Need Mortgage Help?
808-596-4401
Fast Mortgage Rate Quotes

Marking The Path To Home Ownership With Information

Comments Off on Marking The Path To Home Ownership With Information
Bookmark and Share

stages-of-home-ownershipUse Your Personal Financial Information To Help Yourself

The digital age gives consumers the chance to find out how they appear to credit agencies, to track changes in credit and manage finances better. With a little determination, consumers who know how to exploit the technology and interrogate the right information sources can use it to assist themselves in qualifying for a home loan.

Unless you just won the lottery or you have great personal wealth, when you go to buy a home you will need to borrow the money to do so from a bank or mortgage company. Lenders will look at two aspects of your finances: Your income and spending habits to decide on your creditworthiness.

Check Out Your Three Credit Reports

The Fair Credit Reporting Act (FCRA) gives you the right to review your credit reports without charge from Experian, Equifax, and TransUnion once a year. If you have not done so in the last 365 days, go to the Website at annualcreditreport.com to download your reports from the three main credit-reporting agencies. These reports will show you exactly the information that lenders will see when they consider your loan application. A little preparation can prevent a disappointment; sometimes consumers discover incorrect information on their reports. You should look through all three reports very carefully and be prepared to query anything that appears to be inaccurate.

Track Your Credit Score Changes

Your FICO Score is an excellent indicator of your financial condition; it is a standardized model for credit scoring, and financial services companies have used it for more than five decades now. There are now web-based services that will give you an up-to-date calculation based on your information from the credit reporting agencies. If you choose one such as creditkarma.com, which does not ask for a credit card when you sign up, you need not worry about fine print trapping you into a payment plan.

Create A Structure To Pursue Your Goal

One of the most useful types of mobile digital applications is the personal finance app. It gives you the insight to track your spending and set up a budget and savings plan. As an example, mint.com will help you set up a budget and even connect with your bank and credit cards to give you real-time information. When you have this sort of insight into your personal finance you have a better chance of staying in control and beating your goals.

The credit card companies and banks know a lot about you, and they use that information to market unsuspecting consumers with any enticing financial products they think that they can sell. So, don’t be an unsuspecting customer any longer. Information is the key to taking control of your financial life. Make use of online personal financing analytical tools to set a budget, pay down your unsecured debt and start saving for a deposit.

Jumbo Loans Unlock Dream Homes

Comments Off on Jumbo Loans Unlock Dream Homes
Bookmark and Share

Jumbo Mortgage BasicsFinancing A Worldly Paradise

If price were no limit what kind of house would you buy? If you look around at your local housing markets from this point of view, it’s incredible what you can purchase with sums of money that are not that far out from the typical home loan. If you have excellent credit and enough equity to buy a two-bedroom condo with cash, then you are most likely in a position to finance a big house in the swankiest neighborhood in town. Let’s take a look at how that could work.

Jumbo Home Loans Too Big To Conform

One of the most significant boundaries in residential real estate is the maximum size for a conforming loan. Conventional loans are limited in size to $417,000 in most regions, and $729,750 in the most expensive, where home prices trend above the national average and luxury homes are larger and more expensive than that on the whole. Jumbo loans are those loans underwritten on homes of greater value, and they are more like traditional real estate investments where the lender requires a substantial deposit and above average credit ratings for the borrower.

Lenders have very reasonable concerns related to lending so much in one package, such as the volatility of the local property market and the chances that housing prices would fall. Your jumbo loan will have a higher interest rate, often an ARM with five years fixed interest, which then adjusts annually after that.

Interest and Mechanics Like Sub-Prime

Jumbo loans are not for everyone and not for the financially faint-hearted. It does not take membership in the so-called “one-percent”, but you will need to have proven your chops as an established business owner or professional employee of means.

