Tag Archives: Refinance

Interest Rate and APR…What’s The Difference?

An annual percentage rate (APR) reflects the mortgage interest rate plus other charges.

There are many costs associated with taking out a mortgage. These include:

  • The interest rate
  • Points
  • Fees
  • Other charges

The interest rate is the cost you will pay to borrow the money, expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan.

An annual percentage rate (APR) is a broader measure of the cost to you of borrowing money, also expressed as a percentage rate. In general, the APR reflects not only the interest rate but also any points, mortgage broker fees, and other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.

Why have both?

“The biggest difference between the two is that the interest rate calculates what your actual monthly payment will be,” says Kathleen Beck, Mortgage Lender, “while the APR calculates the total cost of the loan. A homebuyer can use one or both to make comparisons when shopping for loans.”

As an example, a loan with a 4.25% rate will have a lower monthly payment than a loan for 6.5%, assuming both loans are fixed for the same term.  Which means the total cost of the 4.25% APR will be less than the loan with the 6.5% APR.

How long you will stay in your home matters

If you plan on staying in your home for the entire 30 year mortgage, it makes sense to go with the lowest APR because you will end up paying the lowest amount for your house.  But if you know you are not going to be living in that house that long, it could make sense to pay fewer upfront fees and get a higher rate and a higher APR because the total cost will be less over the first few years.

“Because the APR spreads the fees out over the course of the entire loan, you get the most value only if you stay in the home throughout the entire mortgage.” Kathleen says.

The Right Lender is Crucial

Kathleen says “If you are planning on staying in your home for a shorter period of time you need to do the math and figure out your break-even point. A good lender will help you do that, I will help you do that!” You need to know if you are going to lose money by paying for a lower APR, but end up moving sooner than your break-even point!

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What is Hygge and why should I try it?

The temperatures are dropping, and the nights are getting longer, which is the perfect time to practice hygge! Pronounced “hue –gah”, it is a Danish practice that has helped Denmark have one of the happiest populations in the world for 40 years in a row! (at least since those statistics have been compiled)

Hygge has no real western translation, but it has been described as “cozy” or “homey,” but neither of those translations take into account the emotional part of hygge, which can get lost in the efforts to create a cozy environment when trying to describe hygge. But that is not a bad thing, because a cozy environment is vitally important to a successful hygge.

First off, there is nothing you need to buy, or learn or do in order to hygge. It is not so much in what you do, but in how you do it, and in being present, and aware. Hyggehouse.com describes it this way – “Hygge literally only requires consciousness, a certain slowness, and the ability to not just be present – but recognize and enjoy the present.” It is about holding this time spent as sacred, and important. You can hygge alone, or with friends or family, but the time spent is cozy, comfortable and the people present are engaged and aware of this special time.

There is a lot written about hygge online, and I encourage you to research and learn as much as you can about this Danish tradition. For now I will just help you get ready for your first hygge experience!

You will want to do these things as a starting point, and adjust and change it as you need to in order to suit your lifestyle and environment.

The first thing you need is a place to hygge. A cozy space by a fireplace or wood stove is best, but any warm cozy spot in the house will do, as long as people can join you if it is family or friends hygge time. Light a bunch of candles, enough to illuminate the space you are going to hygge in. Turn off all the lights, tv, computers and such. Prep the space by having it nice and warm. Put on a pot of water for tea, or cocoa, and find some comfort type snacks. Hygge is perfect for fresh baked cookies, warm breads and cakes, and other soul satisfying pastries. If you are watching calories or on special types of diets, look for foods that would fit the comfort profile. Have your tea and cookies ready for you when you are dressed for hygge!

The perfect hygge ensemble would include slouchy wool socks on your feet, comfortable cozy pants such as sweats or joggers on your legs. Sweatshirts, sweaters and cozy flannels for your top and knit cap if you need one for your head!

Nestle yourself into a cozy chair or couch with your family, make sure ALL electronic devices are out of the picture, turned off or in another room. If it is your first time, have a plan of topics to chat about, that are not too heavy or sad. Hygge should be healing to the soul and strengthen the relationships with the people that are with you.

