Refinancing your home may seem like a big decision, but it’s essentially swapping your current mortgage for a new one—potentially with better terms, a lower interest rate, or a different loan balance. When you refinance, your lender will pay off the old mortgage and issue a new one. But why refinance? If you’re curious about how the mortgage refinance process works or wondering how it might benefit you, we’re here to walk you through every step.

TL;DR - Key Takeaways

• Refinancing Basics: Refinancing replaces your current mortgage with a new one, potentially offering better terms, a lower interest rate, or cash from your home’s equity.

• Reasons to Refinance: Common reasons include lowering your interest rate, removing mortgage insurance, or accessing cash for large expenses through a cash-out refinance.

• Choosing the Right Lender: Select a lender who listens to your financial goals, educates you, and helps you choose the best mortgage refinance option for your needs.

• Closing Costs Matter: Refinancing involves closing costs of 3-6% of the loan principal. Talk to your loan officer to determine how long it will take to recover those costs (your break-even point), and if you can roll them into your loan.

• Walking Through the Refinance Process: We walk through every step, starting with gathering documents, submitting your application, and through what your closing appointment will be like.

When to Consider Refinancing Your Mortgage

There are several scenarios where refinancing can be a smart financial move:

1. Rate and Term Refinance

Goal: Refinancing gives you the option to shorten the term to pay off your loan faster and potentially secure a lower interest rate. Alternatively, you can extend your loan term, spreading out payments over a longer period and lowering your monthly costs.

2. Remove Mortgage Insurance

Goal: If you have an FHA loan, you’re required to pay a mortgage insurance premium (MIP) for the life of the loan. Many homeowners refinance to a conventional loan once they reach 20% equity, allowing them to drop the insurance and lower your monthly expenses.

3. Cash-Out Refinance

Goal: A cash-out refinance lets you tap into your home’s equity by refinancing for a higher loan balance and taking the difference in cash. This is a great way to access funds for large expenses like home renovations, education, or consolidating high-interest debt.

Knowing when to refinance is key to maximizing your savings. Tools like a Mortgage Refinance Savings Calculator can help you determine whether a refinance is right for you.

 

Starting the Mortgage Refinance Process

1. Choose the Right Mortgage Lender

The first step to refinancing is finding a mortgage refinance lender you trust. They will walk you through different mortgage refinance options and help you choose the one that aligns with your financial goals.

Choose a lender who listens, asks about your goals, educates, and communicates clearly.

When is it Worth it to Refinance?

A good rule of thumb is to consider refinancing if you can lower your interest rate by at least 1%. For instance, if you currently have a 7% rate and find that you could refinance at 6%, it’s likely worth running the numbers with your lender. Beyond that, your lender can help you calculate the total savings and how long it will take to break even on the cost of refinancing.

 

Closing Costs

Understanding Closing Costs When Refinancing

You might ask, “Is it worth it to refinance my mortgage?” One key factor is closing costs, which are typically 3-6% of the new loan principal. You’ll want to make sure the financial benefits of refinancing outweigh these costs. Your lender can help calculate your break-even point—how long it will take to recoup the cost of refinancing through the savings generated by your lower monthly payments.

TIP: If you’re planning to move before you reach your break-even point, refinancing might not make sense financially. However, if you plan to stay in your home long-term, refinancing can yield substantial savings.

How to Pay for Refinancing Closing Costs

You can either roll closing costs into your loan or pay them upfront at closing. Talk with your loan officer to decide which option works best for your situation. Some homeowners prefer to pay upfront to avoid increasing their loan balance, while others like the flexibility of rolling the costs into the loan to avoid out-of-pocket expenses.

 

Steps in the Mortgage Refinance Process

Now that we’ve covered the basics, let’s dive into the key steps you can expect when going through the mortgage refinance process:

2. Gather Documentation

Before filling out a mortgage refinance application, you’ll need to gather essential documents. Every situation is unique, but you’ll likely need the following:

• Government-issued ID and Social Security number
• Recent pay stubs
• W-2s from the past two years
• Federal tax returns
• Proof of additional income (if applicable)
• Mortgage statements, credit card statements, and other debts
• Retirement and investment account statements
• Homeowners insurance policy

Your documents may be needed again in the processing phase, so keeping them on hand in the beginning and throughout your loan process can save you time and headaches.

