Entries by The Staples Team

The Perks of Buying a Home with Low Or No Down Payment

The decision to buy a house in St. George may be exciting to make, but the process of buying a home could become overwhelming. One of the considerations when buying your first house relate to financing the plan. The first time or repeat homebuyers have two options. Either buy a home for cash or take a home buying mortgage. We are interested in the second option of purchasing a house through a mortgage facility.

Therefore, mortgage borrowers can choose the low to no down payment mortgage or take the conventional loan that requires a 20% down payment.  So, what are the perks that come with the no to low down payment home mortgage? This article examines the advantages of choosing a low to no down payment mortgage when buying a house st. George.

1. Become a Homeowner Sooner

Raising a 20% mortgage down payment could require months, if not years of saving. The low to no down payment mortgages could help you to fast track the homeownership dream. Therefore, an option like the 3.5% on FHA home loan could require a few or a single paycheck to clear. This allows you to become a homeowner sooner than you expected.

2. Have more Cash To Pay Property Maintenance

Home mortgage down payments have left a majority of new homeowners house rich but cash poor. Therefore, options that allow you to spend less on your home mortgage will mean you have more money in your pocket. This amount could be used to fund property maintenance or even buying new home furniture.

3. Qualify for First time Home Buyer Program

Many home lenders offer lower down payment options for people purchasing their first home. For instance, the VA home loan allows qualifying members to own a home at 0% down payment.

4. You Qualify for a Mortgage with Low Credit Score

Compared to conventional home loans, some low to no down payment home mortgages allow you to qualify for a home mortgage even with a lower credit score. Therefore, this helps you to fast track the homeownership ambitions. For instance, FHA home loan accepts mortgage borrowers’ applications with a credit score of as low as 580, with a down payment of 10%. The VA home loan accepts applications with a low credit score and sets no down payment requirements for the borrower to qualify for a loan. 

Now that we have looked at some of the rewards that come with a low to no down payment home mortgage let us examine the borrowers’ options.

1.  The FHA Home Loan —Low Down Payment Home Loan  (3.5% down)

One of the low down payment home mortgages is the Federal Housing Administration home loan. The FHA home loan allows first-time homebuyers a chance to afford a home with as low as a 3.5% down payment.

The FHA home loan is available through appointed mortgage lenders to help more Americans buy a home. Besides the low down payment requirement, the FHA home loan offers friendly mortgage terms. For instance, the mortgage allows borrowers with a credit score of at least 580 to borrow a mortgage so long as they can pay a 3.5% down payment. Alternatively, where the credit score is below 580 but above 500, the borrowers can still get a loan with a down payment of 10%.

2.  The HomeReady™ Mortgage – Low Down Payment Mortgage (3% down)

The HomeReady™ Mortgage is a unique home mortgage requiring a low down payment. Backed by Fannie Mae and available from various lenders, how down payment mortgage offers below-market mortgage rates and reduced mortgage insurance costs. Therefore, the HomeReady™ mortgage allows qualifying borrowers an opportunity to own a home.

3.  The VA Home Loan — No Down Payment (0% Down payment)

The VA home loan is an excellent example of mortgage loans providing up to 100% financing. The US Department of Veteran Affairs guarantees the home mortgage, and it is available to active service members or the surviving spouses. Like the FHA home loan, the VA home loan was established to improve home affordability in the US.

Conclusion

Therefore, we have looked at the popular low to no down payment home mortgages available in ST. George. When applying for the low and no down payment home mortgage, verify whether your preferred mortgage lenders offer the particular option you are interested in. borrowing.

10 Hacks To Improving Your Credit Score While Buying A House In Utah

Do you intend to buy a home in Utah? Maybe you may be considering a home mortgage. If so, mortgage lenders will look at your credit score to determine suitability for a home mortgage.  Buying a house with bad credit could limit your options. Therefore, if you have bad credit, work on credit repair to qualify for the home buying credit.

Are you looking for effective credit repair options? This post outlines different hacks to help you repair your credit score. Therefore, by practicing the tips explained here, your credit score will be on the upswing, enabling you to buy a house in Utah.

1. Keep An Eye On Credit Score Reports and Dispute Errors Immediately.

A bad credit score could be because of an erroneous entry by the mortgage lenders or the credit bureau. Therefore, you should raise a dispute immediately. The only way to identify such incorrect entries that cause lousy credit scores is by checking about your credit report regularly. Luckily,  credit reports can be generated online. Alternatively, you can call the credit bureau or send an email requesting your credit report.

