Blog — James Whitener - Whitener Team

A Home Improvement Loan: How To Get One

A Home Improvement Loan: How To Get One With more people spending time at home than ever before, many people are wondering how they can go about changing the way the home is laid out. This can be an expensive project, which is why many people are interested in getting a home improvement loan.

With many people buying outdated houses, there are numerous projects that many homeowners want to finish; however, this process is not the same as applying for a mortgage. There are home equity lines of credit, cash-out refinance opportunities, and financing through the contracting company. How is the process of applying for a home improvement loan different, and what do homeowners need to know?

Gather The Right Information Before Tapping Into Home Equity

One of the most common ways homeowners complete projects is to tap into the equity in the home. Therefore, no matter what option someone chooses, they need to make sure they gather the right information. All homeowners must make sure they have a great credit score before pursuing this option. Homeowners have the right to check their credit score once per year free of charge. They also need to have documents that verify their income, as lenders will want to take a look at someone’s debt to income ratio. Other forms of debt include car payments, credit card debt, and student loans.

Compare The Cost Of The Loan Options

Next, homeowners need to take a look at the cost of each loan. There are home equity loans, home equity lines of credit (HELOCs), and cash-out refinances. The interest rates on these loans can vary depending on the market, and many of them will have closing costs as well. Homeowners need to take a look at the costs and the interest rate to figure out which option works best for them. Some of these loans have adjustable rates on them, which can make them risky, and some of these loans have limits that are dependent on the amount of equity in the home.

Fixer Upper Loans Are Available

Those who have purchased a home in dire need of repairs might qualify for a rehabilitation loan, which is a Federal Housing Administration (FHA) 203(k) rehabilitation loan. This provides funds for renovations and repairs that are necessary to restore a home. Consider all options available before deciding.

September 16, 2021/by whitenerteam_admin

What Are The Requirements To Sell A Home Using An FHA Loan?

Home Mortgage Tips

What Are The Requirements To Sell A Home Using An FHA Loan? Before an owner can market a property to buyers that want to use a FHA loan, he will want to familiarize himself with the FHA’s standards. FHA won’t insure loans on just any property.

While their standards aren’t as stringent as they used to be, a home needs to be in relatively good condition to qualify for FHA financing.

Location And Lot

To qualify for FHA financing, the property has to be located on a road or easement that lets the owner freely enter and exit.

The access also has to be paved with a surface that will work all year a long dirt driveway that washes out in spring won’t qualify.

The FHA also wants the lot to be safe and free of pollution, radiation and other hazards. For that matter, it also needs to provide adequate drainage to keep water away from the house.

Property Exterior

The FHA’s requirements for making a loan start with the home’s roof. To pass muster, the house must have a watertight roof with some future life left. In addition, if the roof has three or more layers of old shingles, they must all be torn off as part of the replacement process.

The property’s exterior has to be free of chipped or damaged paint if the home has any risk of having lead paint. Its foundation should also be free of signs of exterior (and interior) damage. It also needs full exterior walls.

Property Interior

The property’s interior also needs to be inspected. FHA standards require that the home’s major systems be in good working order.

Bedrooms should have egress routes for fire safety and the attic and basement should be free of signs of water or mold damage.

The bottom line is that the FHA wants to make loans on homes that borrowers can occupy. This doesn’t mean that a home has to be in perfect condition to be sold to an FHA mortgage-using borrower. It just needs to be a place that they can live.

September 15, 2021/by whitenerteam_admin

What To Know About Shopping For Mortgage Rates

Mortgage

What To Know About Shopping For Mortgage Rates Applying for a home loan can be an exciting process; however, this is a major financial decision. Therefore, potential homeowners need to make sure they understand how to shop for the best mortgage rate possible. A mortgage is usually a long-term loan, allowing potential homeowners to purchase a home using small monthly payments. Fortunately, there are a variety of tools available that can make the process easier. What do potential homeowners need to know when shopping for mortgage rates?

Do Get A Pre-Approval Letter

First, all potential homeowners need to get a pre-approval letter before they start the home-buying process. Because the market is competitive, buyers need to get a pre-approval letter to show they can secure financing for a home they want to purchase. Sellers want to know the deal is going to go through if they make an agreement with someone. The pre-approval letter will allow someone applying for a home loan to compete with other offers, including cash ones.

Do Not Go The Easy Route

One of the biggest mistakes people make when taking out a home loan is going with their existing bank. It is possible their current bank may provide competitive rates; however, applicants should not choose their existing bank solely because this is the easiest option. Instead of going with the easiest option, get the best possible rate from a lender.

Do Work With A Professional

Applying for a mortgage is a complicated process, so potential homeowners need to work with a professional who can guide the way. A trained, licensed professional can help applicants go through this process, explaining why they need certain documents. Then, a professional loan officer can advocate on behalf of the applicant, increasing their chances of earning approval from the lender.

Do Not Overlook Other Potential Expenses

Many homeowners overlook other potential expenses that come with owning a home. For example, homeowners also need to budget for real estate taxes and homeowners’ insurance. Even though this is wrapped into the monthly payment, this is not included in the mortgage. This can blindside homeowners who are not prepared. Homeowners also need to think about potential maintenance expenses. This is important when homeowners are trying to budget accordingly.

September 14, 2021/by whitenerteam_admin

What’s Ahead For Mortgage Rates This Week – September 13, 2021

Financial Reports

What's Ahead For Mortgage Rates This Week - September 13, 2021 Last week’s economic reporting was limited due to the Labor Day holiday. Job openings were reported along with weekly readings on mortgage rates and jobless claims.

