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Author: Mann Mortgage

A Veteran’s Guide To VA Loan: 7 Things To Know

Posted on by Mann Mortgage

From a large down payment to financing mortgage insurance, closing charges, and other fees, the journey to home ownership can be hard. But if you’re a veteran or service member, VA home loan programs may provide significant assistance in obtaining the keys to your new home. VA home loans are one of the most distinct loan programs in the country, with significant benefits such as better terms, no down payment, cheaper interest rates, and more. Read on to learn important facts about VA loans that you may not know about.

What is a VA Loan?

It is a mortgage insured by the U.S. Department of Veterans Affairs for service members, veterans, and surviving spouses. Its primary objective is to assist veterans to purchase, build or improve a house, or refinance an existing mortgage.

Things You Should Know About a VA Loan

With interest rates currently at all-time lows, it makes perfect sense to consider VA loan options if you believe you are qualified.

Here are seven facts you should know about this loan program:

Zero Down Payment

The most significant benefit of a VA loan is that eligible buyers can typically finance 100% of the transaction price of their primary home. Almost all other financing options require a down payment of 5% to 20%. For traditional homebuyers, this requires years of dedication and savings.

Government-Backed

If the homeowner defaults, the VA guarantees that a part of the loan will be paid back to the lender. The government’s backing provides lenders with the security to offer competitive rates and conditions.

No Time Limit

Once you’ve acquired it, your eligibility for a VA loan never expires. If a veteran served 10, 20, or even 40 years ago and never used their loan, they can utilize it to purchase a property today. Eligibility for a VA loan is determined by the length and period of military  service.

Use Loan Benefit More Than Once

A common myth is that after you’ve used your VA loan, you cannot use it again. Fortunately, this is untrue. Once your eligibility has been restored and your prior loan has been repaid, you are eligible to reapply and possibly use a VA loan again at any time.

Low Interest Rates

As VA loans are backed by the government, lenders are more likely to grant favorable terms. In fact, VA loans offer the lowest rates on the market. The average 30-year VA loan fixed rate is often cheaper than those of traditional loan programs.

No Monthly Mortgage Insurance

A VA loan does not need monthly mortgage insurance, which may be necessary on other loan programs if you do not put down 20%. Both purchase and refinance VA mortgages involve a funding charge, which can be rolled into the loan or eliminated for eligible veterans with service-related disabilities.

Spouses Could Qualify

Unremarried spouses of fallen service members can purchase a house without having to pay mortgage insurance or a down payment. The fees for VA funding are also waived for them.

If you’re a service member or a veteran, it’s beneficial to consider getting a VA loan when shopping for a home. If you want to know more about VA loans and your eligibility, contact our experts today!

A Step-By-Step Guide On How To Apply For A USDA Home Loan

Posted on by Mann Mortgage

If you are having difficulty saving for a down payment on a new house, you should look into the USDA Rural Development Loan. USDA home loans provide mortgages with no down payment for rural homebuyers. It is ideal for people with modest incomes who do not wish to live in a city or metropolitan setting. This initiative has assisted many people who would not have been able to acquire a home otherwise. Read on to find out about the eligibility criteria and how you can apply!

What are the Eligibility Criteria for a USDA Loan?

To be eligible for the USDA Guaranteed program, you must:

  • Be a permanent resident of the U.S.
  • Be constructing or purchasing a home in a rural location.
  • Have a household income that falls within the program’s guidelines for your area.
  • Have a minimum credit score of 640.
  • Live in the house as your main residence.

How Do You Apply for a USDA Loan?

If you satisfy the USDA loan qualification requirements and are ready to buy a property, follow these steps:

Contact a USDA-Approved Lender

If you want to construct a house, locating a USDA-approved lender is a good place to start. Working with a lender who specializes in the rural home program can have a significant impact on prospective homeowners.

Get Prequalified

Once you’ve decided on a lender, the next step is to become pre-qualified. Pre-qualifying for a USDA loan is a straightforward process that offers an estimate of what you can pay and whether you are eligible for the program. During this phase, your lender will examine your affordability and notify you of any red flags that may prevent you from securing a USDA loan.

