Top Ten Home Buying Playlist

Here’s a post I saw on FreddieMac’s Facebook page that I thought might be valuable to  followers here on my blog

road trip3Like making the perfect music playlist for your road trip that thrills all passengers, buying a home requires that you build a “Top Ten Homebuying Playlist” of sorts – one that makes your journey less stressful and more successful.

As you build your Homebuying Playlist, it’s important that you do your homework and focus on the key components of the buying journey, from getting Pre-Approved for your mortgage to the costs involved.

Keep in mind what you are making the playlist for, what your goals are, and how each element is vital for the overall experience. Playlists have an order.

Some must-have components for a successful Top Ten Homebuying Playlist:
1.  Down Payment – That portion of the purchase price of a home that you pay up front, usually between 3-20%. It’s your equity in the property
2.  Credit Score – Your credit score is a single number, ranging from 350 to 850, that represents and summarizes information from your credit report, indicating your likeliness to repay your debt. Generally, your credit score plays a significant role in getting approved for a loan and the interest rate you are charged — the higher your score the better.
3.  Pre-Approval Letter – It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. A Pre-Approval letter will tell you how much home you can afford and can help you move faster and with greater confidence.
4.  Private Mortgage Insurance (PMI)– PMI is a monthly premium required by your lender if your down payment is less than 20%, protecting the lender if you are unable to pay your mortgage.  Get the low down on PM
5.  Closing Costs – These are fees charged by the people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.
6.  Points – Sometimes called discount points, these are up-front payments typically used to reduce your mortgage interest rate on the loan to obtain a lower monthly payment. A point is 1% of your loan amount, or $1,000 on a $100,000 loan.
7.  Appraisal – Once you make an offer on your home, your lender will order an appraisal to get a professional opinion on the value of the home. This is usually performed by a qualified appraisal professional who estimates the value of a property by taking current market values of similar homes and the quality of the home into account.
8.  Annual Percentage Rate (APR) – The annual rate it costs you to borrow over the term of the loan, including the interest rate, points, fees and certain other charges you are required to pay.  The APR is the bottom-line number you can use to shop and compare rates among lenders.
9.  Fixed-Rate Mortgages (FRM) – A fixed-rate mortgage has an interest rate that does not change during the entire term of your loan.  This is the most common type of mortgage, giving you certainty and stability over the life of the loan.
10.  Adjustable-Rate Mortgage (ARM) – A type of mortgage with an interest rate that adjusts after an initial period of time — typically 3, 5, or 7 years — and resets periodically. ARMs usually give you lower monthly payments at the onset, but over time your payments will change with interest rates.

A good playlist can take you far, even saving you significant time and money on your journey. Take your time to plan it out well and you’ll enjoy smooth sailing (and maybe dancing too!).

Reach out to Me to discuss the right mortgage option for your family and to take advantage of my FREE Jump Start Mortgage Pre-Approval service.


Tuesday Tips – Your Monthly Mortgage Payment

tuesday tipsWhen looking at a potential home purchase, don’t forget to factor property taxes into your budget. Be sure to consider homeowner’s insurance and, if necessary, your monthly PMI premium too. All will be included in your monthly mortgage payment obligation.

Purchase or Refinance. Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE “Jump Start” Mortgage Pre-Approval service.

Consider These FAQ Before Purchasing a New Home

How do you know if owning a home is right for you? Buying a home is a big step. Here are some FAQs to consider before purchasing a home.
family financeHow would a buyer know if they are ready to buy a house?
A home is a lifestyle & commitment change, which may include many factors when deciding to purchase a home. Growing a family, relocating, an extended family living together, or low interest rates are all examples that can be the deciding factor when a new buyer is ready to purchase a home. Buying a home is a good investment in your future.
What are some ways to ensure a buyer’s finances are in order before they buy a house?
The first discussion that the agent will have with the buyer is if the buyer is Pre-Approved for a mortgage. They should always be Pre-Approved by a mortgage loanpre-approval 2 officer at a local lender whom they trust. Some of the factors that are taken into consideration to be Pre-Approved are to always maintain a good credit score, income and asset verification and employment status.
It is imperative that the buyer is educated on what they should or shouldn’t do while the mortgage is in the process. Also, the buyer should never over extend themselves with a mortgage payment. A little hand holding goes a long way!
If a buyer has found a house that fits their needs, what can they do to get more information about the neighborhood?
Before a buyer signs on the dotted line they should always educate themselves on the neighborhood. They should visit during the day, night, and weekends, check out local online forums, talk with neighbors, review crime stats, and the amenities that the town offers. Location, location, location is the most important factor when purchasing a home!
How can buyers better prepare themselves for the home buying process?
The home buying process should not be stressful or problematic. It should be a great and happy experience, but unfortunately not every buyer will agree. It is a team effort… the agent, the mortgage officer and the buyer.
cooperationThe agent and the loan officer should never pass any stress onto the buyer. The agent’s responsibility is to find the buyers a home. The agent should be knowledgeable in explaining the following steps to the buyer: contract, home inspection, mortgage commitment, and closing.
The loan officer’s job is to put all the pieces of the puzzle together. He is responsible for educating and guiding the buyer through the complicated mortgage process, He must understand the details of the transaction and the buyer’s needs. He assembles all relevant documents to support the mortgage application and submits them to his underwriter for approval.
The buyer’s job is to keep the agent and loan officer informed and comply immediately with any questions or concerns they may have. When the agent and the loan officer prepares the buyer, their buying experience should be pleasant and happy. The only thing that the buyer should be worried about is packing.
What are some important things that buyers should consider when buying a home?
It is the agent’s responsibility to keep an open dialogue with their buyers and explain to them what will sell and what may not sell in the future. Location is the number one factor when buying a home, try not to purchase a home that has less than 3 bedrooms, don’t purchase near or under a highway. These are some examples buyers should think about when purchasing a home. Don’t be afraid to ask your agent and loan officer the hard questions

