Category Archives: Mortgage Tips

Routine Maintenance Of Various Systems In Your Home

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Routine Maintenance Of Various Systems In Your HomeWhen you are a first-time homeowner, learning about your property can feel overwhelming. There are a number of systems in your home that require routine maintenance. Knowing when to have system serviced will help keep your home running smoothly. From the plumbing in your home, to the heating and cooling, understand that each system may need routine maintenance from time to time. 

Your Heating And Cooling System

To maintain comfortable air temperatures in your home, it’s important to keep your heating and cooling system up-to-date. If you have a whole home system, it should be serviced once before the heating season and once before the cooling season. When you get filters changed, and your system serviced, you are less likely to have to deal with emergency repairs. In addition, your HVAC system will run more efficiently.

When You Have A Septic System

Waste water leaves your home either through the town sewer system or through a septic tank. If you have a septic system on your property, you need to have the system serviced every other year. Check the records of your septic system to see when it was serviced previously.

Address Plumbing Issues

A leaky faucet is a localized problem, while discovering that all of the drains in your home are draining slowly is systemic. You need to repair small leaks to avoid wasting water in your home, while systemic problems must be addressed by a professional. If your drains aren’t working correctly, you may have a block in your main sewer line. Know where the main shut off valve is for the water coming in to your home in case of an emergency.

Electrical Needs In Your Home

Your home has an intricate electrical system that is controlled by an electrical panel usually located in your basement. When a circuit trips, you will need to reset the circuit breaker. If your home consistently has problems with a specific circuit, you’ll want to have the circuit checked by an electrician to see if it is overloaded.

It’s exciting to own a home for the first time. Once you understand the various systems in your home, it becomes easier to take care of your property. With good maintenance, you can help avoid emergency repairs to your home. Your heating and cooling will be more efficient, and you won’t run in to problems with your septic system if you have one. If there is something you don’t understand in your home, call a professional to get the problem looked at.

What’s Ahead For Mortgage Rates This Week – July 10, 2017

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Last week’s economic reports suggested that demand for homes is rising despite a jump in mortgage rates and rising home prices fueled by low inventories of homes for sale. Demand for homes rose by 1.40 percent as interest rates jumped after the 10-year Treasury rate rose by 10 basis points.

Construction spending was unchanged in May as compared to a -0.70 percent reading in April. Although builders express high confidence in housing market conditions, construction spending continued to lag behind spending levels based on builder confidence readings.

Home buyers received good news as major credit bureaus removed two key components from consumer credit reports. Fannie Mae and Freddie Mac raised the debt/to income ratio for home loans from 45 percent to 50 percent of gross income. This move was made to help would-be home buyers swamped with education debt. Doug Duncan, Fannie Mae’s chief economist, said that raising the debt to income ratio would not increase lender risk significantly.

Mortgage Rates, New Jobless Claims Rise

Mortgage rates rose last week. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose eight basis points to 3.96 percent; the average rate for a 15-year fixed rate mortgage rose five basis points to 3.22 percent. The average rate for a 5/1 adjustable rate mortgage rose four basis points to 3.21 percent. Discount points averaged 0.60 percent for a 30-year fixed rate mortgage and held steady at 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Jobless claims rose last week to 248,000 new claims from the prior week’s reading of 244,000 new claims, but this increase does not appear to be related to layoffs. Non-Farm Payrolls for June increased to 222,000 jobs added as compared to 180,000 jobs expected and May’s reading of 152,000 jobs added. Non-Farm Payrolls include public and private-sector jobs.

ADP Payrolls, which reports private-sector job growth, dipped in June to 158,000 jobs added as compared to 230,000 private-sector jobs added in June. Employers have repeatedly cited difficulty in finding skilled candidates for job openings, which makes it less likely that they’ll lay off employees who have needed skills. The national unemployment rate edged up in June with a reading of 4.40 percent against expectations of 4.30 percent and May’s reading of 4.30 percent.

What‘s Ahead

This week’s scheduled economic reports include testimony by Fed Chair Janet Yellen, readings on inflation and core inflation and retail sales. Mortgage rates and new jobless claims will be released along with a reading on consumer sentiment.

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

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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.

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

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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.

3 Things That Determine Your Mortgage Interest Rate

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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.

Thinking of Buying a Second Home? Assess Your Finances First

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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.

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

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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.

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

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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.

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

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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.

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!