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As interest rates have risen in recent weeks, much attention has been paid to the effect rising rates may have on the housing market.  While interest rates do play an important role in your monthly mortgage payment, they are not the only factor to consider.

If you’re planning to purchase a home this year, be sure to understand each of the components that make up a mortgage payment, which can help you determine a monthly payment with which you are comfortable.  Here are the parts of a mortgage payment:

Principal: The principal part of your monthly payment pays off the loan amount you initially borrowed to buy your home.

Interest: In return for providing the funds you need to buy a home, lenders charge monthly interest on the principal balance you owe.

Taxes: Property taxes may be collected by your lender on a monthly basis and held in an escrow account to be paid on your behalf as they come due. The good news is: property taxes are usually fully deductible at income tax time. Consult a tax advisor for details.

Homeowners Insurance: Homeowners insurance provides financial protection in the event of losses that are the result of fire, wind, natural disasters or other hazards. Most mortgage lenders require you to have a homeowners insurance policy and may also be collect these funds to hold in an escrow account to pay your insurance company.

Mortgage Insurance: Mortgage insurance protects the lender against financial loss if a customer fails to repay the loan.

  • FHA-insured loans require a mortgage insurance premium (MIP)
  • VA loans may require a funding fee
  • Conventional loans can be insured with private mortgage insurance (PMI)

If mortgage insurance is applicable to your loan, that part of your payment is forwarded to the agency providing the insurance.

If you have questions, our mortgage consultants are always available to help you understand the home loan process!  Please also check out our on-line resources such as our mortgage payment calculator or our house hunting checklist!

 

 

 

This table is only to be used as a guide and does not include all loan types or loan features. Not all loan types are available to all borrowers. Borrowers will be subject to qualification and must satisfy all underwriting requirements and conditions. Not all borrowers will qualify. Speak with your mortgage consultant and carefully consider each of your home financing options so you can determine the home loan that is right for you.

All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance. Licensed by the Delaware State Bank Commissioner. Also licensed in District of Columbia, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

NMLS ID #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/)

©2017 Prosperity Home Mortgage, LLC. All Rights Reserved.


Financing Your Home: Knowing Your Options Will Save You Money

By Tim Wilson, Chief Executive Officer, President, Prosperity Home Mortgage.

 

It’s a great time to buy a home. Interest rates for mortgages remain near historic lows allowing you to buy more for your money. If you’re currently a renter who has been trying to save for a home down payment, you’ll be happy to hear about these down payment options that can put you on the path to homeownership in no time.

What are the options?

Unlike typical 20 percent down payment loans, there are mortgage programs that offer affordable no and low down payment options. Please note we have listed only a few of the programs available. Not all of these programs may be available to you or in your area and certain restrictions may apply, including loan and lender requirements that vary by program.

No down payment

The Veteran’s Administration (VA) offers zero down payment loans for veterans and active duty military members. With a VA loan, you’ll often pay a funding fee that can be financed with the home loan or paid at closing.

The USDA program also offers no down payment options, which help make homeownership more affordable for low and moderate income families in certain designated rural areas in each state. There are also income limits based on your area’s average median income and number of people living in your household.

Down payments as low as 3 percent (conventional loans)

Conventional loans are offered through Fannie Mae and Freddie Mac with a down payment as low as 3 percent. These programs, though, require private mortgage insurance (PMI), which will increase your monthly housing costs. PMI rates vary depending on the size of your down payment and your credit score. But once you have at least 20 percent in home equity, your PMI payments can be eliminated.

For borrowers who want to avoid paying PMI, there’s another option: get two loans and contribute a down payment of 5 or 10 percent. For example, with an 80/10/10 loan where the first mortgage covers 80 percent of the home’s value, a second loan accounts for 10 percent and the remaining 10 percent is the down payment. Similarly, many lenders also offer 80/15/5 loans, enabling borrowers to make a 5 percent down payment.

