MONEY MATTERS

Is it time for a second mortgage?

With interest rates at historic lows, many Alabamians are MONEY case, ask your mortgage provider to update your pre-approval letter to match the price of finding that this is a good time to buy a second home on the MATTERS your offer.) As another helpful way to use bank lake; to take out a construction loan to build financing for your home, if you are buying or pay for home renovations; or to refinance or own a home that needs a lot of work, or if existing mortgages. you want to build a new home, you should

In fact, with rates so low, I have seen look into a construction loan. And if you clients who purchased homes recently own a homesite free and clear, you can use coming in and wanting to refinance. the equity to secure the construction loan. A

In terms of buying a second home, if construction loan is specifically tailored to you are starting to look at properties in the match this type of project, since it includes area, here are a few things you can do to giving payments to the contractor as work is make sure you aren’t making any financial completed. mistakes in the process. First, you’ll want to get pre-approved. David Ballard Finally, if you already have a mortgage, it might also be a good time to consider Houses that are priced right are getting refinancing, since you may be able to reduce snatchedup quickly in this market, so you want to be either your payment or the term of the loan. able to act quickly without waiting to get approved. For example, we have clients who bought a home just

Your mortgage specialist analyzes your qualifying a few years ago with a 30-year mortgage, and they’re now factors, but you should also take a broader look at how a refinancing to a 15- or 20-year mortgage while keeping purchase could impact your finances. First, consider the their payments close to what they were before. down payment that will be required – usually 10 percent As you consider all these mortgage options, it pays for a second home, but maybe as much as 25 percent, to look into whether your mortgage provider has any depending on the loan type and amount. incentives for refinancing at this time, such as reduced

Then, make sure that you’re comfortable with or zero closing costs or a low fee for refinancing. the payment — not just the principal and interest. The key is having a knowledgeable mortgage You also need to consider the costs of homeowner’s professional who can help you see the options and insurance, property tax and homeowners’ association choices ahead of you – someone who will take the fees. Depending on the size of the house, you should time to understand your personal situation and has the also consider the cost of upkeep, utilities and other knowledge to craft a solution that works for you. necessities. Taking a big-picture look at this will help you feel comfortable that you won’t be putting yourself in a ~ David Ballard is a home loan consultant for Valley tough financial situation down the line. Bank, drawing on a complementary background that

When you make an offer on that beautiful property includes experience in the insurance and construction you’ve fallen in love with, you will supply your prefields. He focuses on helping customers finance homes. approval letter to the seller. Make sure you don’t show all your cards here — you want to be sure that the preapproval letter from your bank does not, for example, say you are approved for a $400,000 purchase if the price you want to pay for the home is only $350,000. (In this