How HARP Can Help You

house near the woods

 

house near the woodsHARP, which stands for the Home Affordable Refinance Program, was created to help struggling homeowners refinance their mortgage. This government program is designed to assist homeowners, who owe more money than what their home is worth, to have the opportunity to refinance their mortgage and lower their monthly payment. Interest rates in today’s market are 30% lower than rates in 2008, which can mean significant monthly savings! Find out if you meet the HARP eligibility requirements below:

Eligibility Requirements

-Fannie Mae or Freddie Mac must own or back your mortgage loan

-The value of your home is less than your current mortgage or your LTV ratio is 80% or higher

-Your home is your primary residence, second home or investment property

-Your mortgage was created on or before May 31, 2009

-You are current on your mortgage payments

 (No more than one late payment in the last 12 months, no 30+ day late payments in the last 6 months)

*Note: There is not a minimum credit score required for this program and closing costs can be bundled into your new loan.

Over 3 million Americans have taken advantage of this program. If you were turned down in the past, you may be eligible now. Several changes have been made since HARP was originally introduced. The guidelines and eligibility requirements are much simpler now. To learn more about the HARP program, give one of our mortgage specialists a call at (877) 788-4564 or receive a free quote here >> https://www.paramountequity.com/loan-options

  • “Freddie Mac and Fannie Mar have adopted changes to the Affordable Refinance Program (HARP) and you make be eligible to take advantage of these changes.”
  • “If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.”
  • “You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mar by checking the following websites:
  • www.freddiemac.com/mortgage or http://www.fanniemae.com/loanlookup/.”
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Is It Time to Refinance? 5 Factors to Help You Decide

Beautiful curb appeal of American house in olive exterior paint.

When a new mortgage replaces an original mortgage, the process is known as refinancing. You, the borrower, can get a much better interest rate if you choose to refinance. In a shaky economy, funding a home mortgage can prove troublesome. Ignoring the problem will not only impact your credit score but could leave you financially unstable.Beautiful curb appeal of American house in olive exterior paint.

Not sure if you should to take out a new loan of this kind? Absorb the following factors to make an informed decision about refinancing:

  1. Your Credit History Has Improved - A lender will always take a borrower’s credit score into account before offering a loan. A credit score will be negatively impacted if a payment is failed to be made or if a payment is made late. These two reasons will cause interest rates to be higher. A borrower with a high credit score will be considered an ideal candidate for refinancing, which will in turn be given a lower interest rate.
  2. Your Income Has Increased - When your debt-to-income ratio changes, it will be the perfect time to refinance your mortgage. The extra monthly cash flow you are receiving, whether it is from working overtime or you were given a raise, can be used to fund a mortgage refinance. Using extra cash to pay off a mortgage loan will ensure your payments are made on time. As a result, your credit score will improve and your chances of obtaining another loan in future will increase.
  3. Your Debts Have Decreased - One of the main reasons why a lender will turn down a borrower for a loan is because their debts are too high. Committing to a mortgage refinance means that you need to be in a comfortable financial position to do so. Aim to repay your debts little by little and then explore your refinancing options.
  4. Your Home Value Has Increased – Have you thought about how much equity you have built up to refinance a mortgage? A great rate is guaranteed once your equity increases, so pay attention to changes in property value if you are keen to refinance with low interest rates. In order to estimate your home’s value, read news reports, assess property tax valuations, and investigate the recent sales of similar properties.
  5. You Want A Fixed Rate Mortgage - Fluctuating interest rates may leave you feeling worried. After all, how are you supposed to relax if your monthly payments increase and your income stays the same, or decreases? Replacing an existing loan with a mortgage refinance that has a fixed rate is a better option than an adjustable rate mortgage because you will know precisely how much you are paying and when.

Refinancing could leave you with a much fatter wallet since you will be spending less for your home in the long run. Lower interest rates will relieve you of some pressure and make it easier for you to avoid late payments. When you consider the fact that late payments will have a negative impact on your credit score, it’s pretty clear to understand why so many homeowners are refinancing a home mortgage.

