Why does every Realtor Want Me To Be Pre-approved?

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Today we are going to tell you why getting a loan can be very beneficial for you and how to get the most out of it.

 

Here are the different points that we are going to touch during this post:

 

  • Getting a mortgage can be a great thing for your future
  • Interest deduction( what’s that and why should I know about it?)
  • Fixed payment
  • Increasing equity

 

Getting a mortgage sounds like a scary step for most of us, and rightfully so it can be if it’s not done right. When someone buys a house, it’s very common to see the case of a confident man/woman/couple who think that they can pay a 30 year mortgage quicker than they are supposed to, and this is a frequent mistake that leads to financial crisis in many cases and regretting having taken a mortgage in the first place.

 

Don’t be one of those people, and make sure you take your time and evaluate things before jumping off a bridge. If, at the moment, with your current financial situation, you just can afford to go for a 30 year mortgage, wait and save more money. Why? Because you don’t want to become a bank’s slave, pay extra commissions and having that mortgage as the worst of your nightmares. Nearly 100% of the US citizens end up paying extra commissions that benefit the richer and make them poorer in the end.

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Getting a mortgage can be a great thing for your future when you save a down payment of at least 10%, but ideally 25%, to then apply to a 15 year fixed-rate mortgage that will ensure a much brighter and happier future.

 

The interest deduction is another interesting matter to take a look at when buying a property. It can decrease the amount of taxes you’d have to pay for a mortgage, which is certainly something to take into consideration.

 

One of the reasons reason why in Sean La Rue Home Loans we recommend purchasing a property is because of building equity, which represents one of the main financial benefits of homeownership.

Equity means, in a simple way, how much you owe from your actual home. You have negative equity when you take your loan balance from the value of your home and the result is a negative number.

When can we improve our equity?

1- When we get rid of a good amount of our mortgage payment

2- When the market’s price of our place goes up

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*How to reduce loan balance:

  • Apply for short mortgages: on average, people struggle a lot more when having to pay longer term mortgages than shorter ones, so you may want to save some more money and make sure you pay your home in the least amount of time possible!
  • Make big payments when you can: if things are going well for you, why not  taking out some of that mortgage payment? I’m sure it’ll be such a relief.
  • Be consistent with your monthly payments: consistency is everything when paying a mortgage, that’s why as time passes, if you’ve been paying regularly every month, more of each payment goes towards equity, and less of each payment becomes interest charges.

 

People have mixed feelings about mortgages, some think that it’s like you are forced to save money every month, and what many don’t see is that you are building up the value of an asset. With a home, the asset isn’t cash in a savings account—it’s equity in your home.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

How To protect Yourself against Hacking, Fraud And Identity Theft

Welcome to a new article for Woke Wednesday’s in Real Estate, where we’ll be talking about hacking and identity fraud/theft.

 

 

Welcome to a new article for Woke Wednesday’s in Real Estate, where we’ll be talking about hacking and identity fraud/theft.

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So first, let’s talk about what identity fraud means: it’s that unfortunate situation when someone steals your personal information to use it for his/her own benefit, which can end up really damaging your finances if that person decides to open credit cards with your personal info or stuff like that.

If your identity has been stolen, how do we find that out?

First, go to credit card charges to check if there are any charges that may surprise you, but you can also identify identity fraud by receiving a debt-collection call or if you notice that your credit scores has gone down. So in order to act quickly in case of identity fraud, make sure you check your bank statements regularly!

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We may still suffer from identity theft, but there are ways make it less likely to happen. Here are a few tips:

  • Use safe passwords
  • Be careful what you share online
  • Don’t give out your information easily
  • Get a shredder
  • Follow your instincts
  • Check often your credit reports

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So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Apply for a loan at https://www.SeanLoans.com

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

What’s the difference between Homeowners and Hazard Insurance

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In today’s post we are going to talk about homeowners insurance and hazard insurance, and why it is so important in order to protect property owners against the possibility of any possible thefts or damages from fires or any unfortunate natural events earthquakes, storms…

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When someone applies for a mortgage, it is requested to give proof of insurance in the property so that the bank can issue the mortgage. When it comes to home insurances, homeowners can get either take a look at all the options and pick one that suits best their needs, or leave it in the hands of their banks, which will add an extra cost to the mortgage given.

