Smart Money Habits That Will Help You Save up a Mortgage Down Payment Faster

Lower-Payment-SaveAre you ready for home ownership? The prospect of owning your own house or apartment is an exciting one, but with any financial transaction this large there are some things to consider. The first is your down payment – that is, the initial payment you’ll put against the cost of the house to reduce the amount that you’re borrowing in a mortgage. Let’s have a look at four habits that will help you to get your down payment saved up faster.

Build (And Stick To!) A Reasonable Budget

The first and most obvious tip is to stick to a reasonable budget. Determine how much you have coming in and going out of your bank accounts and credit cards each month. Group everything into areas like ‘food,’ ‘utilities,’ ‘dining out,’ ‘entertainment’ and more. Then, reduce each area to a reasonable amount and avoid any overspending.

Figure Out Your ‘Latte Factor’ And Eliminate It

If you’re unfamiliar with the term, a ‘latte factor’ is that one consistent purchase that you make each day which, over time, drains your bank account. For example, if you spend $5 each day on your coffee habit that adds up to almost $2,000 per year in unnecessary costs. Pay close attention to your spending habits and try to eliminate anything that you can.

Make Automatic Payments To A Down Payment Fund

If you’re working a stable job and have regular pay periods, you may want to explore setting up a separate savings account for your down payment. Once you have this account opened, set up automatic deposits from your regular bank account after each pay day. This limits your ability to spend your cash while building up your down payment fund automatically.

Don’t Carry Credit That You Don’t Need

Finally, try not to carry credit that you aren’t going to use. This includes department store credit cards, extra bank credit cards or lines of credit. While it won’t necessarily harm your credit score to have available credit, if you do have it you’re far more likely to use it than if you don’t. You’ll need to be disciplined to save up your down payment. So don’t bother with extra credit that may be too tempting to resist using.

These are just a few of the smart money habits that will help you get your mortgage down payment saved up as quickly as possible. When you’re ready to discuss mortgage financing for your new home, contact our your trusted mortgage professional.

Top Uses Of A HELOC

care-sunt-cartierele-unde-gasesti-cele-mai-ieftine-garsoniereHomeowners who have equity built up in their homes can tap into that equity using a home equity line of credit, or HELOC. This financial tool can be a great way to accomplish a number of financial goals.

Here are four excellent uses of a HELOC for homeowners to consider.

Consolidating Costly Debts

Credit card debt and other types of consumer loans are costly, unless a debtor is lucky enough to have a no-interest card. Borrowers can consolidate that debt into a HELOC, which is much more affordable because it is a secured debt.

This advantage only works if the borrower stops adding to the debt problem. A HELOC becomes a valuable tool to get rid of debt quickly when used properly.

Create An Emergency Fund

Most people do not intend to end up in credit trouble, but emergencies happen. Emergency home repairs, job loss, or car repairs can quickly add up to unwanted debt.

A HELOC provides homeowners the option to have an emergency fund. Should one of these emergencies pop up, the homeowner can use the HELOC for an affordable source of funds.

Home Repairs That Add Value

Some home repairs add value to the property, but are also expensive. A HELOC can provide a source to fund these repairs. Because they put value back into the property, homeowners may be making wise use of their equity when using the HELOC in this way.

To make this work well, homeowners should choose repairs that do add to the home’s value. Since the cost of the repairs comes from the equity, the home’s owner should recoup the costs later when selling the home.

Funds For Investing

Finally, homeowners can use funds from a HELOC to get started in investment. This is risky, because the loan is paid regardless of how successful the investment is, but it can give a homeowner the chance to start investing for the first time.

Similarly, retirees can sometimes use HELOC funds to supplement retirement income if investments are struggling. This is a temporary solution to give investments a chance to recover, but for those living on a fixed income it is very helpful to have this option.

The HELOC is a valuable tool for homeowners that allows them to tap equity when it is needed. Since they have spent years building up this equity, homeowners should not fear using it when it can help with their financial goals.

Contact your trusted loan professional to find out if a HELOC may be right for you.

Understanding the Factors That Impact Your Credit Score

credit-score-to-buy-a-houseMost consumers believe if they pay their bills on time, they need not worry about their credit score. Oftentimes, it is a rude awakening when they apply for a mortgage loan, car loan, or any revolving credit to learn they are not going to get the lowest rates available due to their credit score. This is because paying bills on time only accounts for 35 percent of your credit score. The remaining 65 percent is spread out among other factors that impact your credit score.

