Our Concierge Program is a vehicle that helps Buyers and Sellers with virtually all of the services they require.  As a consumer, you have the right and are encouraged to choose professional services to complete your real estate transaction.  Here are various types of mortages available.

All About Adjustable-Rate Mortgages Adjustable-rate mortgages (ARMs) differ from fixed-rate mortgages in that the interest rate and monthly payment can change over the life of the loan. ARMs also generally have lower introductory interest rates vs. fixed-rate mortgages. Before deciding on an ARM, key factors to consider include how long you plan to own the property, and how frequently your monthly payment may change. Why Choose an Adjustable-rate Mortgage - The low initial interest rates offered by ARMs make them attractive during periods when interest rates are high, or when homeowners only plan to stay in their home for a relatively short period. Similarly, homebuyers may find it easier to qualify for an ARM than a traditional loan. However, ARMs are not for everyone. If you plan to stay in your home long-term or are hesitant about having loan payments that shift from year-to-year, then you may prefer the stability of a fixed-rate mortgage. Components of Adjustable-rate Mortgages - Adjustable-rate mortgages have three primary components: an index, margin, and calculated interest rate. Index - The interest rate for an ARM is based on an index that measures the lender's ability to borrow money. While the specific index used may vary depending on the lender, some common indexes include U.S. Treasury Bills and the Federal Housing Finance Board's Contract Mortgage Rate. One thing all indexes have in common, however, is that they cannot be controlled by the lender. Margin - The margin (also called the "spread") is a percentage added to the index in order to cover the lender's administrative costs and profit. Though the index may rise and fall over time, the margin usually remains constant over the life of the loan. Calculated Interest Rate - By adding the index and margin together, you arrive at the calculated interest rate, which is the rate the homeowner pays. It is also the rate to which any future rate adjustments will apply (rather than the "teaser rate," explained below). Adjustment Periods and Teaser Rates - Because the interest rate for an ARM may change due to economic conditions, a key feature to ask your lender about is the adjustment period... or how often your interest rate may change. Many ARMS have one-year adjustment periods, which means the interest rate and monthly payment is recalculated (based on the index) every year. Depending on the lender, longer adjustment periods are also available. An ARM can also have an initial adjustment period based on a "teaser rate," which is an artificially low introductory interest rate offered by a lender to attract homebuyers. Usually, teaser rates are good for 6 months or a year, at which point the loan reverts back to the calculated interest rate. Remember, too, that most lender will not use the teaser rate to qualify you for the loan, but instead use a 7.5% interest rate (or calculated interest rate if it is lower). Rate Caps - To protect homebuyers from dramatic rises in the interest rate, most ARMs have "caps" that govern how much the interest rate may rise between adjustment periods, as well as how much the rate may rise (or fall) over the life of the loan. For example, an ARM may be said to have a 2% periodic cap, and a 6% lifetime cap. This means that the rate can rise no more than 2% during an adjustment period, and no more than 6% over the life of the loan. The lifetime cap almost always applies to the calculated interest rate and not the introductory teaser rate. Payment Caps and Negative Amortization - Some ARMs also have payment caps. These differ from rate caps by placing a ceiling on how much your payment may rise during an adjustment period. While this may sound like a good thing, it can sometimes lead to real trouble. For example, if the interest rate rises during an adjustment period, the additional interest due on the loan payment may exceed the amount allowed by the payment cap… leading to negative amortization. This means the balance due on the loan is actually growing, even though the homeowner is still making the minimum monthly payment. Many lenders limit the amount of negative amortization that may occur before the loan must be restructured, but it's always wise to speak with your lender about payment caps and how negative amortization will be handled.

