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5 Things to Know Before Refinancing Your Home
Are you thinking of refinancing your home? Refinancing can be a great way to save money on your monthly mortgage payments or get a lower interest rate. However, it’s important to understand all of the facts so that you can make an informed decision.
Whether you’re just starting to do your research or are ready to take the plunge, this post will outline key information that you should be aware of before taking the next step.
Here are five important factors to keep in mind:
1. Current mortgage rates
In order to determine if refinancing makes sense for you, you need to know your current interest rate. If interest rates have dropped since you originally took out your mortgage, you could potentially save money by refinancing at a lower rate.
Additionally, if your financial situation has improved since you took out your mortgage, you may be able to qualify for a lower interest rate and save even more money.
In general, being conscious of this information can help you make a well informed decision about whether or not refinancing is right for you and allow you to get the best possible rate.
2. Know your home equity
Another vital factor to keep in mind is your home’s value. It’s important to know your home equity before refinancing because it will determine how much money you can borrow.
Your home equity is the difference between your home’s current market value and the amount you still owe on your mortgage. So, if you have a lot of equity in your home, you’re more likely to be approved for a refinance than if you have little or no equity. And if you’re approved, you may be able to get a lower interest rate on your mortgage.
You’ll need to have your home appraised in order to determine how much equity you have in your home. You can do this by contacting a local real estate agent and requesting an estimate of your property’s value.
3. Your Debt to Income Ratio
Your debt-to-income ratio (DTI) is an important number to know before thinking about a mortgage refinance. A DTI is the amount of debt you have compared to your income. In other words, it’s a percentage that will help you understand how much of your income goes towards debt payments each month. This includes: student loans, car payments, credit card bills, and etc.
Theoretically, you want this number to be low so that you have more money available each month to put towards other things, like savings or investments. You can calculate your debt-to-income ratio by dividing your total monthly debt payments by your gross monthly income.
Lenders use this to determine how much they are willing to lend you. A high DTI ratio could mean a higher interest rate or even being denied for a refinance loan. Ideally, you want to have a DTI ratio below 36% as this will show that you’re able to comfortably handle your monthly debt payments.
4. Check your credit score
Before you even begin to think about a mortgage refinance, you’ll want to check your credit score. It’s one of the most vital factors that lenders will take into account when you apply for a refinance loan.
For instance, lenders will use this information to determine whether or not you can qualify for a refinance as well as the interest they will offer you. Generally, a higher credit score means you’re seen as a lower-risk borrower and therefore, may be offered a better interest rate on your loan. Conversely, a lower credit score could mean you’ll be offered a higher interest rate or may not be approved for a loan at all.
Overall, it’s definitely in your best interest to check your credit score before applying for a refinance loan. Typically, it’s recommended to have a credit score of 620 or above. You can check your credit score for free using online tools like Equifax or Experian.
5. The costs of refinancing
Before refinancing your home, it’s important to know the costs involved. These can vary depending on the lender, but typically include appraisal fees, loan origination fees, as well as closing costs.
Knowing the costs of refinancing is important for several reasons. For one, you’ll be able to compare the costs of different lenders and shop around for the best refinance rates and terms, allowing you to get the most out of your refinance. It also helps you to budget so that you have enough money to cover all of the fees associated with refinancing.
Factoring in these costs will help you to avoid any surprises later on and ensure that you’re making the best decision possible for your financial future.
1st Eagle Mortgage can help you navigate the process
If you are considering a mortgage refinance, it’s crucial to understand the process and what to expect so that you can save yourself a lot of hassle down the road. Being aware of these 5 factors will also help you make a wise decision about whether or not this option is right for you. Nonetheless, it’s important to remember that refinancing is not a quick fix for all of your financial problems. But if done correctly, it can save you money in the long run.
At 1st Eagle Mortgage, we want to help you make the best decision for your family and finances. We have years of experience in the industry and can guide you through every step of the process. We offer a variety of refinancing options and can work with you to find the perfect solution for your needs.
No comments yet10 Common Myths About Reverse Mortgages
A reverse mortgage can be a great tool for seniors who are looking to access their home equity in retirement. However, there are many myths about reverse mortgages that can scare people away from this option. Some people think that they are too good to be true, while others think they’re a risky investment.
In this blog post, we’ll debunk some of the most recurrent myths and help you decide if this type of loan is right for you. Check out one of our blogs to learn about how someone can benefit from a reverse mortgage.
Here are 10 of the most common myths and the truth behind them:
Myth 1: You can’t get a reverse mortgage if you have an existing mortgage
This is simply not true. You can actually have both a traditional mortgage and a reverse mortgage at the same time. However, you will likely have to pay off your existing mortgage with the proceeds from the reverse mortgage.