2. Doubling the Bill Repayments

Another fundamental approach for ensuring credit score repair is to pay twice the amount due to outstanding debts. Doubling the bill repayments protects you in case of a rainy day, and you cannot keep up with the repayments. Bear in mind that defaulted mortgage repayments will accrue interest making your ability to repay the mortgage much difficulty. Therefore, to keep off debts, you should consider doubling the amounts paid monthly.

3. Embrace low Credit Utilization

Now that you are planning to buy a house in Utah, ensuring low credit utilization can be the right approach to keeping your credit on the upswing. In that regard, avoid taking additional credit cards and repay the existing balances on time. Eventually, you will have a low debt-to-income ratio, which improves your ability to qualify for house buying mortgages.

4. Keep Existing Credit Accounts Open

Even if you have stopped using individual credit accounts, it is wise you do not close such accounts. Keeping old credit cards open but low on credit helps improve the overall credit score.

5. Work on Reducing the Current Debts and Utility Bills

While this may sound obvious, some people are oblivious of the advantages of reducing credit when qualifying for a mortgage. Apart from improving the credit score, the debt-to-income ratio improves positively when your current debts and utility bills are lower.

6. Pay Off Student Loans

Missing student loan repayments negatively impacts your credit score. Therefore, if your student loan is in arrears, the chances are that it is the leading cause of a low credit score. Bear in mind that a delinquent student loan from your 20s will hurt your credit score for many years, preventing While this may sound obvious, some people are oblivious of the advantages of reducing credit when qualifying for a mortgage. Apart from improving the credit score, the debt-to-income ratio improves positively when your current debts and utility bills are lower.

you from achieving the homeownership dream.

7. Ask for Credit Limit Increase

Call your credit card company and ask them to consider a credit limit. Note that if you have a high credit limit but maintain a low credit utilization, there will be a positive impact on your overall credit score.

8. Set Targets

Setting credit score targets and working towards achieving the goal would be the best approach to improving the credit score. The plan on attaining the credit score within the set timelines will include strategies for repaying existing loans. Besides, you will stay focused on minimizing the credit utilization.

9. Downgrading Costly Credit Cards

If you do not want to keep paying a monthly fee on that flashy credit card, downgrading it helps in credit score repair. However, we mentioned that old accounts should not be closed. Instead, call the credit card company and request a swap to a similar and more affordable or to-fee credit card version. However, this could mean giving up on some benefits, but eventually, it pays off in the form of keeping the credit score afloat.

10. Take a Credit Builder Loan

Taking a credit builder loan is another strategy for beginners who do not have a credit score. Ideally, the credit builder loan diversifies your credit mix and counts as a loan you opened, paid off, and closed. Bear in mind that you may not qualify for a home mortgage if your credit score exists. Therefore, taking a credit builder loan helps much in your home buying journey.

Conclusion

A credit score is an important indicator when it comes to owning a home. Therefore, you ought to make sure that the score is high at all times. Check the credit score regularly and work towards repairing a damaged credit score. By doing so, mortgage lenders will consider your mortgage application and provide you a loan. 

When to Rent and When to Buy!

For a long time, tradition has been that homebuying is a significant achievement in one’s lifetime. However, today people are considering home rentals for a lifetime. So, how do you decide when to buy or to rent?

Whether to rent or buy a home remains an intensely personal decision. Here is an overview of the considerations that help you decide on renting vs. buying.

You Don't Have Enough Savings to Pay a Down Payment

If the only mortgage options available to you require a down payment, you need to set aside some savings to pay the required amounts. It’s never too late to start saving. Until you are ready, keep renting for the time being.

Your Credit Score is Low

A low credit score hurts your ability to qualify for a mortgage. However, not all mortgage loans require a good credit score. Your credit score and credit report have a significant impact on whether or not you can qualify for a home loan. If your credit score is still low, start working on repairing your credit. Stick with home rentals until you have a credit score high enough to qualify for a home mortgage.

Your Monthly Housing Cost Will Exceed 30% of your Gross Income if you Buy.

According to personal finance experts, your housing costs should not exceed 30% of your current gross income. If homebuying means your total housing cost will be higher than 30% of your income, you might consider renting until you have a higher salary. You can purchase a lower-cost home to make sure the cost doesn’t exceed that 30% mark or continue saving until you can afford to buy.

Buying Makes you Home Rich but Cash Poor

Property ownership comes with some additional responsibilities. For instance, you will be required to pay property maintenance costs, buy furniture, home repairs, utility payments, and other expenses. If you do not have enough cash flow to cover these additional costs, keep renting a home. 

Current Debt to Income Ratio is Above 43%

If you need to finance a home, lenders will calculate your current debt to income ratio. This ratio helps the loan officer determine your suitability for additional debt. A high debt to income ratio hurts your ability to repay the outstanding loans and ensure timely mortgage repayments. Bear in mind that late mortgage repayments will negatively affect your credit score.

