Archive for July, 2015

Comments Off on NAHB: Home Builder Confidence Holds Steady

NAHB: Home Builder Confidence Holds Steady


2015
07.17

NAHB Home Builder Confidence Holds SteadyHome builder confidence remained steady at the highest reading in almost ten years according to the National Association of Home Builders (NAHB) Wells Fargo Housing Market Index for July. The latest reading of 60 for the index was identical to expectations and June’s reading, which was revised to 60 from an initial reading of 59. The NAHB Wells Fargo Housing Market Index is based on readings of zero to 100 with readings over 50 indicating that a majority of home builders surveyed are confident about housing market conditions. July’s reading was the 13th consecutive month of readings above 50.

July’s Housing Market Index Highest Since November 2005

NAHB chief economist David Crowe said that July’s reading is consistent with stronger markets for new and existing homes as well as job growth, but also noted builder concerns over obtaining lots for development and necessary labor at favorable prices.

The monthly reading for housing market condition is based on three components. Two components showed improvement with the reading for current market conditions up one point to 66; the reading for housing market conditions in the next six months gained two points for a reading of 72 and the reading for buyer foot traffic in new housing developments lost one point for a reading of 63.

Report Details Regional Market Conditions

NAHB’s three month moving average of regional builder confidence showed gains of one point in the South for a reading of 61; the Midwest also reported a gain of one point to 55. Builder confidence readings for the Northeast and West each gained three points to readings of 47 and 60 respectively.

NAHB chairman Tom Woods said that based on current readings, housing markets should continue to improve throughout the second half of 2015. Economic analysts agreed with this assessment and noted that evidence suggests that housing markets are seeing a steady upswing.

In unrelated reporting, the Department of Commerce is due to release reports on housing starts and building permits today.

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House Hunting? Watch for These 5 Red Flags when Viewing Potential New Homes


2015
07.16

House Hunting? Watch for These 5 Red Flags when Viewing Potential New Homes From the sales price to the general layout of the building, there are numerous factors that buyers will consider when touring homes. While there are specific factors that buyers may be searching for in a new house, there are also a few warning signs that home buyers should keep their eyes open for. The following are among the top red flags that may serve as warning signs.

Signs Of Poor Home Maintenance

It is reasonable to expect all homes to have some signs of wear and tear unless they are new construction. However, it is also reasonable to expect that sellers have taken some steps to improve the condition and look of the property before listing it. When a home appears to be poorly maintained on a superficial level, home buyers should pause to consider what other aspects of the home have also been poorly maintained that are not visible.

The Grading In The Yard

When a yard grades toward the house, issues with erosion and even flooding may be concerns. Everything from a brief, torrential downpour to snow melt can result in water running toward a property when grading is a concern. Home buyers should take time to review the yard carefully to determine how water may flow when it rains or when snow melts.

A Foul Odor

It is common for sellers to try to make their home smell appealing, and different types of deodorizers may be used to mask everything from food smells to pet odors. However, it is important for home buyers to pay attention to the underlying smells in a home. Everything from a musky or mildew-y smell to sewage smells and gas odors should be warning signs.

Repairs To One Wall

Homeowners may repaint walls to make the space look cleaner, brighter and more appealing, so a fresh coat of paint by itself is not a warning sign. However, if the paint is on just one wall or if the area under the fresh coat of paint appears to have been recently textured or repaired, these are signs that water damage or other damage may have been addressed recently.

Signs Of Pests And Rodents

Another warning sign relates to signs of pests and rodents. Even if bugs and rodents are not visible during the initial tour, things like a can of bug spray, mouse traps and other related items may indicate that the seller has had an issue with bugs and rodents.

Some warning signs will be obvious during an initial home tour, but others may require more skill and experience to see. Because of this, it is best for all home buyers to consider ordering a property inspection to learn more about the condition of the home before finalizing their buying plans.

Comments Off on Mortgage 101: 3 Reasons to Avoid Giving Wrong Information on Your Mortgage Application

Mortgage 101: 3 Reasons to Avoid Giving Wrong Information on Your Mortgage Application


2015
07.15

Mortgage 101: 3 Reasons to Avoid Giving Wrong Information on Your Mortgage ApplicationA mortgage application is typically several pages in length, and it requires you to provide a considerable amount of information about your personal, professional and financial life. Some mortgage applicants may not have access to all of the information when completing the application, and others may simply skim over the form and provide incomplete answers. These are only a few of the reasons why information on the mortgage application may not be accurate, but there are several key reasons why applicants should avoid giving inaccurate information.

