Current Mortgage Rates: Richmond, VA
3.000% (3.001% APR) 30yrs
2.375% (2.381% APR) 15yrs
as of 03/04/21
Read More

Building on Trust™

RatePro

blog

Everything about FHA Loans 2019 web

FHA (Federal Housing Authority) Loans are designed for first-time homebuyers and can help buyers with low or building credit to make homeownership a reality. FHA Loan limits are set by the U. S. Department of Housing and Urban Development, or HUD.

It is important to stay up-to-date on what these changes are if you are interested in signing an FHA Loan in 2019. And remember, these limits can vary by state and housing market, so be sure to check with your local mortgage lender to discuss the current rate.

FHA loan limits 2019

What is a high-cost or low-cost market?

Locations within Virginia range from low-cost to high-cost. The central Virginia market, including Richmond, is currently set at $535,900.

FHA loan limits increase when the average price of homes rises. This means that the limit is considering the average home price over the past two years in Virginia. It is also expected that home prices will continue to rise and FHA loan limits may change again to correspond. This could mean that FHA Loans can work with your home buying budget and correspond with the market that you wish to buy in.

FHA downpayment 2019

FHA Credit Reqs 2019 1

Lender requirements

Although an FHA Loan is insured through the Federal Housing Agency, the mortgage lender may have specific requirements that they set to qualify for an FHA Loan. It is important to discuss these requirements before deciding what type of loan that you would like, and it may be helpful to learn about other loan options as well. Remember, when looking for a mortgage, a priority should be the face-to-face contact only available from a local mortgage lender.

Want to learn more about other loan types? Check out What Mortgage Loan is Right For You?

NewYears

New Year’s resolutions are hard to keep—but if you are planning to buy a home in 2019 or later, that decision will benefit you for life. With a few smart choices, these resolutions can help you to save money, improve your credit score, and to find a mortgage and home that fits your lifestyle.

Look ahead at 2019 with these resolutions:

1. Start a savings fund

The first step in preparing to buy a home should be to start a savings fund. FHA Loans require a down payment of 3.5% of the home’s cost. Other mortgages typically see down payments of 20% of a home’s price, and it can take time and planning to accrue that amount of money.

If you are not able to provide a large down payment, learn more about FHA mortgage loan requirements.

If you have trouble saving, try using a financing app, look for places where you can cut spending, or speak with your bank about creating a savings plan. Any amount that you can set aside will be useful in buying a home.

2. Check your credit score

Be prepared to check your credit score before planning to shop for a mortgage. If you have established credit accounts and a good history of on-time payments, then your score may already be above 580, which is required for an FHA loan.

However, if you do not have good credit history, here are a few ways that you can plan to improve your score in just one year.

  • Lower your credit usage. You should use no more than ⅓ of your available credit each month.
  • Make on-time payments for your credit accounts. A single late payment can be one of the largest negative impacts on your credit score. If you have trouble remembering payment dates, use your accounts’ online interface or app to set up automatic payments on each due date.
  • Pay your full balance each month. Showing a consistent payment history and low credit usage will help improve your credit score.
  • Don’t over check. If you are applying for credit cards, mortgage loans, or other large credit accounts, a hard pull will be made on your accounts. This can negatively impact your score if too many occur within a year.
  • Similarly, a self check of your credit score will not impact it negatively. This is called a soft pull. Make sure that you use a reliable credit checking agency to view your score periodically. Many banks and financial institutions are now providing monthly credit reports as an included service with certain accounts.

With these credit tips, you can begin to see your score improve. If you make a habit of using these methods, you can expect to have a better credit score by the next new year.

3. Plan for pre-approval

When you are shopping for homes, pre-approval can help you to make a decision on a home when the time is right. Homes can sell faster than you expect, and getting a pre-approval can allow you to make an offer on a home when you are ready to act.

4. Choose a mortgage lender that understands your needs

When you are shopping for pre-approval, you can start to build a relationship with a mortgage lender that understands your interests, your home market, and what you expect in a loan.

If you are looking for a close, personal connection with a mortgage lender, try shopping locally. Local mortgage lenders are often easier to contact, can meet with you to explain costs and other variables, and are most familiar with your local market values.

Taking time to understand your finances and learn about your mortgage options can be helpful at any time of the year. If it is your goal to buy a home in 2019, RatePro Mortgage wishes to help with any information that you may need. Good luck!

Are you planning to refinance your home this year? View more information here!

How to build equity in your home website 1

Your home’s equity is an important part of your mortgage loan. Believe it or not, the equity (or value of your home) is almost always growing. If you have plans to refinance, building your home’s equity can help you to get a larger amount or a lower interest rate. It will also play a part in the sale of your home if you plan to sell.

Follow these steps to build equity:

1. Increase your down payment

This is the single fastest way to build equity in your home right from the start. If you pay a larger down payment, then you will own more of your home when you purchase it with a mortgage. A large down payment is not necessary, but it will help you to build equity quickly.

2. Pay more than your monthly principal

Find ways to save extra out of your monthly budget and put it toward your monthly principal, or mortgage payment. Even the smallest additional amount can have huge effects on your equity compounded over time. Try setting aside a small amount to pay toward your principal each month, and increase this as possible.

