Author Archives: joeglez

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

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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!

Making Sure You Are Ready To Take On A Mortgage

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Making Sure You Are Ready To Take On A MortgageThere is so much to know when it comes to homeownership that even wading into all of the information can seem overwhelming, but if there’s one thing you need when the time comes to purchasing a home, it’s to be prepared. Here are a few ways that you can ensure you’re ready for what a mortgage entails so that buying your dream home will be a positive experience you won’t regret.

Consider All Of Your Options

Instead of accepting the mortgage that your bank is offering you, it’s very important to do some research and determine what some of the best options out there are for you. While it’s entirely possible that the option pushed forward by your bank will work out, in the days of so much information online it’s silly to go into your biggest purchase blindfolded. Take some time out and read about the products available so that, when the time comes, you can make an educated decision.

Know Your Credit History

Lenders will most definitely be digging through your finances and credit history for anything that might make them leery of your financial state, but you’ll want to be aware of your own standing so that you can be prepared for what this might entail. By getting your credit report and score before going through the process of acquiring a mortgage, you can fix any errors that might be on your credit report so that you’ll be prepared for the result when the time comes for pre-approval.

Plan For The Future Possibilities

If the mortgage amount you are planning on paying seems feasible on a month-to-month basis, it’s certainly a good place to start, but if you not on a fixed rate mortgage, you will need to consider the ever-fluctuating state of interest rates, and you need to prepare for this reality at the same time. It’s important to base the amount you’ll be spending each month off of the income and expenditures that you’ve worked out in a budget, but you’ll want to add in some wiggle room so that a jump in the rates won’t sink your dream of home ownership.

There are many things to be aware of when starting the process of purchasing a home, but delving into your credit history and doing the necessary background research can make for a smoother experience. If you’re looking for advice on purchasing a home, contact your local mortgage professional for more information.

What’s Ahead For Mortgage Rates This Week – February 14, 2022

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What's Ahead For Mortgage Rates This Week - February 14, 2022Last week’s economic reporting included readings on inflation and the University of Michigan’s preliminary February reporting on consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Rises as Fed Considers Raising Key Rate

The government’s Consumer Price Index for January reported that month-to-month inflation rose by 0.60 percent as compared to an expected increase of 0.40 percent which was based on December’s month-to-month increase of 0.50 percent.  Year-over-year inflation rose to a rate of 7.50 percent, which was the highest inflation rate in 40 years. Core inflation, which excludes volatile food and energy sectors, also rose 0.60 percent in January from December’s reading of 5.50 percent.

Analysts said that the Federal Reserve will likely raise its key federal funds rate range to help slow inflation, but drastic dips in the inflation rate aren’t expected. While the Fed predicted inflation to ease in a statement made last December, inflation has only increased. The Fed’s strategy of raising interest rates would ease high consumer demand and help slow rapidly rising prices for housing, goods, and services.

Mortgage Rates Rise, Jobless Claims and Consumer Sentiment Fall

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by 14 basis points to 3.69 percent. The average rate for 15-year fixed-rate mortgages rose by 16 basis points to 2.93 percent. Rates for 5/1 adjustable-rate mortgages averaged 2.80 percent and nine basis points higher. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for  5/1 adjustable-rate mortgages.

223,000 new jobless claims were filed last week as compared to the prior week’s reading of 239,000 first-time claims filed. No information for continuing jobless claims was released last week.

The University of Michigan reported a preliminary index reading of 61.7 for January’s Consumer Sentiment Index. This was the lowest consumer sentiment reading in ten years and was attributed to consumer concerns over rising inflation.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing market conditions, Commerce Department readings on building permits issued, and housing starts. Data on sales of pre-owned homes will be released along with weekly reporting on mortgage rates and jobless claims.

How to Calculate Your True Cost of Living and Determine How Much Mortgage You Can Afford

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How to Calculate Your True Cost of Living and Determine How Much Mortgage You Can AffordA monthly mortgage can seem like enough of a financial responsibility on its own, but there are many factors involved in home ownership that affect its fiscal feasibility. If you’re in the market for a house and are wondering how your income will stack up against the rest of your expenses, here’s how to determine a home cost that’s reasonable for you.

