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Cape Coral Branch

Cape Coral sits on Florida’s stunning Gulf Coast, and the fun-to-say Caloosahatchee River runs here. But that’s not all—oh no. There are more than 400 miles of canals here, making it the city with the most miles of navigable waterways in the world. Cape Coral Beaches

“Snowbirds” are Northerners who head down to Florida to escape their unbearably frigid winters, just like migrating birds. One in five people of Cape Coral only live here seasonally. It probably has something to do with the fact that average highs hit the upper 70s to lower 80s November through March, with average lows staying in the mid 50s to low 60s.

Cape Coral burrowing owlsThe city has the largest population of burrowing owls in Florida, with about 1,000 nesting pairs. They’re one of the smallest owl species, averaging an adorable 5 to 8.5 ounces and 7 to 11.5 inches tall. In celebration, the Cape Coral Friends of Wildlife has been hosting the Annual Burrowing Owl Festival for well over a decade.

Sun Splash Family Waterpark is a massive recreation center with all sorts of wet fun, including pools, splash pads, water slides, tube rides, flume rides and more. There’s stuff for kids of all ages, and for adults who want to act like kids.

And so much more to enjoy this great city: Cultural Park Theater, Four Mile Cove Ecological Preserve, the biggest Oktoberfest celebrations in the state, Octoberfest Cape Coralenvironmental classes hosted by Rotary Park Environmental Center, the Academy of Model Aeronautics and the Cape Coral R/Sea Hawks Club where your radio controlled toys can fly as well as the honoring those who served with the Southwest Florida Military Museum and Library offering 34,000 square feet of military history.

Not to forget about all of the luscious green golf courses, amazing spots to indulge as “foodies,” culture and history too much to fathom…come experience this amazing city!


Single-Family, Townhome or Condominium?

Which Home Style fits You?

Whether you’re first-time home buyer, downsizer, upgrader or simply just trying to picture your life owning your own space in Cape Coral, we’ve broken it down to give you positives and negatives to owning each style of dwelling.

Single Family Home

Owning a home can offer a variety of positives as well as considerations based on your goals and desires as a person, couple or growing family. Certainly a single-family offers more space for families that are growing. In addition, homes tend to be a better investment vehicle with generally a higher demand and freedom to build, expand and renovate as needed. Land Home Financial Single-Family Home

Considerations to owning a single-family home versus a townhome or condominium usually mount up in cost to maintain. Owners are typically responsible for all maintenance.

Condominium

Usually less expensive by equal comparison to a single-family home as the building maintenance is managed by the homeowner’s association for a monthly fee. These costs go to lawn maintenance, the common areas including the gym, pool, mail center, security gates and general property care. Land Home Financial Condominium

Considerations to owning a condominium would be that there is less space for growing families yet may be ideal for singles or couples as well a few others. They are generally a weaker investment than a home and harder to differentiate with less options in expansion and renovation.

 

Townhome

Owning a townhome generally can be less expensive than a single-family home due to the maintenance being offset through the association fees as well as minimal yard and garden spaces to maintain. Land Home Financial Townhouse

A townhome is a weaker investment compared to a home yet stronger than a condominium. Also, you have fewer neighbors as well as more property to enjoy. The same considerations with expansion and renovation apply when choosing a townhome over a single-family home.

Final Words

Life’s filled with endless opportunities such as travel, study, flatting, social events, must-have retail products, thoughts of marriage and possible children.

Home ownership is often the afterthought, in a series of decisions that ultimately affects our financial position and timing in acquiring our own piece of turf.

If you aren’t lucky to have your parents fund your travels or university, there are choices to be made: do you work and save for a house? Or do you travel? Or do you study then work and save for a house? Or do you get married and have children then work and save for a house?

The end result is that there is always going to be a sacrifice along the way. So if home ownership is your ultimate goal, something is going to have to take the back seat.

 


20 Reasons to join Land Home Financial

20 Reasons to join LHFS

Land Home is a privately-owned mortgage banker, opened in 1988. We strive to promote and live by a community-based philosophy with our external customers and internal LHFS community. Land Home Financial is committed to servicing its customers by providing home loan options that best fit their needs.

