If you are thinking about buying your first house, you probably have a lot of questions. Common ones are: how much can I afford, can I get approved, etc. It’s also a good idea to organize and try to optimize your finances. However, even if you’re starting with modest resources, you can still set yourself up for mortgage success. Here are some tips on where to start.
Recognizing Mortgage Readiness
Before diving into homeownership, it’s essential to know if you’re genuinely prepared for this commitment. According to a Freddie Mac study, the following signs indicate you might be in the right financial position:
• A credit score of 661 or above.
• A debt-to-income ratio (DTI) under 25 percent, focusing on mortgage debt. Including other obligations like student loans, the percentage can be a tad higher.
• A clean financial history without any bankruptcies or foreclosures in the last seven years.
• No overdue debt payments surpassing 90 days.
Your credit score plays a pivotal role. Landing in the 661 and above range boosts your creditworthiness. However, scores between 600-660 signify you’re on the brink, while anything below 599 indicates you might need to reassess your financial readiness.
Although deviations from these benchmarks don’t disqualify you from getting a mortgage, they might mean you’re overextending yourself or jeopardizing other financial aspirations.
Boosting Your Financial Standing
When considering you for a mortgage, lenders dissect your financial landscape — from credit scores to employment history. To enhance your mortgage approval chances, consider the following:
Monitor Your Credit: Begin by accessing your free credit reports from all three bureaus – Equifax, Experian, and TransUnion. They are available weekly on AnnualCreditReport.com until the close of 2023. Rectify any discrepancies and understand the areas demanding improvement. Remember, most mortgages necessitate a minimum 620 score, but achieving a 740 or higher ensures the best interest rates.
Manage Your Debt: Ensuring on-time payments is crucial. If this has been a challenge, now is the moment to negotiate with creditors for a feasible solution. Lessen your debt through strategies like the debt avalanche, debt snowball, or consider debt consolidation. An optimal DTI ratio is often below 45 percent, although the specific percentage can vary by lender. Also, be wary of new loans which might spike your debt or adversely affect your credit score.
Prioritize Savings: Set aside funds not only for the down payment and closing costs but also for additional expenses like furniture or repairs. On average, the down payment in the first quarter of 2023 was $26,250. Although first-time buyers often deposit 6-7 percent of the purchase price, some loans only demand 3 percent down. Closing costs, too, can vary based on the location. Regardless of the exact amount, start saving with steps like automating your savings or reducing discretionary expenses. And fill out our online analyzer or schedule a meeting on our website and we can develop a customized plan for you. https://annualcreditreport.com

This week we saw the release of Consumer Price Index (CPI) for June 2023, which recorded a rise of 0.2 percent, a slight increase from May’s 0.1 percent, according to the U.S. Bureau of Labor Statistics. Year-over-year, the all-items index experienced a 3.0 percent hike, a decrease from May’s 4.0 percent, indicating a sustained deceleration in inflation for the past 12 months. With the inflation rate now standing just one percentage point above the Federal Open Market Committee’s 2 percent goal, the inflation scenario, particularly its impact on the housing market, demands a closer look.
The slowing of inflation, however, does not translate equally into the housing sector. The Bureau’s data highlight the ‘shelter’ category, encompassing housing costs, as the most significant contributor to the CPI’s all-items increase. However, he also hints at potential stabilization in rents and home prices, a necessary step in addressing the critical issue of housing affordability in the nation.
Encouraging data from CoreLogic suggest a slowdown in the home price growth rate, while Fannie Mae’s Home Purchase Sentiment Index shows a meager increase, pointing to a potentially less heated market. However, with current high mortgage rates, potential home buyers might still hesitate. Lawrence Yun, Chief Economist at the National Association of Realtors, offers some optimism, “Low inflation means low mortgage rates. Therefore, decelerating consumer prices could steadily lift home sales and increase home production in a few months.”
If you are considering making a move, schedule a consultation with us on our website and we can recommend options based on your unique needs.

