Are you the type of person that struggles with remembering to pay their bills on time? You’re not alone. People across the country regularly submit late monthly payments, inflicting terrible damage to their credit. Let’s take a quick look at how paying your loan or other monthly payments late can have a negative impact on your mortgage.
Your Credit Score Is At Risk
As you already know, almost all banks, credit cards, mortgage companies and other lenders rely on your credit score to help assess the risk of lending money to you. Paying any of your payments late – even something as small as your mobile phone bill or a department store credit card – can result in negative marks showing up on your credit report. If you are late enough times or fail to repay the late payment in full, then your score will start to drop.
Refinancing Can Be Affected
If you already have a mortgage, then a lower credit score can be a problem when you try to refinance. The process of refinancing involves taking out a new mortgage, in which your lender will reassess your risk using your credit score as one of the indicators. If you have been making late payments, you might end up having to settle for a higher interest rate or you may even be declined for the new mortgage.
Making A Late Payment? Contact Your Lender
If you are caught in a bind and have to make a late payment, it is best to get a call in to your lender as soon as possible. First, there may be a grace period in which you can be a few days late without any penalty. If that little bit of breathing room is all you need to get caught up, you’re set. If not, you can let them know your circumstances and discuss what options you have.
It is essential to pay your monthly payments on time, even if it means making some small sacrifices in other areas. The better your credit score looks, the more opportunities you will have to make positive financial moves in the future. To learn more about monthly mortgage payments or to take out a mortgage on a new home, contact us today. Our team of mortgage professionals is here to help you find a mortgage to buy the home of your dreams.
Whether you’re a first-time homebuyer or an experienced real estate investor, if you are planning to borrow funds to buy a home you will want to choose the right mortgage product. In today’s blog post we’ll explore how interest-only mortgages work and why they’re the perfect choice for some homebuyers.
How Interest-Only Mortgages Differ From Conventional Ones
As the name suggests, interest-only mortgages are loans where you are only required to pay off the interest portion of the loan each month for some specific term. The length of these loans can be up to ten years, although five or seven is the most common. Once this period is over, you will have some options. Some choose to refinance their mortgage into a new term; others will make a lump-sum payment to pay off the balance. The most important item of note is that during the interest-only period, no principal is paid off unless you pay a bit extra.
The Pros And Cons Of Interest-Only Mortgages
Interest-only mortgages are a popular choice because of their many upsides. Your monthly payments are almost certainly going to be far lower during the interest-only period. This is because you’re not responsible for paying down the principal of the loan. A lower monthly payment frees up money that you can use for other purposes, such as investing. Also, your entire monthly payment during the interest-only period should be tax deductible, which may contribute to a refund each year.
Note that there are some potential downsides to interest-only mortgages as well. For example, if your mortgage interest rate is adjustable, you can end up paying more in interest than if you had locked in. You also need to stay disciplined financially. Once the interest-only period ends, your monthly payment may increase significantly to cover both interest and principal.
Who Should Consider An Interest-Only Mortgage?
Interest-only mortgages are a good fit for those individuals or families where you are confident that your income is going to grow significantly in five or ten years. Alternatively, if your income is somewhat sporadic and you want the option of paying lower payments in some months and more substantial payments in others. The key point is that these mortgages offer flexibility that other mortgage products do not.
As you can see, interest-only mortgages are an excellent choice in certain circumstances. To learn more about how an interest-only mortgage might be right for you, contact our professional mortgage team today. We are happy to share our experience to find mortgage financing that perfectly suits your needs.
Buying or selling a home can be a long and sometimes difficult process, especially if you have never done it before. From working with an agent to hiring a real estate attorney it’s important you don’t miss any key steps throughout the process. Whether you live in Leominster, MA, Phoenix, AZ, Denver, CO, or Charleston, SC hiring a Real Estate Attorney and working with the right team of professionals will only ensure your homebuying or selling process goes smoothly. To help with this process we asked experts from across the country to share their top tips with you.
1. Don’t try to rush through the process
A big mistake that experienced real estate buyers make is that they try to rush through the process. They feel like they understand exactly how it is going to work because they have bought a home before. So, they end up rushing, making a few key mistakes in the process. Remember that this is an important financial decision with substantial legal implications and it is important to take the time to get it right. Nobody should try to rush through this process when they are looking for a new home. -David Rocheford, The Law Office of David R. Rocheford, Jr.