Once everyone is cozy, under lap blankets, curled up with the family dog on their lap, or warm by the fire, you have begun to hygge! If you wish to have soothing music on in the background that is also ok, but not too loud as to hinder conversation. Now just talk to your family or friends, sip your tea and snack on your cookies if you wish for the next hour or so. That is all there is too it!

Hygge, when done on a nightly basis can be transformational. It will become a time to look forward to in the hour or so before bedtime. It allows you to unplug and unwind, without distractions and connect or reconnect with those people that are important to you. Afterall, some of the happiest people in the world have attributed hygge as one of the reason why they can stay so positive in winters that last so long!

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Guide To The Best Pumpkin Patches

Fall is an amazing time to live in the Sacramento Region and the surrounding foothills. As the nights get cooler and the days get shorter, the leaves come alive with vibrant colors and the excitement of Fall fills the air. The region is known for agriculture, and it is no surprise that pumpkin patches that bring the feel and flavor to the fall abound! Here are four of our favorite Pumpkin patches in the region, and we are sure one is close to you, but be adventurous and trek out to see them all, it will be worth your time!

Davis Ranch
13211 Jackson Road, Sloughhouse, CA 95683 – (916) 82-2658

Davis Ranch is a produce stand located off Hwy 16 in Sloughhouse. But during the fall, it becomes a favorite destination for fans looking for a great pumpkin patch and other fall fun! Attractions include a great corn maze, pumpkin patch, pumpkin pyramid, kiddy corn maze and weekend tractor rides to pick your own pumpkins. You will also be able to go home with all the fresh produce needed for a hearty fall dinner.

Zittel Farms zittelfarms.com
6781 Oak Ave., Folsom, CA – (916) 989-2633

Located in Folsom, CA since 1976, Zittel Farms is a favorite pumpkin patch among locals and visitors alike. Touting one of the largest varieties of pumpkins in the region, the pumpkin patch is sure to excite the younger ones. Weekends are great because you can get a real hayride! There is plenty for adults too, such as a collection of antiques from across the USA, Amish made décor and fine handcrafted preserves and honey.

The Flower Farm http://www.flowerfarminn.com
4150 Auburn Folsom Rd., Loomis, CA 95650 – (916) 652-4200

The Flower Farm is a beautiful, multi-purpose farm easily located right off of Folsom Auburn rd. The farm itself is composed of a delicious café, a bed and breakfast, a very large nursery, an event center and Casque Wine Tasting Room. This is a great destination with something for everyone in the family! Of course, the reason we are mentioning it is because of the beautiful pumpkin patch that features their very unique “Pumpkin People Tours”. There are plenty of activities for the kids on the weekends, and of course fall food, wine and beer in the café for the parents! Be sure to check their calendar for details.

Apple Hill – applehill.com
Camino Ca

More than 50 Apple Hill ranches have been the fall destination for families since 1964. With a large assortment of pumpkin patches, farm stands, wineries, breweries, eateries and activities, one of the biggest reasons to visit besides the pumpkins is the fresh hot apple donuts and take and bake apple pies! Apple Hill is a Fall tradition for many, but be sure to plan ahead, and get an early start to beat the traffic. On the weekends, all traffic is diverted to the last Apple Hill exit 54, and then funneled back through Carson Rd. There is no exit from the eastbound lanes on exits 48 and 49 in Camino. Certainly worth the effort, you will enjoy the cool mountain air, the rural farms and the amazing assortment of pumpkins, baked goods and fresh pressed apple cider, maybe even some warm spiced cider!

Fall is the favorite season for many who live in the region, and a visit to any of these wonderful, family friendly farms will show you why that is! Good luck and happy pumpkin huntin’!

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Using Gift Money To Secure Your Loan

Congratulations on your decision to buy a house! Chances are you may be getting a gift to help secure the mortgage on that house, so we wanted to give some guidelines in receiving and using that money!

