Condotel Financing: How Does It Work?

Many homeowners are struggling to finance a condotel or luxury condominium. These properties do not meet the conventional loan requirements of Freddie Mac or Fannie Mae, so there are a limited number of mortgage lenders who will finance these properties. Many specialized lenders will finance a condotel or non-warrantable condominium. What is a condotel, and how do you get a condotel mortgage?

What is a condotel?

A condotel is a combination of a condominium and a hotel and is a unique type of property ownership. Each condotel is a part of a large-scale property that operates similar to a hotel, with a wide range of amenities and resort-style features. A condotel owner purchases a unit within the property and uses it as a second home or vacation spot while renting it out through the main property. Because of this unique arrangement, loans for condotels require different financing requirements and allow for different things. This includes:

Loan information

• Down payment minimum of at least 15%
• Available financing for vacation/second homes up to 85% LTV to $3M
• Available financing as an investment property up to 85% LTV to $3M
• Classification as a second home allowed
• Cash-out options for investment/vacation/2nd home up to 70% LTV

Allowances

• Allows for daily, nightly, weekend, or longer rentals
• High investor concentration
• Loan can qualify for the 1st unit in the complex
• Will finance for individuals/entities owning more than 10% of units

What is a non-warrantable condominium?

A non-warrantable condominium is any condo that does not meet the traditional Fannie Mae or Freddie Mac lending requirements. A condominium is non-warrantable if it features one of the following requirements:

• Requires a membership, such as a golf or country club
• Is part of a continuing care facility
• Is currently party to a lawsuit
• Allows individuals/entities to own more than two units/20% of the property
• The property features commercial space exceeding 35% of total property space
• Has 15% or more of the units that are delinquent on HOA dues
• Operates as a hotel or motel, such as a condotel

Financing for a non-warrantable condominium has the same basic loan standards and allowances as you see with a condotel.

How do condotel loans work?

Condotel loans are considered non-traditional loans as they do not meet the traditional mortgage requirements. However, they still require you to meet certain income, asset, and credit score requirements. In many cases, the loan requirements focus more on the property and the buyer. For example, many lenders will require the condotel to be at least 600 sq. ft. and have basic kitchen facilities and separate bedroom space. Once the requirements are met, the loan process follows the same steps as a traditional loan.

Challenges of getting condotel loans

Condotel or non-warrantable condominium financing is slightly different from a traditional loan. Because a condotel or non-warrantable condo does not meet the requirements of a conventional Fannie Mae or Fannie Mac mortgage, many big bank lenders will not take the risk of underwriting these loans. This means that you will need to find an approved lender specializing in non-standard mortgages. Once you do this, the mortgage process is very similar to a conventional mortgage.

How to get condotel and non-warrantable condo loans?

Once you find a lender specializing in non-traditional mortgages, applying for your loan is not much different. The lender will evaluate the property, ensuring it meets their property qualifications, such as the minimum square footage and property layout. In addition, you must meet their borrower qualifications, including a minimum credit score which is often 680. They will require income and asset information similar to a traditional loan. You must also meet the LTV requirements and have the minimum down payment required. In some instances, lenders will also look at the financial health of the condotel property in general when determining your loan.

When you apply for a condotel or non-warrantable loan, you can expect rates that are at least a half-percent higher than thof or conventional loans. However, because smaller lenders underwrite these loans, mortgage approval times are often shorter than those with big banks.

Let Hero Home Programs help you through the loan process.

Because condotel and non-warrantable loans are considered non-traditional, many borrowers expect them to be difficult. The truth is the hardest part of getting a loan for these properties is finding a lender that underwrites non-traditional mortgages. Once you find one of these lenders, the process is usually very straightforward.

However, at Hero Home Programs, we understand that these unique financing options can be intimidating or confusing. Our goal is to help borrowers achieve their homeownership and our experts can help.

Speak to us today to see how Hero Home Programs can help you achieve the financing you need.

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Benefits of Interest-Only Mortgage Loan

When you are looking to purchase a home, you may consider different loan types, one of which is an interest-only mortgage. What are the benefits of interest-only mortgage loans? What are the disadvantages? When should you consider an interest-only loan?

Here we take a closer look at this loan type and how it may work to your advantage when purchasing a home.

What is an interest-only mortgage loan?

In simple terms, an interest-only loan is a mortgage where you pay just the interest for the first several years of the loan. In most cases, these payments last between three and ten years. It typically lowers your monthly mortgage payment during that period. However, once the interest-only period closes, your payments increase to include both the interest and the principle.

Most interest-only loans are adjustable-rate mortgages (ARM), so your interest rate can increase or decrease throughout both the interest-only and the remaining period. When the interest-only period ends, your loan can either require a lump sum of payments or continue with regular monthly payments that include both the interest and principal balance.

To get a better understanding, let’s look at a basic example:

If your mortgage is on $100,000 with an interest-only ARM at 5% and an interest-only loan period of ten years, you will have a monthly interest-only payment of $417 for the first ten years. When the interest-only period ends, your payment will then include the principal and interest and raise substantially. Keep in mind that if you had a 30-year loan, the principal is now amortized over 20 years instead of 30.

Advantages of an interest-only mortgage loan

Interest-only loans can make good financial sense for buyers in a wide range of different situations. Benefits can include:

• Increasing income: If you are anticipating a substantial increase in income before the end of the interest-only period, this type of loan could allow you to purchase a larger home you know you can afford after the income increase.
• To qualify for a larger home: Because your first payments will be lower during the interest-only period, you may qualify for a larger, more expensive home than you would with a conventional loan.
• Rising home prices: Using this type of loan may allow you to purchase a home before prices rise while still allowing you the time to prepare for the increase in payments after the interest-only payment period ends. It also allows you to buy before the home prices increase, meaning you will gain equity in the home before you begin paying the principal and can refinance later.
• Investment strategy: During the interest-only period, the money that would go toward the principal can be invested elsewhere to get a higher return.
• Tax deductions: As the payments are all interest during the initial period, they are completely tax-deductible.
  Pay the equity on your schedule: You can pay the equity down on your schedule during the interest-only payment period, allowing you to decrease your payments when that period ends.

Disadvantages of an interest-only mortgage loan

While there are many times that this type of mortgage loan is beneficial, there are some disadvantages that can create problems when the interest-only period ends. These can include:

• Rising interest rates are possible with an ARM.
• If you plan to invest the principal payment amounts during the interest-only period, you risk losing or spending the money instead of investing.
• Changes in your situation may leave you unable to afford the larger payments when the interest-only period ends.
• The housing market may decline, and you may not experience the home appreciation you expected. In some cases, the loan balance may be higher than the home’s value, making it impossible to refinance the loan.

Types of interest-only home loans

Interest-only loans are also known as exotic loans, exotic mortgages, and are sometimes referred to as subprime loans. While they were never targeted to those with subprime credit, they did play a large role in the subprime mortgage crisis years ago. For this reason, many interest-only loans of the past are no longer used. There are, however, still interest-only mortgages available that can benefit some home buyers.

Jumbo mortgages

Jumbo mortgages are necessary for home loans that exceed the limits set by the Federal Housing Financing Agency (FHFA). While conforming loan limits can vary by state, as of 2022, the upper limit is currently $647,200. Adding the interest-only to these large loans can allow wealthy buyers to maintain larger returns in the financial markets instead of the mortgage principal. However, to qualify for these jumbo interest-only loans, high qualification standards must be met.

Interest-only home equity lines of credit (HELOC)

Interest-only home equity lines of credit, or HELOCs, are second mortgages that work like credit cards where you borrow against the equity in your home. For example, they are often set up where you can use the credit line as needed during the first ten years while only paying the interest. At the end of the 10-year period, the credit line is closed, and your remaining payments over the next 20 years cover the interest and principal.

