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.

How to Pay off a Mortgage in 10 Years

how to pay off a mortgage in 10 years

Purchasing a home is an exciting part of life. But, home ownership means taking on a lot of debt.

About 80% of home buyers choose a 30-year fixed rate loan. While 15-year loans are available, expanding the term of the loan means smaller monthly payments.

But, what most people don’t realize is that the longer the loan, the more interest you pay.

If you purchase a home for $250,000 with a 4.5 interest rate, you’ll pay more than $206,000 towards interest. As a homeowner, you want to pay your mortgage off as quickly as possible.

Looking for tips on how to pay off a mortgage in 10 years? If so, you’ve come to the right place!

Continue reading for tips to paying off your mortgage quickly.

1. Purchase Wisely

The first step to paying off your mortgage early is to make a wise purchase.

Buying a home shouldn’t put you in a financial bind. Your mortgage should take up no more than 28% of your total monthly take home.

Set yourself up for success by buying a home that fits into your budget. Otherwise, the chances of paying off your mortgage early are slim.

2. Pay More Than the Minimum Monthly Payment

Your monthly payment is determined by the total loan amount as well as the interest rate. Other costs can also be wrapped into the mortgage including:

When making your payment, be sure to put extra money towards the principal amount. This money will go towards the loan without any going towards interest or escrow.

The extra principal amount will depend on the total value of the loan.

If you purchase a home at $200,000, you’ll want to put at least an extra $1,000 towards principal.

3. Pay Down Smaller Debts

If you’re wondering how to pay off a mortgage in 10 years, start focusing on other debt.

Chances are you pay other loans each month. If you have a car loan or credit card debt, pay them off quickly.

By paying off other loans, you’ll have more money to put towards your mortgage.

4. Cut Costs

To pay off your mortgage early, you’ll need to cut costs where possible.

Take a look at your spending habits. What services can you do without for a little while? Where can you spend less or not at all?

The average American spends more than $1,200 on cable each year. But this is just one way to save money. You can also:

  • Avoid eating out and cook all meals at home
  • Reduce cell phone bill
  • Spend less on clothing and shoes
  • Eliminate consumable habits like drinking and smoking

By cutting costs, the money you save can be put towards your principal mortgage balance.

How to Pay Off a Mortgage in 10 Years: Wrap Up

Paying off your mortgage early seems like a daunting task. But, with a little financial planning, you can achieve your goal.

The key is to set a budget, create a plan, and stick to it!

If you have any questions about mortgage loans or home buying, you’ll want to talk to a professional.

At Benchmark Mortgage, we have the expertise needed to guide you in the right direction. Contact our team today.

5 Secrets to Getting a Mortgage After Bankruptcy

mortgage after bankruptcy

If you’ve had to file for bankruptcy, you know how much of a toll it takes on your financial reputation. It can seem impossible to rebuild your credibility, and it’s easy to feel like you’d need a miracle to buy a new home.

The good news? You can still become a homeowner even if you’ve had to file for bankruptcy in the past. You just have to learn how.

We’ve put together 5 secrets to getting a mortgage after bankruptcy.

1. Wait

No matter what you filed under, you’re going to have to be patient before you can apply for another mortgage after bankruptcy.

The length of time you’ll have to wait varies. The most common period of time is around two years, which usually applies to anyone who filed a Chapter 7 bankruptcy.

If you filed for Chapter 13 bankruptcy, though, you’ll have to play the waiting game for 3 to 5 years instead.

2. Open New Credit Accounts

While you’re waiting, you can work towards making yourself a good investment for a bank or lender.

Step one should be to start rebuilding your credit score. It took a hit after you applied for bankruptcy, so you’ll need to build it back up before filling out any new applications.

It might seem counterintuitive to open new lines of credit, but you need to resurrect your credit score. While you’re at it, make sure you’re paying all of your bills on time and saving money for a down payment.

3. You Can Still Get An FHA Loan

An FHA loan is a great option for people who are applying for a mortgage after bankruptcy. Since it’s financed by the government, the restrictions aren’t nearly as strict as they are for a conventional loan.

It doesn’t require perfect credit, which makes it a perfect option in this situation. Plus, non-conventional credit like paying your rent on time will work in your favor.

If you haven’t been able to save a lot of money, don’t worry. With FHA loans, you only need to put 3.5% down.

4. Find A Conventional Mortgage With Low Money Down

One downside of FHA loans is that their interest rates tend to be a little bit higher. If that’s something you want to avoid, you can still apply for conventional mortgages.

Your credit has to be better to do this, but in some cases you can find conventional mortgage loans with low interest rates and low money down.

5. Apply For A USDA Loan In Rural Areas

If you’re looking to live in a rural community and don’t make a lot of money — think low-income or lower middle class — you can apply for a USDA loan.

If you can’t qualify for other loans, this option doesn’t require a lot of money down and is low-interest. In some cases, you might not even have to wait the full two years. That varies from person to person, though, so be sure to check what the guidelines are for your situation.

Are You Ready to Finance Your New Mortgage After Bankruptcy?

