Susan A. Pomfret RICP, USA Mortgage

Buying a home in November can offer several unique benefits, particularly if youre looking for a less competitive market and potential cost savings. Here are some reasons why this month might be an ideal time to purchase a home:Minimal CompetitionBy November, the real estate market is much quieter. Most buyers have completed their purchases before the holiday season, reducing competition for available homes. With fewer active buyers, youll likely face less pressure and have more room to negotiate on price and terms.Motivated SellersSellers with homes still on the market in November are often highly motivated. They may be eager to close before the holidays or the end of the year, creating opportunities for buyers to negotiate better prices, closing costs, or favorable terms.Year-End Tax BenefitsPurchasing a home before the end of the calendar year can provide valuable tax benefits. You may be able to deduct mortgage interest, property taxes, and other closing costs from your taxable income. These deductions could significantly lower your tax liability for the current year.Potential Price ReductionsNovember often sees price reductions, especially on homes that have been on the market since the summer. Sellers may lower prices or be more willing to negotiate in order to close a deal before the year ends. This can lead to great deals and the chance to purchase a home below market value.Easier NegotiationsWith fewer buyers in the market, sellers may be more flexible on issues like closing timelines, repairs, or other contingencies. This puts you in a stronger negotiating position, making it easier to secure favorable terms that suit your needs.Slower Market, More AttentionReal estate agents, lenders, and other service providers tend to have lighter workloads in November. This means they can devote more attention to your transaction, ensuring smoother communication and faster processing of paperwork, inspections, and approvals.Pre-Holiday Deals on Home GoodsNovember coincides with major shopping events like Black Friday and Cyber Monday, offering significant discounts on home appliances, furniture, and electronics. If you buy a home in November, you can furnish and upgrade it at a fraction of the cost, taking advantage of these holiday sales.Avoid Holiday RushBy purchasing a home in November, you can settle into your new space before the holiday season begins in full swing. Moving before the holidays means youll be able to enjoy your new home during this festive time without the stress of searching for a home or planning a move in December.Mild WeatherIn many parts of the country, November still offers relatively mild weather, making it a convenient time for moving. Its easier to move and handle home repairs or renovations before winter weather sets in.Preparation for SpringBuying in November allows you time to settle in, make any desired improvements, and potentially take advantage of the spring market if you plan to sell or rent out your home. This timing also helps if youre buying with plans to move again in the future.November offers a quieter, less competitive buying environment, motivated sellers, and opportunities to save money on the home and on related purchases. If youre in the market for a home, its an excellent time to find a good deal and close before the years end. Our local lenders are here to help!

Susan A. Pomfret RICP There are many misunderstandings about Home Equity Conversion Mortgages (HECMs). Something everyone can agree on is that HECMs offer an avenue for older homeowners to use a portion of the equity in their homes to supplement their income in retirement. You may have heard some other things about HECMs that are misleading. Lets separate fact from fiction. Myth #1: I wont own my home. Fact: Just like a regular mortgage, you keep the title to your home. The lenders interest in your property extends only to the balance of your HECM loan.Myth #2: I wont have anything to leave my children. Fact: The loan is not due until the last borrower dies, moves out, or sells the home. If you pass away, your heirs can either sell the home or refinance it. The HECM lender will receive the amount owed on the loan. In addition, you cannot borrow the full appraised value of your home, and home values have risen steadily in recent years. This creates two ways in which there may be equity for your heirs after the home is sold and the loan is repaid. Please note there is no guarantee that your homes value will stay the same or increase.Myth #3: I cant sell my home. Fact: You can sell your home just as you would if you had a regular mortgage. The HECM will be paid off with the proceeds from the sale, and you will receive the remaining funds.Myth #4: Ill have to pay taxes on the funds I receive from the loan. Fact: Proceeds from a HECM are usually income tax-free, but you should always consult your tax advisor to make sure you understand any tax consequences.Myth #5: I have to pay off my current home loan before I can apply for a HECM. Fact: The HECM will pay off your existing mortgage, and then the funds available to you will be based on the equity in your home and amount the program allows you to borrow.Myth #6: There are restrictions on the way I can use the funds from the loan. Fact: You can use the proceeds from a HECM any way you wish. Your home may well be your greatest asset, and wise use of these funds can give you greater security in retirement.Myth#7: I should only consider a HECM as a last resort. Fact: Rather than considering a HECM as a last-ditch effort to raise retirement funds, financial planners are making it part of comprehensive retirement planning. Uses for HECM funds include paying for long term care, improving cash flow, remodeling your home to allow aging in place, paying off higher interest consumer debt, and delaying the start of Social Security so the monthly benefit amount can grow. If you have additional questions about HECMs or Reverse Mortgages, I'm here to help. Call me today for more information about this retirement income option. 401-595-7300.

The St. Louis Business Journal reports: Creve Coeur-based DAS Acquisition Co. LLC has entered into a joint venture agreement with a Phoenix-based real estate franchisor to boost loan volume.DAS Acquisition, the home mortgage lender that does business nationwide as USA Mortgage, said the venture with Realty Executives International Services LLC is starting with two loan offices in the St. Louis area and one in Kansas City.The brand name is Mortgages by Experts and the legal name of the joint venture entity is Mortgages by Experts 1 LLC. The final documents were signed last month.The two local offices opened this week with four loan officers working in existing offices of franchisee Realty Executives of St. Louis in Sappington and Imperial. The Kansas City office will have one loan officer and will open later this year. Ron Mueller, president of DAS Acquisition, said the goal is for the three offices to reach $200 million in annual loan volume, generating $5.5 million in annual revenue.Were excited to partner with Realty Executives International because they have hundreds of franchises all over the United States, said Ron Mueller, president of DAS Acquisition.

When envisioning your dream home, the possibilities are endless. Turning a house into a dream home often involves personal touches, luxurious features, and functional upgrades that cater to individual lifestyles and preferences. Here are some common features that contribute to this transformation:1. Open Floor PlanSeamless Flow: Large, open spaces connecting the kitchen, dining, and living areas create a sense of openness and make the home feel more expansive.Natural Light: Maximizing windows and glass doors can enhance natural light, making spaces feel brighter and more inviting.2. Gourmet KitchenHigh-End Appliances: Stainless steel or custom panel appliances, including double ovens, built-in coffee machines, and professional-grade ranges.Large Island: A spacious kitchen island with casual dining or entertaining seating.Custom Cabinetry & Smart Storage: Pull-out drawers, spice racks, and hidden storage to maximize functionality.3. Luxurious Master SuiteSpacious Bedroom: A large master bedroom with high ceilings, large windows, or French doors leading to a private balcony or patio.Spa-Like Bathroom: Features like a walk-in shower with rain showerheads, a soaking tub, double vanities, and heated floors elevate comfort.Walk-In Closet: A well-organized, expansive closet with custom shelving and lighting adds a touch of luxury.4. Outdoor Living SpacePatio/Deck: A beautifully designed outdoor area with a built-in grill, seating, and fire pit, ideal for entertaining or relaxing.Pool or Hot Tub: These provide relaxation and recreation while enhancing the homes appeal.Lush Landscaping: Well-maintained gardens, greenery, and even water features like fountains or ponds add a sense of tranquility.5. Home Automation and Smart TechnologySmart Lighting: Automated lighting systems that can be controlled via smartphone or voice activation.Security Systems: State-of-the-art home security, including cameras, smart locks, and motion sensors.Smart Thermostats: Systems like Nest or Ecobee that help control energy usage while maintaining comfort.6. Entertainment SpacesHome Theater: A dedicated media room with a large screen, surround sound, and comfortable seating for a cinematic experience at home.Game or Recreation Room: A space for games like pool, and foosball, or even a mini-bar for gatherings.7. Dedicated Home OfficeWith remote work becoming more common, a well-designed home office equipped with built-in shelving, ample desk space, and natural light is essential for productivity.8. Energy Efficiency and SustainabilitySolar Panels: Adding renewable energy sources like solar can reduce utility costs and environmental impact.Energy-Efficient Windows and Insulation: These upgrades improve comfort and lower energy bills.9. Personalized DetailsUnique Architectural Elements: Vaulted ceilings, crown molding, or exposed beams can add character.Custom Art/Decor: Personal touches like unique artwork or custom-built furniture make the space truly your own.10. Guest Quarters or In-Law SuiteA separate guest house or in-law suite provides privacy for guests or extended family members.Which of these features resonates most with your idea of a dream home? Regardless, our local lenders are here to help you navigate the homebuying process.

