Buying a Home With a Mortgage? Here’s What You Can Expect at Your Closing Meeting

April 6, 2017 by

Buying a Home With a Mortgage? Here's What You Can Expect at Your Closing MeetingIf you’ve decided to invest and have finally found your ideal home, it’s probably an exciting time for you and your family. But before the deal is sealed, there will be a closing meeting so that all of the loose ends can be tied up. If you want to be ready for closing and are curious what the final meeting will entail, here are a few things to be prepared for.

The Last Walk Through

The initial home inspection may have already occurred prior to your closing meeting, but a final walk through should also be granted in the event that anything has happened to the house since it occurred. If problems have been made note of and a price or repair has been negotiated, you won’t need to worry, but the final walk through is a good opportunity to cover off any additional maintenance issues.

Discussion Of The Details

It’s a good idea to bring any paperwork you have regarding your mortgage along to the closing meeting as this will enable you to follow up on any outstanding questions and go through the specifics of the home sale. In all likelihood, you’ll be going through items like the closing costs, escrow payments, the settlement costs related to the home sale and the deed of trust to secure your mortgage, so ensure you understand all of the documents and are prepared to sign on the dotted line.

All The Appropriate Parties

You may expect the closing meeting to be rather informal after the offer has been accepted, but there are many parties that will be present in order to transfer the ownership of your new home. In addition to the home seller, yourself and your respective real estate agents, there will also be any attorneys present, a closing agent, and the lender. While it can be overwhelming to have so many people present, it is generally a formality so that the proceedings can take place without a hitch.

If you’ve determined that the home you’ve made an offer on is right for you, the closing meeting will likely be a seamless experience. However, it’s important to ensure you’ve done your final walk through and looked over all the applicable documents to avoid any issues related to the purchase of your home. If you’re getting prepared to buy a home, contact your trusted mortgage professionals for more information.

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Your Debt-To-Income Ratio and How It Affects Your Mortgage

April 5, 2017 by

Your Debt-To-Income Ratio and How It Affects Your MortgageWhen you’re delving into the market in the hopes of finding your dream home, it’s likely you’ll come across the term debt-to-income ratio. This may not seem important at first, but your DTI is the key to determining the amount of money you can put into your home and just how much you should spend on a monthly basis. If you’re curious about what this means for you, here’s how to calculate it and how it can impact your mortgage.

What’s Your DTI Ratio?

One of the best ways to determine whether or not a home is affordable for you is to first calculate your DTI ratio. To get this amount, add up all of your monthly payments including any credit card, loan and mortgage payments, and divide this amount by your gross monthly income. The amount you get is your DTI percentage and this will help to determine how much your monthly payment should be.

What Does Your DTI Mean?

Your DTI percentage helps to determine the amount of house you can afford on a monthly basis, and this is why it can be such a good way to help you find the right home. While a DTI of 25% or less is ideal, a DTI that rises above 43% may be hard to get financing for since there will be little room for error. When it comes to a higher debt load, approval may come down to what your credit history says about your financial health.

The Amount Of Home You Can Afford

It’s easy to be convinced that your dream home is for you, and worth the splurge, but investing in too much home on a consistent basis can lead to future financial difficulties. If you’re set on a home that has a high monthly payment, you may want to hold off until you’ve saved a larger down payment or revamp your budget so that you can make the investment work for you. It may also be worth continuing the housing search so that you have more flexibility to invest in education, travel or other things down the road.

Your DTI ratio may be unfamiliar now, but this can be a great save when it comes to determining how much home you can afford and what will stretch your limits. If you’re currently looking into your housing options and are curious about what’s available to you, contact your trusted mortgage professionals for more information.

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Understanding Mortgage Amortizations and Why Longer Periods Can Cost More

April 4, 2017 by

Understanding Mortgage Amortizations and Why Longer Periods Can Cost MoreBuying a home is one of the largest investments you will make in your life, and that’s why so many people have longer mortgage amortization periods to pay down the principal. While it may seem appealing to have a longer amortization period, here’s why an extended loan term can end up costing you more and may be less financially beneficial when it comes right down to it.