Credit Usage and Impact on Score

Nearly one-third, 30 percent, of your credit score is based on how much of your available credit you are using. For example, if you have combined credit available of $100,000 and you use $90,000, you will suffer a decline in your credit score. Those consumers who have similar credit lines and are using $9,000 will get a slight bump in their score.

New Credit vs. Old Credit

We seldom think about how long we have held a line of credit open. However, some consumers “exchange” credit lines for other credit lines due to special offers made by credit card companies. This is not necessarily a good idea since 15 percent of your credit score is determined by the age of your credit accounts. The longer you have had an account, the better in most cases. The calculation will take all open credit accounts, take the amount of time they have been open and get an “average age”. If you have six accounts which have been open less than a year and six that have been open five years, the newer accounts will count against you in this case.

Mixing up Credit Lines

A consumer who has only a mortgage and a single credit score will take a modest hit on their credit score versus a consumer who has multiple credit cards, a mortgage, and an auto loan. The types of credit you have will account for 10 percent of your credit score and the more varied your open credit lines, the better. While it is inadvisable to open new credit lines simply to show a variety of types, having installment loans, retail credit cards, and traditional credit cards is a good idea.

New Lines of Credit Opened

One danger many consumers are unaware of is suddenly opening new lines of credit. For example, a new homeowner may open a new account with a home improvement store, a general retail store, and a new credit card to help them furnish and repair their new home. This could be a red flag since the credit lines are new, and there is no established history on the mortgage, or the new credit lines. Since this factor accounts for 10 percent of your credit score, you could suffer a temporary decline in your credit score.

Consumers should be aware of the factors which impact their credit score, and also be aware of the factors that do not impact their scores. Understanding your credit score may be the most important tool you have when buying a home, or refinancing your current mortgage.

Please contact your trusted mortgage professional to discuss how your credit score may be impacting your ability to finance your next home purchase.

Seller-Paid Closing Costs In A Seller’s Market? Yes, It’s Still Possible

buying-a-fixer-upper-homeFor first-time home buyers, closing costs are a major hurdle for home ownership. Coming up with a down payment and several thousand dollars for closing costs can be hard without home equity to tap.

To help, buyers often ask sellers to cover all or some of these costs. In markets favoring buyers, this is a common habit, but when the market switches to favoring sellers it becomes harder. Sellers who know they may get multiple offers are less likely to say “yes” to this request.

Yet even when the market favors sellers, buyers can still ask for this help. It all depends on how the offer is presented. Here’s how to potentially make it look appealing, even with other offers on the table.

Buyers Need To Consider The Total Amount

Many sellers build negotiation room into their asking prices. This means they anticipate some offers coming in that are lower than their asking price.

Buyers asking for closing costs can offer the full asking price or more than the asking price to make the offer more appealing.

For example, if the buyer needs $2,000 in closing costs, and offers $2,000 more than the asking price, the seller won’t stand to lose money and will find the offer more appealing. This, in effect, rolls the closing costs into the loan.

On the flip side, if a buyer makes an offer well below the asking price, then also asks for closing costs, the seller is likely to say no.

Buyers Should Consider Other Components Of Their Offer

Sometimes the problem the buyer faces is a lack of cash to cover the closing costs, particularly when using a no- or low-down payment loan option. To make the offer more appealing, buyers should look at the rest of the offer’s terms.

For example, a buyer may ask for closing costs but overlook other contingencies, such as non-urgent repairs. This makes the offer appealing, because the seller’s costs even out.

Buyers Can Offer To Close Quickly

Another way to make seller-paid closing costs something a seller will accept is moving the closing date up. Most sellers want to sell quickly, so the faster the buyer can close, the better the offer may look.

For buyers in a seller’s market who need closing cost help, the key is to make all other aspects of the offer appealing. By doing so, these buyers may just get the closing cost help they need to move forward with their home purchase.

One of the best things to do before entering into negotiation is to have your mortgage funding pre-approved. Contact your trusted home loan professional to get started today.

What’s Ahead For Mortgage Rates This Week – July 9th, 2018

board-of-the-federal-reserveLast week’s economic releases included monthly readings on construction spending, public and private sector job growth and June’s national unemployment rate. Weekly readings included Freddie Mac mortgage rates and new jobless claims.

