Annemarie Torcivia - RE/MAX  Trinity



Posted by Annemarie Torcivia on 4/13/2020

FHA loans have long been a valuable resource for Americans who want to fulfill their goal of homeownership but who don’t have the benefit of a lengthy credit history and equity.

If you’re hoping to buy a home in the near future but want to explore all of your options in terms of financing, this article is for you.

Today we’re going to talk about FHA loans and how to know if you qualify for one.

What are FHA loans?

FHA loans are issued by private mortgage lenders across the country, just like regular mortgages. The difference, however, is that an FHA loan is “guaranteed” by the federal government.

Lenders decide your borrowing eligibility, and how much you can borrow, by determining risk. If you don’t have a sizable down payment (oftentimes 20% or more) and you have a low credit score, most mortgage lenders will see you as a risky person to lend to.

When you get an FHA loan, however, the federal government assumes some of that risk, allowing you to secure the loan anyway.

This means you can buy a home with a low credit score, a smaller than usual down payment, and save on some closing costs.

How do I qualify for an FHA Loan?

To find out if you qualify for an FHA loan, you’ll head to the same place as a traditional mortgage--a mortgage lender. Oftentimes, you can simply call or visit the website of lenders to get the process started.

As with all things, it’s a good idea to shop around for a mortgage lender. Their offerings will be largely similar, but there might be minor differences that make one better than another for your particular circumstances.

Down payment requirements

To secure an FHA loan, you will need to make a down payment of at least 3.5%. However, this low down payment comes with a price. You’ll typically be required to pay private mortgage insurance (PMI) fees on top of your accruing interest for your loan.

Credit score requirements

While you can often secure a mortgage with a lower credit score through an FHA loan, there are still some requirements. To secure a loan with the lowest possible down payment (3.5%), you’ll need a credit score of 580 or above.

Previous homeowners and FHA loans

A common misconception about FHA loans is that they are only for first-time homeowners. However, you can still qualify for an FHA loan if you’ve owned a home before as long as it has been three years since you’ve had a foreclosure or two years since filing for bankruptcy.

If you meet these three conditions, you should be able to secure an FHA loan through a traditional mortgage lender.




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Posted by Annemarie Torcivia on 6/24/2019

For those who want to acquire a house, it helps to get your finances in order. That way, you can quickly and effortlessly navigate the homebuying journey without having to worry about how you'll afford your dream house.

There are many quick, easy ways to straighten out your finances before you embark on the homebuying journey, such as:

1. Assess Your Credit Score

Your credit score ultimately can play a major role in your ability to secure a great mortgage. If you understand your credit score, you may be able to find ways to improve it prior to conducting a home search.

It is important to remember that you are entitled to a free copy of your credit report annually from each of the credit reporting agencies (Equifax, Experian and TransUnion). Request a free copy of your credit report today, and you can take the first step to evaluate your credit score.

If you find that your credit score is low, there is no need to worry. You can always pay off outstanding debt to improve your credit score over time.

Also, if you identify any errors on your credit report, you'll want to address these mistakes immediately. In this scenario, you should contact the agency that provided the report to ensure any necessary corrections can be made.

2. Look Closely at Your Monthly Expenses

When it comes to buying a house, it generally helps to have sufficient funds for a down payment. The down payment on a house may fall between 5 and 20 percent of a home's sale price, so you'll want to have enough money available to cover this total for your dream residence.

If you evaluate your monthly expenses, you may be able to find ways to save money for a down payment on a house.

For example, it may be beneficial to cut out cable TV for the time being and use the money that you save toward a home down payment. Or, if your dine out frequently, cooking at home may prove to be a substantial money-saver that could help you speed up the process of saving for a down payment.

3. Get Pre-Approved for a Mortgage

With pre-approval for a mortgage, you can enter the housing market with a budget in hand. Then, you'll be better equipped than ever before to narrow your search to houses that fall within your price range.

To get pre-approved for a mortgage, you'll want to meet with banks and credit unions. These financial institutions can teach you about different mortgage options and help you assess all of the options at your disposal.

Furthermore, don't hesitate to ask banks and credit unions about how different types of mortgages work. This will enable you to gain the insights that you need to make an informed decision about a mortgage based on your financial situation.

If you need extra help as you prepare to pursue a house, you may want to hire a real estate agent as well. In fact, a real estate agent can help you find a high-quality house at a budget-friendly price in no time at all.




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Posted by Annemarie Torcivia on 9/3/2018

If you’re buying a home for the first time, you have a lot to learn. There are so many decisions that need to be made and new terms to be understood. While you may have been saving up for a downpayment, you’re most likely going to need t finance the majority of the cost of your home. Knowing how to deal with lenders, real estate agents, and other professionals involved in the process of purchasing a home will make your life that much more straightforward. Read on for some mortgage tips that every first-time home buyer should understand.


Know Your Budget


You may find when you apply for a mortgage that you’re able to finance more than you thought you could. Being able to borrow such a significant amount is where many home buyers get caught in a numbers trap. Although the bank may be willing to loan you a certain amount, you might not actually be able to afford it. While the bank looks at many of your financial numbers, the bank doesn’t know your entire budget. How much you spend on groceries each month or the cost of your monthly phone bill are out of the picture when the mortgage company approves you for a loan. Whatever amount of money you borrow to buy your house will result in a monthly payment amount. If you’re only paying $800 per month in rent but your mortgage payment will be $1400, that will result in a significant budget adjustment. Will you be able to come up with the additional $600 each month to pay the mortgage? You need to look at your entire budget seriously to be safe in your mortgage transaction. 