30-year interest-only mortgages

These are similar to a conventional 30-year mortgage, with the main difference being you only pay interest payments for the initial period (between 3-10 years). However, because the principal is not paid down during the initial period, monthly principal payments are higher for the remaining 20 years than they would be in a conventional 30-year mortgage. To qualify for these loans, lenders typically require a higher down payment and charge higher interest rates due to the increased risk they are taking with the loan.

Can an interest-only loan benefit you?

While an interest-only mortgage loan can be beneficial for a lot of buyers, it is definitely not for everyone.

At Hero Home Programs, we can help you navigate the home buying and lending process and help you determine if this is a good option for you or if better programs exist to help you achieve your homeownership goal. To learn more about your home loan options, visit Hero Home Programs online today.

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Guide to Closing Costs and Taxes

When you buy, sell, or refinance a home, closing costs are a major part of every transaction. Unfortunately, this can also be costly as many different mortgage fees and closing costs are required to transfer the home into your name. But what do closing costs include? Are taxes included in closing costs? Are any of these costs tax-deductible?

This guide will take a closer look at what is included in your closing costs and what may be considered deductible when it comes to tax time.

What happens at closing?

The purpose of the closing is to transfer ownership of the home to you. During this transfer, it is common to include the seller, real estate agent, your title or escrow company, and a variety of supportive office staff. During closing, you will go through and sign all the forms necessary to transfer ownership of the home. The title or escrow firm collects cashier’s checks for the closing costs and distributes the new keys to you upon completion.

What are closing costs?

Closing costs are essentially how third parties and lenders involved with the processing of a mortgage loan receive payment for their processing. On average, a buyer can expect to pay 3%-6% of their loan amount in closing costs. A few days prior, every buyer should receive a closing disclosure that itemizes all the fees included in the total closing costs.

Third-party closing costs

Third-party closing costs are expenses paid to outside companies and providers that assisted in selling the home.

• Attorney fees: Not all states require the use of attorneys. However, if an attorney is needed, they typically charge a percentage of the selling price but can work for hourly or flat fees.
• Title search costs: Your title company will arrange for a title search before the loan is completed to ensure no liens or lawsuits are involved with the property. They also verify that the seller is the current owner.
• Homeowners insurance: In many cases, your loan may require the first year’s premium of homeowner’s insurance to be paid up-front as part of your closing costs.
• Real estate agent’s sales commission: Real estate agents work for a commission on every property sold. This payment goes directly to the real estate agent.

Finance and lender charges

Finance and lender charges are assessed by your mortgage lender and can cover a wide range of fees and payments. These can vary based on your lender’s requirements but can include:

• Origination or application fees: These fees are for processing your mortgage. They may be a flat fee or a percentage of the loan value.
• Inspections: Inspection fees cover the required inspections necessary to approve your loan. These can include termite inspections or water tests to ensure a well and water system can maintain sufficient water supply to the purchased property.
• Points: A point equals 1% of the loan value and paying points can help you reduce your mortgage rate.
  Document preparation fees: These fees cover the price of all the documents you will be signing during your closing.
• Land survey: Lenders often require a land survey to ensure that no one has encroached on the property. Land surveys are also done to verify buildings and determine improvements on the property.
• Appraisals: These costs cover the appraisal of your property that was used to establish value.
• Credit report: This is the cost of running the credit report required to approve you for your mortgage loan.
• Private Mortgage Insurance: Lenders often require PMI for buyers with a down payment less than 20%.
• Release fees: If the property has current liens against it and the seller has worked with the lien holder to acquire payment from the sale of the property, fees may be necessary to release the lien. In most cases, the seller pays this fee.
• Escrow account: Many lenders require that an escrow account is set up to cover taxes, homeowner’s insurance, and PMI if required. This money is collected monthly and used when these premiums are due.
• Prepaid interest: While your typical first mortgage payment is not due for six to eight weeks after closing, interest on your loan begins accruing immediately. Prepaid interest is the interest that will accrue between the closing date and your first mortgage payment.

Statutory costs and taxes

Statutory costs and tases are the fees collected by state and local agencies necessary for the sale of any property. These will vary by state and county and can include:

• Transfer taxes: This is a common fee required to transfer the title and deed from the seller to the buyer.
• Recording fees for deed: The county clerk typically collects this fee to record the deed transfer and adjust the property tax billing information to the new owner.
• Pro-rated taxes: Depending on when your sale takes place and when local taxes are collected, taxes such as school taxes and county taxes may need to be split between the buyer and seller depending on the occupancy percentage.
• Impound account: Similar to an escrow account, your lender may require an impound account to cover local taxes.
• State and local fees: Some state or local governments may require additional fees, such as a mortgage tax.

Are closing costs deductible?

Not all closing costs are deductible when filing your taxes for the year. However, those fees that are considered taxes or interest are.

Loan points

The IRS considers points as a form of prepaid interest. These are tax-deductible if you meet these conditions:

• The mortgage covers your primary residence
• The mortgage is being used to make upgrades to your primary home
• Paying points is a normal business practice in your area, and you did not pay more than is customary
• You use the cash method of accounting
• The lender charged the normal amount for points
• The cash brought to closing was at least the amount of points charged by the lender
• The points were calculated as a percentage of the loan
• Your closing documents clearly shows how much you paid in points

Prepaid interest

Prepaid interest is the amount of interest paid to cover the period between closing and your first payment.

Property taxes

The state and local property taxes you pay are deductible in the year you pay them. The maximum a married couple can deduct is $10,000 ($5,000 for single) per year for property tax, sales tax, and state and local income tax combined.

Origination fees

The fees the lender charges to underwrite and process your loan, the IRS considers these fees the same as points, making them tax-deductible. These fees can even be deducted if the seller pays them.

Mortgage insurance premiums

The IRS considers four different types: private mortgage insurance (PMI), VA funding fees used for VA loans, USDA guarantee fees towards a USDA loan, and FHA up-front premiums used with FHA loans. This deduction is also dependent on certain income limits. You cannot claim this deduction once your adjusted gross income (AGI) exceeds $109,000.

Closing on your new home

As you can see, closing costs and taxes can cover a wide range of different fees and expenses. In fact, the average buyer will pay between 2-5% of their loan amount in closing costs.

At Hero Home Programs, we understand how intimidating the home closing process can be, and our team is here to help walk you through the process and ensure everything goes smoothly. To learn more, visit us online today.

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FMERR Program: All You Need to Know

Homeowners looking to change their mortgage terms or reduce their interest rates often turn to home refinance loans. Unfortunately, many homeowners find that their homes have dropped in value or live in an area where home values are stagnant. This often means that the homeowner has lost value in their home, and they do not have enough equity to qualify for a standard refinance loan.

The good news is, for those sitting underwater when it comes to home equity, refinance programs, such as the Freddie Mac Enhanced Relief Refinance Program (FMERR), can offer assistance. Here we take a closer look at the program, including FMERR qualifications and eligibility.

What is Freddie Mac Enhanced Relief Refinance (FMERR)?

In areas where the housing market has dropped or remained stagnant, homeowners often find they do not have the equity available in their homes to qualify for a traditional home refinancing mortgage. Created by Freddie Mac, the Freddie Mac Enhanced Relief Refinance (FMERR) program was created to help homeowners with little to no equity in their homes qualify for refinancing. This means that, even with no equity, homeowners can qualify for refinancing at lower interest rates as long as they meet certain other guidelines.

Who qualifies for the FMERR Program?

While home equity is not a requirement for the FMERR program, there are other qualifications that you must meet to qualify and receive loan approval.

1. Loan owned by Freddie Mac

To begin applying for an FMERR loan, Freddie Mac must own your current loan. Because Freddie Mac is taking the risk on this high LTV loan, they limit their program to the loans they originally approved.

For loans owned by Fannie Mae, there is the HIRO program. If you have an FHA, VA, or USDA home loan, a Streamline Refinance loan is your option.

