2016

Nichole Odijk-DeMario is a Chicagoland freelance writer whose work has appeared in local, national, and international outlets since 2007.

First Time HomeBuyer Downpayment Assistance is BACK!- Atlantic RE Brokerage

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The Florida’s Hardest-Hit Fund Program is back and offers a bridge to homeownership with up to $15,000 downpayment assistance.   This program provides federal funding for qulified first time homebuyers in areas hardest hit by housing and job market decline.    Brevard County is one of the few counties where this is availalbe.    What a fantastic time to to purchase your first home.

 

As a full service brokerage, Atlantic Real Estate Brokerage can help every step of the way.  We can introduce you to lenders that offer this program, and the move on to finding you the perfect home.  But there are a lot of details thrown in along the way and that is what your REALTOR will be able to help you with.  Laying out the homebuying plan and executing it !! That is our speciality.

There are several criteria for homebuyers to qualify for this program, however this is a fantastic opportunity to first time homebuyers to get into a new home with less money down.  A few things to consider:

  • The downpayment assistance is a 5 year deferred loan that is forgiven at 20% per year
  • Must be first mortgage with a 30 year term
  • Must be primary residence
  • Education is required

To find out if you qualify, call us and we will introduce you to one of our lending partners that offers this loan.

 

About Atlantic Real Estate Brokerage – Satellite Beach, FL

Laura D Hazlett has been a Florida Broker for over 8 years and in the Real Estate Management Industry for over 12 years. She is a proud mother of a college graduate (USF), is a graduate of University of Miami, and a successful business owner.  Laura’s no-nonsense approach to real estate makes transactions easy, because of her direct style of communication and her team of successful partners.

Laura has assembled a great team of Agents. Selected with professionalism and a concierge approach to clients and vendors, Atlantic Real Estate Brokerage Agents are the best in their field.  They are selective with their client base which proves to be an effective way to serve all clients with world-class service.

The Worst Mortgage Advice – Atlantic RE Brokerage

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worst mortgage adviceThe Worst Mortgage Advice Home Buyers Actually Believe

 

Getting a mortgage is a daunting prospect, which explains why so many people seem eager to pat your hand and say, “Let me give you a little advice.” Sure, those pearls of wisdom may come from an ocean of good intentions, but the suggestions might not necessarily be right for you. In fact, they could be dead wrong.

So before you take some friendly outside counsel as gospel, be sure to check it against our list of the worst mortgage advice people often give.

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‘Don’t bother getting pre-approved for a mortgage’

Why you might hear this: Hey, you’ve barely begun shopping for a home! There’s no need to get all serious about mortgages just yet. And besides, a mortgage pre-approval isn’t real anyway your application isn’t reviewed by an underwriter,

Why it’s bad advice: While a pre-approval might not be “official,” it will help you avoid major problems down the road.

“Getting pre-approved by a bank is one way to avoid the heartbreak that comes from falling in love with a house you can never buy,” says Maryalene LaPonsie of MoneyTalks. “It may also give you an edge if there are multiple offers for the same property. A seller will feel more confident selecting a bid from someone with a mortgage pre-approval rather than a person who hasn’t even begun the process.”

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‘Get your mortgage from the bank where you already have an account’

Why you might hear this: When it comes to convenience, you just can’t beat the bank you’re already using. Plus, since you have an existing relationship with it, it’ll give you the best rates, right?

Why it’s bad advice: You already know to shop around for a home. You need to do the same with your loan.

“Even though the big bank where I keep my checking and savings accounts claims they’ll give me better service and an easier application process, that may not always be true,” says Albert Tumpson, a banking and real estate attorney who owns several properties and refinances them every couple of years. “I’ve found more favorable terms with other venues. Always go with the most favorable terms.”

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‘Don’t bother reading the fine print’

Why you might hear this: Because actually perusing all that mortgage paperwork will drive you insane! And besides, this is the standard contract that everyone gets. Just sign here, here, and here—and you’ll save yourself a ton of headaches.

Why it’s bad advice: Because that fine print contains some clauses that could cost you serious money!

“Take your time and go over every last word with a fine-toothed comb,” says Jamie, a homeowner who purchased her second home two years ago. She was astounded when her lender asked her to sign a mortgage contract involving hundreds of thousands of dollars without “bothering” to read the details. Jamie ended up taking several hours to go over the contract and found several items to dispute. So what if the process took a little longer? It was well worth the wait.

