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Tag: Home Equity Loans

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.

Saving While Renting: How to Save For a Home While Paying Rent

January 31, 2020 / / 0 Comments
  • Saving while renting is possible!

The idea of saving up for a home is an exciting one. You picture having your own yard that can host plenty of barbecues and your own space to make as much noise as you want without worrying about waking up the neighbors. But until this dream can become a reality, you have to save up for the down payment while paying the sky-high cost of rent. It might seem impossible to accomplish such a large savings goal while paying monthly rent, but it is possible with a few adjustments. Below we list a few ideas to help accelerate your savings!

Pay Debts and Set up A Savings Account

  • Have a plan in place to pay down debts

The more you pay down your debts before purchasing a home, the better you can free up extra funds for say, an emergency home repair. Being debt-free can also help raise your credit score, allowing you to get better rates for your mortgage. Setting up a savings account designated for your down payment is another great way to speed up your savings efforts. When you set up an automatic savings, the money is gone from your account without realizing it was even there!

Get a roommate

Splitting costs with a roommate is a great way to free up funds for a down payment. You can split bills such as gas, cable, water, and electricity along with the cost of rent. Want to save even more? If your apartment or home you are renting accommodates it, having multiple roommates will really crank up the savings by splitting the costs three or four ways!

Get a Second Job

It might sound daunting having a second job outside of your full-time position, but nowadays there are plenty of side gigs you can do that won’t inconvenience your personal life at all! If you have a particular skill, such as home repairs or graphic design, you can advertise your services on the many freelance websites available to earn extra money during your free time.

Prepare Your Own Meals

  • Preparing your own meals can save you a substantial amount of money.

An average lunch out can cost you about $10.00 a day and eating out for dinner can be much higher! You can easily save a few extra dollars a month by limiting how often you eat out. Preparing meals at home costs less and batch cooking ahead of time will ensure food is prepared for even the busiest days. You can have leftovers for lunches the next day and packing a few healthy snack options will save you from visiting the vending machine throughout the day.

Cut Back on Cable

The cost of cable nowadays is sky high! With the added service fees, you end up paying a bundle for a service you no longer really use. With more affordable streaming services available, you can easily drop your monthly cable service and still watch your favorite shows when it is convenient for you. Not only will you lose any bulking equipment, you will lose that bulky bill as well!

Conclusion

Saving up for a down payment while paying rent takes time and effort, but with a few lifestyle adjustments, you will be amazed at the amount of money you can put away to buy a new home. When you are ready to purchase a home, make sure to seek out a reliable mortgage company for the best rates possible. The experts at American Mortgage Resource, Inc. are here to help you purchase the home of your dreams!

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.

How Jumbo Loans Can Benefit You

August 26, 2019 / / 0 Comments

When it comes to Jumbo Loans, these are loans that are over $400,000. These type of loans are similar to traditional mortgages but jumbo loans are quite a bit more difficult to get approved for. It is for that reason that they are for individuals with a higher income range. If this individual or individuals want to look into buying a nicer home, they will naturally need a bit larger of a mortgage loan.

As the name suggests, a jumbo loan will offer the ability, to a qualified borrower, for a sum that is quite a larger sum than is typically allowed. There are many ways that Jumbo Loans can benefit you. Read on and find out a few.

The Basics of Jumbo Loans

Dependent on where you live in the United States, you will fall custom to various different loan restrictions. This is referred to as “conforming loan limit.” What this means is generally the highest amount a borrower can receive on a single mortgage. This amount is usually between $400,000 and $600,000 in most states.

Though this loan may be larger, as you were looking for, it does come with a few tradeoffs. This includes higher mortgage rates due to the higher risk assumed by the lender of your choosing. Not only that, but Jumbo Loans typically require a credit score of 720 or higher.

Jumbo Loans are Versatile

There are many more benefits that come along with Jumbo Loans. There is a lot more flexibility in income qualifications. What we mean by this is that our Jumbo Loans come with no private mortgage insurance attached. The fixed rates offered will often be as low as 4%. While many lenders will offer both 15- and 30-year loans, they will also offer both fixed and adjusted rates. This provides the option down the line to refinance, if needed.

Not only that, but Jumbo Loan lenders are attaching attractive offers including private medical insurance, reduced lender fees, and quicker processing of the loan application.

Now that you have a better understanding of what jumbo Loans have to offer you, it is time for you to figure out if this type of loan is right for you. For all of you mortgage loan needs, you can count on our team at American Mortgage Resource, Inc. to provide you with the exceptional service that you deserve.

The Benefits of Refinancing your Current Mortgage

July 30, 2019 / / 0 Comments

You absolutely love your home, but would be happy to see your mortgage rates drop. There are so many things that are on your list of things to pay for, including paying off expensive debts and saving for important events coming up in your life. If you are dissatisfied with your current mortgage terms and fees, it might be worth your while to consider refinancing your mortgage in favor of more desirable rates. In this blog post, we will further define refinancing and the ways it could help you save money on your home.

What is Refinancing?

Homeowners utilize this strategy to achieve their respective financial goals. Typically, people refinance their loans in order to acquire lower interest rates or to alter the terms of the mortgage itself. Refinancing your mortgage can also help you change your variable loan rate to a fixed one, which will provide you with more peace of mind. The initial loan gets paid off by the bank, then another loan can be created with new guidelines. It is recommended that you have a great credit score when attempting to refinance your home because this will ensure you get reduced interest rates. Those with a low credit score might end up with higher rates if they attempt to refinance, so it is important that you are aware of your own score. With time, people’s earnings tend to increase, which allows them to pay their bills more quickly and expand their credit score; this is the time to consider refinancing.

Advantages to Refinancing

The biggest benefit of refinancing your mortgage is achieving lower interest rates on your monthly mortgage payments, which will allow you to put your money toward your other priorities. You will be astounded by the hundreds of dollars you save annually with a refinance. Another reason people decide to use this strategy is because they are looking to secure enough money for a substantial purchase in their life, be it a car or paying off credit card debt. To do this, they refinance with the aim to get equity out of their home. First, an accurate appraisal is required, then the lender determines the percentage of the appraisal that they will loan out. Finally, the amount that was owed on the original mortgage is subtracted so it can be paid off. The homeowner is then left with the remaining balance to pay off their newly refinanced loans.

Are There Risks to Refinancing?

It is important to do thorough research to determine your potential savings prior to making this big decision. If you do choose to refinance your mortgage, there is the possibility that you will need to pay new closing costs. In addition, it is recommended that you hire a lawyer to help make sure you get the best deal possible. Along with inspection fees and application fees, refinancing your home might end up costing more than staying with your current mortgage costs.

Conclusion

Finding a way to lower the interest rates on your mortgage can seem overwhelming, but it can save you a significant amount of money in the long run. A qualified mortgage broker will make the entire process much simpler for you, so you can focus on more pressing things in your life. If you are looking for a home mortgage broker to help you make the best financial decisions for you and your family, you can count on us at American Mortgage Resource. We look forward to serving your financial service needs.

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