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Budgeting Down Payment First-time Homebuyer Homebuying Homebuying Tips Mortgages Pre-approval Purchase Self-Employed

How to Get a Mortgage if You’re Self-Employed

You’ve finally put some action behind the go-getter title your friends gave you and started a successful business. Now you’re looking for the perfect place to wind down after putting in the work. But as a self-employed individual, are there extra hoops you’ll need to jump through to buy your new home? Let’s find out. 

Does Being Self-Employed Make it Harder to Get a Mortgage?

The answer depends on what you consider harder. The biggest difference between a self-employed and an otherwise employed person is the documentation a lender may request to increase your chances of approval. 

When applying for a mortgage while self-employed, you need to be realistic about your income and what you can afford, prepared to submit more paperwork, and willing to pay constant attention to detail. 

Understanding Your Unique Self-Employed Situation

When assessing a self-employed borrower, most lenders will want to have a good understanding of the nature and location of your business, your business’ financial viability when it comes to current and future income generation, and your personal income stability.  

Employment Verification

Employment verification is the first step in proving you are successfully self-employed. Documents verifying self-employment status can include written communication from the following:

  • Current (and past) clients indicating services performed
  • A letter from your licensed CPA, or tax preparer
  • A professional organization that can attest to your membership
  • Any state or business license that you hold
  • Evidence of worker compensation and insurance for your business
  • A Doing Business As (DBA) issued at least 2 years prior to your application date.
Income Documentation

You’re much more likely to be approved for a mortgage if you can provide proof of a steady income. You may think you only need a few tax documents to breeze through the income verification portion of the approval process, but there have been recent changes in requirements, and you need to be prepared.

In June 2020, mortgage organizations Fannie Mae and Freddie Mac instated specific income verification practices for self-employed borrowers. According to a bulletin posted by the organizations, “the mortgage file must include a written analysis of the self-employed income amount and justification of the determination that the income used to qualify the borrower is stable.”

Because of these new stipulations, your lender will now ask for the following to verify your income:

  • 2 years of personal tax returns (this includes W-2s if you’re paid through your corporation)
  • An unaudited year-to-date (YTD) profit and loss statement that is signed by the borrower and reports business revenue (i.e., gross receipts or sales), expenses, and net income                      Note: The statement must cover the most recent month preceding the application received date.
  • 3 months business account statements no older than the latest two months represented on the YTD profit and loss statement                                                                                                                Note: Personal asset account statements evidencing business deposits and expenses may be used when the borrower owns a small business and does not have a separate business account.

The Road to Approval

Documentation is not the only thing you should consider when it’s time to submit your mortgage application. The road to approval may be clear of speedbumps if you have these four segments of your financial portfolio in order.

Credit Score

If there’s one thing self-employed mortgage applicants share with every other applicant out there, it’s what lenders will view as an acceptable credit score. 

Lenders look to your credit score for information on your debt repayment history, and a better score may equal more favorable loan terms, so be sure to keep your credit score as high as possible at all times.

Debt-To-Income-Ratio 

When it comes to getting a mortgage while self-employed, underwriters look at your existing debts instead of your income. This is how your debt-to-income ratio (DTI) is calculated.

Your DTI is a measurement of your income against your recurring debts, and it determines how much money you have available for potential monthly mortgage payments. 

DTI may hold more weight for self-employed borrowers because lenders might view tax write-offs as lowered income. This could result in existing debts becoming a larger share of your approved budget. 

If your DTI is 50% or higher, it may be wise to pay some current debts down before you apply for a mortgage. 

Downpayment

Your lender will also require proof that you have the funds for a down payment, miscellaneous fees, and enough funds to cover the initial monthly mortgage payments. 

This is why having a thorough understanding of your financial situation is so important. If you know that you will not be able to afford these expenses or you’re not willing to make the necessary financial adjustments, you should hold off on applying for a mortgage.