The exception to being a conforming loan means that your mortgage company cannot do what they love to do best: sell the note attached to your loan to Fannie Mae or Freddie Mac, these two agencies gather conforming loans together as pools of debt and then sell them to investors as bonds. Jumbo loans are in a different class, one that is closer to sub-prime lending and the mortgage backed securities so closely associated with the financial crisis of 2007-2008. However, jumbo mortgages are still accessible available to qualifying consumers.

Securing Your Luxury Home

Luxury homes are an aspirational objective for many Americans, the American Dream in the flesh. Qualifying for said goal is the pinnacle of the financial and real estate pyramid; it is the home that would make even your realtor envious.

You will need to qualify on income, pay a twenty percent deposit, and have excellent credit. In return, you get a finer-than-average home, one that is exquisite in style, location or perhaps both. The United States has every manner of luxury home from the Tudor-style country mansion and the house on the hill to urban penthouses and architectural landmarks; jumbo loan financing means that you have arrived, and a beautiful home can be yours.

Should You Take The First Loan Your Lender Offers?

Comments Off on Should You Take The First Loan Your Lender Offers?
Bookmark and Share

Home Mortgage BasicsCrafting The Right Loan For You

The principle here is to get prequalified with confidence but get pre-approved sparingly. The difference is that for the latter, you will have to have a hard inquiry on your credit report that adversely affects your credit score every time you do it; too many home loan inquiries could prevent you getting the terms you want or need. Your lender should have the experience to get close to your needs on the first attempt but it does not mean that you cannot get a better fit to your needs, especially if you are stretching to make the deal happen.

The Ideal Lending Professional

Let’s say you choose a lender, go through all of the paperwork and the approval process, they offer you a loan that you can afford to close with and make payments, you qualify, and the house or condo qualifies. In this case, you might want to go ahead and grab it and get the home you want into escrow as soon as possible.

If you are working with a broker who knows your needs and understands the market you have a strong probability that they will hit the mark with the first proposal. Once you are preapproved, you can quibble over the details of how much and when in execution.

What Is Your Objective Here?

A home loan financing professional will work to find the right thing for your situation and needs. It is the experience and training that will enable them to serve you and get the product right on the first attempt. However, sometimes things aren’t that neat and tidy. If you are stretching to get the most real estate you can afford or negotiations for the home your family has fallen in love with hangs in the balance, you may have to get creative or make use of one of the variations that your lenders can create.

As an aside, never let the seller know that you have fallen in love with the home. In fact, avoid falling in love with any real estate before you have closed the deal. The knowledge that you have an emotional attachment gives the other side an advantage in negotiations that they will exploit ruthlessly; there is no room for emotion in real estate.

The Purpose Of Points And

Ask yourself: Does this loan package give me what I need out of the deal? Factors to scrutinize include interest rates; closing costs and how many points you pay up front for the privilege of a reduced interest rate over the life of the loan. Loans that run for fifteen to thirty years are very sensitive to changes in the agreed interest rate of fractions of a percent. Reduced rates are not only cheaper monthly; they can add up to huge savings over the life of the loan. Prepaying points on your loan can reduce that lifetime cost.

Ease Of Acquisition Versus Affordable Payments

Your mortgage arranger is working to get the deal that helps you to make the real estate purchase that you desire. That does not mean the first package they propose is the right one for you. So, the obvious answer is no, unless you are thrilled and amazed at the perfection of it, you should not take the first offer. It always pays to shop around and look at alternatives in home finance, as with all the great decisions in life.

Should I Invest All Cash Or Finance My Home Purchase?

Comments Off on Should I Invest All Cash Or Finance My Home Purchase?
Bookmark and Share

Home Purchase BasicsShould You Keep Ahold Of The Folded Gold?

In spite of the financial stress and strains on the average consumer there is apparently a large subset of investors capable of paying cash for homes these days.

You may feel that you are getting some extra security when you own your home debt free. This may be the case but it might work out that the cash could be put to better use when you have a low interest, tax deducted payment and a health investment portfolio.