Find a House in a USDA-Approved Neighborhood

After you become pre-qualified, look for a property in a USDA-eligible neighborhood and put in an offer. Your requalified letter demonstrates to sellers and brokers that you are a lender-verified USDA buyer who is ready to close.

Sign a Purchase Agreement

After you’ve found the ideal home, you’ll collaborate with your lender and agent to submit an offer. Your lender will request a USDA loan appraisal as soon as you and the seller sign a purchase contract. The appraiser will make certain that the house is move-in ready and that it fulfills USDA requirements. If anything does not match industry standards, it must be corrected before the closing.

Complete Processing and Underwriting

After you have signed the contract, an underwriter will check your information and the file to ensure that your application and supporting papers are authentic and correct. Because the USDA program employs a two-party approval system, the underwriting procedure for USDA loans may take longer than for traditional mortgages. The loan file will first be reviewed by your lender to make sure it complies with all USDA standards. They will then certify the file, either automatically or manually. 

Close the Deal

When both the lender and the USDA approve your loan file, you’ll get a “clear to close,” which indicates you can proceed to closing day. You’ll sign the loan note and other documents on closing day and receive the keys to your new residence.

If you’re unsure if you and your proposed property are eligible for a USDA loan, contact us today!

6 Steps On How To Get A Mortgage

Posted on by Mann Mortgage

The first step in any home ownership journey is to secure financing. But when you don’t know where to look, it might be tough to obtain a loan for your dream house. The best approach to securing a loan is by working with a lender.  However, you must first understand what lenders are looking for and be prepared to go mortgage shopping. Learning how to get a mortgage and qualifying for one can be stressful, but this guide will simplify the entire process for you.

How to Get a Mortgage?

If you’re ready to apply for a mortgage, follow these six steps:

Focus on Saving

The first thing you need to do is start saving for a down payment. Most lenders will decline to work with you if you do not make any form of down payment. In general, you should have six months’ worth of mortgage payments in your savings account. Also, remember to save for closing costs so that you have everything you need to begin the mortgage-buying process.

Verify Your Credit Reports

Lenders start the application process by reviewing your credit history, so you should keep an eye out for them. Review your credit history to confirm that your creditors are providing you with the right information about your credit accounts. Directly dispute any mistakes you discover with the credit bureaus. Satisfy delinquent collections with creditors, and then follow up to ensure your creditor is updated.

Keep Track of Payment History

Payment history is a key element in credit scoring, so start making prompt payments on your accounts. Examine your credit record for any late payments that were incorrectly reported.  Next, keep a close eye on your fluctuating account balances. The amount you charge in relation to your extended limit will have a negative influence on your credit score.

Gather Essential Documentation

Collect the pay stubs for the last 30 days, bank statements, and federal tax returns for the last two years before meeting with your lender. Most lenders will require each borrower to possess a two-year job history (in the same field of work). Some lenders, however, may make allowances for young graduates who are new to their field. Instead of pay stubs, self-employed borrowers may be required to furnish a profit-and-loss statement and tax returns for two years.

Select a Mortgage Type

When you are confident that you have the necessary savings and that your credit score is where it needs to be, you can start exploring your loan options. Some of the most popular types of loans are jumbo loans, conventional loans, and government-issued loans.

Get Preapproved

Getting preapproved for a mortgage is one way to reduce some of the stress associated with the home purchasing process. When you are preapproved, a lender will consider personal factors like your income, credit score, and assets to determine how much you can borrow. This gives you a competitive advantage because home sellers know there’s a high chance you’ll be able to acquire financing quickly.

Ready to apply for a home mortgage? Get in touch with our team today!

A Guide To FHA Loans: What You Need To Know

Posted on by Mann Mortgage

An FHA loan is an excellent option to consider if you do not fit the traditional mortgage lending model. This government-backed mortgage may be the solution you need to secure funding for your home.

What Is an FHA Loan?

Insured by the Federal Housing Administration, an FHA loan can be an excellent opportunity for some homebuyers to acquire a mortgage. If an individual has a 500-credit score or better (on the broker’s side), they can enjoy the opportunity to simply make a minimum 3.5% down payment. For first-time homebuyers with credit challenges or very little savings, these are some of the most popular loans around.