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‘Always go with the lowest interest rate’

Why you might hear this: A lower interest rate means lower monthly payments. Duh.

Why it’s bad advice: Lower interest rates can have all sorts of strings attached—often in the form of an adjustable-rate mortgage.

ARMs are not always a bad thing, but just be on the alert when someone suggests an interest-only ARM, says Shant Khatchadourian, president of SKR Capital Group. “Interest-only ARMs can result in significant payment shock, especially if rates increase down the line and amortization kicks in.”

In the past, as interest rates were dropping and home values were rising rapidly, interest-only ARMs worked well for some people—especially those who didn’t plan to stay in the home beyond the length of the loan’s first term. But although interest rates are low, they’re likely to rise soon, so beware.

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‘Borrow as much as you’re approved for, even if you don’t need it’

Why you might hear this: Who doesn’t want a bigger and better house? Besides, a bank wouldn’t approve you for all that money unless you could afford to pay it back, right? Right?

Why it’s bad advice: It’s always wise to live slightly below your means, since you never know when life might pitch you a financial curveball, such as a layoff or medical problem.

“You can qualify for monthly payments up to 50% of your income these days,” says Khatchadourian. “But half of your gross income seems like quite a bit for most people, especially when they factor in taxes and insurance.”

So be sure to make a budget, decide what monthly payment you’re comfortable with, and stick to it.

 

 

Article From realtor.com by Lisa Johnson Mandell

 

4 Tips to Determine How Much Mortgage You Can Afford

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By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.Costs of Refinancing

Home ownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Why not just take out the biggest mortgage a lender says you can have? Because your lender bases that number on a formula that doesn’t consider your current and future financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Consider those lifestyle issues as you check out these four methods for estimating the amount of mortgage you can afford.

1.  Prepare a detailed budget.

The oldest rule of thumb says you can typically afford a home priced two to three times your gross income. So, if you earn $100,000, you can typically afford a home between $200,000 and $300,000.

But that’s not the best method because it doesn’t take into account your monthly expenses and debts. Those costs greatly influence how much you can afford. Let’s say you earn $100,000 a year but have $1,000 in monthly payments for student debt, car loans, and credit card minimum payments. You don’t have as much money to pay your mortgage as someone earning the same income with no debts.

Better option: Prepare a family budget that tallies your ongoing monthly bills for everything — credit cards, car and student loans, lunch at work, day care, date night, vacations, and savings.

See what’s left over to spend on homeownership costs, like your mortgage, property taxes, insurance, maintenance, utilities, and community association fees, if applicable.

2.  Factor in your downpayment.

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which protects the lender if you default and costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

But, if interest rates and/or home prices are rising and you wait to buy until you accumulate a bigger downpayment, you may end up paying more for your home.

3.  Consider your overall debt.

Lenders generally follow the 43% rule. Your monthly mortgage payments covering your home loan principal, interest, taxes and insurance, plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 43% of your gross annual income.

Here’s an example of how the 43% calculation works for a homebuyer making $100,000 a year before taxes:

1.    Your gross annual income is $100,000.

2.    Multiply $100,000 by 43% to get $43,000 in annual income.

3.    Divide $43,000 by 12 months to convert the annual 43% limit into a monthly upper limit of $3,583.

4.    All your monthly bills including your potential mortgage can’t go above $3,583 per month.

You might find a lender willing to give you a mortgage with a payment that goes above the 43% line, but consider carefully before you take it. Evidence from studies of mortgage loans suggest that borrowers who go over the limit are more likely to run into trouble making monthly payments, the Consumer Financial Protection Bureau warns.

4.  Use your rent as a mortgage guide.

The tax benefits of homeownership generally allow you to afford a mortgage payment — including taxes and insurance — of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example: If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, buy a home that will give you the same payment rather than going up to a higher monthly payment. You’ll have additional costs for homeownership that your landlord now covers, like property taxes and repairs. If there’s no room in your budget for those extras, you could become financially stressed.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

The Hidden Costs of Refinancing—Atlantic RE Brokerage

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Costs of Refinancing

With mortgage rates at historic lows,  many homeowners are contemplating refinancing their mortgage.   Why not? After all, negotiating for a lower interest rate saves you tons of money, right? Well, yes and no. Got that?  Read on to learn some of the Hidden Costs of Refinancing.

