First Time Home Buyer Tips

First Time Home Buyer Tips

By Brian Kordell

If you have been thinking of purchasing your first home, there are some things that you should do before shopping around for your dream home or attempting to get a mortgage loan. If you follow these tips, you will be the ideal first time home buyer for any Realtor or mortgage company.

1. Know your TRUE expenses. – More often than not, those looking to buy their first home don’t keep track of their true expenses. Without a realistic budget, you won’t know what you can actually afford for your mortgage payments. A great way to get an accurate budget is to use a free software to track your expenses. This includes everything you spend money on, cash, cards and checks. Keep your receipts for everything and track your spending habits. There is a lot more to a budget than just car payments, groceries, rent and utilities. You most likely spend money on entertainment, eating out, clothing and special occasions such as friend or family birthdays and holidays. Once you have tracked your expenses for several months, you will know what you can comfortably spend on a mortgage payment without diverting too far from your lifestyle. This is also a great tool to see where you can cut expenses and put more away for your down payment.
2. Good Banking Habits – Many first time home buyers end up shocked to find out that the few thousand their parents gave them to help with the down payment on their first house may not be counted towards their actual account balances when going through the mortgage process. If at all possible, keep depositing your paychecks into a savings account and use any cash help you have received to purchase a home towards your monthly expenses, or even better – to remove any negatives off your credit or pay down credit card balances. Of course, there are a few mortgage programs that allow for gift help with down payments, but you may get a better deal all around if you show steady income through a paycheck, showing that your checking account balance didn’t just surge from $0 to $5,000 from a single deposit. If you hold gifted money in your account for a year, it’s more likely to be accepted. If you are self-employed there may be other specific requirements. 
3. Credit Rating – Knowing what’s on your credit report and keeping it as clean as possible is very important. Lenders will look at your credit rating, and also look at how many charge accounts, loans and inquiries you have on your credit reports. If you have any negative marks on your credit for un-paid or late-paid accounts, you will need to clean them up. Many collections agencies will agree to remove the account entirely off your report if you reach a settlement or pay in full. If you can’t come to an agreement with a creditor to remove negatives off your account, try to pay it off as soon as possible anyway. You will also want to check for mistakes. It’s not uncommon for people to have mistakes on their credit reports. If you find mistakes, make sure that you contact all 3 major credit bureaus to dispute the false information and give at least 3 months’ time to allow for removal of any false information.
4. Save for Closing Costs and Fees – Many first time home buyers don’t realize that there are fees outside of a mortgage loan itself involved in the process. Make sure before you decide to go with any lender that you get all fees and closing costs in writing before you decide they are the right lender for you. 
5. Watch the Market – Knowing what’s going on with mortgage rates and government loan programs is a good idea. It’s also good to know the housing market where you want to purchase your home. Research is invaluable. If you don’t know that mortgage rates reached an all time low you could miss out on an opportunity to lock in a rate. If you don’t know that the neighborhood you wanted to move into has four homes in foreclosure and is moving the market value of homes down instead of up, you could end up owing more than your home is worth in a year. A simple search online will give you insight to what’s going on in your area.
6. Get Pre-Approved, Not Just Pre-Qualified – If you are sure your finances and credit is in order, you have a decent nest egg and down payment ready, have watched the market and feel like you are ready to start looking for homes, make sure to get Pre-Approved for a certain amount before you approach a Realtor. Getting pre-qualified is just a preliminary process, and while it’s great to shop around a few lenders to see what rates they are offering and what the total cost of the loan could be, once you have found the best deal, get a Pre-Approval from them with everything in writing. You may need to do a rate lock as well, which will lock in your ideal interest rate for a certain period of time. This will make the whole shopping process so much easier, you will have a set budget to provide a Realtor and can focus on the fun part – Finding your first home! 
7. Don’t Skip the Home Inspection! – Once you have looked at homes and feel you have found the ONE, make sure to get a full home inspection. This includes a termite inspection. You will want to know any potential repairs before hand, and if they are extensive, you may be able to negotiate price, or get into a home loan that allows for repair expenses to be included in the loan. 
8. Get Everything In Writing From Start To Finish – From the closing costs to the offer on the home, make sure that everything is in good order and that all expenses and contingencies are in writing. If you make an offer, make sure that it’s in writing that the offer is only good if inspection is passed.

 These are just a few tips for First Time Home Buyers to make the process go so much easier and skip some potential snags along the way.

Brian Kordell with Advisors Mortgage Group, LLC is a dedicated New Jersey lender.

What Is FHA Streamline Refinance?

Do You Have an FHA Mortgage?

