Homebuying Articles

Equip yourself with the information you need to know throughout the homebuying process so you can make a house your home.

Learn About Buying A Home

From fixed interest rates to mortgage insurance to homeownership association fees, there are lots of variables in homebuying. Use these articles to break down each topic so you can confidently embark on your homebuying journey.

All Homeownership Purchasing A Home Investment Properties Maintenance and Renovation Refinancing Your Mortgage

Is It Possible to Get a Mortgage Refinanced with No Closing Costs? When it comes to refinancing a mortgage, you need to spend money to save money. Closing costs can amount to thousands of dollars, depending on the home loan. This is why the prospect of a mortgage refinance with no closing costs is so attractive. But, is it real or a myth? Here’s the truth about zero-cost refinancing. What “No Closing Costs” Really Means When a mortgage refinance comes with no closing costs, consumers should be wary. That’s because there is actually no such thing as a cost-free mortgage refinance. It requires a variety of billable administrative research and work to complete: Credit report fee Appraisal Fees Settlement or Attorney Fees Title Fees Recording Fees Third party verification fees The homeowner can pay these costs at closing, or the costs can be integrated into an ongoing payment plan. When a mortgage refinance has “no closing costs,” the fine print may require higher interest rates to cover what you would normally pay at closing. Why You Pay for Closing Costs Closing costs are part of the home purchase process. Since a mortgage refinance loan is viewed as another type of home loan by lending institutions, refinance packages require the same closing procedure. Here are some of the most important closing costs: Lender’s and Owner’s Title Insurance—Protects you from any title issues and ensures you are the official homeowner. Appraisal—Confirms the value of your home and any equity gained since your initial mortgage. Survey—Identifies property lines, structural changes, and geologic features of your property. Insurance Reports—Conducted to determine if the home is in a flood zone, fire danger, etc. Loan Origination Fees—Paid for processing, lender research, and underwriting. Home Inspection—Determines if any aspects of your home are in need of repair. Settlement/Attorney Fees—One of the largest fees the borrower will pay. All of these costs are necessary components of the refinancing process. Without these services, refinancing would be extremely confusing, complicated, and time consuming. Closing Costs Can Be Regained While closing costs may seem like a high price at the time, you can regain your losses in a reasonable amount of time by locking in a great refinancing rate. First Bank can help you find the best refinancing rate for your mortgage*, so 3 min read

Jumbo Home Mortgage Loans If you are thinking of buying a home with a higher property value and can handle larger monthly mortgage payments, a jumbo loan could be a suitable option for you. Jumbo loans are typically offered with the same options as conventional loans, and you may even be able to add extra features, such as interest-only payments or temporary buydowns. What Is a Jumbo Mortgage Loan? A jumbo home mortgage, or non-conforming, loan is any mortgage amount that exceeds the conforming loan limit set by the Federal Housing Finance Agency. Because jumbo loans cannot be issued by Fannie Mae or Freddie Mac, they often carry more credit risk and have slightly higher interest rates than other loan options. The current conforming loan limit is set at $510,400 for a one-unit property in the contiguous United States (including D.C. and Puerto Rico). So, if you want to buy a house for more than $510,400, your loan will be considered jumbo. Jumbo loan limits also vary depending on location of property and number of units on it. In Alaska, Guam, Hawaii, and the U.S. Virgin Islands, jumbo loan limits are higher. Things to Consider: Interest rates are usually slightly higher with jumbo mortgage loans than on conforming loans with lower amounts. If you choose the interest-only option, you cannot build equity through monthly payments without making voluntary principal payments during the interest-only period. Jumbo Loans from First Bank: First Bank offers jumbo loans in a variety of fixed-rate and adjustable-rate options. To learn more about our Jumbo Loans or any of our other home mortgage options, visit your local First Bank branch to speak with a mortgage specialist. Loans subject to credit approval. ———- Sources: Jumbo Mortgages: Definition, Rates and Loan Limits http://www.investopedia.com/terms/j/jumboloan.asp https://localfirstbank.com/mortgage/loans-programs/jumbo-loans/ Locations 2 min read

