4 Steps to Make Relocating to Michigan Go Smoothly

grand haven michigan light house

Have you ever wanted to make the move out of state but did not know how to go about the process? If you are ready for the big move and Michigan is your destination call Riverbank Finance and speak with our loan officers today!

Michigan has many attractions for people looking to relocate from another state. Although Michigan is mostly known for its lakes and for being shaped like a mitten, these are not the only things that it has to offer. Grand Rapids, for instance, was ranked by Headlight Data as having the fastest growing economy in the United States. There is always something to do. You could go visit Traverse City’s wineries or walk the dunes along Lake Michigan. Whether you enjoy to do Michigan probably has it!

Steps to Make Relocating to Michigan Go Smoothly:

  1. Research! Research! Research!

Research is one of the most important things that you can do to make moving to Michigan feel easy. If you have an idea on what type of location you would like to live in search it on the web.  If you are thinking that would like to live along the beach give a place like Grand Haven a try.  If hiking and being surrounded by nature is what you want then try the Upper Peninsula. Maybe you are interested in the city life, then give Grand Rapids a.k.a. “Beer City, USA” a try. There is a place for everyone in Michigan as long as you can brave our winters that is!

After determining the area of Michigan that you would like to live in check the stats of that area. What are the rates of unemployment, poverty, and crime in the area? How do the schools compare to others in the state? You should ask yourself what is important to you and what you expect to gain from the place you will live.

  1. Get Pre-Approved for a Home Loan

If you have decided that buying a home in Michigan is the best fit for your family, then the next step is to get pre-approved for a mortgage. Our licensed loan officers here at Riverbank would be more than happy to offer you a free consultation to review home loan options. You can apply for a home loan only, in person or over the phone. During the mortgage pre-approval meeting, your loan officer will review your income, assets and goals and recommend mortgage solutions that fit your needs.

  1. Find a Knowledgeable Michigan Realtor

Now that you have researched potential areas that you would like to live and gotten pre-approved for a mortgage, in its time to find a realtor. Try looking for a realtor that has experience in finding the type of home that you are looking for and in the area that you are looking in. If you know anyone in the area ask them for recommendations or search on the web. Your loan officer may also be able to recommend reputable Realtors to assist with your home purchase. It might also be helpful to find a realtor in your current state to help you sell your current home. It might not be possible for someone to purchase a new home when they are still paying for their current one.  Your Realtor should be able to help you coordinate the sale and the purchase of both homes to ensure things go as planned.  If you are able to, plan a trip to Michigan to visit the properties before moving here.

  1. Find a New Job in Michigan

As part of the Pre-Approval process, your loan officer will advise you on the requirements to find a new job and get an accepted offer. The job generally should be in the same field that you were working and the pay should be at the very least the same you are making at your current job or more. For those looking to get a job that is bonus or commission based, might want to think again. Lenders will need a similar pay history of 1 to 2 years depending on the program requirements. It is better to wait on getting one of these types of jobs until after you have closed on your loan and settled into your new home.

Call Riverbank Finance at 1-800-555-2098 and speak with our loan officers about your move. Hire those movers, pack up your moving van, and come join us here in the Great Lakes State!

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2018 Conforming Loan Limits and FHA Loan Limits Increased

On November 28, 2017, it was announced by the Federal Housing Finance Agency, or FHFA, that for 2018 the baseline loan limit for conforming loans will increase from $424,100 to $453,100. This is due to raising house prices and real estate appreciation. According to the FHFA, from the third quarter of 2016 to the third quarter of 2017, home prices have increased at an average of 6.8%. Therefore, conforming loan limits have increased by 6.8%.

Related: 2019 Conventional Loan Limits in Michigan

How are Conforming Loan Limits Calculated?

The new Conventional Loan Limit does not apply to all areas of the United States. There are certain areas in the country that are considered to be high cost, such as Alaska and areas of California. In order for these areas to be deemed as high cost, 115% of the local median home value must exceed the baseline loan limit. In these areas, the baseline loan limit will increase by 150%. This makes the maximum loan limit for these areas $679,650, which was increased from $636,150. A map of the U.S. counties and their maximum loan limits can be found here.  There are no counties in Michigan that are considered to be a high cost area.

