Mortgage Closing Scams: Protect Yourself!

Mortgage Closing Scams: Protect Yourself!
Husband and wife shaking mortgage lenders hand

Mortgage Closing Scams: How to protect yourself and your closing funds

Closing on a new home can be one of your most memorable life moments. It’s the final and one of the most critical stages in the home-buying journey, but with the exchange of key paperwork and a sizable down payment, it can also be a stressful experience, especially for first-time homebuyers.

The FBI has reported that scammers are increasingly taking advantage of homebuyers during the closing process. Through a sophisticated phishing scam, they attempt to divert your closing costs and down payment into a fraudulent account by confirming or suggesting last-minute changes to your wiring instructions. In fact, reports of these attempts have risen 1,100 percent between 2015 and 2017, and in 2017 alone, there was an estimated loss of nearly $1 billion in real estate transaction costs.

While it’s easy to think you may not fall for this kind of scam, these schemes are complex and often appear as legitimate conversations with your real estate or settlement agent. The ultimate cost to victims could be the loss of their life savings.

Here’s what you should know and how to avoid it happening to you.

How it works

Scammers are increasingly targeting real estate professionals, seeking to compromise their email in order to monitor email correspondences with clients and identify upcoming real estate transactions. During the closing process, scammers send spoofed emails to homebuyers – posing as the real estate agent, settlement agent, legal representative or another trusted individuals – with false instructions for wiring closing funds.

How to avoid a mortgage phishing scam:

  • Identify two trusted individuals to confirm the closing process and payment instructions. Ahead of your mortgage closing, discuss in person, or by phone, the closing process and money transfer protocols with these trusted individuals (realtor, settlement agent, etc.). Be cautious about exchanging any details about your closing over email. You may want to use this opportunity to also create a code phrase, known only by these trusted parties, if you need a secure way to confirm their identities in the future.
  • Write down their names and contact information. Use the Bureau’s Mortgage Closing Checklist to list these individuals and their primary phone numbers.
  • Before wiring money, always confirm instructions with your trusted representatives. Never follow instructions contained in an email. Verify the closing instructions, including the account name and number, with your trusted representatives either in person or by using the phone number you previously agreed to.
  • Avoid using phone numbers or links in an email. Again, scammers can closely replicate the email address, phone number and format of an exchange from your agents. Avoid clicking on any links or downloading attachments without first confirming with your trusted representatives.
  • Do NOT email financial information. Email is never a secure way to send financial information.
  • Be mindful of phone conversations. It may be difficult to identify whether a phone call is fraudulent or legitimate. Scammers may call and ask you to verify your personal or financial information. When in doubt, always refer back to your trusted professionals to confirm whether it’s legitimate.

What to do if it happens to you

  • Contact your bank or wire-transfer company immediately. Ask for a wire recall. Reporting the error as soon as possible can increase the likelihood that you’ll be able to recover your money.
  • File a complaint with the FBI. Contact the FBI’s Internet Crime Complaint Center at

While it can be easy to think you’ll never fall for a scam of this nature, the reality is that it’s becoming more and more common, and the results can be disastrous for eager homeowners. By being mindful and taking a few important steps ahead of your closing, you can protect yourself and your loved ones.

To learn more about the closing process, including how to prepare for your closing and common pitfalls to avoid, check out our Mortgage Closing Checklist. For information and resources for the each stage of the home-buying journey, visit the Bureau’s Buying a House tool.


The resources on mortgage closing scams are part of the Consumer Financial Protection Bureau’s work to protect consumers from unfair, deceptive, or abusive practices. We arm people with the information, steps, and tools that they need to make smart financial decisions.

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Turn Your Home into a Top-Notch Vacation Rental

Turn Your Home into a Top-Notch Vacation Rental
Florida city street

What You Need to Know to Turn Your Home into a Top-Notch Vacation Rental

Privately owned vacation rentals are a booming business as of late. Homeowners are learning how to make some solid earnings by attracting guests to well-designed, well-maintained homes in desirable locales. If you’re looking to turn your main home or a side property into a top-notch vacation rental, here are some things you need to know.

Get the details taken care of first
Is there anything more annoying than having to think about taxes and insurance? Certainly not in the context of vacation rentals. It’s good to go ahead and deal with this stuff immediately, as you don’t want to be rushing to take care of it the week before your first renter arrives or — god forbid — forget about it altogether and suffer the financial consequences.