To Finance Or Not To Finance

When you have the cash you are definitely in a position of strength in negotiations. You represent less risk and the chance to close fast. There will be less paperwork and sellers will prefer you when there are other offers that are financing. The cost of setting up finance is considerable even if you can get the lowest available interest rates.

On the other hand real estate is not a liquid asset. This means that all of the cash you put into your home will be tied up and subject to delays, paperwork and fees if you need to get at it. Having a home loan for at least part of the asset will free up the capital for other projects or just for contingencies.

Cash In The Bank Is A Liquid Asset

The uncertainty of changing personal needs means that it is prudent to have cash accessible in case of medical emergencies or a change in your work status. You will have an easier time approaching the bank in good times; attempting to finance is always easier when you have no pressing need.

If you do decide to finance a new purchase or refinancing while putting in cash on your existing home you do have the option of exactly how much to fund yourself. Real estate finance companies and banks take a very favorable view of leveraged properties where you have an equity stake of greater than twenty percent.

After all, it is your equity that will be lost first if there is a substantial drop in price or you are forced to sell at a discount. From your perspective, with a twenty percent equity stake or more you will not have to take out mortgage insurance and you will be positioned to get the best available interest rate.

Retirees Get Taxed On Lump Sums

Finally, your distance in time from retirement is a critical factor in whether you choose cash or finance but it might not be in the way you would expect. It depends on your taxable status and the source of your cash.

In retirement it may save on your tax bill to defer savings withdrawals from your 401k or IRA. So continuing to make the house payment could be cheaper than clearing the balance with savings. You don’t want the lump sum you withdraw to kick you into a higher tax bracket.

What A Choice To Have

It is an interesting dilemma when you have significant amount of cash to invest. The lower long-term costs plus the need for accessible cash to fend off the unexpected turns in life must be weighed against the costs of initially creating the loan. Arguably this is a wonderful position to be in if it applies to you; being stumped by your choice of financial options is the definition of the expression embarrassment of riches.

Some Places Age Better Than Others – Here’s What To Look For

Comments Off on Some Places Age Better Than Others – Here’s What To Look For
Bookmark and Share

Home Purchase BasicsBuilt At The Same Time And Crumbling Together

When you are house hunting and you are looking for any bit of information that will indicate of a good investment opportunity take a cruise around the neighborhood you are considering and just look at the condition. Before you lay out cash for reports and guides to an area try this simple trick.

Use your own senses to determine if the general area will be one in which you would like to live and spend time. Sometimes you can make some pretty conclusive assessments from the window of your car.

Look For Signs Of Decline

Real estate has a lifecycle over which it will build, thrive and then fade over time. Each building has its own life; some buildings will need replacement sooner, others later. What makes a truly long-term thriving neighborhood is the ebb and flow investment and how individual buildings change, so that there is always some growth to counter the decay.

Seek Signs Of Life And Renewal

A healthy neighborhood is one in which there is a relatively constant rate of change. Some of the things to look out for are mixed use, local amenities, a mix of building ages and a general sense of culture and community.

Older neighborhoods bounded by fast roads on all sides might have less potential to renew. They may lack the diversity that makes thriving mature communities so delightful. If all of the buildings are built and sold at once then they are likely to begin to decay at once.

Urban Homesteading Is A Thing For Some

Avoid neighborhoods with too many abandoned buildings and vacant lots. That is, unless you want to be some sort of urban pioneer, ignoring the dereliction to get a really cheap deal on land and buildings. The risk is that no one else sees it that way and the condition only continues to deteriorate.

The lack of municipal services can be a literal hazard. For example, if the fire department is overloaded and underfunded then the entire block could burn down before a house fire is under control.

This is an extreme case however; in fact many areas in decline will be renovated and regenerated by collaborations of government and local businesses. The time to invest in an area like this is after the commitments have been made and ground broken on projects that will help to heal the urban blight and return it to good use.

Using Your Own Senses And Judgment

So when you are house hunting keep this in mind: If it is a new subdivision are there covenants or other restrictions that will prevent renewal? If it is an older community is there a diverse array of property ages, and healthy well-maintained exteriors or are they unmodified and beginning to decay?