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What is a VA loan?

little girl hugging her military father

little girl hugging her military fatherDown payments are a critical step to securing a good deal on a mortgage. The general percentage of the total amount required ranges depending on the lender and the personal applicant. In some cases, whereby the property a buyer is hunting is relatively large and expensive, a higher down payment will be requested.

Putting a big chunk of money on the table is not always achievable for people on a lower income or people with a poor credit score. This is where a VA loan comes in – one of the few loan types made available to homebuyers with an undesirable lending history.

Five Things to Remember About VA Loans

The thought of being granted that all-important loan that could transform your dreams into reality is definitely something to get excited. Since they are a lot more straightforward and easier to get granted acceptance for than unconventional loans, there is no wonder why they are such a popular option. Get clued up on the subject before you decide whether or not VA loans are right for you.

Here are five valuable and beneficial pieces of information to keep in mind ahead of the application stage:

The Fees – A variable funding fee will be required just once to set up an account of this kind.

Eligibility – The majority of people who apply for a VA loan will be approved during the pre approval phase.

Military Members – Although most applicants will be accepted, lenders prefer active veterans and Military members.

Simple Application – The fact that VA loans can be granted without mortgage insurance makes it a much more appealing choice for borrowers.

No Down Payment – Financial stress is relieved for borrowers who don’t have access to a great deal of funding.

Tips for Improving Credit Score

Taking the time to make some small changes to your finance habits will aid you in boosting your credit score. Make payments, even if they are very small, to improve lender trust. This will also put you back in the good books of lenders you failed to pay in the past. Following a budget plan is another viable option.

Do you really need to borrow?

Let’s say for example, you are planning on sprucing up a property that is currently for sale at a price that is hard to beat, the temptation to borrow will be irresistible, for sure. Nevertheless, thinking things through is crucial because you might find yourself in a spot of future financial bother if you are not capable of repaying now. Take the time to boost your credit score and approach a lender again.

Figuring Out a Repayment Plan

The importance of understanding if you are able to commit to regular mortgage payments cannot be stressed enough. Getting in touch with a lender is the best way to figure out how much you can realistically afford to repay. The calculations will be based on a few factors, such as:

– Your incomings

– Your outgoings

– Your reliability with previous payments

Don’t worry too much about that last one, because even if you have been unreliable in the past, some lenders will consider you based on other determining factors. To improve your chances at obtaining a VA loan from a trusted lender, aim to make a fee changes. For example, try to reduce existing debt as a way of improving credit score.

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5 Questions to Ask During an Open House

Home for sale

Home for saleOne of the longest standing real estate traditions is an open house. If you are new to buying properties, take a moment to understand what an open house is and how it could aid you in making a purchasing decision. A way of generating traffic and luring in interested buyers for a potential sale; open houses are usually organized on weekends. The real estate agent will do a number of things to prepare for an open house, such as create ads in the local newspaper, put signs up in the surrounding area, and even embellish the property with banners and balloons to capture the attention of passers-by.

It’s not just the real estate agent who has a duty during an open house, however. As someone who is considering investing in a property, it is your duty to ask questions at this stage. Below, we expand on the five main questions you should be asking prior to purchasing a commercial or residential property.

  1. Why do the sellers want to move? - By asking this question face-to-face, rather than over the phone, you can get an honest answer from the seller or the seller’s realtor. Should the homeowner be transferring ownership of the premises due to relocation, work-related issues, or finances, you needn’t worry. If the seller is transferring home ownership because of constant repairs or if the area or schools are unsafe, you should think about this decision further.
  2. How long has the property been on the market? – The longer a property has been on the market, the more questions you should be asking. A desirable piece of real estate will not be on the market for long before it is snapped up. If a home has been on the market for a while, be sure to check the market value and condition of the home. Some seasons attract more buyers than others, so take this into account as well.
  3. How many offers have been made? - When you know you are competing with other offers, decide whether or not you want to proceed or walk away. Asking this question is essential because it gives you an idea of what the seller deems a reasonable offer. Additionally, it enlightens you about how much interest the property is getting.
  4. Are there any issues with the home? – Not every property featured on the real estate market will be perfect. In fact, a lot of buyers will be on the hunt for properties that they can acquire for a discounted price and renovate. If you are looking for a home that doesn’t need too many repairs, be sure to ask major repair questions, such as when the roof was last repaired.
  5. When was the house last updated? – You can figure out if the property is worth the asking price based on how often it has been maintained and/or updated over the years. If you are looking to avoid making updates down the road, we suggest finding a property that has been recently updated.

