Joe Gonzalez at CrossCountry Mortgage, Inc.
  • Home Selling
  • Home Buyer
  • Mortgage
  • Refinancing
  • Apply Now
  • Send Secure Documents

Tag Archives: Financing

What To Know About IRS Installment Agreements And Home Loans

Posted on September 10, 2021 by joeglez

What To Know About IRS Installment Agreements And Home LoansWhen applying for financing, lenders want to make sure the client is going to pay back the balance of the loan. Therefore, they will look into pre-existing debt including credit card debt, student loans, car payments, and back taxes. Sometimes, applicants have IRS installment agreements. This is an agreement consumers make with the IRS to pay taxes over an extended timeframe. How might this impact someone’s ability to apply for home financing? 

IRS Installment Agreements Count Against The Debt To Income Ratio

The IRS is going to calculate someone’s debt to income ratio when figuring out whether an applicant can apply for a home loan. Therefore, lenders will view IRS installment agreements as another form of debt along with medical debt, car loans, and student loans. As long as there is not too much debt, applicants should still be able to qualify for a home loan even if they have an installment agreement with the IRS. Even though having an IRS installment agreement may reduce the size of a loan someone may qualify for, applicants can still qualify for a home loan.

Lenders Will Look At Payment Histories

Lenders will take a look at how long the IRS installment agreement has been in place. Some mortgage programs may ask for proof of timely payment history. They know that if applicants have paid their installments on time, they should pay their mortgage on time as well. Some home lenders may require a payment history of up to 12 months. It is critical to discuss all financing options with the lender when looking for a home loan. 

Applicants Must Have Proper Documentation

To qualify for a home loan with an IRS installment agreement, applicants must produce proper documentation. Lenders will ask for a copy of the agreement. Then, they will verify the payment history of this debt. Keep in mind that federal tax debt holds first priority. This means that the lender will want to protect their own interests, asking the IRS installment agreement to give up their first position in favor of the mortgage. Typically, this is not an issue; however, this is something applicants need to discuss with the loan officer. That way, they can place their application in the best position possible to be successful. 

 

Posted in Mortgage | Tags: Financing, IRS Agreements, Mortgage |

How To Pay Off Your Mortgage Early: 4 Methods That Work

Posted on May 13, 2020 by joeglez

How To Pay Off Your Mortgage Early 4 Methods That WorkWhile a mortgage is a necessity for many people who have the dream of owning a home, it is also a form of debt. Most people do not like owing money to someone else. Therefore, homeowners might be looking for ways to pay off their mortgage early. The reality is that people are charged interest for having a mortgage. If a mortgage is paid off early, this is less money than the bank will take and more money in the pockets of homeowners.

There are a few methods people can use to pay off their mortgage early.

Make Extra Payments

At the beginning of a mortgage, the vast majority of the money that people send the bank goes toward interest. In the end, most of the payment covers the principle of the loan. If someone is willing to make extra payments, these added payments are going to directly attack the principle. When the principle shrinks, there is less interest that accrues. Making extra payments is the most direct way to attack a home loan and pay it off more quickly.

Refinance The Mortgage

Another option people should consider is refinancing the mortgage. Essentially, a homeowner takes out a second home loan that pays off the first home loan; however, the new home loan has a lower interest rate. This may allow people to pay off the loan more quickly. Furthermore, people can refinance to a shorter-term, allowing them to pay off the loan more quickly.

Recast The Mortgage

Recasting the mortgage is a little bit different than refinancing. In recasting the loan, people throw a lump sum at the principle in exchange for a new amortization schedule based on that lump sum. This means that people will have a new schedule that reflects the principle that is left, often resulting in a shorter payment schedule.

Split The Monthly Payment In Two

Finally, many people are paid biweekly. Therefore, it might be easier for people to pay their mortgage biweekly. If someone pays their mortgage biweekly, they are making 26 half-payments per year or 13 monthly payments per year. The effect is that someone makes one extra monthly payment per year. This payment attacks the principal directly, helping people pay off their mortgage faster.