Rick Cignoli

Then reach out to Me at 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE Jump Start Mortgage Pre-Approval service and be ready to make an offer on your dream home.

Tuesday Home Buyer Tips

tuesday tips
Mortgage Pre-Qualification ≠ Mortgage Pre-Approval

Mortgage Pre-Qualification is an estimate based on the verbal information you supply your loan officer of how much a lender will be willing to lend you. It is a simple process that provides an informal snapshot of your creditworthiness just to get an idea of how much you can afford to spend on a new home.
Pre-qualification is not binding, and there is no guarantee that you will, in fact, get a loan for that amount

Mortgage Pre-Approval is a formal commitment that can only be issued by an underwriter. It requires formal application and a thorough examination of your financial situation by the underwriter and confirms in writing how big a house you can afford to buy and how much money you can borrow to buy it.
By going through the formal process of obtaining Mortgage Pre-Approval, before you start house hunting, you’ll show sellers that you are qualified and serious about buying their home.pre-approval-2

Reach out to Me to discuss the right mortgage option for your family and to take advantage of my FREE Jump Start Mortgage Pre-Approval service.





Co-Borrower vs Co-Signer: What’s the Difference?

When applying for a mortgage, it is important to understand the difference between a Co-Borrower and a borrowers choose to buy their home with another person. Whether it is a spouse, parent, sibling or some other person you trust, it is important to know what to look for in a “purchasing partner,” including the Difference between a Co-Borrower and a Co-Signer.  

If you’ve saved for a down payment but need a higher credit score to complete the deal, this is a perfect example of a team effort that could secure a home loan for you together when you might not have been able to do it on your own.

CO-BORROWER   A co-borrower will be a co-owner of the property with their name on the title of the home after closing. Their level of involvement also means that the co-borrower’s assets, credit history, employment history, and debts are assessed because they are applying for the home loan right along with you.
Typically, all the qualifying information for both applicants is thrown into one pot. Income is combined income is used to determine the ability to pay; everyone’s combined debt payments are used to determine the single Debt:Income ratio; and the best credit score is used to qualify for the appropriate product and terms.
Both borrowers do not have to live in the subject property. For example, a parent may agree to apply for the mortgage with their child. The parent would continue to live in their primary residence and the child would live in the new home. Both parties would be obligated for repayment of the loan and both would be on the title. There are certain loan programs that do allow for a “Non-Occupant Co-Borrower.”

CO-SIGNER   A co-signer applies for the loan with you (remember they’ll have their credit pulled to assess their ability to qualify for the loan), but their name will not be on the title of the home. They are connected to the loan and are financially responsible, along with you, for paying back the mortgage, but do not have ownership rights to the property.
co-signThis scenario would be quite rare in the mortgage world. Most lenders today require all borrowers to have a vested interest in the collateral securing the mortgage. A co-signer is usually required when the primary borrower does not have the credit history to make a satisfactory determination of their intent to repay the debt; perhaps their first credit card or first car loan. 

WHAT’S THE DIFFERENCE    The main distinction between the two roles mainly pertains to the ownership of the property. A Co-Borrower has the advantage of co-owning the property with their name on the title of the home. If, for some reason, you are unable to make payments, the co-borrower can assume ownership of the property. A Co-Signer is not on the title and would not have the same rights.
The most important factor to remember is to choose someone you trust and who is financially responsible. A co-borrower or co-signer can assist you with qualifying for a better interest rate because of debt-to-income ratios or various other factors, but you both carry the responsibility for making sure payments are made on time. If unforeseen circumstances mean your co-borrower or co-signer can’t make their agreed-upon part of the monthly payment, you are still responsible, and the same goes for them.
If your purchasing partner has a higher credit score and you’ve saved for a down payment, this is a perfect example of a team effort that will secure a home loan for you together when you might not have been able to do it on your own.

