Showing posts with label Down payment. Show all posts
Showing posts with label Down payment. Show all posts

Saturday, March 18, 2023

5 Tips for Buying a Home on Self-Employed Income

Buying a home can be tricky for anyone, especially for those who are self-employed. But, with the right information and preparation, it doesn’t have to be impossible.

Here are five tips you can use to help make the process of buying a home on self-employed income smoother and less stressful.

Start With Bank Statement Mortgages

When you’re self-employed, your income is not always easy to prove, which can complicate the mortgage application process. A bank statement mortgage will allow the lender to consider money in your bank account as proof of income rather than relying on tax returns or other traditional forms of proof. 

This means that you don’t need to provide as much paperwork and documentation when applying for a loan.

Prepare Your Financial Records

Regardless of whether or not you are using a bank statement mortgage, there are still financial records that lenders will want to see. Make sure you keep detailed records of all your income sources so that when it comes time to apply for a loan, you have everything ready and available. 

This includes things like profit/loss statements from your business, copies of tax returns from previous years, current bank statements showing consistent deposits over time, etc.

Save For a Down Payment

A down payment is essential when buying a home—even more so if you’re self-employed because lenders may require higher down payments for people who don't have regular paychecks coming in every month. 

It's important to start saving now if you haven't already; even small contributions each month can add up over time and make the difference between being able to buy the house of your dreams and having to settle for something else.

Cut Your Expenses

If you want to buy a house but need more saved up, one way to increase your savings is by cutting down on expenses where possible. 

That might mean taking public transportation instead of driving everywhere or bringing lunch from home instead of eating out every day; whatever works best for your lifestyle and budget! 

Every penny counts when it comes to saving up enough money for a down payment on a house; any amount saved can make all the difference in achieving your dream of homeownership.

Talk to a Mortgage Broker

A mortgage broker has access to many different types of loans from various lenders across the country—which means they’ll be able to find one that fits your needs perfectly! 

They'll also be able to talk through any concerns you may have about applying for a loan as someone who is self-employed and provide valuable advice on how best to handle this type of situation.

Buying a home on a self-employed income doesn’t have to be an impossible task—it just takes some extra preparation and planning ahead! 

Start by looking into bank statement mortgages if possible, prepare all necessary financial documents, save up as much money as possible, cut back on unnecessary expenses, and consult with qualified professionals like mortgage brokers who specialize in helping clients like yourself navigate through this process smoothly and successfully! 

With these five tips under your belt, you should be able to achieve the homeownership dream.

Friday, June 3, 2022

What You Can Do to Prepare to Qualify for a Home Loan

Now that you have decided the time is right to buy a home, your next step is getting yourself in the best possible position financially so that lenders will be eager to approve you for a home loan.

Since doing so will get you a mortgage that has excellent terms regarding interest rates and other costs, you want to give yourself plenty of time to get everything in order before applying for your loan. 

To make sure you get an excellent loan that lets you buy your dream home, take the following steps right away.

Check Your Credit Report

Believe it or not, most credit reports contain errors. If yours has errors, such as stating you were late on payments or failed to pay off a previous loan, you can forget about most lenders giving you a home loan. 

Since lenders will always check a loan applicant's credit report when considering a loan application, beat them to the punch by checking it yourself. Should you discover errors, get these fixed before seeking your home loan.

Pay Down Your Debts

When you seek a home loan from a lender such as Fairway PNW, they will always look at the amount of debt you already possess in comparison to your income. 

If you can pay down credit card debt and other debts before applying for your mortgage, your debt-to-income ratio will be much more favorable, increasing your chances of being approved.

Save Up a Large Down Payment

If you start planning early on to buy a home, one of the best things you can do to get the best home loan is to save up as much money as possible to provide a down payment on your dream home. 

For example, if you can save up 20-25 percent of the home's price as a down payment, most lenders will believe your financial position is strong enough to allow you to make monthly mortgage payments.

Know What You Can Afford

Finally, take time to think about how much house you can really afford. By doing so, this will let you know how much money you will need for a down payment, what type of home loan you should seek, and which lenders will likely be willing to work with you to help you get approved for your loan.

Though it will take some work on your part, preparing ahead of time for a home loan will soon have you getting a mortgage you can afford. Before you know it, you will be walking through the front of your new dream home.

 door of your new dream home.

Wednesday, May 4, 2022

Saving for a Luxury Car? 4 Ways to Allocate Funds Correctly

If you're like most people, the dream of owning a luxury car is a strong one. These cars are symbols of status and wealth, and for many people, they represent the ultimate in luxury. Luxury cars come with a high price tag.

