Tips for Getting Your Offer Accepted

In a competitive market, the best approach is to be aggressive. The key is to lead with your best offer. Don’t expect the seller to go back and forth negotiating with you. Remember, they have the upper hand. Make an attractive offer from the get-go to ensure yours doesn’t get tossed aside.

Be sure to get pre-approved* and find a real estate agent before starting your home search.

• Know what you want.
  Decide on your list of wants, needs, and deal-breakers ahead of time to avoid decision fatigue and allow yourself to move quickly. Once a home comes on the market that fits your criteria, be prepared to view it and make an offer immediately.
• Make an offer above list price.
  Offering below list price is likely not an option when inventory is tight. If you know this could be a potential budget-buster, look for homes below your price range so you have room to offer up. This is where a great real estate agent is an invaluable asset. Your agent is there to help you get the home you want at the right price point, but they’ll also help set realistic expectations, whether that means walking away or going in with a higher bid.
• Waive contingencies.
  Contingencies, such as the appraisal or inspection, exist to protect the buyer, but in a bidding war, many buyers forego them to seal the deal. This can be a risky move, though, so talk to your agent about the pros and cons.
• Negotiate on timing.
  Does the seller want a quick closing? Include a closing date in your offer letter. Does the seller want to live in the property for a few weeks after the sale until they can close on their next home? Be flexible with the move-out date.
• Put more money down.
  If the home appraises for less than the agreed-upon sale price (which can happen when homes are selling above list price), you’ll need extra cash to make up the difference between the sale price and the loan amount. A larger down payment signals that you have cash on hand to do this and are more likely to have your financing approved, whereas a buyer with a smaller down payment may have to walk away from the deal.
• Include an escalation clause.
  This essentially tells the seller that you’ll beat the price on other offers up to a certain amount. For example, you could outbid other buyers’ offers by $1,000, up to a max price of $350,000.

Should You Wait to Buy?

Buying in a competitive market can be intimidating, but it’s not impossible! If you’ve thought about putting off your home purchase until the competition dies down, consider this: While more inventory could come on the market in the future, that doesn’t guarantee a return to a buyer’s market. It’s also difficult (if not impossible) to predict in which direction home prices and mortgage rates will head. Instead of trying to time the market, buy a home when the time is right for you.

Fortunately, there are multiple financing options that may be able to help you afford the home you want. If you’re serious about buying, our recommendation is to explore all of your financing options now and get pre-approved.* That way, you’ll be ready to move quickly when you find the right home.

*This is not a commitment to lend. Pre-approval is subject to certain conditions. Not all borrowers will qualify.

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post How to Be a Competitive Buyer in a Tight Housing Market appeared first on Choice Bank.

Your Loan May Be Sold or Transferred

This is perfectly normal and nothing to be alarmed about. When you close on your loan, your lender has four options:

1. Keep the mortgage as part of their portfolio and service it themselves.
2. Keep the mortgage but sell the servicing rights.
3. Keep the servicing rights but sell the mortgage.
4. Sell both the mortgage and the servicing rights.

Selling the Loan: The Secondary Market
In many cases, your loan will be sold to a third-party investor, such as a government-sponsored enterprise (GSE) like Fannie Mae or Freddie Mac or private investors. When this happens, your loan gets bundled into a pool of other loans that are sold together as mortgage-backed securities (MBS) on the secondary market.

• Your lender — the institution you got your mortgage from — may sell your loan, and many others, so it has cash to fund more loans.
• The secondary market is where investors can buy bundles of mortgages, which may include yours.
• Fun fact! You may own parts of other people’s home loans if MBSs are part of your investment portfolio.

Servicing the Loan: Who Handles the Payments?
Loan servicing is basically the after-closing care of your home loan. The servicer sends out your monthly bills and processes the payments you make. It monitors your escrow or impound account to ensure there’s enough money to pay for insurance and taxes, and makes those payments for you.

