This is a great opportunity to receive up to $5,000 towards down payment or closing costs assistance. This grant becomes available once a year so now is the time if you are thinking of purchasing a home. As with all loan programs, restrictions do apply.

The Federal Home Loan Bank of Cincinnati (the FHLBank) has established and set aside funds for the Affordable Housing Program (AHP) funds to help encourage homeownership. These funds are available to Members as
grants to assist homebuyers under the Welcome Home Program.

Uses of Funds

Welcome Home grants are used to fund reasonable down payments and closing costs incurred in conjunction with the acquisition or construction of owner-occupied housing by low- and moderate-income homebuyers. The grants are limited up to $5,000 per homebuyer and Members are subject to an aggregate limit of $200,000 per offering. It is possible a grant amount of less than $5,000 is given if all the funds are not needed at the discretion of the Member. All funds are reserved for specific homebuyers purchasing specific homes and cannot be transferred to other homebuyers or to other homes.

Funds Available for 2012

Total funds available for 2012 will be announced in late February 2012. Funds will be reserved for Members and homebuyers on a “first-come, first-served” basis, but only to the extent that funds are available. Once all funds have been reserved, the FHLBank will no longer accept Reservation Requests.

Click here for more info

Option Financial, LLC
6551 Harrison Avenue
Cincinnati, OH 45247
(513) 598-5900

Working with a trustworthy, experienced lender can help prevent such mistakes. But homebuyers also need to take responsibility for their budgets and choices. An excellent place to start is by developing a short- and long-term outlook on their purchase.

What are the three biggest financial mistakes of first-time homebuyers?

#1 – Spending Too Much

Lenders qualify buyers based on their incomes and debt-to-income ratios but those figures do not take into account how much borrowers spend on items such as transportation, savings, food and other necessities. When borrowers fail to take into consideration these additional monthly expenditures they can soon discover they have purchased more than they can truly afford.

Buyers should create their own budget and decide how much they want to allocate each month to their mortgage. Many first-time homebuyers experience considerable swings in housing expenses when they go from $700 a month in rent to $1200 in mortgage payment. They should also factor in the unplanned expenditures that are bound to occur when owning your own home like unplanned home repairs typical maintenance.

#2 – Not Getting PreQualified Early

Meeting with a trusted lender for a buyer consultation and prequalification for a mortgage should be the first step toward homeownership. Unfortunately many first-time homebuyers wait until they are ready to start house hunting before they contact a lender. Making this an early step in the process will prepare the buyers not only for the monthly payment but also the costs associated with the mortgage and the many steps in the mortgage process. Some buyers may need to spend up to a year saving more money, increasing their incomes or cleaning up their credit before making an offer on a home.

#3 – Not Understanding Credit Score Impact

While most consumers know it’s important to have a high credit score, not everyone understands how expensive a low score can be.

Mortgage rates and terms are tiered based on a borrower’s credit score. Credit scores of 720 and above will receive the best rates and terms resulting in possible savings of thousands of dollars each year.

Good mortgage interest rates are still available for borrowers with cores below 720 but as scores go lower interest rates can go higher as well as possibly more stringent requirements such as a larger down payment. Minimum credit scores of 620 are typically the lowest levels to qualify for a home mortgage.

A more recent guideline that borrowers should be aware of is that most lenders are now required to get a current credit report just prior to closing. Borrowers should avoid credit purchases and opening new accounts. Many first-time homebuyers are eager to furnish their new home and rush to make purchases on their credit cards. This can result in lower credit scores or higher debt-to-income ratios that can make them ineligible to close on that loan.

Today is a great time to buy a new home and the best thing you can do to ensure that you make the right choices is both property and financing is to get professional advice from real estate and mortgage experts. With their excellent advice and guidance you can maximize your chances of making the right decision.

Need a mortgage professional? You can contact Option Financial and ask for a no obligation consultation.

Option Financial, LLC
6551 Harrison Avenue
Cincinnati,OH45247
(513) 598-5900

www.optionfinancial.com

Home buyers are becoming more upbeat today as they seize the opportunity to snatch up properties at very low prices and at very low interest rate. If you are a potential home buyer considering the purchase of a new property then you should make the choice to seek expert advice from knowledgeable real estate and mortgage professionals. Do your homework first before starting on the hunt for a property. The volatility of the last several years has changed the rules, especially when it comes to home financing.

Before you buy a property you should first analyze your goals and the anticipated value of that property over 3, 5, 10 years, or even longer. What seems like a great deal today could cost you a fortune if you can’t resell at the price you want or you can’t wait for the values to rise in the real estate market. Careful consideration of all factors is the surest way to minimize risk to your long-term wealth. Utilizing the services of a professional real estate agent is a smart way to help you make the right decision.

One thing all serious home buyers should do before beginning to look at homes is get pre-approved for a mortgage. The collapse in the housing market was the primary result of very lax lending standards. Because of this, lenders and the institutions that govern them, have implemented higher lending standards and practices making it much harder to obtain a mortgage. Banks are willing to provide low rate mortgages but only if the borrowers have the necessary credit scores, credit history, assets, debt-to-income ratios, etc. demonstrating a willingness and ability to make they monthly mortgage payments.

