FHA-Condos-Updates

Huge Updates – FHA Makes it Easier to Finance Condos

Starting October 15, 2019, FHA is updating their guidelines to make financing a condo easier for owners. This has been a long awaited update that will allow for individual unit approval and relax it’s requirements to make more properties eligible for FHA financing. 

This new policy creates flexibility within changing market conditions. This update includes the following key changes: 

Individual Condo Unit Approval for FHA

It is now easier to approve single-unit condos for financing. Previously, a person who wanted to purchase a condo using FHA financing had to choose a unit within an existing approved condominium project. The entire building would have had to receive approval before a person could buy a single unit with an FHA-insured mortgage loan. 

Now the FHA will allow the approval of individual condo units! The new guidelines will allow certain single-unit condos to qualify for FHA mortgage insurance, even if the rest of the project/building has not yet been approved for the loan program. 

Who Benefits from this Change?

Ben Carson, the HUD Secretary, believes that this new update will be especially helpful to first-time home buyers and senior citizens. 

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families … Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

The majority of FHA-insured condo buyers have never owned a home before. HUD estimates that there will be an additional 20,000 to 60,000 condos per year could become eligible for FHA financing. 

Condo Restrictions

  • Lenders are able to do single-unit approval for existing condos that are not in an approved development at 90% LTV. The borrower must have 10% down.
  • Unit is at least one-year old or is already occupied
  • Not in a project that has been denied, banned or blocked by the FHA already. (It can be an expired project or not appear at all, but not a Rejected project)
  • The project has to have five units or more
  • 50% or more owner-occupancy percentage (If we can get the project approved it’s 35%, but on a spot loan it’s 50%)
  • 10% or less FHA concentration (no more than 10% of the properties already have FHA loans)
  • No manufactured homes
  • No houseboats
  • Is not part of an unapproved phase of a condo project that has approved phases already
  • No cooperative ownership
  • No condo hotels or hotel arrangements
  • No rent pooling agreements
  • No timeshares
  • No multi family condo units
  • No care facilities
  • Not in a Coastal-Barrier Resources System (coastal areas where new construction is no longer allowed)

Disclaimer: We are not affiliated with the Department of Housing and Urban Development or the Federal Housing Administration in any way. The information above is for educational purposes only and does not constitute official policy. To learn more about these changes, refer to the HUD website.

 

Sources: 

http://www.homebuyinginstitute.com/news/fha-guidelines-individual-condo-units/

https://www.housingwire.com/articles/49851-fha-to-make-financing-easier-for-condo-owners/

https://www.forbes.com/sites/brendarichardson/2019/08/15/new-fha-guidelines-expand-access-to-condo-mortgages/#679da059323b

Why rent when you can OWN? Get a FREE Payment Quote in Minutes!

HappyFam-FirstTimeHomeBuyers

How to Buy your First Home: The Steps you Need to Follow

Buying your first home can be SO exciting, but it can get overwhelming if you’re unsure what all the steps are. So much excitement comes with knowing that you qualify for a home loan and soon you will be buying a home in Arizona. Before you start your journey to buying a house in Arizona, here are some tips you may want to keep in mind. 

  1. Grow your cash reserves 

Home buying can be an expensive venture, and you will need to have some cash set aside. For some homebuyers, getting a mortgage is the first option in order to finance their dream home. However, first-time homebuyers may not be aware of the importance of having some cash set aside before applying for a home loan or considering different Arizona home buying programs that finance homebuyers. Many lenders require cash reserves before accepting loan applications. Here are some important facts you need to know about having cash reserves when applying for home mortgages. 

  • Cash reserves are the saving balances that will be available after the close of the home purchase. 
  • You may use part of the cash reserves to clear down payment for the home you are planning to purchase. 
  • Lenders consider cash reserves to be the emergency fund and you will use it as a backup to pay for housing expenses in case anything happens to your income.
  • Mortgage lenders will calculate cash reserves in months. This refers to the number of months your reserves can be used to pay for housing expenses.