Conventional –Fannie Mae
Gift Donors may be a relative, such as the borrower’s spouse, fiancé, domestic partner, child (or other dependent), or any other individual related by blood, marriage, or adoption (or legal guardianship).

  • The donor MAY NOT be—or have any affiliation with—the builder, the developer, the real estate agent, or any other party interested in the transaction.
  • Gifts are NOT allowed for investment properties.

Conventional – Freddie Mac

  • Gift Donors may be a relative, such as a blood relative, spouse, fiancé, domestic partner, or legal guardian.
  • The donor MAY NOT be—or have any affiliation with—the builder, the developer, the real estate agent, or any other party interested in the transaction.
  • Gifts are NOT allowed for investment properties.

FHA Loan

  • Donors can be a relative as defined below*, or a close friend with a clearly defined and documented interest in the borrower.

”Relative” is defined as follows, regardless of actual or perceived sexual orientation, gender identity, or legal marital status:

    • Child (son, stepson, daughter, stepdaughter, foster child, or adopted son or daughter, including a child who is placed w/the borrower by a legal adoption agency)
    • Parent, step-parent, or foster parent
    • Grandparent, step-grandparent, or foster grandparent
    • Spouse or domestic partner
    • Brother or step brother
    • Sister or stepsister
    • Uncle or aunt
    • Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law

VA Loan

  • You must be able to document that the gift funds come from an acceptable source — a family member or someone with a family-like relationship — with a legitimate paper trail via a bank account or financial institution.
  • No one involved in the loan transaction, including the lender, can be the source of the funds.

Who ever gifts you this money is helping you achieve a dream, and could position you in a great spot with regards to your new mortgage! Be sure to thank them in a grand way for their generous gift!

Sources:
Kim Kirk – SPMC.com
Veteransunitied.com

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Home Lending Debt-to-Income Ratio Increase Could Mean More Buying Power For Homebuyers

Fannie Mae has raised the debt-to-income ratio to 50% DTI, reasoning a higher debt ratio doesn’t mean poor credit. The debt-to-income (DTI) ratio is determined based on a borrower’s total amount of debt, including credit cards, student loans, auto loans and mortgages, compared to their total income. Fannie Mae’s recent changes will hopefully allow more homeowners to enter the housing  market with new expanded debt-to-income requirements, making it easier for borrowers with good credit but higher debt to acquire a home loan.

Applicants with high DTI ratios have been told their debt is too high for home lending approval. The Washington Post printed an article outlining how those rejected on home lending applications due to high debt-to income ratios often make payments for their debts early, signaling that on time payment, or payment default isn’t the issue. Of those declined applicants, some have never actually defaulted on their credit, but were declined based on their higher debt due to raised student expenses, cost of living increases as well as other expense inflation.

Fannie Mae wants to allow more homeowners to enter the market as it increases the DTI requirements. This shift by Fannie Mae opens up the market to almost 100,000 new, responsible, homeowners, and one might even be you! If you’re interested in getting pre-qualified for your home, give a call!

Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395

#Mortgage #MortgageLoanProcess #Debt #DebtToLoanRatio #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

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Biggest Benefits to Your VA Loan

VA loans are beneficial for those who qualify for a VA home loan; including veterans, active duty, national guard and reserve members.  In order to apply for a VA loan, aside from your service, you must have suitable credit, sufficient income, and a valid Certificate of Eligibility (COE) to be eligible for a VA-guaranteed home loan. The home must be purchase as your personal residence.

The biggest benefits of a VA home loan:

