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A person in red boots pressure washing a walkway

Simple Solutions to Enhance Summer Curb Appeal

Keeping up with regular home maintenance can add curb appeal and help you maintain the investment in your home. Read on for a checklist of chores you should complete this summer to make sure your home is in tip-top shape.

 Check your lawn irrigation system to make sure it’s functioning properly

 Clean out your gutters

 Power wash your driveway, sidewalks and concrete porches

 Patch any holes and cracks in your driveway

 Inspect your porch for loose boards or nails and repair as needed

 Clean/ inspect siding of your home and repair as needed

 Prune all shrubs, bushes and trees that are growing close to your home, especially around any AC units

 Clean your chimney

 Wash your windows and window screens

 Check for leaks in outdoor faucets and hoses

 Clean and repair your grill

Summer days are long, so take advantage of the extra sunlight to tackle the exterior maintenance on your home!


Understanding Mortgages

Women using a tablet in a park

How to get an FHA mortgage: A guide for homebuyers

Whether in the city, suburbs or perhaps someplace more rural, owning a home is something virtually everyone sees themselves doing at some point. But when you have a family to support, are on your own for the first time or simply don't have enough saved to use toward a down payment, circumstances of the moment can make homeownership seem like a pipe dream.

An FHA mortgage can help bridge the gap so you can live out your aspirations. Backed by the Federal Housing Administration, FHA loans are available through most mortgage providers and are ideal for individuals who have steady income, but may lack certain other financials that are asked for when filling out a loan application. For example, if your credit score is less than perfect or you can't afford a 20 percent down payment toward a property's purchase price, a loan from an FHA lender can make a lot of sense.

That said, there are a few key aspects that must be fleshed out in order to qualify for an FHA loan. Here, we'll address these elements, as well as a few other important considerations so you can qualify for an FHA on the first try.

How does an FHA mortgage compare to a conventional mortgage?

FHA loans are a lot like conventional loans, in that you can buy them with fixed-rate or adjustable-rate interest - typically in 15-year and 30-year increments - and require an initial down payment, among other similarities. However, the approval process isn't as stringent for an FHA mortgage versus a traditional loan product. For example, instead of a 20 percent down payment, you can put as little as 3 percent down, which is slightly less than what the average is these days (5 percent), according to the National Association of Realtors.

What you spend in interest is largely determined by your credit history, meaning how reliable you are at making your payment on time. Here as well, FHA loans have looser credit restrictions than conventional mortgages. Generally speaking, FHA loans require a minimum credit score to be close to 600.

However, should your down payment be larger - say 10 percent or 15 percent - you may be approved with a FICO® score that's a bit lower. It's worth noting that any down payment that's less than 20 percent requires the purchase of mortgage insurance, which we'll discuss a bit further later on.

Another key distinction FHA loans have versus conventional loans are interest rates. FHA rates are typically lower than conforming loans. But again, your creditworthiness - among other financial characteristics - will factor in to how much you can expect to spend in interest, which is also influenced by market dynamics that are almost constantly in flux.

Calculator with images indicating home, groceries, car and vacation

What should my debt-to-income ratio be?

You've probably heard about debt-to-income ratio, but if you're new to homeownership, you may not be exactly sure what it means. It's pretty straightforward: It basically is an assessment of how much of your gross income goes toward monthly payment expenses. You can calculate this through the use of mortgage calculators, but you can also do it on your own by simply dividing the totality of your monthly debt payments (i.e. installment and revolving, not including household utilities) by what you earn in the typical month, before taxes are taken out. Multiplying the answer by 100 will give you a percentage, which is your DTI.

In order to be approved for an FHA loan, the DTI should be no higher than 43 percent, which is an indication that less than half of your monthly earnings are put toward existing expenses. The lower your DTI, the more likely it is you'll be approved, with the ideal ratio being between 28 percent and 36 percent. However, it's important to emphasize that no single factor will be the deciding one as to whether you'll be given the green light. Lenders take into account the totality of your financial and employment situation.

What's the deal about mortgage insurance?

Although there are exceptions, such as with VA loans, mortgage insurance is typically required on any loan where the down payment is less than 20 percent of the purchase price. This rule applies to FHA loans, regardless of how much money you use toward the upfront cost. Mortgage insurance is included in your monthly mortgage payment. FHA requires mortgage insurance for the life of the loan unless you are able to refinance due to an increase in equity.