If you currently have an FHA mortgage, you may be able to refinance with a streamline fha refinance. The streamline refinance process allows for less paperwork and requirements then a regular refinance. You can usually do an FHA streamline refinance without the need to provide an appraisal on the property, and sometimes you can finance your closing costs by taking a slightly higher interest rate. This leaves you the opportunity to lower your mortgage payments or move from an adjustable rate mortgage into a more secured fixed rate mortgage. With an FHA streamline refinance, you would not be able to get cash out of the equity in your home, it is meant to provide homeowners with an easier and quicker way to lower their interest rate and payments.

Benefits of an FHA Streamline Refinance

• Many times no appraisal on the property is required
• Your lender can offer you a “no closing cost” refinance by slightly raising your refinance rate and covering the closing costs themselves
• You can quickly lower your monthly payments by lowering your mortgage interest rate
• You can convert from an adjustable rate mortgage to a fixed rate mortgage

FHA Streamline Refinance Requirements
In order to be eligible for an FHA streamline refinance, you will need to be current on mortgage payments, and you must have an FHA insured home loan.

New Jersey FHA Streamline Refinance

 If you are in New Jersey and wish to refinance your current FHA mortgage, Advisors Mortgage Group, LLC offers FHA streamline refinancing. If you are looking to get cash out of the refinance, we also offer other opportunities to refinance your FHA loan. As you NJ Lenders, we are proud to help our community with their financial needs. Feel free to contact us for a free quote by filling out our 30 second form on our website, www.njmortgageexperts.com.

Low Mortgage Rates May Rise

Mortgage Rates Are Still Low At The Close of 2012

If you have been in the market to purchase a new home, or refinance your current mortgage, take advantage of the current low mortgage rates available while they last. With continuing positive signs in the housing industry, mortgage rates may start to rise again in 2013.

According to HUD and the U.S. Census Bureau, home sales of newly constructed single-family residences reached an increase of 4.4% in November, while showing a 15.3% increase over last year‘s numbers.

While this is great news for the housing industry’s road to recovery, it does mean that home inventory is declining, so if you are planning on purchasing a new home, the options will be less. This also means that as the housing industry continues to improve, mortgage rates will start showing an increase.

Currently in New Jersey, the average sale price of a home has shown a decline month over month, quarter over quarter and year over year, and the overall average of homes sold is at $260,400 as of November 2012. Mortgage rates are sitting at an average of 3.26% for 30 year fixed rate mortgage loans, whereas 15 year fixed rate mortgages are at an average of 2.57% and 5/1 adjustable rate mortgages are sitting at a 2.55% average nationally.

These are still relatively low rates and for current homeowners, taking advantage of mortgage refinancing at this time is still a great idea.

NJ In On Request for Distressed Homeowner Tax Relief

NJ Signs Into National Letter to Congress

By: Brian Kordell

The New Jersey Attorney General, Jeffrey Chisea has signed into a national letter requesting Congress to extend the the expiration of the 2007 Federal Mortgage Debt Relief Act, which allows homeowners who have had mortgage debt forgiven after a foreclosure or short sale, or through loan modification to be excluded from the homeowners taxable income on their primary residence only. Currently, the taxpayer relief is only in effect til December 31st, 2012. Attorney General Chisea is among 42 others to sign the letter addressed to Congress.

With many homeowners across the nation benefiting from the huge National Mortgage Settlement awarded from the 5 largest mortgage servicing companies in the U.S., and while many banks are offering loan modification and debt relief for distressed homeowners.

The New Jersey Attorney General talked about the importance of extending the tax exclusion, to keep from deterring consumers who cannot afford an unexpected tax from participating in the settlement meant to help them.

Are you an underwater homeowner in New Jersey? You may not need a loan modification or debt relief. Another option out there for homeowners who are current on their mortgage but underwater on their home value is available, in the HARP refinance program.

NJ Foreclosure Maintenance Measure

NJ Mortgage Lenders May Be Required to Maintain Foreclosures

By Brian Kordell

Senator Ron Rice is the primary sponsor for a bill making its way through legislature requiring mortgage lenders to keep their foreclosed property inventory in good maintenance.

Reasons listed for this bill is health, safety and neighborhood value. When foreclosed homes go attended, they can deteriorate, be a target for crime and cause the value of the surrounding neighborhood to drop.

Think of it this way - If you are looking to purchase a home, you are going to want to look at the neighborhood around any potential contenders before you decide on the right one for you. If you have a family, you might be looking at nearby parks, school district ratings and potential neighbors. You drive through each neighborhood as you go to view a new possibility, and notice that the home next door to the one you are viewing is vacant with wood over the windows or a sagging porch or  even may be vandalized. The home you are looking at may be beautiful, but with the eyesore next door, you might think twice.