Who issues insured FHA mortgages? Answer: Lenders like nonbanks, credit unions, and banks. Why do you need insurance? Answer: The lender is willing to let you purchase a property with a lower credit score or low down payment because they are insured by the FHA. This is one reason why potential homebuyers who might not ordinarily qualify for a loan – but who still need the money with which to purchase a house – can receive very favorable terms. Only lenders who are approved by the FHA can offer these types of loans.

An FHA home loan can be used to refinance or buy the following:

  • FHA-approved condominiums
  • Four-unit multifamily homes
  • Two-unit multifamily homes
  • Single-family houses 
  • Some types of manufactured homes

Conventional Loans Vs. FHA Loans

Compared to a conventional loan, qualifying for an FHA loan may be easier for some. Additionally, FHA loans:

  • Regarding gifts of down payment money from charitable organizations, employers, or family, they have more liberal rules.
  • Compared to conventional loans, FHA loans allow for lower credit scores. (In some cases, lower mortgage payments, too.)
  • Compared to conventional loans, FHA loans may require certain closing costs

FHA Loans – The Different Types

FHA loans come in a variety of options. Here are the most common:

  • EEM or Energy Efficient Mortgage
  • Title/Property Improvement Loan
  • CP (Construction to Permanent) Loan
  • 203(k) Rehab Mortgage
  • Basic Home Mortgage Loan 203(b)

One of these is most likely better for your situation than others. Each comes with its own set of features, limitations, and benefits. While an FHA loan can be an incredible opportunity for some individuals, it may not be right for everyone.

Explore your options by conferring with the knowledgeable professionals at Mann Mortgage. 

Mann Mortgage – It’s Never Been Easier to Apply For A Loan!

That’s a bold statement – but it’s true. In less than 10 minutes, you can apply for the funds you need through Mann Mortgage. With over 18,000 reviews from satisfied customers, we are one of the top USDA RD lenders. For over 30 years, we’ve been offering hassle-free, trusted home lending services.

To assist you in home purchasing, we’ll go above and beyond what’s expected as your personal, reliable mortgage expert. Just some of the loans we offer include the following:

  • Reverse mortgage
  • Renovation
  • Construction
  • Jumbo loan
  • USDA RD
  • FHA loan
  • VA 
  • And of course, conventional loans

Use our Branch Finder to see if we have a location near you. 

Feel free to contact us by calling our office at 855-692-0102 or emailing us at contactus@mannmortgage.com. You can also use our convenient online form, if you wish. Fill it out, send it in, and we’ll be in touch.

Christmas Tree Sweepstakes Rules

Posted on by Mann Mortgage

NO PURCHASE IS NECESSARY TO ENTER OR WIN. A PURCHASE DOES NOT INCREASE THE CHANCES OF WINNING.

1. Eligibility: This Campaign is open only to those who follow https://www.facebook.com/katiedillingerloanofficer and who are 18 years or older as of the date of entry. The Campaign is only open to legal residents of the United States, and is void where prohibited by law. Employees of Life Mortgage, its affiliates, subsidiaries, advertising and promotion agencies, and suppliers, (collectively the “Employees”), and immediate family members and/or those living in the same household of Employees are not eligible to participate in the Campaign. The Campaign is subject to all applicable federal, state, and local laws and regulations. Void where prohibited.

2. Agreement to Rules: By participating, the Contestant (“You”) agree to be fully unconditionally bound by these Rules, and You represent and warrant that You meet the eligibility requirements. In addition, you­­­­­­­ agree to accept the decisions of Life Mortgage as final and binding as it relates to the content of this Campaign.

3. Campaign Period: Entries will be accepted starting on November 23rd, 2021 and ending December 3rd, 2021.

4. How to Enter: The Campaign must be entered by following https://www.facebook.com/katiedillingerloanofficer. The entry must fulfill all Campaign requirements, as specified, to be eligible to win a prize. Entries that are incomplete or do not adhere to the rules or specifications may be disqualified at the sole discretion of Life Mortgage. You may enter only once. You must provide the information requested. You may not enter more times than indicated by using multiple email addresses, identities, or devices in an attempt to circumvent the rules. If You use fraudulent methods or otherwise attempt to circumvent the rules, your submission may be removed from eligibility at the sole discretion of Life Mortgage.

