For starters, you have access to special loan programs that can help you close a loan more quickly and less expensively than if you had already purchased a home before.
In first-time mortgage loans, you can expect benefits like lower down payment requirements, subsidized interest, and caps to the fees that lenders can charge you.
Lower Down Payments
First-time homebuyer loan programs often offer down payments as low as 0%-3% of the loan amount. Non-first-time loans can require a minimum down payment of up to 20%.
If you are a lower income buyer, you may also have the government or some other organization subsidize the interest paid on your loan. That helps keep your monthly mortgage payment lower allowing you to better afford a home.
Private Mortgage Insurance (PMI)
Some of these programs could require you to pay for private mortgage insurance (or PMI) which adds to your costs while still making the home more affordable.
Using a Mortgage Broker
Getting with a reputable mortgage company to get you pre-approved will be your best bet to find a program tailored to your situation, saving you lots of time and money.
We’d love to help get you into your first home, paying as little as possible. Give us a call at 801.542.0961!
You invest in real estate to make money. The best investments are those that make the greatest amount of money with the least amount of effort. So you want to put a value on the time you spend managing your investment as well as the money you put into it.
How do you make more with your investment? First you need to start with the best loan. One of the experts at Integrity First Lending can get you started with that.
Minimize Cost on Repairs
When starting your investment, make sure you get a great licensed home inspector to look for hidden issues with your property. Two things you may not know how to look for that will cost you in the end are mold and structural damage. The time it takes you to repair these problems is time you won’t have tenants in your home. Large amounts of money can be lost here.
Low Maintenance Yards
Consider landscape. When you buy a home you’re going to live in, you understand the work involved in keeping up a beautiful yard. Tenants may not have the same love for beauty as you do. However, when trying to find someone to occupy the residence, they may expect to see the property in perfect order. This is a two-edged sword that you don’t want to get caught up in. Keep yards and gardens to a minimum. Consider low maintenance yards when you’re looking for the perfect property.
When your investment is empty, you aren’t making money. In fact, you’re spending money on maintaining the loan. Every time a renter leaves the property you incur the cost of paint, possibly new carpet, etc. Keep turn over down to reduce the overall costs. This might mean higher deposits, or higher rents to get a higher quality of renter in your property.
Before you purchase a property, check out the neighborhood. Are you purchasing a home where you can get renters that can be proud to live there? If they’re comfortable in their new home, they will stay longer.
Check up on references before renting. Who better to know what kind of tenant you’re getting than a previous owner. It only takes a few moments of your time to save possibly thousands in repairs. Check out the length of time a prospective renter was in their previous location, and the reason why they left.
Remember this is an investment property. You’re not here to make friends or cut corners. Renters expect to pay for extras. Make sure when you rent a property you protect your interest. Charge a damage deposit that is reflective of the type of property. If you’re renting a single family home with a yard, there is more to get damaged. Consider the current cost of repainting, repairs, and carpet.
First and last month’s rents are standard for most investment properties. Don’t undercut your safety net. A common item that is overlooked is pets. So many people are looking for pet-friendly rentals. The trick is getting a pet that isn’t going to attack and destroy. To motivate your new tenant and their four-legged friend, try charging a pet deposit and a monthly pet fee. This helps to minimize the overall damage, if there is any. If they leave the home free of damage be honest in giving a refund.
When you make the decision to become a real estate investor, and you start with your first property, make sure you have the best team to get you started. You need a broker with expertise in real estate investing. You don’t want to settle for just any loan. Find a great home inspector. And find a great attorney to look over your documents. A lot of money can be saved when working with the right team of home loan professionals.
For most home buyers, closing costs are one of the biggest up-front expenses of a new home loan – and sometimes they come as quite a surprise.
You’ve saved and saved for your down payment and, now, you have to come up with thousands more to close on your mortgage?
Fortunately, we have some simple tips and tricks that can help reduce your closing costs and, as a result, reduce the amount of cash you have to bring to the table before your close-of-escrow date.
Request Seller Assistance with Closing Costs
Most buyers submit offers that are below the seller’s official asking price. Most people assume that sellers build in a little “wiggle room” in their listing price and – let’s be honest – no one wants to pay more for their property than absolutely necessary.
