Blog – Page 10 of 787 – First Rate Financial Group

26

Mar

Mortgage

Navigating Down Payment Options: Your Guide to Homeownership

So, you’ve decided to take the plunge into homeownership – congratulations! One of the most critical aspects of buying a home is figuring out your down payment. It’s a significant financial commitment that can shape your home-buying journey. But fear not! There are various down payment options available to suit different financial situations and goals. Let’s explore them together.

Traditional 20% Down Payment: The traditional route suggests putting down 20% of the home’s purchase price. This option often allows you to avoid private mortgage insurance (PMI), potentially saving you money in the long run.

While a 20% down payment may seem daunting, it can provide immediate equity in your home and lower your monthly mortgage payments.

Low Down Payment Programs: Many lenders offer programs that require a lower down payment, sometimes as low as 3% to 5% of the home’s purchase price.

These programs can be particularly beneficial for first-time homebuyers or those with limited savings. However, they often come with additional costs, such as PMI, which adds to your monthly expenses.

Government Assistance Programs: Various government-backed loan programs, such as FHA loans (Federal Housing Administration), VA loans (Department of Veterans Affairs), and USDA loans (United States Department of Agriculture), offer low or no down payment options for eligible buyers.

These programs aim to make homeownership more accessible, especially for individuals who may not qualify for conventional loans due to credit or income limitations.

Down Payment Assistance Programs (DPA):

DPAs provide grants or loans to help cover the upfront costs of purchasing a home, including the down payment and closing costs.

Eligibility requirements and availability vary by location, so it’s essential to research programs offered by your state or local housing authorities.

Gift Funds and Family Assistance:

Some homebuyers receive financial assistance from family members or close relatives in the form of gift funds to help cover the down payment.

It’s crucial to follow lender guidelines and document the source of the gift funds to ensure compliance with mortgage regulations.

401(k) or Retirement Account Withdrawals:

While generally not recommended due to potential tax implications and long-term consequences, some homebuyers may consider withdrawing funds from their 401(k) or retirement accounts to bolster their down payment.

Before tapping into retirement savings, it’s essential to weigh the pros and cons and consult with a financial advisor to understand the implications fully.

Seller Concessions:

In some cases, sellers may be willing to offer concessions to help buyers cover closing costs or part of the down payment. Negotiating seller concessions can be a strategic approach, especially in a competitive housing market.

The down payment is a crucial aspect of the home-buying process, but it doesn’t have to be a barrier to homeownership. With various down payment options and assistance programs available, there are solutions to fit every budget and financial situation. Remember to carefully evaluate your options, consider your long-term financial goals, and consult with a knowledgeable mortgage lender or financial advisor to determine the best approach for you. Give us a call to go over your options.

25

Mar

By First Rate Financial Group

Financial Reports

What’s Ahead For Mortgage Rates This Week – March 25th, 2024

While it’s not a set deal, the Federal Reserve does appear to be on track for a June rate cut, and following its two-day policy meeting, the central bank’s rate-setting Federal Open Market Committee said it will keep its benchmark overnight borrowing rate in a range between 5.25%-5.5% until then.

Additionally, the government has also avoided another shut down as a series of rushed bills had approved spending for the government by another 1.2 trillion dollars. This is good news for lending markets as the debt ceiling has previously tied up rate decisions in the past.

FOMC Rate Decision

Federal Open Market Committee has stated it will maintain the current interest rate for central banks and will keep its benchmark overnight borrowing rate in a range between 5.25%-5.5%.

Existing Home Sales

The numbers: Home sales rose in February as home buyers snapped up a slew of new listings. Sales activity posted the biggest increase since February 2023. Sales of previously owned homes rose by 9.5% to an annualized rate of 4.38 million in February, the National Association of Realtors said Thursday.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates are seeing an increase by +0.05% with the current rate at 6.21%
• 30-Yr FRM rates are seeing an increase by +0.13% with the current rate at 6.87%

MND Rate Index

• 30-Yr FHA rates are seeing a -0.20% decrease for this week. Current rates at 6.40%
• 30-Yr VA rates are seeing a -0.20% decrease for this week. Current rates at 6.42%

Jobless Claims

Initial Claims were reported to be 210,000 compared to the expected claims of 213,000. The prior week landed at 212,000.

What’s Ahead

As of this week, the only thing to watch out for is the Personal Consumption Expenditures (PCE) index, which is the Federal Reserve’s preferred measure of inflation outside of the CPI and PPI data releases. We will also be seeing initial estimates for the first quarter GDP estimates, gauging the total growth of the economy.

22

Mar

By First Rate Financial Group

Mortagage Tips

Consumer Guide: Mortgages for Veterans – A Guide to VA Loans

Are you a veteran or an active-duty military member considering homeownership? VA loans offer significant benefits tailored to meet the needs of veterans and service members. Here’s a concise guide to understanding the advantages and requirements of VA loans:

Benefits of VA Loans:

No Down Payment: One of the most significant advantages of VA loans is that they often require no down payment, making homeownership more accessible for veterans and active-duty military personnel.

Lower Interest Rates: VA loans typically offer lower interest rates compared to conventional mortgages, which can result in substantial savings over the life of the loan.

No Private Mortgage Insurance (PMI): Unlike many conventional loans, VA loans do not require private mortgage insurance (PMI), further reducing the overall cost of homeownership.

Flexible Credit Requirements: VA loans tend to have more lenient credit score requirements compared to conventional loans, making them accessible to a broader range of borrowers.

Assistance in Avoiding Foreclosure: The Department of Veterans Affairs provides support and resources to help veterans and service members avoid foreclosure, including loan modification options and financial counseling.

Requirements for VA Loans:

Eligibility: To qualify for a VA loan, you must be an active-duty military member, veteran, reservist, or National Guard member who meets specific service requirements. Spouses of service members who died in the line of duty or as a result of a service-related disability may also be eligible.

Certificate of Eligibility (COE): You must obtain a Certificate of Eligibility from the Department of Veterans Affairs to prove your eligibility for a VA loan. This document verifies your military service and determines the amount of entitlement you have available for the loan.

Property Eligibility: The property you intend to purchase with a VA loan must meet certain requirements set forth by the Department of Veterans Affairs. These requirements ensure that the property is safe, sanitary, and structurally sound.

Income and Debt Requirements: While VA loans are more flexible than conventional loans, lenders will still evaluate your income and debt-to-income ratio to ensure you can afford the mortgage payments.

Occupancy Requirement: You must intend to occupy the property as your primary residence within a reasonable period after closing the loan. VA loans are not available for investment properties or vacation homes.

VA loans offer numerous benefits and opportunities for veterans and active-duty military personnel to achieve homeownership with favorable terms and conditions. If you’re eligible, consider exploring VA loans as a viable option for purchasing your dream home. Make sure to consult with a knowledgeable lender experienced in VA loans to guide you through the process and help you make informed decisions tailored to your unique circumstances.