What else should I know about FHA loans?

Perhaps the best aspect of loans backed by the FHA is they offer a tremendous amount of flexibility. For example, say that you're able to put 3 to 5 percent toward the down payment of a home, but you'd like to put more money toward the cost so you can pay off your mortgage more quickly. If you've received gift money from a parent or, close friend or relative, you can use these funds so you can pay off a bigger chunk. These gift funds can be used in conjunction with what you spend or can cover the cost in its entirety.

Lastly, you may be wondering the maximum loan amount you can be approved for with an FHA mortgage. The amounts have changed from year to year, and in 2019, the ceiling rose to $726,525, HousingWire reported. That's up from $679,650 in 2018. With the median value for a property among all housing types nearing $250,000, according to the most recent estimates from the NAR, the new maximum loan amount is certainly sufficient to cover the cost of the majority of houses up for sale.

Homeownership is the American dream. The flexibility and payment options available with an FHA loan can help turn those dreams into reality. With the home buying season rapidly approaching, getting in touch with your favorite loan officer to learn more, and let the search begin!


Understanding Mortgages

Illustration of a suburban house

First-time home buyer loan programs: What are the options?

No matter where you are in life - a recent college grad, newlywed or just someone who is finally ready to make the leap - first-time homeownership is a big decision. According to the National Association of Realtors (NAR), roughly 33% of the market is composed of first-timers, a share that's remained fairly consistent over the past several years. That's a significant figure and it's understandable, given that buying a house is something that most people hope to accomplish at some point.

Regardless of your situation, you probably have lots of questions which, stacked on top of one another, might rival the height of a skyscraper: How much can I afford? Should I live in the country or the city? What is the application process like? Who are the mortgage lenders and which should I choose? What will my interest rate be? Are there any assistance programs available? You get the picture - and that's just a few of the burning questions first-time buyers may ponder. 

Here's the good news: As numerous as your questions may be, almost equally as abundant are your options, particularly when it comes to loan programs. So, which one should you choose? Here are the details on a few of them that can help guide your decision:

FHA Loans

Backed by the Federal Housing Administration, FHA loans are among the more popular options, particularly for first-time buyers. The reason for this is the qualification standards are a bit looser compared to others. Although the FHA operates the program, FHA loans are sold through private lenders.

Perhaps the most attractive aspect of FHA loans, aside from their wide availability, is the fact that many people are eligible. For example, even if your credit score is lower than what's considered ideal, that isn't always a deal breaker. Furthermore, you're not expected to come up with a sizeable down payment, as this can be as low as 3.5% of the purchase price.

USDA-RD Loans

Another government-backed mortgage option is the program run by the U.S. Department of Agriculture. Similar to FHA loans, USDA-RD loans are sold through private lenders and are geared toward homebuyers whose incomes are considered low to moderate. You fall into this bracket if your combined household income is between 50% and 80% of the median salary in your geographic area, as defined by the Department of Housing and Urban Development.

They're a loan type ideal for first-time buyers, but USDA-RD loans are exclusively for those who live in rural parts of the U.S. What defines "rural"? There's actually no official definition, but generally speaking, according to the Census Bureau, it's any place that is not considered a metropolitan statistical area (MSA). From a geographical perspective, MSAs are the exception, not the rule, so even if you don't think you live in a rural enclave, don't discount your eligibility. Why? Because 97% of the U.S. populace resides in a location the USDA-RD loan program covers.

Here's another attractive aspect of USDA-RD loans: a down payment is optional. Surveys by the NAR show that the down payment is often the biggest obstacle for prospective buyers; USDA-RD loans help make homeownership possible. That said, there are a few prerequisites in order to be considered eligible. Your FICO® score (that's your credit score) and household income must meet a certain total, depending on the size of your family. The more there are of you, the more you're able to earn.

Keep in mind that even though you're not required to make a down payment with a USDA-RD loan, you are expected to purchase mortgage insurance. Even here, though, premiums tend to be more affordable compared to traditional loan products.