How Mortgage Loans Work... Excluding property taxes and insurance, a traditional fixed-rate mortgage payment consist of two parts: (1) interest on the loan and (2) payment towards the principal, or unpaid balance of the loan. Many people are surprised to learn, however, that the amount you pay towards interest and principal varies dramatically over time. This is because mortgage loans work in such a way that the early payments are primarily in interest, and the later payments are primarily towards the principal. In the Beginning... You Pay Interest - To help calculate monthly payments for loans based on different interest rates, lenders long ago developed what are known as "amortization tables." These tables also make it fairly easy to calculate how much money of each payment is interest, and how much goes towards the principal balance. For example, let's calculate the principle and interest for the very first monthly payment of a 30-year, $100,000 mortgage loan at 7.5 percent interest. According to the amortization tables, the monthly payment on this loan is fixed at $699.21. The first step is to calculate the annual interest by multiplying $100,000 x .075 (7.5%). This equals $7,500, which we then divide by 12 (for the number of months in a year), which equals $625. If you subtract $625 from the monthly payment of $699.21, we see that: $625 of the first payment is interest $74.21 of the first payment goes towards the principal Next, if we subtract $74.21 (the first principal payment) from the $100,000 of the loan, we come up with a new unpaid principal balance of $99,925.79. To determine the next month's principal and interest payments, we just repeat the steps already described. Thus, we now multiply the new principal balance (99,925.79) times the interest rate (7.5%) to get an annual interest payment of $7,494.43. Divided by 12, this equals $624.54. So during the second month's payment: $624.54 is interest $74.67 goes towards the principal Note:  In Canada, payments are compounded semi-annually instead of monthly. Equity - As you can see from the above example, even though you pay a lot of interest up front, you're also slowly paying down the overall debt. This is known as building equity. Thus, even if you sell a house before the loan is paid in full, you only have to pay off the unpaid principal balance… the difference between the sales price and the unpaid principle is your equity. In order to build equity faster… as well as save money on interest payments… some homeowners choose loans with faster repayment schedules (such as a 15-year loan). Time Versus Savings - To help illustrate how this works consider the previous example of a $100,000 loan at 7.5 percent interest. The monthly payment is around $700, which over 30 years adds up to $252,000. In other words, over the life of the loan you would pay $152,000 just in interest. With the aggressive repayment schedule of a 15-year loan, however, the monthly payment jumps to $927 for a total of $166,860 over the life of the loan. Obviously, the monthly payments are more than they would be for a 30-year mortgage, but over the life of the loan you would save more than $85,000 in interest. Bear in mind that shorter term loans are not the right answer for everyone, so make sure to ask your lender or real estate agent about what loan makes the best sense for your individual situation.

How Much Can You Afford… Understanding how much you can afford is one of the most important rules of home buying. Depending on your individual situation, your budget can affect everything from the neighborhoods where you look, to the size of the house, and even what type of financing you choose. Bear in mind, however, that lenders will look at more than just your income to determine the size of the loan. Likewise, you may find that there are some creative financing options that can help boost your purchasing power. Loan Pre-qualification versus Pre-approval - One of the best ways to determine your budget is to have your real estate agent or lender pre-qualify you for a loan. Prequalification is different from pre-approval, because it is only an estimate of what you'll be able to afford. On the other hand, pre-approval is a more formal process where a lender examines your finances and agrees in advance to loan you money up to a specified amount. What Factors are Important to Lenders - Banks and lending institutions will use several criteria to determine how much money they'll agree to lend. These include: Your gross monthly income Your credit history The amount of your outstanding debts Your savings or the amount of money you have available for a down payment and closing costs Your choice of mortgage (i.e. 30-year, FHA, etc.) Current interest rates Two Important Ratios - Lenders also use your financial information to figure out two, very important ratios: the debt-to-income ratio and the housing expense ratio. Debt-to-Income Ratio - Many lenders use a rule of thumb that the amount of debt you are paying on each month (car payment, student loan, credit card, etc,) shouldn't exceed more than 36 percent of your gross monthly income. FHA loans are slightly more lenient. Housing Expense Ratio - It is generally difficult to obtain a loan if the mortgage payment will be more than 28 to 33 percent of your gross monthly income. Down Payments Make a Difference - If you can make a large down payment, lenders may be more lenient with their qualifying ratios. For example, a person with a 20 percent down payment may be qualified with the 33 percent housing expense ratio, while someone with a 5 percent down payment is held to the stricter 28 percent ratio. Other ways to improve your purchasing power: Gifts - If you're having trouble saving money, many lenders will allow you to use gift funds for the down payment and closing costs. However, most lenders require a "gift letter" stating the gift doesn't have to be repaid, and will also require you to pay at least a portion of the down payment with your own cash. Negotiating Closing Costs - Through negotiation, some sellers may agree to pay all or most of your closing costs (for example, if you agree to meet their full asking price). If you choose to try this, make sure to ask your real estate agent for advice. Loan Programs - Many local governments have special loan programs designed to help first-time homebuyers. Loans may be available at reduced interest rates, or with little or no down payments. Check with your local housing authority for more information. Loan Types - Some homebuyers choose Adjustable Rate Mortgages (ARMs) because of low initial interest rates. Others opt for 30-year loans because they have lower monthly payments than 15-year loans. There are significant differences between different loans, so make sure to discuss the pros and cons of different loans with your agent or lender before making a decision.