3. Submit Your Refinance Application

Once you’ve gathered all your documents, it’s time to submit your application. This step involves sharing details about your financial situation, such as your assets, liabilities, and property information.

Our online application process is safe, secure, and easy to complete right from your smartphone or computer.

After submitting your application, your credit will be checked to give your loan officer a complete picture of your finances. Within three business days, you’ll receive a Loan Estimate (LE), which breaks down your estimated closing costs and the terms of your new loan. Be sure to review it carefully and notify your loan officer immediately if you spot any errors—like a misspelled name or incorrect address.

4. Processing

During this stage, your loan processor verifies your financial details. This includes checking your income, assets, and credit score. They may request additional documents to clarify or confirm information, so keeping your documents organized can help speed up the process. The processor will also open an escrow account and may order an appraisal to determine your home’s current market value.

Appraisal

An appraisal is typically required during a refinance to ensure the new loan amount does not exceed the home’s value. Some loans, such as FHA Streamline Refinance and VA IRRRL, may waive the appraisal requirement, but for cash-out refinance, it’s usually necessary.

5. Underwriting

The underwriting process reviews all the information you’ve provided. The underwriter might grant:

	Direct approval: Your loan is approved with no further action needed, and you can proceed to closing.
	Conditional approval: You’ll need to provide additional documents or clarification before receiving full approval.
	Denial: What happens if your refinance application is denied? In rare cases, your loan could be denied due to credit history, insufficient income, or other factors. If this happens, the underwriter will explain the reasons, and you can work with your lender to explore alternatives.

6. Review Your Closing Disclosure

Three days before your closing date, you’ll receive a Closing Disclosure (CD) outlining the final details of your loan, including the closing costs. Compare it with the Loan Estimate you received earlier and carefully review the terms. If anything seems off, don’t hesitate to ask your loan officer for clarification.

Closing and Final Steps

7. Closing Day

On closing day, you’ll meet with a title company representative, and possibly your loan officer to finalize your loan. Bring a state-issued photo ID and any remaining funds needed to cover closing costs (if not rolled into the loan). After signing the documents, the loan funds will be distributed. If you’re refinancing to take out cash, you’ll typically receive your funds a few days after closing.

8. First Monthly Payment

Depending on the closing date, you may be able to skip one or two mortgage payments. After that, your regular monthly payments will begin. 

If you’re interested in how to pay off your mortgage quicker, here are a few ways you can do that.

 

Wrapping it Up

We hope this guide has provided clarity on the mortgage refinance process. Whether you’re aiming to reduce your monthly payments, access your home’s equity through a cash-out refinance, or eliminate mortgage insurance, refinancing can offer significant financial benefits. With the right approach, you can save money and achieve your long-term financial goals.

When you’re ready to explore your refinancing options, feel free to reach out to us. We look forward to helping you navigate the process and find the best solution for your needs!

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Refinancing an existing loan may result in the total finance charges being higher over the life of the loan.

Understanding the Influence of School Districts on Property Values and Home-Buying Decisions

When you set out to buy a home, a myriad of factors will run through your mind as you create your must-have list. Your list will probably include neighborhood, size, location, and amenities. Among these, the quality of the local school district often plays a pivotal role in determining property values. This aspect isn’t just important for families with children; it also influences home values for individuals, investors, and couples without kids. Understanding how school districts shape property values can provide you with valuable insights, helping you make more informed and strategic real estate decisions.

TL;DR - Key Takeaways

• Higher Property Values: Homes in high-performing school districts often see greater appreciation and higher values.
• Increased Demand: Strong school districts attract more buyers, leading to faster sales and higher prices.
• Neighborhood Appeal: Good school districts enhance neighborhood stability and desirability, boosting property values.
• Higher Property Taxes: Homes in top-performing districts usually have higher property taxes, contributing to increased school funding and property values. The inverse is also true and can perpetuate educational and financial inequality.
• Market Resilience: Properties in top school districts are generally more stable and retain value better during economic downturns.

Start Your Search with Home Location

In real estate, the principle of “location, location, location” is frequently emphasized as the primary factor influencing property value. Within this concept, the quality of the local school district is a crucial component in determining home values. This relationship is more than academic; it has practical implications for anyone considering a home purchase.

