Category Archives: Uncategorized

4 Important Questions To Ask Before Refinancing Your Mortgage

Posted on by

4 Important Questions To Ask Before Refinancing Your Mortgage

So you are thinking of refinancing? Well you are in luck because I have 4 quick and important questions you should ask yourself before doing so.

1) Do I Have Enough Equity To Get A Mortgage?

To get a conventional loan, you will usually need to have at least 20 percent equity. This means that your house will have to be worth at least $250,000 to get a $200,000 loan.

If you have less equity, you could end up having to pay for private mortgage insurance, which can easily add $100 or more to your monthly payment.

2) How’s My Credit?

Most lenders will look at your credit score as a part of determining whether or not to make you a loan. With conventional lenders, your rate will depend on your score and the higher it is, the lower your payment will be.

Other lenders, like the FHA and VA programs have an all or nothing rule. If you qualify, your rate won’t be based on your credit, but if your score is too low, you won’t be able to get any loan. Generally, 620 credit scores are the lowest that will qualify you for any loan.

3) What Do I Want To Accomplish?

Mortgages typically offer a choice as to their term. While the 30-year loan is the most popular, shorter term mortgages save you money since you pay less interest over their lives. They also get you out of debt sooner, at least as regards your house.

The drawback is that they carry higher payments since you pay off more principal every month. This can make them less affordable for some borrowers, generally, you’ll need to keep your current house and loan for anywhere from three to six years to break even on the costs of refinancing.

4) How’s My Current Loan?

If you have an adjustable rate mortgage, you may want to switch to a fixed rate mortgage simply for the additional security it offers you. On the other hand, if you are planning to move relatively soon, your current mortgage could be a better deal whehter it’s fixed- or adjustable-rate.

When trying to decide what to do, compare the cost of refinancing with what it would cost you in additional interest to hold on to your existing loan. While the breakdown is different for every borrower, generally, you’ll need to keep your current house and loan for anywhere from three to six years to break even on the costs of refinancing.

Deciding what to do with your mortgage can be complicated. Working with a qualified loan broker that can consider every angle with you can help you to make a better decision.

What’s Ahead For Mortgage Rates This Week – March 17th, 2014

Posted on by

What's Ahead For Mortgage Rates This Week March 17 2014Last week’s economic reports provided rays of light as compared to the recent slump in positive economic news.

Unusually severe winter weather conditions affected housing-related indicators as home builders and home buyers stayed on the sidelines.

With spring on the horizon, last week’s economic news showed welcome signs of growth.

Job Openings Up, New Jobless Claims Fall

Employment is a major factor in the decision to buy a home; would-be home buyers received a vote of confidence last week as January’s job openings increased by one million to 40 million as compared to December’s reading of 39 million job openings.

February’s reading will likely reflect a lull in activity due to winter weather conditions in much of the U.S.

Weekly jobless claims fell from 324,000 to 315,000. The Bureau of Labor Statistics reported expectations of 330,000 new jobless claims, so the latest report was good news.

Weekly reports are more volatile than monthly statistics; analysts typically track employment trends by reviewing rolling averages of several weeks’ new jobless claims data.

Mortgage Rates, Retail Sales Rise

Freddie Mac reported that average mortgage rates rose last week. The rate for a 30-year fixed rate mortgage rose by nine basis points to 4.37 percent. 15-year fixed rate mortgages had an average rate of 3.38 percent; this was an increase of six basis points

The average rate for a 5/1 adjustable rate mortgage was 3.09 percent, up from the previous week’s reading of 3.03 percent.

Discount points dipped from 0.70 to 0.60 percent for a 30-year fixed rate mortgage, were unchanged for 15-year and 5/1 adjustable rate mortgages at 0.60 and 0.40 percent.

Retail sales increased for the first time in three months according to the Commerce Department.

February retail sales surpassed expectations of a 0.20 percent gain and came in at 0.30 percent. January figures were downwardly adjusted to -0.60 percent. Retail sales exclusive of automotive sales were also higher at 0.30 percent than expectations of 0.10 percent.

The University of Michigan Consumer Sentiment index for mark was slightly lower at 79.9 than expectations of 80.8.

This was the lowest reading in four months, and was attributed in part to higher gas prices and consumer concerns over developments in Ukraine.

What’s Coming Up

This week’s economic news includes several housing-related reports.