Our team of mortgage consultants is ready to help you navigate through this confusing process. Get in touch today to find out how we can help you bounce back and secure a mortgage for the house of your dreams.

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!

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!

Buying Still Cheaper Than Renting

Expensive Apartments/Condos photograph

Even in light of rising home prices, Trulia‘s October 2016 “Rent vs. Buy Report” successfully argues that owning your home with a conventional 30-year fixed rate mortgage costs less than renting in major US metros, even in high priced areas like Honolulu, HI (which sees 17.4% cost reduction over renting). The highest difference was 53.2% in Miami, FL and West Palm Beach, FL.

Nationally, the average was an impressive 37.7% cost reduction.

It’s a Game of Pace

Even while home prices are appreciating nation-wide, interest rates have remained so low that the pricing increase has not approached matching rental inflation.

Prices would have to appreciate 23% in Honolulu, HI, to over 45% in Ventura County, CA before renting, at current rates, becomes less expensive than buying. On the other side, rates would have to approach 9.1%, which would be a 145% increase over the current average of 3.7%, for renting to be financially more attractive than buying. (We have not seen rates like those since January 1995, according to Freddie Mac)

Consider also the Family Wealth aspect of home ownership, coupled with ownership being closely tied to the American Dream, and the reduced out-of-pocket cost of owning over renting, and it might make one wonder if the benefits of renting are really worth it.

The Takeaway

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.

The numbers are clear. It makes good financial sense to be a homeowner. Let’s not forget the slice of the American Dream that comes with it! If you are interested in taking advantage of the benefits of home ownership, but aren’t sure where to start, call or contact me today! 

The post Buying Still Cheaper Than Renting appeared first on Benchmark.

Want To Achieve Your Goals In 2016? There’s An App For That!

There is a big difference between having a goal and achieving it. As you plan out what you’d like to achieve next year, try enlisting the help of technology to stay on track. photo_807

GoalsOnTrack guides you through a goal-setting process and helps you create the action plan. The app then helps track your changing habits and completed tasks for a fully visual guide to success. Free for iPhone, iPads, Android, Blackberry and Windows Phone 7*.

LifeTick offers coordinated goal setting and tracking functions to help families, educators, small businesses or any group that wants to accomplish something together. Available for iPhone, Android and iPad. Free for individuals with limited functions, or pricing from $14 per month for groups*.

Habit List helps you build great lifetime habits (eating right, drinking more water, exercising regularly) by tracking your “streaks,” or how many times you complete a task in a row. Schedule the habits you want; then get reminders that keep you on track. $3.99 for iPhone*.

Coach.me begins with the premise that goals are easier to achieve with accountability. Choose goals and the type of coaching you require—advice, motivation or prompting—and be held accountable through crowdsourcing. You can hire a coach, get help and encouragement from other users, and set up reminders to push you toward success. Free for iPhone, Android and web*.

irunurun is the perfect app for those with a competitive streak. After you input the action or habit you want to track, assign it a point value. Try to achieve 100 points each week. Build an accountability team by inviting friends, family or colleagues to any action you choose. Free for individuals on iPhone and iPad. Prices from $49 per month for groups*.

Whatever you aspire to do in the year ahead, don’t go it alone. Pick one of the applications above and let technology carry some of the burden. Here’s wishing you the very best of everything in the upcoming year!

*Prices and availability offered at time of writing.

Source: Entrepreneur

Be A Yard Sale Success Story

Spring and summer are the best seasons for holding a yard sale. It’s a great way to declutter your house, get ready for a future move, or put a little extra cash in your pocket. But simply throwing out a few signs doesn’t mean it will be a success. Instead use these 10 tips to help ensure your yard sale is a winner: sidebar_860

Cater to early birds. Start your yard sale earlier than other yard sales in your area so shoppers will begin their shopping day with you. This gives you an excuse to keep your prices higher, too.

Check your calendar. Don’t schedule your yard sale on a holiday weekend or during a local fair, festival or large sporting event.

Take a rain check. If it rains, consider taking down your signs and rescheduling so you can maximize traffic on the day of your sale.

Scope out competition. Before your own yard sale, visit other sales in your neighborhood to get an idea of typical prices.

Position properly. Place all of your items (except extra large items) on tables so shoppers don’t have to bend.

Testing, testing. If you plan to sell electrical items, have an outlet and extension cord handy so you can show shoppers that the items work.

Grease the wheels. If you want to sell larger ticket items, look for those items in a local circular and then attach the ad to your item so shoppers can see that they are getting a great deal.

Suits you, sir! If you have a variety of items that men would like, place them on their own table. If married couples stop by your sale, both parties will enjoy looking.

Go viral. Advertise your sale ahead of time in your local newspaper classified section, on community boards at your local food stores and on Craigslist.

Give a hoot. Wait until the morning of your yard sale to hang signs in your neighborhood, and make sure you take them down that day to avoid any fines from your homeowners association or your town. You don’t want to have to use all the cash you earn to pay a fine!