Separate Personal & Business Expenses

People who own businesses tend to intermingle business and personal debts, but this can backfire on those seeking a mortgage. The increase in credit usage may hurt your mortgage application if you charge business purchases, such as office phones or other supplies, to your personal cards or accounts.  

Keeping your business and personal accounts separate will more accurately reflect your financial profile (and increase your chances of being approved for a mortgage). 

Ready to Be a Self-Employed Homeowner?

Landing a mortgage while self-employed doesn’t have to be difficult! All you need is the RIGHT information and the RIGHT preparation to become a homeowner. Think you’re ready to take the next home-buying step? Click here to get started. 

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Budgeting Down Payment First-time Homebuyer Homebuying Homebuying Tips Mortgages Pre-approval Purchase

Cease Your Lease: Advantages of Buying a Home

Owning a home has been a rite of passage for generations, but in recent years, one obstacle has kept people from their home-buying goals—rent. While many have broken free from the leash of a lease, one group still clings to the world of renting.

Millennials: Stuck in The Rent Ring

For the millennial generation (those born between 1981 – 1996), rent is an ever-present—and often welcome—expense. According to data from the Pew Research Center, more millennials choose to rent over buying a home compared to generations prior. Several factors play into many millennials’ decision to continue renting. Past economic decline, postponement of marriage, the housing bubble, and freedom to apartment hop have all lead millennials to stick with their landlords. But as the housing market continues to improve, millennials need to know that the American Dream of owning their own home is still within reach. 

Top 3 Reasons to Buy vs. Rent 

1). Owning a home will benefit you in the long run

Renting your home (or apartment) means shelling out income to a landlord and putting nothing toward an investment you own. Buying a home trumps renting because it can result in financial gain in the future. When you buy a home with a 30-year mortgage and make the required payments, you will come out owning your home, and money will stop coming out of your pockets. However, if you rent a property, you will have nothing to show for all the time and money you put toward paying your rent. 

2). Boosted equity as property values rise

Rising home values are the name of the game (and are expected to be on the ups for the foreseeable future), which makes homeownership a profitable long-term investment. According to Zillow, the average U.S. home price has increased 13.2% from May 2020 to 2021—a record rise since the company began aggregating housing data in 1996. 

This increase in property values is critical when deciding to buy versus rent because owning a home can result in a significant return if your home is sold at a higher value than it is purchased. And, with each monthly mortgage payment, you boost the amount of equity—a tangible growth in your home value that you can borrow against—you have in your home. 

3). Avoid constant rent increases

Though the amount may be unpredictable, one thing is for sure, your rent is going to rise (likely every year). With steadily rising rent comes constant budget changes and potential overpayment for a property that does not live up to its price tag in living conditions. Sound like a nightmare? Well, with a fixed-rate mortgage, you will always pay the same amount each month on a home you own, and you can’t be kicked out by a landlord!

*The Principal and Interest payment remains the same on a fixed-rate mortgage. Typically, only the escrow portion of the payment (insurance and property tax amount) increases. 

Breaking the Cycle: Letting Go of Beliefs That Keep You with a Lease

Bright lights can bog you down

We get it—the lure of living in the big city is strong for millennials, but a large metropolitan area could only offer you sky-high rent prices (as opposed to a fixed-rate home with a backyard). If those city lights are beginning to blind you, consider moving to a more rural area just outside and landing a home that suits you with a USDA loan

Don’t let debt stop you from getting a house with a deck

Student loan debt is a massive concern for many who want to leave renter life behind, but being debt-free isn’t a requirement when buying a home or qualifying for a mortgage. Lenders do consider your current debt, including any associated with student loans, but only to determine your DTI (Debt-to-Income Ratio). Your DTI is simply a measurement of your income against recurring debts, and lenders look to it to decide whether you will be in a financial position to make payments on a possible mortgage. The more debt you have, the more likely you are to fall behind on your payments. But don’t lose hope—lenders have varying options when it comes to DTI ratios. 