The NAHB Home Builder Index for March, Housing Starts and Building Permits for February, and Existing Home Sales are set for release.

On Wednesday, the Fed’s FOMC statement will be released and Fed Chair Janet Yellen will give a press conference. The Fed is expected to continue its ongoing tapering of quantitative easing.

Leading economic indicators will be released along with the Weekly Jobless Claims report and Freddie Mac’s Primary Mortgage Market Survey.

Make Your Home Green This St. Patrick’s Day

Posted on by

Make Your Home Green This St. Patrick’s DayYou’re ready to make some changes to your home, but you want to be smart with your money and see a positive return on your investment.

While most homeowners don’t see that return until they sell their home, you can start seeing the benefits now through conserving energy by making your home green.

So in honor of the upcoming green holiday, stop searching for that pot of gold. Get inspired by St. Patrick’s Day to go green to cut your energy costs with the environmentally friendly renovations below. You’ll soon see the savings building up at the end of the rainbow.

  • Use Reclaimed Wood For Flooring

    • Instead of chopping down more green for your floors, reclaim wood that’s already been cut. While prices vary depending on they type of wood and how it was transformed, you can get a unique look and conversational piece that no one else will have.

    Just think, you could be standing on the Jackson’s old barn or a dismantled ship.

  • Green Your Latrine

    • Install a low-flow toilet, which according to www.ConsumerReports.org could save you money. Older toilets use about 3.5 gallons per flush, while newer low-flow toilets can use less than 1.3 gallons.

    If you don’t want to dish out the dough for a new toilet, then add pebbles or a sealed water bottle into the back tank to displace water and reduce consumption.

  • Install A Programmable Thermostat

    • This is something you can easily do on your own. Purchase a programmable thermostat at any home improvement store for around $50, shut off power to the room you’ll be replacing it in, unscrew your old one and connect the wires to the new one.

    Finished! Now you won’t have to worry about remembering to turn the air down at night and you’ll save money monthly.

  • Replace Old Kitchen Appliances

    • If your refrigerator or dishwasher is more than 10 years old, then consider replacing them with newer energy efficient models. Look for appliances that have Energy Star labels, as these machines have passed strict energy requirements.

    While this upgrade might cost you up front, you’ll quickly be saving energy and leaving more green in your bank account. Don’t get pinched this St. Patrick’s Day! Instead of just wearing green, surround yourself in it by making environmentally friendly renovations.

    By taking your home green, you’ll reduce your energy usage and see savings in your monthly bills!

    Legal Secrets For Homeowners

    Posted on by

    Legal Secrets For HomeownersBeing a homeowner is exciting. It can be financially rewarding, too. Unfortunately, it can also put you in a tough legal position.

    Between the complexities of owning a house, having to deal with lenders and the risk that comes from owning something valuable, keeping yourself legally protected is a good idea.

    Here Are Some Risks And Some Ways To Handle Them

    1. HOAs. If you own a condo, townhome or other property in an association, the homeowner association is extremely powerful. Not paying their dues, violating their rules, or doing just about anything else to end up on the wrong side of them could leave you subject to fines or even foreclosure.
    2. Neighbors. Whether or not good fences make for good neighbors, bad neighbors make for legal problems. Before dealing with your neighbors, research your community’s laws to see what options you have to deal with their unlicensed backyard dog breeding facility, teenager that steals your oranges or their tree that keeps breaking your window. It’s good to know what your responsibilities are as a neighbor, as well.
    3. Legal Paperwork. Part of having a house is having paperwork. Keeping it in a safe place where you can get to it when you need it is always a good idea.
    4. Being A Landlord. If you’re thinking about moving out and turning your house into a rental, take the time to see if you can really do it. Your mortgage, your homeowner association bylaws and your community’s laws can all either prevent you from renting out your house or can impose conditions or extra costs.
    5. Financial Scams. When you own a house, you’re at risk of being the victim of mortgage scams. If you also have strong credit, you could also be a target for identity thieves that want to steal your good name to steal money.
    6. Insurance. Your insurance does more than pay if something happens to your property. It can also give you liability protection that pays off if you harm someone at or away from your home. Given that you could lose your house in a suit, this protection is particularly valuable.

    Being a homeowner requires more than just mowing the lawn and painting on occasion. You will also want to pay careful attention to your legal exposure and manage it.