If sellers do indeed have a little room for negotiating, you could make your offer at or near full price but request that the seller contribute to your closing costs. Although you’ll still be paying these costs yourself, you’ll essentially be financing them into your loan rather than having to bring in the cash at closing.
But, because not every home loan program allows a seller contribution, check with your mortgage lender to make sure this is a workable solution for you.
Get a VA Home Loan
If you’re an active duty service member, veteran, or the surviving spouse of a member of the military, consider using the U.S. Department of Veterans Affairs home loan program. VA loans require the seller to pay your closing costs, making the dream of homeownership a more achievable reality.
Although you must meet the eligibility requirements, VA loans often have a more favorable interest rate than other mortgage programs. Talk with your mortgage lender to see if one of these loans is right for you. You’ll need to b
Use a Grant or Closing Cost Assistance Program
In Utah, many municipalities and agencies offer down payment and closing cost assistance programs for qualified buyers. Although these programs change each year, depending on available funding, they can provide invaluable assistance with home loan closing costs.
Talk to your loan officer to determine what programs are currently available in your area and what you need to qualify.
Schedule Your Home Loan Closing at Month-End
This last tip is one of the simplest of all, and can potentially save you hundreds (or thousands) of dollars in closing costs: close on your loan as close to the last day of the month as possible.
The cast you must bring to close includes per-diem (per-day) interest charges based on how many days into the month you close your loan. If you close on the last day of the month, you will minimize those interest charges as much as possible.
Talk to a No Closing Cost Home Loan Expert
But the best way to ensure you get a home loan that truly suits your needs and goals is to work with an experienced mortgage lending professional. At Integrity First Lending, we specialize in low-down and zero-down home loans.
We take the time to understand your needs and your goals, and then we get to work on making those dreams a reality. We understand how difficult it can be to put together enough cash for a down payment and closing costs but we don’t believe those challenges should stand in the way of you becoming a homeowner.
With convenient office locations in South Jordan and Tooele, Utah, Integrity First Lending assists clients throughout the Salt Lake City area and northern Utah. Contact us today to get started. We look forward to helping you with all your new home mortgage needs, including zero-cost home loans.
Whether you’re looking to refinance your current mortgage or you’re looking for a new loan, you need to know about private mortgage insurance (PMI) and how it affects you.
PMI is a privately secured insurance that is required on conventional loans with less than 20% equity in the property. This insurance protects the lender against any loss if the borrower defaults on the loan. A mortgage is just a large investment to the lender so they want to protect their interest in your home.
How PMI Works
When you start your loan, a private insurance agent will set up a policy that calculates 2% or more of your loan value that will be charged monthly as a part of your loan. So the higher the overall loan, the more you pay. This amount is based upon your current credit score and the overall down payment.
If you have an FHA secured loan, PMI is required throughout the life of your loan. FHA mortgages are loans that are given to lenders with less than perfect credit scores and lower down payment amounts. So it only makes sense that a PMI would be required.
Reducing and Eliminating PMI
There are multiple ways to reduce and eliminate your PMI. Considering the type of loan is your first start. If you’re a veteran and you qualify for a VA loan, you’ll never be charged private mortgage insurance. You worked hard to protect your country, now your country wants to protect you.
FHA loans require PMI through the life of your loan. Because FHA loans are available to borrowers who have lower credit scores, and lower down payments, an FHA loan is their only option. But it’s these same factors that make them a higher risk to the lender. Requiring PMI is the lenders way of protecting their interest.
If you have an FHA loan that requires mortgage insurance, the best way to eliminate your insurance is to build your credit, build on equity, and refinance with a new conventional loan.
If you have a 20% down payment when you apply for your loan, PMI will not be required on your loan.
Although conventional mortgages may require PMI in the beginning, as you grow the equity in your home you grow closer to eliminating your mortgage insurance. It takes time to build up 20% equity in your home. In the beginning of your loan, more of your payment goes to interest than principle. By paying a bit more every month, you build up equity faster, shortening the length of time required before you can remove the required insurance.
When you hit the point of 20% equity and you qualify, there are two options to look at. If you are sure you have the best loan you can get, you can just request that your lender drop the PMI and lower your monthly payment. But if interest rates are lower, and loans are prime, you might want to consider this time to refinance your house. Contact a broker at Integrity First Lending and see if you qualify for a no closing cost mortgage.
