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Closing on a home is an exciting milestone, but it’s also a process that involves a lot of moving parts. From the time your offer is accepted to the moment you get your keys, there are several steps that must be completed by both you and your lender. While the process can take several weeks, proper preparation can help things go more smoothly and reduce the chances of delays along the way. Once you reach closing day, you’ll finalize the purchase by signing a series of documents, paying any remaining closing costs, and receiving the keys to your new home. You may be joined by your real estate agent, the seller, a closing agent, and potentially an attorney. The documents you’ll review include your closing disclosure, loan agreement, mortgage note,…

When it comes to first-time homebuying, understanding what constitutes a “typical” down payment can make the process feel a lot more attainable. In 2024, the median down payment among first-time buyers was 9 percent of the purchase price—meaning on a $400,000 home, most newcomers put down about $36,000. However, loan programs tailored for first-timers often let you start with as little as 3 percent down, and government-backed options like VA or USDA loans may even require zero down. Deciding on your down payment is all about weighing the trade-offs. A 20 percent down payment is considered ideal: it typically secures the lowest interest rates and lets you bypass private mortgage insurance (PMI) altogether. But given the median amortization patterns, very few first-timers reach that benchmark right out of the gate—only…

A 3/1 adjustable-rate mortgage (ARM) offers homebuyers a fixed interest rate for the first three years of their loan, followed by annual rate adjustments for the remaining term. During the initial three-year period, your monthly payments remain consistent, giving you the predictability of a traditional fixed-rate mortgage. After those introductory years, however, the interest rate can adjust once per year based on market indexes—such as Treasury yields or the Secured Overnight Financing Rate—plus a set margin determined by the lender. Once the three-year fixed period ends, the annual rate adjustments are governed by caps that limit how much your interest rate can increase at each adjustment and over the life of the loan. For example, an initial adjustment cap might restrict your rate from rising more than 2 percentage points…

Homeowners sometimes assume that today’s higher mortgage rates have slammed the door on refinancing, yet the truth is more nuanced. While the era of sub-3 percent loans is well behind us, national lending data show 30-year fixed rates have mostly hovered in the high-6 to low-7 percent range since 2023, with the occasional dip. If you locked in a loan closer to 8 percent during that spike—or if you have goals that go beyond trimming the rate—refinancing can still deliver meaningful value. The key is to weigh costs against long-term gains and be ready to act quickly when mini-reprieves in pricing appear. One scenario where refinancing shines is when your personal finances have improved. Say you bought with minimal cash down and a mid-600 credit score at the tail end…

A piggyback loan—often called an 80/10/10 or combination mortgage—is a clever way to buy a home with less cash up front. Instead of a single mortgage plus private mortgage insurance (PMI), you take out two loans at closing: one for 80 percent of the home’s value and a second for 10 percent. You then cover the remaining 10 percent with your own down payment. This structure lets you sidestep PMI, which can add hundreds to your monthly payment, and keeps your main mortgage under the conforming loan limit so you avoid the stricter requirements of a jumbo loan. Beyond skipping PMI and jumbo-loan hurdles, piggyback loans let you stretch your cash reserves. In a standard 80/10/10 setup, you’re only putting 10 percent down instead of 20. Some lenders even offer…

When it comes to mortgage rates, you might wonder how much influence the Federal Reserve really has. While the Fed doesn't directly set mortgage rates, its decisions significantly impact the borrowing environment for homeowners. Recently, the Fed chose to maintain its benchmark interest rate at 4.25–4.5 percent, signaling stability after several changes throughout 2024. This decision encourages lenders to keep mortgage rates relatively steady, which can offer some comfort to potential homebuyers. Mortgage rates mainly track the yield on the 10-year Treasury bond rather than the Fed's rate directly. When the Fed keeps rates unchanged, it can reassure bond markets, often leading to slightly lower Treasury yields and, consequently, more affordable mortgages. For instance, after the Fed’s recent announcement, the bond market responded positively, lowering the 10-year Treasury yield. This…

Inheriting a home with an outstanding mortgage can be a springboard to new opportunities rather than a source of anxiety. By gathering the loan statements, confirming the servicer’s details, and keeping payments current, you safeguard the property while the estate is settled and gain precious time to weigh your best options. Reviewing the loan’s balance, interest rate, and payment schedule—ideally alongside an estate-planning attorney—equips you with clarity and confidence, ensuring the process stays smooth and compliant with state-specific rules. Armed with the numbers, heirs can choose a path that turns the property into an asset. Thanks to federal protections, relatives who wish to live in—or rent out—the home can assume the loan without triggering a costly due-on-sale clause. If several heirs are involved, one party can finance a buy-out (via…

Many people assume that once you retire, your chance to qualify for a mortgage disappears—but that’s not the case. Thanks to fair lending laws, age cannot legally be used against you when applying for a home loan. Whether you're downsizing, helping a family member, or relocating for lifestyle or tax reasons, it's absolutely possible to get approved for a mortgage later in life. What matters most is your financial profile—your income, credit, debt-to-income ratio, and assets. Understanding the Challenges Older Borrowers May Face While lenders cannot reject your application based on age, retirees may face some practical hurdles. Often, fixed incomes or distributions from retirement accounts can make it harder to meet traditional income requirements. Additionally, existing mortgage debt or high monthly obligations can increase your debt-to-income ratio, which lenders…

familiar with private mortgage insurance (PMI). This insurance is typically required by lenders to protect themselves in case a borrower defaults. For a few recent tax years, homeowners had the opportunity to deduct PMI premiums on their federal returns, offering some relief on their overall tax burden. However, that deduction expired after the 2021 tax year, and currently, PMI is no longer tax-deductible. Between 2018 and 2021, eligible homeowners who itemized their deductions could write off PMI premiums. This was a welcome break for many, especially those paying hundreds annually in PMI costs. If you didn’t take advantage of the deduction during those years, there's still a chance: you may be able to file an amended return and claim those missed deductions. Just keep in mind that your mortgage must…

Buying a home is often a team effort, whether it's with family, friends, or business partners. A common question among potential homebuyers is how many people can join forces on a mortgage. Although there's technically no legal limit, most lenders typically allow up to four borrowers on a conventional mortgage. This limitation usually comes down to underwriting software, which comfortably accommodates up to four borrowers without requiring manual handling. Applying for a mortgage with co-borrowers offers several great benefits. It can make qualifying for a loan easier, as combined incomes and credit scores often increase your buying power and help secure more favorable mortgage terms. Plus, sharing costs makes homeownership more affordable and accessible. This arrangement works especially well for multi-generational households, co-living setups, or friends investing together. However, having…