The Federal Housing Authority Announces Update to Student Loan Policies

Understanding which home loan program is the most beneficial for you when purchasing or refinancing a property is key to making a successful loan choice. Our loan officers are up to date on the best programs and newest guidelines, and are here to educate you on your most advantageous options.

If you have current or past student loan payments, the Federal Housing Administration’s (FHA) updated policy could be great news for you! The Federal Housing Administration (FHA) helps buyers with low incomes and low down payments who may not qualify for conventional mortgages.  FHA insures the loans, giving lenders the confidence to provide financing to people who otherwise would not qualify.

Effective now, monthly student loan debt may be excluded from your debt-to-Income ratio ( DTI) when the program, creditor or student loan servicer indicates that the full loan balance has been forgiven, cancelled, discharged or otherwise paid in full.

For outstanding student loans, regardless of payment status, to calculate monthly obligation:

o            Use the payment amount reported on the credit report or the actual documented payment (when payment is above zero), or

o            Use .5 % of the outstanding loan balance, when the monthly payment reported on the credit report is zero.

What does this mean for borrowers with student loans?

This new update allows student loan debt to be calculated at 0.5% of the loan balance if the payment is not reported on the credit report when determining loan eligibility. This may give more purchasing power to some buyers with existing student loan debt.

For more information about these beneficial changes, contact one of our experienced loan officers today!

Steps on the journey to purchasing your dream home!

Get Pre-Qualified

Complete a loan pre-qualification – Contact one of our loan officers to get started!

Submit basic documentation – This can include pay stubs, bank statements, credit reports, and statements for any other debts or loans you might have. Your loan officer will let you know exactly what they need!

Discuss what you can afford – Your loan officer will discuss mortgage program options with you to find the best fit for your budget and situation. A monthly budget worksheet can be very helpful for this part of the process because it helps you to review your spending habits so you know how much money you’ll want to have leftover after your home bills each month.

Finalize pre-qualification – Your loan officer will put together a pre-qualification letter based on your loan choice so you can start shopping for a home!

Shop For a Home

Submit an offer using a pre-qualification letter – Home sellers almost always require a letter of pre-qualification from a lender along with the purchase offer from your realtor. If they accept your offer, you can move on to the next step!

Congrats! You ratified on the purchase of your new home – This means the seller has accepted your purchase offer in writing!

Begin the Loan Process

Activate your loan application – Your loan officer or loan processor will reach out to you to guide you through these steps.

Lock in your interest rate and order the appraisal – Locking your interest rate means that if rates go up prior to closing on your home, your rate stays the same. Your loan processor will schedule an appraiser to verify the current market value of the home you are going to purchase.

Sign loan disclosures and provide additional documentation as needed – Your loan processor will send you important disclosures with information about your loan to sign electronically and let you know if they need any additional documents from you to send over to one of our qualified underwriters.

Submit to underwriting – Your loan processor and loan officer will send all of the information on your loan choices, the home you are purchasing, and the documentation you have provided to our underwriters to finalize the approval of your loan.

Underwriting

Underwriter reviews loan and issues conditional approval – A conditional approval means your loan is approved so long as you provide any additional documents that they might need. There are not always conditions on approval at this point in the process, but it is not uncommon.

Provide documentation to satisfy conditions – Your loan officer, loan processor, and underwriter will work with you to obtain any additional documents needed for the final approval of your loan.

Loan is Approved

Loan is moved to our closing department – Your loan officer or loan processor will reach out to you to find out which title company you would like to use and schedule the closing. They will also send you a Closing Disclosure to review and sign three days prior to closing.

Cash to close amount is provided to you – This is the amount of money needed “at the table” (even though many closings are now electronic!) on the day of closing. This information will have been included in your Closing Disclosure.

Get a certified check or wire – Reach out to your bank to obtain a certified check or wire transfer for the amount needed for closing. Be aware of wire transfer fraud and confirm directly with your title company that the wiring information is accurate!

Settlement Day!

Sign your loan documents – This can now be done in person or remotely!

Get your house keys – Congratulations!! Once the paperwork is signed and completed you’ll receive your new house keys!