3. Try new ways to save

There are smartphone applications, like Digit, that can allow you to save money over time as you use your money in regular ways. This money can be withdrawn and added to a mortgage payment at any time, and could add up in big ways! If you are not a fan of applications, try to find other small ways in which you could save small amounts on everyday purchases.

Click here for information on refinancing your mortgage

4. Start a shorter mortgage term

If you choose to sign a shorter mortgage term, you will build equity in your home at a faster rate. Although your monthly payments will be higher, your total interest paid on the life of the loan will be greatly reduced, increasing your equity.

5. Renovate, remodel, or improve

By adding value to your home, your equity will increase. Choosing to start a renovation is more than a labor project, it’s a financial one! Assess how much you will spend on a renovation and the value that it could add to your home. It is also likely that the value of your neighborhood is fluctuating over time as well which can add to your home’s value.

6. Put extra money to work

If you have extra money from a work bonus, selling stocks, or a gift, use it to pay more toward your principal. Just make sure that you specify to the lender that the additional funds are to be paid towards your principal in order reduce the future interest costs and speed up your equity improvement.

7. Practice financing

Learn about your finances and spending patterns, and find ways in which you can save the most money to put toward your mortgage loan. You can use financial planning apps, like Mint, and other similar apps, that allow you to monitor your spending, check your credit score, and create budgets.

Benefits of new equity

When you own more equity in your home you’ll be able to get more out of a refinance, renegotiate a mortgage loan, and improve your credit. If you have financial plans for the future, make sure that you are considering building your equity in your home.

 

web mortgage loans

Knowing more about different types of mortgages can assist you in finding the right lender, choosing the best type of loan, and planning for different variables and options. Ask your mortgage lender to explain several types of plans, and work together to determine which loan would be best for your current and future needs.

Conventional Mortgages

A conventional mortgage, also known as a fixed rate mortgage, has a fixed APR for the duration of the loan term. However, loan terms are variable. 15- and 30-year conventional loans are the most common, and may affect your down payment, APR, and monthly payment. Either way, a conventional mortgage will have a fixed APR until you choose to refinance or pay off the loan.

FHA Loans

FHA loans can be the easiest type of loan to qualify for because they require a low down payment of 3.5% and allow the purchaser to have a credit score anywhere above 585. Although these are the minimum requirements for starting an FHA loan, having a higher credit score and larger down payment can affect your mortgage term, APR, and monthly payment. Each individual mortgage lender may have different specifications.

Read more about FHA Loans here.

VA Mortgage Loans

VA Loans are specifically for United States veterans, service members, and widowed spouses of deceased service members. To purchase a home with a VA loan, you do not need to provide a down payment or purchase mortgage insurance.

Although costs are generally lower with a VA Loan, they do require a one-time lending fee of 2.15%. This fee is reduced to 1.25% is the buyer provides a down-payment of 10% or more. Another benefit of a VA Loan is that Veteran’s Affairs will re-negotiate on behalf of the loan recipient should they run into financial difficulty.

You can learn more about the qualifications for VA Loans here.

Adjustable rate mortgages

Adjustable rate mortgages come in several different types and are available based on the lender you choose to work with. The variables that affect the APR could be loan term, current market rates, repayment history, cost of the home, and income. Choosing an adjustable rate mortgage is usually for a unique home buying situation, such as a large purchase.

One year ARMs

A one-year Adjustable Rate Mortgage will have a fixed APR for one year, and afterward, have a rate that changes yearly for the remaining life of the loan. This adjustable APR will be based on the loan index, repayment schedule, duration of the loan, and other factors. The benefit of a one year ARM is that the first year will generally have a very low APR. They will also have an adjustable rate cap, which prevents the APR being raised above a certain rate.

5/5 and 5/1 ARM

You may also benefit from a 5/1 ARM (adjustable rate mortgage) loan. A 5/1 ARM will have a fixed low-interest rate for the first 5 years of the loan, and afterward, the interest rate and monthly payment will be variable from year to year based on the loan index, as well as the market and payment history. The benefit of a 5/1 is the low-interest rate if you are likely to pay the loan off within that time.

USDA mortgage loan

Also known as the United States Department of Agriculture (USDA) Rural Development Loan or Rural Housing Loan, a USDA mortgage loan was created to help populated rural areas and to stimulate economic growth. These loans are for designated rural areas. Choosing a USDA loan could allow you to finance 100% of the purchase price.

Refinancing a Mortgage

A mortgage loan is different from other loans in that you are building equity as you pay off the loan. For this reason, both complete and incompletely paid off mortgage loans are available for refinancing with your lender or another. Refinancing a loan can be an excellent financial choice if you are making new investments and wish to use the equity that you already have.

Review the terms of your mortgage to understand this flexibility, and know that it may only be an option with some longer-term mortgages. Learn more about refinancing a mortgage here.

Should you refinance

 

Many homebuyers use the equity that they own in their homes to refinance their mortgage. There are multiple benefits to refinancing a mortgage loan—however, there are specific times that can benefit the homeowner significantly more. That’s why it’s important to think about when and if you should refinance your home.