For families with children or those planning to start a family, the quality of nearby public schools is a major priority. A well-regarded school district can provide not only educational advantages but also a strong sense of community and stability. Even for buyers without children, the attractiveness of a high-performing school district may not be immediately apparent, but these districts often lead to increased property values, enhanced neighborhood appeal, and strong resale potential.

Whether you are a young family, an empty nester, or a first-time homebuyer, understanding how school districts impact property values can aid in making strategic, informed real estate decisions. Here, we explore the key ways school districts influence home valuation.

Four Ways School Districts Impact Property Value

1. Property Value Appreciation:

The impact of school districts on property values is most evident through property appreciation. Often, there is a direct correlation between the performance of local schools and the value of nearby homes. High-quality school districts tend to be associated with increased home values due to heightened demand and perceptions of community stability and prosperity.

For instance, a study reported by The New York Times revealed that a 5% improvement in school test scores can lead to a 2.5% increase in home values. Similarly, the National Bureau of Economic Research found that every additional $1 spent on public schools results in a $20 increase in home values. This data underscores the financial benefits of investing in quality education, benefiting both schools and local homeowners.

While standardized test scores are just one aspect of a school’s performance, they provide accessible information for narrowing down your home search. Homes in reputable school districts generally experience higher demand, quicker sales, and increased prices.

2. Increased Housing Demand:

High-performing school districts generate significant demand for homes. Research from the National Association of REALTORS® (NAR) indicates that 30% of buyers aged 33-42—likely to have young children—consider “quality of the school district” as a top factor when selecting a neighborhood.

Homes in desirable school districts often receive more online views and sell faster compared to properties in less favored areas. Realtor.com reports that homes in high-performing school districts sell eight days faster than those in other regions. This heightened demand can drive up property values, as buyers are eager to make competitive offers on homes in these sought-after districts.

Even buyers without children may find homes in strong school districts attractive due to the associated stability and potential for long-term value appreciation, further boosting property values.

3. Neighborhood Stability

The reputation of a school district can significantly influence the perceived stability and appeal of a neighborhood. Schools with strong academic performance and positive community engagement often create a “halo effect” that extends to the surrounding area.

This perception of stability and prosperity can enhance property values. Homes in neighborhoods with highly regarded schools are often viewed as more desirable due to the associated benefits, such as higher incomes, better resources, and lower crime rates. Although this is more of a perceived effect than a direct cause-and-effect relationship, it can still powerfully impact property values.

Appraisers consider both objective and subjective factors when determining a home’s value. As properties in desirable school districts generally achieve higher sales prices, this can influence appraisals and future property values in the area.

4. Impact of Property Taxes

While public schools may seem “free” to attend due to the absence of upfront costs or monthly fees, they are funded through local, state, and federal taxes, with local property taxes playing a substantial role. Homes in high-performing school districts often have higher property taxes, which are used to support and enhance the schools, creating a cycle of increased performance and higher property values.

In contrast, the funding disparities between affluent and less wealthy school districts can perpetuate educational inequality, affecting low-income students and contributing to a cycle of poverty. Additionally, the NAR found that home prices in high-performing suburban school districts were 49% higher than the national median and 77% more expensive than those in lower-ranked districts.

Many states have stepped in to help compensate for this imbalance locally, but it’s still important to understand how local property taxes fund public schools and the broader socioeconomic impacts concerning your own home research.

What Else Matters?

• Resilience During Market Volatility:

  Homes in high-performing school districts tend to exhibit greater resilience during market downturns. An experiment by BiggerPockets, a real estate investor, found that properties in districts with high school ratings (4-5 stars) experienced less severe value declines during recessions compared to homes in less desirable districts (1-3 stars). This resilience is attributed to the sustained demand for homes in strong school districts, which can help maintain or even increase property values during economic uncertainties.

  For sellers, this means that homes in reputable school districts can be a safer investment during volatile market conditions, potentially achieving higher prices and quicker sales.

• Proximity to Private Schools:

  The presence of private schools can also influence property values. While private schools are not funded through public taxes, their proximity can enhance the appeal of a neighborhood. Homes near prestigious private schools often command higher prices, as buyers are willing to pay a premium for the convenience and prestige associated with these institutions.

