Taxes. You can usually choose to pay property taxes as part of your mortgage payment or separately on your own. If you pay property taxes as part of your mortgage payment, the money is placed into an escrow account and remains there until the tax bill for the property comes due. The lender will pay the property tax at that time out of the escrow fund.
Prepare to spend some time sitting back and waiting. Each application is thoroughly reviewed by the grant-making agency, sometimes causing a long lag time between when you submit your application and when you are notified about the decision. In the meantime, don't stop making your mortgage payments, or at least pay as much of them as you are able to, or it may look like you aren't taking your mortgage obligation seriously.
Following the financial crash of 2008 and the subsequent collapse of the housing bubble, many (but not all) real estate markets eventually recovered. Entered into in a prudent way, home ownership remains something you should consider in your long-term financial planning. Understanding how mortgages and their interest rates work is the best way to ensure that you're building that asset in the most financially beneficial way.
Whether it is purchasing your first home, buying a vacation home or downsizing to something more appropriate to fit your life style, a new beginning can be a wonderful experience. It can also be a bit overwhelming. There are open houses to attend, homes to compare and a sea of information to sort through. During these times, having a team around you is extremely important. One of the most important members of that team is your loan officer (and mortgage company)
Investopedia’s Mortgage Calculator is based on a complex formula that factors in your mortgage principal (how much you are borrowing), the interest rate you’re paying and the duration of the loan to determine how much that monthly mortgage payment will be. It lets you try out different scenarios of how much you might borrow and what varying interest rates will do to the amount you’ll be asked to pay. Read below to understand what each of these terms mean.
John and Anne are a retired couple, aged 72 and 68, who want to stay in their home, but need to boost their monthly income to pay living expenses. They would like to remodel their kitchen. They have heard about reverse mortgage loans, but didn’t know the details. They decide to contact a reverse mortgage loan advisor to discuss their current needs and future goals.
If there’s going to be a gap between the sale of your home and the purchase of your new property, some people apply for what’s known as a ‘bridging loan’ to bridge this gap. This type of loan means you can move into your new property before you’ve sold your home. However, these should only be considered a last resort as they usually very high interest rates and fees. Seek professional advice if you’re unsure, and if you’re considering this type of loan you must be comfortable with the risks involved as you’ll essentially own two properties for a period of time.
If you are thinking about buying a home in the near future, before you start house hunting or get pre-approved for a loan, it’s a good idea to check your credit report and find out what your credit score is. You are entitled to a free credit report once a year from each of the three credit bureaus – Equifax, TransUnion, and Experian, which you can access at www.annualcreditreport.com.
On the whole, the lowest interest rates are available to borrowers who have large deposits, or in the case of those remortgaging, significant equity in their property. Typically, you’ll need at a deposit of at least 40% to be eligible for one of the best rates. If you have only 10%, there are mortgages available but you’ll probably pay a higher rate.
Lenders use the information you provide at the time of application for loan approval or denial. If you get approved, don’t change your employment or income status until after the loan process is complete. Changing your employment or income during the process will significantly delay the lending process at best, and at worst, it could cause you to be denied for your loan altogether.
Research your utilities. If you're moving into a larger home than you're used to, a home that is newer or older than you're used to or located in a climate that's hotter or colder than you're used to, ask your real estate professional to find out what the home's energy bills have typically been. This can help prevent being surprised by a higher utility bill than you're expecting. If you're moving into a new community, find out about water costs, too.
For the majority of homebuyers, a fixed-rate loan is the best choice, especially in a low-interest environment like we're in now. However, if you don't plan on being in the home you buy for more than a few years, an adjustable-rate mortgage could save you thousands of dollars in interest. For example, if you're buying a home to live in during four years of graduate school, an adjustable-rate mortgage with a five-year initial rate period could be a smart idea.
The US Treasury administers the Hardest Hit Fund, which provides aid to the states that were most impacted by the economic crisis. Each of these states have local agencies that help homeowners in various ways, including mortgage payment assistance for the unemployed, principal reduction, and transactional assistance. This helps people either afford the homes they’re in, or move to more affordable housing.
The Federal Housing Authority gives mortgage assistance to anyone with a FHA loan. You can refinance your mortgage without going through a lot of difficult begging or bureaucratic red tape. They let you reduce your mortgage rates and skip a month's payment without a third-party appraisal. In order to qualify for this, you need to a) not have any late payments on your current loan, b) have a decent credit score and c) wait a minimum of six months between streamlining processes. Refinancing doesn't always reduce your rates - it just lowers them to the current rates. Always make sure you're getting a good deal before deciding to streamline or refinance.
Due to limited availability of funds, the New York State Mortgage Assistance Program (NYS-MAP) will no longer be accepting loan applications after February 15, 2019. In addition, we cannot guarantee that we will be able to fund loans for clients who have received conditional approval letters. Please keep this in mind as you work on your application with your housing counseling or legal services provider.
Don’t let lenders dictate how much you should spend on a mortgage loan. Lenders determine pre-approval amounts based on your income and credit report, and they don’t factor in how much you spend on daycare, insurance, groceries, or fuel. Rather than purchase a more expensive house because the lender says you can, be smart and keep your housing expense within your means.
DO THIS: UNDERSTAND WHAT YOUR NUMBER IS BEFORE BUYING A HOUSE OR REFINANCING A MORTGAGE. A HIGHER CREDIT SCORE INDICATES BETTER CREDIT AND CAN HELP YOU GET A BETTER MORTGAGE INTEREST RATE. IF YOU’RE IN THE PROCESS OF IMPROVING YOUR CREDIT, ASK YOUR LOAN OFFICER ABOUT MORTGAGE PROGRAMS WITH FLEXIBLE CREDIT REQUIREMENTS, LIKE FHA AND VA LOANS THAT MAY ONLY REQUIRE A FICO OF 580.