First-Time Home Loans – Is a Fixed-Rate Mortgage Right for You?

When you shop for a first-time home loan, you will come across a wide range of options. Fixed-rate mortgages are popular, as they come with several advantages. However, going with a fixed rate loan is not the right choice for every home buyer.

Getting a home loan that meets your individual needs is important, so consulting with a mortgage expert is well-worth your time. Meanwhile, for a general understanding of whether you may benefit from a fixed-rate loan, read on.

Fixed interest mortgage loans for first-time buyers

Advantages of Fixed-Rate Home Loans

Many first-time home buyers turn to mortgages with fixed rates because the benefits allow for easier budgeting. Reasons to consider this type of mortgage loan include:

  • Stable interest rate – The rate never changes, so market fluctuations are no cause for concern. At the same time, if the interest rate drops, you can refinance.
  • Payment predictability – Though the amounts that go toward principal and interest change over the life of the mortgage, the monthly payment remains the same.
  • Ability to pay down principal – Most first-time home loans with fixed rates do not have restrictive prepayment penalties, which means you can make extra payments without incurring fees.

Disadvantages of Fixed-Rate Home Loans

As we mentioned, a fixed-rate mortgage is not always the right solution for everyone who’s buying their first home. The drawbacks include:

  • High upfront costs – With a fixed-rate loan, the origination fees, underwriting fees and other closing costs are usually steeper than they are with other types of mortgage loans.
  • Eligibility requirements – Loans with fixed rates can be difficult to qualify for, and buyers who have poor credit or plan to make small down payments are less likely to get an approval.
  • Lockedin interest rate – If the interest rate is currently high, locking in that rate for a first-time home loan may not be a wise financial move.

Should You Consider a Fixed-Rate Mortgage?

Generally speaking, if the interest rate is currently low, locking it in for the lifetime of your first home loan can make sense. That said, not all home buyers benefit from this type of loan. You may want to consider an alternative mortgage option if any of the following describes your situation:

  • You are only planning to stay in the home for a few years
  • You have a low credit score and/or a small down payment
  • You want a loan with a lower starting interest rate

When choosing a mortgage, you will need to consider a number of personal and financial factors. To make the decision easier, get advice from a mortgage expert – like the professionals at Integrity First Lending.

Our friendly loan officers are happy to help first-time home buyers in northern Utah, and we have the skill, knowledge and experience to help you find a first-time home loan that meets your individual needs. The Integrity First Lending team can answer your questions, explain your mortgage options and help you every step of the way.

If you are planning to buy your first home in South Jordan, Tooele or in the greater Salt Lake City area, let Integrity First Lending make the process easier. To discuss fixed-rate mortgages and first-time home loans, contact us today.

 

To Become a Landlord, Consider an Investment Property Loan

The traditional path to becoming a landlord is to save up money to purchase a rental home. Taking out an investment property loan is a shortcut, allowing you to achieve your goals sooner.

However, when it comes to financing investment properties, the options are somewhat limited. Many programs, including VA home loans and FHA mortgages, are only open to borrowers who want assistance purchasing a primary residence.

If you’re interested in an investment property loan, talking to an expert in rental home financing – like the team at Integrity First Lending – is the best course of action. In the meantime, here’s a look at the basics on loans for investment properties.

Utah investment property loans

Conventional Home Loans

Conventional mortgages, or those not backed by the government, are an option for investment properties.

To purchase a rental home with conventional financing, you’ll need a solid credit score and a significant down payment – up to 20%, in some cases. Fixed-rate mortgages with 15- or 30-year terms are popular, but some adjustable-rate loans may also be good options for aspiring landlords.

Cash-Out Refinance Loans

If you have equity in your current home, a cash-out refinance loan may put you on the path to becoming a landlord.

With this financing solution, you’ll be refinancing the balance of your mortgage along with up to 80 percent of the loan-to-value (LTV) ratio of a rental home. You’ll end up with a new loan that covers both properties and has a single payment.