    A little bit of care could save you a lot of money and trouble down the line.

    Legal Secrets For Homeowners

    Posted on by

    Legal Secrets For HomeownersBeing a homeowner is exciting. It can be financially rewarding, too. Unfortunately, it can also put you in a tough legal position.

    Between the complexities of owning a house, having to deal with lenders and the risk that comes from owning something valuable, keeping yourself legally protected is a good idea.

    Here Are Some Risks And Some Ways To Handle Them

    1. HOAs. If you own a condo, townhome or other property in an association, the homeowner association is extremely powerful. Not paying their dues, violating their rules, or doing just about anything else to end up on the wrong side of them could leave you subject to fines or even foreclosure.
    2. Neighbors. Whether or not good fences make for good neighbors, bad neighbors make for legal problems. Before dealing with your neighbors, research your community’s laws to see what options you have to deal with their unlicensed backyard dog breeding facility, teenager that steals your oranges or their tree that keeps breaking your window. It’s good to know what your responsibilities are as a neighbor, as well.
    3. Legal Paperwork. Part of having a house is having paperwork. Keeping it in a safe place where you can get to it when you need it is always a good idea.
    4. Being A Landlord. If you’re thinking about moving out and turning your house into a rental, take the time to see if you can really do it. Your mortgage, your homeowner association bylaws and your community’s laws can all either prevent you from renting out your house or can impose conditions or extra costs.
    5. Financial Scams. When you own a house, you’re at risk of being the victim of mortgage scams. If you also have strong credit, you could also be a target for identity thieves that want to steal your good name to steal money.
    6. Insurance. Your insurance does more than pay if something happens to your property. It can also give you liability protection that pays off if you harm someone at or away from your home. Given that you could lose your house in a suit, this protection is particularly valuable.

    Being a homeowner requires more than just mowing the lawn and painting on occasion. You will also want to pay careful attention to your legal exposure and manage it.

    A little bit of care could save you a lot of money and trouble down the line.

    What Financial Preparations Should I Make Before Applying For A Mortgage?

    Posted on by

    What Financial Preparations Should I Make Before Applying For A Mortgage?Getting a mortgage isn’t an easy thing to do. Before a lender will put down tens of hundreds of thousands of dollars, it wants to know that the borrower can handle the loan so that it will get paid back. to this end, there are three things that a potential homebuyer can do to prepare for the mortgage approval process.

    Managing Debts

    For many homebuyers, managing their credit score is the biggest challenge. Mortgage lenders like buyers with strong credit. While getting strong credit usually isn’t something that can be done overnight, paying bills on time, all of the time can help to build a positive profile.

    Using as little credit as possible is also helpful, since high utilization of existing credit lines can harm a borrower’s score. Having less debt can also reduce monthly payments, making it easier to qualify for a larger mortgage.

    Managing Income

    Lenders look for two things when it comes to a borrower’s income:

    • Stable incomes are preferred, so being able to prove the income with a W-2 form or other documentation is usually required. Self-employed people will typically need to prove their income with their tax returns, so taking high write-offs can make it harder to qualify.
    • A borrower’s income should be significantly higher than his total monthly debt payments. Lenders divide a borrower’s monthly payments including their proposed mortgage into the gross monthly income. If the payments exceed a set percentage, the lender will shrink the mortgage until it considers the payment affordable.

    Managing Paperwork

    To qualify for a mortgage, borrowers typically need to submit a comprehensive file of supporting documentation. This can include tax returns, pay stubs and bank and investment account statements.

    Since lenders frequently want some historical data, it can be a good idea for people considering applying for a mortgage to start collecting documentation months before they actually begin the mortgage application process. That way, they will have everything the lender wants and when the lender needs it.

    How Do Mortgage Lenders Decide How Much You Can Borrow?

    Posted on by

    How Do Mortgage Lenders Decide How Much You Can Borrow?When you visit your lender to get a mortgage for your home, they will tell you the maximum amount that you are allowed to borrow. But how do they reach this total and what factors do they take into consideration?

    How do they determine that one borrower can take on a bigger mortgage than the next? This decision is made by mortgage companies by considering a wide range of factors, including your credit information, your salary and much more.

    Here Are Some Of The Common Ways That Lenders Determine How Much You Can Borrow:

    1. Percentage Of Gross Monthly Income

    Many lenders follow the rule that your monthly mortgage payment should never exceed 28% of your gross monthly income.

