Kathy Foran - REALTY EXECUTIVES Boston West



Posted by Kathy Foran on 3/7/2021

Photo by Nattanan Kanchanaprat via Pixabay

If you’re in the market to purchase a home, it can be a confusing process. Interest rates, types of loans and what may apply to you can all sound like a foreign language. It’s always best to have some background knowledge before going to see a mortgage broker to make sure you’re on the same page. Although there are many components to the process, one of the main elements that directly affects you is the type of loan you qualify for. Here’s a quick guide:

  • Land Purchase

You may want to build a home on a specific piece of land. Most banks offer up to 85% of the price of the land for residential and investment purposes.

  • Home Purchase

These loans finance the purchase of a new residential property or home from previous owners. There are many categories: fixed-rate, adjustable-rate, conventional, jumbo, FHA, VA, USDA and bridge. Each one has elements that mortgage brokers use to determine whether you would be a good candidate for that type of loan.

  • Home Construction

If you’re looking to construct your home from the ground up, this is the type of loan you will be considered for. The loan and application process is a little different from a standard home purchase loan. If you want the loan to be included as a part of the total price of the house, the land should have been bought within a year.

  • Home Expansion/Extension

Even if you’re purchasing a home, you may decide you need to expand it. These types of loans work differently if you are purchasing the home, so working with a mortgage broker will provide more insight.

These four loan options may directly impact your decision and ability to purchase. When considering the type of loan you are seeking, you should also think about where you want to live and how long you plan to stay there. Each specific type of mortgage loan may require different amounts for a down payment, have different standards, require mortgage insurance and interest.

The type of mortgage loan and interest rate will also affect your monthly payment. A mortgage broker should be able to help choose wisely to save money in a number of areas. The most important thing to remember when searching for a home loan: they are not one size fits all. Every home loan is dependent on your current circumstances, credit rating and income level.

Everything may sound confusing right now, but you have a good foundation to work from. As your mortgage broker walks you through the process, you'll be able to identify those loans that may be mentioned without feeling like you're lost. Being educated on what's out there can also help ask the right questions. Although a mortgage broker is designed to help you get the loan you want, they also want to make money too. Working with one that appreciates your knowledge (even if limited) is key. Good luck!




Tags: mortgage   loan   Homebuying  
Categories: Uncategorized  


Posted by Kathy Foran on 1/24/2021

Image by Tumisu from Pixabay

It's easy to think that investing in real estate is an incredibly expensive venture. You may think you need thousands if not tens of thousands saved before you can even think about it. But there are ways to jumpstart your portfolio even if you're renting one of the cheapest apartments in your neighborhood. Learn more about assumable mortgages and how you can use them to get ahead. 

Taking Charge 

An assumable mortgage is one that's allowed to be transferred to another person. So if a property owner no longer wants to pay their mortgage, they have the option to put the property in someone else's name. You'll still need to qualify for the loan, and you'll need to go through the lender to work it out properly. Informal assumptions are liable to be canceled immediately (with the lender demanding full repayment on the loan).

The Terms 

You cannot assume all types of mortgages. As a general rule, insured loans, such as USDA, FHA, and VA loans, are assumable while conventional loans are not. In an assumable mortgage, the terms of the loan stay the same. A buyer won't have to worry about the interest rate or deadline changing. So a 15-year mortgage taken out three years ago gives you 12 years to pay it off. 

Why Choose an Assumable Mortgage?

There are a few ways to get started in investing without saving for a large down payment, so it helps to understand the perks of each option before choosing one. The biggest advantage of an assumable mortgage is that you have the chance to lock in a property at a relatively low-interest rate. The closing costs are also more reasonable, given the strict limits on FHA, VA, and USDA fees for buyers.

Why Skip an Assumable Mortgage?

Assumable mortgages are not always recommended for buyers in rapidly exploding neighborhoods. This is because you're still paying the total value of the home at the time of sale. So let's say the property was originally sold for $100,000 two years ago and $20,000 has already been paid off, but the home is now worth $150,000. You'll still need to make up the difference in the home's value to complete the sale — which usually means taking out a second loan. 

Assumable mortgages can be a great way to get started in real estate, but they're not for everyone. If you're shopping around for one, consult a real estate agent or financial advisor who can answer the nitty-gritty questions about how the loan works and what you can expect. 




Categories: Uncategorized  


Posted by Kathy Foran on 5/31/2020

Image by mohamed Hassan from Pixabay

A land contract and a mortgage have a number of similarities. For example, you can use either option to purchase a home Both loans must be repaid on a monthly basis.

Understanding the Differences 

A land contract is a legal agreement between a buyer and a seller. Rather than a traditional mortgage scenario with a bank, the seller becomes the lender. The buyer and seller agree on a price for the home then negotiate terms and a payment schedule. 

In many cases, these repayment terms follow a schedule of monthly payments much like a mortgage. However, a balloon payment for the remaining balance is often due within three to five years. At that time, you would then obtain a traditional mortgage to fund the remainder that's due. 

Land Contract Risks

While it can seem like a land contract would be an ideal way to secure a home, it does involve risks you need to know about. A land contract can be a way for you to close on a home if you aren't able to qualify for a mortgage that covers the full cost right away. The three to five years that a typical land contract lasts can give you time to improve your credit and increase your financial soundness. 

Before you agree to a land contract, though, be aware that the property is not yours until you make the final (balloon) payment. This means that if you make any improvements to the property during that time, you could potentially be out of your investment. You are also not building up any equity in the home during the time that the land contract is in effect. 

