Richard Pikula | MidAmerica Bancorp, Inc.

5 Common Mortgage Mistakes You Need to Know (And Avoid)

September 22, 2021 by Richard Pikula

Getting a mortgage is one of the most challenging things you have to go through to own a property. When it’s your first time, it’s easy to make mistakes, which can delay the process or cause an inconvenience. That’s why we have put together the most common mortgage mistakes here to help you avoid them as much as possible.

Common Mortgage Mistakes

Failing to Lock the Mortgage Rate. When you don’t lock the interest rate on the mortgage, it will go up, and it can go up a lot, which may catch you by surprise. Unfortunately, a lot of people commit this mistake, but don’t be one of them. You can lock or float the rate when you apply for a mortgage, but make sure you understand your options when choosing between the two.
Having a Low Credit Score. You probably know that your credit score usually plays a significant role in your home loan application. Sure, you can still get a mortgage with a lower-than-average credit score, but you’re in for a higher mortgage rate. You can even get disqualified for this. So, as much as possible, take care of that credit score and maintain a good one to get the best mortgage rates possible.
Not Knowing How Much You Can Afford. A lot of first-time homebuyers do this, but who can blame them? They get so overwhelmed with the many houses to choose from and the thought of finally owning a property that they forget to “look within their means.” It’s important to figure out how much you can afford before you search for a property, and you can do so by getting a pre-qualification or pre-approval by a lender. This will let you know how much home you can afford based on how much the lender is willing to lend you. Looking at homes is fun, but you’ll only end up disappointed if you find out you can’t really buy them. Plus, it’ll be such a waste of time.
Spending a Lot of Money. When you’re about to start a home loan application process, it’s not wise to be big on spending or even opening new credit cards. Why? Doing so can affect your credit score, which can then hurt your chances of getting a mortgage or an affordable rate. Before you think about splurging, settle your mortgage first!
Not Shopping Around. Shopping around for homes that you can’t afford is one thing; shopping around for lenders is another. The latter is crucial; therefore, don’t stick to just one lender; shop around and find the best deals out there. Every lender is unique, and who knows? You might just find something just right up your alley. So, go on, take the time to research and shop for lenders until you find the right one for you.

Buy A Home With MidAmerica Bancorp Inc.

Knowing these common mortgage mistakes can help make the home loan process go as smoothly as possible. Avoid them at all costs, and next thing you know, you’re a step closer to finally owning your dream home.

Own your dream home today! MidAmerica Bancorp Inc. can help you with a first-time home buyer loan and offer a range of mortgages with low down payment options. Contact us at (708) 237-4050. We serve clients in Oak Lawn, Burbank, Hickory Hills, Chicago, and Illinois, Indiana, Florida, Michigan or Wisconsin.

Learn about the New Mortgage Rule and How It Can Prevent Your Foreclosure

September 17, 2021 by Richard Pikula

Many mortgage borrowers strapped for cash and find it financially difficult to keep up with all the monthly payments often see foreclosure on the horizon. When one missed payment after another, it piles up, then lenders have no choice but to take back the mortgaged property due to failure to keep up with their agreed terms.

Meeting monthly payments amidst the COVID-19 pandemic is more challenging than ever for anyone—even for the affluent, especially since the outbreak has left many hardworking individuals unemployed as businesses took one of the hardest hit during these tough times.

The good news is that the economy cares for its people; that’s why financial institutions employed the new Mortgage Servicing COVID-19 rule from August 21, 2021, onwards. It’s a silver lining for people nearing foreclosure as the new rule strives to temporarily halt or lower mortgage payments as society is still recovering from the pandemic.

Understanding the 2021 Mortgage Servicing COVID-19 Rule

Under the new rule from the CARES Act, mortgage services extend their help by easing the terms borrowers need to meet throughout their repayment period. While that doesn’t mean you’re free from financial obligations, the new rule gives borrowers from all walks of life the chance to explore different options to prevent foreclosure.

Remember that forbearance doesn’t start automatically, so be sure to contact your lender first before you pause your monthly payments. Requesting for more options is easier for people, too, since the new rule also encourages mortgage service providers to provide solutions without submitting and organizing applications.

The new mortgage rule also states that by January 1, 2022, all services need to reach out to borrowers and offer different options to ease their financial burdens before proceeding with the foreclosure process if both parties fail to reach a satisfactory conclusion.