  The presence of both public and private educational institutions can make an area more attractive to potential buyers, driving up property values.

• Finding the Right Fit:

  Ask ten different families and you’ll get ten different answers on what makes a school “good”. For some, traditional metrics such as test scores and graduation rates are sufficient, while others may seek a school that offers a specific cultural or emotional fit for their children.

  If you’re looking for a school district that aligns with your family’s specific needs rather than just a highly ranked school, consider exploring resources like Niche.com’s blog post “Beyond Test Scores, What Really Makes a “Good” School?” for additional questions to help you find the right school.

School Districts Matter, Whether You Have Kids or Not!

The impact of school districts on property values is substantial and multifaceted. Regardless of whether you have children, evaluating the quality of local schools can be a strategic component of your home-buying or real-estate-investing process. The benefits of purchasing in a high-performing school district extend beyond educational outcomes, affecting property values, demand, neighborhood stability, and property taxes.

Homes in strong school districts generally appreciate faster, attract higher demand, and offer greater long-term value. Understanding these dynamics can aid in making a well-informed real estate decision. Collaborating with a local real estate agent can provide further insights and help evaluate the best options based on your unique needs and goals. By factoring in the quality of local schools, you can make a more comprehensive decision that benefits you now and in the future.

Let’s get you pre-approved in your favorite school district, today!

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Have you ever dreamed of owning a home but felt discouraged by the thought of a hefty down payment? You’re not alone. For many Americans, saving for a down payment can be a significant hurdle. Fortunately, there’s good news! Down payment assistance programs (DPA programs) can help bridge the gap and make homeownership a reality.

We aim to bring more attention to DPA programs and the positive effect they have on home affordability, especially for first-generation and first-time homebuyers. Down Payment Assistance programs have never been more crucial. By increasing awareness among both buyers and real estate professionals, we can empower more people to achieve the dream of homeownership.

TL;DR - Key Takeaways

• Down payment assistance programs (DPAs) exist to help you buy a home. These programs can provide financial support for your down payment and closing costs.

• You don’t need a large down payment to buy a home. There are loan options with low or even no down payment requirements, and DPAs can further assist with this.
• Closing costs can be significant. Understanding these costs is crucial when budgeting for your home purchase.
• There are different types of DPAs. Grants, forgivable loans, low-interest loans, and deferred-payment loans are available options.
• Eligibility for DPAs is broader than you might think. Many programs are open to a variety of individuals, not just first-time homebuyers.
• Taking action is key. Research available DPA programs, get pre-approved for a mortgage, and work with a knowledgeable lender to guide you through the process.

What Are Down Payment Assistance Programs?

DPA programs are financial tools designed to ease the burden of down payments and closing costs for qualified homebuyers. These programs come in various forms, including grants, forgivable loans, and low-interest loans. They can significantly reduce the upfront costs associated with buying a home, making homeownership more accessible and affordable.

What Do Down Payment Assistance Programs Pay For?

Despite the general name of “down payment” assistance programs, many assistance programs allow funds to be used toward a down payment or closing costs, or both!

Down Payment:

Though there are several common loan programs with 0% down payment required for eligible buyers, generally the lowest down payment options you will find require 3-5% of the home purchase price to pay upfront on your loan.

Closing Costs:

Not as widely discussed as down payment, but equally as important is closing costs. This group of fees and expenses can potentially end up higher than your down payment amount (especially if using a low or no down payment option). Closing costs are fees and expenses, ranging from 2-6% of the loan amount that are also due at closing with the down payment.

They will cover services and taxes such as appraisals, title insurance, taxes, origination fees, etc. For example, if your home loan is $250,000, you might pay between $6,000 (2%) to $18,000 (6%) in closing fees especially if you live in an area with higher local taxes.

Pro TIP: Closing costs can also be a negotiation factor with the home seller/builder, real estate agents or your lender. You may not need a DPA program to help with these – let’s chat about this if you have more questions on closing costs.

Benefits of Down Payment Assistance:

• Reduced Upfront Costs:

  DPA programs can free up your savings, allowing you to focus on other moving expenses or future home improvements.