Loan Approval is Based on It

The initial loan application will usualy serve as a basis for the pre-qualification of the mortgage request. The applicant may make a decision to move forward with an offer to purchase a home based on this pre-qualification, but the pre-qualification is based on the accuracy of the information that is initially provided to the lender in the loan application. If the information is incorrect then an applicant may not be able to qualify for the loan and the deal could fall through. 

Information Will Be Verified

The majority of the information that is provided by the applicant in the loan application will be verified at various points throughout the loan process. For example, a credit report may be pulled very early on in the loan process, and it may be used to document the accuracy of the debts and monthly payments that the applicant wrote on the loan application. Tax returns, pay stubs and other related documentation may also be required. Essentially, the lender will eventually have access the accurate data, so there is little benefit to provide inaccurate information up-front on the loan application.

It Is Against the Law

A final reason why it is not advisable to provide inaccurate information on the application is because this is illegal. There is a disclaimer on the standard mortgage application that goes into detail about the law regarding providing false information on a loan application. There are also disclosures that are signed before and during closing that relate to this.

Completing a loan application is among the first steps mortgage applicants take when applying for a loan, and it is easy to overlook the importance of providing accurate and detailed information at this stage in the process. It is best to take time complete the loan application as thoroughly and accurately as possible since it is a legal requirement and because of many other negative consequences. Those who have questions about how a loan application works or who would like to begin the loan application process can reach out to their trusted mortgage professional for assistance.

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3 Reasons Why Your Closing Costs Will Vary Depending on the Type of Home You Buy


2015
07.14

3 Reasons Why Your Closing Costs Will Vary Depending on the Type of Home You BuySavvy home buyers who are preparing to make a real estate purchase should do their research and understand that they need to save money for not only the down payment, but the closing costs as well. The closing costs can account for as much as three to five percent of the sales price in some cases, so this can be a rather sizable amount of money. Some home buyers however, may not realize that the amount of closing costs can vary considerably based on the home that is purchased. With a closer look at why this is, home buyers can make a more educated decision when selecting a home to purchase.

Prepaid Taxes And Insurance

One of the most significant closing costs relates to prepaid taxes and insurance, and both of these expenses are directly tied to the location and value of the property. Consider that the property tax rate can vary based on the city, county, and state. Real estate insurance can also vary based on the type of construction of the home, if the home is located in a flood plain, and other factors. These are only a few examples of how the location and property type can impact these fees, and home buyers should consider the costs assoicated with the tax rates and insurance when selecting a property to purchase.

Third Party Reports

There are several third party reports that are commonly paid for at closing, and these include an appraisal, a survey, a pest inspection and a property inspection. The third party reports may vary in cost based on the size of the home, the amount of land that is being purchased, and even the condition of the property. Those who want to keep their closing costs lower may consider learning more about how these fees are calculated up-front before finalizing their plans to buy a specific home.

Title Insurance Fees

Title insurance fees are another typically sizable expense for home buyers, and this insurance offers protection to the lender if the title is not clean. Title insurance can increase based on the size of the property as well as different factors that are revealed with a title search. This information can be difficult to learn with an initial home search, but home buyers should be aware that title defects can increase closing costs.

The location, size, age and construction of a property all impact the closing costs. Those who are shopping for real estate may be inclined to make a decision that keeps closing costs down, and they can reach out to their knowledgeable mortgage professional for more assistance with their particular situation.

Comments Off on What’s Ahead For Mortgage Rates This Week – July 13, 2015

What’s Ahead For Mortgage Rates This Week – July 13, 2015


2015
07.13

Whats Ahead For Mortgage Rates This Week July 13 2015Last week’s scheduled economic events were few due to the Independence Day holiday. Freddie Mac’s weekly survey of mortgage rates brought good news as mortgage rates fell across the board. The Federal Reserve released the minutes of its most recent Federal Open Market Committee (FOMC) meeting and weekly jobless claims rose.

Job Openings Rise to Highest Level Since 2000

The Labor Department reported that U.S. job openings rose from April’s reading of 5.33 million to 5.36 million job openings in May. This was the highest reading for job openings since the report’s inception in 2000. Private sector job openings rose to 4.85 million, an increase of 16 percent. Government jobs rose increased by 511,000 open jobs from April’s reading of 430,000 job openings. Based on the Labor Department’s report of 8.67 million unemployed workers, there were 1.60 job seekers for each job opening in May as compared to 2.10 job seekers for each job available in May 2014. There were approximately 1.80 job seekers for each job available when the recession started in December 2007.

