Archive for the ‘Mortgage Tips’ Category

Comments Off on What’s Ahead For Mortgage Rates This Week – October 3, 2016

What’s Ahead For Mortgage Rates This Week – October 3, 2016


2016
10.03

Last week’s economic releases included reports on new and pending home sales, S&P Case-Shiller Home Price Indices and regularly scheduled weekly reporting on mortgage rates and weekly jobless claims. Readings on consumer sentiment and confidence were also released.

New and Pending Home Sales Lower as Peak Sales Season Winds Down

August readings for new and pending home sales were lower than for July; analysts said that slim supplies of available homes and rising home prices contributed to slower home sales. Peak home sales typically occur during spring and summer. Homebuyers with school-aged children prefer to be settled into a new home when school starts in August and September.

According to the Commerce Department, new home sales achieved their second highest reading since the Great Recession. Although lower than July’s reading, August sales of new homes reached 609,000 on a seasonally-adjusted annual basis. Analysts expected a reading of 600,000 new home sales based on July’s reading of 659.000 new homes sold. August’s reading was 20.60 percent higher year-over-year. High demand for homes appears to be kicking home builders into higher gear as they strive to ease slim inventories of available homes.

The impact of short inventories of available homes was reflected in August’s reading for pending home sales. Home sales awaiting closing fell in August from July’s reading of +1.20 percent in July to 2.40 percent in August. The National Association of Realtors® said that home sales are declining due to very limited inventories of available homes. Rapidly rising home prices and strict mortgage qualification requirements also contributed to slipping sales. After home buyers sign a purchase contract, they are at the mercy of changing mortgage rates their ability to qualify for a mortgage. Pending home sales supply an indication of future closings and mortgage loans.

According to the S&P Case-Shiller 20-City Home Price Index for July, home price growth dipped from June’s seasonally adjusted annual rate of 5.10 percent to 5.00 percent. Slim inventories of homes for sale and high demand were again cited as primary reasons for slower home price growth. While demand is high, slim supplies of available homes can cause would-be buyers to postpone their home search until more homes are on the market.

Mortgage Rates Fall, New Jobless Claims Rise

Mortgage rates fell across the board last week according to Freddie Mac’s weekly survey of rates. The average rate for a 30-year fixed rate mortgage fell six basis points to 3.42 percent; the average rate for a 15-year fixed rate mortgage was four basis points lower at 2.72 percent. 5/1 adjustable rate mortgages had an average rate of 1.81 percent, which was one basis point lower than the previous week’s reading Discount points were also lower and averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose last week to 254,000 claims, but new claims were lower than the expected reading of 259,000 new claims which was based on the prior week’s reading of 251,000 new jobless claims. New jobless claims have stayed below 270,000 new claims for three months for the first time since 1973.

In prepared testimony before the Financial Services Committee, Federal Reserve Chair Janet Yellen discussed problems facing two major banks and said the Fed’s goal was managing its regulatory stance to support financial stability.

September’s Consumer Confidence Index reading rose to 104.1, which exceeded analysts’ estimated reading of 99.3 and August’s reading of 101.1.

What’s Next

Next week’s scheduled economic reports include readings on construction spending and several labor-related releases including ADP Payrolls, Non-Farm Payrolls and the National Unemployment Rates. Weekly reports on mortgage rates and new jobless claims are set for release as usual.

Comments Off on Credit Score Got You Concerned? Here’s 3 Ways to Get It Together

Credit Score Got You Concerned? Here’s 3 Ways to Get It Together


2016
09.27

Credit Rating ScoreIf you’re worried about your bad credit, you’ll want to do everything in your power to improve your rating as quickly as possible – especially if you are looking to purchase a home in the near future. Improving your credit rating can give you access to better interest rates on mortgages or even help you to get that job you’re after.

IMPORTANT! If you are currently involved in a home loan transaction, speak with your trusted mortgage lender before taking any action regarding your credit!

So how can you boost your FICO score quickly and easily? Here’s what you need to know.

Get Your Credit Report And Dispute Any Errors

Credit reporting agencies don’t always keep 100% perfect records, and there’s a good chance that your credit report contains at least one error. One recent FTC study found that 25% of consumers have an error on their credit report and that in 5% of cases, the errors were actually severe enough to impact the loan terms that borrowers were able to negotiate.

