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.

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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.

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
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.

 

refer a friend

329 High Street Ext, Thomaston, CT 06787 –Eligible for 100% USDA Financing

Move right into this 3 Bed, 2.5 Bath 1,748 Sq. Ft. Colonial. It’s Move In Ready

And … It’s Eligible for Up to 100% USDA Financing. No Down Payment Required.

The USDA Guaranteed Rural Housing Development Loan offers many benefits to qualified Millennial Home Buyersusda 3

♦ No Down Payment Required! Up to 100% Financing of the home’s appraised value.

♦ Reduced PMI is cheaper than premiums associated with Conventional & FHA loans

♦ Ability to Finance the Closing Costs into the loan when the appraised value is greater than the negotiated sales price.

♦ One 30 year fixed rate mortgage at today’s low interest rates.

♦ Reduced Mortgage Insurance is cheaper than PMI on Conventional and FHA loans

♦ No limit on Seller Contributions. No Limit on Gift Funds

♦  No cash contribution is required from buyer329 High St Ext Thomastonhttps://www.zillow.com/homedetails/329-High-Street-Ext-Thomaston-CT-06787/72141793_zpid/

pre-approval 2Reach out to Rick Cignoli @ 860.945.9284 to find out if the USDA Guaranteed Rural Housing Development Loan is the right mortgage option for you and to take advantage of his FREE “Jump Start” Mortgage Pre-Approval with Rate Assurance service.

Then call Bethany Lydem at Team Stone Crest 860.596.0116 to schedule a showing and be ready to make an offer.

What Is PMI?

PMIPrivate mortgage insurance (PMI) is required by lenders when a homebuyer makes a down payment on their home of less than 20%. If the borrower is unable to, then lenders will typically look at the loan as a riskier investment and will require the borrower to take out PMI.
It is a type of insurance policy that protects the lender, not you, from losing any money if your home ends up in foreclosure. PMI is also required if you decide to refinance your home with less than 20% equity.
How do I pay for PMI?
There are several different ways to pay for PMI. Some lenders may offer more than one option, while other lenders do not. Before agreeing to a mortgage, ask lenders what choices they offer.
The PMI payment is usually paid monthly as part of the overall mortgage payment to the lender. Once the borrower has paid enough towards the principal amount of the loan (the equivalent of that 20% down payment), he or she can contact their lender and ask that the PMI payment be removed.
Borrower-paid PMI (BPMI) is when you have monthly PMI payments, you are required to continue paying PMI until your loan balance reaches 78% of the original value of your home. If you would like to cancel your PMI, you must obtain approval from your lender in doing so and your home must reach 20% of the purchase price or appraised value. It is also required to have adequate equity as well as a good payment history.
Single-premium PMI means that the premium is paid upfront in a single lump sum. This does not require any monthly payments and can be paid at full at closing or financed into the loan.
Lender-paid PMI (LPMI) is a permanent part of your loan. The cost of the PMI is included into the mortgage interest rate and allows for lower monthly mortgage payments. However, with this type, you will end up paying more interest in the life of the loan.
PMI payments on conventional loans are usually cancellable when the loan balance is 78% of the original appraised value of the property.
Payments for PMI can be avoided entirely if you originally make a down payment of 20% of the purchase price of your home.
FHA LOANS
There are two types of mortgage insurance to pay on FHA loans
Mortgage insurance is required when borrowers put down less than 20 percent. It insures the mortgage for the lender in case the borrower defaults. When the Loan-to-Value is less than 20%, All FHA loans require the borrower to pay two mortgage insurance premiums.
 ♠  Upfront premium (UFMIP): 1.75 percent of the loan amount, paid when the borrower gets the loan. The premium can be rolled into the financed loan amount.
Annual premium (MIP): 0.45 percent to 1.05 percent, depending on the loan term (15 years vs. 30 years), the loan amount and the initial loan-to-value ratio, or LTV. This premium amount is divided by 12 and paid monthly.
 ♠  Monthly Mortgage Insurance Premiums (MIP) are not cancellable. The must be paid for the life of the loan regardless of LTV.
USDA LOANS
USDA Mortgage Insurance is mandatory on all USDA Loans regardless of your down payment amount. USDA mortgage insurance is made up of two parts; the Funding Fee (or Guarantee Fee) and a monthly Mortgage Insurance Premium (MIP), The Guarantee Fee is added to the amount financed and the Monthly MIP becomes part

Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my Jump Start Mortgage Pre-Approval service.
I am committed to helping your family live comfortably and financially secure in your new home with the Right Mortgage and the Right Rate!