FHA Mortgage Loan Insurance If you’re in the market for a new home, it’s quite likely that you have thought about acquiring mortgage loan insurance through the Federal Housing Administration (FHA). Established in 1934, the FHA has helped millions of people insure their properties. Over the years, especially following the economic crisis of 2008, the FHA has implemented requirements for potential homebuyers. Loan Limits To remain eligible for FHA loan insurance, consumers must fall within the loan limits. These limits are not only divided by state but are also doled out per county. If you’re curious as to what your state’s FHA loan limits are, you can refer to the Federal Housing Administration’s website. Debt-to-Income Ratio This ratio was set to ensure homebuyers do not purchase a property that they cannot afford. By using these calculations, it can be determined whether or not a person has the potential to meet the demands of owning a home. The ratio is looked at in two different ways: Mortgage payment expense to effective income = Total mortgage payment divided by gross monthly income. The maximum qualifying ratio is 31%. Total fixed payment to effective income = Total mortgage payment added to monthly revolving and installment debt, which is then divided by gross monthly income. The maximum qualifying ratio is 43%. Credit FHA requires that a borrower have good credit standing. In order to receive approval, a lender analyzes the borrower’s past credit performance. Loan approval will likely be declined should the credit history reveal slow payments, poor financial decisions, and delinquent accounts. Other issues are having no credit history, filing for Chapter 7 or Chapter 13 bankruptcy, making late payments, being subjected to foreclosure, and receiving collections, judgements, or federal debts. Apply for an FHA Loan with First Bank You have a friend at First Bank to better understand the loan requirements. We work with the Federal Housing Administration to offer FHA insurance mortgages. In order to quicken the process, you can apply online. Just be prepared with some financial information, such as income, assets, and expenses; you will also have to know the property’s information, like the estimated purchase price and down payment (if buying) or estimated property value and loan amount (if refinancing). ——— Sources: 2 min read

FHA Loans vs. Conventional Loans: How to Tell the Difference Overwhelmed with the prospect of buying a home? FHA loans and conventional loans are likely two sources of financing that you’ve considered. Let First Bank help you understand these options and come to a conclusion about which best suits your needs and budget. After all, choosing the right loan is key for timely, affordable payments. Choose the Right Loan with First Bank If you’re a first-time homebuyer or interested in purchasing your second home, there are different qualifications for each loan you should consider: FHA loans—The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by approved lenders. Single and multi-family homes in the United States (and U.S. territories) can qualify. First Bank can help put you on the right track to securing one of these loans. The advantages of an FHA loan can be: Owing a lesser down payment, as low as 3.5%. Enjoying quicker eligibility following a major credit issue such as bankruptcy or foreclosure. Allowing a co-applicant to help you get the loan, even if you don’t live in the same household. Conventional Loans—A non-government insured loan that can be used with a second home purchase or an investment. Unlike FHA loans, conventional loans can require a higher credit score (often a minimum of 640), but they can have some major advantages for you. Conventional loans can allow: A risk-based premium, unlike FHA where one set premium rate is required from everybody, MI if applicable. Your monthly payments to be lower, even if you have a higher interest rate. Your loan to cover a higher loan amount. You to cover different types of loans like, investment or second home (FHA doesn’t do those types). When considering an FHA loan versus a conventional loan, keep in mind that conventional loans are not affiliated or insured with the government like FHA loans. Additionally, an FHA requires mortgage insurance and conventional loans do not, unless the LTV exceeds 80%. There is an upfront MI premium (1.75%) that is required on FHA loans that is not required on Conventional loans. For a more detailed look at FHA loans versus conventional loans, or assistance with applying, call or meet with your local mortgage loan professionals. *Loans subject to credit approval. 3 min read

FHA Loans 101: 3 Major Requirements If you have a strong understanding of the FHA loan requirements, you’ll experience a quicker and smoother loan application process. FHA loans provide homebuyers of all income levels the opportunity to purchase a home with lenient qualifying terms and lower down payment requirements. There are, however, three major requirements that prevents people from purchasing an unaffordable home. Three Major Requirements Debt-to-Income Ratio:There are two debt-to-income ratio requirements that FHA lenders will look at in order to determine if a buyer can afford a home: Mortgage payment expense to effective income: Add your total mortgage payment and divide it by your gross monthly income. The maximum ratio to qualify is 31%. Total fixed payment to effective income: Add your total mortgage payment and all recurring monthly debt and divide it by your gross monthly income. The maximum ratio to qualify is 43%. FHA Credit: FHA loans are more lenient when it comes to qualifying terms, but there are still certain credit requirements applicants must meet. If you have no credit history, filed for bankruptcy, have a history of late payments, been foreclosed on, or sent to debt collections, it will be harder to get approved for a loan. Application: Aside from financial requirements, there are a few FHA loan application requirements buyers must meet and present to their loan officer: Address (past two years) Social Security number Names and location of your employers (past two years) Gross monthly salary at your current job(s) Information for all checking and savings accounts Information for all open loans Complete information for other real estate you own Approximate value of all personal property Certificate of Eligibility and DD-214 (for veterans only) Current check stubs and your W-2 forms (past two years) Personal tax returns (past two years), current income statement, and business balance sheet for self-employed individuals If you understand the FHA loan requirements and are ready to apply for a loan, you can apply online with First Bank.* Have more questions about FHA loans? Visit the FHA’s website, or contact your local First Bank branch to learn more. *Equal Housing Lender. NMLS #474504. Loans subject to credit approval. ——— Sources: http://www.fha.com/fha_requirements_debt http://www.fha.com/fha_requirements_checklist http://www.fha.com/ 2 min read