This same house may sit on the market until the owners decide to drop the price to motivate potential buyers. Thus, potentially bringing the overall value of the neighborhood down when another owner looks to sell, and the appraiser reviews recent selling prices of the surrounding properties.

The same issue comes up when another household in the neighborhood is looking for mortgage refinance.  If homes in the neighborhood recently sold for less, it can be taken into consideration in an appraisal causing the homeowner to have a higher loan to value and less opportunity to refinance.

Senator Rice indicated in a statement that mortgage lenders should be taking responsibility for the homes they foreclose on, whether they themselves are located in or out of the state their properties are located. The measure would force mortgage lenders to fix any building violations with their foreclosed inventory within 30 days or pay the same fines a homeowner would. This measure could help not only a future borrower for the foreclosed property keep rehab costs low, but keep neighborhood home values from significantly dropping.

If you are looking for a local, New Jersey Mortgage Company, please contact us for all your home financing needs, we are sure to have a NJ mortgage loan that works with your unique situation.

Refinance Your New Jersey Mortgage Loan Now!

Refinance Your New Jersey Mortgage Loan Now!

By: Brian Kordell

Mortgage rates are hitting an all-time low, and New Jersey homeowners need to take advantage of this historic time! These rates are not only great for potential buyers, but they allow current homeowners to refinance their existing loans into a more advantageous situation. Some of the benefits of refinancing include lower monthly payments and building your home’s equity faster. Refinancing also allows you to move out of a stressful financial situation simply be re-working the terms of your loan, and with the packages available to New Jersey homeowners, there really is no better tie to refinance than now. 

There are several options for refinancing:

• Refinance with the lower interest rates currently available – this will lower your monthly payments, which can be especially helpful for those nervous about foreclosure
• Shorten the length of your loan – changing your loan’s term will give you long-term savings, as it will lessen the amount of interest you are paying over the life of the mortgage.
• Change your ARM (adjustable-rate mortgage) into a fixed-rate mortgage – this will enable you to have the same monthly payment amount over the course of your loan, which though it may mean a higher monthly payment, can provide peace of mind and security for the future.

The low rates that accessible to New Jersey mortgages today will not last forever – and waiting for them to fall lower could cause you to miss them! As the economy improves, mortgage rates will also. So act now! Start looking today at how refinancing your New Jersey home can save you money, and well as provide you with more time to spend with your loved ones and relax!

New Jersey Reverse Mortgages

Reverse Mortgages in New Jersey

 If you have been looking for information on reverse mortgages in New Jersey, this post should give you some general information to consider. If you would like to get more information about your specific situation, feel free to contact us directly.

What is a reverse mortgage?

 A reverse mortgage is a specific kind of loan, designed for those over the age of 62 and retired, that enables them to secure an income by borrowing money against the equity in their homes. The loan can either be delivered to the borrower in the form of a monthly income, tax-free, or all at once in a lump sum. This option allows retirees to remain the owners of their home while incurring an income for their fun and free golden years!

Essentially what happens is much like a normal mortgage, only, as the name implies, in reverse! Instead of you paying the lender for your home, they buy your home equity from you and pay you it’s worth each month. This income is yours to spend as you wish; there are no spending restrictions or stipulations.

In order to qualify for a reverse mortgage, you must meet a few requirements. The candidate must be 62 years of age or above, and the home must be their primary residence. The candidate must also own at least 30% of their home’s equity. Finally, the candidate must not be planning for their heirs to inherit the home.

Another benefit of a reverse mortgage is that is does not come due until you sell your home or pass away. Some potential candidates might be apprehensive about the lender having ownership of the equity, but a reverse mortgage does not give the lender the right to possess your home under any circumstances. You are the owner of your home until you decide to sell or pass away, in which case the balance on the reverse mortgage is inherited by your children or heirs along with your estate. It must be repaid, but this can be simply a matter of your heirs selling the home and using the proceeds to pay the lender.

There are several options for the delivery of the reverse mortgage, and you may decide to combine one or more in order to meet your financial goals. The lender can provide the money in the form of an income, with monthly deposits, or it can be transferred all at the same time in a one-time payment at the closing. Additionally, if you are interested in setting up a new credit line, the lender is able to tie it directly to the equity they purchase from you.

Whether you are in need of income to be put towards living expenses, medical bills, or even that trip you’ve always wanted to take, a reverse mortgage may be a viable option for you!

If you are looking for a reverse mortgage in New Jersey, contact Advisors Mortgage Group today!