It’s National Homeownership Month and what better way to celebrate than knocking down barriers to homeownership!  We’ll bust some common myths and shed light on some lesser-known facts for first-time homebuyers, giving you even more insight as you prep for achieving your homeownership goals! Let’s get into it.

Don’t believe it? It’s true! While having no credit history presents a challenge, it doesn’t disqualify you.

Having an established credit history and a good credit score can improve your chances of qualifying for a mortgage. But if you are looking to buy a house with no credit, there are options available. The key is to demonstrate your financial responsibility. Here are some ways to do that:

  • Go Through Manual Underwriting: Manual underwriting is ideal for home buyers with no credit because it allows lenders to verify payment history in other ways. You can request proof of on-time payments from your landlord, insurance company, utility companies and more to verify that you pay your bills on time every month.
  • Get a Cosigner: Having a cosigner could be a huge plus for someone with no credit history. But keep in mind that being a cosigner can be a large risk since they also assume responsibility for the loan, even if you are the one who fails to make payments.
  • Making Rent Count: Paying rent consistently demonstrates financial responsibility and can positively impact mortgage eligibility.
  • Cash Flow Assessment: Talk to your lender about assessing your cash flow by reviewing financial account transaction patterns, balance trends and other observations over time.

Before you disqualify yourself due to not having a long credit history, let’s talk!

We will shout this from the rooftops for as long as it takes: You DON’T Need to Put 20% Down to Buy a Home!

In fact, the median buyer puts down just 13%, and this amount reduces to 8% for first-timers and buyers under the age of 32 (NAR 2023 study).
While a 20% down payment might offer a potentially lower interest rate and no PMI, it’s not always the most strategic move for everyone.

Here’s why:

  • Opportunity Cost: Putting a larger down payment might mean delaying your homeownership journey. The sooner you buy, the sooner you start building equity (see fact #3).
  • Financial Flexibility: Keeping some cash reserves allows for unexpected expenses or future investments.
  • Forced Appreciation: A popular option is to put in a good down payment (3-10%), then make home improvements or renovate right away. You can improve the home you’re in and immediately make an impact on your net worth. Just make sure to focus on improvements with the best return on investment.

The size of your down payment should be a strategic decision based on your unique financial situation. We can help you run the numbers and find the sweet spot that balances affordability with long-term financial goals.

No matter how much money you need for a down payment, saving up that nest egg can be a big challenge. But did you know that many people, not just low-income buyers, qualify for down payment assistance programs?  These programs are designed to help first-time homebuyers bridge the gap between their savings and the down payment amount, and some don’t even have a first-time homebuyer requirement!

The eligibility requirements could be based on:

  • Income
  • Location
  • Credit score
  • Property type

And they can come in the form of:

  • Grants – Never have to be repaid
  • Loans – Repaid at low or no interest
  • Forgivable loans – Debt forgiven, often after 5-10 years
  • Tax credits – Save money on federal taxes

Plus, there are programs available in every state through state and local agencies, city or county administrators, employers, or non-profit sources.

The biggest challenge? Figuring out which programs are available in your area and what you qualify for.

That’s where we can help! Just reach out, and we’ll connect you with the resources you need.

The American Dream used to be a sprawling McMansion, but times have changed. Today’s savvy homebuyers are prioritizing smart space utilization over square footage. Here’s why:

  • Affordability: Smaller homes generally cost less.
  • Less Maintenance: Less space means less cleaning and upkeep.
  • Focus on Functionality: It’s all about creating a space that perfectly suits your needs.

Don’t get us wrong, a spacious home is great if that’s your jam. But before you get swept up in square footage, consider how you’ll actually use the space. Could you maximize a smaller home with storage solutions, efficient layouts, and clever use of outdoor areas? Perhaps the money saved on a smaller home could be used to invest in an architect who can help you create a truly functional living space.

While interest rates might seem high right now (June, 2024), they’re a far cry from the crazy rates of the past. In October 1981, interest rates peaked at a whopping 18.63%…yikes!

Average Mortgage Interest rates from April 30, 1971 through June 13, 2024. Source: Freddie Mac https://www.freddiemac.com/pmms
Source: Freddie Mac Primary Mortgage Market Survey 4/30/1971 – 06/13/2024

Other than a great lender, a great buyer’s real estate agent can make your homebuying experience amazing!

Did you know that in 2023, 89% of homebuyers used a real estate agent? The majority of those that did not have a real estate agent were newly constructed homes. A buyer’s agent acts as your champion throughout the homebuying process, offering a wealth of expertise and guidance. Here’s how they can help:

  • Finding Your Perfect Match: They’ll help you assess your needs and wants in a home, then search for properties that fit the bill within your budget.
  • Negotiation Master: They’ll advocate for you during negotiations to help you secure the best possible price.
  • Hidden Gem Hunter: They can tap into unlisted properties to expand your search options.
  • Paperwork Powerhouse: They’ll handle the majority of the home offer paperwork, saving you time and stress.
  • Your Knowledge Hub: They’ll answer your questions, explain processes, and ensure you stay on top of deadlines.