This is just one factor in your decision to choose a neighborhood or not but it is one that you can inspect easily with a calibrated eye by just driving around and looking. It could lead to a major decision and all with no fee greater than the tank of gas you use to do it.

How Much Do I Pay Out Of Pocket For That Home Loan?

Comments Off on How Much Do I Pay Out Of Pocket For That Home Loan?
Bookmark and Share

Home Mortgage BasicsMortgage Fees A Go-Go

When you are buying a home and using finance, as most people do, there is a whole host of fees at closing that you will have to pay out of pocket. Which is to say, the amount of cash at closing you have to contribute.

Financing Brings Flexibility To Closing

Although there will be costs at a real estate closing, even if you pay all cash, a significant portion of these are generated by the lender. It helps to look at what those costs are and how flexible the lender is in how you pay them.

Even though you will have to make trade-offs to achieve it you can significantly reduce the cash you need to pay at closing when finance is involved. Consider it safe to say that the lender is going to get the fee from you somehow. After all, they are lending money as a business; they have an expectation that the more money they lend, the more they should make to do it.

Borrower Break Down

The most significant part of the cost of borrowing comes in the form of origination fees and points. The loan origination fee goes to paying the commissions and salaries of the people working to sell you the loan.

Points are prepayments of interest on your loan; they range from zero to four points. Not having any points (zero points) will save closing costs for you at the expense of paying a higher interest rate over the term of the loan.

Paying more points at closing will save you from paying higher interest over the long term. Because of the way that interest is calculated the savings will be much higher than the cost of the points.

List Of The Costs Related To The Loan

  • Appraisal fees
  • Home inspection fees
  • Lenders title insurance fees
  • Credit report fees
  • Loan origination fees
  • Prepaid interest points

Other Closing Items That Pile On The Expense

At the time of signing the contract the buyer pays an earnest money deposit, which is usually around one percent of the sale price of the property. Title insurance also comes in owner’s policies.

  • Earnest money deposit
  • Owner’s title insurance
  • Title transfer fees
  • Et cetera

When you finally choose a home to purchase and apply for finance for the property, the lender is obligated to give you a detailed written estimate of your costs within three days. So before you sign the contract you will have an accurate breakdown of the costs that you will have to clear at closing.

Lenders Can Save You At Closing At A Price

A buyer’s costs at closing will likely fall in a range of between two and five percent. However, costs are not fixed at a statutory rate. Part of making the real estate sale happen is finding the funding to make the closing process go to completion.

Lenders can provide a lender credit; an upfront payment at closing that offsets the cost of the many items of closing and can even give you a no-cost closing. This will, of course, cost you in the long term, with a higher interest rate that will be far more expensive over time.

Prepare To Sell By Lining Up Your Support Team

Comments Off on Prepare To Sell By Lining Up Your Support Team
Bookmark and Share

Home Selling TipsLine Them Up And Knock Them Down

Ever heard the expression “Get your ducks in a line”? As corny as it sounds it is a great principle to follow when you are preparing to sell a property. Whether you are making a move because of work, moving up to house a growing family, downsizing because of an empty nest or determined to become the local real estate mogul, you need to have a network of professionals and contractors on call to make the transaction go quickly and smoothly.

If you have a buyer who wants to close quickly it can be very enticing. You want the cash price or generous terms that they offer so it is all too easy to fall into a trap of ceding control in the process and putting yourself in a weak negotiating position. That would leave you open to any number of crafty negotiation maneuvers.

When you have a network of all the people who will facilitate closing you help to bring back negotiating power in your favor. So here is a quick run down of some of the most helpful people you can work with to sell that home.

Some Great Members For Your Team

Realtor – You are going to need a good realtor to list and sell your property. This may be the same one who acted as your buyer’s agent when you bought the home in the first place or it might be someone in his or her network. It really comes down to finding a realtor in whom you are confident and with whom you can have a great working relationship.

