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Fall Homeowners Checklist

For a homeowner, fall is the perfect time to make sure your home is in tiptop shape. The winter season puts a large burden on your home, so proper maintenance and protection during the fall will ensure your home makes it through whatever winter brings our way!

Outside:

1. Are your windows and entryways properly sealed and caulked? Check for cracks, gaps, and holes to prevent cold air from sneaking in! 47% of energy in your home is due to heating and cooling, and proper insulation can save you 20% on monthly costs!

2. Clean those gutters! After all of the leaves have fallen, you want to rinse and flush them of all of the leaves. This is usually easier in the beginning of the season, before the leaves are wet and weighed down. After they are cleaned out, repair any cracks to prevent leakage or ice damns.

Image Via HGTV

3. Inspect foliage. While the trees are absolutely beautiful this time of year, you are going to want to inspect them for low or weak hanging branches, and anything close to windows. The last thing you want is a tree breaking through the window come the first big storm.

4. Cover your outdoor furniture or store it somewhere it will stay dry.

Inside:

1. Inspect ceilings for crack and/or leaks. Failing to make these repairs may lead to a much more costly repair in the future.

2. Clean carpets, wash curtains, and replace bedding with thicker fabrics.

3. Have your fireplace checked and chimney cleaned.

Image via Twin City Fireplace

4. Clean or change HVAC filters. This will keep your air clean and allergens at a minimum.

5. Check all carbon monoxide and fire alarms. Make sure you have extra batteries on hand, or replace them before they go out.

All of us at Home Point Financial Corporation wish you a safe, happy, and healthy autumn!

 

Barbara Grogg                                                Direct: 717-991-8388

Branch Manager/Mortgage Advisor         Efax:  215-525-9663

NMLS 535271                                                    barbara@barbaragrogg.com

3500 Market Street, Suite 206                    www.barbaragrogg.com

Camp Hill, PA 17011                                           View my LinkedIn Profile

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Pre-Approval VS Pre-Qualification

In the world of mortgage, it may get confusing navigating the many different terms and labels that will be thrown at you throughout the process. At Home Point Financial, it is important to us that our customers know exactly what status they are at in their mortgage process, which is why we are dedicated to educating customers on the important must-know terms in home buying.

Image via Flickr

Pre-Approval and Pre-qualification sound very similar, and some companies even use the terms interchangeably. However, they are different, and not knowing the differences may lead to a lot of misunderstanding between lender and buyer.

Getting “Pre-Qualified” for a mortgage is the very first step in the mortgage process. During this process, you will supply the lender with some basic information about your financial standing. This will include your income, debts, and various assets, but no formal credit check. You may get pre-qualified over the phone or online, to give you an idea of the amount you will qualify for. However, this doesn’t mean you have been approved for the loan. Also, the amount in which you are Pre-Qualified is never a sure thing. Think of it as a quick estimate or quote for what you may be loaned.

“Pre-Approval” is the next step in the mortgage process. This is where you will go into a mortgage provider and fill out an application for a loan, and pay an application fee. This application will go much more in-depth than the pre-qualification process. The creditor will perform a financial background check on you (credit rating, assets, debts, etc.) in order to determine the amount you are pre-approved for and at what interest rate. This amount will be given to you in writing, giving you, the new homebuyer, an advantage when looking for homes.

Completing both of these steps is a great idea for potential homebuyers to know how much they can afford before beginning the search for a new home. This allows the homebuyers to commit to a home without having to figure out what they can afford after the fact.

Remember, getting pre-qualified or pre-approved does not mean you are locked into the loan. The final step is loan commitment, which is where you will be given a formal contract from the bank. If you have any questions, me to get answers.

 

Making Smart Decisions When Applying For A Loan

 

Navigating all of the different types of loans and what you can afford as you begin the mortgage process may get confusing. Home Point Financial Corporation is here to help. It is important to make smart decisions when applying for a loan, especially in regards to your credit score, so here are some quick tips!

Image via RealityTimes

You Ideally Want a Credit Score Above 675

First of all, you want a credit score that is attractive to lenders. Typically this number is around 675 or higher, 700 being optimal. A score around this number or higher tells lenders that you will make your mortgage payments on time and can afford to pay off your loan. Anything lower will be considered risky to lenders.

Determine How Much You Can Afford

You and your home buying partner (if you have one) need to sit down and determine how much you can afford. Typically, you should not be spending more than 28%-35% of your income on mortgage. You also need to think about what kind of down payment you can afford. The more you pay up front, the lower your interest rate will be.

Refrain From Opening New Lines of Credit

When you are preparing to apply and shop around for a mortgage, it can be a risky move to open up new lines of credit. When in the process of getting a loan, you want your credit history to look strong and stable. Opening new lines of credit or making a big purchase (such as a car) while in the loan process is a red flag for lenders.

Lower Credit Score = Higher Mortgage Payments

If you have a low credit score, your mortgage payments will be significantly higher than if you were to have a good credit score. This may put unnecessary financial strain on you from month to month.