2018 FHA Loan Limits Increased

Staring January 1st 2018 FHA Loan Limits have increased its floor to $294,515 from $275,665. This means that buyers can purchase a home of $305,196 with the minimum down payment and still get an FHA loan. In high cost areas, FHA’s loan limit ceiling will increase to $679,650 from the current level of $636,150. In high cost areas, home buyer can purchase a home up to $704,300 and still use the minimum FHA loan down payment of 3.5%.

Do Other Loan Options Have Loan Limits?

USDA and VA loans do not have their own loan limit like FHA. These loan programs utilize Conventional loan limits set by the FHFA. VA may also allow larger loan amounts up to $1,500,000 if the borrower pays the funding fee at the closing over the 453,100 limit.

What if the Loan Size I Need Is Larger than the Loan Limits?

If the loan amount needed exceeds these limits then an option for you would be a non-conforming loan called a jumbo loan. These non-conforming loans follow a different set of guidelines and rates than conforming loans. For 2018, jumbo loans will be for loans that exceed $453,100. Riverbank Finance is also able to help with jumbo loans!

Jumbo Mortgage Loan limits

For loans over the conforming limit of $453,100, we are able to offer jumbo loans. Current Jumbo loan limits at Riverbank are set at 3 million dollars. The purchase price of a property can be above this limit however the buyer would need to pay cash for the difference. Our Jumbo loans options include 40 Year Interest Only Loans, 30 Year Fixed Rate Loans, 15 Year Fixed Rate Loans and Adjustable Rate Mortgages.

What are the Benefits of Conventional Loan Limit Increases?

Loan limits increasing is beneficial to clients as house prices rises because conventional/conforming loans offer the best rates. Higher loan limits allow borrowers to finance higher amount at low fixed rates. Jumbo loans typically do not offer as low of rates as conventional loans do which may be less attractive. Clients will have a wider range of houses they can get financed with a conventional loan. With our 97% Conventional Mortgages, a home buyer could purchase up to a $439,507 home with the minimum 3% down payment. For buyers that plan on utilizing a 20% down payment to avoid PMI, they can not purchase a home for up to $566,375 with 80% financing on a conventional loan.

To confirm the maximum loan amount you qualify for call a Riverbank Loan officer today at 800-555-2098 or request information below!

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USDA Mortgage Repair Escrow Program

What is a USDA Mortgage?

The USDA loan, or Rural Developmental loan, allows for homebuyers to purchase a home with a zero down payment.  This is great for people that want to live in a rural area and get a loan that is truly zero down.  Benefits of getting a USDA loan is that you may still qualify three years after the discharge date of your chapter 7 bankruptcy and three years after having a foreclosure.  The USDA website lists the areas of Michigan that qualify for this loan by county. You can also type in the address on the USDA website to confirm address eligibility as well.  Here is the link- https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

What if the House has Repair Issues?

Depending on the issue, Riverbank Finance may be able to help you by using the USDA Mortgage Repair Escrow program.  This program allows for the cost of the home to be combined with the cost of the repairs.  The cost of the repairs cannot go above 10 percent of the final loan price.  The term for a purchase or rate/term refinance using this loan is 30 year fixed.  The repairs are required to start within 30 days from the closing date and end within 180 days of closing.  Additionally, those interested in this program cannot use a contractor for the repairs with whom they have a conflict of interest with (i.e. family members or friends).

Related: USDA Rural Development Loan Calculator

What are the minimum requirements to qualify for the USDA Loan Repair Escrow Program?

In order to qualify for the USDA Repair Escrow Program you must meet some requirements.

USDA Repair Escrow ProgramThe requirements include:

  • A credit score of 620 or higher (at least 2 credit scores must be provided)
  • Must obtain an Accept/Eligible or Refer/Eligible recommendation from GUS
  • 10% of purchase price
  • Get a bid from a licensed contractor for the work to be done.
  • Standard USDA guidelines still apply.