About Mortgage Amortization

Generally speaking, a 25-year mortgage amortization period can be typical, but there are many loan periods that a homebuyer can choose for amortization. While a longer-loan period may seem enticing because it will mean a smaller monthly payment, a shorter amortization will enable you to own your investment sooner, which can be a great boon for many people. It’s worth being aware of what works best for you as this will depend on your financial situation.

Paying Off The Principal

For those who have a high monthly payment, a longer mortgage period can seem like a benefit. However, while this will lower your monthly payment, it also means that you will be paying less on the principal over time and this can cost you when it comes to interest. A shorter loan period, on the other hand, may force you to re-do your budget to make the monthly payment, but you’ll be paying more on the principal each month and less on interest over time. A 25-year term may sound good at first, but a shorter term may be more financially lucrative in the long run.

What Works Best For You?

It may seem like a shorter loan period is the right financial decision, but there are a lot of factors that go into determining what will work best for you. If your interest rate is low and you’re struggling to make your monthly payment as it is, a longer loan period may be for the best. However, if you have the money in the bank and you can still live your life while saving a little bit extra, a shorter loan period may be an option that saves money in the end.

On the surface, a longer loan period and a shorter monthly payment may seem optimal, but it’s important to weigh all of the variables before deciding on your mortgage amortization. If you’re currently getting prepared to invest in a home, you may want to contact one of our mortgage professionals for more information.

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What’s Ahead For Mortgage Rates This Week – April 3, 2017

April 3, 2017 by

Last week’s economic news included Case-Shiller Home Price Index reports, pending home sales, and consumer confidence readings. Weekly readings on average mortgage rates and new jobless claims were also released.

Case–Shiller: Home Prices Higher in January

According to Case-Shiller reports released last Tuesday, average home prices increased in January. The national average home price rose 0.20 percent from December to January; year over year, home prices grew by 5.90 percent. Home prices were 0.90 percent higher on a month-to-month basis when seasonally adjusted. The West continued to dominate home price growth. Seattle, Washington reported 11.20 percent growth in home prices year-over-year. Portland, Oregon reported year-over-year home price growth of 9.70 percent and Denver, Colorado reported that home prices grew by 9.20 percent year-over-year.

San Francisco, which posted double-digit home price growth in recent months, posted year-over-year home price growth of 6.20 percent. Home prices declined 0.40 percent month-to-month. While short supplies of homes for sale continued to drive up home prices, slower home price growth rates in San Francisco, California posted fell by 0.40 percent month to month and were 6.30 percent higher year-over-year. San Francisco posted double-digit year-over-year growth in recent months; slower home price growth over a period of months could signal a cooling of red-hot home prices in high-demand markets.

The three cities with lowest home price growth rates were Cleveland, Ohio and Washington, DC, where home prices rose 3.90 percent year-over-year. New-York City posted a year-over-year gain of 3.20 percent.

Pending Home Sales Rebound in February, Mortgage Rates Drop

The National Association of Realtors® said that pending home sales reached their second highest reading in ten years. Pending home sales rose 5.50 percent in February as compared to January’s negative reading of -2.80 percent. The Pending Home Sales Index rose to 112.30 in February as compared to January’s reading of 106.40. Unseasonably warm weather, home buyers rushing to buy before mortgage rates and home prices go higher. Improved jobs markets and few layoffs were also seen as boosting consumer confidence in buying homes.

Freddie Mac reported lower average mortgage rates last week the average rate for a 30-year fixed rate mortgage fell by nine basis points to 4.14 percent. The average rate for a 15-year fixed rate mortgage was five basis points lower at 3.39 percent. The average rate for a 5/1 adjustable-rate mortgage was six basis points lower at 3.18 points. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Lower mortgage rates could help first-time buyers who’ve been sidelined due to rapidly increasing home prices and mortgage rates.

In other news, new jobless claims were lower than last were with 258,000 new claims filed as compared to last week’s reading of 261,000 new jobless claims. Analysts expected a reading of 247,000 new claims filed. Spring holidays and school vacations can create additional volatility in week-to-week first-time jobless claims.

