Standard Bank Blog

Top Ten Things to Know about Mortgage Loans – Spring 2013

Martin Luther King Jr. left a great legacy in United States history. Born in Atlanta, Georgia in 1929, King grew up to be one of the most influential civil rights activists in the 1960’s. It is only right, that as Americans we take time to honor King’s values and beliefs. His most famous speech, titled I Have a Dream, was given on August 28, 1963 on the steps of the Lincoln Memorial. This location was very fitting, due to the fact that King drew inspiration and was influenced by many famous people in history, one being Abraham Lincoln. More so, Martin Luther King Jr. quoted Lincoln from his speech The Gettysburg Address. Just one year later, Time magazine named him Man of the Year, and he was also presented with the Nobel Peace Prize that same year.

Curious what the advantage of a Reverse Mortgage is vs. a Home Equity Loan?

Reverse Mortgages do not require credit or income qualifications and thus, tend to be easier to obtain than Home Equity Loans.

Another way a Reverse Mortgage differs from a Home Equity Loan is that it offers more flexibility in payout options.  You can get the money in a lump-sum payment, a monthly check for life, a line of credit, or a combination of these options. You choose the option that best fits your needs.

Has the value of your home declined? Have you been thinking you aren’t able to refinance because you owe more than your home is worth? We may have good news for you! You may be eligible to refinance through the HARP II (Home Affordable Refinance Program). Also known as the Making Home Affordable Program, HARP II, is designed to help you get a more affordable and stable mortgage.

In order to qualify for HARP II refinancing:

• Your existing loan must be a Fannie Mae or Freddie Mac originated loan
• You must have made the last 6 months of payments on time  
• No minimum credit score is required
• Only first mortgages are eligible; A Home Equity cannot be combined with a first mortgage, and no cash can be taken out  
• Primary residences, second homes and investment properties of 1-to-4 units are eligible
• Appraisal may or may not be required

Homeowners often dread the first of the month as they know that large house payment is due.  There are many others that relish in the idea.  Why would they do that?  I can tell you I am one of them and that is because I pay extra to principal and that gives me the piece of mind that I will own my home sooner, saving me money.

There is a strategy to this though.  You should not just go and take every spare cent and start sending it off to your mortgage.  If you have other outstanding debt that has a higher rate you should work on paying that down first.  It would also be a good idea to have a cushion in savings.

Bad credit scores are “the biggest loser,” as they can keep you from making major purchases such as a home or car.  They can impact your insurance costs, and even keep you from being hired for certain jobs.

FICO credit scores range from 300 to 850.  It is important to know what factors impact your credit score, so you know which exercises will have the highest impact:

As a mortgage lender, I’ve promoted June as National Home Ownership month for many years in many ways, but this year has special meaning.

After the economic and housing challenges of recent years, June 2012 truly represents the right time to buy for many households.  Interest rates are at historic lows.  Property values are at or near their lowest level.  In many areas, buying costs less than renting.  Affordability, as measured by the National Association of Realtors, is very high.  The supply of properties on the market is plentiful, although demand is increasing, so the upward pressure on prices is beginning in some local markets.  The financial benefits of home ownership are significant.

I began my career in banking as a result of buying my first home.  I was referred by a family member to a mortgage broker in order to apply for a loan.  Being a first-time homebuyer and not knowing what to expect, coupled with the fact that as it turns out, the mortgage broker was more interested in a commission than me; the process wasn’t enjoyable to say the least.  Fortunately for me, I went with another mortgage lender that walked me through the loan process, from start to finish.  Not long after moving into that home, it came to me, there are a lot of Veteran’s out there just like me buying their first home; and they could benefit from having one of their own, committed to walking them through the process.  So, after serving in the Marine Corps, Infantry, and majoring in Political Science in school; on a whim, I applied for a home lending position with a bank.  Needless to say, I got that job and thus began my career in banking.  Over the years, I had the opportunity to help many individuals and families buy their first home, refinance their existing home and help them achieve their financial goals.

If you were interested in making a purchase, but delayed, and when you went back to the store, the price was lower, the financing more attractive, with many product choices and attractive options. . . . would it make a difference to you?  Today’s housing market is similar!
 
There are 5 key reasons why now is an excellent time to buy a home.

First, interest rates are at historic lows. 

We all see the ads for low mortgage rates and news articles advertising record low mortgage rates but what is a low mortgage rate?  Is it a good time to refinance your mortgage? Before you decide, you need to find out if a refinance will help you meet your financial goals sooner.  There is no cost to contact a mortgage professional and ask a few questions to find out if refinancing is right for you.  Just because it worked out for your neighbor or your best friend, your situation may not be the same.

When you refinance you are not necessarily paying off your loan any faster so if that is a major financial goal you may want to refinance into a shorter term.   Are you planning to move soon?  If so, you may decide that a refinance is not a good option at this time.