With housing prices pushing the affordability envelope for many Americans, some individuals are considering buying a fixer-upper. We’ve all seen the home makeover shows with astonishing before and after transformations, but should you take on such a project? Here are a few things to consider:

1. Know Your Limits: Assess how much of the work you can handle yourself. Consider how much time you have available for renovations. Ask yourself if you’re prepared to live in a construction zone for a while.
2. Work Out Costs In Advance: Invite a contractor to join the inspection and provide a written estimate for the proposed work. If you’re planning on doing the work yourself, calculate the cost of supplies. In either case, add an extra 15% to the costs to account for any unexpected expenses.
3.Check Permitting Costs and Procedures: Consult with local officials to determine whether your planned work requires a permit, and what the associated costs might be.
4. Be Extra Careful with Structural Issues: If the house requires structural repairs, be sure to double-check the work and its cost. Hire a structural engineer for an inspection. If structural work needs to be undertaken, make sure to factor this into your bid.
5. Include Inspection Contingencies: It’s crucial to hire professional inspectors to check for hidden issues like mold, piping problems, pest damage, etc. If issues arise, don’t hesitate to ask for discounts. Should too many red flags be raised, or if the seller isn’t willing to adequately discount the cost of repairs, then it may be in your best interest to walk away and continue your search elsewhere.
If you aren’t sure how much you can afford with today’s changing market, schedule a consultation or fill out a quick qualifier on our website.

The image of homebuyers often conjures up young couples, freshly married or new parents, looking for a nest to raise their family. However, senior citizens and retirees also have valid reasons for house-hunting. Even with today’s higher home prices and interest rates, seniors maybe in need of a mortgage for a variety of reasons, here are options for qualifying and loan options.
Applying for a mortgage as a senior entails meeting the same financial criteria as other borrowers, such as credit history, debt-to-income (DTI) ratio, income, and other assets. However, the documents required to qualify for a mortgage are slightly different for retirees. For instance, you’ll have to provide forms to document income instead of pay stubs and W-2 forms. These might include Social Security award letters, retirement award letters, and federal tax returns for income from IRA/401(k) required minimum distributions (RMDs), interest, dividends, annuities, and rental property.
Despite these requirements, you should remember that minimum scores can only qualify you for a loan in general; they don’t guarantee the best interest rates the lender offers. Also, while a DTI ratio as high as 50 percent might be acceptable, lenders usually prefer your monthly income spent on debt payments, including your mortgage, to be less than 45 percent.
Experts often caution retirees taking on high mortgage debt as substantial monthly payments become more challenging without a steady income source. However, some mortgage strategies can be beneficial for retirees who can afford to make a significant down payment for a home.
There are various home loan options available for retirees or seniors, such as conventional loans, cash-out refinance, home equity loans, home equity lines of credit (HELOCs), reverse mortgages, and no-document mortgages. Each of these options has its unique advantages and requirements, so you should carefully consider which suits your situation best.
Retirees with good credit, sufficient income, assets, and limited debt are good candidates for a mortgage or home loan. However, the application process is often slightly different and can be more challenging. If you or a loved one are considering buying or refinancing a home in retirement, it’s crucial to calculate your post-retirement income, assets, savings, total housing expenses, life goals, and life expectancy. Schedule a consultation on our website and we can review the options for you.

Navigating the home-buying journey with little to no credit history can seem daunting. However, FHA loans, insured by the Federal Housing Administration, can be a lifesaver for prospective homebuyers with such financial constraints. Their flexible financial prerequisites make them an excellent alternative for those dealing with debt or other personal finance challenges. The FHA loan program’s forgiving nature makes it easier to obtain than traditional loans, helping more people join the homeowner’s club. However, an easier application process doesn’t mean a less serious commitment; diligent preparation is crucial to sidestep common errors in home loan applications. If the appeal of less stringent requirements entices you, stick around as we delve into how to secure an FHA loan with low credit.

Understanding FHA Loan Eligibility and Requirements for Low Credit

The minimum credit score required for an FHA loan is 580, but there’s an exception: a credit score as low as 500 may still qualify, but with a higher down payment upon purchasing the home. Specifically, a down payment of 3.5% is needed if your credit score is 580 or above, while a 10% down payment is required for scores between 500 and 579. Additionally, mortgage insurance will be required for the entire duration of the loan if the down payment is less than 10%.

Securing an FHA loan with low credit requires meeting several criteria. These include the credit score and down payment requirements mentioned, a consistent employment history with documented income for at least two years, an income sufficient for the FHA loan amount, no bankruptcy or foreclosure in the past three years, and a primary residential home in livable condition.