Take your time looking around when you attend an open house and try your hardest to envision yourself living in the home. Think about how your furnishings will look inside each room, and if the price of the home falls within your budget. Don’t forget to factor in the closing costs, to avoid unexpected surprises.

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How to Understand the Impact of your Debt-to-Income Ratio and How It Affects the Loan Process

Businessman's hands with calculator and cost at the office and F

Businessman's hands with calculator and cost at the office and FGearing up for a loan application can stir up a mixture of emotions, from euphoria to anxiety about the entire process. All that is required for a plain sailing experience is knowledge on the subject and in particular, on the topic of debt-to-income (DTI) ratios. Many loan applicants will be unaware of the fact that this is considered by a lender before the applicant is accepted for a loan.

What is considered a good debt-to-income ratio?

Dividing your total gross income with your recurring monthly debt is the easiest way to understand what your DTI income ratio is. Once you are aware of this, you can take a step forward and arrange a meeting with a lender. By doing so, you can discuss your loan options and talk about whether your DTI is good or could do with some improvement.

The Negative Impact on Financing

Put it this way: if a lender looks at a borrower who has a DTI of 50% or above, you are instantly in the red. In many cases, they will not give you a second look since you will be deemed “dangerous” in their strict book of lending. This can make it a struggle to obtain financing. On a brighter note, there are multiple lending options out there now that consider applicants with a poor credit history and DTI.

Tips for Being Approved for a Loan

Fear not if you fall into the red category when it comes to calculating DTI because it does not mean that your chances of loan approval have gone completely out the window. In fact, the following tips could actually teach you how to handle your finances overall:

– Pay off any debts you have accrued.

– Reduce your DTI by paying in affordable amounts.

– If you are able, settle high-interest debts.

– Stop spending so much and start saving more.

– Write a monthly budget and stick to it.

– Cut off direct debits or subscriptions that you no longer require.

Improving the Debt-to-Income Ratio

Sit down and really get stuck into your finances. It will be worth it when you get one step closer to being accepted for a loan, despite having a low DTI at the beginning. Pay attention to the higher debts on your list, if possible. Paying off larger amounts faster will ensure that your credit rating boost at a quicker rate. This will also lift that credit rating arrow from the red spot to the amber or, if you really commit, close to the green.

There are plenty of ways in which you can improve your DTI, prior to applying for a loan. This will boost your chances of acceptance and will have a positive effect on your credit score as a whole. Take it upon yourself to perform a recalculation of your DTI every month, as this will paint a clearer picture of how your financial situation is changing, for the better!

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What Closing Costs does the Buyer and Seller Pay?

Couple meeting financial advisor

Couple meeting financial advisorThe real estate market provides huge profit potential for sellers, as long as the seller takes the right approach. According to the 2016 National Association of REALTORS Profile of Home Buyers and Sellers, 51% of homebuyers will use the Internet to find their ideal home, whereas 34% will use the services of a real estate agent. The remaining percentage of buyers will make an investment move after seeing a yard sign, hearing about the real estate listing from a family/neighbor/relative, or will know the seller directly.

No matter how you intend on attracting a buyer (if you are a seller) or searching for the ideal home (if you are a buyer), it is important that you are aware of the fees involved once a selling price has been determined. Unless you understand what the typical closing cost includes, there is a chance you may be left surprised with unexpected costs.

Familiarize yourself with the process of closing a real estate transaction to eliminate surprise once the home ownership is shifted from the seller to the buyer.

