Maybe the answer to this question is that it is one more thing to cram into an already busy life.  Like getting a will done, it is not exactly something many people don’t feel like dealing with. As a result, like the junk drawer or the crowded garage, most people tend to turn a blind eye until it becomes a total mess.  At that point, the issues become stressful and only then do we seek assistance. Avoidance does not cure anything!

Rather than letting something find you once it becomes a problem, why not get a financial health checkup as well.  Just like a haircut, a physical, or a dental checkup, consulting your financial advisor, mortgage banker, and CPA regarding ways you may be able to improve your life should be an annual habit at the very least! By getting in on the lower interest rate, the better investment return, or even finding tax write-offs you did not know about, you must ask your trusted professional.  Your financial health plays a role in your physical health, so it just might help in other indirect ways!

Many financial ‘check-ups’ are free. By getting a free consult, you give yourself the opportunity to not only maximize your current financial situation, but you can prepare for the future as well. 

Don’t delay, call your financial advisors, and stay proactive! Call us at ENG at 724-776-4100  to optimize your mortgage and find out if there are ways you could be saving money before your next mortgage payment is due!

     As consumers, being conscious of the rate of interest we pay on things is necessary to being financially responsible.  After all, why we would we pay more on something than we have to?  There are several factors which determine a customer’s qualification for interest rates. Credit, provable income, assets, and equity in a home are all factors that many consumers are aware of.

     However, the confusing part for most people (even in the lending industry), is who sets the market for the interest rates and what makes the current rates what they are?

    While mortgage lenders control who gets approved for a loan, the actual interest rates are largely determined on what is called the secondary market where mortgages are bought and sold. Similar to how stocks are bought and sold, mortgages are traded actively as well.

     Fannie Mae and Freddie Mac, two large and influential mortgage investors, were founded by the government decades ago to help bring efficiency to the lending process. They and other mortgage investors buy loans that lenders make and either hold them in portfolio or bundle them with other loans into “mortgage-backed securities.” These are sold to Wall Street, mutual funds and other financial investors, which trade them much the same as Treasury securities and bonds.

    These financial investors in the secondary market, not mortgage lenders, are the ones who collectively determine the general trends of mortgage interest rates.

    As with the stock market, interest rates in the secondary market tend to move up and down. In general, when the economy is on an upswing, investors demand higher yields, forcing lenders to raise mortgage rates. In a market downturn, rates tend to drop for consumers because of increased investor demand.

    Mortgage rates are complicated, but hopefully this article helps shed some light on how rates are set. Call us at 1-877-229-6901 with any questions you may have.

The HARP program is designed to help existing homeowners get competitive lower rate financing in a market when some home values have declined.  The government entities (Fannie Mae and Freddie Mac) want customers to stay in their homes and by expanding the lower rate offers to more homeowner’s including those with little and sometimes, no equity.  Typical conventional credit and income requirements do apply, but below are some features this program has to offer:

• These refinances are for limited cash out loans ($250 and below) and are to pay off existing first lien mortgages.
• Typically used to refinance Fannie Mae and Freddie Mac loans, the HARP program does include refinances of many other loan types if approval is granted.
• 640 credit scores and typical conventional debt ratios apply
• Appraisal can be waived in lieu of a $75 property fieldwork waiver or other lower cost valuation production (thus helping those with little or no equity) in many situations, varies by customer
• New Mortgage Insurance coverage not required if current conventional loan does not require MI.  * Check if simul 2^nd done at same time can be refinanced by paying MI
• No seasoning required – does not matter when you bought the home!

Many clients who were ineligible to refinance and take advantage of the lower rates are now able to do exactly that!  a HARP loan the mortgage solution for you? It is a very popular and helpful product for some of the following situations:

1.      Areas of declining market value with less equity

2.      A divorce or death where a name needs added or removed

3.      Customers looking to avoid cost of a full appraisal

4.      Customers who are worried about MI being added to their loan upon refinancing due to the home value being less than purchase price

Do any of these situations apply to you?  Let us know by visiting us at www.engmortgage.com or by calling us at 724-776-4100.  We want to hear from you!