Myth 2: The bank owns your home
Once again, this is false. You remain the owner of your home with a reverse mortgage. The loan is secured by your home, but you still have all the rights and responsibilities of ownership.
Myth 3: They are expensive
While it’s true that there are some fees associated with taking out a reverse mortgage, such as origination fees and closing costs, these can often be financed into the loan. This means that you won’t have to come up with any money out of pocket to get the loan.
Additionally, there are no monthly payments required with a reverse mortgage, so you don’t have to worry about making payments every month.
Myth 4: You have to make monthly payments
Nope! With a reverse mortgage, you don’t have to make any monthly repayments. The loan is only repaid when you sell the property or pass away.
Myth 5: Reverse mortgages are only for people who are struggling financially
This is yet another popular myth, but it couldn’t be further from the truth! While a reverse mortgage can provide some financial relief for someone who is struggling to make ends meet, it’s not just for people in financial difficulty.
In fact, many people use the money for other purposes, such as making home improvements or travelling. It can also be a good way to supplement your income in retirement or to get access to cash if you need it for a large purchase.
Myth 6: You need to have a good credit score in order to qualify
Unlike traditional mortgages, there is no minimum credit score requirement when it comes down to determining your eligibility for a reverse mortgage. As long as you are at least 62 years old and own your home outright, or have a low enough loan balance, you should be eligible.
Myth 7: You can outlive a reverse mortgage
False. As long as you live in your home, you will never have to worry about the reverse mortgage loan being called due. It’s only when you sell the property or the last surviving borrower dies that the loan needs to be repaid.
Myth 8: You have to pay taxes on the money you acquire
The money you receive from a reverse mortgage is not considered taxable income. This means that you don’t have to pay any taxes on the money you get from the loan.
Myth 9: The bank can take away my home
This is not true. As long as you stay current on your property taxes, maintain the property in good repair, and are meeting all other requirements for the loan, the bank cannot take away your home. As mentioned earlier, the reverse mortgage loan will only come due if you sell the property, permanently move out of the home, or pass away.
Myth 10: It will affect my Social Security and Medicare benefits
A reverse mortgage will not affect your Social Security or Medicare benefits. These are two separate programs that are not connected in any way to your home equity. However, if you receive Medicaid benefits, those could be affected.
Takeaway:
If you’re considering a reverse mortgage, don’t let these myths hold you back. Reverse mortgages can be a great way to tap into the equity in your home and can give you the financial flexibility you need in retirement. It’s important to do your research to get a better understanding of how they work and to clear up any misconceptions that you may have heard.
At 1st Eagle Mortgage, we want to make sure that everyone has access to the information they need to make informed decisions about their financial future. If you still have questions or would like more information, visit our website to see if a reverse mortgage is a right choice for you.
No comments yet3 Ways To Pay Back A Reverse Mortgage
If you’ve taken out a reverse mortgage, you’re probably wondering how you’re going to pay it back. Unfortunately, there’s no one-size-fits-all answer – it all depends on your individual situation.
When you take out a reverse mortgage, you are borrowing against the equity in your home. This type of loan can be a great way to get access to money for retirement or other expenses, but it’s important to remember that you will need to pay it back eventually. There are a few different ways to go about doing this, and we’ll outline them below.
When Do You Need to Pay Back a Reverse Mortgage?
The terms of each loan vary depending on the mortgage lender and the borrower’s individual circumstances. But, generally speaking, reverse mortgages must be repaid when the borrower dies, sells the property, or permanently moves out of their primary residence.
How Do You Pay Back a Reverse Mortgage?
If you’ve taken out a reverse mortgage, you’re probably wondering how to pay it back. Here are 3 of the most common ways to do it:
1. Selling the home.
One of the most common ways is to sell the property. As previously mentioned, when you take out a reverse mortgage, you’re borrowing against your home equity. The loan is typically repaid when you die or sell the house. If you sell the property while you still owe money on the home loan, then the proceeds from the sale will go towards paying off the debt.
This is often the best option for people who don’t want to keep the loan open for a long period of time. Furthermore, it not only frees up the equity in your home which can be used for other purposes, but it also ensures that you won’t have to worry about the property being foreclosed on if you can’t make the payments.
However, there are two things you should know if you’re considering selling your home to pay back a reverse mortgage:
- First, you’ll need to get approval from your lender before selling your home.
- There may be fees and other costs associated with selling your home, so it’s important to talk to your lender about those costs before making any decisions.
Ultimately, whether or not paying off a reverse mortgage this way is a good idea depends on your individual circumstances. If you’re confident that you can sell your home for enough to cover the loan balance, then it’s definitely worth considering.