Does Your Company do the following:

  1. Service over 90% of your closed loans?
  2. Send monthly mortgage statements with your picture and contact information?
  3. Pay you a yearly Residual bonus on your serviced loan volume, year over year?
  4. Pay you same BPS on all funded loans including DPA’s and Bond Loans? With NO pay tiers!
  5. Have payroll cycles that DO NOT end on last day of the month? (This is huge)
  6. Offer a zero-employee cost health insurance plan for employee only coverage?
  7. Allow MANUAL U/W down to 580 on FHA & VA loans
  8. Have zero hits to price due to credit score or loan amount on FHA & USDA loans above 620?
  9. Have zero price hits due to credit score or loan amount on VA loans over a 600?
  10. Respect our Veterans by not charging any lender fees on VA Loans?
  11. Is the Master Servicer of their own Down Payment Assistance suite of products?
  12. Offer a 1% down Freddie loan with lender paid MI?
  13. Offer DPA products down to a 620 score?
  14. Offer a full suite of products for Manufactured Housing, including Construction to Perm?
  15. Have an internal appraisal desk, thus eliminating the need for an AMC?
  16. Has their own US based Contact Center that will call on behalf of your realtors to invite the public to their Open Houses?
  17. Have a Boarding Department resource that helps you navigate and get acclimated during your first 120 days.
  18. Has a one-page sheet of internal overlays? We U/W to the AUS Findings!!
  19. Have over 5 Billion dollars in their Servicing Portfolio? Significant monthly cash flow!!
  20. Locate your branch on “Main Street” in your community?

How many NO’s did you come up with? At Land Home Financial, we say YES to all of these and more.

With all these features, could you see yourself making more money? We would enjoy the opportunity to have a confidential conversation to see if Land Home Financial is a fit for you!

 

 


8 Things to Know about Single Family Home Investing

Single-Family Home Investing

  1. Know your investing criteria first

With any investment, be it stocks, bonds or real estate, you need to know what your objectives are and it is no different with single-family home investing. If you’re focused on safety and security, consider exploring low-risk investment homes that generate steady, reliable yield. An example of this may be a more expensive investment property in a good school district. You’re going to get a lower yield, but you may see better downside protection and less volatility. If you have a longer-term horizon or you’re seeking higher returns, you may want to take on a little more risk. Often, lower-priced homes will be more risky, but you may get higher yields and potentially higher long-term returns.

  1. Don’t limit your investment property search to where you live

If your primary residence, income property, and job are all located in the same area, you have a lot of concentrated risk and are more vulnerable to the swings of the local economy. An online marketplace for buying and selling leased single-family rental homes, spread risk by investing in markets outside of where they live. (Hiring a local property manager or a “local community lender” like Land Home Financial is key here.)

Land Home Financial Rental Investing

Diversification is just one reason to expand your investment property search. You won’t be able to find a great income property for $100,000 in Seattle, Denver, or Oakland, Calif.; but you can if focus on the Midwest, South and Southeast, including Florida.

  1. Separate investing from operations

One of the appeals of investing in single-family rental homes is you can hire strong local property management firms to handle day-to-day management tasks of rent collection, repairs and maintenance, and leasing. Over the past several years, property managers have adopted new technologies and business processes to manage homes more effectively for owners.

While some people do choose to self-manage, hiring a property manager can save you a lot of time and potentially money in the long run. While property management companies typically charge between 7% and 8% of the rent, they manage properties for a living and can work to ensure the property is leased, in good condition, and the tenants are happy. Additionally, using a local property manager effectively allows you to buy properties outside of where you live, as self-managing is difficult if the property is not nearby.

  1. Real estate investing is a marathon, not a sprint

You might be familiar with the house-flipping reality TV shows in which a person buys a home, fixes it up, and sells quickly for a profit. While that can be an effective way to make a one-time profit, it’s the exact opposite of how you should approach single-family rental home investing, which is about building long-term wealth. Instead, treat it like a nest egg.

In addition, don’t be overly influenced or reactive to short-term fluctuations in your rental property portfolio. You may own a home for a few months and have to deal with a tenant moving out unexpectedly, but the next tenant might reside there for several years before you have another vacancy. Look at this investment over a multi-year horizon and consider your overall outlays and inflows over that long timespan. If you buy a decent house in a decent area, the returns tend to be quite attractive over time and can add a nice counterbalance to other types of investments.

  1. Take advantage of the tools and resources available to you

New developments in technology and data access are making real estate ownership more broadly accessible to the everyday investor.

Single-family rental homes currently is a $3 trillion industry, with 1 million homes trading hands among investors every year. The investment opportunities are ripe, and never has it been less complicated for investors to buy and own homes outside their geographic location.

*Whether you are buying or selling, Land Home Financial can assist. We have developed Partner Relationship all over Florida to accommodate our customers*


Have You Considered Refinancing?

Refinance with land Home financial Cape CoralA tight budget, an expensive home renovation and the desire to get your home paid off quicker are all good reasons to refinance your home. But what does refinancing your home mean and how can it help you achieve your financial goals? Take a look at the definition of home refinancing and what it can do for you.

What is Refinancing?

When a homeowner is refinancing, it means the homeowner is attempting to acquire a new mortgage for their home. The new mortgage pays off the original mortgage, usually giving the borrowers a better interest rate and/or a shorter term, or even cash.

Why Refinance?

