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Utah Home Tour Tips: Budget and Mortgage, Appliances, Remodels

home tour tips mortgage

Within the majority of homebuying situations, multiple things are happening at once. Most buyers will be touring homes at the same time as they’re working with their loan officer and mortgage lender on basic approval and related areas, for instance, and while these are certainly two distinctly different parts of the process, they tend to cross over in some basic ways.

At Altius Mortgage and our partners at Mortgage Ogden, we’re here to help with comprehensive mortgage loan services, from standard home loans to first-time buyer programs, mortgage refinancing and many others for Utah clients. However, our loan officers are not limited to their expertise in the mortgage realm alone, and we often serve as basic advisors and confidants to our clients in several areas, including how their home tours may occasionally interact with our roles. For instance, if you’re considering touring a home that’s above your originally-planned budget, your loan officer will work with you to obtain a pre-approval letter at this higher range if you decide to make an offer on the home.

What are some general themes you should be keeping in mind when it comes to touring homes? This two-part blog series will go over several.

Price and Budget

Your overall budget will obviously be a significant factor here, as will the listed price of any home you’re touring or considering. This is one major theme you’ll have a chance to evaluate ahead of time through online listings and other resources, though as professionals in the industry will tell you, you can never truly know a home’s quality until you see it in person.

One major tip here: Be sure to budget for more than just your mortgage. You need additional funds for closing costs, long-term maintenance and any potential emergencies that come up, and sapping your entire savings just to get the home will leave you in a bad spot financially.

Quality and Age of Appliances

Another important factor in any home tour is the quality and age of the major appliances that will be remaining in the home, such as the dishwasher, various plumbing fixtures, and possibly several others. If all the major fixtures are only a few years old, you can be confident knowing they won’t need replacement anytime soon; if there are older items, however, you may have to budget for replacements or repairs within the next couple years.

Remodeling Qualities or Capabilities

For many buyers, the home’s remodeling capability will be a huge factor, and something you’re looking at closely during a home tour. Not only should you be considering this from a budgetary standpoint, you should also be looking for simple areas or components that can be easily remodeled or upgraded to meet your eventual goals. Is there some extra room in your kitchen that might allow for an island upgrade, for instance? Or perhaps there’s a certain wall in the home that you feel you could tear down to create a more open space. The potential themes here are limitless, but you need to be able to spot them.

For more on what to be looking for as you tour homes and obtain a mortgage loan, or to learn about any of our mortgage rates or related services in Utah, speak to the staff at Altius Mortgage and our partners at Mortgage Ogden today.

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Understanding Escalation Clauses in Home Offers

escalation clauses home offers

Buyers who have been on the home market anytime in the past six months are well aware: It’s a seller’s market out there. Many homes will have multiple offers placed on them within just days of hitting the market, and buyers – plus their realtors and loan officers – are looking for ways to improve offers and make them more attractive to sellers.

At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to serve the vital loan officer role in this process, offering mortgage loans for a variety of buyers. We’ve assisted numerous clients with everything from pre-approval and confirmation of purchasing power through finalizing their loan, and we’re happy to offer several areas of expertise when it comes to improving offer quality. One tool that some buyers are using is the inclusion of what’s called an escalation clause in their offer to the seller – what is an escalation clause, how does this work, and should you consider using one in your next offer? Here are some basics to consider.

Escalation Clause Basics and Example

Also simply referred to as an escalator in some circles, an escalator clause involves a buyer stating in their offer that while they are offering a certain monetary amount, they are actually prepared to pay some extra if needed – to a certain point, which will also be defined in the offer.

As a simple example, let’s say you’re considering a home that was listed at $300,000, and offering at this listing price. However, you’re also including an escalation clause that says you are prepared to go over the asking price by $10,000. In this case, if another prospective buyer offers a maximum of $305,000, you would be the winning bid as part of your escalation clause.

In other cases, an escalation clause can be done differently. You can state that you will beat the next-highest offer by some amount, usually $1,000 or sometimes more – in the above example, if you used this method, your offer would automatically trigger to $306,000 if the next-highest offer was $305,000.

Do I Need an Escalation Clause?

There’s no such thing as “needing” an escalation clause, but these have absolutely become more common over the last six months or so as the market has become so tough. If you’re offering on a great home you know will have several offers, an escalation clause is often a great way to put all your cards on the table and perhaps gain an advantage over other buyers. Your realtor will often be able to speak to the seller’s agent and determine if lots of offers will be coming in – if this is the case, you may consider an escalator.

