Mortgages Archives - Home Loans by Sean Young

A Guide to Financing Home Improvements and How Mortgage Refinancing Can Help

January 13, 2022 by Sean Young

A Guide to Financing Home Improvements and How Mortgage Refinancing Can Help If you’re planning to remodel or renovate your home in the near future – whether to provide a better living environment or as part of a house flip – you’ll need to find a way to pay for your home improvements. There are several different possible sources of renovation money, each with their own advantages and disadvantages. One option that is gaining popularity is mortgage refinancing.

How does mortgage refinancing work, and how does it compare to other renovation financing options? How can you use a mortgage refinance to get the most out of your renovation? Here’s what you need to know.

Home Improvement Investments: Which Renovations Generate The Best Returns?

If you’re considering a mortgage refinance in order to fund your home improvements, you’ll want to concentrate on doing renovations that increase your home’s value. Otherwise, you’ll be taking on more debt without gaining anything in return.

If you want to max out your return on investment, re-finishing your kitchen is your best strategy. Remodeling Magazine’s annual cost-to-value renovation analysis shows that new appliances, a new coat of paint, and new surface finishes in the kitchen generate the biggest returns. Meanwhile, swimming pools and home offices tend to generate the lowest returns because they appeal only to a select group of buyers.

Your Options For Financing Home Improvement Projects

Financing for a home improvement project is a critical consideration. Unless you can afford to pay $20,000 out of pocket for a remodeling project, you’ll need to secure financing of some sort.

Your options for home improvement financing include home equity lines of credit, renovation mortgages, and refinancing. A HELOC may not be an ideal solution, as repayment requires discipline, while a renovation mortgage (or home renovation loan) is typically used only for foreclosures and other properties requiring major renovation work.

Mortgage Refinancing: A Smart Option For Savvy Borrowers

If you’re looking to simply make improvements to your existing home, a mortgage refinance is likely your best option. A straight refinance gives you a lump sum of cash that you can use to pay for renovations upfront.

There’s also a “refinance plus improvements” arrangement, which can provide you with extra capital as you need it. Under this model, you can get up to 80% of your home’s post-renovation appraisal value – however, you’ll only get the money as the renovations are completed and inspected. With a straight refinance, you’re not out of pocket for any length of time.

Making smart home improvements is a great way to boost your home’s value and improve your living conditions. An experienced mortgage professional can help you to find financing for those renovations without a hassle. Contact your local mortgage advisor to learn more.

The Do’s and Don’ts of Getting Approved for a Mortgage Quickly

January 5, 2022 by Sean Young

The Do's and Don'ts of Getting Approved for a Mortgage Quickly If you’re ready to buy a home, getting approved for a mortgage is a critical step that you can’t skip or rush. And although it may seem like the lenders can be a bit arbitrary in their approvals, there’s actually a detailed set of criteria they look for when approving or denying an application.

So how can you ensure your mortgage gets approved quickly and without any hassles? Here’s what you need to know.

Do: Have All Your Documents In Order Right Away

Processing the paperwork on a mortgage approval is one of the most time-consuming parts of getting a mortgage. And if you forget to include a form or fill something out incorrectly, it may take your lender days or weeks to sort out the problem. So before you go to your lender to get approved, make sure you have all of the necessary documents and that they’re all filled out correctly – it’ll save you a great deal of time later.

Don’t: Accept A New Job Or Start A Business While Closing

Once it comes time to close on your mortgage loan, you’ll want to keep your finances as consistent as possible until after the closing. Any change to your financial situation can throw a wrench into the approval process and delay your loan. If you’re planning to quit your job to start a business, accept a new job, cut back your hours, or go on parental leave, wait until after the home sale closes.

Do: Get Pre-Approved With Your Lender

One simple thing you can do to greatly speed up the approval process is get pre-approved. If you’ve already been pre-approved for a mortgage through a certain lender, then securing a mortgage through that lender will be a very smooth process – and in some cases, a pre-approval can speed up your mortgage approval by a week or even more. With a pre-approval in hand, the only issue that remains to be settled with the lender is providing them with your new home address.

Don’t: Co-Sign A Loan For A Friend Or Relative

Any major purchase or new debt of any kind will read as a serious red flag for your lender, one that will take time to sort out. Your lender will do a second credit check just before closing the mortgage, and any new loan amounts can delay or stop the approval. So if a friend or relative asks you to co-sign their loan, wait until after your mortgage is approved.

Getting approved for a mortgage can seem challenging, but by following a few simple rules, you’ll make it easy for your lender to sign off. For more mortgage approval advice, contact your trusted mortgage professional today.

Major Mistakes Which Are Sure to Increase Your Closing Costs

December 28, 2021 by Sean Young

Three Major Mortgage Mistakes Which Are Sure to Increase Your Closing Costs When shopping for a mortgage, it is important to take closing costs into account. While some closing costs are the same for all lenders, different programs may add or reduce some of the burden borrowers face when closing on a home loan.

Let’s take a look at some major mistakes that could result in borrowers paying more than they need to in closing costs.

1) Failing to Take Property Taxes Into Account

Property taxes are generally put into an escrow account that is established prior to closing on the home loan. In most cases, a homeowner will have to pay 12 to 14 months’ worth of property taxes prior to close.

This can represent several thousands of dollars or more depending on the property taxes associated with a property. While everyone has to pay property taxes, finding a home in a low tax area can significantly reduce the cost of closing on a loan.

2) Failing to Ask Lenders for Credits Toward Closing Costs

A lender may have a program in place that enables them to give a borrower a credit toward applicable closing costs. While this generally may not count toward the down payment, it can still be a significant help for first-time buyers or anyone else who may not have thousands in a bank account ready to pay for lawyers or titling fees.

Depending on where the property is purchased, there may be programs available that provide funding for those who promise to stay in the property for a certain amount of time.

3) Failing to Ask the Seller for Concessions

The seller of a property may offer up to 6 percent of any closing costs associated with the sale of the property. While a seller does not have to offer any concessions, they could potentially provide hundreds or thousands of dollars that may not need to be repaid.

In addition to closing cost support, a seller could also provide appliances or other items that can further save a buyer money during and after the purchase is finalized.

A home buyer can save a lot of money by taking simple and common sense actions. By doing research into cost saving programs and credits toward closing costs, those who may have felt that home ownership was beyond their reach may be able to achieve their dream. To learn more about closing costs, you may wish to talk to a mortgage professional in your area.