Nov
28
Here’s an interesting article on how mortgage rate adjustments have changed lifestyles. A few years ago people were using their homes as ATM’s; taking out cash at will to buy things. I was never a big proponent of racking up debt at the expense of your home’s equity. Here’s why: Mortgage market hangover could choke holiday sales
However, I doubt a lack of equity will really curb the appetite to purchase “stuff.” To put things in perspective on Saturday I ventured to Best Buy to check out flat screen (LCD/PLASMA) televisions. The ones with $1000 up to $5000 price tags. The section was full of people all wanting to buy this high ticket item including myself. While I was enamored with the “kick ass” picture quality and slick design, I opted against buying a new television. It’s basic logic, whenever I buy something I feel the need to use it to justify the purchase. As it stands, other than sports I rarely watch television so buying a television would force me to watch television.
Visa wasn’t happy with my decision, but I’ll bet that he was happy with this past weekends results. Visa should change their marketing slogan, “It’s everywhere you want to be” to “No equity, we’ve got you covered.”
Jan
1
Buy vs. Rent
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One of the main benefits of buying a home vs. renting a home (or apartment) is that your mortgage interest that you pay each year is tax deductible. This can help at tax time to get more money back from the IRS. Another advantage of buying vs. renting is that with buying a home you are actually investing your money into a fairly safe investment. Unlike renting, when you are basically just throwing your money out the window.
Ask your mortgage professional to provide you a detailed analysis of the benefits of buying vs. renting. You will see many benefits of buying.
Another benefit in buying a home instead of renting is that you will be building equity. Your equity can later be turned into cash.
Owning your home vs. buying represents much more in terms of freedom and security. Very few renters actually realize that on a month to month rental the landlord can ask them to leave with only 30 days notice. This can usually be done without cause, meaning that they normally would not need a reason to do this. In many cases, rental properties have restrictions on how many persons may live in the property, pets, number of automobiles allowed, and many other things that can affect the way the renter lives.
There are many rent vs. buy calculators available online that will help demonstrate the advantages of homeownership compared to your current renting situation. These calculators provide all different kinds of information such as tax savings, equity gained, and a breakdown of differences between the payments.
Another advantage to buying a home is that you are locking into a payment. As in most cases rent will increase yearly while your mortgage payment may stay the same up to 30 or 40 years.
Keep in mind that owning a home has many responsibilities too that renting does not. A homeowner needs to upkeep the home. If the furnace goes or the hot water heater quits a homeowner needs to take care of these items. As a homeowner you must make sure that your property taxes and homeowners insurance get paid. Also, as a homeowner you must upkeep the exterior of the home, the yard, landscaping etc… While these responsibilities do exist for a homeowner the benefits of owning your own home still outweigh and are much more rewarding than the benefits of renting. Your home should always appreciate in value and you are going to basically make money simply for living there and making your monthly housing payment.
For many people, psychological and emotional factors drive their decision to stop renting and buy a home. These factors include pride of ownership, a feeling of establishing roots, a desire for a place to raise a family, desire for privacy, and freedom - freedom to paint your walls any way you want, freedom to barbeque on your own back porch, freedom to play with your dogs in your own back yard.
Other sites: Loan Officer | Stated Income Loan | How To Choose A Real Estate Agent | Delinquency | MIP | Closing Costs | Selling your home with a real estate agent| Pay Option Arm Calculator
Jan
1
100% Financing
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Editors Note: Due to the mortgage and credit crunch, 100% financing has been eliminated. If you’re in need of a Denver Financing contact us to discuss your mortgage options.
100% Financing allows you to buy a home with no money down.
100% home loans are widely available nowadays. Not only do government loan programs such as FHA and VA offer Zero Down mortgages, conventional loan programs with No Money Down feature are also offered by many traditional mortgage banks.
100% financing can be a great loan even for those who do have access to a down payment. Down payment funds can many times can be better kept aside for things such as other investment opportunities, a reserve account for emergencies and future home improvements.