Need a buyer’s agent connection? We know excellent, hard working professionals in your area who can help you find your perfect home, just reach out!

According to the National Reserve, homeowners have roughly 40 times more net worth than renters.

That’s a staggering statistic! Here’s why:

  • Equity on Your Side: With every mortgage payment, you build equity in your home, essentially paying into your own investment.
  • Stable Housing Costs: Owning a home means predictable monthly payments, unlike rising rents that can strain your budget.
  • Long-Term Security: Homeownership provides a sense of stability and a place to call your own, contributing to overall financial well-being.

Buying a home can be a big leap, but for many people, the long-term financial stability is well worth it now and for generations to come. That’s why we love homeownership!

Thinking about skipping the school district research because you don’t have kids? Think again! 30% of buyers between the ages of 33-42 named “quality of the school district” as a top factor when choosing their neighborhood.
(2023 NAR Home Buyers and Sellers Generational Trends)

school bus image

Buyers often seek districts that provide well-equipped schools, including libraries, sports facilities, science labs and technology resources. The presence of these amenities suggests a commitment to providing a comprehensive educational experience, making the surrounding properties more desirable. In fact, In fact, according to the Urban Institute, “A 1 percent increase in school spending increases house prices on net by 1.03 percent”.

Even for those without children, a good school district can be a smart investment, as it often translates to higher resale value when you decide to sell.

Student loan debt is a reality for many millennials and Gen Z buyers, but don’t let it discourage you from homeownership! Here’s the good news:

  • Debt-to-Income Ratio is Key: Lenders consider your overall debt-to-income ratio, which focuses on your monthly payment amount, not just your total debt number.
  • Many Qualify: A report by the National Association of Realtors shows that 38% of first-time buyers have student loan debt.

We can help you understand how your student loans will impact your mortgage eligibility and explore your options. Don’t count yourself out!

According to a Pew Research Center survey, the majority of Americans (57%) prefer spacious living with houses further apart, even if it means a commute to amenities. However, a significant portion (42%) favor walkable communities with smaller homes closer together.

Here’s a breakdown of where most homes are sold:

  • Suburbs/Subdivisions: 33%
  • Small Towns: 27%
  • Rural Areas: 23%
  • Urban Areas: 12%
  • Resort Areas: 5%
Source: NAR 2023 Profile of Homebuyers and Sellers

Did these Facts About Homeownership Surprise You?

If any of these facts for first-time homebuyers got you wondering if homeownership could be possible for you, let’s chat! We will set up a no-cost consultation to learn more about you, your goals, and your options.

LINTHICUM, MD, June 10, 2024— NFM Lending and its Family of Lenders announced today that we have been recognized once again as one of the top lenders in the country by Scotsman Guide, the leading magazine and resource for mortgage originators. This year, we have achieved several prestigious accolades:

· 14th Largest Retail Lender in the Country

· #1 Retail Lender in Maryland

· 21st Overall Lender (including wholesale mortgage companies)

· 20th Largest VA (Veterans Affairs) Lender

· 21st Largest FHA Lender in the Country

The list put out by Scotsman Guide is “the industry’s most comprehensive, verified rankings of the nation’s top producing mortgage companies.”

David Silverman, Founder and CEO of NFM Lending, expressed his gratitude and pride in the company’s achievements: “It is an incredible honor for NFM to be recognized in these rankings. Over the last 10 years, we have experienced tremendous growth, steadily moving up the ranks to become a top 15 lender. This recognition is a testament to the hard work and dedication of our entire team. We are committed to continuing our growth and providing exceptional service to our clients.”

NFM is proud of this achievement and thanks its NFM Family and real estate partners for their support.

About NFM Lending

NFM Lending is a mortgage lending company currently licensed in 49 states in the U.S. and Washington, D.C. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, BluPrint Home Loans, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit nfmlending.com, like our Facebook page, or follow us on Instagram.

LINTHICUM, MD, June 4, 2024— NFM Lending and its Family of Lenders are pleased to announce LaTasha Waddy’s promotion to Executive Vice President and Chief Legal Officer. Waddy has been integral to the NFM Lending team since 2012, previously serving as General Counsel and Chief Compliance Officer.

In her tenure at NFM Lending, Waddy has demonstrated exceptional leadership and dedication, significantly contributing to the company’s overall business strategy and success. Her expertise and commitment have made her a critical member of the executive team, where she has played a pivotal role in guiding the company through complex legal and compliance landscapes.

“I am excited to announce that LaTasha Waddy has been promoted to Chief Legal Officer and Executive Vice President of the NFM Family of Lenders,” said Founder and CEO David Silverman. “As those at NFM and many throughout the industry know, LaTasha has been much more than a lawyer for our organization. She is a thoughtful leader, coach, mentor, businesswoman, and phenomenal teammate. Her understanding of every department and the inner workings of our ever-changing industry is unparalleled. We are excited to see her take on new and more impactful responsibilities that will benefit not just NFM Lending but our entire industry.”

Waddy’s promotion reflects NFM Lending’s commitment to recognizing and nurturing talent within the organization. As Executive Vice President and Chief Legal Officer, she will continue to oversee the company’s legal and compliance functions while taking on additional responsibilities to enhance NFM Lending’s strategic initiatives further.

