What is PMI & Do I Need it to Buy a Home?

What is PMI & Do I Need it to Buy a Home

The world of real estate is full of acronyms. Those who work in the business get used to these ‘call letters’, and don’t often give them much thought. For someone who’s new to the home buying process, the various acronyms can be confusing if not simply overwhelming. Understanding key acronyms and basic definitions is an excellent way to gain the knowledge you need to help you buy with confidence. When it comes to mortgage funding, PMI is an acronym you may hear mentioned by lenders. You may have already asked yourself, “What is PMI, and do I need it to buy a home?”

What is PMI & Do I Need it to Buy a Home?

PMI stands for Private Mortgage Insurance, and is often required for a home buyer to purchase alongside their mortgage if their down payment is below 20%. Whether your down payment is less than 20% because you just don’t have the cash, or you have a reserve but want to save it for home improvements after you move in, PMI allows for a lower down payment towards a house.

Typically, when you purchase an insurance policy, you do so to protect your family and property against loss due to damages. PMI works a bit differently. Mortgage lenders are taking on a risk by funding the purchase of a home. If circumstances arise where you can’t pay your mortgage, the lender faces losing a lot of money should the loan go into default.

To help lessen the risk on a property where more than 80% of the sale price is funded by a loan, PMI is required. While you the home buyer pay for this insurance, either as a separate policy payment or incorporated into your monthly mortgage bill, you won’t receive a benefit if a claim is filed. Your lender will. Essentially, PMI helps balance out the risk to loss ratio of a mortgage for the funding institution.

Even though the beneficiary of any claims would be the lender, there are benefits for buyers to get PMI as well. Namely, if you aren’t able to cover the standard 20% down payment, getting a PMI policy will help you get into a home of your own sooner than saving over the long term.

Many home owners also need to only carry PMI with their mortgage loan for a certain period of time. The key is to watch the market and keep appraised of your home’s value compared to your total mortgage loan amount. With appreciation, your home will rise in value. Once your loan to value ratio has shifted so you owe less than 80% of the property value, you can seek refinancing of your loan to do away with the PMI policy, and possibly get a better interest rate, effectively lowering your mortgage payment as well.

There are different types of PMI policies, each one catering to various needs and situations of the buyer and the lender. Learn more about this common element of mortgage funding with this article by Investopedia. Whether you need PMI or not, when it’s time to buy a home, work with a Realtor® who has a passion in helping their clients find solutions towards achieving their home dreams. Get the conversation started with Matt Haviland. Give him a call today at 609-338-3773 or send him an emailThe Haviland Group and Keller Williams Realty are here to help you find the right home from start to finish.

Down Payments for a Home – How Much do I Really Need?

One of the first questions asked when someone is planning to buy a home is, “How much do you have to put down to buy a house?” You may think the answer is a simple one, but this is not necessarily the case. The amount of a down payment needed depends on several factors and your own individual situation.

The first thing to consider is what type of mortgage loan you can qualify for. The type of loan will determine what the minimum requirement is for a down payment on a house. If you qualify for a first-time buyer loan program, chances are you will need a lower down payment, good news for those struggling to save for this major investment.

For qualified buyers through the FHA you can buy with a down payment as low as 3.5%, or possibly with a zero-down payment, but there’s a price. If you qualify for this option, you’ll be required to pay for mortgage insurance for a while. Mortgage insurance isn’t for you but for your lender to be able to recoup the losses should you not make your payments. A down payment helps lessen the overall principal amount of a loan. The higher your down payment, the lower the principal funding. The more principal funding a lender provides, the more money they’re putting at risk in a loan.

While you may not need a down payment through an FHA loan, your monthly mortgage payment will include the cost of mortgage insurance from which you won’t directly benefit. This can be a worthy trade-off if saving for a down payment is a challenge. And the good news is, you won’t have to pay for mortgage insurance for the duration of your loan. When there’s a suitable amount of equity built into your property, you can request a review to discontinue the insurance.