You’re a homeowner! All of your hard work has paid off and it’s time to enjoy your lovely new home.

If you have any questions about the process of purchasing or refinancing a home, including questions about low and no down payment options, reach out to one of our experienced Loan Officers today!

Buying a Home with Student Debt

With graduations upon us, graduates past and present are reminded of the price of their education. According to the U.S. Federal reserve, in 2021 44.7 million Americans have student loan debt and in Maryland the average balance is $36,689. Many potential homebuyers think with a mound of student debt it will be nearly impossible to purchase a new home. Luckily, there are options for those with debt to buy homes. The Maryland Mortgage Program offers the SmartBuy 3.0 program, which helps to qualify homebuyers to pay off student debt during the purchase of their home.

The terms are simple.

You must have minimum existing student debt of $1,000 and the loan must be in your name. The program offers up to 15% of the home purchase price with a maximum of $30,000 in financing to be used towards paying off your debt. The full, outstanding balance of the student loan must be paid off as part of closing; partial loan payment is not permitted. The student loan may be in repayment or deferred status.

Financing for student loan relief will be in the form of a 0% interest, deferred loan with no monthly payments. The loan is forgivable over 5 years; this means if you live in your home for 5 years, your debt is forgiven, repayment is not needed! If you choose to sell or refinance the property within 5 years, the remainder of the student debt loan will be due upon the sale of your home.

This is a great program to utilize if you are a first-time homebuyer and have accrued student loans over the past few years. Contact one of our loan officers today to see if you qualify!

 

 

*Student debt information pulled from Student Loan Hero: https://studentloanhero.com/student-loan-debt-statistics/#:~:text=44.7%20million%20Americans%20with%20student%20loan%20debt

Tips to Boost Your Home’s Curb Appeal

Everyone wants to put their best foot forward when it comes to the first impression others have of their home. Curb appeal is important not only to your guests and neighbors, but it can also have a major impact on potential homebuyers’ initial feelings about your property. Most homeowners are so used to looking at their yards every single day, they can easily overlook areas that need improvement or potential focal points that could really add a wow factor. Read on for tips to properly assess your space and boost that curb appeal to make your home shine!

Experts suggest taking photos of all angles of your yard and analyzing them as if you were an expert – and a stranger! Taking a step back to critically review your property can allow you to see things you might otherwise miss. Take stock of your neighbors’ yards as well – what you like and dislike about the general level of maintenance quality. Aim to be at least on par with the other homes nearby, or ideally, to transform your front façade into the best on the block!

Plants that Pop

A gorgeous front garden is a sure-fire way to get the right kind of attention for your home. Flowers in bright colors that compliment the color of your house are the most affordable way to make a big impact. Consider a mix of annuals and low maintenance perennials, and include some evergreen pieces to carry your garden beds through the fall and winter.

Polished Paint

Chipped paint is not just an eyesore, it can raise questions about the level of care your entire home receives and put doubt in the minds of potential home buyers. Be sure to touch up any damaged paint. Has your paint color gone out of style or faded? A fresh, popular color can brighten up the whole look of your home. Changing the color of your front door and shutters are the easiest and quickest fixes. If you have a Homeowner’s Association, be sure and check that any new colors you choose are allowed.

Entry Focal Point

A clear designated front entry is key to the success of your curb appeal. If there is any confusion about which entry is the front, an easy to see and follow path will help visitors find the way. Dress up the front porch with potted plants, easy to read house numbers, and other decorations. Accessorize the front door with a seasonal wreath and add an elegant porch light.

Address Eyesores

Some items are essential to modern homes, without being particularly attractive to look at. If a utility meter or AC unit is stealing center stage in your front or side yard, consider ways to screen them from view. Plants, trellises, and easy to install decorative panels are all great options with aesthetic appeal.

Trim and Tidy

Maintenance is a major factor in the curb appeal of any home. Clear away clutter and find an attractive storage solution for it in your back yard if possible. Keep your lawn, shrubs and trees properly edged and trimmed, and your flower beds weeded and mulched. Rake up leaves in the Fall and water your grass and plants when appropriate in Spring and Summer. Clean and power wash surfaces when appropriate to keep everything looking its best. Your hard work will pay off and your home will impress!