FOMC Minutes: Fed Issues No Firm Date for Raising Rates

On Wednesday, the Federal Reserve released the minutes of June’s FOMC meeting, during which nine of ten committee members indicated that they were not ready to raise the federal funds rate. One FOMC member indicated that they were willing to wait for another meeting or two to raise rates. While FOMC has hinted at the likelihood of raising rates this fall, committee members are wary of moving too quickly and cited developments in China and Greece as concerns that contributed to the committee’s current wait and see position. When the Fed does raise its target rates from 0.00 percent, consumers can expect higher mortgage and loan rates.

Freddie Mac: Mortgage Rates Fall, Jobless Claims Rise

Mortgage rates fizzled last week with Freddie Mac reporting average rates lower for all types of mortgages. The average rate for a 30-year fixed rate mortgage was four basis points lower at 4.04 percent and discount points unchanged at 0.60 percent; the average rate for a 15-year fixed rate mortgage was also four basis points lower at 3.20 percent. Average discount points for a 15-year mortgage fell from 0.60 to 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by six basis points to 2.93 percent with discount points unchanged at 0.40 percent.

According to the Labor Department, weekly jobless claims rose to 297,000 new claims filed as compared to 282,000 new claims filed the previous week. There were no estimates for last week’s jobless claims due to the holiday.

What’s Ahead

This week’s scheduled economic reports include Retail Prices, Retail Prices Except Automotive and the NAHB Housing Market Index. The Commerce Department is set to release monthly readings for Housing Starts and Building Permits. In addition to Freddie Mac’s report on mortgage rates and the Labor Department’s report on new jobless claims, the University of Michigan will wrap up the week with its Consumer Sentiment report.

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Dealing with the Summer Heat? How to Keep Your Home Cool Without Using a Ton of Energy


2015
07.10

Dealing with the Summer Heat? How to Keep Your Home Cool Without Using a Ton of EnergyMany people look forward to the long, relaxed, sunny days of summer, but they also dread opening up their energy bills throughout the summer months. Cooling a home can be costly, and many are searching for convenient ways to lower cooling costs without sacrificing on comfort inside the home on the warmest days of the year. These are just a few of the cost-effective and convenient options that can help homeowners to reduce cooling costs throughout the summer.

Keep The Blinds Closed

A significant amount of heat can enter a home through the windows, and blinds and curtains provide an extra layer of insulation between the window glass and the interior of the home. Some types of blinds and curtains are more effective at blocking heat than others, and homeowners may consider making an upgrade for the best results. For example, wood blinds can block significantly more heat than thin, almost translucent sheers.

Run The Ceiling Fans

Another way to keep cooling costs lower throughout the summer months is to run ceiling fans regularly. Ceiling fans help to circulate the air, and this helps the central cooling system function more efficiently. In addition, ceiling fans also can make those who are in the room feel cooler, and this may mean that homeowners can keep the home’s thermostat set at a slightly higher level than it otherwise would need to be set at for comfort indoors.

Use Heat-Generating Features At Night

There are numerous appliances and types of equipment that may be used indoors throughout the summer that can generate a considerable amount of heat, and running these at night can reduce the need to run the central cooling system as much during warm days. Consider that everything from running the washing machine and dryer to using the dishwasher and oven or range can emit heat in the home, and these serve to counteract the work that the cooling system is doing. When possible, limit the use of these features to cooler nighttime hours.

Keeping the home cool throughout the summer is a top priority for most, and the good news is that there are easy ways to reduce the cost associated with keeping a home cool. These ideas all can be beneficial in a homeowner’s quest to reduce energy costs during the summer.

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The Pros and Cons of Paying Your Mortgage Bi-weekly Vs. Monthly


2015
07.09

The Pros and Cons of Paying Your Mortgage Bi-weekly Vs. Monthly When applying for a new mortgage or after closing, many may have the option to choose between a single monthly mortgage payment or smaller bi-weekly payments. There are benefits and drawbacks associated with both options, and some personal financial considerations may need to be reviewed in order to make a decision that is best for the individual. With a closer look at the pros and cons of both options, homeowners or home mortgage applicants can make a more informed decision.