Many people wait to receive income tax money, a big bonus at the end of the year, or a large gift from an immediate family member before they begin looking to buy a new home. A 100% zero down loan eliminates this waiting period and allows you to obtain the home you want now. Especially now with the uncertainty of interest rates and where they will be in the next 6-12 months. Now is the time to begin looking for your dream home. Waiting may cause you to accept a higher interest rate because the rates have increased during the time you waited. Even if you do have money available for a down payment it is always a good idea to keep some money put away for a rainy day or for an old furnace that needs to be fixed, an old water heater that needs to be replaced or some other basic home repairs. Also, you may want to have some money left to help pay for some of the costs associated with buying a new home, such as buying window treatments, decorating, new furniture, etc…
Almost all lenders allow this now and it can even be done with poor credit. Down to a 560 currently, although the interest rate will be reflective of your credit score!
By using 100% home financing option to control your up-front expenses by reducing your down payment to as little as zero without having to pay mortgage insurance. Most commonly know as 80/20 combo mortgages.
Besides being commonly known as 80/20 combo mortgages. 100% Financing can also be called NO MONEY DOWN or ZERO DOWN.
With 100% or Zero Down home loans, a home buyer is able to minimize his or her out of pocket expenses allowing them to purchase their dream home much sooner. In addition this allows more cash for the family to use for other home necessities.
You can now get 100% financing for the full purchase price of a home a single loan. In recent years, loan products have been developed to provide home buyers with the opportunity to purchase a home without a down payment. For many years, the minimum down payment required was 5% of the purchase price for a home. Then, special first-time home buyer programs came into existence, which usually required a 3% down payment. Now you can buy a home without a down payment.
100% Financing programs are off erred by lenders in markets where property values are stable or increasing. In markets that show decreasing property values, lender are much less likely to offer 100% Financing programs.
Often you can still do 100% Even with poor credit with a seller carry back. The lender will finance 80% and the seller will finance the remaining 20% Some lenders will allow this even with a credit score as low as 540!
Writing closing costs into the Purchase and Sale contract is called adding “seller concessions”. Many lenders will allow up to 6% of the sale price of the home to be paid in seller concessions.
If you are considering purchasing a property with no money down, please contact your local mortgage agent before you write your offer.
One effective way to get a win-win is to help someone with no down payment money on a For Sale By Owner home. The seller is more likely to agree to seller concessions when they know they are saving the realtor commission. If you find a 100% loan for the buyer and the seller will agree to 6% seller concessions, the broker can get a fair commission for playing real estate agent and directing the parties to a good title company or attorney to help with contracts and closing. This is often considerably cheaper than FHA because FHA has the mandatory up front PMI of 1.5% although the interest rate may be a little higher than the FHA rate. You might also ask your mortgage broker about companies that offer to have the PMI added to the interest rate where it is tax deductible, or have them do an 80/20 loan to avoid MI altogether.
100% financing does not include your closing costs. Your Real Estate Agent may write the closing costs into the contract for the seller to pay so that you may not be required to use any of your funds to purchase your home.
If your credit score is below 700, another excellent way to avoid PMI Private Mortgage Insurance on a 100% purchase is to contact us and enquire about a subprime 100% purchase mortgage loan.
You will still have to put down earnest money on the home you plan to purchase. If you obtain 100% financing, the earnest money will be used toward your closing costs.
Borrowers with strong credit scores will have more 100% financing programs to choose from with better rates than a borrower with a lower score.
Although more difficult to qualify for, there are No Money Down programs for investment properties as well. The property has to be residential, up to 4 units. As an investor pay close attention to your cash flow on any property as 100% financing often pushes expenses beyond income.
Many people today are opting for 100% financing, or zero down programs. This puts you at an advantage if you already have cash on hand. While it would seem logical to put money down towards your purchase, you may want to consider your situation after the loan closes. Will you have enough cash left over?