Landscape Lighting

Finally, consider your home’s curb appeal after hours. Landscape lighting can beautifully accent your walkways, entryway, and garden in the twilight and evening – times when many house hunters schedule showings, since it’s outside of regular business hours and they’re free to go and take a tour! From spotlights on a statement tree, to simple solar lights lining a flower bed, to string-lights accenting a beautiful porch railing, the options for outdoor lighting are almost limitless, and fun to explore.

These simple tips will help you bring out the absolute best in your home and wow visitors and neighbors alike. It is also a wonderful feeling coming home to your own gorgeous front yard! Since you took before pictures to assess your needs at the start of the project, be sure to take after photos too so can compare and enjoy!

Are you getting ready to put your home on the market, or considering a refinance to help afford home upgrades? One of our experienced loan officers would love to help! Contact us today!

10 Obstacles to Avoid when Closing on Your Home Loan

It takes some time to close even the most straightforward of home loans. These tips offer insight for avoiding pitfalls in between application and closing, so you can help make your loan process as quick and easy as possible!

1. Buying Large Items

Avoid buying things like cars, boats, or other high-end items. Purchases like these can alter your debt-to-income ratio or amount of reserves and may impede your home loan qualification or delay your loan closing. It’s best to wait, review your budget after closing, and make any large purchases you can comfortably afford at that time.

2. Job Change

Quitting your job or changing jobs can have an impact on your home loan qualification. If you plan to make a move to a new position or company, try and hold off until after closing if possible. Most employers will be understanding your need to wait.

3. Credit Change

Avoid opening or closing credit lines. Opening new cards create hard inquiries on your credit report, and closing credit lines may increase your credit utilization. Either one of these could lower your credit score and potentially change your interest rate or home loan qualification.

4. Banking

Avoid changing bank accounts. Underwriters often need bank statements and records in order to approve your loan. Changing banks can mean needing to provide all new statements, and can delay closing.

5. Ignore Questions

Answer all questions from your loan officer. Your loan officer is gathering information and documentation from you that is vital to your home loan closing. Ignoring requests from your loan officer or loan processor could cause closing delays.

6. Delinquencies

Do not pay bills late. Even one late payment can have a major impact on your credit score, and even after the payment has been made it still takes time for your score to rebound. This change in your credit score could have a negative impact on your rates or home loan approval, so it’s very important to be extra vigilant and avoid any late payments prior to closing.

7. Credit Checks

Do not let anyone other than your loan officer run a credit check on you. Many credit checks create hard inquiries on your credit report, which can lower your overall credit score. This can alter your rates and home loan qualification, so it is best to avoid any credit checks until after your home loan has closed.

8. Loans

Do not sign or cosign a loan. Obligating yourself to a different loan prior to closing affects your debt to income ratio. Even cosigning for someone else means you are still liable for the payments on this other loan. The best-case scenario is that your loan officer will need additional documentation for you regarding this new loan, which could delay closing. The worst case is that this new loan would negatively impact your debt to income ratio to the point where you no longer qualify for your home loan!

9. Avoid Large Deposits (Other than your paycheck)

Mortgage Companies are required by federal law to look into large deposits, so any unusual large bank deposits often need a written explanation and this could delay your home loan closing.

10. Payday

Do not take an advance on your salary. This can alter your payment schedule which might hinder your home loan approval.

From application to closing, our entire team at First Home Mortgage will be working our hardest to ensure the best customer service and smoothest process for each and every one of our clients! If you or someone you know is looking to purchase or refinance a home, contact one of our experienced loan officers today!

Moving Checklist

Making the move to your new home can be a dream come true! Follow this moving checklist to keep the process as smooth and seamless as possible. You’ll be all settled into your new space in no time!

Moving Checklist – Two Months Prior to Moving: Organize and Purge

Go through each room in your home and decide what to keep and what to get rid of. Having to pack and move items can be a great incentive to let go! Set these items aside for donations or selling. Yard sales are a great idea if you want to make a few bucks to get rid of bulkier items. Also, take note and label any items that will need special packing or insurance.

