Budgeting for Your First Home Down Payment

November 26, 2020 by Cindy Steelman

Owning a home is one of the biggest milestones in adulthood that many people hope to achieve, but it can be difficult if you don’t have the right financial support to afford the downpayment. Therefore having the right budget plan in place can help you reach your homeownership in a reasonable amount of time. A better downpayment will mean lower monthly payments toward your mortgage and allow you more flexibility with housing prices when you search for your home. First time home buyers in Roseville should aim for a comprehensive budgeting process for a more successful home purchase.

How Much is Required to Buy a Home?

Although many people begin saving for their homes early on, most don’t know exactly how much will be required to buy it. Downpayments aren’t constant across the board since they will vary depending on the purchase price but putting more down initially will save you plenty in the long run. Figuring out from the very start how much is required will give you a much better idea of what you can and can’t afford, especially given the lifestyle you want to lead.

The question is, how do you know how much to budget for your downpayment? A good rule of thumb is to save up to 20% of the purchasing price. For instance, if your dream home is worth $300,000, then you should have at least $60,000 tucked away for the initial payment.

Don’t Forget Other Costs

While the down payment is no doubt one of the most important costs that come with purchasing a new home, it’s crucial to take into account other fees as well, such as mortgage costs, escrow and title fees, and home inspection fees. Allot two to three percent of your purchase price to these fees. If you are not able to save it yourself there are several other options to consider. 1) You can request the seller to help pay for them when you make your initial offer for their home (the seller has to agree); 2) At times, if the interest rates are right, you can take a higher interest rate and get a credit from the bank to cover some or all of them (Roseville mortgage broker can help you with this); or 3) You can accept a gift from a relative to help cover some or all of them.

Planning Your Budget for Your Home Purchase

Settling on a budget first requires you to decide on the purchase cost you’ll aim for and the amount you want to save. After that, you must decide when you want to purchase your home so that you can set a target amount to save up per month to reach your goal. Once you’ve figured out this amount, you can begin finding ways to achieve it.

Outlining Your Final Monthly Budget

The amount you need to save per month should be factored into your monthly income and expenses. When calculating your income per month, make sure to consider the net amount, meaning the income you make after you’ve deducted the non-negotiables; such as household expenses, retirement pay, insurance, and bills. Saving more money to reach your purchase goal may be challenging, but it’s not impossible.

On the other hand, expenses can be treated as an opportunity because you have more control over them. Cutting out extras like your daily coffee and eating lunch out will save you plenty in the long run and can add to your goals of saving up for your home. Even your fixed expenses like rent or loans (car, personal, or student) can have a workaround. For instance, you could choose to rent out a cheaper apartment or sell your car for a cheaper option with a lower monthly payment.

Lastly, consider making adjustments to your home purchase goals. Explore different options for home loans in Roseville and be a little bit more flexible with your decisions so that you can achieve your dream home sooner rather than later!

Buying a Home in Roseville with Steelman Mortgages

Knowing where to start with budgeting for your home’s down payment can be confusing. Yet, taking it to step by step and remembering to account for all income and expenses is one way to ensure that you plan your finances accordingly to reach this ultimate goal. With the help of the right mortgage company in Roseville, you can achieve your dream home in no time.

Here at Steelman Mortgages, you’ll find one of the best mortgage lenders in Roseville, CA. We provide a simple and enjoyable process to provide answers to all your mortgage questions. To apply for a fast and easy mortgage, contact us today at (916) 847-7263!

Why Your Bank Statements Will Affect Your Mortgage

November 20, 2020 by Cindy Steelman

Bank Statement Loan Tips In Roseville California

A first-time homebuyer in Roseville, or anywhere, knows that there is quite a bit of paperwork involved. You can’t really avoid this, no matter how much you try. Applying for a mortgage can be particularly daunting but at Steelman Mortgages we make it easy.

One of the your important documents a lender will ask for is your bank statements.

Do you know what this tells your mortgage lender in Roseville, aside from what you spend in a month? Quite a lot.

Bank Statements

Bank statements are documents that are issued either monthly or quarterly, which give a summary of banking activity. These are sent through USPS, e-mail, or sometimes both. Banks generally give you statements so that you can keep better track of your funds and, should there be inaccuracies, report them in a timely manner.

