Mortgage Chicagoland

It's Time to Buy

There is more demand for a rental property now than ever. The high demand is causing rent prices to skyrocket. If you are looking for a long term lease your mortgage could be less than rent per month!

The mortgage bill for today’s homeowners is the best it has been in decades. With 20% down on a median priced home, around $154,000, your monthly payment could be only $616. This number is only 12.1% of the median U.S. family income.

If you are in a stable financial state with good credit in addition to the affordability then it is the best time to buy. In almost all of the top metro areas it is now cheaper to buy than rent.

Benefits of Homeownership:

- Pride of ownership

o You have control of your home

o Sense of stability and security

- Financial benefits:

o Price appreciation helps build home equity

o Tax benefits

Are you ready to own a home? First you need to take a look at your financial situation. Can you afford a monthly mortgage? If so, the next step is to shop for a loan. Contact me today for your mortgage needs and I can help you become a homeowner.

It's Time to Buy

There is more demand for a rental property now than ever. The high demand is causing rent prices to skyrocket. If you are looking for a long term lease your mortgage could be less than rent per month!

The mortgage bill for today’s homeowners is the best it has been in decades. With 20% down on a median priced home, around $154,000, your monthly payment could be only $616. This number is only 12.1% of the median U.S. family income.

If you are in a stable financial state with good credit in addition to the affordability then it is the best time to buy. In almost all of the top metro areas it is now cheaper to buy than rent.

Benefits of Homeownership:

- Pride of ownership

o You have control of your home

o Sense of stability and security

- Financial benefits:

o Price appreciation helps build home equity

o Tax benefits

Are you ready to own a home? First you need to take a look at your financial situation. Can you afford a monthly mortgage? If so, the next step is to shop for a loan. Contact me today for your mortgage needs and I can help you become a homeowner.

Cutting Costs Around The Home

In today’s economy, people are looking for different ways to save money on expenses. Here are a few ways to save money on your home:

Cut costs on your mortgage

The continued rate dip has opened up a refinancing window that is pretty hard to pass up. Many borrowers are refinancing to lower rates and even refinancing to shorter term loans in order to pay off their mortgage quicker. Now is as great a time as ever to make sure you have the best rate and
mortgage and are in the best financial situation available.

If you’re in need of repairs, now is the time to negotiate

Though it may be on the way up, contractors are still facing a slumping market and will probably be
willing to strike a deal to get your business, especially during these cold winter months. A recent survey on a consumer review website stated that 81% of contractors say they'd negotiate labor costs; more than 25% said they'd drop prices by more than 10%. Also, service providers like house cleaners and landscapers are cutting rates, too. Remember to get multiple price quotes.
You'll have the most bargaining power if you can be flexible about the timing of
your project.

Look for Deals

When sales slow down after the holiday season and end-of-the-year sales, many furniture shops will make deals to move their inventory, so check up on local deals around your neighborhood. At
times gently used floor models can go for 25% off. And remember another easy way to save money –sign up for e-mails from furniture shopping sites and other stores who offer coupons on their websites or via e-mail. Also, if you’re in need of a new television or other appliance, now is the best time to buy, as new models are coming out in the spring and sales on current stock offer great deals
right now. Also, if you have credit card with that store, ask about 0% financing, as most of them offer it on an 18-36 month basis for their customers.

Some other cost cutting ideas:

Try to set thermostats no higher than 68 degrees in winter. Turn your heat down even further at night or when you're not home (unless you have a heat pump, which operates more efficiently at one consistent setting). Each extra degree in winter can increase heating costs by 3%. During the summer, each degree can raise cooling costs by 6%. This can be a real cost saver, potentially saving you up to $325 to $500 annually.

Cut back on the use of your dryer. Not only is it a big energy drain, it can also suck heated air out of your house very quickly in winter. Instead, hang clothes on a clothing rack to dry and just use the dryer for towels and other heavy items and this can save about $25-$50 per year.

Install the new type of fluorescent bulbs in lights you leave on for long periods. They provide four times as much light and last ten times longer than incandescent bulbs. It can save you up about $10-$50 a year.

Steps To Take Once Your Home Is Under Contract

Congratulations, your home is under contract! Now what do you do? Life is always easier when you are prepared, so here is a list of things to expect prior to closing.

Pay Close Attention to the Calendar

Your purchase contract is filled with contingency expiration dates. Make sure you are aware of the buyer’s financing contingency and option period. As your loan officer, I’ll make you aware of these deadlines and of anything that needs to take place prior to a certain date. Your realtor is also a great source of information to ask any questions to, as we’re both here to help through this process.

Be Prepared for the Inspection

It’s typical for buyers to perform an inspection and negotiate repairs during the contract’s option period. The inspector will schedule a time to complete the inspection thru the showing service. As with showings, it’s best if you are not present during the inspection. Please make sure the inspector is able to access all parts of your home (no locked doors, etc.) and that all of the utilities are turned on and working prior to the inspection.

Repairs

If any repairs have been negotiated with the buyer, it is your responsibility to have the repairs completed by licensed service providers. Please let me know if you need any referrals, as I have great business relationships with many different people in the industry. Make sure you get a receipt from each provider detailing the work performed as the buyer may want to see a copy of all receipts prior to closing.