2. Understand how much paperwork is involved
Attorney’s wish buyers and sellers understood just how much paperwork will be involved! Many first-time buyers and sellers think they’ll sign their name once and the closing will be complete. In reality, buyers and sellers need to sign 10+ documents, and often much more! -Sean O’Dowd, Close Concierge
3. Have your funds squared away before you start house hunting
A good real estate agent will tell you to always know where the money is coming from before you even start looking. In real estate, acting fast gives you a HUGE advantage over other buyers. If your dream home goes on the market, you want to be ready to put in an offer as soon as possible. In order to do that, you need to have the funds already squared away so that you can make the most competitive offer upfront. -Agent Advice
4. Be prepared to make fast, difficult decisions One thing that buyers need to be prepared for is the incredible speed at which they need to make major financial decisions. In a hot market like Phoenix, Denver, Boise or Salt Lake City it’s hard to find a median-priced, detached, single-family home that survives past the first weekend. When a buyer asks “what do you think we should offer?”, I tell them that if you really want this house you need to make your best and final offer up front. In 2021 the asking price is more like the starting bid at an auction and the cash-heavy, decisive buyers are winning. -Michael Bennett, Atlas Real Estate
5. Hire a good home inspector
A competent home inspector can uncover expensive construction defects you may not see during a walkthrough of your potential dream home – allowing you to walk away before closing. However, if you discover a problem after closing that the sellers did not reveal, your options are to pay for the fix yourself or file a failure to disclose lawsuit. So do yourself a solid: hire a good home inspector. -Robinson & Henry, P.C.
6. Don’t forget to update your estate plan
One of the biggest mistakes we see is when clients forget to update their estate plan with the new home or property recently purchased. Specifically, the mistake occurs by not updating their plan to include the deed and title to their new home in their Will or titling the new asset incorrectly. Secondly, it’s important to give implicit instructions on how you would like your home or property distributed upon your death, including any joint owners with right of survivorship. It is integral to update your estate plan every three years or after key life events, such as moving to a new state and/or selling or buying a new home. -Wiles Law
7. Understand your credit score
It’s so important to Understand your credit score and what type of impact that is going to have on your ability to get a mortgage and finance the home you intend to purchase. Knowing your credit score is one of the best tips we can give to buyers who want to begin the home buying journey because it truthfully starts with being ‘able’ to buy a house. If you are not able to buy a house then you need to figure out what needs to happen in order for you to be able to, and that begins with understanding your credit score and personal finances. -Ryan Fitzgerald, UpHomes
8. Take time to properly complete the seller disclosure
When selling a home take the time to properly complete the required seller disclosure. Failing to disclose information about your home that could materially impact a buyer’s decision to purchase can result in legal liability. Read the questions carefully and answer truthfully and completely. In certain situations, it may be prudent to seek legal advice in complying with disclosure requirements. -Bailey Law Firm
9. Know that a Real Estate Attorney can save you money
I wish that home buyers and sellers knew that using a Utah real estate attorney can eliminate a large amount of commission owed to a Real Estate agent. A Real Estate Attorney is also an expert in drafting contracts and can craft and create a sale agreement that specifically protects your interests. -Brian K. Jackson, Brian K. Jackson, LLC
10. Talk with your agent to find out when you will have access to your new home
In South Carolina, there are some counties in which, traditionally, the keys are not transferred to the buyer until after the deed records. Recording can sometimes be delayed until the day after closing, therefore, please speak with your Agent to discuss when you will be given access to the property. -Angie D. Knight, Grand Strand Law Group, LLC
11. Be aware that buyers need their own title insurance policies
Buyers need their own title insurance policies! Title problems could be as mundane as a border dispute and the insurance policy you bought for your lender will not provide any coverage. Only your own title insurance policy can protect you and they are relatively inexpensive compared to what you could be paying in future lawyer fees. -Phillip A. Curiale, Curiale Hostnik PLLC
12. Communication is the key to a successful closing
When a closing attorney reaches out to the consumer there is a genuine purpose. Most often the closing attorney is in need of vital information that will keep the closing on schedule. For example, the closing attorney may reach out to the seller to get mortgage account information, homeowners association contact information, or the last four digits of social security numbers so that the closing attorney can get information to clear liens. The closing attorney may also reach out to a buyer for information about the lender, whether or not the buyer wants a survey, how the buyer intends to hold title, or if the buyer plans to attend closing or close via power of attorney. Thus, when the closing attorney’s office reaches out to the consumer it is imperative that the consumer respond immediately as the request is most often time-sensitive. -Blair Cato Pickren Casterline, Podcast: Dishin’ Dirt
Originally Published on Redfin
Seattle, WA
By: Lexi Klinkenberg
Lexi is part of the content marketing team and enjoys writing about real estate and design trends. Her dream home would be a contemporary home with an open floor plan, lots of windows, and a waterfront view.