You can get your annual credit report from all three credit reporting agencies for free. Carefully read over it. If you see any errors – if your name is misspelled, if they have the wrong address on file, or if there are late or unpaid charges that you didn’t make you can dispute the items in question.

Try Maintaining A Lower Utilization Ratio

Your debt-to-credit ratio (also known as your utilization ratio) is one of the more important factors that determine your credit score. It measures the outstanding balance on your accounts in relation to the total credit available to you, which helps lenders assess your capacity to take on new debt.

If this number goes beyond 30 percent, you’ll start to see your credit score drop. Ideally, you should aim for a utilization ratio below 10 percent this will prove to your lender that you can responsibly pay for the credit you use.

Have Recurring Bills? Automate Your Payments

Automating your monthly payments can be a great way to boost your credit score. Whether it’s your mortgage, your credit card, or your student loan, a pre-authorized monthly payment will ensure that everything gets paid on time and give you a great credit history.

Your FICO score is a number that will determine your eligibility for mortgages and other loans. These are general tips to help with your credit score and improve the overall reporting of your credit.

Call your local mortgage professional to learn about what kind of a mortgage your credit score can afford you.

Comments Off on 3 Things That Determine Your Mortgage Interest Rate

3 Things That Determine Your Mortgage Interest Rate


2016
09.20

Minimum FHA Mortgage Credit Scores Are Falling: Here's What You Need to KnowWhen you initially start shopping for a home mortgage, you may be drawn to advertisements for ultra-low interest rates. These may be rates that seem too good to be true, and you may gladly contact the lender or mortgage company to complete your loan application. However, in many cases, mortgage applicants are unpleasantly surprised and even disheartened to learn that they do not qualify for the advertised interest rate. By learning more about the factors that influence your interest rate, you may be able to structure your loan in a more advantageous way.

Your Credit Rating

One of the most important factors that influence an interest rate is your credit score. Lenders have different credit score requirements, but most have a tiered rating system. Those with excellent credit scores qualify for the best interest rate, and good credit scores may qualify for a slightly higher interest rate. Because of this, you may consider learning more about your credit score and taking the time to correct any errors that may be resulting in a lower score.

The Amount Of Your Down Payment

In addition, the amount of your down payment will also play a role in your interest rate. The desired down payment may vary from lender to lender, but as a rule of thumb, the best home mortgage interest rates are given to those who have at least 20 to 30 percent of funds available to put down on the property, and this does not include subordinate or secondary financing. If you are applying for a higher loan-to-value loan, you may expect a higher interest rate.

The Total Loan Amount Requested

In addition, the total loan amount will also influence the rate. There are different loan programs available, but one of the biggest differences in residential loans is for very large loan amounts. The qualification for a jumbo loan will vary for different markets, but these loans qualify for different rates than conventional loans with a smaller loan amount.

While you may be able to use advertised interest rates to get a fair idea about the rate you may qualify for, the only real way to determine your mortgage rate will be to apply for a loan and to get pre-qualified. Contact your local mortgage lender today to request more information about today’s rates and to begin your pre-qualification process.

Comments Off on Thinking of Buying a Second Home? Assess Your Finances First

Thinking of Buying a Second Home? Assess Your Finances First


2016
08.30

The decision to buy a second home may be made for a number of reasons. For example, you may have a destination where you and your family love to spend free time in, and you may be ready to settle into your own space in this location. You may be considering the tax benefits associated with a second home, and you may even have plans to live in the home as your primary residence after you retire.

While there may be numerous benefits associated with the purchase of your second home, you may be concerned about how affordable it will be for you to manage the additional expense of a second mortgage payment.

Consider All Of The New Expenses Related To The Purchase

A second mortgage payment may be a rather major expense to take on, but it is not the only expense related to buying the new property. In order to ensure that the mortgage payment is affordable, you need to ensure that all aspects of secondary home ownership are affordable for you.

For example, consider HOA dues, repairs and maintenance expenses, property taxes, insurance and cleaning or lawn care service since you will not be available to handle these chores on a regular basis. If you can comfortably take on all of these expenses, you may make your purchase with confidence.