Note that having larger cash reserves before applying for a mortgage can help to negotiate for a lower rate. Therefore it may be beneficial to consider accumulating enough cash reserves to attract cheaper mortgage rates from lenders.

2. Determine the value of the house you are willing to purchase

The second step that you need to consider is determining the value of the house that you can afford. It is not all about buying a house in Arizona, but ensuring you are buying an affordable property. This helps you to avoid over borrowing. Some home buyers find themselves trapped in debts because they purchased a property that is more expensive than what they can afford to pay. If you qualify for a mortgage when buying a house in Arizona, it does not mean you have to take the maximum amount to purchase the property. You need to consider a suitable Arizona home buying program that will help you finance the home while also making it affordable for you to repay.

3. Use your cash reserve as a down payment

If you are not able to raise the full amount to purchase a home in Arizona, then try raising the down payment. This can be 20% of the total price or even more. This means that you will not have to pay for private mortgage insurance. The PMI is meant to protect the mortgage company when you are not able to make the repayments ending up to foreclosure.

Not sure where to start? Have more questions? Find a Loan Officer and ask them anything!

4. Compare home buying mortgage rates 

Congratulations for qualifying for the loan! What’s next? Compare what other lenders are offering. Research different Arizona home buying programs. Be keen to check the rates at which they are willing to lend you at. Some lenders will charge you more compared to others. Remember to read the full mortgage terms and conditions and ask questions. Just because a lender is charging you a lower interest rate doesn’t mean the mortgage will be affordable for you. The terms and the total cost of the mortgage might make the mortgage more expensive. Don’t be afraid to ask questions throughout the process.

5. Does the Home you are buying match your requirements?

There are several factors to consider when determining a suitable home. Are you purchasing a home with an intention to resell for a profit? What is the likelihood of finding a buyer in case you are planning to resell? Check for the features making the home suitable and other attractions in order to determine if the price is suitable and right for you.

6. Consider Home inspection and valuations to ensure a fair buying price

When buying a home in Arizona, you need to involve third parties. First, you need home inspectors who will check to make sure the home is constructed as per the local regulations and standards. If the house does not meet the minimal requirements, you might end up incurring losses when the authorities finally catch up with you. The property valuer will calculate the face value of the property to advise you if you are getting fair pricing.

Consider undergoing the above steps before buying a house in Arizona. The steps will help you identify a suitable lender, the best Arizona home buying programs while making sure you purchase the most suitable and affordable property.

Ready to see the amazing possibilities of owning a home? We’re happy to help. Get a payment quote and one of our Loan Officers will gladly assist you.

7Tips

Seven Tips for Finding the Best Mortgage Lenders for First-Time Buyers

You just landed your first job and you really want to achieve your life dreams...

If you’re planning to purchase your first home, congratulations! There are several home financing options available today. One of these options is taking out a home loan mortgage. But…how do you find a reputable mortgage lender? Finding a mortgage lender can be the easiest thing ever (we’re not even kidding)! So long as you have shown proof of qualification for the mortgage, hundreds of lenders will RUN after you. Unfortunately, only a fraction of the lenders who approach you, qualify as best mortgage lenders in Arizona or Utah. So, how do you find the best mortgage lender as a first-time buyer? Here are SEVEN tips for you to consider when finding that special lender.

  1. Know what you have and what you need to borrow

The most important step and the one you should start with is organizing your financials before you start visiting lenders. The first question is, how much do I need for a new home? Second, you need to determine what you have, and calculate the deficit so that you borrow only the amount needed. In fact, this helps you to avoid bad debt where you borrow more than what you need. If you have some savings that you can use to purchase your new home, you can use it as a down payment to secure the property before the mortgage-processing period is over. Accumulating some cash reserves before borrowing is a good indication to the lender that you have a positive finance record. This is actually a tip you need to consider in order to make sure you qualify for a home loan.