*Most lenders prefer a potential borrower’s DTI to be about 35% or lower during the approval process. 

Tie the knot after finding your way home

In a report about millennial home-buying trends, Bank of America states, “Life events such as getting married or having children are typical triggers to buying a home. The longer this age group lives with parents or independently, the more homeownership will be delayed,” However, this does not have to be the route you take. Even if your social media status says single, you should still be seeking to own a home to build wealth for your future—and an FHA loan (or a VA loan if you are military-affiliated and eligible) can help a new home be your plus one.

Ready To Leave Your Lease Behind? 

Buying a home is a huge step for up-and-coming generations, but it doesn’t have to be stressful. If you’re ready to let go of the leasing life and start living life, we can help! Getting a quote or pre-approval letter is easy. To get started, click here

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Credit Down Payment Government Loans Homebuying Homebuying Tips Interest Rates Loans Mortgages Purchase Refinance

Appreciating Our Veterans One VA Loan at a Time

What does it mean to be a Veteran? Being a veteran means fighting for the freedoms of those you have never met. It means having a willingness to give up everything while expecting nothing in return. Being a veteran means volunteering to leave the home you’ve always known, so others won’t have to. It means that you not only understand the concept of courage, but you embody it.

Most of all, being a veteran means taking off the uniform and rebuilding a civilian life when your service is complete. Here at MortgageRight, we understand how difficult it can be to make the transition from protector to private citizen. To show our appreciation for your sacrifice, we provide easy access to a mortgage made just for you—the VA home loan.  

What Is a VA Loan?

Homeownership can become a hassle if you’re not equipped with the financing options that are right for you. For the vast majority of military borrowers, the VA loan program is the most beneficial. These versatile, $0-down payment mortgages have made it possible for more than 24 million service members to achieve their dream of homeownership. 

Despite the program being designed to create a seamless homebuying experience for service members, much of our military population is left in the dark about the program’s unique benefits, and this leads them to choose less favorable loan options.

Who Qualifies? 

To be eligible for a VA loan, you must be a veteran or active service member who has satisfied at least one of these service requirements:

  • Served for 90 consecutive days during wartime 
  • Served for 181 days during peacetime 
  • Served in the National Guard or the Reserves for 6 years

Surviving spouses of service members may also qualify if the service member’s life was lost in the line of duty or if they sustained a service-related disability.

Before you can obtain a VA loan, you will need to present your lender with a copy of your Certificate of Eligibility, which is a document provided by The Department of Veteran’s Affairs as proof of your qualification. To prove previous military service, you must provide a Report of Separation (DD Form 214). If you are on active duty, you will need to provide a Statement of Service instead.

Though The Department of Veteran Affairs does not require a minimum credit score to qualify, it is best to maintain a credit score of 620 or higher to ensure third-party lender requirements are met. 

Backed by Benefits

  • Zero Down Payment

Other loan programs usually require at least a 3% down payment when purchasing a home. However, if you’re looking to buy a home with a VA loan, one of its most advantageous aspects is that the down payment requirement is no longer a burden. 

  • 90% Equity Cash Out

For homeowning service members and veterans, refinancing with a VA loan opens the door for a 90% equity cash out. This option replaces your existing mortgage with a new loan for more than you owe on your current mortgage and allows you to pocket the difference if your home has risen in value. This is especially beneficial if you are looking to save for higher education or retirement, pay off higher-interest debt, or make needed home improvements.

  • Say No to Mortgage Insurance Costs

Unlike other home loans on the market that require mortgage insurance premiums when the borrower has less than 20% equity in their home, VA loans do not come with any mortgage insurance premiums or private mortgage insurance costs—which helps borrowers save even more each month. 

 

Though a VA loan offers savings opportunities at every corner, it does require a VA Funding Fee (that is 2.3% of the amount borrowed with a VA loan, which increases to 3.6% if you are a previous VA loan borrower).

