The Different Types of Home Mortgage Loans and Which is Right for You

Did you know there are many varieties of home loans, and that not every mortgage is the same? Rainbow Mortgage Inc. is a local mortgage broker with has access to more loan programs than the big banks, ensuring you get the best mortgage loan for your situation. Even though there are many different types of loans, the majority will fall into these categories:

Conventional Loans:

The standard home mortgage loan is a conventional loan. Many people believe you need a 20% down payment when applying for a conventional loan however, this is not true. Rainbow Mortgage Inc. is proud to be one of the few mortgage companies in Minnesota to offer a 1% down payment program.

FHA Loans:

FHA Loans are backed by the US Federal Housing Administration and carry mortgage insurance throughout the life of the loan. FHA Loans have a minimum down payment requirement of 3.5% which can be from a savings account or gifted monies. Not every property qualifies for an FHA loan, but FHA home loans are available to those who have lower credit scores.

VA Loans:

Active duty military members and veterans of all military branches are eligible for a VA Home Loan. Two of the best perks of a VA Loan are the lower rates and that there is no down payment required! In addition, a VA Loan provides the option of a cash-out-refinance for up to 100% of the home’s value for any reason.

Jumbo Loans:

In most counties, a home mortgage larger than $453,100 is considered jumbo! These loans typically require higher rates than conventional and FHA loans.  However, Rainbow Mortgage Inc. is now able to offer a high balance loan option (loan amount from $453,100-$679,650) while still keeping the loan “conventional”.  This option allows for lower rates, easier guidelines, and fewer documents than a jumbo loan.

USDA Loans:

For those looking for a home in a rural area, the home may qualify for a USDA Home Loan. This government loan program is designed to improve the economy and quality of life in rural areas. Although there are income limitations with this program, the loans have lower rates and don’t require a down payment.

Specialty Home Loans:

As a Twin Cities mortgage broker, our team has access to more lenders with more loan products than the big or local banks do. If you have a unique situation (self-employed, unemployed, need down payment assistance, or have had credit issues), we can help find the best home loan program for your scenario. At Rainbow Mortgage Inc. we never say “no”, we say “not now” as we’ll work with you create a plan to help you achieve your housing goals.

 

Ready to Learn More?

Contact the experienced mortgage brokers at Rainbow Mortgage Inc. to learn more about any of these programs and get started today!

Mortgage Loan

Save up to $525 with a FREE Home Appraisal!

If you’re buying a home, you may have noticed that it can be difficult to save money. As a Twin Cities mortgage broker, Rainbow Mortgage Inc. is ready to help you save money by shopping the rates and loan programs of many lenders. We’re one of the only Twin Cities mortgage companies that currently offer a FREE appraisal on homes in Hennepin and Ramsey Counties!

The $525 savings is offered on any Hennepin or Ramsey County home with a conventional loan and a minimum of a 3% down payment. Unlike other banks that may offer free appraisals, this program has no income limit for the homebuyers! Whether you’re a first-time home buyer or this is your 3rd home, this program will save you over $500 on top of Rainbow Mortgage Inc.’s exceptional loan pricing. Throughout the entire process, you’ll receive the highest level of customer service and dedication from our expert mortgage brokers.

Interested in saving money, but don’t have enough for a 3% down payment? Ask about our 1% down payment program! We’re proud to offer many other home mortgage programs that can save you money upfront and throughout the life of your loan.

Ready to Get Started?

Contact our team today at 952-405-2090 to learn more about these home loan programs and how we can help you save money!

4 Questions to Ask Your Lender If You’re Going Through a Divorce

During a divorce, one of the largest hang ups can be the real estate. Not only do the separating parties have to decide who is keeping the home and who is relocating, but there has to be consideration on what both parties can afford. Finding the mortgage expert to help answer divorce and mortgage questions is essential for a fluid divorce proceeding. Before choosing any given local mortgage broker company, ask these questions to ensure you’re in good hands:

Have you worked with clients who are currently going through a divorce? If so, for how long?

Rainbow Mortgage Inc. has been working with clients going through divorce since 2004. Since then, we’ve built a reputation as being the mortgage and divorce experts, while finding creative solutions to complex financial situations. We’ve worked alongside dozens of attorneys and have gained their trust while handling complicated transactions during a divorce.

