fbpx
Average Rates: 3.6% - 30yr|3.25% - 15yr
for a free quote!

Homestead Financial Mortgage

Let Homestead Financial Mortgage provide you with a stress-free home mortgage or refinance experience! Ask us anything at anytime because it's always #zerotofindout.

What President Obama’s Reelection Means for Homeowners

Resources

Though both presidential candidates were short on specifics about their housing policy, refinancing, new mortgage regulations and mortgage interest deduction all won on Election Day. Here’s what President Obama’s reelection means for homeowners.

While Mitt Romney talked about economic stimulus throughout much of the campaign, the Obama Administration made it easier for homeowners to refinance with historic low mortgage rates and plans to make refinancing available to even more borrowers in the next four years. Refinancing gives homeowners more spending money and is a form of economic stimulus. Housing policies that help for folks on the verge of losing their homes are still in the works.
New mortgage regulations are coming like the Consumer Financial Protection Bureau established by the Dodd-Frank Act. Set to take effect by January 2013, these new mortgage standards will trigger legal and financial implications for lenders should a mortgage be judged to be beyond a borrower’s ability to repay. Critics of the Dodd-Frank Act, like Mitt Romney, have argued that such a plan holds back mortgage lending. Legislators will need to strike a delicate balance between giving lenders the incentive to expand mortgage credit while also protecting consumers from high risk loans. Continue reading “What President Obama’s Reelection Means for Homeowners”

With a depressed housing market on the mend, this presents a great opportunity people looking to buy their first home. As is with most first time home buyers, cash is at a premium. Today we’ll talk about a clause in a real estate purchase used to help called seller concessions.

What are seller concessions?

Seller concessions, like it sounds, is where the seller of a home, “concedes” some of their proceeds to help the buyer pay for mortgage and other closing costs and or prepaids on the purchase of a home. The offer to buy the real estate normally comes with a minor upward adjustment to sales price to allow the seller to get to the same net figure. If done correctly, this can reduce the amount a borrower has to bring to closing by thousands of dollars.
How do seller concessions work?

For example, Michelle, in Kansas City is buying a home for her first time. She wants to buy a home for $200,000, qualifies for a 95% mortgage and has roughly $10,000 to put down. Michelle can offer $204,000 with $4,000 in seller concessions. The math works out as follows:

No Seller Concessions With Seller Concessions
Purchase Price $200,000 $204,000
Closing Costs and Prepaids $4,000 $4,000
Seller Concessions $0 $4,000
Total Due $204,000 $204,000
Loan Amount $190,000 $193,800
Due at Closing $14,000 $10,200

The above example illustrates how offering a higher sales price, but asking for seller concessions to pay for closing costs allows the seller to get to their target sales price but helps the buyer get into their home with the minimum amount of cash possible. The mortgage balance is a little higher but the change to payment is negligible and cash is at a premium.

To conclude, the use of seller concessions will help a buyer purchase a new home when money for closing costs is scarce. This helps credit worthy buyers purchase homes and sellers obtain what they were hoping to get out of their property.

In “Climbing Your Way out of Debt Part I,” we looked at the cost of paying down debt by focusing on credit cards with the highest balance before focusing on lower debt balances and loans. This time we examine how much money it will cost over the long term if you pay down credit cards charging the highest interest first. We’ll also examine the costs of emotion when it comes to borrowing money from family members. Continue reading “Climbing Out of Debt – Part 2”

Like many Americans, you have a few credit cards and do your best to manage your money responsibly but it seems every month you come up a few hundred dollars short. Trouble is your annual raise hasn’t kept pace with the rising costs of gas, groceries and other necessities let alone discretionary or luxury items like movie tickets, your fitness club membership or trips to the spa. You know if you don’t rein in your spending, you’re debt will grow and climbing your way out of debt will be even more difficult than it is right now. Nobody wants, or likes, to be in debt especially in today’s tough economy. While climbing your way out of debt may seem like achieving the impossible, there are several ways to do it. Continue reading “Climbing Out of Debt – Part 1”

Of all of the mortgage products on the market, today we’ll talk about a Home Equity Line of Credit or HELOC – what is, how it works, benefits vs. drawbacks and if it would be right for you.

What is a HELOC?

A HELOC is a revolving line of credit that your home secures. Think of it a cross between a credit card and mortgage, only with a lower interest rate because your home secures the underlying debt. An additional benefit is since the debt is secured by your home, the interest is tax deductible. Continue reading “When is a HELOC Right for You?”

