Have You Ever Heard Of A Financial Advice to Only Get a 15-Year Mortgage? Is a 15-Year, Fixed-Rate Mortgage Right for You?

You may see financial advice that encourages you to take out a 15-year mortgage in preference to a 30-year fixed rate mortgage. The reasons for this advice vary, but include lower amount of interest paid over the course of the loan, paying off your house sooner, and building equity in your home more quickly. Advisers base most of their articles on a $200,000 mortgage. In a higher housing cost area or one where prices are rising quickly, does this advice hold true in all cases?

You’ll pay less interest over the course of your loan with a 15-year mortgage

This is true if you plan on staying in your home for 15 years or longer. Over the course of a 15-year, $500,000 mortgage at a fixed 4% interest rate, you’ll pay about $167,000 in interest over 15 years. A 30-year fixed-rate mortgage at 4% interest will cost you about $193,000 more in interest over the course of 30 years. But these figures make the most sense if you plan to stay in the same home and same mortgage.

You’ll build equity in your home faster

While you start to pay your principal down on your home faster with a 15-year fixed rate mortgage, you can also make additional house payments on a 30-year mortgage to help build equity. You should think about the uses of home equity in your overall financial plan. Equity in your home is valuable if you want to apply for another type of loan, including a home equity line of credit (HELOC) or a business loan.

You’ll pay off your house in half the time

This is completely true: a 15-year mortgage will pay off your house twice as fast as a 30-year mortgage. If your goal is to own your home and stay in it, then paying off the mortgage as quickly as possible is a clear financial choice.

You don’t have to limit your choices to a 15-year or a 30-year fixed rate mortgage. You can choose other amortization terms, including a 10-year mortgage, or adjustable rate mortgages (ARMs) with varying terms. A qualified and experienced mortgage professional can help you to decide which mortgage terms are right for you. Talk with one today to learn what your best home loan options will be.

Sources

https://www.daveramsey.com/blog/why-daves-against-30-year-mortgages

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At The Moment, Is There a No Ratio Jumbo Loan and Can it Help You to Achieve High Priced Home Ownership?

You may find mortgage advice online that indicates you need to have a low debt-to-income ratio (DTI) to qualify for a jumbo mortgage loan. How low? A DTI of less than 36% is one of the most often-quoted figures.

While many lenders use debt-to-income ratios to determine eligibility for mortgages, not all do. You can find no ratio jumbo mortgages that can help you to buy the home you want.

What is a No Ratio Jumbo Home Mortgage?

A no ratio jumbo home mortgage is a home loan issued by a lender that uses criteria other than debt-to-income (DTI) to qualify you for your loan. You may find jumbo home mortgages that ask you to make varying down payments, but don’t require you to have a DTI lower than 36%.

What other criteria could I need to meet for a No Ratio Jumbo Loan?

No ratio jumbo mortgage loan criteria can vary. Some lenders may ask for you to show a reserve fund equal to a specified number of mortgage payments: for example, three to nine months worth of mortgage in the bank. You may also qualify based on co-ownership of property or business income.

You can also be asked to make a down payment that varies depending on your credit score. Some 100% loan-to-value (LTV) loans may be available for no ratio jumbo home mortgages.

One thing to remember about no ratio jumbo home loans is that they can fit your individual needs. One of the best reasons to consult with an experienced mortgage loan professional is to gain access to a variety of mortgage products. You may access additional loan programs that can help you to buy your high-priced home or luxury condo. These can include bank statement loans, and loans for buyers with limited credit history.

Sources

I just used this as an example: https://www.fundamentalrate.com/

https://www.rocketmortgage.com/resources/jumbo-loan

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Discover How to Get An FHA or A Conventional Mortgage With An Existing Student Loan Debt: Get To Know More About These Options Currently Available For You

You’ve probably seen more than a few of the thousands of articles and news reports about how student loan debt is preventing people from buying homes. And, if you’re like one of the 65% of college graduates who have student loan debt, you could owe an average of $47,671, according to Nerd Wallet, which did a study of how much people owed in student loans in 2018. If you’ve attended graduate or professional school like med school or law school, you might owe $100,000 to $200,000 or more. More than 44 million people in the U.S. have student loan debt, and the total owed is more than $1.6 trillion, according to the Federal Reserve Board.

Those are the stats, but how can you buy a house with student loan debt?

First things first: pay close attention to your credit score. You have many options for free credit monitoring. You can usually get credit and ID theft monitoring services as benefits from good credit card companies.

Making all of your monthly payments on time contributes to a high credit score. Missing even one payment can have serious consequences for your FICO credit score. If you find an error, it’s worth your time to take action to remove it from your credit report.

Don’t take on additional debt if at all possible. For example, if you have credit cards, don’t use them unless absolutely necessary, and pay them off as soon as possible. Lenders like to see credit utilization less than 30%. If you can reduce the balances on any credit accounts other than your student loans to 10% or less, this will boost your credit score.

Second, look for assistance programs that might help you make a down payment on a house or offer you a low down payment requirement. FHA loans, VA loans, and in certain areas, even USDA loans can over low or zero down payment options.

You can also investigate options to consolidate your student loans and pay them off faster. The sooner you get your student loan payments under control or paid off, the sooner you will be able to seriously start looking for a house and becoming a home owner. A qualified mortgage professional will be glad to work with you on qualifying for a California home mortgage and home ownership.

Sources

https://www.forbes.com/sites/zackfriedman/2018/07/18/student-loans-mortgage-home/#31c6a5775752

https://www.nerdwallet.com/blog/loans/student-loans/student-loan-debt/

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