Posted in Mortgage | Tags: Financing, Financing Options, Mortgage |

4 Things Not To Do When Buying A Home

Posted on May 6, 2020 by joeglez

4 Things Not To Do When Buying A HomeThere is a long list of things that people need to do when they are looking to buy a home; however, it is also important for people to know what to avoid as this process unfolds. There is a lot for people to remember and it is easy for people to get carried away when they start looking at their dream homes. Even though it is great to look at a bunch of houses and imagine living there, it is critical for people to stay grounded and know what to avoid.

Do Not Make Any Large Purchases During The Home Buying Process

One of the biggest mistakes people make when they are looking at buying a home is they open their wallets too big. If people end up taking on other big purchases, they end up accruing more debt. This is going to mess up their debt to income ratio and will make it harder for people to qualify for a home loan. Therefore, try to avoid making any other large purchases during the home buying process.

Do Not Take Out Multiple Credit Inquiries

While this might not sound real, the truth sometimes hurts. The more times people pull their credit report, the worse it looks. Therefore, by making multiple credit inquiries, people could actually hurt their credit score. It is important for people to pull their credit score at least once to fix any inaccuracies that might be present; however, people should not get carried away.

Do Not Skip The Pre-Qualification Process

Many people want to avoid filling out excess paperwork; however, the pre-qualification process is a good idea. When someone pre-qualifies for a mortgage, they get a budget ahead of time and immediately look like a serious buyer. This means that their offer looks more competitive to a potential seller. Finally, the pre-qualification process could also help someone qualify for a lower interest rate.

Do Not Be Anxious

The process of buying a home can be stressful even for those who have been through it before. Just remember to ask questions along the way and individuals will be set up for success. There are trained professionals who are willing to lend a helping hand to those in need.  

Posted in Mortgage | Tags: Credit, Financing, Mortgage |

Building An Emergency Fund During An Emergency

Posted on April 1, 2020 by joeglez

Building An Emergency Fund During An EmergencyBy now, it should be apparent that this COVID-19 (Corona-virus) pandemic is going to be here for several months. It is already causing the market to plummet and is disrupting jobs all over the country. Many people who work as hourly employees (or are independent contractors) are starting to suffer. As people’s budgets start to feel the squeeze, this is exactly the time that people should be relying on an emergency fund; however, for those who don’t have one, it is time to start saving.

How To Create An Emergency Fund

Even though cash assistance from the government might be coming soon, this is not going to be enough to get people through the crisis. To start building an emergency fund, it is important to take a look at the regular income first. Try to figure out how many shifts are going to cut and estimate what money is left (unless you are a salaried employee).

After this, take a look at other possible sources of credit. Know the limits on the card and figure out to what extent these cards can be drawn out. If there is an income tax refund coming, plan for this; however, remember that the government might be behind.

Finally, try to cut spending where possible. Remember that vacations should be postponed, given travel restrictions. Most restaurants are going to close, so try to shop at the grocery store instead. Finally, consider asking the bank to put a stop on mortgage payments. These are all great ways to save immediate money.

Save What Is Left

Finally, after figuring out all of the expenses, subtract this from the expected monthly income over the next few months. Whatever is left should be socked away into an emergency fund. It is critical to have this fund put away in case a repair is needed on the house or if someone gets laid off. 

Other Ideas To Consider

Finally, while this is not advisable, people might be able to cut retirement contributions to help with the emergency fund. It is better to save for the future when possible, but this can help people save money in a pinch, if needed. Take these tips to heart over the next few months and build an emergency fund.

Posted in Mortgage | Tags: Financing, Mortgage, savings |

Is A 15 Or 30 Year Mortgage Right For You?

Posted on January 14, 2020 by joeglez

Is A 15 Or 30 Year Mortgage Right For YouWhen someone is looking to purchase a house, they need to think about how long they want their mortgage to last. While a bank can structure a mortgage to last for any number of years, the most common lengths are 15 and 30 years. While a 30-year mortgage is typically more affordable, a 15-year mortgage is cheaper overall. 

When someone is trying to decide how long they want their mortgage to last, there are a few important tips to keep in mind.