  • The IRRRL Deal

If you have an existing VA-backed home loan, the IRRRL (Interest rate reduction refinance loan) is another added perk. This program is perfect if you want to reduce your current monthly mortgage payments or increase payment stability. 

Let Us Appreciate You

As a Veteran owned and operated lender, MortgageRight always rises to the challenge of helping active and veteran service members navigate the VA-loan landscape and secure the mortgage that meets their unique homebuying needs.

Unsure if the VA loan is right for you? We can help! Get a quote or pre-approval letter or email us at contact@mortgageright.com for any questions.

Happy Military Appreciation Month & Thank You for Your Service!

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Homebuying Homebuying Tips Loans Mortgages Pre-approval Purchase

How Pre-Approvals Can Help You Get Your Offer on a Home Accepted

Pre-approvals for a mortgage loan are like getting verified on Twitter. It’s a sign that you’re the real deal. 

Getting pre-approved before you start shopping for a new home isn’t a requirement, but it definitely gives you a leg up. We want to help you get your dream home, and a pre-approval letter gets you one step closer. 

So, what is a pre-approval? How do you get one? Is it worth it? Let’s take a look. 

What Is Pre-Approval?

A pre-approval determines how much money you can borrow to purchase your home. Lenders analyze your income, assets, and credit score to determine three homebuying factors:

  • The type of loan you can get approved for
  • How much you can borrow
  • What the interest rate will be

The lender will then provide you with an official pre-approval letter that details this information.  

It’s important to note that pre-approval and pre-qualification are NOT the same. Pre-qualifications can be beneficial in providing insight into your loan opportunities, but are less in-depth and therefore less accurate.  

How Do You Get Pre-Approved?

The pre-approval process is essentially a mortgage application. Your lender will want to evaluate your finances, which includes reviewing documentation in the following areas:

  • Proof of income
  • Employment verification (bank statements) 
  • Proof of assets (retirement or investment account statements)
  • List of any liabilities
  • Credit history (rent history, credit report)
  • Identification
  • Debt-to-income ratio (DTI)

How Does a Pre-Approval Help You Buy Your Dream Home?

Your pre-approval letter essentially says, “you can buy a house worth X amount of money,” because you are highly likely to get a loan for the amount stated by your lender. 

Your real estate agent will typically want to see your pre-approval letter before showing you houses to ensure you both aren’t wasting time looking at homes outside your budget.

It will also be valuable when making an offer on “the one,” because it shows the seller you won’t have problems getting financed for the amount you’re offering. That’s all the more important if it’s a hot property and others are making offers. With pre-approval, you may already be one step ahead of those other potential buyers. 

And because a pre-approval is “essentially a mortgage application,” the rest of your home buying process will go a lot smoother. By doing some of the work upfront, you can shift your focus on the fun stuff, like your living room color scheme or building a backyard entertainment space. 

Start Now!

If you’re considering a move or looking into buying your first home, it’s a great time to start the pre-approval process! And we can help! Click the blue button in the top right corner of our home page to get started. If you have questions, reach out to us! We’d love to help you take the next step on your homebuying journey.

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Budgeting Homebuying Homebuying Tips Interest Rates Loans Mortgages Purchase Refinance

Take Advantage of Unheard-Of Interest Rates

2020 is shaping up to be an interesting year for the US housing markets. The combination of a global pandemic and an election year has led to historically low-interest rates. Now is a great time to assess your financial situation and develop a plan to take advantage of this unprecedented time in the housing market. And these low-interest rates are no secret; applications to refinance have gone up by 80% to the highest level since the financial crisis of 2009. Even though this may be a stressful time in the stock market with uncertainty about the future, taking advantage of these low-interest rates is a concrete step you can take towards financial security in insecure times. Don’t get anxious, get proactive! We don’t know how long rates will stay this low, so now is the time to act!

