M & M Mortgage

For many, the idea of renting a home or an apartment can seem like an attractive option because of the simplistic nature of renting. Renting isn’t always the best option, or the best way to spend your money, however. While paying rent, hundreds of dollars are thrown every month into oblivion, never to be seen again.

Investing in the ownership of a home can create value. Home values and property values are likely to increase over time, meaning that you will likely be able to sell your home for more than you bought it for, thus making it a good investment. As for mortgage and property taxes, both are tax deductible, and although they are both significant expenses, the return on the investment is likely to outweigh the expenses.

Although renting is most likely the easier option, it may not always be the best option. It is true, however, that home ownership can be more financially demanding than renting, but there are programs and agencies to help with the cost of home ownership. In the end, home ownership is usually the better way to invest your money.

Where do most people have their 2nd homes? Arizona? Florida?

How often does this happen to you when you visit your favorite vacation resort? First, you take a peek at the real estate section of the local newspaper, or slow down when you drive by a home with a “For Sale” sign out front. You find yourself mentally redecorating your rental condo to suit your own tastes, and finally catch yourself number-crunching to figure out what it might cost to have your own place on the lake or in the mountains. Congratulations, friend – your daydreaming has moved you into the legion of potential second-home buyers!

You’re hardly alone. With the economy in recovery mode over the past year, vacation home buying has been making a strong comeback, according to the annual investment and vacation home survey complied this past spring. That report shows that 553-thousand vacation homes were sold in the US last year, an 8 percent increase from 2008, when consumers and their checkbooks were hunkering down during the recession.

When do you know you are ready for a 2nd home?

Finances

1. Can you afford the down payment?

This is only the tip of the iceberg, but you’ll need to come up with about 20 percent of the cost of the vacation house. Tapping into a home equity line on your main house is an option, but be careful. What you’re actually doing is putting your house up as collateral. So you don’t want to skip payments and risk losing your primary residence. And watch the “limits”: You can typically deduct interest on no more than $100,000 of home equity borrowing. Tapping into your 401(k) plan is a bad option — it sets back your retirement planning and the money you repay is taxed twice.
2. Can you afford the monthly and seasonal expenses?

Mortgage lenders are more cautious when it comes to financing vacation homes, so your interest rate may be higher than on your primary residence. In addition to principal, interest, taxes and insurance, you’ll probably have utility bills, condo or landscaping fees, repair and maintenance costs, plus the cost of furnishing and equipping another home.
3. Could this home ultimately threaten your financial security?

A vacation home can strain the family budget, so make sure you don’t jeopardize your retirement plan or children’s college education because you’d like a summer retreat. Figure out how much you need to put aside each month to cover the necessary saving. You may even want to have that amount automatically drawn from your paycheck or checking account so you don’t mistake those funds for recreation dollars. Then, if there’s money left over for the down payment, mortgage payments, maintenance costs and an emergency fund to cover three months of your vacation home expenses, strap on that beach hat, slide into those flip-flops and go house hunting.
4. Do you know the tax consequences if you sell?

A recent change in tax law allows you to pocket the entire gain on your primary residence if you have owned and lived in it for two of the past five years. If your vacation home’s value has skyrocketed in price since you bought it, consider moving in full-time for two years before you sell.
5. Do you plan to rent your second home to others?

Rental income can subsidize your dream. But there are tax consequences you need to consider before hanging the “For Rent” sign. If you use your second home strictly as your own vacation place, you can deduct the mortgage interest and property taxes on Schedule A — just as you do for your principal residence. If you decide to rent it out for just a few days (fewer than 15), you get to keep the rental income tax free.

Is it more challenging to get approved for a 2nd home?

A few years ago, many Americans leveraged their rising home equity to purchase second home or vacation home properties. Right before the real estate bubble burst, for example, most of the residential sales involved a second home. But that holiday home era is now a relic of the past.

Securing financing to invest in a second home was relatively easy just three to four years ago. Nowadays, however, coming up with the financial means to snag a vacation home is next to impossible-unless you have oodles of cash burning a hole in your pocket. Lenders are hurting, and they’re passing their financial pain along to customers.

Log cabins are beautiful and homey to live in. However, they are high-maintenance and expensive. Because they are built of organic materials, it is almost like they are alive.