You're Planning To Move to a Different City Soon

If you suspect an upcoming transfer at your workplace, this might not be the right time to buy a home. Wait until you’re settled in your new town before buying. If your work involves traveling often, you may postpone buying plans until you decide it is time to settle in a specific city.

 

When Buying a Home is the Ultimate Choice

You are Planning For Retirement

For seniors, renting a home may not be the right decision. You might want to stay away from city life, be closer to family or find a more peaceful location to retire. Buying a home makes the most sense in this scenario. You can buy the home with cash, finance the home, or take a reverse mortgage with your owned property and enjoy a happy retirement life with an income source guarantee.

You Have a Good Credit Score and Enough Savings For a Down Payment

If your credit score is above 640 and you have enough savings for a 20% down payment, take a conventional home loan and buy for a property. There are also loan programs that don’t require a large down payment to qualify. Credit score and ability to pay a down payment or settlement fees are some things to consider before applying for a mortgage.

You Do Not Have Other Debts

If you are keeping your debts low, it means that you can afford a mortgage. Some debt is healthy and helps build your credit score. Make sure to keep your balances on credit cards low and pay them on time each month. Besides, mortgage lenders will look at your debt-to-income ratio to determine your ability to repay the home mortgage.

Your Income is on the Upswing

Are you getting a pay rise soon? Probably you just landed a promotion or your dream job, and your income is increasing soon. Buying a new home could be a perfect way to celebrate your latest achievements.

Conclusion

When considering rent or buying a home, weigh the costs. If buying makes you house rich but cash poor, you are better renting than buying. If you are planning for retirement, buying could mean peace of mind, and you have an opportunity to live on home equity. Make a “pros and cons” list to help you decide whether to purchase a home or keep renting.

Tips To Maximize Your Income With Your Rental Property

Do you own new home rentals? Are you looking for ways to maximize your revenue by renting a home? Home rentals could be a faster approach to repaying an outstanding mortgage balance. Therefore, maximizing income with your rental property helps in a big way. In this article, we look at ways to maximize your revenue with your rental property.

Do some Market Research

One of the worst mistakes when renting a home is pricing the home rentals too low. Ideally, this occurs when the rental property owners think that by pricing the property more down, they will attract tenants and minimize the vacant periods. However, the reality is that pricing below the market price hurts your ability to attract quality tenants.

Researching the rentals market is the best practice before pricing your home rentals. Therefore, make sure that the pricing is at par with the current market pricing. By so doing, you are guaranteed to earn regular rent cycles as you attract the right tenants.

Do as Much Property Maintenance As You Can

One of the reasons Americans choose home rentals over homeownership is to avoid the responsibility of property maintenance. Therefore, to maximize the income generated from tenants, property owners must ensure proper property maintenance.

Property maintenance is not rocket science! It could include repainting old walls, ensuring broken plumbing fixtures are replaced, re-roofing worn roof, and other essential repairs. These go a long way in ensuring tenants’ satisfaction. Therefore, rent increment notice will not be met by notices to vacate. Besides, tenants stay longer, providing a regular income.

Hire a Property Manager

Rental property managers have a better experience on how to handle renters. Besides, experienced property managers have a marketing strategy for the rental homes they manage. In that regard, the rental properties under the management of an agency will have shorter vacancies.

The property management agencies are always on-site to attend to issues raised by the tenants. Therefore, there is a higher customer satisfaction rate. A good property manager has a good understanding of the current rentals market. Consequently, you are confident that your rental property will not be underpriced, leading to lower profit margins. Lastly, rental property managers will work harder to ensure the properties are filled and earn a regular commission for the hard work.

Implement a Pet Fee

Virtually, the majority of tenants have a pet. Adding extra fees to be allowed to live with the pet within your rental properties means an additional revenue stream. This additional fee can be a one-off payment or regular payments per pet. Therefore, if you own a no pets rental apartment, consider allowing pets. Then, come up with a strategy for introducing a pet fee or including the pet in the monthly rent.

Enforce Rental Contracts Using Written Rental Agreement

An excellent rental property agreement protects the interest of the property owner and the tenants’ rights. Besides, tenants feel secure when they have a rental agreement in the form of a document. Therefore, make sure you write a contract, and both parties sign the agreement to mark the beginning of the tenancy contract.

A well-written rental agreement helps the property owner and the tenants to avoid expensive legal battles. It’s great to have this in writing to refer back to the document if there is an issue. When there is a misunderstanding, the record will help the rent tribunal in reaching arbitration. If you have limited knowledge of writing a rental agreement, you could refer to the free templates available online and customize one. An experienced rental management agent can help you in writing the rental agreement.