You’ll likely need to change your insurance and bulk up your personal property liability coverage. A far as taxes go, you’re allowed to deduct depreciation alongside normal deductible expenses like property-management fees, insurance, property taxes, and cleaning services and repairs.

Home improvements for best ROI
Being near the beach will certainly be a major draw for your vacation rental property. Of course, it also makes everyone else’s rental home highly desirable. Meaning you’ll need to do what you can to make your property stand out in a crowded selection of cool rentals.

Turning your home into a great vacation rental will require certain updates and improvements. First, make sure you provide the basic amenities that renters crave. Some of their top requirements include a washer and dryer, usable closet space, smart home technology, and well-maintained outdoor spaces. Next, think about return-on-investment when it comes to the more-involved home projects you take on. For example, painting and landscaping are fairly cheap on the front end and pay off well. Moderate kitchen and bathroom remodels pay off better than full-scale projects, but even a moderate renovation can cost at least $4,000 in West Palm Beach.

Staying ahead of the game on home maintenance is the whole game
Once your rental property is up and running, you won’t be changing it up that often. You’re in maintenance mode. But this isn’t a set-it-and-forget-it sort of situation. Proper home maintenance requires a big-picture approach when it comes to owning a top-notch rental property.

Keep in mind that home maintenance is all about preventing a major catastrophe. For instance, one easy way to make sure your HVAC system is running smoothly is to have a schedule for changing your air filters. A great way to ensure you remember this is to set up a filter subscription service so you always have filters on hand. It’s also a good idea to take note of your roof and gutter systems as well. Poor drainage can lead to serious foundational issues and cost $10,000 or more. Keeping your pipes, drains, and faucets leak-free and cleaned is vital. A great vacation rental that makes money for you is one that is trouble-free.

Know where and how to list it
Drawing attention to your property is the final step in making sure it’s successful. You’ll want to list your property on as many quality sites as possible (AirBnb, ClickStay, and to name a few). Each listing should have at least 20 good-quality photos, and you should set up message notifications for every site so that you can quickly respond to inquiries.

Your home will likely bring you plenty of renters looking for stays of all lengths. Make sure your home is a top rental property in the area by incorporating smart upgrades, staying diligent when it comes to maintenance, and being proactive with your listings.

Guest Writer: Erin Reynolds of |

Should You Consider Buying an Airbnb Florida Investment Property?

Should You Consider Buying an Airbnb Florida Investment Property?
Airbnb home in Florida

Should You Consider Buying an Airbnb Florida Investment Property?

Have you thought about buying an Airbnb investment property but not sure where to start? I’m sure you have noticed Airbnb rental in the sunshine state is thriving. Airbnb announced that its Florida host community has surpassed the ten-figure mark by earning a combined $1.2 billion in supplemental income in 2019. Two key factors that determine the success of an Airbnb investment property are high demand and occupancy rate. In the article below, Daniela Andreevska from Mashvisor explains how you can profit from an Airbnb investment property.

If you’ve been reading about US housing market predictions, you are already aware of the fact that Airbnb rentals are expected to remain a defining factor in many markets across the nation. Despite opposition from the hotel lobby and local homeowner associations, short term rental properties are here to stay.

This is why you, as a beginner or even an experienced real estate investor, are wondering whether you should purchase an Airbnb investment property next year and what the best location for this type of real estate investment is. The answer to the first question is “Absolutely YES!”, and the answer to the second one is “In the Florida real estate market.”

Buying an Airbnb Florida Investment Property

The main reason why you should be considering buying a vacation rental in the Florida housing market in 2020 is the high demand. Florida is not only one of the most visited states by both domestic and foreign tourists but also becoming an international business hub. As you already know, in real estate investing a high number of tourists and business visitors translates into demand for vacation homes, or high Airbnb occupancy rate, which on the other hand translates into money for Airbnb rental property investors.

The second most important reason to go for an Airbnb Florida rental in 2020 is the fact that the local legal and regulatory environment remains friendly to short term rentals, unlike many other popular destinations in the US, such as California for example.

So, if you are still not sure whether buying a vacation home in Florida is the right choice for you, let’s have a look at the average Airbnb occupancy rate by city in the Sunshine State. The high levels will clear all your doubts!