Susan A. Pomfret RICP Did you know you can help your clients 55 or 62 and older reduce their monthly housing obligations? We all have enough concerns now, so wouldnt it be of value to help your clients lower their stress about paying their monthly mortgage payment, credit card bills or installment loans? Perhaps you have baby boomer clients who are helping their elderly parents financially? Senior housing wealth has reached over $13 trillion* and may offer financial relief. By tapping home equity with a Home Equity Conversion Mortgage (HECM), those 62 and older can have flexible options. They can choose to receive HECM funds through a monthly payment, line of credit, initial draw, or a combination of methods. An even better feature is that no matter how they decide to take their funds at closing, they can change their payment plan at any time, as often as they need to throughout the loan.** Flexible options are very important as seniors navigate retirement, not only because their lives change as they get older, but also because they will have a tax-free*** safety net when they need it most, even for unexpected events.For those 55 and older there are similar choices available with Portfolio Jumbo Reverse Mortgage Products. Though they are not available in every state, and have some restrictions on payment plan flexibility, these loans are still a good option to consider.In 2014 the Financial Industry Regulatory Authority (FINRA) updated their Investor Alert about Reverse Mortgages, noting that recent changes to the program added additional safeguards for the borrower. They also stated FINRA is issuing this Alert to urge homeowners thinking about reverse mortgages to make informed decisions and carefully weigh all of their options before proceeding. And, if you do decide a reverse mortgage is right for you, be sure to make prudent use of your loan. As with any financial product, clients need to rely on an experienced professional to educate them about the risks and benefits to ensure they are making an informed decision. You can learn more at ttps://www.finra.org/sites/default/files/InvestorDocument/p517004.pdf There have been many studies that show how a HECM or Reverse Mortgage can help with Sequence of Returns Risks and Longevity Risk. I particularly like this article because it describes a coordinated strategy that is simple to implement https://toolsforretirementplanning.com/2016/08/20/sacks-and-lafaye-case-study/ In addition, Jamie Hopkins, Esq., LLM, MBA, CFP, RICP wrote a book titled Rewirement: Rewiring the Way You Think About Retirement! that I highly recommend, along with books and studies by Wade Pfau, Ph.D., CFA.Finally, think of HECMs and Reverse Mortgages as part of the financial planning/ retirement income planning process. They can be part of discussions with your clients about deferring social security, paying for health care and long-term care costs, making home modifications, keeping their current home, or buying a new one. They may offer a useful tool when gray divorce is the challenge, and as mentioned above, they may protect against Sequence of Returns Risks. About Susan A. Pomfret, RICP. Susan was one of the first to originate HECMs in Rhode Island, starting in 1989. She began her mortgage career over 30 years ago. She is a familiar and respected face in the senior community, combining her professional experience with senior volunteer work. She served as Co-Chairperson of the Board of Directors for the Senior Agenda Coalition, Board of Directors member for the RI Chapter of the Alzheimers Association and was Co-Chairperson for Alzheimers annual fundraising auction. Her volunteer work with the National Reverse Mortgage Lenders Association (NRMLA) includes serving as an appointed member of the Government Affairs, State and Local Issues Subcommittee. She has lobbied at the RI State House, participated in many rallies, and testified on various senior bills and issues, both in RI and on Capitol Hill. She was chosen to assist in writing the first Certified Reverse Mortgage Professional (CRMP) test, was a frequent columnist for Senior Digest Newspaper and PrimeTime Magazine, and was a monthly co-host of the Senior Digest Radio Show on WPRO 620AM. Susan has been published in many national mortgage industry publications and was chosen to cover the 2005 White House Conference on Aging (WHCOA), as well as attend the invitation-only 2015 WHCOA Forum in Boston, MA. She co-founded of the RI Chapter of the National Aging in Place Council, is an appointed member of the Aging in Community Act Subcommittee (affiliated with the Lt. Governors Long-Term Care Coordinating Council) and is an appointed Alzheimers Ambassador RI U.S. Representative. Susan holds a Bachelor of Science in Paralegal Studies and Certificate in Gerontology from Roger Williams University and Retirement Income Certified Professional (RICP) Designation from The American College of Financial Services.  *https://www.prnewswire.com/news-releases/senior-housing-wealth-reaches-record-7-70-trillion-301154029. **The servicer will charge a $20 change fee each time they change the payment plan. ***Contact a tax professional.

Susan A. Pomfret RICPAccording to the National Reverse Mortgage Lenders Association (NRMLA), homeowners age 62 and older had housing wealth over $13 trillion. This wealth is not liquid. Its locked up in home equity at a time when older Americans are looking for ways to fund their retirement. Home Equity Conversion Mortgages (HECMs) are one way to unlock this money, and financial planners now consider them an integral part of financial planning for retirement.What Is a HECM? A HECM allows homeowners 62 and older to access a portion of their home equity to use in retirement. Reverse Mortgages are available in certain states for those 55 and older and offer higher loan amounts than HECMs. Retirement Income Planning BasicsA secure retirement income plan should meet your financial goals and address retirement risks. Financial goals may include a source of income, paying for contingencies, and leaving funds for your heirs. Retirement risks may include longevity, inflation, healthcare costs, the need for long term care, the sequence of withdrawal of your funds from your available sources, and changes in public policy. A financial planner can help you develop a plan to address these issues, and a HECM can be an important part of your plan. Ways to Use a HECM in Your Financial Plan The proceeds from a HECM can be used in any way you wish. Once the HECM has paid off your existing mortgage, a financial planner can help you set priorities for the way you spend these funds, such as:                              Fund home renovations to age in place                               Purchase a new home (HECM or Reverse for Purchase)                               Spend home equity first to leverage investable asset growth potential                               Coordinate home equity to mitigate sequence of returns risk                               Use tenure payments to reduce portfolio withdrawals perhaps to keep them at a                               sustainable level (4-6%)                                Use tenure payments as an annuity alternative                                Delay your Social Security                                Manage your tax bracket                                Manage a Roth conversion                                Pay for long-term health care                                Fund end-of-life care                                Protect your homes value                                Create a contingency fundIf you are considering a HECM as part of your retirement plan, its important to remember that the amount you can borrow is determined by the age of the youngest borrower, the interest rate, and the appraised value of the home or maximum claim amount, whichever is less. Also, youre responsible for property taxes and homeowners insurance. Finally, you must continue regular maintenance and make necessary repairs to keep the home in good condition. If you have additional questions about HECMs or Reverse Mortgages, I'm here to help. Call me today for more information about this retirement income option. 401-595-7300.