Plan For Out Of Pocket Expenses


You know that you need to save for a downpayment on the home of your dreams. What you may not know is that there are many other out of pocket expenses that you need to foot the bill for when you buy a home. These costs include:


Inspection

Legal fees

Insurance

Pizza for the people who help you move

Repairs to the home

Utility costs


There are so many expenses that you need to come up with when you buy a home. Don’t merely save enough for your down payment and stop. Make sure you have a financial cushion for emergencies, money to help furnish the house, and more. 


Mind Your Credit


When you buy a new home, it may be tempting to buy new furniture, decor, or other items for your property. Hold off on opening any new credit or making large purchases. While a new car will look great in your new driveway, it won’t look so good on your credit score. Be very mindful of your credit score when you are getting ready to buy a home.  





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Posted by Annemarie Torcivia on 11/6/2017

Securing a mortgage can take years of planning and saving. Depending on credit score and financial history, it can be difficult for some people to secure a mortgage with a reasonable interest rate and down payment.

As a result, the U.S. government--at both the federal and state level--has created several programs to make the goal of homeownership more achievable for more Americans. 

These programs are designed to help a number of people, including first-time homebuyers, low-income families, people living in rural areas, Native Americans, and veterans and servicemembers of the United States military.

In today’s article, we’re going to be talking about “VA loans,” or loans guaranteed by the United States Department f Veterans Affairs.

What is a VA Loan?

When a bank chooses to approve someone for a mortgage, they have weighed the risks of that person’s ability to pay back the loan. The less certain a bank is that they will see a return on their investment with a borrower, the higher the down payment and interest rate they will require.

One incentive that the U.S. Department of Veteran Affairs offers its service members and veterans is the ability to receive a loan that is, in part, guaranteed by U.S. Government. That means that lenders can safely approve you for lower interest rates and down payments knowing that the money they are lending you is insured.

Who is eligible for a loan?

Loans guaranteed by Veterans Affairs aren’t strictly for veterans. Active duty service members, including National Guard and Reserve Members may also be eligible. In addition to service members, people who are or were spouses of veterans or service members might also be eligible for a VA loan.

Specific eligibility requirements can be somewhat complicated, so it’s a good idea to visit the eligibility page or contact your local Veterans Affairs office.

What are the perks of a VA Loan?

If you’ve spent a significant portion of your time serving in the military, there’s a good chance that saving for a home has been placed on the back burner. Shopping around for a loan with an affordable down payment can be daunting or impossible for many.

Fortunately, with a VA loan eligible recipients are able to receive a loan with a low down payment or even no down payment.

In a time when down payments can average 20% of the mortgage, that can mean a lot of money you won’t have to spend up from. For example, a home that costs $275,000 would have a 20% down payment of $55,000.

What are the fees?

This great deal does come with one catch. As with many loan assistance programs, there is a fee charged for the services. On top of the funding fee charged by the VA, there are other costs associated with buying a home.

These may include appraisals, inspections, credit reports, and more. Additionally, lenders may charge a 1% flat fee for those using a VA loan.




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Posted by Annemarie Torcivia on 6/19/2017

Once you have gone through the pre-approval process and have narrowed down your home search, there’s a good chance you’ll soon find a place that you want to make an offer on. This can seem like a huge step for any first time homebuyer. Even seasoned home buyers feel butterflies when the time comes to make an offer on a home they love. Before you even start your home search, you should become educated on how to make a good offer in order to land the property that you really want. There’s so many factors that effect your offer including the surrounding properties and the current state of the market. Here are a few very important pieces of advice that you should heed in order to have a successful time securing a home and closing the deal. 

Craft A Persuasive Offer

In many areas there’s a low inventory of homes and a high number of those seeking to buy. This means that you’re not guaranteed to get a property that you have made an offer on. Lowball offers might not be at all competitive and even insulting to sellers in certain markets. Often, you may need to make an offer of more than the asking price if you’re in love with a home. By working with your real estate agent and doing the right research, you can craft an offer on a home that will be compelling for sellers.    

Decide On Your Contingencies 

Once an offer has been accepted, it’s time to get to work on those contingencies. Be especially mindful of financing contingencies. If something falls through in the process, you’ll want to be sure you can get the deposit you made back. Also keep in mind that sellers love reliable buyers who have already been preapproved.  

Home inspection contingencies are another area of importance. After you sign the purchase agreement and the inspection is complete, you’re allowed to ask the seller to make repairs or provide you with a counter offer. While this can be one of the more nerve-wracking aspects of home buying, it has many positives. Home inspections protect buyers from purchasing a home that they can’t live with in cases of extreme mold, termites and other environmental and structural issues. 

The appraisal contingency is also important. In order for you to qualify for a loan, the property must be appraised. The property must be valued at or above the purchase price. A loan will only be approved by a lender up to the appraised value. If your home loan is $400,000 but your home of choice is appraised at $390,000, you’ll have a problem.       

Your Finances Matter Until You Get To The Closing Table

Don’t go crazy with all kinds of purchases before you reach the closing table. Opening a new credit account at your favorite furniture store, for example, could lead to a disastrous surprise on closing day. Hold off on big purchases until after you secure your home. Also avoid making large transfers or deposits from your bank account. don’t do anything to negatively affect your credit score

  

Know What To Bring To The Closing

Don’t show up to the closing for your home purchase unprepared. You’ll need to have the following items: 


  • Photo ID
  • Checkbook
  • Cosigners 



Think Ahead


Be sure that you think of the future when you’re purchasing your home. You’ll need to have enough cash flow to pay for things like property taxes, home insurance, utility bills and even new furniture for your home. Plan your future mortgage payments accordingly. Some companies have payments that are monthly or bimonthly. 


While buying a home is a huge undertaking, with the right plans in place, the process will be as seamless as possible. With the right plans, the moving truck will be pulling into the driveway before you know it.      




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