Month: May 2017

It can be hard to stay on top of a changing real estate market from day-to-day, but it’s a matter of fact that there are more available mortgage products out there than ever before for many different kinds of homebuyers. If you’re wondering how you can take advantage of easier lending opportunities and strike while the iron is hot, here are some things to consider.

Take Care Of Your Credit

While many regulations on mortgage applications may have been loosened in recent years, it goes without saying that having a better credit score will still enable you to qualify for a mortgage more readily. Instead of risking it, ensure that you’ve obtained a copy of your credit score and are aware of where you stand as a financial risk. By working on your credit and correcting any errors on your report, it will be that much more likely to have your mortgage application approved.

Saving For A Down Payment

It’s often said that 20% is the ideal amount to put down in order to avoid private mortgage insurance, but it’s not the required amount in order to invest in a home. While it may save money, in the long run, to put more money down, for those who want to get into the housing market, there are many opportunities for putting a lot less down and still being able to purchase. It’s possible you may want to hold off until you can save up for your down payment, but possibilities exist for mortgages with as little as 3.5% down.

Dealing With Closing Costs

Saving up for a down payment and deciding to invest in a monthly mortgage payment is a significant commitment, but adding mortgage closing costs to that can be a bridge too far for many potential homebuyers. Fortunately, many lenders nowadays are offering the opportunity for closing costs like origination and attorney fees to be included in the total cost of the loan. While this will bump up the amount of your monthly payment, it can make a mortgage more feasible from the start.

For many people, there’s a lot of stress that goes along with applying for a mortgage, but with lower down payments required and closing costs included in the total price, getting approved has become a lot easier in recent years. If you’re currently in the market for a new home, contact your trusted mortgage professionals for more information.

As a potential homebuyer who is new to the market, many of the terms and mortgage products available to you can be more than a little confusing. Piggyback loans might be a little less familiar than many other options, but if you’re ready to jump into the housing market this type of mortgage can be useful for you. If you’re hoping to invest in a home sooner rather than later, here are the details on this type of loan.

What’s A Piggyback Loan?

While most mortgage loans require one loan and one lender, a piggyback loan is used for homebuyers who don’t have 20% to put down but want to avoid private mortgage insurance (PMI). Because a mortgage with less than 20% down will require the homebuyer to pay PMI, a piggyback loan can assist in avoiding this. For example, in the event that the homebuyer is putting down 10%, their primary mortgage will cover 80% of the purchase price while the piggyback loan will cover the remaining 10%.

What Are The Requirements?

Since there have been many issues with piggyback loans in the past, there are more requirements for this type of loan than there used to be. While it varies from lender to lender, most homebuyers will be expected to put down at least 10% in order to qualify for this loan. In addition, they will be required to have a good credit score to ensure they are a good risk. While the debt-to-income ratio will fluctuate from lender to lender, potential homebuyers will have to prove that they can make their monthly payments.

Is This Loan Right For You?

It’s important before deciding on a piggyback loan that it’s the right choice for you. Since a piggyback loan will require you to pay down two different loans, it means that you will not be able to tap into your home equity in the event that you want to free up funds. It can also put home ownership in harm’s way if there are any financial setbacks. As well, while PMI can be canceled after the equity in your home is at 20%, a piggyback loan does not provide this option.

A piggyback mortgage can be a good option for homeowners who want to get into the market, but it’s important to determine if it’s a financially solid choice before wading in. If you’re currently getting prepared to buy, contact your trusted mortgage professionals for more information.