With housing prices at all-time lows, it’s an ideal time for first-time home buyers and veterans to take advantage of a statewide affordable loan program. The Illinois Housing Development Authority, (IHDA) currently offers a mortgage loan program for first-time homebuyers purchasing homes located in the state of Illinois called SmartMove. IHDA’s Smart Move loan offers first-time homebuyers with low to moderate income an affordable first mortgage loan product with optional down payment and/or closing costs assistance.
SmartMove gives homebuyers flexibility as it can be used with either Conventional, FHA or USDA loan products. SmartMove loan programs offer homeownership opportunities to fit a variety of first-time homebuyer’s needs. Borrowers who qualify for the 30-year, fixed-rate SmartMove loan also have the option of applying for a second loan for up to $6,000 in down payment and closing cost assistance as a zero-percent loan forgivable over 10 years. Qualifications include a minimum credit score of 620 for FHA, USDA and VA loans and 660 for conventional loans. Borrowers must contribute at least 1% or $1,000 of the purchase price, whichever is greater. Household income and purchase prices limits apply and homeownership counseling and mortgage insurance is required.
Both of these programs are geared towards borrowers who need extra flexibility on sources of income, or who have limited funds for down payment and closing costs. Homebuyers interested in applying for a SmartMove loan should contact me for more details.
Borrowers outside of Illinois, please check with your state government for similar programs.
In today’s economy, people are looking for different ways to save money on expenses. Here are a few ways to save money on your home:
Cut costs on your mortgage
The continued rate dip has opened up a refinancing window that is pretty hard to pass up. Many borrowers are refinancing to lower rates and even refinancing to shorter term loans in order to pay off their mortgage quicker. Now is as great a time as ever to make sure you have the best rate and mortgage and are in the best financial situation available.
If you’re in need of repairs, now is the time to negotiate
Though it may be on the way up, contractors are still facing a slumping market and will probably be willing to strike a deal to get your business, especially during these cold winter months. A recent survey on a consumer review website stated that 81% of contractors say they’d negotiate labor costs; more than 25% said they’d drop prices by more than 10%. Also, service providers like house cleaners and landscapers are cutting rates, too. Remember to get multiple price quotes. You’ll have the most bargaining power if you can be flexible about the timing of your project.
Look for Deals
When sales slow down after the holiday season and end-of-the-year sales, many furniture shops will make deals to move their inventory, so check up on local deals around your neighborhood. At times gently used floor models can go for 25% off. And remember another easy way to save money –sign up for e-mails from furniture shopping sites and other stores who offer coupons on their websites or via e-mail. Also, if you’re in need of a new television or other appliance, now is the best time to buy, as new models are coming out in the spring and sales on current stock offer great deals right now. Also, if you have credit card with that store, ask about 0% financing, as most of them offer it on an 18-36 month basis for their customers.
Some other cost cutting ideas:
Try to set thermostats no higher than 68 degrees in winter. Turn your heat down even further at night or when you’re not home (unless you have a heat pump, which operates more efficiently at one consistent setting). Each extra degree in winter can increase heating costs by 3%. During the summer, each degree can raise cooling costs by 6%. This can be a real cost saver, potentially saving you up to $325 to $500 annually.
Cut back on the use of your dryer. Not only is it a big energy drain, it can also suck heated air out of your house very quickly in winter. Instead, hang clothes on a clothing rack to dry and just use the dryer for towels and other heavy items and this can save about $25-$50 per year.
Install the new type of fluorescent bulbs in lights you leave on for long periods. They provide four times as much light and last ten times longer than incandescent bulbs. It can save you up about $10-$50 a year.
With Valentine’s Day quickly approaching, many couples may be planning to make reservations to a fancy restaurant, placing an order of flowers for their loved ones or just getting ready to share a special evening with their significant other. If you’re in a relationship that you think is heading down the path of a house, a marriage and a family, one important thing that couples should also be sharing is their credit score and credit reports. It may not sound as romantic, but it is just as important to your relationship and your future. Once the time is right in a relationship, it’s important to discuss any past credit or financial issues that would impact your ability to buy a home together.
Put Everything on the Table: Make a list of your current debt, including student loans, car payments, credit card debts. Be transparent about debt and finances.
Check Your Individual Credit Reports—and Share Them: These reports provide detailed information about what is currently owed, what has been owed to other lenders and details of any missed or late payments. Everyone is entitled to a free credit report from each of the three credit bureaus per year. Visit www.annualcreditreport.com, the official site of the three credit reporting agencies in the country.