Airbnb Occupancy Rate by City in Florida

If you are a new real estate investor, you might be thinking “What is a good occupancy rate for Airbnb?” While no one has a precise answer to this question, not even the top real estate experts, obviously the higher, the better. But we can generally say that anything above 50% is a good Airbnb occupancy rate, especially in a highly competitive rental market as Florida.

As you will see from the figures above, most places in Florida provide higher than typical Airbnb occupancy rate. Let’s take a look at the Airbnb occupancy rate by city in the Florida real estate market at the end of 2018 as these figures are expected to continue into 2019 and beyond:

  • Key West: 74.6%
  • Miami Beach: 64.9%
  • Orlando: 59.5%
  • Jacksonville: 57.0%
  • Fort Lauderdale: 56.2%
  • St. Petersburg: 55.1%
  • Sarasota: 54.4%
  • Miami: 54.2%
  • Lake Worth: 53.5%
  • Tampa: 52.9%
  • Naples: 52.3%
  • Fort Myers: 52.1%
  • West Palm Beach: 50.8%
  • Boca Raton: 43.4%
  • Miami Gardens: 43.3%
  • Greenacres: 31.3%
  • Punta Gorda: 23.8%

As data from Mashvisor’s investment property calculator reveals, the highest Airbnb occupancy rate by city in Florida is in Key West, at 74.6%, while the lowest Airbnb occupancy rate by city is in Punta Gorda, at 23.8%. The rest of the top places to invest in real estate in the Florida housing market have short term rental occupancy rates in the 40s, to 50s, and even 60s. So we can conclude that the average Airbnb occupancy rate in Florida is about 50-55%.

What’s the Importance of the Airbnb Occupancy Rate by City for Investors?

The average Airbnb occupancy rate in the location where you plan to buy a vacation rental is crucially important because it will determine your rental income, or in other words – how much money you will make from your short term real estate investment property. Your Airbnb rental income is a function of two factors: 1) The nightly rate which you charge for your property and 2) The occupancy rate of your rental. While there is no way to know EXACTLY what part of the time your Airbnb rental will be occupied and what part vacant, the typical Airbnb occupancy rate by city is a close approximation of what you should expect in this regard.

Moreover, when searching for and analyzing prospective investment properties to buy through Mashvisor, you get to see what occupancy rates other properties (similar to the one you are looking at and in close geographic proximity to it) actually get when listed on the Airbnb platform. That’s where the data for the average Airbnb occupancy rate by city presented above comes from, which means that it is highly accurate and reliable as it is based on actual bookings on

But that’s not all. In addition to determining your rental income (i.e., how much you get from Airbnb guests per month from your vacation home), the Airbnb occupancy rate also plays a major role in calculating your cash flow and return on investment.

To show you how important the occupancy rate is for your return on investment, let’s have a more detailed look at Key West.

This island city has not only the highest average Airbnb occupancy rate by city in Florida but also the highest Airbnb rental income ($8,560) and the highest cap rate (7.0%). For comparison, the monthly Airbnb rental income in Punta Gorda is only $1,240, while the cap rate is close to 0. The high occupancy rate makes money for short term rental investors in Key West, while the low level in Punta Gorda does not allow investors there to even break even.

Airbnb Rental In Florida

How Can You Boost Your Airbnb Occupancy Rate?

As an investor in vacation rentals, you must be wondering how you can push your occupancy up – above the average Airbnb occupancy rate for your location – in order to make more money. Here are some tips and tricks that will help you out in this regard:

1. Develop a comprehensive Airbnb pricing strategy

Pricing your Airbnb rental property right lies somewhere between science and magic. Getting the right rental price for your property is hard, but it is crucially important for your success. The first step is to investigate what other, similar short term rentals in the area charge – where Mashvisor’s valuation analysis will be of indispensable help.

The next step is to evaluate the high and the low seasons in your location and to adjust your price accordingly. Don’t forget to factor in weekends and weekdays as well. Most importantly, remain flexible. Once you’ve settled your nightly rate, if it prevents you from achieving a high occupancy rate, consider lowering it. After all, it’s better to rent out your property for a few dollars less than to keep it vacant. If, on the other hand, demand is strong at the current price, you can consider raising the rate a bit and see if this affects demand negatively.

