Four Mistakes to Avoid When Making an Offer for Your Dream Home

Four Mistakes to Avoid When Making an Offer for Your Dream HomeYou’ve scoured the new home listings, been to all the open houses and have finally found the home of your dreams. It is now time to draft an offer and begin the negotiation process. Below we’ll share four mistakes that you will want to avoid when making an offer on your dream home.

Mistake #1 – Not Working With A Professional

The first mistake that home buyers make is trying to buy a home without using the services of a real estate professional. Buying a home is a significant financial transaction and one where the seller and their agent are working hard to ensure they come out ahead. Having experienced representation on your side of the table ensures that you won’t be taken advantage of.

Mistake #2 – Skipping The Home Inspection

The second mistake – and one that is more common than you think – is skipping the home inspection. There are countless instances of home buyers thinking that the house looks great on the outside without realizing that there are issues with the roof, the foundation, the plumbing, inside the walls or some other area that’s tough to see. Having the house professionally inspected before tabling an offer ensures that issues are fixed up before the transaction is complete. Alternately, if you’re willing to move ahead regardless, you can ask for the price to be reduced as compensation.

Mistake #3 – Not Being Pre-Approved For Financing

The third mistake in our list is making an offer on a home without being pre-approved for the amount of mortgage financing you will need. Regardless of how good your credit is, the mortgage application process is one that can present challenges. Also, many home sellers will require evidence of financing pre-approval before accepting an offer, so it’s best to come prepared.

Mistake #4 – Taking On Other Debts

Once you’ve decided on the home you want to purchase, you will want to avoid taking on any other debts which can affect your credit score. Don’t buy a car, open any new credit cards or do anything else which will show up on your credit report. Once you are pre-approved for your mortgage, you’ll want to keep your credit as spotless as possible to ensure that nothing goes wrong.

If you’re prepared and clear-headed, the offer process will go smoothly and you’ll soon be moving into your dream home. When you’re ready to explore financing options, contact us today.

Pay Your Mortgage Off Faster With These Money-Smart Strategies

Pay Your Mortgage Off Faster With These Money-Smart StrategiesAs with any loan or line of credit, there are benefits to getting your mortgage paid down. You’ll pay less in interest, potentially saving thousands over the repayment period. Moreover, you’ll own your home outright that much quicker.

Let’s explore four money-smart strategies that will help you to pay your mortgage off faster.

Start With The Obvious And Increase Your Payments

It won’t come as a surprise that one of the easiest ways to get your mortgage paid off is to increase the amount you put towards your monthly payments. Most lenders will allow you to place any extra funds directly against the outstanding loan amount or “principal.” This is very efficient as it avoids having to commit any additional funds to interest.

One trick that many families use is to round the payment amount up to the nearest hundred-dollar figure. For example, if your mortgage payment is $652.32, you would pay $700 instead. This might be an easy burden on your wallet but still amounts to an extra seven percent of your payment.

Accelerate Your Payment Schedule

Another way to get your mortgage paid off as quickly as possible is to accelerate how frequently you make payments. For example, if you are currently making payments on a monthly basis, you can switch to bi-weekly payments instead. This means that instead of 12 large payments per year, you’re making 26 smaller payments. However, your interest will still compound on a monthly basis which means that over time you’ll end up paying less in interest. Not all mortgage products support this, so it is best to check with your mortgage professional to ensure it is an option open to you.

Dedicate Your Tax Refund To Your Mortgage

If you receive a tax refund or other large sum of money, consider using it to pay your mortgage down further. This is an excellent use for a spare block of cash as it gets you one step closer to owning your home, free and clear.

Refinance Your Mortgage To A Shorter Term

Finally, one last strategy is to look at a shorter term for your mortgage. For example, if you started with a 30-year amortization, you can refinance down to a 15-year loan instead. This will require having access to significantly more money to place against your payment, so be sure to carefully budget for this additional cost.

These are just four of the many ways that you can get your mortgage loan paid off faster. For more information or to inquire about a mortgage for your next home, contact us today. Our professional team is happy to share additional strategies that can have you owning your dream home in no time.

How to Get a First Time Home Buyer FHA Loan

first time home buyer fha loan

Are you looking to own your part of the American dream? Want to have a place to call your own?