Will you work with my attorney to ensure they’re up to date on my loan’s process?

Our goal is to save you time, money, legal fees, and trips to court by working with your attorney. We take the time to meet and work with your attorney to ensure that your goals are met and you’re able to get into your home whether it’s through a refinance or a purchase.

Will you read over my divorce decree to ensure I’ll be able to achieve my financial and housing goals?

Our Twin Cities mortgage experts prefer to read your divorce decree before it’s sent to the judge to be signed. This way, we can ensure the wording will allow you to obtain your goals and will not hinder your loan process. If your decree has already been signed, we can still look it over, however, it may need some adjustments which the judge will have to sign off on.

I was the homemaker while we were together, will I still be able to afford a new home?

Yes! If you have reentered the work force and are working full time, you only need to provide one full pay stub. If you’re going to be working part time, there are other conditions that apply.  Some programs even allow a letter of employment to be used in lieu of a pay stub.  Give us a call for more details on what you need to qualify for your loan.

 

Getting a mortgage after a divorce doesn’t have to be difficult. Contact the local mortgage advisors at Rainbow Mortgage Inc. to have all your mortgage and divorce questions answered today!

2018 Financial Resolutions

It’s not too late to start your 2018 Resolutions!

More than 25% of people who make a New Year’s Resolution include a financial goal on their list.  Here are the four most common finance-related New Year’s Resolutions, and how you can easily follow them throughout the entire year!

 

1) Monitor Your Credit Score

Don’t put yourself in a situation where you apply for a loan and have to hope your credit score is good enough. Monitoring your credit score is easy to do and should be done every few months. Keeping an eye on your credit is not only beneficial when applying for a home mortgage loan or credit card, but you’ll also be able to see if there are any fraudulent accounts opened in your name. Federal law allows you to get a FREE copy of your credit report every 12 months from each credit reporting company to determine if the information on your credit report is accurate and up to date. You can check your credit for free at www.annualcreditreport.com.

2) Track Your Expenses

The best way to manage your money is to know exactly where it is going. You can start tracking your expenses by writing down where you’re spending your money. You may be surprised to find out how much you’re actually spending, and how those Target runs and extra items at the grocery store really do add up. Once you see your spending habits, you’ll be able to find areas you can cut back and set a realistic budget.

3) Cash Diet

 After the holidays, you and your bank account may be feeling a little sluggish. If you’re like me, you’ve indulged in too many cookies and drinks and swiped your card too many times over the last few months. Consider helping your waistline and your budget by going on a cash diet by only paying with cash. When physically handing over cash, you’re seeing the money leaving your possession at that very moment. Unlike when you swipe your card, you generally won’t experience the same feeling until you check your bank statement to see all of the transactions at which point it’s too late.

4) Save

I am fairly sure that there isn’t a single person who hasn’t thought “I wish I would have saved more” at one time in their life. It is never too late to start saving, and it’s ok to start small. The easiest way to start is to set up automatic transfers from your checking account to your savings account every month. Setting a goal will also help you save. It’s great to say, “I’ll save more” but setting a specific goal will make it easier for you to see your progress and achieve your goal.

 

If your New Year’s Resolution is to save for your next home, ask our Twin Cities mortgage team about our low-down home mortgage payment options. You may only have to save 1% of the home’s value to be approved for a home loan! Rainbow Mortgage Inc. is one of the few independent home mortgage companies in Minnesota to offer this unique program. Learn more about our 1% Down Payment program and start your 2018 New Year’s Resolution today!       

Rainbow Mortgage Inc.

3300 Edinborough Way #550

Edina, MN 55435

 NMLS# 345827 || 952-405-2090|| www.rainbowmortgageinc.com|| dave@rainbowmortgageinc.com

U.S. Homes get Snapped up at the Fastest Pace in Three Decades

“Here’s more evidence that the defining characteristic of the U.S. housing market is a shortage of inventory for sale: Homes are sitting on the market for the shortest time in 30 years, according to an annual report on homebuyers and sellers published today by the National Association of Realtors.

The typical home spent just three weeks on the market, according to the report, which focused on about 8,000 homebuyers who purchased their home in the year ending in June. That was down from four weeks in the year ending June 2016 and 11 weeks in 2012, when the U.S. housing market was still reeling from the foreclosure crisis. It was the shortest time since the NAR report began including data on how long homes spend on the market, in 1987.