If you’re in forbearance, know that mortgage providers need to notify you about the end of your forbearance program, offer repaying solutions for your missed payments to mitigate a foreclosure, along with additional details on how to acquire free housing counseling services.

Who is Eligible for the 2021 Mortgage Servicing COVID-19 Rule?

Federal forbearance programs cater to federally backed mortgage borrowers, but the new rule issued in August 2021 now allows all kinds of homeowners to seek financial assistance and join the forbearing program with the exception of borrowers with home-equity lines of credit, open-end lines of credit, investment properties, and reverse mortgages.

The Bottom Line: Avoiding Foreclosure and Recovering from the Blow of the Pandemic

If you’re worried about foreclosure, you can jumpstart your forbearance closure by consulting with your lender so you can find ways to pick your finances up during this time of need.

Are You Looking for a Personal Finance Company in Oak Lawn?

If you’re a first-time homebuyer who is searching for the best home loans with competitive rates, then MidAmerica Bancorp, Inc is one of the best mortgage companies to call in town!

We strive to make it possible for everyone to achieve their goals of settling down; that’s why we offer a wide range of mortgage products for first-time and returning homebuyers with low down payment options.

From FHA, VA, conventional, refinancing, to jumbo mortgages, get in touch with us today at (708) 237-4050 to see what we can do to get you the keys to your dream home.

Should You Buy a Home Without Your Spouse? What to Know

September 9, 2021 by Richard Pikula

Depending on where you live, there are several factors to consider when buying a property without your spouse. In some cases, it is possible to be the sole owner of the property. What’s more, buying a house together could affect your housing loan and other matters; here are things you should keep in mind before making a purchase.

Is It Possible to Keep My Spouse’s Name off the Title?

Individuals who live in common-law states like Illinois, Indiana, Florida, Michigan and Wisconsin can keep their spouse’s name off the title, the document that shows who owns the house. Your title isn’t necessarily linked with your mortgage—the names on the mortgage are responsible for paying back the loan. Meanwhile, the title shows the person who owns the property.

If you put your spouse on the title and not the mortgage, it means they are joint owners of the property with you but aren’t legally obliged to make mortgage payments.

Why Should I Consider Leaving My Spouse off the Title?

Even if you’re living in the house together, there are several reasons why you might want to leave your spouse’s name off the title.

Keeping finances separate: When you’re buying a property with the money you had before the marriage, it makes sense to keep the purchase under your name. As the sole buyer, it’s understandable why you’d want to be the only person on the title.
Planning your estate: If you have children from a previous marriage, having sole ownership of certain assets allows you to care for them and leave them something when you pass on. It might not be possible if you share all your properties with your spouse.
Protecting your finances: The reality is, some people have a poor credit history, despite being outstanding in other areas of life. If your partner has defaulted on loans, it makes sense to leave them off the title. It prevents previous mortgage lenders from claiming your house as collateral.

Is It Possible to Keep My Spouse’s Name off the Mortgage?

Whether you live in a common-law or community property state, you can leave your spouse off the mortgage. Your credit scores and incomes are reasons why these could be an option.

Due to Credit Scores: If you apply for a mortgage with your spouse, the lenders will scrutinize the person with the lower credit score. If your spouse’s score is low, it could prevent the loan’s approval—most places place their cut-off at 580. What’s more, the higher your credit score, the lower the interest rate, and having a low score could prevent you from accessing the best rates.
Due to Disparate Incomes: When you fill out a mortgage application, you will need to prove your source of income and show pay stubs, W-2s, and the like. A newly self-employed individual might find it challenging to qualify for a loan. If your spouse can’t prove their source of income (and have debt), their financial standing could impact your debt-to-income ratio, which could prevent you from qualifying.

Using Money from Your Joint Account

If you apply for a mortgage, you have to show that you have the funds necessary for covering the down payment and miscellaneous costs. When you apply for the loan without your spouse, you cannot use in your application the assets that are in their name only. The case is slightly different for joint accounts—it is possible to buy alone using your joint bank account.

Conclusion

There are various practical reasons why you might leave your spouse off your mortgage or house title. Buying a home is a big step for anyone, and you need to make choices that would bring you the best outcomes. You could also consult a mortgage broker—speaking with a professional could help you figure out all your options.

Trust MidAmerica Bancorp, Inc. with helping you find your dream home. We are a mortgage company serving Illinois, Indiana, Florida, Michigan and Wisconsin, offering a range of home loan and refinancing options. Get a free mortgage rate quote today, or call (708) 237-4050 for inquiries!