Access Your Home Equity Now, You’ve Earned It !
Having over 20 years’ experience as a Mortgage Broker, I have witnessed many challenging times for homeowners and their finances. Throughout all of them, there are some basic fundamentals that can help you through it. One of those basic fundamentals is to have a reserve of funds so you never miss a mortgage payment. If you miss one payment it will lower your credit score by approximately 75-90 points. That drop in your credit score has a much longer effect on your future ability for a mortgage loan than just missing the payment. After you catch up, the side effects of missing that one payment can last for years!
While home values are still increasing, albeit not at the 10-12% appreciation that we have seen in the last couple of years, they are appreciating closer to the average of 4.25% – 4.5%. With that in mind you should consider taking advantage and get a mortgage loan that allows you to access $40,000 – $50,000 of your homes equity without making any payments now. You can do this and only make payments on the loan when you need it, and you may never need it at all. It’s your home equity and you’ve earned it. Many of my past clients took advantage of this basic fundamental during the financial crisis of 2008-2009. It helped them in many ways by keeping their home, paying their bills, and keeping their credit score high.
Home Bidding Wars Have Slowed
As in the past, there are opportunities that arise when the market is volatile. Right now, is becoming a great time for many that were not able to get into the housing market previously due to all the bidding wars. For the last couple of years, we have heard about homebuyers paying $20,000 – $100,000 over the asking price/appraisal value to own a home. It resulted in many qualified home buyers being beat out of the opportunity to acquire the home they desired. While the supply of homes available has doubled in the last couple of months it is now becoming more of a buyers/sellers’ market. There is much more negotiating going on and there are ways to purchase a home with little money down at rates in the 4’s.
Learn About The 2-1 Buydown Mortgage Loan
Surprisingly there are homes that you can purchase with 100% financing, and they are not a VA loan. A mortgage loan that the mortgage lender has not been able to offer is now coming back and it’s called the 2-1 Buydown Loan. This is how the loan works:
(1) When you find a home, and for example purposes, the mortgage rate is 5%. Once you qualify for the home, the lender allows you to (a) make payments on the loan as if it were 3% for the 1st Year and then (b) in the 2nd Year, you make payments at 4% and then (c) in the 3rd Year and remaining years, you make payments at 5%. This allows you to have some disposal income to help in the beginning years of home ownership.
(2) It can also work well for those that know their income is going to go up in the next couple of years.
First Time Home Buyers, This Is For You
The 2-1 Buydown Loan mentioned above is also great for First Time Home Buyers. There are also many FTHB (First Time Home Buyer) programs in which you can actually purchase a home with a 5-10% down payment and have no mortgage insurance. Others will allow a parent or family member to help you qualify to purchase your first home and your parent or family member does not have to live with you.
Want To Save & Build Your Equity Faster?
If yes, consider looking at a Rehab Mortgage Loan. This is a mortgage loan where the mortgage lender will allow you to finance improvements at initial application and give you time to make those improvements, (i.e., upgrade the kitchen, change flooring, improve the bathrooms, add a room or garage, upgrade the landscaping, and more.) With this mortgage loan approach, you are able to take advantage of a home in the area of town you desire, you get to do the personalization enhancements you want, and the bank will help.
Why Is Home Ownership So Beneficial For You?
First, when you make a payment to live somewhere, you are either paying to build up your equity or you’re paying to help build up someone else’s equity. So, consider that homes have appreciated over the last 20 years from $219,000 in 2000 to $589,000 in 2021. Because of that massive level of appreciation, it has made many homeowners want to purchase investment properties. It’s a great scenario for the investor – the tenant makes the mortgage payments, which is paying the mortgage down, and the investor is collecting the equity, and some potential tax savings.
Affordable Interest Mortgage Serves Colorado, Arizona & Wyoming
If you would like to learn more about any of these great mortgage loan options, call me and we can discuss which one is best suited for your own personal circumstances. I have been in the Customer Satisfaction Business since 1977. In 2001, I founded Affordable Interest Mortgage, a full-service residential mortgage brokerage company in Colorado, Arizona, and Wyoming to offer residential mortgage loan products and investment tools. I know how to help clients plan for and react to this type of market change involving their home and their finances. My passion and energy are always focused on sharing knowledge and educating consumers about the latest news and updates affecting the mortgage industry and thus their finances. Call me today to explore your mortgage options (720) 895-0500.
COLORADO NMLS #298191: (720) 895-0500
ARIZONA NMLS #2128571 – MB-1021756: (602) 830-1000
WYOMING NMLS #4594: (877) 594-8475
Equal Opportunity Lender.