2. Refinancing the reverse mortgage
Another option for paying back a reverse mortgage is refinancing. This means taking out a new loan, using your home equity as collateral, and using the proceeds to pay off the reverse mortgage. This can be a good option if you have good credit and can qualify for a lower interest rate than what you’re currently paying on your reverse mortgage.
Many people choose this method because it gives them more flexibility in how they can repay their loans. For example, if you originally took out a lump sum reverse mortgage, you may have used some of that money to pay off debts or make home improvements. If you refinance, you can choose to take out a new lump sum or switch to a line of credit option, which gives you more ongoing access to funds as needed.
Here are some things to keep in mind when refinancing a reverse mortgage:
- You’ll need to have enough equity in your home to qualify for a new loan.
- Refinancing will incur costs, so it’s important to make sure that the benefits of refinancing outweigh those costs.
- Your age and current financial health status will be taken into account. This is because reverse mortgage lenders want to make sure that borrowers will be able to continue making payments throughout the life of the loan.
- It’s important to remember that refinancing will extend the length of your loan, so you’ll want to make sure you’re comfortable with that longer repayment timeline.
Paying back your reverse mortgage by refinancing is a great option for those who want to keep their home. Of course, as with any financial decision, it’s important to consult with a professional before making any decisions.
3. Repaying the loan in full with cash
If you’ve got the cash on hand, paying back a reverse mortgage is pretty straightforward. You can also choose to repay the loan in full, either through monthly payments or as a single lump sum.
But before doing this, there are a few things to keep in mind:
- First, make sure that you have the funds to cover the payoff amount.
- It’s also important to notify the lender of your intent to pay off the loan. They’ll then provide you with instructions on how to do so.
The Bottom Line
Each option has its own advantages and disadvantages, so make sure you weigh your options carefully before deciding which one is right for you. Whichever route you choose, make sure to stay in touch with your mortgage lender so they can help you keep track of your progress and ensure that everything is going according to plan.
If you’re considering a reverse mortgage, be sure to reach out to 1st Eagle Mortgage. We can help connect you with the right resources and answer any questions you may have about the process. Our team is here to help make your retirement as comfortable and worry-free as possible.
No comments yetBest Ways to Use The Rising Home Values For Refinancing
It’s no secret that home values have been on the rise for the past several years. In fact, according to Zillow’s latest report, they are projected to continue increasing through 2022.
Keep reading to learn more about the current housing market trends and what this could mean for you!
Today’s Real Estate Market
According to the Freddie Mac House Price Index (FMHPI), home values grew by 11.3% in 2020 and 15.9% in 2021. Many real estate experts predict that it will only rise further in 2022. Especially as the spring season approaches, you can most definitely expect the prices of homes to soar.
For the past few years, we’ve seen historically low interest rates which has spurred on buyers looking to purchase a home. We’re also still in the midst of a pandemic which has caused many people to reassess their living situation – resulting in a stronger buy demand for housing. On the flip side, there is a limited supply of homes available for sale which is causing prices to rise significantly.
But what does this mean for homeowners?
For homeowners, the jump in home prices is great news! It means your home is likely worth more than it was when you first purchased it, which can give you a nice little nest egg to tap into if you ever want to sell or refinance.
Consider refinancing your mortgage
If you’re a homeowner, there’s a good chance you’ve thought about refinancing your home at some point. And if your home’s value has increased, now is a great time to do it!
Here are a few of the best ways you can take advantage of today’s market to refinance your home:
Cash-out refinance
With home values on the rise, many homeowners have built up significant home equity. If you need cash for home improvements, debt consolidation, or other purposes, refinancing can be a good way to access that equity. You can choose to get a cash-out refinance loan, which essentially means you are taking out a new mortgage for more than what you currently owe on your home. The difference will be given to you in cash, which can be used as you see fit.
Just be aware that a cash-out refinance will likely have a higher interest rate than your current mortgage. So, if you’re not planning to stay in your home for the long haul, it may not be worth it.
Get rid of private mortgage insurance
If you put less than 20% down on your original mortgage, you’re most likely paying private mortgage insurance (PMI). PMI is an insurance policy that protects the lender in case you default on your loan.
While PMI is a common requirement for low-down-payment loans, it’s an extra expense that you can get rid of by refinancing your home. Once your home value rises and you have at least 20% equity in your home, you can apply to have PMI removed.
Shorten your loan term
When home values rise, it typically means that your property is worth more than it was when you purchased it. This increased home equity can be used to your advantage by refinancing to a shorter loan term.
