Rhode island mortgage - what to expect when buying a home in rhode island

Maybe you’re buying your first home in Rhode Island, or perhaps you’re relocating to Rhode Island from another state. Either way, it’s important that you educate yourself on Rhode Island home loans before shopping for a home and mortgage. This article explains what you’ll need to know before buying a home in Rhode Island:

The median price of a home in Rhode Island is $133,400. Recently, homes in Rhode Island have been appreciating at rates above the national average -- Rhode Island has the highest appreciation rates in New England. However, in some parts of Rhode Island, appreciation rates are at an all time high. In fact, home prices are rising four times as rapidly as personal incomes. As a result, income levels in many parts of Rhode Island are too low to purchase a median-priced home with a conventional loan.

Home prices in Rhode Island can vary greatly between zip codes. For example, while the median home value for the state of Rhode Island is $133,400, the median home value in the summer of 2005 for Providence, Rhode Island, was $520,000. Recently, Rhode Island average interest rates have been below the national average.

Rhode Island state law prohibits “subsection 10 mortgages” that exceed either the APR or the points and fees threshold established by lawmakers. Additionally, prepayment fees and penalties are not allowed on any home loan after the first year of the mortgage. If a borrower pays off their home in full during the first year of their mortgage, the prepayment penalties cannot exceed 2% of the balance at payoff.

Rhode Island residents are subject to a sales tax, a “piggy back” state income tax, and motor fuel tax. However, Rhode Island recently eliminated their motor vehicle tax.

Mortgage choices that you have

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When selecting a mortgage, there are many things to think about and wonder about. For anyone that is looking for a way to secure the best loan for their next or first home, they should weigh all of their options, carefully deciding what the right way to go is. With so many different types of mortgages out there, though, this can be relatively difficult for you to do. Take a moment, then, to find the best way to get your mortgage to fit within your life.

Here are some of the mortgage options that you have and you should carefully consider before purchasing your home.

New Timers: If this is your first home loan, you have the advantage in many ways. First of all, you may qualify for a government backed loan. The FHA loan is a commonly used loan that allows for the lenders to offer better interest rates and lower fees. It can help any new homeowner to actually secure the home that they want even when their credit is not that great. This federal government will help to back these loans for you, giving you more of an option in funding it. Also, there are many benefits offered to first time home buyers throughout the states from various cities. Find out if your city offers any benefits to moving here.

The Down Payment: When it comes to having a down payment or not, many of those that bought homes twenty or more years ago, did so with large down payments. Today, many people are buying them without any. Which is the right way to go? If you do not have the funds set aside for a down payment on your home, you should still consider purchasing one. If you do have the funds to put down on a home, do it. This can greatly reduce the amount of money that will need to be financed which means less interest payments on it as well. Carefully consider the amortization schedules that you can get before signing a mortgage to determine if it is a better choice all around.

VA Loans: If you have served in the armed forces of the US, you may qualify for a VA loan. These will allow an individual to secure a loan with federally backed funds. It can help to lower the cost of the home’s interest rate too. If you are applying for a mortgage with a home lender, make sure to tell them of this status as it can greatly help you.

With so many options, it pays to do your homework. The good news is that there are tools called loan calculators that you can use to help you to see what your monthly payment will be as well as how much your home will end up costing you with various options like these. Use them and see what the best solution for your needs is. This can be done easily and within seconds right on the web. Also, always ask your mortgage lender to inform you of any and all options that you may qualify for with your home loan.

Reverse mortgages - get the money you need - part 2 of 4

To recap part 1, Reverse Mortgages are loans that allow you to borrow back the equity in your home. If you are 62 years of age or older, they are a way to borrow against the equity in your home to provide you with tax-free income. Probably a good idea if you're a senior who needs cash for medical care, to maintain your standard of living, or for other reasons.

So, what are some of the disadvantages of Reverse Mortgages?

- They are even more complicated than conventional mortgages and the consequences of various options might not be always up front.