To keep a log home in top condition, requires the wood logs to be treated and maintained regularly year after year so the wood doesn’t dry out and rot. Sometimes the logs can warp and need to be repaired or replaced, which is expensive. Also, weather wears out the weatherproofing material between the logs, and it will also eventually need to be maintained and repaired continuously over time.

If you are up to the regular high maintenance (either by doing it yourself or by paying someone else to do it), then a log cabin is a wonderful type of building that is well worth the investment.

For more info on anything mortgage related…please visit themmmortgage.com

Order to take when Buying a Home?

1. Get your credit in shape: Order your credit reports

One of the first steps any prospective buyer should take is to take advantage of the free credit reports everyone is entitled to request annually, thanks to federal law. While there are many sites on the Web offering “free” credit reports, many of those offers require that you sign up for a free trial of a credit-monitoring service that will cost money if you fail to cancel during the free trial period. The official site where you can get free, no-strings-attached credit reports annually from the Equifax, Experian and TransUnion credit bureaus is www.annualcreditreport.com. You can receive one free credit report from each of these three agencies every year.

2. Organize your financial paperwork

You also should gather up all the financial documents that a lender will need when you submit an application. They include copies of your income tax returns, W-2 wage statements, paycheck stubs, bank and investment account statements, divorce decrees and child support documents and recent credit card statements. Having those documents handy will also help you put together a realistic budget and help you figure out what you really can afford to pay as a down payment and toward subsequent monthly payments for mortgage principal and interest, plus property taxes and insurance.

3. Craft a budget: How much house can you afford?

There is a difference between the maximum payment a borrower can qualify for — which can sometimes be surprisingly high — and the amount you can comfortably afford, says Combs.
“Each person has to know the difference in his own mind,” she says. “If you’re just getting by with your current rent payment, and the lender says you can qualify for more, give it some thought.”
However, first-time buyers, in particular, often don’t know how the tax-deductibility of mortgage interest and property taxes can help offset a mortgage payment that is higher than their rent. A good real estate agent can help you figure out the bottom line.

For more info on anything mortgage related…please visit themmmortgage.com

What is a good score?

A score in the range of 630-680 should get you a good Rate but not the best available interest rate on a credit card, car loan, or mortgage. Even if you have a good score, checking all three of your credit reports is a great way to identify bad behavior, like missed payments, and to make sure your report is free of any errors that might be harming your score. Knowing what’s in your credit report gives you the power to correct inaccuracies and to identify and change bad habits that might be keeping you from an even better score.

How can you get your credit score for free ?

The Fair Credit Reporting Act gave consumers access to free annual credit reports from the three major credit reporting agencies through a centralized source, AnnualCreditReport.com, in 2003. A free credit score has never been a right.

Numerous sites promise “free” scores, but in reality they sign people up for a fee-based credit monitoring product. The score costs nothing only if the consumer cancels the order before the end of the trial period.

Several sites will give you a free credit score or score estimate, such as the FICO Score Estimator at Bankrate.com. Score estimators, which provide a score range, may rely on answers to questions about your credit situation or come from credit report information, while actual scores are computed from credit report data.

None of the free scores and estimates available deliver actual FICO scores, the most commonly used score by lenders. The free scores and estimates do, however, give you an idea of where your credit rating stands.

How Often should you check your Credit Report ?

After we resolve cases for our clients, they often ask how often they should check their credit reports for the future. My usual answer is, at least quarterly. If you have had problems with inaccurate credit reporting, you may want to check monthly. Also, if you are in the process of applying for credit you really need (for example, a home loan), you may have to monitor it daily until the inaccurate information is cleaned up.

For more info on anything mortgage related…please visit themmmortgage.com

Have you had issues with getting your closing documents to the
closing table on time? Why? Is it the company? Is it the processor? The
closer? The title company? Maybe all of the above??

with all the changes in the industry it’s hard sometimes to
identify what or who is to the cause of the delay! Will they EVER get a break??
It seems every regulatory change knocks one more chink out of their
armor.) With the new laws mandated it’s going to get even worse…but that’s another story.

But when we get right down to it, it’s usually making sure you start
with the right loan officer and Company!

1. A poor loan officer in a poor environment will surely result in a disaster.
2. An inefficient loan officer in a company with great systems can even survive, at least most of the time.
3. And certainly a good loan officer in an inefficient system will eventually fail.

So, it’s not just what loan officer you work with but what COMPANY
your loan officer works with that will produce the result you desire:

For more info on anything mortgage related…please visit themmmortgage.com