Years of building up equity in your home can work in your favor. Before you get ready to call your broker and get your new home upgrade or refinance started, you want to get the most out of your equity. That means getting the best appraisal.
An appraiser is a third party that will give an unbiased opinion of your home’s current value. They are responsible for comparing your home to current marketing values, assessing the value against similar homes in your neighborhood, and the overall condition of your property.
An appraiser helps the lender determine the risk on your home. The lenders are looking for the best return on their investment when putting trust and value into your new mortgage.
Get the Outside Ready
Getting your home ready for an appraisal is like putting on your best dress and making sure you focus on your home’s best features.
Start with your home’s curb appeal. Is your front yard trimmed and appealing? This means more than just a mowed lawn. Gardens should be weeded and if possible add a touch of extra color to accentuate your home’s charm.
If you home is being appraised in the warm weather, adding floral planters on your front stoop adds an inviting element to the front of your home. Step back and ask yourself, would you want your family living and playing on this front lawn.
Although the front of your home is your first defense, your back yard should be trimmed and staged as well. Garages, out buildings and decks add value to your home. Make sure your decks are cleaned off and stained. Now is the time for you to do that weekend garage cleanout and have a big garage sale. You can remove all of the extras that you don’t use anymore.
Make the Inside Look Bigger
Once inside your home your appraiser will look at the obvious and the not so obvious. Is there functionality in the layout of your home? Although the layout of your home cannot be changed, the way you perceive flow in your home can be helpful in accentuating its function. Move furniture to open up space and improve walking areas.
Having a clean and organized home creates the perception of space. Put any extra items in your home away and show off its beauty. Don’t overdo the wall décor. This too can give the perception of clutter.
Make It Look New Again
If you want to get the best appraisal from your home, make it feel new again. You can do this by simply putting up a new coat of paint in each of the rooms of your home. Although you may think paint colors that are bright or unique are appealing. This may not be the case to a new buyer who may not have the same taste in color you do. Keep your paint colors neutral and pure.
Your carpets can make you home look older than it really is. Pay a professional to come in and clean your carpets giving them that brand new look. Do you have hardwood floors under your carpet? Consider taking the carpet up and giving your hardwood floors a new life.
When you look around your home consider the value of your windows. Putting new windows in your home can create great value in your home. This does not necessarily mean you need to replace your windows. Start with a good cleaning inside and out. Putting up simple and yet attractive window dressings can give your rooms a blast of color and class.
Point Out the Unique
Does your home have any unique points of interest? It’s these unique elements in your home that give value over the others on your street. Remember that your appraiser has to follow rules when doing an evaluation. Make your home stand above the rest and get a few more dollars added to your appraisal.
Get a New Appraiser
Although appraisers are now required to follow a stringent set of rules, it is still based on the opinion of one person. If you feel like your appraisal was low, get another one. There is no rule that says you can’t get a second opinion.
The amount of your refinance is dependent on it’s evaluation, so make sure your home is all dressed up and ready to go. Any amount of money you put into improving the look will come back to you in the end.
For great rates on refinance or other mortgages, contact Integrity First Lending. We make the home loan process easy!
Buying a home can be a complex process, and some homeowners find themselves with a mortgage that doesn’t work for them, or home repair problems that they can’t afford. A little work up-front can save you years of headaches and thousands of dollars.
Check Your Credit Score First
Home buyers need at least a credit score of 620 to qualify for a loan. The higher your credit score the better the rate and terms of the loan. Some new buyers will not find their latest credit score, make an offer on a home, put earnest money down, and then try to qualify for a loan. If anything has changed your score to a lower number than what you were expecting, it could terminate the agreement, and you could lose all of the earnest money you deposited.
Get Pre-Approved for a Mortgage Before Shopping for a Home
Even if you know your credit score, lenders factor in many other financial variables that could raise or lower the amount they are willing to lend. The best way to know how much home you truly qualify for is to get pre-approved by the lender. Nothing can be worse than finding the perfect home only to find out later that you can’t qualify for it. A mortgage broker can shop for the best interest rate and terms that fit your situation. You can then shop confidently with your pre-approved amount.
Get a Home Inspection Before Purchasing
Sometimes, in an effort to get that home no matter what, first-time buyers may be tempted to not pay for an inspection. Structural and other necessary home repairs can dramatically increase your initial costs.
A home inspection is a must for all home buyers. Sellers should expect it.
