total home lending

The Big Day: Closing Day

The big day has come.

Homeowners insurance- check

Home inspection- check

Now comes the day you have been waiting for. The day you officially close on your home. If everything is in place, the day itself should be a breeze.

 

What exactly should you expect?

First and foremost, give yourself ample time and bring as much patience as you possibly can. One big mistake people make is not allowing enough time for the actual closing. Your lunch break may not actually be enough time to close.

Besides, if you give yourself a half day (or even a full day) for the closing, you can always take time to enjoy and celebrate your new purchase!

In addition to planning for the time out of your day, it is typically a good idea to schedule your closing close to the end of the month, but not right at the end of the month. That will allow for enough time to address any issues or concerns that may come up over the course of the closing.

Don’t be afraid to ask for a final walk through

Many buyers are often allowed to do one final walk through 24 hours before the closing. This will allow for you to see if any damage has been done to the house or property since you signed the contract. If there is something to note, this final walk through provides the opportunity to negotiate any necessary repairs.

 

There are a few things to bring to the table

It is extremely important to bring all the papers you have collected and accumulated over the home-buying process. That means the good faith estimate, the proof of homeowners insurance, contract, your inspection reports, and any other documents that you have sent to the bank as a proof of your mortgage.

Besides the piles of paperwork, there can also be a handful of people present at the closing. While the actual people required to be present can vary from state to state. The people involved can range from your attorney, the home seller, your mortgage lender, and, of course, you.

Yes- it is a big day

But that does not mean it needs to be stressful, chaotic, or have anything go wrong. Talk it over with your attorney (if you have one) and definitely your mortgage lender. All of the preparation will be worth it- so you can sit back, enjoy the experience, and take the keys to your new home.

 

 

Total Home Lending

 

 

Natasha Mason

The Big Day: Closing Day2020-09-28T15:14:20+00:00

Debt Management: Time to take control of your finances

For many, debt is a big, scary word with countless implications. So taking on a home mortgage can be just as daunting. But we are here to tell you… it’s manageable! Whether you are 100% debt free, have a credit card balance, or even a few student loans, getting and managing a home mortgage is possible. You just have to have the right tools and tips to get yourself on the right track.

Of course, he first step in managing your debt is to get organized. And we have a few tips to get you on the right track.

 

Know your debt

While it seems self-explanatory, the first step to successful debt management is to actually take a look at what you owe (and how much of it there is). So what does that mean for you? Lay out all of your loans, credit card balances, car payments. Add it up and take note! While it may be something you have been avoiding, acknowledging your debt and piecing together a “picture” of it will help you in the long run.

 

Organization is your friend

A great way to stay on top of your finances is to create a monthly calendar exclusively for your bills. Label the days they are due, you can even include the total of each payment. Then, hang it on the wall or the fridge. When it is present in your daily life, it will keep it fresh in your mind, reminding you to make those payments on time. Tried this and still having trouble? It may be time to consider setting up automatic payments. That way, you are guaranteed to pay on time, month after month.

Next, make a budget. List out all of your monthly expenses- bills, debt, even groceries and gas! Then, put it next to your monthly income. See exactly how much you can save, and how much extra you have to pay towards your debt. Establishing a monthly budget will help you stay on track for making your monthly payments, and help you create a larger “savings” you can fall back on.

 

Bills, bills, bills

You got it- the next step is to pay your bills on time. Cable, car loan, DTE, student loan. No matter what the bill is, pay it on time! It is very important to get yourself on the right track. Rumor has it that it takes 30 days to create a habit. Make it your habit to pay each of your bills on time, every month.

 

Collections

Any collections or call off’s should be the first to go. Throw your full force (or as much as you can manage) toward these until they are paid off in full. Once they have been paid, you can focus your attention on the principal balances of your debt.

 

Minimum payments

Most of us have seen that phrase- “minimum payment.” It could be in reference to your student loans, your credit card bill. Anything. Regardless of your overall balance, it is crucial to make that minimum payment! It will keep you on the right path to paying off the total balance, one month at a time.

 

The bill of most importance

Which debt is of the highest importance? Yes, that’s right. Which one is most crucial for you to pay off (in full) first? A good way to determine this is to take a look at your interest rates. A good rule of thumb is to pick the one with the highest rate. Now what? If your finances permit, take a little extra money each month and put it towards that debt. Even if it is just $30 more than the minimum payment. That extra money will only help you pay off the debt in full that much faster.

Another good trick to keep up your sleeve- let’s say you have a car loan with a $200 monthly payment. Once you pay off your car, take the $200 a month you were budgeting for the car loan and put it toward another debt. Since you are already budgeting that money each month, repurposing it once you have paid off your car loan will only help you pay off other debts. This is a great technique to use, especially if you have a few different sources of debt.

