Posted in Mortgage & Finance

Can I Refinance While Buying a Second Home?’ Here Are the Mortgage Rules

As a buyer and a seller, you may be asking, “Can I refinance while buying a second home?” Maybe you’ve found a property that will be a killer investment at a bargain price. Or perhaps the beach cottage you’ve had your eye on for years just came on the market.

Whatever the reason, if you’re considering applying for another loan while refinancing your current home, the process can be a bit complicated. To give you the full picture, we consulted mortgage experts and broke down the rules.

‘Can I refinance an existing mortgage while buying a second home?’

There’s nothing wrong with refinancing one mortgage at the same time that you are buying an investment property or second home with a mortgage, according to Andrew Weinberg, principal and licensed mortgage broker at Silver Fin Capital Group, in Great Neck, NY.

The key factor in making both the refinance and new purchase work is to ensure you will qualify for the new home loan.

“This means taking into account your current home payment,” says Ralph DiBugnara, president of New York’s Home Qualified and vice president at Cardinal Financial. A mortgage bank can very easily tell you the total payments and loan amounts you’ll be able to carry based on your current income.

In some cases, you may even have to refinance to reduce your current mortgage payment to qualify for the new loan. Or you may need to cash out funds from the refinance to come up with the down payment on the new property.

The only ironclad rule is that you can’t refinance a primary residence while applying for a mortgage on a new primary residence.

Consider working with one lender for both mortgages

The benefit of doing both loans—refinancing and obtaining a new mortgage—is that you can deal with a single loan officer and provide most of your documents (e.g., tax returns, W-2s, pay stubs, bank statements, etc.) only once.

You can also optimize your loan balances and your monthly payment to a degree by doing both loans with the same lender, says DiBugnara.

If you need to work with two different lenders, both need to be aware of the other loan.

When refinancing and buying at the same time isn’t a good idea

You shouldn’t refinance a home you intend to sell in the next six months or so because it’s not cost-efficient.

“The closing costs don’t vary because you intend to pay off your loan in a short period of time,” says Weinberg.

Additionally, most refinances have a clause stating the borrower must stay in the home for at least one year. This means you cannot refinance a primary residence, close on a second home, and then immediately move into it permanently.

The differences between investment and second home

When applying for your second mortgage, your lender will take into account how you plan on using the property. So it makes a difference if the second home is for investment purposes or is a vacation home for personal use.

“If the home is an investment, you can use proposed rental income as an add-on to your second income when qualifying for the second mortgage,” says DiBugnara.

But if you’re purchasing a vacation home, the new debt will count 100% against your current income and could prevent you from qualifying for a refinance and a second mortgage.

The good news for those looking to buy a beach cottage or winter retreat? Vacation home mortgage rates are typically lower than investment home rates.

“You can also typically put less money down—sometimes just 10%,” says Kylie Pak, owner of RedBrick Properties, in Richmond, VA, who specializes in property investing.

For more smart financial news and advice, head over to MarketWatch.

SOURCE: Realtor.com

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Posted in Home Maintenance

4 Outdoor Updates That Add Value to Your Home

Selling your home? The experts at Better Homes & Gardens Real Estate say these projects make the best outdoor investments.

The smallest details of a home’s upkeep can make all the difference to a potential home buyer. Make these small updates to make a good impression without having to do a complete exterior overhaul. Most of these updates are quick and affordable so you can get them done in a weekend.

1. Keep Landscaping Simple

Most buyers want low-maintenance plantings. Putting down mulch or groundcover also makes for easy upkeep. If you want to go with something temporary, put colorful annuals in pots. Add mulch, pull weeds, and trim hedges around the yard for a clean and effortless look.

Easy Landscaping Ideas

2. Fix Damaged Siding

Residing can be a long and often pricey process. Show buyers that your siding is in good shape by repairing any cracks, missing pieces, and surface chips. For a fresh look without painting, consider a professional pressure wash. If the exterior is brick, fix thinning areas of mortar.

