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Posted by MDM Realty, Inc on 7/3/2018

If youíre trying to decide whether itís best to move from your current home or to make the necessary improvements on the home, itís not an easy decision. One thing you may have to consider is how to get the capital in order to have those home improvements done. 

Thereís a variety of options available to you in order to secure a loan to renovate your home. Whether you need to renovate the kitchen, build out from your current property, or replace the heating system, thereís ways that you can get the money to complete these necessary updates. 


One thing to consider about any of the options discussed is that you donít want to be paying for home improvement loans until you need to update everything once again. If youíre preparing to sell your home, making improvements is a wise choice, as it can increase the return that youíll get on your home. 

Donít Run Out Of Cash


 If you cannot complete the improvements that you started, you may not be able to get another loan to complete them. You can typically borrow between 80 and 90% of your home equity. The downside to refinancing your home or taking out home equity lines of credit is that youíll need to pay closing costs once the loan is approved. In other words, youíll need to put out some cash in order to get some cash. 

Use Your Own Cash

If you have some cash saved up, itís wise to just do one project at a time. This can take some time, but can be more economical in the long run. If you donít need to complete your repairs in a hurry, then using your own savings is a good idea.

Refinance Your Home

If you would benefit from a lower interest rate, refinancing your home can be a great option. As long as the cost of repairs doesnít exceed the number of years that the updates will last, refinancing makes sense. 

Home Equity Credit Line


If your mortgage is locked in and working for you, home equity lines of credit are always a good option. You can draw money out as you need it and pay it back as you go. You wonít need to pay interest until you use the money and the loan is good for 10 years. The downside is that if you donít make the payments, you could lose your home.   

Home Equity Loans

This type of loan allows you to borrow a fixed amount and then pay back the loan with a fixed monthly installment. A 15 year term is typical of this type of loan.


Construction Loans


A construction loan can be used to build a house or to make large-scale renovations. These loans are short-term and not always easy to find access to. Not to mention that they are heavily managed and perhaps the least popular option presented here. 


FHA 203K Loans


This type of loan is generally used to purchase a home that is in need of much repair. The downside is that youíll need mortgage insurance for the entire life of the loan. Less complicated repairs often offer a more streamlined FHA loan of up to $35,000. 


FHA Title 1 Loans


These loans provide up to $25,000 for home improvements. The money is insured by the federal government and can be obtained from approved lenders. Homeowners donít need access to equity in order to get one of these loans and they are available in 20 year terms. 


These are just some of the options that are available to you as a homeowner seeking ways to get cash to make improvements to your home. You can tap into other types of personal loans including credit cards. Really, you need to do whatís best for your finances. Itís good to know that thereís options available to you to improve your home.




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Posted by MDM Realty, Inc on 7/25/2017

You may have heard of an FHA loan, and you probably werenít sure if you were eligible for one. FHA loans are insured by the Federal Housing Administration which is a part of the United States Department of Housing and Urban Development.  

 If you have an FHA loan, it includes special mortgage insurance which helps to protect lenders from a loss should the loan be defaulted on.  

Why An FHA Loan?


Due to the extra insurance lenders can offer these loans at an lower interest rates. These loans are also easier to qualify for. This makes affordable housing more accessible. 


Things To Know About FHA Loans


The minimum credit score depends upon the type of loan that you need.

If you have a credit score of 580 or higher, you can provide a down payment as little as 3.5% with an FHA loan. 

If your credit score is lower than 580, you are required to make a down payment of at least 10%. 

If your score is lower than 500, you may be ineligible for an FHA loan all together. 


FHA loans require a low down payment, which is why it is so enticing to buyers. While these types of loans may have limited availability, itís good to do your research and see if youíre eligible. 


Securing The Down Payment


Generally, buyers use their own savings to make a down payment on a home. Some states have government assistance programs that provide grants to be used for a down payment on a home.  


Incentives With FHA Loans


The Federal Housing Administration has special provisions to allow sellers, builders and lenders to pay for some of the other costs incurred while buying a home including the closing costs, appraisal, credit report, or title expenses. This allows builders and sellers to provide incentives to entice buyers. This could have an effect on the interest rates associated with the loan if the lender agrees to pay these costs. Buyers can compare rates with different lenders for these purposes.            


Mortgage Insurance And FHA Approved Lenders


The Federal Housing Administration is a provider of insurance and not a lender. You must be sure that you go with an FHA approved lender in order to get your loan in check. This is where itís important to shop around for benefits, loan standards and rates.  


The re are 2 required insurance premiums for FHA loans. The upfront premium is about 1.75% of the loan amount. This is paid at the time the loan is secured and can be financed as part of the loan amount. The second premium is the annual premium which is paid monthly and varies based on factors such as the length of the loan.  


As you can see thereís many benefits for home buyers who need additional mortgage insurance and assistance in buying a home. Talk to your lender about how you can secure an FHA loan today and make buying a home a reality. 









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Posted by MDM Realty, Inc on 10/3/2012

They always say it costs money to make money but I donít think that anyone ever thought that paying a mortgage could make you money. A few months ago I went to a fantastic Real Estate seminar that talked all about this concept and how it applies to homeowners all over the country. Currently mortgage rates are at an all time low, agreed? Imagine if 10 years from now you could guarantee your home to transfer to a new buyer at that same low rate that you got today. It would seem unlikely, but in fact it can and will happen. Two particular types of loans, FHA and VA, are the only loans that are, and will be, assumable to a new buyer. So letís say today in 2012 you purchase your home with a rate of 3.5% and in 10 years, 2022, the going rate is 7%. The buyer is debating between your house for $400,000 with a 3.5% rate or another house for $400,000 with a 7% rate. Your house will actually be worth more to that borrower based on the assumable rate. The statistics they are using for calculation purposes is approximately $10,000 for every point. That would make your house actually worth $435,000 based on that theory. When you think about the number of FHA loans being approved every day in this country that could have a very large affect on the future of Real Estate. I hope that the VA starts giving lots of loans to our Soldiers coming home and that this will be just an added benefit for them. They deserve at least that and so much more. So before you take that conventional mortgage think again and ask your mortgage broker about an FHA, it may you make you some money back in years to come. Written by Heidi Zizza Realtor mdm realty inc. www.metrowesthomesandlife.com