  • To Lower the Interest Rate– Most mortgage lenders say that shaving even .50% off of a mortgage interest rate is a good enough incentive to consider refinancing. The long-term savings by getting a rate reduction can outweigh the cost of a mortgage refinance.
  • Shorten the Term of the Loan– The most common mortgage terms are 15-year and 30-year. In some cases, with a lower interest rate, getting a new 15-year can leave monthly payments very similar to what they were at the 30-year mortgage rate inevitably getting the home paid off much quicker. Changing from an ARM to a Fixed-Rate – Adjustable rate mortgages can offer lower interest rates at times. However, an arm isn’t for everyone. When homeowners need to control their monthly budgets with a more steady payment, changing to a fixed-rate mortgage when rates are low may be the best way to go.
  • Draw From the Equity– Sometimes homeowners need large sums of money to cover expenses such as a remodeling project, school tuition, or to consolidate other debts like credit cards and auto loans. It’s important to evaluate overall financial health and spending habits before tidying up other debts and expenses using your mortgage.
  • Eliminate PMI– Another possible benefit to refinancing is the elimination of private mortgage insurance. If the original down payment on the home was less than 20% PMI is usually required by the lender. A borrower may be able to refinance and if the value of the home has increased enough, thus eliminating PMI.

Points to Consider

  • Cost of the refinance– Application fees, title fees, lender closing fees, and loan origination fees are all costs to look into before deciding to refinance. Lenders, like Land Home Financial will help homeowners figure out when and if the costs would be recuperated.
  • Overall Financial Health– If the main goal of the refinance is to pay off the mortgage earlier, borrowers should also consider their other financial goals. The ability to save appropriately for retirement and pay off other higher interest loans should be factored into the decision to refinance. If refinancing doesn’t affect the monthly payment very much, refinancing could be just the ticket to achieving personal financial success.
  • Requirements– Contact Land Home Financial to find out the requirements for refinancing.

Final Words

By working with a trusted residential mortgage lender, homeowners can find a loan that is tailored to their specific financial situation, offering just the right term and interest rates. The refinancing process will operate quickly and smoothly, giving them true financial security and peace of mind.

Office Location: 1229 Cape Coral Pkwy E, Unit 13 Cape Coral, FL 33904


6 New Years Resolutions for Homeowners

For-Keeps New Years Resolutions for Homeowners

We all make New Year’s resolutions, but let’s be honest, most are wishful thinking. By February, that “lose 20 pounds” or “learn Spanish” resolution has gone right out the window.

But not for you, new homeowner. This year is different.

Your first 12 months of homeownership set the tone for the entire journey. With just a few smart decisions, you can save money now and get more out of your investment later.

So make room on that list between “run a 5K” and “travel more.” Here are essential New Year’s resolutions for new homeowners.

1. Start an emergency fund

Homeownership has a funny way of costing more than you think. An emergency savings fund provides a financial safety net, and your new home is the perfect reason to start one.

Remember, if the furnace quits on a cold night, there’s no landlord to call. Laid off unexpectedly or surprised by major car repairs? Mortgage payments are still expected on time and in full. Without an emergency fund, these expenses could force you into credit card debt or worse.

Ideally, your emergency fund should cover several months of expenses, but it’s OK to start small. Set aside a portion of every paycheck with the goal of saving $500 as quickly as possible, and then contribute as much as you can moving forward.

2. Take a closer look at your homeowners insurance

Just because a standard homeowners insurance policy satisfied your lender, it doesn’t mean you’re adequately covered.

“Homeowners insurance isn’t one-size-fits-all. There are unique coverage options and, more importantly, ‘exclusions’ that homeowners need to be aware of,” says Ryan Andrew, president of The Andrew Agency, an independent insurance agency in Richmond, Virginia.

Does your policy cover the full cost of your jewelry or other valuables? Are disasters like earthquakes and floods excluded? Will the policy pay if your dog bites the new mailman?

“Your home is usually your biggest asset,” Andrew says. “Spend a few minutes reviewing your coverage and exclusions, and ask questions so you understand your policy.”

3. Get an energy efficiency audit

Heating, cooling and powering a home isn’t cheap. Why be uncomfortable or spend more because your house wastes energy?

After the dust settles, you may notice more about your home, particularly if you bought new construction, says Jessie Ferguson, director of operations at Renewable, a home energy consulting company. Maybe the air smells funny or one bedroom is colder than the others. She recommends getting an energy-efficiency audit rather than guessing at the problem.

Using blower door tests and infrared cameras, energy audits measure air leaks and detect air infiltration or missing insulation. Audits are performed by utility companies, city governments and some contractors.

“An energy audit is an inexpensive way to get real information about your house. They’ll tell you which fixes will deliver the best bang for your buck,” Ferguson says.

In addition to lowering your utility bills and making you more comfortable, a more efficient home may end up putting free money in your pocket, thanks to local, state and federal rebates.