2.Research the mortgage options online

Researching lenders online is the most common approach for first-time homebuyers. When you want to shortlist mortgage lenders in AZ or UT, it is easy to find more information online. Today, almost every financial solutions provider advertises their financial products online. This applies to mortgage lenders in Scottsdale, Mesa, Gilbert, St. George, Richfield and other cities. Therefore, before you look elsewhere, you will want to research the mortgage lenders online. 

3. Ask friends and colleagues for recommendations.

Your friends and coworkers are great resources when searching for mortgage lenders near you. When talking to them, be sure to note what their experience was like. Ask them about their overall repayment experience, what the service was like, as well as the support they received. 

4. Come up with a list of lenders based on the above tips.

Now, you have the information from online sources and obtained a collection of experiences your friends and colleagues have been through. By now, you have a short list of potential mortgage lenders in AZ or UT. Hooray! Now the step is, determining which lender is right for YOU!

5. Visit narrowed down lenders and find out their loan terms

In order to find the best mortgage lenders in Arizona or Utah, talk to mortgage loan officers about their loan terms and listen keenly to the mortgage conditions. 

6. Rates matter!

A mortgage lender might have good reviews online and provided great experiences to your friends and family, but lending rates do not remain the same forever. Your friend might have enjoyed a lower rate, and may recommend you to a certain lender. Be sure to check the current lending rates before signing the mortgage application forms. Compare what different mortgage lenders in Arizona or Utah are charging. 

7. Consider how much the lender is willing to give

Different mortgage lenders might not extend similar credit amount. You want to make sure that the chosen lender extends an amount that matches what you need. Before accepting the offer, check the price of the property to be sure you are getting an amount that you will absolutely need. 

We hope you received some nuggets of wisdom from reading our seven tips! We are not only passionate about helping first-time homebuyers identify the best mortgage lenders in Arizona or Utah, but we are also passionate about creating a memorable and positive experience for all homebuyers.

Ready to see what's possible? Get in touch today!

Why You Don't Need A 20% Down Payment For A Home

Why You Don’t Need A 20% Down Payment For A Home

There was a time when homebuyers, first-time or tenured, were always encouraged to abide by the golden rule of thumb; to have at least 20% for a down payment saved for the desired home. For example, if the home was listed for $300,000 then a $60,000 down payment was ideal. Luckily, those days are long gone and the industry has shifted to benefit homeowners that may not be able to come up with a hefty down payment.

First, we need to assess where you are in the home buying process as well as your experience with owning a home. Are you a first-time homebuyer? Are you currently renting an apartment and don’t have the means to save for a down payment? Do you already own a home and looking to move into a new one?

For instance, if you already own a home and are looking to get into a new one but simply don’t have excess cash in the bank for a down payment, do not worry. You may have enough equity in your current home to help pay for your next one.  ‘What is equity?’, you may ask. The equity of a home is the value of the homeowner’s interest in their home, that’s right – – value. This means if you have built up enough equity, you can use this type of value to pay for your next home once you sell the current home.

But what if you’re a first-time homebuyer?

We got you. Keep scrolling.

There are various types of mortgages or home loan programs that do not require a 20% down payment. ‘But if I don’t put down a large down payment, won’t that make my interest rate on my loan increase?’ No. In fact, You can still lock in a great interest rate while putting down as low as  2%-4%.

Conventional Loan

  • For a primary residence purchase, you can put down as low as 3% down
  • The Debt-to-Income ratio can be as high as 45%
  • Qualifying guidelines are more strict than an FHA loan
  • If the down payment is less than 20%, requires a monthly mortgage insurance (MI)

FHA Loan

  • Requires only 3.5% down
  • Qualification guidelines are more flexible
  • Requires up-front & monthly mortgage insurance (MI)

USDA Rural Housing Loan

  • 0% down!
  • USDA low closing costs
  • Qualification guidelines are more flexible
  • Low monthly mortgage insurance

VA Loan

  • No down payment required!
  • Only available to eligible veterans only
  • VA up-front funding fee, but no monthly mortgage insurance (MI)
  • Subject to VA eligibility rules

If those programs aren’t enough to convince you that owning a home without putting down 20% is possible, there are also state, county and city specific programs available that may fit your needs even better. Take a look at our down payment program comparison chart below for Arizona Programs!