Sometimes, your mortgage lender also services your loan. More often, though, your lender will transfer servicing rights to another company. Your loan servicing can change hands any time, and even many times, over the life of your loan. Your lender must notify you of the transfer and provide you with the new servicer’s contact information since you’ll need to start sending your payments to the new company.

Key Takeaways About Servicing

• It’s more important to know who services your loan than who owns it. You probably won’t have further interaction with your loan’s owner, but you’ll be making monthly payments to your servicer.
• The new servicer cannot change the terms of your loan. You will still owe the same amount, for the same interest rate, for the same time period.
• The only thing that changes is where you send your payments! Pro tip: Don’t forget to update your autopay if you get a new servicer.

Your Monthly Payment May Change

As mentioned, your servicer cannot change the amount of your monthly payments. But your payment can change. This will happen if your taxes or insurance fluctuate. It will also occur with an adjustable-rate mortgage (ARM) if you don’t refinance when the initial fixed period ends. If your payment needs to increase, you will receive a letter from your servicer letting you know the new amount.

It’s also possible to overpay into your escrow account. Your servicer is required to audit your account at least once a year. If it finds you’ve overpaid, you will get a refund check. Refinancers often get refunds because the new loan usually includes money to pay off your old escrow account.

Other Things to Watch for

Pay attention to interest rates. Interest rates rise and fall all the time. If they go down enough, you might be able to lower your monthly payment by refinancing. Stay in touch with your Loan Officer for an accurate picture of market rates and to discuss possible savings opportunities.

Keep an eye on that equity, especially if you’re paying private mortgage insurance (PMI). Suppose you put less than 20% down on your home but have since built up at least 20% in equity. In that case, you can inquire about eliminating PMI, a fee that helps protect your lender if you default on your loan.

Prepare for a deluge of mail. Once you are officially recorded as the property owner, your loan becomes part of the public record. As a result, your mailbox will start filling up with offers to refinance your loan, extend your credit, or sell you additional services, such as home security systems, home warranties, and even life insurance.

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post What Happens to Your Loan After Closing? appeared first on Choice Bank.

Understanding Home Equity

Before we dive into the exciting possibilities, let’s start with a quick refresher on what home equity is. Home equity is the portion of your home’s value that you truly own. It’s the difference between the market value of your property and the outstanding balance on your mortgage. As your home’s value increases over time, so does your equity.

Now, let’s explore how you can leverage this growing equity to your advantage.

1. Home Equity Loans and HELOCs (Home Equity Lines of Credit)

One of the most common ways to tap into your home equity is by taking out a home equity loan or opening a Home Equity Line of Credit (HELOC). These financial products allow you to borrow against the equity you’ve built up in your home.

• Home Equity Loan: This option provides you with a lump sum of money, which you can use for a specific purpose, such as a major home renovation or paying off high-interest debts.
• HELOC: A HELOC, on the other hand, operates like a credit card with a revolving line of credit. You can borrow funds as needed, making it a flexible solution for various financial goals.

2. Cash-Out Refinancing

Cash-out refinancing involves replacing your existing mortgage with a new one that’s larger than your current balance. The difference between the two mortgages is given to you in cash. This method can be an excellent choice if you want to secure a lower interest rate while accessing your equity.

3. Reverse Mortgages

Reverse mortgages are designed for older homeowners. They allow you to convert a portion of your home equity into cash, typically in the form of monthly payments or a lump sum. You can continue to live in your home, and the loan is repaid when you sell the property or pass away.

4. Investing in Your Future

Once you’ve accessed your home equity, the possibilities are virtually endless. Here are a few ideas on how you can use the liquid cash to fund your dreams:

• Home Remodel: Enhance the value and comfort of your home with renovations, whether it’s a kitchen upgrade, a bathroom remodel, or adding a new room.
• Education: Invest in your or your children’s education by covering tuition fees, books, or other educational expenses.
• Debt Consolidation: Pay off high-interest credit card debt, which can free you from the burdens of revolving debt and boost your financial well-being.
• Investments: Consider putting your cash into investments like stocks, bonds, or real estate to grow your wealth even further.

