First Time Home Buyer? Hip, Hip Hooray For Thda!

Have you ever heard of THDA? It’s an acronym that stands for the Tennessee Housing Development Agency. According to its website, it was established in 1973…… "In order to promote the production of more affordable new housing units for very to promote the preservation and rehabilitation of existing housing units for such persons, low and moderate income individuals and families in the state, low, and to bring greater stability to the residential construction industry and related industries so as to assure a steady flow of production of new housing units…" Many thinking that THDA is a certain loan type, people have heard of THDA and are confused, times. In fact, it’s lending agency.

All THDA mortgages must be insured by private mortgage VA or RECD And as these loans are intended for low to moderate income families or individuals, FHA, insurance, there is a income limit and acquisition cost limit. Also, you must be a first time homebuyer unless your home is in a targeted area. Why is THDA so fantastic for a first time homebuyer? Well, it comes down to money. THDA offers a below market rate and will allow up to 100% financing.

Have you been reading the papers lately? It’s not so easy to find 100% financing these days. youâ�, that is, Unless��™re a first time homebuyer. It also has programs that allow for down payment assistance via grants from certain approved agencies (if your loan type requires a down payment). If you have satisfactory credit and the home you wish to buy meets THDA’s standards, then you’re in business. All THDA mortgages are 30 year fixed rate loans, so you needn’t worry about finding yourself with an ARM loan (adjustable rate mortgage) and a new payment you can’t afford in 3 years. And THDA allows lenders to only charge customers a standard 1% origination and. 25% discount fee.

It also closely monitors fees associated with the loan. THDA really looks out for the best interest of the first time homebuyer. If you are eligible for a THDA loan, you can feel pretty certain that an unscrupulous lender can’t take advantage of you because THDA won’t let them. For so many people, buying a home is pretty intimidating. THDA takes away the uncertainties a buyer faces with its guidelines and lending practices. If you do apply for a THDA loan, be prepared to document your credit worthiness.

THDA loans require slightly more documentation than your average loans because of the uniqueness of its product. In order to offer more, THDA asks for more – ensuring you qualify for its pretty awesome program. Sounds like a fair trade, if you ask me. What are the disadvantages of a THDA loan? Not many. They do have a federal recapture tax if you sell your home within the first nine years of owning it.

But it sounds scarier than it really is. I’ve heard that only about 1% of THDA customers actually pay this tax. That’s because a bunch of really great things have to happen to you in order for it to actually apply to you. And if those great things happen to you, paying the recapture tax won’t matter much to you anyway. I’ve been in the business for 16 years and have only heard of one person actually having to pay one.

He graduated from medical school and his income when through the roof. His property was sold above market value than for the area because it was adjacent to some property that a huge retailer wanted to purchase. Again, good things have to happen to pay the recapture tax. So, you shouldn’t be afraid of it. More people need to hear about and take advantage of the THDA loan programs. It’s such a great product and really helps the community and the housing industry.

If you’re a first time homebuyer or think you’re in a targeted area, make sure you ask about THDA to see if you would qualify for a loan. You won’t regret it!

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Small Business Credit Cards

Often small business owners mistakenly believe they would not be approved for business credit cards. What you may not know is that the majority of credit cards are awarded to small business owners with no employees! In fact, 75% of all small businesses have no you might be pleasantly surprised at the availability of credit card options, so if this describes your business, employees.

Before you go around applying to every business credit card on the you, however, market'll want to take a little time to find one that will most benefit your own business needs for credit. -Do you carry a balance from one month to the next or do you plan to pay off all purchases made with a credit card every month? -Do you tend to shop the same store regularly? -Do you travel conducting business from your car and traveling from one location to another constantly? Considering how you currently conduct your business will help you select credit cards that best match your needs, particularly by airplane- or are you a road warrior, frequently. If you rarely have reason to buy airline tickets, it doesn't make sense that you apply for a business credit card with airline miles. And if you are shopping for office supplies in the same store each month- you'll want to look at cards that give you bonuses or cash back on those regular purchases. For example, let's say you regularly purchase printer pens and staples in order to operate your business, paper, ink.

