Posted by Muneeza Realty Group on 1/13/2018

For the generation that grew up at the height of the subprime mortgage crisis, buying a home is a scary concept. Many young people in the 18-34 age range are dealing with high rent, a poor job market, unpaid internships, and student loans the size of a home loan. Yet, others are finding their footing and realizing that owning a home is advantageous in the long run. If you're thinking of delving into the world of home ownership for the first time here's a crash course in Home Buying 101.

Figure out your finances

You should be an expert at you and your significant other's personal finances if you are thinking about buying a home. The first thing to look at is your income and expenditures. Put the following information in a spreadsheet:
  • Total monthly income
  • Total monthly expenditures (bills, gas, food, etc.)
  • Total monthly savings
  • Total savings and assets
  • Credit and FICO score (request both of these online)
When crunching these numbers you should (hopefully) find that your income is higher than your expenditures and your savings should account for most of the difference. If your savings is lower than it should be, you either missed something on the expenditures list or you are spending more than you should be if you want to buy a home. Down Payments Down payments on a home, post-financial crisis, range from anywhere between 0-25 percent of the price of the home, 20 being the median. A down payment ideally shouldn't break your savings in case you have any unforeseen expenses once you buy your home. Moving is time-consuming and can be pricey, so you'll need to account for this in your finances.

Lock Down Your Financing

There are several types of mortgages that you'll need to choose from, and you'll want to learn about fixed and adjustable mortgage rates. This information should be informed by your long-term plans. Are you looking for your first home or your forever home? If you don't plan on fully paying off the home you might look for a low, adjustable rate while you earn money. But if you want to stay in your home until it's paid off, a fixed rate might be better for you.

Finding and buying your home

Once you've determined your price range, start thinking about things like location and the kind of home you can afford. If you're handy with tools and have the time, it might be in your best interest to buy a home than needs some work at a lower cost. If you'd rather put in more hours at work, go with the home that needs less work and save money that way. Depending on whether or not you're in a buyer's market or a seller's market, the ball can be in your court or the seller's. In a seller's market, which is more likely today in many parts of the country, the seller will have more leverage in negotiations, including closing dates and move-out dates. Due to high competition, you should also be prepared to miss out on some offers. But be patient, and you should find the home you're looking for.  





Posted by Muneeza Realty Group on 9/2/2017

Credit cards won’t be the only thing impacted by rising interest rates. Student loans, auto loans and retail product costs could also shift upward. So too could the price tag on home equity loans and mortgages. Get ahead of the change. Start taking steps like those highlighted below to avoid getting blindsided by a bigger mortgage.

Steps to worry free mortgage payments

Pay down debts early – Submit more than the minimum on debts, particularly debts that have interest rates tied to them.

Think short and long term before you make new purchases – Consider the short and the long term before you take on new debt. For example, you might be able to afford new furniture now, especially if you buy the furniture on a delayed payment plan. But, the purchase could put you in the hole six months later should you not receive the raise you were expecting or your work hours be scaled back.

Increase your home’s value – To stay ahead of housing market shifts, including rising interest rates, take steps to increase your home’s value. Re-paint your house. Wash the siding, plant trees, hedges or flowers to improve your home’s curb appeal. Also, repair appliances, roofing, cracks in sideways and the driveway.Upgrades like new kitchen cabinets, stylish light fixtures, bathroom faucets and floor tiles can also improve your home’s value.

Move to a fixed interest rate mortgage – You may have to pay closing costs and other fees to make the switch. But, a fixed interest rate can protect you from having to confront rising monthly mortgage payments each time feds raise interest rates.

Shop for a more affordable house – Reduce your housing debt. Start shopping for a house that you can afford. If you take this approach, buy your new house before rates go up again. Also, look at older homes and houses that need TLC. You could save big by buying an older home or a house that needs repairs if you have construction and interior design skills. There are people who earn attractive salaries repairing, upgrading and redesigning homes. If you have these skills, use them on your own house.

Rent out apart of your house – Generating additional income to pay for a bigger mortgagecould be as simple as renting out your finished basement or another part ofyour house. Before you rent, check your local housing codes to ensure that thespace you rent out meets regulations. Also, conduct a thorough background andcredit check on potential renters.

A healthy economy benefits everyone. A healthy economy can also cause feds to raise interest rates. When this happens, you might be fortunate and get a respectable job raise. You also might have to face the fact that your monthly mortgage payments just went up. By taking a proactive approach when interest rates rise,you could keep your finances stabilized. You might also discover innovative ways to turn your home into a bigger and more profitable investment.




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Posted by Muneeza Realty Group on 8/5/2017

Everyone knows that their credit score will affect the mortgage they qualify for and the interest rate they receive. The details of how exactly those numbers are arrived at, however, are a bit hazy for the average prospective homeowner.

This confusion is due to a number of reasons. Chief among them is the fact that your average person isn’t well-versed in credit terminology or the variables that go into determining their credit scores.

In this article, I’m going to break down credit scores and credit bureaus, then discuss how each of them affects the mortgage rate you could receive. Then, we’ll talk about some ways you can boost your score to qualify for a better rate.

Anatomy of a credit score

Credit scores are determined by five main variables. In order of importance, they are:

  • 35%: your payment history on loans, bills, credit cards, etc.

  • 30%: your total debt amount for all of your accounts

  • 15%: length of your credit history (how long you’ve had open accounts for loans, credit cards, etc.)