There are a couple of benefits to shortening your loan term when home values rise. First, you’ll build home equity more quickly. Having more equity gives you more options and flexibility if you ever need to sell or refinance your home in the future.
Second, by refinancing into a shorter loan term, you can save money on interest payments. If you can lower your interest rate by even a fraction of a percent, you could save thousands of dollars over the life of your loan. As a result, you will be able to free up some extra cash each month, which you can then use to pay down debt or save for other goals.
Sell your home
Finally, you could sell your home and move into something more affordable. With housing prices on the rise, this could be a great time to profit from your investment and downsize to something more manageable.
Bottom line
No matter what your goals are, refinancing can be a great way to use the rising value of your home to your advantage. If you’re thinking about refinancing your home, be sure to talk to a mortgage lender to see what options are available to you.
No comments yet5 Ways to Consolidate Credit Card Debt
If you’re like millions of other Americans, you may be struggling with credit card debt. And if that’s the case, you’re not alone. In 2021, the average American household had over $6,000 in credit card debt.
Credit card debt can be a major burden, especially if you have multiple cards with high balances. But don’t worry, there are steps you can take to get yourself out of this mess. One of those steps is debt consolidation.
In this blog post, we’ll break down what debt consolidation is, how it can benefit you and five ways to do it. Keep reading for all the details!
What is debt consolidation?
When you consolidate your credit card debt, you are essentially taking out a new loan to pay off all of your current credit card debt.
It’s a good way to save money on interest charges and get yourself out of debt more quickly.
It can also be helpful if you’re struggling to keep up with multiple bills every month. The key is to find a consolidation option with a lower interest rate than what you’re currently paying on your credit cards.
There are several methods for debt consolidation. Each option has its own pros and cons, so make sure to compare your options and evaluate your situation carefully before making a decision.
Benefits of debt consolidation
Before diving into the different types of ways to consolidate debt, I think it’s important to first understand some of the advantages in doing so.
Lower interest rates
First, debt consolidation can help you save money on interest payments. When you have multiple balances on different cards, you’re likely paying multiple interest rates. Consolidating your debt into a single loan will allow you to pay off your debt at a lower interest rate, which can save you a lot of money in the long run.
One monthly payment
Debt consolidation can also help you simplify your monthly budget. When you have numerous cards with different payments and due dates, it can be difficult to keep track of what needs to be paid when. Consolidating your debts into one monthly payment will make it easier to manage your finances and avoid late payments.
Easier budgeting
With only one monthly payment to make, it’s much easier to create a budget and stick to it. You’ll know exactly how much money you have to work with each month, and you can plan your spending accordingly.
Increased credit score
Having several credit cards and carrying a high balance on them can hurt your credit score. Consolidating your debt will help improve your score, and it will show lenders that you’re able to manage your debt more responsibly.
How to consolidate credit card debt
Now that you know the benefits to consolidating credit card debt, it’s time to learn some of the most common ways to do it.
1: Balance transfer
This is one of the most popular methods for consolidating credit card debt. If you have a good credit score, you may be able to qualify for a balance transfer credit card.
With this type of card, you can transfer your existing credit card balances to a new card with a lower interest rate. Some cards even offer 0% interest rates for a limited time, which can help you save money on interest payments and pay off your debt faster. So make sure to pay attention to the terms and conditions.
2: Consolidate with a personal loan
Taking out a loan to pay off your debt is another common way to consolidate credit card debt. If you have a good credit score and are looking for a lower interest rate, a personal loan could be a beneficial option.
This type of consolidation loan allows you to combine all of your debts into one monthly payment, with a lower interest rate than what you’re currently paying. Just be sure to look around for the best rates.
3: Use a home equity loan
If you have equity in your home, you can use it to get a loan or line of credit to consolidate your credit card debt.
There are a few things you’ll want to consider before tapping into your home equity. First, how much debt do you have? Second, what’s the interest rate on your credit cards? And finally, is your home worth more than what you owe on it?
If you can answer yes to all of those questions, then a home equity consolidation loan might be a great option for you.
With that said, you may be wondering why you would want to consolidate your debt by tapping into your home equity. After all, your home is probably your biggest asset and you don’t want to put it at risk. However, there are some good reasons to consider this course of action.
For one, the interest rate on a home equity loan is usually much lower than the interest rate on a credit card. This means that you could save a lot of money in interest charges by consolidating your debt into this type of loan.
Another advantage is that you will have only one payment to make each month instead of several. This can make it much easier to stay on track with your finances since you don’t have to worry about making a handful of payments each month.
4: Debt management plan
A debt management plan is a formal agreement with your credit card company that allows you to pay off your balance over time.
