What You Should Know Before Refinancing Your Mortgage

Refinancing a mortgage is a process in which you get a new loan to pay off a previous one. This is available to borrowers who want to close their variable loans and open a new loan with fixed interest rates. This is a great option for new home buyers as well as for those who are experienced in home buying. A refinanced loan is a better alternative to individuals with good credit history.

To know more about your eligibility in approaching the refinancing of your mortgage, you should consult with an experienced Mortgage Broker Southampton PA has. A seasoned mortgage broker will help you to collect useful information before settling on refinancing. Because refinancing is for reducing loan interest rates, a lack of information regarding the process may lead to unnecessary expenditure or even result in loss.

Below are a few basic facts that can help get you started with your research on refinancing. 

What is considered refinancing?

Refinancing is the process in which you obtain a new mortgage whilst still paying back the previous mortgage. This is done to reduce monthly payments, lower interest rates, allow you to take cash-out and can help you change mortgage companies if need be.

The Advantages following Refinancing

• Reduced interest rates: The major benefit of refinancing is reduced interest rates. When people work for a long period of time, they gain the financial stability to pay their bills promptly. This helps to boost your credit score. With an increased credit score, many are eligible to borrow loans with reduced interest rates. This is one of the main reasons why more and more people opt to refinance their mortgages. While you can get a loan at a low-interest rate, refinancing saves you hundreds of dollars each month, which will eventually reflect in your savings.

• The ability to take cash out for large purchases: The next major reason behind refinancing mortgages is to have the ability to take out cash for a large purchase. For example, when a person wants to buy a car or to pay their pilling credit card debt, then they can take equity out of their home. This equity allows them to make a large purchase.

There are also different types of financing based on your situation and needs. You may not know much information regarding the type of refinancing mortgages that are best suitable for you. Trust the experts at Latitude Financial to discuss your case and pick the option that would be best suited for you. A Bucks County Mortgage Broker will be the best person to guide you to make the right decision when it comes to refinancing your mortgage.

Types of refinancing

There are two main types of refinancing mortgage options available:

1.   Cash-out refinance mortgage

2.   Rate and term refinancing mortgage

● Cash-out refinances mortgage: With this type of financing, you are able to take money out of the equity of your home. When you find that your home equity has built up to a great amount, you can use it for huge expenses, such as: to pay medical bills, pay education fees for children, or even pay heavy credit card debt. You can also pay for major home improvement projects such as repairing the roof of your house, renovating the interiors of your house, etc. If these capabilities are something you’re looking for, you can opt for cash-out refinance mortgages.

● Rate and term refinance mortgage: With this refinancing model, you can shift to a loan that offers lower interest rates. You can also choose a loan program where you have to pay fixed rates, which can offer you stability.

If you want to pay off your loan early, you can opt for higher monthly payment loans, which will lower your rate of interest, and you can repay the loan early. On the other hand, if you want to shift to low monthly repayment rates, then you’ll want to look for a loan that offers an extended period for repayment with less of a monthly payment.

When is the best time for refinancing my mortgage?

Most banks and lenders want the borrower to continue with their previous loan for at least 12 months from the time of sanction. But variation with the rules is possible with a reliable mortgage broker. Search for “Mortgage Broker Near Me” and get in touch with Latitude Financial’s experienced mortgage brokers who can help you navigate through rules, secure processing, and find discounts offered by lenders.

Settling on refinancing

Refinancing your mortgage is a crucial decision that requires in-depth knowledge. The process may intimidate first time home buyers, as some parts really require the experience of an expert.

To get the best suggestions on refinancing, it is always good to consult the experts. Latitude Financial can arrange a free-of-cost consultation with their top mortgage brokers who can suggest the best possible options for you.

Latitude Financial

550 State Road, Suite 103, Bensalem, PA 19020

215-600-1810

https://latitudemortgage.com/

2020 Updated Details On USDA Loan Eligibility, Income Limits, And Mortgage Rates

The United States Department of Agriculture (USDA) has intended to grant loans to new homeowners who are considered low-income and are interested in living in a rural area. Previously known as farm loans, USDA-approved loans promote rural living outside of the metropolitan city of Philadelphia. Consequently, these loans are only available in certain areas of Pennsylvania.

USDA eligibility

The eligibility criteria for the USDA are based on a combination of factors, such as geographical location, household size, income per family, income credit score, etc.
Let us examine the eligibility criteria in detail:

● Monthly housing costs should be proportionate to gross monthly income at a 29% ratio.

● A minimum credit score of 640 is required to be qualified for the USDA Mortgage Philadelphia offers. Proof of a monthly income is required in order to prove the financial aptitude of the homeowner, as it shows that they are able to fulfill monthly housing expenses and other debts.

● Household income of the family can only be up to 115% of the median income of the area.

● The property must be in a rural area as marked by the authorities of the USDA.

Low rates and No Down Payment

The USDA loan is a special initiative to encourage new home buyers to buy a house in rural areas. Since USDA loans are guaranteed against loss by the US Department of Agriculture, they are a great option that comes with little risk.