If you're planning to save up for a luxury car, it's important to allocate your funds correctly. This article will discuss four ways to save money and put it towards your dream car.

Create a Budget

The first step to saving money is to create a budget. Determine how much money you need to save each month to reach your goal. Once you have a budget, stick to it.

Having a budget will help you track your progress and ensure that you're on track to reach your goal.

Check On Used Luxury Car Deals

You don't necessarily have to buy a brand-new luxury car. There are many deals on used luxury cars that can save you money. Do your research and find a good deal on the car you want.

Consulting with a reputable used luxury car dealer is a good idea. A used luxury car dealer is experienced and can help you find a car that fits your budget. Used luxury car dealers often offer incentives to buyers. 

These incentives can include cashback, low-interest financing, and lease deals. It all depends on the individual dealer though, so check with them first.

Shop Around for Financing

If you're planning to finance your luxury car, it's important to shop around for the best interest rate. Many lenders offer loans for luxury cars. It's important to compare rates and terms before you choose a lender.

Getting a financier is easier with the help of a dealer. They usually have good relationships with multiple lenders and can get you a better interest rate.

Save Up for a Down Payment

A down payment is an important part of financing a car. The larger the down payment, the lower your monthly payments will be. If you're able to, save up as much money as possible for a down payment.

Saving up for a down payment may take some time, but it's worth it in the end. A large down payment will reduce your monthly payments and help you pay off your loan more quickly.

Ultimately, buying a luxury car is a big decision. It's important to allocate your funds correctly to make the purchase. By following these four tips, you'll be on your way to owning the car of your dreams.

Sunday, November 7, 2021

Factors that Impact your Mortgage Rates

Since every lender has the inside knowledge of how a mortgage interest rate is determined, it is only fair that you, as a customer, have the same understanding. So, how is your individual interest rate determined? 

There are several factors that go into the decision, and knowing what they are can help you learn what to expect going forward so you can better negotiate your loan.

Here are just six of the basic components that are considered:


The duration of your loan, which is referred to as a “term,” is how long you have to pay it back. Those that are shorter term may have higher payments due each month, but they tend to have lower costs overall, including lower interest rates.

Down Payment Amount

If you put down a larger down payment, you will most likely receive a lower interest rate. This is because you will increase your stake of ownership in the property, therefore you appear to be a much lower-risk recipient for a home loan.

Type of Interest Rate

There are two different types of interest rates, which are “adjustable” and “fixed.” As the names imply, adjustable rates change after a time, and fixed rates are locked in. An adjustable rate fluctuates depending on the market.

Size of the Loan

If your loan is especially large or small, you may end up paying higher-than-average interest rates. Remember, your loan amount will depend on not just the price of the home, but also includes closing costs. And, you should also subtract your down payment amount.

Type of Loan

There is a plethora of loans out there, including VA, USDA, FHA, and conventional types. Rates tend to change in accordance with the type of loan that you acquire.

Credit Score

Your credit score can certainly affect your interest rate, because it acts as a predictor of how likely you are to pay back your loan. That is because credit scores reflect your payment history on your bills, including credit cards, utilities, and other loans.

Just keep in mind that it isn’t any one of these factors that determines your interest. It is the combination of all of them that culminates in your particular rate. 

Taking the time to understand each of these reasons will help you to find the best mortgage for your personal situation. And, understanding these factors is one way to take control of your future when it comes to determining your interest rate.

Sunday, August 25, 2019

How You Can Buy a House Without Thousands in Your Savings Account

You may think that it isn’t possible to get a mortgage without a large down payment. The truth is that you may be able to get a mortgage with no down payment at all depending on what type of loan product you use. Let’s look at how you can become a homeowner even if you don’t have a lot of cash in the bank.

Look for Loans Insured By the Government

The Federal Housing Administration (FHA) offers loans with a down payment of 3.5%, and the down payment can be gifted by a friend, parent or colleague. Those who are willing to live in a suburban or rural area may be eligible for a USDA loan that comes with no down payment requirement. 

It is worth noting that you will need to pay private mortgage insurance if you make a down payment of less than 20%.

Do You Have Good Credit?

Lenders that offer conventional mortgage services may allow you to make a smaller down payment without having to pay private mortgage insurance. This is generally true if you have a credit score of at least 700 and a steady income. 

If you have a credit score between 640 and 699, it may be possible to be approved for a loan with a down payment of less than 20% if you have significant assets.