This plan typically has lower interest rates and monthly payments, and can help you avoid bankruptcy. It’s a good option for those who are having trouble paying off credit card debt but aren’t eligible for other options due to a poor credit score.
5: Credit counseling
If you’re experiencing financial hardship and are having trouble keeping up with your credit card payments, you may want to consider credit counseling. This is a process where a counselor will help you develop a plan to pay off your debt and improve your credit score. They can also help you negotiate with your creditors to get a lower interest rate or to get your debt forgiven.
Final Takeaway
No matter which option you choose, be sure to do your research and compare rates before settling on a plan. With debt consolidation, you can save yourself money and stress in the long run and get on a path to financial stability. Talk to a financial advisor or credit counseling service to get started.
April 20th, 2022 by Herb Levin
No comments yet5 Reasons A Reverse Mortgage Could Benefit You
If you’re like a lot of people, you may be wondering if a reverse mortgage is ideal for you. While there’s no one-size-fits-all answer to that question, it’s important to first understand what a reverse mortgage is.
What is a reverse mortgage?
A reverse mortgage is a loan that allows homeowners over the age of 62 to borrow money against the value of their home. It can be a great option for those looking to access some of the equity they have built up in their home, without having to sell it.
It can be a helpful financial tool for seniors who want to supplement their income, cover unexpected costs, or pay off their mortgage sooner.
In this post, we’ll break down five reasons a reverse mortgage could benefit you – so you can decide if it’s the right option for you.
Keep reading to learn more!
It gives you financial flexibility for retirement
When people retire, they often find themselves in situations where money is tight but there’s still an essential need to maintain some level of living comfortably. Many homeowners have found success in taking out loans from their homes as opposed to getting social security payments or relying on their spouse’s income.
With expenses such as healthcare and day-to-day living costs continuing to rise, while income levels remain stagnant or decline; getting a reverse mortgage allows you to afford these necessities much easier over time. This is because you can use your home equity to supplement your income.
You can use the money from the loan for any purpose, including paying off debts, making home improvements, or covering living expenses.
With a steady stream of income coming through, seniors are able to cover their expenses in retirement. So if you want more financial flexibility and to improve your overall quality of life, you should consider getting a reverse mortgage.
You can stay in your home as long as you want
If you’re struggling to make ends meet, a reverse mortgage could give you the freedom to stay in your home and not have to worry about making monthly mortgage payments.
With a reverse mortgage, you can choose to receive a lump sum of cash, a line of credit, or monthly payments. This extra cash can help you cover your living expenses and allow you to stay in your home longer.
You don’t have to pay taxes on the income
One of the key benefits of a reverse mortgage is that you don’t have to pay taxes on the income you receive from the loan. This is because the IRS considers the money as “loan proceeds” as opposed to an income you earned. Subsequently, the money you receive from the reverse mortgage will have zero impact on your Social Security or Medicare benefits. This can be a big help if you’re retired and living on a fixed income.
You’re protected if the balance goes over your home’s value
If you’re worried about taking out a reverse mortgage because you think your home’s value could drop and leave you owing money, don’t be.
Contrary to a traditional mortgage, there are no monthly payments required. So, if the value of your home decreases and your reverse mortgage loan balance increases, you don’t have to worry about failing to pay the loan. The lender won’t be able to pursue any assets other than your home to satisfy the debt.
With a reverse mortgage, you’re protected from having to pay back more than the value of your home. So if you sell your home to pay off a reverse mortgage, the lender will cover the difference between the sale price and the amount you owe.
There are no monthly mortgage payments
A reverse mortgage, unlike a traditional mortgage, does not require monthly payments because the lender pays them. The borrower does not need to make monthly payments until the borrower dies, sells the home, or permanently moves out of the home.
As long as you live in the home and don’t breach the terms of the reverse mortgage agreement, you don’t have to make any payments on the loan until it comes due.
This can be a helpful option for seniors who are no longer able to work or don’t have enough income to cover their monthly expenses.
Contact 1st Eagle Mortgage to get a reverse mortgage today
Reverse mortgages are one of our specialties at 1st Eagle Mortgage. We have decades of experience in the mortgage sector and have the expertise to guide you through this process.
March 10th, 2022 by Herb Levin
No comments yet5 Steps to Refinance Your Mortgage
Are you feeling stuck in your current mortgage situation? Is your monthly interest payment too high? If so, you’re not alone – refinancing is one of the most popular strategies for saving money on your mortgage.
However, refinancing can be a complex process, so it’s important to take the time to plan ahead and make sure you’re doing everything correctly. But before you get started, there are a few things we should go over.
What does it mean to refinance your mortgage?
