American Mortgage Resource, Inc.

Providing the Best Financial Resources for Boston and Massachusetts

Tag: buying a home

Home Equity Loans: The Answer You’ve Been Looking For

September 30, 2020 / / 0 Comments

Qualifying for certain loans and credit cards can be a difficult and confusing process for many of us. Homeowners have a unique advantage when it comes to borrowing money in a pinch as they may be able to qualify for a home equity loan. Follow along below as we discuss home equity loans and their pros and cons.

What’s a Home Equity Loan?

A home equity loan is a fixed or adjustable form of credit secured by how much equity you have in your home and enables you to borrow against that equity. Essentially this type of loan is a second mortgage as you will have to continue paying your primary mortgage while simultaneously making payments on your new home equity loan.

Pros

Home equity loans can save the day when you need help repaying higher interest debt elsewhere or funding home renovations. A distinctive benefit these loans offer is that while their interest rates may be slightly higher, any interest paid on them is tax deductible.

Cons

Undoubtedly the biggest risk in taking out a home equity loan is that your lender may be able to force you to sell your home to resolve the loan if you are ever unable to make your payments. Additionally, your home will have to be appraised to establish its value and you will have to provide proof of sufficient credit and income.

Final Thoughts

When considering applying for a home equity loan or any other type of loan, be sure to shop around to compare the varying plans offered by banks, credit unions, and mortgage companies in your area. At American Mortgage Resource, Inc. we have relationships with over 20 different lenders and strive to make the process as simple and smooth as possible. Contact us here to learn more about our affordable services.

Home Loans 101

March 31, 2020 / / 0 Comments
Home Loans

A home loan, also referred to as a mortgage loan, is an agreement where you are loaned money to purchase a home. In this agreement you are allowing your lender to take action if or when you are negligent to making payments on your loan. Most importantly, the bank lending you this loan can take your property and sell it, should you refuse to pay, forcing you to move out.  Now that you know the basic of what a home loan is, we will get deeper into the discussion of the steps you need to take in order to get a home loan. These steps will help determine how much you pre-qualify for so that ou can make an offer on your dream home!

How much can you borrow?

Determining how money you can borrow is determined by a few factors: how much of a monthly payment can you afford, credit and employment history, income and debt, and the amount that a bank can lend you. By speaking with a representative from American Mortgage Resource, Inc. we will be able to determine what kind of terms and loan programs you can benefit from most.

Pre-qualifying for your loan

Pre-qualifying for a loan is the most important step as it is where you save the most money. During the process you will share with us financial and personal information that is used to determine your pre-qualification. Once this is all processed we deliver a pre-qualification letter that your realty agent will use as buying clout when making an offer on your future home.

Apply!

Once an offer has been placed on your home, and it has been accepted, the loan application process is to be completed. We make it easy to do through our website. And when the time is right, an appraisal on your new home will be made.

We coordinate with the escrow company who is handling the funding of your approved loan to make sure all papers your lenders will need are completed and in order.

Overall, the process to getting a home loan might seem a bit intimidating, but when you work with our team, it becomes easier. We have years of experience working with future home-owners and know how to make the home loan process easy to understand and enjoyable. For more information about our services, visit our website.

The Most Popular Mortgages and Their Benefits

November 25, 2019 / / 0 Comments

Buying a home is both one of the most exciting events in a person’s life and one of the most stressful. Ensuring you find the right house while also deciding on the proper mortgage that will set you up for a successful future can be an extremely difficult task, but with the right help it is more than possible. Below we have listed the four most popular mortgages when it comes to real estate, so read on if you’d like to find out which of them is best for you!

Fixed Rate Mortgages:

Easily the most popular of any home mortgage, a fixed rate mortgage basically means that a set interest rate is applied to your loan, which provides a very stable and consistent monthly payment. The length of these fixed mortgages can range from anything as long as 30 years to a much shorter 15 years, which obviously just means you will be paying it off in smaller increments over a longer period of time or vice versa. While close to 90 percent of home owners opt to go with the 30 year mortgage to start, due to the lower monthly payments, the interest you pay on a short 15 or 20 year mortgage can make for a much more reasonable loan, because it is much lower considering how low the liability is for the bank.

