Author Archives: joeglez

What’s Ahead For Mortgage Rates This Week – July 31, 2023

Posted on by

What's Ahead For Mortgage Rates This Week - July 31, 2023Last week’s economic reporting included readings on the Fed’s interest rate decision, S&P Case-Shiller’s Home Price Indices, sales of new homes, and pending home sales. Weekly readings on mortgage rates and jobless claims were also released.

The Federal Reserve raised its target interest rate range to 5.25 to 5.50 percent; this announcement signaled that rates for home loans and unsecured credit would also rise.

S&P Case-Shiller Reports Slower Home Price Growth  in May

Average  U.S. home prices fell in May according to the S&P Case-Shiller 20-City Home Price Index. Home prices were -1.70 percent lower as compared to an expected dip of -1.90 percent and April’s reading of -1.70 percent. The top three cities reporting the highest pace of year-over-year home price growth were Chicago, Illinois with home price growth of 4.60 percent; Cleveland Ohio, where home prices grew by 3.90 percent, and New York City, where home prices rose by 3.50 percent.

Sales of previously owned homes fell due to high demand and slim supplies of homes for sale. Homeowners stayed on the sidelines while waiting for lower mortgage rates, but prospective buyers didn’t seem discouraged by rising rates, which recently approached 7 percent.

Craig J. Lazzara, managing director at S&P Case-Shiller Indices, said that the rally in U.S. home prices continued in May.

New home sales fell to a seasonally adjusted annual pace of 697,000 sales in June. Analysts estimated a pace of 725,000 sales and May’s reading showed a pace of 715,000 new home sales. Higher home prices in popular metro areas and rising mortgage rates created affordability challenges for first-time and moderate-income home buyers.

In related news, the FHFA Home Price Index reported that home price growth for homes owned and sold by Fannie Mae and Freddie Mac rose by 0.70 percent in May and was unchanged from April’s pace of home price growth. The FHFA reported year-over-year home price growth of 2.80 percent.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher mortgage rates for the fourth consecutive week as the average rate for 30-year fixed-rate mortgages rose by three basis points to 6.81 percent. The average rate for 15-year fixed-rate mortgages was five basis points higher at 6.11 percent.

First-time jobless claims fell to 221,000 claims as compared to the previous week’s reading of 228,000 claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending,  public and private-sector payrolls, and the national unemployment rate. Weekly readings on mortgage rates and first-time jobless claims will also be released.

Selling a House “As-Is”: Pros, Cons, and Considerations

Posted on by

Selling a House

When it comes to selling a house, homeowners have different options available to them. One approach that some sellers consider is selling their house “as-is.” This means selling the property in its current condition without making any repairs or renovations.

Pros of Selling a House “As-Is”

Convenience: One of the primary advantages of selling a house as-is is the convenience it offers. By selling the property in its current condition, you can avoid the time, effort, and cost associated with repairs and renovations.

Cost Savings: Selling a house as-is can potentially save you money. When you sell a property in need of repairs, you can avoid the expense of hiring contractors or professionals to fix issues. Additionally, you won’t have to invest in materials or deal with unexpected expenses that may arise during the renovation process.

Faster Sale: Properties listed as-is often attract buyers who are specifically looking for fixer-uppers or investment opportunities. Consequently, selling as-is can expedite the selling process and lead to a quicker sale compared to selling a house that needs repairs.

Cons of Selling a House “As-Is”

Lower Sale Price: While selling a house as-is can speed up the selling process, it often comes at the expense of a lower sale price. Buyers may discount their offers to account for the repairs they’ll need to undertake after purchasing the property. Keep in mind, you might not receive the full market value for your home.

Limited Buyer Pool: Selling a house as-is typically appeals to a narrower pool of buyers. Many potential buyers may prefer move-in-ready homes, which means you might have fewer interested parties.