Thinking about buying a home? First things first, youll need to save money for a down payment. What is a Down Payment?Lets break it down to the basics. A down payment is the money you bring to the closing table. You can borrow money from a mortgage company, like USA Mortgage for example, in the form of a home loan or mortgage, but a portion of the total cost will come directly from your pockets.Look at it like this: the down payment serves as an insurance of sorts for your local lender. When you hand over a check from your own account, it means youre officially invested! That tells us you are someone who we can trust to make payments on your monthly mortgage year after year. We love to work with people like you!Saving for a down payment not only proves yourself to the lender, but it also helps set your own mind at ease. Fun fact: a sizeable down payment REDUCES your monthly house payment. This allows you to choose a shorter mortgage term so you can say see ya! to this debt sooner rather than later. How Much Should I Save for a Down Payment?No one likes debt. Car loans, student loans and credit card debt can take up a big part of our income, leaving us with less money for the things we really want to use it on.The big question is, how much should you save? Its different for every buyer, which is why you need to work through the process below to determine what will work best for you. Here are a few ways to determine how much you should be saving:Determine how much you can afford each monthA good rule of thumb is to spend no more than 25% of your monthly pay (after taxes) on your mortgage payment. If you use too much of your budget on your monthly payment, that will leave you unprepared if any emergencies come up. We suggest that 25% (or even less) is the perfect amount.Want to find out what your 25% is? Figure out how much money you (and your spouse, if applicable) bring home each much. Multiple that number by .25 to find your monthly mortgage amount.Use your monthly mortgage payment to arrive to a total mortgage amount.When it comes to deciding which mortgage you choose, we recommend a 15-year-fixed rate, which is guaranteed to save you SO MUCH MONEY compared to the traditional 30-year option. Learn more about the differences hereSpend some time on our mortgage calculator.It helps to input different numbers into the home value and down payment section with the goal of hitting your preferred monthly payment. Talk things over with a spouse, friend or family member and make notes of your options. This is great knowledge to have as you begin to save for a home.Aim for between 10% and 20% for your down payment.Decide which percentage works best for you. If you choose 20%, this can lower your interest rate, opens the option for a 15-year mortgage and help you avoid private mortgage insurance (PMI).Want to know how this number was calculated? Multiply the total mortgage amount by the percentage you are putting towards a down payment. That is your savings goal, get ready to start putting some money in your piggy bank! What Other Costs Should I Consider When Saving for a Down Payment?A down payment isnt the only home-buying cost you need to think about, keep ready to find out what else you should be saving for!Private Mortgage Insurance (PMI)PMI is a fee that is added to your monthly mortgage payment if you put less than 20% on your home. You can expect PMI to add about $50 for every $100,000 you spend on a house. Learn more about Private Mortgage Insurance here.Appraisal and Inspection FeesIn order for your lender to sign off on your mortgage, youll need to have your new home appraised and inspected before you close. Each of these items can cost a little bit over $300, on average.Closing CostsA lot more work than you think goes into signing on the dotted line. Unless the seller agrees to pay closings costs, youll be responsible for feeds between 2% and 5% of the total mortgage value. How to Save for a Down PaymentStart with a smaller number.If the grand total you need to save intimidates you, just divide it up! First, decide when you would like to buy. Take the number of months away from your goal date and divide your needed down payment by the number of months you must save. Creative Ways to Save for a Down PaymentIf you think that the amount you are supposed to saved is too high, dont panic! Give yourself a little more time to save and be on the lookout for different ways to save. Here are some suggestions:Set up a Down Payment FundOnce you figure out the amount you should save each month, create a budget to track your saving and create a Down Payment FundThrow extra money towards your Down Payment Fund. Look for ways to slim down your budget so you can put more money toward your down payment. Here are a few ideas:Cut cablePack your lunchMake coffee at homeCancel gym membershipsWork overtimeStart a side businessGet a second jobStore your down payment savings the smart way There will come a time where you see all the money youre saving and want to take a spontaneous, expensive trip. Trust us, it will happen. To protect yourself from the temptation, dont store your down payment money in your regular bank account. We recommend a separate savings account or a money market account instead. Now you have all the information, start saving for that dream home youve been thinking about! Already have enough money saved up, ready to buy? Search for a local USA Mortgage lender near you to start the homebuying process.