Buyers are snapping up homes quickly at a time when for-sale listings are in short supply, forcing them to compete. The number of available properties declined in September, according to NAR’s monthly report on existing home sales, marking the 28th consecutive month of year-on-year decline in inventory.

In addition to moving fast, buyers also had to pony up to close the deal. Forty-two percent of buyers paid at least the listing price, the highest share since the NAR survey started keeping track in 2007.

“With the lower end of the market seeing the worst of the supply crunch, house hunters faced mounting odds in finding their first home,” said Lawrence Yun, NAR chief economist, in a statement. “Multiple offers were a common occurrence, investors paying in cash had the upper hand, and prices kept climbing, which yanked homeownership out of reach for countless would-be buyers.””

As seen in MPA Mag. Read original article here.
Copyright Bloomberg 2017

Three Credit Mistakes to Avoid When Going Through Divorce

Going through a divorce is a very challenging time for most people, parenting plans, splitting of assets, who gets the dog and so on. One area that many divorcing couples overlook is the effects of their divorce on their credit score. Simple things can reduce your score overnight by over 100 points or more if you are not careful. Here are three mistakes to avoid if you are going through a divorce.

  1. Stop paying your bills.

    The number one category for credit scoring is how well you pay your bills. Payment history makes up 35% of the credit score. Many times when couples split up before the divorce is final or they ever meet with an attorney, they will stop making payments on their credit accounts. If you stop paying credit cards, car loans or mortgages it will adversely affect your credit score and can prevent you from refinancing your home, purchasing a new one, renting or even buying a new car.

    A better plan is to freeze all revolving accounts so additional debt cannot be added to the family budget. You must continue to make the minimum monthly payments on the credit cards, and make your payments as usual on your auto loans and home loans. These simple steps will protect your credit score for future use and limit the amount of debt the family will have post decree.

  2. Over Charging/Going over the Limit on your credit cards

    Another large part of the credit score is your available credit.  If you go over the limit, I have seen scores drop over 125 points in one day by just adding $200.00 of debt.  The $200.00 in debt put two credit cards over the limit causing the client to go from a 667 credit score to a 542 credit score, that changed their loan from approved to denied.  Over charging or going over the limit can happen when one of the spouses moves out and uses joint accounts to furnish the new residence or it can occur if you are using your credit card to pay your attorney fees with credit cards.

    A better plan is for each spouse to get their own credit upon one or the other moving out so that all expenses are traceable to each party.  As mentioned in mistake number one, freeze the account so that no additional debt can be incurred. Finally, if you cannot get a new card and you are getting close to a limit, call the credit card company to increase your credit limit.  Credit card companies are more likely to increase credit lines if you are abiding by your contract limits, once you go over the limit they are less likely to assist you.

  3. Closing Accounts

    We see this one a lot!  When couples are faced with divorce, they want to protect themselves from further loss.  Couples either on their own or at the advice of their attorney close all the credit account, sometimes, due to circumstances surrounding the divorce, closing the accounts may be advisable.  However, if the divorce is amicable and there is some trust left, leave the accounts open, at least until you have your housing situation squared away.  I recently had a client that had a 744 credit score, it took them 6 months to complete the divorce.  In the process of the divorce they, paid off all the credit card debt and closed them, sold the house, and paid off the car loans.  You would think with no debt the credit score would be over 800!  The facts of the matter turned out to be the exact opposite.  At the time we needed a 640 credit score to qualify for a home loan, the credit score dropped to an amazingly low 636!

    A better plan would be to again freeze the credit card accounts and active lines of credit so that no additional debt jointly held debt would be obtained.  You can always payoff accounts, you just want to leave them open long enough to obtain your home loan financing.

 

Should you have any questions regarding this article, or any home financing questions, please feel free to contact Dave Jamison at 952-405-2090.

David Jamison is an Accredited Speaker and presenter of Continuing Law Education on the subject of Divorce and Mortgage, A Certified Mortgage Divorce Planning Professional, Certified Mortgage Planning Specialist  and Dave has been featured on 980 am Radio as a Divorce Mortgage Specialist.