About 32% of all residential sales in 2016 were first-time home buyers.

Buying a home is a huge step in life. As a first-time home buyer, chances are you’ve already started the search for your perfect house. But before you can purchase a home, you’ll need a lender.

One loan to consider is the first time home buyer FHA loan. FHA loans are attractive because of the low down-payment requirement. These loans also offer more flexible qualification requirements.

Want to apply and get approved for the first time home buyer FHA loan? If so, keep reading! We’ll cover 3 tips that will increase your chances of getting approved.

1. Know What’s Affordable

As a buyer, your mantra should be to buy a home that’s financial comfortable for you. While you may want a huge home with a lot of land, being strapped for cash because of your mortgage payment isn’t ideal.

With FHA financing, your mortgage payment cannot be more than 31% of your monthly income.

Before you start shopping, know what you can afford. Use a mortgage payment calculator to combine your existing expenses with a home payment.

When determining your price point, ensure you have money to set aside. As a homeowner, there’s always the risk of appliances breaking. Your monthly budget should allow you to set money aside in an emergency fund.

2. Know & Improve Your Credit Score

As with any mortgage loan, your credit score impacts interest rates. It will also impact down payment percentages as well as loan amount.

FHA loans can be approved with a down payment as low as 3.5%. But, to get approved for this percentage, your credit needs to be above 580. A score of 579 and below requires a down payment of 10% or more.

Before applying for an FHA loan, be sure that your credit is in good standing. To maintain or improve your credit score:

  • Pay down credit card balances
  • Pay bills on time
  • Fix any errors
  • Clear up any collection accounts

Once you’ve applied for a loan, you’ll want to avoid applying for any other loans or lines of credit. Otherwise, your score will drop.

3. Save Towards a Down Payment

With the first time home buyer FHA loan, you’ll need to come to the table with a down payment. The amount will depend on the total cost of the home as well as the approved percentage.

As an FHA borrower, you can use various funds as part of your down payment. For example, you can use money from your savings account. Aside from your own money, you can also use funds from:

  • A state or local grant
  • Cash gifted from a family member or close friend
  • A charitable organization

With gifted funds, a letter must be provided. The letter has to state that there is no expectation of repayment. The letter must also disclose the nature of the relationship.

First Time Home Buyer FHA Loan: Wrap Up

The FHA first time home buyer loan is an attractive option. To best position yourself to get approved, follow the tips above.

Of course, you don’t want to go through the home buying process on your own. You’ll need a real estate agent to show homes. You’ll also need a lender who can help you throughout the mortgage loan process.

If you want a committed team of mortgage professionals, look no further than Benchmark Mortgage.

We’re experienced in FHA loans as well as VA, USDA, and conventional loans. As a first-time home buyer, we know how confusing the process can be.

Our team will make home buying easy!

Now’s your chance to start your American dream. Contact our team today to discuss your needs.

5 Things First-time Home Buyers Should Know Before Signing on the Dotted Line

5 Things That First-time Home Buyers Wish They Knew Before They SignedWithout a doubt, it can be both overwhelming and exciting to find your dream home and be able to put the money down for it. However, there are a lot of things to know before signing on the dotted line so you can avoid buyer’s remorse. Instead of going it alone, here are a few tips to keep in mind before you decide to commit to your new home.

A Good Agent Is Important

Many homeowners want to find the right place on their own, but having an agent along to assist you in the process can go a long way towards finding your ideal home at the right price. Instead of risking it, choose an agent that comes highly recommended and has an abundance of experience in the business.

Is The Price Right?

It’s easy to be taken in by a beautiful home, but before putting money down you’ll want to calculate your debt-to-income (DTI) ratio to make sure it’s within reach. You may feel like you can make it work, but paying a high mortgage will become a drain over time and may ruin the happiness of your home investment.

What’s The Potential?

When it comes to first-time buying, many homeowners go into it with unrealistic expectations. However, demanding too much of your investment can mean you miss out on the gems that have a lot of hidden potential. Instead of saying ‘no’ right away, consider what you can improve for little cost.

Researching The Neighborhood

The focus for many homeowners is definitely the house, but ‘location, location, location’ is a cliche for a reason. Instead of focusing only on your home, ensure you’ll be living in a neighborhood where you can feel safe and will have access to all the amenities you need.