Make sure you take some time to think through who might be a solid, trustworthy co-borrower or co-signer for you. When you are ready, reach out to Me at 860.945.9284 to determine if it is the right fit and to discuss the right mortgage option for your family and to take advantage of my FREE  Jump Start Mortgage Pre-Approval service and be ready to make an offer on your dream home

Mortgage Glossary : Your Guide to Understanding Basic Mortgage Jargon

The  Mortgage Process can be confusing. Here’s a Mortgage Glossary to help you understand some basic mortgage jargon

PRE-APPROVAL LETTER:  A Pre-Approval Letter is a commitment from your lender pre-approval-2that will tell you how much of a home you can afford and the maximum amount of money you are qualified to borrow.
To become Pre-Approved you will need to provide all the documentation of your creditworthiness. An Underwriter will review and verify all your paperwork to determine how much the lender thinks you can afford to borrow,
Having a Pre-Approval Letter in hand before shopping for homes can help you move faster. And with greater confidence in a competitive market.

what-is-good-credit-scoreCREDIT SCORE:   A number ranging from 350 – 800 that is based on an analysis of your credit files. Your credit score plays a significant role when applying for a mortgage. The score helps lenders determine the likelihood that you’ll repay future debt payments. The higher your score, the lower the risk of default, the more mortgage program options available to you, including a lower interest rate and lower payments.

MORTGAGE RATE:   The interest rate you pay to borrow the money to buy your new home. It’s the cost of the money you pay to borrow the money over a time period. The lower the credit score, the lower the rate, the lower the mortgage payments.

APR:   The Annual Percentage Rate is broader measure of your total cost for borrowing the money to Interest Rates Will Risebuy your new home. The APR includes the not only the total interest rate cost, it also includes points, lender processing fees, and certain other credit charges a borrower is required to pay in order to get the loan Since costs are added to the total interest rate cost, the APR is usually higher than the interest rate.

APPRAISAL:   After you make an offer on a home, your lender will order an appraisal of the property to get a professional, unbiased opinion on the value of the house. This is a necessary step in getting your mortgage secured as it validates the worth of house both to you and your lender. The appraised amount is a key factor in determining your mortgage’s Loan-To-Value and confirming to you that you are paying a fair price for the property.

CLOSING COSTS:   The costs to complete the real estate transaction. These costs are in addition to the purchase price of the home and are paid at the closing of the transaction. They include points, appraisal cost, taxes legal fees, homeowners insurance, financing fees, and items that must be prepaid or escrowed. Closing costs are generally 2 to 5% of your home purchase price.

DISCOUNT POINTS:   A point equals 1% of your loan amount (1 point on a $200,000 loan = $2,000). A point is essentially prepaid interest. You pay an upfront interest payment to lock in a lower interest rate for the term of the loan.

DOWN PAYMENT:   The down payment is your equity in the property. It is that portion of the cost of your new home that you pay upfront to secure the purchase ofdown payment 2 the property. The larger the down payment the greater your share of ownership in the house and the lower the perceived risk by the lender. The lower the risk, the lower the interest rate on your mortgage. The reverse is true too. The smaller the down payment, the greater the risk of default and the higher the interest rate. Down payments are typically 3 to 20% of the purchase price of the home.

ESCROW (After Home Purchase):   In Connecticut, borrowers can consider escrow to be a savings account set up by the lender to pay for future taxes and the annual home owners insurance premium.
After the home is purchased, the buyer uses an escrow account to pay property taxes and home insurance charges incurred as a homeowner. The mortgage loan servicer makes these payments for you, and has direct access to the escrow account. Mortgage lenders prefer escrow accounts especially for property tax payments, as they don’t want the property, backed by their mortgage loan, to fall behind in taxes and risk a tax lien on the property. The same thinking applies to homeowner’s insurance, where the lender can’t afford the homeowner to miss payments, and thus risk losing insurance coverage on the property.
For homeowners dealing with an escrow account, a good rule of thumb is to expect to pay two months’ worth of taxes and insurance into the escrow account at closing. Typically, once per year your mortgage lender will review your escrow account to make sure you have sufficient funds in your escrow account to cover property tax and home insurance payments.

PRIVATE MORTGAGE INSURANCE (PMI):   Private mortgage insurance, also PMIcalled PMI, is a type of mortgage insurance you are required to pay for if you are financing more than 80% of the home’s appraised value. Like other kinds of mortgage insurance, PMI protects the lender—not you—if you stop making payments on your loan. PMI is the term commonly used for conventional mortgage. With FHA loans, it is known as the annual Mortgage Insurance Premium (MIP). There is no PMI on VA Loans.
Confused? Let Me help put the pieces of your puzzle together. Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE Mortgage “Jump Start” Pre-Approval service.


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Tax Refund for Your New Home

tax refund

This tax season remember that a tax refund can be used as a down payment to purchase your new home in 2019.
Even if you chose a 100% financing mortgage option, your tax refund can be used toward the closing costs.

Purchase or Refinance! Reach out to Me to discuss the right mortgage option for your family and to take advantage of my FREE Jump Start Mortgage Pre-Approval service.