So, It May be Beneficial to Work on Your Score First

If your score is less than ideal, it may be best to work on improving your credit score before looking for a mortgage lender. Easy ways to improve your credit score include making credit card payments on time, keeping balances low on credit cards (don’t just pay the minimum due), pay off debts, and avoid opening more lines of credit than you need.

 

Barbara Grogg                                                Direct: 717-991-8388

Branch Manager/Mortgage Advisor                 Efax:  215-525-9663

NMLS 535271                                                                barbara@barbaragrogg.com

3500 Market Street, Suite 206                                 www.barbaragrogg.com

Camp Hill, PA 17011                                                   View my LinkedIn Profile

 

Understanding your Credit Score

A credit score is what lenders utilize to determine and evaluate what risk is associated with lending someone money. A credit score is typically needed before opening up a new line of credit, auto loan, a mortgage, or any other type of loan. Navigating a credit score report may be confusing, so here are the top things you need to know to understand your credit score.

 

The Score

A credit score will range between 300-850. The higher the score, the better credit you have. Typically, a good credit score is considered to be around 720 or higher.

Factors Affecting Your Credit Score

There are several factors that go into determining a credit score. The biggest factors are:

  • Amount of Money You Owe: Owing large sums of money on credit accounts will typically lower your credit score.
  • Payment History: Submitting payments on time and paying off loans yields a higher score.
  • New Credit: People who have opened up several new credit lines in a short period of time are considered high-risk.
  • Length of Credit History: A credit score will determine how long your credit lines have been opened, from your oldest account to most recent.
  • Credit Mix: This evaluates the types of credit you have. Having a well- rounded history of credit (auto, mortgage, retail, etc.) is good, but do not open accounts you do not intend to use.

Your Score Will Change

If you are unsatisfied with your score, know that it will change over time. For example, making a payment on a credit card or paying off a car will affect your score.

Who Determines My Credit Score?

There are three credit bureaus, Equifax, TransUnion and Experian, which will provide all the credit, work and living address history they have on you when a credit score is requested. This will include employment history, work and home addresses, loan history, credit card history, and any other relevant information. Your credit report will include what is most heavily affecting your score.

If you are applying for a mortgage at Home Point Financial Corporation, we will work with you to determine how we can help. We understand our clients are more than a credit score, so we utilize a wide range of factors in determining your loan status. Learn more about our loan programs today!

http://www.barbaragrogg.com

Barbara Grogg                                                         Direct: 717-991-8388

Branch Manager/Mortgage Advisor                 Efax:  215-525-9663

NMLS 535271                                                                barbara@barbaragrogg.com

3500 Market Street, Suite 206                                 www.barbaragrogg.com

Camp Hill, PA 17011                                                   View my LinkedIn Profile

How to Prepare for Financially Buying your First Home

You just got married and you’re looking for the perfect new home to start your family in. You’ve never bought a house before so what can you expect? Buying your first home is a big deal. It can be an exciting time in your life, but it can also be overwhelming. Buying a new home can come with a lot stress if you are not prepared financially. Here’s a guide to help you make one of the biggest purchases of your life.

Via EveryStockPhoto

How To Be Prepared

The best thing to do before buying a new home is to prepare financially. There are many things you need to consider in order to navigate through the complicated and stressful home-buying process.

First you need to determine how much you can afford. This means that you should only spend what you can afford today. Treat your home as an investment.

Learn how mortgage rates work. Compare current mortgage rates and get good estimates from a few lenders on what your rate and costs would be.

Start saving money for a down payment. Having a down payment of up to 20% of the home you want to buy is almost a necessity today. Not only will you need a down payment, but also most mortgage lenders like to see that you have at least six month’s worth of mortgage payments on hand.

Make sure both buyers’ credit is in good shape. If you’re buying a new home with your spouse, you’ll both need good credit to qualify for the mortgage. If one of you has bad credit, you need to be prepared to buy the home with only one borrower on the loan. So, make sure to check your credit score and take the steps necessary to improve your credit if it needs it.

Take your time. Buying a home is a huge decision, so make sure you’re ready. Its better to buy a home when you are financially prepared, and not just because housing prices are low.

Following these guidelines will ensure that your experience as a first time homebuyer is a pleasant one. By choosing Home Point Financial Corporation for your lending needs, you can rest assured that this process will be stress-free.

Contact me today for a consultation

Barbara Grogg                                                Direct: 717-991-8388

Branch Manager, NMLS 535271                         Efax:  215-525-9663

3500 Market Street, Ste 206                                   barbara@barbaragrogg.com

Camp Hill, PA 17011                                                www.barbaragrogg.com

                                                                                         View my LinkedIn Profile   

FHA loans require a lower down payment and less stringent lending standards.

 

FHA loans require a lower down payment and less stringent lending standards. This could be a great option for first time homebuyers especially.

An FHA home mortgage loan is a loan insured against default by the Federal Housing Administration. The program came about during The Great Depression as a way to encourage home-ownership during hard financial times. The FHA loan program is still around today and borrowers of all types can still take advantage of all that FHA has to offer.

Because the FHA insures that loan, lenders are more willing to work with borrowers who may not qualify for conventional loans. The qualifying guidelines are much more flexible that other types of loans, especially in regard to credit history. Borrowers with a less than perfect credit history may still qualify under FHA guidelines.

