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New Year 2018, New Home!

Heather Paige Moody

A New Year brings new goals, new beginnings and a new perspective!!

Most clients that come into my office has been turned down from other lenders and feel defeated before we even start the credit check. What I tell each client is that a No is sometimes for a better YES down the road. Discouragement and defeat will not get you to the place you want to be, but hard work and dedication will.

Keep in mind that there are so many loan programs available that most lenders all can offer. The difference is some lenders underwrite using guidelines set by the program and some lenders have overlays on top of the guidelines. As in some lenders will go down to a 580 credit score and some will start at 620.  So if you get a turn down, don’t give up!

Do your research.

Ask questions…

What is your minimum credit score?

What do I need to do in order to purchase a home? ( If the lender can not sit and make a plan with you, then get another lender. )

What are my best 3 loan options? This is very important. You are the one making the purchase not the lender. Let the lender know your long-term goals. This can make a difference in the loan product that fits your needs.

As a home buyer the most important thing you can do is be upfront and honest during the loan application. It is easier to get a solution to an issue ahead of time than to go backwards in the loan process.

Here a few tips of the Do’s and Don’ts when you are trying to purchase a home. So remember positive thought get positive results. If you have any questions on the loan process please shoot me an email or comment. Let’s make 2018 the year you turn Realty into Reality!
Blog Credit Do’s and Dont’s during the loan process

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Understanding Down Payment Assistance Options for Home Mortgages

Heather Paige Moody

Buying a home is a significant milestone, but the financial demands can be daunting. One of the biggest hurdles for homebuyers is often the down payment. Fortunately, there are various down payment assistance options available to make homeownership more accessible. Let’s explore some of these options and how they can help you achieve your dream of owning a home.

What is Down Payment Assistance?

Down payment assistance (DPA) programs are designed to help homebuyers with the initial costs of purchasing a home. These programs can provide financial aid in the form of grants, loans, or tax credits, reducing the amount of money buyers need to save before buying a house.

Types of Down Payment Assistance

1. Grants

Grants are a popular form of down payment assistance as they do not need to be repaid. They are often provided by government agencies, non-profit organizations, or local housing authorities. Eligibility for grants may depend on factors such as income level, location, and whether you are a first-time homebuyer.

2. Loans

Some assistance programs offer low-interest loans to cover down payment costs. Unlike grants, these loans need to be repaid, but they often come with favorable terms. They may be deferred, meaning no payments are required until the home is sold or refinanced.

3. Forgivable Loans

Forgivable loans are a unique option where the loan is forgiven if you meet certain criteria, such as living in the home for a specific number of years. This can be an excellent option for those planning to stay in their new home long-term.

4. Employer-Sponsored Programs

Some employers offer down payment assistance as part of their employee benefits package. These programs can include grants or loans and may be tailored to the specific needs of employees. It’s worth checking with your employer to see if such options are available.

5. State and Local Government Programs

Many states and municipalities offer down payment assistance programs to encourage homeownership in their areas. These programs vary widely in terms of eligibility and benefits, so it’s crucial to research options available in your specific location.

How to Qualify for Down Payment Assistance

While eligibility criteria for down payment assistance vary by program, some common requirements include:

  • Income Limits: Many programs are designed for low to moderate-income buyers, so there might be income caps.
  • First-Time Homebuyer Status: Some programs are specifically for first-time homebuyers, though the definition of “first-time” can vary.
  • Credit Score: A minimum credit score is often required, though it may be lower than typical mortgage requirements.
  • Homebuyer Education: Completion of a homebuyer education course may be mandatory.

Steps to Access Down Payment Assistance

  1. Research: Start by researching available programs in your area. Local housing authorities and online resources can provide valuable information.
  2. Contact Agencies: Reach out to organizations offering assistance to learn more about their specific programs and application processes.
  3. Prepare Documentation: Gather necessary documentation such as proof of income, employment history, and credit reports.
  4. Apply: Complete the application process for the programs you qualify for.
  5. Follow Up: Stay in touch with program administrators to ensure your application is processed smoothly.