As you can see, low-down loan programs are available but if you’re not sure which one is best for you , we highly recommend you give any of our experienced loan officers a call to get you pre-qualified with the best program fit for you and your family. Give us a call today at (480) 832-4343 or fill out an application here: https://www.sunamerican.com/apply-now 

References:

https://www.forbes.com/sites/trulia/2014/04/02/dont-have-a-20-down-payment-for-a-home-check-out-these-alternatives/#7db412e437a8

https://themortgagereports.com/20594/downpayment-options-less-than-twenty-percent

Loan Programs

refinance blog

What Does it Mean to Refinance Your Mortgage?

When homeowners refinance, it gives them access to a new mortgage loan replacing its existing one. Homeowners can customize the details of a new mortgage loan including the loan’s mortgage rate, loan length in years and the amount borrowed. So, what makes a refinance attractive? Refinancing can be taken advantage of to reduce the monthly mortgage payment, withdraw cash for home improvement projects, cancel mortgage insurance, among other helpful uses.

Here, we will break down the different types of refinance mortgages.

Rate and Term Refinance

This type of refinancing changes the interest rate and/or the length of the term and does not change the amount of principal. Perhaps the original mortgage terms made sense for you when you initially agreed to it but as time goes on, circumstances may change. For example, if you’re looking to trade your 7-year adjustable rate mortgage for long-term stability, doing a rate and term refinance into a 30-year fixed rate loan may be better for you. On the other hand, if you’re looking to pay off your mortgage sooner than later, you could also refinance into a shorter loan term.

What if the interest rate on your mortgage is significantly higher than current interest rates? You can refinance to get a better rate and help you save money on your mortgage monthly payments.

Cash-out Refinance

cash-out refinance is a refinance option where the new mortgage loan is for a larger amount than the current mortgage loan and you receive the difference between the two loans in cash. One of the most common reasons why homeowners do a cash-out refinance is to transform the equity (ownership) that’s been built up in their home into cash. This cash can be spent on home improvementspay off student loans, debt consolidation or other important financial needs.

This type of refinancing has slightly higher interest rates due to a higher loan amount. The cash-out amount limits to 80-90% of your home’s equity. For example, if your home has a value of $200,000 but your remaining mortgage balance is $100,000, then the equity in your home is $100,000. If you are needing $50,000 for a home improvement project or using it for other financial priorities, you can choose to refinance your loan for $150.000 and receive $50,000 in cash at closing.

HELOC (Home Equity Line of Credit) Refinance

This particular type of refinance is a loan that’s set up as a line of credit for some maximum draw instead of a fixed dollar amount. It is a revolving line of credit that uses your house as collateral. The bank gives you an amount that you may borrow and may access at any point in time. There are two main ways of tapping into this line of credit; writing a check or using a credit card that’s connected to the account.

If you’re a homeowner that has built some equity in your home and need some additional cash for helping your child pay for college, renovating your home or buying a car, borrowing money this way may offer low interest rates and improve financial flexibility.

Ready for the first step to refinancing your mortgage? Here at Sun American Mortgage we want to help you find the best possible solution and save you money at the same time. Call us to talk about some of your options, or start with our simple online application.  480-832-4343

References:

https://www.nerdwallet.com/blog/mortgages/refinance-cash-out/

https://www.mtgprofessor.com/A%20-%20Second%20Mortgages/what_is_a_heloc.htm

dream home - cash

4 Money Mistakes To Avoid When You’re Closing On a Home

As a borrower, there are very specific moves you should avoid making throughout the mortgage loan process.

Luckily, we don’t leave you in the dark and we’ll tell you upfront what you should and shouldn’t be doing while you’re trying to close on a home. 

Today we will review the top 4 money mistakes borrowers make that could make or break closing on your dream home. 