Down payments starting at 3.5 percent (FHA loans)

Through the Federal Housing Administration (FHA), loans are available with down payments starting at 3.5 percent, but FHA loans require both an upfront fee and annual mortgage insurance premium (MIP) paid with your monthly mortgage. Unlike PMI payments, you’ll pay the MIP for the entire loan term.

Are there other ways to save for my down payment?

Down payment assistance programs also may be available from state or local housing finance agencies. On average, buyers receive from $5,000 to $20,000 in assistance, depending on the program and state of residence. For example, through the Virginia Housing Development Authority, first-time homebuyers can receive grants of up to 2.5 percent of the purchase price of the home, which does not have to be repaid. To be eligible, homebuyers must meet certain income limits and credit score requirements.

How much does this reduce my costs?

The savings with a lower down payment loan are substantial: To purchase a $300,000 home, you would need $60,000 for a 20 percent down payment. Switching to a 3.5 percent down payment requires $10,500: $49,500 less than for a 20 percent down payment loan.

As you can see, there are many options, but also many variables. Everyone’s situation is different. A qualified mortgage consultant at Prosperity Home Mortgage, LLC, can help you through the process of finding the right loan for your needs.

 

 

 

Note: Low down payment options may not be the best option for all borrowers. Consult your mortgage consultant to review potential loan scenarios and financing options to determine the home loan that is right for you. All products listed are for primary residence financing only.

All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance.  Licensed by the Delaware State Bank Commissioner.  Also licensed in District of Columbia, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

NMLS ID #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/)

©2016 Prosperity Home Mortgage, LLC. All Rights Reserved.


If you’ve recently started house hunting, you may have found that the home buying journey can be lengthy. Finding a place with the right combination of must-haves and nice-to-haves can be complex and time consuming.  How much square footage do you need?  Do you want to be close to parks, shopping, or services?  Will your commute to work be acceptable?

These types of questions are important, but they can be overshadowed by the possibility of rising mortgage rates as you apply for a home loan.  While interest rates should not be the only concern when obtaining home financing, your rate does have an impact on the loan amount for which you can be approved.  Quite simply, the lower your interest rate, the more buying power you have.

Interest rates have risen in recent weeks, but we still want our clients to be able enjoy an exciting path toward homeownership, not one filled with anxiety about changing interest rates.  That’s why you may be interested to learn about the Prosperity Buyer Advantage: Lock, Shop & Home loan program, which offers buyers an opportunity to counter the worry of rising interest rates.

The Prosperity Buyer Advantage1 allows you to get much of the home financing process out of the way and obtain a Commitment Letter, which can help set your purchase offer apart from other offers a seller may be considering.  Participating in the Prosperity Buyer Advantage costs you nothing additional and can help prevent last-minute issues with your home financing, so you can enjoy an on-time loan closing.

What’s more, Lock, Shop & Home allows you to lock in an interest rate for up to 90 days at TODAY’S rate instead of waiting to lock in a rate only after you’ve found a home to purchase.  Here are a few highlights:

  • No property address is needed at the time of application and rate lock.
  • Lock an interest rate up to 90 days.2
  • Conforming and high balance loan amounts are available.
  • May be used with conventional or government fixed rate loan programs.3

Want to learn more about the Prosperity Buyer Advantage: Lock, Shop & Home loan program and see if it's the right fit for you? Contact a mortgage consultant near you!

 

 

 

1. Prosperity Buyer Advantage is not a loan approval. Ask your mortgage consultant for details about Prosperity Buyer Advantage. A Commitment Letter is based on information and documentation provided by you and a review of your credit report. The interest rate and type of mortgage used to approve you for a specified loan amount is subject to change, which may also change the terms of approval. If the interest rate used for credit approval has changed, you may need to re-qualify. Information provided by you is subject to review and all other loan conditions must be met. After you have chosen a home and your offer has been accepted, final loan approval will be contingent upon obtaining an acceptable appraisal and title commitment.  Additional documentation may be required.

