T. Jay Johnson Jr. - Lamacchia Realty, Inc.



Posted by T. Jay Johnson Jr. on 5/29/2020

If buying a home is something youíre considering, you might be curious about the different types of mortgages that are available to you. After all, the interest rate on your loan could have a huge impact on your finances over time, saving you thousands of dollars.

In todayís post, Iím going to demystify the home loan by explaining the most common types of mortgages. That way, youíll be able to approach a lender with a bit of context and knowledge to help make the best mortgage decision for you and your family.

Fixed-rate mortgages

The most common types of home loans in the United States today are fixed-rate mortgages. A fixed-rate mortgage has the benefit of stability in terms of its interest rate--year after year, or the lifetime of your loan, you know exactly what percent of interest youíre going to pay.

Fixed-rate mortgages most frequently come with repayment terms of 15 or 30 years. However, some lenders offer different repayment periods.

As with any debt, paying off a mortgage in a shorter term typically amounts to paying less interest over the lifespan of the loan. For this reason, buyers who can afford higher monthly mortgage payments often opt for a 15-year fixed-rate mortgage.

If you canít afford higher monthly payments, a 30-year loan will typically have lower mortgage payments, but at the expense of paying more interest over the life of the loan.

The 30-year option is the most often in the United States, where first-time buyers typically have too many other monthly bills to afford a high mortgage payment.

Adjustable-rate mortgages

Adjustable-rate mortgages (ARMs) were once an ideal option for first-time buyers who could purchase a home at a very low interest rate and then refinancing once that rate was set to rise. However, after the housing crisis of 2007, trust in the housing market drastically declined.

In recent years, ARMs have begun to make a comeback. However, they currently still only account for around 5% of home loans.

Adjustable-rate mortgages come with one important advantage and one huge disadvantage over fixed-rate mortgages. The upside is the ability to borrow money for a home at a lower interest rate than other mortgage types. The down side? Your interest rate isnít locked in for the length of the loan, meaning your rate could, in theory, rise dramatically before you sell or pay off the home. This is exactly what happened to borrowers during the subprime mortgage crisis.

Guaranteed loans

There are a number of special loan programs that have been sponsored by the government over the years. Among them are USDA rural development loans, VA loans for veterans and their spouses, and FHA loans offered by the Federal Housing Authority.

All of these loans make it easier to buy a home with little or no down payment or a credit score thatís less than perfect. That makes these options great for first-time homeowners.




Tags: Mortgage   Buying a Home  
Categories: Uncategorized  


Posted by T. Jay Johnson Jr. on 5/22/2020

Most homeowners would love to be able to pay off their mortgage early. However, few see it as a possibility when they take into account their earnings and other bills.

 There are, however, a few ways to pay down your mortgage earlier than planned. But first, letís talk about when it makes sense to try and pay off your mortgage.

 When to consider paying off your mortgage early

If you recently got a promotion, have someone move in with you who contributes to paying the bills, or recently got a secondary form of income, you might want to consider making extra payments on your mortgage.

However, having extra money doesnít always mean you should spend it immediately on your home loan.

First, consider if you have a large enough emergency savings fund. It might be tempting to try and throw any extra money at your mortgage as soon as possible, but there are other financial commitments you should plan for as well.

If you have kids who will be applying to college soon, remember that student aid takes into account their parentsí finances. If your children plan on applying to institutions with high tuition, then your equity will be counted against you.

Refinancing to pay your mortgage early

Refinancing your home loan is one option if youíre considering increasing the payments on your mortgage. If you can refinance a 30-year loan to a 15-year loan with a lower interest rate, youíll save money in two ways--your lower interest rate and the fact that youíll be accruing interest for less time.

There is a downside to refinancing. Once you refinance, youíre locked into your new payment amount. So, if your higher income isnít dependable, it might not make sense to commit to a higher monthly payment that you arenít sure youíre going to be able to keep paying.