Military veterans and active personnel can qualify for a VA loan, which will waive the down payment completely if you don’t have the funds to put down. These loans are provided through various lenders but backed by the US Dept. of Veteran Affairs. As such, if you don’t have a down payment you won’t have to include mortgage insurance. If you or your spouse has been a part of the military, this is an option worth looking into.

So how much of a down payment do you have to have for a house if you don’t qualify for a special program loan? The standard answer is 20% of the sale price. For a $100,000 home, this would mean you need $20,000 for a down payment. This is a sizable sum which can be a challenge for even the savviest saver. If you don’t have the full 20% however, not all is lost. Some lenders are willing to go as low as 5%-10% for a down payment, provided you pay for mortgage insurance to help lessen the risk to the lender.

To help avoid this extra expense though, you may be able to achieve the 20% down payment through a grant. While most grants are geared towards lower incomes and first-time home buyers, there are options for those in-the-middle-income buyers as well.

Learn more about down payments with this Bank Rate article. If it’s time to buy a home, get the conversation started with Matt Haviland; give him a call today at 609-338-3773 or send him an e-mail. Matt and his team are passionate about helping their clients achieve their home dreams; The Haviland Group and Keller Williams Realty are here to help you find the right home from start to finish.

How Important is Your Credit Score for Buying an Atlantic County Home?

How Important is Your Credit Score for Buying an Atlantic County Home?

You’re ready to buy a home. You have stable employment, and make good money, so you should be able to easily get a loan, right? Not so fast. Lenders all use credit scores to help determine your ability to pay your debt before they take a risk on lending you money for a new home. Credit scores can vary from 300-850. That’s quite a range, so what should your credit score be to buy a house?

How Important is Your Credit Score for Buying an Atlantic County Home?

A credit score is calculated using a software program created by the Fair Isaac Corporation, or FICO. Understanding how your FICO score is used will help you understand the importance of a good score. Mortgage lenders use your score when determining your reliability towards making timely payments. This helps establish not only your approval or denial, but also what interest rate will be offered if approved.

According to Nerdwallet, excellent credit scores are considered to be 720 and up, and fair or “average credit” scores fall between 630-689. Credit scores falling below the average or fair range often result in the denial of credit to the borrower or credit offers at a much higher interest rate. Various things can impact your score, but most important is when you pay your bills, if they’re on time or not. Also, if you have a large number of late payment fees applied to your accounts or any of them in collections, your score will be lower.How Important is Your Credit Score for Buying an Atlantic County Home?

Credit scores are reported by three agencies, Equifax, Experian and Transunion. All three agency reports are pulled by lenders to help determine your overall credit score. These scores usually vary slightly from one another. Lenders will use the median score to determine a borrower’s overall FICO score. For example, if your reports come back with a 680, 705, and 720, the lender will use 705 as the number to determine your eligibility as a borrower.

FHA (Federal Housing Administration) loans require a minimum credit score of 580 to qualify for their 3.5% down payment option which is popular with first-time home buyers. You might be approved for an FHA loan with a score lower than 580 but the minimum down payment required will be 10% in those circumstances.

How Important is Your Credit Score for Buying an Atlantic County Home?Raising your score quickly can help you get approved for a loan or to get approved for a better interest rate. Even slight differences can greatly affect the rate you’re offered. According to MyFICO.com payment history contributes 35% to your credit score. In order to avoid paying late payments, set-up auto payments or reminders for yourself so everything is paid on time. Reducing the amount of debt owed is important as well, though not as simple to change. Pull your credit report to determine where the highest interest is being charged and focus on paying off those accounts first for the greatest impact. When reviewing your credit report make sure it is accurate. Dispute any discrepancies for debt you don’t owe or that you’ve already paid. If you make these changes you should see your score start improving each month.

