Financing Your Home
Mortgage rates are at 50-year lows and home prices are affordable. This is creating a rare buying opportunity. Nobody knows how long this will last so now is the time to buy a home.
Shopping for a home loan is a big task but does not have to be overwhelming. Teresa has the experience to guide you every step of the way through the mortgage process. With thousands of loan products available, she can help you sort through the maze to find the loan that is right for you.
Read the articles and use the calculators and tools available here to help you get started then give Teresa a call to help you find the right lender and right loan for you.
Contact Teresa for information on qualifying for special mortgage programs:
Ohio Heroes Program
Grants for Grads Program
First Time Homebuyer Program
MCC Credit Program
USDA Rural Housing
Find Out What You Want in a Home Mortgage
You’ve finally found the home you want, but aren’t sure if you can afford it? Or perhaps you want to reduce the rate on your existing mortgage.
Here are some tips to help:
What Will My Monthly Payment Be?
Your monthly payment depends upon the loan amount, the interest rate and the term of your mortgage loan. You can reduce your payment by reducing the amount of your mortgage or getting a lower interest rate. You can also lower your payment by choosing a 30-year term instead of a 15-year term.
What Term Should I Choose?
A 30-year mortgage has a lower monthly payment, but you will build equity faster and save on interest payments with a 15-year mortgage. For example a 4.00%, 15-year mortgage for $200,000 has a monthly payment of about $1,479, while the monthly payment for the same 30-year mortgage is about $955.
How Much Can I Afford per Month?
This depends on your financial situation. Many people spend between 25% to 50% of after-tax income on monthly mortgage payments. Under this rule, a person with after-tax monthly income of $2,000 could afford to spend between $500 and $1000 monthly.
How Much Can I Borrow?
This depends upon the amount of a down payment you can make, the equity in your home, the monthly payment you can afford, and current mortgage terms available.
How Much Should I Put Down?
The more money that you are able to put down, the lower your monthly payments will be. However, there are loan programs with low down payment requirements to make it easier to afford your first home.
Should I Get a Fixed or Adjustable Rate Mortgage (ARM)?
A fixed rate mortgage helps you plan your finances by ensuring that your monthly payment will stay the same. ARMs typically have a lower interest rate to start with, and are good for people who would rather pay less at the start of the term knowing that they will be able to afford more in the future. With an ARM, your rate may rise or fall over the term of the loan depending on market conditions.
About Mortgage Fees
Most mortgage lenders charge "points." A "point" equals 1% of your total loan amount. Generally the more points you pay up front the lower your interest rate will be. With a zero point loan, you pay only the closing costs. Closing costs include (but are not limited to) such charges as credit reports, loan document preparation fees, and appraisals.
Mortgage pre-qualification. Why does it matter?
Let me see if I can frame it this way...
Has this ever happened to you? You’re out with friends and decide to grab dinner. There’s a new place in town you’ve heard is fantastic. Rave reviews, amazing cuisine. Everyone’s excited. You drive over, pay for parking, and sure enough, there’s a crowd. The atmosphere is perfect, the menu looks incredible. Mouths water, you can’t wait. You step up to put your name on the list and the hostess says: “Name for your reservation?”
“Reservation? I had no idea they were required!” Awkward apologies. They’re booked and you’re out of luck. Not even a seat at the bar. It’s embarrassing. Your friends are disappointed. So much for your recommendation. It’s not so different when you’re thinking of buying a home and you haven’t spoken to a mortgage professional in advance. You can search, find the right home, negotiate a contract... then uh-oh. You find out you aren’t qualified.
If you’re thinking about beginning a home search soon, let me help you avoid disappointment. You'll get a picture of your credit score, the type of rate you’d pay, plus get the chance to correct any errors or problems on your credit report. A pre-qualification letter can have a direct impact on your ability to negotiate, too.
Would you like a list of mortgage professionals I know and personally trust?
Just email me at Teresa@TeresaButler.com / drop me a line at 614-565-8161 and I’d be glad to send you referrals.