When you refinance your mortgage, you are essentially taking out a new loan to pay off your existing mortgage. This new loan will have terms that differ from your previous mortgages, such as a lower interest rate, a longer loan period, or both.
Refinancing can be a great way to save money on your monthly mortgage payments and it can also help you pay off your mortgage faster!
When should you refinance your mortgage?
When interest rates drop
If interest rates have dropped since you originally took out your mortgage, it could make sense to refinance to get a lower rate. This could save you money in the long run, as you’ll end up paying less interest on your mortgage loan.
When you want lower monthly payments
If you’re having a hard time paying your mortgage on a monthly basis, then refinancing can be a good option. By refinancing to a lower interest rate or extending the term of your loan, you’ll be able to save money every month.
When you want to cash out equity from your home
If you’ve been diligently making payments on your mortgage, chances are you now have some equity built up in your home. Refinancing allows you to tap into this equity and use it for other purposes, like home upgrades and debt repayment.
When you want to pay off your loan sooner
If you’re looking to become mortgage-free sooner, refinancing into a shorter-term loan could be a good option. This will likely mean higher monthly payments, but you’ll pay off your loan more quickly!
Should I refinance my mortgage?
Understanding your goals for refinancing allows you to take advantage of saving money on your mortgage payments. Furthermore, having a solid plan in place will help you make the most out of refinancing and avoid any potential issues in the future.
So if you feel like any of the reasons mentioned above pertain to you, then refinancing may be the right option for you.
In this post, we’ll walk you through five steps to refinancing your mortgage to help make the process as smooth and stress-free as possible!
1. Know your credit score & home equity
Your credit score is one of the most important factors in determining whether or not you qualify for a refinance. Lenders will use your credit score to determine your risk level and whether or not you’re likely to default on your loan.
The higher your credit score, the better chance you will be eligible for a lower interest rate. You can check your credit score for free online or through your credit card company or bank.
Another factor that will affect your ability to refinance is your home’s equity. Equity is the portion of your home’s value that you own outright. To qualify for a refinance, you’ll need to have enough equity in your home to cover the cost of the new loan.
2. Shop around for the best rate
Once you’ve determined your credit score and home’s equity, it’s time to start looking around for the best refinance rate. With so many different lenders out there, it’s important to compare rates and terms from multiple lenders to get the best offer.
Don’t just focus on the interest rate – also look at the fees and closing costs associated with each loan. To estimate your monthly payments and compare loans side by side, you can use a mortgage refinance calculator.
3. Get Pre-Approved for a Loan
Once you’ve found the best home loan refinance, it’s time to get pre-approved for a loan. Getting pre-approved will give you a better idea of how much money you can borrow and what your monthly payments will be.
Pre-approval gives you a conditional commitment from the mortgage lender for a specific loan amount, allowing you to move forward with your home purchase knowing that your financing is in place.
4. Apply for the Loan
Once you’ve been pre-approved, it’s time to apply for the home loan refinance. This is where you will need to get your financial documents in order. It shows the lender that you’re a responsible borrower and have the financial resources to cover your mortgage payments.
The process will vary depending on the mortgage lender, but generally, you’ll fill out an online application and then submit supporting documentation about your income, debts, and assets.
5. Close on your loan
After your home loan refinance is approved, it’s time to close on it. This involves signing a bunch of paperwork and paying any closing costs. Once everything is finalized, your new loan will be in place and you can start saving money.
Takeaway
If you’re thinking about refinancing your mortgage, these five steps will help you get the process started. Just be sure to do your research and compare rates and terms from multiple lenders before making a final decision!
For more information on refinancing and to connect with 1st Eagle Mortgage, visit our homepage.
February 15th, 2022 by Herb Levin
No comments yetWhat Home Buyers Can Expect From Mortgage Rates in 2022
With inflation on the rise and a recovering economy, home buyers will have to put on their brave faces and go to bat for their dream homes in 2022. The good news is, most financial analysts and experts agree that the market shouldn’t be nearly as intense as in 2021.
Most economic pros predict mortgage interest rates will rise in 2022.
Most experts agree that mortgage rates will slowly climb to about 3.6% by the end of 2022. The Federal Reserve is tapering asset purchases, and everyone will feel the effects on mortgage rates. Moreover, inflation is rising, and a slowly recovering economy will put pressure on mortgage rates.
However, if you’re a home buyer, don’t be discouraged. While rates are ticking upward, they are still pretty low. Suppose other aspects of real estate improve, such as if inventory or pricing becomes more buyer-friendly, higher rates won’t feel as heavy of a burden. That said, our advice is not to wait to start looking and planning.
What does this mean for home buyers?
