21 Oct 2022
By Kevin Gahagan

Refinancing A Mortgage: How Does This Work?

Mortgage

Refinancing A Mortgage: How Does This Work?If your financial situation has changed, you might be interested in refinancing your mortgage. In general, refinancing means that you will replace your current mortgage with a new one. The process of refinancing is similar to the process of applying for a mortgage, but you need to think about your goals during the refinancing process. That way, you can put yourself in the best financial position to be successful.

Why RefinanceYour Mortgage?

There are several reasons why you might be interested in refinancing your mortgage. For example, you might want to tap into the equity in your home to cover another major financial expense. Or, if interest rates have gone down since you first took out your mortgage, you might want to save money by replacing your current loan with one that has a lower interest rate. You might also want to refinance your house in an effort to pay off the loan more quickly.

How Does The Refinancing Process Work?
During the refinancing process, your lender will do a deep dive into your financial history. They will take a look at your credit history and credit score. They will also analyze your payment history on your existing loan. Your lender will also take a look at your income, employment history, and total equity you have in your home. Your lender will also look at other sources of debt, such as a car loan or student loan.

Are There Any Drawbacks?
There are a few drawbacks you need to know. For example, if interest rates have gone up since you took out your mortgage, refinancing might not be the best choice. Furthermore, you may have to pay closing expenses again, which can be expensive. Finally, if you withdraw equity from your house, it can cause your monthly payment to go up; it could also lengthen the term of your loan by several years.

You should think carefully about whether refinancing your house is the best financial move. You need to consider your financial situation along with the current conditions in the real estate market. If you reach out to an expert, you can figure out what refinancing your home might mean for your mortgage.

 

15 Jun 2022
By Kevin Gahagan

Get Your Mortgage Paid Down Faster With These 5 Simple Money Saving Strategies

Home Mortgage Tips

Get Your Mortgage Paid Down Faster With These 5 Simple Money Saving StrategiesThe monthly mortgage payment can be burdensome for many, but it’s possible you’ve thought of trying to pay it down more quickly. Without getting a new job or working overtime, here are some tips you can use on a daily basis to save additional funds and pay off your mortgage at a swifter rate.

Make Your Lunch

The five or ten dollars spent on lunch might not seem like a lot, but over time this amount adds up to a lot of savings. Instead of hitting the cafe, pick one or two nights each week to prepare a lunch for yourself so you can skip the daily expense.

Take A Coffee To Go

Like lunch, coffee is another thing that can end up costing a lot of money. However, instead of going for the two-dollar cup, make a pot before you leave for the day or opt for the office coffee instead. If you prefer yours on the go, you can always make it a once-a-week treat.

Avoid The Impulse

This might seem like a hard one to stick with, but instead of buying something because you want it, sit on it for a day or two and see if it still appeals to you. In all likelihood, the desire to purchase will pass and you’ll manage to keep more money in the bank.

Read The Flyers

Items like groceries may be a necessity, but that doesn’t mean that you have to buy the first thing you see. From fruits and vegetables to packaged goods, there are plenty of food items that go on sale all the time. By the time the month is out, you’ll be surprised how much you can save just by shopping around.

Skip The Cell Phone Plan

For most people, having a cell phone is a necessity these days; however, there are ways that you can get around the high costs that are often associated with smart phones. Instead of going for the expensive plan you have, settle for a little bit less service and talk to your provider about deals they can offer you.

It may seem like paying a higher monthly amount on your mortgage is impossible, but there are little ways to save each day that can help you pay it down faster. If you’re planning on looking for a new home in the near future, contact one of our mortgage professionals for more information.

11 May 2022
By Kevin Gahagan

The Younger Generations Are Interested In Owning A Home

Mortgage

The Younger Generations Are Interested In Owning A HomeThe real estate market has been red hot this year, with many people looking to purchase a home because of record-low interest rates. This includes younger individuals, as younger generations are interested in owning a house for the first time. The past couple of years have been anything except normal, and the housing market has taken off, with demand far exceeding supply. Why is this taking place?

Record Low-Interest Rates Are Driving People Into the Market

Even though there are many reasons why people are interested in purchasing a home, incredibly low-interest rates are one of the biggest reasons. Many people are interested in taking out a home loan with a 30-year term. Potential homebuyers think that they may never see interest rates this low again. As a result, many are looking to capitalize on this opportunity before it disappears. This is increasing competition for homes on the market, driving up their values.