Consumer sentiment index readings for March increased to 96.90 against expectations of a 97.60 index reading. February’s index reading for consumer sentiment was 96.30.

What‘s Ahead

Next week’s scheduled economic reports include readings on construction spending, ADP payrolls, Non-farm payrolls and the national unemployment rate. Mortgage rates and new jobless claims will also be released.

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Student Loans vs. Down Payments: 3 Ways You Can Manage Both and Buy a New Home

March 31, 2017 by

Student Loans vs. Down Payments: 3 Ways You Can Manage Both and Buy a New HomeThe idea of paying off your student loans and buying a home at the same time can seem like an impossible feat given the impact on your Debt-to-Income (DTI) ratio. However, there are ways it’s possible to have enough funds and good enough credit to make your dream of home ownership come true a little more quickly. If you’re currently considering how to manage both, here are some options you might want to consider.

Decrease Your Debt

Lenders will be looking at your DTI ratio in order to determine whether or not you’re a solid financial bet, so before throwing yourself into the market, it can be a good idea to minimize your debt load. While this doesn’t mean paying off all of your student loans, try putting more down over a period of a few months so you have additional wiggle room. By making a budget plan that you can stick to, you’ll slowly eat away at the principal and have a little more room to invest when the time comes.

Add Another Income

You’re probably working pretty hard in your post-student life to make ends meet and pay off debt, but one of the best ways to pay off two loans is to bump up your income. Whether you decide to find something part-time on the weekend or hone one of your skills for freelance profit, a little bit of extra money each month can make a huge dent in the amount you owe in no time at all.

Consider A Starter Home

It’s entirely possible that you’ve got your eye on your ideal home, but if you’re dealing with student debt there’s a pretty good chance that the monthly payment will be unattainable. Instead of choosing a home that’s out of your league, make your dream of ownership come true by picking something that will be affordable month to month. While it might not be exactly the house you’re dreaming of, you’ll still be putting equity into something so you’ll have money to invest down the road.

It’s certainly not an easy feat to take on student loans and mortgage debt at the same time, but by improving your income and paying down as much as possible before investing, you may be able to do both at once. If you’re currently in the market for a home, contact your trusted mortgage professionals for more information.

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Trim Your Mortgage Closing Costs by Following This Easy 3 Step Guide

March 30, 2017 by

Trim Your Mortgage Closing Costs by Following This Easy 3 Step GuideYou may be so busy with determining your debt-to-income ratio and deciding what kind of offer to make that closing costs have gotten lost in the mix, but it’s important to remember that finalizing your mortgage will cost you extra. While there’s no way to get around paying money to solidify your mortgage, there are a few steps you can take in order to make it more economical for you.

Shop Around For A Lender

Many people go with the lender that is offered to them, but it’s a good idea to do the research so you can find the deal that’s right for you. Instead of sticking with one option, look into the closing costs for a handful of well-reviewed lenders that have been on the market for at least a few years. While it takes more than a list of fees to make the right decision, it will give you a good sense of the true cost of your mortgage and can help you make a more informed choice.

Be Prepared To Negotiate

There are people who are comfortable with negotiation and those who are not, but if you want a better deal it’s worth discussing it with your lender. While there are a number of third-party fees that are non-negotiable, many of the fees that lenders charge can be so you’ll want to get a list of what they charge and what they might be willing to budge on. It’s unlikely you’ll get everything you ask for, but it doesn’t hurt to ask in the event that it leads to substantial savings.

Review Your Loan Estimate

You have the ability to call off your mortgage at any time up until you’ve signed on the dotted line, so ensure you’ve read through the paperwork and understand your closing costs clearly. If there’s anything you’re uncertain about or any cost you weren’t made aware of, it’s imperative to address it with the lender before signing. This will be the last chance you’ll have to negotiate and go over everything so the lender may be a little more flexible on any final hesitation.

There are a number of costs associated with home ownership, but it’s important not to forget about the final closing costs as these can greatly impact the total cost of your home. If you’re currently getting prepared to purchase a home, you may want to contact one of our mortgage professionals for more information.