Conclusion

Down payment assistance programs play a crucial role in making homeownership attainable for many individuals and families. By exploring these options and understanding the qualifications, you can take a significant step towards purchasing your home. Remember to research thoroughly and seek guidance from housing professionals to find the best assistance program for your needs. We have some new down payment assistance options…

Below shows some of the highlights on just one of the products we have! This program, available in all states except New York, offers 3.5% and 5% down payment assistance programs for FHA and USDA loans.
Product Highlights
Utilize with either FHA or USDA loan to purchase a home
Up to 5% of purchase price can be used towards borrower’s down payment and or closing costs
No Income or first-time homebuyer restrictions
Available in all States except NY

The Pathway DPA is an APM national DPA product that utilizes APM FHA guidelines for the 1st and 2nd liens. The DPA 2nd allows for 3.5% or 5% in down payment assistance funds. Purchase transactions only. Repayable: Amortized, 10-year term with a fixed interest rate 2% higher than the first mortgage.

Program Highlights
Loan types: 10-year fixed rate, 3.5% or 5% DPA 2nd (30-year fixed 1st lien)
Loan purpose: Purchase
Occupancy: Primary Residence, 1-2 Units
Min FICO: 580
Max LTV: Per FHA Agency Guidelines
No high-balance loan amounts
Available in all states except NY
Repayable, amortized, 10-year term, with fixed interest rate 2% higher than the 1st lien
After closing, the investor will not subordinate the 2nd lien for 36 months on the 3.5% DPA and 60 months on the 5% DPA.

We have more options that might fit your needs, please contact us today to see if this is something that can benefit you!

Happy house hunting!

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8 Mistakes to Avoid If You Are Thinking Of Building or Remodeling a Home….

Heather Paige Moody

Have you ever walked into a home (either a brand new one or one that’s been around for 25 years or more) and said to yourself, “I wonder what the builder was thinking when they built this house?”
Maybe you are thinking of finally building your dream home. Or considering downsizing the one you currently own. Or need to remodel the one you currently live in.
Here are 8 things to keep in mind:
Have a vision of what you want your home to look like. The floor plan is just the first step in the process. There a hundreds of thousands of decisions you will need to make. Take just the bathroom – what color tile? What pattern? Will the cabinets match? Faucets? Countertops? The floor? And that’s just one bathroom!
Find the right people – By people, I mean an architect, a builder, sub-contractors, suppliers. Are they licensed and bonded? More importantly, can you get along with them? Do they offer suggestions? Are they difficult to deal with?
Visit the construction site often – Be sure that the home/remodeling is being built to your expectations. Ask questions. Make suggestions. Visiting your home every other day is recommended.
Building too big of a home – Don’t think about what size you need right now—but what you will need 7 to 10 years from now. A well-designed 3,000 sq. ft. home may work just as well as an ill-designed 5,000 sq. ft. home.
Work that you can do to reduce costs – Ask the builder what sweat equity he/she will allow you to do to help reduce costs. Painting the walls or staining the trim. Maybe you have a friend who is a licensed electrician who would charge you less.
Think about the upgrades – When a builder provides you with a price to build your home/remodeling, it’s usually based on “medium grade” materials. Take kitchen cabinets for example. What type, color and grade are included? Or should you pay $8,000 extra for solid maple cabinets instead? It depends on your budget and if you can find something that you like in the medium grade so you can use the money for something else. Other than you loving maple wood, there is very little resale value in upgraded cabinets when it comes time to sell. Consider only adding your MUST HAVE upgrades.
Think about selling your home in the future – Even if you never plan to sell your home, your descendants may have to do so. Build your home so it’s not a nightmare to sell.
Think about monthly mortgage payments – When you have been pre-approved for your mortgage amount there are a few things to consider.
What will the interest rate be when the home is completed?
How much will extra upgrades add to the monthly payment?
How much money will you need after the closing (window coverings, furniture, landscaping)?