2. Date of loan originations

Your current loan must have an origination date on or after November 1, 2018, to qualify for the FMERR program. In addition, your current mortgage must be at least 15 months old before you can qualify.

3. Loan-to-value (LTV) ratio

Applying for a traditional refinance loan requires a maximum loan-to-value (LTV) ratio to qualify. In contrast, the FMERR has a minimum LTV requirement. For example, you must have an LTV ratio of 97.01% or higher for a single-unit primary residence. In other words, you need to have less than 3% equity in your home to be approved.

3. Debt-to-income (DTI) ratio

Unlike traditional mortgages, there is no maximum debt-to-income (DTI) ratio to be eligible for FMERR refinancing. The new loan is designed to replace an existing loan and often reduces the existing monthly payments. However, lenders must prove a 45% DTI if the payment increases by 20% (this can occur when you switch from an adjustable to a fixed-rate mortgage).

4. Net tangible benefit

The point of any refinance loan is to achieve a benefit, and the FMERR program is no different. Refinancing with the FMERR program must offer at least one of these financial benefits to qualify:

• Lower interest rate
• Reduced monthly payment
• Improvement in mortgage terms
• Change from an adjustable rate to a fixed-rate mortgage

5. Good payment history

Your payment history matters when it comes to an FMERR loan. You must have no 30-day last payments within the past six months and no more than one 30-day late payment within the last 12 months.

6. Credit score

Technically, there is no minimum credit score requirement for the FMERR loan as it is replacing your previous loan with new financing. However, some lenders can establish their own requirements, run a credit score, and have a minimum score requirement.

Should you apply for the FMERR program?

If you are looking to reduce your interest rates or find a mortgage with better terms, then a mortgage refinance is your best option. If you are sitting with little to no equity in your current home, choosing the FMERR program may be your only option.

But what are the pros and cons associated with an FMERR loan?

Pros

• LTV value: Unlike traditional refinancing programs, FMERR allows for refinancing with a much higher LTV ratio and even refinances when you owe more than the current value of your home.
• Save money: A net tangible benefit is a qualification for this program, so you must benefit financially by refinancing. This can be a lower rate, lower monthly payments, and a shorter loan term.

Cons

• Upfront closing costs: As with any mortgage or refinancing, you will be required to pay closing costs on your FMERR loan. This can amount to thousands of dollars, so you will need to budget this expense.
• Limited ARM terms available: While most people choose a fixed-rate FMERR loan, adjustable-rate mortgages are an option but are limited to 5/5, 5/1, 7/1, 10/1, 5/6-month, 7/6-month, or 10/6-month terms.

Refinance your home even when you don’t have the equity

If you are looking to save money or improve the terms of your current mortgage but have limited equity in your current home, a Freddie Mac Enhanced Relief Refinance (FMERR) loan may be the perfect solution.

At Hero Home Programs, we understand how intimidating the home refinancing process can be. Our goal is to help everyone reach homeownership and maintain it at the rates they can afford.

Visit us online today to learn more about how we can help you navigate your home refinancing and find you the best possible rates and programs.

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Can You Get a Second Home Mortgage With FHA?

Many assume that FHA loans are only for first-time homebuyers. While first-time buyers do make up the majority of borrowers that take advantage of these loans, the fact is many borrowers who already own a home or have in the past can take advantage of the benefits associated with an FHA loan.

But can you buy a second home with FHA? While buying a second home with FHA is possible, there are some considerations. Here we take a closer look at the FHA and how it can benefit you when buying a second home or even an investment property.

What is an FHA loan?

An FHA loan is a mortgage loan backed by the U.S. Federal Housing Administration. These loans require lower minimum credit scores and smaller down payments than traditional mortgage loans. While the federal government insures these loans, they are actually administered by FHA-approved lenders. These loans are designed for those who may not qualify for more conventional mortgage loan options.

Can you use an FHA loan on a second home?

An FHA loan is designed to be used to purchase a primary residence. However, there are circumstances when you can purchase a second home with an FHA loan. For example, if you already own a home with an FHA loan but no longer live in it, such as through a divorce, you may be eligible for a second home purchase. Also, if you had a home with an FHA loan and decided to keep that home as an investment and rental property, you could qualify for an FHA loan for your new primary residence.

Before diving into more occasions when you may qualify for a second home FHA, let’s look at the eligibility qualifications for an FHA loan.

Eligibility

• You must have a credit score of 500-579 with a 10% down payment or a score of 580 and above with a 3.5% down payment.
• Verifiable 2-year employment history
• Verifiable income with pay stubs, tax returns, etc.
• Front-end debt ratio of no more than 31% of gross monthly income
• Back-end debt ratio of no more than 43% of gross monthly income
• You must wait two years after a bankruptcy or three years after a foreclosure before applying

Requirements

• FHA approved appraisal that meets the HUD guidelines
• Purchasing a primary residence
• Maintain FHA mortgage insurance on the loan

Aside from these basic FHA requirements, there are other requirements when using an FHA loan on a second home. These can include higher down-payments, higher minimum credit score requirements, and a cash reserve.

Can you have more than one FHA loan at the same time?

While you can qualify for an FHA loan more than once, you can only have one FHA loan at a time under general circumstances. However, there are four scenarios where you may qualify for a second FHA loan while still paying for your first property and FHA loan.

• Job relocation: If you are changing jobs and require a relocation over 100 miles from your current primary residence and do not want to sell your current residence, you may qualify for a second FHA loan to purchase your new primary residence.
• Leaving a joint-owned property: Oftentimes, especially during a divorce, you may be the co-owner of a current home where you no longer reside. In this case, you may qualify for a second FHA loan for your new primary residence.
• You were a cosigner for another property: If you acted as a cosigner for someone else to purchase a home with an FHA loan but never lived in the said home, you may qualify for an FHA loan to purchase your primary residence.
• Growing your family: If your current home no longer meets the needs of your growing family, you may qualify for a second FHA loan to purchase a new primary residence and maintain your first home as a rental property.

Can you purchase an investment property with an FHA loan?

FHA loans are designed to purchase primary residences and not second homes or investment properties. As shown above, there are some scenarios where it is still possible to buy a second property as a primary residence, leaving your first home as an investment property. There are two other times where an FHA loan may be used to purchase investment properties.

• Refinancing an existing FHA loan: Using a streamline refinance, you can refinance an existing FHA loan on a home you no longer live in as long as it lowers your monthly principal and interest payments.
• Multi-family properties: You can qualify for an FHA loan for a multi-family, such as a duplex, as long as one of the units will be used as your primary residence.

Applying for an FHA loan on the second home mortgage

Before you consider applying for an FHA on a second home mortgage, you will want to focus on boosting your credit score and increasing your cash reserves. In addition, start with an FHA mortgage calculator to see how much you can afford when it comes to a second home and what specific qualifications you may need.

Financing your second home with FHA

While financing a second home with an FHA loan is not common, it is still possible. When you purchase the second home as your primary residence, it gives you a second investment home that can add to your overall net worth.

However, at Hero Home Programs, we understand how confusing the home buying process can be. We can help you navigate the FHA home buying process and help ensure you meet the qualifications for a new FHA loan when needed. To learn more about Hero Home Programs and how we can help, visit us online today.

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Your Complete Guide to Mortgage Loan Documents Checklist

When you buy a home, the necessary paperwork for a mortgage application and underwriting can often seem overwhelming. Having a mortgage loan closing documents checklist can help make this process easier and help ensure you have everything ready before it is needed.

Here, we provide all the typical loan information necessary for your application and home closing.

Loan application information

When applying for a home mortgage and going through underwriting, your mortgage lender will need to take a deep dive into your personal and financial life. Unfortunately, this is necessary to help ensure you meet all the necessary loan requirements and guidelines and that you are in the position to afford your monthly mortgage payments. Knowing what information may be required in advance allows you to make sure you have all the necessary paperwork you may need ahead of time to help speed up the process and get you into your new home sooner.