Investing In An Inspector

A home inspection may feel like a formality, but it’s important to have the right inspector so they will notice maintenance items that can hugely impact your finances. While little items that need to be fixed-up are not a big deal, issues with the foundation or the roof can cause major grievances if they’re not detected.

There are a lot of things to keep in mind when it comes to buying a home. But by doing your research and being aware of your financial outlook, you’ll be well on your way to a good investment. If you’re currently in the market for a home, please contact us for more information.

What’s Ahead For Mortgage Rates This Week – July 10, 2017

Last week’s economic reports suggested that demand for homes is rising despite a jump in mortgage rates and rising home prices fueled by low inventories of homes for sale. Demand for homes rose by 1.40 percent as interest rates jumped after the 10-year Treasury rate rose by 10 basis points.

Construction spending was unchanged in May as compared to a -0.70 percent reading in April. Although builders express high confidence in housing market conditions, construction spending continued to lag behind spending levels based on builder confidence readings.

Home buyers received good news as major credit bureaus removed two key components from consumer credit reports. Fannie Mae and Freddie Mac raised the debt/to income ratio for home loans from 45 percent to 50 percent of gross income. This move was made to help would-be home buyers swamped with education debt. Doug Duncan, Fannie Mae’s chief economist, said that raising the debt to income ratio would not increase lender risk significantly.

Mortgage Rates, New Jobless Claims Rise

Mortgage rates rose last week. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose eight basis points to 3.96 percent; the average rate for a 15-year fixed rate mortgage rose five basis points to 3.22 percent. The average rate for a 5/1 adjustable rate mortgage rose four basis points to 3.21 percent. Discount points averaged 0.60 percent for a 30-year fixed rate mortgage and held steady at 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Jobless claims rose last week to 248,000 new claims from the prior week’s reading of 244,000 new claims, but this increase does not appear to be related to layoffs. Non-Farm Payrolls for June increased to 222,000 jobs added as compared to 180,000 jobs expected and May’s reading of 152,000 jobs added. Non-Farm Payrolls include public and private-sector jobs.

ADP Payrolls, which reports private-sector job growth, dipped in June to 158,000 jobs added as compared to 230,000 private-sector jobs added in June. Employers have repeatedly cited difficulty in finding skilled candidates for job openings, which makes it less likely that they’ll lay off employees who have needed skills. The national unemployment rate edged up in June with a reading of 4.40 percent against expectations of 4.30 percent and May’s reading of 4.30 percent.

Whats Ahead

This week’s scheduled economic reports include testimony by Fed Chair Janet Yellen, readings on inflation and core inflation and retail sales. Mortgage rates and new jobless claims will be released along with a reading on consumer sentiment.

5 Essential Facts About USDA Home Loans

usda home loans

Buying a home or getting a mortgage loan may feel like it’s becoming increasingly harder as the years pass. Because of this, if you’re branching out, you may want to consider USDA home loans.

USDA loans come with their own sets of qualifications and are usually geared for rural or low-income buyers. However, there are a number of benefits to taking out this type of loan. Let’s take a deeper dive and explore 5 of those benefits!

Purpose

The purpose of USDA home loans is literally to assist low-to-moderate income buyers in rural areas in purchasing a home.

When you don’t have a lot of money, sometimes it can seem like actually owning a home is a pipe dream. USDA home loans help give people who aren’t wealthy a chance at affording a home.

This can help promote prosperity, according to the US Department of Agriculture. USDA loans exist to promote happiness, harmony, and improve the quality of life.

Types

There are two types of USDA loans: direct and guaranteed. Direct loans have more requirements to use. Your property has to qualify as “modest in size” for your area, and it cannot have a market value that exceeds your loan limit. There are also limitations put on your home itself.

Direct loans are aimed at low-income families, so the requirements can be strict.

Guaranteed loans are similar, but they open a few more doors and aren’t quite as strict.

Qualifications

Direct and guaranteed loans have different sets of qualifications. To qualify for a direct loan, you must not own a home. You also must not be able to obtain a loan elsewhere, and you have to legally be able to handle a loan.

If you’ve been suspended from participating in federal programs, you will not be able to apply.