Section 1What is a Renovation Loan?Available for buying or refinancing a home, Renovation Loans roll mortgage and remodeling costs into one loan. Renovation Loans are based on a homes estimated value after renovations are complete, allowing you to borrow more than a traditional home equity loan. By improving the value of the home, the renovations can help you build equity faster than you could buying a move-in ready house, giving you more control over the value of your property.By preserving older homes or those in disrepair, Renovation Loans help refresh and revitalize neighborhoods and provide a way for buyers to purchase in a pricier neighborhood at a more affordable rate. After all, homes needing work rarely list at full market value. Your willingness to invest time and patience while living in a construction zone can pay off in a lower overall purchase price. Whether you add a bathroom, knock out some walls, install energy-efficient appliances and water-saving fixtures and landscaping, youll experience the pleasure of creating a home that truly reflects your values, tastes and lifestyle.Renovation Loans offer a number of advantages over some traditional methods of financing:Avoid depleting your savings or maxing out your credit cards to pay for needed repairs and wanted upgrades.By combining your mortgage and your remodeling loans, you simplify your monthly bill paying and may lower your interest rate.Claim a larger tax deduction by combining renovation and mortgage interest.*Build equity faster by increasing the value of your home.Add to your homes value when you decide to sell.*USA Mortgage is not a licensed to provide tax advice. For more information on tax deductions, please reach out to your licensed tax advisor.How Does A Home Renovation Loan Work?Requirements & RestrictionsWhen you qualify for a Renovation Loan, you will be subject to a variety of guidelines and limitations. Most Renovation Loans require that you live in the home as your primary residence. There are limits to the amount of money you can borrow as well as what kind of projects you use it for.You must use licensed contractors for any structural, electrical or plumbing renovations. And you can only have one general contractor overseeing work on your home. Your mortgage lender wants to protect its assets until the loan is paid off. So, theres no cutting corners by hiring your part-time handyman buddy or doing it yourself. You and your contractors must abide by a set payment schedule. And, you may be required to work with a consultant to manage the renovation process.Section 2Types of Renovation LoansCustomize your home and find the perfect mortgage loan solution. With over a dozen financing options to choose from, youre sure to find the right loan to turn your fixer-upper into the home of your dreams.FHA 203(k) LoansInsured by the Federal Housing Administration, FHA 203(k) loans are backed by the government, making them a good choice for buyers who need a low down payment or have less-than-stellar credit. Available in Limited and Standard options, they can be used to purchase a one- to four-unit family home, individual or site condominium unit or a mobile or manufactured home.Advantages:3.5% minimum down payment optionLower credit score requirementsNo income limitsA $5,000 minimum on renovation costsGifts allowedSeller contributes of up to 6% of the purchase price15- to 30-year term with fixed interest rateDisadvantages:Requires Mortgage Insurance Premium which can be rolled into the monthly loan paymentsMust be an owner-occupied, primary residenceAllowed Improvements:Repair/replace roofs, gutters, and downspoutsRepair/replace/upgrade existing HVAC systemsRepair/replace/upgrade plumbing and electrical systemsRepair/replace flooringMinor remodeling, such as kitchens and bathrooms not involving structural repairsPainting, interior and exteriorWeatherization, including storm windows and doors, insulation, weather stripping, etc.Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovensAccessibility improvements for persons with disabilitiesLead-based paint stabilization or abatement of lead-based paint hazardsRepair/replace/add exterior decks, patios, porchesBasement finishing and remodeling not involving structural repairsBasement waterproofingWindow and door replacements and exterior wall re-sidingSeptic system and/or well repair or replacementLimited FHA 203(k) loans cover minor, non-structural repairs and upgrades up to $35,000. There is no minimum cost for renovations.Standard FHA 203(k) loans require a HUD-approved 203(k) consultant to work with the owner and the contractor to ensure all required renovations are made and payments are disbursed on-schedule, as directed. You will need to select the Standard loan if your home needs major rehabilitation work, structural repairs, landscaping or renovations exceeding $35,000. Renovations must be $5,000 or more. You cannot use the Standard loan to purchase or renovate any luxury item or make improvements that are not a permanent part of the property.Fannie Mae HomeStyle Renovation LoanThis loan can be a smart choice for homeowners with good credit and a sizeable down payment. It can be used for repairs, remodeling or energy efficient upgrades as well as to finance primary, vacation and rental properties.Advantages:Minimum 5% down payment or 10% for second homesGift funds may be used towards the down payment and closing costsOffers higher loan limitsNo restrictions on type of repairs as long as they are permanently affixed and add value to the propertyDisadvantages:Requires Private Mortgage Insurance for down payments less than 20%Cash-out Mortgage RefinancesOne of the most common choices for financing home improvements, a cash-out mortgage lets you refinance your home for more than you owe. You can then draw on the extra money to pay for your renovations. Offering a fixed interest rate, a cash-out refinance loan can lower your interest rate and/or your monthly payments.Conventional Cash-out Refinance Loans are a great option if your credit is good and youve built a lot of equity in your home. Their larger loan limits can cover more costly renovations. Conventional cash-out loans limit you to an 80% loan-to-value ratio (LTV), which is the amount of the loan divided by your homes market value.FHA Cash-out Refinance Loans are backed by the government, making it a good option for homeowners with lower credit scores and higher debt-to-income ratios. With a maximum loan-to-value ratio of 80%, an FHA cash-out lets you borrow more money, while potentially lowering your interest rate or changing the length of your loan.FHA Title 1 Loans are backed by the FHA and are a solid option for borrowers with poor credit or little-to-no equity in their home. Single-family home owners can borrow up to $25,000 for home improvements while owners of multi-family properties can borrow up to $12,000 for each additional living unit with a limit of five units or $60,000.VA Cash-out Refinance Loans are also backed by the government and are available to eligible service members and veterans as well as their unmarried surviving spouses. Allowing you to refinance up to 100% of your homes current value, a VA cash-out is a great option, even if youve only accrued 10-15% equity in your home. Unlike other types of cash-out loans, VA cash-outs do not require private mortgage insurance.Home Equity Loans & Lines of CreditAccess the money youve invested in your home while youre still living in it. Home equity loans and lines of credit are personal loans that use your home as collateral. Often used to finance college tuition, debt consolidation, or new business ventures as well as home improvements, home equity loans let you borrow up to 80% of your homes market value minus the amount you owe on the mortgage. It can be a smart choice if you have a substantial amount of equity built into your home and want to borrow a large lump sum for bigger renovation projects.Home Equity Loan Advantages:Fast approvalsLower rates and closing costsFixed interest rateFully amortizing, so you start repaying interest and principal from the beginningNo restrictions on how you use the moneyMay be tax deductibleask your tax advisorDisadvantages:Higher rates than cash-out loansSmaller loan amountsPayments do not go towards your existing mortgageAdds another monthly loan paymentHome Equity Line of Credit (HELOC) is a revolving credit line you can draw on as you need it. Typically offering variable rates, HELOCs are similar to credit cardstake out as much as you need at any time, up to your credit limit. Your monthly payments depend on current interest rates and your loan balance. You can pay it down over time or all at once as you see fit. HELOCs are a good option for smaller, less expensive or ongoing projects.HELOCs have a draw phase, during which you can draw on your credit line as much and as often as you need to while paying off the interest each month. After a set amount of time (typically 10 years), you will enter the repayment phase. You can no longer take money out of your credit line. Instead, you will make monthly payments on the interest and the principal as the loan becomes fully amortized through the remainder of your term.Home Equity Line of Credit Advantages:Borrow what you need, as you need itLow monthly payments during the draw phaseLow to no closing costsGreat for smaller or ongoing projectsPay interest only on the amount borrowed, not the entire credit lineDisadvantages:Variable interest ratesHigher rates than a home equity loanLender can change repayment termsMonthly payments can grow substantially when you enter the repayment periodOther OptionsNot all of your renovation loan options use your home as collateral. There are a number of other loans that can help you pay for home improvements.Personal Loans & Lines of CreditUnsecured loans that do not require you to put up collateral, personal loans and lines of credit eliminate the risk of losing your house or car should you become unable to repay the loan. Offering speed and simplicity, personal loans can be processed and approved quickly with far less paperwork than refinance or home equity loans require.Advantages:No home equity or collateral neededNo appraisal requireda great asset if your home is in disrepairAccess money quicklyDisadvantages:Higher interest rates, especially for borrowers with lower credit scoresLoans limited to $100,000Personal Lines of Credit are revolving lines of credit allowing you to borrow what you need, as you need it, up to the limit of your credit line. Like the HELOC, a personal line of credit functions much like a credit card, offering great flexibility in when and how much credit you draw on and how you pay it back. Unlike credit cards, credit lines have variable interest rates that can be applied to your existing balance. Be sure you understand how often and how much your lender can raise your rate before signing on to a personal line of credit.Contractor FinancingAccording to a survey by Consumer Reports, 42% of general contractors offer financing options to their clients. Some may offer to help you secure a loan through a trusted third-party lender. Rates and terms can vary widely, so make sure you understand the details, just as you would with any major financial commitment. Before signing, look for online reviews from your contractor-lenders previous customers and check with your local Better Business Bureau.Section 3Which Home Renovation Loan is Right for You?With so many renovation financing options to choose from, the question is: which one? The answer is unsatisfying: it depends.Take a long, objective look at your unique situation. Are you buying a new home or refinancing your current one? Hows your credit? Hows your equity? How extensiveand expensiveare the renovations you want to undertake? How fast do you need the money, and how much paperwork and hassle are you willing to go through?All of these questions, and more, play a role in determining the best loan for your situation.Are you a homeowner with lots of equity but a higher rate on your existing mortgage? A cash-out refinance can provide the money you need to fund your renovations while lowering your interest rate. If you have little to no equity built up or youre struggling with your mortgage, a personal loan or line of credit may be your only option.Are you dreaming of renovating a fixer-upper with good bones and lots of potential? Whether buying or refinancing, a no-equity-required FHA Title 1 loan or FHA 203(k) loan can provide the money you need. Although Title 1 loans are capped at $25,000 for single-family homes, they offer additional financing for up to five units in a multi-family property. Keep in mind that a 203(k) loan requires a great deal of paperwork and processing time, making it a less desirable option if you need to move in a hurry.Have you built a decent amount of equity? Are you happy with your current mortgage rate? A home equity loan or line of credit can provide the financing you need to renovate your home just the way you want.Are you buying or refinancing, need money for renovations, and dont mind following a long list of rules? The FHA 203k or Fannie Mae Homestyle loan may be right for you. And, if youre a veteran or active-duty military, dont hesitate to take advantage of the benefits youve earned by serving our country. Take a good look at the low-cost, easy-to-qualify-for refinance loans from the VA.Do you have bad credit? Government-backed refinance loans may be your best bet. Borrowers with lower credit scores and little-to-no home equity may consider taking out a smaller loan to get a lower interest rate or putting up collateral such as your car to get an affordable rate on a larger loan.In a big nutshell, here is a top-line look the best option for every situation:Can you lower your interest rate? Cash-out refinance Looking at an older or fixer-up home? FHA 203(k) rehab loan Undertaking a big, one-time project? Home equity loan  Planning several ongoing projects? Home equity line of credit Have low-to-no equity? Personal loan Doing smaller, short-term projects? Credit cardsAn experienced and reputable Mortgage Loan Originator can help you navigate all the options and steer you in the right direction.Best and Worst Home Improvement ProjectsBefore you knock out that wall, pick out paint, or begin mentally decorating the home office youre planning to add, think about your long-term goals for your home and your family. Are you renovating to make your home safer, more comfortable, and more energy efficient? Or do you have grand visions of scoring big profits when you sell the home next year?While its entirely reasonable and desirable to reshape your home to better fit your needs, your budget and your interests, do not expect to make a killing at resale. Homeowners rarely recoup 100% of the money spent on remodeling projects. Yes, an additional bathroom, updated kitchen or in-ground swimming pool can improve your equity and resale value. But not enough to pay for itself.In fact, the home improvements that tend to generate the best ROI are some of the least exciting, like fiberglass insulation for the attic, a new steel front door, manufactured stone veneer, minor kitchen remodels, and garage door or siding replacements.Borrowers see the worst ROIs from such sexy projects as a bathroom addition, installing a backyard patio, major or minor bathroom remodels, and major kitchen remodels. While such renovations may not pay for themselves, they can increase your homes equity and value. If renovations make you happier, prouder and more comfortable in your homeand you can afford the expense and the hasslea renovation loan can be well worth the investment.Tips and Red FlagsHome improvements and the financial commitments that come with them are a massive investment of your money, time and sanity. Shop as carefully for your Renovation Loan as you did for your house.Shop around and talk to more than one lender, paying close attention to rates and terms, closing costs and fees.Beware of balloon payments, a large lump sum that is due before you can pay off your loan. You dont want to be surprised just when youre looking forward to being done with loan payments.Look beyond the interest rate. The lowest rate does not always indicate the least-expensive or best loan for you.For FHA 203(k) loans, be sure you understand the contractor disbursement schedule. They are designed to protect yourand your lendersassets and ensure you get the high-quality work you are paying for. Your FHA 203(k) consultant can help you understand the details.Check your rate variability. If rates go up on your variable-rate loan, it could raise your monthly payments and overall cost of your loan considerably. Ask if you have the option to convert the loan to a fixed rate down the road.Check your credit score before shopping or applying for a loan. It can be a good indicator of which type of renovation loan will best meet your financial needs as well as what your interest rate might be.Section 4Four Steps to SuccessThink youre ready to buy or refinance and renovate? The Mortgage Loan Originators at USA Mortgage recommend taking these first steps to ensure your Renovation Loan process is as smooth and rewarding as possible:Know your budget and get pre-qualified. Talk with a Mortgage Loan Originator to determine your total purchase price eligibilitytotal purchase price = sales price + renovation bid + 20-35% of the bid.Narrow your search. Look at homes that meet your requirements for lot size, location, and unit count. Bridge the market options and your home renovation goals with a bid from a contractor you trust.Prepare for underwriting. Once your offer and bid are finalized, allow time for your mortgage to be processed and underwritten. Dont make changes to the scope of work or your chosen contractors while your loan is under review.Close the loan, and start your renovations. With your and your lenders approval, your contractor may be eligible to receive some funds as early as loan closing to help get the project underway. You will receive a draw welcome letter once your renovation escrow account is ready for disbursing payments to your general and sub-contractors.Section 5Getting StartedCongratulations! Youve closed the loan, and renovations can now begin. During the contractor review process, a renovation expert will discuss the details with your contractor to make sure they understand the steps needed to complete your projects. The way your contractor is paid will be determined by the type of loan you get.Review your closing documents. Make sure any payments due at closing have been delivered.Apply for any required permits. Prior to closing, you should have signed a permit certification form. All progress draws on the loan are contingent on having the required permits in place and city inspections being completed.Contact your draw administrator. Within 10-25 days of closing, the draw administrator will send you a welcome email notifying you that the escrow account for the renovation funds is setup and ready for disbursement.Complete project. As work is completed, you and your contractor will request draw inspections and progress payments. Once the work is complete, any change order or contingency requests can be processed along with any principle reductions.Enjoy your newly renovated home!When you finance with USA Mortgage, you get an ally and a lender for life. Were with you for the long term. And our commitment doesnt end when your renovations are complete. Well reach out periodically to let you know of any changes in the market and alert you to additional opportunities to save money. And if you ever have questions about your loan, reach out. Were here to help any time you need it.LEGAL:DAS Acquisition Company, LLC is not affiliated with or endorsed by any government entity or agency, including USDA, HUD or VA. Interest rates and products are subject to change without notice and may or may not be available at the time of commitment or lock-in.

