Mortgage Made Easy: Taking The Step To Buy a Home

To buy or not to buy, that is the question. Let us guess, you’ve spent your entire adult life going from rented apartment to rented apartment, and you’re starting to wonder if now is the time to bite the bullet and buy a house. Think of the space you’d have! And the yard! You could finally get that dog you’ve been thinking about! We get it. Buying a house sounds like a dream come true, but at the same time, it’s an enormous responsibility. There are three main checkboxes you want to tick before you can be confident that now is the right time for you to buy a house. Finances Maybe you’ve got the cash on hand to buy a home without taking out a loan. More likely though, you are hoping to make a down payment and get a 15 or 30-year mortgage. That’s a great plan, but it’s crucial to figure out if it’s feasible. Before applying for a loan, set aside some time to go through your finances and make sure you have a good understanding of your debt-to-income ratio (DTI) and your credit score. As everyone always says, knowledge is power, and knowing where you stand financially is the first step to being ready to buy a home! Personal Equally as important as understanding your finances is knowing your priorities. Yes, owning a house would be very fun and exciting, but it’s also a huge commitment. You have to have a serious talk with yourself, and if applicable, the person you’d be buying a home with. Do you want to settle down in one spot for a while? Most people recommend that anyone who buys a home should intend to live in it for at least five years. Real Estate isn’t a great short-term investment, so it’s best to be committed for a while. Make sure you are ready to take on the financial responsibility of monthly payments, knowing that it might mean spending a little less on “fun” activities. We want you to take these considerations seriously; we want you to make an educated decision! The Housing Market At the time this blog post is being written, the housing market is booming. While house prices are on a bit of a steady incline, mortgage rates are the lowest we’ve seen in 50 years. But, things change, and rates will vary depending on your location as well. Connect with a local real estate agent and figure out what the housing and mortgage markets are up to in your area. It’s good to know what kind of financial climate you’d be walking into. With these three things in mind, you should be able to determine if now is the right time for you to buy a home. The answers you find will provide you with a sound basis of internal and external deliberation and consideration. Happy house hunting!

So, you wanna talk about mortgages? Well, you came to the right place. Let us break it down for you. First things first, what IS a mortgage? A mortgage is a legal contract between you and a lender. It outlines your promise to pay back all the money you borrow for a house, plus interest. If you break that promise, the lender has the right to repossess your home and sell it in foreclosure. Money, as you might have imagined, plays a massive role in the mortgage process. The big four money keywords are as follows: principal, down payment, and interest, and term. The principal is the amount of money you borrow from the bank to pay for the house. You could also think of the principal as the loan. An easy way to think about the principal is this: Principal = purchase price – down payment Now let's talk down payments. A down payment is the amount of your own money that you put towards the house right away. It's an upfront payment that determines how much your principal will be. Now we have interest. Interest is the amount of money the bank charges to give you the loan. In most instances, it’s referred to as an interest rate and comes in a percentage. Interest rates can depend on a lot of things, but the big-ticket item is your credit score. The better your credit score, the lower the bank’s risk; therefore, the lower the interest rate. Finally, the term of a loan is the length of time you have to pay it off. Most loan terms are either 15 or 30 years. The longer the term, the lower the monthly payments. In addition to those big four terms, there are some smaller items to understand: taxes and insurance. Owning a home comes with all new kinds of payments, such as property tax (which goes towards public services, schools, and infrastructure) and homeowners’ insurance (basically a security blanket in case of emergency, just like health insurance). In some instances, you may even need to pay for mortgage insurance. As you can see, a mortgage loan is a big and sometimes confusing commitment. But luckily for you, we are here to walk you through it! Still curious? Get a quote and see what your mortgage loan could look like!

Q: How will my new loan amount be determined? A: We’ll order a final payoff on your existing mortgages and will share a copy of that statement with you along with a summary of your final closing costs. With this information on hand, we will consult with you to set the final loan amount and get you all squared away! Q: Is this the interest lowest rate I can get and is it final? A: We specialize in finding low rates for every person we work with and will only ever come to you with the lowest possible rates we can find. This rate is an estimate based on the information you have provided. Once we pull your credit, we can get you a more definitive loan estimate. Q: What's APR? A: An annual percentage rate, or APR, is the rate of interest per year that is paid to a mortgage lender. APR's can be fixed or adjustable depending on the loan. Q. What happens with my existing escrow account and how is my new escrow account funded? (Prepaid Items and Escrowing for Property Taxes and Insurance) A: While these quotes don't include an estimate for funding your new escrow account, we will have one before the process is complete. You will also be refunded for any money in a current escrow account at the time of the payoff of your existing mortgage. Q: Where do closing costs and fees come from? A: Closing costs and fees come from a myriad of transactions that occur during the mortgage process. They include mortgage insurance, homeowner's insurance, appraisal fees, and property taxes. Typically, closing costs and fees calculate out to be around 2% - 5% percent of your total home cost. Q. What is the difference between Prepaids and Escrow? A: Based on the timing of the settlement on this refinance, payments may be due for property taxes and property insurance within the time period between the settlement date and the first mortgage payment due date on this new mortgage. These payments are collected as "Prepaids" at the time of settlement on this refinance to insure timely payment. Monies collected to fund your new escrow account are for the purpose of making all future property tax and property insurance payments. Q. Do I need to continue to make monthly mortgage payments on my existing mortgage? A: Yes! Until the funding of your refinance is done, you still are required to make your mortgage payments. Q: Why do you need my social security number? A: We use your social security number and other personal information to get a clear and accurate understanding of your financial situation. It is standard practice in all financial transactions and we take every precaution to ensure your information is safely and securely stored. Q: How long will this process take and what's next? A: Our goal is to complete this entire process, from loan application to closing, in under three weeks or less. The next steps to making this happen is pulling your credit and getting all of your details confirmed. Then, we can lock in your rate and get the process moving! See for yourself - get a refinance quote today!