“I am honored to take on this new role and grateful for the opportunity to continue contributing to NFM Lending’s growth and success,” said Waddy. “I look forward to working with our exceptional team to navigate the challenges and opportunities ahead.”

NFM Lending congratulates LaTasha Waddy on her well-deserved promotion and looks forward to her continued leadership and contributions to the company’s future achievements.

About NFM Lending

NFM Lending is a mortgage lending company currently licensed in 49 states in the U.S. and Washington, D.C. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, BluPrint Home Loans, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit nfmlending.com, like our Facebook page, or follow us on Instagram.

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.

Homeownership Rates in US by State_Datawrapper

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, April 5, 2024 — NFM Lending and its Family of Lenders is proud to congratulate their loan originators who were recognized in the Scotsman Guide Top Originators 2024 lists.

Each year, Scotsman Guide recognizes the nation’s top-producing mortgage loan originators. Originators are ranked in ten categories, including Top Dollar Volume, Most Loans Closed, and Top Purchase Volume. Each set of rankings is thoroughly audited, making Scotsman Guide the mortgage industry’s “most intensely reviewed, accurate and substantiated rankings of its kind.” To be considered, entrants must either have done at least $25 million in loan volume or personally closed 75 or more home loans in the 2023 calendar year.

Oleg Tkach was ranked at #75 nationally and led the Top Dollar Volume category for the company with $150,593,253 in production, followed by Jane Floyd ranked 3106 nationally with $$150,593,253, and Daniel Sa ranked #191 with $$101,483,726.

“What an incredible year it was for these top salespeople!” said NFM Lending President / Chief Operating Officer, Bob Tyson. “Everyone in the mortgage industry knows the headwinds we faced last year, and yet these individuals faced the challenges head-on and came out on top. Congratulations to them and all our originators. We are looking forward to a great 2023.”

NFM Lending would like to recognize and congratulate all the loan originators within the NFM Family for this incredible achievement.

 

Top Dollar Volume

NFM Lending

David Arocho

Michael Badessa

Michel Baez

Camille Baldwin

Tyler Barnett

Andrew Beigel

Trevor Bennett

Benjamin Burkett

Brian Burnham

Anthony Cellini

Michael Colagrossi

Jerry Cook

Gregory Cowart

Casey Coyle

Mario Cua

Mack Dadyan

Rich Dillman

Jane Floyd

Ronald Gosewisch

Dana Gounaris

Tina Konidaris

Dakotah Kutz

Tracy Marino

Kelsey Marquardt

Kyle McCort

Jeff Miltenberger

Todd Novosel

Brandon Pavlovic

Jesse Perrone

Craig Pollard

Bryan Raiford

Steven Rivera

Daniel Sa

Shanon Schinkel

Justus Sharp

Matthew Shiner

Shane Staples

Rob Stettler

Blane Stewart

Oleg Tkach

Raquel Wilson

Tammy Wittren

 

Main Street Home Loans

Darran Anthony

Neil Bourdelaise

Clay Carroll

Karen Dulmage

Derek Evans

Carolyn Flitcroft

Rita Hairston

David Licciardi

Peter O’Donnell

Kyndle Quinones

Michelle Roman

Salvatore Savastano

John Savastano

David Travers

Jon Wald

 

BluPrint Home Loans

Jeff Welgan

 

Elevate Home Loans

Chris Magnotta

 

Element Home Loans

DeAnn Ellis

Sharon Wofford

 

 

Most Loans Closed

NFM Lending

 

NFM Lending is proud of these loan originators’ accomplishments and wishes them continued success.

 

About NFM Lending

NFM Lending is a national mortgage lending company currently licensed in 49 states in the U.S. and Washington, D.C. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, BluPrint Home Loans, Freedmont Mortgage Group, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Instagram.

Confused about pre-qualification and pre-approval? You’re not alone! Many first-time homebuyers get tripped up on these mortgage terms; not only do they sound similar they have a few similar qualities. Here we break down the difference between pre-qualification and pre-approval, explaining what each involves. Also learn about the benefits of getting pre-approved, and how it can give you a leg up in today’s competitive housing market.

Venn diagram comparison of pre-qualification and pre-approval for first-time homebuyers. Pre-qualification: 1. Informal estimate of mortgage size a buyer qualifies for based on basic financial info. 2. Also, helps narrow down home and loan options to what you can possibly afford. Pre-approval: 1. Definitive answer on how much you can borrow and possible interest rate 2. Speeds up the buying process 3. Positions you as a strong buyer, like a cash buyer, with a large advantage over prequalified buyers

Pre-qualification: Testing the Waters

Imagine pre-qualification is like window shopping. You get a general idea of what you like and where you might want to shop, but you’re not quite ready to commit.

Pre-qualification is a quick and easy process, often done online with a calculator. First answer some basic questions about your income, job situation, and any debts you have. Then, based on this info (which you provide), a lender will give you a rough estimate of how much you might be able to borrow.