Whether you are closing up your beach house after Labor Day or getting your primary residence ready for the cold season, winterization is an important process that homeowners should not neglect for their property.The purpose of winterizing a home is to avoid higher energy costs and any damage caused by cold weather and snow. Heres how to winterize your home properly to weather the season.Insulate: Ensure your home is properly insulated and sealed. You can add insulation to your attic to help keep your home warm and energy efficient. You can also insulate pipes in unheated areas, like attics, basements, and garages, that could freeze.Check your roof: Inspect your roof for missing or damaged shingles and replace them if needed. A leaky roof can cause significant damage during the winter.Clean gutters: Clogged gutters can cause damage to your siding and trim, or create ice dams on your roof.Sweep your chimney: A yearly chimney sweep can increase your fuel efficiency and protect your home from fire risk.Reverse ceiling fans: Use a switch to change the direction of your ceiling fan blades to create an updraft and circulate heat down.Change furnace filters: Change your furnaces air filter every two months during the winter. A dirty filter can reduce your furnaces efficiency.Winterize pipes and hoses: Cover outdoor pipes and winterize sprinklers and hoses.Winterize plants and landscaping: Take care of your plants and landscaping. 

The housing market may finally be entering a transitional phase. While summer sales have been sluggish so far, there are indications that activity could pick up by the end of the season.Mortgage rates have fallen to their lowest levels in approximately 15 months, and the influx of much-needed resale inventory is providing buyers with more options.Additionally, home shoppers can take heart in the continued decline of the median price for new homes, which has now dipped below the median price for resale homes, even as builders persist in offering buyer incentives.Experts contend that the housing market will only regain momentum when mortgage rates decrease sufficiently to alleviate affordability challenges. This would also encourage homeowners who are currently locked into low rates to sell, thereby increasing inventory to meet growing demand.