They are necessary expenses and you should consider applying for cards that allow you to earn cash back on those exact purchases! When you get 5% back on office supply purchases you make, it just makes sense to use your card for those purchases and start accumulating your rewards. Citibank and GM all offer business credit cards with cash back on office supply purchases, American Express, Discover, ranging from 1% to 5%; and also some rewards programs offer points that are later redeemable towards merchandise. Other credit cards for small business owners offer different types of typical rewards, and could include anycombination of the following, rewards: -Bonus points (redeemable for or airline miles, cash back, merchandise) -Unlimited free companion tickets for flights-Access to personal business assistant-Travel accident insurance coverage-Cash Back on specific purchases or on all purchases made with your card-Rewards towards the or maintenance of a vehicleIn addition to the rewards that are offered from spending with your credit cards, lease, purchase, they also offer assistance keeping track of your business expenses. If you were to use a credit card each month to pay for all of your business expenses, you would have no problem knowing where your money has gone each month! You can view both your mailed statements as well as your online statements (available with the majority of credit cards) to see details on what was paid for that month, and how much.

Instead of writing numerous checks and mailing each one individually. You could write one check at the end of each month to pay off your credit card account. Not only do you save time writing checks, but you'll also have an easier time balancing your checking account. issuing them a credit card linked to your account means you, if you have employees, Plus'll see their expenses on your monthly statement as well- making it easy to keep track of everything in one, convenient place. Small business credit cards are available to business owners- even if you do not have other employees! They can make your record keeping easier and you can gain numerous benefits just by paying for your regular business expenses with a credit card.

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Buying Your First Home, It’s Easier Than You Think! – Now What? Series Part 3 Of 3

For a first time homebuyer, once you’ve found a house and been pre-qualified for a home, the steps to closing can be somewhat confusing. It’s actually a simple process that when understood, actually makes sense. You have found the perfect house.

You can’t believe that you are actually buying it! You thought buying a house was only for old people with like in their thirties or something, you know, kids. Now what happens? You’ve should already have been pre-qualified for a home loan by a mortgage specialist. In saying as much, that lender gave you a letter, fact, and you gave it to the seller, giving them peace of mind that your offer is real and you can back it up.

Your credit has probably already been pulled and you’ve been given a copy of it. Your realtor will provide the fully executed sales contract to your lender. Upon receipt of this within three days of receipt of your contract, your lender will update and get you all your documents and disclosures to sign, contract. If your credit has already been pulled and you’ve seen these documents, expect a NEW set since you finally have a property in mind. And trust sign and sign again, this is only the beginning of the deluge of documents you will see, me.

Your lender will now go back to your loan and put in all the particulars of this property - such as taxes, homeowner’s association fees - and reflect any earnest money you may have put down with the contract. At this you can explore locking in an interest rate or reserving funds if the loan is through a particular housing agency, with a property determined, point. Your lender will also want to collect and update documentation that proves all you have related about yourself. I call it “eye balling” the documents. Assessments will be made if there is further documentation required to substantiate your loan application. When all contract contingencies are removed, the lender will order the appraisal for your property.

The lender chooses the appraiser and the type of appraisal necessary to ensure the value of the property. After all, it’s the lender’s money on the line, and in case you don’t repay your loan, the value of the loan may have to recouped in a foreclosure sale of the property. Not likely to happen, but the lender will make sure they are protected by the appraisal. The appraiser will notify all parties involved that there may be repairs required before the value can be found or the property will adhere to a certain standard required by the lender. The lender will communicate this information to your realtor to negotiate the repairs with the seller.

The lender prices, processes and assembles your loan for underwriting. They order title work from your chosen title company and coordinate all the pieces of the puzzle for the closing. They collect your homeowner’s insurance and share this information with the title company. The title company searches the title and rectifies any outstanding liens for closing. Sometimes, the title company finds old tax liens or worker’s liens (known as materialmen’s liens). They make sure that these liens will be satisfied prior to you taking ownership to the property.

