10
Nov
By support
Home Mortgage Tips

3 Ways That You Can Leverage Mortgage Financing to Build a Real Estate Investment Portfolio

3 Ways That You Can Leverage Mortgage Financing to Build a Real Estate Investment PortfolioReal estate may be one of the most important things that you will ever invest in, but it can also be a useful means of increasing your financial well-being. If you’re getting into the real estate game and are wondering how you can make use of investing in homes to improve your net worth, here are three ways you can successfully work towards a real estate investment portfolio that will make you proud.

Home Equity Line of Credit Loan

Also known as HELOC, this is the type of loan where a homebuyer taps into the equity of their home while they are still paying off their mortgage. As the equity that has been paid into the home is available without the homebuyer having to apply for it, this allows those who invest in real estate to borrow against equity to renovate the property or pay for a deposit on another property.

Pick Properties That Will Appreciate

It goes without saying that most people want to invest in a property that will increase in value, so as an investor you need to be especially careful about what you invest in. Since you may have problems paying all your property fees if the value of one decreases, try and be aware of future market trends and neighborhood hotspots. This means diversifying the properties you invest in and including a buffer in your payment plan so that, even if the market takes a turn, you can still pay off your amount owing.

Investing In Under Market Value

There are few better ways to improve the financial feasibility of your investment portfolio than investing in a property that is under market value. Not only will you have an automatic gain with the purchase price, you will be able to invest that money into improvements in order to bump up the market price even more. While finding this type of property can be difficult for the newcomer, looking for neighborhoods with potential or properties that require little maintenance can be a good place to begin.

There are few better things to invest in than real estate, but it can be hard to know where to put your money in the beginning. Whether through a home loan or purchasing a property under market value, there are plenty of ways to bump up your net worth. If you’re currently considering an investment in real estate, contact your trusted mortgage professional for more information.

08
Nov
By support
Home Mortgage Tips

Reverse Mortgages 101: How This Unique Financial Product Can Make Your Life Easier

Reverse Mortgages 101: How This Unique Financial Product Can Make Your Life EasierIf you’ve been in your home for a while and have considered other loan options, you may have heard the term reverse mortgage without being aware of how this product can benefit you. While this type of mortgage works for those who have a high amount of equity in their home, here are the details on reverse mortgages and how this product may work for you.

What’s A Reverse Mortgage?

The reverse mortgage was created in 2009 as the Home Equity Conversion Mortgage for Purchase (HECM) and is something that can be used by those who are older than 62. As this type of mortgage does not require the homeowner to pay monthly mortgage payments, it enables those who use it to repay their loan after they move out or pass on. If the cost of maintaining your home is manageable and you don’t plan on moving, this can be a useful option.

The Requirements For Reverse Mortgages

Beyond the age requirement, those who want to utilize this product need to own their current property or have a high amount of equity in it. They must have the ability to pay any insurance and property tax on the home, and they must comply with the standards that are set by the Federal House Administration (FHA). This means that applicants may require documentation like bank statements to confirm their financial security, or even pay stubs if they are still receiving a monthly income.

The Pros And Cons

A reverse mortgage can be an option for those who don’t want to make a regular monthly payment on their home and would like to turn it into a source of additional funds while still owning it. While this can be an option to for those who want to stabilize their monthly expenditures, it’s also important to be aware that there can be higher costs associated with a reverse mortgage. In addition to a higher interest rate, reverse mortgages incur a higher overall interest payment since monthly payments are deferred until the loan is paid in full.

There are many types of mortgage products out there on the market, but you may not be aware that a reverse mortgage or the Home Equity Conversion Mortgage for Purchase (HECM) can be a useful option for many seniors. If you are wondering if this option is right for you, contact your trusted mortgage professional for more information.

03
Nov
By support
Home Mortgage Tips

Understanding How Mortgage Amortization Works and How It Can Affect Your Future

Understanding How Mortgage Amortization Works and How It Can Affect Your FutureWhether you’re just beginning to peruse the market or you’ve recently found your dream home, there’s a chance you’re already considering the lenders and loan terms that will work best for you. Amortization may be a less-familiar term when it comes to the layman’s knowledge of buying a home, but knowing more about exactly what it means can go a long way towards a more secure financial future.

Explaining Mortgage Amortization

Amortization is the process of paying off your mortgage loan through regular monthly payments. While a portion of each monthly payment will go towards the price of the home and a portion will go towards interest, having a higher monthly payment can mean you pay less interest on the home’s balance overall. This means that, with a shorter amortization period, you can actually end up paying a lot less for your home.

Why It Can Be Good To Pay Down Sooner

It’s easy to believe that paying your monthly mortgage amount is enough, and this can certainly suffice, but putting down more than this can actually improve your financial situation in the long run. Because the early years of paying off your mortgage will involve paying interest on a larger home balance, it can take a while to even break even and begin to see a lowered interest payment and principal. By making lump sum payments or pre-payments, you may significantly lower your amount owing and pay off your home much sooner.

What’s Best For You?

Certainly, higher monthly payments or lump sums can minimize the amount you owe, but depending on the house you choose, a higher monthly payment can be a tight squeeze. This can also adversely affect the quality of your life if you’re working too much to make ends meet or budgeting so much you can’t enjoy your life. While a shorter loan period is great if you can swing it, if it will negatively impact your life and the financial benefit is not worth it, you may want to take a little longer to pay down.

There are a lot of terms and phrases involved in the mortgage process that can be confusing for the new homeowner, but deciding on the length of your amortization can have a significant impact on your future finances. If you’re currently considering the amount of house you can purchase with your monthly payment, contact your trusted mortgage professional for more information.