Qualifying for an Investment Property Loan

You may be ready to become a landlord, but are your finances in order? To qualify for a loan with a good interest rate, you should be in a strong financial position – you want lenders to know that you can afford to invest in a rental home.

For the best chance at an approval for an investment property loan with a favorable rate, experts say you should take steps to improve your credit score. Pay down your credit card balances, take care of any small bills in collections and, if possible, get added as an authorized user on an account with a good payment history.

Having a large down payment also improves the likelihood of being approved for financing and may even help you secure better loan terms. In addition, if you put down at least 20 percent, you can save thousands by avoiding mortgage insurance.

Consult with an Expert in Rental Home Financing

Investing in a rental home is a great way to boost your income, but finding a lender and securing financing may take a little ingenuity. If you’re ready to take the leap, having a highly-experienced loan officer at your side can make all the difference.

Integrity First Lending, based in northern Utah, can help you realize your goal of becoming a landlord. Our team of professionals has decades of combined experience in the mortgage and home loan industry, and we can tell you everything you need to know about qualifying for an investment loan.

For more information about Integrity First Lending, or to discuss your options for an investment property loan, contact our South Jordan or Tooele office today.

When to Use a Broker Like Integrity First Lending

Why would you want to use a broker for your home loan? It would be easy to just run to your nearest bank or credit union. But this may not be the best way to get a loan that is created just for you.

Like everything else, there are good loans and bad loans. Lenders are really investors in your home. They want to make the most money for their investment, with the safest return. When giving a loan, they are more concerned with their own interest in the loan than you or your needs.

A mortgage broker is different. They are a personal loan shopper for your home loan. Because they are not the lender, there is no conflict of interest in getting you the loan that is looking out for you. Think of them as the glue that holds the process together without ripping at the edges.

It is the job of the broker to verify your financial information, run the numbers, and understand your needs. Then, they can go out and look at all of the options that you qualify for to find the best loan, at the best interest rate, with the lowest closing costs.

If you have special needs before qualifying for your loan, such as information on your credit report and repairs that you can make to improve it, they will be there for you. They can refer you to a specialist in credit repair, set up your private mortgage insurance, and so much more.

The brokers at Integrity First are not only knowledgeable about the loans that are currently on the market, but they have taken the time to specialize in specific types of loans. It is our mission to know the best interest rates for every type of loan. They will help you determine if an FHA loan or conventional loan is best. What if you are a veteran that is looking to own your first home? They’ll help you navigate a VA loan. They will help you get all of your paperwork in order, saving you time and frustration.

Getting a mortgage can be a very time-consuming process. When you let a broker do the heavy lifting and point you in the correct direction, you can save time and money navigating the mortgage process.

Eligibility Requirements for Utah VA Loans

Do you qualify for a VA loan?

Ultimately, the U.S. Department of Veterans Affairs has the final say, but many service members, reservists, veterans and their surviving spouses meet the VA loan eligibility requirements. An experienced loan officer can determine whether you’re likely to qualify, but these are the basic guidelines for qualification.
How to qualify for a VA loan in Utah

VA Loans for Servicemen and Veterans

If you’re on active duty now, you can establish eligibility after 90 consecutive days. Similarly, anyone who served at least 90 days of active duty during World War II, the Korean War, the Vietnam War or the Gulf War should qualify.

For veterans who served during peacetime and those who were separated from service, qualifying for a VA loan requires at least 181 days of continuous active duty.

In the event of discharge due to a service-connected disability, current and formers members of the armed forces may qualify for a VA home loan with fewer days of active duty.

VA Loans for Military Spouses

If you’re a surviving spouse of a service member or veteran, you may be eligible for a VA home loan under a few different circumstances.

Un-remarried spouses of veterans who died during service or as a result of a service-connected disability are typically eligible, as are spouses of service members who are missing in action or prisoners of war. Surviving spouses who are receiving Dependency and Indemnity Compensation (DIC) benefits may also qualify.

In addition, surviving spouses age 57 or older who remarried on or after December 16, 2003 may be approved for a VA home loan.