 According to the Federal Reserve, the rate for a 30-year fixed mortgage has been about 3.75% in early 2020, and recent events have taken it even lower. That means if your rate is above 4%, you could benefit from refinancing! If you currently have a VA, FHA, or USDA loan, we have even more good news. You don’t have to have an appraisal to refinance to a lower rate.  

Here are some ideas for ways to take advantage of low-interest rates:

  • Refinance your mortgage – lower your payments by thousands of dollars or cut your term in half!
  • Refinance other loans such as student loans 
  • Make large, one-time payments on other debt.
  • Consolidate and pay off your debt – pay off high-interest credit cards to save money.
  • Purchase a new or second home – whether you’ve been looking for a vacation house, an investment property, or an upgrade for your family, now is the time! 
  • Start a business – use your savings as a nest egg to finance your dream company.

Call (205) 776-8401 to speak to any of our Mortgage Loan Experts to discuss your financial goals and find out how we can help you save thousands with a refinance. Or, head on over to our website and click the Apply Now button for an online application. 

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Budgeting Credit Down Payment First-time Homebuyer Home Inspections Homebuying Homebuying Tips Interest Rates Loans Mortgages Purchase

Mortgages 101: Everything You Need to Know About This Home Buying Process

Purchasing a home is an exciting process. However, it can be intimidating when you consider all the decisions and details leading up to closing day. 

We want to help make the process just a little easier. To do so, we put together some of the most frequently asked questions about mortgages and the mortgage process – a Mortgage 101, if you will. By the end of this blog, you’ll be even closer to getting your dream home!

  1. How do I start the mortgage process?

Before submitting your mortgage application, you’ll need to have an idea of the type of mortgage loan you want, ensure your credit report is error-free, choose your lender, get pre-approved, and assemble your loan paperwork. 

If that sounds like a lot — just hold tight. We are going to break each of these down further in the following questions. 

  1. How do I know which type of mortgage loan is right for me?

There are many types of mortgages available to choose from based on requirements, interest rates, and availability. Some of the most common are conventional mortgages, government-insured mortgages, fixed-rate, adjustable-rate, and jumbo mortgages. 

To help you get an idea of the mortgage that’s right for you, we wrote a blog on each of these types (and more!) and broke them down into their characteristics and benefits. Read about them here!

  1. Can I get a mortgage loan without a credit score?

It is more challenging to get a mortgage loan without a credit score, but it’s not impossible. As we mentioned in the previous question, you can get an FHA loan with low or no credit. However, this can incur greater costs in the long run with fees and insurance. 

If you don’t have a credit score — the best process for you is finding a lender who does manual underwriting. Manual underwriting is a hands-on process that reviews your proof of income, rental history, and other documents to evaluate your ability to pay debts. In addition to documentation, you’ll need to have a sizable downpayment (20% if possible), allowing you to get a mortgage loan — suggest going for the 15-year conventional. 

  1. How should I choose a mortgage lender?

First and foremost, do your research. What are your options? Should you check out a credit union, mortgage banker, or smaller financial institution?

Come with the right questions. The more you know beforehand, the more you are positioned to ask the relevant questions to help you make your decisions. This guide can help! Start by figuring out what type of loan(s) you are interested in and what you can afford. 

  1. What is pre-approval? How do I get pre-approved?

A pre-approval determines how much money you can borrow to purchase your home. Lenders will analyze your income, assets, and credit score to determine the type of loan you can get approved for, how much you can borrow, and what the interest rate will be. 

Pre-approval is a practical step in the mortgage process, as you can show sellers that a lender is willing to loan you the money. It makes the searching process more straightforward and can make your offer on a home stronger. 

  1. Are pre-qualification and pre-approval the same?

While they ultimately aim to reach the same goal, a pre-qualification is not as accurate as a pre-approval because it is less in-depth. A prequalification is more of an estimate because you do not have to provide as much information, such as your credit report. However, both are beneficial in giving insight into your loan opportunities. 