2. Excel as an Airbnb host

Reviews from Airbnb guests are one of the key factors for the success of your rental business. The more and the better Airbnb reviews you have, the more people will be willing to stay in your vacation home and the higher rate they will be willing to pay. Make sure your Airbnb rental is equipped with everything needed to assure a comfortable stay and that it is always clean between guests. If needed, hire an Airbnb property management services company. While this will cost you a fee, these professionals will take the best possible care of your property while allowing you to focus on other more important aspects of your real estate investment business, such as growing your property portfolio.

3. Provide more extras

If you want to have a high Airbnb rental income through a higher than average Airbnb occupancy rate, don’t go for just the basics of what’s required from a vacation rental. The homesharing business has become so competitive that you have to put in some extra effort in order to stay on top of your competition and score a higher occupancy rate than the rest of the properties in the area. One of the best ways to do that is to provide some extras to your guests such as good coffee and tea, some breakfast items, toiletries, good wi-fi, and others. Your guests will definitely note those in their Airbnb reviews and secure more demand for your rental. And as you already know, more demand means higher Airbnb occupancy rates, which means more money in your pocket or bank account. Or ideally, money to buy multiple investment properties.

After learning about the average Airbnb occupancy rate by city in Florida, you are a step closer to becoming a successful short term rental property investor. The next step is to find the most profitable property for sale which matches your budget and your personal preferences.

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Consumer Awareness – Wire Fraud

Consumer Awareness – Wire Fraud
Fraud Ninja Photo- Blog

Consumer Awareness - Wire Fraud

At Ideal Lending Solutions, keeping our customer’s personal information private and secure is a top priority. We will remain vigilant against wire fraud through clear communication at all times. Here are a few tips consumers should keep in mind during the mortgage process to reduce their risk of wire fraud.

When you buy a new home, chances are good that you shared this great news with a lot of people, including your social media network. Some of the people that hear about this exciting news may be criminals that you are not even connected to but who are intent on intercepting your money.

According to the FBI, wire fraud is growing each year exponentially. As your lender, we want to protect you so here are some tips to avoid any potential issues:

  • You will be communicating with many people on our staff throughout your loan process.
  • Information sent to you from us that contains personal information will be encrypted to protect your privacy.
  • Always communicate private information through a private internet connection and not through Public Wi-Fi. There is a lot of financial information that you do not want to send through public access Wi-Fi where it is easily intercepted.
  • When you receive an email, always look at the sender’s email address to make sure it is from the person you think it is. Criminals know that just a subtle change, like a letter in the email address, will go unnoticed by most people.
  • Always verify the authenticity of each wire transfer request. NEVER follow instructions in an email. Call us first to verify the information, using the number you have contacted us on before, and NEVER call the number on the wire transfer request. These folks are very sophisticated, and our goal is to protect you during the mortgage process.


Reprinted with permission –

Home Buying Process

Home Buying Process
House Keys

Home Buying Process

Ideal Lending Solutions meets with you to discuss loan options and help you determine the right loan choice for your situation and financial goals.

Ideal Lending Solutions issues your pre-approval and you start looking for a home with a real estate agent.

You search for your home. It is suggested to use a real estate agent, as they can help guide you in your search and negotiate the property price.

Once you find your dream home, your real estate agent presents an offer. Once the offer is accepted, a closing date is set.

You review and sign your contact with your real estate agent.

Any remaining documents are required at this time. Once the contract has been submitted to Ideal Lending Solutions, the loan goes into processing.

Ideal Lending Solutions orders appraisal, title report, insurance binder and other necessary documents. A home inspection takes place to determine any repairs needed.

Receives and reviews all the documents, verifies all information and prepares the file for underwriting.

Loan is conditionally approved or declined and underwriter asks for conditions. Homebuyer provides conditions.

A copy of the property appraisal and mortgagee clause must be provided to secure homeowners insurance policy.

Final approval is issued and any final conditions are collected and satisfied. Loan is clear to close, closing documents are sent to the title company.

It’s time to schedule the closing! You and your Realtor will be notified that your loan is clear to close and a closing date is scheduled.

Borrowers complete one final walk-through of the property to approve condition of the home.

All parties sign the closing documents to finalize the purchase of your home.

You’ve closed on your home and it’s time to move in. After closing, we will send you a customer satisfaction survey. We appreciate your participation and referrals.

*A pre-approval does not constitute a loan com-commitment or guarantee of a loan. Pre-approval is subject to a satisfactory appraisal, satisfactory title search, and no meaningful change to borrower’s financial condition.

