Explaining how mortgage money works is a great way to alleviate any stress a buyer might be feeling during the home-buying process.

Sticker shock is one of the biggest reasons why people are anxious when buying a home. However, once they know how mortgage money works, they likely realize that their buying power is stronger than they thought.

All because they’re using other people’s money.

Key takeaways

  • Trying to save to purchase a home with cash takes much longer
  • Mortgages free up cash for repairs and renovations
  • There is such a thing as good debt

mortgage vs cash

Financing a Home Purchase with a Mortgage isn’t as Scary as you Think

When first-time homebuyers hear the word “mortgage,” they immediately think about the debt that comes with it. And since smart money says today’s first-time homebuyer is probably carrying substantial debt already (credit cards, student loans, car loan, etc.), adding more to the pile isn’t that appealing.

Naturally, purchasing a home outright with cash, or at least plunking down a huge down payment to avoid as much mortgage debt as possible, can seem like the best choice.

However, there’s a lot more to think about when deciding to purchase a home with cash versus a mortgage loan. And while it would feel really good to own the home outright, there are some long-term detriments to not seeking mortgage financing. Continue reading

Key takeaways

  • Separate what you need from what you want
  • Do your homework on what the market wants
  • Budget, budget, budget!

tax return home investment

Boost Your Home’s Value with a Little Investment

Nice big tax return this year? Lucky you! If you have a nice, strong savings account, you might want to think about putting some of that tax return into your home.

And no. We’re not talking about installing an in-ground swimming pool or adding a new air hockey table in the basement. Investing in your home is about putting money toward what you need, not what you want. Not everybody likes air hockey, but everybody loves a roof that doesn’t leak!

The first step is getting online and checking out some real estate websites to see what’s hot. Nowadays, smart homes are the hot topic. But unless you’re pulling in buckets of money, stick with these tried and true renovations to add value to your home. Continue reading

Key takeaways

  • Tax refunds could be a substantial influx of cash – use it wisely
  • A tax refund could cover your whole down payment
  • Funds to close are often overlooked until you have to pay for them
  • Deposit the refund and keep it there to build your financial strength

tax refund

With good planning, a tax refund could cover the whole down payment for a home purchase!

If you’re looking to buy a home at the start of the year, there’s good reason to hang on to your tax refund. This is the time of year when potential homebuyers have the most funds at their disposal, and that extra money comes in handy when making a down payment on a home, financing funds to close, or building financial strength. So don’t go on a spending spree just yet! Continue reading

Cuts could have saved eligible homeowners an average $500 annually

FHA Mortgage Insurance Rate CutWe got some disheartening news toward the end of the business day last Friday. The FHA Mortgage Insurance Premiums (MIP) reduction scheduled to take effect on mortgages with close/disbursement dates on or after January 27 have been “suspended indefinitely” according to the Department of Housing and Urban Development (HUD). The FHA mortgage insurance rate cut would have reduced annual premiums by a quarter (1/4) of a percent, making it easier for realtors to expand access. Continue reading

Key takeaways

  • Being pre-qualified is NOT the same thing as pre-approved
  • Home buying starts in the lender’s office
  • There are ways to improve your chances of approval
  • Reliable pre-approvals take longer than an hour

pre-approval meeting

Pre-approval: Your First Step to the American Dream

Alexander Graham Bell once said, “Before anything else, preparation is the key to success.” Buying a home is a huge undertaking; and preparation and information to make a successful investment. That preparation starts with getting pre-approved for a mortgage loan…and a pre-approval meeting with a mortgage lender is a great way to begin the process. Continue reading

MIP Reduction Expands Credit Access for Homebuyers

Big news out of the Federal Housing Administration this week. Effective for mortgages with close/disbursement dates on or after Jan. 27, 2017, the FHA has reduced the Annual Mortgage Insurance Premiums (MIP).

For borrowers: It essentially reduces the annual premiums they will pay by a quarter (1/4) of a percent. U.S. Housing and Urban Development Secretary, Julián Castro said that these new rates will save new FHA-insured home owners an average of $500 in 2017.

“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” Castro said.

Continue reading

Key takeaways

  • Get exactly what you want
  • Better for your health
  • Easier to recoup your investment

new home construction

Building Your Home: Getting a Dream Home is Only the Beginning to the Benefits

Buying a home is one of the largest investments a person will likely make in his/her lifetime. As such, a buyer must consider every angle when a purchase is made. Location, cost, local economy, school district, property taxes…it’s all important to the process.

And because those details will vary from person to person, one buyer’s ‘perfect home’ might be lacking for someone else. While new home construction may seem like an overwhelming solution, it’s a surefire way to get exactly what you’re looking for. In fact, with our area’s aging housing stock, there are several other benefits to building that you probably don’t even realize.

 

Continue reading

In case you missed it, the U.S. Department of Housing and Urban Development launched new sales incentives for the states included in the HUD Philadelphia Homeownership Center region (Philadelphia HOC). The incentives are for the purchase and sale of HUD homes, and are designed to benefit both buyers and real estate agents registered with HUD.

The Philadelphia HOC region includes Ohio, Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, and the District of Columbia.

The two incentives, which took effect October 1, include:

  • Buyer Bonus – $100 down payments on HUD homes financed with FHA-insured financing
  • Agent Bonus – Real estate selling agents (agent for buyer) get $500 for every HUD home purchased with a FHA Rehab Loan

In order to qualify for the broker bonus, the bid must have been awarded on or after October 1, 2016, and the purchase must be made with an FHA 203(K) loan. All HUD properties available for sale can be found at www.hudhomestore.com.

Contact our office to learn about HUD homes in your area so you can take advantage of these incentives.

*Down payment and terms shown are for informational purposes only and are not intended as an advertisement or commitment to lend. Please contact us for exact quote and for more information on fees and terms. Not all borrowers will qualify.