Determine Your Down Payment

Before you start with anything else, you’ll want to determine the amount of money you can put down so you can estimate your monthly payments. The traditional amount for a down payment is 20% of the home’s purchase price, so if you don’t have anything close to this amount it might be worth waiting a little longer so you can minimize your payments and the amount of interest or mortgage insurance you’ll be paying in the long run. Each person’s situation is different, and there may be programs available with less than 20% down. This is an excellent question to pose to your trusted mortgage advisor.

Calculate Your Monthly Budget

If your mortgage cost already seems high, it will definitely be worth carefully calculating your monthly expenditures. Instead of a wild guess, take the time to sit down and calculate what your costs are including food, utilities, transportation and any other monthly necessities. Once you do this, it’s also very important to add any debt repayments you’re making to the mix. The total amount of your estimated mortgage costs, debt payments and living expenses should give you a pretty good sense of if your mortgage is viable in the long term.

Don’t Forget About The Extras

When it comes to purchasing a home, many people envision that they will be eating and sleeping their new home so don’t pay attention to all of the additional costs that can arise with living life. A new home is certainly an exciting, worthwhile financial venture, but ensure you’re realistic about what it entails. If you’re planning to go back to school or have children in the future, you’ll want to add a little bit of extra cushion in your budget so that you don’t have to put your other dreams on hold for the sake of your ideal home.

It can be very exciting to find a home you feel good about, but it’s important before making an offer to realize the amount of house you can afford so you don’t find yourself in a hole down the road. If you’re currently on the market for a new home, contact your trusted mortgage professional for a personal consultation.

An Overview Of Electronic And Smart Locks

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AAn Overview Of Electronic And Smart Lockslmost everyone has been locked out of their home before. If you do not have a hidden key or someone else with a key, it can be stressful to wait for a locksmith to come and open the door. Fortunately, there are ways homeowners can address this issue, and one of the options is to get a smart lock or an electronic lock instead. 

How Smart Locks And Electronic Locks Work

Every smart lock is different; however, they have a few themes. Basic electronic locks have a combination that someone has to enter before the door unlocks. Other electronic locks use fingerprints, RFID, or Bluetooth recognition to allow someone to enter. Many smart locks also allow the owner to give out digital keys that allow friends, children, and other people to come and go. The combinations are stored and act as a digital log of who has entered the home. 

The Benefits Of Using Smart Locks And Electronic Locks

There are a number of benefits that come with using smart and electronic locks for homes. First, homeowners never have to worry about getting locked out of the house, as they don’t have to worry about losing manual keys. Second, homeowners can keep track of people, including their children, as they come and go. Finally, smart locks do not necessarily have to be rekeyed or replaced. Homeowners can change the combination when they feel it is nessesary..

Choosing The Right Electronic Lock

Even though smart locks and electronic locks have a variety of benefits, it is important for homeowners to think carefully about which option is best for them. Homeowners need to make sure whatever lock they choose is compatible with their phone. They also need to select locks that have security measures in place that prevent people from cracking the code or getting through the keypad. Finally, take a look at how many combinations the lock can handle. Sometimes, homeowners like to assign people specific codes so they know exactly who is coming and going. Some locks can even be customized so that certain combinations only work on certain days. This can be helpful if there is a maid or tutor who comes from time to time. 

Which Home Equity Loan Is The Best Option?

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Which Home Equity Loan Is The Best Option?There are a number of significant advantages that come with homeownership, and one of the biggest advantages is the ability to take out a home equity loan. As homeowners pay off the mortgage, the amount of equity in the house increases. Homeowners can borrow against the equity in their house to fund other projects. For example, homeowners could borrow against home equity to complete a home renovation, pay medical expenses, or pay down student loans. The most common home equity loans include cash-out refinances, a traditional home equity loan, and a home equity line of credit. Which is the best option? 

A Cash-Out Refinance

The first option is called a cash-out refinance. Essentially, homeowners are taking out a loan for an amount that is greater than the current mortgage. Then, homeowners will keep the difference in the two loan values for their personal use. Homeowners essentially refinance the existing mortgage and extract additional equity. There is only one mortgage payment, and any interest on the new loan is tax-deductible. 

