Millennial Money: Why this tech-savvy, social media, passionate generation may have difficulty saving for the future

The stereotype is millennials are lazy and entitled. But, that’s far from the truth. In fact, this group of tech gurus, social media specialists who have a knack for food and culture are driven to making a difference in the world. Our way of living and doing business has dramatically changed due to the technology inspired and developed by this largest living generation. But, when it comes to finances, millennials may experience some challenges to building a nest egg.

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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

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

The other day, one of my realtor friends called and asked if they should suggest that one of their sellers offer financial concessions to help sell the house. An interested buyer had the money for the down payment, but not enough funds to cover the costs & prepaids.

Of course, my answer wasn’t a simple “yes” or “no”…few of my answers ever are. But at the end of the day, if the seller is looking to close that sale ASAP, then Seller Concessions can be a beneficial utility.

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mortgage payments
In my last post, I discussed what drives a lending decision. I also want to take a look at payment ratios/formulas and how they impact the total monthly payment for a home. The dirt is in the details…let’s consider buying a house.

Whenever my team works with a client, maybe the most frequently asked question is, “How much will this house cost me every month?” It’s understandable….a necessary question. Buying a home is a huge financial investment. Not to mention one of the most important financial decisions a person will make. I find many clients are under informed about what home ownership truly costs.

The mortgage loan is simply one variable in the grand scheme of things. Instilling confidence by providing “how to” details is important…with financial clarity comes less anxiety.

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Early this morning, as I shoveled the overnight delivery from Winter Storm Rex, I find myself reflecting on all the reasons I detest winter – and they are many.

Getting out of a nice warm bed earlier to dig my car out from the snow, then chiseling off all the ice that accumulated overnight just so I can join the long parade of horrible drivers ranks pretty high on that list. But if I had to pick my personal Winter Enemy No. 1, it’s gotta be those high utility bills.

If ever there was a good enough reason to invest in some eco-friendly alternatives to generating energy for my house, the wintertime gas bill is it. And while “Going Green” with such sustainable energy upgrades like fuel cells, solar panels or wind turbines isn’t a novel concept, few have made the investment because, let’s face it, the cost is usually more than the average American homeowner can handle.

Fortunately, AmeriFirst Home Mortgage has rolled out the PowerSaver Grant. It’s an FHA-approved grant that allows AmeriFirst to cover some closing costs when a buyer makes specific eco-friendly home improvements with the FHA 203k loan. But what does that mean?

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If you’re a prospective homebuyer/homeowner seeking mortgage financing using ‘conventional loans’, you could end up paying more come April 2014.

‘Conventional loans’ = Fannie Mae and Freddie Mac, aka Government-sponsored enterprise (GSE) loans.

Earlier this month, the Federal Housing Finance Agency ordered Fannie Mae and Freddie Mac to increase charges called “guarantee fees,” or g-fees, that are embedded in the cost of home loans to protect investors from losses. Theoretically, raising these fees would bring private capital back into the mortgage market and better reflect a borrower’s credit risk.

For loan officers, this will likely make it more difficult to determine whether a borrower is a better candidate for a GSE loan or a loan through the Federal Housing Administration (FHA). But for borrowers, the potential impact is much more significant: adding thousands of dollars to closing costs.

Starting March 2014, the Loan-Level Price Adjustment fees, or LLPA fees, of GSE loans may be raised for borrowers with credit scores above 660 and a down payment of less than 30%. Borrowers with scores between 680 and 760 who are making a 5% to 10% down payment could see an interest rate that is 3/8 of a percent higher.

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As the housing market steadily bounces back, many homebuyers may be considering 203(K) loans to help purchase fixer upper homes. A 203(K) loan not only makes such a purchase possible, but also can make a project like an addition or a remodeled kitchen economically feasible for someone who doesn’t have a few extra thousand dollars lying around.

In this blog, I want to give you a good idea of what this loan is and what it can mean to a homebuyer or current homeowner.

The 203(K) is a specific type of mortgage through the Federal Housing Administration (FHA) that is geared toward homebuyers and homeowners who are looking to improve their home with repairs or upgrades. The funds can be easily and quickly accessed to pay for property repairs or improvements, including those identified by a home inspector or an FHA approved appraiser. There are two types of 203(K) loans to meet different needs.

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