Your home is more than just a place to live; it’s a valuable asset that can help you achieve your financial goals. Whether you choose a home equity loan, HELOC, cash-out refinancing, or a reverse mortgage, unlocking your home equity can be a game-changer in your financial journey. So, if you’ve seen your equity grow over the years, now is the time to explore how you can turn it into liquid cash and fund your dreams. The path to financial freedom may be closer than you think, thanks to the power of home equity.

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post Tapping Into Your Home Equity appeared first on Choice Bank.

Step 1: Get Prequalified

Before you dive into the world of house hunting, it’s crucial to understand your financial capabilities. Getting prequalified for a mortgage is the first step in this exciting journey. This process involves meeting with a lender or mortgage broker to assess your financial situation. They will review your income, credit score, and debts to determine how much you can afford to borrow. This prequalification will help you set a realistic budget for your home search, saving you time and disappointment later on.

Step 2: Find a Home

Once you’re prequalified, it’s time to start the hunt for your dream home. Working with a real estate agent is invaluable during this phase. Real estate agents have access to listings, market insights, and negotiation expertise that can help you find the perfect property. They’ll take your criteria into account, such as location, size, and budget, to narrow down your options and arrange viewings of potential homes. When you’ve found “the one,” your agent will assist you in making an offer.

Step 3: Get the Right Mortgage

Choosing the right mortgage is a critical decision that can affect your financial well-being for years to come. There are various loan programs available, each with its own terms and conditions. Your lender will help you determine which mortgage option aligns best with your financial situation and long-term goals. Consider factors like fixed or adjustable rates, the length of the loan (usually 15 or 30 years), and down payment requirements when making your choice.

Step 4: Get an Appraisal

An appraisal is a professional assessment of a home’s market value. It is essential to ensure that the property is worth the loan amount you’ve applied for. Lenders typically require appraisals to protect their investment and ensure they are not financing an overpriced property. An appraiser will evaluate various factors, including the home’s condition, location, recent sales of comparable properties, and any upgrades or improvements. If the appraisal comes in below the agreed-upon purchase price, you may need to renegotiate with the seller or reconsider your offer.

Step 5: Close on Your Home

The closing is the final step in the home-buying process and the moment you officially become a homeowner. During this process, you’ll sign a myriad of documents, including the mortgage agreement, title deeds, and insurance policies. It’s essential to review these documents carefully with your real estate agent or attorney to ensure that everything is in order. You’ll also need to bring funds for your down payment and closing costs, which vary but typically amount to a few percent of the home’s purchase price.

Step 6: Move In

Congratulations! You’re now the proud owner of a new home. The moment you’ve been waiting for has arrived. It’s time to gather your belongings and make the transition to your new abode. This might involve hiring professional movers, enlisting the help of friends and family, or tackling the move yourself. Once you’re settled in, you can start enjoying the perks of homeownership, such as decorating your space, making it your own, and building equity over time.

The home-buying process may seem daunting, but with the right guidance and knowledge, it can be a rewarding and fulfilling journey. By following these six essential steps, you’ll be well-prepared to navigate the complexities of buying a home. Remember, it’s not just about finding a place to live; it’s about finding a place to call home, where you can create lasting memories and build a bright future for yourself and your loved ones. Happy house hunting!

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post Understanding the Home-buying Process appeared first on Choice Bank.

1. Timely Payments Are Non-Negotiable

The foundation of a healthy credit score is making payments on time. This holds true for all your existing credit obligations, from credit cards and auto loans to student loans and personal loans. Late payments can cause your credit score to plummet and raise red flags with lenders. Ensure that you keep up with your current bills and avoid late payments at all costs.

Set up reminders, automate payments, or use budgeting apps to help you stay on top of your financial obligations. Remember, your payment history accounts for a significant portion of your credit score, so maintaining a flawless track record is essential.

2. Pay More Than the Minimum

While making timely payments is crucial, it’s also advisable to pay more than the minimum required amount whenever possible. Credit scoring models take into account your credit utilization ratio, which is the amount of credit you’re using compared to your total available credit. By paying down your balances and reducing your credit utilization, you can positively impact your credit score.

