LENDING >> LENDING HOT TIPS

Lending Hot Tips

Don't Over-Extend When Buying a Home

Make sure that you do not buy a home that you cannot afford. It’s possible to get swayed into purchasing a home that will push you to your limits financially. Your total debt load (all debts including your house payments) should be no more than about 35% of family income before taxes.

Don't Be Afraid of Owning

Many renters are renters because they are just too afraid to purchase or they don't realize that they can qualify to own. Many will go through paying rent to the landlord and never build any equity, because they cannot find the "perfect" house. When purchasing a home be willing to accept a few cosmetic imperfections as long as they’re not structural problems.

Make Sure You Calculate Actual Total Costs

Don't forget to calculate the costs of insurance, maintenance, property taxes and other expenses when you determine how much monthly payment you can afford. And remember that these costs generally go up every year.

Consider a Shorter Loan Term

You can save tens of thousands of dollars over the life of the loan depending on the loan term (the number of years over which your payments are made). You may wish to choose a 15-year mortgage over a 30-year mortgage if you can manage the higher monthly payment. You will be saving many dollars in interest for the house over time.

Explore FHA loans

If you’re short on savings for a down payment, the 3% down payment makes it much easier to get into your first house.

Apply for a Loan When You Start Your Home Search

Apply for a home loan now to determine how much home you can buy. This will also show home sellers that you are ready to buy. It will strengthen your negotiating position when making an offer.

Refinancing Can Lower Your Monthly Payment for an Existing Loan

You may be able to refinance your existing loan at a lower interest rate and reduce your monthly loan payments. Interest rates are at a historical low so you may find a rate much lower than what you're currently paying for your existing loan or mortgage. Refinancing when rates are down could save you hundreds of dollars every month and thousands over the life of your loan.

Refinancing to Consolidate Debts

You may choose to refinance to consolidate debts and replace high-interest loans (purchase loans, student loans, credit card debt, etc.) with a low-rate loan. This can be an excellent way for you to clear all your existing credit cards, loans and other debts and replace them all with one low cost cheaper monthly payment. A debt consolidation loan can be a smart solution for someone who has many outgoing monthly payments. A refinance loan allows you to repay existing loans from the proceeds of a new loan. The refinance loan is usually secured on property or your home.

Be Careful With Personal/Family Loans

Should I get a loan from a family member? Make sure you review the IRS rules regarding interest income-tax and the gift tax. According to the IRS, for a loan to be a loan interest must be paid. If not, it's a gift. In either case, it's subject to taxation laws.

If you need more information or assistance with your loan decisions, our team of professionals are standing by to be of service to you.

At My Twin Cities Home we have available over 100 different sources of funding for your needs. We will seek out the best program to match for what you are looking for. Balancing finances with the best loan product for you for your long term financial health.