The Benefits Of A 15-Year Mortgage

There are a few important benefits that everyone should know about a 15-year mortgage. Some of the biggest benefits include:

  • With a 15-year mortgage, people are going to pay off their home more quickly. This will free up cash to spend in other places. Those who are looking to retire without a mortgage may want to go with a 15-year mortgage. 
  • Next, a 15-year mortgage is going to come with a lower interest rate. Because the bank is going to get their money back more quickly, they are going to reward the borrower with a lower interest rate. Overall, the bank is taking on less risk.
  • Finally, a 15-year mortgage is also going to be cheaper overall. With a lower interest rate and a loan that is paid off more quickly, the bank is going to take less of someone’s money over the life of the loan. 

The Benefits Of A 30-Year Mortgage

A 30-year mortgage has some notable differences when compared to a 15-year mortgage. There are a few important benefits that people need to remember. These include:

  • The monthly payments are going to lower. Those who are planning on paying for their children’s college education, or who envision a car payment in the near future, may want to have extra cash on hand to fund them.
  • As someone pays off their mortgage the interest paid on the loan is tax-deductible. Since more interest is paid on a 30-year mortgage, there will be greater tax savings as well. This means that people will get some of their money back.
  • Finally, a 30-year mortgage is also more flexible. During the loan, people may elect to make extra payments. This allows someone to pay off their home more quickly.

These are a few of the most important points people need to remember when trying to decide between a 15-year and 30-year mortgage.  As always, call your trusted home mortgage loan professional to discuss the options available for your personal situation.

Posted in Mortgage | Tags: Financing, Interest Rates, Mortgage |

3 Traps First-Time Homebuyers Fall Into — And How To Avoid Them

Posted on December 13, 2019 by joeglez

3 Traps First-Time Homebuyers Fall Into -- And How To Avoid ThemWhen someone purchases their first home, this is a significant step. There are a number of issues that people need to think about because purchasing a home is typically someone’s most significant investment.

With this in mind, there are three common traps that first-time homebuyers often fall into. Fortunately, there are ways to avoid these traps as well.

Looking At Homes Before Applying For A Mortgage

Perhaps the biggest mistake that people make is that they look for homes before they apply for a mortgage. Without a successful mortgage application, it will be difficult to find a home at all. Of course, people enjoy looking at homes because it puts their future into perspective. At the same time, it is important to have an idea of how much home someone can afford. This will be difficult to do without knowing how large of a mortgage someone will be approved for. Apply for a mortgage before looking at homes.

Draining The Savings Account

Most people will want to put down some sort of a down payment. After all, this can help one get a lower interest rate on their mortgage. At the same time, don’t think about the down payment as simply a number in the savings account. Calculate how much of a down payment is truly necessary. People shouldn’t have to drain their entire savings account for the down payment. This money might be needed for closing costs, home repairs, and other potential emergencies. 

Not Working With Trusted Professionals

The internet has provided people with instant access to vast amounts of information. This has the benefit of allowing the new home buyer to educate themselves and do research on homes to purchase, mortgage financing options and a lot of other home buying topics. However, the internet can also provide incorrect information or only partial information. 

That’s why it’s so important to work with trusted real estate and mortgage professionals who have your best interest in mind. Feel free to ask them a lot of questions and get specific answers about your personal financial situation and home purchasing needs. They are trained and have years of experience making sure that you get the best combination of things to serve your needs.

Purchasing A Home

These are a few of the most important issues that every first-time homebuyer should think about. It can make a significant difference in someone’s financial future. Pay attention to these and reach out to your local network of trusted professionals today!

Posted in Real Estate | Tags: Financing, First-Time Homebuyers, Real Estate |

What is Owner Financing When Buying A Home?

Posted on October 30, 2019 by joeglez

What is Owner Financing When Buying A HomeThere are many options when it comes to taking out a loan on a new home. One of the options that people might have heard about is called owner financing. In general, the property owner takes the place of a traditional lender.

Instead of someone taking out of a loan from a bank or a credit union, they take out a loan from the owner of the property. Similar to a traditional loan, the buyer will make payments to the seller over a period of time with a certain interest rate.