  1. What information should I have available when applying for a loan?

You’re getting closer and closer to locking down that mortgage loan! First, you’ll need to submit the official mortgage application through your lender. You’ll also need your ID, proof of income, tax returns, bank statements, retirement or investment account statements, rent history, credit report, and possibly a few others if specified by your lender. You may even have most of these nearby if you have gone through the pre-approval process! 

  1. Do I need to do a home appraisal and inspection? Why?

Yes! Lenders require a home appraisal before issuing a mortgage. Although it’s a worst-case scenario, they want to make sure the home is valued high enough to recover the cost of the loan if the buyer defaults on the mortgage. 

Inspections, however, are optional — but highly beneficial. It can often be the deciding factor in finding the home right for you. Here are 10 things buyers should know about home inspections!

  1. What homes can I afford, and what will my mortgage payments cost?

One of the most important factors to consider before beginning the search for a new home is your budget. You have to consider the down payment necessary for your new home and the monthly cost of the mortgage. Your mortgage payment is affected by a few factors, including your credit, DTI (debt-to-income ratio), and current assets. It also depends on how many years you want to spread the payment over. 

Once you have an idea of how much your home will cost, try our mortgage calculator! It will provide a helpful estimate of what your mortgage payment will be each month. 

  1. What does a lender look for when approving my mortgage loan?

As we have mentioned, your mortgage loan approval is affected significantly by your credit history, debt-to-income ratio, and current assets. When checking your credit history, lenders will look for:

  • Few to no recent credit applications
  • Positive payment history
  • Credit utilization (only using around 30% of your credit limit at once)
  • Being an authorized user on another account (their activity can reflect your credit)
  • Bankruptcies or other negative marks (delinquent account, charge-offs, etc.)

In addition to making sure you have a stable income, your lender will also assess how much of your current income goes to pay off debts. If this is a significant amount, the lender may determine that you are not well-suited to take on more debt, or your interest rate may be higher. 

Lastly, lenders will often want to see any bank statements or investments, as high-value assets will reflect positively on your ability to make a sizable down payment or pay your mortgage on time each month. 

Bonus Question: Can I Start Now?

Absolutely! At MortgageRight, we help people like you find the mortgage that’s right for you by securing your pre-approval letter and low rates. To start your home buying journey today, head over to our home page and click the quote or pre-approval button in the top right-hand corner. Just a few clicks will get you that much closer to the long-awaited move-in day! Do you have a question that’s not on this list? Feel free to email us at contact@mortgageright.com or give us a call at (205) 776-8401, and we will be happy to answer it for you!

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First-time Homebuyer Homebuying Homebuying Tips Loans Mortgages Purchase

Which Type of Mortgage Loan Is Right For Me?

Getting a mortgage loan can be a daunting task. However, the greater understanding you have about these loans as you begin your home buying journey, the easier it will be. 

There are many types of mortgages available to choose from. They differ based on requirements, interest rates, and availability. In this blog, we list the most common types of mortgage loans, and for which type each homebuyer is best suited. 

Conventional Mortgages 

Conventional mortgages are home loans not insured by the federal government. This type is best suited for borrowers who have a strong credit score, stable employment history, and can make a down payment of at least 3% of the home’s cost. 

Read more about conventional mortgage loans here!

Government-Insured Mortgages

Although not a mortgage lender itself, three government agencies back mortgages: the Federal Housing Administration (FHA loans), the U.S. Department of Agriculture (USDA loans), and the U.S. Department of Veterans Affairs (VA loans). 

  • FHA Loans are for borrowers who don’t have a large down payment saved up and do not have the highest credit. 
  • USDA Loans are for moderate and low-income borrowers. Borrowers must purchase a home in a USDA-eligible area but often are not required to make a down payment.
  • VA Loans are flexible, low-interest loans for those serving in the military, both active duty and veterans. These do not require a down payment. 

Fixed-Rate Mortgages 

As per the name, these mortgages keep the same interest rate over the life of your loan. They also provide a consistent monthly payment on your mortgage and come in 15-year, 20-year, or 30-year loans. 