Increase Your Emergency Savings Account Balance

While your current budget may easily accommodate the new mortgage payment and the related expenses, the unfortunate truth is that your income or expenses may not remain static in the future. You may suffer from unemployment or a serious illness that reduces your income. You may have extra expenses due to a car accident or severe damage to a home.

These are just a few of the many things that can happen, and it is important that you have an adequate cash reserve in your emergency savings account that allows you to pay for all of your expenses for at least several months. Because your expenses will increase substantially with your new mortgage payment, you may need to increase your emergency savings account balance.

While it can seem intimidating to take on a new mortgage payment and other related household expenses for a second home, you may be able to more comfortably take on this additional expense when you follow these tips. For more information, speak with your mortgage professional to get a quote for your new mortgage payment and interest rate.

Comments Off on Why Your ‘Debt-to-Income Ratio’ Number Matters When Obtaining a Mortgage

Why Your ‘Debt-to-Income Ratio’ Number Matters When Obtaining a Mortgage


2016
08.26

If you are looking to buy a home, you may want to consider shopping for a loan first. Having your financing squared away ahead of time can make it easier to be taken seriously by buyers and help move along the closing process. For those who are looking to get a mortgage soon, keep in mind that the Debt-to-Income ratio of the borrower plays a huge role in the approval of your mortgage application.

What is a Debt-to-Income Ratio?

A debt-to-income ratio is the percentage of monthly debt payments compared to the amount of gross income that a person earns each month. Your gross monthly income is typically the amount of money you earn before taxes and other deductions are taken out. If a person’s monthly gross income is $2,000 a month and they have monthly debt payments of $1000 each month, that person would have a DTI of 50 percent. The lower the DTI the better. 43 percent is in most cases the highest DTI that potential borrowers can have and still get approved for a mortgage.

What Debt Do Lenders Review?

The good news for borrowers is that lenders will disregard some debt when calculating a borrower’s DTI. For example, utilities, cable, phone and health insurance premium would not be considered as part of your DTI. What lenders will look at are any installment loan obligations such as auto loans or student loans as well as any revolving debt payments such as credit cards or a home equity line of credit.In some cases, a lender will disregard an installment loan debt if the loan is projected to be paid off in the next 10-12 months.

What Is Considered Income?

Almost any source of income that can be verified will be counted as income on a mortgage application. Wage income is considered as part of a borrower’s monthly qualifying income. Self-employed individuals can use their net profit as income when applying for a mortgage, however, many lenders will average income in the current year with income from previous years. In addition, those who receive alimony, investment income or money from a pension or social security should make sure and include those figures in their monthly income as well when applying for a loan.

How Much Debt Is Too Much Debt?

Many lenders prefer to only offer loans to those who have a debt-to-income ratio of 43 percent or lower. Talking to a lender prior to starting the mortgage application process may help a borrower determine if his or her chosen lender offers such leeway.

A borrower’s DTI ratio can be the biggest factor when a lender decides whether to approve a mortgage application. Those who wish to increase their odds of loan approval may decide to lower their DTI by either increasing their income or lowering their debt. This may make it easier for the lender and the underwriter to justify making a loan to the borrower. For more information, contact your local mortgage professional today.

Comments Off on Three Proven Ways You Boost Your Credit to Get a Mortgage Approved

Three Proven Ways You Boost Your Credit to Get a Mortgage Approved


2016
08.12

These 10 States Have The Biggest Mortgage DebtCredit problems are unfortunately common, and they can make it difficult for you to obtain a mortgage. Even if you are able to obtain a mortgage with your credit issues, the rate may be rather high in comparison to what you may qualify for if you obtain a mortgage without fixing your credit problems. While some issues may take a while to fix, you may be able to see a decent increase in your credit rating when you follow a few easy steps.

Pay Off Outstanding Derogatory Credit Items

When you review a copy of your credit report, you may notice that some items have an outstanding balance due. If the account is in good standing, the outstanding balance is not a primary issue unless you have an excessive amount of debt. If the account is not in good standing, such as if you have a series of late payments or a collection account being reported on the credit report, you can see a boost in your credit rating when you pay off these debts.