Adhere to Credit Boundaries –Before making any purchases on your credit cards, talk about how this will impact your plan and your future. Talk about how you’ll pay off future bills, that way there won’t be any surprises down the line.
Plan to Reduce Debt Together: Discuss and implement a plan that will correct any past irresponsible behavior on either of your parts. Don’t dwell on it now, but instead, take the necessary steps to fix it. Debt doesn’t have to be a deal breaker if you face the challenge head on.
Finding a foreclosure isn’t always easy – you have to make sure and do your homework, researching whether or not this purchase is worth the time, effort and money that goes into the process. The safest deal is with a bank-owned property, that way there are fewer risks, no taxes and liens and no tenants that need to be evicted. Typically you’ll find that the property doesn’t sell at as big a discount as at an auction, but there is much less risk, as you can obtain financing through 1st Advantage Mortgage and can have the property inspected. This is very similar to buying a property from another owner, but instead it is owned by a bank.
There are foreclosures that are riskier than others, particularly if you’re going to buy a foreclosure at an auction. Buying from an auction means you can’t go in and inspect the property, and you also may find other liens against the home. Generally homes that sell at auctions will provide you with the lowest purchase costs, but be prepared to pay cash, as you won’t be able to take out a mortgage for this type of home. In providing mortgage financing, it is essential for us to inspect the property and have an appraisal done in order to protect our clients from making a purchase that is not worth their time or money.
Keep in mind that people who lost their home in foreclosure very likely couldn’t afford to maintain their property. Be prepared to pay for any problems such as plumbing or electrical repairs, leaky roofs, or even a poorly kept interior or exterior that will need the care that the previous homeowner didn’t or couldn’t provide.
Though there are some risks and probably some added costs to purchasing a foreclosed property, there are many homes out there that are in great shape and have just become the product of economic hardship among their previous owner. If you find a home that is worth the effort, take advantage of a golden opportunity.
Financing an Investment Property
Financing your first investment property can be a daunting task—but if done correctly and by working with the right people, it can be just as beneficial and rewarding.
By taking advantage of the current all-time low interest rates, you can receive rates and pricing that you wouldn’t be able to get just a few years ago. The housing market always goes through price fluctuations and right now housing prices are down. This is the perfect time to buy while rates and pricing are low and there are renters out there in need.
First things first, check your credit early for any errors you’ll need to address. The better your credit score is, the better your chances are for being approved for an investment property loan. Once your credit is reviewed, analyze your finances to make absolutely sure that you are ready to take on an investment property. Also remember that investment properties tend to require larger down payments and stronger finances than is needed for a primary residence.
Next, choose the type of investment you’d like to purchase. Investment properties can include anything from vacant land and rental houses to condominiums or commercial properties. After deciding what type of building you’ll buy, research the area that fits best for your intentions and goals. Research the surrounding area to make sure the neighborhood offers good schools, nearby transportation, shopping areas and entertainment venues that renters will be looking for. The community is just as important as the property, as you’re investing in the surrounding area as much as the building itself.
Also, make sure not to overpay on the property by ensuring that your rental income from the investment will cover your monthly mortgage payment as well as taxes, insurance, maintenance and repairs. If you’re cut out for the work, purchasing investment properties can be quite profitable and can turn into a steady second income for years to come.
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With home prices as low as they are today and down payment assistance programs hard to come by at times, a little-know HUD program allows for soon-to-be married couples to gather monetary gifts from friends and family and place them into a down payment program for an FHA mortgage. The program, called The FHA Bridal Registry, works like a traditional registry but is even more flexible. The bride and groom can speak to me as their mortgage lender and we can set up what is essentially a custodial savings account for the dedicated purpose of funding their down payment. Then the couple can simply provide the details to friends and family. In turn, the couple’s guests can deposit funds directly into the account, or they can just hand cash or checks to the couple for deposit into the account. These arrangements offer additional flexibility beyond the traditional down payment gift rules applicable to FHA loans, which require that gift funds (versus money the couple would have saved up from their own income) be “sourced,” meaning borrowers must document their family relationship between themselves, show where the giver got the funds from and produce a letter from the giver stating that the funds are a gift and not a loan. A few other things:
So, if you are currently planning for a wedding and a home purchase, why not skip on asking for that expensive vase or another blender and put money toward the purchase of your new home? Contact me for more details. |
