So you’re finally ready to purchase a home. Congratulations! The home buying process is an exciting process, but it can also be long and arduous--especially if you don’t know what to expect. Buying a home and obtaining a mortgage loan for Blacks can be even more difficult, due to a long history of discrimination within the mortgage industry. With this said, it’s important to be prepared and knowledgeable. The more prepared you are, the faster the mortgage lender can process your loan. Here are our foolproof steps that will make applying for a home loan a breeze. Check your credit report! There are a number of resources available to help potential homebuyers check their credit report so that they are in the know about what’s reported on your credit. You can view your credit report by visiting freecreditreport.com or annualcreditreport.com. Usually, you can check your credit report for free once a year; however, during COVID-19, you can check your credit report weekly. This way, you won’t be surprised by anything that arises during your loan process. If there is anything that does arise on your credit, contact a loan officer to see if it would negatively affect your odds of being approved. At the beginning of the loan process, your loan officer will run your credit report and check your credit score to learn more about your credit history and any outstanding debts. Determine how much home you can afford: While a loan officer will review your financial standing and tell you how much you are pre-qualified for, it is helpful to know how much house you can afford to purchase. There are several free home affordability calculators available online that will consider your average monthly income, total monthly debt and how much down payment you have saved to tell you exactly how much house you can afford to purchase. Commit to a Savings Plan: No matter your loan program, purchasing a home requires money. By adequately saving and preparing for your home purchase, you can be prepared for anything that may arise for your loan. The minimum down payment amount for most loans is 3% but it’s important to save a little more for closing costs, appraisals and more. And don’t forget, you’ll still need to cover moving and furniture expenses. Luckily, most banks today have tools that allow you to save towards a goal. Some even have saving folders to make saving up for a home easy. Review your budget and set an amount you’d like to automatically deduct from your account, along with a date you’d like to be fully funded. This way, you can be well-prepared for homeownership. Pay off debt: Paying off outstanding debt is a great way to decrease your debt-to-income ratio and free up additional money to go towards your monthly mortgage payments. As you pay down your debts, you will also have more money to put towards saving for a home. Gather your paperwork: Gathering your paperwork upfront can help expedite your loan process. Your mortgage loan officer will likely ask you to provide proof of income (paystubs, W-2, tax returns), documentation of assets, and personal identification. Have these documents at the ready and once your loan is in process, be sure to respond to requests for additional documentation as quickly as possible. Reduce Spending: Once your loan is in process, your loan officer may tell you to reduce your spending, limit credit card use and abstain from opening new lines of credit. Heeding this advice will prevent unexpected changes to your loan and allow for a smooth loan approval process. Connect with a Mortgage Loan Officer: Speaking with a mortgage loan officer is a great first step on the path to homeownership. Mortgage Loan Officers can review your financial standing, and counsel you as you set out to become a homeowner. They will tell you which loan programs you qualify for, how to get the lowest mortgage interest rate and get you pre-approved for a loan so that you can begin house hunting. Do you think you are ready to buy a home? Contact us to buy a home and leave a LEGACY today! (844) 455-3669‍

When you refinance your mortgage loan, you are essentially replacing your existing loan with a new one. There are many benefits to refinancing a loan, and today, we’re going to explore each one of those reasons. Top Reasons to Refinance: To Reduce Your Interest Rate and Monthly Payments Do you think you’re paying too much for your mortgage? Do you believe your interest rate is too high? Refinancing is a great way of reducing your interest rate while also making monthly payments more affordable. Obtaining a lower interest rate and capitalizing on the lower monthly payments can also help borrowers pay off their loans more quickly.To Access Equity Speaking of home equity, a cash-out refinance enables consumers to access the equity they have built into their homes. This money could be used to pay for a child’s education, cover medical expenses, fund a business venture or even to invest in additional real estate. This is what makes homeownership a great wealth-building investment. To Reduce the Loan Term Want to pay down your mortgage faster? Refinancing from a 30-year fixed into a shorter-term