Section 1Know your reasons for refinancing.There are as many reasons to refinance as there are types of loans. Some homeowners want to lower their interest rate, to shorten the length of their loan, to convert from an adjustable-rate to a fixed-rate mortgage, to draw on the equity theyve built in their home to fund a financial emergency or opportunity, to finance a large purchase or to consolidate debt.Buyer: Jane Doe of Edwardsville, ILHome: $150,000 single family ranchLoan: 30-year fixed-rate for $120,000 at 9%Refinance: 15-year fixed-rate at 5.5% APRChange in monthly payment: $805 to $817To lower the interest rate on your house.One of the most popular reasons for refinancing, lowering your interest rate by even a percentage or two can save money, reduce your monthly house payments and help you build equity faster. By refinancing to a shorter term, you can achieve a lower interest rate without dramatically changing your monthly house payment.Convert an Adjustable-Rate to a Fixed-Rate Mortgage.Adjustable-rate mortgages (ARMs) typically start out offering a low rate for a set amount of time. When that time is up, the rate adjusts based on market conditions, usually going up. This is the perfect time to refinance to a lower-interest, more predictable fixed-rate mortgage. If you started out with a fixed-rate mortgage but dont plan to stay in your home for more than a few years, you might want to refinance with an ARM to take advantage of falling interest rates.Tap into your homes equity.If youve built a decent amount of equity in your home, you may qualify to refinance and draw on that equity for a number of other expenses: paying down high-interest rate credit cards or loans, paying college tuition, starting a business or remodeling your home. Before applying, discuss the risks and rewards with your lender to make sure this kind of loan is right for your situation.Consolidate mortgages.Home buyers who lack the standard 20% down payment often turn to piggyback or 80-10-10 loans, taking out one loan for 80% of the home price and a second mortgage for 10%. The buyer provides the last 10% as a down payment. Often, the second loan has a higher rate than the primary loan. Refinancing can allow you to consolidate both loans under one more manageable interest rate.Revise the length of your mortgage.If your finances allow, shortening your 30-year loan to 15- or 20-years can save considerable money over the term of the loan. Or, if your income has been reduced, switching to a longer-term loan can help lower your monthly payments.Lose the Private Mortgage Insurance (PMI).For home buyers who want a conventional mortgage but are unable to make a 20% down payment, lenders often require PMI to cover their loss in case the buyer defaults on the loan. Lenders may require PMI coverage for a certain length of time or until the buyer has built 20% equity in their home. You may also qualify for a refinance loan that doesnt require you to pay costly PMI premiums.Section 2Make sure the timing to refinance is right.Every homeowner is different.Finding the right time to refinance depends as much on your personal situation as on the market. How long do you plan to stay in your home? How strong is your credit? Are you planning to start a family, or is an empty-nest on your horizon? Have you paid a lot the principal? If so, refinancing may not be your best bet.Many homeowners first consider refinancing when they notice that interest rates have dropped below their current rate. But as weve already seen, thats hardly the only reason to refinance. Is your ARM resetting soon? If you plan to stay in your home for several more years and choose to refinance, moving to a fixed-rate mortgage can save you money and eliminate surprises. Has your credit score improved? You may now qualify for better rates.Your interest rate will largely depend on your credit score and credit history. If youve experienced some financial setbacks lately, you may want to improve your credit score before you consider refinancing. Take a look at your other debts. Would the money youd spend on closing costs be better spent paying off those high-interest credit cards? Be realistic. If now isnt right, keep paying down your mortgage and other debts and strengthening your credit. When rates drop again, youll be ready to take advantage of a lower interest rate.Is refinancing worth the time and effort?Traditional wisdom says your new mortgage rate should be lower than your current rate by at least 1%. But todays mortgage market is anything but traditional. Innovative lenders like USA Mortgage are constantly working to develop new and better ways for buyers like you to get the right mortgage to fit your budget, lifestyle and goals. That way, you dont have to spend as much time looking to compare refinance rates. Recent experience demonstrates that lowering your rate by even .75% may make it well worth your while to refinance.You can expect to pay from 2% to 5% of a loans principal in closing costs. Your lender may also require an appraisal of your home, title search and application fees. So, consider carefully whether refinancing is in your best interests. Begin by reviewing your current loan. How much equity have you built? And how is your credit? The answers will determine what kind of loan you can qualify for and whether or not youll need to get mortgage insurance. Do you have the ability to pay thousands upfront in closing costs? How long will it take for the savings you get from refinancing to off-set closing costs and fees? This break-even point will be a critical factor in deciding whether or not a refinance is the right move for you right now.What if youve only lived in your home for a short time but find a new interest rate that could save you money? How soon can you refinance after purchasing a home? It depends on your lender. Most wont refinance a mortgage theyve issued within the last 120180 days, in which case youll need to look to another lender. Does your original mortgage charge a penalty for paying off the loan early? If so, refinancing before the penalty expires may not be in your best interests. Consult a reputable lender to be sure.Section 3Research. Shop. Compare.And do your homework before you refinance.So, youve done some research, and youre feeling confident that you have the financial and mental resources to refinance. This is where your homework really begins.Exploring the Different Mortgage OptionsOf all the many loans and lenders out there, which are right for you? Even if you can significantly lower your interest rate while keeping the same type of loan you already have, that may not be your best choice. Begin by understanding the options.Fixed-Rate MortgagesOffering a consistent interest rate throughout the length of the loan, fixed-rate mortgages are some of the most popular. Typically available in 30-, 20- and 15-year terms, some fixed-rate loans provide a cash-out option allowing you to draw on the equity in your home.A 30-year fixed rate is a great choice if you plan to stay in your home for several years and have enough equity to avoid paying for private mortgage insurance. Because loan payments are stretched out over 30 years, your monthly payments may be lower, but you will pay more interest.A 20-year fixed rate condenses your payments over a shorter time, allowing you to save interest by paying off your loan 10 years sooner.Youll pay considerably less interest with a 15-year fixed rate mortgage and build equity much more quickly. But your monthly payments will be noticeably higher.With an interest-only loan, youll pay only interest for the initial part of the loan. Once the interest is paid off, youll start paying down the principal. These loans arent a good fit for most borrowers. But if you want low monthly payments, dont expect to stay in the home for more than a few years and expect your income to grow, you may want to ask your lender about your interest-only options.Adjustable-rate mortgages (ARM)Offering a low initial interest rate, a 30-year ARM will adjust to a fully indexed rate after a set period of time, usually 5, 7 or 10 years. This introductory rate is typically lower than fixed-rate loans, making it a good option for buyers who plan to sell their home before the rate adjusts up.Government ProgramsMany of the mortgage loans offered by the U.S. government are designed to help borrowers successfully achieve home ownership with manageable loans for borrowers in a variety of financial situations.FHA LoanInsured by the Federal Housing Administration, an FHA loan can be a great option for borrowers with poor credit or limited savings who may not qualify for many traditional fixed-rate loans. Although the credit requirements are less stringent, you will be required to buy private mortgage insurance if you do not have 20% equity in your home.Streamline RefinanceIf your current FHA loan is in good standing, an FHA Streamline Refinance may be a good choice if youre looking to quickly lower your interest rate and monthly payment without an appraisal.VA LoansThe Veterans Administration offers several refinancing options for borrowers who currently hold a VA loan or are eligible to get one.If youre hoping to tap into the equity in your home, a cash-out VA refinance will allow you to access up to 90% of your homes current value.If you currently have a conventional or ARM loan and want to switch to a VA loan, a rate-term refinance is a fixed-rate loan that allows you to finance up to 100% of the homes value without mortgage insurance.Lower your interest rate and change the terms of your loan. With no out-of-pocket costs or appraisals required, an Interest Rate Reduction Refinance Loan (IRRRL) offers streamlined refinancing for borrowers with a VA loan.Choosing the right lender to refinance with.Now that you have an idea of what kind of refinance loans are available, its time to start vetting lenders. If you were pleased with the experience you had working with your current mortgage provider, youll want to include them on your list of candidates.Before you start making calls or surfing websites, consider what features are most important to you: lowest rates, fast closing times, online convenience, or in-person customer service? No one lender will be a perfect fit for every borrower. So, list your priorities and seek out mortgage lenders who share them.Ask neighbors, friends and colleagues for recommendationsor warnings. Check out online reviews. Contact lenders by phone, email or online, and start asking questions.Are They Licensed?Every state in the country requires Mortgage Loan Originators to maintain a current license. To verify licensing, visit the Nationwide Multistate Licensing System website, NMLS Consumer Access Website.How Experienced Are They With Refinancing?Mortgage lending is a complex business with ever changing products, regulations and rates. Find someone whos closed a wide variety of loans for borrowers like you.Ask for three references from former clientsand follow up with them. Talking with someone whos been there, done that with the lender youre considering can boost your confidence that youre making the right decision.Whether you prefer interacting by phone, email, text message or carrier pigeon, will they communicate with you how and when youre most comfortable? Refinancing is life-changing decision. You deserve to work with a firm and a Mortgage Loan Originator you can trust. USA Mortgage Loan Originators are available to their clients 24/7.Getting estimates.Its your mortgage make sure it works for you.Dont hesitate to ask for estimatesits your financial future on the line. And, it could save you a substantial amount of money and hassle over the life of your loan. According to the Federal Home Loan Mortgage Corporation (also known as Freddie Mac,) borrowers could save an average of $1,500 over the life of the loan by getting one additional rate quote and an average of about $3,000 for five quotes.Once youve narrowed down your list of preferred lenders, request a Loan Estimate from the top 3 to 5 firms. They will respond with a Loan Estimate, formerly called a good faith estimate, which is a simple, three-page document spelling out the specifics of the loan they are proposing, including:Loan amountTerm lengthTotal closing costsInterest rateTax and insurance costsRepayment penalties, if applicableOrigination chargesThis allows you to accurately compare loans from different lenders, so you can make a confident and educated decision. Lenders are required to give prospective borrowers their Loan Estimate within three days of receiving your application. Submit your applications within a narrow time frame to ensure each lender is estimating based on the same market conditions. Your credit score should not be affected provided you submit your applications in less than 30 days.*Estimates provided for illustrative purposes only. This does not represent a commitment to lend. Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan. Crunching the numbers with a refinance calculator.Heres where you get down to the details to determine which estimate, if any, is right for you. Compare your Loan Estimates to each other as well as to your current mortgage. Reviewing what youve paid in interest so far and what you will pay on your current loan, versus the refinance, will give you a solid idea of your total loan costs for each option.Youll find a variety of refinance loan calculators online to help you crunch the numbers. Most lenders offer one on their websites. USA Mortgage has one you can use here.Pay close attention to closing costs, as this will be a big factor in how quickly youll begin to see savings with your new loan. Plus, you will need to pay closing costs in full on the day you close.Use this simple formula to calculate the break-even point on the loans you are considering:Total closing costs divided by the monthly savings your new loan will provide.Use this simple formula to calculate the break-even point on the loans you are considering:To calculate your break-even point, run the numbers on each loan estimate you are considering to determine whether or not the loan meets your needs.Total closing costs: $4,800Amount saved per month: $160Time required to fully recover closing costs: $4,800 / $160 = 30 monthsAs you compare estimates, remember that rates change daily, even hourly. Just because a lender posts a great rate on their website doesnt mean that will be the rate you get when you apply. You can and should ask the lender to lock the rate in their estimate for an amount of time. Youll need to apply for the loan before the lock expires to get that rate.Be sure to consider the tax deduction youll receive with the new loan versus your current one. Mortgage interest is tax deductible and can provide a sizeable savings for many borrowers. Talk with your tax advisor to make sure you wont pay more in taxes by refinancing your home.Watch for these red flags when you refinance.Refinancing a home is one of the biggest financial decisions youll ever make. Stay vigilant to avoid these common mistakes that can cost you time and money over the course of your loan.Its not all about the interest rate.Many factors go into the final cost of your loan. Closing costs, fees, points, all can affect what you end up paying over the term of your loan. Some lenders may offer appealingly low interest rates meant to distract you from excessively high fees. Some advertised rates are based on the borrower paying points to lower the rate, adding to the up-front cost of the loan. Ask your lender about loan origination fees, points, credit reports and all other fees before you submit your application.How much are you really saving?If youre not getting at least .75 to 1.00% off your current interest rate, refinancing may not be worth the effortunless you have a high-end home which would bring higher savings or you plan to stay in the home for a long time.Dont wait for the lowest rate.Even the most experienced mortgage lenders find it tough to predict when and how much rates will change. Trying to time your mortgage to get the very lowest rate could cause you to miss a good opportunity. Ask the lenders youre looking at to lock your rate to ensure youre getting the loan you need and want.Understand the estimates.Youve taken the time to get several loan estimates. Take the time to carefully review them. Compare the terms, closing costs and fees. And compare each lenders estimate against what they promised before you applied. If there are major discrepancies, you may want to delete them from your short list.Go easy on your equity.Compared to other types of loans, refinancing loans offer lower interest rates. Plus, your interest payments are usually tax-deductible. If you need cash for home repairs or other large purchases, a refinancing loan that lets you draw on your home equity sounds like a no-brainer. Just be careful not to take too much out in case housing prices fall. Otherwise, you could find yourself in a tight financial squeeze trying to make your monthly payments.Dont overextend yourself.Most homebuyers initially opt for a 30-year mortgage. While it can significantly lower your monthly payments, refinancing with another 30-year loan can put you back where you started and increase the amount of interest youll ultimately pay. Instead, ask your lender for a shorter-term loan matching the time you had left on your original mortgage. Say youve been paying on your home for seven years. Refinance with a 23- or 20-year loan instead of a 30. Not only will it lower your interest rate, it could shave years off your mortgage without raising your monthly payments.Avoid penalties for paying off your loan early.To compensate for the loss of interest, some mortgages charge a penalty if you pay off the loan ahead of schedule. Of course, this is exactly what refinancing does. While it can help borrowers with poor credit secure a mortgage, make sure the penalty will expire within 3 to 5 years from the start of the loan.Beware of junk fees.Before accepting a loan, scour the estimate for junk fees added to the closing costs. Charges for document preparation, document delivery, or excessive fees for obtaining credit reports are signs your lender is trying to squeeze more fees out of your loan. If they are charging you for simple tasks you could have done yourself, chances are its a junk fee and worth negotiating out or even choosing a different lender.Section 4What to expect when completing your loanNow that youve selected a lender and the type of loan you want, all thats left is to finish the paperworkand there will be a lot of it. But your lender will guide you through it.Closing on a refinance loan will be similar to what you experienced with closing on your original mortgage, without the sellers or real estate agents. You may meet at the closing agents or attorneys office, or your attorney may work with the closing agent to complete the documentation without a formal meeting.Different lenders will require different documentation. When in doubtbring it to the closing! All of them will conduct a credit check, even if youre using the same lender who wrote your original loan. They may or may not require an appraisal of your home.Be sure to bring the home purchase package you received at the closing of your first mortgage. This will provide much of the information your lender will need to complete the paperwork for your new loan. By providing your current Title Insurance Policy, you may even receive a credit.Youll also want to bring along the loan estimate from your chosen lender to compare to the final loan they offer. Less reputable lenders may try to sneak in small fees that can really add up. If you have doubts or questions, this is the time to speak up!At closing, you will be expected to:Review and sign all loan documents.Provide a certified or cashiers check covering all closing costs and fees.Set up an escrow account if you plan to combine your taxes, homeowners insurance and mortgage into one monthly payment.Provide proof of homeowners insurance.You will sign and receive copies of a number of documents, including:Closing Disclosure, a line-by-line itemization of all your closing costs.Deed of Trust or Mortgage detailing the lien on your property as security for the lender if you should default on your loan.Promissory Note declaring your agreement to all of the terms of the loan as well as your promise to make your monthly payments on time, in full, to the lender throughout the life of the loan.Section 5Conclusion:Were here when you need us.As a home lender, USA Mortgage is behind you for the long term. We dont start our relationship by giving you fake rates that change at closing. And our commitment doesnt end when you close on your loan. Well reach out periodically to let you know of any changes in the market and alert you to additional opportunities to save money. If you ever have questions about your new loan, reach out. Were here to help any time you need it.