At any point during the land contract, your position as the buyer could be compromised. For example, the seller is the legal owner of the property until the contract has been fully paid. If they experience financial problems and lose the property, you would have no claim to it and would forfeit your payments. 

As the buyer, you are obligated to meet your payment agreement. If you don't do so at any time during a land contract, the deal ends. The property stays with the seller and you are out the money you've invested. 

Advantages of a Mortgage

With a mortgage, you must pay property taxes and honor your obligations to the lender. As long as you do so -- and avoid liens -- you have legal recognition as the property owner. 

A land contract can seem like an attractive alternative if you don't think you qualify for a traditional mortgage. Before agreeing to one, though, be sure you understand the pitfalls that could be involved. 




Tags: mortgage   loans   Financing  
Categories: Uncategorized  


Posted by Kathy Foran on 3/15/2020

Applying for a mortgage may seem like a long, stressful process at first. Fortunately, we're here to help you take the guesswork out of submitting a mortgage application.

Now, let's take a look at three tips to help you streamline the mortgage application process.

1. Ask Questions

A bank or credit union likely will ask you to provide a wide range of information as part of the mortgage application cycle. And as you complete a mortgage application, you may have questions along the way too.

Remember, a lender is happy to help you in any way possible. If you ever have concerns or questions as you complete a mortgage application, you should reach out to a lender for expert support. That way, you can reduce the risk of potential problems down the line that otherwise could slow down the mortgage application process.

Even a single mistake on a mortgage application may prevent you from getting a mortgage. Perhaps even worse, a delayed mortgage application may force you to miss out on an opportunity to acquire your dream house. But if you reach out to a lender as you complete your mortgage application, you can gain the insights you need to quickly and effortlessly finalize the necessary documentation to obtain a mortgage.

2. Be Thorough

A mortgage application may require you to look back at your financial and employment histories and provide information that a lender will use to determine whether to approve or deny your submission. Meanwhile, you should be ready to provide a lender with any requested information to ensure a seamless application process.

As a homebuyer, it is your responsibility to include accurate information on your mortgage application. In fact, failure to do so may cause a lender to reject your mortgage application. If you allocate the necessary time and resources to dot every I and cross every T on your mortgage application, you can boost the likelihood of a fast approval.

3. Shop Around

For homebuyers, it is crucial to check out all of the mortgage options that are available. If you meet with a variety of banks and credit unions, you can review myriad mortgage options and select a mortgage that complements your finances.

Banks and credit unions generally provide a broad array of fixed- and adjustable-rate mortgages. If you learn about all of the mortgage options at your disposal, you can find one that enables you to purchase your dream house without breaking your budget.

Of course, once you are approved for a mortgage and are ready to launch your house search, you may want to hire a real estate agent as well. A real estate agent will offer plenty of guidance at each stage of the homebuying journey. In addition, a real estate agent can make it easy for you to find a top-notch residence at a budget-friendly price in any housing market, at any time.

Start the mortgage application process today, and you can move one step closer to acquiring your dream residence.




Tags: mortgage   Buying a home  
Categories: Uncategorized  


Posted by Kathy Foran on 2/9/2020

Going through the process of applying for a mortgage only for your application to get denied can be a frustrating and confusing time. If youíre hoping to buy your own home in the near future, itís vital to secure financing or you risk missing out on a home that you may have been depending on getting.

In todayís post, weíre going to talk about what happens when your mortgage application is denied and what you can do to fix the problem as quickly as possible.

Determine the Cause of Denial

If your application is denied, priority number one needs to be to understand what happened. Since lenders are required to provide denied applicants with a letter explaining why they were denied, this just means reading the letter and making sure you understand all of the reasons listed.

There are a few common reasons that an application may be denied. Some of them are simple fixes, while others might require time and effort on your part that may delay your house hunt for a while.

One issue that many mortgage applicants have to handle is when their employer wonít provide proof of income to a mortgage lender. Since income verification is vital to the mortgage application process, itís important to make sure you can provide all of your income details from the last 2 years to the lender.

Sometimes there are issues with contacting employers, such as when your former place of employment goes out of business. Or, you may be a freelance or contract worker with atypical forms of income verification. Regardless, make sure you are clear with your loan officer regarding your employment history.

Other common causes for denial of an application include problems with your down payment (such as not meeting the required down payment amount) and credit history issues, such as having a lower score than you thought.

Credit score lower than expected

Itís not uncommon for a lender to run a credit check and come up with a score that is lower than you anticipated. Since scores change on a monthly basis, and since there are differences between the scores provided by the three major credit bureaus, you might find that your lender found a score slightly lower than what thought.

If the score is drastically different, however, this could be a sign of two things. First, make sure that you havenít recently made multiple credit inquiries (such as applying to several lenders who perform credit checks) or by opening new credit cards or loans. These inquiries temporarily lower your credit score.

If you havenít recently made any inquiries (other than applying for a mortgage with your lender of choice), then itís a good idea to get a detailed credit report and scrutinize it for errors. Inaccuracies on your credit report can be disputed and resolved and can give your score the boost you need to be competitive on your mortgage application.  

Choosing a different lender

While most lenders use similar criteria in determining your borrowing eligibility, there are some differences between lenders.

For example, some lenders might take on more risk by lending to someone with a lower credit score. However, they will also likely require a higher interest rate in exchange for the added risk theyíve acquired.


Now that you know your options for what to do when an application is denied, youíre well-equipped to start tackling the issue and getting back on track to becoming a homeowner.