When inquiring into mortgage rates or dealing with a mortgage application, you will deal with a licensed Mortgage Loan Officer. On any email or business card, there will be 6 digits behind a Loan Officers name, which is their NMLS ID number. Today we will discuss what it means to be an NMLS licensed loan officer, the history of how licensing came to be, the benefits to the consumer of Loan Officer Accountability, and what goes into getting a Mortgage Originator’s License. Continue reading “Making a Licensed Mortgage Loan Officer”

Many people ask when looking into refinancing their mortgage ask why their credit is considered good, but not excellent. It is a common misconception that simply because you pay your bills on time every month that your credit is viewed as excellent.

There are other important factors involved in credit score ratings derived by credit reporting agencies. For instance, the 3 credit bureau agencies, Trans Union, Equifax and Experian look at how many credit cards you currently have open, how long they have been open, and how much is currently owed with each creditor associated with the credit limit available. These factors can make a big difference when looking to get a refinance approved and the program qualified for. A consolidation home loan refinance is a productive way to pay off credit card debt in full.

Also, it often increases credit scores from good to excellent in a quick time period, since credit cards that were once listed as owed with high balances are reported as paid in full through the debt consolidation refinance program.

If you’re interested in learning more about repairing and maintaining a good credit score, particularly if you need to improve your own credit score, then read on. Perhaps, as a potential first-time homeowner, you’re in the market for a mortgage—or maybe you need your mortgage refinanced; either way, good credit is important!

Fixing and repairing your credit score is more than simply paying off debt regularly and in a timely manner, however. Yet it seems to be commonplace for consumers to be ignorant of what affects their credit score and what they can do to repair it and maintain a higher score.

But as already mentioned, there’s a lot more involved with what goes into a credit score. Here are five other, perhaps lesser-known ways you can fix and then improve your credit score. Continue reading “Repairing Your Credit Score: Other Options”

In trying to makes sense of advertising of mortgage company ads, one will hear many things. Today we will discuss what it actually means when someone says they can refinance your home without an appraisal.

Is a No Appraisal Refinance Possible?

Yes, it absolutely is. Currently, approximately 10% of our mortgage refinance transactions are done without an appraisal. In addition to saving the $350-$500 cost of the appraisal, the transaction can move faster due to many appraisers being backlogged, Currently, the refinance transactions that are done without an appraisal comes down to either conventional HARP loan or an FHA streamlines. Continue reading “What Does it Mean When a Mortgage Company Advertises “No Appraisal Required””

Mortgage rates tumbled again last week and homeowners nationwide are fired up about refinancing. From homeowners drowning in underwater mortgages to those who refinanced 30-year mortgages at rates that hovered just below 4% last October, all kinds of homeowners are trying to take advantage of these new historically low rates. While every household’s financial situation is different, record-breaking low interest rates, a competitive lending market and changes in some federal refinancing programs for struggling homeowners make now the best time to refinance your home mortgage.
Continue reading “Record-Breaking Interest Rates Fire Up Homeowners”

Of the 3 major criteria needed to qualify for a mortgage to buy a home, Credit, Capacity, Collateral, today, we will focus on Capacity. In other words, we’ll talk about how income is calculated, your DTI (debt to income ratio) and how that ratio is used to underwrite your mortgage.
Continue reading “How Much Income Do I Need to Make to Qualify for a Mortgage?”

With home values and home equity taking a beating the last five years, many homeowners are left wondering if there is anything they can do to increase the value of their home and their home equity. While there are some ways to increase your home’s value, many cost more than what you’ll gain, especially if you contract out the work. However, if you’re willing and able to do the work yourself, your “sweat equity” can boost the value of your home and increase your home’s equity. Despite the current economy, now is a good time to do home improvements since interest rates are at historic lows and contractors are scrambling for work. Provided you plan to stay in your home for a number of years and you do the right home improvements, you could enhance your home’s value when home prices recover.
Continue reading “Increasing Your Home’s Value and Equity”

Over the past 5 years, mortgage interest rates have gone in one direction, down, down, and down. Each time we appear to have hit a floor, the bottom drops out of it to another floor.

Over this time frame, some borrowers have taken an “I’ll get around to it” attitude. However, I thought it wise to break down what the actual savings on refinancing in today’s market will actually mean.