Length of Your Loan:  15-Year, 30-Year, or a Biweekly Mortgage... In the past, the 30-year, fixed-rate mortgage was the standard choice for most homebuyers. Today, however, lenders offer a wide array of loan types in varying lengths... including 15, 20, 30 and even 40-year mortgages. Deciding what length is best for you should be based on several factors including: your purchasing power, your anticipated future income and how disciplined you want to be about paying off the mortgage. The Benefits of a Shorter Loan Term - Some homeowners choose fixed-rate loans that are less than 30 years in order to save money by paying less interest over the life of the loan. For example, a $100,000 loan at 8 percent interest comes with a monthly payment of around $734 (excluding taxes and homeowner's insurance). Over 30 years, this adds up to $264,240. In other words, over the life of the loan you would pay a whopping $164,240 just in interest. With a 15-year loan, however, the monthly payments on the same loan would be approximately $956 for a total of $172,080. The monthly payments are more than $200 more than they would be for a 30-year mortgage, but over the life of the loan you would save more than $92,000. The Advantages to a 30-year Loan - Despite the interest savings of a 15-year loan, they're not for everyone. For one thing, the higher monthly payment might not allow some homeowners to qualify for a house they could otherwise afford with the lower payments of a 30-year mortgage. The lower monthly payment can also provide a greater sense of security in the event your future earning power might decrease. Furthermore, with a little bit of financial discipline, there are a variety of methods that can help you pay off a 30-year loan faster with only a moderately higher monthly payment. One such choice is the biweekly mortgage payment plan, which is now offered by many lenders for both new and existing loans. Biweekly Mortgages - As the name implies, biweekly mortgage payments are made every two weeks instead of once a month… which over a year works out to the equivalent of making one extra monthly payment (compared to a traditional payment plan). One extra payment a year may not sound like much, but it can really add up over time. In fact, switching from a traditional payment plan to a biweekly mortgage can actually shorten the term of a 30-year loan by several years and save you thousands in interest. If you're interested in a biweekly payment plan, make sure to check with your lender. In many cases, lenders also offer direct payment services that automatically withdraw funds from your bank account, saving you the trouble of having to write and mail a check every two weeks. Making Extra Payments Yourself and Do it Early - Another way to pay off your loan more quickly is to simply include extra funds with your monthly payment. Most lenders will allow you to make extra payments towards the principal balance of your loan without penalty. This is especially attractive to homebuyers who are concerned about their future earning power, but still want to be aggressive about paying off their loan. For example, if you had a 30-year loan, you might decide to send the equivalent of one or two extra payments a year (which could shorten the overall length of the loan by many years). But if your financial situation suddenly took a turn for the worse, you could always fall back on the regular monthly payment. One important note, though, is that if you do decide to send extra funds, make sure to do it EARLY in the life of the loan. This is because most home loans are calculated in such a way that the first few years of payments are almost entirely interest, while the last few years are mostly applied towards the principal balance. Thus, you can get the most bang for your buck by making the extra payments early in the life of the loan.