When it comes to finding a home, this is an exciting time. Many people love looking at houses; however, the reality is that people also need to think carefully about how much house they can actually afford. Buying a home is a big decision and for many people this is going to be the most expensive purchase they ever make in their lives. Therefore, it is important to take the time to get this decision right. There are plenty of ways for people to calculate how much house they can actually afford. With a budget in mind, this will make the shopping process easier.
The 28 Percent Rule
One of the top ways that people can figure out how much house they can afford is called the 28 percent rule. This is a simple formula that states that the house should only spend 28 percent of their gross income on expenses related to homeownership. This includes:
The mortgage, including the principal and interest
Real estate taxes
Homeowner’s insurance
Private Mortgage Insurance (PMI), if this applies
HOA dues
Keep in mind that this is the gross monthly income, meaning that this is before taxes.
The 36 Percent Rule
Another key rule that people need to keep in mind is called the 36 percent rule. This is a rule that states that that people should not spend any more than 36 percent of their gross monthly income on debts. This might include housing expenses (such as the ones above), loan payments (including car loans and student loans), child support, alimony, and credit card debt. Therefore, those who have more of these expenses are going to have less money to spend on a home.
Find The Right Budget For A Home
This is a short overview of how people can figure out how much house they can afford. Once people know how much they can spend each month on a home, they should be able to calculate backward to figure out how big of a loan they can actually take out. Of course, it is always important to remember that there are trained professionals who can help people figure out exactly how big of a house they can afford.
Packing up and moving to a new city is a grand adventure. A new town means new things to do, new people to meet, and new sights to see. However, settling into a new city is also a little scary. When everything around you is unfamiliar, it can be tough to find your footing. You’re not alone navigating this big change in your life. Countless people have packed up, moved cities, and thrived doing it. These are some of the best tips for making your new city feel like home.
Updating Your Car Insurance
If you’re moving to a new state, you’ll need to switch your car insurance as soon as possible. Every state is different in terms of laws and regulations, so it’s important to research what they are in your state before shopping for insurance. Then, you can start searching for the plans that are available in your zip code, which is an important factor in determining your plan’s rates. From there, you can decide which coverage you really need and how to save the most money by obtaining multiple quotes. Getting your car insurance taken care of early will give you peace of mind as you settle into your new city.
Finding Work
If you moved before lining up a job, you have a challenge ahead of you. On one hand, you need to generate income quickly to gain financial stability in your new home. On the other, accepting the first full-time job that comes along could threaten your ability to find work that matches your interests and qualifications.
Consider entering the gig economy to make ends meet while you look for work in your field. Gig economy jobs have a lot of flexibility, which means you’ll still have time to send out resumes and attend interviews for full-time jobs. Dog sitting is one great option when you’re new to town, because you effectively get paid to meet your neighbors! Even if you’re a stay-at-home parent looking for side work, a side gig dog sitting is a great way to get to know your community.
Don’t Forget Fido
Speaking of dogs, there are steps you should take to help your best four-legged friend adapt to your new city as well. First, be sure to keep your pet’s belongings and set them up in your new space. A familiar bed and favorite toy can go a long way in making Fido less anxious about the move. Then, before you head out to explore nearby dog parks, make sure he’s caught up on his vaccines and that he knows basic commands like sit and stay.
Learning the Lay of the Land
You’re going to get lost a lot during the first weeks in a new place. However, that doesn’t mean you should stay in! Accept the adventure and spend time exploring the streets of your new neighborhood. Go on walks, try local restaurants, coffee shops, bars, and supermarkets to find your favorites, and drop into community events that pique your interest. You’ll not only learn your way around, but you’ll also get a feel for the local flavor.
Settling Into Your Home
If you’re not comfortable in your house, it will be hard to feel comfortable in your community. In addition to logistical tasks like cleaning, organizing bills, and updating your home’s safety features, you’ll want to decorate so your new place feels warm and familiar. However, that doesn’t mean replicating the interior design of your last home. To adapt your décor to the new house, factor in the home’s color scheme, floor plan, and traffic flow.
Before making any design changes to the exterior of your home, follow Trulia’s advice and check with your homeowner association. An HOA can be your friend or foe, and the last thing you want is to start off on the wrong foot.
Making Friends
Finding friends is one of the toughest parts of moving to a new city. When everyone around you has established social networks, it’s hard to break in and form meaningful relationships. However, that doesn’t mean it’s impossible! As Realtor.com points out, the best way to meet new people is by joining groups that align with your interests. Whether that’s a parents’ group, a hobby-focused meetup, a faith community, or a community garden, you’ll meet like-minded people who, in time, could become lifelong friends.