Research Home Moving Companies

Getting estimates from multiple different home moving companies is a worthwhile time investment. On-site estimates are the most accurate. It’s best to get your estimate in writing(or email), and be sure it has a USDOT (U.S. Department of Transportation) number on it. Due to the current pandemic, most companies are offering virtual moving estimates. You can walk them through your space, they will ask you questions during the walkthrough, while you can let them know what is and isn’t coming on your move. They will provide the same quote as if they went to you on-site.

Start a Home Moving Binder

This a great place to keep track of all your estimates and notes on all the items you’ll be moving. This can include, but not limited too: moving checklist, moving budget spreadsheet, utilities, moving company information.

Collect School Records

If you have children and are moving to a different school district, contact their current school and arrange for their records to be sent over to their new school. You can even put these records into your moving binder to better manage all your paperwork.

Moving Checklist – One Month Before Your Move: Choose Your Moving Company

Select your moving company and get your finalized contract with your dates and other details.

Start Packing

Pack any items that aren’t being used frequently and any off-season items to make things easier on moving day. Clearly label each box with its contents and which room it goes in. Separate any valuables to take with you in your personal vehicle on moving day.

Notify Necessary Parties

It’s a good idea to alert all the following ahead of your move: your banks, brokerage firms, your employer’s human resources department, magazine and newspapers you subscribe to, credit card companies, insurance, and utility companies. If the cable and internet provider you currently use are not available where you are moving, make sure to find a new company that offers the features you want and need.

Forward Medical Records

If you are moving to a new location with a new primary care physician, have your doctor forward your medical records to your new office.

Moving Checklist – Two Weeks Before: Arrange A Few Days Off for Moving Day

If you aren’t moving during a weekend, you’ll want to make sure you have a full day off work to get everything done.

Get your vehicle checked

Make sure your car is all tuned up for the trip! This is especially important if you are moving a long way.

Contact the Moving Company

Reconfirm your arrangements to be safe.

Moving Checklist – One Week Before: Refill your Prescriptions

Get any regular prescriptions refilled prior to your move so you won’t immediately have to worry about having them filled at a new pharmacy

Moving Checklist – A Few Days Before: Pack your suitcases

Try and have all of your packing done a few days before your move, and pack suitcases with a few days of clothes for your entire family so you will be prepared while you unpack at your new house!

Moving Day! : Verify your movers

Make sure the number on the moving truck matches the USDOT number on your contract.

Inventory

Keep a copy of your signed inventory list once everything has been unloaded.

Now it’s time to enjoy your new home and unpack your labeled boxes that are already in the correct rooms – at your own pace since you already have the prescriptions and clothes you need for now! Congratulations and enjoy!

If you are moving during the pandemic, check out this blog post for even more tips and tricks.

Are you looking to purchase a home? Contact one of our experienced loan officers today!

Source: https://www.realsimple.com/home-organizing/organizing/moving/moving-checklist

15 Tips to Reduce Your Utility Bills

Life can get expensive, and some costs will always be outside of our control. Read on for 15 tips to reduce your utility bills and save some serious green!

1. Check the seals on all your windows, doors, and appliances.

Drafty doors and windows make your thermostat work harder all year round. Poor seals on your appliances do double damage since the fridge or oven will have to work harder to maintain their internal temperatures,  while the cool and hot air escaping will also have an impact on the overall temperature of your home. Sealing everything up saves energy and money.

2. Fix leaky ductwork and change your air filter.

Just as windows and doors can let hot and cool air seep out, so can the ductwork for your heating and cooling systems. Check to make sure there are no leaks, and repair any you find. This lets your system run with optimal efficiency and saves valuable wasted energy. An old filter can also reduce the effectiveness of your heat and air conditioning, costing you unnecessary cash. AC pros recommend replacing your air filter every 45-90 days.

3. Give your thermostat a nudge.

Setting your thermostat back when you’re away from home can offer some seriously valuable savings without impacting your comfort. Smart thermostats have programmable schedules that will do the work for you! Also consider light bedsheets in summer and extra blankets in winter, so that you can save a few degrees overnight and still sleep soundly.