Leveraging Your Money… One of the greatest financial aspects of buying a home is the ability to leverage your money. Simply put, leverage allows you to use a small down payment and financing to purchase a larger investment. For example, if you bought a $125,000 home with 10 percent down, you leveraged the $12,500 down payment to purchase an asset worth 10 times that amount! Appreciation - The benefits of leverage really become apparent with appreciation, or the rise in value of a property. Using the above example, say you were to live in the house for 5 years, and during that time property values in your area were to rise an average of 2.5 percent a year. Your home would then be worth over $141,000. By putting only 10 percent down, you get to enjoy the appreciation for the full amount! Paying Yourself - In addition to the 10 percent down, you'll also have to make mortgage payments. But with each payment, a certain amount of money is being used to pay down the principal balance that you owe. This is called building equity. So in the event you sell your house, not only can you realize a profit from your leveraged money, you also have a chance to pay yourself back for the money you've put in over the years. No wonder so many people consider a home an excellent investment!

Refinancing Your Home... Refinancing your home can be an excellent way to bring down your monthly mortgage payment, raise cash, or consolidate debts with high interest rates. However, you need to do your homework before deciding to refinance. One important factor is the difference between current interest rates and the rate of your original loan. You also need to take into account the amount of time it will take to recoup the costs of refinancing. When Should You Refinance - Some common reasons homeowners refinance include: Lower monthly mortgage payments Convert an adjustable rate mortgage (ARM) to a fixed-rate mortgage Raise funds for family expenses (i.e. college tuition) Pay off high-interest loans Home improvements The old rule of thumb is that you should refinance your home if interest rates fall more than two percent.  That is because refinancing usually involves most of the same closing costs (loan origination fee, prepaid interest, etc.) as the original loan. For anything less than two percent, the savings on your monthly mortgage payment might not be significant enough to be worth your while. Savings Versus Time - For some homeowners, though, the two percent rule is not as important as the time needed to break even on the refinancing.  For instance, if it costs $3,000 to refinance a house, and the monthly mortgage payment is lowered by $90, it would take almost three years for the savings to cover the costs of refinancing. If all the information (survey, title search, etc.) for your old loan is still current, however, the lender may be willing to waive many of the fees. In addition, you may be able to roll the closing costs of a refinance loan into the new note.  In other words, you do not avoid the closing costs, but instead pay them back over time along with the rest of the loan. If you consider this option, be sure to calculate the potential savings versus the expense of paying off a higher principal balance. Keep in mind that refinancing usually lengthens the time it takes to pay off your house. If you are three years into a 30-year mortgage and then refinance with a new 30-year loan, you'll end up making payments on the house for 33 years. Nevertheless, if the monthly savings are substantial enough, you still could end up paying much less over the long haul with the new loan. Adjustable Rate Mortgages (ARMs) - Timing can also be a factor in switching from an ARM to a fixed-rate loan.  For example, rising interest rates might influence you to covert your ARM into a fixed-rate loan if you plan to stay in your house for several more years. Conversely, you may plan to move in a year or two, and find a lender who is willing to offer you dramatic interest rate savings with an ARM. In this case (and as long as the closing costs are minimal), it might make sense to switch from a fixed-rate loan to an ARM. Equity - Refinancing with a new loan does not mean you have to give up all the money you have paid towards your old mortgage.  With each payment, you build up a certain amount of equity in a property… which is the amount you have paid on the principal balance of the loan. For example, if you have a $100,000 loan at eight percent, you would build about $2,800 worth of equity in the first three years.  Thus, if you refinanced, the new loan would only amount to $97,200. Raising Cash with Home Equity Loans... Use Caution - If you've built enough equity, you can refinance in order to take cash out of the property. Perhaps you need money to pay off your credit cards, add a new bathroom, or cover the costs of braces for a child. Regardless, lenders will typically allow you to borrow against the equity you have built in your house, plus appreciation (often up to 75 percent of the current appraised value).  These types of loans are also called home equity loans. Be cautious, however, of lenders offering 100 percent or 125 percent home equity loans… their rates are often markedly higher than traditional lenders. In addition, any amount you borrow that is above the market value of the house is NOT tax deductible. Talk to Your Lender - With all the different types of refinancing loans available today, you should take some time to shop around and speak with several lenders before making a decision. Be sure to discuss all the expenses and benefits, as well as what will be expected of you, in advance. The more you educate yourself, the better your chances of finding the right refinancing package.