A Home Equity Loan

The next option is a traditional home equity loan. Homeowners borrow against the existing equity in the home, and homeowners create a second mortgage. There is a fixed interest rate on the second mortgage, and homeowners receive the money as a lump sum. It is not unusual for the interest rate on the second mortgage to be higher than the first mortgage.  Then, they have to pay off the second mortgage just like the first mortgage. 

A HELOC

Homeowners who are okay receiving the funds over time might be interested in a home equity line of credit, also known as a HELOC. The initial interest rate on a HELOC is often lower than the mortgage, but it can vary with time. Payments are often lower because homeowners only owe money if they actually use the line of credit. Interest is only charged on the outstanding balance.

Choose The Right Option

Homeowners need to understand the differences between these home equity loans to choose the best option for them. Some of them provide lump sums, some create multiple monthly payments, and some have more flexible payment terms. The features of each loan must be compared to the needs of the individual homeowner.

 

Analyzing The Closing Disclosure: What Everyone Must Know

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Analyzing The Closing Disclosure: What Everyone Must KnowIt is exciting to hear that an offer has been accepted, and many homeowners are ready to move into their new houses as quickly as possible. At the same time, homeowners must take the time to review all documents associated with the purchase. Purchasing a house is a major financial decision, and homeowners need to understand what their obligations are. That is where the closing disclosure is critical. What type of information is included in the closing disclosure, and what do homeowners need to know now?

The Closing Disclosure Includes Fees And Costs

First, homeowners need to take a look at the numbers included in the closing disclosure. Of course, the biggest number will be the purchase price. Homeowners will see the amount of money they put down, and they will see the total balance of the loan. 

Homeowners should also take a look at the monthly mortgage payment. Understand that this monthly payment may not be the same as the amount of money that is drafted out of the bank account every month. Often, banks withdraw money for real estate taxes and home insurance premiums, holding that money in escrow for the homeowner.

Homeowners also need to take a look at the interest rate. They need to understand whether the interest rate is fixed or variable.

Look At The Terms Of The Loan

Homeowners also need to look at the terms of the loan. They should understand how long it will take them to pay off the mortgage. They also need to understand the consequences of missing a monthly mortgage payment. They need to see whether there is an acceleration clause and whether there is a late fee tied to any late payments. Homeowners must also understand when the first mortgage payment is due. 

Talk To A Trained Professional About The Closing Disclosure

There is a lot of information in closing disclosures, it can be intimidating for someone who has not been through this process before. That is why all new homeowners need to work with a professional who can make sure they understand the terms of the mortgage. Homeowners must understand what they are agreeing to before they sign on the dotted line. 

 

What’s Ahead For Mortgage Rates This Week – February 7, 2022

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What's Ahead For Mortgage Rates This Week - February 7, 2022

Last week’s economic reports included readings on construction spending and labor-related reports on jobs and the national unemployment rate. Weekly data on mortgage rates and jobless claims were also published.

Residential Con

The Commerce Department reported overall construction spending rose by 1.30 percent in January, which was the largest increase since April of last year. Private residential construction spending fell by 0.30 percent in January; this was the sixth consecutive month for declining private-sector residential construction spending.struction Spending Falls in January

Analysts cited costly building materials, fewer available options for prospective buyers,  and higher mortgage rates as factors contributing to less construction spending. Homebuying traditionally slows during the winter months.

Mortgage Rates Little Changed, Jobless Claims Fall

Freddie Mac reported little change in average mortgage rates last week as the rate for 30-year fixed-rate mortgages remained unchanged at 3.55 percent. Rates for 15-year fixed-rate mortgages averaged 2.77 percent and three basis points lower than for the previous week. The average rate for 5/1 adjustable rate mortgages rose one basis point to 2.71 percent on average. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages,  0.70 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims were lower last week with 238,000 first-time claims filed as compared to the prior week’s reading of 261,000 first-time claims filed. Analysts predicted 245,000 new claims would be filed. Continuing jobless claims were also lower with 1.63 million ongoing claims filed as compared to the prior week’s reading of 1.67 million continuing jobless claims filed.

