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Federal Housing Administration Loans

October 9, 2020

Couple reviewing paperwork while sitting with their laptopAre They Right For You?

If you're looking to purchase a home, but are nervous about your credit score, or debt obligations, an FHA (Federal Housing Administration) loan may be a good choice.


Advantages of an FHA Loan

  • There are minimal credit requirements which can help ease your mind and the mortgage qualifying process. According to the FHA, loans may currently be granted with little or no credit history, and/or less-than-perfect credit.

  • The initial down payment on the home will be less than those of conventional mortgage loans. With other loans, you may be required to put down 5-10% of the purchasing price, but with an FHA loan, you may only have to make a down payment as low as 3.5%.  

  • Qualifying for an FHA loan may still be possible, even with a substantial amount of debt. Most mortgage loans limit a buyer’s monthly home and debt spending to a certain percentage of their income. While FHA loans have the same stipulations, they generally allow home and debt spending up to higher ratios of the buyer’s income, which can be helpful.

  • FHA loan interest rates are fixed and often lower than those of other mortgage loan types. This could help you save a lot over time on your interest payments.

  • Sellers have a higher percentage option for concessions than they normally would, if the buyer is using an FHA loan to purchase the home. Sellers may contribute up to 6% of the closing costs.


Potential Disadvantages of an FHA Loan

  • If you have good to great credit, the low, fixed interest rate of an FHA loan may actually not be as low as you could otherwise get from another mortgage loan option. This could cost you thousands of dollars over the long run.

  • Private mortgage insurance (PMI) is more expensive for those who get FHA loans. The initial low down payment on the home can result in higher-priced insurance payments. There is an upfront mortgage insurance fee along with a monthly premium to be paid over the life of the loan.

  • FHA loans will not allow you to flip a house. They require the property to be inspected and to qualify as FHA-eligible. This standard inspection generally prevents ‘fixer-uppers’ from qualifying, so if you're looking to find a house to flip, the FHA loan would not be an option.

  • The total amount allowed for you to borrow with an FHA loan changes from county-to-county. If you live in a county with a high demand for, but low supply of, homes, your FHA loan may not allow you to buy the home you were hoping for because its price does not land within the parameters of the loan’s allowable amount.


Borrow Smarter

We understand that every situation and every home is unique. Mortgages can be complicated, but we make it easy. We look forward to working with you on your specific need to find the best possible solution. Get started with the application process below.

 

If you have questions about what type of mortgage is right for you, consider scheduling an introductory discovery call with one of our Mortgage Team representatives. Simply click on the button below, select the “Apply for a Loan” service from the menu and choose the “Mortgage Services” option.

 

Article adapted from BALANCE Financial Fitness Program.

Posted in: FHA loan

A Shift In Savings Strategies

July 29, 2020

A woman reviews her finances from her home.Forming New Spending and Saving Habits

COVID-19 has caused shifts in many of the things we do that make up our daily lives. One major shift has been with money management. 

What have you noticed about your spending habits in the past few months? With stores, restaurants, venues, attractions and so many other places closed during lockdown and beyond, the options to spend money outside of our home, other than online shopping, or for essentials, were few and far between. In that time at home, away from our usual daily stops, we were given the opportunity to reflect upon our past spending habits.

We’ve been able to look at that daily cup of coffee we used to get on the way to work, the places we’d go to on our lunch breaks, and meeting friends out on the weekends with a different view. All of a sudden that money wasn’t being spent. It was being, more or less, saved. People are now spending less, saving more, and planning ahead. 

Statistics show that over the past 5 months, including both during quarantine and post quarantine, entertainment, social activities, traveling (even gasoline) and impulse buying are all down. That’s just the tip of the iceberg. According to CUNA Mutual Group’s Trends Report, indicating COVID-19 impacts, personal spending fell 13.6% while savings balances in credit unions rose 4.7% in April. Consumers, it seems, have been sticking to purchasing essentials only- and only when needed.

This shift in spending, along with stimulus checks and relief loans, have helped to ease the financial burden of furlough and layoffs, enabling many of us to get by. Even for those that may have been fortunate enough to continue working in an essential industry, we still see those consumers driving less, eating out less, traveling less, shopping less, etc. This has helped increase the balance of their savings. 

If you have been able to create some pockets of extra funds, now is the perfect time to consider looking at your budget and deciding more strategically on what it is you really need. It is a time to scrutinize your own past habits and channel those funds to what is really important. Use our Budget Calculator to find out your net monthly and yearly income.

Paying owed bills is certainly a great start. Paying off loans is yet another. Once loan payments are more manageable, or possibly gone quicker than you were expecting, you can take the money you were using to make those payments and use it for something else- like building up your savings again. 

If this experience has taught us anything about our spending habits, it’s to consider planning ahead with serious, realistic goals of saving. 

To help you get going on starting a new savings strategy, try a Term Share Certificate or Money Market Account. These are great places to save that can earn higher dividends.

Can you refinance and consolidate your debt? Rates are very low right now on car loansmortgageshome equities and more.

Use this helpful Savings Goal Calculator to find out how long it will take you to reach your savings goal.


Save Smarter

We are here to help you plan for the future with our Savings Account Options. Call 315-735-8571 to talk about your options or make an appointment with one of our friendly and knowledgeable representatives today. Simply click on the button below and select the “New Accounts” service from the menu.


Buying A Home

July 9, 2020

Couple reviewing their finances so they can buy a home.The Cost of Buying

Buying a home can be a big step, and an important one. You want a home you and your family will be happy in for as long as you own it. 

We can help you figure out how much you can realistically afford.

Begin by defining your goals. Consider where you want to live, the features you're looking for, and what you feel is a comfortable monthly payment. We’ll work with you to ensure you factor in all of the variables like down payment, closing costs, etc.

Check out this quick tool to help give a rough idea of what you may be able to afford today.

There are other financial and personal factors that could determine what kind of mortgage loan you might be eligible for. For example, if you are a Veteran, new home buyer, have certain income thresholds, etc.

First Source has a systematic process we’ve developed over the years to make your experience as easy and as smooth as possible. This is an important milestone in your life and we want to make sure you can reach it with financial stability. That is why we will communicate with you through every step along the way.


Live Smarter

We look forward to working with you on your specific need for affordable home ownership. Get started with the application process below.

 

If you’re not ready to apply for a Mortgage loan, you might want to consider scheduling an introductory discovery call with one of our Mortgage Team representatives. Simply click on the button below, select the “Apply for a Loan” service from the menu and choose the “Mortgage Services” option.


Article adapted from Banzai.

Posted in: Mortgage

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