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Worried About Climate Change? Here Are 4 Ways to Make Your Home More Climate Friendly

March 29, 2017 by

Worried About Climate Change? Here Are 4 Ways to Make Your Home More Climate FriendlyMany people are concerned with having a negative impact on the environment, but it can be hard to know where to begin when it comes to climate friendly solutions around the home. Whether you’re planning for a future investment or are interested in fixing-up the home you’re in, here are some solutions for greening up your personal space that won’t bust the bank.

Evaluate Your Insulation

If your insulation is not installed properly or requires more padding, this will have a significant impact on your energy use and your monthly electricity bill. By doing a candle test around the house to check for drafts around windows or air ducts, you can easily determine places that need a bit of a patch so the cold air can stay outside.

Re-Use An Old Item

When re-designing a space in your home, it’s tempting to run out to Pottery Barn or IKEA to pick out something new, but re-using an old piece can go a long way towards lessening your footprint. Instead of heading to the big box store, search online for old items people are selling or visit a garage sale. You may just find an unexpected piece that will add a vintage touch.

Collect The Rainwater

A great way to conserve water around the home is to set up a barrel somewhere in your yard to collect water when it rains. Whether it’s from the sky or coming down from the eaves troughs, it’s one of the easiest ways to conserve. While this green-friendly venture is DIY, it will still provide much-needed water when you’re washing the car or watering the plants.

Install A Programmable Thermostat

One of the best ways to conserve energy in your home and lower your electricity bill each month is to install a programmable thermostat. This will enable you to set the heating and cooling in your home so it works in conjunction with your schedule and you won’t have to make the adjustment on your own. You may even want to lower the temperature or change your adjustment times to provide even greater savings.

For many people, the impact they’re having on the environment is an important concern, but there are things that homeowners can do to minimize their impact.

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Renovating on a Budget? Check Out These Equity-boosting Inexpensive Home Upgrades

March 28, 2017 by

Renovating on a Budget? Check Out These Equity-boosting Inexpensive Home UpgradesThe idea of embarking on home renovations may strike many homeowners as an expensive one, but there are plenty of ways that you can easily upgrade your home without spending a lot of money. If you’re looking for improvements that will truly (and frugally) improve the value of your home, here are a few do-it-yourself options you may want to consider.

Change The Lighting

There are few small fixes that will improve the look of your home like lighting, so one of the best things you can do for the overall look of your house is change out some of your bulbs. Instead of going for a light that will look dingy or orange, choose a tone that’s not too bright but will still illuminate your rooms and highlight their best features naturally. Much like a coat of paint, the right light can change everything about the way a visitor will view your home.

Consider A Cabinet Makeover

One of the most outdated features in a kitchen is the kitchen cabinets, and it’s also one of the first things that a potential homebuyer will notice when they enter the room. Fortunately, installing new cabinets doesn’t have to be a huge job that involves a lot of time. Instead of getting a floor-to-ceiling makeover and a construction crew, consider upgrading the doors and hinges or picking a new color for a difference that will instantly improve the room.

Pull Out The Paint Brush

Painting may be one of the least popular household tasks because it takes so much time, but outside of lighting, few things will improve the look of your home like a new coat of paint. While it’s important to ensure that you stick with a relatively neutral shade so that it doesn’t overwhelm the viewer, it will easily upgrade the look of your home and hide any unsightly damage to the wall. It’s also a good idea to remember the front door since it’s the first thing homebuyers will notice!

The word ‘renovation’ often makes people see dollar signs, but it doesn’t have to cost an arm and a leg to upgrade your home. By adding a new coat of paint or upgrading the lighting, you’ll be well on your way to a more modern look.

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What’s Ahead For Mortgage Rates This Week – March 27, 2017

March 27, 2017 by

Last week’s economic news included releases on new and pre-owned home sales and weekly readings on average mortgage rates and new unemployment claims.

Pre-owned Home Sales Fall, Due to Dwindling Inventory

5.48 million pre-owned homes were sold on a seasonally adjusted annual basis. Analysts expected 5.45 million sales based on January’s reading of 5.69 million sales. Lagging supplies of listed homes continue to cause home prices to rise as buyers compete for fewer available homes. First time buyers represented only 32 percent of sales as compared to the normal reading of 40 percent. First-buyers represent new demand for homes and they are important to sales of existing homes that allow current homeowners to move up to larger homes.