6 Costs Homeowners Overlook and How to Pay for Them

6 Costs Homeowners Overlook and How to Pay for Them
6 cost blog photo

6 Costs Homeowners Overlook and How to Pay for Them

For many people, a house is the biggest investment they’ll ever make. And whether you’re a first-time homeowner or you’re buying your third property, you’re bound to end up covering some unexpected expenses. Here are six costs homeowners tend to overlook and how to pay for them:

1. Property taxes

Be prepared to pay property taxes and keep in mind that they rarely decrease. Homeowners often pay them every month along with their mortgage payments. If your loan is backed by the Federal Housing Administration, you’re required to have an escrow or impound account.

If you don’t have to make property tax payments through an escrow account, they may be due at the end of the year. In some counties, you might pay them in installments.

2. Homeowners association fees

Whenever you move into a new home or condominium, you become part of a community. In many cases, there are fees associated with the maintenance and general upkeep of shared common areas. The money collected might cover snow removal, landscaping or repairs to a meeting room.

Monthly homeowners association (HOA) fees for standard single-family homes tend to cost between $200-$300, but rates can vary depending on several factors, including how recently a housing community was built and the kinds of amenities that are available. That’s why it’s best to know how much fees cost upfront. In West Hollywood, Calif., for example, residents in Sierra Towers condos get access to a 24-hour concierge service and valet parking, but spend around $4,000 per month on HOA fees.

3. Insurance premiums

If you own a home, another cost you should include in your budget is insurance. The average annual homeowners insurance premium costs $1,120, according to recent data provided by the National Association of Insurance Commissioners, but the amount you pay may be higher or lower based on where you live and the kind of policy you choose.

Homeowners insurance typically covers personal possessions, liability for injuries that take place on your property, the structure of your house and additional costs associated with living elsewhere if your home is severely damaged. If you live in an area prone to natural disasters, you might need a supplemental policy like flood insurance.

4. Repair and maintenance costs

Repairing or replacing a roof, furnace or air conditioner can be expensive, and at some point, you might have to address plumbing issues or trade in some old appliances.

The cost of home maintenance is another thing you’ll have to factor into the cost of homeownership. You’ll need money to keep your yard, gutters, carpet and everything in between in tip-top shape.

Financial experts generally recommend setting aside 1 percent of your home’s value to cover the cost of unexpected repairs and maintenance. If you’re trying to save money, you’re better off doing some of the work yourself. Just make sure you have enough funds for the materials you need to get the job done.

5. Costs associated with selling a home

Having a home that’s well-maintained not only lets you enjoy your house while you’re living there, but also prevents you from being saddled with additional costs when you’re ready to sell it.

Replacing your roof or furnace might be something you want to put off, but failing to make necessary repairs or meet demands made by potential homebuyers could hurt your market value or cost you a sale.

6. Pest control costs

Pests are a real concern for many homeowners. Over time, all sorts of critters—like termites, ants, spiders and rodents—might invade your home. Depending on how serious the problem is, you might need to fumigate your house.

If you’re interested in buying a home, make sure you hire an inspector to check for bugs and termites that could cause structural damage. While lenders don’t always require homebuyers to pay for pest inspections, it’s important to have one done. You don’t want to close on a house only to find out later that there’s an issue. Termite inspections generally cost between $75-$150, according to Angie’s List.

Build a rainy day fund!

It’s always better to be prepared for a storm than to be caught in a downpour without an umbrella. Despite the high costs, owning your own home can be a rewarding experience.

Hope for the best and prepare for the worst by keeping enough money in your savings account to cover unforeseen costs. Make sure you account for all of the hidden expenses and fees associated with buying a home and budget accordingly.


Hippo is an InsureTech company that’s reimagining home insurance through the lens of homeowners. Hippo Insurance is available to homeowners in 10 states throughout the U.S. and will be available to more than 60 percent of the nation’s homeowners by the end of 2018.

How to Ensure You’re Buying the Perfect Home

How to Ensure You’re Buying the Perfect Home

How to Ensure You’re Buying the Perfect Home

For most people, buying a home is the biggest investment they’ll make in their life. Not only is it a huge financial undertaking, but your final choice is a decision you’ll be living with for the foreseeable future. The process may sound daunting, but by taking the right steps, buying your perfect home doesn’t have to be stressful.