The Structure Of Owner Financing

If someone elects to go with owner financing, there are several terms that will specify the repayment structure. The most common structure is called a note and mortgage.

This is a secure form of financing. It is also the closest in structure to a traditional mortgage from a bank. The seller will put together a note that specifies the size of the loan and how it will be repaid. The mortgage will secure the seller with the property in case the borrower cannot repay the loan.

The buyer is still placed on the title of the home. Then, the mortgage is recorded with public records, just as in a traditional loan. There are other types of seller financing; however, this is the most common structure.

The Structure Of Repayment

You may have questions regarding this type of financing when compared to a traditional mortgage. Just as in a traditional mortgage, the repayment terms can vary. You will still have the opportunity to negotiate the terms of the loan.

Typically, interest rates are close to that of a loan from a bank or credit union. There are still options to set up a fixed-rate or adjustable-rate mortgage as well.

The Benefits Of Seller Financing

There are several benefits for both the buyer and the seller. First, seller financing may allow the seller to avoid paying capital gains taxes on the property. This can also help the seller offload a property that otherwise might not sell.

The buyer will also be able to purchase a home without having to borrow from a bank. Often, there is less paperwork and fewer fees. Finally, a buyer that might not qualify for a traditional bank loan might be able to buy a home through seller financing.

Understanding Owner Financing

It is important for everyone to think carefully before signing up for this type of financing. This is a unique option that you should understand when looking for a home.  Consult with your trusted home mortgage professional to get the best answer for your particular situation.

 

Posted in Mortgage | Tags: Financing, Homeownership, Mortgage |

Common Reasons Why Buyers Are Denied A Mortgage

Posted on October 29, 2019 by joeglez

Common Reasons Why Buyers Are Denied A MortgageWhen you are buying a new home, it is an exciting process. You have spent months searching and have found the home you want to purchase. You are ready to move into the home of your dreams. 

Unfortunately, you have found out that your request for a mortgage has been denied. This can be a deflating experience. Fortunately, there are ways to avoid this by understanding the most common reasons why a buyer is denied for a loan.

The Loan Requirements Have Changed

One of the most common reasons why you might be denied a mortgage is that the terms of the loan have changed. For example, the lender might have raised the minimum credit score requirement. This might sound unfortunate; however, it does happen from time to time.

Loan requirements might change from the pre-approval stage. If this happens, think about searching for a loan from a different lender.

You Added Debt

The debt to income ratio is going to matter when applying for a loan. If you are pre-approved for a loan and your amount of debt changes, the lender is going to look at this closely. Common forms of debt include student loans and credit cards.

Even small changes in your debt amount can impact your ability to qualify for a loan. Try to avoid buying a new car or maxing out a credit card during the mortgage application process. This will help you keep the loan you’ve worked so hard to earn.

You Changed Jobs

Finally, employment status also matters to the lender. When you take out a loan, the lender needs to know that this will be repaid. This depends on you having a steady stream of income from your job. 

If you decide to change jobs between the time of pre-approval and the time of purchase, your employment history and income stream do not mean as much. While changing employment will not totally disqualify you, make sure to discuss this possibility with your lender. Changing jobs within the same field is likely fine; however, moving to a new career entirely can be a red flag.

Mortgage Denials are Frustrating

It is frustrating to have your request for a loan denied. Fortunately, understanding these common reasons can help you avoid this deflating experience. Think about all of these possible scenarios when you apply for a home loan. And rely on the expertise of your trusted home mortgage professional.

Posted in Mortgage | Tags: Credit, Financing, Mortgage |

How To Crowdfund A Renovation Project

Posted on September 20, 2019 by joeglez

How To Crowdfund A Renovation ProjectCrowdfunding came into prominence with the Jumpstart Our Business Startups (JOBS) Act that President Obama signed into law during 2012 and subsequent enhancements. The JOBS Act made it easier for startups to raise money and for the first time allowed the legal ability to advertise the investments and accept small investors.

Innovate And Renovate

Crowdfunding is useful for many projects. The method raises money to create new products, make documentary films, and for many kinds of fashion items. Crowdfunding successfully raises money for real estate transactions. 