The Perks of Pre-qualification:

  1. Fast and Easy: No need to gather paperwork or get your credit checked (yet).
  2. Budget Compass: Get a general idea of what you can afford, helping point you in the right direction.

The Downsides of Pre-qualification:

  • Not Set in Stone: The estimate is based on what you tell them, and the lender hasn’t verified your finances yet, so sellers likely won’t take your pre-qualification seriously.
  • Can’t look at homes with an agent, yet: Similar to a seller, real estate agents know you may not actually be able to afford the homes you think you’d like to look at and will encourage your to get pre-approved first.

Remember: Pre-qualification is a great first step, but it’s not the real deal – a pre-approval is where things get serious.

Pre-approval: Getting Down to Business

Pre-approval, on the other hand, is like actually having your credit card out and ready to swipe at the store. You know exactly how much you can spend, and sellers know you’re a serious buyer. This gives you the upper hand to other window shoppers when you’re find the right place and want to make an offer right away.

What happens during a pre-approval?

Income, Assets, Debts

You will fill out a mortgage application and answer some questions about your finances, rental or ownership history, and credit history. Then you will provide documents to verify your:

  • Income (think paystubs, W2s, etc.)
  • Assets (bank statements)
  • Any debts you owe (like car payments, student loan payments, credit cards, etc).

Save our Pre-Approval Document Checklistto help you organize your documents before getting pre-approved.

Credit

Next, we will pull your credit report to see your credit score, checking to see if there were any red flags in the past that weren’t disclosed. Things like bankruptcy, delinquency on a loan, etc.

Savings

We’ll also discuss how much you have set aside for a down payment and closing costs.

Based on this verified information, you’ll receive a pre-approval letter stating the exact amount you’re pre-approved for, and the estimated interest rate.

How Long is a Pre-Approval Valid for?

The pre-approval letter will only be good for 60-90 days. Finances change, interest rates change, and we want to make sure clients still qualify for what they were originally pre-approved for, or maybe they qualify for even more after additional review!

You’ll just need to provide updated (or additional) documents you’re asked for. We will take current interest rates into consideration and how the fluctuations in interest rates could affect your affordability.

Benefits of Being Pre-Approved:

  • Solid Numbers: You know exactly how much house you can afford, no more guessing games.
  • Realistic Expectations: Sets clear boundaries for your home search, so you don’t fall in love with a place you can’t afford.
  • Stronger Offer: A pre-approval letter shows sellers you’re a serious, truly qualified buyer, giving you a leg up on the competition.

Pre-Approval with a Trusted Lender 

Getting pre-approved with a trusted lender provides you with added peace of mind and gives you access to a professional who can run multiple scenarios for you and all the “what ifs”:

We’re here to help, so use our expertise to your advantage now and for your future.

Be Honest and Upfront in Your Pre-Approval

During your application, but honest and upfront about your financial situation. This will help us give you an accurate picture of what you can afford and avoid any surprises down the road. We can often work through many of the challenges our clients are nervous to share with us.
Remember, we are here to serve you! Its our goal to help homebuyers achieve sustainable homeownership and build generational wealth now and in the future.

Pre-Qualification vs. Pre-Approval: Side by Side

Comparison chart between pre-qualification and pre-approval for first-time homebuyers. Pre-qualification: Info verified? No. Turn around time? Speedy, within minutes. Impact on offer strength: Weak. Impact on credit score: None. Pre-Approval: Info verified? Yes. Turn around time? A bit longer (1-3 business days). Impact on offer strength: strong. Impact on credit score: Hard Pull.

Beyond Pre-approval: Setting Sail on Your Homebuying Journey

With your pre-approval letter in hand, you’re officially ready to set sail on your homebuying adventure! Here are some additional things to keep in mind:

  • Work with a Real Estate Agent: A good agent can help you find homes within the budget we’ve set together, negotiate and guide you through the offer process, and answer any questions about homebuying along the way.
  • Factor in Additional Costs: Remember, the mortgage isn’t the only expense. We will also consider closing costs, homeowners insurance, and potential property taxes when discussing your budget.
  • Enjoy the Ride! Buying a home can be stressful, but it’s also an exciting time. Celebrate the milestones and don’t be afraid to ask for help when you need it.

Check out our home loan process map to see what’s to come in your homebuying journey. 

By understanding the difference between pre-qualification and pre-approval, you’ll be a more informed and confident homebuyer. With the right preparation and resources, you’ll be well on your way to finding your dream home!

LINTHICUM, MD, May 3, 2024 — NFM Lending is pleased to announce the opening of a new branch led by Branch Manager Petros Christophilis. The branch is located at 3334 NE 65th Street, Seattle, WA 98115. The new NFM Lending branch will focus on expanding NFM’s flexible and powerful lending platform to better serve community families with exceptional customer service. NFM Lending offers Conventional, FHA, VA, USDA, Jumbo, and many other loan options to fit every borrower’s needs.

“I am thrilled to join the NFM Lending family, a decision inspired by the company’s exceptional culture, dedication to outstanding customer service, and the comprehensive range of loan programs offered,” said Christophilis. “I feel like I have truly found a new home here and am excited to begin this next chapter of my career with such a reputable and well-rounded company.”