What Is a Perfect Home?

The first step to ensuring you’re buying your ideal property is identifying what “perfect” means to you. It may sounds obvious, but the easiest way to start is by making a list of your priorities. What is a “must-have,” what would be nice and what isn’t important? If you’re buying with a partner, make sure you compare lists and decide what can be compromised on and what will be the deal-breakers.

Experience is key here—we’ve all lived in places that at first glance we thought were suitable, only to find out later that the kitchen we initially thought was cozy was actually far too small for our needs, or that the seemingly bright living room only gets direct sunlight for a few hours a day. Don’t be afraid to ask friends and relatives about their experiences either, as they may be aware of something you hadn’t thought of.

What Can You Really Afford?

Before scouring the market for your ideal property, you need to know what you can afford.  By getting pre-approved for a mortgage first, you’ll know exactly how much you can borrow based on a professional assessment of your finances. Ultimately, this will make the whole process much easier. A trap that many buyers fall into is assuming that the maximum amount they can borrow is what they should spend on their new house. Look at what your monthly repayments would be and ensure that your budget factors in all ongoing maintenance costs, any fees you may incur from the buying process and any improvements you may want to make in the future.

Your budget should also allow you to put funds aside each month for emergency maintenance. If your heating system fails one winter, do you have the savings to fix it? Lastly, think about any potential changes to your income you may face in the next 5-10 years, how they could affect your ability to make payments, and whether there are any safeguards you can put in place.

Choosing Your Professionals

Purchasing a home can be extremely difficult without assistance from industry professionals; having the right team can be the difference between a smooth buying process and a costly disaster. Hiring a real estate agent provides numerous advantages. An experienced REALTOR® can find properties that you may otherwise miss, negotiate prices and recommend lenders. They’ll also be able to answer any questions you may have about a property, as well as any you may not have even thought to ask.

When it comes to lenders, be aware of the different types of loans available to you and how they can impact your long-term finances. Just because one lender is prepared to loan you more money doesn’t necessarily mean they’re your best option.

Location, Location, Location

It’s not uncommon for buyers to find their perfect home, only to discover too late that the area it’s in is far from ideal. Take note of what you like about your current neighborhood and what you would change, and bear this in mind when scoping out potential locations. Take the time to explore the two-mile radius surrounding the property. Drive around in the daytime and at night. Would you feel safe and comfortable walking around the neighborhood at these times? Test your commute between the property and your workplace during rush hour. Could you do it every day? You can even spend a Saturday afternoon politely knocking on a few doors and asking your potential neighbors how they feel about the area.

Finally, remember that just because certain aspects of the location won’t affect you, it doesn’t mean they won’t be important to someone else if you decide to sell the property in the future. Even if you don’t have children, being in a good school district can add up to 20 percent to your house value.

Do Your Homework

Carrying out thorough research on a property and area before you buy can take time and money, but the benefits far outweigh the cost. Look at general property values in the local area and study how they have changed recently. What are similar homes in the neighborhood selling for? This will help you decide whether the asking price is fair and could indicate what may happen to the value of your property in the future.

A professional home inspection will cost a few hundred dollars, but could end up saving you thousands in the long run. If they find any potential issues with the home, you can request the seller makes repairs on the property, or use it as a bargaining tool to lower the price (and cover any costs the repairs may cost you). It’s also worth having a map of the property; a survey of the land means you’ll know exactly what you own, which can resolve any possible border disputes should they arise.

Buying for Tomorrow

A perfect home isn’t just for now; it’s for the future, and there are two ways to look at this. Firstly, it’s important to visualize whether you can see yourself living and growing there. Try and imagine yourself and your family in each room and whether it feels “right.” You also need to look for the potential in the property if you decide to expand or refurbish parts of it. You might not be planning to do this anytime soon, but it’s important to know you’ll have the option later on.

The flip side to this is remembering that a dream home is something you build yourself. Don’t get put off  by superficial things like the color of the walls or the shade of the carpets. In the long run, these things can be changed relatively inexpensively. Not all houses are going to be in the best condition when you see them, but, with remodeling, you can add your own style and touch to a home and truly make it yours. Remember that houses are generally not perfect to begin with, and there will always be things that could be different. If you’re flexible, it’s easier to move in and start creating your dream home.


Does the Federal Government Offer First-Time Home Buyer Grants?

