- Can You Lower Your Mortgage Payment By Paying Down Principal?
Homeowners often see a mortgage as one of their largest financial commitments, and paying it off faster can feel like a major financial win. Extra payments toward the principal reduce the balance more quickly, but they generally shorten the loan term rather than lower the required monthly payment, unless you refinance or the lender recalculates… read more…
- VA vs. FHA Loan: Requirements and Costs
VA loans and FHA loans both aim to make homeownership more accessible, but they serve different groups and have distinct rules. VA loans, backed by the Department of Veterans Affairs, are available to eligible service members, veterans and some surviving spouses, often offering no down payment and no mortgage insurance. FHA loans, which the Federal… read more…
- What Is a Defeasance Clause in Real Estate?
A defeasance clause in real estate is a provision in loan agreements that defines how a borrower can satisfy the lender’s requirements in order to release their lien on the property. This clause can vary in its application, depending on whether the loan involves residential or commercial real estate. In residential mortgages, defeasance clauses typically… read more…
- What Is Yield Maintenance and How Does It Work?
Yield maintenance is a prepayment penalty designed to safeguard lenders against losing interest income when a borrower decides to settle a loan ahead of schedule. Yield maintenance compensates for these losses by requiring the borrower to pay an additional fee. This fee is based on the present value of the lost interest, ensuring that the… read more…
- How Much Money Can Be Gifted for a Down Payment?
For many prospective homeowners, receiving a monetary gift from family or friends can be a life-changing step in making homeownership a reality. However, understanding how much money can be gifted for a down payment involves more than just accepting a check. There are specific guidelines and regulations that both the giver and receiver must adhere… read more…
- Getting a Mortgage in Retirement: What Does It Involve?
A retirement mortgage caters to seniors who are no longer earning a regular salary. It allows them to access home equity or finance a home purchase with repayment terms that are tailored to their retirement income. Lenders will assess these mortgages based on the borrower’s retirement income, credit history and the value of their assets,… read more…
- Pros and Cons of Reaffirming a Mortgage
Reaffirming a mortgage during bankruptcy means you agree to keep paying your mortgage despite the bankruptcy, but the consequences of reaffirming a mortgage may vary. The pros include maintaining homeownership, retaining any built-up equity in your home and potentially improving your credit score through continued on-time payments. However, the cons involve losing bankruptcy protection for… read more…
- How to Calculate Your Housing Expense Ratio
Your housing expense ratio, which compares your housing costs to your gross monthly income, tells you what portion of your earnings goes toward housing expenses. Understanding this ratio can help you decide whether your housing costs are within a manageable range and make informed choices about your financial health. To determine your housing expense ratio,… read more…
- Can You Deduct Mortgage Interest on Rental Properties?
Owning rental properties offers various tax benefits, including the ability to deduct mortgage interest on those properties. This deduction allows landlords to potentially reduce their taxable rental income by the amount of interest paid on the mortgage, potentially leading to significant tax savings. To qualify, the property must be rented out or available for rent,… read more…
- Comprehensive Guide to VA Loans
The Veterans Affairs loan program, established to honor American service members and veterans, provides a range of mortgage options designed to make this cornerstone of the American dream more attainable. Whether it’s buying a new home, refinancing an existing mortgage or making home improvements, the VA loan program offers current and former members of the… read more…
- What Are the VA Loan Limits for 2024?
VA loan limits have changed over time. The 2024 updates reflect the current economic climate and housing market trends, which aim to ensure that the program remains relevant and beneficial. Whether you’re a veteran considering a home in a standard-cost area or a high-cost county, the VA loan limits could influence your borrowing capacity and… read more…
- We’re 65, Have $120k Left on Our Mortgage and an IRA Worth $650k. Should We Pay Off the Mortgage?