Let’s get started! 

mortgage loan process - moving

1. Moving money around

A general rule of thumb while closing on a home is to keep your money in the same place. If moving money around is unavoidable, it’s important to keep a good paper trail. 

One of our underwriters, Anna says this regarding moving money around..

“Moving money around is okay, we can document transfers from one account to the other pretty easy. The issue is: “Undocumented Assets” this is when we have a large deposit and we are unable to document the source. All large deposits must be documented from an acceptable source per FHA, FNMA, VA, USDA guidelines.”

close on a home - money

2. Applying for new credit cards

A TransUnion TRU, -0.87%   study released in May showed that consumers increase their credit card spending as much as two or three times their previous rate just before they close on a home. Spontaneously applying for a credit card during the mortgage loan process could possibly get your loan denied altogether. Sometimes the problem can be fixed, but it ends up being a major headache for everyone. 

One of our loan officer’s Derek, gives a great example of a borrower he worked with who faced this sort of dilemma during the closing process:

“My client was at Home Depot buying a washer and dryer. He got to the counter and the cashier asked him if he would like to save 10% on his purchase. He did the quick math in his head and calculated that would be $200 bucks off his new fancy schmancy washer and dryer- good deal right?!

He signs up for the credit card at the register and leaves Home Depot. Suddenly, he realizes what he has done and calls me at 9:30pm in a panic since we are a week from closing.  We were able to save things but it involved a bunch of phone calls to Home Depot’s credit department and about $100 worth of credit supplements. Everything fell into place, but that credit card turned out to be not such a great deal after all.”

The application’s credit inquiry could plummet your credit score by several points. This may not sound like much now, but those few points could be the difference between you closing on your dream home or not. 

Closing a credit card account is another decision you should consult with your lender about first. This could potential cause/affect your credit score for the worse. The key to remember is, your Loan Officer knows and sees these things all the time, they are the expert. So when in doubt, consult with them first.

Click here to learn more about credit score tips and how to clean up your credit report!

close on a home - card

3. Making big purchases

In all the excitement of closing on your dream home, you might want to impulsively buy new appliances or other big purchases.

Did you know these major purchases have the ability to keep you from closing on your home altogether and/or hurt your DTI (debt-to-income ratio)?

One of our Loan Officers gave an example of a past client who purchased a brand new car during closing.

“I had a client who’s car broke down and he went to the dealership to get it repaired. While waiting for the repair, the salesman that was trolling the lobby area says, “What if we traded in your broken car and helped you buy a new one? We’ve got some great deals today!”

The client, with nothing else to do while they wait, goes out to the lot to look around. The salesman ends up getting them set up in a new car with financing that is about $300 per month more than what they were paying with their old car.

This decision killed our DTI and now the client could only qualify for about 2/3rds of what they wanted to buy. We had to cancel our pre-qualification because their debt to income ratio was out of whack. They are currently renting until the car is paid off or they are able to sell it to get rid of that vehicle loan. Sad.”

These purchases have to be documented, and it’s better for everyone to just wait until the closing process is all said and done.  

mortgage loan process - car

4. Switching Jobs

When you are trying to close on a home, the last thing you want to do is switch jobs or companies. However, there are a couple exceptions that can be made.

For example, if you’ve recently changed jobs before starting the mortgage loan process, but its in the same line of work- you will be fine. 

Everything is being qualified on the borrowers current income with that current employer.  So, if you change jobs that process starts over and everything needs to be re-verified, such as:

– Verification of employment

– Income amount

– Type of work (is it the same or different)

– Are they still W-2 or have they switched to 1099, commission or self-employed

– We won’t have pay-stubs and need at least one prior to close in most instances; so start date comes into play

How much of a problem this is really depends on where you are in the process. Changing 2 months before closing is easier to handle than 2 weeks before. 

close on a home - write

If there’s one piece of advice you takeaway from this article, it’s this… during the mortgage loan process, if there’s any sort of financial change you want to make – it’s a MUST to consult with your loan officer/agents first. 