Example 1 – Paying off your Mortgage Faster

Borrower John in Chesterfield, MO has a $175,000 mortgage at 5.5%with 25 years left at a payment of $993.63 and has been putting off refinancing due to the trouble of rounding up all of the income documentation.
What is available is $175,000 mortgage at 15 years at 2.75% which carries a payment of $1,187.59.
Total payback on John’s loan (993.63x25x12) is $298,089 but by applying for a lower rate on a 15 year leaves him with a total payback of $213,766, saving John a whopping $84,322.

Ex. 2 Improving Cash Flow for Investments

Borrower Lisa from Overland Park, Kansas has a $200,000 Mortgage at 5.5% with 25 years left which carries payment of $1,135.58

What Lisa wants to do with her situation is refinance to a 30 at 3.500% and invest the excess cash flow. The payment on her $200,000 mortgage is $898.08, saving her $237.49. If Lisa invests the $237 savings every month over 30 years, assuming a 5% return in a tax deferred account, she will have $197,000 left over when she pays off her mortgage in 30 years.

So to conclude, if it’s to pay off your mortgage quicker, or to take advantage of investment opportunities, there are great financial opportunities in today’s refinance market.

The main reason homeowners today refinance is to get a lower interest rate. But what many homeowners don’t realize is that refinancing helps them to rebuild the equity in their homes more quickly. For those of us who bought homes prior to 2006, most of us have less home equity than we used to because our homes are worth considerably less than they were a few years ago. Therefore, we have less home equity. Fortunately, refinancing can help homeowners to rebuild the equity in their home.
Continue reading “Rebuilding Your Home’s Equity with Refinancing”

If you’re one of the millions of homeowners with an underwater mortgage who would still like to refinance but can’t qualify for HARP (the federal Home Affordable Refinance Program), there are still some options. Though limited to borrowers in specific situations, you can still refinance a negative-equity mortgage even if you don’t qualify for HARP as long as your mortgage loan is backed by the FHA or VA.

Provided you’ve kept up with your mortgage payments, both FHA and VA mortgage loans offer what is known as “streamlined” refinancing that enables you to be approved for a refinance almost automatically. In fact, credit scores, appraisals, proof of employment aren’t necessary no matter how much the value of your home has fallen below what you owe on the loan. But it’s important to remember there are criteria that must be met.
Continue reading “Refinancing Without HARP”

Yep, that’s right. Ben Bernanke, the Federal Reserve Chairman, refinanced his home. Your eyes do not deceive you. So, what about you? Don’t you think it’s time for you to refinance your home too? According to Bernanke’s financial disclosure form, he took out a 30-year mortgage with a fixed rate of 4.25% to replace one he took out in 2011 at 5.375%. Granted Bernanke has better credit than most Americans and has access to information the average consumer doesn’t, but besides that why are so many Americans waiting to refinance their homes when rates are at historic lows?

Because no two situations are alike. Refinancing isn’t an option for some homeowners because they have no equity in their homes, their homes aren’t worth as much as the balance on their mortgages or they have bad credit while homeowners who have a FICO score of 740 or above, at least 10% equity in their home and few debts are better equipped to refinance.
Continue reading “Ben Bernanke Refinanced his Home, Maybe You Should Too”

Unless you’re living under a rock, you know it’s a presidential election year, with Election Day less than two months away. And while many are already sick and tired of the mud-slinging and negative ad campaigns, there’s one thing that homeowners should be paying close attention to – a refinancing expansion bill the White House is urging the U.S. Senate to vote on as early as this week.
Continue reading “A Refinancing Expansion”

For the past decade many homeowners have taken advantage of cash-out refinancing, taking out a new mortgage with a loan amount that’s bigger than the balance on the old mortgage with the homeowner receiving a check for the difference at closing. However, today mortgage lenders are seeing much more of what’s known as “cash-in” refinancing where the borrower refinances their home mortgage for a smaller amount than their old loan, with the homeowner taking a check to the closing.
Continue reading “Why Cash-in Refinances are in Vogue”

Most people who consider refinancing their home mortgages do it to get a lower mortgage rate. According to the Bureau of Economic Analysis the average interest on an outstanding mortgage at the beginning of 2010 was 5.979%. With mortgage rates at historic lows and well below 5.979%, refinancing is a no-brainer. But what many home owners don’t know are the other reasons why they should consider refinancing their home mortgages.
Continue reading “Why You Should Refinance”

It’s an election year and with unemployment not getting any better, stocks going nowhere and news that the housing market isn’t out of the woods yet, many people are left wondering if now is a good time to buy a home. Despite what you hear in the news, there are still cases when buying a home still makes sense.
Continue reading “Is Now a Good Time to Buy a Home?”