Seek a Down Payment Loan

Lenders may allow you to take out what is referred to as a piggyback loan. In such a scenario, you would take out one loan that covers the cost of the home. You would then take out another loan that would cover the cost of the down payment. 

The two loans are repaid simultaneously over the course of several years, and interest rates on piggyback loans are generally the same as interest rates on conventional home loans.

If you find yourself in a better financial situation at some point after closing on the property, you can refinance those loans into one traditional mortgage. In the meantime, you can accrue equity in your home that can be used as collateral for a future loan or other provide financial flexibility.

Buying a home can be a significant milestone in your life. It can provide you with a sense of stability that may be difficult to achieve when renting a home or apartment. If your mortgage comes with a fixed-rate, you will know exactly how much your housing payment is for next 10 to 30 years.

Wednesday, January 10, 2018

4 Financial Resources for Families Looking for a New Home

Higher home prices and the decreasing number of homes available for sale aren’t the only things keeping most families in city apartments. Most of these families, regardless of their income levels remain hooked up in rentals as they don’t know how to source for funds to buy a home. 

Here are four possible financial sources for families seeking to buy their family home.

State Down-Payment Grant

Where do you live and what is your average annual income? Those are the only questions most state, county or even state governments ask in determining whether you qualify for down payment assistance. 

To make homes affordable to all citizens, state and county governments set up the little-known down Payment Assistance Scheme. This helps low income earners raise the down payment required by most mortgage providers.

College Graduation Grant

A Bachelor’s degree in any related field can also earn you a significant grant amount that you can use as a down payment for a family home, in Indianan and Ohio at least. 

In these two localities, you qualify for up to 2.5% of your home purchase if you graduated with a bachelor’s degree here within the last two years and have a full-time job.

Mortgage Loan

Mortgages by far remain the most popular financial resources to purchasing a family home. With a stable source of income and the required down payment, you can approach any financial institution offering mortgage services for financing. 

Note that the higher your down payment you raise and shorter the repayment period, the more favorable the mortgage repayment terms.

Through Low down Payment Loans

Though they suffered a major setback in the recent housing crisis, low down payment loans are still available. For instance, the Federal Housing Authority only requires that put down as little as 3.5% of your home purchase price.

Good Neighbor Next Door

Is your career centered on community services like emergency medical technician, firefighter, an active law enforcement officer or even a veteran? That too can increase your chances of owning a family home

Through the Good Neighbor Next Door program, the U.S. Department of Housing and Urban Development can finance up to 50% of the home’s listing price if you seek to buy a house in regions that the institution considers revitalization areas. 

There is a catch though. You must work full-time in the designated occupation and agree to live in the home for not less three years after purchase.

Bottom Line

Real estate experts believe the only reason hindering could-be homeowners from owning a home is the fact that they aren’t familiar with the different finance resources available to them. 

If you dream of moving your family out of a rental into a decent home, research on the various financial sources available to you based on your profession, income levels, and residence.

Tuesday, June 23, 2015

How to Reduce Your Mortgage Payment Significantly

Imagine finally saving up enough money to make a down payment on your first new home and when you finally get the rates for your mortgage you are stunned. They are higher than you ever thought possible and are already considering whether or not you can even afford them. 

When purchasing a home, you start with a set mortgage rate. In the beginning, the majority of your payment goes towards interest but as you reach the end of your loan the payments being made are the principal. If you feel as though your mortgage rate is too high, there are several ways to lower it.

Pay Off 20% of Your Home

If you have purchased your house with less than a 20% down payment, you are paying private mortgage insurance (PMI). This can tack on thousands of extra dollars every year. 

After you have reached the point where you own 20 or more percent of your home, contact the bank. They will look at your loan and drop this PMI. Be aware that this is not something that happens automatically and you might have to be proactive to save this money.

Extend the Life of Your Loan

Shorter 15 or 20-year mortgages come with a higher monthly payment. Refinancing to a conventional 30-year mortgage will help to make your monthly payment fall dramatically. One factor to be aware of when choosing this method to reduce your payment is that your interest rates will go up. You can, however, pay more than the monthly payment to get rid of your interest quicker.

Pay Your Mortgage Insurance at the Start of the Year

When your mortgage insurance is added on to your monthly payment, it can be a significant amount of cash. Instead of paying the same amount each month for many years, ask your lender about paying it all or part of it off at the time of closing. When you pay it off all at once, you are not going to be stuck paying the same amount each month until it is naturally paid off. This will result in a substantial amount of savings.

