Author Archive

Short Sales vs. Foreclosures: What’s the Credit Score Impact?

There are many reasons you may be having a hard time paying your mortgage and it’s certainly stressful to be in a position where you may lose your home. You do have options available to ease your financial burden, including a short sale of your property. But if you don’t take action, the lender may foreclose upon your home. Both short sales and foreclosures will impact your credit score, so it’s important to understand the implications.

The Impact of a Short Sale on Credit Ratings: A short sale is a transaction where the borrower requests that the mortgage lender accept a loan repayment for less than the full amount. In most cases, you’ll have to provide proof of a financial hardship that impacts your ability to pay or that you’re being forced to relocate for your job. (more…)

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What will Fannie Mae HomeReady do for Borrowers?

Blue Key and Great House

In August 2015, Fannie Mae announced a new option for would-be homeowners who have been turned down for conventional mortgages due to lower or moderate income levels: HomeReady. The goal of the program is to recognize that today’s households encompass several generations, all of whom contribute to the well-being of all residents. If you’re a borrower who has experienced difficulties in applying for a home mortgage, here’s what you need to know about this innovative program. 

Fannie Mae HomeReady Facts for Borrowers: There are a few key features of the HomeReady mortgage program that will appeal to borrowers.

  • Low Down Payment: Borrowers can obtain financing for up to 97% and there are flexible options for qualifying applicants.
  • Flexible Down Payment Source Options: An array of resources can be used for down payment and closing costs, with no minimum contribution requirement from the borrower’s own assets.
  • Educational Programs: Borrowers can learn from educational opportunities to help them understand the implications of home buying and ownership. These programs are required under the HomeReady program.

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What is Home Equity?

A thorough understanding of all the terminology related to your mortgage is critical, but many borrowers have only a general idea of what home equity means in the arrangement. In addition, there are many other factors that affect – and are affected by – the value of your home’s equity. Some basic information should help you grasp the concept of home equity and how this amount factors into your financial situation. 

Definitions: Understanding home equity starts with learning the terminology to hear how some of the different concepts work.  (more…)

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Tips for First Time Homebuyers

loving couple looking at their home

It’s exciting to go house shopping; learning about the loan application, pre-approval and mortgage process isn’t quite as interesting. Still, educating yourself is an essential part of getting financing for your new home. Owning a home is one of the biggest financial investments you’ll make during your lifetime, so you might be feeling a little overwhelmed by the process. Check out a few tips for first time homebuyers that will make things easier once you do find the perfect property.

Run your credit report. Even if you regularly monitor your credit rating, you should run a report in the months before you decide to start house hunting. You want to have time to correct any errors or repair negative items well before you approach lenders for a mortgage. In addition, you should review your credit report to get an understanding of your credit rating. A score of 620 or more is probably enough to qualify for a mortgage, but you’ll get better interest rates the higher your rating. (more…)

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Pay off Mortgage or Invest?

It feels good to be in a financial position where you’re trying to decide whether to pay off your mortgage or invest in other assets, such as real estate. Either option can advance your financial stability and impact your future, but paying off your home loan may be more suitable in some cases; likewise, investment might be better for others. It’s important to weigh a few factors to determine which arrangement is best for your situation.

Tax Benefits: Your mortgage payments are tax deductible, so you’ll lose this benefit if you pay off your mortgage early. If you have a higher income and are able to itemize several other deductions, the impact of removing the tax benefit can be significant. Other homeowners falling into a lower tax bracket might consider investing their savings into real estate or other assets rather than a mortgage payoff, as the tax savings are likely negligible or even zero. (more…)

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5 Things You Need to Know About a 5/1 ARM

There are a number of different types of mortgages. Keeping them all straight can be confusing. Which kind is the best for you? Which one will cost you the least amount of money? Well, the two most basic types of mortgage are fixed rate and adjustable rate. A fixed rate mortgage sets your loan at one particular interest rate, which doesn’t change over the entire course of the mortgage. An adjustable rate mortgage (ARM) can have its interest rate raised or lowered at certain times, based on the fluctuations of interest rates in general.

If you’re getting a mortgage when interest rates are especially low, a fixed rate mortgage is a good option, as it will allow you to lock in the lower rate and not have to worry when they start to rise again. An ARM is a better option when rates are higher, as you can have the opportunity to lower your rate later on. (more…)

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Everything You Need to Know About VA Loans

Everything You Need to Know About VA Loans

Everything You Need to Know About VA LoansIf you’re a Veteran of the U.S. Armed Forces or in active duty, you might be aware of a specialized home loan program administered by the Veteran’s Administration. There are significant benefits to obtaining a mortgage backed by VA support for eligible borrowers, so the plan is worth looking into if you think you qualify. Some general information about VA loans, the advantages and the financing process will be helpful if you’re considering one.

What is a VA loan? It’s a home loan backed by the VA which is available to members of our nation’s military, either active duty or those who have served in the past. The federal government doesn’t actually provide the loan funds, but the Department of Veterans Affairs acts as a sort of co-signer on loans for those individuals who qualify. (more…)

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How a Good Realtor can Make or Break the Home Buying Process

Even after you’ve made the big decision to buy a home, there are still other choices you’ll have to make as you’re looking for the perfect place. One of the first tasks you’ll need to accomplish is finding the right realtor to assist you in your house hunting efforts. There are countless real estate professionals out there, but you must separate the good from the bad to make the home buying process run smoothly. Here’s why a qualified realtor is important and some pointers on what to look for.

A Good Realtor is Critical for Several Reasons  (more…)

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