Easy Budget Management For Some

With a single monthly mortgage payment, there is often a need for those who get paid two or more times per month to properly budget so that they can comfortably manage the large mortgage payment with all of their other expenses throughout the month. With bi-weekly payments, the two smaller payments may be easier for some who are paid multiple times per month to manage and budget for. When an individual gets paid one time per month, the individual pay prefer to make the single payment each month.

Faster Debt Reduction

With a monthly payment schedule, 12 full payments will be made per year, and this is in contrast to a bi-weekly schedule which will result in the equivalent of 13 full payments being made per year. Essentially, the extra full payment that will be made with a bi-weekly payment schedule will result in faster debt reduction and in greater accumulation of equity over time. This can improve the homeowner’s financial standing over time.

Lower Interest Charges Over The Life Of The Loan

Because the principal balance will be reduced at a faster rate over time with bi-weekly mortgage payments, the total interest that is assessed on the loan will be reduced in comparison to monthly payments. Depending on the size of the loan and the interest rate on the loan, this may equate to a savings of tens of thousands of dollars or more in some cases.

Each homeowner’s or home applicant’s financial situation will be unique, and factors related to income, payment schedule, the desire to increase equity quickly and more should all be carefully considered. Bi-weekly payments often can be established during the loan application process, but they may also be set up after closing. Those who are interested in establishing affordable mortgage payments can speak with a mortgage representative about some of the different options available.

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Let’s Talk Hardwood: Why Converting Your Home to Hardwood Flooring Will Boost Its Value


2015
07.08

Let's Talk Hardwood: Why Converting Your Home to Hardwood Flooring Will Boost Its ValueWhen a homeowner makes the decision to upgrade flooring in one area of the home or throughout the entire space, there are numerous materials that may be considered. While each material option has its unique benefits and advantages, many are drawn to hardwood flooring as an option. This is a material that has the potential to boost home value, and a closer look at its benefits will reveal why this is the case.

A Durable, Long-Lasting Material

With many flooring options, homeowners understand that the material will need to be replaced or upgraded over the years. With hardwood flooring, the timeless appeal and incredible durability of the material means that the floor may be an investment to enjoy for many long decades. In fact, with periodic maintenance and regular care of hardwood floors, some hardwood floors may provide the homeowner with 50 years or more of beautiful use in the home.

Numerous Stylish Options

More than that, there are numerous style options for homeowners to consider, and this provides the ability to easily select a material that is ideal for the look of the home. In addition, hardwood floor generally has universal appeal that many desire, and this increases the desirability of the home to future home buyers. This is especially true when a more classic tone of wood is selected rather than a modern or trendy tone.

Improved Indoor Air Quality

Some flooring materials, such as carpet, may have a detrimental impact on indoor air quality, but this is not the case with hardwood flooring. The material is easy to clean, and this means that dust, dander and other allergens can easily be removed from the floor. This will have a direct and beneficial impact on indoor air quality that current owners as well as future home buyers can enjoy.

While hardwood flooring can be desirable and beneficial for current property owners, the appeal of the material will extend to future home buyers. When hardwood flooring is well-maintained by the owner, it is a true investment that will add true value to the home and that may help the owner to sell the property more quickly when the time comes.

Comments Off on Start with the Basics: How to Create a Budget to Determine How Much Mortgage You Can Afford

Start with the Basics: How to Create a Budget to Determine How Much Mortgage You Can Afford


2015
07.07

Start with the Basics: How to Create a Budget to Determine How Much Mortgage You Can AffordA mortgage is typically one of the biggest monthly payments and financial responsibilities that a person is responsible for. Mortgage payments usually impact the person’s budget significantly for several decades or longer.

While there are mortgage calculators online that can be used to estimate an affordable mortgage payment, it is important to start with a basic budget. A budget will allow you to more accurately determine how large of a mortgage payment is truly affordable before applying for a new mortgage.

List Income From All Sources

The first step to take to prepare a budget is to list all sources of income that is received regularly. This may include regular paychecks from both spouses, dividends, annuities, and any other sources of income that the individual or the family receives on a regular basis. Most budgets are prepared on a monthly basis, so ensure that the total amount of take-home income for a typical month is included in the budget.

List Recurring Expenses

Create a list of all expenses for the month to complete the next step in the budget-making process, and this should include utilities, minimum credit card payments, car loans, monthly food and gas expenses, and more. Ideally, it will include an allotment for savings, home maintenance expenses, and other expenses that the individual or the family may have. The more accurate the list of expenses is for the budget, the easier it will be to estimate a new mortgage payment amount that is actually affordable.