Explore Your Homeowner's Insurance

Every once and a while you should be exploring your options for homeowner's insurance. What was the lowest rate when you purchased the home may not be the lowest rate available to you now. Take some time and explore different providers. 

Request free quotes and see if you can get your insurance cheaper. When insurance is escrowed into your monthly payment, a lower insurance cost will be noticeable when you pay your mortgage bill every month.

No matter what you are doing with your mortgage, you should never just sit and pay the same amount year after year. Explore new options and potential ways to save on your monthly bill on a regular basis as there are many options for individuals to make changes. Talk to the bank and loan providers to discover ways to lower your cost.

Wednesday, June 10, 2015

First Time Buyer? 7 Things You Need To Know Before You Purchase A Home

Are you a first-time home buyer ready to get into the market? Between advice from friends or family, loans, closing costs and more, it can be overwhelming. Here are seven important things you need to know that can help alleviate your anxiety: 

Examine Your Credit

A poor credit score, or no established credit, can alter your home-ownership plans. Get a free credit report and read through it for errors. If you find any mistakes, contact the credit reporting bureau to ensure they are corrected. This can greatly affect the loan you may get. 

Collect Documentation

Gather pay stubs, W-2 forms, bank statements, filed income tax returns for the past two to three years, and any other documentation you may feel is necessary. Have them available to show to the lender. You may need to provide this paperwork to a few different people, so it's important to have them readily available. 


Getting pre-approved for a mortgage is important when you are house hunting. Your current bank or local credit union, like Saginaw Medical Federal Credit Union, are good places to start your search. You can also search online to find lenders offering the best rates in your area. Applying to multiple lenders helps increase your chances of getting a loan approved at the best rate possible without having a negative impact on your credit score. 

Create Your budget

One of the most important steps is to establish your budget. It’s necessary to determine how much you plan to pay for your house. It is recommended that buyers spend no more than one third of their income on housing. Your monthly payment can also vary depending on how much you plan to use for a down payment. 

Find Out Closing Costs

Closing costs usually contain origination charges, settlement and title fees, taxes and items like homeowners' association fees and homeowners insurance. Sometimes, they are often higher than expected, so it's important to budget accordingly. 

Choose A Real Estate Agent

It is ideal to find and choose a real estate agent to assist you with the process. Utilize local ads or the internet to research and assemble a list of local agents and start finding out more about their experience. Look for realtors with a lot of experience, especially in the area and price range where you intend to buy. These realtors will be familiar with the current housing market and the history of the market in your preferred area, and they can help you distinguish between good and bad options.

Be Patient

First-time home buying is time-consuming and stressful. Many first-time home buyers become disheartened due to rising property prices and increasing interest rates. There's also chances that there may not be enough properties available that suit the buyers needs.

Taking important necessary steps before the home-buying process can save you time and money. It's important to do your research and talk to different professionals before you decide to make an offer on a home. These tips can help you to be prepared to buy your first home.

Friday, April 24, 2015

How to Know When You Can Finally Afford to Buy a Home

If you have always dreamed of owning your own home, you might be afraid that you can't afford one. 

Even with the right planning and months or years of saving, it can be a big step that doesn't always seem attainable. 

However, there are a few signs that you can look for to determine if you truly can afford to purchase a house. These are a few signs that your bank account can handle a mortgage payment.

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You Have a Down Payment Saved Up

First and foremost, you will probably be required to save up a down payment to purchase your home. In many cases, you will need to have at least 20 percent of the price of the home in savings. 

Even if you don't have to pay this much, having saved up a down payment is a great first step. After you have saved for a down payment, consider allocating that monthly savings amount to something else like closing costs. 

Once if you have reached a savings goal, continue to add that money to your savings so it never feels like a burden, but rather an expected “expense” each month. 

You're Paying All of Your Bills On Time

It's important to be paying all of your bills on time before you think about purchasing a home. Not only do you have to worry about your credit rating, but you don't want to fall even more behind on your bills after purchasing your home. 

If you can comfortably pay all of your bills and have money leftover to save, buying a house could be a good option for you. Ideally, you should be putting money into your savings for a house that equals what a monthly payment would be. 

This will allow you to see how much money you have leftover if you really did have a mortgage payment. 

You Qualify for a Mortgage

Before you can purchase a home, you have to ensure that you qualify for a mortgage. Luckily, you can find loans which can make home ownership easier than you think. 

For example, if you are a veteran or active service member, you can purchase a home with a VA loan, which requires no money down. Take a look at Low Va Rates to find out how you can afford to buy a home. 