Appraisal

The buyer’s lender will schedule an appraisal on your property. If the appraiser needs to access your home in order to complete the appraisal they will schedule an appointment and you’ll be notified ASAP.

Moving Out

The sales contract requires the home be turned over to the buyer in the same condition it was in when the contract was accepted. Be careful when moving out to not damage the property. Once all of your items have been removed, go through each room again. Think about what condition you expect your new home to be in when you move in and make sure your home is in the same condition after you move out.

Final Walk-Thru

Once you have moved out, the buyer will schedule a “final walk thru” to check the status of agreed upon repairs. Make sure the house looks great prior to the buyer’s final walk thru.

Closing

24-48 hours prior to closing (depending on when the title company receives the closing instructions from the buyer’s lender), the title company will send you a HUD-1 Settlement Statement detailing all of the financial aspects of the transaction. We will review this document together to make sure everything is accurate. The HUD-1 will tell you the exact amount of the proceeds you will receive from the sale and/or the amount of money you need to bring to closing.

Don’t Forget

The buyer will need house keys, garage door openers, mailbox keys, security fobs, etc! You can either bring all of these with you to closing, or bring a key to closing and leave the remaining items at the house for the new owner.

Congratulations!

Introducing HARP 2.0

There's a big change coming in the HARP 2.0 program that will make it easier and faster for homeowners to refinance their underwater mortgages, and possibly save them several hundred dollars as well.
Over the past few weeks, HARP 2.0 has been rolled out to lenders, and we have the opportunity to offer our borrowers a great opportunity to refinance to a lower rate and save significantly on their monthly mortgage costs.
Those new guidelines include eliminating the limit on how far underwater a borrower can be and still qualify for a HARP refinance. Previously, borrowers could owe no more than 125% of the value of their home; the new guidelines have no limit on how much your mortgage debt may exceed your home value.
There are some qualifications that each borrower must meet. You are only eligible if your current loan was bought by Fannie Mae or Freddie Mac prior to May 31, 2009 - we can help you determine this. You will also need to show that you have been current on your mortgage payments – you may have one 30-day late payment in the past 12 months, but none within the past 6 months. Contact me to see if you can qualify for this program.
HARP 2.0 is available through 2013, so even if you don’t qualify now—if you had a late payment in the last six months, for example—there’s still time to get back on track to qualify and take advantage of this great program.
The point of HARP 2.0 is to help struggling, underwater homeowners or simply to assist borrowers who wanted to refinance into a lower rate but couldn’t qualify under previous guidelines. With this program you will be able to refinance into a better rate, reduce your mortgage payments, pay down your loan balance and rebuild your equity.

Taking Advantage of SmartMove Mortgage Products

SmartMove Mortgage Products from the Illinois Housing Development Authority offer affordable interest rates and down payment assistance for borrowers of low to moderate income. The programs are ideal for borrowers who need extra flexibility on sources of income, or who have limited funds for a down payment and/or closing costs. Features of these products include:

• Offers up to $6,000 in down payment and closing cost assistance as a 10-year 0% forgivable loan

• Maximum LTVs from 96.5 – 100%

• Conventional / FHA / USDA insured products available

• Fixed rate with terms up to 30 years

• Reduced mortgage insurance requirements on conventional programs

Note, however, that certain qualifications apply.

• Minimum credit score requirement: 620 (FHA and USDA loans); 660 (conventional loans)

• Maximum total debt (back end) ratio of 45%

• Buyer must contribute 1% or $1,000 of the purchase price, whichever is greater

• First-time homebuyer or qualified exemption

• Household income and purchase price limits apply

• Homeownership counseling is required

Think you or someone you know might qualify? Give me a call or pass my info along.

Refinance the Right Way

Refinancing your mortgage is a great way to save money, especially with current rates at all-time lows. If you’re looking into refinancing, there are some things you definitely shouldn’t do if you’d like to move forward successfully in the refi process.

Here are some tips:

Don’t Neglect Your Credit Score

Even though you’re already a homeowner, your FICO score will continue to play a huge role in all of your financial endeavors, and your refinance is definitely one of them. As a general rule, scores in the mid-to-high 700s will secure the best mortgage rates available. If your credit score goes down, the interest rate can rise significantly. So if your score is less than stellar, you should begin improving your FICO score before refinancing your mortgage in order to obtain the best rates and financing.

Don’t Acquire More Credit During Your Refinance

Don’t apply for a new credit card or finance another huge purchase during your application process. The entire loan application process requires significant documentation with any new balances or debts, and in some cases, taking on new debt can halt your refinance entirely. Avoid that as much as you can.

Don’t Ignore Your Savings Account

While the fees for getting a loan could be minimal, you may still be required to bring enough cash for other items (insurance and taxes), as well as interest on the loan from the date of closing to the end of the month. These items can easily add up to several thousand dollars and you’ll be required to document where you obtained the cash for closing. In most cases, a copy of your most recent bank statement along with an explanation of the source of any large deposit is required. As a result, it’s important to maintain sufficient savings to handle the closing costs—so keep saving.