Saving for the Down Payment... Saving funds for a down payment should be part of an overall program to get your finances in order prior to shopping for a home. This includes rounding up financial records, examining your spending habits, and setting a budget you can live with. Remember, too, that the down payment is not the only up-front expense. An allowance for closing costs should also be included in your savings budget. How Much is Required - The down payment is usually expressed as a percentage of the overall purchase price of the home, and varies depending on the lender, the type of financing and amount of money being lent. In the past, the typical down payment was 20%, but in recent years lenders have been willing to offer conventional financing with as little as 3% down. U.S. Government financing programs, such as those offered by the Dept. of Veterans Affairs (VA) or the Federal Housing Administration (FHA), also require minimal down payments. Private Mortgage Insurance - Typically, if your down payment is less than 20% of the purchase price, lenders will require you to carry PMI, or private mortgage insurance. This insurance protects the lender in case of loan default, and usually involves an up-front payment at closing, as well as a monthly premium. However, once you have paid off 20% of the loan, you can request the policy be canceled. Some lenders cancel the premium automatically, while others require you to make a request in writing. Gifts - If you are having trouble saving enough money, many lenders will allow you to use gift funds for the down payment… as well as for related closing costs. The gift may come from family, friends or other sources, but remember that lenders usually require a "gift letter" stating the gift doesn't have to be repaid. In addition, some lenders will also require you to pay at least a portion of the down payment with your own cash. Thus, if you plan to use gift money to purchase your house, ask your lender about their policies regarding gifts. Earnest Money - Buyers are usually required to deposit earnest money with the seller when they make an offer. If the offer is accepted, the earnest money is then credited towards the down payment. The amount varies widely depending on the seller and local custom, but be prepared from the outset to have funds earmarked for this purpose. Don't Forget Closing Costs - In addition to the down payment, you will also need to save for additional fees associated with the loan. Known as closing costs, these charges cover items such as title insurance, documentary stamps, loan origination fees, the survey, attorney's fees, etc. When you submit your loan application, lenders are required to supply you with a good faith estimate of your closing costs. Some buyers are surprised by the amount of the closing costs, which can easily run into the thousands of dollars. Remember, though, that closing costs can be negotiated with the seller. For example, you may agree to pay the full asking price in exchange for the seller paying all the allowable closing costs.

Throwing it into Reverse CAN be a Good Thing for Some… A reverse mortgage is a loan against a home that enables an aging homeowner to convert his/her home’s equity into tax-free income. It is a tool for homeowners aged 62 and older living in their primary residence. Mobile homes typically do NOT apply. The loan comes due at death or time of a permanent move. It is NOT a traditional home equity loan. It is NOT based on income or credit levels. The homeowner CANNOT lose the home for failure to make payments as there are no payments to make. The homeowner can never owe more than the value of the home. It is the responsibility of the homeowner to keep real estate taxes and insurance current. The home must be free and clear or proceeds from the reverse mortgage can be used to pay off the existing mortgage debt. There are fees involved which come from the proceeds of the loan. A reverse mortgage does NOT affect Social Security; however, SSI and Medicaid can be a different story. The most common kind of reverse mortgage is insured by HUD and it is important to use a loan originator or lender who specializes in reverse mortgages.

