25 Jan 2023
By Kevin Gahagan

On Time, Every Time: How Being Late on Monthly Payments Can Affect Your Mortgage

Home Mortgage Tips

On Time, Every Time: How Being Late on Monthly Payments Can Affect Your MortgageAre you the type of person that struggles with remembering to pay their bills on time? You’re not alone. People across the country regularly submit late monthly payments, inflicting terrible damage to their credit. Let’s take a quick look at how paying your loan or other monthly payments late can have a negative impact on your mortgage.

Your Credit Score Is At Risk

As you already know, almost all banks, credit cards, mortgage companies and other lenders rely on your credit score to help assess the risk of lending money to you. Paying any of your payments late – even something as small as your mobile phone bill or a department store credit card – can result in negative marks showing up on your credit report. If you are late enough times or fail to repay the late payment in full, then your score will start to drop.

Refinancing Can Be Affected

If you already have a mortgage, then a lower credit score can be a problem when you try to refinance. The process of refinancing involves taking out a new mortgage, in which your lender will reassess your risk using your credit score as one of the indicators. If you have been making late payments, you might end up having to settle for a higher interest rate or you may even be declined for the new mortgage.

Making A Late Payment? Contact Your Lender

If you are caught in a bind and have to make a late payment, it is best to get a call in to your lender as soon as possible. First, there may be a grace period in which you can be a few days late without any penalty. If that little bit of breathing room is all you need to get caught up, you’re set. If not, you can let them know your circumstances and discuss what options you have.

It is essential to pay your monthly payments on time, even if it means making some small sacrifices in other areas. The better your credit score looks, the more opportunities you will have to make positive financial moves in the future. To learn more about monthly mortgage payments or to take out a mortgage on a new home, contact us today. Our team of mortgage professionals is here to help you find a mortgage to buy the home of your dreams.

13 Jan 2023
By Kevin Gahagan

In a Hurry to Buy a Home? Speed Your Mortgage Approval up by Following This Checklist

Home Mortgage Tips

In a Hurry to Buy a Home? Speed Your Mortgage Approval up by Following This ChecklistHave you finally found your dream home after months of searching, only to discover that the seller has received other offers? Few circumstances can raise your stress level as much as finding yourself in a bidding war against another buyer. However, being unprepared by not having your finances in order can make the situation even worse. Let’s take a quick look at a few ways that you can speed up your mortgage approval if you are in a hurry to buy your next home.

Pull Your Credit Report ASAP

The first step you will want to do is check your credit report so you have an idea what your mortgage lender will be seeing. You can get a free copy from the major credit reporting agencies up to once per year, so take advantage. There are scams out there, so be sure to only request a report from a government-approved credit agency.

Get All Of Your Paperwork Ready Before You Go In

You will want to gather up as much financial documentation as you can before heading in to meet with your mortgage advisor. Pay stubs, tax forms, and bank statements are all going to be required to prove that you are accurately reporting your current financial situation. You will also want to be able to provide reasons for any substantial loans or other transactions that have taken place in the past couple of years.

Share It All And Keep No Secrets

If you want your mortgage approval to come back quickly, it’s best to be truthful and hold nothing back during the application process. If you lie or try to gloss over areas that you feel are a bit negative, it can end up delaying your approval. Be straight with your advisor and don’t keep any secrets from them.

Work With A Professional Team

Last but not least, if you want the fastest possible mortgage approval you will want to work with a professional team. An experienced mortgage advisor knows the ins-and-outs of the mortgage marketplace. They know which lenders will be able to process quickly and which tend to be on the slower side. If you try to borrow a mortgage from a bank or large lender, you are tied into their process which may not be as quick as you would like.

When you’re ready to buy a home, give us a call. Our mortgage team is happy to help you secure your financing, no matter how much of a hurry you might be in. We look forward to assisting you!

30 Dec 2022
By Kevin Gahagan

4 Financial Benefits of Home Ownership

Home Mortgage Tips

4 Financial Benefits of Home OwnershipHome ownership may be one of the most familiar goals of adulthood, but there’s more than one reason why so many people flock towards this type of investment and leave the rental market behind. If you’re trying to decide if you should make the big plunge towards buying, here are some benefits of saving up for a down payment and finding the right place to settle in.

It’s More Economical

Many people eschew home ownership simply because it can be hard to wrangle together the funds for a down payment. However, while a monthly rental is money you’ll never see again, the money you put down on a mortgage is being invested back into your home, making for a solid investment you can capitalize on later.

Instant Tax Deductions

The interest that you pay on your mortgage payment can be one of the most tumultuous aspects of purchasing a home, but you may not know that you actually have the ability to deduct many associated costs on your taxes. From origination fees to property taxes, there are plenty of costs that go along with your home that can be claimed for a refund when tax time comes!