Popularity for USDA approved loans has increased because of low-interest rates, especially in comparison to conventional mortgage loans. There are also many other factors that contribute to the popularity of the USDA home loan, such as:

● The low amount of risk

● The fact that they are easily attainable from USDA approved lenders

● The USDA having lower mortgage rates than FHA loans, VA loans, and other types of loans

● A reduced mortgage insurance premium of 0.35% annually

● Its availability for first time home buyers and repeated home buyers alike

● A fast closing date, usually within 45 days

USDA Insurance

As the USDA loan is framed to help low-income groups own houses, it offers affordable insurance rates, which are much lower than other mortgage loan insurances. The requirement of the USDA loan insurance are as follows:

● The borrower needs to pay an upfront fee of 1.00% of the loan size at the time of closing.

● The borrower needs to pay 0.35% of the remaining principal each year as an insurance premium.

However, it is possible to pay less than 1.00% of the upfront fee at closing. The buyer can add the upfront fee amount to his/her loan amount to lower the burden of paying a large upfront down payment. For example, if a person is granted a USDA loan amount of $100,000, and does not want to pay an upfront fee:

The buyer’s upfront mortgage insurance cost will be $1,000, and in addition to that, a sum of $29.17 will be added in addition to their monthly mortgage insurance premium.

Because of these capabilities, the USDA loan has gained popularity among rural home buyers with limited financial capabilities.

USDA Borrower’s Income Requirement

The USDA loan has been made easy for borrowers. Because of such low investment risks, the USDA approved lenders are reluctant to accept many loans under this program. Therefore, lots of paperwork and criteria are required to get USDA home loans.

There are also several strict rules when it comes to the income of the borrower. Experienced Philadelphia Mortgage Brokers can help you with the application and approval process. They can take care of all the required paperwork and tell you many valuable details about any particular type of loan along the way.

As the USDA loan is framed to help the low-income group to get homeownership in the rural and sub-urban areas, requirements limit things like the number of members in a family, the place where the property is, etc. The required loan amount also changes depending on the area and also fluctuates with the number of home members and their annual income.

● For 1-4 members the annual income limit is $86,650.

● For 5-8 members the yearly income limit is $114,650.

However, the income cap per household changes with the addition of a new house, and again, with the location. So, for example, in 2019, in California, the USDA income limit for 1-4 members’ family is currently $212,550, and that for 5-8 members in a family is $280,550, respectively.

Contact a Mortgage Broker

There are still many important details and an abundance of knowledge about USDA home loans that would be helpful to know. There are factors such as the place of the property, the total annual income of the family, and more. Get in contact with an experienced Levittown PA Mortgage Broker at Latitude Financial to discuss your home buying needs in detail. They will help you to buy loans at the best possible rates and will also help you with paperwork and other groundwork related to home loan approval.

Latitude Financial

550 State Road, Suite 103, Bensalem, PA 19020

215-600-1810

https://latitudemortgage.com/

What Is An FHA Loan? How it is different from Other Types of Loans

Federal Housing Administration (FHA) loans are also known as FHA insured loans. FHA insured loans are a type of federal assistance that allows lower-income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford.

One of the unique features of an FHA Philadelphia loan is that it requires a lower credit score and lower down payment compared to other loans.

What Makes An FHA Loan Different?

• FHA loans are specially designed for low to medium-income earners.
• FHA loans require lower to moderate credit scores without much financial backup.
• FHA loans require a minimum of 3.5℅ down payment.
• There is a limit to the amount an FHA loans Bensalem PA business can offer you.

What Are The Requirements of An FHA loan?

The FHA insures single and multi-family housing loans in the USA. Searching online for“how to get FHA Loans Near Me” or “what are the prerequisites for an FHA loan approval” is a great first step. Here is a list of the requirements one needs to know to get approved:

• FICO® score at least 580 = 3.5% down payment.

• FICO® score between 500 and 579 = 10% down payment.

• MIP (Mortgage Insurance Premium) is required.

• Debt-to-Income Ratio < 43%.

• The home must be the borrower's primary residence.

• The borrower must have steady income and proof of employment.

Apart from these, there are specific special provisions of an FHA loan that must be addressed. These include:

• The FHA Approved bank will evaluate your qualifications for FHA loans.

• The bank will also look at your work history for the past two years as well as payments like rent and bills.

• Bankruptcy does not disqualify a borrower from getting an FHA-insured mortgage, as long as the borrower has re-established good credit.

• The lower your down payment and credit score are, the higher the interest rates will be.

• The Lender must be FHA approved, and there must be a steady income history.

• He/she must be a legal resident of the USA and must be of legal age to undergo paperwork.

• In a normal conventional loan process, the buyer needs to address out-of-pocket expenses and payments. However, with FHA loans some of these expenses are covered by the Lender on your behalf.

FHA loans are quite beneficial for anyone with low to medium income looking to buy their  dreamhouse. Contact Latitude Financial and get an FHA loan without any hassle. The process is quick and easy