Typical Buyer’s Closing Costs

  • The Down Payment - This is the initial payment a buyer will make to reserve the home. A larger down payment means reduced loan interest, so aim to put down as much as possible.
  • Loan Fees – A lender will assess your credit score and charge a fee to process the loan application.
  • Prepaid Interest - When daily interest builds on your loan, this must be paid at the time of closing. Once again, the amount depends on your credit report and financial situation.
  • Inspection Fees – A property inspector will charge this fee to assess the condition of the property. This service is valuable since it aids the buyer in making a final decision.
  • Appraisal - The fee charged by a qualified appraiser to determine a property’s market value.
  • Mortgage Insurance – Should a mortgage loan default, mortgage insurance will cover it.
  • Hazard Insurance – Damage caused by Mother Nature, vandalism, theft, or unintentional circumstances can be repaired, with costs covered by this insurance policy.
  • Title Insurance – A kind of indemnity insurance that shields a buyer and lender if the seller is unable to transfer home ownership.
  • Documentary Stamps - Documents that transfer real estate interest must be stamped, so that the excise tax can be imposed properly.

Typical Seller’s Closing Costs

  • Broker’s Commission – Every realtor will charge a different percentage of commission on the final property sale value. This will be deducted at the time of purchase.
  • Transfer Taxes – Consider this a transaction fee for transferring home ownership from you to the buyer.
  • Documentary Stamps on the Deed - This is a tax on documents detailing the transfer, sale, acceptance, or loan agreement for a property.
  • Title insurance – Indemnity insurance is equally as important for the seller to pay, as it is for the buyer.
  • Property Taxes – Property expenses must be divided fairly to ensure the buyer is only paying from the moment he/she claims home ownership. This is guaranteed when property taxes (a proration) are paid.

Calculating the closing costs prior to making a property purchase or agreeing to a sale will ensure you are satisfied with the outcome. Use the Internet to your advantage at this time, by estimating the costs with an online calculator. A few influential factors include the condition of the house, its size, and the features (interior and exterior).

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How much home can you afford?

Businessman's hands with calculator and cost at the office and F

Businessman's hands with calculator and cost at the office and FPerhaps one of the biggest downfalls associated with being an adult is the fact that as an adult, we must be responsible for our finances. No more pocket money or asking the parents for a few funds to get you through the weekend – this is the real deal. It doesn’t have to be a stressful time however, whether you are a millennial or make up the “baby boomer” generation, however.

Pushing through the financial force field can be difficult if you don’t know much about financing for home buying. On that note, let’s discover more about how a mortgage approval could steer you in the right direction for real estate success.

Financial Factors to Consider

Before you can start searching for the perfect home, the financial aspect must be put in the spotlight. Sit down (preferably with a financial advisor or lending expert) to figure out how your financial situation is looking. Take the following financial factors into account to ease the house-hunting process:

Down Payment – This is the initial payment you will put down on your property. It will depend on your credit score and ability to make regular payments. Down payments for any loan are contingent upon personal applicants qualifications.

Monthly Expenses - Do not start looking at properties until you know precisely how much money is outgoing every month. Monthly expenses include car payments, credit card payments, and alimony.

Flexible or Fixed Loans? – This is a tricky one. If you want to start off with minimal expenditure, but risk paying a higher interest rate in future, go flexible. Fixed loans are more secure, in the sense that the monthly interest rate does not change.

Reasons to Consider Financing for Home Buying

While some people are in a position to afford the cost of buying a home outright or even affording a high interest rate, others are unfortunately not. This is particularly true for millennials aged around 30. With poorer credit scores and less financing experience, securing a mortgage can be tough. Financing for home buying is beneficial, because it means you have control over your cash for the mortgage lifetime. It also makes becoming a homebuyer possible.

Finding the Best Rates in 2017

Interest rates are changing all of the time and if you are to find the best rates before someone else beats you to it, or before rate fluctuation occurs, there are a few things you need to do. Aside from shining up that unattractive credit score and thinking about how long you intend on living in/working in the property, you can do more to find the best mortgage rates in 2017. First things first, use the Internet to research mortgage rate comparisons on a daily basis or at the very least, a few times per week. This will keep you in the loop about what’s a good deal and what’s not. Your knowledge on the current rate climate will help you to determine whether or not now is the time to act.

