Category: Real Estate

Purchasing your first home is something to celebrate. For many people however, it is a pipe dream. The cost of buying a home in the US has never been higher than it is now. Studies from data analyst Statista, indicate that the average sales price of a new home in 2021 reached a whopping $453,700. Of course, figures are constantly shifting and changing, and if current trends continue, we are looking at potentially pricing young, first-time buyers completely out of the market.

This might all sound doom and gloom, but there is some good news. If you start early enough, put together a plan, and know what you want to search for, you stand a much better chance of saving up the initial 20% down payment for purchasing a home, and obtaining a Fha mortgage for first time home buyers at favorable rates. Obviously, the rate at which you receive your mortgage depends upon your personal circumstances, but the fact that you have a down payment sitting in the bank makes you a valuable commodity to a mortgage lender.

Planning is Key

There are two schools of thought. The first is that you should ride with the flow of the wave, see what happens and live life to the fullest. The second is that you should enjoy your life and go with the flow, but have a plan at the same time. Why is the second option more favorable?

If you approach life without any plan in place, even a rough one, you’re going to miss the big points. You’ll end up looking back and wishing you had done this, or that, or that you had the money to try this opportunity. By thinking about what you want, you’re planning your life out. This way you’re just giving yourself some guidance in terms of where to go and what to do. If you don’t do this, you will never achieve the things you really want, and that will lead you down a road towards regret.

Why Saving is Important?

You don’t have any idea about the future, but having a comfortable savings amount tucked away gives you more confidence, because you know you’ll be able to overcome any hurdles. It also means that you will be much more able to take advantage of any great opportunities which might come your way, e.g. travel or change jobs, because you have the safety net underneath you.

You don’t have to save huge amounts every month and give yourself a lesser quality of life, you just need to put a little aside and not touch it. Looking into high interest savings accounts is a good way to earn cash whilst you’re saving, and you could also look at possible investment opportunities.

If you begin saving for a down payment for your home now, it is going to be much less of a burden when you decide to buy one. What if you don’t have any savings and see a house that you just love so much? Trying to put together 20% of the cost of the house (your down payment) is going to be an uphill struggle. If however, you save a little over the years, you might find that you already have that down payment sitting there waiting, or at least most of it, and then you only have a little more to find. By saving, you are investing in your future.

Why do you Need a Down Payment?

A down payment reassures the low down payment mortgage company who is going to lend you money for your future house, that you have the financial capacity to afford the monthly repayments. If you have no down payment, it doesn’t look good. It basically tells them that you can’t save, do not have enough income, and therefore a bad investment for their business.

A down payment in the US needs to be 20% of the overall value of the home you’re looking to buy. You will need to have this in a lump sum, and it will need to be in your bank for around three months before you approach a mortgage company. If you have less than 20% saved up as your down payment, many mortgage lenders won’t consider lending to you. Some however may, but you will need to pay something called PMI (Private Mortgage Insurance). This is a type of insurance which you will need to pay monthly over the long-term, and will send the cost of buying a home skywards.

Conclusion

Buying a house involves spending a substantial amount of money, but with proper planning and savings, you will be able to find a way to purchase your dream home. And even if you’re short on savings, there are mortgage companies that provide down payment assistance to home buyers that can help you with your financial needs and navigate through the different stages and steps involved.

If you’re looking for a mortgage company that offers bad credit mortgage loans in Florida, Miller Mortgage, LLC, can help you with your financial needs and requirements.

Mortgage brokers are experienced professionals in finding the best interest rates and lowest fees, and closing the loan on time. For first-time home buyers, navigating through the numerous processes (such as finding a fixed rate mortgage home loan) can be a daunting task, which is why partnering with a mortgage broker can be a wise decision.

Mortgage Broker Explained

A mortgage broker is an intermediary party to match borrowers and lenders. For refinancing or buying a new home, a broker can help you find the best mortgage rates after assessing your particular needs and situation. These professionals will not just offer you competitive pricing and rates, but they will also help you partner with the most suitable lender. These experienced mortgage experts can quickly determine the best lender for any type of borrower.

For those seeking a VA loan or an FHA zero down mortgage solution, finding a mortgage broker having relevant experience in this particular field will help simplify the process for you. They will make all the calculations and tell you about the options for which you qualify.

One thing to note here is that a mortgage broker is not specifically a lender of mortgage funds; they will originate the loans and place the order with the lenders. Upon closing of the deal, the funds would get disbursed. Mortgage lenders have access to a wide variety of lenders and mortgage products, unlike bank loan officers, who are only confined to the mortgage solutions provided by the bank.

What Mortgage Brokers Do?

From real estate agents to closing agents and underwriters, mortgage brokers work with everyone who participate in the lending process. It ensures the borrower gets the best loan and the loan is closed on or before time.

A broker can work with a brokerage firm or work as an independent entity. They are highly skilled at researching loan options and negotiating with lenders for their clients. To make the loan paperwork a seamless process, they will study the buyer credit reports and verify the information (income and expenses). You may also find mortgage brokers who have access to a powerful loan-pricing system, which can furthermore speed up the process.