Should you prioritize debt or savings? This is one of the most common questions in household finance, and it comes up particularly in the field of retirement savings. For this example, let’s say you have a $650,000 IRA and a $120,000 mortgage. As you approach retirement, should you leave that money invested or pay off… read more…
- How to Qualify for a Lower Mortgage Rate
Securing a lower mortgage rate will depend on different factors, including your credit score, the size of your down payment, employment history and debt-to-income ratio. Understanding these factors and taking practical steps to improve them can effectively position you to qualify for more favorable rates. Here are four ways to help you qualify for a… read more…
- What Are Real Estate Transfer Taxes?
Whether you’re a savvy real estate investor or a homeowner selling the house you raised your children in, you’re likely counting on the impending sale to generate ample profits. However, although you might have 100% equity or put in the blood, sweat and tears for the necessary renovations, your net gain might be lower than… read more…
- What Is Adverse Possession of a Real Estate Property?
Adverse possession is a legal concept that occurs when a trespasser, someone with no legal title, can gain legal ownership over a piece of property if the actual owner does not challenge it within a certain period. To avoid such scenarios, it is of utmost importance that property owners familiarize themselves with the conditions and… read more…
- What Is Forbearance?
Navigating financial hardships can indeed be like walking a tightrope. But here’s the good news: understanding tools like forbearance can provide you a safety net. Forbearance acts like a pause button that allows you to momentarily stop or reduce certain debt payments until you get back on your feet. If you’re contemplating forbearance, consider speaking… read more…
- What Is Mortgage Curtailment?
Mortgage curtailment is the act of paying off a mortgage ahead of schedule by making additional payments. This accelerates the repayment process and shortens the loan term, helping homeowners potentially save thousands in interest payments. Here’s a closer look at mortgage curtailment, how it works and some of the primary benefits of this repayment strategy.… read more…
- What Is a Wraparound Mortgage and How Does It Work?
A wraparound mortgage is a unique financing option that allows a homebuyer to assume the seller’s existing mortgage while obtaining additional financing to cover the remaining purchase price. This alternative form of lending can help buyers with less-than-perfect credit or those seeking to avoid conventional lenders. However, it requires a clear understanding of its mechanics… read more…
- How Do Mortgage Rates Work?
When you take out a mortgage to buy a home, you will have to pay back both the balance that you borrowed (referred to as the principal) and the interest that pays for the cost of the loan. How much you will pay in interest depends on the size and type of mortgage, your down… read more…
- Should You Buy a House in Cash or Get a Mortgage?
Buying a home is a major milestone. Therefore, deciding on how you should pay for it will also have important long-term consequences. If you can buy your home in cash, you could avoid unnecessary debt. But, taking out a mortgage can also free up your cash to invest in other things. Let’s take a look… read more…
- What Is Mortgage Insurance and How Does It Work?
Typically, when you make a down payment that is under 20% of a home purchase, you will have to get mortgage insurance. This lowers the risk for a mortgage lender to give you the money. Here’s a breakdown of what mortgage insurance is and how it works. A financial advisor can help you create a… read more…
- What Percentage of Your Income Should Safely Go to a Mortgage?
Buying a home is one of the biggest financial decisions many people will ever make. And it can also be one of the most complex. Even the simple question of what percentage of your income should safely go to a… read more…
- How to Refinance a Home Equity Loan
Taking out a home equity loan could make sense if you need cash for home improvements, repairs or other expenses. You might be wondering if you can refinance home equity loan debt to get a lower interest rate or change… read more…
- How to Remove FHA Mortgage Insurance
Many first-time homebuyers will discover that they have to pay for something called “mortgage insurance.” This adds to your monthly mortgage payment and is often an unpleasant surprise. That’s particularly true if you sought out an FHA loan, which are structured… read more…
- Using Your 401(k) to Pay Off Your Mortgage
The government offers several incentives for retirement accounts like 401(k)s. For instance, they’re a tax-deferred investment, meaning you won’t pay taxes on them until you withdraw. 401(k) deposits also don’t count as taxable income during the year that you make them,… read more…