Don’t Constantly Refinance

It’s advantageous to jump on a low rate like the ones currently being offered. However, it’s key to also remember that the most important thing is to put yourself in the best financial situation possible. If you can, refinancing into a 15-year term can offer you a great way to pay off your mortgage in half the time at the current low costs Down the line, even if rates remain great, refinancing back into a 30-year mortgage adds a lot of time and interest to your mortgage. Before you know it, you’ll find yourself at the doorstep of retirement with a hefty mortgage still remaining on your home. Ask me questions and we’ll sit down and compare what loan situation is best for you.

Be Open with your Credit Reports - it's the Best Thing for your Future Finances

If you’re in a relationship that you think is heading down the path of a house, a marriage and a family, one important thing that couples should also be sharing is their credit score and credit reports. It may not sound as romantic, but it is just as important to your relationship and your future. Once the time is right in a relationship, it’s important to discuss any past credit or financial issues that would impact your ability to buy a home together. Put Everything on the Table: Make a list of your current debt, including student loans, car payments, credit card debts. Be transparent about debt and finances. Check Your Individual Credit Reports—and Share Them: These reports provide detailed information about what is currently owed, what has been owed to other lenders and details of any missed or late payments. Everyone is entitled to a free credit report from each of the three credit bureaus per year. Visit www.annualcreditreport.com, the official site of the three credit reporting agencies in the country. Adhere to Credit Boundaries –Before making any purchases on your credit cards, talk about how this will impact your plan and your future. Talk about how you’ll pay off future bills, that way there won’t be any surprises down the line. Plan to Reduce Debt Together: Discuss and implement a plan that will correct any past irresponsible behavior on either of your parts. Don’t dwell on it now, but instead, take the necessary steps to fix it. Debt doesn’t have to be a deal breaker if you face the challenge head on.

Looking into Foreclosure Properties

Buying a home that has been foreclosed upon can provide large profits for potential buyers and investors. During stressful economic times, many great homes go into foreclosure due to job loss or other personal and financial hardships, and it can be advantageous to take a look at these properties as they become available. Finding a foreclosure for a great price, coupled with current
all-time low mortgage rates could mean now is as good a time as ever to start
your search.

Finding a foreclosure isn’t always easy – you have to make sure and do your homework, researching whether or not this purchase is worth the time, effort and money that goes into the process. The safest deal is with a bank-owned property, that way there are fewer risks, no taxes and liens and no
tenants that need to be evicted. Typically you’ll find that the property doesn't sell at as big a discount as at an auction, but there is much less risk, as you can obtain financing through 1st Advantage Mortgage and can have the property inspected. This is very similar to buying a property from another owner, but instead it is owned by a bank.

There are foreclosures that are riskier than others, particularly if you’re going to buy a foreclosure at an auction. Buying from an auction means you can’t go in and inspect the property, and you
also may find other liens against the home. Generally homes that sell at auctions will provide you with the lowest purchase costs, but be prepared to pay cash, as you won’t be able to take out a mortgage for this type of home. In providing mortgage financing, it is essential for us to inspect the property and have an appraisal done in order to protect our clients from making a purchase
that is not worth their time or money.

Keep in mind that people who lost their home in foreclosure very likely couldn't afford to maintain their property. Be prepared to pay for any problems such as plumbing or electrical repairs, leaky roofs, or even a poorly kept interior or exterior that will need the care that the previous homeowner didn’t or couldn’t provide.

Though there are some risks and probably some added costs to purchasing a foreclosed property, there are many homes out there that are in great shape and have just become the product of economic hardship among their previous owner. If you find a home that is worth the effort, take advantage of a golden opportunity.

Financing an Investment Property

Financing your first investment property can be a daunting task—but if done correctly and by working with the right people, it can be just as beneficial and rewarding.

By taking advantage of the current all-time low interest rates, you can receive rates and pricing that you wouldn’t be able to get just a few years ago. The housing market always goes through price fluctuations and right now housing prices are down. This is the perfect time to buy while rates and pricing are low and there are renters out there in need.

First things first, check your credit early for any errors you’ll need to address. The better your credit score is, the better your chances are for being approved for an investment property loan. Once your credit is reviewed, analyze your finances to make absolutely sure that you are ready to take on an
investment property. Also remember that investment properties tend to require larger down payments and stronger finances than is needed for a primary residence.

Next, choose the type of investment you’d like to purchase. Investment properties can include anything from vacant land and rental houses to condominiums or commercial properties. After deciding what type of building you’ll buy, research the area that fits best for your intentions and
goals. Research the surrounding area to make sure the neighborhood offers good schools, nearby transportation, shopping areas and entertainment venues that renters will be looking for. The community is just as important as the property, as you’re investing in the surrounding area as much as the building itself.

Also, make sure not to overpay on the property by ensuring that your rental income from the investment will cover your monthly mortgage payment as well as taxes, insurance, maintenance and repairs. If you’re cut out for the work,purchasing investment properties can be quite profitable and can turn into a steady second income for years to come.