Even if it’s a decision you feel wouldn’t be a big deal, it’s better to be safe than sorry!

What are your concerns regarding the mortgage loan process? Are there any questions we can answer for you? Please comment below, browse our website, or give us a call 480-832-4343. Our team works so hard to be thorough and make this process as easy as possible!

Click here to use our Online Accelerator and get a quick estimate today! 


References: 

https://www.primaryresidentialmortgage.com/about-us/our-blog/5-mistakes-to-avoid-during-the-mortgage-process.php

https://www.realtor.com/advice/finance/ways-home-buyers-mess-up-mortgage/

https://www.inman.com/next/the-dos-and-donts-of-the-home-loan-closing-process/

https://www.amerifirst.com/amerifirst-blog/5-activities-to-avoid-between-mortgage-pre-approval-and-closing-on-your-new-home

home buyer - home

Ready for a LOWER down-payment?

Are you looking to become a homeowner in 2018? We’ve got some pretty exciting news for home buyers!

This week, we are excited to announce the addition of Freddie Mac Home Possible Fixed Rate product. 

Home Possible gives Americans much more flexible guidelines and a better opportunity to purchasing their dream home. Keep reading to see the outline of all the benefits that come with this new option!

Product Highlights

Home Possible offers lower down payment options for buyers with a moderate income or in underserved communities. This product also provides higher loan-to-value ratios and lower than standard mortgage insurance requirements!

What are some other benefits to this product?

– Financing up to 97% LTV; up to 100% CLTV on eligible transactions with Affordable Second lien

– 1-unit properties, condominiums, and PUDs (attached and detached)

– Purchase and rate-term refinance transactions

– Maximum loan amount of $453,100

– 15,20, and 30 year terms

– Minimum FICO of 620

– Reduced MI coverage of 25% for 90.01% to 97% LTV

To get started with this great product, there is a short Homeownership Education course required. Click here to learn more! 

We work so hard here at Sun American Mortgage to help you accomplish the American Dream of becoming a homeowner!  We will walk you through every step of the home buying and mortgage loan process and thoroughly answer any questions you may have.

No matter your financial situation, we will help find the mortgage loan program that fits you BEST. Take the first step and get a quick and easy Pre-Approval here or call us at 480-832-4343.

Scary (Avoidable) Mistakes People Make in the Mortgage Loan Process!

What’s scarier than applying and qualifying for a mortgage, and then having to start the process ALL OVER?!

Starting from scratch all because of one mistake that could’ve easily been avoided…

Today we will list the most common (and avoidable) mortgage mistakes, how to steer clear of them, and why they mess up the mortgage loan process! 

Switching Up Jobs

This is one of the most common mortgage mistakes lenders have to deal with. Changing careers or even deciding to retire in the middle of it all, can really hurt your chances of closing on your mortgage. To put it simply, a lender can’t make a case for a borrowers future income based on their current income if jobs are in transition. Underwriters look at employment and income, length of time you’ve been employed, stability and more!

If you’re expecting to change jobs during the application process, just let your lender know ahead of time so paperwork is easier for both of you. As long as you can show moving forward that your future income will be able to make those monthly mortgage payment, there’s no need to worry about starting all over again.

Credit Changes

Does it FREAK you out when something negative pops up on your credit report? Are you extra careful how you spend your credit cards and meet payment deadlines? Good! During the mortgage loan process, keeping major tabs on your debt to income ratio, credit score, and how on time you are paying your bills, is going to be crucial. Even after you’ve been approved and are in the mortgage loan process, don’t forget how important it really is to stay on top of your credit score.

Here are a few other things that can lead to trouble with your impending mortgage…

-Getting a new credit card. Whether that’s through your favorite department store, avoid the temptation to register for one. This results in a MAJOR headache later for you and your mortgage lender.

-Getting an auto loan. This can potentially throw your debt to income ratio out of whack, change how much you qualify for, and totally cancel out the previous pre-qualification that’s been done.