Ensure Strict Tenants Screening

To ensure you find tenants who are always on time with rent cycles, you need to review the tenants’ screening process. The screening process starts with reviewing the rental application letters. Also, contact the prior property owners to find out if they had any issues with the tenant. Look out for complaints relating to rent payments and the ability to cope with other tenants. Do not allow tenants blacklisted by other property owners. To ensure high-quality tenants, request the rentals applicants to authorize credit background checks. This way, you can avoid blacklisted tenants and accept tenancy applications from tenants who pay rent on time.

Ensure an Easy Rent Payment Process

Tenants appreciate an easy rent-paying process. Therefore, provide different alternatives for the tenants to pay you through. A convenient rent payment approach guarantees you steady rent income, as tenants can pay from anywhere and at any time.

Conclusion

Your rental property should be treated like any other business. Ensure proper management practices so that the tenants keep paying rent on time and the market price. Besides, protect your rental property so that it remains attractive to renters.

Unlock The Secrets To Buying A House In St. George Even With A Low Down Payment

Did the thought of buying a house in St. George, Utah, just cross your mind? First-time home buyers wonder how much down payment they need to save. Did you know there are low and no down payment mortgage options suitable for you? In this post, I unlock the secrets to buy a house in St. George with a low down payment. Keep reading to discover.

No Down Payment Mortgage

As the phrase depicts, no own payment mortgage is a home loan that allows the first time homebuyers and the repeat homebuyers to purchase a property with no money required.  The homebuyer just needs to pay the standard closing costs. Otherwise, the homebuyer gets to enjoy 100% financing from the mortgage lender.

If the idea of zero down payment home mortgages sounds acceptable to you, the VA home loan and the USDA home loan could be considered.

USDA Home Loan

Backed by the United States Department of Agriculture, the USDA home loan offers qualifying buyers 100% financing. Initially, the mortgage was known as the section 502 mortgage, and today it is often called the rural housing loan.

The USDA rural housing loan is available to the buyers looking to purchase properties within the rural regions. However, do not confuse this to mean that it is for the buyers living in rural areas alone. It is available to buyers in suburban areas too. Apart from being a zero own payment mortgage, the USDA home loan is a low-interest mortgage loan.

So, what are the requirements for you to qualify for this zero down payment mortgage? Keep reading to discover:

  • The household’s annual earnings should not exceed the median household income for over 15%.
  • Agree to occupy the property as the primary residence
  • Must be a US national or a qualified alien
  • The property should be within the eligible site.

The VA Home Loan

Second, in our listing of the no down payment home mortgages, we have the VA home loan. Backed by the Veterans Affairs department, the VA home loan is available to the U.S military members and their surviving spouses. Apart from being an affordable home loan, applicants enjoy several benefits. For instance:

  • You are allowed to use the property as intermittent occupancy
  • Bankruptcy and derogatory credit does not disqualify you
  • Does not require a mortgage insurance

Here are some of the requirements to be eligible for the VA home loan:

  • You are an active-duty officer and served 90 continuous days
  • A veteran who meets length-of-service (90 days in wartime and 181 straight days)
  • Surviving spouse of a veteran who died while in service or from a service-connected disability

The VA home loan is a good option for first-time homebuyers with a low credit score and does not have enough savings to afford a high down payment.

Low Down payment Home Mortgages

If you can raise a down payment of any size, you can save through lower interest rates and, generally, better loan terms. Therefore, here are some of the options to consider when it comes to low down payment loans.

The FHA Home Loan

The Federal Housing Administration guarantees the FHA home loan to ensure affordability to the first time home buyers with a low down payment.  With as low as 3.5%, first-time homebuyers can access the credit they need to achieve their homeownership dream. The FHA is also a low credit score loan type with lenient loan terms. Your debt-to-income ratio must be less than 43%. Further, you must prove that you earn a steady income. Most FHA home loans require a monthly mortgage insurance premium. Here is an overview of the requirements to apply and get approved for the FHA home loan.

  • A fico score of at least 580 to make a 3.5 % down payment or FICO score of between 500 to 579 with 10% down-payment
  • Debt to income ratio of less than 43%
  • Provide proof of income
  • Monthly mortgage insurance premium

The FHA home loans will make homeownership easier if you meet the set requirements.

HomeReady by Fannie Mae

The HomeReady loan is a 3% down payment loan. The mortgage type is ideal for middle-income homebuyers, considering borrowers who cannot make to 3.5% down payment to secure the FHA home loan. To qualify for the HomeReady loan by Fannie Mae, you must have a credit score of at least 620. With a credit score of above 680, you get better rates.

Therefore, if you are looking to purchase a home in St. George, Utah but afraid you cannot raise the high down payment, consider the low down payment or the no down payment home loan programs.