Settle Judgments

Legal matters can also be reported on your credit report, and they may be settled or still outstanding. An example of this would be if an electrician serviced your home, and you did not pay the bill. The electrician could file a lien against you. A settled judgment may still be a ding on your credit rating, but it is far better than having an unsettled judgment. If you notice that you have a judgment reported on your credit report, you may consider taking the necessary steps to settle it and get back in good standing.

Pay Off Small Balances

If you can afford to do so, it can improve your credit rating to pay off small balances. A portion of your credit rating will be determined by the number of open accounts and the number of accounts with balances that you have. By focusing on the small balances, you can often see a quick improvement in your credit score. There may also be a benefit to closing these accounts after they have been paid off.

Before you apply for a mortgage, it is wise to request a copy of your credit report. You want to remove any items that you find on the report that do not belong to you. For those derogatory items that are yours, you can follow these steps to help improve your credit rating with fast results.

Comments Off on Eliminate These 5 Barriers To Saving For Your Down Payment This Month!

Eliminate These 5 Barriers To Saving For Your Down Payment This Month!


2016
02.19

Saving Up: 5 Barriers to Saving Money That You Can Eliminate in Just One MonthWith all the expenses that go into monthly living and the temptations that come along with life, saving money for the down payment on your new home can be quite a struggle for many people. If you’re having a hard time saving and are wondering what you can do to ensure a higher bank balance next month, here are a few things that may pose a risk to getting the home of your dreams.

Forgetting To Take Lunch

One of the things most likely to defeat your bank balance is the daily office trip to the deli or diner. Instead of opting for an easy but expensive $10.00 lunch, take a few minutes at the end of each day to put together a sandwich or salad so you don’t have to spend extra funds on your lunch break.

Relying On Cable Television

With all the available options for streaming services, many people are switching out their packages for something a lot more economical. Cable can easily add up to $100.00 a month to your expenses, but a streaming service may only be a fraction of the cost and will provide savings you’ll soon notice.

Splurging On Morning Coffee

Grabbing the familiar cup of joe on the way to the office is certainly a way to ease yourself into the day, but one coffee can add up to a huge expense by the end of the month. If this is a vice you crave, try taking your own coffee to work and opt for a treat once a week if you really can’t resist.

Impulse Buys At The Grocery Store

Food certainly counts as a necessity, but there are many things that end up in the grocery cart at the end of a shopping trip that aren’t really staple items. If your cart is filling up with chips and chocolate, you might want to stick to your list or review your cart before the final purchase.

Avoiding Your Budget

Unless you’re taking to a spreadsheet to balance out your expenses and earnings, you may not see any significant savings at the end of each month. Budgeting will give you a better idea of what you can and can’t afford consistently, so make sure you’re writing everything down.

The idea of cutting back on spending is rarely a popular one, but there are things you can do every day that will make for a better bank balance at the end of the month. If you’re looking for more tips on buying your own home, contact your trusted mortgage professional today!

Comments Off on What Factors Affect Mortgage Payments?

What Factors Affect Mortgage Payments?


2015
11.20

As you can see in the video below, the amount of the down payment the size of the mortgage loan, the interest rate the length of the repayment term and payment schedule will all affect the size of your mortgage payment. In bullets:

  • Down payment
  • Loan size
  • Interest rate – fixed or adjustable
  • Repayment term – how long
  • Payment schedule – how often

all affect the size of your payment.

Comments Off on How To Build The Ultimate Tree House For Your Children In Just Seven Steps

How To Build The Ultimate Tree House For Your Children In Just Seven Steps


2014
06.12

How to Build the Ultimate Tree House for Your Children in Just Seven StepsBuilding a tree house is a time honored tradition for many families. One of the benefits of having a yard is the ability to build a tree fort for your children.

If you’re planning to build a fun fort for your kids, here are seven steps to help you create the ultimate tree house.

The Ultimate Plan For The Perfect Playhouse

The best projects are often the most thought out. Sit down with your children and lay the plans for their tree house. Let them contribute their thoughts and ideas so they feel a part of the planning process.

Although you won’t need an engineering degree to build a quality tree fort, it’s important to calculate all the measurements and specifications of the build.