The lender would usually pay the mortgage broker a fee or a commission once the loan has been closed. Some mortgage brokers also charge fees from the borrower directly and not relying on the lender. For such cases, it is usually a flat fee that can be paid at closing or financed along with the mortgage.

Questions to Ask a Mortgage Broker

Before you get too much into the process with your selected mortgage broker, you should ask these questions to verify if the chosen broker is the right fit for you:

• How much do they charge and who pays for the fees?
• Who are their partner lenders?
• What are the total years of experience they have?
• Are they licensed to operate in your state/region?
• Can they show references?
• How do they take care of lock rates?

Choosing a Mortgage Lender

You must do your homework to find the most suitable mortgage broker. You may start by asking for referrals from trusted people. You can also read online reviews and check with BBB (Better Business Bureau) for complaints. Once you start exploring your options, you need to broaden your horizon and look beyond the basic services offered by the broker. For example, if you are looking for a home affordable refinance program, you need to interview the broker and see if they can particularly assist you on that. Consider their communication style and how they manage their client requirements to gauge how they will work with you. For instances when you are not comfortable with the way how they manage their business, you always have other options to look forward to.

About Miller Home Lending

Miller Mortgage, LLC is a licensed mortgage broker operating in Massachusetts and New Hampshire. Our only mission is to offer the best customer service and secure the lowest mortgage interest rates by partnering with credible lending agencies. Our volume allows us to procure very low mortgage rates and flexible programs in the market. We can help you with great service and low rates whether you are planning to buy a home to refinance one.

A home is an investment property with a potential to bring returns multifold. One way to leverage it is by refinancing it. Refinancing a home essentially means trading the current mortgage with a new one. When refinancing a home, mortgage lenders in MA, who provide new mortgage and refinance loans, use the loan to pay off the remaining payments of the previous mortgage, leaving the homeowner with just one loan that often has a larger principal and lesser interest rate.

There are multiple reasons to refinance a home. A cash-out refinance allows a homeowner to use the equity of their home to get money, while a rate-and-term refinance can be used to get a better interest rate and/or lower monthly payments for the new mortgage. A refinance can also be used to remove or add a person to the mortgage, such as in the case of divorce or marriage. These provisions can be very helpful for homeowners for consolidating their present and future financial conditions.

Here are 5 major benefits of refinancing a home.

Pay off mortgage loan early

Refinancing enables homeowners to reduce their loan term. While a mortgage with a long term provides the borrower time to sort out their finances, it also increases the total amount for payment because of the interest that accumulates over time. For a borrower who has been paying down a mortgage loan for years, refinancing the loan can considerably shorten the term without a significant increase in monthly payments. Shortening the loan term allows them to pay less by avoiding the accumulated interest amount.

Lock in a fixed interest rate

Mortgage loans have two primary types of interest rates which are fixed-rate and adjustable-rate. While a mortgage with a fixed-rate charges a set rate of interest that remains the same throughout the life of the loan, an adjustable-rate mortgage charges a variable rate that starts below current market rate, and then increases over time. Homeowners with adjustable-rate mortgages can refinance their loan with a new one that has a fixed-interest rate to avoid the stage of the mortgage loan where the interest starts to increase, saving them a substantial amount of money.

Secure a loan with a lower interest rate and monthly payment

Refinancing a home allows a homeowner to save a considerable amount of money by getting a new loan with a lower interest rate. The lower monthly payments and interest savings offered by the new mortgage loan enables a homeowner to pay off other debt, save more, and improve overall financial stability.

Procure funds for home improvement or renovation

The equity of a home is built by reducing the remaining loan amount through monthly payments, increasing the value of the home, or the combination of both. A cash-out refinance provides a homeowner the ability to access the equity they’ve accumulated on their home. This equity can be used for a wide range of needs including financing home renovations or improvements, paying off debt, or use it to cover medical, legal, and other large expenses.

Remove private mortgage insurance

Except for VA loans, a borrower pays for private mortgage insurance (PMI) when financing more than 80% of a home’s value with a mortgage loan. This protects the mortgage lender in the unfortunate event that the borrower defaults on the mortgage and the home goes into foreclosure. PMI costs between 0.4% to 2.25% of the mortgage annually and is included in the monthly payment. Refinancing can remove the PMI and all the expenses associated with it.

Conclusion

Buying a home is a big investment that requires meticulous preparation and planning. Since a substantial amount of money goes into purchasing a house even when financing it with a mortgage loan, any provision that helps to improve the terms and conditions of the mortgage can massively benefit the homeowner, and refinancing does just this. It enables a homeowner to trade in their current mortgage loan for a new one with much better terms. It also allows a homeowner to access the equity value of their home and use it for a variety of purposes.

If you’re looking for a mortgage broker for a commercial property or residential property, Miller Mortgage, LLC, is a trusted mortgage broker in MA that provides all kinds of services related to mortgage lending. Turn to their experience and professional expertise for all your home buying needs. Visit their website to learn more about their services.