Navigating FHA Loan Refinancing and Interest Rates with Lower Credit

The FHA Streamline program makes refinancing an FHA loan a reality for those with lower credit scores or debt. The program substitutes your current FHA loan with a new one offering better rates and terms. This refinance process usually requires less paperwork, has more lenient credit standards, and results in quicker closings. Even if your credit history has worsened, it shouldn’t hinder refinancing into a new FHA loan unless you have missed payments.

Your FHA loan interest rate will likely be higher if you have a lower credit score. However, as FHA loans are backed by the Department of Housing and Urban Development (HUD), lenders can often offer competitive rates compared to traditional mortgages.

Understanding FHA Closing Costs and Preparing for Application

Closing costs, charged by mortgage lenders and others involved in the loan process, typically range between 2% and 6% of the home’s sale price. In some cases, seller credits can cover these costs entirely. You’ll receive an estimate of the closing costs from the lender when applying for the mortgage and a final disclosure three days before the property ownership transfer.

When applying for an FHA loan with lower credit, documentation is critical. Gather all necessary information, including names of borrowers, current address, social security numbers, employment information, credit report, tax returns, bank account statements, and any other information requested by your lender.

Despite the challenges of low credit, securing an FHA loan is still possible with the right information and preparation. Schedule an appointment with us on our website and we can see if an FHA or other loan is right for you.

When it comes to the decision between buying or renting a home, in today’s market, we have to look at number of market and individual factors. With rapidly increasing housing prices and a significant inventory shortage, the thought of purchasing a home may seem daunting with the US Census Bureau and the US Department of Housing and Urban Development reported the median sales price of $436,800 for homes at the start of 2023.
Buying a home brings with it a set of unique advantages. The possibility of building equity, the tax benefits, and the freedom to customize your living space are all compelling reasons to consider homeownership. However, these benefits are balanced by potential drawbacks such as variable monthly payments, maintenance responsibilities, decreased flexibility, and the risk of your home’s value decreasing. This is why it’s essential to carefully analyze your personal and financial circumstances before making this significant decision.
Understanding the current housing market is crucial for potential homebuyers. The imbalance between supply and demand has intensified competition, making it harder to find affordable properties. Moreover, house prices are growing faster than income rates, challenging many potential buyers’ affordability. Additionally, with mortgage rates influenced by several factors, including macroeconomic forces, the total cost of homeownership can increase significantly. However, shopping around for the best mortgage rates can save thousands of dollars over the life of the loan.
Ultimately, deciding to buy a house is a deeply personal decision and needs to consider your individual timeline and life circumstances. Factors such as your lifestyle, family size, career trajectory, and financial capacity should all be taken into account. This decision should also factor in the ongoing costs of homeownership, including the potential for expensive repairs and upgrades.
In conclusion, both renting and buying have their merits and drawbacks, and what might work for one person might not work for another. Understanding the current market conditions and honestly evaluating your personal and financial situation are the keys to making the best choice for you. There’s no one-size-fits-all answer, but with careful consideration, you can make the decision that best suits your needs in today’s market. Fill out our purchase analysis on our website or schedule an consultation and we can help determine the best fit for your needs.

For first-time homebuyers, purchasing a home is a huge financial commitment and in today’s pricing environment its also a considerable financial challenge for many Americans. However, homebuyer grants can significantly lighten the financial load, grants aren’t available to all home buyers and are usually aimed at lower income buyers.
Understanding Grant Eligibility
Requirements vary between programs, several common elements are worth noting:
• Income limits: Many programs consider households that earn 80 percent or less of the area median income (AMI) as “low-income.” Therefore, access to these programs is restricted to those within this income range. Moreover, the income limits adjust depending on the number of household occupants.
• Home price limits: Certain programs may restrict your spending to a specific range of residence prices. These limits are largely dependent on the local housing market.
• Buyer’s contribution: Despite the substantial assistance provided, most grants mandate that the homebuyer contributes some cash. The common requirement is 1 percent of the purchase price or $1,000—whichever is greater.
• Residency status: Typically, grants are only available to those intending to make the purchased property their primary residence, not a rental or second home.
• Education requirements: Numerous grant programs require you to complete a homebuyer education course before you can access the funds.
Here are some larger programs to consider but there are many state and local programs as well.
HomePath Ready Buyer Program
Offered by Fannie Mae, a government-backed mortgage enterprise, the HomePath Ready Buyer program allows you to claim up to 3 percent of your home’s purchase price for closing costs. However, your property choice is limited to HomePath properties, foreclosed homes owned by Fannie Mae. Completing a homebuyer education course is a prerequisite for this program.
National Homebuyers Fund
The nonprofit National Homebuyers Fund offers grants for down payments and closing costs, which can amount to 5 percent of your home’s purchase price. Notably, you don’t need to be a first-time homebuyer to qualify. However, you do need to secure a mortgage lender who participates in the program. Assistance is available to help find suitable lenders.
Good Neighbor Next Door Program
Offered by the U.S. Department of Housing and Urban Development, the Good Neighbor Next Door program is open to law enforcement officers, teachers, firefighters, and emergency medical technicians. This program offers a 50 percent discount on homes in designated revitalization areas, which becomes a freebie provided you live there for three years. However, like the HomePath program, you don’t have the freedom to buy just any home.
State and Local Grants
Beyond nationally available programs, financial assistance may be obtainable through local organizations. Many states offer grant programs for first-time homebuyers, especially those relocating for work. Consult your state’s housing finance authority or ask your real estate agent for advice on local grants.
These are just a few options to consider. You can schedule a consultation with us on our website and we can review your situation to help you see what you can qualify for and your different program options.