Guaranteed home loans have income-eligibility requirements. To get a guaranteed loan, you must also be a US citizen or otherwise qualified, and you need to be able to pay your credit obligations in a decent amount of time.

Down-payments

The great thing about USDA home loans is that they don’t require a down payment.

If you’re a qualified borrower and have been approved for the loan, there’s no down-payment required. This can wind up saving you thousands in home-buying costs and upfront expenses.

Insurance

USDA loans do not have private mortgage insurance, also known as PMI. Instead, your USDA loan will have a premium for your mortgage insurance wrapped up in the cost.

Typically, this is about 2% of your entire loan cost. However, it’s also not a separate payment, and it’s included in the cost of your loan.

USDA home loans: the right choice

USDA loans are a great choice for people looking to purchase in rural areas. Additionally, if you’re a low-to-moderate income homebuyer, it’s very likely that you qualify for one of these loans.

A USDA loan can help you save thousands of dollars in homebuying expenses because they don’t require down payments. However, you do need to make sure that you qualify.

If you have questions regarding home loans and the home buying process, please don’t hesitate to contact us!

5 Key Items for a Quick Mortgage Approval

Want a Quick Mortgage Approval? Come Prepared With These 5 Key ItemsAre you finally getting into the real estate market? There are a few key items you’ll need to prove your reliability to a mortgage lender.

Previous Tax Returns

To ensure the earnings information you’ve provided to the lender, you’ll need tax returns for the two years prior to your mortgage application. In addition, you may also be required to provide your W-2s as backup documentation.

Bank Statements

For your down payment, you’ll need to present bank statements to show you have a cushion in case interest rates increase. If you do get money gifted to you for your down payment, you’ll need a letter to prove you’re not indebted to the provider.

Recent Pay-stubs

It can be much more difficult to get approved for a mortgage if you have a patchy work history or happen to be self-employed. You’ll need 2 months of recent pay stubs to prove consistent employment. The pay-stubs provided should also be an accurate reflection of the salary you’ve provided on your application to ensure no discrepancies.

Investment Statements

It’s certainly a good sign to the lender if you have a healthy balance in your checking and savings accounts. But you’ll also need to provide any statements for mutual funds and other investments. While they may not be necessary to prove financial soundness, they will help with approval if you have a lot of money squirreled away.

A Listing Of Debts

A lender will also want to know about any outstanding debts like auto loans, credit card payments or student loans. This will give the lender a good sense of your honesty and your ability to manage your mortgage.

Mortgage approval may seem like a time-consuming process with no certain end. By having the appropriate documentation and being upfront about your debts, you may be able to speed up the timeframe. If you’re currently perusing your mortgage options, contact us for the inside scoop.

How to Determine Your Home Loan Eligibility

home loan eligibility

Are you looking to take that next step in your life? Have you finished browsing the net looking for that perfect place to call home?

Are you ready to become a homeowner?

Before you can actively start looking to purchase a property, the first sensible thing to do would be to check out your home loan eligibility.

Why?

Because knowing how much you can borrow not only helps you understand your own financial situation but also it stops you from getting your heart set on a place, only to find it out of your budget.

Let’s take a look at the best ways to check on your maximum home loan potential.

Calculate your Home Loan Eligibility Early To Set Your Search In the Right Area

When it comes to a home loan, the math is actually quite simple. You look at what you have coming in – your income – and you deduct your outgoings each month – your expenditure. The rest is just a matter of seeing how much you can realistically afford to pay back each month.

There are plenty of home loan calculators out there that can help you get a ballpark figure.

The main criteria that get looked at when applying for a home loan are:

Age – As harsh as it sounds, age plays a role in your home loan calculations.

Employment Status – if you are in a stable full-time job, then that is a big check in the plus column because a regular income shows the bank that you are in good standing to make your payments every month. The amount you are earning will also directly influence the amount you can borrow.

Credit Rating / Credit Card History –  If you have been living a debt free life, or at least maintaining your credit card by paying off your purchases in a simple large lump sum each month, then you score maximum points. The better managed your credit card history, the better image you produce for the banks looking to lend you money.

Choosing the Right Home Loan for You

There is more to finding a home loan than just understanding your home loan eligibility. Loan types and duration are also deciding factors.