Essential Homeowner’s Insurance Life has the ability to catch us off-guard with unanticipated and costly expenses, such as house damage from a fallen tree or basement pipes bursting during the winter season. That’s why homeowner’s insurance is essential for anyone interested in purchasing a home. Purchasing a home is a major life event, so you want to make sure your investment is protected and insured. So, how does homeowner’s insurance work? You pay an annual premium and choose a deductible amount to be paid when you file an insurance claim. That premium is generally paid on a monthly basis as a part of your mortgage. If an event that’s covered by your policy damages your home, such as a fallen tree or fire, you should immediately contact your insurance company to file a claim. The company sends an adjuster to assess all of the damage once your claim is filed. Based on his or her notes, your insurance company will offer a sum of money for repairs, then settle the claim. The amount may be negotiable if you feel it’s not substantial enough to cover the cost of repairing or rebuilding your home. Keep in mind, however, that filing more than 2-3 claims, especially for minor losses, can backfire and lead to an increase in your annual premium. What Kind of Coverage Does Homeowner’s Insurance Include? Without home insurance, it’s likely that you wouldn’t be able to afford the cost of home repairs or rebuilding. With the average cost of a claim coming in at approximately $7,500, even filing one claim in the entire span of your insurance policy can make it worth the protection. Here are some common claims homeowners file: Interior damage—Any accidental damage to your house’s interior is covered by home insurance, including water damage, theft, fire, paint peel, and glass breakage. Exterior damage—A large portion of claims are made up of exterior insurance claims, particularly to repair damage resulting from storms. This kind of claim is particularly applicable to homeowners in wooded or coastal areas who have a higher risk of damage from lightning, wind, or falling debris. Total destruction—While this kind of claim is less common than others, it’s the “most common insurance” offered. The average home value 3 min read

Compare First Time Mortgage Rates with First Bank When you’re ready to buy a house, it’s easy to get caught up in all of the excitement of shopping and forget about the financial aspect. Once you’ve found the perfect house, the first thing you may be wondering is where to get 20-year mortgage rates, or even 30-year mortgage rates. But you may not know that you have other options. First Bank can help you determine what type of mortgage works best for you, and help structure a loan that meets your individual needs. About 20-Year Mortgage Rates Before we tell you where to get 20-year mortgage rates, let us explain what a 20-year mortgage is, and tell you about all of your options. Twenty-year mortgages are typically offered as fixed-rate mortgages, meaning your interest rate—and your total monthly payment of principal and interest—will stay the same for the entire term of the loan. A fixed-rate mortgage offers a predictable monthly payment, making it easier for you to follow your budget. With fixed-rate mortgages, you also have the option to take them out in 15 or 30-year terms. These other two options could work better for you depending on your financial situation. While a 20-year mortgage helps you pay off your home faster and build equity quicker than longer-term fixed-rate mortgages, a 15-year mortgage will help you pay it off even faster, and pay less interest. However, 15-year mortgages have higher payments than other longer-term mortgages. 30-year fixed-rate mortgages allow you to pay off your loan with lower monthly payments, but since the life of the loan is long, you’ll pay more interest and build equity slower than you would with a shorter-term loan. First Bank offers conventional fixed-rate mortgages in 15, 20, and 30-year terms, and we also offer adjustable-rate mortgages. To learn more about our loan options, or if you’re still wondering where to get 20-year mortgage rates, visit your local First Bank branch. Our loan experts will be happy to teach you more about mortgage loans and rates, or help you structure a loan that meets your needs. *Loans subject to credit approval. 2 min read