Matt Haviland with The Haviland Group and Keller Williams Realty offers a complimentary credit score check and credit evaluation by filling out this form on the Mortgage Help page or their website. Complete the form for your evaluation today. If you would like more information, please give Matt a call today at 609-338-3773 or send him an e-mail. When you’re ready to buy your first home, Matt and his team are here to help from start to finish.

Grocery Store For Sale

Pleasantville NJ Grocery Store Business For Sale

Investment Business For Sale

Do you know anyone who would like to own their own Grocery Store?   This 7,000 square foot specialty grocery store is available for sale.  The store specializes in south asian cuisine.  The store currently brings in about $85,000 a month in income.  All fixtures and equipment are included.  High traffic location and centrally located.  Contact me for more details.

The Good Life Goes on After 55 in The Village Grande at English Mill

Egg Harbor Township, New Jersey's best 55 and over community.

If you’re approaching retirement and looking to enjoy the good life with more time for your active lifestyle, you’ll want to check out The Village Grande at English Mill. Located in Egg Harbor Township, this adult only, 55+ community has it all, from finely appointed homes to community amenities and events throughout the year; there’s always something going on at The Village Grande.

Originally built between 2006-2017, there are six different floorplans, with each property boasting its own upgrades and features which were available at the time of construction. As a premier, developed community, home features may include security and high-tech options, extended patios, screened-in porches and year-round sunrooms. All properties have at least 2 bedrooms, 2 baths, and a 2-car garage. These single-family homes range from 1,558- 2,261 square feet on one or two levels.

The Village Grande at English Mill is six miles from I-76, about an hour drive to the Philadelphia International Airport, making the location ideal for anyone who loves to travel or has frequent visitors, but also wants to live outside a major metro area. The Village Grande is conveniently located near a wide variety of entertainment and activities, such as New Jersey beaches, casinos, and theme parks. Other exciting attractions are just a short drive away in nearby Atlantic City and Ocean City. Everyday needs and local fun are easily found in Egg Harbor Township as well. Convenience is just one reason The Village Grande is the perfect place for active adults to call home.

With countless amenities featured, there’s something for everyone at The Village Grande at English Mill. The Grande Club is a 10,000 square foot clubhouse which is the center of community life, including public and private events. The Club has a beautiful ballroom for any special occasion; residents can take full advantage of the facilities to celebrate that special birthday or anniversary.

In addition to space for events, the Grande Club features a fitness center with an indoor lap pool for year-round exercise, plus two saunas and locker rooms. Other amenities include meeting rooms, a lounge and catering kitchen, two card rooms, an arts and crafts studio, library, and billiards room. There’s also an outdoor pool with a sun deck open for seasonal use. Beyond swimming, residents enjoy the use of two tennis courts, two bocce ball courts, and a putting green. Add in scenic walking trails around two beautiful ponds, and you can see just how good life is at The Village Grande.

There’s never a shortage of ideas for what to do next at The Village Grande at English Mill. For those who enjoy the socializing offered by a 55-plus community, there are a number of interesting ways to connect and have a great time with your neighbors. Holiday celebrations are always big events with breakfasts, dinners, and parties inspired by the 4th of July, Halloween, Grandparent’s Day and more.

Sports-minded residents can enjoy fishing, cycling, jogging and tennis clubs. Keep your mind and your body active and intrigued with the walking or travel club, or mornings with Thai Chi and water aerobics. For hobbyists, there’s a selection of clubs and regularly scheduled activities to choose from. Take your pick of arts & crafts, computers, book clubs and gardening, just to name a few.

You’re also free to enjoy purely social clubs like Dine Around, the Women’s Club and a Veterans Club. Join tea parties, day trips around the region and a variety of different card and game nights – Pinochle or Canasta anyone? There’s something for everyone – maybe you’ll find something new to enjoy! Check out the full list of clubs and active lifestyle groups for what may spark your interest.