• Increased Buying Power:

  With DPA assistance, you could qualify for a higher loan amount, opening up more home-buying options.

• Greater Affordability:

  DPA programs can make monthly mortgage payments more manageable.

• Accessible for Various Buyers:

  DPA programs cater to a variety of individuals, including first-time homebuyers, people with disabilities, veterans, and low-to-moderate-income families.

• Promotes Stable Communities:

  By helping more people achieve homeownership, DPA programs contribute to building stronger communities.

Types of Down Payment Assistance Programs:

There are numerous DPA programs available to fit different buyers’ needs. Here are a few common types:

1. Grants:

   A homebuyer grant is a type of DPA program that provides a one-time cash sum applied directly to reduce the amount needed for down payment on the loan. The best part is – they don’t have to be repaid.

2. Forgivable Loans:

   These function like second mortgages but are forgiven if you meet specific requirements like paying your mortgage on time every month and staying in the home for a specific period (typically from 3-10 years). The loan is forgiven in increments until it’s completely forgiven at the end of the period. If you decide to move before then, you’ll need to pay back the funds that have yet to be forgiven. If you adhere to the requirements, you won’t have to pay the loan back at all!

3. Low-Interest Loans:

   These loans are similar to second mortgages but with a lower interest rate than your primary mortgage. You’ll repay the low-interest loan along with paying monthly payments for the first mortgage, typically over a few years.

4. Deferred-Payment Loans:

   You don’t typically pay interest on these loans, but you’ll eventually need to repay them when you sell the house or refinance the mortgage.

5. Individual Development Accounts (IDAs):

   These matched savings accounts require participants to save money and receive matching funds from a government agency or community organization.

Who Offers Down Payment Assistance Programs?

There are thousands of down payment assistance programs nationwide. Programs may be offered by your state, county, and city government agencies, non-profit organizations, or even individual mortgage lenders. They can take the form of grants, loans, or a combination of both. The terms and conditions of these programs are all very different, but the ultimate goal is to make home-buying more accessible for more people by removing barriers or adding incentives.

The Department of Housing and Urban Development (HUD) has a list of local home buying programs by state. Check with your city and county to see if they offer any grants or loan programs. Your loan officer can also help you to find the right DPA program for you!

What Are the Eligibility Requirements?

Qualifying for a DPA program might be easier than you think – don’t rule yourself out! Eligibility requirements vary by program, but here are some common factors:

• Property Location:

Some programs prioritize buyers in specific areas, like rural communities or Metropolitan Statistical Areas (MSAs).

• Cash Reserves:

Programs might require a minimum or maximum amount of savings.

• Homebuyer Education:

Many programs require completion of a homebuyer education course. These courses can be done in person or virtually and provide valuable information about the home buying process, financial management, and homeownership responsibilities.

• Occupancy Requirements:

These programs are typically for primary residences, not investment properties or second homes.

• Income:

Programs often help those with incomes below or within certain area median income levels.

• First-Time Homebuyer Status:

Often the term “first-time homebuyer” will refer to someone who has not owned a home within the last 3 years. Check with each DPA program to understand their requirements.

• First-Generation Homebuyers: 

Some programs target first-generation homebuyers, who are less likely to be able to rely on assistance from family. 

• Individuals with Disabilities: 

There are a variety of down payment assistance options available to borrowers who have a disability or a family member living with them that has a disability.

• Service Professions:

Veterans, teachers, firefighters, and other community heroes may have access to specific programs.

• Credit Score:

While some programs allow for lower credit scores, many still require a minimum credit score.

Misconceptions About Down Payment Assistance:

One of the biggest misconceptions about DPAs is that they’re only for first-time homebuyers. Not true!  Did you know that you can qualify as a “first-time” home buyer even if you’ve owned a house before? You are considered eligible to apply for first-time home buyer loans and benefits if you haven’t owned your principal residence in the last three to five years. So, if you owned a home in the past but are renting now, don’t just count yourself out, just make sure to check how your target program defines the term.

Nearly 40% of all programs are open to repeat buyers who have owned a home within the past three years or longer.