Disclosure Obligations: Selling a house as-is doesn’t absolve you of disclosing known defects or issues with the property. Failing to disclose material defects can lead to legal complications and potential lawsuits.

Considerations for Selling a House “As-Is”

Evaluate the Property’s Condition: Assess the extent of repairs needed and the overall condition of the house. Determine if selling as-is is a viable option or if minor repairs could help attract a wider range of buyers and potentially increase the sale price.

Consult with Real Estate Professionals: Engage with experienced real estate agents or property consultants who can provide insight into local market conditions, potential buyers, and pricing strategies. Their expertise can help you make an informed decision about selling your house as-is.

Weigh Financial Implications: Consider the financial implications of selling as-is versus investing in repairs. Calculate potential repair costs, estimated sale price, and the impact on your net proceeds. Determine if the convenience of selling as-is outweighs the potential financial trade-offs.

Selling a house as-is can be a viable option for homeowners looking for convenience and cost savings. However, it’s crucial to carefully consider the potential drawbacks, such as a lower sale price and limited buyer pool. Assessing the property’s condition, seeking professional advice, and evaluating the financial implications are essential steps in deciding whether selling a house as-is is the right choice for you.

Financial Considerations When Buying a Home

Posted on by

Financial Considerations When Buying a HomePurchasing a home is one of the most significant financial decisions many individuals make in their lifetime. It involves a substantial investment of money and requires careful consideration to ensure long-term financial stability. To navigate the complexities of the home-buying process, it’s essential to be well-informed about the various financial considerations involved. In this blog post, we will explore key factors to consider when buying a home to help you make informed decisions and achieve financial success.

Establishing a Realistic Budget:

Before diving into the home-buying process, it’s crucial to establish a realistic budget based on your financial situation. Consider factors such as your income, existing debts, credit score, and other financial obligations.

Saving for a Down Payment:

Saving for a down payment is a significant aspect of buying a home. Lenders typically require a down payment, which is a percentage of the home’s purchase price. Saving for a substantial down payment not only reduces the overall loan amount but also helps secure better mortgage terms, such as lower interest rates. Aim for a down payment of at least 20% to avoid private mortgage insurance (PMI) and decrease your monthly payments.

Understanding Mortgage Options:

Explore different mortgage options to find the one that suits your financial goals and circumstances. Common types of mortgages include fixed-rate mortgages, adjustable-rate mortgages (ARMs), and government-insured loans. It’s essential to carefully evaluate interest rates, terms, and potential risks associated with each type before deciding.

Considering Closing Costs and Additional Fees:

In addition to the down payment, be prepared for closing costs and other fees associated with purchasing a home. Closing costs typically include expenses like appraisal fees, loan origination fees, title insurance, and attorney fees.

Evaluating Long-Term Affordability:

While you may be able to afford the monthly mortgage payment currently, it’s essential to consider long-term affordability. Consider potential changes in your income, lifestyle, and expenses. Ensure that you have a realistic understanding of how your finances may evolve over time, accounting for future goals like starting a family, education expenses, and retirement planning.

Assessing Property Taxes and Insurance:

Property taxes and homeowners’ insurance are ongoing expenses that come with homeownership. Research the property tax rates in the area where you plan to buy a home and include them in your budget.

Maintaining an Emergency Fund:

Owning a home comes with unforeseen expenses, such as repairs, maintenance, and unexpected emergencies. Aim to have three to six months’ worth of living expenses set aside in an easily accessible savings account.

Getting Pre-Approved for a Mortgage:

Before house hunting, consider getting pre-approved for a mortgage. This process involves a lender reviewing your financial situation and creditworthiness to determine the amount they are willing to lend you. Pre-approval provides a clear understanding of your budget, strengthens your bargaining position with sellers, and speeds up the closing process once you find your dream home.

When buying a home, making well-informed financial decisions is crucial for your long-term financial well-being. Remember to evaluate long-term affordability and maintain a financial cushion to handle unexpected costs. By following these financial considerations, you’ll be better prepared to embark on your homeownership journey and achieve financial success in the long run.