The Federal Reserve has lowered interest rates for the first time since 2020, setting the stage for reduced borrowing costs across the board.Here are a few items to note per CNN The Fed has waited four years to cut rates.This marks a crucial milestone for the central banks historic inflation fight, which kept rates at a bruising 23-year high for more than a year.In a significant shift for the US economy, this is first the jumbo-sized rate cut since Covid.Its a major economic milestone both for the central banks long fight with inflation and for Americans battling a higher cost of living for the past two years.Wall Street had been divided on whether the Fed would introduce a typical quarter-point cut or a more urgent, half-point cut.Even more cuts could happen before the end of the year.Stocks climbed Wednesday midday as investors cheered the Federal Reserves decision to cut interest rates by a half point.Our local lenders are here to help you navigate the housing marketing and easily purchase or refinance. Take advantage and get started today!

Being a first-time homebuyer is exciting! But we know it can also feel overwhelming. Even though you may be eager to purchase, we want to help make sure that you dont end up hurting your financial goals.Homebuying is worth doing this the right way and that means buying a home that you love and that doesnt hurt your future money goals. Check out our 10 tips for first-time homebuyers to tackle the home-buying process.1. Build an Emergency FundWe hope this doesnt come as a surprise, but owning a home is expensive! Its much more expensive than renting, even if your monthly house payment will be similar or cheaper than your current rent amount. When you own a home, youre responsible for all the maintenance and upkeep costs those can add up fast. Before buying your first home, make you have an emergency fund of three to six months of expenses in place.If you have a big emergency fund available, youll have the cash to pay for large expenses that come your way after you move into the home.2. Determine How Much House You Can AffordBefore you get emotionally attached to a house, check your monthly budget to determine how much house you can afford. You need to leave room in your budget for other things, so make sure your monthly housing costs (including HOA fees, taxes, insurance, etc.) are going to be no more than 25% of your monthly take-home pay.Dont forget that property taxes and homeowners insurance will affect your monthly payment too. Youll also need to factor those numbers in before settling on a maximum home price.3. Save a Down PaymentIf saving up to pay cash for the total price of a house isnt reasonable for your familys timeline, we recommend at least saving for a down payment of 20% or more. Then you wont have to pay for private mortgage insurance (PMI), which protects the mortgage company in case you cant make your payments and end up in foreclosure. PMI usually costs 1% of the total loan amount, and youll be charged that 1% every year.4. Save for Closing CostsAlong with your down payment, youll also need to pay for closing costs. If youre a first-time homebuyer, you may be wondering how much it costs to close on a house. On average, closing costs are about 34% of the purchase price of your home. Your lender will give you a specific number so you know exactly what to bring on closing day. These fees pay for important steps in the home-buying process, including:AppraisalHome inspectionCredit reportAttorneyHomeowners insurance5. Get Preapproved for a LoanOnce youre confident you have enough cash saved to pay for closing costs and 20% of your home, youre ready to take the next steps in the homebuying process: preapproval.Preapproval shows sellers that youre a serious buyer, which is a great way for first-time homebuyers to get ahead in a competitive market! To get preapproved, your lender will verify your financial information (proof of income, taxes, etc.) and submit your loan for preliminary underwriting.6. Find a Home for Sale in Your Price RangeAccording to recent data reported by the National Association of Realtors (NAR), most buyers either found the home they purchased online (50%) or through a preferred real estate agent (28%).Real estate agents provide valuable market expertise and can help you find great deals on homes as soon as (or before) theyre listed. Loan officers and real estate agents go hand in hand and we would be happy to put you in contact with a great referral.7. Research Neighborhoods for Best FitAfter youve found some homes for sale in your price range, be careful not to make a decision based on the property alone. According to a NAR survey, home buyers are more willing to compromise on a homes condition (23%) and size (19%) than on the quality of its neighborhood (7%) and distance from a school (2%). Make sure you factor neighborhood quality and location into your decision.Ask your real estate agent for information on crime rates and the quality of schools around your prospective neighborhoods. Calculate your new commute times to see if they seem manageable. Visit the neighborhood at different times and days to check for traffic conditions and noise levels and to see if people are comfortable being outdoors. Only choose a neighborhood that you and your family feel good about.8. Attend Open Houses and Think Long TermOnce youve narrowed down the neighborhoods, attend a few open houses. Looking at homes that are for saleeven if theyre not a perfect fit for youis a great way to learn more about the area. When you do eventually find a house you love, youll know how your place compares to better or worse homes in that neighborhood.9. Make a Competitive Offer (Thats Within Your Budget!)Lets say you found the home you want and can afford. Since youre already preapproved for a loan, youre ready to make an offer. If youre a first-time homebuyer, it may be hard to know how much you should offer. Thats when you can rely on the expertise of your real estate agent.Ask your agent to help you make sure your offer is competitive, but also within your budget and the homes value. Be careful not to make an impulsive offer thats higher than you can afford just to knock out the competition. A personalized letter might help your offer stand out among multiple bids in a hot market.10. Prepare for ClosingOnce a seller accepts your offer, the closing process will begin. Keep things running smoothly by knowing what to expect when closing on a house. The average closing process takes 43 days, which gives you plenty of time to tackle closing items. A real estate agent will schedule the remaining steps from the home inspection to the final walkthrough, and theyll keep you informed about any roadblocks.As you prepare for closing, make sure you read every document and ask your real estate agent to explain anything you dont understandespecially before you sign the official contract for the home transaction. Itll be your signature on the documents, so youll be the one responsible for anything you sign.Ready to Get Started?Your first home is a big purchasemaybe even the biggest one youll have ever made up to this point in your life and we will be more than happy to help you navigate the process!