Real Estate Broker – The broker is always there in the background because they provide the realtor’s network and MLS. It helps if they are someone with whom you can communicate and trust. It helps them if they also act as the listing agent.

Escrow Company – It is normally the seller’s choice as to which company handles the escrow.

Pest Inspector and Building inspector – These are not strictly necessary on the seller’s side as the buyer will be sending their own in when the decide to buy. However, you don’t want to get caught with defects that kill an otherwise great deal. Don’t let issues that could easily be handled before the buyer even sets foot in the property blow the deal for you. Send in the inspectors to save time and effort later.

Attorney – Having a real estate attorney watching from on high will do wonders to make everyone in the process behave. Having an attorney review documents will ensure that all is above board and truly in your best interest.

Photographer or Videographer – There’s nothing like the unfair advantage of having the best pictures and video to catch the eye of the premium buyer. The cost of these services is not so much for the few minutes they spend but the years of training that go into the refined picture composition that really stands out on websites and in printed media. Pictures and video are an investment that sells houses. You can even have a drone fly over and do a spectacular video flyby, which will stand out in even the fanciest high-end real estate markets.

Staging Company – Finally, if there is no furniture in the house, hire a staging company to bring in some furnishings and features that look good. Alternative exchange your shabby old interior for one that will create the ambiance to build the desire to live in your property for the future owners. Get some curb appeal and push it all the way into your home to create a dramatic affect.

Cloudy Days, Cloudy Titles And The Stormy Weather They Bring

Comments Off on Cloudy Days, Cloudy Titles And The Stormy Weather They Bring
Bookmark and Share

Title Insurance BasicsWhat Could Possible Go Wrong In Real Estate?

There is an unspoken fear in the back of the mind of every owner, seller and buyer of real estate in the U.S.A. That fear is best expressed as the good old question that catches all risks and has too often been the famous last words of those who undertook dangerous endeavors too lightly: What could possibly go wrong?

Defects In The Title

There is one specific thing of which buyers particularly need to beware: The possibility that some previously unknown party could come forward with a legitimate legal claim to the property that you have purchased, who takes control of your interest, either the whole or in part. That would be very upsetting to say the least.

Real estate, meaning land and the improvements on it, always has a history. Title to a property can have conflicting and minor claims that have been forgotten for any number of reasons and that interest may only come to light years later. It might even happen at the most inconvenient time, such as just after you have taken possession of the property by paying your hard earned savings and taking on huge financial debt.

Professionals On The Lookout

Fortunately the real estate industry is configured to make this as remote an outcome as possible. Selling a home includes title search as a normal part of the process, title search is designed specifically to catch any possible conflicts or a cloud on the title before you close on the sale and to convey the asset free of liens and encumbrances.

Now, there is always the very remote risk that the cloud on the title will not be found. A title search really just reduces this risk to the absolute minimum. To prevent a costly court battle that results from any defect to the title it is standard for the buyer to purchase title insurance to protect himself or herself.

Two Types Of Title Insurance

There are two forms of title insurance. The first is an owner’s policy, which is largely self-explanatory: It assures you retain the wealth behind your interest in the property. The second is a lender’s policy: It protects the interest of any lender, assuming you had to raise finance to buy the property.

If a claim to title is discovered during the search the remedy is to obtain a quitclaim deed, which may require a legal action. When the cloud comes to light after certification by the title company, your title insurance policy will cover the cost of the legal actions to clear the title.

Clouds Are Rare But Expected Occasionally

There is always the possibility that some sort of defect of the title to real estate can arise. Fortunately, the real estate industry has learned over the decades how to prepare for such contingencies and to insure against them.

As long as you follow the standard guidelines, perform the required searches and secure the policies that protect you a cloud on your title will be unlikely or be dealt to ensure that you have everything that you need to enjoy your new home.