Personal identification

To begin with, you will need to provide personal identifying information. This will include photo IDs and social security cards for every person on the mortgage. You may also need to provide information regarding your marital status and the number of children you have, as well as their personal information.

If you are not a U.S. citizen, you may need to provide proof of permanent residence and immigration status. It can include a copy of your green card, employment authorization documentation, or your approved visa.

Employment and income history

In order to prove that you can make your monthly mortgage payments and afford the amount of your home loan, the lender is going to require documents that confirm your employment and income history. This can include pay stubs from your employer for at least the last 30 days, W-2 forms from the last one to two years, and your income tax returns for the last two to three years.

If you are self-employed, most lenders require at least two years of a steady income in the same self-employment industry. Proof of this can come from client contracts or letters from your current clients. If you own a business, you will need to provide your business license and proof of insurance, as well as at least two years of tax returns, both personal and business.

Profit and loss statements

If you own a business, in addition to the information listed above, you will also need to provide a cash-flow analysis and a year-to-date profit and loss statement verified by a certified accountant.

Bank statements

Your lender will want to ensure that you have the assets available to cover your down payment and closing costs, as well as maintain cash reserves if they are required. To show this, you will need to submit bank statements for at least two to three months.

Investment account statements

If you plan to use money from an investment or retirement account to cover your down payment or closing costs, you will need to provide statements from all these possible accounts. This can include retirement accounts, 401(k) plans, stocks, and certificates of deposit.

Gift letter

If a family member is gifting you the money for your down payment, you will need to acquire a gift form and letter ensuring that this money is a gift and not a loan that is expected to be paid back.

Assets and liabilities

Lenders will need to calculate your debt-to-income ratio to ensure that you have the financial ability to make your monthly mortgage payments. To do this, you will need to provide your bank investment account statements and proof of all debts, such as auto or student loans, credit cards, personal loans, and any other regular expenses.

Credit history

The lender will need to check your credit history, though you are not required to run and submit your own credit report. Instead, your mortgage lender will ask for your permission to run a credit check. If you have a thin credit history, they may ask for alternative credit data, such as utility bills, rent history, cable bills, and more.

Rental history

Some lenders will require you to provide a rental history to show proof of regular monthly housing payments. This can include a list and contact information of your landlords over the last two years.

Signed sales contract

You will need to provide a signed copy of the sales agreement between you and the seller. It is the document that shows the purchase price and all the home details. It also includes the terms you and the seller agreed to.

Proof of additional income

If you rely on additional income, such as alimony or child support, you will need to provide documentation on the amount and duration of these payments. In many cases, this will require a copy of the court order.

Bankruptcy documents

If you have a bankruptcy on your credit history, you will first need to talk with your lender about how long you need to wait before considering a mortgage. You will need to prove that all debts are discharged and no longer outstanding. In addition, if you had a previous foreclosure in your bankruptcy, you may have to wait seven years before you are eligible for a mortgage.

Divorce decree

If you are divorced and pay or receive child support or alimony, your lender is likely to require a copy of your divorce decree to provide proof of income or liability.

Checklist helps

As you can see by the checklist, the required documents and information associated with the home loan process can be overwhelming. At Hero Home Programs, our goal is to help everyone reach homeownership. We research all the available home loan products and discounts you may be eligible for and help walk you through the lending process.

To learn more about how we can help you get into the home of your dreams, visit us online today.

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What is HIRO Mortgage Program?

If you are looking to change your mortgage terms or lower your interest rate, you may consider a home refinance loan. This is a wonderful option for many. However, what if you live in an area where the property values have dropped? A traditional refinance loan requires a minimum of the existing home equity, and many find that they do not qualify because of depressed property values.

The good news is the HIRO loan program is a government refinance program that offers an alternative refinancing option. Here we take a closer look at the HIRO program, how it works, who can qualify, and any other alternative options available to you.

What is the HIRO Program?

The Fannie Mae High Loan-to-Value Refinance Option (HIRO) is a program designed to help homeowners in areas where the property values are stagnant or even falling. In these areas, many homeowners lost equity in their homes, leaving them ‘underwater.’ The goal of the HIRO program is to provide loans to these homeowners, allowing them to refinance into a lower interest rate and monthly payment.

How does the High LTV Refinance Option (HIRO) Program works?

Traditional refinance loans require you to owe less than 80% of your home value. The HIRO loan program lets you refinance with a much lower loan-to-value (LTV) ratio. In fact, there is no maximum ratio if you refinance into a fixed-rate mortgage. There are also some differences regarding how a HIRO loan works.

Let’s take a closer look.

Income verification

Refinancing with HIRO still requires a completely new mortgage and a similar application process. However, this application process offers much more flexibility than traditional mortgage applications. For instance, in many cases, income verification, employment verification, asset checks, and home appraisals are often not necessary. This is partially due to the initial eligibility requirements for the HIRO program, which we will discuss below.

In addition, there are no credit score requirements to qualify for a HIRO loan. As it is intended to replace your current loan, lenders are not required to pull a credit report or require a minimum credit score. There is also no debt-to-income ratio ceiling that must be met for the HIRO program.

Rates

Interest rates for any loan are based on the risk posed by the lender. Because you have little to no equity in the home when you apply for the HIRO program, the lenders are taking higher risks than with other refinance loan options. For this reason, HIRO loans often have a slightly higher interest rate than traditional refinancing options.

Who qualifies for the HIRO mortgage program?

If you are considering a HIRO loan, you must meet several qualifying factors to be eligible.

• Your original mortgage must be dated October 1, 2017, or later
• Your existing mortgage must be at least 15 months old
• All payments must be up to date on your current mortgage. This means no late payments within the last six months and a maximum of one late payment in the last year.
• Your current mortgage must be first-lien financing and not a second mortgage.

Key qualification factors

In addition to the requirements listed above, the HIRO program also has additional key qualification factors for program approval.

1. Fannie Mae backs current mortgage

Because Fannie Mae backs the HIRO program, their first key qualification factor requires that Fannie Mae back your current mortgage. Given that they are taking the risk on this high LTV loan, they want to limit the program to loans they originally approved. If Fannie Mae does not back your current loan, there are additional alternatives we will discuss below.

2. Minimum and maximum LTVs

Traditional refinance loan options require a maximum LTV ratio to qualify. However, as we mentioned, the HIRO program does not have a maximum limit. They do, however, have a minimum LTV ratio. This minimum varies based on the property type. For example, the LTV for a 1-unit primary residence is 97.01% or higher. A 1-unit second home has a minimum LTV of 90.01% or higher, and a 1- to 4-unit investment property has a minimum LTV ratio of 75.01% or higher.

3. Net tangible benefit

The final key qualification factor for the HIRO program is the loan must provide you with a net tangible benefit, meaning you must gain an advantage by refinancing your mortgage.  Examples of a net tangible benefit include:

• Lower interest rate
• Lower principal and interest payment
• Reducing the terms of your loan
• Changing from an adjustable-rate mortgage to a fixed-rate

When should you seek a high LTV refinance?

If you are interested in achieving any of the net tangible benefits above, such as a lower interest rate or shortening the term of your loan, then a mortgage refinance loan is a great option. If the amount of equity in your home is not enough for a traditional loan, then a HIRO program loan offers you the perfect solution.

Alternatives for HIRO Program

Because the HIRO program requires current loans backed by Fannie Mae, it is not open to all homeowners. There are, however, similar programs designed for those with loans backed by Freddie Mac or FHA, VA, and USDA borrowers.

Freddie Mac Enhanced Relief Refinance (FMERR)

The Freddie Mac Enhanced Relief Refinance (FMERR) program is very similar to the HIRO program, with the main difference being it is for those with current loans backed by Freddie Mac. Also, one important requirement is that your current loan must have been originated on or after November 1, 2018.