They also make sure that everything historically has been recorded and released properly. Once the appraisal is received and the documents are submitted to underwriting for final approval, the lender receives an underwriting decision. Sometimes, there may be something in your file that will cause an underwriter to ask for more documentation. Sometimes, an underwriter will ask for additional comparable sales of homes in the area for the appraisal. Many times, a customer never knows that these conditions arise because their lender anticipates or addresses them for them. Sometimes a customer may be contacted for information.

But, your mortgage specialist should have a good assessment of the situation and be able to validate and explain anything they ask of you. Two days before closing, you will receive a HUD-1 Settlement Statement from your lender and/or title company. This document is summation of all the charges and fees in connection with your loan. You will be asked to review this document to ensure that it is correct. It will also reflect how much cash you will need to bring to closing.

At the closing, all parties involved usually show up at the same time to sign documents. Sometimes, the seller and the buyer sign separately due to scheduling conflicts. Your realtor and your lender should be expected to attend your closing. You will sign a stack of huge you will handed the keys to your new home, but when all is said and done, documents! Your lender, Realtor and title company should all work to make this process as seamless for you as possible.

Their job is to make this experience an informed, easy and worry free process. You will have to make certain decisions, but you should be informed so that they do not overwhelm you. It’s easy to forget how mind boggling all the documentation can be in the home loan process when are exposed to it every day as part of your job. Your lender should be patient and explain things simply -no smoke and mirrors. Buying a home doesn’t need to be difficult or stressful.

A good lender will make it exciting and educational!

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Some Pros and Cons of Owning Real Estate

Pro: It goes up. While other investments tend to especially in desirable areas, real estate, fluctuate, usually becomes more and more valuable. One thing that remains true of this country is that our population is steadily growing. Eventually, all of those millions of people are going to need places to live.

Con: It goes down. Just as nothing is completely certain, whether your real estate will be as profitable as you’d like depends on a variety of factors. Find out what you can about the area you’re buying in—scout out local businesses and talk to your potential neighbors. What good things are happening in your area? Are there aspects that worry you? Make a list.

Also consider how long you want to be there. While flipping is possible, most of the time you need to be patient before your home sells for the amount you’d like. Pro: Your monthly payment is fixed. Aside from your monthly payment will usually be fixed, which fluctuate every year, taxes. This means no landlords raising rent and no trying to calculate your changing home budget. In and most mortgage companies have convenient ways to pay online, your mortgage company will make all this painfully easy for you to pay on time, addition.

Con: Your taxes can go up. If taxes in your neighborhood rise, that’s a good sign your property value is rising too. Sit tight and be patient—the taxes are usually going to schools and roads and funds that will profit the community. If you can afford to pay the value of it will be high and your neighborhood well worth living in , then by the time you sell your home, them(or moving from, as the case may be. ) Pro: Tax benefits. There are many tax benefits you can gain from owning a home.

You can deduct most and taxes, mortgage interests, repairs. Talk with your accountant about these options, and save all your receipts from anything having to do with your home. Con: You can be foreclosed on. In the event you can no longer afford your property, the government can seize your home. Foreclosures are and can be avoided by proper budgeting and by paying attention to your mortgage statement, however, rare.

If there is anything you are confused about, most mortgage companies offer friendly and helpful advice. After too, they have an interest in your interest, all. Pro: You can actually enjoy and use your real estate investment. Unlike and stocks, which depreciate with wear, cars, which you can’t ever see or play with, your home can be a secure and enjoyable investment if you choose to live in it. You can tear down walls and paint the trim loud colors.

You can open up ceilings and put a Jacuzzi in your master bath. You can sit on your new cedar deck in the mornings and watch the birds come flocking to your yard. You can make it messy or tidy it up. It’s yours. Con: Owning a house is not always easy.

Owning a home can be difficult at times. You might need to rewire a switch or replace a door knob. You’ll need to keep up your yard and regularly maintain your appliances so they last longer. Keep a list of handymen trees, and every now and then check your roof, handy, and plumbing. Keep some money in the bank in case something does happen that insurance won’t completely cover.