What is a Home Warranty?

Posted on by

What is a Home WarrantyA home warranty is a type of service contract that provides coverage for repairs or replacements of major systems and appliances in a home. It typically covers items such as heating and cooling systems, electrical systems, plumbing, water heaters, and kitchen appliances.

Home warranties are purchased by homeowners to protect against unexpected expenses for repairs or replacements that may occur due to normal wear and tear.

When a covered item breaks down, the homeowner can contact the home warranty company, which will send a qualified technician to diagnose and repair the issue. If the item cannot be repaired, the home warranty company will typically replace it with a similar model.

It is important to note that home warranties are not the same as homeowners’ insurance. Homeowners insurance covers damage to the structure of the home and personal belongings due to unexpected events such as fires, storms, or theft. Home warranties, on the other hand, cover the repair or replacement of items due to normal wear and tear.

What’s generally included in a home warranty?

The items that are typically included in a home warranty can vary depending on the specific plan and provider, but they generally cover major systems and appliances in a home that are subject to normal wear and tear. Some of the most common items included in a home warranty are:

Heating and Cooling Systems – This typically includes coverage for furnaces, heat pumps, air conditioning units, and ductwork.

Electrical Systems – Issues with your home’s electrical system can be expensive and dangerous. Having these covered makes sure that your home stays safe. This includes coverage for the main electrical panel and wiring throughout the home.

Plumbing Systems – Just like electrical repairs, plumbing issues often require a professional and can cause major problems if not fixed right away. Having these things covered by a home warranty will cut repair costs and includes coverage for the water heater, pipes, and drains.

Kitchen Appliances – This includes coverage for the refrigerator, oven, dishwasher, and built-in microwave.

Laundry Appliances – This includes coverage for the washer and dryer.

Garage Door Opener – This includes coverage for the garage door opener and related components.

It’s important to note that while these items are typically included, each home warranty plan is different, so it’s important to read the details of the plan to understand what is and is not covered. Additionally, there may be optional add-ons available for specific items or systems that are not covered under the basic plan.

Critical Tips To Consider When Hiring A Home Contractor

Posted on by

Critical Tips To Consider When Hiring A Home ContractorHiring a home contractor can be a daunting task, as the success of your home renovation or construction project depends largely on the competence of the contractor you choose. Here are some critical tips to consider when hiring a home contractor:

Research: Do thorough research on potential contractors before hiring them. Check their credentials, licenses, certifications, and experience. Also, look for reviews and testimonials from past clients to get an idea of their work quality.

Get multiple quotes: Request quotes from multiple contractors and compare them. This will give you an idea of the average cost of the project and help you choose the contractor that offers the best value for your money.

Check for insurance: Ensure that the contractor has liability and worker’s compensation insurance. This will protect you from liability in case of accidents or injuries on the job site.

Define the scope of work: Clearly define the scope of work and project specifications in writing. This will help avoid misunderstandings or disagreements later on.

Set a timeline: Establish a realistic timeline for the project and make sure the contractor agrees to it. This will ensure that the project is completed on time and within budget.

Communication: Effective communication is crucial when working with a contractor. Make sure that the contractor is responsive and easy to communicate with, and that you are comfortable asking questions and expressing concerns.

Contract: Sign a contract that outlines all the terms and conditions of the project, including payment schedules, warranties, and dispute resolution procedures.

By following these critical tips, you can hire a reliable and competent home contractor who can deliver quality work on time and within budget. When contacting previous clients, be sure to ask specific questions about their experience, such as whether they completed the project on time, if they stayed within budget, and if they were responsive to any concerns or issues that arose during the project. This information can help you make an informed decision when choosing a contractor and give you peace of mind knowing that you have hired a competent and reliable professional. 