Does the Federal Government Offer First-Time Home Buyer Grants?
Happy Family Picture

Does the Federal Government Offer First-Time Home Buyer Grants?

You know home prices have jumped and buying your first home can be a stretch. “First Time Home Buyer Federal Grants” is a common search term today. In fact, you’ll see ads all over the internet promising them, so now seems like a good time to review all the federal grants available that first-time home buyers can tap into. Here we go:

There are none.

An exhaustive search chasing down click bait yielded a grand total of zero federal grants that will help you with the down payment or closing costs. But don’t despair. There are quite a few ways in which the federal government or other agencies can help you afford a home, and state and local governments offer far more programs than we have room to recite. Let’s take a look.

What Is MCC?

The only direct help you’ll get from Uncle Sam comes in the form of a tax credit. It’s called the Mortgage Credit Certificate Program (MCC). With this program you receive a tax credit of 35 percent of the total annual interest you pay. The rest of the interest is still deductible.

The “real” grants are all local. Search for “First Time Home Buyer Assistance (Your County)” and you’ll probably find a local government agency or non-profit that offers a grant or loan to help you with your down payment or closing costs.

This can make quite a difference. A deduction means the government gives back a portion of your interest based on your highest tax rate, while a credit means you get 100 percent back. Let’s say your annual interest is $10,000 and your tax bracket is 22 percent. At the end of the year, your tax deduction is worth $2,200 – your tax bill is reduced by that much.

With the MCC program, the first 35 percent of your interest cost is reimbursed, and the rest is deductible. So, your tax credit is $3,500, and your deduction is 22 percent of the remaining $6,500, or another $1,430, for a total benefit of $4,930.

There are income limitations and other criteria, and this program is run locally, so your county must participate for you to use it. Nevertheless, it’s a pretty substantial benefit. Search for “MCC Certificate Program (Your County)” to find your local organization.

Government Home Loans

We’ve written about them before, but VAFHA and USDA loans offer low or no-down payment options with no or low mortgage insurance, and lower interest rates than conventional loans. By insuring lenders against losses, the government (via HUD) encourages lenders to make loans at favorable rates and terms.

Better yet, almost every lender (whether bank, credit union, mortgage lender or mortgage broker) can offer these loans, so you can shop aggressively to get the best interest rate and terms.

Targeted Home Buyer Programs

Some people have steady income and serve important roles in society but can’t qualify to buy homes. Teachers, law enforcement officers and fire fighters are folks we all want in our communities but are often priced out of the market if they are just starting out.

HUD’s Good Neighbor Next Door program steps in by selling discounted homes in targeted revitalization areas. The discount can be as much as 50 percent off of market value! You must sign a note for the amount of the discount and commit to live in it for at least 36 months, but you pay no interest nor make payments and the note is forgiven at the end of three years. (Technically, this could be considered a federal grant, although it is really a grant of equity rather than cash.)

Fannie Mae and Freddie Mac Foreclosure Offers

Fannie and Freddie are not government agencies, but they do offer help.

Fannie Mae offers the HomePath program to help qualified buyers purchase Fannie Mae foreclosures. You must meet certain income requirements and otherwise be qualified for the loan. You must be a first-time home buyer and take a homeownership class, which qualifies you for closing cost assistance of up to 3 percent of the purchase price of the home. This cannot be applied to the down payment, but it can be used to buy down the interest rate for a lower payment.

You can then search for current listings of foreclosed homes on the HomePath home page and start making offers!

Freddie Mac offers its own version of this. The HomeSteps program sells Freddie foreclosures. Rather than offer a closing cost incentive, HomeSteps allows owner-occupant buyers a 20-day right to make offers without having to compete with investors. You don’t have to be a first-time home buyer, but you do need to live in the property.

Local Home Buyer Grants

The “real” grants are all local. Search for “First Time Home Buyer Assistance (Your County)” and you’ll probably find a local government agency or non-profit that offers a grant or loan to help you with your down payment or closing costs. These programs range from pretty good to extraordinary and are worth the effort if you need one to get your first home.

Happy shopping!

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Get Rid of Your Mortgage Insurance

Get Rid of Your Mortgage Insurance

Get Rid of Your Mortgage Insurance

Changes in the housing market could mean big savings for you! 

Lack of inventory and a spike in purchases has caused a rise in home values. This means that you may have enough equity in your home to eliminate costly mortgage insurance premiums by refinancing.