The available supply of pre-owned homes was 6.40 percent lower in February than for February 2016. Real estate pros reported that as of February 2017. There was a 3.80 months’ supply of available homes as compared to the normal range of six-month supply.  

Regional Results for Existing Home Sales

Existing home sales declined in three out of four regions tracked by the National Association of Realtors®. Sales of previously owned homes fell by 13.80 percent in the Northeastern region; the Midwestern region posted a 7.00 percent decline in sales. The Western region reported a 3.20 percent decrease in sales. The Southern region posted a 1.30 percent increase in existing home sales.  

Sales of new homes rose in February; 592,000 homes were sold on a seasonally-adjusted annual basis as compared to expectations of 571,000 sales and 558,000 new home sales in January. Sales were 6.1 percent higher than for January and were 12.80 percent higher year-over-year. February’s reading was the highest in seven months

Analysts said that the national median price of a new home was $296,000 in February, this was 3.90 percent lower than January’s reading and 4.90 percent lower year-over-year.   

Mortgage Rates Fall, New Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week. The average rate for a 30-year fixed rate mortgage fell by seven basis points to 4.23 percent. The rate for a 15-year fixed rate mortgage was six basis points lower at 3.4 percent. The rate for a 5/1 adjustable rate mortgage was four basis points lower at 3.24 percent on average. Discount points for fixed rate mortgages averaged 0.50 percent; discount points for a 5/1 adjustable rate mortgage averaged 0.40 percent. Lower mortgage rates stood in contrast to the Fed’s decision to raise the federal funds rate last week.

New jobless claims jumped last week with a reading of 258,000 new claims as compared to the prior week’s reading of 243,000 new claims and expectations of 240,000 new claims. While week-to-week readings for jobless claims are notoriously volatile, the four-week rolling average of new jobless claims was higher by 5000 new claims at 246,000 new claims.

What’s Ahead

This week’s economic news includes Case-Shiller Housing Market Index and pending home sales. Also scheduled are readings on inflation and consumer confidence.  Weekly reports on mortgage rates and new jobless claims will also be released.

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Spring Is Real Estate’s ‘Rush Hour’ — Here’s How to Tell If You’re Prepared

March 24, 2017 by

Spring Is Real Estate's 'Rush Hour' -- Here's How to Tell If You're PreparedThe most popular time of year to buy a home is in the spring, and this means that if you’re preparing yourself for getting into the real estate market, you may be experiencing a time crunch. If you’re wondering if you’ll be ready to put your home up for sale in time to take advantage of the season, here are few things you’ll want to think about.

Have You Cleaned Up And De-cluttered?

Spring is not only an optimal time to put your home up for sale, it’s also an ideal time for spring-cleaning! Instead of leaving all of the de-cluttering and clearing away to the time when you know you’ll be moving, get prepared by going through your stuff and discarding anything that you don’t want to move. This will not only make the packing up procedure more streamlined, it will also make the basic cleaning duties like vacuuming a dusting a little easier to carry out.

Are You Prepared To Move?

A home can sit on the market for a few weeks or months, and it can also sell on the first day, so you’ll want to have a game plan for moving beforehand. If you don’t yet have a place to stay, determine a plan for yourself and your family so that you can start looking for a home to invest in or at least rental property. You don’t want to lose out on a good offer by not being prepared, so make sure you know where you’re going before getting into the market.

Do You Know The Market Conditions?

Spring is certainly the most popular time to buy, but if your home isn’t priced right for the conditions of the market, it may linger longer than you’d expect. If you’re selling on your own, you may want to take a look at the MLS listings to determine what similar homes in similar areas are selling for. It can also be a great idea to utilize the services of a local real estate agent who will have background knowledge of the market and be able to do the tough negotiating for you.

With spring being the best time to sell, it’s important to de-clutter your house ahead of time and be aware of the market conditions you’ll be dealing with.

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