An inspection should be done by a certified inspector who is trained to find problems with the foundation, the roof, plumbing, heating and air conditioning, electrical, and the presence of mold or pests. If any problems exist, you may get the seller to pay for them. If not, you will need to consider the costs and decide to move forward with the purchase or back out without penalty.
Negotiate on Home Price
It is best to work with an experienced and reputable real estate agent to help locate a home and negotiate on your behalf. A real estate agent will understand market trends, home values in the area, and how competitive other buyers are at the time.
In a highly competitive climate, you do not want to try to start with a low ball offer. If you really want the home, your first offer should be at the fair market value for the home. If for some reason your offer comes in too low, or negotiations go back and forth too long, the seller will often find a buyer with a better offer and you end up losing your home over a relatively small amount of money.
Whatever you or your real estate agent negotiates, get it in writing. Verbal agreements are not binding and you will most likely lose if it comes down to a legal battle.
Wait to Acquire New Debt Until the Deal is Done
Nothing will kill a home loan closing faster than a change to your credit situation. While your loan is processing, buying a new car on credit can be just as damaging as opening a new account at a local furniture store. Put off opening new credit accounts or making major purchases until after your loan closes and you have the keys to your new home.
If you can avoid these mistakes and keep learning all you can to help protect yourself, you will come out well and soon you will be living happily in your first home.
Starting a home loan application means you are on your way to receiving your pre-approval letter. That letter will let you know exactly how much you can borrow. That knowledge will help you save time and money as you search and make an offer on a home.
Get a jump on fixing any financial issues
Going through the application process will help identify any financial issues that need to be addressed. Things like credit score, debt-to-income ratio, work history, and more are reviewed by the lender. If any issues need addressing, this gives you an opportunity to do that to make sure you qualify.
Save money by positioning for a better rate
You won’t get a true rate for your situation until you apply for a home loan. The information given in your application allows a mortgage broker to shop around for the best terms and rates that fit your situation.
If a financial issue may take time to correct, you may want to consider correcting that issue and re-applying at a later time to qualify for a better rate or higher mortgage amount. In the long run you could save thousands of dollars.
Save time by speeding the time to closing
When all issues are resolved and you have a pre-approval letter in hand, that document will help make you and your offer more attractive to the seller of the home, oftentimes putting your offer ahead of others. The seller will see an serious buyer, an approved funding amount, and will imagine a much smoother and faster closing process. Your negotiations will be taken more seriously and you can find yourself saving time and money in many areas.
Your mortgage broker can help you get a pre-approval letter by having you complete a loan application. You can go to IntegrityLending.com and start the application process online.
We’d love to help get you into your first home, approved and saving money.
Get Your Pre-Approval Letter by Starting Your Application.
You usually don’t get what you don’t ask for when negotiating. So ask responsibly. You want to create a reasonable and fair offer that benefits both parties.
In the process, there are some Do’s and Don’ts that can help make sure you are getting a good deal.
Have your real estate agent negotiate for you. An experienced and reputable agent will help you get the deal you want. They should know the market, pressure points for sellers, common and flexible areas of negotiation, and how to time offers and counter offers. Much of the negotiating process is a business dance of sorts. Your realtor will know how to dance well.
Know what is most important to you. Knowing this will help temper a common desire to defeat the seller. If you get what matters most to you, you will know what are more flexible negotiating points for you. For instance, is a rock-bottom price more important than having the seller make expensive repairs to the home? Are you more interested in the closing date or that the seller pays the closing costs?
Learn the seller’s motivation to sell the home. Knowing whether the seller is looking for a quick sale, has not been able to sell the house for some time, or other factors can help you and your realtor craft an offer that satisfies the seller better.
Get it in writing and pictures. If appliances, furniture, or other features are included, spell it out in the contract. Take pictures of what’s included too, so it is very clear to both parties what has been agreed to.
Don’t give a lowball offer. Using a realtor will help prevent you from offering too low and insulting the seller. You would rather get a counter offer from the seller, rather than have the seller tell you to take a hike.
Don’t base your offer off of an estimated value you saw online. Online services that list home values can be extremely inaccurate. Trust your realtor to help you come up with the right offer to make. If the home is listed at or below fair market value, it’s unlikely you will get it for less. However, if it’s priced above fair market value and it’s been on the market for a while, a lower offer would be an appropriate starting point.