Susan A. Pomfret RICPI am sitting at a kitchen table educating Mary (82) about how a HECM may benefit her. Once I started asking her questions about what struggles she is having, I was hit with a lot more than I thoughtshe is not only having difficulty financially, but also emotionally. Are you prepared for this? You better be. As a HECM expert, you need to be sure you are an all-around resource for the seniors you meet.Mary began to tell me that when her husband passed away, learning to live on one Social Security check was frustrating. She soon realized what bills she needed to pay and what things she would have to do without. Obviously, as she aged, her health care costs increased and most of her money went toward that and her home. She said she was fine with that because she had no plans to leave the home that she had been in for more than 45 years. It is where she raised her children and where her grandchildren and great-grandchildren now enjoy playing in the beautiful backyard.She started to tell me how, at times, she is lonely and sad, and that most of her lifelong friends have passed. I asked her if she gets involved in her local senior center and she said, The people there are too old for me. I responded, That is why they need you! Have you ever considered volunteering? And it would be a good excuse to get out of the house a few hours a week.I always carry around my states Department of Elderly Affairs Pocket Manual, so I was able to give her a contact to call. I also mentioned to her that we have a program called The Friendly Visitor that she may want to look into. I told her my mom was involved with this program and developed a lovely friendship with the woman who came to visit her each week. My good old pocket manual also had that information.From there, she was telling me that this winter had been very difficult (those of us in New England can surely relate to that). She mentioned that she had to get oil so frequently that when it was delivered, she would tell them to just fill it halfway. I informed her about our states heating assistance program, which she was not aware of.And yes, you guessed it, I was able to give her the information from my pocket manual along with the number to Rhode Island Saving Energy (RISE), who will come to a seniors home and perform a free energy-efficiency evaluation. They will even replace old light bulbs with energy-efficient ones for free, and possibly install a new, energy-efficient refrigerator at low or no cost! As I continued to help Mary with some of her difficulties, I saw that her mood picked up and she was much more optimistic than when I first arrived. As I continued to help Mary with some of her difficulties, I saw that her mood picked up and she was much more optimistic than when I first arrived.This is just one example of how I was resourceful to Mary beyond a HECM. I was able to address her issues right on the spot. Would a HECM solve some of these issues? Absolutely, but given that these programs are available to her, why wouldnt I share my knowledge about them with her?So, lets get back to the HECM. After identifying some other issues, Mary realized that the program would truly relieve some of her financial stress and she decided to move forward. A few months after closing, she called to thank me again for all my help. Best calls ever, right? As I told her before, it was my pleasure and I aim to be as resourceful as possible. She wanted me to know that she is volunteering at the senior center three hours a week and loves it. She has even met some new friends because of it. She also signed up to be a Friendly Visitor and makes weekly visits to two senior ladies who are homebound, and she is grateful to be making a difference in their lives. By doing these two things, Mary thinks she is helping others, which she is. Just as importantly, she is helping herself, without even realizing it.Sure, I helped her with her financial struggles by helping her obtain a HECM, but I also got her out of her isolation and gave her a new purpose. By the way, she told me she took advantage of the heating assistance program and RISE. Now that spring is finally here, she is looking forward to purchasing a new swingset for her yard for the kids to enjoy.Ironically, as I was writing this story, I received a call from a gentleman about his adult sister. She has severe disabilities, and between her mortgage and credit card debt, she is struggling each month. Unfortunately, she is only 56 years old, so I was not able to help with a HECM, but I was still able to be a resource to him by giving him information on our local housing agency that may be able to refinance her into a very low interest rate, along with a debt counseling agency that can help negotiate with her creditors to reduce her interest rate and monthly payments, making things more manageable for her. So, I guess the lesson learned here is how truly important being a resource to people really is!Lastly, I am fortunate that my state has various senior nonprofit organizations, where I volunteer. Giving back is very important to me. It not only teaches me about what is available for my clients (things that are not in my pocket manual), but also allows me to build awareness about HECMs and show people that HECM professionals really do care about helping our seniors.Writers Note: March 2024. I am happy to say that I am serving the Southwest FL area and can be as resourceful given my referral partners and the Seniors Blue Book. Reach out today for more information, 401-595-7300 or spomfret@usamortgage.com

A HECM for Purchase allows those 62 and older to purchase a primary residence, there is also a Reverse Mortgage for Purchase product for those 55* and older (*in most states).Borrowers are realizing the benefits of using a HECM for Purchase and how they can improve their retirement and live a more financially stress-free retirement.Home Equity Conversion Mortgage (HECM): What is it? A loan for homeowners 62+. Must apply to the borrowers primary residence. Proceeds available determined by age of the youngest borrower, expected interest rate, and property value (2024 HUD national lending limit: $1,149,825). Must be SFR, 2-4 unit, townhome, or an FHA-approved condo or manufactured home. Borrower is responsible for paying property taxes, insurance, and any other property charges, as well as upkeep of the property. Loan becomes due when borrower sells, no longer maintains the home as a primary residence, or the last remaining borrower passes. Reverse Mortgage Jumbo products are available for higher home values (loan amounts up to $4 million) for homeowners 55* and older. Borrower safeguards Independent HUD counseling is required prior to loan application. Financial assessment is required for loan approval (no FICO score or DTI requirements). Life Expectancy Set-Aside (LESA). Capped interest rates. Full disclosure of costs.ExampleMary (age 75) wants to move and right size to a home that is better suited for her. She currently pays roughly $1500/mo. for her current mortgage.She figures she will net about $375,000 from the sale of the current property and ideally would like to purchase a home outright so she can eliminate the burden of a mortgage payment.Problem! Marys forever dream home that she has fallen in love with is $500,000. So, her real estate agent introduces her to the option of a HECM for Purchase loan.Marys HECM for Purchase option:Purchase price of forever dream home: $500,000.Proceeds from sale: $375,000.HECM for Purchase down payment: $216,966 (assuming buyer is paying all fees).Remaining proceeds from sale: $158,034.Realized funds without HECM for Purchase: $0.Realized funds with HECM for Purchase: $158,034. *For illustration purposes only. 12,000 people that turn 65 each day* 34% of all homeowners are over 60 years old** Is a HECM right for you? Contact me today to learn more at spomfret@usamortgage.com or 401-595-7300.Sources:*https://www.cnbc.com/2017/10/03/health-care-dilemma-10000-boomers-retiring-each-day.html** https://www.nar.realtor/sites/default/files/documents/2020-generational-trends-report-03-05-2020.pdf