Eligible Property Types:

  • 1 unit single family residences (no multi-unit properties)
  • Condominiums – HUD/FHA, VA, Fannie Mae, or Freddie Mac must approve or accept
  • New Manufactured Homes only – singlewide or multi-wide
  • Existing manufactured homes must follow guidelines that meet the Existing Manufactured Housing Unit Pilot Program
  • Planned Unit Developments

Is there a Limit for the Amount of USDA Repair Escrow?

Yes, the limit for the amount of USDA Repair Escrow is 10 percent of the final loan price.  This amount includes the cost of the repairs, reserve costs (1.5 times the cost of the repairs), 2 inspection fees ($165 each), and if required, the costs of permits.

What repairs can be done with the USDA Repair Escrow?

  • Carpet / Flooring
  • Paint
  • Repairs can be cosmetic
  • Or functional like installing a new water heater or buying a stove for the home

What repairs are ineligible for USDA Loan Repair Escrow?

  • Roof repairs
  • Foundation/structural repairs – the structure of the building may not be disturbed by the repairs
  • Electric repairs
  • Plumbing repairs

If this looks like the loan for you, please give our trusted loan officers at Riverbank Finance a call at 1-800-555-2098 or apply on our website today!

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The Mortgage Process: What Happens After Pre-Approval

Congratulations! You passed the pre-approval stage for getting a home, but what happens next?

Once you have a pre-approval letter from your lender, you can start looking for a home to purchase. Keep in mind that the letter is only good for 60 to 90 days, depending on the type of approval you received.

Why Should I Get Pre-Approved?

A pre-approval gives you an edge when shopping for a home because realtors and home sellers know you are already qualified to buy, according to a lender’s standards. It also means your time from agreeing to buy and closing will be faster, since approval is already done. During your search, keep the lender estimates in mind. It is an amount you can comfortably afford for a home. It is not advisable to go above it.

Once you have found a home that meets your needs and your pre-approval amount, you can start the sale process by giving the seller the pre-approval letter and making an offer on the house. If the seller accepts your offer, the next step is to start the underwriting process.

 

What is the Mortgage Underwriting Process?

Now that you have an accepted offer on a house, you will work with your loan officer to sign an official mortgage application. This will start the loan process and allow us to submit your application to underwriting for approval. If you have not yet provided the supporting documentation to verify the information on your application you will need to do this now. These documents will include income, assets, and credit documentation.

Required Documents to Apply for a Mortgage

  • Drivers License
  • Social Security Card
  • 1 Month Paystubs
  • Most Recent 2 Year W2 Statements
  • Most Recent 2 Years Tax Returns (if self employed or commission)
  • 2 Months Bank Statements
  • Most Recent Quarterly Retirement Statement
  • Home Owner Insurance Quote

(Additional Documentation may be required in Underwriting. Not all borrowers will need to present these documents – Ask us about our Automated Home Loan process where we electronically verify your information.)

Once your application is signed (we use electronic signatures to speed up the process), then your loan is submitted to an underwriting. The underwriter will review the information to confirm that it matches what was submitted on your application. They may have questions or request additional documentation at this time. Once your loan is “Conditionally Approved” in underwriting we will move to the appraisal.

What Happens During the Appraisal Phase?

An appraisal takes into account the interior of the home, the exterior, and the value of surrounding homes in the neighborhood. Once the appraisal is over, the loan can be processed. An underwriter will process the loan and clear the loan for closing. The appraisal must come in either greater than or equal to the value of the purchase price. If it comes in low you may need to bring additional cash or renegotiate with the sellers.

Once through processing, your loan will be scheduled to close. This is where you will sit down with an escrow agent or a notary to make everything official and legal. 

The Final Stretch: Closing Costs

The last part of the process, before you can start packing up your moving boxes, is the closing. Closing costs are what you pay for outside of the home itself. So, if you get an appraisal, the appraiser needs to be paid for their services. In addition, there is title insurance fees, taxes, tax services, and other fees that come with closing. These fees can range anywhere from 0-5% of the cost of the loan. 

