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30

April

Changing Interest Rates Have A High Impact On Purchasing Power

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buying power header

Purchasing power, simply put, is the amount of home you can afford to buy with the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a particular monthly housing budget.

The chart below shows what impact rising interest rates would have if you planned to purchase a home within the local median price range, and intended to keep your principal and interest payments between $1,600-$1,700 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 6.25% (for every $25,000). DOWNLOAD PRINTABLE FILE

Buying Power- FCM_ALL

10

July

Q&A: Mortgage Insurance

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couple celebrating new home handing keys and moving boxes

Question: What is mortgage insurance and how does it work?

Answer: Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get.

Typically, borrowers making a down payment of less than 20 percent of the purchase price of the home will need to pay for mortgage insurance. Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get. But, it increases the cost of your loan. If you are required to pay mortgage insurance, it will be included in your total monthly payment that you make to your lender, your costs at closing, or both.

There are several different kinds of loans available to borrowers with low down payments. Depending on what kind of loan you get, you’ll pay for mortgage insurance in different ways:

If you get a conventional loan, your lender will arrange for mortgage insurance with a private company. Private mortgage insurance rates vary by down payment amount and credit score but are generally cheaper than FHA rates for borrowers with good credit. Most private mortgage insurance is paid monthly, with little or no initial payment required at closing.

If you get a Federal Housing Administration (FHA) loan, your mortgage insurance premiums are paid to the Federal Housing Administration (FHA). FHA mortgage insurance is required for all FHA loans.  It costs the same no matter your credit score, with only a slight increase in price for down payments less than five percent. FHA mortgage insurance includes both an upfront cost, paid as part of your closing costs, and a monthly cost, included in your monthly payment.

If you don’t have enough cash on hand to pay the upfront fee, you are allowed to roll the fee into your mortgage instead of paying it out of pocket.  If you do this, your loan amount and the overall cost of your loan will increase.

If you get a US Department of Agriculture (USDA) loan, the program is similar to the Federal Housing Administration but typically cheaper. You’ll pay for the insurance both at closing and as part of your monthly payment.  Like with FHA loans, you can roll the upfront portion of the insurance premium into your mortgage instead of paying it out of pocket, but doing so increases both your loan amount and your overall costs.

If you get a Department of Veterans’ Affairs (VA) loan,  the VA guarantee replaces mortgage insurance and functions similarly.  With VA loans, there is no monthly mortgage insurance premium. However, you will pay an upfront “funding fee.” The amount of that fee varies based on:

• Your type of military service
• Your down payment amount
• Your disability status
• Whether you’re buying a home or refinancing
• Whether this is your first VA loan, or you’ve had a VA loan before

Like with FHA and USDA loans, you can roll the upfront fee into your mortgage instead of paying it out of pocket, but doing so increases both your loan amount and your overall costs.

Source: Consumer Finance Protection Bureau

15

March

Don’t be a Victim — Four Ways Protect Yourself from Refinance Scams

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get-me-out-1605906_1280Buying or refinancing your home may be one of the most exciting, yet complex, financial decisions you’ll ever make. Like First Class Mortgage, many lenders, appraisers, and real estate professionals stand ready to help you get a nice home and a great loan. Unfortunately, scam artists are getting smarter, stealing millions of dollars from homeowners by promising too-good-to-be-true financing, foreclosure relief, and refinancing programs.

1. Never, ever pay fees upfront. 
If they ask you to pay a fee up front to refinance, a red flag should be going up in your mind. It is illegal to request or accept fees upfront of promised results.

2. Beware of unsolicited offers from strangers. 
If you receive an email, phone call or letter from a bank, lender or loan modification company, don’t trust the display name. Use the “look, don’t click” method to explore the email. Hover your mouse over any links embedded in the body of the email to see if the link address looks weird. If it does look strange, do not click it.

3. Pause before signing or sending any payments. 
When pressured to sign papers or send payment immediately, hit the pause button. Have a professional review the documents before you sign something you end up regretting. Remember that you can always Contact Us.

4. Seek help from a trusted partner.
Before refinancing or modifying your loan, give us a call to see what we can do to help. If you need to modify your mortgage because you’re struggling to make payments, or if you’ve received a foreclosure notice, your lender might work with you on negotiating repayment terms.

Think you’ve been a victim of fraud or identity theft?
First, file a police report with your local law enforcement agency, then contact the Federal Trade Commission, your state attorney general’s office, and the Better Business Bureau.

Sources:
*     Federal Trade Commission: www.consumer.ftc.gov/articles/0100-mortgage-relief-scams 
*     Federal Bureau of Investigation: fbi.gov/investigate/white-collar-crime/mortgage-fraud
*     NeighborWorks ® America: www.loanscamalert.org 

25

January

First Class Mortgage. Our Expertise, Your Peace of Mind.

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Welcome! We launched our new website and blog!

For fourteen years, First Class Mortgage’s goal has remained simple — deliver an exceptional mortgage experience. We thank our customers for joining us on this awesome journey and we hope that you will continue to be a part of our story.” 

This blog is an exciting new element to our multimedia offerings. Its purpose is to answer your top mortgage questions and provide resources for your personal wealth. We will share company news, community information and breaking mortgage news.

But, we don’t want a static blog. We will leverage social technologies to engage in two-way communication with our customers. From there we will take your feedback into consideration as we create new content, tools, and resources. 

Please contact us to let us know what you think of our new website and blog! All comments and feedback are welcome. We would love your suggestions for new information or topics. What do you want to learn more about? Is there something we are missing that you would like to see? What other questions do you have? 

We look forward to growing with you as we embark on this new journey.

Thanks for stopping by!

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Fargo, ND

2300 13th Avenue S
Fargo, ND 58103

Phone: (701) 356-9898
Fax: (701) 356-0344
Toll Free:1-877-375-2016
Email: directors@firstclasscorp.com
NMLS 2520

Grand Forks, ND

2750 17th Ave S Suite A
Grand Forks, ND 58201

Phone: (701) 775-3288
Fax: (701) 775-2443
Toll Free: 1-866-775-3288
Email: gfsales@firstclasscorp.com
NMLS 193150

Maple Grove, MN

12906 63rd Ave N
Maple Grove, MN 55369

Phone: (763) 416-6789
Fax:(763) 416-1855
Toll Free: 1-800-259-1233
Email: mgsales@firstclasscorp.com
NMLS 322842

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