First-Time Home Buyers
Are you eager to take the leap into home ownership? Evaluating your personal financial situation can help determine if you’re ready to purchase your first home. Here are four items to take under consideration in qualifying for a mortgage and deciding “how much house” you can afford.

Credit Score
Generally speaking, you need a credit score above 660 to qualify for a mortgage. If your score is lower than 660, put together an action plan to improve your credit.

Income and Job History
Most mortgage providers will request your income and job history for up to two years (or longer). They will also take under consideration your current financial assets and liabilities.

Down Payments
Depending on your personal situation, programs are available for first-time homebuyers with one-hundred percent financing and down payment assistance. Other mortgage programs allow your down payment to be a gift from a family member.

Monthly Payments
What is a comfortable monthly payment that won’t leave you house poor? Monthly payment calculations should include the principal plus interest, property tax, homeowner insurance, and the possibility of mortgage insurance.

Re-financing
How do you know when it makes sense to refinance your mortgage? A general rule of thumb is if a reduced interest rate results in higher savings than the cost of the fees associated with a new mortgage, then refinancing could be a good option for you. When making calculations, consider how many years you plan to stay in your home. If moving to a different home is a possibility in the near future, refinancing may not be a wise financial decision.

If you currently have a mortgage with an adjustable rate, keep in mind that interest rates are on the rise. By refinancing to a fixed-rate mortgage, you could have greater financial peace of mind knowing your monthly house payments will remain steady.

Home owners who have lived in their residences for several years may want to consider refinancing to a short-term mortgage of five, seven or ten years. With a short-term mortgage, you can reduce the amount of interest you will pay over the life of the loan, build equity faster, and pay-off your home sooner!

Reverse Mortgages
If you’re looking for extra income during retirement, a reverse mortgage might be a good fit for your financial plans.

A reverse mortgage is a loan made to a homeowner who wishes to convert their equity into cash. Unlike a home equity loan, the homeowner does not make monthly payments to the lender. In fact, with a reverse mortgage, you will receive monthly payments from your lender! Best of all, a reverse mortgage provides tax-free income allowing you to retain the ownership of your home. The loan isn’t repayable until you no longer occupy the home as your principal residence. Reverse mortgages are available for homeowners who are at least 62 years-old.