If you negotiated that the sellers will pay these closing costs and pre-paid items then they will cover them at the closing otherwise these fees will need to be paid by you at the time of the close. If you are short on cash, ask your loan officer if you qualify for lender paid closing costs. This is where we will give you a credit at the close to cover some or all of your 3rd party fees. You will always need to cover your own down payment funds (unless a special program allows differently).

In summary, to start buying a home, the first step is the home loan pre-approval. Be sure to make an appointment with a Riverbank Finance professional loan officer today by calling (800) 555-2098.

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What’s the Deal with Credit Scores?

credit scores

The History of Credit Scores

Credit reports and scores have played a large part in many Americans’ lives, but what do we really know about credit scores?  Before the use of credit scores, it was up to lenders to decide whether a person would be granted a loan.  This method was not always the best as lenders’ own personal biases would sometimes come into play.  In the new age of credit, factors such as age, race, and religion are not allowed to be reported to the credit bureaus, which makes for a fair playing field.

What is a Credit Score

Credit scores are three numbers that tell a lender the borrower’s credit risk, basically can or will the borrower be likely to pay back the money.  The three major bureaus, TransUnion, Experian, and Equifax, store data that has been collected from creditors, collection agencies, and other financial institutions.  This information is then calculated into a score, the most common being the FICO score.  The FICO score ranges from 300 to 850 with 850 being the best, but also almost impossible to obtain.  The best way to increase your FICO score is to make sure you are paying your bills on time and to keep the amount you owe low.

How Does My Credit Score Help Me Get a Mortgage?

Having a good or excellent credit score is helpful when trying to apply for a mortgage.  Here at Riverbank Finance, our loan officers will ask our clients about their credit scores to see if they qualify based on guidelines from our lenders.  With your permission, our loan officers can immediately pull your credit from the three bureaus.  This makes it possible for them to quickly determine whether you are preapproved for a loan or not.  Being able to quickly pull credit helps to speed up the process.

What if My Credit Score is Too Low to Get a Mortgage?

If you were not approved for a loan because of your credit score there are still some things that you can do to improve your credit score and to get your dream home.  As stated earlier the easiest way to increase your credit score is to pay your bills on time.  When a lender sees that a person has had a bunch of late bills and bills that are in collections it tells the lender that the borrower may not be trusted to pay back the money loaned.  So, get those bills paid on time!

Related: Buying a Home with Bad Credit

How to Improve Your Credit Scores

  • Pay Bills on Time
  • Pay Down Revolving Debt
  • Build Long Term Credit History
  • Dispute incorrect information

High credit card balances also hurt your credit score.  To fix this, try and pay your balances off as low as possible and make sure that you are not using more than 20 percent of your available credit.  Also make sure that you are using different types of credit accounts which can include mortgages, auto loans, student loans, and credit cards.  The length of time that you have had credit can affect your score.  You will want to keep the oldest line of credit that you have open and not open too many new ones.  Finally, keep the number of hard inquiries into your credit score low!  Although this only makes up a small percentage of your credit score every point counts!

What is the Minimum Credit Score Required for a Mortgage?

At Riverbank Finance, we are able to go as low as a 580 credit score for FHA Loans, VA Loans, and even some Zero Down USDA loans.  This is great for those still trying to increase their scores!  For conventional loans, we are able to take a 620 credit score and higher.  Give us a call at Riverbank Finance and see if we can help you to improve your credit score today and move you into your dream home!

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How to get pre-approved for a mortgage

Things to avoid when buying a home in Michigan.

If you are new to the home-buying process, you are probably aware that one of the best first courses of action is to get pre-approved before you start house hunting. So, you head to your bank or financial institution, but you have no idea what goes into the process of pre-approval. What do you need to get pre-approved? What should you expect? Here’s the low-down.

What is mortgage pre-approval?

First comes first. What is pre-approval, and why is it so important? Pre-approval is the first step to getting a mortgage. Your lender will take a look at your finances, your credit history, and your employment and determine whether you can afford to buy a home and, if you can, how much of a home you can afford to buy. That will help you narrow down your choices as you search for the right home within your budget. Getting pre-approved will also show home sellers and their realtors that you are ready to buy.