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The fact is, many homeowners are blindsided when they learn that there are a slew of costs for refinancing that can hit your savings hard. And there’s the hassle factor. After all, even though you’ve already been approved for the loan originally, lenders will want to reassess your credit history and your home once again before they agree to refinance your loan. That takes work (and paperwork), and you’ll have to pay to get these things done.

 

“Just because your neighbor refinanced doesn’t necessarily mean it makes sense for you to refinance,” says Staci Titsworth, a regional manager with PNC Mortgage in Pittsburgh. A lot of it boils down to how much you’ll save in interest. For example, a 3% drop in your interest rate will probably save you plenty, but a 0.5% drop may not be worth the pain and paper shuffling it entails.

 

To help you weigh whether refinancing is right for you, we thought we’d clue you in to some of the lesser-known fees you’ll have to cough up to get the job done. (They vary by area; these are ballpark estimates.) And while some of these expenses are fixed based on your specific loan and personal finances (mainly credit score and income), others are negotiable. So don’t be afraid to see if there’s any wiggle room to save some money where you can!

Application fee

Cost: $75 to $300

This covers the costs of processing your loan refinance request, including the lender checking your credit report. You will likely have to pay this fee, unlike other fees on this list, even if your refi is denied.

Prepayment penalty

Cost: One to six months’ worth of interest payments

Some lenders will slap you with fees for ending your original loan early.  Prepayment penalties are typically assessed at 2% to 4% of the original loan amount. Your loan agreement should spell out whether you’re subject to prepayment penalties. (FHA loans do not have any.) However, you may be able to get these penalties knocked off—or at least reduced—by negotiating with your lender. If you’ve been a responsible borrower (i.e., you’ve made your payments on time and in full every month), you should have more negotiating power.

Appraisal fee

Cost: $300 to $700

When you got your original loan, the lender charged a fee to have an appraiser assess the home and make sure that the property was worth at least as much as the loan amount. The same procedure takes place when you refinance. Bonus: You’ll get a professional opinion on the current price of your home. Sweet!

Home inspection fee

Cost: $175 to $350

Even though you probably got a home inspection when you first bought your place, a lot can change over the years, so your lender will want to recheck the property for any new problems that have cropped up. One potential way to cut costs: Reach out to the home inspector you used when you purchased the property and ask if you can get a discount for being a repeat customer.

Title search and title insurance

Cost: $700 to $900

When you refinance, your lender will want to conduct a title search  and get title insurance as safeguards—just as it did the first time around. After all, new liens on the property or other issues may have come into the picture since the first time this search was conducted. To save cash, dig up a copy of your original title report to save the lender some of the legwork of sifting through your home’s title history from scratch.

Attorney review/closing fee

Cost: $500 to $1,000

Most lenders charge borrowers for fees paid to the lawyer or title company that conducts the closing. There isn’t much room for negotiating price here, since they typically charge a fixed hourly rate.

Points

Cost: 0% to 3% of the loan principal

Time for a quick re-education. There are two types of points: origination points and discount points. Origination points are what the lender charges to cover the administrative costs of processing the loan. However, you may be able to negotiate this fee if you use your original lender, who may be willing to offer financial incentives in order to retain your business. After all, it doesn’t want you going elsewhere for your loan. Advantage: you! Use it.

Now let’s move on to discount points, which are optional. But here’s why you should consider them: You’re essentially prepaying the interest on your new loan—which, in turn, reduces your monthly mortgage payment. If you’ve got a stash of cash you can put toward points, this is a great way to save on interest down the road. But you need to calculate your break-even point to determine whether or how many discount points you should purchase, says Titsworth. For example, if you plan on staying in the home for five years and know that you’ll recoup the costs of purchasing the discount points in three years, they’re worth buying. Ask your lender to crunch the numbers to be sure.

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Daniel Bortz is a Realtor in Maryland, Virginia, and Washington, DC. Daniel is also a writer with a background in financial reporting and editing. His work has appeared in Money magazine and National Geographic Traveler and on CNNMoney.com, Entrepreneur.com, TheFiscalTimes.com, USnews.com, and HuffingtonPost.com.