The different home models in The Village Grande range in floor plan and square footage. Two of the original model plans, the Deerfield and Eden, are properties with an extra room, ideal for a den or guest space. If you’re looking for more room, you’ll want to watch for these properties to come on the market. These properties are also priced in the mid-range of the market. Whether you want a single story or two-level home or are seeking a listing with some extra bells and whistles from when The Village Grande and English Mill first came available, you’ll want to work with an agent who knows the community. Matt Haviland has been working with buyers and sellers in this 55+ community for many years now and is familiar with the different floor plans and special features you may be looking for. If you like this community, you’ll also want to take a look at The Village Grande at Little Mill which boasts the same great floor plans and amenities in Egg Harbor Township.

For more information on The Village Grande at English Mill or its sister property The Village Grande at Little Mill and living in Egg Harbor Township, call Matt Haviland with The Haviland Group and Keller Williams Realty today at 609-338-3773 or via e-mail to find out how he can help you.

 

 

 

Can I Buy a House in Atlantic County with No Money Down?

Atlantic County Real Estate

Many people continue to rent for fear of the unknowns of home buying. We’ve shared some information on several great programs for first-time home buyers in our last post. But what if you don’t have a down payment? There are some programs which allow no money down, but certain criteria must be met.

Can I buy a house in Atlantic County with no money down?

USDA Loans are backed by the U.S. Department of Agriculture (USDA). These loans are also known as rural housing or rural development loans as they provide help with the purchase of houses located in certain rural areas and include zero down payment mortgage options for borrowers who qualify. Criteria for qualification includes household income, number of people living in the home and other factors such as approval of the property you are purchasing by area and size among other parameters.

USDA offers a helpful tool on their website to easily calculate the numbers you enter to determine your eligibility. Two types of single-family home loans are available with USDA, Single-Family Direct Home Loans and Single-Family Guaranteed Loans. Both programs have specific requirements for potential buyers which are outlined on the website. You can also search an address for eligibility to determine if a property in a small town or rural area of Atlantic County is covered. For example, just south of Egg Harbor, Corbin City is an area where there may be eligible homes due to its rural designation.

VA Loans programs assist active military members and veterans through the U.S. Department of Veterans Affairs. These loan programs don’t require private mortgage insurance and they have no down payment mortgage options. While these loan programs are provided by private lenders and mortgage companies, the VA guarantees a portion of the loans to get the borrowers the best rates possible. This program is also available to surviving spouses of military personnel and veterans as well.

Can I buy a house in Atlantic County with no money down?The New Jersey HomeSeeker Program now offers $10,000 down payment assistance grants for residents of Atlantic, Burlington, Camden, Essex, Gloucester, Mercer, Passaic and Union Counties. This grant is available for first-time homebuyers who qualify and obtain first mortgage financing through the New Jersey Housing and Mortgage Finance Agency’s (NJHMFA) Homeward Bound mortgage program. Contact our office to see if you qualify.

For more information on no down payment mortgage options, check out this information from Investopedia.  As always, Matt Haviland with The Haviland Group and Keller Williams Realty offers free consultation for first-time homebuyers. Contact Matt today at 609-338-3773 or via e-mail to find out how he can help you.

First Time Homebuyer Mortgage Options Around Atlantic County

First Time Homebuyer Mortgage Options Around Atlantic County

First Time Homebuyer Mortgage Options Around Atlantic CountyYou’ve saved and planned and you’re ready to take the plunge into home ownership. There are many great mortgage choices for first-time homebuyers to consider. This list will break down some of the most popular options and provide links to find out more about the ones you may qualify for.

First Time Homebuyer Mortgage Options Around Atlantic County

FHA Loans are 15 or 30-year loans which are backed by the Federal Housing Administration under the U.S. Department of Housing and Urban Development (HUD). FHA Loans usually allow approval for borrowers with lower credit scores. These loans can also help through low down payment mortgages and lower closing costs. You’ll have to pay a slightly higher rate for mortgage insurance however, which can be paid upfront or annually.

