Archive for the ‘Money Matters’ Category

What You Need When Applying For A Mortgage

February 18, 2016

moneymortgage

Getting a mortgage in 2016 is quite a bit easier than it has been in years past. However, there are still certain things that mortgage lenders are looking for when applying for a mortgage. Keep in mind that although your credit score is important, there are other factors that come into play when applying for a home loan.

  • The first thing that mortgage lenders are going to want to know from you is if you are a good credit risk. They are going to look at your FICO score but they are also going to look at how you pay your bills. If you want to get a good interest rate on your mortgage then you will want to make sure and pay your bills on time every time. Your debt to income ratio is also going to play a key factor in what kind of interest rate you get on your home
  • Lenders are going to want to know if you will be able to handle your house payment once you get into your new home. In order to find this out they are going to look closely at how much you and your spouse make on a weekly or monthly basis. They will also, as I already mentioned, look closely at your debt to income ratio. Lenders also want to know that you have a steady job and that you have been there for a number of years.
  • Lenders do NOT want you to go out and purchase new things for your new house on your credit card right before you get your home loan approval. Many folks mess up by doing this type of thing right before they get their approval only to be devastated to find out that because they ran up debt on a credit card they are no longer going to be considered for the loan. Play it safe and only make your new purchases for your new home once you are safely in your new home.   A good time to have a little extra money to purchase new items might be during the first month you are in your new home because many times your payments won’t start until you have been in your home for one month.

These are just a few ideas to help you get the most out of your home mortgage. Remember to shop around for the best match when it comes to a lender. Although most lenders are good at what they do, they are not all created equal. Do your best to work hard, pay your bills on time and not use your credit cards for large purchases and you will be well on your way to a home loan approval.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties 
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

4 Reasons to Refinance Your Home in 2016

January 15, 2016

refinance

2016 is here and New Year’s resolutions will be prevalent. Why not make a resolution of your own and refinance your home. There are many benefits to refinancing and some of those reasons you will find listed below.

  1. A lot of folks tend to rack up credit card debt over the holidays and since Christmas has just come and gone it’s likely you have some credit card debt to pay off.   By refinancing your home you can put all of your credit card debt together and into the refinance. It is much better to pay off your credit card at say 5% instead of the interest you may be paying such as 18%. A good rule of thumb however if you do plan to use your refinance to get rid of your credit card debt is to cut the cards up and vow not to use them again. Perhaps you can keep one credit card that is to be used for emergencies only.
  2. Another great reason to refinance your home this coming year is to start saving towards retirement or even towards your child’s college education. Both of these are good causes and if refinancing can help you get to your goal of savings for these two a bit more quickly then why not take advantage of it.
  3. One of the biggest reasons folks tend to refinance their homes is to get a better interest rate. This is a very good reason to refinance because many times you can get a much lower monthly payment by having a lower interest rate and this may help you to more easily pay other bills that may have fallen behind.
  4. This last reason to refinance your home may sound a little out of place but if you happen to need a reliable vehicle and you haven’t been able to afford one, you can throw your car loan into the refinance as well. This is good if you have been trying to make your old worn out car last as long as possible but it has finally begun costing you more in repairs than the car is actually worth.

There are plenty other reasons to refinance your home in the coming year and even some reasons why you may not want to. Do your homework to see what is worth it to you and what is not when it comes to refinancing your home.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

Home Buying After Foreclosure

January 8, 2016

home buying

If you think that once your home goes into foreclosure that you will never be able to own a home again you are wrong. There are guidelines and wait periods however and those are listed below. If you do have to go through a foreclosure realize that it is not the end of the world and that there is light at the end of the tunnel. It may be easy for you to give up and settle for renting the rest of your life but you do not have to. Become a home owner again with just a few steps that need to be taken.

  • All mortgage loan types require a waiting period once you have gone through foreclosure but those waiting periods vary. If you have a conventional loan backed by Freddie-Mac or Fannie Mae you are going to have to wait the longest period of time before getting another loan as these loans require that you wait 7 years from completion. Most conventional loans will also require a good debt to income ratio before you can apply for a new loan.
  • VA loans, which are the Department of Veterans Affairs backed loans, only require that you wait a period of two years before applying for a new home loan. Only folks who have served or are serving in the military can apply for these types of loans however.
  • FHA loans, Federal Housing Authority, will allow you to have another home loan as quickly as just a year after your foreclosure if you can prove that the situation that caused your foreclosure was out of your control such as a job loss or a medical issue. If you are unable to provide the needed proof of these types of circumstances you will have to wait three years to get another FHA loan.