The branch’s goal is to continue to provide the same commitment and dedication to borrowers, ranging from first-time homebuyers to seasoned buyers looking for their next home, a second home, or investment properties.

“We are very excited to announce the addition of Petros to the NFM family,” said NFM Founder/CEO David Silverman. “Petros is one of the very top originators in Washington State in both production and professionalism. His work ethic and experience level are at the top of the game, and we look forward to working with Petros to increase his presence in the region and help as many families as possible realize their dream of home ownership and lower payments.”

 

Christophilis is currently seeking qualified Mortgage Loan Originators for full and part-time positions.

For more information, please contact:

Petros Christophilis Branch Manager NMLS# 92866 206-406-4690 petros@teampetros.com teampetros.com

 

 

 

About NFM Lending

NFM Lending is a national mortgage lending company currently licensed in 49 states and the District of Columbia. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies includes Main Street Home Loans, Bluprint Home Loans, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Instagram.

Dreaming of shedding years off your mortgage and saving a ton on interest? You’re not alone. From millennials and Gen Z to those who are preparing to retire, many homeowners are prioritizing early mortgage payoff. Here we’ll explore powerful techniques to pay off a mortgage early like biweekly payments, lump sum payments, and even the potential of mortgage refinance. We’ll answer all your burning questions, like “Is it really better to pay off my mortgage early or invest?” Let’s unveil the best ways to pay off your mortgage early and help you craft a personalized plan for financial freedom.

Why Pay Down your Mortgage Faster?

Now that you’re a homeowner, you aren’t paying your landlord’s mortgage and instead you’re building equity in your own place. Now picture yourself with that same home and free from a monthly mortgage payment, with the financial freedom to invest, travel, retire, or just breathe a little easier. That’s the magic of early payoff.

What are some advantages to paying off your mortgage early?

  • Save Money on Interest: The longer it takes to pay off a loan, the more interest is paid over that time. Early payoff can mean tens or even hundreds of thousands saved in the long run (depending on loan size).
  • Fast-Track to Financial Freedom: Being mortgage-free means a significant chunk of your income is freed up. Depending on your investment strategy, this could allow you to invest more aggressively, save additional money for retirement sooner, or simply enjoy a more comfortable lifestyle.
  • Tap Into your Home Equity: A larger dent in your mortgage balance increases your equity. Your home’s equity can be a valuable resource for unexpected expenses or home improvements.
  • Peace of Mind, Priceless: There’s a priceless serenity that comes with knowing your home is truly yours, with no monthly payment hanging over your head.

What is the Best Way to Pay Off Your Mortgage Early?

There’s no one-size-fits-all approach to early mortgage payoff. The ideal strategy depends on your financial situation, risk tolerance, and long-term goals. Consider these factors when creating your plan:

  • Current Financial Situation: Analyze your income, expenses, and existing debt to determine how much extra you can comfortably allocate towards your mortgage.
  • Risk Tolerance: Are you comfortable with a potentially tighter budget in exchange for faster payoff?
  • Long-Term Goals: Do you prioritize early financial freedom or are there other financial goals you want to focus on?

Once you’ve considered these factors, you can choose the strategies that best suit you.

Understanding Principal Vs. Interest

Before we delve into specific strategies, let’s solidify the role of interest vs principal in your mortgage payment. This is key to maximizing your payoff efforts.

  • Interest: The fee you pay for borrowing money (expressed as APR).
  • Principal: This is the actual amount of money you borrowed for your mortgage to purchase the home.
  • Amortization: The calculation of how your loan is paid down over a specific amount of time when regular payments are made.

Note: There are other costs added to your total monthly mortgage payment (local property taxes, homeowners insurance, HOA fees, etc.), but we’re only discussing principal and interest right now.

Every monthly payment is divided between interest and principal. In the early years of your loan, a larger chunk goes towards interest, with a smaller amount chipping away at your principal balance.

Interest vs payment sample graph. This shows the correlation between interest and principal to make up a total, fixed-rate monthly payment over the amortization period. Early mortgage payoff means more interest saved over the life of the mortgage.

Example: For simplicity, let’s imagine your monthly Principal and Interest (P&I) payment is $1,000. Every loan is amortized over time, meaning monthly payments are split between principal and interest, reducing the loan balance over the span of your loan term. In the beginning, maybe $700 goes to interest and only $300 reduces your loan amount. The next month, your overall principal is reduced by $300 and the interest is now calculated upon your new, lower balance. That’s why early payoff is so powerful – it allows you to pay down the principal faster, reducing the overall interest you pay over time.

Related: Take a look at our amortization calculator.

Strategies for Early Mortgage Payoff

Pro Tip: Before changing your payment strategy, confirm if your mortgage servicer allows extra principal payments without penalties. 

Alright, now that you’re armed with that knowledge, let’s explore some strategies to conquer your early mortgage pay-off strategy. Get ready, these may surprise you!

The Biweekly Mortgage Payment: 

One popular way that some homeowners pay down their principal more quickly is to make biweekly payments. Instead of paying one monthly payment, you pay half the payment every 2 weeks.