5. Prizes: The Winner(s) of the Campaign (the “Winner”) will receive an artificial holiday tree, valued at $250.00. Actual/appraised value may differ at time of prize award. The specifics of the prize shall be solely determined by Life Mortgage. No cash or other prize substitution shall be permitted except at Life Mortgage’s discretion. The prize is nontransferable. Any and all prize-related expenses, including without limitation any and all federal, state, and/or local taxes, shall be the sole responsibility of Winner. No substitution of prize or transfer/assignment of prize to others or request for the cash equivalent by Winner is permitted. Acceptance of prize constitutes permission for Life Mortgage to use Winner’s name, likeness, and entry for purposes of advertising and trade without further compensation, unless prohibited by law.

6. Odds: The odds of winning depend on the number of eligible entries received.

7. Winner Selection and Notification: Winner will be selected by a random drawing under the supervision of Life Mortgage. Winner will be notified by means of email within 1 day following selection of Winner. Winner will also be announced on Facebook platform. Life Mortgage shall have no liability for Winner’s failure to receive notices due to spam, junk e-mail or other security settings or for Winner’s provision of incorrect or otherwise non-functioning contact information. If Winner cannot be contacted, is ineligible, fails to claim the prize within 2 days from the time award notification was sent, or fails to timely return a completed and executed declaration and release as required, the prize may be forfeited, and an alternate Winner selected. Receipt by Winner of the prize offered in this Campaign is conditioned upon compliance with any and all federal, state, and local laws and regulations. ANY VIOLATION OF THESE OFFICIAL RULES BY WINNER (AT LIFE MORTGAGE’ SOLE DISCRETION) WILL RESULT IN WINNER’S DISQUALIFICATION AS WINNER OF THE CAMPAIGN, AND ALL PRIVILEGES AS WINNER WILL BE IMMEDIATELY TERMINATED.

8. Rights Granted by You: By entering this content (e.g., photo, video, text, etc.), You understand and agree that Life Mortgage, anyone acting on behalf of Life Mortgage, and Life Mortgage’ licensees, successors, and assigns, shall have the right, where permitted by law, to print, publish, broadcast, distribute, and use in any media now known or hereafter developed, in perpetuity and throughout the World, without limitation, your entry, name, portrait, picture, voice, likeness, image, statements about the Campaign, and biographical information for news, publicity, information, trade, advertising, public relations, and promotional purposes. without any further compensation, notice, review, or consent. Optional verbiage for Contests: By entering this content, You represent and warrant that your entry is an original work of authorship, and does not violate any third party’s proprietary or intellectual property rights. If your entry infringes upon the intellectual property right of another, You will be disqualified at the sole discretion of Life Mortgage. If the content of your entry is claimed to constitute infringement of any proprietary or intellectual proprietary rights of any third party, You shall, at your sole expense, defend or settle against such claims. You shall indemnify, defend, and hold harmless Life Mortgage from and against any suit, proceeding, claims, liability, loss, damage, costs or expense, which Life Mortgage may incur, suffer, or be required to pay arising out of such infringement or suspected infringement of any third party’s right.

9. Terms & Conditions: Life Mortgage reserves the right, in its sole discretion, to cancel, terminate, modify or suspend the Campaign should virus, bug, non-authorized human intervention, fraud, or other cause beyond Life Mortgage’s control corrupt or affect the administration, security, fairness, or proper conduct of the Campaign. In such case, Life Mortgage may select the Winner from all eligible entries received prior to and/or after (if appropriate) the action taken by Life Mortgage. Life Mortgage reserves the right, in its sole discretion, to disqualify any individual who tampers or attempts to tamper with the entry process or the operation of the Campaign or website or violates these Terms & Conditions. Life Mortgage has the right, in its sole discretion, to maintain the integrity of the Campaign, to void votes for any reason, including, but not limited to: multiple entries from the same user from different IP addresses; multiple entries from the same computer in excess of that allowed by Campaign rules; or the use of bots, macros, scripts, or other technical means for entering. Any attempt by an entrant to deliberately damage any website or undermine the legitimate operation of the Campaign may be a violation of criminal and civil laws. Should such attempt be made, Life Mortgage reserves the right to seek damages to the fullest extent permitted by law.