- They may be relatively expensive compared to other alternatives.

- Although the money you receive is tax-free, it may affect your eligibility for "need based" public assistance benefits such as Medicare, Supplemental Social Security Income (SSI) and Medicaid/MediCal.

- Reduces the equity you have in the property which could cause a potential negative impact for your heirs.

- This source of funds is often not well understood, even by real estate and legal professionals. (Check out their experience before accepting their advice.)

In general, what types are available?

- FHA-insured mortgages - Home Equity Conversion Mortgage (HECM).

- Lender-insured.

- Uninsured.

Each type differs in the amount you can borrow, how the proceeds will be paid, and allowed expenses such as interest, closing costs and other fees.

Here are some things to think about before getting this financing :

-How much money do you need?

-Is there another way to get the money you need ?

-Will a Reverse Mortgage make you or your partner ineligible for any government benefits - now or in the future?

-Do I qualify for this kind of Mortgage?

-How much can you borrow ?

-How much will it cost you in fees and interest to borrow this money, even if you don't have any out-of-pocket expenses?

-Will you have to sell your house before you die to pay off the loan ?

-If you die, and your spouse is still living in the home, will he or she have to leave or pay it all off ?

-Will the loan become due and payable if you go to a long-term care or nursing home?

-What will your heirs or you have left after the loan is paid off?

-Are there any early-repayment penalties?

-What are your obligations, such as property maintenance, property taxes and insurance?

Seven important things to do before you make a decision :

1. Decide how long you expect to stay in your home. These loans are relatively expensive for the first 2-3 years, so consider other options first.

2. Consult with a HUD-approved Reverse Mortgage counselor before you apply. This information service is usually offered free of charge. A counselor can help you decide what kind of financial help you need and what type is best.

3. Decide if you really need it. Another type of loan may be a less costly solution to meet your financial needs.

4. You might want to Include your family, especially grown children, in the decision-making process. It's good to get a general agreement among your heirs that going ahead with this type of mortgage arrangement is okay with them. Remember, you may be reducing their inheritance.

5. Shop around for the best deal. It may affect how much money you get immediately and in the long-term, how the money is paid out, how much you pay in interest and other charges, and so on.

6. Determine if your Mortgage affects your eligibility for "need based" public assistance benefits you may receive.

7. After you have considered all the facts, does getting a reverse mortgage make you happy ? If yes, that's a good sign. If you're not sure, best to examine all of the alternatives again.

That's all for this week. In Part 3 next week we'll talk about frequently asked questions concerning reverse mortgages - stay tuned !

Mortgage leads for new loan officers

If you are a loan officer and you are new to the business, one thing you may be short on is leads.

Leads can be obtained in many ways. Through customer referrals, networking groups, family members, friends, etc.

However, for a new loan officer, you may need to jump start your business, and investing with a mortgage lead company may be the way to go.

You probably haven’t heard many good things about mortgage lead companies. However, there are some good ones out there. And if you take your time and do your research, you may just find the right one for you.

Here are a few things to avoid:

Avoid the mortgage lead companies that recycle their leads. Recycling means they sell them over and over again.

So, most likely these leads have gone through the hands of dozens of loan officers before reaching your desk, so steer clear.

Stay away from lead companies that buy their leads from third party companies than sell them to loan officers at a profit.

You never know how many times those third party companies sold those leads to other mortgage lead companies.

In the beginning, your budget may be a little bit tight, so look for lead companies that allow for a low minimum deposit.

Also, look for lead companies that obtain their leads through sites they own and operate on their own. This is always a good indication that the lead is of good quality.

And look for lead companies that sell real time mortgage leads, and/or sell them exclusively. When you buy your leads exclusively you can cut out your competition.

Real time leads are also known as fresh leads, so they are hot off the press once you receive them. With real time leads your closure ratio will be much higher and the return on your investment will be that much better. And why shouldn’t it be? You work hard for your money.