Possible Reasons to Avoid an Escalation Clause

On the flip side, some realtors won’t work with escalation clauses – whether the seller’s agent or even your own agent. This is for a few reasons, including the possibility that there aren’t multiple offers; in these cases, adding an escalator really just signals to the seller that you’re willing to pay more than what you offered, and often limits your leverage in negotiations. In addition, for the second form of escalator we went over above, where you offer a set amount above the next-highest offer, there’s some serious potential risk here if another offer comes in very high.

For more on escalator clauses, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.

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Predatory Lender Red Flags: Deception, Accounts, Debt Cycle

predatory lender red flags debt

In parts one and two of this multi-part blog series, we’ve gone over a number of signs that you might be dealing with a deceptive or predatory mortgage lender. While most in this industry are straightforward and reputable, there are also unscrupulous individuals or companies who try to take advantage of mortgage borrowers, especially first-timers who have not been in the market before.

At Altius Mortgage and our partners at Mortgage Ogden, we’re here to ensure this never happens to you. On top of offering numerous mortgage loans and services, including those tailored to first-time homebuyers, we also provide assistance with a wide range of tips and areas of expertise – including how to avoid scammers and other dishonest folks in this industry, especially as you’re shopping around to find the ideal lender. Today’s final entry into our series will go over a few other signs to watch out for.

Deceptive Presentation

We’ve touched on this area already in terms of lenders who will show you a monthly interest rate while trying to make it seem like a yearly one; sadly, deceptive presentation is a common tactic among predatory lenders. There are several ways this might happen, from graphs that are drawn with misleading data bars to information you’re sent in paper form that doesn’t quite match what the lender told you during your conversation.

If you’re unsure about any piece of data or paperwork, you should ask. If the answer you’re getting from the lender only confuses you further, or does not actually present you a solution, this could be a red flag that you’re being duped.

Bank Account Access

There are basically no situations where a lender should need access to your bank account for direct withdrawals. One who asks for this, or for a backdated check, is often preparing to pull money out of your account that’s not even related to the mortgage. Ensure you protect yourself from this harmful tactic by only working with reputable lenders who have a history in your area.

Debt Cycle

Finally, one of the toughest tactics to spot from predatory lenders, but also one of the most common, is the way they manipulate loan terms. A “predatory” loan is really designed to keep the borrower in a debt cycle, one where their interest rate is so high that they’re only ever paying down interest – their principal balance stays the same for years at a time while interest just keeps building up. These lenders will target people who don’t have the financial means to recover from this sort of thing.

However, you can avoid this tactic by simply being diligent. Read every bit of paperwork carefully, and work with independent financial advisors to confirm you’re not putting yourself in a bad position.

For more on common signs of a predatory lender, or to learn about any of our mortgage rates or mortgage loan services, speak to the staff at Altius Mortgage today.

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Predatory Lender Red Flags: Paperwork, APR, Misrepresentation

predatory lender red flags APR

In part one of this multi-part blog series, we went over some basic signs that you might be dealing with a fraudulent or predatory mortgage lender. While most lenders in the field are experienced and reputable, there are sadly some who attempt to scam or otherwise take advantage of borrowers entering the market, especially first-timers.

At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to offer a wide range of home loan services, including mortgages ideal for first-time homebuyers and many other services. We’ve also helped steer clients away from scammers in our industry, generally by providing them with some of the telltale signs that indicate you might not be dealing with an honest lender. Here are a few other such red flags to keep an eye out for as you’re evaluating which lender to work with for your mortgage needs.

Paperwork Issues

There’s lots of paperwork involved in any mortgage loan situation, and this is one area where predatory lenders will try to fool you. One common tactic here is leaving several blank fields within a contract – the goal here is for the shady lender to go through and add details later, once you’ve already signed the contract, in an attempt to make these changes legally binding.

If you’re filling out a loan application by hand, be sure all blank spaces are filled with a proper value – or if there is no such applicable value, enter “N/A” in that space (do not use a single 0, which can be manipulated). For computerized filings, there should be an auto-filling format. If this is not possible, this could be an immediate red flag with your lender, as it should be a simple process.

Monthly vs APR

Another frequent tactic scammers will use is changing the way they represent the loan terms. Many will try to show you the monthly interest rate for a mortgage as if it’s the yearly rate, for instance, but you should be diligent here: Always ask for the APR, or annual percentage rate, which covers your full payment requirements including fees and other costs. Be sure you can afford the full yearly amount before entering into any agreement.

