mortgage101: 3 Ways to Improve Home Buying Power - 08/19/19 12:01 PM
 
If you or anyone you know is buying a house this summer, chances are you’ll be dealing with competing for offers and low inventory issues.  Here are three ways to avoid getting priced out of the house you want:
1 – Consider Your Overall Debt Strategy
For example, what would it look like if you used some of your down payment funds to pay off other debts instead of using those funds for a down payment?  This may open the door to getting you qualified for a larger mortgage so you can bid higher on the house. Plus, home loans often carry … (1 comments)

mortgage101: How to Successfully Get a Mortgage in 2019 - 04/01/19 09:23 AM
 
If you've traveled in an airplane recently, you probably went through a security check at the airport.  These security checks are required by a federal law called the USA Patriot Act.  This very same law has a provision that requires mortgage companies, banks, and financial institutions to document your source of funds when you buy a house or refinance a mortgage.  In short, the US government has recruited mortgage lenders in its fight against terrorism!  In fact, lenders are required by law to ask you for:
The exact source of funds used for your down payment and earnest money deposit. … (2 comments)

mortgage101: How to Swim With the Sharks (and not get eaten alive!) - 03/25/19 10:49 AM
 
Getting a mortgage today is a lot like swimming in a pool filled with sharks.
My role is to help you navigate these dangerous waters and get you to the other side safely. Here are just a few of the sharks we'll need to watch out for:

Buy-Back Sharks Most mortgages today are sold after the closing to large financial institutions like Fannie Mae and Freddie Mac. These gigantic companies are in business to make money... a lot of money. These sharks have been under a lot of pressure by the government lately, and they're circling the waters looking for … (1 comments)

mortgage101: Two Ways to Benefit from Rising House Prices - 03/18/19 10:22 AM
 
House prices have gone up in many markets across the country. This chart illustrates what rising house prices could mean for you based on your home value and the rate of appreciation in your neighborhood. Here are two ways you may be able to benefit if your home has gone up in value:
1 – Cash-out Mortgage Refinance
You may be able to access some of your newly created home equity by refinancing your mortgage into a higher-balance loan. Cash-out proceeds may be used for:
Debt consolidation – pay off other debts with higher interest rates Home improvements – make new indoor … (1 comments)

mortgage101: 3 Reasons to Finance Your Home Improvements - 03/04/19 09:31 AM
If you’re thinking of paying cash for home improvements, you may want to think twice.  Here are three reasons why you may want to consider a cash-out mortgage refinance or home equity loan instead:
1 – Preserve your cash: a large home improvement project could quickly deplete your savings. Think about this project in the context of the next 3-5 years. What other large expenses could crop up during that time period, and would it be useful to keep your savings on hand for those items?
2: Opportunity Cost of Money: would it more useful to invest that money in a college savings plan or … (1 comments)

mortgage101: 3 Ways to Get Prepared for Home Ownership - 02/25/19 09:20 AM
 
1: Prepare Your Credit Mortgage lenders typically require at least 24 months of good credit history in order for you to qualify for a mortgage.  It's normally a good idea to have a few credit cards, a few installment loans, and 24-month history of making rent payments on time.

2: Prepare Your Cash Flow Mortgage lenders typically require less than a 43% debt-to-income ratio in order to qualify for a mortgage.  This means that your total monthly debt payments (including the new mortgage payment) should be no more than 43% of your monthly income.

3: Prepare Your Savings Mortgage lenders typically require … (2 comments)

mortgage101: Three Steps to Get Started as a Real Estate Investor - 02/18/19 08:32 AM
 
1 – Determine your approach and your investment objectives Are you looking to “buy and flip” or “buy and hold”?  If you’re looking to buy and flip, you’d probably want to start looking for homes that have the highest potential resale value after-improvements.  If you’re looking to buy and hold, you’d probably want to start looking for homes that have the highest potential cash-flow opportunities.

2 – Determine your budget It’s a smart idea to “never be 100% invested” when you invest in real estate.  For example, if you have $100,000 available to invest, you may want to set aside … (0 comments)

mortgage101: How the Fed Impacts Mortgage Rates - 12/17/18 09:36 AM
 
The Federal Reserve Open Market Committee (FOMC) meets at least eight times per year to discuss and vote on US monetary policy. The Fed controls the Fed Funds rate, which is essentially a bank's cost of money. When the Fed increases the Fed Funds rate, short-term interest rates such as the Prime rate and LIBOR go up. These are often used to determine interest rates on adjustable rate mortgages, home equity lines of credit, credit card balances, and business loans.
However, interest rates on fixed-rate mortgages are not tied to changes in the Fed Funds rate.  Mortgage rates are determined by the supply and demand for mortgage bonds in … (2 comments)

mortgage101: How to Improve Your Balance-to-Limit Ratio - 12/10/18 09:39 AM
 
Your balance-to-limit ratio looks at the balance you owe vs. your available credit lines.  This has a 30% impact on your score. Keeping your credit balances below 50% of your available limit is very important. Keeping your balances below 30% of your available credit is even better.
For instance, if you owe $10,000, and you have $100,000 of credit available to you, you are only using 10% of your available credit line. On the other hand, if you owe $10,000 and you only have $10,000 available to you, you have "maxed out" your available credit and your credit scores will be … (1 comments)

mortgage101: The Gift Tax Myth: How to Navigate Around It - 11/19/18 04:18 AM
 
Many people aren’t aware of the fact that, in most situations, there really is no gift tax. Here’s why…

  $15,000 Annual Exclusion The federal government gives each of us an allowance to gift anybody $15,000 per year without incurring any gift tax. This $15,000/year replenishes every year, and it’s $15,000 per person. So, theoretically, I could gift every person that I know $15,000 today, and then another $15,000 next year and the year after, and there would be NO gift tax.

$11,180,000 Lifetime Exclusion What most people don’t realize, is that there’s a second allowance of $11.18mm! In other … (1 comments)

mortgage101: Why You Don't Need to Give Out Three Business Cards - 07/30/18 07:48 AM
   
Some real estate agents believe that they must give out three different names when referring a mortgage lender.  This is not true.  Here's why:

No RESPA Violation There was an old rule in the Real Estate Settlement Procedures Act (RESPA) that allowed real estate agents to earn a separate fee from the buyer if they help the buyer "evaluate financing options".  Most real estate agents didn't charge this extra fee to buyers and therefore had nothing to be concerned with in this area.  However, the agents who did charge this fee to the buyer were required to help the … (2 comments)