Why You Should Consider a Home Energy Audit

Posted on by

Why You Should Consider a Home Energy AuditIn today’s environmentally conscious world, finding ways to save on energy costs has become increasingly important. One effective method to achieve both goals is by conducting a home energy audit. A home energy audit is a comprehensive assessment of your home’s energy efficiency and helps identify areas where energy is being wasted.

Identify Energy Inefficiencies: A home energy audit provides a detailed analysis of your home’s energy consumption patterns. Certified auditors use specialized tools and techniques to evaluate various aspects of your property, including insulation, HVAC systems, appliances, lighting, and more.

Save on Energy Costs: Identifying energy inefficiencies through a home energy audit allows you to take targeted actions to reduce your energy consumption.

Enhance Comfort and Indoor Air Quality: A home energy audit not only helps you save on energy costs but also improves the overall comfort and indoor air quality of your living space.

Contribute to Environmental Conservation: Reducing energy consumption through a home energy audit has a positive impact on the environment. By minimizing energy waste, you can help lower greenhouse gas emissions associated with electricity generation.

Access to Incentives and Rebates: Many utility companies, government agencies, and environmental organizations offer incentives and rebates for energy-saving upgrades. By conducting a home energy audit, you gain valuable information to take advantage of these programs.

A home energy audit provides valuable insights into your home’s energy performance, allowing you to identify areas for improvement and make informed decisions to enhance energy efficiency. By conducting a comprehensive assessment, you can save on energy costs, improve comfort and indoor air quality, contribute to environmental conservation, and access incentives and rebates. 

It’s important to prioritize the recommendations based on your budget and potential energy savings. You can also reach out to a professional contractor or energy auditor for assistance in implementing the recommended upgrades. By addressing the issues identified during your home energy audit, you can improve the energy efficiency of your home and save money on utility bills. Consider a home energy audit today and take the first step toward a greener, more energy-conscious lifestyle.

Understanding Assumable Mortgage Loans

Posted on by

Understanding Assumable Mortgage LoansMortgage loans are an essential aspect of financing the purchase of a property. Among the various types of mortgages available, one option that may be advantageous for both buyers and sellers is an assumable mortgage loan.

An assumable mortgage loan is a type of home loan agreement that allows a homebuyer to assume the existing mortgage of the seller when purchasing a property. In other words, the buyer takes over the seller’s mortgage terms and conditions, including the interest rate, repayment schedule, and remaining balance.

Benefits of an Assumable Mortgage Loan:

Favorable Terms: Assumable mortgages often carry lower interest rates than current market rates. By assuming an existing mortgage, a buyer may secure more favorable terms compared to obtaining a new loan, potentially resulting in significant savings over the long term.

Reduced Closing Costs: Since an assumable mortgage involves taking over an existing loan, the buyer can avoid certain closing costs associated with originating a new mortgage, such as loan application fees, appraisal costs, and title insurance premiums.

Streamlined Approval Process: Assuming a mortgage can simplify the home buying process as the buyer bypasses the extensive underwriting process typically required for a new loan. This can save time and effort, especially if the buyer’s financial situation is not ideal for securing a traditional mortgage.

Considerations and Limitations:

Lender Approval: While assumable mortgages can offer advantages, it’s important to note that not all mortgages are assumable. The terms and conditions of the original mortgage agreement, as well as the lender’s policies, will dictate whether assumption is allowed. Obtaining approval from the lender is a crucial step in the process.

Qualifying Criteria: The buyer assuming the mortgage must still meet the lender’s qualifying criteria. The lender will assess the buyer’s creditworthiness, income stability, and other relevant factors to ensure they can meet the financial obligations associated with the mortgage.

Liability for the Seller: Although the buyer assumes the mortgage, the seller may still remain partially liable for the loan. Depending on the specific terms of the agreement, the seller may be held responsible if the buyer defaults on the loan, potentially impacting their creditworthiness.