Misrepresenting Information

In some cases, a lender may tell you to intentionally misrepresent your information on a loan application. They may tell you to write down more income than you actually receive, for instance, or to report your income as full-time rather than part-time. Simply put, this behavior is illegal and represents fraud; any lender trying to talk you into it is committing the same crime, and you should never work with them.

For more on how to spot the signs of a predatory lender, or to learn about any of our mortgage rates or home loan services, speak to the staff at Altius Mortgage today.

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Predatory Lender Red Flags: Credit and Rushing

predatory lender red flags credit

There are unfortunately several areas of modern life and economics where we have to be on the lookout for scams and dishonest people, and the mortgage world is one example. While many mortgage lenders are reputable, legitimate professionals looking to help buyers obtain the funds they need to purchase a home, there are also some who are only looking to make a quick buck, and do so using various dishonest, predatory or outright fraudulent methods.

At Altius Mortgage and our partners at Mortgage Ogden, we’re reputable mortgage lenders with years of experience in the industry and hundreds of satisfied clients to back up our quality, customer-first services. We offer numerous areas of assistance for clients, from mortgage loans for first-time homebuyers to help with refinancing, tips on mortgage rates and numerous other distinct areas. We welcome comparisons of our services to other lenders as you shop around, both because we want the best for all our clients and because we’re confident we’re the ones to provide it – but we’re also here to advise you of some of the signs that another lender you’re considering is not reputable, and in fact may be predatory or fraudulent and should be avoided. This multi-part blog series will dig into all the red flags to keep an eye on here.

Goals of Legitimate Lenders

Firstly, a positive word on what a mortgage lender experience should be like. A legitimate mortgage lender is here to help you make safe, intelligent decisions with your finances as you make one of the largest purchases in your life. They help you take out a loan that you will be able to make payments on comfortably for many years into the future, ensuring your overall finances will remain intact even as you take on this new expense.

Predatory lenders, on the other hand, are just here to make quick cash. They will write loans that are far too costly to borrowers, trapping them in a cycle where they only pay interest and cannot reduce their principal, or other related themes.

What are some of the early signs you might be dealing with such a lender?

Lack of Credit Check

If the lender attempts to move you forward without a check on your credit, this is a huge and immediate red flag. Some loans are designed for people with low or no credit, sure, but the lender still has to check to confirm your status here – and any who doesn’t is trying to pull a fast one.

General Rushing

One of the key practices of predatory or fraudulent mortgage lenders is attempting to confuse you, and a common tactic they use here is rushing. You’ll be rushed to sign paperwork, or told that reading the fine print really isn’t important and you should just trust the lender’s word. This is a frequent sign that there are clauses or parts of the contract the lender does not want you reading.

For more on signs that you might be working with a predatory lender, or to learn about any of our mortgage rates or home loan services, speak to the staff at Altius Mortgage today.

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Mortgage Payment Components: Taxes and Insurance

mortgage payment components taxes insurance

In part one of this two-part blog series, we went over some basics on the important components involved in a standard mortgage payment. While the final number involved in your monthly payment is the most important broad consideration for any mortgage borrower, understanding the various factors that contribute to this eventual tally is also a vital task.

At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to help with any of these basic areas for our clients as they look to understand any part of their mortgage or home loan options. We’re proud to offer many mortgage programs specifically for first-time borrowers who have not been through this process before, and might need our assistance with some of these areas. Today’s part two of our series will go over a couple other important components of a standard mortgage payment to be aware of.

Tax Component

Another important section of your mortgage payment will be for property taxes, which are in place due to your jurisdiction and are used to fund various public services like trash collection and others. In many cases, property taxes will be collected as part of your payment each month, then held in a separate escrow account until the end of the year – this means you’re paying single payments instead of one large lump sum at the end of the year.

In addition, this escrow format usually involves the lender covering the difference if the final tax amount comes out higher than expected, then billing you for it in future payments. This also helps the borrower avoid a tax lien. For those who do not have 20% of the purchase price available for a down payment, lenders will often require this escrow format as a way of protecting them from a huge property tax bill if there’s a foreclosure. FHA loans, in addition, will require escrow accounts be used.

Insurance Payments

Finally, there are two types of insurance that might be found as part of your mortgage payment:

  • Homeowners’ insurance: In many cases, homeowners’ insurance and flood insurance will be collected by lenders and placed in escrow. This may lead to more favorable terms if you agree on this. A lender cannot require you to use a particular insurer here, but they can require that such insurance be carried.
  • Private mortgage insurance (PMI): In cases where you are paying less than 20% down for your home, private mortgage insurance must be maintained until a certain amount of the loan has been paid off. PMI protects the lender from potential risks.