Streamline refinance

Streamline Refinance is a refinancing option for FAH, VA, or USDA home loans. This loan option works for those with little to no equity in their home requires no credit check or income verification, and follows the basic qualifications of the other programs.

Conclusion

A HIRO loan is a great option for those with little to no equity in their home refinance to reduce their interest rate or monthly payments. At Hero Home Programs, we understand how intimidating the home loan refinancing process can be to homeowners, and we are here to help.

Contact us online today to learn more about how we can help you navigate your refinancing and make the most of your homeownership.

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Home Loans for Paramedics and EMTs

Emergency medical service (EMS) personnel, such as paramedics and emergency medical technicians (EMT), selflessly give their service to protect and take care of their community every day. Unfortunately, homeownership is often just out of reach despite the vital role they play. However, thanks to special EMS mortgages and mortgage loans for paramedics, many first responders can achieve the dream of homeownership.

Difference between paramedics and EMTs

When it comes to EMS personnel, there are different levels of certification. These certification differences affect the level of care that responders can provide to community members. To better understand the differences, we look at both paramedics and EMTs.

Emergency Medical Technicians (EMTs)

The role of an EMT is to assess a patient and determine if there are any life-threatening injuries or illnesses. Their treatment options focus on basic health procedures, such as CPR, oxygen administration, stabilizing and splinting injuries, or administering epinephrine for an allergic reaction. To become an EMT, you do not need a college degree but rather complete an EMT training program requiring at least 170 hours of education.

Paramedics (PM)

Paramedics are licensed, pre-hospital service providers providing many of the same medical treatments that emergency room staff can. This can include administering medications, starting IV lines, providing airway management, EKG administration and interpretation, and much more. Paramedic training is a college degree program that can take up to two years and include 1,000 to 2,000 hours of training to complete. In many cases, these programs require a college-level anatomy and physiology course before acceptance.

Home buying challenges for first responders

Despite providing life-saving services to the community, wages for EMTs and paramedics often keep homeownership out of reach. According to a 2021 EMS1 survey, more than half of EMS personnel work more than one job. This is despite 63% working more than 50 hours a week and 21% working more than 70 hours a week.

In addition to the mental and physical stress of the job, the inability to make a living wage often leads to burnout. Unfortunately, it usually keeps many EMS personnel from owning their own home.

Home loan programs for EMS providers

The good news is there are many different home mortgage programs available for first responders, including EMTs and paramedics. These programs offer everything from down-payment assistance to reduced fees and grants to help with the down payment.

Here we take a closer look at some of the available assistance options.

Hero Home Programs – First Responder Home Loans

Hero Home Programs and their First Responder Home Loans is a comprehensive program that works with first responders to find all the possible home assistance programs they are eligible for. They research all the possible programs available to you, including down payment assistance, low-cost mortgages, and federal and local grants that are often available for first responders. Once they locate all available options, they also work with you to find the best financing options that complement the additional benefits, making your home buying and financing process much easier, with less work for you to do.

Advantages

• Research is done for you, meaning less work for you
• Credit on closing
• Additional vendor discounts
• They find all available rebates and grants
• Low-rate mortgage loans
• Maximum savings

Eligibility
The Hero Home Program is open to all EMS personnel and first responders.

FHA Loans

A Federal Housing Administration (FHA) loan is insured by the Federal Housing Administration and offered by approved lenders. These loans only require a 3.5% down payment and are designed for low to moderate-income earners.

Advantages

• Small down payments
• Flexible qualifications, with the main requirements being good work. and credit history
• Acceptance of lower credit scores

Disadvantages

• Upfront Funding Fee: This is a fee of 1.75% of the total amount financed. This fee can be paid upfront or rolled into your monthly mortgage payment.
• Mortgage Insurance Premiums (MIP): MIPs are required for the life of all FHA loans.
  It will cost more over the life of the loan.

Eligibility
To qualify for an FHA loan, you must have a verifiable employment history, a credit score between 500-579 for a 10% down payment or over 580 for a 3.5% down payment, and have the home appraised by an FHA-approved appraiser.

HUD Good Neighbor Next Door

The Good Neighbor Next Door program is offered by the Department of Housing and Urban Development (HUD). This program provides homes to first responders at 50% off the listing price. This means if you find a home for $200,000, you will pay monthly mortgage payments of just $100,000. This only applies to select homes in revitalized communities.

Advantages

• Purchase a home for half the asking price

Disadvantages

• Limited selection of homes available for the program
• If multiple people apply for the same home, the applicant chosen is determined by a randomized lottery
• Must stay in the home for a minimum of 3 years

Eligibility
You must be employed full-time as a firefighter, EMT, paramedic, or law enforcement officer with a fire department, EMS unit, or law enforcement agency.

Firefighter Next Door® First Home Buyer Program

If you are a first-time homebuyer or have not owned a home in the past three years, you are eligible for the Firefighter Next Door First Time Home Buyer Program. With this program, you can purchase any home on the market, and you may also be eligible for the Firefighter Next Door Grant and additional down payment assistance.

Advantages

• No application fees or up-front costs
• Easy application process
• Low down payment options
• Grants up to $8,000
• Down payment assistance up to $10,681.00
• Preferred interest rates
• Free appraisal
• Free homebuyer representation
• Discount title fees

Eligibility
The Firefighter Next Door First Time Home Buyer Program is open to all firefighters and first responders, including EMTs and paramedics.

Home buying made easier with Hero Home Programs

As you can see, there are many potential programs available to help first responders achieve their dream of homeownership. At Hero Home Programs, we want to help all those who serve our community, including EMTs and paramedics, navigate the home buying process and find all the possible assistance they can to help achieve their goal of owning a home.

Contact us online to learn more about how we can help you move into your new home for as little as possible.

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Federal Government Employee Mortgage Programs

The home buying process can be stressful for everyone and, in many cases, may seem intimidating. This is especially true for first-time homebuyers.

However, as a government employee, you are eligible for many different home mortgage programs that can make the buying process so much easier and have you enjoying homeownership in no time at all. From special federal employee mortgage loans to mortgage assistance and grants, these programs can save you thousands of dollars and make the home buying process more attainable.

Let’s look at just how these programs work and who is eligible.

Who is a federal government employee?

Government employees are anyone who works for the federal, state, county, or city government. These can include employees from federal government agencies, such as the Department of Agriculture, to librarians and park rangers. In many cases, this also includes teachers in public education and those working in healthcare.

Home buying challenges

While working in many of these professions is rewarding, it can also contribute to financial challenges, making homeownership a little more difficult and often out of reach. Some common challenges associated with government employee positions can include salary limitations and frequent relocations.

1. Salary limitations

For most private sector positions, you can shop around for positions that offer a higher salary and, in most cases, you can expect regular raises and evaluations that contribute to an increase in income. Unfortunately, as a government employee, you may not make as much as those in similar private-sector positions, and salaries are often capped, so room for growth is not always possible. This can make it difficult to save the money necessary for a down payment on a home.

2. Job locations can change frequently

If you work in the military or other areas of the government, relocation is often a part of the job description. This can make it difficult to commit to owning a home. However, you must keep in mind that homeownership is a way to build your assets. While you may need to relocate, you can rent your home out to tenants who will, in the end, pay your mortgage for you.

Public Servant Next Door® First Time Home Buyer Program

Administered by the Teacher Next Door® National Home Buying Program, the Public Servant Next Door program provides grants and down payment assistance to those buying their first home or those who have not owned a home in over three years.