Labor Reports Show Slower Jobs Growth, Unemployment Rate Ticks Up

ADP Payrolls reported 301,000 fewer private-sector jobs open in January as compared to 776,000 private-sector jobs available in December. Analysts expected 200,000 private-sector job openings in January. The government’s Non-Farm Payrolls report showed 467,000 jobs added in January as compared to the expected reading of 150,000 jobs added and December’s reading of 510,000 public and private-sector jobs added. Hiring in December was higher than expected as analysts predicted less hiring due to the ongoing spread of the omicron variant of COVID-19.

The national unemployment rate rose to 4.00 percent in January as compared to December’s reading of 3.90 percent. Analysts predicted national unemployment to hold steady at 3.90 percent.  

 What’s Ahead

This week’s scheduled economic reports include readings on inflation and consumer sentiment along with weekly data on mortgage rates and jobless claims. 

How To Deal With An Appraisal Gap

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Three Tips To Get The Best Financing On Your Second Home PurchaseThe vast majority of people will need to go through a mortgage lender when purchasing a home. One of the last steps in the purchase process is the home appraisal. The lender wants to make sure they are not lending more money than the house is worth. If the appraisal value comes in above what the buyer is paying, then the buyer is happy because they might be getting a great deal. On the other hand, if the appraisal comes in below what the buyer is paying, this can be frustrating. What is the appraisal gap, and how does it work? 

Buyers Might Be Asked To Bring More Cash Or Pay PMI

In many situations, buyers will be asked to pay PMI if they are not putting 20 percent down. For example, if someone is buying a $250,000 house, they might be asked to put down $50,000 to avoid dealing with PMI.

Ultimately, if the lender is financing more than 80 percent of the loan’s value, PMI might be required. In the example above, if the house only appraises for $200,000, then the lender will only finance $160,000 before asking for PMI. Therefore, to get the lender down to $160,000, the buyer would have to bring another $40,000 to the closing table (for a total of $90,000 down) to avoid paying PMI. 

If the buyer is not willing to pay PMI or close the gap, the sale could fall through, leading to other ramifications.

Get An Accurate Valuation Before Making An Offer On A House

If there is an appraisal gap, it can be frustrating for a buyer who is asked to bring more cash to the table. Furthermore, if the sale falls through, the buyer could lose his or her earnest money. Depending on the market, earnest money could be tens of thousands of dollars. That is why it is important to get an accurate valuation of the house before making an offer. No matter how beautiful the house might seem, it is important not to overpay, as it increases the chances of dealing with an appraisal gap. If there is an appraisal gap, buyers need to carefully evaluate their options before they decide how to proceed. 

 

Three Tips To Get The Best Financing On Your Second Home Purchase

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Three Tips To Get The Best Financing On Your Second HomeAre you buying a property as your second home? Perhaps you are looking for a small cottage or apartment where you can escape to for your vacations, or maybe you want to have another home closer to your relatives?

Maybe you want to rent out your second property and make a steady income from your investment. Whatever the reason, a second piece of real estate can be a fantastic investment. However, sometimes getting a mortgage on your second home can present a challenge.

Generally, a mortgage lender will have tougher standards for vacation home — or second home — loans than primary home loans. This is because usually when you are buying a second home your finances will be stretched thinner and you will have less money to spare due to already paying a mortgage on your primary home.

This additional risk may mean that your second home mortgage can be more difficult to close and likely could carry a higher interest rate.

Here are three tips to keep in mind that will help you to get the best mortgage on your second property:

Build up a decent amount of savings.

Your mortgage lender will want to be able to see that you have a large amount of savings in reserve so that you will have enough to pay for the mortgage even if you were to lose your job or other income source.

Pay off any credit card or installment debt.

Many lenders will be hesitant to approve your second home mortgage if they see that you have a lot of debt on your credit card. They will want to see that you have a low debt to income ratio so that you will be able to pay back the loan.

Use your primary home as a resource.

If you have always made your payments on time and you are well on your way through paying off your first house, you may have equity to borrow against for some or all of your second home purchase.

These are just a few tips to keep in mind in order to make getting a mortgage for your second property as easy as possible.

To find out more about investing in a second home or vacation property, contact your trusted real estate professional today.