For more credit tips to BOOST up your credit score, checkout some of these clips from financial and credit expert Jeff Boulton

Big Purchases

Just as a general rule, save any big purchases for AFTER the closing of your mortgage. Another way to doom your mortgage approval is to spike up your debt to income ratio.

Maybe you’re super excited about your new home and want to put all the new home decor charges on a credit card. BAD IDEA.  Spending big bucks on new home decorations, a motorcycle, a spontaneous trip, or anything else on your credit cards is a definite NO while you’re in the process of closing on a home. Life gets busy and random expenses will naturally pop up, so this is one of the most common mortgage mistakes that can get easily be forgotten.

What are some other red flags for mortgage lenders to see from borrowers? Here’s some more “DON’TS” to help you better prepare for the mortgage loan process..

-Getting involved in a timeshare. Really anything that requires you to “finance” – or that will be showing up on a credit report isn’t worth the trouble down the road.

-Paying off charges or collections without consulting with your loan officer first

-Changing bank accounts or making changes to your credit profile.

Following these simple guidelines will keep this final chapter of the home buying process as hassle-free as possible! As a mortgage company, our favorite part of the job is delivering the great news that you’ve closed on your dream home. Keeping these tips in mind throughout the process will make your life much easier and speed that process up as well!

Call us to talk to one of our knowledgeable team members today 480-832-4343 or use our NEW Online Accelerator application to get a quick estimate of what you can qualify for!


References:

https://www.mortgagelendersofamerica.com/preapproval-tips

https://www.moneytips.com/7-mistakes-to-avoid-after-mortgage-pre-approval

closing costs - wallet

What Are Closing Costs?

If you’ve been interested in becoming a homeowner, you may be wondering what the different costs are and what they entail. Closing costs are a standard step in the home buying process! So it’s good to do your research and look up whats included, how to save, and why they are necessary. 

What are closing costs?

Mortgage closing costs are fees charged by the lender to the borrower, for services that were performed to close your loan. This is how we seal the deal and get ready to finally move you into your new home!

To avoid surprises, get a good idea from the start of what gets included in those costs and how much you’ll need to have ready. Many mortgage closing costs go to a third party for their services in helping close the transaction, and lenders usually have no control over these fees. 

closing costs - writing

What’s included in closing costs?

If you want to get a good idea of what home buyers typically spend on these closing costs, on average it comes to about 2-3% of the property price. Again, this is totally situational and prices vary from person to person. 

Some of these fees include:

Lender Fees: Here at Sun American we have some of the LOWEST lender fees in the Valley. These fees include a Documentation Prep Fee & an Underwriting Fee. This ranges anywhere from $1,000-$1,200 altogether. 

Title Company: A title company makes sure that the title to the home is legitimate. They issue title insurance for that property that protects the lender or owner against any claims against the property. To learn more about title companies and why they are a necessity in the home buying process, click here

ESCROW: When you close, you may be required to deposit money into an Escrow account for homeowners insurance, PMI Impound, and Property Tax Impound for example. 

There can also be some other 3rd Party and Appraisal Fees. The amount of fees and their prices all just depends on the property, which lender you choose, and some other factors. 

Saving tips, how to prepare for them!

It’s not like these costs will come as a shock or will hit you out of nowhere. From the beginning of the mortgage loan process, a Loan Officer is going to give you a Loan Estimate which gives you a good breakdown of the services, fees, and costs through this process. An estimate shows you your estimated interest rate, monthly payments, taxes, insurance, and closing costs. 

If paying for closing costs out of pocket is not something that you want to do, you are in luck! There are actually several really effective ways to take care of the closing costs that don’t involve your bank account. In fact most buyers never end up having to pay for them out of pocket! We suggest negotiating a closing cost concession from the seller in the purchase contract for all or at least most of the closing costs.