The core loan types you should be looking at:

Fixed Interest –  The simplest loan. All you need to do is set your interest rate for 15-30 years and simply let your payments run. A great loan for those that are buying with the intention of staying put, and want to know exactly how much they will be paying for the foreseeable future.

Adjustable Rate Mortgages – If your credit rating is working against you, then you can counter balance this to some degree by taking a flexible interest rate loan. Here, the rate is set for a shorter period of time and will then be adjusted.

Federal Housing Administration Loan – For many people, being able to save the average 20% needed for a downpayment on a home, can be tough. With FHA home loans, you can put down as little as 3.5% on a down payment and move on with a fixed interest rate.

The only caveat with this is that you need to take out mortgage insurance, which you can spread over the life of the loan. This totals to approximately 1% of the full loan value.

Buying a Home is the Biggest Decision You Will Make

Making the decision to buy a home is one of the biggest things you will do in your life. To do so without due care and attention can be problematic.

By first understanding your home loan eligibility you can get yourself started on the next phase of your life with a clean conscience, knowing that you are not getting yourself into financial trouble.

If you need help with arranging your home loan or are looking for a quote, get in touch with us today. We are here to help.

3 Helpful Benefits For First Time Home Buyers

benefits for first time home buyersDid you know a number of benefits for first time home buyers exist today?

Buying your first home is an exciting, important, and sometimes stressful process. For first time home buyers, special benefits sweeten the deal and encourage sales.

The term first-time buyer refers to individuals who’ve not purchased a home in 3 years. Most first-time buyers range from 18-34 years old, however bounce-back come in all ages.

Whichever category you fit into, you might not know about the benefits available to you. In this article, we’ll go over some of the benefits for first time home buyers.

Mortgage Interest Deductions

Tax rates favor homeowners. In fact, home ownership is often thought of as a shelter from taxes.

For many, the mortgage tax deduction benefit overshadows the intangible benefits, like pride in owning a home.

How can you qualify? Your mortgage balance must not exceed the cost of your new home. Mortgage interest proves deductible on your tax returns. This is a great benefit because interest is the largest part of a mortgage payment.

Property Tax Deductions

Property taxes for your first home are deductible for income tax purposes as dictated by the Internal Revenue Service. Vacation homes can also benefit from this tax deduction.

Capital Assets

Most people consider their first home a starter home. When you decide to move, you’ll benefit from gaining capital assets.

How does this work?

If the profit you make on your home is more than what is allotted for any tax exclusion, the profit is considered a capital asset. These profits receive special tax treatment.

Even if you profit from the sale of your home, the taxable portion of that profit remains small.

Use Your Mortgage To Build Equity

Each month that you pay your mortgage, you not only pay interest, you also pay the principal balance of the loan. The more of this you pay off, the more equity in your home you secure. This means more ownership for you.

Your Home Appreciates

The real estate market is volatile. It occurs in cycles.

Across the board, homeowners see their investment as a safeguard against inflation of the market.

First Time Homebuyer Loans

First time homebuyer loans come with low down payments, reduced interest, and limited fees. They’re offered to first time home buyers through the Federal Housing Administration.

This type of loan acts as a benefit for first time home buyers because of its minimal restrictions. Consider a first time home buyer loan a large down payment is out of reach, you cannot meet high-interest payments and fees, or your credit score is low.

All of these factors make these loans too good to miss out on for many buyers.

Benefits For First Time Home Buyers in 2017

As you can see, many tangible benefits for first time home buyers exist today. From tax deductions to an easier loan process, buying a home offers more than pride in ownership.

Starting your first home search? Contact us today to learn more about mortgage loans that work for you!

What You Need To Know About Getting Your Next Mortgage

Yes, It's Getting Easier to Get a Mortgage. Here's How You Can Take AdvantageIt can be hard to stay on top of the changing real estate market from day-to-day. As a matter of fact, there are more available mortgage products out there than ever before for many 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, having a better credit score will still enable you to qualify for a mortgage much easier. 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 the 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, there are many opportunities for putting a lot less down and still being able to purchase. You may want to hold off until you can save up for your down payment, but possibilities do 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. Adding mortgage closing costs to that can be a bridge too far for many potential homebuyers. Fortunately, many lenders 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. If you’re currently in the market for a new home, contact us for more information.