What do you need to get pre-approved?

To help the pre-approval process go smoothly, before you sit down with a mortgage professional, make sure you check your credit reports. Resolve anything negative, such as bills in collections, and dispute any errors. For most loan programs the disputes will need to be resolved and closed out prior to your loan application. This will give you the highest and most accurate credit score for mortgage qualifying. Higher credit scores will allow for a quicker loan process with lower interest rates.

Throughout the mortgage process, don’t apply for any new credit cards, don’t take on any new debt or make any large purchases, don’t close any of your current credit accounts, and don’t ask any of your creditors to lower your credit limit. These could significantly alter your chances of getting a mortgage.

Pre-Approval Document Checklist

  • Drivers License
  • Social Security Card
  • Most Recent 2 Years W2 statements
  • Most Recent 2 Years Tax Returns (If Self Employed or Commission Based)
  • 1 Month of Paystubs
  • 2 Months of Bank Statements
  • Quarterly Retirement Account Statement
  • Proof of 12 Month Rent History (may not be required)

For pre-approval, you’ll also need to provide documentation of the last two years of tax returns; proof of income including W-2s and pay stubs; a written referral letter from your landlord with some proof that you’ve been paying your rent in time (such as carbon copies of checks or money orders); two forms of government identification such as drivers license and social security card; and proof of income from other sources, such as government assistance and child support. Lastly you will need to document any assets. This will include any money you have in stocks, IRAs and retirement accounts. Also make sure the money for your down payment and closing costs are in the bank, ready to go.

Request a mortgage pre-approval by phone or online

Once you have gather the required documentation you can call a loan officer at 1-800-555-2098 to get start over the phone or apply online at https://riverbankfinance.com/app which is our online secure loan application.  A licensed loan officer walk you through the pre-approval process and help to review all available loan options.  Many times we are able to issue a pre-approval over the phone or online within minutes.

What happens when you get pre-approved?

Once you are officially pre-approved your loan officer will provide you with a Pre-Approval Certification. This document will state that we have reviewed your loan eligibility and have determined that you are likely to qualify for the loan program given. Your Realtor will ask for this document before you start shopping for a home. You may also want this updated prior to writing an offer on a home to make sure it matches your bid.

Related: Visit our Mortgage Calculators to estimate mortgage payments

So, when you’re feeling ready, come and visit us here at Riverbank Finance, and we can help you start the pre-approval process. Call us at 800-555-2098 to schedule an appointment with one of our professional loan officers. We want to help you get into your new home!

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How a HELOC Can Help You Become Your Own Boss

Michelle Huizinga is a hairdresser in West Michigan, but you won’t find her at a retail salon near a grocery store. Instead, Michelle, like many enterprising entrepreneurs, works from her own home. Through a room she renovated in her home, Michelle now sees her clients and her children with no travel time.

“I started working from home because I had two small children at home. It’s a great way to make extra money while being my own boss and still able to spend as much time as I want with my kids. I can be flexible. I don’t have to be busy one week, where a lot is going on in our family. Also it cuts down on childcare costs because my husband can watch the kids at night when I cut hair.”

How can I start an at-home business?

While the freedom of self-employment is enjoyable, there is one catch: it can cost several thousand dollars to renovate a room in a home to become a business, like a hair salon. Depending on the work done out of the home, the State of Michigan might also require certifications.

“We had to build the salon in the basement from scratch. We needed walls, plumbing, shampoo bowl, equipment.” Michelle estimates that, at the minimum, one could need about $5,000-10,000 to start such a salon.

How a HELOC Can Help

With a HELOC (Home Equity Line of Credit) loan from Riverbank Finance, you, too, could quickly become your own boss in your own home. The Line of Credit is great because it only charges interest on the money you borrow and use, just like a credit card. Traditionally, rates for a HELOC are lower than the average credit card rate, as well.