The Assumption Process: Assuming a mortgage typically involves several steps:

Identify Assumable Mortgages: Buyers should inquire whether the seller’s mortgage is assumable and review the terms and conditions outlined in the original mortgage agreement.

Obtain Lender Approval: The buyer must apply with the lender to assume the mortgage. This involves submitting financial documentation, undergoing a credit check, and meeting the lender’s criteria.

Execute an Assumption Agreement: Once approved, the buyer, seller, and lender enter into an assumption agreement, detailing the terms and conditions of the transfer.

Closing and Transfer: The buyer assumes the mortgage during the closing process, which involves transferring ownership of the property and assuming responsibility for the mortgage payments.

It’s important to note that assuming a mortgage can be a complex process and may not be the best option for every buyer. Buyers should carefully review the terms of the mortgage and assess the risks before agreeing to assume the loan. Additionally, buyers may want to work with a real estate agent or attorney to help navigate the process.

What’s Ahead For Mortgage Rates This Week – July 17, 2023

Posted on by

What's Ahead For Mortgage Rates This Week - July 17, 2023Last week’s economic reporting included readings on month-to-month and year-over-year inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also published.

Month-to-Month Inflation Rises as Year-Over-Year Inflation Slows

The Consumer Price Index for June rose 0.20 percent in June as compared to May’s reading of 0.10 percent growth and expectations of 0.30 percent month-to-month growth. The core CPI reading, which excludes volatile food and fuel sectors, fell to 0.20 percent growth in June as compared to May’s month-to-month reading of 0.40 percent growth.

The year-over-year reading for the Consumer Price Index in June slowed to 3.00 percent growth as compared to May’s reading of 4.00 percent and analysts’ expected reading of 3.10 percent year-over-year growth.

The year-over-year reading for the Core Consumer Price Index showed 4.80 percent growth; analysts expected year-over-year inflationary growth of 5.00 percent. May’s year-over-year inflation reading showed 5.30 percent growth. Year-over-year readings show overall inflation trends without month-to-month volatility.

Rising interest rates did not appear to impact consumers’ enthusiasm. July’s preliminary index reading of 72.60 for the Consumer Sentiment Index was the highest reading published since September 2021. Analysts expected an index reading of 65.50 as compared to June’s reading of 64.40.

Mortgage Rates Nearing 7 Percent

Average mortgage rates rose last week and approached 7.00 percent for 30-year fixed-rate mortgages according to Freddie Mac’s weekly Primary Mortgage Market Survey.  The average rate for 30-year fixed-rate mortgages rose by 15 basis points to 6.96 percent. The average rate for 15-year fixed-rate mortgages rose six basis points to  6.30 percent. July 13 jobless claims will be published this week.

What’s Ahead

This week’s scheduled economic reporting includes readings on home builder confidence in single-family housing market conditions, and government reporting on housing starts and retail sales. The National Association of Realtors® will release its monthly report on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims are also expected.   

Insufficient Property Appraisal What to Do When the Appraisal Falls Short

Posted on by

Insufficient Property Appraisal What to Do When the Appraisal Falls ShortWhen buying or selling a property, one crucial step in the process is obtaining an appraisal to determine its value. Appraisals provide an objective assessment of a property’s worth, influencing important decisions such as mortgage approvals, negotiations, and even insurance premiums.

However, there are instances when the appraisal falls short, causing challenges and uncertainties for both buyers and sellers. In this blog post, we will explore what to do when faced with an insufficient property appraisal and provide some practical steps to navigate this situation.

Understand the Appraisal Process:

Appraisals are typically conducted by licensed professionals who evaluate various factors, such as the property’s condition, location, comparable sales, and market trends. Appraisers use these factors to determine an accurate value for the property.

Review the Appraisal Report:

When you receive the appraisal report and find it insufficient, take the time to thoroughly review it. Look for any errors or discrepancies that may have influenced the final value. Understanding the appraisal’s weaknesses will help you determine your next steps.