The Ultimate Guide To Buying A House With Bad Credit In Utah

Did you know that you could still buy a house in Utah with a low credit score? While credit score is lenders core consideration whether to lend you or not, having a low or bad credit score does not mean that, you will not own your first or second home. In this post, we share important insights guiding you on how to buy a house with bad credit.

1. Home Loan Programs for Borrowers with Low or Bad Credit Score

The federal government has multiple loan options, meant to help Americans afford homeownership. For the borrowers with a bad credit score, there are different home buying programs to consider. Here is an overview into each of the options:

  • The FHA loan for Bad Credit

When you have a low credit score, Federal Housing Administration offers you a chance to redeem your dream of homeownership. The FHA home loans come with a lower standard compared to the conventional home loans. This is because the Federal Government is committed to removing obstacles to homeownership. Therefore, with a credit score below 580, you qualify for a FHA home loan, so long as you can afford a down payment of above 10%.

  • VA Loans For Borrowers with Low Credit Score

If you are a former member of the military or you are an active member or a surviving spouse, you qualify for the VA home loan. Started by the Federal Department of Veteran Affairs, the VA home loan is meant to help qualifying members afford homeownership. Therefore, it is a fantastic starting for first time buyers. Apart from being a friendlier option for borrowers with low or bad credit score, the VA home loan offers a decent interest rate.

  • USDA Home Loan

The United States Department of Agriculture offers affordable home loans. The objective is to encourage homeownership within the qualifying rural areas. The USDA home loan is a zero down payment mortgage option, hence an affordable option for first time homebuyers.

Therefore, if your bad ort low credit score are keeping you from owning a home in Utah, consider the options we have just highlighted. Here are other tips  for borrowers with a poor or low credit score.

2. Check and Correct your Credit Score

Are you planning to buy a house in Utah? The initial step should be checking your current credit score. if you have a poor credit score, you will want to understand why. Check the credit report to determine what would have gone wrong. Apply to have any mistakes on credit report rectified, so that your credit score is good.

3. Choose to Pay a High Interest Rate

You still qualify for home mortgage with a lower credit score, but this could mean paying a higher interests rate. The mortgage lenders raise the interest rate with an intention of recovering their money soon. Thus, if you are willing to pay a high interest rate, the better chances of qualifying for a mortgage with the low credit score.

4. Higher Down Payment

Mortgage lenders will take chances if a borrower with a poor credit score is willing to pay a high down payment. The simple logic is that a large down payment shows the lender that you are willing to take on more risk on your home loan. In addition, the mortgage lender believes that you are less likely to run without paying the remainder. Lastly, it is a show of commitment that you are ready to buy a house in Utah. therefore, if you can come up with a 20% or more on your home purchase, you increase the odds of earning a mortgage approval.

5. Focus on Rebuilding your Credit Score

If your credit score is as bad, you may not qualify for home loans. Therefore, the only option left is work on your credit score. The road to rebuilding your credit score can be a tough one, but with commitments, you can achieve the objective. Here are some options to consider when it comes to improving your credit score.

  • Focus on repaying outstanding debts
  • Setup repayments reminder to ensure you do not miss the deadlines
  • Pay more than once in a billing cycle
  • Contact your creditors and setup a repayments structure
  • Apply for new credit sparingly
  • Consider debt consolidation plan

The points we have highlighted will help you improve the credit score.

6. Buy in cash

Finally, if your credit score is poor and lenders have shown you the door, the only option is to buy the house in cash. While only a few are privileged to afford the cash-buying price, you can save for years and still achieve the dream of owning a house in Utah. Come-up with a savings plan and fast track it to achieve the objective faster.   

Buying a home with a poor credit score may not be a simple process. Talk to a knowledgeable mortgage broker for professional assistance.

Renting Vs. Buying A Home In St. George? Which Is Better For You?

The most crucial factor when debating renting vs. buying is determining affordability. If you cannot afford home buying now, home rental is the immediate alternative. Otherwise, you have to cope with living with your relatives until you are ready to rent or buy a home.

So, should you rent or buy a home? In this post, we put into perspective the two sides of the coin. There are particular considerations to bear in mind, helping you decide whether to buy or rent a home.

Therefore, if you are contemplating renting vs. buying, we hope the insights here will give you a perspective helping you make the critical decision.

1. Monthly Budget

As indicated, affordability is a critical factor when making decisions that involve financial expenditure. For homeownership or renting a home, the first step is deciding the amount you can afford to spend on housing monthly. In that regard, calculate how much you are bringing in as monthly income. Next, deduct the total monthly expenses, including basic requirements like food, water, and transportation.  Do not forget to factor the actual monthly savings too. The remainder is the amount you can spend on housing. Whether renting or buying a home, stick to about 28% to 30% of your gross income. Avoid biting more than you chew because it can put you into financial trouble.