You Have an Emergency Fund in Savings

It's important to have an emergency fund in your savings account. Then, if something goes wrong with your home, you will have the money that you need to cover the expenses. Your emergency fund can also help you if you fall behind on your mortgage due to unforeseen financial emergencies. 

Your Income is Steady

Your income should be steady, and you should know how much money you will bring in every month. If your income is unreliable, then you will need to be able to make your mortgage payment with the smallest amount of money that you receive in a month. 

This is a good indicator of how much you can really afford for a new home. 

You've Had the Same Job for a While

Your mortgage lender will probably want to know that you have had your job for a while. Different lenders have different requirements, but you will probably need to have the same job for at least one year before you can look into a mortgage.

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Purchasing your own home can be a wonderful milestone. Although you might be afraid that you can't afford to purchase a home of your own, these are a few signs that it is finally time. 

If these things apply to you, then you can schedule an appointment with a banker to find out more about qualifying for financing and purchasing your first house.

Wednesday, March 11, 2015

Is There a Minimum Required Down Payment for Mortgages?

The minimum amount required for a down payment of a mortgage is 5% of the cost of the home when less than $1 million. For homes worth more than $1 million, the minimum increases to 20% of the home’s cost.

This amount will be modified by your debt levels and income, so by simply having 5% of your home’s price in cash doesn’t automatically grant you the mortgage you need to afford your home.

Your Debt Service Ratios Limit Your Mortgage

The Gross Debt Service Ratio and Total Debt Service Ratio limit how much of your monthly income can go towards mortgage payments. Your GDS is limited to 32% while your TDS is capped at 40%. Even if you’ve saved a significant portion of your down payment, your bank will not allow you to take on so much debt to severely limit the remainder on your income after making your mortgage payments.

The GDS is calculated by adding up mortgage principal and interest, taxes, heating expenses, and condominium fees if applicable. These monthly payments should not exceed 32% of your gross monthly income. The TDS adds up housing costs, credit card interest, car payments, and other loan expenses, which should leave 60% or more of your gross household income.

If you’re buying a home with a down payment of less than 20%, you will be required to purchase mortgage default insurance since you now have a high-ratio mortgage. It’s worth noting that additional costs required to close a home isn’t part of the cost of a mortgage, so having funds available to pay for them is important.

What to Do In Case Your Mortgage Falls Short

There are a number of ways to address the limitation your bank has placed on the mortgage they will lend to you.

● Save enough money to increase your down payment. Although this doesn’t change your GDS and TDS ratios, you will require less of a mortgage with a greater down payment. If your debt-service ratios are too restricting, it may not be feasible to simply increase your down payment.

● Pay off your debts to reduce your TDS ratio. Prior to signing a mortgage, take steps to aggressively reduce your existing debt. It may seem appealing to let low interest rate debt sit around, but it’ll cut into how much you can afford to spend on a home.

● Increase your income to give yourself more room for your GDS. Reducing spending is easier than increasing income, and depending on your local economy and job availability, finding a higher paying job may be difficult.

Apply for a full service mortgage with your partner, or ask someone to be your guarantor. Parents, employers, or anyone with a good credit history could co-sign your loan. 

Why are the GDS and TDS Used by Lenders?

In the case of sudden job loss, having to repay a large mortgage puts you in a financially risky position. This is good for neither the lender nor the consumer. Consult your bank or a professional in personal finances for more information.

Author Bio:

I am Eric Jones, a businessman by profession. Business and entrepreneurship are my passion and I love researching on the various aspects of those areas. I make sure that I don’t miss out any updates and for this reason I read quite a lot. Law is yet another area which I am passionate to know more about.

Thursday, August 7, 2014

How to Finalize a Stress-Free Mortgage Deal?

There are a lot of words that people have used when describing mortgages, but “stress-free” isn’t one of the more common ones. Much of the time, every aspect of getting a mortgage is loaded with stress and causes a good deal of anxiety for the borrower.

Not only do you have to go through the approval process, which can be stressful all on its own; you also have to finalize the deal and close everything so its all legal and ready to go. There’s no magic formula that’s designed to take all the stress or unforeseen obstacles out of getting a mortgage, but if you know some of the potential issues ahead of time, you may be able to move through the process with little or no stress.

Make a List

One of the more annoying things about a process like this, is that it’s easy to think of a ton of pertinent questions when you are sitting in traffic or out grocery shopping, but you draw a blank when it’s time to ask. Make it easy on yourself and carry around a small notebook and pen, or use your mobile device to type questions as they pop into your head.

