RE/MAX Executive Realty



Posted by RE/MAX Executive Realty on 4/14/2019

If youíre hoping to buy a house in the near future, youíll want to focus on saving for a down payment.

Down payments are a way to let a lender know that you are a low-risk investment, and a way to save money on interest over the term of your loan.

If you have your other finances in order--a good credit score and stable income--thereís a good chance that making a 20% or more down payment will land you a low interest rate that can save you thousands while you pay off your loan.

How large should my down payment be?

The larger the down payment you can afford, the more money youíll likely save in the long run. While there are ways to get a loan with no or very small down payments, these arenít always ideal.

First, if you put less than 20% down on your home loan, youíll be required to pay private mortgage insurance, or PMI. These are monthly payments that you make in addition to the interest that is accrued on your loan.

So, if you donít put any money down on your home, youíll accrue more interest over your term length and youíll pay PMI on top of that.

What affects your minimum down payment amount?

Lenders take a number of factors into consideration when determining your risk. If youíre eligible for a first-time home owners loan, a veteranís loan, or a USDA loan, your loan can be guaranteed by the government. This means you can likely pay a lower down payment while still receiving a reasonable interest rate.

When applying for a mortgage, be sure to reach out to multiple lenders and shop around for the rates that work for you. Many lenders use slightly different criteria to determine your eligibility to pay a lower down payment.

Other things that affect your minimum down payment include:

  • Credit score

  • Location of the home you want to buy

  • Value of the mortgage

Saving for a down payment

Youíll get the most value out of your mortgage if you put more money down. However, if youíre currently living in a high-rent area, it could mean that itís in your best interest to get out of your apartment and start building equity in the form of homeownership.

If you want to buy a home within the next year or two, there are a few ways you can help increase your savings.

First, determine how much you need to save. Depending on your housing needs and the current market, everyone will have different requirements. Do some home shopping in your area online and look for homes that are within your spending limits. Remember that you shouldnít spend more than 30% of your monthly income on housing (mortgage, property taxes, etc.)

Next, find out what a 20% down payment on that home would be, adjusting for inflation.

Once you have the amount you need to save, remember to leave yourself enough of an emergency fund in your savings account to last you a month or two.




Tags: mortgage   down payment  
Categories: Uncategorized  


Posted by RE/MAX Executive Realty on 3/17/2019

Perhaps one of the most challenging things about buying a home is saving for the downpayment. Collecting such a large sum of money can be difficult. The truth is that most buyers actually think that they need more than they actually do to buy a home. The downpayment doesnít need to be a barrier to your path to homeownership. There are so many programs that offer low and even no down payment home loans. Read on to learn more about down payments and programs that can help you. 


First, letís look at what a down payment is and how it can help you. If you put 10% down on a $200,000 home thatís $20,000. The downpayment minus the purchase price of the home is $180,000, and that's how much your home loan will be. The more money you can put down on the house, the lower your home loan will be and the lower your monthly mortgage payments will be. A large down payment can indeed save you in the long term. If youíre looking to move into a home sooner rather than later, saving a considerable sum isnít always possible.  


Low Downpayment Mortgages


You need to decide what type of home loan you need by the amount of downpayment youíre willing and able to put down. Some benefits go along with making a down payment, but there are some negatives. 


By making a substantial down payment you may despite your savings, leaving little money for emergencies. Your mortgage rate may not be affected by a large downpayment either. It can be hard to decide what type of loan to get and just how much you really can afford.  


FHA Loans


FHA loans are among the most popular type of home loans. The downpayment thatís required is just 3.5%. The requirements are simple, and you donít have to be a first-time homebuyer to qualify. 


The drawback to an FHA loan is that you cannot cancel the monthly mortgage insurance that comes along with it unless you refinance the home. Traditional mortgage insurance is canceled when you have built up 20% equity in the house, but this isnít the case with FHA loans. 


Another positive about FHA loans is that your credit score doesnít have to be stellar in order for you to qualify. Some lenders approve FHA loans with credit scores as low as 580. 


VA Home Loans


Buyers who have current or former military service status can qualify for this zero down mortgage. These loans are benefits to veterans and current members of the Armed Forces. While no downpayment is required, buyers may put down any amount they wish. The only requirements are that buyers be members of the military either currently serving for 90 days or two years of active duty service if not an active member.   


The above options are great for those who canít afford or donít wish to put down large down payments but still hope to be homeowners. 





Categories: Uncategorized  


Posted by RE/MAX Executive Realty on 2/3/2019

If youíre finding that your finances are a bit tighter these days, you might need to adjust your budget a bit. Have you ever thought about alternatives in helping you to pay your mortgage? Thereís a few things that you might be able to do in your home to save a few bucks and be more comfortable with your budget and finances. 


Share The Space


This might sound crazy, but it works for many people. If youíre willing to share your living space with others, it could help you to make a dent in your mortgage. This works especially well if you have a home with a separate entrance like an in-law apartment or something similar. 


Make Adjustments To Your Expenses


There are many different costs that come along with owning a home. If you reduce some of these expenses, youíll be able to cut your overall spending. You donít need to completely adjust your entire way of living to do this. Some ideas:


  • Cut the cord on cable and install streaming devices
  • Go on a family cell phone plan
  • Skip the gym membership
  • Use public transportation
  • Cook at home instead of eating out
  • Use coupons


Put Tax Refunds To Good Use


If you normally get a tax refund, you can apply that money to your mortgage instead of using it to buy something else. You could also adjust your withholdings. This would allow you to get a bit more money in your paycheck each week. Youíll get less of a refund during tax time, but the extra money may help you to pay down bills throughout the year. 


