Mortgage insurance is an insurance policy that a borrower must obtain if their down payment on a home is less than 20 percent of the appraised value or sales price. This insurance policy compensates lenders or investors for losses due to the default of a mortgage loan. A default happens when the borrower stops paying on a mortgage. The borrower also benefits from mortgage insurance as well. Acquiring mortgage insurance allows borrowers to purchase a home before having the full 20 percent of a down payment.

Types of Mortgage Insurance: There are typically two types of mortgage insurance. The first is mortgage insurance bought from the government, for those with FHA or VA loans. The second is for conventional loans, which are bought from a private division, also known as private mortgage insurance or PMI. Typically, the type of mortgage insurance required depends on the type of mortgage a borrower receives.

Cost of Mortgage Insurance: With FHA loans, there is an up-front mortgage insurance premium and annual premium that is collected monthly. VA loans have an up-front funding fee, but no annual or monthly premiums. With Conventional Mortgage insurance, the rates vary. Usually, the lower your down payment and/or the lower your credit score, the higher the premiums. For specific details about the cost of your mortgage insurance, contact us a 855-Norcom-1.

Avoiding Mortgage Insurance: Putting down 20 percent or more when purchasing a home, will allow you to avoid paying mortgage insurance on a conventional loan.

Cancelling Mortgage Insurance: Once you’ve built up a certain amount of equity in your home, typically 20 percent, you can request to cancel your mortgage insurance policy. The lender will also automatically cancel the insurance policy once you’ve reached 22 percent in equity, based on the original appraisal value of the home. 

Solar panels have increasingly become more popular over the past few years, and don’t show any signs of slowing down. At the end of 2014, there were more than 600,000 homes outfitted with solar panels, according to the Solar Energy Industries Association. Leasing options have contributed to this growing number, since some leasing programs require little to no money up-front. The deals can seem attractive, but a question for homeowners is, should you lease or buy solar panels?

Buy:

Installing solar panels on a house to generate electricity often costs $20,000 or more. However, there will most likely be a certain percentage of federal tax credit that could bring down the cost right away. Not only will you be able to take advantage of tax breaks, you will also be able to start saving money on your utility bill each month, and take advantage of Solar Renewable Energy Certificates, or SRECs. Power companies that are required to get some of their electricity from renewable sources, buy these SRECs from homeowners. Currently the SRECs are worth about $200, but the prices fluctuate. Every time a homeowner accumulates 1,000 kilowatts hours of energy, they will be able to sell one certificate, which can generally add up to about seven certificates a year, depending on the system and location. By purchasing a system outright, a homeowner will typically get the most savings, but there is a trade off. The customers are then responsible for maintaining the system. Installers say that the systems are generally reliable, but the panels are not guaranteed past 25 years or so, and the inverters, which converts the direct current to the alternating current that comes from a socket, only lasts about 10 years. 

Lease:

For most homeowners, paying upfront for solar panels is not an option. Leasing, on the other hand, gives more homeowners the opportunity to go solar. Just like a conventional mortgage or car loan, the real cost to customers varies depending on how much they are able to pay up front. The homeowner would also have to have good credit to be eligible to lease. The monthly cost to lease would typically replace your monthly electricity bill. While the lease payment stays consistent, the monthly power bill could potentially go up. Another benefit to leasing solar panels is that a homeowner would not have to figure the incentives and subsidies associated with buying. Beyond that, if a homeowner decided to buy the panels in the future, they could at a discounted price. Customers should also be aware that there is no easy way out of the deal if they decided to sell their home. The system generally stays with the house and the homeowner could either decide to find a buyer who is willing to take over the contract, or prepay for the remaining electricity charges and include that into the purchase price of the home. 

If you have ever done research online to either buy or sell a home, you’ve probably used a popular website like Realtor.com or Zillow. While both sites offer free real estate market data, and are very similar, they both have their differences. Lets compare the strengths and weaknesses of these real estate websites, to see what each has to offer.

Searching: When it comes to searching “homes for sale” on the web, Zillow will most likely appear at the top of the search results, while Realtor.com might appear lower down on the page. This is due to the fact that Zillow maximizes their marketing efforts in order to appear higher in page rankings. This is why many people searching for homes will end up on the Zillow website over Realtor.com.