Whether the question is for the real estate agent or your lender, you’ll have it there in front of you so you can ask when you speak with them. Sometimes, the questions you ask ahead of time will provide information that will make finalizing the mortgage deal easier than if you’d kept the question to yourself.

Take One Last Look

You may have gone through the new house multiple times and had a home inspector do his thing, but it’s not a bad idea to walk through the house one last time a couple days before the closing date. This is more of a “better safe than sorry” kind of approach, but it’s not completely unheard of for people to change things that were supposed to remain the same or take things they were supposed to leave before the deal closes.

It’s also a good time to see if any new damage has occurred, especially if there has been bad weather since the last time you were there. Check to ensure the electricity is working well and the plumbing seems good. If the present homeowner was supposed to make any fixes or do renovations before you moved in, you should check for those improvements too. If things aren’t as they should be in any part of the property, contact your real estate agent right away to have the issue rectified before the deal is closed.

Check the Document Preparation

All of the documents prepared as part of your real estate deal were drawn up by professionals, but that doesn’t mean you shouldn’t look them over a handful of times before closing. In all likelihood the information will be just as it should be, but no one is perfect and you certainly won’t have a stress-free closing if something is wrong.

Check over the wording, all the names for spelling and all the digits for accuracy. The interest rate is also important to check. Don’t just assume that any mistakes will be fixed later and everything will be fine. That may well be the case, but give your lender a call immediately if you notice any issues or even if certain information doesn’t make sense to you. Also, keep a copy of every page of every document you sign.

Call the Utilities

If you want to move into your new home right after the mortgage closes, or even within a few days you should call the utilities ahead of time. If you’re moving to a new area and aren’t sure about which utility companies are used, ask the seller for the names and then get them transferred into your name so there’s a smooth, stress-free transition when you move in. This way, if there will be any delays or issues they can be dealt with before you get there.

Keeping Up with Costs

If you have ever purchased a home before, you know there can be a laundry list of closing costs that the buyer never saw coming. Inspection fees, attorney fees, deposits, etc, they all add up and they can be quite stressful when you think you’re home free and the deal is done. Make a point of finding out what the closing costs will be ahead of time, so you’re ready when they spring them on you. The number you get might not be 100 percent accurate, but it will be close and you’ll be prepared.

Author Bio:
Jonathan Baker is an active blogger who writes about business and finance. He lives in Toronto with his family and also works as a financial adviser to The Butler Mortgage team. He keeps himself about the latest trends in finance and business world and passes on these information to others through his blogs. He can be followed on twitter @Jonatha97039368Image 


Thursday, April 17, 2014

Considerations When Taking out a Home Loan for the First Time

Buying your first home is exciting business, but it’s also a source of stress and uncertainty for those who have never taken out a mortgage before. But don’t let that discourage you. You’re about to pass an important milestone in life, and as long as you do your research and take the proper precautions, you’ll have nothing to worry about.

Begin by running through this important list of considerations:

  • Take Your Time.

The most important thing you can do in preparation for your first mortgage is to slow down and take time to process everything. It’s easy to feel rushed – especially when you have to be in a new location by set date to start a new job, for example. However, rushing leads to missteps. Remember, you can always rent a room for a few weeks or even months if necessary. The last thing you want to do is rush into a 20- or 30-year mortgage when you’re not convinced that a particular property is the right one for you. Just remind yourself that homes go on and off the market perpetually. Even if there are no ideal properties available right now, there certainly will be in due time.

  • Don’t exhaust your savings on the down payment.

This is not an attempt to go against traditional wisdom. Make no mistake: a substantial down payment reduces the principle and cuts down on the amount of interest paid over the life of Smartline home loans. However, once you move into your first house, you’re going to need to buy furniture, appliances, tools and a host of other expensive items that home ownership requires. Better to take this extra money out of your down payment and pay a low mortgage interest rate on it than to pull out the credit card and pile on high-interest debt. You can always increase your monthly repayments down the road. 

  • Ask the Sellers to See Past Utility Bills.

One of the most essential considerations for first-time home buyers is the feasibility of repayment. You want to make absolutely certain that you can afford this house on a monthly basis, and that means taking more than your mortgage repayment into account. Ask the current owners if you can look at their utility bills so that you can cut the guesswork out of how much it takes to heat, cool, power and supply water to this house. Ask for past bills from all seasons (or better yet, from a full calendar year) so that you can accurately determine how much you’ll be paying on top of your monthly mortgage 

  • Scrutinise the Taxes.

As with the utility bills, the annual taxes on the property are going to add to the burden of repayment. Ask to see past property tax statements from several years to help you predict upcoming trends in tax as well. It is also a good idea to speak to your realtor about property taxes in specific cities and neighbourhoods.