For more on the components involved in your mortgage payment, or to learn about any of our mortgage rates or other home loan solutions, speak to the staff at Altius Mortgage today.

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Mortgage Payment Components: Principal and Interest

mortgage payment components principal interest

While there are a number of components involved in any mortgage situation, from mortgage rates to various mortgage programs and term lengths, the eventual goal of borrowers and lenders alike is to arrive at a simple number: A monthly mortgage payment. This is the amount borrowers pay over the life of their mortgage, and it contains a few specific areas where your money will go toward as you make payments.

At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to offer a wide range of mortgage options, from first-time homebuyer programs like FHA loans to numerous options for mortgage refinancing if you’re in need. We help make things simple for our clients, including laying out all the factors that will be involved in their upcoming mortgage payment that create the final number they’re paying each month. What are these elements, and how does each impact your equity and long-term finances within the mortgage? This two-part blog will go over each important component of your mortgage payment.

Principal Balance

The simplest and most straightforward area you pay money toward in a mortgage is your principal balance, which just refers to the actual amount of the mortgage loan itself. Each mortgage payment you make should contain at least some amount of principal balance, but this amount will actually increase as the mortgage goes on – this is because you’re paying down more interest earlier on, and also means you can’t simply divide your principal by your total number of payments to know how much of it has been paid off.

Now, there are certain situations where you might be able to pay down your principal balance faster than your schedule anticipates. If you have the funds available, speak to your lender about adding a bit extra to each payment, or making an extra payment once or twice a year that can be applied fully to your principal balance. Over a period of several years, this can make a major impact.

Interest Paid

The other major component that most are well aware of in a mortgage payment is your interest, which is defined by the percentage of the total loan you’re paying as an incentive to the lender for loaning you this money. As we noted above, you’ll generally begin by paying more interest early in the mortgage, but will then pay less as the loan goes on.

As you may have guessed, shorter loans will come with higher interest rates. In addition, your rates may be higher if your loan amount is higher, or if your credit score is lower than average.

For more on the various components of your mortgage payment you’ll be paying each month, or to learn about any of our mortgage rates or home loan services, speak to the staff at Altius Mortgage today.

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No-Appraisal Mortgage Loans: Benefits, Eligibility and More

no-appraisal mortgage loans eligibility

In part one of this two-part blog series, we went over some basics on a relatively rare and unique situation in homebuying, but one that does take place: The no-appraisal mortgage loan. This type, where the home is not appraised in a typical fashion ahead of sale, are not common on residential properties, but may still happen in certain situations.

At Altius Mortgage and our partners with Mortgage Ogden, we’re happy to offer a wide range of home loan options, from numerous programs for first-time homebuyers to options for mortgage refinancing and several other areas. What might be some of the benefits of considering a no-appraisal loan in unique circumstances, how can you figure out if you’re eligible for this to begin with, and which other factors should you be considering before moving forward? Here are some basics.

Benefits of No-Appraisal Loans

For those who are eligible and fit the criteria, the primary benefit of a no-appraisal loan is cost savings. Homebuyers are generally the ones who are responsible for the costs of an appraisal, which tends to cost several hundred dollars at minimum – when no appraisal is necessary, this is a cost that’s avoided.

In addition, no appraisal often allows mortgage situations to close faster. There’s no more need to schedule and appraiser, work around their schedule, plus wait multiple days for their report. In fact, one of the most common instances where this no-appraisal format is considered is when a quick closing date is required by both parties within the mortgage situation.

Eligibility for Appraisal Waivers

Fannie Mae has created rules and guidelines that state who is and is not eligible for an appraisal waiver or other forms of no-appraisal loan. Here are their regulations:

  • You must be a strong borrower with an excellent credit score
  • You must be able to prove your available assets
  • The dwelling must meet certain qualifications
  • You must meet certain LTV ratios based on the type of property
  • There may be disqualifications for certain property types, including multi-family units or those in disaster-impacted areas
  • Appraisal waiver can be denied anytime the lender has a reasonable belief an appraisal is necessary

Prior Considerations

Before going down this path, it’s vital you understand exactly what the ramifications might be. It’s possible your home’s actual value will be significantly lower than the purchase price you’re paying – this is a risk you take, and you cannot hold the lender or the seller liable for an incorrect valuation later on. Ensure you know your rights and have discussed this with your lender and realtor before proceeding.