The best advice that you can take if you have gone through a foreclosure is to take the needed time to improve your credit. Be sure to pay all of your bills on time, or better yet pay them early. Get your debt to income ratio in good shape and perhaps find a position in a company that pays you well enough to be able to afford to pay a good down payment. Keep in mind as mentioned before that once you have gone through a foreclosure it doesn’t mean that you can never own a home again. Don’t give up and keep pressing forward and you may find that you own your own home again sooner than you may have thought possible.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

How To Get Your 2015 FREE Credit Report

December 11, 2015

free credit report

Did you know that you are entitled to a free credit report once a year from all of the major credit reporting companies? It’s true and time is running out to get your 2015 free credit report. By checking your credit report before you purchase a home or for any other reason for that matter you will be able to see if there is anything on your credit report that is not accurate and remove it and you may also be able to find out if you have been the latest victim of identity theft. The major credit reporting companies are Equifax, TransUnion, and Experian. If you want to get your yearly free credit report all you have to do is go to each of these sites and click on “Request Your Credit Reports”. You can also send a letter to each of the three major credit reporting companies. A few tips to follow are below.

  • Be sure that if you get on a credit report website and are asked for money that you do not respond. There are many hackers out there trying to get your information and this is just one of the many ways in which they do it.
  • Do not give out your social security number unless you are on a site that you know is secure.
  • Check your credit report every four months or so to be sure that your account hasn’t been compromised.
  • There are credit monitoring companies you can hire to keep a watchful eye on your credit report if you feel it is necessary to do so.

Again, be sure that you are not asked for any monies when trying to get your free credit report. Be assured that there are many companies out there that claim they will give you a free credit report only to ask you for your credit card information at the very last step. Step away from those companies and continue with your search until you find one that lets you leave the page without asking for any form of payment. Once you get your report you can then be on your way to making any changes needed to help improve your score. When you get your credit where you want it and where it needs to be, the world will open up to you in ways you never thought possible.

Information courtesy of Chicago Realtor Karen Breen Elia.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

Wall Street Banks Attempt to Edge Out Fannie and Freddie

December 7, 2015

revolving door

Check out this comprehensive article from The New York Times about Fannie Mae, Freddie Mac and Wall Street’s attempts to take over their domain. A behind-the-scenes effort of Wall Street banks to take over the mortgage market is driven by advocates who switch between roles in Washington and the private sector…

Seven years after their dubious lending practices helped push the United States economy to the brink of disaster, the nation’s largest banks are closing in on a long-sought goal: to unseat Fannie Mae and Freddie Mac, the mortgage finance giants, and capture their share of the profits in the country’s $5.7 trillion home loan market.

Taking place largely behind the scenes, the movement to take over the mortgage market has been propelled in part by a revolving door between Washington and Wall Street, an investigation by The New York Times has found.

While the big banks’ effort to enshrine their vision into law has failed so far, plans to replace Fannie and Freddie — which have long supported the housing market by playing a unique role as so-called government-sponsored enterprises, or G.S.E.s — are still very much alive. The Obama administration has largely embraced the idea, and government regulators are being pushed to put crucial elements into effect.

A review of lobbying records, legal filings, and internal emails and memorandums, as well as housing officials’ calendars and White House and Treasury visitor logs, illuminates the banks’ effort. Assisting in this work, the documents show, is a group of high-level housing finance specialists who have moved back and forth between public service and private practice in recent years.

The charge began under Michael D. Berman, who has served not only as chairman of the Mortgage Bankers Association, one of the industry’s most influential lobbying organizations, but also as a senior adviser to Shaun Donovan, who was the secretary of Housing and Urban Development from 2009 to 2014.

Conversely, Mr. Berman recruited David H. Stevens — who was one of the lead architects of the Obama administration’s proposal to phase out Fannie and Freddie — to the mortgage bankers group, where Mr. Stevens is now president and chief executive.

Many in Congress believe Fannie and Freddie contributed to the collapse of the housing bubble, and they still rest on a shaky financial foundation, largely because of actions taken by the Treasury and the companies’ regulator.

While they continue to pose a risk to taxpayers, Fannie and Freddie so far have not been replaced by Wall Street behemoths, partly because local banks popular with many lawmakers are resistant. Moreover, some members of Congress are concerned that low-income borrowers would not be well served by private lenders.

Courtesy of Chicago Realtor Karen Breen Elia.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

Do You Qualify for Down Payment Assistance?

December 4, 2015

home buyer

Most folks these days are living paycheck to paycheck and are having a hard enough time trying to pay all of their bills on time. This is one of the biggest reasons many people are looking for some sort of down payment assistance when it comes time to purchase a new home. For many people owning their own home cannot become a reality because they simply cannot afford to come up with the down payment needed. Rest assured if you are one of those people who have a hard time coming up with enough money to pay bills much less enough money for a down payment on a house, there is hope for you! Below are a few ideas for down payment assistance and what you need to do to qualify for it.