  • Request a Record of Past Improvements.

Regardless of whether or not you plan to do any remodelling, you will want to know what the previous owners have done up to this point. Sellers are prone to making a few improvements before they list a house so that they can get a bit more for it. This is all well and good as long as they are using superior materials. If, on the other hand, a closer inspection of their handiwork reveals second-rate craftsmanship, you may have to make additional repairs to the house after you purchase it. Those are going to cost you.

About the Author: A company with offices in most major regional areas in Australia, Smartline is one of the leading providers of financial solutions such as home loans to customers all over the country.

Friday, October 18, 2013

Should You Purchase a Home After Retirement?

Most people make some major changes to their lifestyle after retiring. Some retirees spent years living in a community they hated and want to move away. They may want to consider buying a home, but aren’t sure whether they can afford to do so while they are no longer working. However, it may still be possible to purchase a home.
What to Consider Before Buying a House in Your Golden Years

You will want to make sure that you make an informed decision. There are a number of things that you will need to consider before buying a home during retirement:

Understand Your Budget

Most retirees are living on a tighter budget after they retire. You will need to know how much money you have on hand to spend when looking at homes for sale in Atlanta Georgia.

Cost of Renting Versus Buying

Many people rent houses after retiring because they believe that is all they can afford. There is nothing wrong with being thrifty, but you will need to know what the actual costs are before making a decision. Trulia conducted a study which found that it is actually cheaper to buy a house in the 100 largest cities in the country. That study also found that the savings are at least 40% in 85% of these cities.

Interest Rates

Interest rates are another important factor to take into consideration. The banks have offered record low interest rates, which mean this may be a perfect time to buy. Some people are still worried that they may not be able to secure a mortgage in the future, because the Federal Reserve has said that it may taper its stimulus plan. However, the stimulus will probably run in the foreseeable future. Mortgage rates have actually continued to drop as the Fed announced that it will continue its monetary easing policies.

Stability of Income

You will also need to consider how stable your income is before deciding whether to buy or rent. Buying a house is a long-term commitment. You may need to think twice if you think your income will drop in the future. This may be a problem if you have a temporary structured settlement or other windfall that won’t last forever. You will also need to consider it if you are going to be working part-time after retiring from your main job, because you probably won’t work forever. You definitely don’t want to use up your entire savings trying to pay for a new house if you won’t have much income in the future.

Ability to Get a Down Payment

You will also need to have a down payment to buy your house. You may not have a lot of money on hand. However, you may be able to borrow money from your 401K to use. According to Ben Barzideh, a financial wealth consultant, you can borrow up to $50,000 or half the value of your portfolio. This could be a great way to come up with a down payment for your new house.

About the author: Kalen writes about real estate financing and investing. He hopes to invest in some rental properties later this year.

Friday, October 4, 2013

How Much Home Can I Afford?

Obviously, everyone wants to own a home, and this can be easier as long as there is sufficient money to buy a new one. However, there are many ways and options to consider in buying and owning a home. The first thing that comes in mind when planning to buy a home is the amount of the house. If you are thinking of getting a home loan, then you should first determine how much you can afford for the home loan.

There are several factors to consider in getting a home loan since the payments can be on par. This makes sense in considering your current financial situation before deciding to buy a house. Likewise, you should also take into account your income, the credit history, debts and the cost of the house. In this way you can easily determine how much home you can afford to loan. Before making your final decision, it is important to consider some pointers.

Down Payment

One of the important pointers to consider in determining the amount of home that you can afford to buy is the down payment. Usually, home loan would require paying 20% down payment from the total house cost. However, you can also opt for non-standard loans that require lower amount of down payment. The downside of getting non-standard loan is the higher interest rates. This makes sense of asking for calculations before making your decision.

Income and Monthly Obligations

In determining how much home you can afford, you need to consider the monthly income and obligations. The mortgage company would require you to furnish the income details as well as the monthly obligations. These details will help the company in identifying the mortgage amount in which you can qualify. In calculating your loan capability, the mortgage company will check your credit card debts.

Interest Rate

Another factor to consider in determining the amount of home that you can afford to buy is the interest rate. Obviously, if the interest rate is lower, most likely you can afford buying bigger house. That is why home buyers should be aware about the prevailing interest rates in the area. It is also necessary to ask for quotes from different mortgage companies. In this way, you can compare which mortgage company can give you the best deals. In addition, you should also consider fixed rate mortgage than a variable rate mortgage. It is because the latter would impact your monthly obligations.