Strive to pay off the total balance on your credit cards each month, rather than just making the minimum payment. This demonstrates responsible financial behavior and can boost your creditworthiness in the eyes of lenders.

3. Job Stability Matters

Lenders consider your employment history and stability when evaluating your creditworthiness. A sudden job change or loss of employment can raise concerns for mortgage lenders, potentially delaying or derailing your loan application.

If you’re considering a job change during the home loan process, it’s essential to discuss this with your loan officer. They can provide guidance on how this might affect your loan application and advise you on the best course of action.

4. Avoid New Credit Applications

Opening new lines of credit or applying for new loans during the home loan process can significantly impact your credit score. Each time you apply for credit, a hard inquiry is recorded on your credit report, which can lower your score temporarily.

To protect your credit score, refrain from applying for new credit cards, personal loans, or any other forms of credit until after your mortgage has closed. Focus on maintaining your existing credit relationships during this critical time.

5. Delay Large Purchases

It’s tempting to start furnishing your new home or making major purchases in anticipation of homeownership. However, making significant expenditures, such as buying furniture or appliances, can increase your credit utilization and potentially harm your credit score.

It’s advisable to wait until after your loan closes to make these large purchases. This ensures that your credit score remains stable throughout the home loan process and won’t jeopardize your mortgage approval.

6. Be Cautious with Cash Deposits

Large, unexplained cash deposits into your bank account can raise concerns for lenders, as they may question the source of these funds. In some cases, these deposits may not be allowed within your loan parameters.

If you need to deposit a significant amount of cash into your account, be prepared to provide a clear paper trail that documents the source of these funds. Transparency is key when it comes to financial matters during the home loan process.

7. Maintain Open Communication with Your Loan Officer

Throughout the home loan process, it’s crucial to maintain open and honest communication with your loan officer. Inform them of any changes to your income, debts, purchases, or other financial matters promptly. Your loan officer can provide guidance on how these changes may affect your loan application and what steps you should take to mitigate any negative impacts.

In conclusion, protecting your credit score during the home loan process is paramount to securing a favorable mortgage rate and loan terms. By following these tips and staying diligent in managing your finances, you can ensure a smooth and stress-free homebuying experience. Remember, your credit score is a valuable asset, and preserving it should be a top priority as you embark on your homeownership journey.

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post Protect Your Credit Score During the Home Loan Process appeared first on Choice Bank.

In today’s ever-evolving real estate market, finding the perfect home at the right price can be a challenging endeavor. Fixed-rate mortgages have long been the go-to option for homebuyers, providing stability and predictability in monthly payments. However, rising interest rates have led many potential homeowners to explore alternative financing options, and adjustable-rate mortgages (ARMs) have gained popularity for their potential to boost your buying power.

Understanding Adjustable-Rate Mortgages

Before we delve into the potential benefits of ARMs, let’s get a clear understanding of what they entail. Unlike fixed-rate loans that maintain the same interest rate for the entire loan term, ARMs typically offer a lower initial interest rate for an introductory period, typically ranging from 3 to 10 years. After this initial period, the interest rate adjusts periodically, often annually, based on a predetermined index and margin.

The Lower Initial Rate Advantage

One of the primary attractions of an ARM is its lower initial interest rate. During the initial fixed-rate period, ARMs can provide significantly lower monthly mortgage payments compared to fixed-rate mortgages. This can make homeownership more accessible for those who are stretching their budgets to buy a home.

Here’s how the lower initial rate can boost your buying power:

1. Afford More House: With a lower initial interest rate, you can potentially afford a more expensive home. This means you can set your sights on a property that might have been out of reach with a fixed-rate loan, allowing you to get the home you truly desire.
2. Temporary Budget Relief: If you’re expecting your income to increase in the near future or planning to sell your home before the initial fixed-rate period ends, an ARM can provide temporary budget relief. You can enjoy lower monthly payments during the initial years while anticipating positive changes in your financial situation.
3. Flexibility in Financing: ARMs can be especially advantageous for those who don’t plan to stay in their homes for the long term. If you foresee relocating within a few years, you can capitalize on the lower initial rate without being overly concerned about rate adjustments down the line.