  • Figure out what your adjusted gross income is so that you will know if you can or cannot qualify for down payment assistance.
  • Complete a HUD application at your local HUD (The US Department of Urban Development) office.   In order to qualify for HUD your adjusted gross income must not be more than 80 percent of the local median income.
  • The down payment assistance program from HUD has a limit of 6 percent of the home’s purchase price or $10,000 so be sure that you know what size and price range you are looking for in a home before you apply for assistance. Knowing some of these things beforehand will possibly save you a lot of hassle in the long run.
  • You may possibly qualify for a grant that you do not have to pay back such as with the American Dream Down Payment Initiative Program. This program is known as the ADDI. If you need assistance with your home down payment be sure not to let this particular program slip through your fingers.

Hopefully these few ideas for down payment assistance will get you started in the right direction when looking for a home of your own. It is important that you don’t get discouraged and give up when looking for these types of assistance programs. They are out there for the taking you just have to be diligent to look for them and see which ones may be able to assist you in your home buying experience. It is all too easy to give up and not look deep into all the different home down payment assistance programs but I promise you if you do enough research you WILL likely find one out there that is just waiting to help you.

Courtesy of Chicago Realtor Karen Breen Elia!

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

Financial Conversations You Should Have With Your Spouse

September 2, 2015

A colleague of mine at Fifth Third Bank shared an article with me titled, Financial Conversations You Should Have With Your Spouse. It is great information and tips on how to start a conversation with your spouse:

spouse

Forty-three percent of people don’t know how much their spouse earns. And that’s just one of the financial discussions that too many married couples keep to themselves — and that can set the stage for marital strife. To ensure you and your better half are on the same page about finances, use these tips to start the conversation.

1. Assess Financial Habits
First, look at how each of you currently spends your money. How much are you spending on the essentials (bills) and extras (entertainment)? You should also review last year’s expenses to get a full picture of where your money is going.

After looking at your current spending habits, discuss your short- and long-term financial goals, such as eliminating debt, saving for a home down payment or replacing a vehicle.

Once you’ve established your objectives, define specific strategies for accomplishing your goals. Do you need to cut back on eating out? Or maybe you need to spend less on your yearly vacation. Whatever you decide, make sure your plan of action is realistic, and fits your and your spouse’s financial situation.

2. Prepare for an Emergency
As one of your goals, talk about creating an emergency fund. Sixty-four percent of people in America wouldn’t be able to come up with $1,000 in an emergency.2 Don’t be part of this percentage. Plan how you’ll work together to prepare for the unexpected.

Even if paying down debt is a primary goal, plan to set aside some money every month for your emergency fund. After all, if you can pull from this fund, you won’t need to add to your credit bills in the case of an emergency. It’s recommended to have three to six months of your monthly expenses saved.

3. Prepare for a Crisis
Review your life insurance needs. You will want more than your employer’s standard one year of salary benefit. Assuming both spouses are working, you should consider purchasing term insurance between 5 to 10 times your annual income, more if you are in your thirties with young children or have large debt obligations (mortgage). Term insurance is affordable and can be purchased for 10, 20 or 30 years. Your Fifth Third advisor can get you quotes from 30+ different insurance firms.

4. Update Your Wills
Another essential discussion is how you want your assets distributed once you’re gone. In other words, it’s time to talk about your wills. Without this legal document, you could be leaving your spouse and/or children in a bind when you pass away. A will clearly establishes both of your financial wishes.

It’s a good idea to review your will at least every five years and whenever an important life event happens — like becoming parents or buying a home.

5. Revise Beneficiary Information
Along with your will, make sure you’ve named beneficiaries for your retirement accounts. Keep these names updated on the same schedule that you review your will. Similarly, revise as needed based on life events. For example, if you named your mother as a beneficiary and she has since passed away, make sure to update the information.

Karen Breen Elia

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

Tips for Raising Your Credit Score

August 7, 2015

We have all been there before, getting ready to buy a house and then suddenly something of a negative nature pops up on our credit score that poses to keep us out of our dream home forever. There are ways to make sure you DO NOT end up in this sort of predicament however. Hopefully, the following tips for raising your credit score will be beneficial to you so that you can find your new home and move in before the holidays!