Here’s a simple example to show the power of a biweekly payment. Let’s say you have a home loan for $400,000 with a 7% interest rate on a 30-year mortgage. In the example below you would pay $139,850.33 less in interest over the life of the loan with biweekly mortgage payments than if you made standard monthly payments!

There are online calculators available to determine these payments, or we can talk and run the numbers for you!

How Does a Biweekly Mortgage Payment Work?

Because a year has 52 weeks, this works out to 26 biweekly payments. This essentially allows you to make 13 full payments a year instead of 12. That one extra payment really compounds over time! When you pay your principal balance down faster, there’s less money to charge interest on, which lowers the amount of overall interest paid.

Make an Additional Principal Payment

Similar to biweekly payments, you can make an extra payment towards the principal each month. Even a small amount can make a big difference over time. Let’s revisit our example: $400,000 loan at 7% interest with a 30-year loan term. If you consistently put an extra $500 towards the principal each month, you could save a significant amount of money on interest payments in the long run.

Additional Principal Payment

There are online calculators available to determine these payments, or we can chat and run the numbers for you!

Important! Be sure to clearly communicate to your lender that any extra payments should be applied to the principal, not interest. 

Rounding Up: Small Change, Big Impact

Don’t underestimate the power of small changes. Consider rounding up your monthly payment to the nearest hundred and applying the difference towards the principal. This might seem insignificant, but over the years, it can make a dent in your loan amount.

For example, rounding up a $1,950 payment to $2,000 translates to an extra $50 towards the principal each month. Over a 30-year loan term, that’s a total of an extra $18,000 you’ve put towards your loan principal and $18,000 less that interest has had to compound on!

Windfall Warrior: 

Tax refunds, bonuses, or unexpected financial windfalls can be powerful tools for early mortgage payoff. Instead of spending them all, consider putting all or part of that money towards a lump sum payment on your mortgage principal.

Let’s say you receive a hefty $5,000 tax refund. Putting that entire amount towards your principal can significantly decrease your loan balance, reducing your future interest payments.

More Early Payoff Strategies for the Ambitious Homeowner

Should I Refinance My Mortgage to Pay it Off Faster?

Refinancing your mortgage can be a strategic move for early payoff. It involves replacing your existing loan with a new one, typically with a shorter term (like a 15-year loan) and ideally a lower interest rate. For example, if you were to refinance and get a 2% lower interest rate, you could save thousands of dollars on interest over the life of the loan.

Another benefit of a shorter loan term: With a 15-year loan, you’ll be putting more money towards your principal balance each month. This allows you to pay off your house much faster and save on overall interest costs. While your monthly payment will increase because the loan term is shorter, it won’t double (which is a common misconception with shorter term mortgages).

Important to consider: There are closing costs associated with refinancing a mortgage. These upfront fees can be significant. Let’s discuss this to make sure the long-term savings from a lower interest rate outweigh the upfront costs of refinancing.

Purchasing with a 15-Year Fixed-Rate Mortgage Option:

If it fits well into your budget, a 15-year fixed-rate mortgage might be an option when purchasing a new home. While the monthly payments will be higher than a 30-year loan, you’ll build equity much faster and save a ton on interest in the long run. Let’s discuss your options and we can give you advice on what would be best for you with your personal budget and finances.

Related: Check out our calculator to compare 2 mortgage options!

 

Should I pay off my mortgage early or Invest?

It might not all be about “can I pay down my mortgage early?”, a better question might be “should I?”

  • Cash Flow Flexibility: Putting extra money towards your mortgage might mean tightening your belt in other areas. Make sure you have a solid budget and an emergency fund saved up before diving in. Financial experts recommend 3-6 months’ worth of your expenses set aside for an emergency.
  • Investment Opportunities: The money you put towards early payoff could potentially generate a higher return if invested elsewhere. However, the stock market has inherent risks, while paying off your mortgage guarantees a return in the form of saved interest. Let’s discuss this and talk with your financial advisor to discuss where your bucks will make the most bang!

Ultimately, the decision depends on your financial goals and risk tolerance, but it is important to know all of your options!

Own Your Future, One Payment at a Time

Remember, paying off your mortgage early is a marathon, not a sprint. Be patient, stay disciplined, and celebrate your milestones along the way.

Let’s talk! We can run all kinds of scenarios for you on your current and potential mortgage options. We’ll see how funds can be allocated and the long-term impact of those choices. We’d love to help you calculate your individual situation!



NFM Lending is not a Financial Advisor, Tax Advisor or Credit Repair Company. You should consult with a Financial Advisor, Tax Advisor or Credit Repair Company to learn more. Refinancing an existing loan may result in the total finance charges being higher over the life of the loan.

Tax Day has come and gone, but while tax season isn’t on most people’s list of “favorite day of the year”, there’s a light at the end of the tunnel: your tax refund! The average refund in 2023 was $2,753, and with that kind of windfall, a tropical getaway might seem tempting. But before you jump on a plane, let’s explore how you can leverage your tax refund. A down payment for a first-time homebuyer, or long-term goals like financial freedom and building generational wealth!