Conventional 3% Down

Otherwise referred to as a conventional 97 LTV (loan-to-value) mortgage, the 3% down loan program is aptly named, because it's custom-made for individuals who may not be able to afford a large lump sum going toward the down payment. Developed by Fannie Mae and Freddie Mac, the conventional 97 program requires an upfront expense of just 3% of the home's value, which is lower than the mandatory amount for FHA loans. As noted on Fannie Mae's website, there are a few other eligibility standards to be mindful about. It's for fixed-rate mortgages only, as opposed to adjustable rate mortgages, and the requested loan amount can't be higher than $484,350. Additionally, while repeat buyers are free to apply, it has to have been at least three years since you last were a homeowner.

VA Loans

If you're an active or retired member of the military, you may be uniquely qualified to apply for an affordable mortgage product thanks to the Veterans Administration. VA loans are backed by this government department but sold through most private lenders. As with USDA-RD loans, they do not necessitate a down payment. VA loans are available to individuals who serve or have served in any of the five military branches - Army, Navy, Air Force, Marines, Coast Guard - or reserves, for a period of at least 90 days at wartime or 181 during peace. Closing costs and monthly payments tend to be more affordable with VA loans as well.

What type of loan is the best option for a first-time buyer?

Given that there are so many mortgage options to select from, you may wonder which is the very best. When it comes down to it, there's no one-size-fits-all answer. Everybody's situation is different and not only that, participating lenders vary. Assistance programs aren't universally available either. That's why it's so important to consult with a mortgage professional who is well-positioned to assess your specific situation and go from there.

Armed with this information, you can enter the market with a better idea of what loan to go with and what you can expect as far as qualification is concerned. Contact your local RMS loan officer for a free consultation.


Helpful Tips

Potted flowers in front of a line of shrubberyThree Landscaping Hacks

Landscaping can add curb appeal to your home, which can add to the value of your house. Additionally, outdoor living areas can help improve your quality of life. Fresh air and a natural environment can improve focus, and lower stress levels. Try these three landscaping hacks to make your outdoor living area into an oasis you can enjoy in the warmer months without breaking the bank.

Front yard with a flower bed lined with stonesAdd a flower bed border of stones:

Adding a border to your flower bed is easy, cheap, and has a large impact. It draws eyes to your garden, immediately adding curb appeal. You can use a variety of rocks that are similar sizes and colors that complement each other.

Add a walking path to connect features:

Walking paths will create focus in your outdoor space while adding charm. Consider using stone pavers as a relatively cheap and easy solution to connect focal points in your yard.

Stone path through flower bedsCreate a container garden:

Flower pot gardenContainer gardens can instantly add pops of color and create a welcoming atmosphere in your outdoor living space. Place potted plants on the ground, on a pedestal or even mount them on a windowsill.

Taking time to add landscaping to your home will increase its curb appeal, add a personal touch, and make your outdoor spaces more enjoyable. Spruce up your yard with some simple features like container gardens or walking paths and spend some time in the fresh air!


Things to Consider

Woman working on finances with a calculator and laptop

Planning for the Extra Expenses of Homeownership

When deciding how much of a home you can afford, don't forget to factor in the extra expenses of homeownership that extend beyond your monthly mortgage payment, taxes, insurance and utilities.

Home maintenance

Home maintenance helps your home run efficiently and keeps your house in good condition. There are a few popular rules of thumb used to estimate how much homeowners will spend annually on home maintenance.

  • The 1% Rule: Budget 1% of the purchase price of your home each year to go towards home maintenance.
  • The Square Foot Rule: Budget $1 per square foot of your house per year for maintenance and home repairs.

Keep in mind that these general rules for home maintenance and repair budgets DO NOT take into consideration many factors like the age of your home, the location, the weather of the area where you live and the condition of your house. All these factors can affect your yearly maintenance and repair expenses.

Household items for your new home

There are many items that first-time homebuyers may need to purchase for their new home. See below for a list of some of the popular items new homeowners buy within the first few weeks of moving in.

  • Calculator with images indicating home, groceries, car and vacationNew locks and keys
  • Garden hose
  • Lawn mower (if applicable)
  • Snow shovel (if applicable)
  • Rake
  • Garden tools
  • Curtains or blinds for the windows
  • Light bulbs
  • Tool kit
  • Fire Extinguisher
  • Grill

Making sure things like maintenance, repairs, and additional household items are included in your budgeting will help you decide how much home you can comfortably afford. It pays to speak with local experts early in the home buying process so you can focus on the right price range and buy your dream home.


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