 

First Home Buyer Tips They Don’t Teach You in School

teacher.jpg
You don’t learn about how to buy a house in school. They don’t teach you  what you need to apply for a mortgage, what kind of loan you’ll need, or what PMI is (it’s called private mortgage insurance)

And let’s not mention that you need to shop around for the best deal — or you can hire somebody to do that for you.

So here are some First Home Buyer Tips to help guide you through the home buying experience. 

BEFORE YOU START LOOKING
♦  Have a conversation with your significant other about what you’re millenial 2looking for, what you need and what you can do without. Standing in the living room during an open house with your real estate agent isn’t the time to argue about wanting three bedrooms instead of four.
♦  Know your financial records. What’s your credit score? How much Low Monthly Paymentsoutstanding debt do you have? What monthly payment can you afford?
How much money did you make last year? You’re going to need to know all of this information. Have all of your paperwork ready to go.
♦  Know your limit — if you can’t afford a $450,000 house, don’t go look at $450,000 houses.
♦  Shop around. There are dozens of real estate agents, attorneys, and mortgage officers so don’t settle. These people are going to work for you, their job is to make you happy. You’re going to be on the phone and meeting with them frequently, so make sure you like who you’re working with.
♦  Do your research. When you do decide on a real estate agent, he or she isGet Pre-Approved going to want to know what your price range is, what neighborhoods you’re interested in, if you want to be close to schools, expressways, public transportation, etc. Know what you want and Get Pre-Approved! 

WHILE YOU’RE LOOKING
♦ This is the big one you’ll be glad someone told you about.
Don’t get too attached to a house, because if it the deal doesn’t work out, for whatever reason, you’re going to be devastated.
♦  Be willing to negotiate, it’s a big part of the game.
♦  This goes hand-in-hand with negotiating: put your foot down and don’t let anyone take advantage of you. If the seller is asking for way more than you’re told the house is worth, or if they’re not willing to fix something that is broken or at least negotiate the cost, you have to be ready to walk open houseaway. There will be more houses, trust me.
♦  Don’t just purchase a house by its listing. Go look at EVERYTHING. A lot of houses look different in person than they do on-line, good and bad.

First Home BuyerI have the belief that anyone that deserves to own a home should be able to do so. The American Dream is still attainable for those buyers who do their homework, establish a game plan and work hard to achieve that goal. I’m here to help.

Source: http://www.silive.com/news/index.ssf/2016/06/buying_your_first_house_things.html

Real Estate Provisions in “Fiscal Cliff” Bill Benefits Housing!

The Cliff at Dieppe
Good News for Home Owners, Home Buyers and Sellers too!

Here is a summary of the Real Estate related issues included in the recent legislation to avert the “Fiscal Cliff.” 

•   The Home Mortgage-Interest Tax Deduction survived (for now).         
          ◊   This deduction could be back on the table once budget talks resume
          ◊   Real Estate Taxes continue to be deductible as well. 
•   Homeowners will be able to deduct their Private Mortgage Insurance (PMI) premiums on their income tax returns.
           ◊   This tax break expired in 2011. The new legislation extends the break through 2013 and makes it retroactive for 2012.  
•   The tax credit for Home-Energy Improvements (up to $500) was restored and retroactive to 2012.  
•   Congress preserved the $250,000/$500,000 Capital Gains Tax Exemption on home sales. 
•   Extended the 15-year straight-line cost recovery for Leasehold Improvements on commercial properties through 2013 and made retroactive to cover 2012.
•   The Mortgage Forgiveness Debt Relief Act was extended for one year.
          ◊   Homeowners who had part of their mortgage debt forgiven as a result of a foreclosure, short sale or mortgage modification won’t have to pay federal taxes on the forgiven portion of the debt.

Tax Advice Disclaimer: The information in this blog should not be used in any actual transaction without the advice and guidance of a professional Tax Adviser who is familiar with all the relevant facts.

Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE  Mortgage Pre-Approval service. We’re licensed in all 6 New England states; NY & FL too. I’m here to help.