Tips for Securing a Mortgage

Keep in mind that certain lifestyle factors will have an impact on mortgage interest rates, not to mention your chance to secure a financing deal at all. Speaking with a financial advisor will relieve you of any concerns or quandaries that might be boggling your brain ahead of purchasing a home. Consider all of your options and do not overload yourself financially.

Read More »

What Closing Costs does the Buyer and Seller Pay?

Couple meeting financial advisor

Couple meeting financial advisorThe real estate market provides huge profit potential for sellers, as long as the seller takes the right approach. According to the 2016 National Association of REALTORS Profile of Home Buyers and Sellers, 51% of homebuyers will use the Internet to find their ideal home, whereas 34% will use the services of a real estate agent. The remaining percentage of buyers will make an investment move after seeing a yard sign, hearing about the real estate listing from a family/neighbor/relative, or will know the seller directly.

No matter how you intend on attracting a buyer (if you are a seller) or searching for the ideal home (if you are a buyer), it is important that you are aware of the fees involved once a selling price has been determined. Unless you understand what the typical closing cost includes, there is a chance you may be left surprised with unexpected costs.

Familiarize yourself with the process of closing a real estate transaction to eliminate surprise once the home ownership is shifted from the seller to the buyer.

Typical Buyer’s Closing Costs

  • The Down Payment - This is the initial payment a buyer will make to reserve the home. A larger down payment means reduced loan interest, so aim to put down as much as possible.
  • Loan Fees – A lender will assess your credit score and charge a fee to process the loan application.
  • Prepaid Interest - When daily interest builds on your loan, this must be paid at the time of closing. Once again, the amount depends on your credit report and financial situation.
  • Inspection Fees – A property inspector will charge this fee to assess the condition of the property. This service is valuable since it aids the buyer in making a final decision.
  • Appraisal - The fee charged by a qualified appraiser to determine a property’s market value.
  • Mortgage Insurance – Should a mortgage loan default, mortgage insurance will cover it.
  • Hazard Insurance – Damage caused by Mother Nature, vandalism, theft, or unintentional circumstances can be repaired, with costs covered by this insurance policy.
  • Title Insurance – A kind of indemnity insurance that shields a buyer and lender if the seller is unable to transfer home ownership.
  • Documentary Stamps - Documents that transfer real estate interest must be stamped, so that the excise tax can be imposed properly.

Typical Seller’s Closing Costs

  • Broker’s Commission – Every realtor will charge a different percentage of commission on the final property sale value. This will be deducted at the time of purchase.
  • Transfer Taxes – Consider this a transaction fee for transferring home ownership from you to the buyer.
  • Documentary Stamps on the Deed - This is a tax on documents detailing the transfer, sale, acceptance, or loan agreement for a property.
  • Title insurance – Indemnity insurance is equally as important for the seller to pay, as it is for the buyer.
  • Property Taxes – Property expenses must be divided fairly to ensure the buyer is only paying from the moment he/she claims home ownership. This is guaranteed when property taxes (a proration) are paid.

Calculating the closing costs prior to making a property purchase or agreeing to a sale will ensure you are satisfied with the outcome. Use the Internet to your advantage at this time, by estimating the costs with an online calculator. A few influential factors include the condition of the house, its size, and the features (interior and exterior).

Read More »
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Paramount Equity Mortgage®, LLC is licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License #4170047; Arizona Mortgage Banker License #0922160, NMLS# 30336; regulated by the Colorado Division of Real Estate NMLS# 30336; Connecticut - Connecticut Mortgage Lender License # ML-30336; D.C. - Mortgage Lender License #MLB30336; Florida Mortgage Lender Servicer License # MLD 898; Kansas - Kansas licensed mortgage company License # MC.0025206; Maryland - Mortgage Lender License # 21172; Nevada Mortgage Banker License #3919; Licensed by the N.J department of Banking and Insurance NMLS#30336; Oregon Mortgage Lender License #ML-3256; Texas – Paramount Equity Mortgage®, LLC NMLS #30336; Utah DRE Mortgage Entity License #6967176; Washington Consumer Loan Company License #CL-30336; and Wisconsin – Wisconsin Mortgage Banker License #30336BA; NMLS ID #30336.