Global Home Realty is a full service Brokerage firm operating throughout Texas committed to providing our clients with expert knowledge and professionalism necessary to complete one of the most significant decisions you are likely ever to make.
Appraisal Management Corp offers compliant Residential Appraisal Management for the lender, Global Home Finance. We offer superior appraisal review and an independent technology platform that results in fast turn times and superior quality of reports.
We don’t think that saving for a down payment should be the reason you put your dreams on hold. We can help you buy your dream home with a zero down mortgage loan. You’ll not only be able to afford a home sooner, you’ll probably be able to afford more home. With a zero down mortgage, the amount of loan you can qualify for is determined by your ability to make your monthly payments rather than how large a down payment you’ve saved. And, for most buyers, this means qualifying for a larger loan.
Buying a home is something we all dream about, usually for years. You may have saved money for a down payment, but just don’t have enough to buy your dream home. If that’s the case, a piggyback loan may be the best option for you. Different than a zero down mortgage, a piggyback loan is actually two mortgages. The first mortgage is for 80% of the purchase price. The “piggyback” loan (or second mortgage) covers the shortfall between the purchase price and your down payment savings
Let us help you explore all your mortgage options. We look forward to helping you!
You’ve finally found the home of your dreams. You believe you can qualify for at least some kind of home loan. There’s just one thing standing between you and your new house: The down payment.
Many home buyers today opt to use funds from their employer’s 401(K) program to come up with the down payment on a house. Ordinarily, you can’t take money from your 401(K) plan unless you retire, leave the company or become disabled, but many company plans permit certain “hardship withdrawals” when there is an immediate and heavy financial need, including the purchase of the employee’s principal residence.
The drawback to a hardship withdrawal is that you will pay taxes and penalties on the amount withdrawn from your plan, which often must be paid in the year of withdrawal. And while hardship withdrawals are allowed by law, your employer is not required to provide them in your plan. Check with your employer’s human resources department if you’re not sure if your 401(K) plan allows hardship withdrawal.
Another approach may be to borrow against your 401(K) – often as much as 50 percent of your account balance. You pay interest on the loan, but the interest goes back into your account. The money you receive is not taxable as long it is paid back and plans can give you anywhere from five to 30 years to pay back your loan.
There are risks involved in borrowing from your 401(K). If you lose your job or leave your employer, you must pay back the loan in full within a short period, sometimes as little as 60 days. If the money is not paid back in that time, it is considered a withdrawal from your plan and subjected to the same taxes and penalties. And while 401(K) accounts can usually be rolled over into a new employer’s 401(K) without penalties, loans from a 401(K) cannot be rolled over.
In addition, because the funds withdrawn from your account are no longer earning compound interest, your account will be smaller when you retire. And you’ll be replacing pretax money with after-tax money.
Some lenders will count the money you borrowed from your 401(K) as an additional debt that will go along with your car payments, student loans and credit cards. While it may seem unfair since you are borrowing your own money, most lenders view it as a payment obligation that affects your debt-to-income ratio in qualifying for a home loan. It may be a factor in whether you decide to make a hardship withdrawal from your 401(K) and pay tax penalties or borrow against it.
Fixed Rate Mortgages
With a fixed-rate loan, your payment remains the same for the life of your loan. The way that amortization works on a fixed rate loan is the longer you pay, the more of your payment goes toward principal. The only way your total payment would vary is if you escrow. Your monthly payment for property taxes may go up, or rarely, down, and your insurance rates might vary as well. Generally speaking, payments on a fixed-rate loan will increase very little year to year if you escrow. The total amount due for principal and interest payment due monthly will not change. The split of that total amount paid to principal will increase and the amount going to interest monthly will go down as the term of the loan nears completion.
When you first take out a fixed-rate loan, the majority the payment is applied to interest. As you pay on the loan, more of your payment is applied to principal. For a free amortization schedule please contact one of our licensed Residential Mortgage Loan Originators.
Borrowers might choose a fixed-rate loan to lock in a low interest rate. People choose these types of loans when interest rates are low and they want to lock in this lower rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing into a fixed-rate loan can offer more monthly payment stability. If you have an Adjustable Rate Mortgage (ARM) now, we can assist you in locking a fixed-rate at a good rate. Call Global Home Finance Inc. at 972-724-3222 to discuss how we can help.
Adjustable Rate Mortgages
Adjustable Rate Mortgages — ARMs, come in many varieties. ARMs usually adjust every six months or every year, based on various indexes like the LIBOR, COFI or CMT Indexes. These indexes can be looked up at any given time so you can see what the fully indexed rate would move to when your ARM is due to adjust. Most Fannie Mae and Freddie Mac loans now are based on LIBOR or London Interbank Offered Rate. The one year LIBOR is the most common index for hybrid ARM mortgages. The Fully Indexed Rate on an ARM is determined by adding the index with a Margin which is typically 2.25% for Fannie Mae Hybrid Arms to arrive at the fully indexed rate.
Most programs feature “caps” that protect you from sudden monthly payment increases. There may be a cap on how much your interest rate can go up in one period then another for the life of the loan. For example: no more than two percent per year, even if the underlying index goes up by more than two percent. Your loan may feature a “payment cap” that instead of capping the interest directly, caps the amount that the payment can increase in one period. The majority of ARMs also cap your interest rate over the duration of the loan period called a lifetime cap and is usually about five percent over start rate. This helps to control the risk with this type of product.
ARMs most often feature the lowest rates toward the start of the loan. They guarantee the lower rate for an initial period that varies greatly. You’ve probably read about 5/1 or 3/1 ARMs. In these loans, the introductory rate is set for three or five years. After this period it adjusts every year. These types of loans are fixed for 3 or 5 years, then adjust. These loans are usually best for borrowers who expect to move in three or five years. These types of adjustable rate programs are best for people who plan to move before the initial lock expires. If you decide that you don’t want to move you can always refinance.
Most borrowers who choose ARMs choose them because they want to get lower introductory rates and payments and don’t plan to stay in the home longer than the introductory low-rate period. The main risk with ARMs is when housing prices go down. Homeowners could be stuck with rates that go up when they can’t sell their home or refinance at the lower property value.
A buydown is a type of financing where the buyer or seller pays extra points (also called discount points) to reduce the interest rate on a loan. Buydowns make it easier to qualify for a loan because they lower a loan’s interest rate. They can also allow you to buy more house for your money.
There are generally two types of buydowns: a permanent buydown and a temporary buydown. A permanent buydown lets you pay extra points to get a low interest rate over the life of your loan.
A permanent buydown can be paid by the seller or the builder as an incentive to finalize a sale by creating lower monthly payments. Sellers can also benefit from assisting with a buydown with a difficult to sell property or during slower market conditions. It increases the buyer’s ability to qualify for a loan, therefore, allowing the home to be sold quicker. Plus, a buydown offer is usually less than a price reduction on the home.
In a temporary buydown, you prepay interest in exchange for a lower rate during the early years of a loan. The most common temporary buydown is called 3-2-1, meaning the mortgage payment in years one, two and three is calculated at rates 3 percent, 2 percent and 1 percent, respectively, below the rate on the loan. On a 2-1 buydown, the payment in years one and two is calculated at rates 2 percent and 1 percent below the loan rate. And on a 1-0 buydown, the payment in year one is calculated at 1 percent below the loan rate.
A temporary buydown can be a benefit to a buyer whose current income is low but anticipates that it will increase during the next two years. First-time homebuyers who need to purchase all of the furnishings that go into a new home may also find a temporary buydown appealing.