Understanding Different Types of Loans... Today's homebuyer has more financing options than have ever been available before. From traditional mortgages to adjustable-rate and hybrid loans, there are financing packages designed to meet the needs of virtually anyone. While the different choices may seem overwhelming at first, the overall goal is really quite simple:  you want to find a loan that fits both your current financial situation and your future plans.  Though this article discusses some of the more common loan types, you should spend time talking with different lenders before deciding on the right loan for your situation. General Loan Categories - Most loans fall into three major categories:  fixed-rate, adjustable-rate, and hybrid loans that combine features of both. Adjustable-Rate Mortgages (ARM) - Adjustable-rate mortgages differ from fixed-rate mortgages in that the interest rate and monthly payment can change over the life of the loan.  This is because the interest rate for an ARM is tied to an index (such as Treasury Securities) that may rise or fall over time.  In order to protect against dramatic increases in the rate, ARM loans usually have caps that limit the rate from rising above a certain amount between adjustments (i.e. no more than 2 percent a year), as well as a ceiling on how much the rate can go up during the life of the loan (i.e. no more than 6 percent).  With these protections and low introductory rates, ARM loans have become the most widely accepted alternative to fixed-rate mortgages. Conventional Loans - A conventional loan is simply a loan offered by a traditional private lender.  They may be fixed-rate, adjustable, hybrid or other types.  While conventional loans may be harder to qualify for than government-backed loans, they often require less paperwork and typically do not have a maximum allowable amount. Fixed-Rate Mortgages - As the name implies, a fixed-rate mortgage carries the same interest rate for the life of the loan.  Traditionally, fixed-rate mortgages have been the most popular choice among homeowners, because the fixed monthly payment is easy to plan and budget for, and can help protect against inflation.  Fixed-rate mortgages are most common in 30-year and 15-year terms, but recently more lenders have begun offering 20-year and 40-year loans. Hybrid Loans - Hybrid loans combine features of both fixed-rate and adjustable-rate mortgages. Typically, a hybrid loan may start with a fixed-rate for a certain length of time, and then later convert to an adjustable-rate mortgage.  However, be sure to check with your lender and find out how much the rate may increase after the conversion, as some hybrid loans do not have interest rate caps for the first adjustment period. Other hybrid loans may start with a fixed interest rate for several years, and then later change to another (usually higher) fixed interest rate for the remainder of the loan term.  Lenders frequently charge a lower introductory interest rate for hybrid loans vs. a traditional fixed-rate mortgage, which makes hybrid loans attractive to homeowners who desire the stability of a fixed-rate, but only plan to stay in their properties for a short time. Balloon Payments - A balloon payment refers to a loan that has a large, final payment due at the end of the loan.  For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after seven years.  As with some hybrid loans, balloon loans may be attractive to homeowners who do not plan to stay in their house more than a short period of time. FHA & VA Loans - US Government Loan Programs such as those of the Federal Housing Authority (FHA) and Department of Veterans Affairs (VA) are designed to promote home ownership for people who might not otherwise be able to qualify for a conventional loan.  Both FHA and VA loans have lower qualifying ratios than conventional loans and often require smaller or no down payments.  FHA and VA Loans also require a seller contribution. Bear in mind, however, that FHA and VA loans are not issued by the Government; rather, the loans are made by private lenders but insured by the US Government in case the borrower defaults. Remember too, that while any US citizen may apply for a FHA loan, VA loans are only available to veterans or their spouses and certain government employees. Time as a Factor in Your Loan Choice - As has been discussed, the length of time you plan to own a property may have a strong influence on the type of loan you choose.  For example, if you plan to stay in a home for 10 years or longer, a traditional fixed-rate mortgage may be your best bet.  But if you plan on owning a home for a very short period (5 years or less), then the low introductory rate of an adjustable-rate mortgage may make the most financial sense. In general, ARMs have the lowest introductory interest rates, followed by hybrid loans, and then traditional fixed-rate mortgages. Rural Development Housing and Community Facilities Programs - The United States Department of Agriculture provides down payment assistance to those that qualify.  You must be a US Citizen or have a green card to qualify. Rural Housing Direct Loans are loans that are directly funded by the Government. These loans are available for low- and very low-income households to obtain homeownership. Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase newly constructed dwellings located in rural areas. Mortgage payments are based on the household's adjusted income.  These loans are commonly referred to as Section 502 Direct Loans. Purpose - Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. Eligibility - Applicants for direct loans from HCFP must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically within 22 to 26 percent of an applicant's income.  