|
In this newsletter you will find out . . .
The Way to Own Your Own Home and
Quit Paying Rent Every Month
How Would You Like to Own The Home You Always Dreamed of, With Less Money Than You Thought Would Be Required?
Of course you would. Most of us want to own a place of our own and not have to rent any longer.
Before you go out house hunting, it will be necessary to ask yourself “Why do I want to own my own home?”
The main reasons people own a home is for financial benefit, the need for more living space, and the desire not to pay rent.
Also, home ownership offers people what they want – tax advantages and investment opportunities. Think about the amount of money you are paying in rent each year when you could be investing that money into your own home and building equity.
By continuing to rent, your landlord is taking advantage of investments and tax savings that could be yours. You could be writing off thousands of dollars in interest and tax expenses each year by owning your own home.
This may all sound good BUT:
1. I don’t have the funds required for down payment.
2. House payments are higher than rent.
3. Getting a mortgage loan is difficult.
You may be surprised to know that the down payment on a new home can be as little as 3% and you may not have to pay any closing costs. You might not realize it, but you could already have enough money to get you into a house.
By making house payments slightly higher than your rent payments, you will have increased tax savings each year.
Obtaining a mortgage loan is not that difficult. First time home-buyers accounted for 60% of homes purchased last year.
What Are Your Alternatives?
You need to be aware that there are alternatives to renting.
In order for you to make the right choice about buying a home and obtaining the mortgage that is right for you, you need to know what your options are - deciding how much down payment is right for you or finding that it may be better to wait to purchase your home.
You can’t be certain you’re doing the right thing if you don’t know what your options are.
With all the confusion about types of mortgages, interest rates, discount points, closing costs and down payment, you need to rely on a banker who is “specialized” in mortgage loans and not rely solely on the recommendation of family and friends.
Have you had this conversation?
Your Parents - “Back when we purchased our house, we went to the bank and told them we wanted a mortgage. About a month later, at the closing, we signed a mountain of papers".
Co-worker - “When we purchased our house, we were so frustrated and on edge all of the time. We played the waiting game, you know, wait for the verifications, wait for the home evaluation, wait for the underwriting decision. We just about went berserk!”
Relative or Friend – “We were told which lender to call. We didn’t compare to see if we were getting the best loan for us with the most competitive costs. Later, after we had a chance to sit down and read our documents, we realized that we should have checked around.”
You should know that:
Rent may increase when the lease is up, while mortgage payments can remain the same.
Getting Pre-approved will save a lot of time and many sleepless nights.
Banks and mortgage companies differ greatly.
Interest rates and closing costs vary from one bank to another.
You don’t have to pay origination points.
The seller can pay all or a portion of your closing costs.
You can still get approved for a mortgage even though you have a few late payments showing on your credit report.
By selecting the right mortgage, you can save hundreds, perhaps thousands of dollars. Don’t be swayed by brokers who may want you to select a mortgage that makes them more money.
The majority of borrowers just don’t know where to go for the answers.
Some realtors may not know about these inside tips; therefore, many potential buyers haven’t heard of them either.
The mortgage programs most popular with the mortgage brokers are the ones that make them the most money.
Knowledge is crucial! A lender that specializes in Mortgages will have the most information regarding various loan programs. With help from an experienced mortgage loan officer, you will be able to make an educated decision regarding your mortgage loan.
Before you buy, know how much house you can afford.
The secret that many people don’t know is that before you even look for a home, you can be pre-approved. That way you can be certain you would get the loan that best fits your situation.
The right information is crucial!
Pre-Approved Mortgages – You can be pre-approved for a mortgage and not just pre-qualified. Mortgage companies may not give you this choice, and they usually charge a fee for this service.
In a pre-approval your income is verified and a credit report is ordered so that the underwriter can qualify you for the mortgage.
After this process, you will know what price house you can afford, what you will need for closing costs, how your credit looks and if you will need to consolidate any debts. Your loan officer will also tell you what mortgage program best suits you and how much your payment will be, so that you see can what you will save in rent.
This is a valid mortgage approval. One that any realtor will accept.
Banks vs. mortgage brokers and mortgage companies – You may think the bank only has a limited number of loan programs, but the truth is banks offer a wide variety of programs to fit your needs. They may be tied in with several different investors that offer loan programs that will be suitable for most buyers needs.