USDA Loans are based on income for qualification and backed by the U.S. Department of Agriculture (USDA). These loans provide help with the purchase of houses located in certain rural areas and include zero down payment mortgage options for borrowers who qualify.

VA Loans are available to active military members and veterans through the U.S. Department of Veterans Affairs and are partially backed by the same. The goal with this program is to assist veterans in purchasing houses. These loans can include no down payment mortgage options and don’t require private mortgage insurance. They do require a one-time funding fee which is a small percentage of the total loan amount.

Good Neighbor Next Door assistance program offers loans for houses which have been foreclosed on at half price to qualified borrowers. This is an incredible program and as such has stringent guidelines. The Good Neighbor Next Door program is available only to borrowers who work in public service sectors as law enforcement professionals, teachers, emergency medical technicians (EMTs) or firefighters. The firefighters and EMTs must also work within the same jurisdiction as the house they are purchasing. These homes are offered in “revitalization areas” as defined by the FHA. These areas generally have a high number of foreclosed properties available.

Fannie Mae and Freddie Mac are government programs which help qualify first-time homebuyers who have low or moderate income with lenders.  The Fannie Mae HomePath Ready Buyer Program in particular offers qualified first-time homebuyers up to 3% toward closing costs for HomePath Properties which were foreclosures under their loan programs.

New Jersey State and Atlantic County Residents can also benefit from some wonderful down payment assistance options outlined in our previous post about First Time Homebuyers Government Programs. Check out the blog post to find out more about first time government programs that are available. These are great offerings specifically for area residents.

The options are too many to list but there’s sure to be something for most any first-time homebuyer to benefit from. For more choices and information see this informative Bankrate article.

Matt Haviland with The Haviland Group and Keller Williams Realty always offers free consultation for first-time homebuyers. Contact Matt today at 609-338-3773 or via e-mail to find out how he can help you.

Take Advantage of First Time Homebuyer Programs Around Atlantic City

First Time Homebuyer Programs

First Time Homebuyer ProgramsSometimes growing up is hard to do and sometimes there’s the thrill of it all, the firsts you’ll experience. There are few things in life as thrilling as becoming a first-time homeowner. Buying your first property, getting the keys and walking through the threshold of a house which will become the first home of your dreams is an exhilarating experience. But where do you start? First-time homebuyers often have many questions about how to search for the features they desire in a house, how to get the best financing assistance and how to find a Realtor® they can trust. There are some great first time home buyers programs right now. Let’s look at how to qualify.

Take Advantage of First Time Homebuyer Programs Around Atlantic City

You’ll want to begin by saving for your down payment but how much do you have to put down to buy a house? Typically, conventional loans require 20% down, but as a first-time homebuyer you may be able to get help covering your down payment. It’s possible to lower or eliminate the amount you need to have up front for a down payment through federal, state and local government programs.

How do you qualify for first-time homebuyer government programs?

Your lender and buyer’s agent will be trusted sources in directing you to the best options which may be available to you. Some of the most common federal government mortgage options such as FHA and USDA loans are well-known and may offer solutions for low or no-down payments for those who qualify.

Most state and local governments offer some assistance as well. We dug a little deeper to find out.

 first-time homebuyer government programs are available in the area.

The Atlantic County Improvement Authority offers a down payment assistance program to individuals who have resided in Atlantic County for at least 12 months and who have not owned a home in two years or more. At a state level, The New Jersey Housing and Mortgage Finance Agency offers several different programs for first-time homebuyers including down payment assistance and mortgage programs explained in a step-by-step guide to help you decide which options are best for you.

First Time Homebuyer ProgramsAll of this information can be overwhelming, but it doesn’t have to be. Check out some great tips for first-time homebuyers from Nerd Wallet. They offer an easy-to-follow but detailed list with some general information to help you get started.