Construction Spending Rises in May

According to the Commerce, construction spending rose 0.40 percent in May; public sector construction spending rose 0.70 percent and private sector spending rose by 0.30 percent. Residential construction rose by o.80 percent, which analysts regarded as a good sign for the economy. Building more homes has long been identified as the only solution for persistent housing shortages that cause high demand for homes and rapidly rising home prices.

Analysts said that volatility and heavy revisions to government reporting, construction spending readings are subject to significant change. April’s reading of 1.90 percent growth was downwardly revised to 0.90 percent growth.

Mortgage Rates and New Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week. Rates for a 30-year fixed rate mortgages were three basis points lower at an average of 4.52 percent. 15-year fixed rate mortgages averaged 3.99 percent and were five basis points lower than for the previous week. Rates for 5/1 adjustable rate mortgages averaged 3.74 percent and were 13 basis points lower than for the prior week.

First-time jobless claims fell last week to 231,000 new claims as compared to 200,000 new claims expected.and 244,000 new claims were filed in the prior week.

Unemployment ticks up as Public and Private Sector Job Growth Slows

ADP payrolls fell to 177,000 private sector jobs were added in June as compared to 189,000 jobs added in May. The Commerce Department reported 213,000 public and private sector jobs added in June, which beat expectations of 200,000 jobs added in June. 244,000 jobs were added in May.

The National unemployment grew to 4.0 percent in June as compared to May’s reading of 3.80 percent. Analysts attributed the rise in the unemployment rate to 600,000 new job seekers entering the market in June.

What‘s Ahead

This week’s scheduled economic reports include readings on inflation, core inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.

Speed up Your Mortgage Closing With This Handy Four-step Guide

Depositphotos 1707618 SAre you in the market for a new house or apartment? If you are financing the purchase by taking out a mortgage, you’ll want to know how to make this transaction run as smooth as possible. In today’s article, we’ll share a quick four-step guide to speeding up the mortgage closing process.

Step #1: Check In On Your Credit Score

The first step before applying for your mortgage is to check in on your credit. Request a copy of your credit score and history from one of the major reporting firms. Go over this report, paying close attention to any old or outstanding items that you may have already dealt with. Many individuals have old delinquencies that must be challenged to be removed from the report, so take care of these first before applying.

Step #2: Have All Your Documents Prepared

As with any loan, taking out a mortgage requires a small mountain of paperwork. The best way to speed this process up is to have all of your financial documentation ready for inspection and use by the lender.

Note that each mortgage provider has different requirements for what you’ll need. A brief list of some items which are commonly requested includes your current employment details, recent pay stubs, recent W-2 forms or tax returns, proof of self-employment or other means of income, asset details such as bank accounts and investments and debt information such as other mortgages, student loans and more.

Step #3: Have An Offer Ready

If you have already settled on the home that you want to buy, it’s best to get your offer prepared in advance of being fully approved for mortgage financing. Your real estate agent will be able to help with crafting an offer that is subject to the home passing an inspection. It’s especially important to have an offer ready in the event that other buyers are competing for the same home that you are.

Step #4: Get The Inspection Finished Promptly

While your lender is completing the home appraisal process, you should be having the home inspected. Getting the inspection completed promptly will prevent any delays due to problem areas that might be uncovered. For example, a pest problem like termites may need to be dealt with, or minor repairs to the roof structure may need to be scheduled.

Following the steps above will help to ensure that your mortgage closing process goes as smoothly as possible. To learn more about your mortgage options or to get the pre-approval process started, contact us today. Our friendly mortgage professionals are happy to assist.

Home Automation Conveniences Attract Buyers

consumer1The rise in Millennial home buyers will inevitably change the items that promote faster and more lucrative home sales.

Consider trends over the past decades that have included conveniences such as built-in dishwashers, central air, energy efficient appliances and many others. As mechanical and technological advances move into the mainstream, prospective home buyers seek them out and favor properties that come tech ready.

While Millennial buyers have a vastly different world view than previous generations, Baby Boomers and Gen X homeowners are also enjoying the ease of technology. For many homeowners, automation equals convenience and improved quality of life. That’s why having the latest automation integrated into a home can make it a priority home on the market. These are some of the latest — let’s call them gadgets — that seem to be piquing the interest of today’s home buyers.

Automation Home Control Devices

The era of clap-on lights and voice-controlled systems has given way to smart technologies. Homes that are integrated with smart technologies are getting a leg up in the market and future-leaning companies are rolling out devices to fill the need.