2. Additional fees may apply.

3. Lock, Shop & Home program is not available for bond, jumbo, or renovation loan programs.

All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance.  Licensed by the Delaware State Bank Commissioner.  Also licensed in District of Columbia, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

NMLS ID #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/)

©2016 Prosperity Home Mortgage, LLC. All Rights Reserved.


The Home-Buying Equation

Sep 15
11:10
AM
Category | Prosperity News

Purchasing a home as a first-time buyer—or even as a repeat buyer—can seem daunting. One way to help alleviate the process is to organize your finances before embarking on the house hunt. Unsure how to get yours in order? Remember A + B + C + D + E:

Ask + Budget + Check + Differentiate + Estimate

Before you start searching for a home, ask a real estate professional for guidance. He or she will have expertise related not only to your local real estate market, but also how to negotiate a deal in your favor.

Next, set a budget that takes into account your down payment, your anticipated monthly mortgage payment (with interest), and your closing costs. These figures are important considerations in the home-buying process, and if you have any questions, a local mortgage consultant can be a good resource to help you get started.

Prior to house-hunting, check your credit report and score. Your credit is a factor in a lender’s approval decision for your mortgage loan application, as well as your mortgage interest rate. Take steps to correct any errors on your report, or improve your score, if necessary.

Shop around for mortgage lenders to differentiate between loan offerings—a variation in rates or terms can lead to significant savings over the life of your loan. Your real estate professional may recommend a few lenders, but it is ultimately your choice with whom to obtain a mortgage.

Estimate oft-forgotten homeownership-related expenses, such as your monthly homeowners insurance premium, your maintenance costs, your moving expenditures, your property taxes and your utility rates. These can all play a role in your overall affordability.

Completing A, B, C, D and E will not only help prepare you for the home-buying process, but also lay a strong financial foundation for you as a new homeowner. And when you’re ready to apply for a mortgage loan, check out these additional tips to help the application process go smoothly!
 

 

 

Reprinted with permission from RISMedia. ©2016. All rights reserved.

All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance. Licensed by the Delaware State Bank Commissioner. Also licensed in District of Columbia, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

NMLS ID #75164 (NMLS Consumer Access athttp://www.nmlsconsumeraccess.org/)
© 2016 Prosperity Home Mortgage, LLC. All Rights Reserved.


Want to help your home financing process go more smoothly?  Once you've received a home loan approval, simply understanding issues that can impact the financing process is important. The following topics address potential challenges that may delay your closing date or even impact your ability to obtain a mortgage.

Follow these tips for a smoother financing process:1

DON’T hesitate to inform your mortgage consultant before making changes to your employment.

DON’T stop making payments on existing accounts.

DON’T make major purchases with credit, co-sign another loan, or max out existing credit cards.

DON’T assume closing existing lines of credit or paying off collections or charge-offs will improve your credit score.

DON’T deplete savings to pay off credit debts.

DON’T make large deposits into your bank account(s).

DON’T change bank accounts or transfer funds within existing accounts.

DON’T hesitate to contact your mortgage consultant if you are concerned something will impact your loan.

 

Individual circumstances will vary. Any one of the above mentioned activities may or may not impact the financing process. Questions?  Contact a mortgage consultant near you to discuss the details about your individual situation.

 

 

 

1. This list is only to be used as a guide and is not all-inclusive. Should events arise requiring changes to your credit, income or assets, your mortgage consultant can discuss how these changes may affect your loan application process. Prosperity Home Mortgage, LLC is not a credit counselor. Information displayed is not credit advice and should not be relied upon or interpreted as such.

All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance. Licensed by the Delaware State Bank Commissioner. Also licensed in District of Columbia, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina,Tennessee, Virginia, and West Virginia.

NMLS ID #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/)

©2016 Prosperity Home Mortgage, LLC. All Rights Reserved.


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