What does a homeowners insurance cover?  Interior damage, exterior damage, loss or damage of personal assets/belongings, and injuries that may arise while on the property. However, it’s important to remember when a claim is made by the homeowner, he/she will have to pay a deductible, which will be calculated based on the type of insurance policy, excess costs..etc

What is key here is to keep in mind is that the higher the deductible is on an insurance contract, the lower the monthly or annual premium on a homeowners insurance policy will be.

But of course, there is a liability limit, that usually stands at around $100,000, but it can go higher depending on the policyholder. What the liability limit does, is to estimate the percentage of the coverage that would go toward replacing or repairing damage to the property structures, personal belongings, and costs to live somewhere else while the property is worked on.

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The reason why at Sean La Rue Home Loans we think it’s a must to get hazard insurance when you acquire a property is because your average home insurance won’t usually  cover all sort of damages that your place could suffer. Acts of war or acts of God will usually not be covered in a homeowners insurance policy. Its actually a common requirement from a lender to ask to have a minimal hazard insurance when applying for a mortgage, to protect the investment and value of the new home.

Think about it this way: it’s much easier to deal with the cost from hazard insurance than having to pay off all the costs generated from an unfortunate event that may happen to your property. Better to be cautious than taking risks with this kind of stuff, specially when living in high-risk areas. Whenever you buy a home, you are making an investment. You are investing so much out of your pocket every month in that investment, so why not spending a couple hundred more per year to insure it?

How much hazard insurance do I need for my home?

We’ll know how to estimate how much hazard insurance is actually needed for our particular case based on how much cost would we have in the worst case scenario(event of a total loss).  This amount may change from one year to another, and could be significantly different from the property’s value, that’s why policies are usually written for one year and renewable. It’s very common that lenders include the costs of hazard insurance in the monthly mortgage payment.

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And that’s all for today’s post, hope you found it useful and don’t hesitate in reaching me out if you have any questions or you are interested in making a consultation.

Stay positive and stay hungry!

Make it a great day,

Sean La Rue

Youtube video: https://www.youtube.com/watch?v=nCg3I6G_Kds

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Credit, Income, & Assets Test: Getting Pre-approved For a Mortgage

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As we mentioned in the video, C.I.A stands for credit, income and assets. We are going to go more in deep in this article about these 3 to learn what it takes to increase our chances of getting pre-approved for a mortgage.

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Here are the list of things we’ll have to pay attention to and how everything works:

1. We need to prove our income

Nowadays, we need to be prepared to start the process of getting a loan, by giving all kinds of documentation about the different sorts of income that we may have, such as:

  • W-2 statements from the past 2 years
  • Year to date income
  • any recent pay stubs that show income
  • 2 most recent years of tax returns
  • Any additional income(alimony, bonuses..etc)

2. We need to prove our assets

In terms of assets, we need to give proof of that we are in a position where we can afford paying the down payment and closing costs, as well as having some cash reserves after that. Normally there will be other requirements such as having to get private mortgage insurance or paying a funding fee, unless we put 20% down.

Also remember that your pre-approval will be based on your FICO credit score, debt-to- income ratio and other factors, and that all loans, except Jumbo loans, are conformed to GSE guidelines.

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3. We need good credit

You will find that most lenders require at least 620 FICO score or above to get your loan approved, even for FHA loans sometimes. What are FHA loans? they are those that require  lower minimum down payments than conventional loans. For these, as we mentioned in the video you’ll need at least a 580 credit score to get pre-approved. However, if your score is lower, you can still get a FHA loan with a 10% down payment.

If you have a high score (760 or above) lenders will offer you low interests, but if on the other hand, you have a low credit score, don’t worry as lenders will suggest ways to improve your score. The only downside for low score borrowers will be that they’ll have to pay their mortgages in longer periods of time.

That’s all for today, hope you found this content useful and don’t forget to follow Sean La Rue in all social media to stay tuned to all kinds of information about qualifying, real state finance… This has been the first of many articles for Monday Mortgage Madness.

Stay positive and stay hungry!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

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