3. Dress Up Your Front Door

A new coat of paint in a color other than white or black makes it memorable for potential buyers. Go with a color that stands out, but also complements the style of the home. Replace the handle if it’s tarnished or looks dated. Spray paint the handle if it just needs a quick update. Accessories like door numbers and knockers give a welcoming feeling, so play up the hardware.

Best Colors for Front Doors

4. Repair Windows

Even a little damage on one window gives the impression that there could be more problems. A few quick fixes will reassure buyers that the windows are nothing to worry about. Fix caulking around frames and glazing on panes for a like-new look. Replace cracked or foggy windows to make the best impression. If there are built-in window boxes, repair them and give them a fresh coat of paint. Then fill with pretty annuals.
Source: better homes & gardens.
Posted in Uncategorized

GET HELP WITH YOUR DOWN PAYMENT

It’s frustrating to have a decent-paying job, a bright earnings future, and accept credit and still not be able to buy a home because you lack the thousands of dollars in cash needed for a down payment and closing costs.

The dreaded down payment stops more potential homeowners cold than any other aspect of the loan process.

To read articles about down payment headaches one would think it’s only millennials who have trouble coming up with the funds.

In reality, most would-be first-time homebuyers, regardless of age, find saving up 20 percent of hundreds of thousands of dollars challenging.

Sure, you may qualify for a loan with a lower down payment, but do you really want to add to your monthly house payment by purchasing the mandated private mortgage insurance policy? That’s what’s required if you don’t have 20 percent equity in a home you purchase.

Today, we’ll explore ways you can get help with the down payment on your new home.

Crowdfund your down payment

Enter, HomeFundMe CMG Financial, which offers a brilliant way for you to come up with that down payment: Crowdfunding – with the approval of Fannie Mae and Freddie Mac.

Before the crowdfunding concept came into being, lenders stipulated that your down payment and closing cost funds must come from your savings (mutual funds, stocks, IRA and 401(K) included), proceeds from the sale of another property, assistance from government programs or non-profits, union, employers or gift money from an immediate relative.HomeFundMe allows anyone to donate funds to help you buy a home and CMG Financial provides the online platform.

While many crowdfunding endeavors offer a return on investment, the HomeFundMe program returns nothing to those who give. Money given is considered a gift, although they can make the gift conditional on the money eventually going to fund a home purchase.

Get help from the government

The government, from local to county, state and federal, offers programs to help Americans get into home ownership. Some of these programs are geared toward the low-income applicant while others are open to all.

Federal Home Loan Bank

The Federal Home Loan Bank offers three programs to help homebuyers with their down payments and closing costs:

  • Home$tart® — Assistance up to $7,500 for borrowers who take the homebuyer education program and earn up to 80 percent of their area’s median income (Unlike the aforementioned programs, these funds come in the form of a grant.
  • Home$tart Plus — $15,000 to borrowers who are currently receiving public housing assistance. Borrowers must complete a financial literacy program and be income qualified.
  • Native American Homeownership Initiative (NAHI) — $15,000 to eligible Native American households to help with a down payment and closing costs.

Good Neighbor Next Door

This program falls under the auspices of the United States Department of Housing and Urban Development (HUD) and offers a discount (typically 50 percent) off the asking price of a home. The program is open to applicants in the following professions:

  • Pre-Kindergarten through 12th grade teachers
  • Law enforcement officers
  • Emergency medical technicians
  • Firefighters

Be aware that this program only covers homes in HUD’s revitalization areas that are listed for sale through this program.

Learn more about the different program available and how to apply on http://jeanethjimenez.com/

State and local programs

FHA offers state-wide down payment grants through a variety of programs. Search for them here.

Search for local programs at Freddie Mac’s website.

The National Association of Local Housing Finance Agencies (NALHFA) suggests using downpaymentresource.com to find information on local assistance programs.

provides local-level program information.

Finally, several labor unions, such as the Culinary Union, offer homebuying assistance programs for members.