Don’t forget about the kids! Helping your children make friends goes a long way to easing their apprehension about moving. Encourage kids to spend time playing outside so they can meet other neighborhood kids. When you talk to neighbors, ask them if they know of families with children the same age as your own. Enrolling kids in extracurricular activities is another way to help them make fast friends who enjoy the same hobbies.
Finally, be patient with yourself! It takes time for a new city to truly feel like home. You might feel a little out of place for the first few months or even the first year. As long as you’re getting out, meeting people, and engaging with your community, you’re heading in the right direction.
Your house is one of the most important investments you will make. Unfortunately, no house is perfect, and when you’re in the process of making the purchase, a repair issue may crop up. How do you determine what should be done, and whose responsibility it is to take care of it?
Red
Flags for House Hunters
Searching for your next abode is a big deal.
You want a place that’s safe, comfortable, and enjoyable, and most homeowners
don’t want to deal with problems immediately after moving in. With a little
scrutiny, you can often rule out homes early in the process.
For example, when you’re at a showing, take a
hard look for evidence of roof issues. Do you see missing or
damaged shingles? Is the paint in good shape, or is it peeling and blistering?
Are there stains on the interior ceilings? A roof repair might or might not be
a deal-breaker, but unless the home is being sold “as-is,” it’s certainly a bargaining chip.
Along those same lines, there are some other red flags worth noting. Standing water can
cause issues, so look for evidence of rotten wood in the kitchen, bathroom, and
laundry floors. If the appliances come with the home, examine them for signs of
neglect, and be alert to drainage concerns around the foundation, such as
ponding water, severe settling, or mold. Also, weed out homes with issues that
are more than you want to face.
Call in
a Professional
Once you find a home you want to purchase, one
of the wisest choices you can make is to invest in a professional home
inspection. This is typically done when you have begun formal contract
negotiations. Fortune Builders points out that you should check the qualifications of inspectors you’re
considering hiring, and ask to see samples of reports they have produced.
Request references, and check with family members and friends to see who they
used, and whether or not they were satisfied with the work.
To Fix,
or Not to Fix?
Once you select an inspector and the report is
complete, you’ll need to sort through the details to figure out what, if
anything, is a sticking point. There are certain repair requests home buyers shouldn’t
bother to make of sellers, such as cosmetic issues, common wear and tear items,
and renovations you intend to complete anyway. (After all, if you’re planning
on doing the work, you want it done to please you. If you leave it to the
seller, they have no obligation to suit your tastes, only basic standards.) The
requests worth considering include things like termite or pest infestations, drainage concerns, major plumbing or electrical problems, lead paint, mold or radon issues, and structural concerns. Basically, stick with
safety issues and problems which are especially expensive to resolve.
Paying
for Repairs
There are a couple of things to bear in mind
regarding your repair requests. Since the seller won’t be staying in the house,
you could have reason to worry about the repairs being completed the way you
would like. Besides, sellers are often in the midst of a lot of expenses, just
like buyers, so they might not have the cash flow to do a nice job. In this
case, you might want to ask for a seller’s concession. Basically, it gives you a
break on the purchase price and allows the seller to get on with the sale, so
everybody wins.
Another idea is to pay for repairs out of
escrow. As Total Mortgage explains, your mortgage company would reassess the
home based on the projected value once repairs are complete, then set the money
aside in an escrow account for you to use toward repairs.
You want your next home to keep you happy,
safe, and comfortable. When you’re purchasing a house, take a hard look during
the showing, and follow up with a professional home inspection. Afterward,
negotiate repairs to ensure you’re satisfied with the results. With a solid
plan in place, you’ll have your investment well-protected.
Are you the type of person that struggles with remembering to pay their bills on time? You’re not alone. People across the country regularly submit late monthly payments, inflicting terrible damage to their credit. Let’s take a quick look at how paying your loan or other monthly payments late can have a negative impact on your mortgage.
Whether you’re a first-time homebuyer or an experienced real estate investor, if you are planning to borrow funds to buy a home you will want to choose the right mortgage product. In today’s blog post we’ll explore how interest-only mortgages work and why they’re the perfect choice for some homebuyers.
When it comes to finding a home, this is an exciting time. Many people love looking at houses; however, the reality is that people also need to think carefully about how much house they can actually afford. Buying a home is a big decision and for many people this is going to be the most expensive purchase they ever make in their lives. Therefore, it is important to take the time to get this decision right. There are plenty of ways for people to calculate how much house they can actually afford. With a budget in mind, this will make the shopping process easier.
By Natalie Jones