4. Adjust your fridge and freezer temperature.

Setting your refrigerator to 38 degrees and your freezer to between 0 and 5 degrees keeps your food fresh, without making the appliance work any harder than it needs to. Setting them any colder is considered unnecessary and ups your utility bill. A packed freezer and fridge help to lower costs even more since the frozen and cooled foods help keep things chilly!

5. Take shorter showers.

Taking just two minutes off your shower time saves about 5 gallons of water every time you wash. This can make a big difference in your water costs throughout the course of a year, especially if you have multiple people in your home and everyone commits and makes the cut!

6. Replace your showerhead.

Can’t shorten your shower time? Try a low-flow energy-efficient showerhead instead. These can save up to 2,700 gallons of water a year! Combining tips 5 and 6 will make for even more savings.

7. Don’t wash clothes in hot water.

Sticking to warm and cold washing machine cycles can save up to 50% of the energy cost of your washer. Be sure to pre-treat stains so everything still comes out looking great!

8. Fix leaky faucets.

Leaky faucets and toilets can end up costing a fortune on your water bill. Regularly check to ensure you have no leaks so that you don’t miss one and end up surprised with a higher than normal utility bill!

9. Adjust the temperature on your water heater.

Lowering the setting on your water heater to 120 degrees versus 130 degrees can save 10% of the energy cost! Turn the water heater to the lowest setting when you’re out of town for even more efficiency.

10. Purchase energy-efficient appliances.

Energy Star-labeled appliances come in a wide variety of price ranges and options, and they can save tons in energy costs over the lifetime of the appliance. If you’re shopping for something new – look for energy efficiency first.

11. Ask about discounted rates.

Some energy providers offer discounted rates during off-peak times. Call your provider to find out if they offer this, and if so try doing your laundry and dishes on off-peak times.

12. Swap out your lightbulbs.

Changing just five of your most frequently used lightbulbs to compact fluorescent or LED Energy Star bulbs can save up to $75 a year. Swap out all the bulbs in your home for an even larger impact.

13. Install dimmer switches.

Dimmer switches aren’t just aesthetically desirable, dimming the lights to suit your mood saves valuable energy as well.

14. Use smart power strips.

This tip is more important than ever with so many of us working from home! Many electronics in our home still use energy when we aren’t using them. Smart Power strips completely cut power to electronics when they aren’t in use, stopping the trickle of wasted energy. The savings can really add up over time!

15. Do an energy audit.

Many utility providers offer home energy audits. These audits can uncover ways your home is wasting energy and give you a personalized plan to correct the problems. Some come at a cost, while some are free! Contact your energy provider to ask about scheduling an audit and see what you can save.

Reducing your utility bills may make a big difference in your budget, and so may reduce your mortgage payment. Contact one of our experienced loan officers today to find out if refinancing your home to help reduce your mortgage payment is the right decision for you*!

*Refinancing your current mortgage loan could result in the total finance charge being higher over the life of the loan.

Source: https://www.nerdwallet.com/article/finance/how-to-save-money-on-your-electric-bill

 

5 Tips to Make the Most of Thanksgiving 2020

1 Decorate and dress up to make the day feel special, even
if you’re celebrating with a smaller group or by yourself
this year.

2 Relax and watch the Macy’s Day Parade. It will look a
bit different this year with no crowds, but the tradition
continues nonetheless!

3 Try outdoor dining and activities as a safer way to gather
with friends and family. Picnic tables and cornhole might
just become new holiday favorites.

4 Adjust your Menu. With many of us having much smaller
gatherings than usual this year, it’s a great time to take it easy and
keep the meal simple. On the other hand, it’s also an opportunity
to test out fun new recipes in smaller batches!

5 Use Facetime and Zoom to “party” with your friends and
relatives who are out of town and may not be able to travel this
year.

Source: https://www.goodhousekeeping.com/holidays/thanksgiving-ideas/g34450121/quarantine-thanksgiving-ideas/

Here at First Home Mortgage, we continue to provide the highest level of customer service while adhering to social distancing guidelines. Our innovative communication technologies allow us to exceed your expectations while keeping everyone as safe as possible. If you are considering purchasing or refinancing a home, please contact one of our Loan Officers today!

