01
Sep
By First Rate Financial Group
Mortgage

Consider A Home Renovation Loan To Navigate A Challenging Housing Market

Consider A Home Renovation Loan To Navigate A Challenging Housing MarketToday, there are many people who are having a difficult time purchasing a house. Even though interest rates have gone up, sales are still happening quickly. Therefore, it can be difficult for people to qualify for a mortgage, purchase a house, and get to the closing table before the property is sold. One potential way to get around the hot housing market is to consider a home renovation mortgage. How can a home renovation mortgage help you? 

A Renovation Loan Can Help People Buy A Less Desirable Home

If you want to close on a home, you might be interested in a house that is not as desirable as some of the others. That way, you don’t have to worry about a bidding war. A renovation loan can help you purchase a less desirable home. If you are interested in buying a home that requires some repairs, but you do not have a lot of cash available for repairs, a renovation mortgage is a special loan that gives you the money you need to repair the house.

How Does A Renovation Loan Work?

Typically, the amount of money you can borrow for a renovation loan will depend on the value of the home after the renovations are completed. Therefore, the appraisal process is a bit different. This is the only type of mortgage that will give a homeowner credit for the future value of the property. Therefore, you can borrow more than you would be able to with a traditional mortgage. You can use the extra cash to perform repairs, which can increase the value of the home.

How Many Renovation Loans Are There?

Just as there are different types of conventional loans, there are different types of renovation loans as well. Each has a different set of requirements, but all of them require you to use the extra money to repair the home. Furthermore, all the work you do on the house has to add to the value of the property. If you have questions about how you can use the money that comes with a renovation loan, you should reach out to a professional who can help you. 

 

31
Aug
By First Rate Financial Group
Mortgage

Expenses To Consider When Buying A Home

Expenses To Consider When Buying A HomeWhen you are in the process of buying a home, it can be intimidating to take a look at so many factors. A home has a big price tag, and you need to make sure that you budget accordingly. Fortunately, this is not a process that you have to go through on your own. There are several items that all experts will say that you have to consider as you budget for your next home purchase.

The Down Payment

Your biggest expense is probably going to be your down payment. In general, it is a smart idea to put 20 percent down on your house. That way, you can avoid having to purchase private mortgage insurance. If you are purchasing a house for the first time, you might be able to put less money down, but you might face a higher interest rate and private mortgage insurance (PMI) payments if you do so.

The Earnest Money Payment

You should also be prepared to put down some earnest money. The exact amount of earnest money, also called due diligence money, that you have to put down will vary depending on the market. You should have a trusted professional who will let you know how much earnest money you should include with your offer. This is money that you use to hold the house in your name as you decide whether you want to go through with the purchase. If you end up buying the house, your earnest money will be put toward your down payment. 

Closing Costs

You should also budget money for closing costs. Some of the items that will be included in your closing costs include a loan origination fee, a title examination, title insurance, an attorney’s fee, an escrow deposit, and a possible survey. In general, you should plan on budgeting approximately two percent of the loan’s value for closing expenses. 

Don’t Forget About Possible Home Repairs

After the inspection, you may have a few items that you need to repair. You may want to have some extra money on hand to cover some quick repair costs. If you budget accordingly, you can streamline the process of buying a home, helping you get to the closing table more quickly.

 

26
Aug
By First Rate Financial Group
Mortgage

The Importance Of Pre-Approval During The Homebuying Process

The Importance Of Pre-Approval During The Homebuying ProcessIf you want to buy a home in the near future, you are probably aware of just how competitive the housing market is. You need to put yourself in the best position possible to be successful by getting pre-approved for a home loan. This is a very important step, particularly when you compete against people making cash offers. Learn more about the importance of getting pre-approved below, and make sure your offer is taken seriously.

A Pre-Approval Letter Shows You Are Serious

The first reason why you need to get a pre-approval letter is that it will show any potential seller that you are serious about buying the home. One of the reasons why settlers like to accept cash offers is because they know the sale will go through. Without a pre-approval letter, the seller may not know if you will be approved by a reminder for a home loan. By showing a pre-approval letter, the seller will know that you will get financing for the home, and they do not necessarily need to worry about the sale falling apart.

Getting Pre-Approved Gives You A Budget

You also need to get a pre-approval letter because it will give you a budget with which to work. Even though it is fun to take a look at different houses and imagine what your life might look like, you need to know how much money you can spend on a house. The lender will let you know the maximum amount that you are approved for, and you can quickly narrow down your search and find the right home to meet your needs.

Get Pre-Approved Before You Start Your Housing Search

The housing market is constantly changing, so you need to take advantage of every opportunity given to you. If you want to make it easier to navigate a difficult housing market, you need to get pre-approved before you start the housing search. Remember that you do not necessarily need to get a loan from the lender that gave you a pre-approval letter, but the seller needs to know that you have been approved by at least one lender if you want your offer to be taken seriously. A pre-approval letter does exactly that.