Monitor your property carefully, and it will be worth your while when (or if) it’s time to sell.

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Conventional vs. FHA Financing: 5 Things You Should Know

Is FHA Financing a good choice? Yes or else it would not have been used by 30 million people. Is Conventional Financing bad?

No. It is just a matter of which service suits your requirements the best. Best FHA loans are offered by thousands of lenders and are readily available nationwide and because they all offer identical terms and services, Better, Good, it is worth your while to shop around to get the best possible rates when you either finance for the first time or refinance. Simple and Basic FHA Financing is a basic mortgage program implemented by the Federal Government in the 1930s with the objective of offering affordable mortgage loan to people who either have had credit problems in the or have low or moderate incomes, are first time home buyers, past. It has expanded in popularity and is today a choice worth considering by any borrower.  . FHA Financing has no hidden fees or high increases that may result in foreclosure down the road.  .

The borrower gets both financial security and peace of mind. Rates, Deposits and Payments  . FHA rates are lower than Conventional rates and you are not subjected to pre-payment fees. You can get fixed-rates with FHA which has a big impact on your monthly re-payments and because your monthly repayments are set, you can budget long term. You do not need exorbitant deposits, 3% of the loan amount will do it.

Other financial institutions insist borrowers prove cash reserves when they close the deal and this means that beside the deposit you get heaps of money in savings, something not attainable by the majority. FHA does not ask for reserves.  . On top of this, FHA allows owners to provide anything up to a 6% cap of the sale price. This can be in the form of what is called &lsquo. Seller contributions. &rsquo. In the event of a market being seller contribution credits secured by the owners, or where sellers use their rights to move homes, slow, can be put toward paying the buyers closing costs.  .

Except for the deposit, this may even cover all of the buyer&rsquo. S closing costs. A word of caution though, contributions by the seller must be attained in writing and must be part of the purchase agreement which is inspected by the provider of the loan. Borrowers must provide sufficient proof of income to demonstrate the ability to pay the mortgage. Requirements of a conventional loan applicant include excellent a sizable down payment, job stability with sufficient income, credit, and low debt to income ratios.

Borrowers who meet Fannie Mae guidelines are rewarded with an interest rate only slightly lower than an FHA interest rate.  . Credit Issues Credit issues affect many people and if you have ever been faced with bankruptcy or foreclosure then the FHA option is your best bet when looking for a mortgage. FHA is more relaxed and lenient toward your application. The criterion is that if you have been subject to bankruptcy, it must have been a year previously to the load application under Chapter 13 Bankruptcy or two years under Chapter 7 Bankruptcy. Conventional Finance institutions may not even look at you under these circumstances.  .

Leniency and Understanding FHA qualifying criteria are that you have permanent employment and can prove you are able to cover your monthly repayments. They also require you produce some sort of credit you can use items like utility payments, and if you do not have what is called traditional credit, history, past rental records, insurance policies or any other report from approved credit providers.  . FHA has unusually liberal standards for qualifying and may allow you to borrow a lot more than conventional loan companies. With FHA programs, as much as 43% of your monthly income can be allocated to recurring monthly costs like mortgage payments and vehicles payments. If you quality, FHA can provide you with 100% of the loan.  . As the borrower, you are liable for the initial insurance premiums which comes to about 5% of the loan amount, but this amount can be absorbed into the loan if need be.    .

Your repayments will be 5% of the total loan amount divided into 12 months, and a 3% deposit is but cannot be absorbed in the loan amount, however no reservations are needed and it can take the form of a gift, required.  . Closing costs are your liability, but can also be funded in the loan amount. Conventional institutions stipulate the borrower have 5% for the deposit as well as 2 months reserves in the bank and will not fund closing costs in the loan amount. Citizenship You do not have to be a citizen to quality for an FHA loan. You can be either a permanent or a non-permanent resident.

If you are a permanent resident, you need to prove this via documentation supplied by the Bureau of Citizenship and Immigration Services (BCIS) who are part of Homeland Security. In the case of non-residency, you need to prove that you can legally work in the country and to do this you will need to produce your Employment Authorization Document issued by the BCIS.