Think About Irregular Income and Expenses

It is important to think about irregular sources of income and irregular expenses. This may include seasonal income from a part-time or temporary job that is expected to continue into the future, as well as quarterly payments for homeowners’ insurance or annual property insurance premiums. While these are not monthly income sources or expenses, they nonetheless should be accounted for.

When a person takes on a larger mortgage payment than the budget allows for, it can quickly become unaffordable for the individual to continue to pay over time. A high mortgage payment also increases the risk of a default in the event of unforeseeable circumstances.

It is best to set up a monthly mortgage payment that is affordable for the individual’s or family’s budget, and these steps provide basic guidance for establishing a budget. A trusted mortgage professional can assist with setting up a mortgage payment that is affordable based on the budget that is created.

Comments Off on What’s Ahead For Mortgage Rates This Week – July 6, 2015

What’s Ahead For Mortgage Rates This Week – July 6, 2015


2015
07.06

Whats Ahead For Mortgage Rates This Week July 6 2015

Last week’s housing-related economic events included the Case-Shiller Home Price Index reports for April, the Commerce Department’s Pending Home Sales report and a report on Construction Spending. In other economic news, Non-Farm Payrolls, the ADP Employment report and Consumer Confidence reports were released. Freddie Mac’s mortgage rates summary and the weekly unemployment claims report were released as usual.

Case-Shiller: Home Price Growth Slows in April

The Case-Shiller 20-City Home Price Index reported that year-over-year home prices slowed in April with a reading of 4.20 percent as compared to the March reading of 4.30 percent. David M Blitzer, chairman of the S&P Dow Jones Indices Committee, said that home prices continue to grow, but are not accelerating. According to the 20-City Index, home prices rose 1.10 percent from March to April and were bolstered by the onset of the spring selling season.

The Department of Commerce reported that pending home sales increased to their highest level in more than nine years in May. Pending home sales were 10.40 percent higher than they were in May 2014, which is a further indication of a stronger housing sector. Analysts consider pending home sales as an indicator of future closings and mortgage originations.

Construction Spending Lower, Mortgage Rates Higher

Construction spending dipped in May to 0.80 percent as compared to April’s reading of 2.10 percent; analysts had expected a reading of 0.50 percent in May. The outstanding news is that construction spending for manufacturing building is up by 70 percent year-over-year in May. While not directly connected to housing, this reading suggests that manufacturers are expanding their businesses and will likely expand hiring as well. Concerns over the labor market have kept many would-be home buyers on the sidelines, but improved hiring reports and wage increases are expected to compel more buyers to enter the housing market.

Freddie Mac’s weekly Primary Mortgage Market Survey brought another increase in average mortgage rates; the average rate for a 30 year fixed rate mortgage rose six basis points to 4.08 percent. The average rate for a 15-year fixed rate mortgage rose by three basis points to 3.24 percent and the average rate for a 5/2 adjustable rate mortgage rose by one point to 2.99 percent. Discount points for a 30-year fixed rate mortgage dropped from 0.70 percent to 0.60 percent and were unchanged for 16-year fixed rate mortgages at 0.60 percent and 0.40 percent for a 5/1 adjustable rate mortgage.

Non-Farm Payrolls Lower; ADP Employment

The Bureau of Labor Statistics reported that Non-farm Payrolls dropped to a reading of 223,000 new jobs added as compared to expectations of 225,000 new jobs added and 254,000 new jobs added in May. The ADP employment report, which tracks private-sector hiring, fared better with 237,000 new jobs posted as compared to 203,000 new private sector jobs added in May.

Weekly Jobless Claims Rise to Highest Level in Five Weeks

New claims for unemployment reached their highest reading in five weeks with 281,000 new claims filed against expectations of 275,000 new claims filed and the previous week’s reading of 271,000 jobless claims filed. The four week rolling average of new claims filed showed an increase of 1000 more claims filed for a reading of 274,750 new claims filed. Analysts said that new jobless claims remained below the 300,000 benchmark for the 17th consecutive week.

The Commerce Department reported that the National Unemployment Rate was lower at 5.30 percent as compared to an expected reading of 5.40 percent and May’s reading of 5.50 percent. June’s national unemployment rate was the lowest reading since 2008 and is a good sign that labor markets are steadily if slowly improving.

No economic reports were released Friday due to the Fourth of July holiday.