10. Limitation of Liability: By entering, You agree to release and hold harmless Life Mortgage and its subsidiaries, affiliates, advertising and promotion agencies, partners, representatives, agents, successors, assigns, employees, officers, and directors from any liability, illness, injury, death, loss, litigation, claim, or damage that may occur, directly or indirectly, whether caused by negligence or not, from: (i) such entrant’s participation in the Campaign and/or his/her acceptance, possession, use, or misuse of any prize or any portion thereof; (ii) technical failures of any kind, including but not limited to the malfunction of any computer, cable, network, hardware, or software, or other mechanical equipment; (iii) the unavailability or inaccessibility of any transmissions, telephone, or Internet service; (iv) unauthorized human intervention in any part of the entry process or the Promotion; (v) electronic or human error in the administration of the Promotion or the processing of entries.

11. Disputes: THIS Campaign IS GOVERNED BY THE LAWS OF the UNITED STATES AND WASHINGTON, WITHOUT RESPECT TO CONFLICT OF LAW DOCTRINES. As a condition of participating in this Campaign, participant agrees that any and all disputes that cannot be resolved between the parties, and causes of action arising out of or connected with this Campaign, shall be resolved individually, without resort to any form of class action, exclusively before a court located in Washington having jurisdiction. Further, in any such dispute, under no circumstances shall participant be permitted to obtain awards for, and hereby waives all rights to, punitive, incidental, or consequential damages, including reasonable attorney’s fees, other than participant’s actual out-of-pocket expenses (i.e. costs associated with entering this Campaign). Participant further waives all rights to have damages multiplied or increased.

12. Privacy Policy: Information submitted with an entry is subject to the Privacy Policy stated on the Life Mortgage website. To read the Privacy Policy, https://lifemort.com/privacy/ click here. Note: a privacy policy is optional, but may be required when running a promotion on the web when using third party platforms or when using features from social channels. Including this information makes it clear to your users how you are going to use their information.

13. Winners List: To obtain a copy of the Winner’s name or a copy of these Official Rules, mail your request along with a stamped, self-addressed envelope to: Life Mortgage, 842 Washington Way 110 Longview WA 98632. Requests must be received no later than December 3rd, 2021.

14. Sponsor: The Sponsor of the Campaign is Life Mortgage, 842 Washington Way 110 Longview WA 98632.

15. By entering this contest, You, the Contestant, have affirmatively reviewed, accepted, and agreed to all the Official Rules.

16. This campaign hosted by Life Mortgage is in no way sponsored, endorsed, administered by, or associated with Facebook.

A good debt-to-income ratio

Posted on by Mann Mortgage

It’s the amount of debt you have compared to your income. Lenders use your debt-to-income ratio to decide whether you’ll be likely to repay your debts to them.

To figure out what your debt-to-income ratio is, add up your ongoing monthly bills. Minimum credit card payments, rent, auto loans, and student loans. Only consider your minimum payments, not the total amount you owe. Add them all up and divide it by your gross monthly income (before taxes and other deductions). This is your debt-to-income ratio and it’s written as a percentage.

As example, if you had a $1,100 monthly car payment, $300 minimum card payment, and $300 minimum student debt payment, your total monthly bills would be $1,700. If your monthly income is $5,000, your DTI ratio would be 1,700/5,000 = 0.34. 0.34 x 100 = 34. Your DTI would be a very healthy 34%.

DTI scores
Your lender’s biggest concern is whether you can pay back the loan. Your DTI score is just one of the calculations they use to help decide. They’ll also look at your FICO score, employment history, income, assets, and more.

At a minimum, they want to see your ratio under 50%. It’s ideal to have yours closer to 35%, but ranges between the two are acceptable.

