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Making The Most of Your Mortgage

Tips for Homebuying, Refinancing, and Using Your Equity

Buying a home is often one of the biggest financial decisions you will ever make. That’s why it’s important to be educated and use trusted resources to help you find the right loan for the right home.

The Steps to Homebuying

Before finding your dream home or visiting an open house, it’s important to begin by analyzing your financial situation. No one likes to be disappointed when they find the perfect home, but it’s out of their price range. Start the process by completing a mortgage application which helps your lender learn more about you and your assets and what you can afford.

After submitting your application, your lender can offer you a pre-approval document. This will tell you the maximum amount they will offer you via a loan for your home. After receiving the pre-approval, you'll need to consider multiple types of loans and shop for your house. Finding the right home and the right loan is the most important and time-consuming part of the process!

Once you have found your home, you’ll make an offer and then work with the seller to settle on a mutually agreeable price. After your offer is accepted, an appraisal, title work, and flood certification will be ordered. Once these services are completed, an underwriter will clear you to close on your new home.


Before beginning the above process, you’ll want to consider these questions:

  • How much are you comfortable spending on a monthly basis?
  • What other housing costs do you need to keep in mind?
  • Do you have enough saved for a down payment?
  • How long do you see yourself living in the new home?


When you’re considering your new mortgage, it’s also important to remember that beyond the cost of the home, you’ll need a down payment, prepaids, closing costs, and reserves.  The best way to get started on this process is to find a reliable Mortgage Loan Originator who can guide you step-by-step through the process. 


Refinancing Basics

If you already have a home, you might be wondering about refinancing your mortgage.  Refinancing your mortgage means that you’ll be replacing your mortgage with a new – and likely better – loan. Refinancing is a good option for someone who is going to be in their home for an extended period of time.

What are the benefits of refinancing?

  • Reduced Interest Rate
  • Reduced Loan Payment
  • Consolidated Debt
  • Extending or reducing your Loan Term
  • Switching from a Variable Rate to a Fixed Rate


What factors might impact your refinance?

The value of your home: The lender cannot lend you more than your home is worth.

Your credit score: This will be a factor toward your eligibility and rate.

Debt-to-income ratio: This will measure your ability to repay the money you’re borrowing.


Home Equity Basics

Your home equity is the difference between what you owe and what your property is worth. If you have a mortgage, your lender also has an interest in the property until you pay off the loan.

A home equity loan is a good option for someone who is seeking a substantial amount of money for a specific purchase or debt consolidation.


What's the difference between a home equity loan and a line of credit?

Home Equity Loan: You receive the money you are borrowing in a lump sum payment. This type of loan typically carries a fixed interest rate.

Line of Credit: You have the ability to borrow or draw cash multiple times, within an available maximum amount. This type of credit typically carries an adjustable interest rate.


Why you might use a home equity loan or line of credit?

  • Purchase Large Ticket Items
  • Make Home Improvements
  • Pay for College Expenses
  • Consolidate Debt


Before taking out a home equity loan or line of credit, ask yourself:

  • How much equity do I have in my home?
  • How long will it take to pay off the loan?
  • Can I get a good interest rate with my credit score?
  • Do I truly need the extra money right now?


Have questions or need trusted advice? Our credit union experts are always here for you. Contact Elements Financial for support in all aspects of your financial life. 

This information is provided for informational purposes only. It does not constitute legal, tax or financial advice. Consult with your tax, legal or financial adviser before taking any action.

Find the Right Loan for Your Home

Elements offers a variety of mortgage terms and types to help you finance the perfect home. Plus, we know that the mortgage process can be full of unknowns and questions. That's why we have a dedicated mortgage team to help you navigate through.

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