When you’re ready to start house hunting, you’ll likely come across homes in neighborhoods that have a rather consistent and harmonious look. It’s a good guess that these homes are part of an HOA, or Homeowners Association. What is an HOA, you ask?

An HOA is an organized group of homeowners within a particular subdivision, planned community, or condominium who create and enforce rules for their properties and residents. There is typically a board of directors who will hold regular meetings to discuss budgets and review rules and regulations. If you agree to live in an HOA community, those rules are legally binding.

How much are HOA fees?

Members of an HOA are required to pay dues on a monthly, quarterly, or yearly basis. They can range in cost from $50 to thousands of dollars, depending on the area and living situation. A community that offers a bunch of amenities will have higher fees than one that does not.

The fees you pay will cover the costs of varying things. Some communities might offer a pool or clubhouse, 24/7 security, trash pickup, a state-of-the-art gym, or even landscaping. It could also cover snow removal or emergency repairs. You should ask for a report of how fees are disbursed for a better understanding of what exactly you’re paying for.

You should be aware that an HOA can raise its fee. Make sure to ask what projects are in process and if there is an emergency fund before making a decision. If they don’t have a reserve fund, you could be on the hook to pay extra or raised fees to fix something unpredictable, such as a roof on a communal building after a storm.

Homes in an HOA are held to a higher standard than you might find elsewhere. The value of your property can increase because the community is going to remain visually appealing; lawns will be mowed, no scrap cars in the front yard, etc. Any issues you have regarding a neighbor can be handled through the HOA rather than personally getting involved. However, an HOA can become a nuisance if they are poorly managed or are extremely limiting.

HOA Houses

Every HOA has different rules, known as covenants, conditions and restrictions, or CC&Rs. Depending on the conditions, you might not be able to make changes to your home that are seemingly insignificant. This can include painting your home a new color, installing solar panels, making renovations, or even changing the color of your front door. You might have to keep your lawn manicured to a certain length or watered even during a drought. Review the CC&Rs so you know all the details before you make a final decision.

When looking for your future home, you should carefully weigh the pros and cons of living in an HOA. Make sure to consider all factors, including costs and rules, to help you determine if this is the right option for you.

If you have questions about HOAs or the homebuying process, contact one of our Licensed Mortgage Loan Originators. If you are ready to begin the process, click here to get started!

When applying for a loan, one of the most important factors that will come into play is your credit score. Before you start the loan application process, you should have a clear understanding of how your credit score affects your mortgage rate so you can assess your financial situation.

Most lenders use the FICO (Fair Isaac Corporation) model for credit scores. This model provides consumers a numerical value on a scale between 300-850. Typically, the higher your credit score, the lower the interest rate the lender will offer to you. Lenders use your credit score to determine how reliable you’ll be as a borrower and the likelihood that you’ll repay the loan as agreed upon. Essentially, they want to make sure you’ll make your mortgage payments on time each month. A lower score might indicate that a borrower could make late payments or even miss some. This is all part of your credit history, which they will also take into consideration.

So, can a bad credit score ruin your chances at obtaining a mortgage?

Not necessarily. It mostly impacts which type of loan you’ll qualify for and the interest rate you’ll receive. A conventional loan usually requires a minimum of a 620 credit score, whereas an FHA loan has a minimum of 580. However, it’s important to note that while some loan programs accept lower credit scores, they might require a larger down payment or some other way to mitigate the lender’s risk in taking on the loan. In addition, even though someone with a 580 credit score COULD qualify for an FHA loan, it does not mean that they will; it is at the discretion of the lender within the guidelines of the loan programs.

Let’s look at an example of how a 100-point difference in credit score can impact a borrower’s mortgage payment.*

A borrower has obtained a conventional fixed-rate 30-year loan of $200,000 with 10% down, meaning the amount borrowed is $180,000. She has a 750 credit score and received a 4% interest rate. Her monthly mortgage payment is $859 (not factoring in other fees, such as private mortgage insurance (PMI) or real estate taxes that may be included in the payment). Now, say that borrower dropped to a 650 credit score. She instead received a 5% interest rate. That increases her monthly mortgage payment to $966. That 100 point difference between credit scores ultimately means an extra $107 added to her mortgage payment each month. While that might not seem like a big deal, keep in mind the duration of the loan is 30 years. Having a higher interest rate means a yearly difference of $1,284; over 30 years that totals $38,520.

If you’re interested in comparing interest rates and monthly mortgage payments, use our mortgage calculator.

If your credit standing isn’t ideal, there are ways to build your credit score.**

Don’t worry if your credit isn’t the best right now. Raising your credit score can take a lot of time, patience, and discipline. However, if you follow these simple guidelines you will soon notice a positive change in your credit and ultimately your financial future. You’ll be able to qualify for better rates when it’s finally time to buy a home.