  • No Down Payment – Rather than paying 5%-20% on a down payment, you may finance a VA Loan up to 100% of the purchase price up to the VA loan limits in your state and county.
  • No Mortgage Insurance – It is common that lenders require you to pay mortgage insurance on a purchase with less than 20% down. There is no mortgage insurance requirement on a VA loan, making it very affordable upfront and over time.
  • Government Guarantee – The Federal Government guarantees the top 20% of  a VA loan.
  • No Prepayment Penalty – Most military personnel know their time in one location may be limited as orders often change.  Regardless of if you’re a veteran or current military, there’s no prepayment penalty or early-exit fee for the VA home loan.
  • Easier To Qualify – VA loan guidelines tend to be more flexible because of the VA loan guaranty. The Dept. of Veterans Affairs wants to make it easy for our service members to buy a home or refinance a home.
  • Funding Fee Flexibility – The VA allows funding fees to be financed so that nothing is due at closing. Also, if the veteran receives disability compensation from the VA the VA Funding Fee maybe waived.
  • VA Loans are Assumable – Assumable means you may transfer your VA loan in the future to a VA eligible buyer that meets the basic VA loan requirements. Assumable loans may be a great benefit to a buyer if the interest rates have increased since the home was originally purchased.

Helping Veterans and service members obtain home ownership financing is a personal goal for me.  There are many benefits to home ownership and even more if you served our country and are eligible for a VA loan.  If you want to learn more about VA Lending and how you can utilize the a VA home loan please email or call me today.

Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395

#Mortgage #MortgageLoanProcess #NoDownPayment #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

 

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Why & How to Keep Your Household Financial Records

Whether your applying to purchase a home or thinking about selling, there are many different reasons why having up to date household financial records can help save you time and money.

Check your current financial records income taxes, W2s, bank, investment and retirement statements, also insurance such life health and disability and see what is missing or out of date. Contact the record keeper and request new copies. Keeping accurate records will help you make important financial decisions.

How Long Should You Keep Records?

  • 7 Years – Taxes/Credit Card Statements and Property Records
  • ALL IRA contribution records
  • 1 Year – Utility bills
  • Indefinitely – Property records

Safely Dispose of Records

Make sure you dispose of your records properly.

  • Digital – overwrite data or physically destroy storage medium
  • Paper – Shred or incinerate

Record Organization Categories:

Keeping your records organized is just as important as accurate. Here are some great categories to organize your records.

  • Health Records – Health insurance policies, bills, prescriptions, life insurance
  • Financial Records – Bank statements, taxes and loans
  • Home/Property Records – Mortgages, Deeds and property tax information

Knowing what records to keep and the proper way to store them can really make a difference when it comes to making important life decisions.

Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395

#Mortgage #MortgageLoanProcess #Records #HouseholdRecords #FinancialRecords #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

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4 Exceptions To Having More Than 1 FHA Mortgage

It is well known that the FHA will not insure more than one property as a principal residence for any Borrower.  What is missing from that information to complete the understanding of what the FHA insures, are the circumstances in which a borrower with an existing FHA-insured Mortgage for a principal residence may obtain an additional FHA-insured Mortgage on a new principal residence.

  1. RELOCATION – Borrowers may be eligible for a second FHA-insured Mortgage without being required to sell an existing property covered by an FHA-insured Mortgage if the Borrower is relocating or has relocated for an employment-related reason. Also if the borrower is establishing or has established a new principal residence in an area more than 100 miles from the borrower’s current Principal Residence.
  2. FAMILY SIZE INCREASE – Borrowers may be eligible for another house with an FHA-insured Mortgage if the borrower provides satisfactory evidence that the borrower has had an increase in legal dependents and the property now fails to meet family needs. Also when the Loan-to-Value (LTV) ratio on the current principal residence is equal to or less than 75% -OR- is paid down to that amount, based on the outstanding mortgage balance and a current residential appraisal.
  3. VACATING JOINTLY-OWNED PROPERTY – Borrowers may be eligible for another FHA-insured Mortgage if the they are vacating (with no intent to return) the principal residence which will remain occupied by an existing co-borrower.
  4. NON-OCCUPYING CO-BORROWER – A non-occupying co-borrower on an existing FHA-insured Mortgage may qualify for an FHA-insured Mortgage on a new Property to be their own principal residence.

The FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance.

Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395

#Mortgage #MortgageLoanProcess #FHALending #FHAMortgage #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

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Buying A Home is Easier Than You Think

The most common misconception about buying a home is that it has to be a complicated process. Obviously factors can play into the simplicity of making a home purchase but if you do your homework, you should walk out of the experience feeling empowered by the simplicity of it.
Step 1 – How Much You Can Afford?
The first thing most buyers do that sets them on the wrong path, is looking for the home, going to open house or searching the web, before finding out what they are financially qualified to buy. Now, maybe you are a “cash” buyer, meaning you are making the purchase with cash you already have on hand, but the average home buyer utilizes home financing to make the purchase so the first step should always be research and consult a trusted mortgage lender. I love Yelp and feel it is a great tool to do background on lenders. Find a great lender that has your best interest at heart and is familiar with all the different loan programs. That lender will work with your financial options to find the best loan program for you. Your lender should work directly with you, meaning you aren’t just talking to their assistant or the loan processor.
Step 2 – Find the Realtor, Find the House
Do the same homework to find the best realtor. A great realtor will know what is on the market in your price range, as well as be in the loop to what is approaching the market and should work with your lender directly to communicate all the interest you have in each property. It is very important that you understand how different elements, such as Home Owners Association Fee’s or flood or other insurance fees pertaining to each individual property can play a role in your monthly mortgage payment.
It is very important that you work with a trusted lender who always have your best interest in mind. By “best interest” that means what you as a buyer will be most comfortable living with, while you transition into home ownership. Sometimes “best interest” gets twisted into maximum you can afford. Buying a home that stretches your budget beyond what allows you to live a good life is a recipe for disaster. The home buying process should be a simple process. Work with people you trust. Communicate when you are not feeling comfortable or do not understand. Your lender and your realtor should have no problem sitting down with you and explaining and outlining how each step of the home buying process works.
If you are interested in learning how to become a homeowner and want to see what you qualify to purchase let me know. Check my Yelp or follow me on Facebook to learn more about my process.
Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395 

#Mortgage #MortgageLoanProcess #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

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What is “Boarder Income” and How Is It Utilized When Applying for a Loan?

Did you know you can use boarder income to help you qualify for certain loan programs? Understanding which programs allow you to utilize boarder income and the requirements for each can help you get ahead when applying for a loan.

Boarder income is income that a person receives for lodging, meals, or related services from people living on their property. There are three types of loans that you can apply boarder income to:

  1. Federal Housing Association (FHA)
  2. Fannie Mae (FNMA)
  3. Freddie Mac (FHLMC)

Federal Housing Association (FHA)

Boarder income applies to Boarders of the subject property renting space inside the borrower’s dwelling unit.

  • Mortgagee must obtain a copy of the executed written agreement documenting intent to continue boarding with the Borrower for purchase transactions.
  • Borrower has a two-year tax return history of receiving income from boarders and the borrower is currently receiving boarder income.
  • Obtain two years of the Borrower’s tax returns evidencing income from boarders and the current lease.

Fannie Mae (FNMA)
Boarder income from boarders in the borrower’s principal residence or second home is only acceptable when:

  • Documentation of the boarder’s history of shared residency that shows the boarder’s address as being the same as the borrower’s address.
  • Documentation of the boarder’s rental payments for the most recent 12 months.
  • When a borrower with disabilities receives rental income from a live-in personal assistant, the rental payments can be considered as acceptable stable income in an amount up to 30% of the total gross income that is used to qualify the borrower for the mortgage loan.
Freddie Mac (FHLMC)

Rental income from the subject 1-unit primary residence rental income generated from a borrower’s primary residence may be used to qualify with a disability if the rental income is from a live-in aide. This Income source may be considered stable monthly income if:

  • The rental income may be considered in an amount up to 30% of the total gross income that is used to qualify the borrower.
  • The live-in aide plans to continue to reside with the borrower for the foreseeable future.
  • Borrower received rental payments from a live-in aide for the past 12 months on a regular basis.
Boarder income can be tricky but is important to take into consideration when applying for a loan. If you have boarder income and want to learn more about how you can utilize it, please let me know as we can discuss your specific scenario.
Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395
#Mortgage #MortgageLoanProcess #Buying #HomeBuyer #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender #BoarderIncome #Income
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