The Steps to Getting Down Payment Assistance:

The steps to access a DPA program typically involve:

1. Pre-approval: Connect with a mortgage lender to help you understand how much loan you qualify for and how much assistance you may need.
2. Research and Apply for Assistance: Your loan officer will help discuss your eligibility factors and find DPA programs that you could qualify for.
3. Homebuyer Education: Most programs require completion of a short online or in-person homebuyer education course.
4. Approval and Assistance: If approved, you’ll receive details about the program and the assistance you qualify for.
5. Purchase Your Home: Work closely with your lender and realtor to ensure a smooth transaction.
6. Comply with Program Requirements: Maintain eligibility by meeting program requirements, such as occupying the home as your primary residence for a set period.

Still Unsure?

Even if you’re unsure if you would qualify for a DPA program, don’t hesitate to reach out to your loan officer. This will give you a clearer picture of your affordability and potential loan amount. Your loan officer can assess your situation and explore all your options, including DPA programs, gift funds, and other strategies to tackle down payment or closing cost challenges.

Your loan officer will be happy to help you narrow down the programs you may be eligible for and help you navigate the process.

Remember, homeownership is a dream within reach for many!

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Please consult with the Loan Originator to discuss your options and to receive specific DPA information. You will need to apply for a first mortgage loan with NFM, Inc. in conjunction with any down payment assistance program. All information contained herein is subject to change at any time. A training class might be required. All DPA programs require to apply for a 1st and 2nd mortgage. Equal Housing Lender. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. 

June is the best month of the year – It’s National Homeownership Month! As a local lender, we’re dedicated to helping people achieve sustainable homeownership and their American Dream. We believe in the power of owning a home, and we’re thrilled to celebrate the countless benefits it brings to individuals, families, and communities this month – and every single day of the year!

The Importance of Homeownership

Homeownership is more than just having a roof over your head – it’s a dream, it’s stability and control of your environment, and it’s a powerful tool for building wealth. Beyond the personal benefits, research shows that stable housing plays a crucial role in children’s well-being, strengthens communities, and contributes to a thriving economy.

We love telling the stories of happy homeowners, especially the ones that capture the joy and fulfillment that comes with ownership after overcoming challenges and hurdles. These new homeowners are the reason everyone at the NFM Family of Lenders is passionate about getting people and families into the homes they love.

The History of National Homeownership Month

To get a glimpse into why we celebrate Homeownership Month nationally, here’s a timeline of homeownership and this special month in the United States. These events have paved the way for more Americans to achieve the dream of homeownership:

Homeownership Rates in the US: A Reason to Celebrate

Homeownership rates in the US have steadily climbed over the years, offering a reason to celebrate progress. In 1900, the homeownership rate stood at 46.5%. By 2000, it had risen to 66.2%, and it continues to hover near that mark today. National Homeownership Month allows us to reflect on these gains and express gratitude for the increased accessibility of homeownership.

Here’s an interactive data visualization that lets you explore homeownership and renter-occupied housing rates by state.

Homeownership Rates Across Minorities

Single women can celebrate having the highest rate of first-time homeownership (19%) behind married couples (59%), and overtaking single men (10%). Especially since women in the U.S. were not allowed to finance the purchase of real estate without a husband or male cosigner until the 1970s.  

However, despite overall growth in minority homeownership, racial and ethnic disparities persist. According to the Census Bureau, the homeownership rate for non-Hispanic White Americans sits at 73.8% (4th quarter 2023), compared to 63% for Asian Americans, 49.8% for Hispanic Americans, and 45.9% for Black Americans. We still have work to do in ensuring equal access to homeownership for all.

Net Worth and Homeownership: Wealth Building at Home

Owning a home is a powerful tool for building wealth, particularly for low and middle-income families. Statistics show a significant gap in net worth between homeowners and renters. In 2022, the Federal Reserve reported a median net worth of $396,200 for homeowners, compared to just $10,400 for renters. This means the average homeowner has nearly 40 times the net worth of a renter. (see graph below):

Here’s what Economist at First American Title, Ksenia Potapov, has to say about the wealth gap between renters and homeowners:

“Renters don’t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments . . .”