Can I Use my Tax Refund for a Down Payment?

Are you dreaming of homeownership? Using your tax refund for a home purchase could lead to several advantages when owning your first home! Here are some benefits to a larger down payment on your loan:

  • Lower Interest Rate: A larger down payment can qualify a first-time homebuyer for a more favorable interest rate on your mortgage.
  • Smoother Pre-Approval Process: A bigger down payment strengthens your financial standing. With less “risk” for a lender to consider, this can make the pre-approval process smoother.
  • Avoiding PMI: With a down payment of at least 20% of the home’s value, you will avoid private mortgage insurance (PMI), which adds to your monthly mortgage payment.
  • Lower monthly payment: This one might be a no-brainer, but a larger down payment means a smaller loan amount. Smaller loan amount equals smaller monthly payment!

Related: Down-payment assistance programs can help first-time homebuyers get started and increase your down payment!

How Much do I Need for a Down Payment on my First Home?

Down payment requirements vary by the type of loan you want to have. Lower down payment doesn’t always mean a better loan program; there are multiple different factors to decide which loan program is right for you. The best mortgage for a first-time homebuyer is the loan that you’re most qualified for. That will depend on several factors, including your debt-to-income ratio, credit score, and yes…down payment.

We take all of these factors into consideration and help you strategize between your options and choose the right one to fit your current and future goals.

Mortgage Types and Minimum Down Payments

 

Common Mortgage Types and Minimum Down Payment

 

Related: Check out our mortgage calculators to do the down payment math yourself!

It’s easy to see how a first-time homebuyer can use a tax refund for a down payment and boost their homebuying strategy, but what about people that already own a home? Other than using the funds for home renovations, how can you use your refund to set yourself up for a better future?

Can I Pay Down Principal or Refi with a Tax refund?

We understand the allure of a vacation, but here’s the thing: by putting your tax refund towards your mortgage, you’re essentially doing two things at once: saving money on interest payments in the long run and building equity in your home faster.

Your tax refund may also be able to help you pay fees associated with refinancing to save you money by:

  • Lowering your interest rate
  • Shortening your loan term (from 30yr to 15yr) 
  • Removing private mortgage insurance (PMI) that may have been required if your down payment wasn’t 20% or more of the cost of your home.

If you’ve decided to use your tax refund on your existing mortgage, there are a few ways to go about it:

1. Applying Tax Refund to Principal

A lump-sum payment directly to your principal balance shortens your loan term, builds equity, and ultimately saves you on interest. The more you pay down the principal, the more interest you save.

Keep in mind:

  • Ensure the payment goes towards your principal, not just a regular payment (principal + interest). 
  • Check for prepayment penalties – some mortgages have them for early large payments. Review your loan terms and talk to your lender if needed.
  • Some lenders might offer “loan recasting,” which recalculates your remaining loan term with the lower principal balance, potentially reducing your monthly payments.

If you’re looking for options to lower your monthly payments specifically, refinancing might be a good fit if rates have lowered since you first bought your home.

2. Using a Tax Refund for Refinancing Fees

Refinancing your mortgage means replacing your existing loan with a new one, potentially with a lower interest rate, better terms, or you could take cash out for projects or major life changes. Here’s where your tax refund can come in handy – it can help cover the refinancing fees, including closing costs and appraisals.

Is refinancing a good option for me?

  • Lower Interest Rates: Perhaps interest rates have dropped since you first took out your mortgage, offering an opportunity to save.
  • Improved Credit Score: If your credit score has improved significantly since the last time you bought a home, you might qualify for a lower interest rate.
  • Debt Reduction: Have you paid off other debts since buying your home? A lower debt-to-income ratio can improve your eligibility for a better interest rate.

Related: How Important is Credit Score When Buying a Home?

How much does a refinance cost?

While refinancing can save you money in the long run, there are upfront costs involved that you should consider. The Mortgage Reports estimates closing costs to range between 2-6% of your loan amount.

Here are some situations where refinancing might not be the best move for you:

  • Recently Closed Loan: Many lenders and loan programs have restrictions on how soon you can refinance after taking out a new mortgage. For almost everyone, you’ll want to wait 180 days before refinancing after your most recent loan began.
  • Minimal Interest Rate Drop: Aim for a rate reduction of at least 1.5-2% to make the refinancing process worthwhile compared to the cost.
  • Short-Term Ownership: If you plan to sell your home soon, refinancing might not make financial sense.
  • Longer Loan Term: Since a refinance is a new loan on the same property, you’ll be starting your loan term over again. A longer loan term might seem appealing for lower monthly payments, but it ultimately means paying more interest overall.

Not sure if refinancing is right for you? That’s why we’re here! Our team can do a complete cost analysis for you before you start the process, making sure you’re confident in your decision before taking the first step.

Boost Next Year’s Tax Refund

Let’s say your tax refund this year wasn’t quite enough to make a huge dent on your homeownership goals today. Don’t worry, there are still ways to optimize your tax situation for next year’s return, potentially putting more money back in your pocket to fuel your homeownership dreams.