4. Consider a home warranty

If the appliances in your new home are near the end of their life cycles, a home warranty may help shield you from the cost of replacement.

Also called home service contracts, home warranties are annual agreements that offset the repair or replacement cost of major home components and appliances.

Approach home warranty companies with caution, however. Read customer reviews and avoid gimmicks that seem too good to be true. Like insurance policies, home warranties are full of fine print, and homeowners often fail to realize what’s excluded until they try to make a claim.

“They can be helpful in the first year of homeownership, when you have so many other things to think about and pay for,” Ferguson says of home warranties. “Just make sure you know exactly what you’re getting.”

5. Create a disaster kit with a home inventory

Your new home is your castle, but it’s not indestructible. A disaster kit that includes financial documents and a home inventory will speed up recovery if the unthinkable happens.

A home inventory can be as simple as snapping pictures of big-ticket items in your home, or you could record items, brands, original prices, ages and condition in a spreadsheet.

No matter which method you choose, a home inventory is the best way to make sure you have enough insurance coverage to replace your valuables, Andrew says.

Store the inventory, along with copies of your personal identification, credit card information, vehicle records and other important documents, in a fireproof safe or another place that’s easily accessible if you have to evacuate.

6. Make a plan to build equity

Unless you bought your home with cash, it will be many years until you own it outright. Make plans now to build equity faster, you can unlock more benefits of homeownership even sooner.

Equity is a fancy word for “how much of your house is paid off.” Home equity is a valuable asset; accrue enough and you can use it to finance major renovations or pay off student loans.

You can build equity slowly just by making your monthly mortgage payments, or you can find ways to speed up the process. For example, take on smart home improvements or switch to biweekly payments to get “equity rich” even faster.

We’re here to help and answer any questions – Click Here to get Connected


Positive Look into Reverse Mortgages

The concept of a reverse mortgage is perhaps a bit counterintuitive. It can come with misconceptions–most founded by inaccurate information. Is a Reverse Mortgage for you? That’s really a question for your loan officer prior to counseling or the HUD counselor. We hope to shed a little light into the process and give you an idea about the benefits that can come with a Reverse Mortgage.

Similar but Different

A Reverse Mortgage turns a homeowner’s equity into cash without the need to refinance the property or obtain a conventional home equity line of credit (HELOC). A HELOC is a line of credit that uses the home as collateral and if used, requires monthly payments the homeowners must make. Similar but different, is a cash out refinance. In a cash-out refinance, homeowners can refinance an existing mortgage and take out some extra cash and use it in whatever way they wish. Still, in both instances, it’s a new loan with new monthly payments. A HELOC and cash out refinance are loan types for those who are “house rich” but maybe just a bit “cash poor” but can still afford to make monthly payments.

A Reverse Mortgage doesn’t require monthly mortgage payments. Typically, the only time a payment is made is when the borrower(s) ultimately leave the property, and the home is no longer the primary residence. They can always choose to make monthly payments of whatever amount they want, a little or a lot, but that is a choice, not a requirement. The funds from a Reverse Mortgage can be accessed through taking a lump sum, a line of credit or monthly payments for as long as the borrower(s) live in the home. The monthly installments can last the life of the loan or for a predetermined number of months, all the borrower’s choice. FHA also allows a combination of all 3, line of credit, lump sum, and monthly payments.

Here are the basic eligibility requirements for a Reverse Mortgage:

The borrower(s) must be at least 62 years of age
The property is the borrower(s) primary residence
The property must have sufficient equity
The borrower(s) must attend a counseling session with a Reverse Mortgage counselor
The borrower(s) must be able to demonstrate a reasonable credit history
The borrower(s) must be able to demonstrate they have sufficient income to cover property taxes and insurance
The last 2 requirements were added in 2015; borrowers must be able to keep their property taxes paid and the collateral insured as well as show responsible credit history. If that seems questionable, there is an option to establish a lifetime set aside (LESA) to ensure those charges are paid and the consumer is protected. Lenders will review the borrower’s monthly required obligations and compare that with the amount of disposable income as well as make certain the Reverse Mortgage is a sustainable solution. Unlike regular mortgages, there is no “debt to income” requirement with a Reverse Mortgage, so it is substantially easier to qualify. If there is an existing mortgage on the property, proceeds from the reverse are used to pay off the mortgage and eliminate existing monthly mortgage payments.

Reverse Mortgage loan amounts will vary based upon the age of the youngest borrower on the application. Generally speaking, the older the borrower, the more money can be issued. The property will also be appraised just like with any other FHA mortgage. The age of the borrower(s) and the amount of equity in the property are the two main line items a reverse lender will evaluate per a formula set down by the FHA. Visit our Reverse Mortgage calculator to get a rough idea of how much you will qualify for.