A seasoned real estate agent will be a great resource when it comes to this negotiation. They do it ALL the time! If for some reason the seller is unwilling or unable to provide the concession needed to cover the closing costs, Sun American can also provide lender credits to pay for them as well through some creative mortgage financing on most loan types. It’s super easy and it only has a minor impact on your final monthly payment. We’ll figure out something that will work for you!

Here at Sun American, we offer some of the BEST prices and rates in town. Our knowledgeable team has a great reputation going on 33 years of incredible service to our community and TONS of five star reviews to show for it. 

If you need some more explanations of fees in detail, checkout these websites to get a better idea! 

http://www.homeclosing101.org/the-closing-process/closing-costs-explained/

https://www.nerdwallet.com/blog/mortgages/cost-to-close-mortgage/

https://www.trulia.com/blog/what-are-closing-costs/


Take the first step and start a QUICK Online Application, free & simple to use!

Or call one of our Loan Officers to learn about our loan programs, how to get started, and how much you qualify for 480-832-4343 www.sunamerican.com

conventional loan - homes

Meeting Your Mortgage Needs

Are you sick of paying rent? Taking out a mortgage is easier than you may think. Especially when you have a knowledgeable and caring team like ours to guide you along the way! Today we want to address common concerns and frequently asked questions we get from new home buyers. 

There are a few different mortgage programs and financing options, by the end of this article hopefully you’ll have a better idea of which one works BEST for you!

Meeting your mortgage needs is our number one goal, lets get started!

What if I can’t afford a 20% Down Payment?

Its unrealistic to think everyone has that 20% down payment stashed away in their bank. Luckily there are other mortgage options to help meet everyone else’s needs. 

For example, with an FHA Loan, lenders require less money from the borrower upfront. This low down payment can be as little as 3.5% down! With this low down payment also comes possibly a higher monthly payment or less equity in the home when you’re ready to sell. 

To learn more about our different Mortgage Programs, click here! 

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I have children in elementary school, I want to pay off my mortgage before they leave to college. How can I do that?

With a 15 year fixed rate loan you’re gaining equity in your home quicker and paying off your loan faster. If you don’t mind a higher monthly payment, a Conventional Loan may your best pick, click here to learn more! 

You could set realistic and attainable financial goals that will help you to pay your mortgage loan off faster. Meet with a financial adviser or do some research. Many have done it and so can you! Here’s a great article that can offer you some tips: http://www.quickanddirtytips.com/money-finance/loans/8-ways-to-pay-off-a-mortgage-early

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I don’t have the best credit score, what type of mortgage should I look for? 

Borrowers with a lower credit score are more likely to get approved if they apply for an FHA Loan. Scores can be a low as 580! However you will still need to do some explaining why your score is so low, how you plan on improving it, etc. Click here to learn more about how to clean up your report and prepare your credit for the mortgage loan process. 

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What else should I take into consideration when I’m buying a home and taking out a mortgage?

Get information from other lenders, do your research, shop around, and make sure you’re getting the best possible price. Here at Sun American we have the best rates and prices in the Valley! Our reviews on Google and Facebook beat any other mortgage business in town, here’s some of our most recent ones! 

conventional loan - reviews

I’m not too sure how long I’ll be living in my current city…should I still take out a mortgage right now? 

Real Estate professionals recommend taking into consideration how long you’ll be staying in that area. A 15 year or 30 year mortgage is the best way to go if you’re pretty uncertain. This gets you the most equity in your home. 

conventional loan - city

What are closing costs and how much will they be? 

Closing costs are fees that come along with your home purchase and are paid at the end of the real estate transaction. In a recent survey done on Zillow.com, on average buyers will pay roughly $3,700 in closing fees. The Loan Estimate from the beginning will give you a pretty good idea of what you’re closing costs will be. 

This week we celebrate 33 YEARS of helping individuals become home buyers! Whatever your concerns or questions may be, we always answer them as thoroughly as we can. The best part of our job is making this new chapter exciting for you and your family. Meeting your mortgage needs is our top priority!

Call to speak to one of our expert team members today! 480-832-4343 


References:

https://www.trulia.com/blog/type-mortgage-best/