Mortgage brokers and mortgage companies may also offer a wide variety of loan programs, but you may pay dearly for the services they offer. Closing costs can be exorbitant when you use a broker or mortgage company.
Watch out for those banks and mortgage companies that don’t lock in your rate!
Many banks and mortgage companies will not lock your rate until you have been fully approved. With many of our conventional programs, your rate can be locked once your credit report has been reviewed, and you have been pre-approved.
FHA Loans –
With a FHA loan buyers can put down as little as 3%, which you can also do with a conventional mortgage. But in a FHA loan a 1.50% fee is added to your loan amount, so your mortgage ends up being higher than you originally thought it would be. In addition, you will be required to pay an additional .50% per year through monthly payments.
We’re not saying the FHA program is not a good program, just that it’s important to compare the loan programs. However, in the end, you will have more equity in your home with a 3% down conventional mortgage than you will with a FHA.
Private Mortgage Insurance – If your down payment is less than 20% you will be required to pay private mortgage insurance (PMI). The FHA and VA mortgage programs also have a form of private mortgage insurance which is paid as an upfront fee.
PMI is charged monthly and is added to your mortgage payment.
How much money do I have to save? - You might already have funds in your savings account for part of your down payment. But did you know that the down payment and closing costs can come from other sources?
During the pre-approval process, your loan originator will let you know how much money you will need and possible sources for these funds.
Besides the funds you have saved, gifts, income tax refund, savings bonds, cash value of life insurance policies, 401K plan, or borrowing against a car are other sources of funds.
First Time Homebuyers Program - If you haven’t owned real estate in the past 3 years and your income and purchase price meet the requirements, you may be eligible for the first time home buyers program, known as WHEDA. In this program you can have as little as 3% down payment and the seller can pay some or part of the closing costs.
How you can save $ - Is a program with a higher interest rate and longer term right for you if you only plan to stay in the house for 5 years or less?
By paying your mortgage off in 25 years rather than 30 years, you can save thousands of dollars in interest.
Is it a good idea to buy down the rate by paying discount points?
When it comes to closing costs, you need to compare apples to apples. Some will be higher but is it wise to pay more in closing costs for a lower interest rate?
By being pre-approved you will get answers to all your questions Financial counseling – There may be a reason you can’t get approved for your mortgage loan today. With our help we can show you how that pre-approval can happen in as little as a year.
Getting pre-approved can save you time and money.
• Your offer may be accepted over a higher bid because the sellers of the property know that you have already been pre-approved for your mortgage.
• Shorter processing time means the closing can happen sooner.
• You already know which mortgage loan program is right for you. You won’t be rushed into making that decision in 3 days per the terms of the purchase agreement.
Use a Buyer’s Agent – In the normal transaction the real estate agent represents the seller and must look out for the seller’s best interest.
On the other hand, a “buyer’s agent” will represent you. They assist you in making the best offer and can negotiate on your behalf to obtain the best price and seller paid costs.
Because we deal with many Real Estate Agents, we can recommend one of our preferred agents to you after you have been Pre-Approved. Any agent we recommend will work on your behalf to save you the most money too.
In Review -
Get out from under paying rent.
Make confident decisions about selecting the right mortgage program.
You won’t be rushed to make a decision about selecting a mortgage program because you had only 3 days after signing the purchase agreement to make that choice. Can you make a decision in 3 days for a mortgage that will last 30 years?
With your desire to own a home, and the knowledge that you have gained from this newsletter, you are ready to take the next step.
You probably have lots of questions by now and are thinking pretty seriously about getting your own house.
We are sure we can save you a lot of time and money.
After sitting down with one of our loan officers, we will be able to give you an analysis of how much you will save by owning your home instead of renting.
It is understandable that you would have doubts and a phone call can take that doubt away. You will spend a few minutes learning information that could save you time and money.
Please give us a call so we can answer all your questions, even if you have doubts.
Eric Tostrud, Hudson (715)-381-7129
Julie Dodge, New Richmond (715)-243-6126
Brian Campbell, New Richmond (715)-243-6147
Ken Zaruba, New Richmond (715)-243-6133
If it’s more convenient, we will send out an application package to you or you can apply online right from this website!
|