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Self-Employed? What You Need to Know about Financing a Home in 2020!

Heather Paige Moody


Self-employed borrowers have always had to jump through a few hoops to finance or refinance their homes. Without a traditional paycheck, lenders look for other ways to document income. The COVID-19 pandemic has affected many business owners and delayed tax return filings. As a result, Fannie Mae and Freddie Mac have enacted changes in the way the mortgage industry processes home loan applications (as of June 11, 2020).
Income Verification
Self-employed borrowers are typically verified by the most recent two years of income tax filings. As a result of the pandemic, those two years might not give a current or accurate picture of the borrower’s income. As the borrower is seeking to secure a loan before the next filing period, underwriters are now requiring a signed Profit and Loss Statement (P&L) from these borrowers.
Profit and Loss Statements
As part of the underwriting process, self-employed applicants must provide an audited or self-generated P&L statement for the current 2020 period. The statement must not be older than 60 days and must include:
• Expenses
• Net Income
• Business Depository Account Statements (two most recent)
• Business Revenue
In addition, the borrower must provide their most recent personal bank statements which should support the P&L statement.
Professional Advice
Self-employed loan applicants have always faced challenges when seeking a home loan. Now more than ever, it’s important to understand the requirements and work with a mortgage professional to ensure the loan application is packaged correctly with all the needed documentation. Lenders are still approving home loans, but with these changes put in place to minimize risk as the mortgage industry works through the challenges of this pandemic.

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What You Didn’t Learn in School – Six Tips from the Financial Experts!

Heather Paige Moody

Did you ever wish they had taught courses in personal money management in school?  Oh, they probably touched on it in high school.  Maybe a little bit in college—that is, if it was a course as part of your major!

So, what we did was depend upon family, friends, and bankers and tax preparers to help direct our financial future.

While I am not a financial planner, I found these six common questions and answers that people ask when it comes to managing their money…

  1. Should I hire a financial planner OR come up with my own financial plan?

Financial planners can help you organize your finances and come up with a long-term plan (like retirement, home improvement, college funds).  If you are money savvy, there are plenty of financial planning tools that you can use online—and most of them are free.

  1. Should I hire an accountant OR should I do my own taxes?

If your taxes are pretty straightforward, you receive a W-2 form, regular deductions, it’s easier and cheaper to do them yourself.  However, if you are self-employed, receive commission or 1099 income, have rental properties or write off business expenses, then hire a professional.  Tax laws change from year to year, so if your taxes are a little more complicated, it’s better not to chance it – or worse, miss valuable deductions that you are entitled to just because you did not know about the changes in the tax code.

  1. Should I use a credit card or a debit card?

Use a credit card to get “rewards” like travel miles or money toward goods and services.  However, be sure to try to pay a majority of the credit card off every month.  Use a debit card if you have trouble managing your finances or controlling your spending.

  1. Should I write my own checks or schedule automatic bill paying?

If you have trouble paying bills on time, by all means schedule automatic bill paying through your checking or savings account.  Even if your bank charges you to do so, it will still save you a ton or money in late fees—not to mention the damage late payment does to your credit score.  Write checks for one-time expenses, like an emergency plumbing repair or school tuition.

  1. Should I get a credit card with a low rate and no perks—or a higher rate with lots of perks and rewards?

You are better off getting a credit card with a low rate.  However, if you pay off the credit card every month and never miss a payment (oh, and want to go on trips), then go with the higher rate because by paying it off every month, the higher rate does not matter at all.

  1. Should I contribute to my 401K or pay off my bills first?

If your company matches your 401K contribution, only put in as much money as the company will match (a company match is like free money).  If your company does not have a 401k matching program, pay off your credit cards, starting with the highest interest rate first, before contributing to your retirement fund.