A company called Nanoleaf is marketing a 12-sided remote that can be programed to automate and control an entire smart home. The Nanoleaf Remote is expected to interface with Apple Homekits to produce amazing home scenes and manage devices throughout the household.

If you saw the movie “Minority Report” starring Tom Cruise, you may remember him interacting with a 3D holographic interface. The new “Talon” smart ring hitting the market is a wearable smart remote that looks similar to the popular Fit Bits. It also interfaces with your home in a futuristic way and can automate most everything. The point is that smart homes are popular and complimentary devices will only make them more so.

Alexa Is The New BFF

Alexa became America’s best friend by providing everything from favorite music to voice-command Google searches. Alexa looks to be everyone’s BFF going forward and more and more home automation technologies are developed to directly connect with the little Echo Dot. iDevices’s new light switches can be brightened or dimmed via Alexa. Consider Alexa-driven automation.

Automated Home Security

In an era when security is frequently on people’s minds, things like motion detectors, security cameras and smart locks are looked upon more favorably when they are integrated into the home and fully automated. Homeowners are not looking to take on home security as an after-work task.

The Ring company, among others, is introducing everything from smart doorbells to outdoor lighting. When fully automated, security can be a huge boon for home sellers.

The Real Estate market remains competitive and seemingly small differences between properties can set them apart. Automation and smart-technology integration can be a game-changer in terms of days on the market and asking price.

Contact your trusted mortgage professional to get your financing pre-approved so you can be ready to make an offer on your new automated dream home.

Is It A Good Idea To Buy A Remodeled Home?

buying-a-new-construction-homeAre you considering buying a flipped house? Here are some ways to tell if it is a good idea or not.

If you watch popular TV shows like Property Brothers, Flip or Flop and Fixer Upper, you might believe that buying a remodeled home is a great idea. These shows always have happy endings. The process looks fun and easy, and the houses turn out beautiful. However, it is rarely this easy when buying a real-life remodeled home.

There are plenty of flipped houses that turn out to have significant problems. Contractors who do remodels sometimes rush through the job. This can lead to subpar work. While the house might look beautiful initially, problems could start to show up months later.

A flipped house can be a great deal. However, it pays to do your homework before buying one. Maintain a skeptical eye when touring the home. If you notice any of these things, move on.

Unpermitted Work
If you live in a full-disclosure state like Texas, you are in luck. Sellers are required to disclose to buyers everything that they know about the house. This should make it easy to get a list of the work that the flipper completed.

Even if you don’t live in a state that requires full disclosure, still ask for a list of work. After you have a list of the upgrades, check for permits. Most larger remodeling projects need a permit.

Avoid a remodeled home that has had unpermitted upgrades. There is a chance that it is not up to code. Aside from being a safety risk, unpermitted work can make it harder to get financing or insurance on a home.

A Flipper With A Bad Reputation
Before making an offer on a rehabbed home, ask who did the work. Learn everything you can about the person or company. Are they known for doing high-quality work?

Flippers that have solid reputations want happy customers. Most want to avoid legal issues later, which could ruin their reputation and damage their business. So, they will usually ensure that the work is up to standard.

Avoid flippers or contractors that are not well known. Many move on to the next town after the job is over and so don’t care if they leave behind unhappy customers as they won’t be around.

A Failed Inspection
Beautiful hardwood floors, countertops and shiny new kitchen appliances might make a house look like it was just built. However, most flipped houses hide a dark history. Many remodeled homes have had a substantial lack of maintenance and were in a state of significant disrepair before being flipped.

Some contractors cover up problems rather than do the extensive work needed. Therefore, it pays to have the home inspected. A good home inspector will be more likely to spot things that an average homeowner might miss.

Your trusted mortgage professional can help you get your financing in order and provide you with a pre-approval letter so you are primed and ready to make an offer on the right property for you.

What’s Ahead For Mortgage Rates This Week – July 2nd, 2018

fotolia 3663046 XSLast week’s economic reports included readings from Case-Shiller housing market indices and data released on new and pending home sales. Weekly releases on mortgage rates and first-time unemployment claims along with the Consumer Sentiment Index for June were also posted.