Smaller investors participate in real estate projects that they would otherwise not have enough investment money to create on their own. They may invest a few hundred or a few thousand dollars. When their smaller investment money combines with all the others, the project raises enough money.

One thing that makes crowdfunding projects work is their popularity. Affinity groups who have a special interest in certain things invest money in projects related to something that they like.

One application of this motivational factor is to raise money using crowdfunding to renovate buildings with a historical value or that otherwise attract the interest of the public. The process does not have to start with money. It can start with crowd sourcing ideas.

The CLUE® Mansion

A fun example is the Hasbro Company teamed up with Houzz to get innovative ideas from interior designers about how to renovate the CLUE® Mansion. The mansion is a backdrop for the popular board game.

This promotion celebrates the game’s 70th anniversary. The mansion’s style in the game stayed the same since the game debuted in 1949. The winning room designs, selected by fans, will be part of a new version of the game.

There is no reason to stop there. A real mansion can be renovated to match the game. This could be a CLUE® museum and could offer escape rooms as a money-making enterprise. This is just an idea at this moment. Perhaps, someone will take this up and run with it.

Crowdfunding Renovations

The point is, historic buildings that are of interest may need renovation funds that can be raised using crowdfunding. Those who have an interest in the building from the local community and elsewhere can support the project by investing in the renovation with a small comfortable amount.

Summary

Renovation projects are not easy to finance using traditional lenders. However, if a thousand people invest $100 each that is $100,000 for a renovation project in your community. Paying back the loan can come from a portion of the entrance fees.

Hopefully, this will spark continued interest in preserving and restoring historic homes, which are a terrific part of the American heritage.

If you are interested in learning more about current financing options, be sure to consult with your trusted home mortgage professional.

Posted in Mortgage | Tags: Financing, Market Trends, Mortgage |

4 Tips To Ensure A Successful Closing

Posted on July 2, 2019 by joeglez

4 Tips To Ensure A Successful ClosingAs you come up to the date of your closing, there’s time to reflect on everything that led to this step. Your real estate agent, mortgage broker, title company and others all work hard to ensure a successful closing for you. They’re all in your corner, hoping for the same outcome as you. They’ve had to do a lot of work behind the scenes that you may not even be aware of. Their diligence and professionalism has already benefited you.

But did you know that it’s not all riding on your team of real estate professionals? There are things you can do to ensure a successful closing, too. 

1. Bring Your Checkbook

In other words, have extra funds available to cover unexpected costs. Anything could happen at the closing table. If there was an error in calculations, or the seller all of a sudden asks for some kind of additional compensation, you could all go home empty-handed. If you bring your checkbook, all those problems could go away and you end up with a successful closing. 

2. Don’t Forget Your ID

You probably don’t need to be reminded to bring your driver’s license with you when you drive. But did you know you’ll probably need to present your ID at the closing table? Funnily enough, people do forget, especially if you’re a woman and you’ve changed purses recently. Before you head to the closing table, double check that you have two forms of ID on you to be on the safe side.

3. Preview The Paperwork

Although everyone’s a professional, human error does occur. If possible, ask to preview the paperwork associated with the closing. Your real estate agent can help you with this step. Read through everything with a fine-toothed comb. Look for spelling errors, mistakes in addresses, and even transposed numbers. The earlier you can review paperwork, the longer the available time to get any errors corrected before the closing.

4. Bring Extra Documents With You

You don’t have to carry your filing cabinet to the closing. But it’s wise to bring relevant financial documents with you and leave them in your car. Lenders may ask for things last minute like old bank statements, a certain cancelled check or something else. 

With the help of your trusted real estate agent and home mortgage professional, your closing will likely go off without a hitch. But, just in case, keep these tips in mind.

 

 

 

Posted in Real Estate | Tags: Closing, Financing, Real Estate |

Check us out on Facebook

Check us out on Facebook

Stay Up-To-Date with Twitter

My Tweets
  • 1
  • 2
  • 3
  • Next
© Joe Gonzalez Team 2019 - at Cross Country Mortgage, Inc. NMLS 3029 | NMLS 1854092 | NMLS 126036