loan, such as a 15-year fixed, could allow you to reduce your interest rate while also paying off your mortgage a lot faster—perhaps without a significant increase in your monthly mortgage payment. To Increase the Loan Term While some want to pay off their mortgage faster, others may be looking to decrease their monthly payment. If this is the case, refinancing to increase your loan term from a 15-year term to a 30-year will cost you more interest, but could reduce your mortgage payment to a more manageable and sustainable amount. To Switch From An Adjustable Rate Mortgage To A Fixed Rate Mortgage If you have an adjustable-rate mortgage (ARM), refinancing will enable you to switch to a fixed-rate mortgage to prevent your monthly payment from increasing any further. To Switch To An Adjustable Rate Mortgage It’s entirely possible to switch from a 30-year fixed-rate mortgage to an ARM if you would like some payment relief, or simply feel you’re overpaying. It’s also possible to refinance out of one ARM into another to not only obtain a new interest rate but to also restart the fixed-rate period on the new ARM. Plenty of wealthy individuals more from ARM to ARM to take advantage of cheap short-term rates while they put their money to work elsewhere. To Go Fully AmortizedAn Interest-Only loan period typically only lasts 10 years before the mortgage must be paid back in full. A borrower with an interest-only mortgage might refinance to avoid a steep monthly payment increase or to refinance out of the Interest Only product into something fully-amortizing. In some instances, they may even choose another Interest Only product to extend the benefits that Interest Only loan products offer. To Go Interest Only If you’re sitting on a lot of home equity, you may decide it’s time to make interest-only payments in order to improve your monthly cash flow. This can free up cash for other expenses, or investment opportunities. This also allows you to diversify your monthly spending and put your money into other things, rather than putting all of your eggs in one basket. Your Borrowing Profile Has Improved Has your FICO score improved? Did you remove negative issues on your credit? Perhaps your home value has increased significantly enough to push your LTV (loan-to-value) ratio into a lower tier. All of these reasons may make refinancing worthwhile. If your borrowing profile has improved since you first applied for a mortgage, it may be time to refinance and obtain a lower interest rate than what you previously qualified for. To Buy Someone Out In certain circumstances, you may need (or want) to add or remove someone from the title or the mortgage. If this is the case, a refinance may be right for you. We see this happen most frequently with divorces, or with a child who is wanting to remove their parents as co-borrowers on their loan. To Protect your Investment Home values are known to seesaw over time, depending on the housing market. If you expect fluctuations in the housing market, it could be a good idea to tap into your interest now, to obtain that money for the future. Many investors will typically refinance while home values are high and then put that money to work elsewhere.To Remove Private Mortgage Insurance We spoke about switching loan products to drop mortgage insurance, but you can also dump private mortgage insurance by refinancing, if you have a low enough Loan to Value (LTV) ratio. If your home has increased in value, or you have paid it down enough to remove the PMI, a refinance could potentially save you a lot of money by reducing your interest rate and getting rid of your PMI payment. It’s a one-two punch! \To Pay Down Mortgage If you’ve come across a large sum of money and have the ability to pay down a big chunk of your mortgage balance, it may make sense to refinance. Making a large mortgage payment then refinancing will allow you to pay off your mortgage more quickly while reducing your monthly mortgage payment and interest. To Consolidate Multiple Mortgages This is a classic reason to refinance. If you have multiple mortgages and want to consolidate them into a single loan, a refinance is often a great way to accomplish this. Many second mortgages have high interest rates or are adjustable (hello, HELOC), so this may be a conservative money-saving move for you.To Consolidate Debt Credit cards, personal loans and other types of debt tend to have higher interest rates than mortgages. Refinancing is a good way to consolidate your debt, allowing you to pay the debt very slowly, making it easier for you to manage. To Access A Program Before It’s Gone You may want to refinance to take advantage of a loan program before it’s gone. This could be a program like HARD, which allows underwater borrowers to refinance, or there could be a change in guidelines like FHA’s recent move to lower the max LTV on cash out refinances from 85% to 80%. There may also be a program being offered for only a limited time. In this instance, it would be wise of you to take advantage of the program now, to avoid missing out.Because You Can! One final reason to refinance is simply because you can. There’s never a guarantee you’ll qualify for a mortgage in the future. Heck, it’s possible you might need today’s low-interest rates just to stay below the Debt to Income (DTI) limit. You could run into some sort of financial hardship, like a job loss (or global pandemic), or rent out your home that you later wish to refinance. If this is the case, it may make sense to refinance now, while you know you will qualify. While there are many benefits to refinancing, homeowners should weigh the pros and cons, research current interest rates and speak to a mortgage professional before choosing to refinance their home. Contact us today and speak with a mortgage originator to learn if refinancing is right for you. ‍