 

Rainy day fund

Earlier we mentioned how budgeting can help you save money. While creating your monthly budget, we recommend creating a separate “emergency” category you can put savings in to. Maybe you don’t have debt now. But what if you have debt in the future? Or a “rainy day” comes around? An emergency fund is a great technique to give yourself financial stability when something unexpected comes along (and anyone who owns a car knows that car issues always come at the most inconvenient times).

Our final piece of advice? Recognize that you may need help. And, if you do, don’t be afraid to ask for it. Finances can be tricky. Managing debt can be tricky, too. Even if you are in a “good place,” but you have questions about how to budget your income or manage your debt, taking to a financial advisor isn’t going to hurt.

Building the skills to manage your finances now can only assist you in the long run. So, whether you are 18 and just heading off to college, or 65 and looking forward to retirement, successfully managing debt is possible.

Don’t let the fear of a mortgage or debt keep you from pursuing the house of your dreams. Get organized and take control of your finances! Next thing you know, you’ll be sharing your financial management tips to friends and family (from the comfort of your dream home).

 

Total Home Lending

 

Natasha Mason

Debt Management: Time to take control of your finances2020-09-28T15:14:21+00:00

Demystifying Mortgage Terms

You’re a first time home buyer. Or you’re looking for your second (or third or fourth) home. Either way, there are a lot of terms thrown around in the mortgage industry. And there are probably a few you aren’t familiar with quite yet.

Well, we are here to help with that. Here are a few of the top terms you may hear throughout your mortgage process. If there’s something you still want to know, tell us! We would love to answer any questions you may have.

 

Let’s start with the basics: types of loans

Adjustable Rate Mortgage- this is a mortgage whose interest rate can adjust throughout the payback period based on market interest rates. Typically, there is a maximum amount the interest rate can be adjusted over the life of the loan, as well as the number of times it can be adjusted throughout one given year.

This type of mortgage features lower interest and lower payments earlier on during the loan term. Lower rates and lower payments can provide the room, financially, for a borrower to purchase a larger home while still being able to afford the monthly payments. Additionally, it allows borrowers to take advantage of falling interest rates without refinancing.

Construction Mortgage- typically a short-term loan, it is given to the borrower to pay for the construction of a new home. If you are considering buying land and building a house, this may be a great option for you to consider to assist on the financial side of building your dream home.

Fixed Rate Mortgage- this is a mortgage whose interest rate stays fixed throughout the payback period of the mortgage. The stability of these loans make budgeting, saving and planning much easier. Fixed Rate Mortgages are also simple to understand, which makes them great for first-time (or any-time) homebuyers.

Jumbo Mortgage- any mortgage that exceeds the limits set by Fannie Mae or Freddie Mac is considered a jumbo mortgage. There is no government backing for these loans, so the requirements to obtain a jumbo loan are significantly higher. The “number” that makes a mortgage “jumbo” varies across the country. For instance, the minimum in Los Angeles, a more expensive housing market than Detroit, is significantly higher. To see if you qualify for a jumbo loan, talk to your loan provider.

Reverse Mortgage- this is where the equity on the house is turned into cash for the homeowner. Home equity is the portion of your property value that you actually own (you can think of it as the part of the property you have already “paid off”). There are a lot of factors to consider when it comes to a reverse mortgage. Fees, your financial stability and how long you plan on staying in your home are a few things to keep in mind when pondering a reverse mortgage.

VA Mortgage- this is a government sponsored mortgage that is guaranteed by the Veteran’s Administration. It is only available to active US service members, veterans and their spouses.

Homeowners

Now for a few more good terms to know

P&I- Principal and Interest. This will be your normal monthly mortgage payment.

PMI- also known as private mortgage insurance. Insurance on a mortgage is generally required of borrowers who make a down payment of less than 20%. Typically, FHA Loans fall into this category and require borrowers to pay a private mortgage insurance. At a certain point during the life of the loan, some borrowers no longer need to pay a PMI.

Foreclosure- the term used to define when a borrower is unable to payback their mortgage and legal proceedings have ensued. This is a period when the lender is, legally, obtaining the title and possession of the home. Typically, houses that have been foreclosed upon are sold and, after sale, the money owed to the mortgage lender is returned to them. For more information and details on foreclosure proceedings, you can talk to your mortgage lender.

Escrow- it is an account set up by the lender to set aside money for the eventual payment of home insurance and property taxes. They are typically required when you (the borrower) are putting down less than a 20% down payment. Requirements regarding escrow accounts are dependent upon your lender.


Don’t let your home buying process be overwhelming or confusing. Talk to one of our loan officers about what options you have available to you! And if there is something you don’t fully understand, just ask. We are here to help.

 

Total Home Lending

 

 

Natasha Mason

Demystifying Mortgage Terms2020-09-28T15:14:21+00:00
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