How to Find the Real Cost of Monthly Payments

Maybe you've run a mortgage calculator to determine the payment on your dream home, and it seems reasonable. However potential homeowners need to understand the real cost of purchasing a home before they sign the mortgage documents. There are several itemized charges that add to a monthly total payment which should be considered; Reliance First Capital brings you a few examples of what they are.

Principal: Don’t suffer sticker shock when you see that you’ve only paid off a tiny fraction of your loan after a year of monthly payments. When you take out a fixed-interest loan for a specified term, your basic monthly payment will stay the same for the life of the loan. However, that payment includes both the amount going to the loan total (or principal) and the interest. At the beginning of the loan the majority of the payment will be going to interest. As time goes on and the principal gets paid down, more of the payment will go toward principal.

Interest: Your basic loan payment will always include both principal and interest, but interest is applied in different ways. The most common loan structures offer either fixed or adjustable interest rates:

Taxes: You will also pay property taxes (for city, county, state, and school district) in monthly increments through your mortgage payments. A part of each month’s payment goes into an escrow account held by the lender, which then pays the taxes when they become due.

It’s critical to understand all of the elements of your total payment before closing on your house. At Reliance First Capital, we take special care to help our customers determine which loan is right for them, and help them decide how much debt burden they can and should take on based on their real monthly payment.

Reliance First Capital can find the loan option to meet your unique lifestyle and financial goals. Learn more about Reliance First Capital by contacting us at 866-735-9004 or visiting us online at www.reliancefirstcapital.com.

Quick Stat

Freddie Mac reports that 84% of homeowners who refinanced their first-lien home mortgage either kept the same loan amount or decreased their principal balance by paying additional money at closing. 46% of these borrowers maintained about the same loan amount, while 39% reduced their principal balance in the latest period.

To learn more about which loan programs you may qualify for, contact your Reliance First Capital mortgage analyst today. Reliance First Capital can find the loan option to meet your unique lifestyle and financial goals. Learn more about Reliance First Capital by contacting us at 866-735-9004 or visiting us online at www.reliancefirstcapital.com.

Source: http://blogs.wsj.com

Why Do Lending Institutions Deny Loan Applications?

Spurred by low interest rates, many people continue to refinance their mortgage and/or purchase new homes. But some find out that they don’t qualify for a mortgage after submitting a loan application. What are some of the reasons why a lending institution would deny an application?

Credit score/history: Many of today’s loan programs, whether conventional or government-backed, require a minimum credit score and a satisfactory credit history. While there are programs that allow for credit scores below 620, consumers must realized that those programs will have more restrictions. For consumers who are facing credit issues, Reliance First Capital offers a free Credit Coach service which can provide insights and recommendations on how to correct and/or improve your credit score. If you're interested in knowing more about the Credit Coach program, ask your Reliance First Capital mortgage analyst for more details.

Appraised value: Lenders, as well as homeowners, are at the mercy of the appraised value of a home for any loan program that requires an appraisal (which is most loan programs). The appraised value is used to determine the Loan-to-Value (LTV) ratio (loan amount / appraised value) which is a key determinant for qualifying for a mortgage.

Income: Lenders, the government, and all involved in the mortgage process want to make sure that a homeowner has the means to consistently pay their mortgage. Thus an applicant’s income is highly scrutinized to ensure this fact. While lenders can take into account issues like seasonality of pay, sources of income, etc., a loan will be denied if it is determined that not enough income is available/provable to meet the proposed monthly mortgage payment.

To learn more about which loan programs you may qualify for, contact your Reliance First Capital mortgage analyst today. Reliance First Capital can find the loan option to meet your unique lifestyle and financial goals. Learn more about Reliance First Capital by contacting us at 866-735-9004 or visiting us online at www.reliancefirstcapital.com.

Spring Cleaning for the Office and Your Brain

Is your home office too cluttered? If so, your business and your sanity could be suffering. Reliance First Capital understands that your living space is a reflection of what is going on inside your mind. Likewise, your home office space reflects what is going on in your business and household affairs. If your office is cluttered with inconsequential junk, chances are your business may be a little disorganized as well.

How to get started

The art of clearing is the practice of discarding what no longer works for you to make room for what matters. 

• Give to get: You no longer use that 35mm camera or flip phone — it’s time to donate unused items to a thrift store or worthy cause. They get something useful and you reduce your clutter. 

• Digitize it: Don’t print every receipt or email or keep every magazine. Create organized files on your computer and scan or download important documents. Use a cloud service to keep it backed up.

• Five-minute mail smackdown: When you bring in the mail, focus on dealing with each item immediately. If you can handle the required action in under five minutes, take care of it right away. Otherwise, file it, trash it, or tuck it in your to-do folder. The same rule applies to emails.

So get organized - not only will you become more efficient, but your brain and your business will thank you!

 

Reliance First Capital specializes in helping customers reach their individual needs with the best loan options. Reliance First Capital can find the loan option to meet your unique lifestyle and financial goals. Learn more by contacting Reliance First Capital today at 866-735-9004 or visit us online at www.reliancefirstcapital.com.

What Are Mortgage Points?

Here at Reliance First Capital, we often get questions on mortgage discount points and how they can affect your loan and your finances. If you’re looking for a home loan, these are important questions and the answers will make a difference in the way you approach your loan planning.

A mortgage point is a fee based one percent of the total amount of your loan. So for a $100,000 loan, one point would be $1,000. 

There are two kinds of points: origination points and discount points. Origination points are typically charged for the origination of the loan. Discount points give borrowers some flexibility in determining the interest rate they will pay for the loan; they are essentially pre-paid interest. Borrowers can typically pay between one and four discount points, and each point purchased can help lower the interest rate.

On a purchase mortgage (vs. a refinance), discount points may be paid by either the buyer or the seller or split between the parties. 

Deciding to pay for discount points may offer several benefits: 

• Mortgage discount points may be tax deductible* 

• A lower interest rate will lower your monthly payment

How does this information help you decide whether or not to buy points? You will want to take into account how long you plan on staying in your home as this will help determine the amount of savings you will realize. To get a reliable evaluation of the benefit you may get from purchasing discount points, be sure to talk to Reliance First Capital today. 

Reliance First Capital specializes in helping customers reach their individual needs with the best loan options. Reliance First Capital can find the loan option to meet your unique lifestyle and financial goals. Learn more by contacting Reliance First Capital today at 866-735-9004 or visit us online at www.reliancefirstcapital.com.

*You should consult with a tax adviser for further information regarding the deductibility of discount points.

Shouldn't I Use My Local Bank for a Mortgage?

Local banks are great for checking accounts, savings accounts, safe deposit boxes, and other services. But they may be very limited in the mortgage programs they can provide.  Reliance First Capital is a direct lender specializing in home mortgages.  We have the flexibility and access to offer many different loan programs which we can customize to match your financial goals.

In addition, a local bank may have stricter lending guidelines which means they might fit you into a standardized plan rather than tailoring a plan to meet your unique needs. Reliance First Capital's Mortgage Analysts take the time to speak with you and identify your specific needs and then customize a loan program to help you achieve your goals.

In the end, whether you use a local institution or a direct lender like Reliance First Capital, we always suggest you choose a mortgage analyst who makes you feel comfortable, provides you with useful information and options, will work around your schedule, and has access to as many programs as possible to help you achieve your financial goals.

Learn more by contacting us at 866-735-9004 or visiting us online at www.reliancefirstcapital.com

Reliance First Capital’s experts can answer your home finance questions and find options that will help you meet your goals.