Benefits for first-time homebuyers

If you are a first-time homebuyer, this program offers a wide range of benefits, including:

• No application fees
• No up-front fees
• Easy application process
• Simple Docs Program
• Low down-payment options
• Purchase any home on the market
• Specific loans for first-time buyers
• Preferred interest rates
• Free appraisal
• Free homebuyer inspection
• Discount title fees

Eligibility

The Public Servant Next Door® program is open to all government employees, including city, county, state, and federal agencies. This includes a wide range of positions but is not limited to:

• Administration
• Clerical and office staff
• Engineers and architectures
• Facilities staff
• Computer and IT specialists
• Transportation
• Legal services
• U.S. Postal Service employees
• Inspectors
• Human resource management
• Park rangers

Government employee housing grants

In addition to down payment assistance of up to $10,681.00, the Public Servant Next Door® program also offers all government employees a housing grant of up to $8,000.00 for the home purchase. This is a non-repayable grant.

Mortgages for Champions

Mortgages for Champions is a program offered through RealFi Home Funding Corp. It was created as a thank-you to all the heroes in the community, including all government employees. This program offers the elimination of all lender’s fees and closing costs, which, in many cases, can save home buyers up to $1,700.00 or more.

Benefits for first-time homebuyers

Mortgages for Champions offers the elimination of lender’s fees and closing costs for first-time homebuyers, including:

• No application fees
• No processing fees
• No underwriting fees
• No commitment fees

Eligibility

Mortgages for Champions is a program designed to help those that help the community, including government employees, as well as:

• Educators
• EMTs
• Firefighters
• Law enforcement officers
• Medical personnel
• Military personnel

Mortgage programs can help you get your first home

Many government employees do not know about the many programs available to help during their homebuying process. The Public Servants Next Door® and the Mortgages for Champions programs are only a couple of the many programs that may be available to help you achieve your dream of homeownership.

At Hero Home Programs, we understand how overwhelming the home buying process can be. Our teams will do the research for you and find all the programs you are eligible for to help you save thousands on your home purchase and allow you to purchase the home of your dreams.

Visit us online today to learn more about how the Hero Home Programs work.

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What is the Good Neighbor Next Door Program?

Do you think homeownership is out of reach? What if we told you that you could buy a home for half the cost of the listing price and a $100 down payment? You would likely say we’re crazy, but the fact is, buyers eligible for HUD’s Good Neighbor Next Door Program (GNND) can do just that. But what is the Good Neighbor Next Door program and how does someone qualify? Let’s take a closer look at the program, the requirements, and some other similar programs available.

What is the Good Neighbor Next Door Program?

The GNND program is a community revitalization program that is sponsored by the U.S. Department of Housing and Urban Development (HUD). The idea of the program is to revitalize homes in certain neighborhoods while offering a significant discount to those that are eligible. The program is directed toward civil servants in the community and allows them to purchase qualifying HUD homes for 50% off the list price and a $100 down payment if you use an FHA loan.

The program requires you to hold two mortgages on your home. The first mortgage is for the 50% cost of the home, and you are required to obtain your own financing. The second mortgage is a silent mortgage that covers the additional 50% of the listing price. You will have no payments or interest on this second mortgage as long as you live in the home for at least 3 years.

Pros

• You save 50% of the homes list price
• Low down payment
• Ability to finance closing costs
• You can include home repair costs if you use a renovation loan, such as an FHA 203(k)
• Financial investment that builds wealth quickly
• You help revitalize the neighborhood you serve

Cons

• Home options are very limited
• Qualifying homes only stay on the market for 7 days in the program, so you must work quickly
• You must pay a penalty if you move before the 3-year term, as you must pay a percentage of the silent mortgage back. For example, if you sell the home after 18 months, you will be required to pay back 50% of the silent mortgage amount.
• If another GNND bid is placed on the same home, you compete with the other buyers through a lottery system.

Who qualifies for the Good Neighbor Next Door Program?

The Good Neighbor Next Door program is open to civil servants in the community. This includes police officers, firefighters, and EMTs working full-time for a federal, state, local, or tribal government agency. The program is also open to full-time teachers teaching pre-k through grade 12 at a state-accredited public or private school. If the teacher works for a private school, they must provide proof that at least one student at the school resides in the same neighborhood as the home they are purchasing.

All of those eligible must certify that they intend to remain an employee in their profession for at least one year and the home they purchase must be in the community they serve.

How do you apply for this program?

If you meet the requirements for the program, you can check the local listings in your area through HUD's website. Keep in mind that homes are only available for listing for 7 days. When you find a home that you are interested in, you can follow the instructions to submit your interest in purchasing the home. You then must obtain loan pre-approval on your own before the program can complete.

Alternatives to Good Neighbor Next Door Programs

If you aren’t a civil servant and do not qualify for the GNND program, there are some other alternatives available to help you purchase your new home. Here we offer information on a few of those programs.

1. Hero Home Programs

Hero Home Programs believes that everyone should have access to homeownership. Their team works with you to take advantage of available programs, grants, and other discounts designed to help you break the cycle of renting and become a homeowner. They have available programs for renters, educators, first responders, healthcare workers, and military personnel.

2. Teacher Next Door

Next Door Programs, including Teacher Next Door, is the largest national home buying program in the United States. They offer programs for teachers, military, civil servants, healthcare professionals, and first-time buyers. Programs include grants, down payment assistance, Fresh Start Credit Repair, and more to help you move from renting to homeownership as quickly and efficiently as possible.

3. Everyday Hero Housing Assistance Fund (EHHAF)

This is a program designed to help everyday heroes, such as police, firefighters, teachers, social workers, and medical professionals, with their out-of-pocket closing costs. They work with sellers to negotiate concessions and then will gift funds to cover the remaining closing costs. These funds are a free gift and do not require repayment.

4. Union Mortgage Assistance

If you are a member of a labor union, you may have access to special union programs designed to assist with homeownership.

5. Government loans

First-time homebuyers, military members, and veterans may have access to FHA, VA, and USDA loans that offer low or no down payment options, helping to make homeownership easier to obtain.

Homeownership is within your reach

Everyone deserves the opportunity to own a home and there are various programs available that can help just about anyone make the dream of homeownership a reality. At Hero Home Programs we understand how the home buying process can be intimidating and overwhelming. Our dedicated team has access to the best grants, rebates, and loans across the country and we are determined to help you find the right program and get you into the home of your dreams. Contact us today and let us help you get started down the road to your new home.

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How Much Rent Can I Really Afford?

Whether you are looking to move out for the first time or deciding it may be time to leave the roommates and find a place of your own, figuring out how much rent you can truly afford is the best place to start. What percent of your paycheck should go to rent? How much do you need to get an apartment? While many experts suggest you follow the 30% rule, that isn’t always possible. However, it doesn’t mean you can’t still afford your own apartment. It just takes a little planning and budgeting.

What is the 30% rule?

The traditional rule of thumb when it comes to determining how much you can afford to spend on rent is the 30% rule. This means that you should be spending no more than 30% of your before-tax income on rent. For example, if you make $60,000 a year, your monthly rent should not exceed $1,500. However, this is not always possible in today’s housing market, especially if you live in a larger city. The good news is with the right budget, you don’t always have to stay within the 30% rule.

Setting a realistic budget

A good way to evaluate your affordable rent rate is to look at all your monthly expenses. Another good breakdown to consider is the 50/30/20 rule. This breaks down to include 50% for fixed costs (rent, utilities, groceries, transportation), 30% for wants (memberships, entertainment, shopping, dining out), and 20% for goals (savings, reducing debt). This breakdown gives a little more wiggle room when compared to the 30% rule. For example, if you find a rental that includes utilities and is within walking distance to work, school, and shopping, you can afford a higher rental price because you will save in other budget areas, such as utilities and transportation.

When creating your budget to see how much rent you can afford, it is important to be realistic. If the numbers are getting tight and you are considering giving things up, such as gym memberships or regular dining out, make sure that this is something you can really live without. While you want to find a rental you can afford, you still want to be happy with your choices.

Consider your local housing market

Your local housing market plays a large role in determining how much rent you can afford and what changes you may need to make in your budget. In some larger cities, such as New York or Los Angeles, you may find that rental prices exceed 30% and, in some cases, even 50%. This may mean you need to adjust your budget further or consider looking for rentals in other nearby locations.