Case-Shiller Reports Rapid Home Price Growth in April

April home prices ticked downward by one-tenth percent for the National Home Price Index, which reported 6.40 percent growth year-over-year. Case-Shiller’s 20-City Home Price Index also dipped by one-tenth percent to 6.60 percent year-over-year. Analysts note that home prices continue to outpace wage growth and inflation, which limits affordability for many prospective home buyers.

Seattle, Washington held the top spot on the 20-City Home Price Index with year-over-year home price growth of 13.10 percent; Las Vegas, Nevada followed with year-over-year home price growth of 12.70 percent and San Francisco, California reported home price growth of 10.90 percent year-over-year. New York, New York was the only metro area to report negative home price growth. Analysts said recent tax law changes and a glut of new apartments impacted home prices.

New Home Sales Rise as Pending Home Sales Fall

Sales of new homes rose in May to a seasonally-adjusted annual level of 689,000 sales. Analysts expected 668,000 sales based on April’s downwardly-revised reading of 646,000 new homes sold. Year-to-date, sales of new homes were 8.80 percent higher than for the same period in 2017.

Rapid home price growth has been driven by high demand and limited inventories of homes for sale. Supplies of new homes dipped from a 5.40-month supply in April to a 5.20-month supply of homes for sale. Real estate pros consider a six-month supply of homes an average inventory.

Pending home sales dipped in May by -0.50 percent, as compared to April’s reading of -1.30 percent. Low supplies of available homes have sidelined buyers who haven’t found homes that they want or can afford. High demand has created bidding wars and cash buyers in some markets have sidelined moderate-income buyers and those who need financing to purchase homes.

Mortgage Rates Mixed, New Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week. Rates for a 30-year fixed rate mortgage fell by two basis points to 4.55 percent. Rates for a 15-year fixed rate mortgage averaged 4.04 percent and were unchanged from the prior week.

The average rate for a 5/1 adjustable rate mortgage was four basis points higher at 3.87 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 227,000 first-time claims filed from the prior week’s reading of 218,000 claims filed. Analysts expected 220,000 initial jobless claims.

Consumer sentiment fell to an index reading of 98.20 in June as compared to May’s reading of 99.30. according to the University of Michigan.

What‘s Ahead

This week’s scheduled economic news includes readings on construction spending and minutes of the most recent meeting of the Fed’s Federal Open Market Committee, Labor sector readings on Non-Farm payrolls, ADP payrolls and national unemployment will also be released.

Weekly reports on mortgage rates and new jobless claims will be released on schedule. U.S. Financial Markets will be closed on Wednesday in observance of Independence Day.

3 Tips For Getting The Most Out Of Your Time House Hunting

mortgage-rates-this-weekIn the ideal home-buying scenario, you’d have plenty of time to find the perfect home. However, this is not always possible. Maybe you are relocating for a job and have to buy a house from across the country. If this is the case, you might have to limit the time that you spend house hunting.

Here are some tips to help you make your search as productive as possible.

#1 Get A Mortgage Pre-Approval

Before attending open houses and searching for a home, you should get pre-approved for a mortgage. Getting pre-approved for a mortgage will help you identify the exact price range that you should be shopping for. It will also let home sellers know that you are a serious buyer. If you are competing with other buyers, a seller will be more likely to take your offer seriously if they know that you can afford the home.

Sometimes you’ll hear the terms pre-qualification and pre-approval thrown around interchangeably. However, these two terms are very different. A pre-approval is much more valuable when it comes to buying a home. Although you will have to provide a lot more information for a full pre-approval, this qualification will provide you with a specific loan amount that you are approved for. A pre-qualification is just an estimate of the amount that you can afford based on your income and other factors. It is not as personalized or customized for your specific situation as a pre-approval.

#2 Find A Good Real Estate Agent

Find a good real estate agent who is knowledgeable of the area that you want to buy in. Ideally, they have lived in the area for a long time and know the community. A good local agent can bring invaluable knowledge to the table about the city. They should be familiar with the homes in the area. They might even know about homes that aren’t on the market yet but will be soon. This knowledge can be invaluable when you are in a time crunch and want to get the most out of your house hunting time.

#3 Make A List Of Your Must-have Amenities

You don’t want to spend time looking at homes that won’t meet your needs. There are probably some things that you’d like to have in a house, as well as things that you must have. So, if you’re in a time crunch, the first thing you should do is make a must-have list. Make a second list of things that you’d like to have but that are not required. Don’t bother looking at homes that lack the qualities on your must-have list.

First things first, contact your trusted home loan professional and get your pre-approval started today!