Adjustable-Rate Mortgages

Adjustable-rate mortgages have flexible interest rates that change with market conditions. These come with a certain level of risk but are beneficial if the home is temporary. 

Jumbo Mortgages 

Jumbo mortgages are for when the home price exceeds the federal loan limits. These are best suited for affluent buyers with good credit, a high income, and who can offer a substantial down payment. 

Read more about jumbo mortgage loans here!

Making Mortgages Easy

If you have more questions about mortgages, don’t worry! We put together this helpful guide featuring frequently asked questions and their answers. Check out the blog here! 

We are in the business of ‘lending as it should be’! Check out our home page to get a quote or pre-approval letter, or email us at contact@mortgageright.com for any questions. 

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Homebuying Homebuying Tips Loans Mortgages Purchase

Buying a Vacation Property? What to Consider When Investing in Your Home-Away-From-Home.

As the number of people purchasing vacation homes is on the rise – many a result of the social limitations caused by the coronavirus pandemic – we offer this helpful guide for those looking to buy a getaway property of their very own. 

Benefits of a Vacation Home

If you’re a frequent traveler and enjoy escaping to one very special spot each year, investing in a vacation home can save you money in the long run. Even better, properties in popular vacation areas often increase in value over time. 

Making such a purchase all the more attractive, you may also be eligible for a tax break from the mortgage on your second home. 

And should you choose to move when you retire, your vacation home could become your primary residence in that special location you already know and love. 

Simply put, vacation homes are a great idea. But what should you consider before investing in one? 

What’s Your Budget?

We aren’t saying it’s all about the money, but, of course, the cost of a second home is one of the most important factors to consider. In addition to a second mortgage, you will also need to factor in the cost of taxes, insurance, utilities, possible HOA fees, and furnishings for the home. 

And that’s just the beginning. As you maintain your vacation home, you may want to consider how it will be cared for when you’re away. Will you need landscaping services? Will you want a security system to protect your unattended home? And don’t forget the cost of traveling there and back. 

While these costs aren’t supposed to discourage you from investing in a vacation home, they are essential considerations when looking for the home that’s right for you and your budget. 

To get a better idea of what your payments will look like, check out our mortgage calculator

Where Do You Want to Rest and Relax?

Location is another essential part of finding the perfect vacation home. Where do you picture yourself escaping for a week away? Where do you want to spend your weekends? You may love the beach, or the city, or the mountains, but do you like that locale enough to spend the majority of your vacations there? You want to choose a place that won’t lose its appeal after a visit or two. 

The second consideration with the location regards distance – in addition to how much it costs to get there, consider travel time. You may choose a vacation home in your DREAM location, but if it takes a half day’s drive to get there, or you need to catch a flight every time you want to visit, then you may not end up spending as much time there as you intended. So, the takeaway here? Decide on a getaway that’s not too far from home!

Is Rental Income a Must?

Many people consider buying a vacation home and then look to rent it out when they aren’t using it. While renting can bring in extra income, it does offer a few challenges. For instance, sometimes renting out your property can have implications for financing and taxes, or homeowner associations may have rules and limitations for renters. 

Also, if you plan to occupy the home during the typical vacation months, consider that there may be fewer available renters during the “off-season.” Renting your property also comes with additional considerations, like how to advertise and who will take care of any significant issues that occur while guests are present. 

If consistent rental income is a must, then do your research on what to expect given your budget and vacation schedule. 

Finding the Vacation Home That’s Right for You

Purchasing a vacation property is an exciting venture, and the professionals at MortgageRight are dedicated to making the home-buying process an easy one – whether it’s for your primary residence or that perfect vacation getaway. Whether you’ve just started looking or you’re ready for a quote, we can help!