Think about your current lifestyle

When creating your rental budget, it is important to think about your current lifestyle and what changes you may need to make to reach your goal. If you have been living at home or with roommates, you may have had all your groceries provided for you or had to share grocery expenses. Getting into your own home will mean you have to fill your fridge, adding additional expenses to your monthly budget. This also includes things like internet service, cable or streaming services, and other monthly home expenses, including monthly rental insurance.

One-time expenses to consider

When you are looking to make the move into a rental home or apartment, there are some one-time expenses you must also consider. Saving for these expenses will need to be included in your temporary budget as you consider your rental affordability, as you don’t want to drain your savings to make your move to a new place.

Moving costs

When moving to a new location, there are many different moving costs to consider. If you are currently living in a home with your own furniture and household goods, you will have to think about hiring a mover company, a self-storage moving container, or renting a moving truck and doing it yourself. There is also the cost of packing supplies to consider, especially if it is a long-distance move. If you are hiring movers, you can expect to pay a few hundred to a few thousand depending on how far away you are moving. Even if you recruit some friends to help and do it yourself, you are still looking at snacks and beverages to thank them for their help.

In addition to physical moving expenses, moving can cause other expenses as well. If you are moving out of another rental, you will have cleaning supplies and costs to leave your previous residence in tip-top shape. In addition, moving to a new area or state means a new driver's license and vehicle registration.

Deposits

When moving into a new home or apartment, you have multiple deposit costs to consider. While you are likely to have a deposit on your new rental, there are additional deposits that are also very common. These can include:

• Last month’s rent – In addition to an initial deposit, many rental properties also require a deposit of the last month’s rent.
• Pet deposit – If you have a dog or a cat that is allowed, you are likely to be charged an initial pet deposit. In addition, some places will also charge monthly pet rent.
• Utility deposits – Many utility companies require a deposit for new customers.
• Connection or transfer fees – Many companies, such as internet or cable providers, charge initial set-up fees or transfer fees to move your service to your new home.

Furniture and household goods

Are you moving into your first new place? Chances are you don’t have your own furniture or household goods. In addition to a new bed or couch, you will also have to consider things like sheets, towels, dishes, silverware, televisions, tables, etc. Shopping second-hand can save you money, especially if you are looking to furnish an entire home.

Is renting your only option?

While we have talked about renting and determining how much you can afford, the truth is you may be able to get more for your money if you purchase a home instead of renting. In fact, there is a chance your mortgage can be less than your rental budget.

Don’t think you can qualify to purchase a home? The team at Hero Home Programs is committed to helping renters get the home financing they deserve. Over time, purchasing a home saves you money and provides a solid investment. To learn more about how our team can help, contact Hero Home Program today.

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What are Micro Apartments?

Do you ever feel like you pay too much rent for space you don’t use? You aren’t alone. There are a lot of positives to downsizing your space to what is considered to be a micro-apartment. These units are between 300 to 500 square feet and are usually located within the heart of a community. It can be a great way to save money too.

Micro apartments seem to become a new trend. In fact, 1 out of 4 renters would consider a micro-apartment. With the growing population size of the world and its major cities, it seems as if micro-apartments may be one of the more sustainable ways to live. And if you feel like you’re never home enough to use the space you pay for, a smaller place may be better for you.
In this article, we’ll take a deep dive into what micro-apartments are, the pros and cons of living in them, and what makes them a good fit for you. In the end, it’s all up to you whether or not it would be a good fit. But if you’re an avid tiny home dreamer, then this may be the perfect first step. If not, we’ll explore an alternative option for you to get you out of apartments entirely.

What is a micro-apartment?

Micro-apartments can vary in size, and there is no formal definition of what qualifies a unit to be a micro-apartment. These units come with a kitchen and dining area, a living room space, a bathroom, and a bedroom. All of this is in 300-500 square feet. So it’s a place you want to have if you don’t expect roommates of any kind, human or furry. There are often communal amenities, like laundry and recreational rooms. Some have wifi and housekeeping included in the monthly rent, but that varies by building.

Micro-apartments are often located in the hearts of big-city communities as affordable living places. They are close to transit stations, parks, or other areas of culture or city life that make them appealing despite their small size. Not to mention, there are often many neighbors and friends to make all in the same building, which can have a lot of benefits if you live alone.

Are micro-apartments a good fit for me?

If you are looking to move to a new city or just accepted a job that has you more often at work than home, a micro-apartment may be the perfect place for you. The people that rent micro-apartments are often younger professionals who are just coming into the scene of their profession. If you are looking to maximize your space while minimizing your payment, a micro-apartment has its appeal.

And it is the perfect transition space. Those that rent micro-apartments usually only intend to stay for one or two years as they land on their feet with their new life direction. And they don’t move out due to dissatisfaction, but rather because they move into homes, larger apartments with a partner, or have saved enough money to finance a larger dream of theirs.

Pros and cons of micro-apartments

Now that we’ve gone over the basics, let’s look at the nitty-gritty details of micro-apartments. Like any apartment style, there are pros and cons to these units as well. It’s good to keep these in mind before signing on the dotted line.

Pros

There are a lot of upsides to micro-apartments. While this list is not exhaustive, it is a general overview of what you can expect.

• Lower monthly rent
• No roommates
• In-building facilities
• Community

And so much more! Don’t let the small size fool you. There are plenty of great things that can be packed into a micro-apartment. Not to mention, if you are the kind of person that loves to be organized and maximize your space, then a micro-apartment would be a good challenge for you.

Cons

While there may be a lot of pros, there can be quite a lot of downfalls when it comes to renting a micro-apartment. However, it is good to remember what your deal breakers are, needs, and wants. The cons, in general, may not seem like a big deal to some, or it may be a deal-breaker for others. Here are some cons to living in a micro-apartment:

• No hosting others
• Less storage and furniture space
• Harder to strengthen roots

Another factor is the weather where you would be living. If there is a harsh winter and you’re stuck inside, there wouldn’t be a lot of space to move about to get out that extra energy. If you are prone to cabin fever, a micro-apartment may not be a good fit for you.

Maybe a home sounds better

You may see the appeal to smaller spaces for less rent, but what if you want more space for equal or even less of a payment? Well, it may be time to look into homeownership. Hero Home Program™ can help you break out of the renting cycle, even if you’re not a community hero. We believe that everyone should be able to achieve their dreams of owning their own space. So, we take care and pride in helping renters secure great mortgage rates that are often lower than their monthly rent. And if you still want that tiny space but want your own house, we can help you there too! No matter what size the space, we’re here to help you find a place to call home.

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Mortgage Applications & Credit Inquiries: What You Need To Know

How does a hard credit inquiry affect my score?

If you're looking to buy a home, you may be wondering about the mortgage application and how that impacts your credit score. (HINT: There is great news within)

When applying for a home loan, this requires a hard pull on your credit, also known as a "credit inquiry." As you might know, credit inquiries can influence your overall credit score. Generally, a hard pull will impact a credit score by roughly 2 to 5 points (Keep in mind, this is just a rough estimate).

In order to understand your real mortgage options, you will need to have your credit reviewed. Every mortgage lender has to check your credit so that they can determine what loan programs and benefits you qualify for. This is an essential step to matching you with the best loan package suited to your unique situation.

Can I talk to multiple lenders without taking several hits to my credit score?

A common fear that many home buyers have is that they don't want to take multiple hits to their credit, especially if they want to shop around for different mortgage options. The great news is, as long as you stay within a 45-day timeframe, you can have multiple lenders check your credit without taking several hits to your score!

According to the Consumer Financial Protection Bureau, "Within a 45-day window, multiple credit checks from mortgage lenders are recorded on your credit report as a single inquiry."