5 Tips for a Safe & Spooky 2020 Halloween

1. Choose Outdoor over Indoor Activities

The CDC recommends outdoor over indoor activities as a safer alternative to indoor activities this Halloween. Some popular safe suggestions are pumpkin patches without hayrides, outdoor costume parades, reduced contact trick or treating, and small outdoor gatherings. Indoor costume parties and haunted houses are considered to put you and guests at a higher risk of sharing germs.

2. Plan for Social Distancing

While outdoor events are certainly safer, it’s still important to practice social distancing as much as possible. If you are visiting a pumpkin patch, try and leave space between your party and others. If you or your children are participating in a costume parade, make sure each contestant stays 6 feet apart. The same goes for any small gatherings you may attend or host. The CDC recommends even greater distance for any events scary enough to get guests screaming, as this could potentially send germs flying even further. For trick or treating, setting out treat bags or candy bowls for children is a great option to spread joy while keeping your distance to prevent the spread of germs!

3. Mask Up!

Halloween is a time when both fun and frightening masks are already common! The CDC suggests that decorative masks are not a safe substitute for medical masks and that a medical mask should still be worn in any sort of public space, and for trick or treating, even if it’s underneath a costume.

4. Keep Sanitizing

When out and about for holiday fun, remember to wash your hands frequently and use hand sanitizer after making contact with surfaces. This is particularly important when visiting pumpkin patches or orchards where others may have touched produce right before you, and if you are going to the door and knocking or touching doorbells. The good news is that candy is not thought to be a high-risk factor for the spread of COVID, so parents don’t need to worry about disinfecting it all once they get their little ghouls and goblins back home!

5. Stay Local

The CDC recommends staying within your own local community as much as possible this year, to prevent possibly spreading COVID between different areas. We are also all advised to take our local directives into account and base our activities around the prevalence of outbreaks in our areas. Someone in an area with no known incidences, for example, has a wider range of safe activity options than a person in a highly impacted area. Some extra cautious suggestions for Halloween fun are yard decorating, virtual costume parties or contests, pinatas at home or scavenger hunts distanced around neighborhoods, and a good old-fashioned pumpkin carving or scarecrow making.

Whatever your situation looks like this Halloween, we can all still honor traditions and make spirited holiday magic while keeping ourselves, loved ones, and communities safe. Wishing everyone a safe, fun, and very Happy Halloween, from First Home to your home! Find more information on current CDC guidelines here.

Here at First Home Mortgage, we continue to provide the highest level of customer service while adhering to social distancing guidelines. Our innovative communication technologies allow us to exceed your expectations while keeping everyone as safe as possible. If you are considering purchasing or refinancing a home, please contact one of our Loan Officers today!

Home Office Small Space Solutions

Many of us  are now working remotely, and finding the space for an office in your home can seem daunting. Fortunately, even the smallest of areas can be transformed into functional and attractive workspaces! Find your inspiration with these unique creative options for a small space.

 

Closet Conversion

Remove a door from a closet and build or place a desk inside. You can use shelving to maximize your storage space, and use sliding doors or panels to hide any clutter for a crisp clean look. Painting the inside of the closet a different color than the rest of the room helps designate the space. Source: http://www.naptimedecorator.net/diy/the-closet-to-office-aka-cloffice-makeover/

Popup Workspace

If you want the freedom to set and break down easily, a popup workspace can be your best solution. Keeping portable work essentials all together allow you to easily relocate from your kitchen, to a coffee table, or to bedroom as needed. It’s a good idea to still ensure you have ergonomic seating if you will be working in the same place for a long period of time. Source: https://www.popsugar.com/home/popsugar-editor-at-home-offices-47352752

Corner Nook

Almost any corner of your home can fit a small desk and chair. Explore options to see which area of your home will work best for you. You can even purchase or build a corner shaped desk if you find your space is particularly tight. Source: https://justagirlandherblog.com/a-cozy-office-nook/

Many of us at First Home Mortgage are working from home as well. Our experienced Loan Officers are utilizing the latest communications technology to provide the highest level of customer service to our clients while keeping everyone safe. If you have any questions about purchasing or refinancing, please contact a loan officer today!

Photo credit: Betsy Goldbold

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