A Solid Foundation For Your Tree House

Prepare the location for your future tree house by trimming away any precarious branches or boughs on the tree you plan to build on. Ensure that your tree house will be well supported, and reinforce any questionable spots.

If your tree fort is being built from the ground up, make sure you’re working with a level foundation.

Have The Right Tools For The Job

Make sure you have all the tools you’ll need to construct your tree house. Power tools and construction equipment can be borrowed from friends and neighbors or rented from your local hardware store.

When the time comes to gather your building supplies, be creative and consider re-purposed supplies. These materials are less expensive and add character and charm. You can find recycled and salvaged items at various recycled construction supply companies and through online classifieds like Craigslist.

Construct Your Tree House With Confidence

When you’re constructing your tree house, make sure it’s structurally sound. Watch tutorials online – you’d be amazed at the things you can learn from watching YouTube videos!

Make sure to measure twice and cut once. Using the proper cutting tool for each cut will help you achieve cleaner, more precise cuts. Also make sure to obtain any permits that may be required for the project.

A Personalized Theme Encourages Creativity

Choose a theme that relates to your child. If they love fairies, use that as the inspiration for your design. Pirate forts and superhero lairs are perfect places to spark imaginative play and creativity.

Incorporate cannons, cupboards and ropes with pulleys to create a unique and fun space for your children to play.

A Colorful Paint Job Brightens The House

When the walls are up and the building is done, it will be time to choose paint colors. Bright colors are a great way to brighten and liven up an outdoor space.

You could even consider creating a mural. Choose something that fits with the theme. This is something that you and your child can do together, or that you can do on your own as an added surprise.

Perfecting Your Child’s Play Space

Once your tree house is built, it’s time to get it ready for play. Decorate the space with fun decor and functional items. Throw pillows and rugs can add color and personality to a child’s play space. Window coverings can be made from scrap fabric or bed sheets.

Creating a tree fort for your child is a memorable experience and a labor or love. A unique space that sparks imagination and nurtures creativity is a wonderful gift to give a child.

Comments Off on How Pre-Qualifying Helps You Find the Right Home

How Pre-Qualifying Helps You Find the Right Home


2014
06.05

How Pre-Qualifying Helps You Find the Right HomeToo often, home buyers are disappointed when they find their dream home only to discover they are not able to get a mortgage to purchase the property. There are methods that potential buyers can use to ensure this does not happen to them. One of these options is to ensure you obtain a pre-qualification from your lender.

It is important to understand the difference between a pre-approval and a pre-qualification. While both are helpful, they do not carry the same weight.

What Are The Differences Between These Options?

A pre-qualification allows a borrower to determine how much money they may be able to borrow. For most borrowers, this allows them to start the house-hunting process with a mortgage amount in mind. Borrowers should understand, while the loan amount can be calculated, changes in interest rate as well as the borrowers credit are not evaluated in this process. In general, the lender will request specific information from the borrower including income and expenses as well as ask about their credit. None of this information is verified by the lender before sending a pre-qualification letter.

On the other hand, a pre-approval requires the borrower to provide a number of documents to the lender, typically the same documents borrowers need to apply for a loan. Oftentimes, this leads borrowers to speculate as to whether a pre-qualification is useful.

Why Pre-Qualification Helps

There are many valid reasons why potential homebuyers should ask about pre-qualifying for their mortgage. Some of these include:

  • Home prices – if a borrower is eligible for a mortgage of $200,000 they will know they will have to seek homes in a specific price range. If a borrower is only able to put down 10 percent, they know the maximum home price they can afford is $220,000.
  • Down payments – in most cases, borrowers who can afford to put down a large down payment will have more options available to them. In some cases, understanding how much mortgage a borrower may qualify for beforehand allows them to save additional money for a down payment.
  • Estimates of dollars needed – another advantage to pre-qualifying is borrowers can get an idea of what additional closing costs they may need to qualify for a mortgage. This can be very helpful for a first time home buyer.

Pre-qualifying for a loan can save a home buyer from being disappointed. There are few things that are more upsetting than finding a home you love only to discover you are not eligible for the loan you need in order to purchase that home.

If you’re contemplating a pre-qualification, call your trusted mortgage professional today for more information.