  • 10%: types of credit you have used (auto loan, student loan, credit card… diversity of loans matters)

  • 10%: recent credit inquiries (such as taking out new loans or opening new credit cards)

To have a “good” (over 700) or “excellent” (over 750) credit score, you’ll need to focus on each of these factors. For most people, paying their bills on time over a long enough timeline is enough to get them into the excellent range.

But things happen in life. People forget to pay an important bill, they have financial emergencies, or they have to take out a loan for an unforeseeable expense.

The credit bureaus

So, who are the people that determine your credit score?

There are three main credit bureaus: Experian, TransUnion, and Equifax. Lenders will look at reports from all three bureaus to determine your rate. Due to the Fair and Accurate Credit Transactions Act of 2003, consumers are able to receive a free copy of their credit report from each bureau once per year.

Since then, companies like Credit Karma have made credit reports even more accessible. Users are able to check in on their credit as often as they want free of charge.

Since much of your credit score is out of your hands, at least in the short-term, what can you do to help boost your score over the next few months to increase your chances of getting a good interest rate on your loan? Two things.

Credit and mortgages

So, just how much of an impact does your credit score have on your mortgage rate? Having an excellent score can give you a full percentage point lower on your monthly interest rate.

One percent doesn’t seem like much, but over the period of a 30-year loan that can amount to tens of thousands of dollars that you could have saved if you had a better credit score. As you can imagine, having an extra $2,000 per year can be quite helpful to a new homeowner.

So, what can you do to boost your score?

Make corrections

Since you have access to free credit reports be sure to go through your detailed report a few months before you plan to apply for a mortgage. Report any harmful errors to help you increase your score.

Don’t apply for new credit

The period from now until you apply for a mortgage is an important one. If you make new credit inquiries (i.e., open up new credit cards, take out new loans, etc.), your score will temporarily decrease. Wait until after you sign on your mortgage to take out other loans.




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Posted by Muneeza Realty Group on 3/4/2017

Securing the best mortgage for your home may seem challenging, particularly for those who are first-time homebuyers. Fortunately, we're here to help you get the best possible mortgage rate, regardless of the real estate market. Here are three tips that you can use to get the best mortgage rate at any time: 1. Find Ways to Improve Your Credit Score. Your credit score likely will influence your mortgage rate. However, those who track their credit score closely can improve this score over an extended period of time. That way, when the time comes to secure a mortgage for a new home, you'll be in great position to get the best mortgage rate possible. Try to check your credit score regularly. You can do so quickly and easily, as you're entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies (Equifax, Experian and Trans Union). To improve your credit score, focus on paying off any outstanding debt. This will help you enhance your credit score without delay. 2. Take Advantage of a Shorter-Term Mortgage. Although you may consider a variety of mortgage options, a shorter-term mortgage may allow you to pay a lower mortgage rate for a shorter period of time. Remember, just because you choose a 15-year mortgage over a 30-year mortgage does not mean you will wind up paying twice as much for your mortgage payment each month. For example, selecting a 15-year fixed-rate mortgage over a 30-year fixed-rate mortgage may prove to be a viable option for many homebuyers. A 15-year fixed-rate mortgage will have higher principal and interest totals than a 30-year counterpart, while the insurance and tax fees associated with both types of mortgages will remain the same. 3. Look at All of the Lending Options That Are Available. It sometimes can be overwhelming to look at all of the banks, credit unions and other lending options that provide mortgage assistance. Diligent homebuyers, however, will dedicate the time and resources necessary to explore all of the lending options at their disposal to make an informed decision. Ideally, you should try to get multiple quotes from a variety of lenders. This will enable you to see exactly what each lender has to offer and improve your chances of making the best decision possible. Lastly, don't forget to lock in your mortgage rate in writing. By doing so, you'll be able to verify you have the mortgage rate you like and the loan you need to secure your dream home. Understanding the ins and outs of landing the ideal mortgage rate can be difficult. And if you ever have concerns or questions along the way, your real estate agent may be able to point you in the right direction as well. Because this agent boasts comprehensive real estate sector experience, he or she may be able to provide guidance and tips to ensure that you can find a reliable lender and land a great mortgage rate. Find a mortgage rate that works for you, and you may be able to save money over the life of your mortgage.





Posted by Muneeza Realty Group on 4/23/2016

If you are in the market for a mortgage you will need to know how a lender determines if you are a good candidate for a loan. When you apply for a mortgage or look to refinance your current mortgage there is a mortgage loan underwriter who who has the job of reviewing your loan application and all of the accompanying documents. After you have completed all the paperwork on your end, you may be wondering what exactly is the underwriter looking for? Typically, the underwriter is looking for two things: 1.) your general creditworthiness and 2.) your debt-to-income ratio. How does an underwriter evaluate creditworthiness? Your creditworthiness will give the lender an idea of your willingness to repay your debts. The most common way to determine creditworthiness is to use your credit score. The lender usually uses your FICO (Fair Isaac Corporation) score. Your FICO score is based on an analysis of your various credit files by the three major credit repositories, Experian, TransUnion and Equifax. How does the underwriter determine debt-to-income ratio? The second thing the underwriter wants to determine is how the new mortgage payment will impact your ability to repay. The underwriter will use a calculation called debt-to-income ratio (DTI). When calculating DTI the underwriter compares your monthly gross income (before taxes) and your monthly debts. DTI requirements vary but typically the underwriter is looking to see if the ratio of debt to income— after the cost of your mortgage principal, interest, real estate taxes, insurance and any private mortgage insurance — is less than 40 percent. There are many other factors that go into whether or not you will be able to obtain a mortgage but these are two of the biggest factors.







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