Thereís also the matter of refinancing costs. Just like the costs associated with signing on your mortgage, youíll have to pay closing costs on refinancing. Youíll need to weigh the cost of refinancing against the amount youíll save on interest over the term of your mortgage to see if it truly makes sense to go through the refinancing process.

Paying more on your current loan

Even if you arenít sure that refinancing is the best option, there are other ways you can make payments on your mortgage to pay it off years sooner than your term length.

One of the common methods is to simply make thirteen payments each year instead of twelve. To do this, homeowners often use their tax returns or savings to make the thirteenth payment. Over a thirty year mortgage, this could save you over full two years of added interest.

A second option is to make two bi-weekly payments rather than one monthly payment. By making biweekly payments you have the ability to make 26 payments in a year. If you were to just make two payments per month then you would make 24 total payments. Over time, those two extra payments per year add up.




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Posted by T. Jay Johnson Jr. on 6/21/2019

There are a number of programs, government-sponsored and otherwise, that are designed to help aspiring homeowners find and get approved for a mortgage that works for them.

Among these are first-time homeowner loans insured by the Housing and Urban Development Department, mortgages and loans insured by the USDA designed to help people living in urban and rural areas, and VA loans, sponsored by the U.S. Department of Veterans Affairs.


In todayís post, Iím going to give you a basic rundown of VA loans, who is eligible for them, and how to apply for one. That way youíll feel confident knowing youíre getting the best possible deal on your home mortgage.


What is a VA Loan?

VA loans can provide soon-to-be homeowners who have served their country with low-interest rates and no private mortgage insurance (PMI).

If youíre hoping to buy a home soon and donít have at least a 20% down payment, you typically have to take out private mortgage insurance. This means paying an extra insurance bill on top of your monthly mortgage payments. The downside of PMI is that it never turns into equity that you can then use when you decide to move again or sell your home.

Loans that are guaranteed by the VA donít require PMI because the bank knows your loan is a safer investment than if it wasnít guaranteed

VA loans may also help you secure a lower interest rate, or give you some negotiating power when it comes to discussing your interest rate.

Finally, VA loans set limits on the number of closing costs you can pay in your mortgage. And, if youíve ever bought a home before, youíll know how quickly closing costs can add up.

Who is eligible?

There are some common misconceptions about who can apply for a VA loan? So, weíll cover all the bases of eligibility.

If you meet one of the following criteria, you may be eligible for a VA loan:


  • Youíve served 90 consecutive days during wartime

  • Youíve served 181 days during peacetime

  • Youíve served six or more years in the Reserves or National Guard

  • Your spouse died due to their work in the military

There are some restrictions to these eligibilities. For example, your chosen lender may still have credit score minimums.

Applying for a VA Loan

There are two main steps for applying for a VA Loan. First, youíll have to ensure your eligibility. You can do this by checking the VAís official website. Be sure to call them with any questions you may have.

Next, youíll need a certificate of eligibility. The easiest way to acquire one is through your chosen lender.  If you havenít chosen a lender, you can also apply online through the eBenefits portal, or by mailing in a paper application.

Once you have a certificate, you can apply for your mortgage and youíll be on your way to buying a home.





Posted by T. Jay Johnson Jr. on 2/22/2019

Getting pre-approved for a mortgage may prove to be a long, arduous process if you are not careful. Fortunately, homebuyers who plan ahead should have no trouble obtaining a mortgage so they can enter the housing market with a budget in hand.

Ultimately, there are many questions to consider as you assess your mortgage options, and these questions include:

1. What type of mortgage should I get?

The two most common types of mortgages are adjustable- and fixed-rate varieties. If you understand the differences between these mortgage options, you can make an informed mortgage decision.

An adjustable-rate mortgage generally features a lower initial interest rate than a fixed-rate option. However, after a set amount of time, an adjustable-rate mortgage's interest rate will increase.

Comparatively, a fixed-rate mortgage has an interest rate that will remain intact for the life of your mortgage. This means you will pay the same amount each month until your mortgage is paid in full.