Factors to Consider

While ARMs can offer increased buying power, they are not without risks. Here are some key factors to consider before opting for an adjustable-rate mortgage:

1. Rate Adjustments: Be prepared for potential rate adjustments after the initial fixed-rate period. Your monthly payments may increase if market interest rates rise, impacting your budget.
2. Risk Tolerance: Evaluate your risk tolerance and ability to handle fluctuations in interest rates. If you’re uncomfortable with the uncertainty that comes with rate adjustments, a fixed-rate mortgage may be a better fit.
3. Future Plans: Consider your long-term homeownership plans. If you intend to stay in your home for an extended period, a fixed-rate mortgage may provide more financial stability over time.
4. Market Conditions: Keep an eye on prevailing market interest rates. It’s essential to assess whether ARMs align with the current economic climate and your individual financial goals.

An adjustable-rate mortgage can be a valuable tool for expanding your buying power in a competitive real estate market. Its lower initial interest rate can make homeownership more accessible and allow you to consider homes that might have seemed out of reach with a fixed-rate loan.

However, the decision to opt for an ARM should be made carefully, considering your financial situation, risk tolerance, and long-term plans. Consulting with a trusted mortgage professional can provide you with valuable insights and help you determine if an ARM is the right choice to boost your buying power and achieve your homeownership goals. Remember, your home is one of the most significant investments you’ll ever make, so it’s crucial to choose the mortgage option that aligns with your unique circumstances and aspirations.

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post Could an Adjustable-Rate Mortgage Boost Your Buying Power appeared first on Choice Bank.

Insulate Your Home

One of the primary ways to keep your home warm during winter is by ensuring proper insulation. Here are some key areas to focus on:

• Attic: Insulate your attic to prevent heat from escaping through the roof. This can significantly reduce your heating bills.
• Windows and Doors: Check for drafts around windows and doors. Caulk any gaps and consider using weatherstripping to seal leaks.
• Walls: Inspect the walls for any gaps or cracks. Use insulation foam or fiberglass to seal them.
• Basement and Crawl Spaces: Properly insulate these areas to prevent cold air from seeping in.

Service Your Heating System

A well-maintained heating system is crucial for a warm and comfortable home during winter. Here’s what you should do:

• Schedule a Professional Inspection: Have a qualified technician inspect your heating system to ensure it’s in good working order.
• Replace Filters: Clean or replace filters in your furnace or heating system regularly. Clogged filters can reduce efficiency.
• Consider a Smart Thermostat: Upgrade to a programmable or smart thermostat to optimize heating schedules and save on energy costs.

Seal Leaky Ducts

Leaky ducts can lead to heat loss and inefficiency in your heating system. To address this:

• Inspect Ductwork: Check for visible leaks and loose connections in your ductwork.
• Seal Leaks: Use duct tape or mastic sealant to seal any leaks you find.

Check and Clean Fireplaces and Chimneys

If you have a fireplace, make sure it’s safe and efficient:

• Inspect the Chimney: Hire a professional chimney sweep to inspect and clean your chimney to remove creosote buildup, reducing the risk of fires.
• Install a Damper: Consider installing a damper to prevent warm air from escaping when the fireplace is not in use.
• Test Smoke Detectors: Test your smoke and carbon monoxide detectors and change the batteries.
• Check Fire Extinguishers: If you have a fireplace or will be burning a lot of candles, stash a small extinguisher within reach of those areas.

Prepare Your Plumbing

Frozen pipes can be a costly and damaging issue during winter. To prevent this:

• Insulate Pipes: Use pipe insulation to protect exposed pipes, especially those in unheated areas like the basement and garage.
• Drip Faucets: On extremely cold nights, allow faucets to drip slowly to keep water flowing and prevent freezing.