The “Two-Thumbs-Up” for Reverse Mortgages

The most compelling reason to get a Reverse Mortgage is to turn equity into tax-free cash while still living in the property. Interest accrues on disbursed funds and is directly tied to an index, such as a 1 Year or Monthly London Interbank Offered Rate (LIBOR), plus a margin (typically 2-3%) and is only paid at a maturity event a.k.a. the sale of the property or six months after the homeowners leave the home. And, the proceeds are tax-free! Yet, please remember you still have to pay property taxes and keep your home insured.

A Reverse Mortgage doesn’t “sell” the property to the lender. The homeowners remain on the title and still own the home. A reverse gets rid of an existing mortgage, therefore eliminating monthly mortgage payments. Heirs are not held liable to pay off the full reverse loan balance should the payoff exceed the value of the home and any remaining equity will flow to the heirs just like any other mortgage.

But, Before The Reverse gets Best Picture…

There really aren’t too many negatives with a reverse but there are some considerations. The value of the inheritance can fall as the reverse needs to be paid off and loan fees may be a bit higher compared to a regular mortgage. Some lenders will cover some or all of those fees, and those that are not paid by the lender are deducted at the closing table. When accessing home equity, it’s important to understand all the financial consequences, and these consequences will be reviewed during counseling, but it may also make sense to speak with your financial adviser to make sure you understand the impact a Reverse Mortgage can have on your estate.

Overall, a Reverse Mortgage is a great option used to access your home equity without having to sell your home, and without any monthly mortgage payments. If you’re curious or know someone who this might benefit, it’s time to call a Reverse Mortgage lender today. And remember, like a friendly movie review from your sister, all opinions are valuable, they just might not be the most accurate or applicable. In other words, see that movie you think you might like, or in this case, look into a reverse, it just might be what you are looking for.

*The above advertisement has not been approved or endorsed by FHA or any other government agency.

*Please note all pricing, percentages and fees are subject to change and are based on personal circumstances. The use of hypothetical statements are meant to illustrate possible outcomes and are not intended to be a statement of facts.


9 Tips to Get Money for a Down payment

Get Money for a Down Payment

Whether you’re purchasing an existing home, building a new home or planning to fix up an older home, you’re probably excited about the prospect of closing the deal and moving in.

Not so fast. Buying a home is an expensive proposition – the biggest investment that most families ever make. While you aren’t required to cover the entire purchase price up front, you do need most times to come up with a down payment before you can close on your home.

The Biggest Closing Cost of All

money-down-payment-calculator

 

Most line items are small change compared with probably the biggest closing expense of all: your down payment. This is because your down payment is a key part of the offer you present to the seller. The general rule of thumb is simple: the larger the down payment, the stronger the offer. More precisely: the greater the down payment’s share of the total purchase price, the more likely the seller is to accept.

 

 

 

Tips and Tricks to Save

1. Determine Your Expected Down Payment and Timeframe

First, figure out about how big your down payment will be.

Down payment size is a function of three overlapping factors: your desired initial loan-to-value (LTV) ratio, your time horizon (when you want to buy), and local housing market conditions. When people talk about budgeting for a future home purchase, they generally refer to list prices: “We’re willing to pay $300,000,” or “We can afford $250,000, but no more.”

However, on the matter of affordability, the most important number is the down payment amount. If you can’t cobble together a $50,000 down payment on a $250,000 house (or a $400,000 house, if you’re putting down less than 20%), then you can’t really afford the house.

Lastly, don’t completely deplete your bank account to buy your dream home. It’s wise to have at least three months’ income in liquid savings as an emergency fund, regardless of your near- or long-term goals. Six months is even better.

2. Shrink Your Required Down Payment With a Special Loan

If you’re looking to buy on an accelerated timetable, live in an expensive housing market, or doubt your ability to save for a 20% down payment on an acceptable house in your target neighborhood, look into special loan programs with lower down payment requirements.

Beyond program-specific requirements, these special loans have some important drawbacks. Perhaps most importantly, they carry Private Mortgage Insurance (PMI) premiums until LTV reaches 78% (though you can formally request PMI removal at 80% LTV).

3. Take Advantage of LHFS Down Payment Assistance Programs

Relatively few prospective homeowners realize that they could qualify for national down payment assistance programs that can reduce their out-of-pocket down payment costs by thousands of dollars.

4. Pay Off Outstanding Credit Card Debt

For many folks, paying off credit card debt is a high-priority goal. Even the low APR Credit Cards usually charge interest rates north of 10% APR. On an average balance of $1,000, that’s $100 in interest charges each year. If your debt load is higher, adjust accordingly.

Paying off credit card debt isn’t always straightforward, though. Focus on your highest-interest debt first, even if that means putting as little as $25 or $50 extra toward your payment each month. As your high-interest debt load shrinks, you can move onto lower-interest credit card debt, and you’ll likely accelerate your progress toward a $0 balance. With lower (or no) interest charges eating into your spending and saving power, you can then direct your dollars toward your down payment fund.

