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Mortgage Financing Programs

by The Pilgrim Team

I am going to cover different loan programs that are being offered as of now ove rthe next few days. With new RESPA rules loan programs have been changing along with how they are offered.

I first will discuss FHA loans as they are known as of today. This is becoming the most popular loan out there today in the York, PA area. The most important factor is the amount of money down that is required by HUD. As a buyer you will need to have at least 3.5% down of your own in the transaction. The Seller can contribute up to 6% of the sale price towards the Buyers closing costs as of today. That will be changing shortly to 3% in april. You can see why it is one of the most popular loans in the market. You can get into a $200,000 house for as little as $7,000! With the rates hovering around 5% +/- and the Tax Credit of between $6,500 for a current married homeowner or $8,000 for a first time homeowner (not owned a home in the last 3 years) you can practically get in for no money down. Keep in mind there is an up front Home Financing insurance premium that you can add either to the mortgage amount or pay it at time of settlement. There is also a monthly fee that is added to your mortgage payment.

For more information call us at Pilgrim Team. 717-757-5955

Should You Pay Off Your Mortgage?

by The Pilgrim Team

As a homeowner, once you have purchased the perfect home, you dream of the day you make the final Home Financing payment and truly own your home. Paying off your Home Financing if you are able to is a good idea for the obvious reasons, one being that you will save thousands of dollars in interest. If you obtained a 30 year loan you will most likely pay more than twice the purchase price of the home before you actually own it.

Of course paying off your Home Financing gives you the satisfaction of actually owning your home. In addition, the mortgage payment is typically the highest of a household's monthly expense, so not having to worry about that each month can bring peace of mind, especially in the case of a loss of a job or retirement. 

Some financial advisors do however advise that paying off your Home Financing is a bad financial move. Some arguments that the money should be invested as to gain a  higher return in the long run. While this advise might sound good in theory there is no guarantee that a higher return can be achieved. 

Paying off your Home Financing has many benefits, but the question many homeowners ask is "How?", especially in a difficult economy. Below are some strategies you can use to help you get to your payoff goal!

  • Keep an eye on interest rates and, if they fall, consider refinancing. If you can reduce your interest rate, shorten the term of your loan or both, refinancing can be an excellent strategy. 
  • Overpay a fixed amount every month. Even if you can afford to pay an 5-20% of your total payment, it can add up to be 1-2 extra payments a year.
  • Biweekly Home Financing payment plans. By paying half of your monthly mortgage payment every two weeks, you end up making the equivalent of an extra payment every year.  Instead of making 12 monthly payments, you’ll make 52/2 = 26 biweekly payments — the equivalent of 13 monthly payments. This will shave years off your mortgage. Moreover, if you’re paid on a biweekly basis, this approach might match your budgeting process better than monthly payments.

In a difficult economy paying your regular monthly obligations can be difficult, and it can be very challenging to try to make any additional payments. They key is to make an attempt, every little bit counts and gets you closer to your goal!

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The Pilgrim Team
Professional Realty Associates
16 Leader Heights Road
York PA 17403
Office: 717-757-5955
717-755-2683
Fax: 717-757-2887