Don’t get hung up on decor. Things like paint, window coverings, light fixtures, appliances, countertops, and carpet can all be easily changed. Don’t make these a focal part of your negotiations. Focus on more important things instead.
Don’t show your hand. While you want to learn the seller’s motivation for selling, you do not want to let the seller know any vulnerabilities like how much you’d be willing to concede to get the home. Especially don’t show any desperation, no matter how much you want the home.
Keep your options open as you begin negotiations. Be willing to walk away over major issues, and be willing to compromise where it makes sense to you. Negotiation is your friend. Use all of these tips to make your purchase that much sweeter.
There are at least 7 things you must do to win in the home buying process. Winning means getting a fair deal and being satisfied with your purchase. These 7 things should happen after you receive your pre-approval letter.
Work with a reputable and referred real estate agent. You don’t want to just work with the seller’s agent to save the seller money. You need an experienced pro that keeps your best interests at heart, knows local property values, and can help in the negotiation process. Since the seller pays realtor’s costs, it makes sense to use a pro.
Create a wish list. Separate your wish list into 2 categories “Needs” and “Wants.” This will help you prioritize what you really should have in your first home and knowing what you could live without if you have to. This will make it easier to eliminate homes or narrow your search to homes that will suit your needs better.
Expand your location search. While you may have your favorite target neighborhoods or school districts to consider, expanding your search can open many opportunities for a bigger property, a safer neighborhood, a less expensive alternative, or other desirable features.
Visit the property multiple times. Homes can look different at different times of the day. Higher traffic on the streets, increased surrounding noise, and other issues may happen at different times of the day that may dramatically affect your lifestyle. Make sure you would like to live there at all times of the day.
Make an attractive offer. Don’t kill your chances of getting that perfect fit home by low balling an offer or being difficult about a few thousand dollars. Over a 30 year loan period, a few thousand dollars is literally a handful of dollars more per month. Instead, make a fair offer for the property. Your realtor can help you. A fair offer coupled with a pre-approval letter will dramatically improve your chances of getting the seller to accept your offer.
Select a reputable home inspector. You will see this tip repeated in other videos and content on our website. You must pay for an inspection to protect yourself from buying a home with structural hazards and expensive repairs. In case your seller is unwilling to pay for needed repairs, you will want an escape clause in your initial agreement that will allow you to back out of the deal. Your real estate agent can help you with this.
Lock in Your Rate ASAP. Once you have selected your home, lock in your rate. You can lock in your rate up to 5 days before your closing. Get the rate lock in writing with a reasonable expiration date, one that won’t expire before that closing. Your mortgage broker will work closely with you on this one.
Doing these 7 things will ensure you are making a reasoned choice in the home you choose. They will also help you and your offer be attractive to the seller. And finally, they will help you protect yourself and minimize your costs.
A pre-approval letter is an official document from a lender that lets the borrower know you are serious, you can get the money, and that the closing process should be smooth and fast. This letter can be shown to sellers at the appropriate time to show the specific mortgage amount they are approved for. These are all things the seller would love to know up front, making it easier for them to accept your offer on the home.
Pre-approval vs. pre-qualification
A pre-approval is different from a pre-qualification. A pre-qualification simply looks at your income, debt and assets. A lender can give you a very rough estimate of what you might be able to afford. At this point your credit score and history, employment history, and other factors have not been considered yet.
Complete a loan application
A pre-approval occurs after a complete loan application has been completed. An advantage of going through a mortgage broker for this process is that the broker has many more options available to them to match the best loan possible to your situation. Banks and other institutions are often limited by the loan products they offer internally. A mortgage broker literally shops the nation, often beating what the banks and other institutions can offer.
Advantage over other home buyers
As you shop for a home, you may encounter many sellers who started the loan process with other buyers only to learn later that the buyers could not qualify for the loan. Oftentimes, sellers need to sell their property quickly at a fair price. Any delays could be costly to them. Armed with your new secret weapon in hand, your pre-approval letter, sellers will entertain your offer as one with less risk. This can also give you a huge advantage when there are competing offers on the same home.
Your mortgage broker can help you get a pre-approval letter by having you complete a loan application. You can go to IntegrityLending.com and start the application process online.
We’d love to help get you into your first home, armed with a secret weapon.
Get Your Pre-Approval Letter by Starting Your Application.