2. Consider the Financial Impact and Predictability

Finance experts recommend running a simple price-to-rent ratio analysis when making decisions such as renting vs. buying. Divide the home price by the annual rent of the comparable unit. In case the ratio is below 20 percent, owning a home is the better bet.

With the home rentals option, you know the monthly rent amounts. However, the property management company may increase the rent when you least expect. Owning a home comes with many upfront bills, which may or may not recur the following month. For instance, a Homeowner may d to replace a broken door in one month, and in the next month, its replacement or repair of a leaky roof. Therefore, when a home is owned, it becomes hard to predict the monthly expenditure.

3. Stability and Flexibility

Owning a home comes with a sense of stability. The homeowner knows that he belongs to a particular community and enjoys the pride of homeownership. Therefore, before buying or building a home, you will want to consider the duration you plan to live within a specific neighborhood. Ideally, the longer you plan to live within the given area, the more financial sense it makes buying a home.

For persons who prefer living in certain areas for a shorter duration, renting makes the financial sense. Thus, it is practical renting a home if you have multiple workstations. This is considering that you will not be able to sell the property within a limited duration and buy another home.

4. Tax Benefits

Home buying offers the investor tax benefits that renter may not enjoy. The homeowners may exclude capital gain they realize from the sale of a home, but up to a limit. The homeowners who itemize tax deductions may reduce the taxable income by deducting the interest paid on the home mortgage. However, the taxpayers who still rent a home may not have a comparable ability to deduct interest paid on household goods. Or the rent paid to property owners.

5. Equity

Home buying comes with the benefit of building equity. Ideally, the property owner can capitalize on home equity over time. For instance, if the property value goes up, the property owner can cash in on the higher value upon home selling. Alternatively, homeowners may borrow a reverse mortgage to fund their retirement. However, the renters are helping the property owners to clear a mortgage and build equity.

Therefore, when comparing renting vs. buying, the goal is to identify the benefits of either of the options. Here is a quick summary indicating the advantages and disadvantages of buying vs. renting.

Buying

Advantages

  • Equity building
  • Allows more stability
  • Accruing tax benefits
  • Homeowners can customize the property to their taste

Disadvantages

  • Risk of losing money in case property value depreciates
  • Requires substantial paperwork which should be done upfront
  • Extra expenses beyond the mortgage payments
  • Rising home prices and a low inventory in many markets
  • Responsible for repairs and remodeling
  • Home Renting

Advantages

  • Comes with fewer upfront costs and paperwork
  • Enjoy more flexibility
  • No responsibility for repairs and maintenance
  • The renter does not need to worry about falling home values

Disadvantages

  • Unpredictable expenses since the landlord may raise the rent or sell property, forcing you to move
  • Limited choices in terms of property customization
  • Renters do not build equity
  • No tax benefits

When evaluating whether to rent or buy a home, take into consideration the points we have highlighted. This gives you a better chance to make the right benefit.

How to get the Most out of Rent Cycles to Save MoneyaHow To Get The Most Out Of Rent Cycles To Save Money

Homeownership certainly comes with its fair share of advantages. However, before you own your first home, the chances are that home rental is the immediate alternative. But how can you transition from renting a home to owning a home?

Planning your rent cycles should be a priority to ensure you are saving enough money to help you achieve the homeownership dream. For many tenants, how to formulate rent cycles to achieve maximum benefits seems challenging.

In this post, I feature crucial tips to help you formulate rent cycles. The information will help you in transitioning from home rentals to homeownership. Keep reading to discover the essential tips

1. Research the Rental Rates

Consider that the global pandemic has disrupted many businesses. As a result, many first time home buyers cannot afford to raise down payment. The only alternative is home rentals, and this has seen the demand for rentals going up. In that regard, you must research the rental rates in your area to know how much you part with monthly.

Determine the state or the city you wish to live and research the average rental amount. Remember to check the rental price for different types of homes. The importance of examining the rental rates is to make sure you are renting within the accessible areas.

2. Know-How Much You Can Afford

The ultimate goal is to transition from home rentals to homeownership. In that regard, you want to make sure that you have some savings to pay down payment and closing costs. Thus, if you spend more on rent that you can afford, you will not meet the objective.

To determine how much you can afford rent cycle payments, select the current total income and the total monthly expenses. Find the difference to see how much you can afford to spend on rent cycles. Be sure to save a percentage to fund your objective of buying your first home.