Here are some key strategies to consider:

Tax Credits for Homeowners

  • Mortgage Credit Certificates (MCCs): These state-issued tax credits can be a game-changer, allowing you to claim a portion of your annual mortgage interest as a federal tax credit, effectively lowering your monthly payments.

Reach out to us to learn more about MCCs and eligibility requirements in your area!

Homeownership Tax Deductions

  • Mortgage Interest: You can typically deduct your mortgage interest payments up to a certain limit depending on your loan amount and filing status.
  • Mortgage Points: If you paid upfront points to lower your interest rate, you might be able to deduct them as well, subject to specific IRS qualifications.
  • Property Taxes: The property taxes you pay on your home are generally deductible. If you dedicate a specific space in your home exclusively for work purposes, you might be eligible to deduct a portion of your related expenses like utilities and internet. 
  • Home Office Expenses: If you dedicate a specific space in your home exclusively for work purposes, you might be eligible to deduct a portion of your related expenses like utilities and internet.
  • Find out more here: The IRS published a great resource for homeowners in 2023 regarding what you can and cannot deduct, MCC credit and other information.  

Keeping good records of your mortgage-related expenses is crucial. This includes your loan documents, receipts for points paid, and documentation of any home improvements you make.

It’s important to note that tax laws can be complex, and eligibility for deductions and credits can vary depending on your specific circumstances. Consulting with a tax professional is always recommended to ensure you’re taking advantage of all the benefits available to you and remaining compliant with federal tax law. We can help you explore these options, or get you in contact with a great Tax Advisor.

In Conclusion

By implementing these strategies and working with a trusted loan officer, you can turn your tax refund into a springboard for achieving your homeownership dreams. We’re here to guide you through every step of the journey, from maximizing your tax refund to navigating the mortgage process.

Get a no-cost pre-approval and explore down payment options for first-time homebuyers – click the Apply Now button above!

 

 

* NFM Lending is not a Financial Advisor, Tax Advisor or Credit Repair Company. You should consult with a Financial Advisor, Tax Advisor or Credit Repair Company to learn more. The pre-approval may be issued before or after a home is found. A pre-approval is an initial verification that the buyer has the income and assets to afford a home up to a certain amount. This means we have pulled credit, collected documents, verified assets, submitted the file to processing and underwriting, ordered verification of rent and employment, completed an analysis of credit, debt ratio and assets, and issued the pre-approval. The pre-approval is contingent upon no changes to financials and property approval/appraisal.

LINTHICUM, MD, March 20, 2023 – NFM Lending and its family of lenders have announced that they have earned the 2024 Top Workplaces USA award, issued by Energage, a purpose-driven organization that develops solutions to build and brand Top Workplaces. The Top Workplaces program has a 15-year history of surveying over 20 million employees and recognizing the top organizations across 60 markets for regional Top Workplaces awards.

Top Workplaces USA celebrates organizations with 150 or more employees that have built great cultures. Over 42,000 organizations were invited to participate in the survey. Winners of the Top Workplaces USA list are chosen based solely on employee feedback gathered through an employee engagement survey issued by Energage.

Results are calculated by comparing the survey’s research-based statements, including 15 Culture Drivers proven to predict high performance against industry benchmarks.

“Earning a Top Workplaces award is a badge of honor for companies, especially because it comes authentically from their employees,” said Eric Rubino, Energage CEO. “That’s something to be proud of. In today’s market, leaders must ensure they’re allowing employees to have a voice and be heard. That’s paramount. Top Workplaces do this, and it pays dividends.”

“We’re honored to be recognized as a 2024 Top Workplace by Energage and USA Today, reflecting our dedication to fostering a positive and inclusive culture,” said Stephanie L. Herring, Chief Human Resources Officer at NFM. “This achievement inspires us to continue prioritizing employee satisfaction and well-being as we strive for excellence.”

“This achievement would not have been possible without our incredible employees’ dedication and hard work,” said Bob Tyson, NFM President and Chief Operating Officer. “I want to thank them for their commitment to making the NFM Family of Lenders a truly great place to work.”

In addition to this award, NFM Lending is consistently recognized for its exceptional company culture. Other awards include: ‘Top Mortgage Employer’ by National Mortgage Professional Magazine; ‘Top Workplace’ by The Baltimore Sun and the Washington Post; ‘Great Place to Work’ by Great Place to Work, ‘Best Mortgage Companies to Work For’ by National Mortgage News, and ‘50 Best Places to Work For’ by Mortgage Professional Magazine. NFM Lending is proud of these accomplishments and each team member for their work to make NFM a Top Workplace.

About NFM Lending 

NFM Lending is a national mortgage lending company currently licensed in 49 states and Washington, D.C. The company was founded in Baltimore, Maryland in 1998. NFM Lending and its family of companies include Main Street Home Loans, BluPrint Home Loans, Elevate Home Loans, and Element Home Loans. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. For more information about NFM Lending, visit https://nfmlending.com/, like our Facebook page, or follow us on Instagram.

Company Contact 

NFM Lending
Gene DiPaula
VP, Communications
gdipaula@nfmlending.com
443-451-3126
nfmlending.com