Adjustable Rate Mortgages:

While this is a less popular option than a fixed rate mortgage in the United States, many different parts of the world like Britain and Australia frequently take advantage of an adjustable rate mortgage (ARM). The reason it would be wise to consider an ARM is because you are able to take advantage of lower interest rates in a given year without refinancing your home. On the flipside, there is always the chance that the rates will go up, causing your payments to increase with it, but there are many benefits to keeping your mortgage open to a yearly reassessment of its interest.

Balloon Mortgages:

This is a much different and specific type of mortgage, which is best used only if you have a strong guarantee that you will have the money necessary for the loan in the foreseeable future. Balloon mortgages are often shorter in length, around 10 years and have much lower payments throughout a majority of the mortgage term. Your payments are often just the interest for a large portion of the term, however, the catch is the fact that you are required to pay a majority of the entire mortgage sum at the end of the term. There are a lot of upsides to a balloon mortgage, but the circumstances have to match up very specifically to make it a good fit.

FHA Loans:

An FHA loan is for a very specific group of borrowers, but can nonetheless be extremely beneficial if you qualify. Designed to be for lower income individuals that are looking to secure a home, Federal Housing Administration loans are approved in order to offer lower minimum down payments for those that can’t afford a large lump sum at signing. They also have a lower threshold for the necessary credit score in order to allow families that have less immediate income to purchase. Oftentimes this type of loan is used by first time buyers and eventually refinanced over time if their financial circumstances improve, but it is important to understand that the smaller the down payment you make, the more you will owe over the course of the mortgage.

Conclusion:

As is evident in our article, there are many different types of loans that serve a large number of purposes for those that use them. Regardless of what you may be looking for when it comes to your mortgage, there is an option out there for everybody. At American Mortgage Resource, we want nothing more than to walk you through the home-buying process and determine what type of loan works best for you. Come in today and start the next great chapter of your life!

Types of Government-Insured Mortgages

September 23, 2019 / / 0 Comments

The U.S. government has made it easier for hundreds of thousands of Americans to buy homes through providing various government-insured mortgages. Many citizens have purchased a house with these mortgages when it wouldn’t have been possible with the other conventional home loans. For more information about these special mortgages, continue reading!

FHA Loans

FHA loans are backed by the Federal Housing Administration. These loans make it possible for you to buy a home, even if you don’t have a perfect credit score or aren’t able to provide a large down payment. This is because they have more lax requirements – borrowers must provide a 3.5% down payment (other loans require a down payment of 20% of the purchase price of the home).

These loans are available for anyone trying to purchase or refinance a primary residence, but are mostly popular with first-time homebuyers. They come with mortgage insurance in case the borrower is unable to repay the loan. FHA loans are usually fixed-rate loans with either 15 or 30-year terms, and 1% of what you pay goes towards the mortgage insurance.

VA Loans

VA loans, granted by the U.S. Department of Veterans Affairs, provide flexible, low-interest mortgages for members of the military (both active duty and veterans) and their families. They don’t require a down payment or private mortgage insurance, and they offer leniency with credit scores. You are expected to pay a funding fee that is added onto your monthly payments, or may be paid upfront at closing. These fees serve to offset the program’s cost to taxpayers.

USDA Loans

USDA Loans are given by the U.S. Department of Agriculture. They assist moderate- to low-income borrowers in buying houses in rural areas. To qualify, you must purchase a house in a specified USDA-eligible area and meet other income limits (for example, the amount of debt you have cannot exceed your income by more than 41%). Most of these loans require no down payment and offer discounted interest rates, but you will have to purchase mortgage insurance.

These loans are perfect for those who struggle financially and are looking to purchase a home in a small, rural town. “Rural” doesn’t necessarily mean “countryside farmhouse.” It simply means that the town is under a certain population count – it can even be a suburban community.

Pros and Cons

Pros: Government-insured loans require lower down payments and have lenient credit requirements. They make homeownership accessible to everyone – since they are secured by the government, sellers are more likely to sell homes to lower-income applicants who are seen as a risk. In addition, buying a home allows you to build equity and credit, which helps you strengthen your finances and progress with your other financial goals.

Cons: The mandatory mortgage insurance premiums can be expensive, and cannot be cancelled on most loans. You will also have higher overall borrowing costs. In addition, you will likely need to provide more documentation to prove your eligibility for the loan.

Conclusion

Government-insured loans have helped countless Americans buy houses. However, you need to find a specialized mortgage company that is registered by the government to provide you with these loans. At American Mortgage Resource, Inc., we are able to help you find the home loan options that will help you the most.

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