Winterize Your Exterior

Don’t forget the exterior of your home:

• Clean Gutters: Clear leaves and debris from gutters to prevent ice dams that can damage your roof.
• Trim Trees and Branches: Trim overhanging branches to prevent them from falling and damaging your home during heavy snow or ice storms.
• Check Roof: Inspect your roof for any damaged or missing shingles. Repair them to prevent leaks.

Stock Up on Winter Essentials

Lastly, make sure you have essential supplies on hand for winter emergencies:

• Emergency Kit: Prepare an emergency kit with flashlights, batteries, blankets, non-perishable food, and a first-aid kit.
• Snow Removal Tools: Ensure you have shovels, ice melt, and a snow blower if needed.

Winterizing your home is an investment that pays off in comfort, energy savings, and peace of mind. By following these steps and being proactive, you can enjoy a warm and cozy home throughout the winter season. Don’t wait until the first snowfall to start winterizing; start now to ensure you’re well-prepared for the colder months ahead. Stay warm, stay safe!

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post A Guide to Winterizing Your Home appeared first on Choice Bank.

But before you rush to view the hottest listings, it’s crucial that you understand ALL of the costs associated with your new home purchase. There’s more to it than just paying off your loan! Whether you’re buying a home for the first time or could use a refresher, here’s what you need to know.

Up Front Costs

Sure, you know about down payments and closing costs, but what about earnest money? And where do those closing costs go, exactly? Here’s a quick look at those payments.

Down Payment: The amount you put down — typically ranging from 0% to 20% — affects how much you end up borrowing, how much your monthly payments will be, and ultimately how much you pay in interest. In some cases, you may be able to use gift funds, and down payment assistance programs exist, as well.

Earnest Money: Sometimes called a “good faith deposit,” the earnest money is due once the seller has accepted your offer — so be sure you have it saved up and accessible before you start house hunting! The earnest money shows you’re serious about buying the home and is usually between 1% and 5% of the purchase price. The funds are held in an escrow account until the transaction is finalized, at which point they will go toward your down payment or closing costs.

It is possible to lose your earnest money deposit if the sale doesn’t go through. Here are situations to avoid so you don’t lose that cash:

• Not meeting deadlines. Your contract most likely outlines when certain milestones need to be met, such as completion of inspections or finalizing your loan. The seller can consider you in breach of contract and cancel the deal.
• Agreeing that the deposit is nonrefundable in your contract. You’ll need to discuss this with your agent.
• Waiving contingencies that protect your interest in the home.
• Backing out of the deal for a reason not covered by your contingencies.

Closing Costs: A one-time payment due when you close your loan, these typically account for about 2% to 5% of the purchase price, so it’s important to save for them ahead of time. Everyone’s closing costs vary slightly, but below are a few examples of what might be included:

• Appraisal Fee: Paid to the appraiser to estimate the fair market value of your home.
• Discount Points: Paying these can lower your mortgage interest rate.
• Origination Fee: Charged to the lender for originating the loan.
• Recording Fees: Paid to make your real estate purchase a part of public record.
• Title Service Fees: These cover the title search, examination, and insurance.
• Transfer Taxes: A tax imposed on transferring the title from the seller to the buyer.

After Your Loan Closes

You pay your monthly mortgage bill as one lump sum, but it actually has four parts: principal, interest, taxes, and insurance.

• Principal: Goes toward your loan amount.
• Interest: Fee for borrowing money from your lender. This will make up the bulk of your payments early on.
• Property Taxes: A percentage of your home’s assessed value that gets paid to your local government.
• Insurance: Includes homeowners insurance and may also include mortgage insurance, which is required is your down payment is less than 20% or if you choose certain loan types.

Taxes and insurance are typically held in an “escrow” or “impound” account and paid on your behalf by your servicer, although you can request not to have these funds held for you, depending on your loan type. The payments are reviewed yearly and adjusted as necessary. Having an escrow account is highly recommended, as it helps to ensure you’ll have the funds to pay your taxes and insurance on time.