When it comes to deciding between an adjustable- and fixed-rate mortgage, it pays to look at the pros and cons of both options. Remember, no two homebuyers are exactly alike, and a mortgage that works well for one buyer may not work well for another. But if you evaluate adjustable- and fixed-rate mortgages closely, you can make the best-possible decision.

2. What differentiates an ordinary lender from an outstanding one?

There is no need to settle for an "ordinary" lender as you pursue mortgage options. Instead, you should seek out an exceptional lender that goes above and beyond the call of duty to assist you.

Typically, an outstanding lender employs mortgage specialists who are ready to respond to any concerns or questions. These specialists can help you evaluate a broad array of mortgage options and decide which mortgage best suits your individual needs.

Don't be afraid to meet with several banks and credit unions, either. This will allow you to assess many lenders and select one that matches or exceeds your expectations.

3. Which mortgage should I select?

There is no one-size-fits-all mortgage that works well for all homebuyers, at all times. As such, you should conduct plenty of research as you explore your mortgage options. This research will enable you to analyze assorted mortgages and lenders and make the optimal choices.

Once you have a mortgage, you can move one step closer to acquiring your dream house. And if you collaborate with a real estate agent, you can receive expert support at each stage of the homebuying journey.

A real estate agent is a must-have for any homebuyer, regardless of the current housing market's conditions. This housing market professional can teach you everything you need to know about buying a house. Also, he or she can help you examine a vast collection of available houses.

Ready to kick off a house search? Get pre-approved for a mortgage, and you can enter the housing market with a homebuying budget at your disposal.




Tags: Mortgage   Buying a Home  
Categories: Uncategorized  


Posted by T. Jay Johnson Jr. on 8/24/2018

Securing a mortgage can take years of planning and saving. Depending on credit score and financial history, it can be difficult for some people to secure a mortgage with a reasonable interest rate and down payment.

As a result, the U.S. government--at both the federal and state level--has created several programs to make the goal of homeownership more achievable for more Americans. 

These programs are designed to help a number of people, including first-time homebuyers, low-income families, people living in rural areas, Native Americans, and veterans and servicemembers of the United States military.

In todayís article, weíre going to be talking about ďVA loans,Ē or loans guaranteed by the United States Department f Veterans Affairs.

What is a VA Loan?

When a bank chooses to approve someone for a mortgage, they have weighed the risks of that personís ability to pay back the loan. The less certain a bank is that they will see a return on their investment with a borrower, the higher the down payment and interest rate they will require.

One incentive that the U.S. Department of Veteran Affairs offers its service members and veterans is the ability to receive a loan that is, in part, guaranteed by U.S. Government. That means that lenders can safely approve you for lower interest rates and down payments knowing that the money they are lending you is insured.

Who is eligible for a loan?

Loans guaranteed by Veterans Affairs arenít strictly for veterans. Active duty service members, including National Guard and Reserve Members may also be eligible. In addition to service members, people who are or were spouses of veterans or service members might also be eligible for a VA loan.

Specific eligibility requirements can be somewhat complicated, so itís a good idea to visit the eligibility page or contact your local Veterans Affairs office.

What are the perks of a VA Loan?

If youíve spent a significant portion of your time serving in the military, thereís a good chance that saving for a home has been placed on the back burner. Shopping around for a loan with an affordable down payment can be daunting or impossible for many.

Fortunately, with a VA loan eligible recipients are able to receive a loan with a low down payment or even no down payment.

In a time when down payments can average 20% of the mortgage, that can mean a lot of money you wonít have to spend up from. For example, a home that costs $275,000 would have a 20% down payment of $55,000.

What are the fees?

This great deal does come with one catch. As with many loan assistance programs, there is a fee charged for the services. On top of the funding fee charged by the VA, there are other costs associated with buying a home.

These may include appraisals, inspections, credit reports, and more. Additionally, lenders may charge a 1% flat fee for those using a VA loan.




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