15 Mar 2023
By Kevin Gahagan

Bridge Loans: What You Need To Know

Mortgage

Bridge Loans: What You Need To Know Are you in the process of selling your home? You probably want to buy a new one right now to ensure you have another house to move into, but what happens if you do not have the cash to buy a home right now? You might need to cash from your current home before you can purchase your next home, but can you really wait to sell your house before buying another one? A bridge loan can help you fix this issue. What is a bridge loan, and how does it work?

What Is A Bridge Loan?

A bridge loan has been specifically designed to let you tap into the equity you have in your current home and use that equity to buy another house. Essentially, you will borrow against the equity in your home, giving you the cash you need to buy your next house. Then, when you sell your current house, you will use the cash from the sale to pay off the bridge loan. That way, you don’t have to worry about selling your current house before you can buy your next one.

How Does The Repayment Process Work?

Like any other loan, you will have to make regular payments on the bridge loan even before you sell your current house. On the other hand, you might not have to pay down any of the principle until your sell your first home. Generally, you need to pay back the loan in a few months, and there is typically a balloon payment at the end that you pay when you sell your house.

Is It Right For Me?

Generally, you should consider getting a bridge loan if you need more flexibility when buying a house. Keep in mind that the loan will come with a slightly higher interest rate when compared to a mortgage, but it could make it easier for you to buy your next home.

Consider Getting A Bridge Loan If You Are Buying A Selling A House

If you are looking for some additional flexibility during the buying process, a bridge loan could help you. You should think carefully about whether you can qualify for a bridge loan and whether it is right for you. Consider reaching out to an expert who can help you.

14 Mar 2023
By Kevin Gahagan

A Reverse Mortgage And A Home Equity Conversion: What To Know

Mortgage

A Reverse Mortgage And A Home Equity Conversion: What To Know If you are getting ready to retire, you need to make sure you have income to support yourself during your golden years. One popular option is a reverse mortgage, and you can use it to supplement the benefits you receive through Social Security. On the other hand, you may have also heard about a home equity conversion mortgage. What are the differences between them, and which one is right for you?

A Reverse Mortgage

A reverse mortgage is a popular option because you can tap into the equity you have in your home to receive funds from a specific lender. In some cases, they will provide you with a single lump sum, but in other cases, they may provide you with monthly installments. You are not required to make any monthly mortgage payments, and you simply have to pay the money back when you sell your home. Your name will remain on the title of your home even as you tap into the equity to support your retirement. There are multiple types of reverse mortgages, and a home equity conversion mortgage is one popular option.

A Home Equity Conversion Mortgage

A home equity conversion mortgage is one specific type of reverse mortgage that is insured by the Federal Housing Administration. It provides you and your heirs with certain protection, and it is only available to borrowers who are 62 years of age or older. If you take out this type of reverse mortgage, you must use the funds to pay off any remaining balance you have on the original mortgage. Then, any funds that are left over will be provided to the homeowner. There are a number of factors that will dictate the amount of money you can receive. They include the age of the youngest borrower, the expected interest rate, and the national lending limit insured by the FHA.

Is This Option Right For You?

If you own your home outright, a reverse mortgage could be a great way for you to support yourself during retirement while also protecting any inheritance you passed down to your heirs. Consider reaching out to a professional who can help you decide if this is the right option to meet your needs.

10 Mar 2023
By Kevin Gahagan

Why Should You Consider Getting An Adjustable Rate Mortgage?

Mortgage

Why Should You Consider Getting An Adjustable Rate Mortgage?If you are planning on buying a house in the near future, you have probably seen that there are multiple options available. You might even be considering an adjustable-rate mortgage, usually shortened to ARM. While many people opt for a fixed-rate mortgage, there are a few reasons to consider an ARM as well. What are some of the top advantages to keep in mind?

A Lower Initial Payment

One of the biggest reasons why many home buyers consider an adjustable-rate mortgage is that you get a lower initial payment. Often, the ARM’s interest rate is lower than the fixed-rate interest rate at the time of signing. This means that you might have more flexibility at the beginning of the amortization schedule, freeing up more cash. You can use that cash to handle renovations and repairs if your house requires them.

You Can Pay Down Your Principle Faster

Because the interest rate is lower at the beginning of the payment cycle, you might be able to use that extra cash to pay down the principle faster. This could allow you to pay off the house earlier, or it might mean that you end up paying less interest over the life of the loan because you can shrink the principle faster.