The cost of the property that you want to buy also depends on the location. If you want to own a home in a commercialized area, then you should expect for higher cost. You need to conduct thorough research if you want to find a property located in your chosen area yet with the price that you can afford. Usually, if the property is of close proximity to the city it would be more expensive.

Indeed, it is very challenging to find affordable property. Nevertheless, St. Louis real estate can help you in finding the home that you can afford. If you cannot afford to buy a home, there are other options to consider. All you have to do is to seek advice from mortgage companies.

Wednesday, February 20, 2013

4 Simple Ways to Secure A Mortgage Loan Despite a Bad Credit History

It is very rare for people to always be granted loans. Even those with average credit are still getting denied by banks and other lending institutions. One might even say that it is part of the experiences of growing up. Money doesn’t grow on trees as they say. Why should it be handed out to you that easily?

For those whose names have been marred with a history of bad credit, however, the implications of the rejection are far more severe. Given that they already have a red flag waving over their profiles, the big concern is that they may not get the money they need. The good news is that they can still get a loan despite that bad financial record. They can still show the lenders that they deserve a second chance.

In order to secure a loan, the first thing you should do is to secure all required documents. This is the most basic thing you have to accomplish. Don’t even think about covering up the facts by lying. The lenders will be running a background check on you anyway. If you lie and get caught, then you certainly won’t get that loan approval. Lenders build their business on trust. If they can’t trust you, they wouldn’t want to do business with you. It’s as simple as that.

That’s just the tip of the iceberg, though. Let’s say, for example, you would like to take out a mortgage. However, you’re worried that your application will be shot down on account of your credit history. Here are some more tips that you can use to get that loan despite having bad credit.

1. Be informed about your credit rating – Some people automatically assume that they have a less than ideal credit score. It can be because they previously had a bad experience, or they’re just not sure if their profile fits the kind of loan they are eyeing. However, the truth is that there is a cap as to what is likely to be a bad credit rating.

If you have a score of 620, then that is incontestably a bad rating. If, however, you get something just a little above 620, that’s a little bit more manageable. It’s still not in the safe zone, but at least it’s not so bad as to keep you from actually taking out a mortgage. That is why it is important for you to get your credit report. Knowing just how much you owe should give you a credible strategy for taking out a mortgage loan with a bad credit history. Aside from that, it should also “alert buyers to any credit errors that should be remedied before making any application for a pre-approval or mortgage application.”

2. Don’t dwell on the bad, highlight the good – What this simply means is that you should focus on your other assets. Of course, it’s not to say that you should cover up your bad history with credit. As mentioned above, that’s just going to work against you. Instead, you can put front and center other financial assets. It can be an impressive insurance account, or even a retirement package. While you may not necessarily be liquid at this point, at least there are things for you to look forward to.

3. Show good faith by offering a large down payment - The other thing you must do to secure a loan with bad credit is to project the image that you are in this deal for the long haul. While it may seem like giving out a large sum for down payment is counter-intuitive, it will definitely show the lenders you are invested in the property.
By paying a larger sum upfront, it also puts the lenders at ease because it minimizes the risk for their part. This in turn could help you nab that much-needed loan to fund your needs. Of course, the problem then turns to coming up with that down payment.  You might consider selling a prize possession, or saving your money. Some states, cities and municipalities also have programs that may be able to aid you with a down payment.

4. Make a practical choice – Understandably, you want to get a nice home to move into with your family. Then again, you also have to be realistic about your situation. If you do have a rather ugly credit standing, then don’t even think about getting something that is way out of your budget. Otherwise, you’ll only perpetuate the cycle of having bad credit. It’s not a place you would want to be stuck in at all.

Take a good, hard look at the kind of house you want and its amount. Then figure out how much you can afford to spend. Keep in mind that having bad credit will mean the mortgage will carry a higher interest rate. It’s not exactly fun, but it’s what you’ll have to deal with as a consequence of your record.

Despite that, however, what is most important is that your chances of getting mortgage financing with bad credit is still pretty good. It’s definitely going to take a lot of hard work on your part. You will have to do a lot of convincing, too, so that you can get your loan approved. But as many other people with bad records have proven, having a red flag on your credit record can be overcome. It’s going to make things a lot harder for you, but it does not have to be something that should permanently incapacitate your loaning capabilities. 

Feel free to join the discussion on the matter, or share your insights and comments below.

Author Bio:
Amy Johnson is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances. She also covers topics on how to identify credit card fraud that can help people protect their credit from credit scams.

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