Monthly Archives: October 2014

Converting an ARM Mortgage to a Secure Fixed-Rate Loan

Converting an adjustable rate mortgage (ARM) into a secure fixed-rate loan has several benefits for owners. Many prospective homebuyers opt for an adjustable rate mortgage when they first buy a property. These loans have an interest rate that’s tied to larger interest rate trends. Early in the life of the loan, payments are lower and can help buyers qualify for larger properties. It’s also a popular choice for buyers who don’t plan to live in a specific location for long. But often, homeowners want the security of a stable mortgage payment over the entire life of their loans or to take advantage permanently of today’s lower interest rates. Here’s a closer look at what’s involved in converting an ARM to a secure fixed-rate mortgage.

Mortgage ConfusionAdvantages and disadvantages of ARM financing

As explained above, there are a number of advantages to ARM loans. In many cases, the lower initial payments allow buyers to qualify for financing. In some cases, it’s also a gateway product that allows buyers to establish a history of paying their mortgage and achieving a better overall credit score. Ultimately, the goal is to refinance when possible. In particular, many homeowners think about refinancing when mortgage interest rates are low. Now, for example, lenders are seeing many refinancing applications from ARM loan holders that are interested in shifting to a fixed-rate product because long-term fixed mortgage rates are highly affordable.

Getting the process started

If you’re considering refinancing your variable rate mortgage, contact a qualified lender to discuss your options. It’s helpful to consider the details of your current loan, current interest rates, and whether financially it makes sense to refinance. A lender can help you understand alternate financing products on the market as well as what the current rate structures look like.

If you opted for an adjustable rate mortgage product due to your broader financial situation, your lender can look at your current credit score and overall financial position. With this information in mind, it’s easy to assess which products might be a good fit for you now. Often, the savings over the life of the loan are enough to encourage homeowners to refinance. But each mortgage transaction is a highly individual process and should be customized to your needs and particular situation.

Are you a homeowner in the greater Las Vegas area who is considering refinancing an adjustable rate mortgage to a fixed rate product? Contact Sydnee Johnson today to arrange for a personalized mortgage consultation.

Qualifying for a Mortgage on a Single Income

Sometimes, finding your way as a single parent or a single buyer in today’s real estate market can be a challenge. I recently had the opportunity to work with a wonderful buyer who is now the proud owner of a new home. Mary* is a nurse and the single mom of two children. She was divorced approximately two years ago, and lost her home to foreclosure when she wasn’t able to keep up with the payments on her own. After renting for a year, she was able to qualify for a second chance mortgage. Today, she’s enjoying her new home along with her family and building important equity for the future. Here are some tips for navigating the mortgage process on one income.

Single IncomeIt’s Possible

Let’s address one of the prevalent myths of the real estate industry. Whether you’re a single individual, recently divorced, or a family that’s living on one income, it’s possible to quality for a loan.

There Are Some Roadblocks

When you’re working with one income, you theoretically have less money each month in the budget. There’s also an increased risk that if you lose your job or encounter other financial setbacks, your ability to pay is in jeopardy. This may or may not be true, but lenders often look at a second income as another layer of protection in times of hardship.

Think About Your Down Payment

A sizeable down payment helps on a number of fronts. It demonstrates your position as a committed and serious buyer. It also lowers the monthly payment and makes it easier for you to qualify for financing.

Employment Verification and Credit History

As a single buyer, it’s very helpful to have a strong employment situation. Copies of your recent paystubs and employment verification are part of the standard mortgage process. Your package may be strengthened by a letter from your employer talking about your performance and the stability of your position. Additional sources of income, such as revenue from a side business or outside support such as alimony, also strengthen your position as a buyer.

Document any Causes of Credit Hiccups

Did you encounter a past obstacle, like Mary, that caused you to lose your home or fall behind on bills? Many people experience credit hiccups as a result of divorce, medical issues, or unexpected unemployment. If you got back on track by finding another job and prioritizing improving your financial status, make sure your application reflects that. A personal statement, legal support explaining your situation (such as copies of a divorce decree or a severance letter for example), and notes from creditors that you’ve paid off balances or gotten current on payments are very helpful in shaping the narrative for a second chance loan.

Are you a prospective buyer in Las Vegas who is thinking of purchasing a home? Contact Sydnee Johnson Las Vegas Home Loans today to learn more about how you can qualify for a loan on a single income or when you’re bouncing back from a divorce or other setback.

*name changed to protect client’s privacy

5 Financial Benefits to Owning Your Own Las Vegas Home

Owning your own Las Vegas home comes with numerous benefits. Yet many people are hesitant to take the plunge with rental apartments being widely available in the local market. There’s rarely been a better time to look at purchasing your own property: interest rates remain affordable and the inventory of available houses allows you to be very selective. Here’s a closer look at five of the top financial reasons that people are choosing home ownership today.