So, what’s the secret behind the #1 wealth builder for low- and middle-income Americans?  Here are some key factors:

• Forced Savings: Your monthly mortgage payment acts like a form of forced savings. Unlike rent payments that vanish each month to build a landlord’s equity, mortgage payments contribute to your long-term wealth accumulation.
• Equity Accumulation: When you own a home, you build equity as the value increases (appreciates) and through regular monthly mortgage payments. This equity becomes yours when you sell, providing a historically significant financial return.

Home Value – Loan Amount = Equity

Equity: the cornerstone of wealth building

Housing equity is the largest component of net worth for most owner-occupied households. Owning a home, even at a more affordable price point, can significantly contribute to your overall financial well-being through appreciation. This is especially evident for Black and Hispanic homeowners and those with lower-to-mid range incomes.

Benefits of Homeownership: More Than Just Financial Gain

Owning a home offers a variety of advantages that go far beyond just financial rewards. In fact, the impact on your physical, mental, and financial well-being can be life-changing. A 2013 study by two professors at the University of North Carolina at Chapel Hill documents a range of social benefits associated with homeownership.

• Building Strong Families and Communities: The sense of satisfaction, stability, quality, freedom, and control that comes with homeownership extends to other important aspects of life, such as education, employment, healthcare, and retirement savings. Homeownership can also positively impact families and children.
• Investing in Your Neighborhood: Studies suggest that homeownership can contribute to a stronger economy and a more vibrant community. Homeowners are more likely to be invested in their neighborhoods, which can lead to increased property values and a thriving local economy. They’re also more likely to participate in local activities and take pride in their surroundings, fostering a stronger sense of belonging and connection with neighbors.

Working Towards an Inclusive Housing Market

National Homeownership Month is a time to celebrate progress, but we acknowledge that significant barriers still prevent many Americans from achieving the dream of homeownership. Here at NFM Lending, we are committed to addressing these challenges head-on.

Recognizing that racial and social inequities, limited financial literacy, and systemic issues have historically disadvantaged certain communities in homeownership, we believe that advocacy and tailored financial solutions are key to closing these gaps. By providing access to funding for home construction and ownership, we can promote inclusive growth in the housing market.

We’re strong believers in creating a housing market that’s open to everyone. That’s why NFM offers special programs and resources to empower first-time homebuyers, low and moderate-income families, and communities of color. These initiatives aim to make homeownership a reality for everyone. And we want everyone to experience the joy and stability that comes with owning a home! You can learn more about our equity, and inclusion initiatives on our website.

Celebrating Homeownership and Looking Ahead

National Homeownership Month is a time to celebrate the power of owning a home and the positive impact it has on individuals, families, and communities. We’ve come a long way in increasing accessibility and equity in h, but there’s still work to be done. Here at NFM Lending, we’re committed to helping more people achieve their homeownership goals and build generational wealth in the process.

If you don’t know where to start, give us a call! We’re here for you before, during, and throughout your entire homeownership journey.

LINTHICUM, MD, June 22, 2017 — NFM Lending is pleased to announce the opening of a new branch in Virginia, led by Branch Manager Blane Stewart. The branch will focus its lending platform throughout Brandy Station and the surrounding area. NFM Lending offers Conventional, FHA, VA, USDA, FNMA, Jumbo, and many other loan options.

“Partnering with NFM Lending allows me to align with a successful company that is focused on optimizing the purchase process for our customers and partners,” said Stewart. “This will allow a Realtor and buyer experience that is consistently excellent every time. This comes from proactive, engaged and transparent communication from contact to closing.”

Stewart’s two branches are located in central Virginia, with the main office in Brandy Station.

“Blane was a ‘wow’ addition in so many ways that matter,” said Greg Sher, Chief Business Development Officer of NFM Lending. “His attitude, determination, honesty, integrity, and commitment to his craft make him a cut above most. We’re truly honored to have him and his team on our journey to the top.”

The branch is currently hiring qualified Loan Originators for full and part-time positions. The branch’s goal is to provide top-notch service, commitment, and dedication to borrowers, ranging from first-time homebuyers to seasoned buyers looking for their next home, a second home, or investment properties. Visit the branch page to learn more: www.nfmlending.com/va331.

About NFM Lending

NFM Lending is a mortgage lending company currently licensed in 29 states in the U.S. The company was founded in Baltimore, Maryland in 1998. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. NFM Lending has firmly planted itself in the home loan marketplace as “America’s Common Sense Residential Mortgage Lender.™” For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Twitter.