One other perk that can help a family save money is that, if a room in the home is used for a business, all the costs associated with said room can be written off on your taxes. So the electricity, water, and equipment used to make a hair salon in a basement can become a tax write-off and save you money as a homeowner.

If you have a skill set like hairdressing, accounting, or a number of any other skills that just require a single room to work in, you, too, could become your own boss, save on your taxes, and increase your family’s income. All it might take is an initial investment with a HELOC. To see if a HELOC is right to start your self-employment dreams, call one of our loan officers at (800) 555-2098 today.

 

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How a Refi Can Help You Care for Aging Parents

No one likes the idea of sending their parent away to a nursing home to be surrounded by strangers all day. But is there anything else that can be done? Maybe you want to have them live with you in a spare bedroom. But what about the cost of upgrading your home to meet their needs and disabilities? Some of the changes don’t come cheap! So if you haven’t saved up, what’s a caring child of aging parents to do?

One option you could explore is refinancing your mortgage to finance home improvements. A cash-out refinance would allow you to get a great deal of money for renovations to provide the best home environment for an aging loved one.

Cashout Refinance for Home Improvements

How easy is your home to navigate for an elderly person? Are there steps at the entrance? Are the railings easy to grasp? Can your entryways become slippery when wet?

If you want to upgrade your home so an older parent can live with you, consider these three important upgrades: mobility, dexterity, and hygiene.

Mobility. It’s important that steps become ramps, handrails are placed in key areas (like bathrooms), and things your parent needs the most are easily accessible. For example, it’s a good idea to have their bedroom close to a bathroom they can use. Hallways and doorways need to have proper and current lighting so they can see obstacles in their way. Stairways can be upgraded to have chair lifts to reduce the risk of falls.

Dexterity. This might seem trivial, but as we age, our hands aren’t what they used to be. Does the oven get stuck, or is the freezer hard to pull open? Does the coffee maker need to be upgraded to decrease the amount of steps your parent needs to make if they want a cup? Upgrading cabinets with more lazy susans or putting more pantry items at eye-level can increase their comfort.

Hygiene. Bathrooms can be a potential disaster when it comes to the elderly and the potential for falls. Including non-slip mats in and around a bathtub or shower, hand rails by the toilet, and curbed or walk-in/sitting tubs can reduce that risk. Keep in mind, removing your existing tub and purchasing a more elderly-friendly tub can be expensive.

Some of these renovations can add up to thousands of dollars or more, depending on how many changes your home needs. But who can put a price tag on keeping a family member at home, rather than at a care center? With that in mind, here are a couple of options: 

Cash-out refinance. You refinance your home for more than it’s worth, and the money you’ve put into the original mortgage is available to use as cash. This is a more advantageous option than a second mortgage, because you still only pay one loan and it often comes with a lower rate than a second mortgage.

Cashout Refinance Alternatives

Alternatives to doing a cashout refinance may be a Home Improvement loan or a Reverse Mortgage. These are unique loan options that can be used to finance the costs of home renovations.

HomeStyle Renovation Loans

Our HomeStyle Renovation Home improvement loan may be a great fit to allow you to finance the costs of home improvements into your mortgage. This program is a conventional home loan that is different from standard mortgages because it uses the future improved value.  The appraiser will prepare your home appraisal valuation based on similar homes that have sold with the amenities and improvements that you are planning. You can still avoid PMI if your loan-to-value is under 80% although this loan option allows up to 95% financing for primary residences.

Reverse Mortgage for Home Improvements

A reverse mortgage loan may be another great solution for the elderly to improve their home’s safety and accessibility. A reverse mortgage is a loan type that allows homeowners to access the equity in their home without having to make monthly principal and interest mortgage payments. At the closing they may be able to receive a lump some in proceeds which can be used to pay for home improvements.

If you are serious about upgrading your home, contact us at Riverbank Finance (800-555-2098) so we can help you find the best way to afford the renovations you need.

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Reasons to Get a Second Mortgage

If you have a major financial need looming over you that you’re just not sure how you’ll afford, you may want to consider taking out a second mortgage. Keep in mind, there are some pros and cons that come along with doing that, so let’s look at the options and you can decide whether this is the right solution for you.

