Posted by Competitive Edge Real Estate Services on 3/6/2018

Purchasing a home is a sign of new financial responsibility for many people. The leap into homeownership is a big and important step. Finding a home and securing a mortgage isn’t easy. Getting ready to take on a mortgage can require a lot of research and education on your part. Before you get too confused, you’ll need to learn the basics of a mortgage and what you should know before you apply. 


Be Prepared


This is probably the best advice for any first time homebuyer. Find some good lenders in your area. You can sit down with a lender and talk about your goals. The bank will be able to explain all of the costs and fees associated with buying a home ahead of time. This way, you’ll know exactly what to expect when you head into a purchase contract without any surprises. 


What’s Involved In A Loan? 


Each mortgage is a different situation. This is why meeting with a lender ahead of time is a good idea. Your real estate agent can suggest a mortgage lender if you don’t have one in mind. No one will be happier for you than your real estate agent if you have a smooth real estate transaction. You’ll be able to walk through the mortgage process step by step with a loan officer and understand the specifics of your own scenario.


What You’ll Need For A Mortgage


There’s a few things that you’ll need to have ready before you can even begin searching for a home. 


Cash For A Down Payment


You’ll need to save up a bit of cash before you know that you’re ready to buy a home. It’s recommended that you have at least 20 percent of the purchase price of a home to put down towards your loan initially.   



A Good Working Knowledge Of Personal Finances


You should have an understanding of your own finances in order to buy a home. Not only will this help you save, but it will help you to ensure that you’re not going to overextend yourself financially after you secure the mortgage. To get your finances in order, honestly record all of your monthly expenses and spending habits, so you know exactly what you can afford.   


The Price Range Of Homes You’re Interested In 


If you have an idea of what kind of home you’d like, it will make your entire house shopping experience a lot easier. You’ll be able to see exactly what you can afford and how much you need to save. When your wish list equates to half-million dollar homes, and you find that you can only afford around $300,000, you don’t need to go into shock! It’s good to have an idea of how much house you can afford and what it will get you. When you do a little homework, you’ll discover that buying a home isn’t such a hard process when you’re prepared!





Posted by Competitive Edge Real Estate Services on 1/30/2018

Buying a home will likely be one of the largest financial decisions you will make in your lifetime. While this may seem scary at first, it’s worth noting that buying a home can also be a valuable financial investment.

When it comes to preparing to buy a home, many people just wait until they run out of room in their apartment before deciding that they need to upgrade to a home. A better approach, however, would be to start planning for your first home a year or more in advance.

Saving for a down payment is a vital step to making the best long-term financial decision. A larger down payment can help you pay off your home sooner, pay thousands or tens of thousands less in interest, and start using your home equity as an asset.

But, saving for a down payment is easier said than done. So, in this post, we’re going to talk about some of the ways you can aggressively save for a down payment so that, when the time comes, you can achieve long-term financial security from your investment.

Setting your savings goals

The first thing you should be thinking about when saving for a down payment is what your goals are in a home. Setting realistic goals in this phase will make saving for your down payment more feasible and less discouraging.

Think about what you really need from a home at this point in your life and compromise where you can.

Remember that on top of your monthly mortgage payments, you’ll likely also be paying for taxes, insurance, utilities, homeowners association fees, and more.

Save on a timeline

When setting your savings goal, make sure you’re aware of the timeframe you’re working with. If you want to buy a home next year, you’ll need to focus on short-term savings options. However, if you’re okay with renting for the next 5 years, investing your money could be a better option.

Lock away your savings

Treat your down payment savings like an emergency fund. Open a separate account, automatically deposit a portion of your pay into the account, and never withdraw from it. To do this, you will, of course, need to already have an emergency fund with a month’s expenses in it.

However, once you’ve established your emergency fund, start immediately depositing into your savings account.

Pay off credit cards

It may seem like saving for a down payment is more pressing than paying off old debt. However, the numbers will show that making interest payments on your credit cards is essentially throwing away money that could have been used toward your down payment savings.

Adjust your spending habits

While it isn’t easy to start spending less once you’ve built a standard of living, there are ways to spend less money and still lead a fulfilling life. Think about where your money goes each month, including bills and services you might pay for.

Now could be the best time to cut the cord and start using a service like Hulu to save $50 or more each month.

Time for a raise?

If it’s been some time since your last pay raise, now could be an ideal time to speak with your employer. To improve your chances of success, don’t discuss reasons outside of work that might be influencing your decision to ask for a raise (such as saving for a down payment). Rather, back up your request with evidence of your accomplishments at work.




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Posted by Competitive Edge Real Estate Services on 1/16/2018

Whether you’re a first-time homebuyer or someone who has previously owned a home at some point in their life, you most likely know how expensive buying a house can be.

Fortunately, there are many organizations who would agree and who seek to help qualified buyers. There are a number of programs available at the state, local, and federal level designed to help certain buyers purchase a home.

There are also a number of myths around these programs, such as what the term “first-time homebuyer” really means.

In this article, we’ll talk about some of the programs you can look into to get help paying for a home.

Who Qualifies as a First-Time homebuyer?

Contrary to what it sounds like, you can still qualify as a first-time homebuyer if you’ve owned a home in the past. The Federal Housing Administration (FHA) has been helping people achieve their goal of homeownership since the 1930s. The FHA connects first-time homebuyers with lenders if the buyer meets certain criteria. Those criteria are:

  • Someone who hasn’t owned a home in the time previous three years. This includes spouses.