Other Fees and Expenses

Be sure you also save for:

• Moving costs
• Annual maintenance and repairs
• Utility bills
• Homeowners’ Association (HOA) fees (if applicable)

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post What Does It Really Cost to Buy a Home? appeared first on Choice Bank.

Know What You Can Afford

The first step is determining what you can afford. Everything else will depend on that answer. Let’s explore what lenders look for when determining whether to give you a loan.

Why Get Pre-qualified?
Before you start looking at houses, it’s important to work with me to get pre-qualified, which will let you know how much home you can afford. This can help you narrow your home search to houses within your budget, give you an idea of how much you’ll need for a down payment, and help you identify budgeting goals to work toward.

How Does My Lender Determine My Loan Amount?
To determine the loan amount you can qualify for, a lender will look at your credit, income, assets, and debts.

Knowing how much you can afford to pay each month toward your mortgage will help you as you begin your search for a new home, and your credit, Loan-to-Value, and Debt-to-Income all contribute to determining your budget and your loan amount.

Costs that Come with Buying a Home

Down Payment and Earnest Money
Before you even buy the home, you’ll need cash for your earnest money and down payment. You may have heard the myth that you need a 20% down payment to buy a home, but there are loan programs available that require as little as 3.5% or even zero down.

Your Monthly Mortgage Payment

• Principal: The actual amount you are borrowing.
• Interest: What it costs to borrow money for your home.
• Escrow: A third-party account used to pay taxes and insurance on your behalf.

Closing Costs
You’ll also have to pay closing costs when ownership of the home is transferred to you. Closing costs are a one-time payment due when you close your loan. These may include:

• Appraisal Fee
• Discount Points
• Origination Fee
• Recording Fees
• Title Service Fees
• Transfer Taxes

Finding a Home

Step 1: Choose the Right Agent.
Along with your lender, your real estate agent is a crucial player in the home-buying process. Start by asking around for a referral and be sure to talk to a few agents before choosing one.

Step 2: Find the Right Home.
Buying a new home can be a stressful event. Making a list of features you must have, would like to have, and don’t want can help you stay focused when you’re visiting potential new homes.

Step 3: Make an Offer.
Your real estate agent or lawyer will draw up the contract that outlines the terms and conditions of the sale. In a seller’s market, you may get a counteroffer, and your buyer’s agent will negotiate on your behalf.

Step 4: Get a Home Inspection.
A home inspection is a thorough examination of the property, from foundation to rooftop, that assesses the home’s general condition and any needed repairs. While it is an additional cost, a home inspection is highly recommended. The inspector will be looking for things like leaky roofs, termite damage, and structural issues.

Getting the Mortgage That’s Right for You

You’ll have a lot of choices when it’s time to select the type of home loan that fits your needs. Below are some common types of home loans:

• First Time Home Buyer
• Conventional and Conforming
• FHA
• VA
• Construction
• Home Equity Loans and Lines of Credit
• Vacation Home
• Investment Property
• Jumbo

Once you find the home loan that works best for you, you’ll need to gather documents that show your income, assets, and debts. These documents include:

• Tax returns
• W-2s and/or 1099s
• Recent bank statements
• Recent paystubs

The Mortgage Application Process

Once you’ve submitted your loan application, it triggers a series of events that must take place before you get your loan approval.

Loan Estimate
Within three days of submitting your application, you will receive a Loan Estimate, a form that details the loan you’ve applied for. This is a summary of what your loan will look like if you decide to move forward.

Processing
Once you decide to continue, the application goes to the processor who checks that all the necessary paperwork is present. An appraisal is also ordered on your prospective property.

Appraisal
At this stage, a licensed third party will evaluate the property to ensure it’s worth the loan amount. The appraiser will look at the home’s condition, age, and size, and will compare the property to other home sales in the neighborhood and consider the replacement cost of the property.

Underwriting
Once the processor has compiled a complete loan file (i.e., the application and all supporting documents), the underwriter reviews the application in detail to make the final decision to approve or deny your mortgage loan. This includes reviewing your employment history, credit history, and appraisal report. The underwriter also ensures your mortgage meets current loan product guidelines. You may be asked to provide additional documentation, which is not unusual.