Interest Is Skyrocketing Among Younger Individuals

Record-low interest rates are appealing to just about everyone, but it is a particularly attractive option for young homebuyers. Many are just beginning their careers and are looking for ways to build wealth. One of the best ways to do so is through homeownership. Many research bureaus have noted that there is a sharp increase in younger individuals looking at houses. 

Many Are Facing An Uphill Battle

Even though there are many young individuals and families looking for houses, there are a number of challenges they will need to overcome. One of the biggest challenges is that there is a historic shortage of inventory. Even though potential homeowners might be able to lock in a low interest rate on a loan, they might not find a house they can purchase. It is difficult for young home buyers to compete against older individuals and families who can make a cash offer. If a bidding war takes place, younger homeowners rarely have the cash to come out on top. 

Asking For Help Is Key

Even though today’s mortgage rates are attractive, it is critical not to overpay for a house. Asking for help from a professional can help potential homeowners make the right decision. 

 

12 Apr 2022
By Kevin Gahagan

Understanding Your Debt To Income Ratio: What It Means

Mortgage

Understanding Your Debt To Income Ratio: What It MeansIf you are looking for a home, you might need to finance it using a lender, such as a bank or a credit union. There are a number of factors that will influence whether your mortgage application is approved. Then, these same factors will play a role in the terms the lender might offer you. One of the most important factors is called the debt to income ratio, or DTI. It is important to understand how this will impact your mortgage application.

What Is A Debt To Income Ratio?

Your DTI is important to the lender because this allows the lender to figure out the likelihood of you paying your mortgage on time. The less debt you have, the more financial stability you have to pay a potential mortgage. 

To calculate your debt to income ratio, you need to calculate all the bills you have for the upcoming month. For example, if you have rent and a car payment, you add these numbers together. Then, you divide this number by your gross monthly income. If your rent is $900 and your car payment is $200, your total debt is $1100. Then, if you earn $3300, divide $1100 by $3300. This is about 33 percent.

Student Loan Debt Is A Driving Factor

With many members of the younger generation getting ready to purchase a house, it is important to understand the impact of student loan payments. Because a lot of potential home borrowers have student loans to pay back, their debt-to-income ratios will be significantly higher. This could make it harder for younger borrowers to get qualified for a mortgage, particularly one with favorable terms.

How To Improve Your Mortgage Application

Before you apply for a home loan, you should try to improve your debt to income ratio by paying down your existing bills. For example, if you have credit card debt, this will be included in your debt to income ratio. Try to pay this off before you apply for a mortgage. You should try to pay down your student loans as much as possible before applying for a mortgage as well. The less debt you carry, the more likely your mortgage application will be approved. 

 

29 Mar 2022
By Kevin Gahagan

How To Transfer The Funds To Buy A House

Mortgage

How to Transfer Funds to Buy a HouseIf you have made an offer on a house and gotten it accepted, congratulations! This is a major step, but you might be wondering how you actually pay for a house. The days of showing up to the closing table with a personal check are in the rearview mirror, as nobody wants a check for a house to bounce after the other person has already walked away with the keys. Furthermore, even if you are buying a house with cash, you certainly do not want to show up with a briefcase full of dollar bills. Here is how you will actually pay for the house. 

Wire Transfer To The Closing Attorney

When you purchase a house, you will send the funds for the down payment and the closing costs to your closing attorney. Typically, the seller has a preferred closing attorney they want to use, and you should be contacted by the closing attorney several weeks before the closing date. They will also give you a finalized document specifying exactly how much money you need to wire to the office to cover the down payment, any fees, and the closing costs. You will also need to go to your bank to arrange the wire transfer. The bank will also verify you have enough money in the account to cover the expenses. 

Monthly Mortgage Payment Gets Drafted Automatically

If you are financing the purchase of a house through another lender, you will need to set up an automatic draft payment with the lender. Even though there are some lenders who will allow you to send a physical check every month, most will encourage you to set up an automatic draft payment out of your checking account. After the sale closes, you will typically have at least one month before you need to make your first mortgage payment. The lender will help you arrange the mortgage draft payment prior to that time. 

Make Sure To Wire The Money Prior To Closing

You should try to wire the money to the closing attorney before the closing date. That way, you will offer any hiccups along the way. If you don’t wire the money in time, the sale could fall through, which can create complications you would rather avoid.