The information provided herein has been prepared by a third party company and has been distributed for education purposes only. The positions, strategies or opinions of the author do not necessarily represent the positions, strategies or opinions of CrossCountry Mortgage or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.
May 4, 2020
This week it seemed like it was a good idea to take a look back and answer some of the questions I’ve had over the past few months! I love hearing what people need help with, and the whole point of this channel is to give practical everyday advice to those who are looking for it! So keep those questions coming! I’m here to help, and always do my best to answer them 🙂
Question 1: Manny inherited a home in 2010, but now he and his fiance would like to purchase a home together. So, Manny is wondering if he qualifies as a “first time home buyer”.
You’d probably be surprised how often this kind of question comes up! It’s not uncommon for someone to inherit property through an estate, and that usually brings questions about what kind of programs someone will qualify for after.
For the purposes of mortgages, “first time home buyers” are considered people who have not purchased a home in the last three years. So since he inherited the home over three years ago, he would be considered a first time home buyer. Obviously we’d have to take a close look and make sure there are no other conditions that need to be met, but with just this information, he qualifies for all the first time home buyer benefits.
Also, something to keep in mind, for most mortgage programs, you only need one of the people purchasing to be considered a first time buyer for the couple be able to take advantage of these.
Question 2: MH wrote in and let us know that she and her family wanted to purchase a home last year, but due to personal financial circumstances, could not. Now prices have increased, and keep increasing, and she wonders if the market will “stabilize” and prices will stop going up.
So this is a tough one to predict- it’s really hard to say if prices will keep going up. At the current moment, there is a lack of supply and a large demand for homes, so there’s no immediate indication that prices would drop. However, because interest rates are SO low (like seriously historically low), you actually have more purchasing power than you would have a year or two years ago. As a result, even with a higher sale price, your monthly payments may end up being even lower than they would have for the same home a couple of years ago.
Question 3 – Thea Davis asks “What’s a donor gift fund statement?”
Very often, people have help from loved ones when it comes to purchasing a home. That brings up something called a “Donor Gift Fund Statement”, which is simply a document that your lender will provide. This statement is filled out by whomever is giving you the money, and has them state their relationship with borrower (you), what the amount is, what the source of the funds is, and that it’s a gift (it doesn’t need to be repaid).
This document really serves to verify that the funds are in fact a gift, and there’s no requirement for repayment.
Question 4: This question comes from Trigger Happy 134. They were looking for a 4 bedroom home, but now realize that they need to look for a larger home to have space for their parents to move in with them.
Moving in with aging parents is a big deal, and it’s absolutely something you can plan for when applying for a mortgage! The most important thing to do here is discuss with your family member what your strategy is going to be, and definitely put an exit strategy in place in case circumstances change in the future. And honestly, that’s the same discussion you should have with any person you’d consider buying a home with!
That being said, if you are purchasing the home together, you will both have to submit applications, you will both have to provide financial documents. But this also means that you will most likely have expanded purchasing power, and more options.
Question 5: Kajung writes in to ask what they should know before they buy a vehicle.
This is such a great thing to be thinking about!! First of all, it is SO important to do as much research as you can up front. You want to be armed with as much knowledge as possible. Then, when it comes to negotiating with the car salesperson, let them know what you have found when it comes to other prices, ask them what they can do for you, and then BE QUIET. I cannot stress this enough- when it comes to negotiating, it’s important to know when to shut up! If you let them know you’re an educated consumer, and also let them know what your budget is, you can shut up and let them give you their best price.
Question 6: Jessica asks, what’s the difference between cash-out refinance and home equity line of credit?
So a cash out refinance is something that is rolled into a single mortgage on your property. A home Equity Line of Credit (HELOC) is actually a second mortgage that follows the first, and has an adjustable interest rate. But with a HELOC, you can pay it down and charge it up on an as-needed basis.
I actually recorded an entire video on what you need to know before refinancing, which has lots of information to consider before doing any type of refinance!
Question 7: Mitchell asks us the SUPER common (and great) question of how to budget when you’re self employed.
I feel you on this one- I’m not technically self employed, but I also don’t have a regular consistent salary. So many people have this same challenge, and I promise it’s something you can manage with a little bit of time and planning.
My best advice here is to look back over the last two years of both income and expenses and take an average. Once you’ve done that, set aside the amount of money that the average revealed.
Some people like to do this by setting aside the exact number, and others do it by percentage.
I personally do it by percentage, and I make sure that money is automatically sent to an account that all of my regular expenses come out of. The reason I like this method is because so often, people spend whatever they make as soon as they get it, and then don’t have anything left over for anything else.
If you’re having trouble figuring out how to budget for your personal expenses, download our free budget guide! Budgeting will help you plan for the future, and make those inevitable ebbs and flows much easier to manage!!
Website by Creative Day
Copyright 2023. All Rights Reserved.
Lizy Hoeffer NMLS ID # 260183. AZ LO-0913409 I am authorized to conduct business in the state of Arizona. All loans subject to underwriting approval. Certain restrictions apply. Call for details. THIS SITE IS NOT AUTHORIZED BY THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES. PHONE NUMBERS DISPLAYED ARE NOT FOR USE BY NEW YORK BORROWERS. NO MORTGAGE SOLICITATION ACTIVITY OR LOAN APPLICATIONS FOR PROPERTIES LOCATED IN THE STATE OF NEW YORK CAN BE ACCEPTED THROUGH THIS SITE. CrossCountry Mortgage, LLC. NMLS1925878, 3100 West Ray Road, Suite 201 Office 212, 218, 219 & 228, Chandler, AZ 85226 (www.nmlsconsumeraccess.org)
Go check your email for confirmation and a little gift from us!
Be the first to comment