Paying A Lower Price

The real estate market fluctuates every day, but one thing is for the certain: the median price of a home is on the rise. While low inflation rates may not be ideal if you’re selling, they can mean a better deal if you’re delving into the market for the first time. Just remember, it’s important to buy a home you can afford as anything that goes beyond your budget is not a solid investment.

A Built-In Savings Account

It may be important to have liquid assets outside of the equity you have in your home, but many people struggle to pay off their home and save money at the same time. While saving outside of your monthly mortgage payment is still important, putting money down on a home is an act of investing, and it’s one you’ll likely make a solid profit on when you decide to sell.

There can be many financial benefits to renting in the short term, but purchasing a home is a more solid financial decision when it comes right down to it. If you’re considering a home and would like to know more about your options, you may want to contact one of our mortgage professionals for more information.

29 Dec 2022
By Kevin Gahagan

Graduating From College? 3 Things You Need to Know About Mortgages and Student Loans

Home Mortgage Tips

Graduating From College? 3 Things You Need to Know About Mortgages and Student LoansAre you thinking about buying a new home using a mortgage loan? If you’ve just graduated from college, you’re probably wondering how your student loans will impact a mortgage and what your options are. In today’s post we’ll share three things that you need to know about mortgages if you’re still working on paying off your student loan debt.

#1: Yes, Your Student Loan Will Affect Your Application

You might as well embrace the fact that your outstanding student loan is going to cause some questions to be asked during the mortgage application process. Mortgage lenders have a responsibility to understand the risk involved in lending a significant amount of money to you. And because of this, any mortgage provider is likely to dig into your financial background to ensure that you are responsible and can afford to make the mortgage payments.

Don’t take it personally. In fact, it’s best to be up front about your existing student loan or other debts and your plan for managing them.

#2: It’s All About Your “DTI” Ratio

Your debt-to-income ratio is going to be a significant factor in the success of your mortgage application. This figure helps to determine how much money you need to send out to balance your debts each month versus how much you’re bringing in from working. If this ratio is too high, it’s a signal that you may not be able to juggle all of the payments you’re responsible for making. Also, keep in mind that over time, your job and income situation will change and this can affect your DTI ratio as well.

#3: Missed Payments Can Cause Serious Problems

Finally, you’ll want to ensure that you don’t miss any student loan payments. Even one missed payment – for any reason – can cause significant damage to your credit rating or FICO score. Successfully managing a higher-than-normal debt load means being strict with your budget and responsible with your payments. If possible, try to have your student loan payments taken out from your bank account automatically. That way you won’t forget or miss the payment deadline.

While it may be a challenge to manage multiple types of debt, it’s not impossible. Juggling student loans with a mortgage can be done and offers the benefit of building your net worth while paying off your past loans. For more information about getting a mortgage when you have student loans, contact your trusted mortgage team today. We’ll be happy to share our insight and make recommendations that fit your situation.

14 Dec 2022
By Kevin Gahagan

How Do I Know If It’s a Good Idea to Refinance My Mortgage?

Home Mortgage Tips

You Ask, We Answer: How Do I Know If It's a Good Idea to Refinance My Mortgage?Are you interested in paying less per month on your mortgage? Or perhaps you would prefer if your mortgage was paid off a couple of months – or years – faster? If you are a homeowner with a mortgage, one option that is open to you is refinancing. In today’s post, we will explore the topic of mortgage refinancing and how to know if it is a good idea.

How Does Refinancing Work?

In short, refinancing is a process in which pay off your existing mortgage and borrow a new mortgage under a different set of terms. In most cases, homeowners will use the funds from the new mortgage to pay off the old one. Depending on the terms of your new mortgage, there may or may not be cash left over which you can use to invest, pay down debts, make renovations or for other purposes.

Refinancing To A Lower Interest Rate

Mortgage interest rates tend to fluctuate over time and because of this, refinancing to a mortgage with a lower rate is quite popular. If you initially borrowed your mortgage when interest rates were at 5%, you may be able to lock-in a new mortgage at a lower rate. Note that it can be tough to try to “time” the mortgage market, so check in with your mortgage professional to find out if the time is right.

Refinancing For Lower Monthly Payments

Another great use of refinancing is to reduce the monthly payment required on the mortgage. If you have ten years remaining on a 20-year mortgage, refinancing to extend the payments out to 15 years will lower the monthly payment.

Refinancing To Eliminate Other Debts

Finally, many homeowners will refinance their mortgage to use some of the home’s equity to pay off other debts. For example, a family might have $25,000 in debts that are being charged a higher interest rate than their mortgage. If they have built up enough equity, they can refinance and draw out $25,000 from the home’s value. This shifts the debt from the higher interest areas into the mortgage, where it can be paid off over time.

As you can see, there are many reasons why you might want to refinance your mortgage. To learn more about the refinancing process, or to discuss your options, contact us today. Our professional team of mortgage advisors is ready to help you choose the path that best suits your financial needs.