Approval
Once your application is approved, you’ll receive a loan commitment letter, which outlines the details of your loan, including the amount being borrowed, the interest rate, and the term or repayment period.

Closing Time

Closing is when your contract is finalized and you sign the documents that make you an official homeowner. But before you close there are important steps you need to take:

• Get a home inspection.
• Get a homeowner’s insurance policy.
• Determine who your closing agent will be.
• Review the Closing Disclosure and make sure any errors are corrected.
• Ask your lender for a copy of your other closing documents so you can review them in advance.
• Find out how much money will be needed to close and how to transfer payment.
• Do a final walk-through of the home to ensure all repairs have been made.

Moving In

Once you’ve closed on your home it means you’re officially a homeowner! Don’t forget to store your paperwork, complete change of address forms with the post office, update your ID, and update your bills to your new address.

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.
Talk to a home loan expert!

The post A Guide to Buying Your First Home appeared first on Choice Bank.

With a HELOC, you are in control of how much you borrow and when, which is a huge benefit when funding a home renovation. After all, sometimes minor projects turn out to be a bit more complicated than expected, or you may want to opt for upgraded flooring or appliances. You may even want a landscaping makeover to go with your new deck!

1. Access to Affordable Funds:
   Home renovations often require a substantial amount of capital. Using a HELOC to finance your project allows you to tap into the equity you’ve built in your home. As a result, you can access affordable funds, typically at lower interest rates than other forms of credit, such as personal loans or credit cards. This can save you money in the long run and make your renovations more financially feasible.
2. Flexible Financing:
   A HELOC offers a flexible financing option for your home renovations. Unlike a traditional loan, a HELOC provides a revolving line of credit, similar to a credit card. This means you can borrow funds as needed throughout the renovation process, giving you the freedom to manage your expenses effectively. With a HELOC, you have the flexibility to access funds, repay them, and borrow again up to your approved credit limit, allowing you to adapt your budget as your renovation plans evolve.
3. Managing Renovation Costs:
   Home renovation projects often come with unexpected costs or changes along the way. A HELOC can be a valuable tool to help you manage these financial fluctuations. Whether you encounter unforeseen expenses, require additional materials, or decide to make enhancements beyond your original plans, having a HELOC in place can provide the financial cushion you need to accommodate these adjustments without derailing your renovation progress.
4. Funding Major Renovation Projects:
   If you’re planning significant home renovations, such as a kitchen remodel or a room addition, the costs can quickly add up. A HELOC can provide you with the necessary funds to tackle these ambitious projects. Whether you want to create a chef’s dream kitchen, add extra living space, or renovate your master suite, a HELOC can empower you to make substantial improvements to your home without compromising your budget.
5. Enhancing Property Value:
   Home renovations not only enhance your living space but also increase the value of your property. By utilizing a HELOC to fund your renovations, you’re investing in the long-term appreciation of your home. Upgraded kitchens, bathrooms, and other improvements can significantly boost your home’s marketability and attract potential buyers if you ever decide to sell in the future. The return on investment from your renovations can potentially exceed the cost of utilizing a HELOC.
6. Interest Deductibility:
   In certain situations, the interest paid on a HELOC used for home renovations may be tax-deductible. However, it is crucial to consult with a tax advisor to understand the specific tax implications in your jurisdiction. Taking advantage of potential tax benefits can further enhance the financial advantages of using a HELOC for your home renovations.

A HELOC may be able to help you navigate the home renovation process with added confidence and financial security. And in addition to getting an upgraded home that you can enjoy now, you’ll be adding to your home’s value for when you eventually sell.

Through our versatile home loan options, Choice can help you capture the pride of a new home. Our team of experienced home lenders specializes in everything from pre-qualification to your final payment. We’re here for you every step of the way.

The post Utilizing a HELOC to Fund Home Renovations appeared first on Choice Bank.