To learn more about credit scores and interest rates, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!

*The figures used in this example are hypothetical and the results are intended for illustrative and educational purposes only. **NFM Lending is not a credit repair company. Please contact a credit repair company for more information on how to improve your credit score.

If you’re ready to buy a home, you should prepare to have an earnest money deposit. This can be an extremely important part of the homebuying process as it essentially lets a home seller know how serious you are as a buyer. So, what is earnest money?

An earnest money deposit, otherwise known as a good faith deposit, is a sum of money that you pay to the seller to let them know you are ‘earnest’ and will follow through on the contract. It is the closest thing to being able to ‘put your money where your mouth is.’ The money doesn’t go directly to the seller but will be held in escrow or a trust by a third-party who holds all finances during the transaction until the sale is finalized and complete. Once the sale is complete, the deposit will go towards your down payment or closing costs, so no additional money is necessary.

The amount of earnest money is not a set amount and will vary based on the market. Typically, it is about 1-3% of the purchase price of the home, but it ultimately depends on the seller. In a buyer’s market you can expect to put down a smaller deposit, however,  in a seller’s market you could be going up against multiple bids so a larger deposit will likely be required. If desired, you can try to negotiate the amount down.

You can receive your earnest money back if the sale doesn’t go through, but it depends on why it didn’t. If you have the right contingencies, or conditions, in the contract and the seller doesn’t meet them, you can get your money back. For example, if the seller agreed that the home appraisal will match the sale price, but it comes back lower, you can back out of the deal. If you decide that you no longer are interested in the house or if you fail to meet the timeline specified in the contract, the seller has the right to keep your money. That’s why it is so important you’re completely serious and ready to purchase the home when you submit the deposit.

To learn more about earnest money, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!

Getting ready to purchase a home is a huge financial undertaking. While you are probably aware of having to save up for a down payment, you might not know about closing cost fees. Don’t be taken by surprise at the closing table; here’s what you need to know about closing costs.

What are closing costs?

Closing costs are the fees charged for services performed during the home purchasing process that you will pay at closing. Closing is the final step of the loan process and is a meeting between you (the buyer), the seller, and closing officer (a lawyer or title/escrow company representative, depending on the state). You will review the legal documents provided in your loan package and execute all required documents. This step is extremely important, as it is the final confirmation of the loan terms as discussed with your lender.

What fees are included in closing costs?

The closing costs you might have to pay will vary based on the property, where you live, and the loan you choose. The following are a few of the most common fees you may see.

Again, closing costs will not be the same for everyone as they vary by region. On average, most homebuyers typically pay about 2 to 5 percent of the home purchase price. For example, if the home costs $250,000, you might pay between $5,000 and $12,500 in closing fees.

Can I avoid closing costs?

It is likely you might be able to avoid some closing cost, but not all. Here a few ways to save on closing costs.

Your lender will provide you with an estimate of what closing costs will be at the beginning of your application process, which will allow you the chance to shop around to find the best lender and deal for you. After finding a lender and going through the loan process, you will receive a closing disclosure, or the final closing cost total, at least 3 business days prior to closing. This is your time to make sure everything looks right and if you have questions or find a mistake, you have time to contact your lender. If you’re worried about how much you’ll pay in closing costs, there’s plenty of options for you! NFM participates in most state bond programs that provide closing cost assistance.

To learn more about closing costs or bond programs, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!

Are you ready to purchase your first home? The homebuying process can get overwhelming, especially when considering all your financing options. While there are several mortgage options available, these are the top loan products for first-time homebuyers.


A conventional, or conforming, loan is not insured or guaranteed by the federal government. This loan option adheres to guidelines set by Fannie Mae and Freddie Mac. With this loan, you can choose between a 15 or 30-year term, with a fixed or adjustable interest rate. Conventional loans are typically used by borrowers with good/great credit and typically require a higher income.


An FHA (Federal Housing Administration) is a government-insured loan. This loan is popular among first-time homebuyers because of their low minimum down payment. This loan requires only a 3.5% minimum, which is much lower than other loan options. You might also pay fewer closing costs.


VA loans are guaranteed by the United States Department of Veterans Affairs for eligible American Veterans and active duty service members. These loans were designed to guarantee service members a federally funded home with their no down payment requirement and up to 100% financing. Information on eligibility for VA loans can be found on the VA website.

Purchasing your first home is a huge milestone. Having a qualified mortgage professional by your side to help you choose the right loan option will ensure a smooth homebuying experience. Let them help you start the homebuying process by getting pre-approved today!

If you have any questions about these loan products, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the homebuying process, click here to get started!