Some of the basics to an FHA mortgage are:

  1. No borrower income limit
  2. More credit score flexibility
  3. Only 3.5% down payment on Purchase loans
  4. Higher debt-to-income ratios (on DU approvals)
  5. Can finance home of 4 or fewer units
  6. Great track record—programs in effect since 1934
  7. Bankruptcy: Two years Chapter 7 from the date of your bankruptcy discharge, borrowers can obtain an FHA loan, provided you have since maintained good credit
  8. Foreclosure: Three years after the final date of foreclosure, borrowers can obtain an FHA loan, provided you have since maintained good credit

FHA loans are ideal for first-time home buyers because of the lower down payment options and more flexible qualifying guidelines. FHA also offers a refinance program for current homeowners. With an FHA home mortgage loan, you can refinance up to 97.5% of your home’s value or an FHA cash-out refinance of up to 85%. Contact one of Home Point Financial’s experienced mortgage professionals to see if an FHA home mortgage loan is right for you or apply online to be pre-approved.

 

Barbara Grogg                                                Direct: 717-991-8388

Branch Manager, NMLS 535271                         Efax:  215-525-9663

3500 Market Street, Ste 206                                   barbara@barbaragrogg.com

Camp Hill, PA 17011                                                www.barbaragrogg.com

                                                                                         View my LinkedIn Profile   

 

Renting vs Buying A Home

Buying a home versus renting is a big decision that takes careful consideration.

While there are several biased sources that can make arguments for or against owning a home, we’ve found that most home buyers base their ultimate decision on emotion.

Yes, there are some tax advantages of owning real estate, as well as the potential to earn equity or pay a mortgage note off after several years.

However, let’s address some of the more obvious topics of discussion first.

Benefits Of Renting:

Lower Acquisition Cost – Unless you’re able to qualify for a mortgage loan with zero down and have your closing costs paid for by the seller, a typical investment to purchase a home is around 3.5% – 7% of the purchase price for down payment and closing costs on an FHA mortgage, and an average of 13% – 23% for a home secured by conventional financing.

Compared to the cost of about 1-3 month’s rent payment, it’s obvious that renting a home makes financial sense in the short-term.

Lower Qualifying Standards –

While the FHA and other government insured mortgage programs have more flexible credit / qualifying guidelines than most traditional home loan programs, there is certainly a lot less paperwork and personally invasive probing required by most landlords and property management companies.

Generally proof of employment / income and a decent credit history (or a good explanation) is needed to rent a home.

Freedom To Move –

It’s easy to find a home through a reputable property management company, move in that weekend and then leave a year later when the rental contract expires.  Not being tied down by a long-term mortgage liability is ideal for people new to a community, in a career that keeps them on the go or for parents with children that prefer a certain school district.

Plus, if you’re planning on moving in the next 3-5 years, then it may become cost-prohibitive due to the amount of equity you’ll have to gain in the short-run just to cover the cost of paying an agent, buyer closing costs, transfer taxes…. so that you can at least break even at closing.

Less Maintenance and Cost –

If something breaks, a simple call to the property management company will generally solve the issue in 48 hours or less.  Plus, renters don’t have to carry expensive homeowners insurance, pay property taxes or worry about interest rates adjusting.

Benefits of Owning:

Pets Are Allowed –

Well, according to the rules and regulations of your county or neighborhood HOA, you can pretty much have as many domestic and exotic pets without having to pay extra deposits.

It may seem like a funny benefit to mention first, but the millions of dog and cat lovers would definitely rank this towards the top of their list.

Pink and Purple Walls –

Yep, you can paint the inside of your house any color you choose.  And depending on whether or not there is an HOA in place, you could probably do the same thing on the home’s exterior.  Landscaping, flooring, built-in shelving… it’s your property to renovate and grow in.

Peace-of-Mind and Security –

The only way you would be forced to move is if the bank forecloses on your property due to a default in mortgage payments.

So basically, you don’t have to worry about a landlord’s financial ability to make mortgage payments on time. Plus, you can stay in your own property as long as you wish.

Tax Benefits –

The US government has created certain tax incentives making it possible for many homeowners to exceed the standard yearly deduction.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

The following three components of your home mortgage may be tax deductible:

a) Interest on your home mortgage b) Property Taxes c) Origination / Discount Points

Stability –

Remaining in one neighborhood for several years lets you and your family establish lasting friendships, as well as offers your children the benefit of educational continuity.

Appreciation of Property –

Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2005, home prices increased on average 6.5%, according to the National Association of Realtors®.

Forced Saving –

The monthly payment helps in repayment of the principal amount. Also when you sell you can generally take up to $250,000 ($500,000 for married couple) as gain without owing any federal income tax.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

Increased Net Worth

Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

While the available tax advantages and potential for earned equity are generally highlighted by most industry professionals as the top reasons to own real estate, it’s important to remember that markets go through cycles.

However, owning real estate that appreciates more than the rate of inflation may help contribute towards your overall investment portfolio, provided your maintenance and mortgage costs are kept low.