Condo Owners And The Power Of Politics

Comments Off on Condo Owners And The Power Of Politics
Bookmark and Share

homeowners-association-basicsGetting Involved With Your Community Association

Have you ever wanted to get involved in your community and maybe even run for office locally? Well, if you live in a complex that has a homeowners association you might just be in luck! Joining the association board of directors is a great way to learn politics at the entry level.

The Importance Of Active Members

Alternatively, and more likely, it might be a matter of concern that you get involved and take control over your fate by joining in.

  • If you don’t get involved you don’t have the option of influencing the outcome of votes.
  • If you don’t get involved you effectively relinquish your right to control outcomes that affect your pocket book and quality of life.

So, there is that; it’s a matter of practical urgency for most condo board members.

Your homeowners’ association, co-op or condo association, if you have one where you live or in the home you want to purchase, has power over your life to the extent that they can set restrictive rules for your community and they can spend money and increase your HOA fees accordingly.

You do have some ability to respond and to do something about it and that is by getting involved. So the question is: where do you start? The management company operates your HOA on a daily basis but the power resides with the HOA board of directors.

Step 1: Go To Meetings

When you first move into an established community that includes an HOA or condominium association you may not be aware of the politics and the activities of the members. Take time to get to know HOA’s annual report in detail and the structure and the schedule of meetings.

It is always helpful to attend HOA meetings to get an idea of what is going on. From that initial involvement you can determine if you want to become involved further or if you have concerns about plans and future developments.

Step 2: Hatch A Clever Plan

Once you have learned the ropes, developed a feel for the culture of the organization and introduced yourself to the key players it becomes a waiting game. Prepare yourself for the next election and start politicking early.

You can make it fun and friendly but you will likely face entrenched competition. So be prepared to work through a couple of election cycles of lost elections before you win; this is definitely an ambition for the long term.

Veterans Administration Loans And What They Can Offer

Comments Off on Veterans Administration Loans And What They Can Offer
Bookmark and Share

va-loan-basicsService to country is one of the most honored traditions in the United States. It is only fair that veterans who have sworn to defend our nation are given some rewards in return for the risks and sacrifices they have undertaken. That is the ethos behind the program of government backed home loans offered by the Veterans Administration.

An Actual Benefit For Service

To be eligible for a Veterans Administration home loan you must have served in the Army, Navy, Air Force, Marines or Coast Guard. Active service members are eligible during and after service and Reservists or National Guard also can qualify.

The ultimate proof of service is your DD214 separation form, which states your record and dates of service and, most importantly, your terms of separation; what type of discharge you received at the end of service. If you are currently serving in the military a VA loan may still be a good option but it will also serve you to investigate other options such as FHA and conventional loans as well.

Much like other government backed programs such as FHA the VA home loan program allows a low down payment. In fact you may be able to forgo the down payment completely and, if they agree, sellers can pay many of your costs.

VA Loans Have Exceptional Terms

Your repayments will be lower due to no insurance premium requirement. Private lenders provide the loans and the VA provides a guaranty. The guaranty enables lenders to offer very favorable terms. Loans can be for the purchase of a home or refinancing to get better terms or to cash-out to pay off additional debts.

The VA also offers other benefits to qualifying homeowners such as grants to adapt your home for special needs. You will need to go through the qualifying process of the VA’s eBenefits Gateway and obtain a certificate of eligibility. You can do this part yourself or have your lender fill it out as part of your application process.

Much of what make this program work is the participation of lending institutions and you will need to work with one that handles VA lending. You will pay a VA Loan funding fee as a percentage basis. However you will not have to make a down payment or pay monthly mortgage insurance. It is up to the lender to set the interest rate, points and closing costs. These rates are not uniform so you might get a better deal by shopping around.

If You Are A Vet It Is Worth Checking Out

VA backed home loans are a great way for the nation to thank veterans and for deserving vets to establish homeownership more affordably. If you think that you might be eligible then you owe it to yourself to ask your real estate professional how you can initiate the process. And thank you for your service.

Mortgage Rates