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The New TILA-RESPA Integrated Disclosure

by Kijner & Sons International Realty


As of August 1st, 2015, the Good Faith Estimate and the Truth-in-Lending Disclosure for most closed end residential loans are going away. Those two forms will be combined into a single Loan Estimate, to be given to consumers within three business days of applying for a loan. Additionally, the Closing Disclosure Form will replace the HUD-1 Settlement Statement and the final Truth-in-Lending Disclosure.

Watch this short video courtesy of Stewart Title to learn more about what the TILA-RESPA Integrated Disclosure (TRID) rule means and how the Consumer Financial Protection Bureau (CFPB) changes impact real estate agents. To watch the video, just click on the image below. 

 


Source: http://bbemaildelivery.com/bbext/?p=video_land&id=4fc771bf-cb5f-67e1-cbe3-845e5218dff5

Specialty Mortgages: Risks and Rewards

by Kijner & Sons International Realty

In high-priced housing markets, it can be difficult to afford a home in Miami or Sarasota Florida. That’s why a growing number of homebuyers are forgoing traditional fixed-rate mortgages and standard adjustable-rate mortgages and instead opting for a specialty mortgage that lets them “stretch” their income so they can qualify for a larger loan.

But before you choose one of these mortgages, make sure you understand the risks and how they work.

Specialty mortgages often begin with a low introductory interest rate or payment plan - a “teaser” - but the monthly mortgage payments are likely to increase a lot in the future. Some are “low documentation” mortgages that come with easier standards for qualifying, but also higher interest rates or higher fees. Some lenders will loan you 100 percent or more of the home’s value, but these mortgages can present a big financial risk if the value of the house drops.

Specialty Mortgages Can:

  • Pose a greater risk that you won’t be able to afford the mortgage payment in the future, compared to fixed rate mortgages and traditional adjustable rate mortgages.
  • Have monthly payments that increase by as much as 50 percent or more when the introductory period ends.
  • Cause your loan balance (the amount you still owe) to get larger each month instead of smaller.

Common Types of Specialty Mortgages:

  • Interest-Only Mortgages: Your monthly mortgage payment only covers the interest you owe on the loan for the first 5 to 10 years of the loan, and you pay nothing to reduce the total amount you borrowed (this is called the “principal”). After the interest-only period, you start paying higher monthly payments that cover both the interest and principal that must be repaid over the remaining term of the loan. 
  • Negative Amortization Mortgages: Your monthly payment is less than the amount of interest you owe on the loan. The unpaid interest gets added to the loan’s principal amount, causing the total amount you owe to increase each month instead of getting smaller.
  • Option Payment ARM Mortgages: You have the option to make different types of monthly payments with this mortgage. For example, you may make a minimum payment that is less than the amount needed to cover the interest and increases the total amount of your loan; an interest-only payment, or payments calculated to pay off the loan over either 30 years or 15 years. 
  • 40-Year Mortgages: You pay off your loan over 40 years, instead of the usual 30 years. While this reduces your monthly payment and helps you qualify to buy a home, you pay off the balance of your loan much more slowly and end up paying much more interest. 

Questions to Consider Before Choosing a Specialty Mortgage:

  • How much can my monthly payments increase and how soon can these increases happen?
  • Do I expect my income to increase or do I expect to move before my payments go up?
  • Will I be able to afford the mortgage when the payments increase?
  • Am I paying down my loan balance each month, or is it staying the same or even increasing?
  • Will I have to pay a penalty if I refinance my mortgage or sell my house?
  • What is my goal in buying this property? Am I considering a riskier mortgage to buy a more expensive house than I can realistically afford?

Be sure you work with a REALTOR® and lender who can discuss different options and address your questions and concerns!

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Sources:

Learn about the National Association of Realtors® Housing Opportunity Program at www.realtor.org/housingopportunity.

For more information on predatory mortgage lending practices, visit the Center for Responsible Lending at www.responsiblelending.org.

 

Get Your Finances in Order: To-Do List

by Kijner & Sons International Realty

If you are looking to buy a house in Miami or invest in Sarasota Florida, Kijner & Sons International Realty gives you tips to get your finances in order before asking for a loan.

1. Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries.

2. Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.

3. Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to your favorite coffee shop or eating dinner at home more often.

4. Increase your income. Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want.

5. Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 percent down payment.

6. Keep your job. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.

7. Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills, too. Pay off the entire balance promptly.

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Source: The National Association of Realtors® (NAR)

10 Questions to Ask Your Lender

by Kijner & Sons International Realty

Kijner & Sons International Realty gives you the 10 questions you should be asking your lender when looking to buy a home either in Miami or Saraosta Florida.

1. What are the most popular mortgages you offer? Why are they so popular?

2. Which type of mortgage plan do you think would be best for me? Why?

3. Are your rates, terms, fees, and closing costs negotiable?

4. Will I have to buy private mortgage insurance? If so, how much will it cost, and how long will it be required? (NOTE: Private mortgage insurance is usually required if your down payment is less than 20 percent. However, most lenders will let you discontinue PMI when you’ve acquired a certain amount of equity by paying down the loan.)

5. Who will service the loan — your bank or another company?

6. What escrow requirements do you have?

7. How long will this loan be in a lock-in period (in other words, the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if it drops during this period?

8. How long will the loan approval process take?

9. How long will it take to close the loan?

10. Are there any charges or penalties for prepaying the loan?

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Sources:

The National Association of Realtors® (NAR)
Used with permission from Real Estate Checklists & Systems, www.realestatechecklists.com

What You Can Do to Improve Your Credit

by Kijner & Sons International Realty

Credit scores, along with your overall income and debt, are big factors in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following: 


1. Check for and correct any errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t order items for your new home on credit — such as appliances and furniture — until after the loan is approved. The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

Looking to purchase a new property in Miami or Saraosta, Florida? Contact Kijner & Sons International Realty at info@kijner.com

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Source:

The National Association of Realtors® (NAR)

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, Knowing and Understanding Your Credit, visit www.homebuyingguide.org.

Loan Types to Consider

by Kijner & Sons International Realty

Kijner & Sons International Realty helps you brush up on these mortgage basics to let you determine the loan that will best suit your needs if you are looking to purchase a property in Miami or Sarasota Florida.

  • Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow for a longer term.
  • Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. These types of mortgages are a good choice when fixed interest rates are high or when you expect your income to grow significantly in the coming years.
  • Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years. Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.

Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use Fannie Mae’s online mortgage calculators.

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Source: The National Association of Realtors® (NAR)

Displaying blog entries 1-6 of 6

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83-85 Boulevard de Charonne, 75011 Paris, France


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