How to Buy a House with No Down Payment

Mortgage with no down payment

If you buy a $250,000 home as a first-time buyer, a $25,000 down payment may seem like an inevitability. In fact, not everyone makes a 10% payment up front. The average today is 6%,1 but your mortgage broker will discuss the best options.

The truth is, home loans, including an FHA loan, may be within reach with a low down payment. Buyers have gotten fair FHA mortgage rates with just 3.5% down, or even less.

How a Zero Down Payment Mortgage Works

There are a few ways to secure a mortgage loan with no down payment. While you attain ownership, you won’t build equity. It can come in useful when repairs are needed. The loan also generally takes longer to pay off.

For a mortgage with nothing down, here are types of home loans to consider:

USDA Loans: Homeowners in rural and low-density areas can qualify, even if they have a lower-than-average credit score. Options include single-family direct homeownership loans and single-family guaranteed homeownership loans.

VA Loans: If you’re a veteran with good credit and sufficient income, you may qualify. You also need a Certificate of Eligibility from the U.S. Department of Veterans Affairs, but you can avoid high closing costs and a private mortgage insurance premium.

Work with Your Mortgage Company

Elite Financial can help with mortgages and FHA loans or if you want to refinance. If a down payment is preventing you from pursuing the home of your dreams, we can help there, too. Many other options are available, from when you’re starting out to later seeking a fixed rate mortgage, cash out refinance, or a rate and term refinance.

Contact us online for a quote or call (805) 494-9930 for assistance.



Revising Your Household Budget for the New Year

Revising household budget
Far too many households don’t set up a budget. Even if you do, it’s important to regularly adjust it. Factors such as FHA mortgage rates can affect your situation, but an FHA loan isn’t the only one. Are you finding yourself living paycheck to paycheck, using credit cards to cover basic expenses or going over-budget on entertainment every month? It may be time to revise your budget before you apply for home loans or refinance. Here are some tips on how:
  • Adjust your spending based on increases or decreases in your income. Tally your monthly receipts and subtract the total from your monthly take-home pay. If the number is negative, adjustments are needed, including cutting out unnecessary expenses like shopping and entertainment.
  • Assess your financial goals. While FHA loans and VA loans are convenient, they require financial planning. Do you need to pay off a student loan or car, or have you done so? Perhaps you paid off a credit card. Working toward or reaching financial goals changes your situation and determines if you’re prepared to visit a mortgage broker.
  • Use money smartly. If you received an inheritance, huge raise, or won the lottery (it’s a long shot, but it happens), don’t blow all that cash. You can save toward a down payment or apply for a mortgage loan. Perhaps it’s time to consider a mortgage company or types of home loans you can afford.
Your budget can influence whether you apply for a fixed rate mortgage or not or vice versa. It can also factor into choosing a cash-out refinance or rate and term refinance. For more insights, contact Elite Financial at (805) 494-9930 or get a quote or pre-qualified online today.

Bad Spending Habits and How to Break Them

Break bad spending habits
Buying a home includes not only a down payment, which is ideally 20% or more of the purchase price, but also the costs of inspections, closing, and moving. High estimates in terms of saving for the average home exceed $55,000.1 Consider FHA mortgage rates and the requirements of other home loans as well. Bad spending habits can impede your goals and/or eligibility for an FHA loan. To break these, try the following recommendations
  • Create a budget of monthly expenses and what you can afford.
  • Use credit cards only during emergencies.
  • Avoid bank overdraft and late fees.
  • Cancel unused services and memberships and apply the savings to paying down debts.
  • Keep visual reminders, such as pictures of houses you like.
To make the most of FHA loans and VA loans, you’ll need to develop good habits first. Your daily habits will influence your ability to buy a home, pay a mortgage broker, and factor in future decisions, such as when you refinance a mortgage. Also, consider shopping habits. Aside from sticking to your financial goals and avoiding emotional spending:
  • Separate needs from wants.
  • Make a shopping list.
  • Set up an allowance based on your budget.
  • Shop with a critical friend.
  • Take only the cash you need for planned purchases.
Once you break bad spending habits and are ready to buy a home, consult Elite Financial for help with a mortgage loan. Our mortgage company can help with a fixed rate mortgage, cash out refinance, or rate and term refinance. Ready to get started? We’ll assist you in finding the types of home loans that work best, so call (805) 494-9930 today!

Fed Rates Expected to Increase in December

In 2008, the American economy was on the verge of collapse. The Federal Reserve invested $4 trillion to provide stimulation during the crisis.1 As a result, interest rates and FHA mortgage rates declined. However, it may now be costlier to have an FHA loan or any home loans, for that matter, as the Feds have decided on increasing interest rates. There have already been two interest rate increases in 2017. The December increase is expected to have impacts on those who take out a mortgage loan, and it is happening because of: 1. Economic growth 2. Low unemployment 3. Anticipated job growth 4. Increased spending 5. Inflation due to gas price increases Currently between 1% and 1.25%, the rate is expected to rise again in the coming year. What does that mean for you, exactly? Mortgage rates are likely to increase. This possibility is real, given the 10-year Treasury yield getting close to 2.40% as of December Homeowners may be considering a refinance on their loans as a result. home loan interest rates As for home sales trends, demand tends to decrease when interest rates are higher. Interest payments may be significantly higher over the long term. This is something you definitely want to talk about with your mortgage broker before making a decision. Deciding whether a cash-out refinance or rate and term refinance is more practical is a good idea, too. For the latest information on FHA loans, VA loans, a fixed rate mortgage, or about all types of home loans, contact Elite Financial, a mortgage company with numerous options. Get a quote online or call us at (805) 494-9930 for help buying a home or refinancing today! Sources

The Most Common Mortgage Myths

Most common mortgage myths
Understanding how mortgages work can help you get home loans in a variety of financial situations. Common mortgage myths provide the wrong information. You may, therefore, miss out on buying a home or on key financial benefits from your mortgage company. Common myths include:
  • “A 20% down payment is always needed”: The Federal Housing Administration (FHA) enables qualified buyers to pay less. With an FHA loan, you may be able to pay as little as 0% up front.1 You will likely have to buy private mortgage insurance (PMI), but paying the 20% threshold doesn’t mean you won’t need PMI.
  • “Your credit score must be perfect”: It does not. If you pay your credit cards on time and don’t miss payments, your debt may not affect lenders’ decisions. However, a high score may qualify you for lower FHA mortgage rates, for example.
  • “Pre-approval is a done deal”: This increases your competitiveness as a buyer, but only opens you up to further vetting by the bank. Additional documentation will be needed to secure FHA loans, VA loans, or other mortgages.
  • “30-year mortgages are best”: Not if you can afford higher payments. Pay off the mortgage loan sooner, and you can save on interest. The benefits (of 15-year mortgages) can be higher for an adjustable rate rather than a fixed-rate mortgage.
  • “I can’t refinance”: People often think their window of opportunity has closed because interest rates have risen. Refinancing can be a good move if interest rates are a percentage point above the loan’s rate and you plan on maintaining ownership for a while.
Elite Financial can assist with all options, from the best types of home loans to completing a cash-out refinance or rate and term refinance. For a mortgage broker that can help secure your loan, get a quote or contact Elite Financial today at (805) 494-9930. Source