Now that you’re ready to set sail, the importance of having a trusted buyer’s agent is key in making the home-buying process go smoothly. You’ll want to find someone who’s ready to work for you, who’s also experienced in serving first time homebuyers and who knows the area real estate market. Matt Haviland with The Haviland Group and Keller Williams Realty offer free consultations for first-time homebuyer programs. Contact Matt today at 609-338-3773 or via e-mail to get started on the path to the door of your first home.

Atlantic County, NJ Real Estate Market Update

Atlantic County, NJ Real Estate Market

Here is a quick overview of the Atlantic County, NJ real estate market using data from June 2018 and comparing it to June 2017.  The data is divided into three categories:  Single Family homes, townhomes and condos, and Adult Communities.  Atlantic County, NJ Real Estate Market For all categories inventory is down and days are market are down.  Median sales price is up 7.4% for single family homes and 9.9% for condos.  Of course all real estate is local so if you want to know what’s happing in your neighborhood or city please contact me.  I can provide this report on a city level and also provide data for your local neighborhood.  You can download a PDF of the report here:  AtlanticCountyMarketReport

5 First Time Home Buyer Loans Mistakes

Don't make these mistakes when looking for first time home buyer loans.

5 First Time Home Buyer Loans Mistakes

5 First Time Home Buyer Loans Mistakes

As a first time home buyer one of the biggest and most important challenges is getting a home loan. Here is a list of 5 first time home buyer loans mistakes you can avoid.

1.  Getting A Loan Amount That Is More Than You Can Afford.   

When you’re shopping for a home loan it’s very common for mortgage companies to say you qualify for an amount that is higher than you can afford. In general your mortgage payment should be about 25% of your  monthly take home pay.  So just because you can spend more does not mean it’s a wise idea.  Write out a budget so you know how much you can afford.

2.  Choosing A Loan With A Mortgage Insurance Premium.

Many first time home buyer loans have a mortgage insurance premium (MIP). This is an insurance policy used with FHA loans if your down payment is less than 20%. With FHA loans this additional fee is a part of your mortgage payment forever. This does not go away even if you build up 20% equity in your home over time. If you can do a conventional loan with 20% down payment you’ll avoid paying mortgage insurance premiums. Saving up for a down payment can save you big money in the long term.

3.  Not Taking Advantage Of Available Grants And Programs For First Time Home Buyers.

There are often local grant programs available for first time home buyers like the Atlantic County $10,000 grant and the NJ $10,000 grant.  These programs give first time home buyers $10,000 towards down payment and closing costs.  This money is forgiven after you keep the house a certain number of years.  Yes this is free money!  The challenge with the grant money is that not everyone qualifies and it’s not always available.  Working with the right mortgage expert who knows the ins and outs of these programs will help you determine the best loan option for you and if you qualify for any available programs.

4.  Not Knowing Your Closing Costs.

Most first time home buyers realize they’re going to need some kind of down payment.  However they often don’t realize there will be additional closing costs. These additional costs will be paid at closing and include settlement fees, title insurance, mortgage fees, and escrows for taxes and home owners insurance. Your mortgage officer can give you an estimate for what your closing costs will be.  And if you’re limited on funds we can negotiate the seller to pay your closing costs for you.

5.  Choosing An Online Mortgage Company.

The best Realtor in NJ

There are many online mortgage companies out there making great offers and claims.  Here is why I don’t recommend using one.  Real estate is local.  An online mortgage company will not be familiar with the local market conditions, neighborhoods and associations.  Online lenders won’t be aware of any local first time home buyer grants or programs.  You can’t meet face to face with an online lender to have them explain loan options and documents with you.  You can’t drop off documents to an online lender that is thousands of miles away. A local mortgage officer will give you better service a personal touch and will often have equal or better rates and programs compared with online lender.

For answers to all your mortgage questions you can ask here and we will get back to you ASAP!

I hope this list of 5 First Time Home Buyer Loans Mistakes helps as you’re searching for a first time home buyer loan.  We are here to help.  Contact us if you need help with your loan.

Best wishes,

Matt

Also check out my 3 things you need to know as a first time home buyer!