3. Find An Alternative Source of Income That Can Pay the Rent

We advise home renters not to depend on their primary source of income to pay rent. If you can get a side hustle, use the amount earned from the side job to pay rent. side hustling helps you raise a significant supplemental income that you can use to pay monthly rent. Ultimately, you will be able to afford a new home. Where the side gig’s earnings cannot pay the entire rent amount, you can save the income.

4. Be Sure Your Budget can Support Additional Expenses.

When getting ready to rent a home, know what you are on the hook for. Check if the potential landlord expects you to pay all utilities, which include electricity, gas and water, phone service, TV service, parking, and so much more.

Do not be afraid to ask the average cost of utilities? This helps you to plan your rentals budget. Bear in mind that the average expenditure on utility bills depends on individual consumption. You can save on utility bills by controlling how you turn up the air conditioner, ensuring taps are switched off, and several other approaches. Saving on utility bills goes a long way in helping you afford the down payment and property closing costs.

5. Pay Rent on Time

Falling behind on rent puts you at the risk of being denied credit in the future. Therefore, you should pay rent at or before the due date. A bad credit report affects your acceptability as a tenant in future. Note that property management companies and property owners will check your credit score to determine your suitability. Therefore, be sure to pay rent on time. 

6. Consider other Alternatives to Renting

Other than paying rent, you can ask to live with your relatives as you plan your home ownership journey. Talk to a close relative, and agree whether they can host you for a while as you save money to pay down payment. Alternatively, you can share home rental cost with a college mate. Do not use the money saved on parties and other none essentials. Be sure to save so that you can afford the down payment and the closing costs.

7. Know How Much a New Home Can Cost

We have looked at different alternatives for renters to raise down payment money and the closing costs. It is necessary you research the housing market so that you know how much to save, to afford the down payment and the closing costs. With the cost of homeownership in your mind, the closer you are getting to achieving the objective.

Conclusion

Buying a new home comes with so much excitement. However, we all begin at some point. Are you living in home rentals but aspiring to transition to homeownership? Follow the tips shared above to help you achieve the objective.

How a Low to no Down Payment will Help you in Long Run

Do you feel like you are locked out of homeownership because you cannot raise the 20% down payment? Don’t worry because we offer low down payment options! The low down payment options allow buyers to fast track the homeownership dream. Thus, the buyer does not have to wait for years to accumulate the savings to hit the 20% down payment mark.

So, how does the low to no down payment option help the buyer in the end?

1. The Buyer Puts Less/No Money Down

The 20% down payment requirement has been a significant hindrance to homeownership. This is mainly for first-time homebuyers who are mostly recent college graduates. Requiring fresh graduates who have not even cleared university loans to pay the high down payment makes it harder for them. Thus, they are left with the option of renting a home, as they struggle to raise enough down payments. The rising housing cost makes it harder for such persons ever to attain the 20% mark.

The low to no down payment mortgage option becomes the savior. With no money or as little as 3.5%, first-time homebuyers can begin the journey of homeownership. The government-backed low to no down payment mortgages started with the focus of helping such first-time homebuyers.

2. Helps to Fast Track the Dream of Homeownership

The homeownership dream could end up taking years as the buyer tries to raise the 20% home mortgage down payment. Remember, there are other costs to meet, like the closing cost, the private monthly insurance. Raising enough money to take care of these costs is not as easy for everyone. The low to no down payment option comes in handy, helping the buyers fast-track the dream of owning a home. This is by eliminating the down payment requirement (through the no down payment mortgage option) or reducing the Down payment amount (through the low down payment option). Hence, paying the other costs becomes much more accessible, reducing the time it takes to buy a home.

3. Buyers have More Cash at Hand

Buying a house in St. George Utah comes with some financial responsibilities, in addition to the down payment. A majority of homebuyers are left with little cash at hand upon paying the down payment. In some instances, the buyers are forced to let go of the nice house they had their eyes on. This is because they cannot afford the closing costs. Leave alone the installments on private monthly insurance. The low to no down payment mortgage comes in handy since the money the limited funds available can be distributed to cater for the other expenses. In the end, the homebuyer does not have to worry about being unable to afford the dream home.

4. They Don’t Have Strict Credit Requirements

Some low down payment home mortgages still do not have strict credit requirements. For instance, the FHA home loan accepts applications from borrowers with a credit score of as low as 580 so long as the borrower can pay a 10% down payment. However, note that the overall requirements are dependent on the mortgage lender you choose.

So, which are some of the low to no down payment options?

●       The FHA Home Loan

The Federal Housing Administration-backed home loan is a low down payment option available through approved mortgage lenders. The FHA home loan comes with a 3.5 Down payment requirement so long as the FICO® score is at least 580. For borrowers with a FICO® score of between 500 and 579, the down payment is 10%.