Buying a home is one of the greatest investments you can make. Why? Because it is one of the quickest ways to generate wealth. In fact, it’s been said that 90% of today’s millionaires built their wealth through real estate. While the cost of entry can vary from city to city, wise investments in real estate can wield staggering returns on investment. Whether we rent or own, we all have to pay for housing monthly; however, those that own are usually better off financially. According to the U.S. Census Bureau, homeowners have a median net worth that is 80 times larger than that of renters. Similarly, a study by Harvard’s Joint Center for Housing Studies found that those who went from renting to owning from 1999 to 2013 gained a total of $85,400. At LEGACY Home Loans, we want to make the path to homeownership accessible for all, so that our customers can pass on sustainable wealth from generation to generation. Still don’t believe homeownership is the way to go? Here are five ways homeownership can build wealth. 1. Homes increase in value over time:Unlike cars, which tend to depreciate in value over time, a home can increase in value from the very first day of ownership. The more your home appreciates in value, the more the owner profits via home equity. 2. Equity can be used for additional investments:Everyone talks about home equity, but how can home equity be utilized to generate additional wealth? Before we answer that, let’s cover, what is home equity?Home equity is how much of your property you actually own. Let’s say you purchase your home with a 20% down payment. Once your home loan closes you will have 20% equity in your home. As you pay down your loan, your home equity increases. As your home increases in value, your home equity also increases. Let’s say you purchase your home with a 20% down payment. Once your home loan closes you will have 20% equity in your home. Now, what can home equity be used for? Home equity can be used in a multitude of ways. Your equity can be used to purchase another home, pay for home improvements such as a kitchen, bathroom remodel or to put in a pool. You can even use your home equity to purchase another home or to pay off your child’s college education. Some even use their home equity to pay off high-interest debt. The possibilities are endless! 3. In some markets, a mortgage payment can be the same or less than average monthly rent payments. In certain markets, it can be more costly to rent a property than to own. Of course, this is the case in major cities like Los Angeles, which is going through a rental crisis, but it also occurs in other cities as well. In fact, a study by: GoBankingRates found that this is the case in 31 US Cities. The average rent price in Columbia, South Carolina, for example, is $1,125 whereas the monthly mortgage payment is $963. And in many other cities, the cost to buy isn’t too much more than the monthly rent. If this is the case in your city, purchasing a home can save you hundreds of dollars monthly. These savings can be used to invest in other investments, to pay off debt, or to simply improve quality of life. 4. Acts as a forced savings account:According to Bankrate, 21% of Americans don’t save any money annually. For those that struggle with saving, a home mortgage can act as a forced savings account. With interest accruing monthly, they are able to put their money towards an investment that will yield more savings than with their personal savings account. 5. Homes have the ability to be passed on from generation to generation:Heirloom homes, or homes that are passed down generationally, are wonderful assets in that they have usually been fully paid for. If the estate has been properly maintained and cared for, the home can be used to generate income in a multitude of ways. For example, the property can be rented out and used to generate a passive revenue stream. If the mortgage loan has been paid in full, this home can quickly turn into a cash-flowing rental. Another great advantage of inherited property is that it can also be used for a cash-out refinance to fund a business, used to purchase additional real estate. Some parents will even purchase homes with the intention of gifting the property to their children in order to pay for college tuition, or as a stream of income for their child during or after college.`Give us a call to start your wealth-building journey to homeownership today! (844) 466-3669.‍