Average debt per American
It’s difficult to tell what an average DTI ratio is, but we can say what the average amount of debt is. A 2021 CNBC report calculated the average American has $90,460 in debt. That includes their credit cards, personal loans, mortgages, and student debt. The higher an individual’s income, the higher their debt (and the easier it is for them to pay off).

Age 18 to 23: $9,593
Age 24 to 39: $78,396
Age 40 to 55: $135,841
Age 56 to 74: $96,984
Age 75+: $40,925

>> What do home lenders do when you have student loan debt?

Reducing your DTI
There are just two ways to do it. Reduce your monthly expenditures or increase your monthly income. Both options will take time and effort but pay off in the long run.

Rather than deciding on your own if your DTI is too high, consider talking to your home lender to go over it together. Local home lenders, like Mann Mortgage, will review your DTI and work with you and your unique financial decision to find the right loan.

6 things you shouldn’t do when you’re pre-approved for a mortgage

Posted on by Mann Mortgage

Just because you’re pre-approved for a loan doesn’t mean you’re guaranteed to get final approval on your loan. When your offer has been accepted and it’s time to begin closing on your loan, your mortgage lender is going to take another detailed look at your credit history, assets, income, and FICO score. You want to make sure you look just as good as you did the day you got pre-approved. How can you do that? 

Don’t miss payments
They’re going to see whether you’ve been late or missed any payments on your credit cards or loans since you were pre-approved. Just one 30-day late payment can negatively impact your credit report by many points. Make sure you have all your medical bills, parking tickets, and utility bills up-to-date and paid too! 

Don’t apply for new credit
Applying for new credit will lower your credit score and, if you’re approved, increase your debt-to-income ratio – a key factor lenders consider when you apply for a mortgage. These changes could affect the terms of your loan or get it denied altogether.

Don’t change jobs
This might be out of your control, but it’s best to stay with the job you had when you had your loan pre-approval. Switching jobs could signal a change in income, which may impact the amount you’re approved to borrow.

Don’t make any large purchases
You might be tempted to start shopping for furniture or appliances for your new home, but you shouldn’t do it. If you put the charges on your credit card, your debt-to-income ratio will change. And if you pay cash, you’ll have less money for a down payment or as an asset. Hold off on any large purchases until you’ve closed on your new home!

Don’t make big deposits
Any big cash deposits into one of your accounts prior to your mortgage closing looks fishy to an underwriter. They’re trained to spot evidence of borrowers needing to be gifted money for their mortgage – a clear sign the borrower may default. If it’s inevitable that you’ll have a deposit over $1,000, expect to be able to show the origin of the funds to your mortgage company. Transferring money between your accounts is generally fine.

Don’t refinance your loans
Don’t refinance your loans for a lower rate until after your home loan has closed. Refinancing is considered taking out a new line of credit, which isn’t good for someone looking for a mortgage. An established loan you’ve been making regular payments on looks better to mortgage underwriters than a new lower-interest loan you haven’t made many payments on yet.

What SHOULD you do?
Talk to your mortgage expert if you have any question on your current credit score or how your actions will affect your pre-approval. Your local Mann Mortgage branch is dedicated to making your experience both personalized and hassle-free.

What is a home equity line of credit?

Posted on by Mann Mortgage

A home equity line of credit (HELOC) uses the equity you’ve built in your home as collateral to get an additional loan. Since you’re using your home as collateral, lending institutions generally are able to offer much more favorable interest rates than you would get from an unsecure borrowing source (like a credit card company).  

Home much money can you get from a HELOC?
Each lending institution has different guidelines that dictate how much they can lend you. Their guidelines are usually based on your loan-to-value ratio (LTV), which is the amount of principal on your mortgage compared to your home’s appraised value. Most often, you’ll need at least 20% equity in your home (which is a LTV of 80%) to qualify. As example, if your home’s current value is $300,000 and the remaining balance on your mortgage is $250,000, you would have an LTV of 83%. For many lending institutions, you would not qualify for a HELOC.  