●       USDA Home Loan

Guaranteed by the United States Department of Agriculture, the USDA loan is one of the no down payment options. The borrowers need to ensure the property is within the eligible locations. The FICO credit score for the USDA loan is at least 640. However, the credit score requirement varies by the lender.

●       VA Home Loan

Backed by the United States Department of Veteran Affairs, the VA home loan is a no down payment home loan.

●       HomeReady Mortgage

The HomeReady mortgage is available through many mortgage lenders. It is backed by Fannie Mae and provides mortgage assistance to those with a 3% down payment. The mortgage offers flexible qualification requirements.

Conclusion

The low to no down payment mortgage options enable thousands of new buyers to afford a home. Talk to a mortgage lender near you to discover the low to no mortgage options you can qualify to borrow.

Top 5 Secrets To Buy A House With Bad Credit

You are dreaming of buying a house in Utah, and on your first visit to the bank, you are told you have “bad credit”. This can feel, as if the deck is stacked against you, hence no chances of living the American dream of homeownership. Not all hope is lost yet. You can buy a house with bad credit. Records show that besides high down payment requirements, a credit score is another major hindrance blocking many people from owning a home of their dreams. So, what is the credit score and what does it stand for?

A credit score is a numerical expression that is based on a level analysis of a person’s credit files. The numeric expression takes into account factors like payments history, the total debt load, and how much unused credit one has. The credit score information can be sourced from the credit bureaus.

In this post, we share helpful insights to help the huge chunk of Americans unable to buy a house in Utah because of a low or bad credit score. First, let us look at why a credit score is such an important factor in homeownership.

Why Bad Credit Score is an Issue in Getting a Mortgage

We have seen that the credit score serves to represent the person’s creditworthiness. Thus, borrowers with a good credit score are considered low risk. Remember that the mortgage lenders are in the business to earn good profits. Thus, the mortgage lenders are willing to fund the dream of homeownership so long as the applicant has a high or a good credit score. Those with a bad or poor credit score are likely to be turned away by the mortgage lenders. This is since the person with a poor credit score is considered a high-risk borrower. The mortgage lender does not wish to risk the amount, and so they simply decline the mortgage application from persons with a poor credit score. so, what next for persons with low or poor credit score?

1. Take Advantage of the Low Credit Score Mortgages

The solution to buying a house with a bad or low credit score is applying for the mortgage options requiring a lower credit score. However, note that the applicant has to meet certain requirements. Here are some viable mortgage options when you have a poor or low credit score:

  • FHA loans for Bad Credit: The Federal Housing Administration offers mortgages for borrowers with a credit score below 580 so long as they can raise a high mortgage down payment of 10% or above.
  • VA Home loans: Veterans, active-duty military and their qualifying spouses can afford their dream loan with a low credit score.
  • USDA Home loans: There is no set minimum credit score. Thus, the buyers who meet the requirements set by the United States Department of Agriculture can apply.

As illustrated, each of the above options comes with its own set of requirements. Thus, borrowers are expected to verify whether they qualify.

2. Offer to Pay Larger Mortgage Down Payment

Mortgage lenders are concerned about the risk of losing money if they lend to a borrower with a poor credit score. a viable option that the mortgage broker may advise such borrowers is to offer a higher down payment. A high down payment can be considered as the commitment that the borrower is interested in buying a home. To run with this option, you have to start saving as early as possible, in order to afford the high down payment amount. Further, a down payment of at least 20% gives the borrower a chance to avoid private mortgage insurance, hence lower payments on the mortgage.

3. Buy Property for Cash

Buying the property of your dreams for cash is not out of the realm of possibility. Others have made it work, and you too can achieve the dream. However, this requires patience, and a high level of financial discipline to make the dream work. To that end, work out a savings plan, and get your finances in order, to fast track the dream of owning a home.

4. Improve your Credit Score

The credit score is a major factor when it comes to borrowing to buy a home. There are different approaches to implement in order to improve your credit score. here are some suggestions to bear in mind:

  • Review your credit reports for bad reports
  • Ensure all bills including your rent are settled on time
  • Pay all outstanding debts
  • Consider a debt consolidation plan

Improving the credit score may take longer than you anticipate. Thus, it is recommended that you keep tracking your credit score even when you do not plan to borrow.

5. Try a Partnership

A partnership is another option for buying a home if you have a poor credit score. you may have a poor credit score, but you have a high down payment, while the other party lacks enough down payment but has a really good credit score. a partnership can help you own a home, and eventually get out of the rent cycles.

Key Takeaway

Even with a poor credit score, you can still buy a house in Utah. talk to a mortgage lender near you for options on how to buy a house with a bad credit score.