Finding Homes: If you want to look at listings of homes for sale, you can do so on both Zillow and Realtor.com, they display featured homes along with more in depth information about the homes. However, when doing identical searches on both sites, where price, number of bedrooms, number of bathrooms, and location are all the same, Realtor.com displayed more houses. A study done by a competitor of Zillow discovered that out of 6,401 home listings in 33 zip codes from 11 metro areas, Zillow was missing about 20% of the listings. The study also found that Zillow tended to lag by about a week in displaying new listings, and about a third of the properties shown as active on Zillow, were no longer for sale.

Realtors: Zillow displays “featured” homes that are listed by agents who pay to have their listings appear at the top of the search results. Zillow also displays agent profiles alongside those of competing agents. Realtor.com just displays the listing agent for the house being displayed. Realtor.com, however, is based off of the MLS listings and is operated by the National Association of Realtors, therefore, Realtors prefer Realtor.com to Zillow.

Estimate Property Value: There are many reasons to estimate a property’s value, but can you rely on these numbers to be accurate? Realtor.com and Zillow both display estimated property value, but both don’t take into consideration all the upgrades or changes an owner has made to the house. These estimates are good to get a ballpark idea of the value, but the appraisal value is what the lenders use, not the estimation on these websites. Both websites, however, make it easy to see comparable listings and recently sold homes near a property.

The bottom line is that both of these sites have strengths and weaknesses. If there is one unique aspect that is particularly important to you, it might make sense to favor one site over the other. Despite the information both sites offer, you may not want to use either site as your primary resource if you are actively searching for a home. Relying on your Realtor is always the best bet.

By Day: During the weekday, Jenerice is a Quality Assurance Underwriter for Norcom. She stays very busy as she performs pre-funding audits for compliance accuracy and credit worthiness. Jenerice works with investors regarding purchase requests and analyzes file quality and production trends. She also assists in researching and responding to investor or agency regulatory audits. It’s a hectic job, to say the least, since everyone constantly emails, calls, or stops by, but she manages to do it all with a big smile on her face. Jenerice enjoys the challenges she faces everyday and the great people she works with. She loves the family environment here at Norcom and looks forward to coming to work each and every day.

By Night: Before heading home for the evening, Jenerice heads to the gym for an intense workout, or attends a yoga class with a few coworkers. After that, she heads home to cook a nice dinner for her family. Following dinner, Jenerice might catch up on the news and some of her favorite primetime shows, or she might work on a file or two, if necessary. In her free time, she enjoys long walks, reading, volunteering in her community, cooking, catching up with a few companies she usually trades with, or spending quality time with her family. For fun, Jenerice spends her time traveling, hiking, hanging out with friends and family, or visiting her husband at his various job sites. Jenerice’s husband is the most important person in her life. Many people don’t know that Jenerice actually is very handy and likes to build. She can frame walls, sheetrock, tile, work with electrical and plumbing, and she can also build a computer from the ground up. She is a bit techy to say the least! 

When purchasing a home, you will most likely have to put down 3.5% or more as a down payment. Your lender will have to analyze and document the source of your down payment in order for your loan to be approved. Typically, your lender will want to see the previous three months of your statements for your checking and savings accounts, in order to verify the source of your down payment. If your statements have any large or unusual deposits, the lender may ask you to explain what they are and document where they came from.

If you have received any significant amounts of money as a gift, this may cause your lenders to question the deposit, and to verify the source of the deposit. In this case, you will have to provide a gift letter. The donor will have to write a letter to your mortgage company verifying that the funds are just a gift and not a loan. The letter states the following:

• The name, address, and phone number of the donor.
• The donors relationship to you
• The date the funds were transferred
• The exact dollar amount of the gift
• The address of the property purchased
• A statement from the donor that no repayment is required
• The donors signature

The question remains, what constitutes a gift fund? A gift fund typically is any single deposit that exceeds 50% of the total monthly qualifying income. For example, if you make $5,000 a month, your lender would most likely question a deposit over $2,500, and therefore you would have to provide a gift letter. This however is partially up to the lenders discretion. If there are any deposits that seem to be out of the ordinary, your lender may question them regardless of your income.

Many homeowners get help from family and friends in making their down payments. That’s fine, but lenders want to make sure any significant deposits in your account are gifts and not loans. This assures you can afford your mortgage payments and will pay back the loan. So if you are expecting to get significant financial gifts, be prepared to document it properly for your lender.