Communicate with the Appraiser:

If you spot errors or discrepancies in the appraisal report, it’s crucial to reach out to the appraiser to discuss your concerns. It’s possible that the appraiser overlooked certain aspects or made mistakes that can be rectified through communication.

Gather Additional Evidence:

If you believe the appraisal is still inaccurate after discussing it with the appraiser, gather additional evidence to support your claim. This evidence may include recent comparable sales, property improvements, or any unique features that were overlooked in the initial appraisal. Presenting a compelling case with strong supporting data increases the chances of obtaining a revised appraisal.

Request a Reappraisal:

In some cases, when the appraisal falls significantly short, you can request a reappraisal from the lender. This request should be accompanied by the additional evidence you have gathered. Some lenders may consider a second appraisal if you can demonstrate valid reasons for your request. However, note that not all lenders will agree to a reappraisal, and their policies may vary.

Renegotiate or Seek Alternative Financing:

If a reappraisal is not an option or doesn’t yield satisfactory results, you may need to consider renegotiating the terms of the transaction. Discuss the situation with the other party involved, whether it’s the buyer or seller, and explore alternatives such as adjusting the purchase price or exploring different financing options.

While an insufficient property appraisal can be frustrating and present challenges, it’s important to approach the situation calmly and rationally. Review the appraisal report, communicate with the appraiser, gather additional evidence, and explore options like reappraisal or renegotiation. By taking proactive steps and maintaining open lines of communication, you can navigate through the process and work towards a satisfactory resolution. Remember, real estate transactions often involve multiple parties, and finding a mutually beneficial solution is key to moving forward successfully.

Smart Home Upgrades That Save Energy and Money

Posted on by

Smart Home UpgradesIn an era where environmental consciousness and cost savings are top priorities for homeowners, smart home technology has emerged as a game-changer. With the ability to automate and optimize various aspects of your home, smart home upgrades offer numerous benefits, including energy efficiency and reduced utility bills.

Smart Thermostats

One of the most effective ways to reduce energy consumption and save money is by installing a smart thermostat. Traditional thermostats often result in excessive heating or cooling, leading to wasted energy and higher utility bills. Smart thermostats, on the other hand, learn your preferences, monitor your daily routine, and adjust the temperature accordingly.

Energy Monitoring Systems

Understanding how much energy your household consumes is the first step towards reducing waste and saving money. Energy monitoring systems, such as smart plugs and smart meters, provide real-time data on your electricity usage for individual appliances or the entire home.

By identifying energy-hungry devices and monitoring their usage patterns, you can pinpoint areas of improvement and make necessary adjustments

Smart Lighting

Lighting accounts for a significant portion of a household’s energy consumption. Upgrading to smart lighting systems, such as LED bulbs and smart switches, can drastically reduce your energy usage and extend the lifespan of your bulbs.

Smart Power Strips

Many electronic devices continue to consume energy even when they are turned off or in standby mode. Smart power strips combat this “vampire power” by cutting off power to connected devices when they are not in use. Equipped with built-in timers or occupancy sensors, these power strips can detect when devices are idle or the room is vacant and shut down power accordingly.

Water-saving Devices

Reducing water usage not only conserves a precious resource but also lowers your utility bills. Smart irrigation systems can optimize your outdoor watering schedule based on weather conditions, moisture levels, and plant requirements. Leak detection sensors can alert you to potential leaks and water waste, preventing costly damage and excessive water usage. Smart shower heads and faucets can regulate water flow and provide real-time feedback on consumption, encouraging water conservation.

Embracing smart home upgrades presents an opportunity to save energy, reduce utility bills, and make your home more sustainable. By leveraging technologies such as smart thermostats, energy monitoring systems, smart lighting, smart power strips, and water-saving devices, you can contribute to a greener future as well as enjoy the added benefits of convenience and control over your living space. Homeowners should take advantage of these upgrades to make their homes smarter, greener, and more cost-effective.