If you have both a checking and savings account, activity from both will likely be in the same singular statement. This also summarizes how much money is in your account and shows a rundown of activities throughout a set period.

If you are self-employed, in addition to bank statements, you must have your federal tax returns submitted. If you are working in a company, then you are on a payroll, which means you would have to provide recent pay stubs alongside W-2s and your federal tax returns.

“Underwriting” is a process that lenders use to analyze your documents and they will give you an approval or a denial depending on many factors. One is verifying your bank statements wherein underwriters do research and assess the risk level you pose. Red flags can pop up during this phase, if there are any, such as a low savings account balance, overdrafts, and unstable income. A sudden deposit of a large amount is a major red flag, as it may be a loan that doesn’t reflect on your credit report.

This is important because your down payment is meant to prove that you are a responsible borrower with savings towards a down payment from a steady income. Once that is done, your lender will give you a definitive yes or no.

Sourced and Seasoned

It’s not just about having bank documents to present; it’s what the bank statements themselves contain. Any mortgage lender will always be looking to see if the assets contained in your account are “sourced and seasoned.” By that, it means they know where your funds are coming from (“sourced”) and that these funds have been in your bank account for some time, not just suddenly dropped in there (“seasoned”).

Both factors essentially assist in fraud avoidance. This also gives your lender all the assurance they need to see that you are not using a loan to make a down payment. Therefore, at least two bank statements (all pages) are required.

Steelman Mortgages: Your Roseville Mortgage Broker

Essentially, your bank statement serves as a way for your lender to verify that you have enough funds to make the monthly payments. It also lets them know that you can cover a down payment and any closing costs required.

Looking for a reliable mortgage company in Roseville and throughout California? Steelman Mortgages is here for you. Call us at (916) 847-7263!

Is This Year Making House Acquisition in the US More Affordable?

November 18, 2020 by Cindy Steelman

This year has brought many challenges to everyone. It continues to reshape the way people live their lives and how everyone interacts with others. But as the saying goes, there is a light in every darkness. This light is somehow apparent in the real estate industry. If you are curious about how this time has positively affected the real estate business, here are some things you need to know.

How This Time has Affected the Real Estate Industry

While the pandemic has affected many real estate market activities, it is not all positive. One of the biggest setbacks is that many people are losing their jobs since there is limited movement in the market. However, no matter how big the pandemic’s impact on the market, not all aspects will be affected the same way.

One positive event that future homeowners can celebrate is the fact that there is a current decline in property values. It can be bad news for some, but it also means more affordable homes for people who currently have healthy finances.

With the rise of the unemployment rate and the lack of secured jobs, banks are less likely to lend money to people. While many factors can affect actual house prices, it is safe to assume that these prices will not rise dramatically in the next few months.

Why Buying a Home Now Makes Sense?

If you compare the numbers from recent years, you will observe that the current rates are the lowest they have been for a long time. If you plan to apply for a mortgage soon, you should also know that current rates have been steady for a while. Having a competitive interest rate on a fixed mortgage can help make your housing costs lower than usual.

In fact, the weekly figures from the Mortgage Bankers Association show that the average interest rates for 30-year fixed mortgages with conforming loan balances, jumbo loan balances, and even those backed by the FHA have declined by 53 basis points since March this year. The rates were considered a record low because of coronavirus.

Should You Buy a House Now?

It depends on you. If you plan to buy a house to serve as your home for a while, but you plan to sell it after many years, then a low mortgage rate sounds like a good deal. Waiting for a few more months may not guarantee you the same offer, but you need to know that there are many factors that you should consider before deciding.

For example, the economy is one crucial factor you should consider. If you believe you can continue to pay off your mortgage loan despite the unstable economic conditions, this is an opportunity you should not let go of.

Buying Your First Home with Steelman Mortgages

The answer to whether you should purchase a property now depends on your level of preparation. If you are in a healthy financial condition, the low mortgage rates and property values today are a once-in-a-lifetime opportunity you should not miss.

If you are a first-time home buyer in Roseville and are looking for a mortgage offer to take, we can help make the process smoother for you. At Steelman Mortgage, we personalize our mortgage services depending on our client’s requirements. Call us today at (916) 847-7263, so we can start connecting you with mortgage options suitable for your needs.

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