This means that you have the option to talk to different lenders and submit multiple mortgage applications, without having to take multiple hits to your credit score (as long as those credit checks are all conducted within a 45-day window).

However, this rule only applies if the credit inquiries have to do with the same loan product (IE a home loan.)

For example, let's say you fill out a mortgage application and have your credit pulled by a mortgage lender. Then, a week later, you decide to apply for a credit card. Even though you're staying within that 45-day window, both credit checks would impact your score because those are two different financial products (IE a home loan vs. a credit card).

Should I check my credit before talking with my mortgage lender?

It's a good idea to take a look at your credit before speaking with your mortgage lender. Generally, when you check your own credit, this is known as a  "soft inquiry" and will not impact your score.

You can check your credit score using on of the three major credit bureaus: Experian, Equifax, or TransUnion. If you haven't already, you should obtain your free credit report from www.annualcreditreport.com This website is backed by the Consumer Financial Protection Bureau.

It's important to view your credit report periodically to ensure that there are no errors or fraud that could be impacting your credit history.

Will my Hero Home Programs™ lender help me with improving my credit score?

When you talk to your Hero Home Programs™ mortgage lender, they'll ask you for a rough estimate of your score BEFORE doing any hard inquiries on your credit. The reason for this being, we want to understand your credit situation before making any changes that could impact your score.

At Hero Home Programs™, we are committed to helping you improve your financial situation. While other mortgage companies might pull your credit right off the bat, our Hero Home Programs™ accredited lenders will only pull your credit at the appropriate time.

In addition, after checking your credit, if it's in your best interest to improve your score, our lenders are committed to helping you through this process, even guiding you through the credit repair journey. We want you to be in the best position possible when buying your home, so that you can qualify for the maximum amount of loan benefits available to you.

Our aim is to not only help you get into your dream home at the best price and the best value possible, but we also want to help you improve your financial situation overall.

Our accredited lenders take multiple factors into account such as your income, credit history, current circumstances, future goals, and your timeline. All of these factors, and more, are essential when it comes to matching you with the very best loan package suited to your unique situation.

By taking these different factors into account, our accredited lenders will not only guide you through your home buying journey, but also help you obtain better financial options and more financial freedom for years to come.

The following blog post Mortgage Applications & Credit Inquiries: What You Need To Know See more on: https://www.herohomeprograms.com/

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Tips on Finding a Cheap Apartment in a New City

Moving to a new city is already daunting enough. You’ve got the job, and now you’ve got to find a place to live. It may seem easy, but there is so much up in the air that it can be overwhelming. There are many reasons that you may relocate for a job— military, healthcare, and teaching opportunities open up, and it is often a nationwide search.

In this article, we’ll discuss what you need to consider when you are apartment hunting in a new city, how you can make ends meet until that first paycheck hits, and where to go apartment browsing online. If you think it might be easier to buy a house after all of that, we’ll talk about that too!

What to consider in finding a new apartment

When moving to somewhere different, whether it is just across the state or across the country, there is a tendency to think that we have a fresh start and that we should make the most of it. And while that’s true, there comes the point where often people will sign leases on apartments they could afford from saving rather than what they can afford for the whole term.

Needs vs. wants

One of the biggest factors you have to consider is what you need and what you want. And that can vary from person to person. An example of a ‘need’ could be pet-friendly spaces, within walking distance to work, or even just the number of bedrooms. ‘Wants’ are things that you can live without, though we may enjoy the convenience. Things like dishwashers, laundry, and large spaces or gathering places (pools, on-site gyms, etc.) are all ‘wants.’ The thing about ‘wants’ is that you can always upgrade after the lease is up and you’ve put down more solid roots in your new town.

Income and pay period

This seems as if it should be obvious, but sometimes we forget our income range when we accept a new job. It is important to look at how often you will be paid and how much you make in a pay period. For example, if you are hourly now and just signed a contract to be salaried, you may not get paid every two weeks. You may have to budget for an entire month rather than every two weeks, which can make a big difference in bills and rent payments.

Deal breakers

After considering your needs and wants, it is time to determine what you absolutely do NOT want. This could be things like smoking status or the inclusion of utilities or lease terms. Just like needs and wants, deal breakers are different for everyone. However, it can help you manage your search and filter out absolute no’s places, so you can focus on finding the right place for you.

Neighborhood

Another aspect to consider is the neighborhood. A great way to check to see if you want to live in an area is to look up the apartment on Google Maps or Safari to get a feel for what is around you. Maybe you are close to a park, or maybe you’re right next to the freeway. It’s a good idea to find where in relation to everywhere else you could be residing before signing any contracts.

Cost of living

While it may seem strange, it is important to look at the cost of living in your new town. The buying power of a dollar may not change, but the price of goods can. Looking at what you can expect to pay for a gallon of milk or a loaf of bread in your new city can help you plan your budget and ensure you aren’t living beyond your means. You can calculate the cost of living from a variety of online comparison calculators, like this one.

Tips on how to find an affordable apartment

Finding a new apartment can feel like finding a needle in a haystack. Not to mention, you can be unsure what is the real deal and what is catfishing apartment edition. Here are some tips and tricks to finding the best apartment for your budget.

Be social

One of the easiest ways to find apartments is to be social, even if you haven’t moved yet. Ask your new boss, join Facebook groups, or find other social networking through your new job or opportunity. This can help you have friends right away as you move in, and you can get an insider scoop of what places are good and not so good.

Only look at what you can afford

You can’t go over your monthly budget if you don’t look above your budget. After you calculate your approximate income, keep those strict parameters when searching for your next place. That way, you won’t be looking at homes that are out of your range and being drawn into a place based on fancy pictures.

Show up ready to rent

If you do a walkthrough tour of your new place, and you’ve decided to rent it, then come prepared with a deposit ready. That way, you can be sure to get in under the advertised rate of rent without waiting a month for an increase in rent. You can also establish rapport with your landlord that way, and they may be more lenient for grace periods.

Improve your credit

Improving your credit may seem like what you want to do when looking to buy a house. And if that’s in the cards for you, just not right now, then you can consider this an early start on that goal. But improving your credit can help you if your prospective place is income-based or looking to take out a loan in advance to cover the lease term.

Plan to move off-peak season

Landlords want people to fill the units. And if you plan to move during the slow times, that can help secure a more affordable rate as landlords try to fill the vacant units. Plus, if you want to hire a moving company, you can save more moving off-season as the demand for their services is less competitive.

Best websites to look for an apartment

There are some websites that look great, and there are some websites that are great. When you’re looking for an apartment online, it can be tough to decide which ones are which. Thankfully, there are a few go-to places that you can trust.

Airbnb

This is more than just a vacation rental place. Airbnb has full-term leasing options as well for those looking to rent. There are probably hidden gems of places on this site, along with the trusted fact that there is a vetting process to post these listings.

Zillow

Again, usually, when you think of Zillow, you think of houses. But they have apartments to rent too! And if you’re looking for a good balance between home and apartment, Zillow can help you find a house available for rent. Talk about the best of both worlds!

Apartments.com

Now, this website is pretty straightforward, just in the name itself. Apartments.com is your one-stop shop for finding apartments, houses, and more to rent. Not to mention, you can easily compare listings, which can be helpful if you are torn between two apartments.

"Maybe I should just buy a house."

So after considering all the factors, planning out when to move, and searching the best sites, you might feel completely ready to take on your new city with zeal. If so, congratulations! We wish you the best in this next step of your life!

But maybe, you’re not feeling so lucky.

If you’ve already been through the apartment search, and everything is either not a good fit or just plain not enough, then you’re not alone. Many people are looking into homeownership instead of renting. Mortgage payments can often be the same or even less of a monthly payment than renting. Hero Home Programs™ can help you go from renting to homeownership, even if you don’t work in one of our ‘hero’ fields. If you think homeownership is the next step for you, apply today for free!

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