For more on no-appraisal loans, or to learn about any of our mortgage rates or other mortgage services, speak to the staff at Altius Mortgage today.

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No-Appraisal Mortgage Loans: Basics and Alternatives

no-appraisal mortgage loans

For the vast majority of mortgage and homebuying situations, a home appraisal is an important part of the process. This involves a third party appraiser examining the property inside and out to provide a professional estimate of its market value, helping confirm to both buyers and sellers (and even lenders) that the price being agreed upon is realistic plus multiple other areas.

At Altius Mortgage, we’re happy to assist all our clients with the appraisal process if needed, including first-time homebuyers, for whom we offer great mortgage rates and programs while also providing expertise and guidance through this process. We’re also available to work with borrowers for a more unique pursuit: A no-appraisal loan, which is much rarer than the normal appraisal process but will still be used in some cases. This two-part blog will go over the details of this program and why it’s sometimes used, plus the kinds of borrowers who might be good candidates for it.

No-Appraisal Loan Basics

As the title suggests, a no-appraisal loan is a home loan that requires no professional appraisal. There are a few methods by which this type of loan might be attained, the most common of which is known as an appraisal waiver – this gives the homebuyer the right to decline having a traditional appraisal done on their property.

As we’ll dig into a bit further later on, no-appraisal loans are not common at all for private residential properties, largely because they present a great risk to both the parties involved and the lender. If there is no objective evaluation of the property, it could come in far more or less valuable than the mortgage amount – leaving borrowers at risk of default on one side of the coin, or sellers stuck with far less than their asking price on the other. However, as of 2017, both Fannie Mae and Freddie Mac have begun offering some select appraisal waivers.

Appraisal Alternatives

The most common alternative used during a no-appraisal loan is a computer calculation program that plays something of a similar role, though with less specific involvement. This program will utilize information like previous home value and other properties in the area to place a value on the home – but as you may have guessed, this alternative is less precise than an actual in-person appraisal.

In other cases, no appraisal will be required at all.

Refinances

A no-appraisal refinance loan is also possible using this same method, and this is an area that isn’t quite so restrictive. Especially in cases where you’re using the same lender for both your original loan and your refinanced loan, there are often relaxed standards allowing no-appraisal refinances – programs like the VA loan, the FHA loan and the USDA loan all have systems in place to make refinancing easier from an appraisal standpoint.

For more on no-appraisal home loans, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.

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Recent VA Loan Changes: Eligibility and Fee Alterations

VA loan changes eligibility

In part one of this two-part blog, we went over some of the basics on recent changes to the VA loan program that makes it both more accessible and more beneficial for those who qualify. Backed by the US Department of Veteran’s Affairs and bringing benefits like no down payments and fantastic mortgage rates, VA loans are meant for military service members, veterans and their families to repay them for their service to our country.

At Altius Mortgage and our partners at Mortgage Ogden, our wide range of loan programs includes robust VA loans and mortgage rates for any of our clients who qualify here. Based on the 2019 Blue Water Navy Vietnam Veteran’s Act, which went into effect in 2020, many of our military veterans and spouses have seen significant positive changes to their ability to borrow and the amounts they can obtain. Here are some further details on how this has happened.

Changing Eligibility

In addition to eliminating the conforming loan limit in many areas for veterans, as we went over in part one, the act above also increases access to VA loans for two groups of veterans: Those who have been awarded a Purple Heart and any Native American service member. For the former group, funding fees will be waived entirely for those who close on their home while on active duty; for the latter group, the $30,000 cap on loans for building or purchasing a home on federal trust land has been lifted.

This simply makes it easier for those in this position to obtain loan funds easily, which was the primary goal of this section of the act.

Fees for Funding

Speaking of funding fees, there have been some small changes made here as well. Specifically, veterans and active service members will pay a slightly increased funding fee of 0.30 percent, up from 0.15 percent. However, National Guard and Guard Reserve members will now see their fees decreased to match this same 0.30 percent figure that active service members pay. This change is meant to be temporary.

Now, several groups of veterans were already exempt from funding fees, including those with service-related disabilities and surviving spouses. In these cases, this exemption remains.

Application Process Stays Unchanged

One area that saw very little change due to the act we discussed above is the application process for VA loans, which remains identical. Veterans who wish to use their VA benefits to purchase a home must still obtain a Certificate of Eligibility, plus potentially additional documents that your loan officer will be happy to detail for you.

For more on recent changes to the VA loan program and how they might impact you, or to learn about any of our mortgage rates or home loan services, speak to the staff at Altius Mortgage today.