– There will be a shortage of homes for sale. Many millennials are trying to buy houses right now, and there have not been enough houses built over the past decade to reach their demand. Limited inventory means more competition
– There will be lots of competition. Be prepared by understanding what you can afford, having a list of your needs in a home, and acting fast when you find a home that meets your requirements. Of course, avoid panic buying because you feel the pressure to move quickly. Know what you can afford and honor your list of needs/wants in your home.
– Home prices will continue to rise, but at a slower pace than 2021. Home values skyrocketed in 2021, and while prices aren’t expected to drop in 2022, they will likely increase at a much slower rate than last year. Buyers will probably still face competitive bidding wars, but they won’t be as frequent or intense as last year.
5 tips for first time home buyers on how to prepare for the 2022 market:
1. Do your research way ahead of time. Since mortgage interest rates will likely go up, this could affect your buying power. Understanding your financial situation is essential, and researching neighborhoods you know you can afford will be beneficial.
2. Improve your credit score.If you’re worried about the rising interest rates, focus on increasing your credit score. The higher your score, the more likely you’ll get approved for a more affordable interest rate and a home loan that meets your financial goals.
3. Save for a down payment. Home prices are higher, and you need to save up to put cash down on your down payment if you don’t have the funds already. The good news is there are still loans for as little as 3% down, so make sure you have the cash and work with the right people to get you a great rate. If you need to save up, consider getting a side gig on top of your current job or selling some of your personal items to earn some extra cash.
- Find a lender that works for your long-term financial goals. Finding the right mortgage loan is always an important aspect of buying a home, especially when prices are inflated. This is where 1st Eagle Mortgage can step in and help. They’ll find a home loan that meets your individual financial needs and connect you with lenders you wouldn’t be able to access on your own. More options mean more likeliness that you’ll find the right home loan option for you. There are several other advantages to working with a mortgage broker. Check out their website for more information.
- Understand what you can afford to avoid panic buying. Understanding your finances and what you can afford is a critical part of being a homeowner. You need to thoroughly comb through your finances and understand your situation before you start even looking for a home so that you don’t panic buy and get stuck with a home and mortgage you can’t afford.
Contact 1st Eagle Mortgage to navigate buying a home in 2022.
As a dedicated mortgage broker service, 1st Eagle Mortgage promises to connect you with a mortgage loan that fits your financial needs and walks you through every step of the home buying and application process.
They have numerous connections to mortgage lenders that you wouldn’t have on your own that can offer lower interest rates, regardless of your financial history. For example, 1st Eagle Mortgage provides home loans for as little as 3% down, even if you have declared bankruptcy, had a short sale or went into foreclosure.
To learn more about 1st Eagle Mortgage, visit our website.
February 2nd, 2022 by Herb Levin
No comments yetThe Key Differences in Using a Mortgage Broker vs. Bank
Have you been dreaming of buying a home and think you’re ready to start the process? Time to figure out how to get approved for a loan, and the process can be a little complicated, especially if you’re a first-time home buyer.
Before you start loan shopping, you need to figure out what the best option is for you – how should you find the best rates? Who can help you? Should you depend on your bank for a mortgage, or look into a mortgage broker? Going into this process armed with knowledge is key to getting the best loan options possible.
Let’s break down the differences:
What is a mortgage broker?
A mortgage broker is essentially a middleman between you and the mortgage lenders. They have connections to a wide range of lenders and can therefore give you access to a wide range of loan options.
If you’re self-employed or have less-than-perfect credit, a mortgage broker could be a great option for you. They can find your results and connect you with multiple types of mortgages you wouldn’t have access to alone. A good mortgage broker can break down how all the moving parts of interest rates, down payments, and closing costs.
When you work with a mortgage broker like 1st Eagle Mortgage, for example, you can feel at peace knowing the team will guide you through the step-by-step process of finding a solid home loan option and getting approved. They also make it their priority to connect you to a lender that will benefit your long-term financial goals.
What is the process for bank mortgages?
When you work with a bank, you will fill out a loan application and meet with a loan officer who will review some options with you. While the process is pretty straightforward, it does have some shortcomings to be aware of.
Working with banks can be limiting, and you have to do your homework. If you speak to only one bank, you’ll never know that there are much better rates out there for you. Your credit score could qualify you for a much better rate somewhere else, so you should talk to as many as possible to see which will work best in your favor.
Key differences and how to determine which is best for you.
Both options have solid pros, but the key differences are:
Mortgage brokers offer a wide selection of choices and, when you work with a mortgage broker like 1st Eagle Mortgage, they’re committed to holding your hand throughout the loan process and guiding you each step of the way. They are also determined to find you the best rates and find a loan that benefits your personal finance goals.
