The journey to homeownership is often symbolized by the quest for the perfect mortgage rate, but the financial responsibility extends far beyond that ...
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In the ever-evolving landscape of real estate financing, an often-overlooked option presents a unique opportunity for both buyers and sellers: the ass...
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The journey to homeownership is a monumental financial achievement, yet the initial mortgage payment and down payment are often just the beginning of ...
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The moment you receive the keys to your new home is a monumental achievement, but it also marks the beginning of a new financial chapter. The transiti...
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For many aspiring homeowners, the path to purchasing a house can feel blocked by the significant financial hurdles of a large down payment and stringe...
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When you embark on the journey of securing a mortgage, you are entering into a significant financial partnership with a lender. This institution is in...
Read MoreYou have specific rights under the Consumer Financial Protection Bureau’s (CFPB) Mortgage Servicing Rules. Key rights include receiving a 15-day notice, a 60-day grace period where a late fee cannot be charged for a payment sent to the old servicer, and ensuring your credit report is not negatively impacted by a transfer-related error.
Lenders use the “Four C’s of Credit”:
Capacity: Your ability to repay the loan, measured by your debt-to-income (DTI) ratio.
Capital: Your savings, assets, and down payment amount.
Collateral: The value of the home you’re buying (determined by an appraisal).
Credit: Your credit history and score, which indicate your reliability as a borrower.
Most lenders require a minimum of $100,000 in personal liability coverage. However, financial experts often recommend carrying at least $300,000 to $500,000 to protect your assets from lawsuits if someone is injured on your property. An umbrella policy can provide additional coverage beyond your homeowners policy limits.
When your mortgage is paid off, your mandatory monthly housing costs will decrease significantly. However, you must still budget for property taxes, homeowners insurance, maintenance, and utilities. It’s a great time to re-allocate those former mortgage payments toward retirement savings, other investments, or long-term goals.
If you plan to sell your home in the next 5-10 years, the financial advantages of the 15-year loan diminish. You won’t hold the loan long enough to realize the full interest savings. In this case, the lower payment and increased cash flow of a 30-year mortgage are often more beneficial, unless you can easily afford the 15-year payment and want to maximize equity for your next down payment.