Today is a great time to buy a new home and the best thing you can do to ensure that you make the right choices is both property and financing is to get professional advice from real estate and mortgage experts. With their excellent advice and guidance you can maximize your chances of making the right decision.

Homeowners who refinance are usually in one of two categories, they either want a more affordable monthly mortgage payment or are looking to lower their debt by shortening the repayment term on their home loan.  Those seeking a more affordable payment will either look for a lower interest rate or a longer term. Those seeking to reduce their long-term mortgage debt and can afford the higher payment look to refinance into shorter terms, typically a 15-year mortgage. This is a way to get out of mortgage debt quicker and reduce the overall cost of the mortgage.

After reaching historic lows late last year, rates trended up through the first quarter of 2011 but are still just 16 percent higher than their all-time lows. Now the interest rates trend are in reverse. The decline in mortgage interest rates could help to increase sales in the housing market as it enters the spring buying season.

According to figures released April 20th by the National Association of Realtors, sales of existing homes rose in March for the sixth time in the last eight months. Today’s extremely affordable mortgages and low house prices should help strengthen the uneven housing market recovery, but tighter lending standards are keeping many potential home buyers on the sideline. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.

Interested in seeing if qualify for a new mortgage to purchase or refinance?
Option Financial, LLC
6551 Harrison Ave.,
Cincinnati, OH 45247
513-598-5900
www.optionfinancial.com

Another very important note…

The number of companies that will be able to offer bond money is decreasing.  US Bank and OHFA are no longer allowing companies that are not Direct Endorsed to participate in the bond program directly. Companies not eligible to participate will also no longer appear on OHFA’s website as an approved lender.

Option Financial will continue to be an approved lender and be listed on OHFA’s site.

Several factors that can favorably impact your credit score include the age at which you first obtain credit, the number of creditors you are active with and — most importantly — how you pay your bills. Even late library books can have an impact.

A credit score is composed of information about a person’s credit history, amount of outstanding debt and the type of credit the person uses.

Not only can credit card debt and missed loan payments damage one’s credit — but outstanding medical bills, non-payment of rent and even unpaid library fines can also negatively impact one’s financial future.

Damaged credit can begin to improve after a period of 12 to 24 months of on-time payment history but could take a period of seven years to bounce back from.

Some credit issues, like filing for bankruptcy, could stay on a credit report for upward of 10 years, according to Gabi Dukes, senior vice president of financial counseling and community development at Security Federal Bank.

“Once you pay them and it becomes satisfied, it still affects credit for a time period, but that doesn’t mean that the score is not going to improve. Sometimes, it may just take some minor adjusting, and, within a relatively short period of time, the credit adjusts depending on what exactly has caused the negative credit,” Dukes said.

Keeping a few facts in mind can help to create good credit — or recover credit that has already taken a hit.

Establish Credit Early
Establishing credit can begin as soon as age 18, when a person is old enough to commit to a contract. Doing so at an early age is a responsible financial move, according to Dukes.

“That is what we encourage young people to do — to establish that relationship with a financial institution early and learn the foundations of finances, which means it starts with saving a portion of your money, a habit that needs to be developed to prepare you for life,” said Dukes.

Dukes said she works with a lot of young people preparing to graduate from high school and facing expenses like their first car loan. If they have a savings account, the bank would let them borrow against their own money, whereas if they were to open a credit card or store credit card, the initial interest rate might be close to 20 percent. Borrowing against savings, one could expect to see one-third of the interest rate.

Understand the Different Types of Credit
Secured credit is borrowing with collateral, for example on a car or a mortgage. Using installment credit, one would borrow and pay off over a period of time. This is likely the type of credit which helps to strengthen a credit score the most, Dukes said. Unsecured credit, like using a credit card, is borrowing without collateral, which often carries a higher interest rate. Revolving credit is often the use of a credit card or department store credit card, which has a set credit limit and requires no collateral.

Don’t have too much credit available to you.
Have three active accounts, for example, a car loan, a savings account and a credit card.

Having a VISA or other major credit card or two is a good idea, as long as you shop around for the best interest rate, Dukes said.

“The utilization of credit, how much of what is available to you in your credit line you use, affects your credit score,” Dukes said.

Using more than 25 percent of your available credit begins to negatively impact your credit score.

Generally, a financial institution would advocate taking on no more than 36 percent credit for one’s monthly income, Dukes said, and even that may be too much.

Be careful when paying just the minimum. Oftentimes, people look at a monthly minimum of $20 or so and think “Well, I can handle that.”

It is important to take into consideration that the $20 minimum, which might reflect one or two percent of a monthly payment, is intended to be paid off over a period of about 20 years, Dukes said.

“The minimum payment is not what a customer should consider, but “how much would I have to pay each month, let’s say, to pay this off in 12 months?” Dukes said.