Buying A HomeBuilding equity each month:

When your finances are limited or you’re in a phase of your life where you’d like to minimize responsibility, renting is the perfect option. If something goes wrong, the repairs are the landlord’s problem to repair. Should you change jobs or meet a partner that lives across the country, you easily have the flexibility to relocate without significant hassle. But one of the realities of renting is that your money is gone. With home ownership, each payment that you make builds equity and ultimately is growing your wealth over time.

Decreasing your tax liability

If you’re looking for a way to lower your annual tax burden, home ownership is a great way to do it. A number of things associated with owning your own home are tax deductible, although the exact percentage that can be deducted depends on your specific situation. Consult a tax or financial professional for personalized advice. Many homeowners deduct property taxes, interest payments toward their mortgage, and even some closing costs. For those buyers considering multiple family properties or purchasing a second home as an investment, it’s possible to deduct some expenses associated with rental houses as well.

Keeping overall costs low

The time that you purchase your home and the interest rate you qualify for have a major impact on what you end up paying over the lifetime of your mortgage. During times with lower interest rates and reasonable sales prices, buyers are making a sustainable investment in the future. Not only is your home likely to appreciate in value which contributes to your financial success, but you’re setting the stage for controlled costs of living through the different phases of your life from raising a family to enjoying your golden years.

Protect against inflation

Inflation is the natural rise in the cost of living. It affects everything from day to day essentials like gas and food to more significant expenses such as rent and vehicles. Year over year, your cost of living is going to be driven up by these forces of the market. Your rent can increase each year according to the whims of the owner and local laws protecting renters. With a fixed rate mortgage, what you’re paying each month stays the same. You’re locking in today’s rates for tomorrow. It’s easier to budget and plan ahead for other expenses, from paying for college to saving for retirement.

Establish financial roots

Home ownership is a major step toward a healthy financial life. Many people look at home ownership as the definitive sign that they’ve put down roots and can turn an eye toward the future. From establishing a 401k to taking the leap and starting their own business, many major financial steps now feel within reach. If you’re craving a sense of stability, home ownership may be right for you.

It may feel like a renter’s market, but there’s never been a better time to buy your own home. The best move toward taking that step is contacting a professional lender that can evaluate your situation and help you decide how to proceed. Contact Sydnee Johnson to get started on the path to owning your own Las Vegas home today.

Tips for End of Year Credit Cleanup

Having an end of year credit cleanup plan can make your dreams of home ownership a reality. It’s already October, and some advanced planning will put you in the best position to successfully apply for home loan financing after the New Year. If you’re thinking about purchasing a home in 2015, it’s never too early to start planning. Just as you are doing pre-holiday fitness routine reviews or purging your house of unwanted items, take the time to develop an end of year credit cleanup plan.

Credit cardsObtain Copies of Your Credit Report and Score

If you haven’t looked at your credit report or credit score in the last six months, it’s time to do so. You are able to get copies of each of your credit reports from the three major bureaus via Freeannualcreditreport.com and you can see your credit score at CreditKarma.com for free or purchase it directly from each bureau. Scour your reports for errors and dispute them. Pay off debts that you might have missed. Endeavor to have collections accounts deleted from your report as you pay them off. These small steps can be a huge boon to your credit rating.

Pay Down Your Credit Cards

For many families, the holidays results in high credit card balances due to gift shopping and seasonal entertainment expenses. But if you’re planning to buy a house early in 2015, rethink this strategy. High credit card balances can bring your credit down significantly. Instead, consider paying off your balances and keeping them low. Use alternate plans for your holiday shopping, such as starting early, paying cash, or reducing your spending. Any money that you save can be socked away toward your down payment.

Automate Your Bill Paying

One of the easiest ways to raise your credit score is paying your bills on time; that comprises about 35% of the score. The most recent months carry the most weight. Set up a schedule that ensures you’ll pay all your bills for the rest of the year on time. Take advantage of a few months of a perfect payment history to help build up your scores.

Apply End of Year Bonuses Wisely

Many employees receive performance bonuses during the final quarter. Or perhaps your family is giving you a financial gift for the holiday season. It’s tempting to buy that new car you’ve been eying or treat yourself to some expensive designer clothes. But think about applying those funds toward your credit goals. Pay down debts and help bolster your available reserves toward a down payment. Both of these steps position you as a stronger buyer.

Are you a prospective homebuyer thinking ahead to your real estate goals for next year? Contact Sydnee Johnson today to discuss your situation, learn how much financing you qualify for, and get personal tips for your end of year credit cleanup plan.

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