  • credit scorePay credit card bills before the statement date. Many times folks wait until the due date to pay a bill but if you are willing and able to pay them before the statement date, your credit score is likely to improve.
  • If you can afford to make multiple payments on your credit balance throughout the month, this will also show favorably on your credit score. Check with your credit card company to make sure you are allowed to do this before beginning because some do not allow it.
  • If you only have a couple bad marks on your credit, you can ask for a “good will deletion” . Of course if you are late over and over again you will not be able to reap this reward but if you can show that you otherwise have paid your bills on time you may be able to get those couple nasty marks off your credit and therefore raise your score!
  • If one of your accounts has recently gone into collections you may be able to pay it off and have it removed from your credit report as a result. Be sure to get any type of promise to delete in writing so that you can be sure it will be taken off once you pay.

Credit issues can be hard to deal with especially if you are looking to purchase a new home in the near future, but take it from someone who knows….it CAN be done and you CAN have the house of your dreams maybe sooner than you had imagined! Keep working at it and you will succeed and come out the other side ready to move forward into your future!

Information courtesy of Chicago Realtor Karen Breen Elia.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

Good News and Bad News About FHA Loans

June 12, 2015

The Federal Housing Administration (FHA) is a government agency within the U.S. Department of Housing and Urban Development (HUD). FHA is not a lender. It provides an insurance fund fha loanthat protects lenders against borrower loan defaults. Therefore, to obtain an FHA loan, a homebuyer must get their loan through an FHA-approved lender. The actual loan and mortgage for your home is actually with a commercial lender.

Not all FHA-approved lenders offer the same interest rates and costs, even for the same loan. Therefore, borrowers need to shop around with multiple lenders for the best total package for an FHA loan.

Here’s some good news…

  • Perfect credit is not a requirement of FHA. The FHA does not dictate a minimum credit score. However, lenders can overlay their own requirements on top of what FHA requires. FHA provides leeway in underwriting for the lender by insuring the loan, but the final decision about the loan is in the lenders hands.

The lenders’ underwriting of a loan is targeted at ensuring that the homebuyer “has the willingness and capability to repay the loan, but we do have flexibility beyond pure credit score to look at the borrower’s financial situation,” according to Vicki Bott, HUD deputy assistant secretary.

  • The minimum down payment is 3.5% of the purchase price of the home. Borrowers can use their own savings for the down payment. But, they can also use other sources such as a gift from a family member.
  • Closing costs may also be covered. FHA allows home sellers, builders, and lenders to pay some of the borrower’s closing costs. However, lenders often charge a higher interest rate if they agree to pay closing costs.

Here are some cautions…

  • Homebuyers should get a Good Faith Estimate (GFE) of closing costs from the lender when shopping for their loan.
  • Mortgage Insurance is a must. Two premiums are required on all FHA loans: first, an upfront premium of 2.25%, charged when the homebuyer gets the loan (but may be financed in the loan); and second, an annual premium of 0.55% paid monthly with the mortgage payment.

Many homebuyers feel this all sounds expensive. However, the alternative is potentially not qualifying for a loan at all. The borrower must compare total costs of the purchase with the equity that potentially is possible in the long haul…along with careful shopping for the loan. Click here for more details.

Information courtesy of Chicago Realtor Karen Breen Elia.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

 

What You Need To Know About the Division Of Real Estate During Divorce

May 15, 2015

If you are considering a divorce or are currently going though one, it is important that you learn as much as you can about divorce laws and how they can impact your real estate holdings. To learn about those laws in Illinois, click here.

divorceAlthough a divorce eventually involves the distribution of all of a couple’s assets, generally the most pressing issue (other than child custody) is the division of your real estate. To make this potentially complicated and emotion-laden process work as smoothly and civilly as possible, consider the following suggestions to help combat volatile issues and strong feelings:

  • Consult with your divorce attorney. A well-crafted settlement agreement can help to avoid many types of disputes. The agreement should be quite detailed, including all potential issues that could arise during the sales process. The agreement should ensure that the interests of both parties are aligned towards selling your real estate so that you both can move on with your lives. Have the property sold or refinanced into one name, while all of the other details of the divorce are being negotiated. Even if your divorce decree assigns possession of those assets to one party, or if one of you voluntarily transfers title to the other, the liability for the loan will remain for both if you do not sell or refinance the asset. 
  • Find a real estate agent who specializes in selling property for divorcing couples. With divorce rates continuing to rise, many Realtors are beginning to market themselves as specialists in selling homes for couples who are divorcing. These agents understand the complexities of a pending divorce case and will work with you on an individual basis.

Before you can decide how your real estate is to be divided, you must first determine its value. If both parties are unable to agree on the current market value, there are several valuation methods that can be used, including current tax assessed value, request for a new appraisal, or an evaluation by a Realtor. Determining equity in order to equitably divide assets is a complex process which can become quite complicated. For more information about this topic, click here.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!