July Job Openings Higher Than Expected

The Labor Department reported record job openings for the fifth consecutive month in July. Economists said that the data used in the report lagged by a month and the readings were not impacted by the Delta variant of the Covid-19 virus.

Job openings fell in construction, trade, transportation, and utilities. There were less than 0.80 unemployed available for each job opening in July. Hiring fell by 160,000 hires to 6.70 million hires. Job separations, which included terminations and voluntary quits, rose by 174,000 to 5.80 million separations. Retirements and location transfers were not included in the job separation data. Private-sector quits rose from 3.00 percent to 3.10 percent, which indicated workers were confident they could find better jobs.

Economists don’t expect hot jobs markets to cool anytime soon. High demand for workers and rising wages indicated that less hiring is unlikely in the near term.

Mortgage Rates Hold Steady, Jobless Claims Fall

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose by one basis point to 2.88 percent. Rates for 15-year mortgages also rose by one basis point to an average rate of 2.19 percent. Rates for 5/1 adjustable rate mortgages averaged one basis point lower at 2.42 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-yar fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

Initial jobless claims fell to 310,000 new claims filed as compared to 340,000 first-time claims filed n the previous week. Analysts estimated 335,0000 initial claims would be filed last week. Continuing jobless claims were also lower with 2.78 million ongoing claims filed; 2.81 million continuing claims were filed in the previous week.

What’s Ahead

This week’s scheduled economic reporting includes readings on inflation, retail sales, and the University of Michigan’s Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims will also be released.

September 13, 2021/by whitenerteam_admin

What To Know About IRS Installment Agreements And Home Loans

Mortgage

What To Know About IRS Installment Agreements And Home Loans When applying for financing, lenders want to make sure the client is going to pay back the balance of the loan. Therefore, they will look into pre-existing debt including credit card debt, student loans, car payments, and back taxes. Sometimes, applicants have IRS installment agreements. This is an agreement consumers make with the IRS to pay taxes over an extended timeframe. How might this impact someone’s ability to apply for home financing?

IRS Installment Agreements Count Against The Debt To Income Ratio

The IRS is going to calculate someone’s debt to income ratio when figuring out whether an applicant can apply for a home loan. Therefore, lenders will view IRS installment agreements as another form of debt along with medical debt, car loans, and student loans. As long as there is not too much debt, applicants should still be able to qualify for a home loan even if they have an installment agreement with the IRS. Even though having an IRS installment agreement may reduce the size of a loan someone may qualify for, applicants can still qualify for a home loan.

Lenders Will Look At Payment Histories

Lenders will take a look at how long the IRS installment agreement has been in place. Some mortgage programs may ask for proof of timely payment history. They know that if applicants have paid their installments on time, they should pay their mortgage on time as well. Some home lenders may require a payment history of up to 12 months. It is critical to discuss all financing options with the lender when looking for a home loan.

Applicants Must Have Proper Documentation

To qualify for a home loan with an IRS installment agreement, applicants must produce proper documentation. Lenders will ask for a copy of the agreement. Then, they will verify the payment history of this debt. Keep in mind that federal tax debt holds first priority. This means that the lender will want to protect their own interests, asking the IRS installment agreement to give up their first position in favor of the mortgage. Typically, this is not an issue; however, this is something applicants need to discuss with the loan officer. That way, they can place their application in the best position possible to be successful.

September 10, 2021/by whitenerteam_admin

The Pros and Cons of Paying Your Mortgage off Biweekly Versus Monthly

Home Mortgage Tips

The Pros and Cons of Paying Your Mortgage off Biweekly Versus Monthly If you have a mortgage, you’re probably looking for the best option to pay it off. Monthly mortgage payments are an easy-to-manage way to pay for your house – in fact, they’re the most common form of mortgage payment but now, many homeowners are discovering that biweekly payments offer them better results.

So is a biweekly payment the better option for you? Which payment strategy best fits your individual circumstances? Here’s what you need to know.

Biweekly Payments: Pay Off Your Mortgage Faster and Save on Interest

Biweekly payments are becoming increasingly popular for a variety of reasons. With a biweekly payment, you’ll pay less money in total interest payments over the course of the whole mortgage, and you’ll pay your mortgage off faster. Biweekly payments also make it easier to budget for your mortgage because they coincide with your paycheck, and the biweekly payment system forces you to make extra payments toward your principal.

That said, biweekly payments also have some disadvantages. If you’ve bought a home at the very top tier of what you can afford, you might not have the budget flexibility for extra payments. Your lender may also force you to pay a $300 setup fee or a processing fee for each payment.

Monthly Payments: Easier to Afford for Large Homes

Paying your mortgage off on a monthly basis has long been the standard, for a variety of reasons – for instance, most homeowners are typically more comfortable with monthly payments as they were the norm during the owner’s years as a renter. It may also be easier to manage monthly payments if you work as an independent contractor and don’t always get paid every two weeks.

Monthly mortgage payments are more affordable for owners of larger homes, which typically come with larger mortgages. A monthly payment schedule also means you make one less payment per year, and for those on a strict budget, this can help to make the daily necessities of life more affordable.

Monthly mortgage payments were once the expected norm, but now, a lot of homeowners are choosing to make biweekly payments in order to pay off their mortgages faster and better budget their money. Monthly payments still remain popular, though, for a variety of reasons.

So which one is better for you? A qualified mortgage advisor can help you determine your best course of action. Call your local mortgage professional to learn more about your mortgage payment options.

September 9, 2021/0 Comments/by whitenerteam_admin

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