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How Much Home Can You Afford?

When you apply for a mortgage, your prospective lender will check several factors, including calculating your debt-to-income ratio in order to determine the amount of mortgage to extend to you. You can get a jump start on the home buying process by calculating your debt-to-income ratio yourself so that you have a good starting point of the price range of homes you’re likely to be able to comfortably afford.

What is a debt-to-income ratio and how is it used?

Your debt-to-income ratio is the difference between your income each month and your monthly payment obligations, and it is expressed as a percentage. Said another way, how much income do you have left over each month after paying your bills? A high ...

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Are you hoping to buy a home in 2017 but worried about the down payment? Looking to live outside of a big city – whether that be in a small city, town or out in the country with plenty of space? Many Americans can afford the monthly mortgage payment on a home for their family, but have trouble coming up with the 20% down payment that conventional mortgages generally require for offsetting the additional expense of private mortgage insurance, or PMI. In many areas of the country, coming up with a 20% or even a 10% cash down payment means saving up tens of thousands of dollars just for this one purpose. Most buyers understand that they will likely need some cash on hand after they purchase their home, either to fund moving expenses o...

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I only work part time but want to buy a home – will I qualify for a mortgage on part time income alone?

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The Federal Housing Authority, or FHA, cut the annual mortgage insurance premium interest rate by .25% for FHA borrowers who closed on their new homes on or after January 27, 2016, making now a great time to buy and save in the process!

What are FHA-backed loans?

The FHA does not extend mortgages to prospective home buyers or lend directly to buyers; however, they do back certain mortgages, providing lenders with additional protections. The FHA loan program is one that many first-time homebuyers find advantageous, with competitive interest rates and a down payment requirement of only 3.5% as opposed to the traditional 20% down required by conventional mortgages.

What is the FHA mortgage insurance premium?

Mortgage insurance is an insuran...

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VA mortgage loans are loans which are offered by the US Department of Veterans Affairs and backed by the United States federal government. They offer an array of benefits and mortgage options to veterans, active duty service members and a select group of other individuals connected to the branches of service in the US. One of the most common myths we hear are calls from service members inquiring whether active duty members can take advantage of these fantastic loan options, or whether VA loans are only for veterans. Another question we often hear is whether or not a long history of service has to be completed before a service member becomes eligible for a VA loan.

Are active duty service members eligible for VA loans? Are newly enlisted ...

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Many families like to gift cash at Christmas, especially to those close family members who anticipate having a large expense upcoming in the new year, like a wedding, a vacation or a home purchase. Still others gift cash because it’s easy and loved by all. If you are thinking about purchasing a new home next year you might be looking for creative ways to raise your down payment amount, and saving your gifted Christmas cash is one great way to do it!

What are the rules regarding using cash as a down payment towards your home purchase?

Cash is king, even in the mortgage world – with a few strings attached. When you apply for a mortgage, your lender will generally require that you submit copies of your past few months’ ban...

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A reverse mortgage, also known as home equity conversion mortgage, is a very different loan product than a traditional mortgage, used to purchase a home. In fact, reverse mortgages are for homeowners – not those looking to purchase a home.

Reverse mortgages function differently than what you commonly think of when you think “mortgage”, and they have different qualifying requirements. If you or someone you know is interested in a reverse mortgage, read ahead to learn more about this unique financing option.

Age restrictions and requirements

Unlike traditional mortgages, which are available to legal adults of any age, only homeowners who are at least 62 or older can qualify for a reverse mortgage.

Additional qualifying re...

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In many areas of the country you can purchase a home and pay less for your monthly mortgage than you might pay for rent – however, when looking at mortgage calculators online, be careful that the monthly mortgage payment you’re looking at is the complete picture of all required homeownership costs and not just the amount you’ll need to reimburse your lender each month for your mortgage loan. In some cases, property taxes can be 50% (or more) of a monthly mortgage payment amount, taking the true price of home ownership much higher than originally anticipated. When you’re looking to become a home owner, make sure that you understand the full financial commitment you’re entering into. There are many advantages ...

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As the housing market across the country continues to rebound, many areas have become “seller’s markets” – a market in which there are more buyers than there are homes for sale and where sellers are more likely to have their choice of buyer and to be able to dictate more attractive options for themselves, rather than buyers being able to dictate terms that are beneficial. In many of these markets, buyers have to content with and go up against offers of “all cash”, where the other buyer won’t be taking out a mortgage and will instead be handing the seller a lump sum of cash for the purchase of their home. How can you combat an all-cash offer? It is possible to submit an offer that’s more att...

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There are many mortgage products available on the market today, which is great for buyers who now have more than one option for purchasing a home. There are your traditional 15-year or 30-year fixed rate mortgage loans (which are often just called conventional mortgages), adjustable rate mortgage loans, balloon payment loans, jumbo loans, variable term mortgage loans - - what do they all mean?!?! And of course most importantly: which one is the right choice for you and your family?

One popular mortgage loan product is adjustable rate mortgages, or ARMs. ARMs generally are advertised as 5, 7 or 10 year (or 5/1, 7/1, and 10/1) ARMs, although some mortgage lenders may offer other loan terms. When you see an ARM advertised as a “5/1&rd...

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