5. Set Aside a Portion of Your Tax Refund

Expecting a tax refund this year? Reserve a slice of it to reward yourself for all your hard work last year – a nice restaurant meal, a frugal weekend getaway, a new piece of furniture for your home. Enjoy it.

Then sock the rest of your refund away in your down payment fund. If you reliably receive a $3,000 refund, spend $1,000, and save the rest, you’ll have $6,000 after three years, and $10,000 after five. That probably won’t account for your entire down payment, but it can’t hurt.

6. Make Recurring Savings Deposits

Knowing you need to set money aside each month is one thing. Actually doing it is another. Set yourself a calendar reminder on the same day each month or pay period to transfer a set amount of money – at least 5% of your take-home pay, and ideally 10% – into your primary savings account. You can then separate the share allotted to your down payment from your general savings or other savings goals. Or, better yet, create a separate savings account whose sole purpose is to hold your down payment funds.

7. Automate Your Savings Deposits

What’s even better than recurring savings account deposits? Automated savings account deposits that you don’t have to remember to execute each month. Most banks allow recurring savings transfers from internal or external checking accounts. Examine your budget and determine how much you can afford to save each pay period or month, and then make it happen, preferably on the same date (or the day after) you receive your paycheck or direct deposit.

8. Withdraw from Your IRA Without Penalty

Under certain conditions, your retirement account can serve as a supplemental funding source for your down payment.

This isn’t free money, of course. If you have a traditional IRA, you need to pay taxes on the withdrawn amount at your overall rate – 28% in the 28% bracket, and so on. On a Roth IRA held for longer than five years, your withdrawal is tax-free, because you’ve already paid taxes on the contribution.

If you and your spouse both have IRAs, you can both withdraw up to $10,000, for a total of $20,000. Depending on the projected size of your down payment, that could be a sizable boost. And, on Roth IRAs held longer than five years, you can withdraw tax- and penalty-free contributions in excess of $10,000, though any withdrawn earnings are taxable at your normal rate.

However, you also have to consider the opportunity cost of taking that money out of your account, potentially for years (by the time you make additional contributions to cover your withdrawal).

9. Take a 401k Loan

You can also borrow from employer-sponsored 401k or fund your down payment. On 401k loans, borrowing limits are much more generous: You can borrow up to the lesser of $50,000 or half the value of the account. That’s enough to fund a 20% down payment on a $250,000 house, or a 10% down payment on a $500,000 house.

However, the devil is in the details. You have to pay back your 401k loans, with interest – typically at 2% above the prime rate. On larger loans, that means several years’ worth of three-figure monthly payments and several thousand in interest charges. Plus, if you take out a 401k loan before applying for a mortgage loan, your credit utilization ratio will spike, which could raise your mortgage loan’s interest rate or cause the bank to think twice about lending to you in the first place.

As a general rule of thumb, 401k loans are useful in two situations: for funding small down payments ($5,000 or less) in their entirety or as the last piece of a multi-year, multi-source down payment funding strategy.

Final Word

Your house might be the single biggest purchase you ever make, but it won’t be the only big-ticket item you ever buy. Unless you can comfortably live without a car, you’re likely to buy a used vehicle every few years. If you have kids, you’ll need to budget for their education. Once you’re ensconced in your home, you’ll probably want to make sensible improvements that enhance its value or accommodate your growing family. And, all the while, you need to have enough set aside for the unexpected.

Every one of these items, and many others not mentioned here, demand a measured, thought-out savings strategy. As you notch small victories in your quest to cobble together a down payment for your dream home, don’t neglect your other goals – whether you’re aiming to reach them next month, next year, or next decade.

 

 

 

 


Stay Within Budget When Buying a House

5 Budgeting Tips

A house is likely to be the most expensive purchase you’ll ever make. And if you’ve waited a long time for this day to come, you’ve undoubtedly thought about the features you desire – maybe you’re craving a huge master bedroom with walk-in closets, or perhaps a gourmet kitchen. We’ve listed five budgeting tips for you to follow that will help you out.

While you don’t want to skimp on the amenities you love, adding too many can drive up the cost and destroy your budget. By thinking about your long-term financial goals and assessing your budget before you buy, you can score the home you want without experiencing buyer’s remorse.

1. Establish a Firm Price Limit and a List of “Must Haves”

When you’re pre-approved for a mortgage, your bank determines how much they think you can afford to spend on a house. But don’t assume the number they provide is the amount you should spend.

Go online and use a mortgage calculator – after you enter a sale price, a loan term, and interest rate, the calculator estimates your monthly payment, including home-owners insurance, property taxes, and private mortgage insurance. Also, research whether there are other expenses you’ll need to work into your budget after buying a home.