Current Mortgage Rates 30-Year Fixed Is now the right time to buy the house you have your heart set on? One important thing to consider is the current mortgage rate trends and whether a 30-year fixed-rate mortgage is a good fit for you. At First Bank, our real-estate loan experts can answer your questions about mortgage rates and more. What is a 30-year fixed-rate mortgage? In the most basic terms, this kind of mortgage provides you with a guarantee that the “interest rate and your monthly payments for principal and interest remain the same for the entire length of the loan.” Budget-friendly: Easily manage and plan your monthly budget without worrying about fluctuating interest rates. It also gives you more breathing room in case your current financial situation changes for whatever reason at some point in the future. Save now: A 30-year loan means lower monthly payments spread out over a longer period of time, in contrast to the high monthly payments of a shorter-term loan. This means the money you save monthly with a longer-term loan can go into your savings or investment accounts now, instead of putting it towards paying off your mortgage immediately. Get flexibility: The beauty of a 30-year mortgage is that even though you have lower monthly payments, you can choose to submit a higher payment equivalent to the monthly rate for a shorter-term loan. This means you can decrease your overall total that much more when you have a bit of extra cash in the bank, but still submit your loan’s lower payment rate when your money is a little tighter. What determines my interest rate? Mortgage interest rates vary depending on several factors, including: The economy. Mortgage rates can fluctuate in some states due to unemployment rates, default and foreclosure rates and differing property values. State laws. States that allow recourse typically have lower mortgage rates. Size of competition. When you have multiple lenders competing for your business, loan costs are typically driven down. Market conditions. An increase or decrease in home building and sales can drive interest rates up or down. Government. Government policies like the Federal Reserve can cause mortgage interest rates to fluctuate. 30-Year Fixed Mortgages from First Bank With a 30-year fixed-rate mortgage from First Bank, home buyers can enjoy a fixed interest rate 3 min read

Refinance Your Mortgage with These 5 Tips Over time, the mortgage market fluctuates and creates new opportunities for homeowners to revise the terms of their mortgage. This is known as refinancing. When refinanced, a mortgage can include lower interest rates, home equity credit, and a restructured loan duration. Homeowners will refinance for many reasons: to get a cash out, to buy out someone on the title, to consolidate their debt, for a low-rate bridge loan, and more. Test out this Refinance Mortgage Calculator, and then see if the following tips can save you time and money in your search for the perfect home loan. 5 Tips to Refinance Your Mortgage Lock in a Cost-Efficient Rate. Ultimately, it is a good idea to lower your monthly payment and re-structure the length of time it will take to pay off your loan. If you are purely looking for a lower rate, according to the Federal Reserve Board, the interest on the mortgage needs to be 1-2% lower than their current mortgage loan rate. Keep in mind that a lower rate isn’t always possible during a refinance, depending on your reason for doing the new loan. Evaluate the Terms. When it comes to mortgage refinancing, you should always read the fine print. Some lenders may offer lower rates, but with much longer terms. To determine if a loan is worthwhile compared to your current mortgage, multiply what you are currently paying (principle with interest, but not escrow) by the number of months left. Do the same for the refinance option and compare to determine if it is a good fit. Consider the Benefits of a New Type of Mortgage. If you are looking to refinance your mortgage, a great tip is to check out the variety of loan types lenders offer. Each may have advantages and disadvantages, and one may be a better fit for your situation. For example, if your financial assets have grown or changed, you may benefit from switching to an adjustable-rate mortgage (ARM) or a fixed-rate mortgage (FRM), depending on your unique needs. Don’t forget about property taxes and escrow accounts, which can also significantly impact your monthly payment amount. Shop Around. The financially savvy homeowner is aware of the many options available for mortgage refinancing. Ask a lot of questions. 3 min read

Five Reasons to Refinance Your Mortgage Banking professionals suggest mortgage refinancing when homeowners want to replace their current loan with a new one, often to reduce monthly payments or lower interest rates. With a mortgage refinance, your current loan is paid off and replaced with a new one. This can be a great option for borrowers with good credit who want to alter their current loan. But refinancing could be risky for borrowers with less than perfect credit. Check out our list of reasons to refinance and see if you could benefit from refinancing your current mortgage. 5 Reasons to Refinance Lower interest rates—If mortgage rates have dropped since you first took out your loan, you could secure a lower rate by refinancing. Lower monthly payment—Lowering your interest rate could have a dramatic impact on your monthly payment. If you intend on staying in your home for several years, lowering your payment could help you save. Shorten loan term—When interest rates fall, homeowners can often significantly shorten their loan term by refinancing without much increase in their monthly payment. Convert between adjustable-rate and fixed-rate—With adjustable-rate mortgages, your initial interest rate may be low and and then increase over a period of time. Refinancing to a fixed-rate mortgage could allow you to avoid an increase in rate. Cash out to make a large purchase—If you have equity in your home, refinancing enables you to cash out on that equity without taking out a loan, such as a home equity loan. A lot of people will use this cash to pay for home repairs, college tuition, or make a large purchase, such as a car. These types of refinances are typically easy to complete and may even be tax deductible. If you still aren’t sure if a mortgage refinance is right for you, visit our online refinance calculator to see how much you could save, or visit your local First Bank branch to speak with a mortgage specialist. Loans subject to credit approval. ——— Sources: https://www.investopedia.com/mortgage/refinance/when-and-when-not-to-refinance-mortgage/ 2 min read