Finding a skilled loan officer who is attuned to your needs and can assist you through the process is essential. Here are five questions you might want to ask your home mortgage lender.

What are my home loan options?
This question will help gauge the loan officer’s expertise and understanding of your specific situation. You may need to share some personal financial information, but a credit check shouldn’t be necessary at this stage.

Could you explain the mortgage process?
A competent loan officer should be able to outline the steps from application submission to loan approval. They should also provide insights into legal and real estate aspects or direct you to your real estate agent for further information.

What do I need to provide for loan approval?
Before submitting any documents, ensure your loan officer explains what they require and why. Detailed financial information and a credit check will be necessary after completing the mortgage application, but this should only be done with your consent.

Can I pre-qualify?
Consider discussing with a lender before house hunting. They can prequalify you based on a few documents, giving you an idea of your purchasing power without going through the full process. A prequalification letter can also make you a more appealing buyer when you’re ready to make an offer.

How long is the entire process?
This question will help you understand the timeline from application to approval, allowing you to plan accordingly. Remember, the duration can vary based on several factors, including the type of loan, your financial situation, and the lender’s processes.

We would love to schedule a consultation with you to answer these questions in more detail and with specifics to your individual needs. Just visit our website and click on “Schedule Consultation”.

There are numerous benefits to being self-employed – you’re your own boss. However, when it comes to securing a mortgage, the process deviates slightly from traditional mortgages. It often involves additional requirements and more administrative procedures. Here are some tips to help you get organized and approved if you’re self-employed.

Apply for a mortgage when your income is high. We understand this is easier said than done, but lenders will focus most on your income from the last two years. If your income fluctuates, it’s best to apply in a high-income year. This strategy can help you qualify for a larger loan amount and a lower interest rate.

Lower your DTI. Your debt-to-income ratio is one of the critical factors in getting approved. Therefore, it’s beneficial to pay down both business and personal debts. Also, avoid opening new lines of credit a few months before applying.

Don’t mix business and personal finances. Keep your business and personal finances separate by maintaining distinct bank and credit card accounts for business and personal use. This separation helps lenders easily discern business income and expenses and demonstrates that you are managing your business professionally.

Please feel free to give us a call or contact us through our pre-qualification app, and we can determine which product best suits your needs. You may be a candidate for a Qualified Mortgage (QM) or a non-QM lender. Either way, we can review and help you get started!

With summer around the corner, a lot of people are asking if a swimming pool will add value to their home (to be clear, we are talking about in-ground pools here).
The answer is, it depends. Studies show that it can add 5% or more to the value of your home, but these studies pre-date Covid. If you are in a warmer climate like Texas or Florida, pools can add more value and may be more desirable. In fact, if your home is in a high-end area where most homes have pools, lacking one can actually lower your home’s value.
Of course, you have to take into account the building and maintenance costs, as well as whether your yard has enough space to accommodate a pool while still leaving ample area.
It’s probably a good idea to add a pool for your own enjoyment rather than just building one to increase resale value. If you’d like more feedback on your property and how it fits into the market, feel free to schedule a consultation with us on our website for more details and the latest market conditions. We can also discuss lines of credit to fund pool development.