Don’t make too many inquiries into your credit score.
“If you have too many inquiries, that would (negatively) affect your credit score,” Dukes said, as it is a sign that the person is seeking credit from too many places.

Once per year, people can obtain free copies of their FICO credit report. Dukes cautions that the actual credit score sometimes varies depending upon where it is obtained. Having a relationship with one financial institution, she said, makes keeping up with your credit a more manageable task.

What else affects credit?
While credit cards and loan payments may be key in affecting one’s credit score, nonpayment of various bills and fees can also have an impact.

Medical bills, for example, are commonly turned over to collection agencies if patients fail to pay the balance not covered by insurance.

“Medical accounts don’t have a lot of weight when it comes to affecting your credit score,” said Natalie Jarrett, director of patient financial services at Aiken Regional Medical Cent

ers. “They do affect it, but it is very slight and, when you are getting a loan for a mortgage or a car, it does come into consideration.”

Jarrett said that common practice after a patient does not pay an outstanding bill is to make several attempts to contact the patient via telephone and mail over a period of six months and then to turn the notice over to collection agencies.

That process may take another six months, she said, and if the patient still does not pay, it will then be reported on the patient’s credit history.

Any outstanding bills could be turned over to a collections agency, even failing to pay your late fees for borrowed library books, according to Aiken County Public Library manager Michael Swan who said that, after a period of time, balances more than $20 are sent to collections.

After 43 days, an unpaid library fine will be turned over to a collection agency, and if not paid by the 120th day, the balance will be reported to a national credit bureau which may affect the person’s credit rating.

Nonpayment of rent can affect a person’s chances of getting a loan, because the amount due is sent to a collection agency if a renter is evicted and has not paid rent.

Rent is not actually reported on a credit report, Dukes said, but it is considered as an alternate source of credit. If a customer applies for a mortgage, previous rental history would need to be verified, and nonpayment could affect the customer’s chances of securing a mortgage.

Dukes said the way to manage finances is to rely less on credit, and more on savings.

“It is very important that you set priorities and have a roof over your head,” she said. “The key thing is that in every budget, there is a savings built in. Make that payment to yourself faithfully every month, and then simply rely on your own savings for emergencies instead of credit. Prepare for different events or different projects instead of just getting everything right away, with a price ticket attached to it. A lot of times, by this interest that you are saving, you’ll find that you can afford even more.”

By ANNA DOLIANITIS Aiken Standard

It was bound to happen. Rates have been at historic lows for a couple of months but the trend last week had rates trending up.  The MBS market saw an initial sell off in the morning, an eye-popping 75 points within minutes of the opening, and then a slow grind back throughout the day to previous day’s closing levels. Then the bottom fell out.So how bad was it? Typical daily ranges of ups and down in the MBS market are about plus or minus 25 points. Yesterday saw a total drop of 119 points. Add that to the cumulative drop last week of 147 and we see a substantial 266 point drop in a week.

Where do we go from here? Well today the market has reclaimed some of yesterday’s losses, up 43 points at 9:00 am.  Some analysts have forecast a ‘cleansing process’ to the bond market as a necessary evil and we saw that yesterday and it may play out over the next few days. If that process takes place as predicted then I think we’ll see mortgage interest rates  revisit historic low levels or even dip lower.

If you’re thinking about refinancing you should get the process started as soon as possible. Lending standards have tightened and the loan process can take several weeks longer than might be expected.  To take advantage of the best rates you should be ready to get lock the rate at the most opportunistic moment.

And remember…

• ‘No Points’ does not mean ‘No Closing Costs’. Typical closing costs still include underwriting, recording fees, title insurance, transfer fees, third party fees, property taxes, escrows, mortgage insurance, etc.
• The rates quoted are for the best borrowers under the best circumstances.

Borrowers who currently have FHA mortgages may be able to take advantage of the Streamline Refinance. Depending on the individual circumstances this can mean no closing costs.  Talk to a loan officer as soon as possible to get more details, discuss your options and get the ball rolling.

Chris Farr Nov 8, 2010

As loan officers we are constantly asked “where are the rates today” and as we give our honest and insightful answers we typically get challenged by what people hear in the media. It’s not that people are wrong about what they hear, it’s that consumers don’t understand what is being said or what is necessary to obtain the best rates.  I heard, as many consumers heard, that rates were at 4% or even less with ‘no points’.

There are a few things that consumers should understand...

• ‘No Points’ does not mean ‘No Closing Costs’. Typical closing costs still include underwriting, recording fees, title insurance, transfer fees, third party fees, property taxes, escrows, mortgage insurance, etc.
• The rates quoted are for the best borrowers under the best circumstances.
• Lending standards have tightened and the loan process can take several weeks longer than might be expected.  If a borrower wants to take advantage of the best rates they should start the loan process NOW and be ready to lock the rate at the most opportunistic moment.

So where are rates heading? Is 3.75% in anyone’s future? There is always that possibility but the best advice is to talk to a loan officer ASAP and get the ball rolling.