Drop your mortgage insurance

If you stay in your current loan, you are required to wait the mandatory 5-year period and continue to pay mortgage insurance. This means throwing away tens of thousands of dollars over the life of the loan. Refinancing can change this and allow you to start saving money each month.

Consolidate your debt and save money

Another benefit of refinancing allows you to payoff high-interest credit cards and installment loans. Consolidating your debt into a lower rate can save hundreds or even thousands of dollars per month! This savings can be applied to your mortgage allowing you pay it off faster, even with the increased balance.

Take advantage of low rates

Rates are still at historic lows which means that now is the time to take action. Why spend money every month on unnecessary mortgage insurance and costly high-interest debt when a single phone call could save you thousands?

Mortgage Insurance Chart

Rates and Terms are subject to change. This property was priced on 1/28/2016 with a credit score of 740. This may not accurately reflect your pricing. Payment does not include HOA dues, and if applicable, actual payment will be greater. All amounts are rounded to the nearest dollar.

10 Important Tips for First time Homebuyers

10 Important Tips for First time Homebuyers
Happy Couple with dog moving into new home

10 Important Tips for First time Homebuyers

Congratulations! Buying your first home is very exciting and a major milestone in your life. While it is a big investment, it is also your first step toward creating wealth and security for you and your family. We’re committed to making your first time home buying experience the best it can possibly be. As dedicated mortgage professionals we believe that each and every one of our loan transactions is the beginning of a relationship that will last a lifetime.  Here are 10 insider tips to help you get started on this exciting journey!

1. Location Data

Have you decided where you want to live? Maybe you want to live in a neighborhood with an award-winning public school system or somewhere near where you work. If you’ve got your eyes on a couple of areas, before you get too much further, check out what homes are selling for where you’d like to live. This will give you an idea of what you can expect to pay and ultimately how much you’re going to borrow.

2. Total Costs

Once you have an approximate loan amount you’ll want to know what your payments will be. At this stage, you should be working with a loan officer who can provide you with multiple financing options. But beyond the mortgage payment, there is also an annual property tax bill and homeowners insurance. In addition, remember there will also be monthly expenses such as your water and electricity bill.

3. Speaking of Costs

Your loan officer will also provide you with an itemized list of potential closing costs you’ll see at the settlement table. This includes both one-time and recurring charges. One-time charges include lender fees and title insurance for example. Recurring charges are interest, taxes and insurance. Add these figures to your down payment amount.

4. Are You Comfortable?

Lenders determine affordability by comparing total monthly payments with gross monthly income. If your house payment exceeds 33 percent of gross monthly income it might be a little uncomfortable. Concentrate more on what you’d like your payments to be each month and less so on the most you can borrow.

5. Trends

What about local real estate data and demographics of the area you’ve chosen? Does it look like the neighborhood is thriving or the other way around? Look at the physical condition of houses in the area. Areas with several vacant homes for sale can indicate a neighborhood in decline.

6. How’s the Credit?

You’ve probably got a pretty good idea about your credit profile. But have you literally checked your credit report? While you’ve been making your payments on time it’s possible there are mistakes in your file that can hamper credit scores.

7. Loan Prep

Your loan officer will provide a list of documentation you’ll need to provide. This includes information about your income, employment and funds to close. This means your pay check stubs covering 30 days, W2 forms, bank statements and tax returns if you’re self-employed.

8. Looking Beyond

This will be your first home but it won’t be your last. First time buyers historically buy their next home within about seven years. Look at your situation and get an idea regarding how long you plan on keeping this first home. This will impact the types of loans your loan officer will present.

9. Don’t Get Pushed Around

When word gets out that you’re thinking of buying a home, you’ll get your fair share of advice both from industry professionals as well as friends and family. But one thing to remember, you’re the boss here. Don’t get pushed around and if it gets a little overwhelming, just pull back and exhale. There’s plenty of time to buy.

10. Have a Little Cash Left Over

Finally, don’t empty your bank account. Lending guidelines will ask there be some funds left over after all is said and done. These funds are referred to as “cash reserves” and counted as how many months’ worth of house payments you have left over after closing. If your total mortgage payment is $2,000 and the loan guidelines ask for three months of reserves, your lender will need to see evidence of $6,000 after your down payment and closing costs have been paid.