If you are looking to purchase a home, you may have wondered what is needed to qualify for a mortgage. When your lender is determining whether you qualify for a home loan, many factors you may not have considered may come into play. Here are a few mortgage do’s and don’ts to keep in mind during your home buying process.

• Don’t: Change jobs (without notifying your lender) – Changing jobs at any point during the home buying process can be risky. Changes to your income can make it more difficult for you to qualify for a loan. A new job may mean a change in pay structure; for example, you may go from a salaried position to something less stable, such as a commission-based job. But even if your pay structure remains the same, your lender may not be able to vouch for your ability to repay a home loan if you cannot show consistent income history.
• Do: Have all your required documentation in place – If you do plan on changing jobs, notify your lender ahead of time. They will able to provide you with advice and let you know what documentation will be required. Be prepared to document as much of your previous income as possible, and make sure you can provide pay stubs from your new position.
• Don’t: Apply for new credit cards – Your credit score is an important factor that your lender will consider when qualifying you for a mortgage loan. Applying for a credit card can affect your credit score, especially if you frequently open and close credit accounts.
• Do: Reduce your debts – Your debt-to-income ratio (DTI) is another factor your lender will consider when qualifying you for a mortgage loan. Your DTI refers to your monthly obligation on long term debts divided by your gross monthly income. The less consumer debt you have to make payments on each month, the less risky you may appear to a lender, and the more likely it is that you may be able to qualify for a home. Pay off and consolidate as much of your consumer debt (credit cards, student loans, auto loans, etc.) as you can prior to applying for a home loan.
• Don’t: Make any major purchases – It may be tempting to go out and spend a lot of money on furniture and appliances for your new place, but it’s important to wait until you close on your mortgage loan. You will want to keep your credit cards paid off, or at least to keep your balances low, to avoid negative effects on your credit score. You will also want to avoid deferred payment plans; even if payments aren’t due for months, it can still affect your DTI and your credit score.
• Do: Pay your bills on time – For any outstanding debt or bills you may have, make sure you are making your payments on time. Late payments can show up on your credit report and affect your credit score.

The mortgage process will require effort and patience, but moving into the home of your dreams will be worth it! If you have any questions about the mortgage or home buying process, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!

Over the past several months, we have answered the top questions about the top mortgage loan options. Our final blog in this series will answer the top 5 questions about United States Department of Agriculture (USDA) loans. If you are considering buying a home, read on to find out whether a USDA loan might be the right choice for you.

USDA Loans
USDA home loans are insured by the United States Department of Agriculture. This loan program allows low- and moderate- income households to purchase homes in eligible rural areas. Home buyers who do not qualify for a conventional mortgage may be able to purchase a home with a USDA loan.

• Who is eligible for a USDA Loan?
  Low- to middle- income home buyers looking to purchase houses in eligible rural areas may qualify for a USDA loan. Other USDA requirements can be found here. Your lender may also have other eligibility requirements, including a minimum credit score.
• How do I know if I meet the income requirements for a USDA loan?
  Income requirements for USDA loans vary by county, and are also based on the number of persons in your household. You can see what the income limits for your area are by visiting the USDA website.

• How can I find out if a property is in a USDA eligible area?
  The USDA website allows you to search property addresses to determine whether they meet Rural Development rural area requirements. What qualifies as rural may vary from place to place, but includes factors such as the area’s population and development.
• Can I purchase a second home with a USDA loan?
  USDA loans are designed to help eligible home buyers attain a primary residence, and cannot be used to obtain a second home.
• What are the benefits of a USDA loan?
  The chief benefit of a USDA loan is that it allows home buyers to obtain 100% financing* for the home, with no down payment required. Additionally, the USDA does not have loan limits in place, so your purchasing power may be higher than it would be with another loan program. Your lender will be able to help you determine how much you qualify for.

If you are looking to purchase a home in a rural area, a USDA loan may be the right financing option for you. For more information about USDA loans, please visit the USDA website. If you have more questions about buying a home with a USDA loan, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!

*100% financing, no down payment is required.  The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included. Loan is limited to the appraised value without the pool, if applicable.