Pay More Towards The Principal 


To make the most of your hard-earned savings, use your money wisely and pay down the mortgage faster. Just be sure that thereís no penalty for a prepayment of the loan. You can either make an extra loan payment each month or you can pay a bit over what you owe on the mortgage each month. If you pay the mortgage faster, youíll save potentially thousands of dollars in interest over the life of the loan. Youíll need to check with your mortgage company to see what their process is for paying more towards the principal of the loan. Keep in mind that the first few yearsĎ worth of your mortgage payments will be going towards interest unless you specify extra payments to go elsewhere.


Whether youíd like a little more of a financial cushion or are just looking to get rid of all those pesky monthly bills, itís never a bad idea to focus on paying your mortgage down as quickly as possible.




Tags: mortgage   finances  
Categories: Uncategorized  


Posted by RE/MAX Executive Realty on 9/23/2018

If youíve been considering taking the next step toward homeownership, youíve likely heard about FHA loans. Offered by the Federal Housing Administration (hence, ďFHAĒ), these loans are great for a number of people hoping to purchase a home but who donít have a large down payment saved.

There are many misconceptions about FHA loans since theyíre often advertised by large, private mortgage lenders but are technically a government program. In order to clear up some of the confusion, weíve provided answers to some frequently asked questions regarding FHA loans.

Read on to learn about FHA loans and how they might help you purchase a home.

Who issues an FHA loan?

FHA loans arenít issued by the government. Rather, theyíre issued by private lenders but insured, or ďguaranteed,Ē by the government.

Since lenders want to make sure theyíll see a positive return from lending to you, they typically want you to have a high credit score and a large down payment (typically 20%). However, not everyone is able to meet those requirements. In this situation, the FHA is able to help you acquire a loan by giving your lender a guarantee.

Are there different types of FHA loans?

Yes. In fact, there are nine distinct types of loans guaranteed by the FHA. These include fixed rate mortgages, adjustable rate mortgages, refinance loans, reverse mortgages, VA loans, and more.

What do you need to qualify for an FHA loan?

Itís a common misconception that you need to be a first-time buyer to qualify for an FHA loan. However, if you have previously owned a home that was foreclosed on or if youíve filed for bankruptcy, the foreclosure and bankruptcy have to be at least three years old.

Youíll also need to demonstrate a stable employment history, usually including two years of employment with the same employer.

Finally, the FHA will ask you for your current and previous addresses, the last two years tax returns, and the W-2 forms from any of your recent jobs.

What is the most I can borrow with an FHA loan?

The FHA sets mortgage limits on loans depending on the state and county youíll be living in. For a single-family home, the limit ranges from $275,000 to $451,000. So be sure to check the limits for your state and county.

Can you refinance an FHA loan?

Refinancing a loan is a great way to receive a lower interest rate or to shorten the term of their mortgage to save in the total number of interest payments. In fact, the FHA typically only allows refinancing when it will result in lower interest payments on a loan.

What is the minimum credit score needed to qualify for an FHA loan?

While you donít need excellent credit to qualify for a loan, the FHA will require you to have a score of at least a 580. You can check your score for free online from a number of companies, such as Mint or Credit Karma. Be aware, however, that scores vary between credit bureaus. So, itís a good idea to check your FICO score once per year, which is the score used by mortgage lenders.




Categories: Uncategorized  


Posted by RE/MAX Executive Realty on 9/16/2018

You may have heard the term ďescrowĒ in your experience with real estate. You might know itís an account, but what exactly does it do for you as a buyer? An escrow account is what your lender uses to make payments on things like property taxes, insurance, and more. The lender collects your monthly mortgage payment, and part of that cash goes into an escrow account. 


This type of account is an excellent option for homeowners because your bills relating to being a homeowner will all be paid without you having to do anything. It makes budgeting a breeze because there arenít any complicated calculations involved. Every month, your lender collects 1/12 of the estimated tax bill and insurance cost for the home. The rest of your mortgage payment covers the principal and interest on the loan of the house.


Are Escrow Accounts Mandatory?


Youíll find that most lenders require you to have an escrow account. The purpose of the account is to keep the home safe as collateral for the loan. The bank has an interest in the proper insurance behind the property. The taxes also need to be paid on time in order to keep the property in good standing. If the taxes arenít paid, a tax lien will be placed against the house. 


Everything In One Place


Youíll receive an annual statement from your lender that will show you how much money was collected and placed in your escrow account. Escrow payments often change because insurance premiums and taxes tend to change quite frequently. The amount being put into escrow may change a few times throughout the year. The lender keeps track of all this for you, saving you some time. 


Bills That Need To Be Paid


Whether you have an escrow account or not the bills that are included must be paid one way or another. Itís a good idea to speak with your lender before you buy a home to find out that bankís procedures around these insurance and tax payments. Property tax and home insurance are items that youíll need to budget for regardless of how your lender does things. An escrow account can be much more convenient for many buyers. 


Escrow is just another one of the many essential terms that youíll come across as a homebuyer. Knowing the advantages and purpose of the account helps you to be informed as you dive into the home buying process. 





Tags: Buying a home   mortgage  
Categories: Uncategorized  




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