5 Home Buying Budgeting Tips with Land Home FinancialFor instance, association dues, a lawn or pest service or possible higher utilities; these costs can really add up and eat into your monthly budget. If you decide in advance which amenities are “must-haves” and which would simply be nice to have, you’ll be in a better position to stay within budget when you start looking at homes.

 2. Keep Tabs on Your Real Estate Agent

Land Home Financial Realtor PartnersI’ve had only positive experiences with my real estate agents, but not everyone is as lucky. Good agents respect your finances and only show you homes you can afford.

That being said, some agents may try to push the envelope and recommend properties outside your price point. Be firm and stick to your guns.

3. Don’t Compare Yourself to Others

It’s very easy to fall into the cycle of “compare and despair.” This is a nasty cycle to fall into, especially when it comes to buying a home. A house isn’t a pair of shoes or an expensive handbag – if you overspend when buying a house, it isn’t easy to recover from the mistake.

Rather than obsessing over the fact that your friend bought a house with an outdoor kitchen, offer your congratulations, and then get excited about what your budget can do for you. Maybe you’ll have four bedrooms instead of two, or you’ll have a gas oven instead of an electric one. Then, think about the ways you’ll benefit from staying within your budget, such as maintaining a healthy vacation or a retirement fund or starting a college fund for your kids.

4. Avoid Bidding Wars

Competing with other buyers is no picnic, and to win a bidding war, you often have to increase your offer. This isn’t necessarily bad, as long as you’re able to stay within budget – however, bidding wars can get out of hand quickly.

If you get caught in a bidding frenzy, you could end up spending more than you want. Decide how much you’re willing to pay for a particular house in advance, and resist the urge to exceed that limit. In other words, be willing to walk away.

5. Bid on Houses That Aren’t Selling

Some buyers shy away from homes that have been on the market for a long time, assuming that there must be some hidden defect. But sometimes, a home’s inability to sell is much more simple. For instance, maybe it just has bad curb appeal, or there’s too much inventory in a particular market.

Therefore, it is important that you do not automatically rule out a house just because it has been sitting for a long time. If anything, seek out these houses. The seller is probably motivated and willing to drop the asking price to move the property.

Even if the seller isn’t willing to drop the price, there are still more opportunities for negotiation when a home has been on the market for months. If you can identify the reason the property hasn’t sold, then you can ask the seller to reduce the home’s asking price or provide a cash allowance for the fix.

If you’re still concerned about possible hidden defects, state in your bid that the offer is subject to a satisfactory home inspection – which is a good idea no matter what.

Final Word

Staying within budget when buying a house takes discipline, so you must approach the buying process with care. Know what you’re willing to spend, and refuse to look at homes listed above your budget. If you’re unable to find a suitable property after a few weeks or months, revisit your budget to see if you have any wiggle room. If not, hold out – it’s only a matter of time before the right house comes along.

 


Dollars & Sense Buying a New Home

Benefits Buying a New Home

The emotional appeal of a brand-new, never-been-lived-in home is undeniable, but did you know that buying a new home has a host of financial advantages? As long as you stick to the timeline and budget you’ve set, your home search should be just like anyone else’s. Throw yourself into the exciting process of finding your dream home!

Less Maintenance

Cape Coral Home Mortgage from Land Home Financial for Maintenance savings for New HomesThe cost of maintenance is something many homebuyers overlook. If you buy new, you likely won’t need to replace the furnace, windows and other essentials for years to come.

Energy efficiency

Cape Coral Home Mortgage from Land Home Financial for Energy Efficient New HomesWhen you buy an existing home, you run the risk of getting poor insulation, drafty windows and used appliances. Newer homes tend to have more energy efficient features, which could save you on energy costs in the long run.

Design Choices

When you buy new, you have the power to build your dream home to match your individual tastes and lifestyle. Why settle for someone else’s taste in bathroom tile when you can choose every detail for yourself? Bonus: the cost of upgrades can be rolled into a 
mortgage payment, allowing you to avoid expensive out-of-pocket renovations down the road.

Warranties

Land Home Financial Cape Coral While warranties are less common on existing homes, they are very common on new homes. This can be a huge benefit for buyers who don’t necessarily have money set aside for unplanned home repairs.

Insurance Premiums

Because new homes have modern plumbing, wiring and HVAC equipment, insurance companies tend to view them as a lower risk than older homes—a difference you could see in your premiums.

Whether you decide on a buying “New Home” or moving into a home built already, we can help provide the very best mortgage loan that fits your situation. Homeownership is a part—the essential part— of the American Dream. That’s a dream worth working toward.

Get Started on the application for a Pre-Approval Amount:

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Click Here to Begin with Scott


Let’s Review Reverse Mortgages

The concept of a reverse mortgage is perhaps a bit counterintuitive. It can come with misconceptions–most founded by inaccurate information. Is a Reverse Mortgage for you? That’s really a question for your loan officer prior to counseling or the HUD counselor. We hope to shed a little light into the process and give you an idea about the benefits that can come with a Reverse Mortgage.