However, if your home’s current value is $300,000 and the remaining balance on your mortgage is $175,000, your LTV would be 57.9% and you would normally qualify for a HELOC for up to 80% of the equity in your home. In this example, you may have access to $65,000. 

Be aware that many lenders won’t give you a HELOC for less than $25,000.  

How do you get the cash?
Much like a credit card, you’ll have a revolving line of credit available. You can access your funds through an online transfer, a check, or a credit card. As you borrow more from your line of credit, your payments will increase though the rate of interest will remain the same.  

When do you have to pay back your HELOC funds?
Even if you get a HELOC, you don’t have to use the funds. As long as your lender doesn’t require you to do minimum draws, it could be a good source of emergency cash or a temporary safety net. If you do need to use the cash, the interest rates are lower than the rates tied to credit cards. 

The benefits of a HELOC
Even if you get a HELOC, you don’t have to use the funds. As long as your lender doesn’t require you to do minimum draws, it could be a good source of emergency cash or a temporary safety net. If you do need to use the cash, the interest rates are lower than the rates tied to credit cards.

The cons of a HELOC
The rate on your HELOC might fluctuate, and if it goes too high, you may have a hard time paying off your interest. Furthermore, your lender may decide to reduce your line of credit if your home’s value takes a drastic dip. And, don’t forget your overall debt load will increase with a HELOC or any other second mortgage.

Alternatives to a HELOC
One potential alternative is a cash-out refinance, which you could also use to pay for a home renovation or to pay off credit card bills.

>> Learn more about a cash-out refinance.

Is a HELOC right for you?
If you have enough equity built into your home and need cash for a home improvement, to cover medical bills, to pay off credit cards, or to sustain your lifestyle after losing a job, a HELOC might be a great solution. To find your home’s current value and how much you could get from a HELOC, contact your local Mann Mortgage expert today.

How much will your down payment on a house be?

Posted on by Mann Mortgage

A down payment is a minimum cash payment a buyer makes during the closing process to secure a loan on a home purchase. Down payment requirements vary for different types of loans, and can range from as low as 0% of the total purchase with a VA loan to as much as 20% or more for conventional or jumbo loans. Similar to your mortgage rate, your down payment amount will be determined in large part by your credit score, the purchase price of the home, and the type of loan you and your loan officer determine will help you the most given your circumstances.

The amount you need depends on the type of loan you get. Below are the six most common types of home loan options and their minimum down payment requirements.

Conventional loan
Minimum down: 3%
These loans are used for purchasing a primary residence, secondary home, or investment property. Though you can put down 3%, you will have to pay private mortgage insurance (PMI). It ranges in cost from 0.55% to 2.25% of the original loan amount per year and is broken down into monthly payments. It ranges in cost from 0.55% to 2.25% of the original loan amount per year and is broken down into monthly payments. Once you own 22% of your home, you can stop paying PMI. You can avoid PMI altogether with a 20% down payment.

FHA loan
Minimum down: 3.5%
Depending on your credit score, you may be able to secure a loan guaranteed by the Fair Housing Administration (FHA) with as little as a 3.5% down payment. FHA loans are available to people with lower credit scores (as low as 500), higher debt-to-income ratio (up to 50%), and with smaller down payments than some conventional loans allow. FHA loans allow the money for a down payment to come from a gift or charitable organization. Borrowers will need to pay an annual mortgage insurance premium (MIP) of between 0.45% to 1.05% of the loan amount – this fee will be paid annually but broken down into 12 payments and added to the monthly mortgage bill. If borrowers put down a 10% down payment, they’ll pay MIP for 11 years. If they put down less than 10%, they’ll pay MIP for the lifetime of the loan.

Jumbo loan
Minimum down: 20%
When someone needs a loan for more than conforming loans allow ($548,250 is most states), a jumbo loan is an option. Since they are too large to be guaranteed by Fannie Mae or Freddie Mac, qualifications to get this loan are tight and borrowers will need an excellent credit score. A 20% down payment is standard, but some lending institutions may require more.