Not to mention, they have connections to multiple lenders you wouldn’t be able to access alone that could benefit your financial situation. And as you probably know, your financial situation is imperative because it typically determines your rate. But if you have less-than-perfect credit, are self-employed, or have a sticky financial past, 1st Eagle Mortgage can connect you to loans that will not only work for you but also benefit you. For example, they offer loans for as little as 3% down, even if you have declared bankruptcy, had a short sale, or went into foreclosure.
Getting a mortgage from your bank or credit union is a simple process, and they could have great options for you. They also may offer you relationship perks for selecting them. However, you have to do thorough research and make sure you shop around a lot. While your bank may promise you the interest rate offered is a great deal, a mortgage broker has relationships with several lenders and could get you an even better rate.
You get to decide.
It’s nice to have options when it comes to taking out a mortgage. It’s a big commitment, and you want to make sure the loan you choose works for you and your financial situation.
As you are shopping around and trying to determine what path works for you, make sure you do your research. Determine and thoroughly break down what your financial situation is, and ask the broker or bank these important questions:
• How long will the process take?
• What loan options do you think I will qualify for?
• How much will closing costs be?
• Is there anything in my loan application that will make it hard to get approved?
• What can I do to improve my financial situation?
For more information and to connect with 1st Eagle Mortgage, visit our website.
February 2nd, 2022 by Herb Levin
No comments yet5 Tips to Get the Best Mortgage Rate
1st Eagle Mortgage breaks down 5 ways to improve your chances of getting the best mortgage loan rate on the market.
There are some great mortgage loan options out there, but you have to qualify for them, and that can take work. To be eligible for better loan rates, lenders look at your credit, employment history, location of your property, and much more. So what can you do to get the best mortgage rate possible?
Learn 5 tips from 1st Eagle Mortgage to find out.
1: Improve your credit.
Giving your credit score a boost is one of the most important things you can do to get a good loan, and it also increases your chances of getting a loan in the first place.
To improve your credit score, pay off as much as you can on revolving account balances, catch up on past-due payments, and don’t miss payments. Another trick for improving your score quickly is to ask for a credit line increase and don’t spend any of it.
If you can improve your score even a little bit, it can make a huge difference in your eligibility for a good mortgage loan. With that said, if you have less-than-perfect credit and have done everything you can to improve it already, 1st Eagle Mortgage can work with you and connect you to multiple loan options that you could be eligible for.
2: Build steady employment.
It’s best not to switch jobs or quit your job right before you apply for a loan, because lenders look at your employment history and want to know that you have steady income coming in.
So unless you’re getting promoted into a new role with a salary increase, it’s best to stay where you’re at and keep things consistent while you’re going through the home buying process.
3: Save for a down payment.
The more cash you put down on your home upfront, the less you need to borrow from a lender, which also means there’s less risk you pose for them. If you pose less of a risk for them, you will probably also get a lower mortgage rate.
While sometimes you can get away with putting down a smaller down payment, experts suggest putting down at least 20% of the cost of your home. On the other hand, you don’t want to drain your savings to pay for a down payment. Keep in mind you’ll also need to pay closing costs, and lenders typically check your account at the end of the loan process to make sure you have at least two months of mortgage payments ready.
So instead of relying on savings, find other ways to raise money, like getting a side gig or selling that old baseball card collection of yours.
4: Shop and compare multiple different lenders.
It’s essential to not settle for the first loan option you’re presented! Look around and compare multiple different rates, because rates can vary drastically from one lender to another.
When you work with a mortgage broker like 1st Eagle Mortgage, you’ll get connected to multiple different lenders you wouldn’t have access to otherwise that might be the best financial option for you. The team of mortgage brokers at 1st Eagle will help you vet through options and find a loan that best fits your long-term financial goals and needs.
5: Consider a 15-year mortgage
Since shorter-term loans pose less of a risk than the traditional 30-year mortgages do, you may find a better rate when exploring this option. However, know that your monthly payment cost will be higher. You could also consider doing an ARM (adjustable-rate mortgage), which may have a low rate, but also keep in mind the rate could increase during your loan term.
Consider working with a mortgage broker to get connected to multiple loan options, regardless of your financial situation.
While you want to make sure you do everything you can to improve your credit and have a solid financial and employment history, know that at the end of the day, you can still have great options for mortgage rates.
There are several benefits to working with a mortgage broker, including the fact that they will find you a loan that fits your needs at the best rate on the market. Whether you’re a first time home buyer, downsizing, refinancing, or a commercial property owner, their goal is to make your loan application process as stress-free as possible for you.
To learn more about 1st Eagle Mortgage, visit our website.
February 2nd, 2022 by Herb Levin
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