Reasons to Get a Second Mortgage

Are you wanting to take your dream vacation to Fiji? A dream vacation is a want, rather than a need. It would be better for you to save your money and take the vacation when you’re truly financially ready. A second mortgage isn’t a good option for those who just want to spend money. It’s a mortgage, so if you can’t repay for any reason, you could lose your house.

Paying for your child’s college tuition, adding an office onto your house, and paying down medical bills or credit card debt might be better reasons to take out a second mortgage. If you have a pressing need that just has to be financed one way or another, this might be a good solution for you.

Types of Second Mortgages

There are two types of second mortgages you’ll want to consider.

  • Home Equity Loan. This is like a typical home loan, where you can choose to get a 15 or 30-year fixed-rate loan or an adjustable rate mortgage for shorter term.
  • Home Equity Line of Credit (HELOC). This is a little bit different, in that you get a line of credit based on how much equity you have in your home. The interest rate is a variable, and the term of the loan doesn’t have a specific timeline. Like a credit card, you’re only using as much money as you need, but you’re borrowing against your house.

Keep in mind, the interest on a second mortgage is typically lower than that of a credit card, but higher than a first mortgage. Also, if you want to refinance your mortgage in the future, you will have to combine both your first and second mortgages into one loan. You’ll end up with a smaller interest rate, but your overall debt will be higher, making your monthly mortgage payments higher.

How Can I Get Approved?

Your lender will want to make sure you can pay off the second mortgage, so you’ll need to provide proof that you have enough income to repay the debt. Additionally, the better your credit is, the more likely you are to get approved.

Call us at Riverbank Finance, (800) 555-2098, to schedule an appointment with one of our professional loan officers to find out whether a second mortgage might be a good option for you. We can take a look at your financial needs and help you find the best solution.

 

Will changes to HARP hurt or help mortgage seekers?

If you’re seeking to refinance after October 1, 2017, you should know there are some changes coming from Freddie Mac regarding HARP. HARP, or the Home Affordable Refinance Program, is in the waning years of its existence, which is a good thing. How Freddie Mac is changing, in relation to HARP, could be a benefit to those seeking to refinance.

History of HARP

Back during the 2008 Housing Crisis, there was an overabundance of homes that were going under and being repossessed. One reason was because homeowners, who had a home with a LTV (Loan to Value) of over 80%, couldn’t refinance.  Because they still owed 80% or more of the loan, no lender would allow them to refinance. So they were stuck paying a big loan with huge interest rates.

Enter HARP. Harp allowed these homeowners a chance, through Freddie Mac, to refinance their loan and get a lower interest rate with more affordable payments. This allowed homeowners who were in over their heads with their mortgage a solution that didn’t cost their home.

Why the Change?

HARP was never created with the intention of staying around forever.  In fact, one requirement of HARP was that the loan had to be older than 2009 for the homeowner to qualify. Since then, the number of applicants has dwindled, as there are fewer mortgages from before that period in need of HARP.

The good news is both Fannie Mae and Freddie Mac are starting new programs to help homeowners who are underwater with their mortgages. No program existed before 2008. Since then, the government has seen the value in allowing more homeowners options to keep their homes.

Freddie Mac is replacing HARP with what is being called the Relief Refinance Mortgage. One key difference is that there is no requirement that the loan must originate before 2009. So if the loan is more recent, a homeowner can take advantage.

Do you Qualify?

Homeowners could qualify for a Relief Refinance Mortgage if they meet the following requirements:

  • The mortgage must be at least 15 months old.
  • The borrower should not have any delinquent payments in the past six months.
  • They can only have one delinquent payment in the past year.

 

Keep in mind, those three requirements aren’t the only ones, but they are the biggest obstacles to qualifying for the Relief Refinance Mortgage, according to Freddie Mac. Homeowners who do meet those qualifications can contact a Riverbank Finance Loan Officer (1-800-555-2098) for more information about getting relief in the form of a refinanced mortgage.