      A typical minimum credit score for FHA, VA, and USDA loan products is 640.  With a conventional product, a score of 680 is preferred.  640 is acceptable, but usually will carry an increased rate.  The scores are very important to remember as it is a matter of being approved or declined.  As a result, not only making payments on time, but not charging a high percentage of the balance on credit cards, and making sure not to have too many inquiries on the credit report are all important factors.   In fact, it can make a difference of thousands of dollars when it comes time to buy or refinance a home, buy a car, or get approved for credit. 

       Knowing your score and credit history is very important, so make a habit of monitoring your credit and make it work for you.  If you have any questions about credit qualifying, please do not hesitate to contact us.  So keep your eyes on that prize and stay focused on keeping that credit score as high as possible!

      For more information on credit reports, and to get a free annual credit report, go to www.annualcreditreport.com.

Start with recommendations from family and friends.  Ask what they liked about them.  What they didn’t like.  And then take it one step further— spend about 30-45 minutes and ask them these questions!

1. How long have you been selling residential real estate? 
2. Is it your full time job?
3. What are your credentials?
4. What other type of real estate training courses have you had?
5. How many homes did you sell last year?
6. How many buyers did you represent?
7. What’s the average time to sell a home? (if listing your home for sale)
8. How do you plan to market my home for sale?
9. What’s the average time it took you to sell your listings?

10.  What’s the average time you spend with someone buying a home (if buying)?

11.  How close to the asking price, versus the sales price, are you able to negotiate (both for buyers and sellers)?

12.  What other service providers do you work with? 

13.  How will you communicate with me? 

14.  How often should I expect to hear from you?

Just a couple of things to keep in mind! Experience is not a guarantee that the person is successful.  Ask additional questions if you don’t understand the answers.  Ask for references.  Make the telephone calls.   And before you buy or sell your home, by all means get pre-approved ahead of time. Call us today to get pre-approved. We would also be happy to recommend a successful Real Estate agent to you as well!

            When purchasing a new home, an eligible U.S. military member or Veteran gets two distinct advantages off the bat.  First, the veteran can get financing with a 0% down payment! In addition, other closing costs, prepaid items, and legal fees can be paid by using a gift or getting assist from the seller**

In regards to interest rates, many times ‘government’ loans offer lower interest rates that your standard conventional loan.

            Also, the veteran is exempt from paying monthly mortgage insurance on the loan as well!  (Most home purchases require monthly insurance to be paid if the down payment is less than 20%.)  Please note: there is a one-time VA Funding Fee that is charged up-front, that can be financed. In addition to these tremendous home purchase opportunities, the VA offers refinance options as well up to 100% (no cash out) or 90% cash out.  There is no monthly insurance required on these products as well.

            In essence, the VA helps provide our country’s servicemen and servicewomen with some additional benefits to get into their own homes.  If you or your family member is a veteran, it almost certainly is worth it for them to utilize their VA eligibility.

            If you have questions or comments about VA home loans, feel free to contact us at 724-776-4100. There is more useful VA loan information on the “Loan Options” tab on this website.

**-Also, if you have any questions about seller assist (VA loan or other home loan), do not hesitate to contact us about learning about this process at the web address above.

Think about a pie.  It’s usually cut into 6 or 8 equal pieces, right?  Each person’s credit score is divided up like pieces of pie, but the difference is that the pieces are NOT equal.

Credit Score determination are generally broken down in the following percentages:

1. Payment History – 35%

Recent (how recently did the later payment happen), Frequency and Severity. 0-6 month is the most severe; 7-24 month not as sever; over 24 month less severe

1. Balance – 30%

High Balances on revolving credit is more severe than on installment account.  Credit reporting agencies look at cumulative totals.  Limits charged up over 75% of the available credit are More Severe. Therefore, it is not always better to go close out account with no balance on them.  Spread out balance if possible – small balances on multiple credit cards is better than one maxed out credit card.

Home Equity Lines – Not as volatile as credit cards. They are treated as a revolving line unless the amount is greater than $30,000.  When the balance is over $30,000, equity lines are treated as installment debt.

Special Note on American Express:  American Express will report previous month balance if no current balance is show.  Always check American Express reporting because it can be reported as being “Maxed Out”.

1. Credit History – 15%

A Trade line between 3-5 is ideal.  The longer the credit history, the lower the risk.