You Can Always Refinance Later

While many home buyers are concerned that an adjustable-rate mortgage might increase after the fixed period ends, you do not necessarily have to stick with the ARM forever. For example, you might decide that you want to refinance the house down the road to a lower interest rate, creating opportunities to save money. You might even end up selling the house and moving before the fixed period ends, giving you an opportunity to reset your loan.

Consider Getting an Adjustable-Rate Mortgage

These are a few of the top reasons why you might want to consider an adjustable-rate mortgage. Like anything else, ARMs have their benefits and drawbacks, and the right option for one person might not be the right option for you. You should think carefully about your specific situation, consider all of the options available, and select the best choice for your needs. Do not hesitate to reach out to an expert who can help you.

09 Mar 2023
By Kevin Gahagan

The Do’s And Dont’s Of Making Your Offer More Competitive

Mortgage

The Do's And Dont's Of Making Your Offer More CompetitiveToday, the housing market is more competitive than it has ever been in the past. You may have your eyes on your dream home, but how can you make it stand out from the crowd? There are a few tips that you should keep in mind. What are a few things you should do, and what are a few things you should avoid?

Do Get A Pre-Approval Letter

Because the housing market is so competitive, the seller is probably going to have many offers. The seller wants to make sure that the buyer they choose already has financing lined up. That way, they do not have to worry about the offer falling through. You can prove to the seller that you are making a competitive offer by getting a pre-approval letter. This letter will guarantee that your offer will be accepted, but a lack of a pre-approval letter can get your offer thrown out immediately.

Do Not Put All Your Eggs In One Basket

While you might have your heart set on a single home, do not put all of your eggs in one basket. Even if you do everything right, there is a chance that your offer will not be selected. Therefore, do not forget to take a look at other houses in the area, and be ready to put in an offer on another house if your first offer is rejected.

Do Offer To Rent Back

Keep in mind that it can take some time for someone to find a new home, so your offer could be more competitive if you allow the homeowners to rent back after they sell you the house. Essentially, this will give them an opportunity to stay in the house, even after you have purchased it, until they can find a new place to live. 

Make Your Offer As Competitive As Possible

These are just a few of the most important tips you need to follow if you are interested in purchasing your dream home. You need to do everything you can to make your offer stand out from the crowd, and that means you need to partner with a professional who can help you find the right house to meet your needs. 

 

08 Mar 2023
By Kevin Gahagan

Manage These 3 Items Before Applying For A Mortgage

Mortgage

Manage These 3 Items Before Applying For A MortgageMortgage lenders weigh the risk of getting their principal and interest paid back by looking at the qualities of the prospective borrrower. And due to the amount of money being requested and lent to purchase homes, those requirements can become daunting.  Working with a trusted and qualified mortgage professional makes this sometimes confusing process a little clearer.

To this end, there are three things that a potential homebuyer can do to prepare for the mortgage approval process.

Manage Debt And Credit Levels

For many homebuyers, managing their credit score is the biggest challenge. Mortgage lenders like buyers with strong credit. While getting strong credit usually isn’t something that can be done overnight, paying bills on time, all of the time can help to build a positive profile.

Using as little credit as possible is also helpful, since high utilization of existing credit lines can harm a borrower’s score. Having less debt can also reduce monthly payments, making it easier to qualify for a larger mortgage.

Manage Income And Qualifying Ratios

Lenders look for two things when it comes to a borrower’s income:

  1. Stable incomes are preferred, so being able to prove the income with a W-2 form or other documentation is usually required. Self-employed people will typically need to prove their income with their tax returns, so taking high write-offs can make it harder to qualify.
  2. A borrower’s income should be significantly higher than his total monthly debt payments. Lenders divide a borrower’s monthly payments — including their proposed mortgage — into the gross monthly income. If the payments exceed a set percentage, the lender will shrink the mortgage until it considers the payment affordable.

Collect Required Paperwork Early

To qualify for a mortgage, borrowers typically need to submit a comprehensive file of supporting documentation. This can include tax returns, pay stubs and bank and investment account statements.

Since lenders frequently want some historical data, it can be a good idea for people considering applying for a mortgage to start collecting documentation before they actually begin the mortgage application process. Once again, working with a qualified finance professional will make this process a lot more comfortable.