Current 30 Year Mortgage Rates – South Carolina If you’re looking for current mortgage rates in SC, it’s a great time to buy! In a recent survey conducted by GoBankingRates, the state ranked 27th in the nation for the lowest average home mortgage. The study combined 30-year fixed, 15-year fixed, and five-year ARMs (adjustable rate mortgages) to rank each state by the average cost of a mortgage. Current Mortgage Rates in SC First Bank offers conventional home loans, including a 30-year fixed-rate mortgage. This types of mortgages are extremely popular among home buyers because the longer loan term allows for smaller, predictable payments. With First Bank’s 30-year conventional loan, your interest rate and monthly principal will never change, allowing you to budget more easily. If you plan to live in your house for a long time, a 30-year fixed-rate loan could be a good option for you and your family. What Affects Current Mortgage Rates in SC? 30-year mortgage interest rates vary depending on a variety of things, such as: Economic factors. Lending is riskier in some states than others due to unemployment rates, default and foreclosure rates and differing property values. State laws. States that allow recourse typically have lower mortgage rates. Recourse is the recovery of additional money from borrowers who default and the foreclosure sale doesn’t earn enough to pay off the mortgage. Size of competition. More lenders competing for your business means lower costs. Types of preferred loans. States with more military bases will likely see more VA loans, states with more rural housing might have more USDA loans, etc. Market conditions. An increase or decrease in home building and sales regionally or nationally can drive interest rates up or down. Government. Government policies like the Federal Reserve can dictate the fluctuation of interest rates. As you can see, there are a number of reasons why a 30-year mortgage rate in South Carolina can vary. The best way to find out what your interest rate will be is by speaking with a First Bank mortgage specialist. If you are ready to apply for a 30-year mortgage, you can find out your interest rate by starting an online application with First Bank. Loans subject to credit approval. ———- Source: Housing Wire: https://www.housingwire.com/articles/48165-this-is-how-mortgage-rates-vary-by-state/ 2 min read

How to Get a Custom Homeowners Insurance Quote Without a Calculator Homeowners insurance may not be the most exciting part of buying a home, but it’s one of the most important. Buying a home is probably your biggest investment, so use every tool to make sure that you’re covered. Homeowners insurance calculators are powerful tools toward that end, but they aren’t always tailored to you. Contact Bankers Insurance for a free quote, and one of our experts will contact you within 48 hours to discuss what best fulfills your homeowners insurance needs. Customized Homeowners Insurance From Your Community Bank As a homeowner, it’s important to know you’re protected from unexpected disasters and your policy is reliable and cost-effective. That’s why Bankers Insurance provides insurance programs that utilize a custom design to fit your specific needs. As a representative of several leading insurance carriers, we’re able to provide you with quality products, competitive rates, and consistently excellent service. Our experts work with you to find the best home insurance solution for you at an affordable, competitive rate. What You Need to Know About Homeowners Insurance Basic homeowners insurance only covers damage caused by “fire, theft and certain natural disasters,” meaning you may have to purchase additional coverage depending on where you live and what materials were used to construct your house. For example, you may want to consider a home warranty to cover repairs and replacements that home insurance won’t cover. According to Forbes, there are 4 Costly Homeowner’s Insurance Mistakes to Avoid: Under-insuring your house. Without enough insurance to cover the cost of rebuilding your house if destroyed, you may be left in a financial crisis following a disaster. You should calculate the cost of rebuilding your house and make sure your protection matches that cost. Additionally, you might consider coverage for your valuables. Assuming you have flood insurance. Depending on where you live, flood coverage could be essential. Many homeowners are unaware that basic coverage does not include flood insurance, but for those living in coastal or other flood-prone areas, that extra coverage is critical. Thinking you have one, flat deductible. It’s common to assume that your policy has a set deductible (usually between $500-$1,000), but that’s not necessarily true. Depending on the cause of damage — hurricane, windstorm, earthquake, and 3 min read

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