14
Jul
By First Rate Financial Group
Mortgage

Down Payment Assistance Programs May Make Homeownership More Affordable

Down Payment Assistance Programs May Make Homeownership More AffordableThere are many people who are currently looking to purchase a home while interest rates are relatively low; however, there are many homeowners who feel like they do not have a strong level of financial understanding when it comes to the process of purchasing a home.

If homeowners don’t have the financial knowledge base to effectively evaluate their options, they might have trouble figuring out what they can truly afford. For example, how much money do homeowners need to save for a down payment? There are a lot of down payment assistance programs available at local, state, and regional levels.

Resources Are Available For First Time Homebuyers

There are many down payment assistance programs that have been made available specifically for first-time homebuyers. Many people who are buying a home for the first time might not be able to put 20 percent down when lenders ask for it. That is why down payment assistance programs might be able to help homebuyers bridge the gap between what they have and what they need. At the same time, there are other programs available as well.

There Are Programs Available for Non-First Time Homebuyers As Well

There are also down payment assistance programs that are open to people who aren’t first-time homebuyers as well. For example, many people are thinking about relocating because they work from home. They might want to stretch their money farther and purchase more space. Some rural areas have USDA loans that do not require a down payment. USDA loans might even be available in the suburbs. These loans might be easier for homebuyers who might not have a large chunk of money saved up for a down payment. Reaching out to these down payment assistance programs could be a smart move.

Understand All Options Available For Down Payment Assistance

Ultimately, there are a lot of down payment assistance programs that could make it easier for potential homebuyers to purchase a home. With many homeowners looking to purchase a home now before interest rates rise, it is important to explore all options available. This includes looking at down payment assistance programs that might make it easier for homeowners to afford a home.

09
Jul
By First Rate Financial Group
Mortgage

A Review Of Government Vs Conventional Mortgages

A Review Of Government Vs Conventional MortgagesThere are two broad categories of mortgages. The first is government mortgages, which include USDA, FHA, and VA loans. These loans are backed and insured by the United States government. The other category is conventional mortgages. These are mortgages that are insured by private lenders, such as banks and credit unions. What are the differences between these two loan options?

Government Mortgages

The qualifications for government mortgages are usually more lenient than conventional loans. For example, FHA mortgages are usually backed by the Federal Housing Administration. FHA loans could be a smart option for borrowers who might not be able to make a large down payment or who are taking out a loan for the first time. In addition, borrowers with higher debt to income ratios and lower credit scores might also be able to qualify for an FHA loan. While it is possible to qualify for an FHA loan with a lower down payment mortgage insurance might still be required.

Another government mortgage is a VA mortgage. This is a mortgage that is insured by the United States government that is available to members of the military. In order to qualify for a VA loan, a Certificate of Eligibility (COE) is required. While VA loans do not charge mortgage insurance, an upfront funding fee could be charged if certain requirements are not met.

Conventional Mortgages

Conventional mortgages refer to home loans that are created and financed by unions, banks, credit unions, and other lenders not associated with the United States government. When compared to government loans, they usually have stricter guidelines. Borrowers seeking a conventional mortgage usually must have a higher credit score, a larger down payment, and a lower debt to income ratio. If borrowers are not able to put 20 percent down, they might be charged private mortgage insurance (PMI); however, some borrowers might be able to negotiate lender-insured PMI if they are willing to accept a higher interest rate.

Speak To A Loan Officer

The right loan for one person might not be the right loan for someone else. Everyone should speak to a loan officer to figure out which type of home loan is right for them. That way, everyone can negotiate favorable terms on a home loan.

08
Jul
By First Rate Financial Group
Mortgage

Refinancing A Mortgage: Is It Too Soon?

Refinancing A Mortgage: Is It Too Soon?Due to the fact that mortgage rates are still hovering near record lows, many homeowners are considering refinancing to a lower interest rate. This is a great way for homeowners to shorten the term of the loan, reduce the size of their monthly payments, and access cash for a home improvement project. On the other hand, there are some situations where it might be too soon to refinance an existing mortgage. What are a few factors to consider?

Conventional Home Loans Might Require A Certain Amount Of Equity

Homeowners with a conventional loan should reach out to their lender to see what the requirements are on the home loan before refinancing. Some lenders require homeowners to have a certain amount of equity built up in the home before they allow lenders to refinance, particularly for a cash-out refinance (when homeowners refinance and tap into home equity as a source of cash). Other lenders might simply require homeowners to wait six months after taking out the initial home loan before going through the refinance process. This all depends on the type of home loan.

FHA Loans Have Several Refinancing Options

An FHA loan is a loan backed by the government. There are several refinancing options available. First, homeowners seeking a cash-out refinance must have lived in the home as the main residence for 12 months and must have had a mortgage for six months. A simple rate adjustment refinance requires seven months of waiting after taking out the initial loan. Finally, anyone going through the FHA streamline process must have made six months payments in order to go through this process.

VA Loans Have A Simple Waiting Period

Anyone with a VA loan must wait 210 days or make six mortgage payments before they are allowed to refinance. Homeowners with questions should reach out to the lender to learn more.

It Might Be Time To Refinance

Because interest rates are still low, this could be a great time for homeowners to refinance their current home loans; however, it might be too soon for some homeowners. Keep in mind that there will also be closing costs associated with refinancing a home loan. Homeowners should work with a professional to see if refinancing is worth it for them.