Similar but Different

A Reverse Mortgage turns a homeowner’s equity into cash without the need to refinance the property or obtain a conventional home equity line of credit (HELOC). A HELOC is a line of credit that uses the home as collateral and if used, requires monthly payments the homeowners must make. Similar but different, is a cash out refinance. In a cash-out refinance, homeowners can refinance an existing mortgage and take out some extra cash and use it in whatever way they wish. Still, in both instances, it’s a new loan with new monthly payments. A HELOC and cash out refinance are loan types for those who are “house rich” but maybe just a bit “cash poor” but can still afford to make monthly payments.

 

A Reverse Mortgage doesn’t require monthly mortgage payments. Typically, the only time a payment is made is when the borrower(s) ultimately leave the property, and the home is no longer the primary residence. They can always choose to make monthly payments of whatever amount they want, a little or a lot, but that is a choice, not a requirement. The funds from a Reverse Mortgage can be accessed through taking a lump sum, a line of credit or monthly payments for as long as the borrower(s) live in the home. The monthly installments can last the life of the loan or for a predetermined number of months, all the borrower’s choice. FHA also allows a combination of all 3, line of credit, lump sum, and monthly payments.

Here are the basic eligibility requirements for a Reverse Mortgage:

  • The borrower(s) must be at least 62 years of age
  • The property is the borrower(s) primary residence
  • The property must have sufficient equity
  • The borrower(s) must attend a counseling session with a Reverse Mortgage counselor
  • The borrower(s) must be able to demonstrate a reasonable credit history
  • The borrower(s) must be able to demonstrate they have sufficient income to cover property taxes and insurance

The last 2 requirements were added in 2015; borrowers must be able to keep their property taxes paid and the collateral insured as well as show responsible credit history. If that seems questionable, there is an option to establish a lifetime set aside (LESA) to ensure those charges are paid and the consumer is protected. Lenders will review the borrower’s monthly required obligations and compare that with the amount of disposable income as well as make certain the Reverse Mortgage is a sustainable solution.

Unlike regular mortgages, there is no “debt to income” requirement with a Reverse Mortgage, so it is substantially easier to qualify. If there is an existing mortgage on the property, proceeds from the reverse are used to pay off the mortgage and eliminate existing monthly mortgage payments.

Reverse Mortgage loan amounts will vary based upon the age of the youngest borrower on the application. Generally speaking, the older the borrower, the more money can be issued. The property will also be appraised just like with any other FHA mortgage. The age of the borrower(s) and the amount of equity in the property are the two main line items a reverse lender will evaluate per a formula set down by the FHA. Visit our Reverse Mortgage calculator to get a rough idea of how much you will qualify for.

The “Two-Thumbs-Up” for Reverse Mortgages

The most compelling reason to get a Reverse Mortgage is to turn equity into tax-free cash while still living in the property. Interest accrues on disbursed funds and is directly tied to an index, such as a 1 Year or Monthly London Interbank Offered Rate (LIBOR), plus a margin (typically 2-3%) and is only paid at a maturity event a.k.a. the sale of the property or six months after the homeowners leave the home. And, the proceeds are tax-free! Yet, please remember you still have to pay property taxes and keep your home insured.

A Reverse Mortgage doesn’t “sell” the property to the lender. The homeowners remain on the title and still own the home. A reverse gets rid of an existing mortgage, therefore eliminating monthly mortgage payments. Heirs are not held liable to pay off the full reverse loan balance should the payoff exceed the value of the home and any remaining equity will flow to the heirs just like any other mortgage.

But, Before The Reverse gets Best Picture…

There really aren’t too many negatives with a reverse but there are some considerations. The value of the inheritance can fall as the reverse needs to be paid off and loan fees may be a bit higher compared to a regular mortgage. Some lenders will cover some or all of those fees, and those that are not paid by the lender are deducted at the closing table. When accessing home equity, it’s important to understand all the financial consequences, and these consequences will be reviewed during counseling, but it may also make sense to speak with your financial adviser to make sure you understand the impact a Reverse Mortgage can have on your estate.

Overall, a Reverse Mortgage is a great option used to access your home equity without having to sell your home, and without any monthly mortgage payments. If you’re curious or know someone who this might benefit, it’s time to call a Reverse Mortgage lender today. And remember, like a friendly movie review from your sister, all opinions are valuable, they just might not be the most accurate or applicable. In other words, see that movie you think you might like, or in this case, look into a reverse, it just might be what you are looking for.

*The above advertisement has not been approved or endorsed by FHA or any other government agency. Please also note all pricing, percentages and fees are subject to change and are based on personal circumstances. The use of hypothetical statements are meant to illustrate possible outcomes and are not intended to be a statement of facts.*