Remember, a successful sale is also a safe sale. Keep money in a pouch around your waist instead of in a cash box (which could easily get stolen while you are helping others). Don’t take any chances by accepting checks, and never allow strangers inside your home to use the bathroom or telephone.

Benchmark Colorado

Sweet and Savory Mother’s Day Breakfast

 

Sweet and Savory Mother's Day Breakfast  - By Kirk Leins

Ready to rock a monumental Mom’s Day breakfast? Here’s a tasty read by Kirk Leins just for you and just in time for Mother’s Day. Bon appetit!

This Mother’s Day, don’t make your mom choose between sweet or savory—spoil her with both! Skip the long lines (and pricey) restaurant brunches with these delicious home recipes for French Toast and Maple Glazed Bacon. Whether you serve her breakfast in bed or at the table, it’s the perfect way to tell her you love her. She deserves it!

French Toast
(Serves 4)

  • 8 slices of artisanal or bakery bread (recommended: challah, brioche or egg bread) cut into 1 1/4-inch thick slices
  • 3 large eggs, beaten
  • 1 cup half-and-half
  • 2 tablespoons honey
  • 1 tablespoon orange liqueur (optional)
  • 1 teaspoon vanilla extract
  • 1 teaspoon ground cinnamon
  • Pinch of salt
  • 3-4 tablespoons unsalted butter
  • Powdered sugar

The night before:

Place bread slices onto a baking sheet and loosely cover with clean towels. Keep out on the countertop overnight. By doing this, you’re prepping the bread to be slightly stale by morning.

In a bowl combine eggs, half-and-half, honey, orange liqueur, vanilla, cinnamon and salt. Whisk well and transfer to a sealable container. Seal and refrigerate overnight.

The morning of:

Preheat oven to 375 degrees.

Remove egg mixture from the refrigerator and transfer into a shallow dish. Soak both sides of each bread slice in the egg mixture, for at least 15 to 20 seconds per side. Transfer the soaked bread slices to a baking sheet and allow to sit for two minutes.

Meanwhile, melt one tablespoon of butter in a nonstick skillet placed over a medium flame. Place two slices of bread in the skillet and fry for 2 minutes on each side, or until golden brown. Transfer to a clean baking sheet and place in the preheated oven for 5 minutes before serving. Repeat this process with the remaining slices of bread.

Dust with powdered sugar. Serve with syrup, jam or whipped cream.

Maple Glazed Bacon
(Serves 4)

  • 12 slices of quality, thick-cut bacon
  • Maple syrup
  • Crushed red pepper (optional)

Preheat oven to 375 degrees.

Line a baking sheet with parchment paper. Arrange bacon slices on the sheet and place in oven.

Once bacon is 3/4 of the way cooked (about 7 minutes), remove the baking sheet from the oven. Using a pastry brush, apply a light coating of maple syrup to the top of each slice of bacon.

Variation: For an extra kick, sprinkle a desired amount of crushed red pepper to each slice and return the sheet pan to the oven.

Continue cooking bacon to the desired degree of crispiness. Remove baking sheet from oven and transfer cooked bacon to a clean plate. Allow the bacon to rest for a few minutes before serving.

Kirk Leins has been cooking his entire life. No stranger to professional kitchens, he currently devotes most of his time to cooking instruction, food writing, and producing television. Kirk also provides his services as a personal chef in and around the Los Angeles area. He has made several TV appearances on both the national and local level, and is the Executive Chef for YOU Magazine. Sign up for Kirk’s free newsletter and cooking blog atwww.NoTimeToCook.com.

Article courtesy of Platinum Marketing and YOU Magazine

Spring Heats Up Housing

According to a late February analysis in the Wall Street Journal, homebuilders are reporting that sales of newly built homes so far this year are going gangbusters.

But sales of existing homes are more lukewarm. Why the difference?333

A simple reason could be that new-home figures are tracked on a more current basis, reporting numbers from orders in more recent weeks, versus existing home sales which often have a full month of lag time since they are tracked by the S&P/Case-Shiller Home Price Index.

Analysts also claim that there is simply less available inventory of existing homes, which has helped the new construction market.

Meanwhile, pending sales, an indicator of future closed sales, rose 1.7 percent from December to January, and are now 8.4 percent higher than the same time one year ago. January marked the fifth straight month of year-over-year gains, and the gains are increasing.

“Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” said the National Association of REALTORS® chief economist Lawrence Yun. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”

A March CoreLogic report also showed that January home prices rose nearly 6 percent from a year ago. In 2013, investors were blamed for pushing prices upward, but it has been suggested that prices are rising again due simply to a lack of inventory in markets large and small across the nation. This news could result in a very competitive housing season for homebuyers.

Freddie Mac is also expecting 2015 to be the best year for home sales and new construction since 2007, according to its March 2015 U.S. Economic and Housing Market Outlook. Freddie Mac cited an improving job market, rising rents and expanded credit availability as some reasons for its positive outlook.

The Bottom Line

Low rates and new home inventory make for an exciting housing season. If you have any questions regarding housing or know of friends, family or colleagues who wish to discuss buying or refinancing a home, please contact me today.