USDA loan
Minimum down: 0%
These loans are designed to improve the economy and quality of life in rural America. If you’re buying a primary residence in a rural area, you may qualify for a USDA loan. You’ll need a credit score of 640 (though some lenders will offer loans for less) and meet income restrictions for the area you’re buying in. Borrowers will pay an annual fee equal to 0.35% of the loan balance (broken down into 12 monthly payments and added to the mortgage bill) as well as a one-time funding fee of 1% of the loan amount due when the loan closes.

The USDA provides this color-coded map to show which areas they classify as “rural”.

VA loan
Minimum down: 0%
If you’re an active member or veteran of the U.S. military (or a surviving spouse) you may be eligible for a Veterans Affairs (VA) loan. The VA doesn’t set a minimum credit score requirement for VA loan eligibility, but lenders typically will. Normally, it’s around 660, but you’ll need to check with your individual lender to see what their qualifications are. Borrowers will need to pay a one-time funding fee of 1.4% to 3.6% of the loan amount and can be paid upfront or rolled into the loan amount. There are no private mortgage insurance fees associated with a VA loan.

What’s the right down payment for you?
Finding the down payment amount depends on your financial goals, your loan eligibility, and other factors. Work with your loan officer at Mann Mortgage to identify the loan programs you qualify for and to help you decide which is best option for achieving your home buying goals.

Buying a house when you have student loan debt

Posted on by Mann Mortgage

More than half of all college students have taken on some form of debt in order to pay for their education – mostly through student loans. The average outstanding amount owed? Between $20,000 and $24,999. If you’re among those that have student loan debt, what are your options for getting a home loan?

How Do Lenders Look at Debt?
When issuing credit, lenders biggest concern is whether a borrower will be able to pay the loan back. They use a lot of calculations to figure it out. One of the major ones is to divide the borrowers’ monthly debts by their monthly gross income. This is called a borrower’s debt-to-income ratio.

To get an idea of your debt-to-income ratio, consider the amount you pay each month for your minimum credit card payments, auto loan, rent, mortgage, student loan, and other monthly payments. Keep in mind that lenders will look at what you pay each month, not the total amount you owe. If you have $20,000 in student loan debt and make $200 monthly payments, your lender will use the $200 monthly payments in the calculation. Now, divide the amount you pay each month by your gross monthly income (before taxes and other deductions). This is your debt-to-income ratio.

Generally, lenders want to see, at a minimum, a ratio of 50% or less.

Should You Pay Down Your Student Loans Before Getting a House?
Thinking about waiting to purchase a home until your student loan debts are paid down can feel like putting your life on hold. Whether you should pay off or down your student debt really depends on your unique financial situation. The price of a home ownership far exceeds just the monthly mortgage bill. There’s insurance, property taxes, utilities, maintenance, and plenty of small expenses. On the flip side, making a wise investment in a home could provide you with financial stability in the right real estate market.

Speak openly with your home loan officer to decide whether now is the right time for you to invest in a home. They’ll be able to give you expert advice about your real estate market, interest rates, and financial requirements for loans you may qualify for.

What Home Loans are Available to People with Student Debt?

Many loan options are available to people regardless of the type of debt they have. Some favorites among young borrowers with student loans are conventional, USDA, VA, and FHA loans.

Conventional loans
If you have decent credit and can make a down payment of at least 3.5%, a conventional loan will offer you many great benefits including PMI fees that stop once you reach 22% equity in your home.

USDA loans
If you’re looking to purchase a primary home in an area defined as “rural” by the USDA, a USDA loan is a great choice. Chief among the benefits for those with student loan debt is a 0% minimum down payment and no private mortgage insurance fees.

VA loans
Another great 0% down payment option for those who are former or current members of the U.S. military. VA loans are available to fund the purchase of primary residences only.

FHA loans
If your credit has been diminished by student loan payments, consider an FHA loan. They’re available to borrowers with FICO credit scores as low as 500. You’ll have to make a down payment of 3.5 to 10% depending on your credit score, but it may be a good option to start building financial stability with a home.

Should You Buy A Home Now?
Depending on your financial goals, taking advantage of the low interest rates might be a great choice. Contact your local loan officer to help you make the decision about whether you’re ready for home ownership or if it would be more advantageous to wait.

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