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Homebuying Homebuying Tips Loans Mortgages Purchase

Silver Linings: How to Make the Best of Buying a Home During a Recession

We are seeing the economic effects of COVID-19 in real-time. This “new normal” is going to be far-reaching, long-lasting, and will likely result in a lengthy recession. It’s not all gloom and doom, though. Markets fluctuate, but they are resilient. There are great ways to make the best of this bad situation, particularly if you plan on buying a home. 

If you have been patiently waiting for housing prices to go down, boy do we have news for you. There has never been a better time to buy. Historically low mortgage rates combined with motivated sellers make this a great buyer’s market. Job instability is a concern, but if you have a stable job situation and a little bit of money saved right now, it could be an opportune time to purchase a home. With less competition from other homebuyers and sellers willing to negotiate, this could be your chance to find your dream home. 

Here are some tips to put you in the best position to buy a home during a recession:

  1. Get pre-approved for a mortgage. Homebuyers who already have financing in place are in a better negotiating position. Having savings is always a bonus, but go ahead and get pre-approved before you start shopping so you can enter every conversation with confidence.
  2. Organize your finances. Don’t get too excited – just because a house is a good deal doesn’t mean you can afford it. Work on your budget. Make sure you take stock of all your assets and debts before you make any big decisions. 
  3. Do your research. With unstable markets, housing prices can fluctuate and give a false sense of value. Make sure you research your neighborhoods well! Knowing historic pricing for an area can give you a sense of objectivity when evaluating an offer.
  4. Get a home inspection. In uncertain times, sellers may be trying to offload homes with problems that are costly to repair. Be very thorough and make sure you’re not buying the home equivalent of a lemon! 
  5. Clear the title. Start with a clean slate. Sometimes the home of your dreams can be the property of your nightmares. Make sure that the property doesn’t have any liens from a contractor or a lending institution. Have a lawyer run the title of your new home to verify it will be transferred without risk.
  6. Use your bargaining power. Watch for motivated sellers. If the price has been reduced on the home several times over the last few months, it may be a signal that they have already moved and are holding the mortgage on two properties. In this situation, the seller may be willing to negotiate to cover closing costs and other fees in order to quickly complete the sale. 
  7. Avoid unnecessary fees. It’s your market right now! When houses move slowly, realtors will sometimes take a few percentage points off of a commission in order to get the deal signed. Negotiating these fees down before closing can benefit both the buyer and the seller, leaving everyone happy.
  8. Use logic. Have the emotional stability to walk away if it’s not the right deal for you. Wait until the right opportunity comes along before you commit.

Even with all these tips in mind, there is no such thing as a foolproof approach to the housing market. An unstable economy means there is risk involved in major purchases like a home, but fortune favors the bold. If you pay attention to these 8 tips, you may be able to find a tremendous deal by acting decisively while others are afraid to move.

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Homebuying Homebuying Tips Loans Mortgages Purchase

MYTH: Now is Not a Good Time to Buy

Real Estate has appreciated a lot lately and we have heard many potential homebuyers say they’re thinking about waiting until prices come down to buy a home. If rising home values are keeping you on the sidelines, you may be waiting longer than you ever intended.

For instance, should you try and wait it out, the market may have gone up 20% before there is a 10% correction. And while you’re waiting for months or years, you may still pay 10% more for your new home after paying rent when you could have started paying off a new mortgage.

The right time to buy your first home is when you are ready; both financially and emotionally. And significant life events (getting married, relocating, landing a great new job, having children) generally drive the decision to consider purchasing instead of continuing to rent.

At MortgageRight, our experience tells us you cannot time the real estate market when data becomes available many months after market events take place. This, along with so many other variables, makes pinpointing a perfect time to buy nearly impossible.

If you are ready to buy your first home, this may be the right time to buy a home. Competitive interest rates and a variety of home loan programs are currently available that will can meet your needs today.

Don’t let this myth is deter you. Instead of continuing to make rent payments to a landlord, start making payments on your own home.

Contact MortgageRight. Our helpful loan associates area always ready to explain the process and your options.