Refinancing allows you to pay off your current mortgage by financing a new loan. Lower than normal interest rates can have many homeowners considering refinancing. Refinancing can allow the loan recipient to “cash out” the value that they have invested in their home in order to make another large purchase, work on home improvements, invest in other ventures, or lower additional debts. There is also the possibility that a homeowner could refinance their mortgage for new loan terms, such as a lower annual percentage rate or monthly premium. In best cases, both goals can be accomplished at the same time.

If the factors involved in securing your first mortgage have changed—for example, a better credit score, income increase, or improved banking history—you could qualify for a decreased monthly mortgage payment

Aside from the benefits of refinancing, there are also some costs. The process of refinancing a home is estimated to cost 3 - 6% of the original loan amount in order to finalize a new mortgage. These costs come from home appraisal costs, closing fees, and new escrow account setup.

Did you know that the best time to refinance your mortgage is the last month of the quarter? March, June, September, and December typically provide you the lowest APR rates.

 

So why refinance?

To lower your monthly payment

This is the most popular reason to refinance. If the factors involved in securing your first mortgage have changed—for example, a better credit score, income increase, or improved banking history—you could qualify for a decreased monthly mortgage payment if you refinance.

Interest rates are low

Many homeowners will refinance their loan when annual percentage rates (APR) are low. How much lower do they need to be? It depends on the outstanding balance of your existing mortgage. Large mortgages see significant payment reduction with only ½% lower rate, while smaller mortgages would need a rate more than 1% lower to justify the cost and effort.

Your credit has changed

If your credit score has changed for the better, you have a strong chance of finding better mortgage terms. First-time homeowners, who may have been building credit at the time of their first mortgage, may have a good chance of getting a better mortgage premium and APR.

To change your mortgage type

If you want to shorten the duration of your loan, change the mortgage type, or find a mortgage with new terms, refinancing is a smart option. If you have an adjustable rate mortgage (ARM), it is smart to refinance a fixed-rate mortgage so that you do not have to pay a larger monthly premium due to the adjusted rate.

 

Follow these steps to refinance your loan

1. Understand the equity that you own in your home

The percentage of your first mortgage that you have repaid, in percentage to your new appreciated home value, will affect the amount that you need to refinance. However, you may be able to refinance the whole value of your home.

2. Get your home’s estimated current value

In order to have your home refinanced, you may have to have the home’s value appraised. This can be beneficial if the housing market has changed for the better, your home has been renovated or improved in a way that adds value, or if your neighborhood market has increased in value or demand. Call your local lender when needing help estimating your home’s current value.

3. Learn your current credit score

Check your credit score before you apply for a new loan. If you did not have established credit when you signed your first mortgage but have made payments on time, then your credit score may have improved. If your credit score has remained the same, you will need to rely on other factors, such as increased income or high equity to get a lower monthly premium or APR.

4. Check current interest rates

Check the interest rates at the time of your refinancing attempt.

Refinance Calculator

5. Use a refinance calculator to figure out what your payments could be

Use a refinance calculator, like the one shared above, in order to build a realistic goal for what you would like your monthly premium and APR to be.

6. Shop for a rate and speak to mortgage lenders

After researching interest rates, look for a mortgage lender that will meet your needs. Refinancing can be more attractive to lenders because you are already approved for a previous loan, meaning that you are an ideal customer.

7. Look into HARP

The Home Affordable Refinance Program (HARP) is a federal program of the United States that was established in 2009 and was intended to help “underwater” or “near-underwater” homeowners to avoid foreclosure. In order to qualify for HARP, the following must be true:

• The mortgage is owned or guaranteed by Fannie Mae or Freddie Mac

• The mortgage was sold to Fannie Mae or Freddie Mac on or before May 31, 2009

• Borrowers are current on mortgage payments with no payments having been made more than 30 days late in the last 6 months and no more than one late payment in the last year

• The property type must be a primary residence, one-unit second home, or a one-to-four-unit rental property

• The current loan-to-value (LTV) ratio must be at least 80%. There is no maximum LTV limit for a new fixed-rate mortgage. The maximum LTV for a new adjustable-rate mortgage is 105%

• You cannot have previously refinanced under HARP

Refinancing is a large benefit of being a homeowner for several reasons. Homeowners may use the value of their home to improve their loan situation or to make a large investment. Whatever your reason for refinancing, follow the steps above in order to get the best options for your loan.

 

Subcategories

Mortgage Rate Meter


Testimonials
 
914817
' We found Rate Pro mortgage after working with several other mortgage companies all of whom failed to grasp our complicated financial situation and ... more '
5.0/5.0
by zac5
890518
' We just purchased our first home and went through RatePro Mortgage to do our lending. I have worked in both big and small retail banks so I have seen ... more '
5.0/5.0
by zuser20140424054854787
838849
' This was my 3rd home purchase and 3rd different mortgage company, and Rick and his staff at RatePro were by far the best. Rick was timely, honest, ... more '
5.0/5.0
by jweimer1968
RatePro