However, payment subsidy is available to applicants to enhance repayment ability.  Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories. Elderly and disabled persons applying for the program may have incomes up to 80 percent of area median income (AMI). Terms - Loans are for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). The term is 30 years for manufactured homes. The promissory note interest rate is set by HCFP based on the Government’s cost of money.  However, that interest rate is modified by payment assistance subsidy. Standards - Under the Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Approval - Rural Development officials should make a decision within 30 days of the Rural Development office's receipt of the application. Basic Instruction - 7 CFR Part 3550 and HB-1-3550

Your Credit History... As part of the loan application process, virtually all lenders will want to see a copy of your credit report. The report will list all your long-term debts (credit cards, mortgage payments, automobile and student loans, etc), as well as your payment history. If you don't have a copy of your credit report, most lenders will generally require you to pay for a copy when they process your loan application. However, most real estate experts agree that it is a good idea to obtain a copy of your credit report several months before you apply for a loan. This is so you have a chance to resolve any problems with your credit before your bank sees it. U.S. Federal law ensures that you have access to your credit report, which may be obtained from your local credit bureau or any of several national firms that specialize in credit reports. Late Payments - For most people, problems with their credit report are likely related to late payments on a debt. If you were late one month in paying off your credit card, but otherwise have a good payment history, chances are most lenders won't be too concerned. But if you have a history of late payments you'll need to document the reasons why. A slow payment history won't necessarily get you turned down for a loan, but you may have to pay a higher rate of interest or otherwise prove to the lender that you can repay your loan in a timely fashion. Errors on Your Credit Report - Many people are surprised to learn that credit reports can often contains errors or inaccurate information. If this is the case with your credit report, you'll need to contact the reporting agency or creditor to have the problem resolved. This can sometimes be a slow process, so make sure to give yourself time to clear up the mistake. Bankruptcies and Foreclosures - There's no getting around it, a bankruptcy on your credit report is not a good thing. But that doesn't mean you still can't obtain a loan. Even though a bankruptcy may stay on your credit report for seven to ten years, lenders will often consider the circumstances surrounding a bankruptcy (family illness, injury, etc.). Moreover, if you have reestablished good credit since the bankruptcy, a lender will be more inclined to approve your application.

When You Should Pay Points on a Loan... When it comes to comparing interest rates for a mortgage loan, homebuyers often have the option of choosing a loan with a lower interest rate by paying points. Simply put, a point is equal to 1 percent of the loan amount. For example, with a $100,000 loan, one point equals $1,000. Points are usually paid out-of-pocket by the buyer at closing. Paying points may seem attractive, because a lower interest rate means smaller monthly payments. But is paying points always a good idea? The answer generally depends on how long you plan to stay in the house. Let's look at an example: Bob and Betty Smith are shopping for loan rates on a $150,000 home. Their bank has offered them a 30 year loan at 7.5 percent with no points. This works out to a monthly payment of $1,049. However, their bank has also offered them a loan at 7 percent if they agree to pay 2 points (or $3,000). At this lower rate, their monthly payment drops to $998, or a savings of $51 per month. By dividing the amount they paid for the points ($3,000) by the monthly savings ($51), we see that they will have to own the house for 59 months (or just under 5 years) before they will start to see savings as a result of paying points. If Bob and Betty plan to stay in the house for many years, then paying points could make good sense. But if they see themselves moving to another house in the near future, they'd be better off paying the higher interest and no points. (Note: for simplicity, the above example does not take into account the time value of money, which would slightly lengthen the break-even time.) Can You Deduct Points on Your Income Taxes - In the United States, one side benefit of paying points on a mortgage loan is that they are fully tax deductible for the same tax year as your closing. However, this does not apply to points paid for a refinance loan. For refinances, the IRS requires you to spread out the deduction over the life of the loan. For example, if you paid $5,000 in points for a 30-year refinance loan, you can only deduct 1/30 of the $5,000 each year for 30 years. If you pay off the loan early, though, you can deduct the remaining amount that tax year.

These companies and individuals are considered to be reputable within the real estate industry, but are in no way endorsed, nor are their services or prices warranted or guaranteed in any manner whatsoever by Heart Of Florida Realty or it’s Associates.