  • A single parent who previously owned a home with a former spouse, or a “displaced homemaker” who has only owned a home a former spouse.

  • People who have only owned homes that didn’t meet building code or a residence not fixed to a foundation.

The way the FHA helps buyers secure an affordable home loan is by insuring the mortgage. This makes it safer for lenders to approve you for a better rate for your home loan.

Veteran, Rural, and Native American Loan Programs

Aside from FHA loans, you might also qualify for a VA loan, a USDA program, or the Section 184 Indian Home Loan program.

VA loans from the U.S. Department of Veteran Affairs help veterans secure low-interest loans with affordable down payments. They will also help repeat veteran home buyers who have had financial difficulties in the past such as foreclosure and bankruptcy.

The Section 184 Indian Home Loan Guarantee Program works similarly to an FHA loan in that the federal government insures the loan so that the buyer can receive a better rate and lower down payment.

This program is designed for American Indian and Alaska Native families. However, not every state is eligible for the loan.

The United States Department of Agriculture is another federal department that offers mortgage assistance. You don’t need to be a farmer or have agricultural aspirations to be approved for a USDA loan. Rather, these loans are designed to help develop rural areas by offering loans with no down payments.

State, Local, and Private Programs

Each state in the United States offers various buyer’s assistance and incentive programs. Be on the lookout for programs specific to your area to find low-interest rates and affordable down payments.

Fannie Mae, Freddie Mac, and other companies work with lenders to create affordable lending programs throughout the country. Remember to shop carefully when dealing with private lenders and look out for hidden costs.





Posted by Competitive Edge Real Estate Services on 5/2/2017

Adjustable rate mortgages are also known as “ARM” loans. These are home loans with monthly payments that move up and down along with interest rates and the market. There’s different periods that occur throughout the time of the adjustable loan including an initial period where the rate is fixed for a certain amount of time. The rates will change along with preset intervals of change. 


Rates Start Lower Than Fixed Rate Mortgages


Interest rates during the fixed rate period of an adjustable mortgage are usually lower than that of fixed-rate mortgages. The most common type of adjustable rate mortgage is called the 5/1 ARM. This means that the rate is locked for a total of 5 years before it becomes truly adjustable. After the 5 years the rate will change every year. Other forms of ARM loans are the 3/1, the 7/1, and the 10/1.


Rate Indexes And Margins


Following the fixed-rate period, the interest rate adjusts with what’s titled the index interest rate. This rate is set by the market and is released periodically by an independent party. Since there are a variety of indexes, your loan will state which index your adjustable rate mortgage will follow. To set your exact rate, your lender will look at the index and then add a number of percentage points that has already been set in place. This is called the margin. For example, an index rate of 2.5 percent and a margin of 2 will equal an interest rate of 4.5 percent. As the index changes, this number will go up and down.


Adjustable Rate Mortgages Come With Caps


If you do decide to go with an adjustable rate mortgage, you should know that you’re protected from extreme rate increases. These loans come with caps that limit the amount that both rates and payments can change by. There are several different kinds of caps including:


Periodic Rate Cap

This limits the amount that an interest rate can change from one year to the next.


Lifetime Rate Cap

This type of cap limits how much the interest rate can change overall throughout the life of the loan. 


Payment Rate Cap

This limits how much the monthly payments can rise over the life of the loan in a dollar amount. This is different than other caps, since it denotes dollars instead of percentage points.


Is This Type Of Loan For You?

Adjustable rate mortgages can be good, depending on the state of the economy and your own financial situation. Stay educated and shop around in order to get the best rates available for you.





Posted by Competitive Edge Real Estate Services on 1/31/2017

There’s so much to consider when to comes to buying a new home. The first issue is that of your finances. You need to make sure that you’re preparing financially for the home search, and not just making your list of “wants” for a new home. It’s an exciting time when you’re purchasing your first home, but don’t let the excitement overtake your responsibility. Here’s some tips to keep you on the financial straight and narrow path when preparing to buy a home: Be Mindful Of Your Credit Score There’s many factors that can affect your credit score. Applying for new credit cards is one of those factors. Your credit score will drop a few points every time you have a new credit inquiry or open a new account. If you do get approved for new credit, lenders may have concerns that you’ll spend up maxing out your new approved credit limit on that account and possibly default on your loan. Closing credit accounts is another factor that greatly affects your credit score. You may think that closing unused accounts is a good idea to help get yourself financially ready for becoming a homeowner. This isn’t true. Closing accounts lowers your amount of overall available credit. This means that your debt-to-credit ratio is larger. This lowers your overall credit score. You can certainly make these smart financial changes after you close on your new home. Keep Records When you move your money around, make sure you have records of it. Your lender will want to know about any unusual deposits and withdrawals. You’ll need to prove where your money comes from. All of the cash that you’ll be using for your home purchase should be in one account before you apply for a mortgage. Keep Up With Your Bills Don’t increase your debt. This will have an affect on the very important debt-to-income ratio which is one of the most vital aspects of loan approval. Also, be sure that you don’t skip your payments on bills. Your history of payments is incredibly important as well. Be sure that you continue to make full, on-time payments on all of your bills. Keep Your Job Even though a new job could mean a raise, or a better situation for you and your family, it could delay you in getting a mortgage. You’ll need to have your employment verified along with pay stubs to prove your source of income. Lenders like to see a longer employment history. Keep Saving The biggest up front costs in buying a home is that of closing costs and the down payment. Those must be paid at the time of closing. Lenders may even verify that your savings is on hand. Keep saving steadily and be sure to keep your savings in place.







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