Borrowing Against Your Home May have its Benefits

Did you know there are two types of home equity loans: fixed rate and lines of credit. Both loan types are offered with loan terms that generally range anywhere from 5 to 15 years and require the borrower to repay the loan in full if the home against which they are borrowed is sold. Though there are borrowing and term similarities, each loan has its differences. A home equity loan (also known as a second mortgage) is a fixed amount that you borrow to be paid off over a certain number of months, while the home equity line of credit (HELOC) is a variable rate. Much like a credit card, a HELOC pre-approves you, the borrower, for a certain spending limit of which you may withdraw.

Cook County Tax Bill Update

Cook County Tax Bill Update

Cook County property tax bills coming in July For the first time in decades the second installment of Cook County property taxes are to hit homeowner's mailboxes in July. Meaning, payment will be due August 1st compared to November 1st. CLICK HERE FOR FULL TRIBUNE ARTICLE

Property Taxes: Homeowner's FAQ Who pays this?  The tax bill is either paid by your lender or if you do not escrow you must send in the payment direct to the Cook County Treasurer's Office or you can check on their website which local banks accept payments.   How to check?  Cook County has set up a website where you can check online if your tax bill has been paid and if you are receiving your homeowner exemption.  You can also confirm your mailing address and ensure the correct name is on your tax bill. Where to check? www.cookcountytreasurer.com The top right hand corner has a section to click for "payments," you can check the status of your payment and also make sure you have your home owner's exemption.  You will be required to give your PIN # which is on your tax bill. What if I'm missing info? If you do not have the information you need please feel free to contact your A and N Mortgage Consultant at any time. 773.305.LOAN (5626) or www.AandNmortgage.com

A and N Tips: Rock That Tax Return!

Smart Ways to Spend Your Tax Refund

Consider using your tax return to maximize your future financial situation

Refi to a Lower Rate

By refinancing to a fixed and/or lower interest rate, you can improve your mortgage savings and your financial situation for years to come.

Spruce Up Your Space

Is your kitchen or bathroom looking a little dingy? If so, consider a renovation. Home renovating and remodeling can drastically improve the value of your home.

Upgrade Your Home

Whether you are planning to grow your family, acquire the perfect vacation home or move to a smaller, more manageable property, your tax refund can play a large part in covering the closing costs and other fees associated with this new purchase.

Does a Property Need to have Appliances?

Credit: Michelle Meiklejohn

Habitable Condition:  Property must be in a condition that is immediately habitable and must contain:

• At least one fully functional bathroom (i.e., shower/tub, toilet, and hand sink).

• Other bathroom(s), if not functional, must be escrowed for repair.

• A fully functional kitchen with appropriate appliances (i.e., sink, cabinets, utilities to support a stove and refrigerator).

• Stove and refrigerator do not need to be present if they are not a built-in, as non-built in appliances are considered personal property. Comparables without appliances are not required.

• If stove and oven are built-in, they must be functional, or the space must be reconfigured to allow for appliance.

 

• Utilities (gas and/or electricity) and plumbing must be functional. If not available for testing, due to "winterization"

New Amendment: Illinois Landlord & Tenant Act

Effective January 1, 2012  For A and N Realtors, Investors, and Landlords: An amendment has recently passed to the Illinois Landlord and Tenant Act which creates a new Section 765 ILCS705/15 "Changing or rekeying of the dwelling unit lock." This New law requires most Cook County Landlords to change locks with every new tenant. If the landlord does not comply with this new rule, which will take effect January 1, 2012, then that landlord may be liable to the tenant for damages sustained because of stolen property by someone with the old tenants' key. MORE INFO HERE

A and N's Home Buyer Tips: Rate Shopping

Tips for Serious Mortgage Shoppers

• Get Educated  Borrowers should know terminology and mortgage basics before they shop.

• Know Your Credit Score   Addressing any issues on your credit report prior to applying for a loan will allow you to take advantage of more desirable mortgage rates and products.

• Shop Your Product Options  Though conventional loans are typically the most desirable, an mortgage insured by the Federal Housing Administration (FHA) may be more feasible.

• Know The Market Trends  Mortgage rates adjust daily. If you find a low rate on a loan you like, consider getting a rate lock. 

I have been receiving a lot of questions about FHA Mortgage Insurance Premium, Here are Some Answers

FHA mortgage insurance is similar to the private mortgage insurance (PMI) required for conventional mortgages with down payments below 20%, but key differences exist:

Up-front Fees: 1% up-front fee due at closing.

Rate: For fixed rate loans, there is an annual premium of 1.1% to 1.15% of the loan amount per year, divided over 12 months. Variable term MIP rates are 0.25% to .50% per month for 15 year or shorter-term loans.

Removal: FHA MIP is mandatory for the first five years of loans with terms more than 15 years (even if your loan balance reaches 78% of the original home value or sales price. PMI premiums can often be removed if the loan balance is below 80% of current market value. Conventional loans automatically remove PMI when the loan balance falls below 78% of the loan amount.

Exceptions: If you have a loan term of 15 years or less and put down 10% or more of the sales price, the MIP will be cancelled after the loan balance falls to 78% (of the original sales price, or the original appraised value, whichever is less). 20% down on a 15-year loan cancels PMI altogether.
How the MIP Affects Your Loan Decision? Considering that PMI payments do not go towards the principle, or add to the value of the home, most borrowers would choose to avoid paying PMI altogether.

However, It's hard to avoid paying PMI without putting 20% down. IF you have good credit history, and the money to put 20% down, then a conventional mortgage is probably better for you as PMI would automatically be lifted. However, if the down payment is a family loan or a gift, you may not qualify for a conventional loan even with 20% down. In that case, an FHA loan with MIP may be your only option, if you cannot afford the higher payments of a conventional 15-year mortgage.

Call A and N Mortgage 773-305-5626 for any more questions!