1. Type of Credit – 10%

The number of trade lines is counted for the present and the past. Special Note:  Finance companies – like furniture and appliances store “buy now and pay later” credit can have one of the most adverse effects on credit.  They are considered higher risk. Having too many finance company accounts can hurt the credit score.

1. Inquiries – 10%

Each inquiry can cost 5-15 points off your credit score.  5-7 inquires per 12 month period should be the limit.  There are limited numbers of inquiry dings per year the credit reporting bureaus will give you. It is not infinite.

• Finance company inquires have the most adverse effect
• Promotional inquires – where companies look at your credit to pre-approve you for credit – does not affect the score unless you accept the offer.
• Multiple-Mortgage related inquires – if done in the 14 day period will not have an adverse effect.

Public Records:  Bankruptcy and any public records can put you in a different risk group.

Bankruptcy:  The credit bureaus look at recently and percentage of trade lines included in bankruptcy. What has the performance been since the bankruptcy? Any lates can be looked at as a risk for repeat of the pattern.

Collections:  It is not necessarily good to pay off collections before applying for a home loan.  Paid or unpaid is still a negative. Paying shows a recently and could lower the score instead of improving it.  The best option is to get a letter from the collection agency (not the original creditor) explaining that it was reported in error. 

Instead of filing Bankruptcy, some consumer goes through a Consumer Credit Counseling Service or Debt Reduction Service to reduce the outstanding balance and debt on each account and then combine it all into one monthly payment.  The conforming mortgage lenders often consider this just like they would a Chapter 13 Bankruptcy.  So be careful!

Divorce Settlements: They don’t automatically show up to the credit report. Consumers will still appear to owe that debt even if it was assigned by a judge to the other spouse. Consumers do have the rights now to provide a letter of explanation to the bureaus.

For additional information on credit and whether your credit will qualify you for a home loan, please call us at 724-776-4100

     The first situation where this loan type is available is to our country’s brave veterans.  The VA (Veteran’s Administration) allows 0% down for new home purchases on a primary residence.  If you are a veteran and have your full eligibility, you can do zero down! ENG is committed to helping Veterans and has an experienced staff to handle these types of government loans.

    The second scenario is on USDA (rural) loans.  In this scenario, the property must be eligible for USDA financing. We can figure out if a property is eligible for USDA 100% financing up-front. It is intended more ‘rural’ areas, but many suburban areas in Western PA do qualify…you might be surprised! This type of loan is not designed for someone in a high income-bracket, but works for many families who qualify for the income restriction. It is always best to talk to an ENG professional before considering this type of loan, as there are a few guidelines that determine if it is a fit or not.

     The other nice thing about both of these loan products is that neither requires monthly mortgage insurance (called MI or PMI)!  This also makes the loan more affordable.  If you are a Veteran or have an interest in a USDA eligible property, feel free to contact us at (724) 776-4100 and we would be happy to help.

    The answer to the question is that 0% down financing is available, so it is indeed a FACT!

By comparison, a first time homebuyer put 3.5% down on an FHA loan with a 5% interest rate.  This $100,000 home had taxes on the property of $2500 and required a homeowner’s policy of $500.  After tax and insurance escrow and mortgage insurance are added back into the payment, this new homeowner’s payment is $866 per month. This person OWNS something and is building equity for the future.

“The Numbers” favor the homeowner! As in the example above, many times renters are paying the same or more than homeowners.

The “American Dream” is based on the idea of owning your own piece of property, not renting one from someone else. Even in a down economy, this still holds true.

If you are thinking of renting, you should think twice, or maybe even three times! Do you know of any examples of anyone who is paying too much for rent?  We encourage your feedback…info@www.engmortgage.com.

• VA mortgages offer 0% down programs to eligible veterans
• FHA mortgages require only 3.5% down
• USDA loans (where applicable) offer 0% down products
• Seller concessions from 3-6% of the purchase price can help to pay closing costs
• With the right qualifications, Conventional loans can offer as little as 5% down  

These are just a few products we can provide our customers who are anxiously awaiting the time to buy their new home.  It may not be as ‘premature’ as many may think. The American Dream is still alive!

We encourage you to tell us about your homebuying goals and what you want to achieve at www.engmortgage.com!  A great way to find out if you have enough money saved to buy a new home is to call us at 724-776-4100 for a free analysis and pre-approval today!