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The Mortgage Types And Repayment Options

Unfortunately in recent years mortgages have become increasingly complex and wrapped up in technical jargon. Borrowers now need to consider at least two things, the type of mortgage loan they want and how they are going to repay it. Have a look at your options below. Types Of MortgagesVariable Rate MortgageRates on these loans fluctuate in line with general interest rates but because they are at the lenders discretion they dont necessarily move as far, or as fast.

Discounts are usually offered to new borrowers in the early years. Tracker MortgageRates on tracker loans are normally linked directly to movements in the Bank of England base rate. The link may be for a limited period rather than the life of the mortgage. Cashback MortgageWhen these loans are granted, cash payments are given to borrowers to spend how they like. They are typically between 6 per cent and 8 per cent of the loan.

Fixed Rate MortgageRates of interest on these loans are guaranteed not to change for a specified period, typically the first three to five years of the mortgage. Capped Rate MortgageWith this type of loan, the interest rate is guaranteed not to exceed a fixed level during the capped-rate period. The advantage is that it can go down if rates are cut. Repayment MethodsRepayment MortgageAlso known as capital and interest mortgages because part of the monthly payments gradually pays off the loan while the remainder covers the interest on the amount outstanding. Offset MortgageThese loans are taken out in conjunction with a current account or savings account. Regular mortgage repayments are required but at the same time the cash in the other accounts helps to reduce the loan, thereby saving interest.

This can help to speed up repayment of the mortgage. Interest Only MortgageAs its name implies, the borrower pays the interest only on the loan during the mortgage term so the capital remains outstanding. Payments may also be made into a savings to repay the capital at the end of the term, such as an Individual Savings Account, scheme. Sometimes the loan is repaid out of the sale proceeds of the property. Endowment MortgageThis is where an interest-only loan is combined with a life assurance with-profits policy intended to pay out a sufficient sum to clear the mortgage at the end of the term. But endowment policy payouts are not guaranteed and many are currently expected to produce shortfalls.

What You Need To Look Out ForArrangement FeesMost lenders nowadays charge you for the work involved in setting up a mortgage or to reserve a loan at a particular rate. The amounts can vary considerably between lenders. Paying more doesnt always get you a better deal. High Lending ChargeIf you are borrowing more than 90 per cent of the property value, check to see whether you will be charged an extra fee. This is to protect the lender in case you fail to keep up the payments, but not all of them make this charge.

InsuranceSome lenders will offer you a lower mortgage rate if you buy their home insurance products. They will also encourage you to take out their mortgage payment protection policy. It is usually better to shop around for the cheapest insurance deal. Early Redemption PenaltiesWith mortgage special etc, fixed rate deals, offers, you will normally be charged a penalty if you pay off your loan within the offer period. In particular, try to avoid those loans with redemption penalties that extend beyond the end of the offer period as you will be stuck on the lenders standard variable rate. Initial Disclosure Documents And Key Facts IllustrationInitial disclosure documents (IDDs) spell out mortgage advisers or are free to sell mortgages from all lenders, such as whether they can recommend products from one company only, services.

Key facts illustrations (KFIs) are given to borrowers when they apply for or are recommended a mortgage. These outline the mortgages cost over its fees and an interest rate expressed as an annual percentage rate , repayments, term(APR). Annual Percentage RateThe APR tells prospective customers the interest rate over the life of the mortgage. This factors in any initial offer rate and then the lenders standard variable rate to which the mortgage reverts, as well as the impact of fees. The APR in the key facts document does not reflect that many mortgage borrowers switch to better deals than the lenders standard variable rate (SVR) after their initial offer expires. Neither does it include the potential costs on leaving the mortgage, such as administration fees and early repayment charges. Standard Variable RateBecause house prices are at a record high many people (probably including yourself) are now thinking of their mortgages in the long term as well as the upfront rate.

For this reason it is worth knowing what current customers are paying. It is highly unlikely that when you come to the end of your fixed or discount rate period you will be on the same SVR as current customers. But you can use the information to see how the lender compares against others in the market.

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