VA Loans for Selected Reserve and National Guard

If you’re a reservist, you can qualify for a VA home loan by completing at least six years of service. To meet the requirements, you must be a member of an active unit in the Selected Reserve or National Guard, attend the required weekend drills and complete the necessary two weeks of active duty for training.

The VA also requires reservists who want a home loan to meet one of the following conditions: continued service in the Selected Reserve, transfer to the Standby Reserve or the Ready Reserve after honorable service, an honorable discharge or placement on the retired list.

VA Loans for Other Beneficiaries

The Veteran’s Administration also approves home loans in some other circumstances.

If you are a U.S. citizen who served in the armed forces of one of our World War II allies, you may qualify. You might also be eligible if you were a member of certain organizations. Cadets at the U.S. Military, Air Force or Coast Guard Academy, midshipmen at the U.S. Naval Academy, Public Health Service officers and officers of National Oceanic & Atmospheric Administration are among those who may be approved for a VA home loan.

Do you have questions about VA loans? Or are you ready to get the ball rolling and apply for a home loan? Let Integrity First Lending help.

With decades of combined loan and mortgage experience, the professionals at Integrity First Lending can explain your options and help you find the best solution to meet your needs. To discuss your eligibility for a VA loan, contact our South Jordan or Tooele, Utah, office today.

Save More Money When Getting an Investment Loan

Becoming an investor in real estate is a great way to make a “long term” profit in today’s real estate market. But getting a loan with current lending standards can be out of the reach of most investors. An investment property, one that you don’t live in but rent out, is a great way to build money for the future. If you’re looking for a short term quick flip, plan on having a large reserve of money to get started. At Integrity First Lending, we specialize in long term investment planning. We want you to succeed for years.

What does it take to get an investment mortgage in today’s tighter lending standards? The only type of loan you can qualify for in a home you don’t plan on living in is a conventional loan. Let’s look at the basic criteria for a conventional loan and the twist you need to make it an investment loan.

Credit Score

Credit scores have a high impact on any conventional loan, but when you’re looking at investing, the lender is going to look at whether you have the financial ability to maintain an investment property and your long term stability from past responsibilities. Before you start, take a look at your credit score and make sure it’s above 740. This may be the place you need to start to get the best loan on your first investment property. This is a great way to get a better interest rate on your investment loan. The better the credit score, the better the interest rate.

Finding a property with a great loan-to-value ratio is essential to saving money on your loan. It pays in the long run to have a property that is investment worthy.

Money

Since investing is all about making money, you should have an adequate amount to invest. Know up front the type of property you plan on investing in. If you invest in a single family home, you will be required to have at least 20% down. If you have more than the minimum amount, you can save money in the long run. The more down, the lower the end pay off, the lower the monthly mortgage amount.

Investment properties require at least 20% down on single family homes and 25% on multi-family homes. Since this is a basic requirement you also save money by avoiding (PMI) private mortgage insurance.

The Integrity Plan

The experts at Integrity First Lending want you to succeed in your investment plan, saving you the most money. We start your investment with a long-term business plan. Showing you how to make sure you have a back-up plan in case of an empty property, renovations that get the best return, and getting the best possible loan available. If you’re looking for a great property that can be occupied by you the borrower and have a rental attachment, we help you verify the rules and regulations for your house.

Give us a call today to learn more at 801.542.0961.

The Power of Being a First-Time Home Buyer

There is great power in being a first-time home buyer, even though you may not feel like it.

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.

first time home buyer

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%.

Subsidized Interest

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!

Make More Money With Your Real Estate Investment

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.

real estate investment loan

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.

Avoid Vacancies

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.

Extra Charges

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.

Professionals

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.

Lowering the Closing Costs on Your New Home Loan

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.

Lowering new home loan closing costs

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.

How to Reduce or Eliminate Mortgage Insurance

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.

eliminate mortgage insurance

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.

Conventional Loans

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.

5 Simple Ways to Get Higher Appraisals

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.

higher house appraisal

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!