    This will ensure that you are not stretched too far with your mortgage payments and you will be more likely to be able to pay them off. Remember, your gross monthly income is the total amount of money that you have been paid, before deductions from social security, taxes, savings plans, child support, etc.

    2. Debt To Income Ratio

    Another formula that mortgage lenders use is the “Debt to Income” ratio, which refers to the percentage of your gross monthly income that is taken up by debts. This takes into account any other debts, such as credit cards and loans. Many lenders say that the total of your debts shouldn’t exceed 36% of your gross monthly income.

    The lender will look at all of the different types of debt you have and how well you have paid your bills over the years. By using one of these two formulas, your mortgage lender calculates the size of a mortgage that you can afford.

    Of course, there are many other factors that need to be considered, such as the term length of the loan, the size of your down payment and the interest rate.

    Remember that when factoring in your income, you usually have to have a stable job for at least two years in a row to be able to count your income. If you want to increase your chances, you could consider paying down your debts or buying with a co-borrower, which will improve your debt to income ratio.

    For more info about mortgages and your home, contact your mortgage professional.

    What’s Ahead For Mortgage Rates This Week – March 10, 2014

    Posted on by

    Whats Ahead For Mortgage Rates March 10 2014Last week’s economic news included construction spending and the CoreLogic Home Price Index for January.  Reports for February included ADP Employment, Non-Farm Payrolls and national unemployment data.

    The Federal Reserve’s Beige Book report and weekly reports on mortgage rates and new unemployment claims rounded out the week’s economic news.

    Highlights for last week include:

    Consumer spending gained 0.40 percent for January. The expected reading was 0.20 percent and the reading for December was flat.

    The Commerce Department reported that increased spending was less an indicator of consumer discretionary spending than an indicator of high utility costs caused by severe winter weather.

    Construction spending ticked upward in January with gain of 0.10 percent as compared to expectations of -0.40 percent and the prior month’s reading of 0.10 percent.

    January’s reading translates to a seasonally adjusted annual figure of $943.1 billion.  

    Federal Reserve: Winter Weather Obscures Accurate Economic Outlook

    According to the Fed’s Beige Book report, much of the U.S. economy was impacted by severe winter weather. The report is based on anecdotal information provided by business contacts and industry leaders throughout the 12 regions of the U.S. Federal Reserve System.

    Eight regions reported slow economic growth. Janet Yellen, chairwoman of the Fed, noted that winter weather was not expected to alter the Fed’s plan to continue reducing its asset purchases under its quantitative easing program. She also said that it may be months before accurate economic readings can be obtained in the aftermath of winter weather conditions.

    Freddie Mac’s Primary Mortgage Market Survey brought good news on Thursday as mortgage rates fell across the board and discount points were also lower in most cases.

    Average mortgage rates were down nine basis points for a 30-year fixed rate mortgage at 4.28 percent. The average rate for a 15-year fixed rate mortgage was 3.32 percent, a decrease of seven basis points.

    The rate for a 5/1 adjustable rate mortgage was 3.03 percent, down by two basis points from the prior week. Discount points were unchanged for 30-year fixed rate mortgages at 0.70 percent, but dropped to 0.50 percent for 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

    Employment Sector: Surprise Results

    The ADP payroll report showed a reading of 139,000 jobs added in February as compared to the prior month’s 127,000 jobs. ADP tracks private sector jobs. The BLS released its Non-Farm Payrolls report for February, which also surpassed expectations.

    175,000 jobs were added against expectations of 140,000 jobs added and January’s reading of 129,000 jobs added. The national unemployment rate rose to 6.70 percent against an expected drop to 6.50 percent from January’s reading of 6.60 percent. Once again, foul weather was seen as a major influence.

    What‘s Ahead This Week

    This week’s economic news schedule is relatively light with no releases set for today.

    Mortgage rates will be released by Freddie Mac on Thursday, along with weekly jobless claims. Retail sales and the University of Michigan consumer sentiment index round out next week’s schedule. 

    Don’t Make These Mistakes When You Want To Get A Home Loan

    Posted on by

    Don't Make These Mistakes When You Want To Get A Home LoanGetting a home loan can be a challenging process, and a finicky one. Qualifying can be challenging and once a buyer gets approved, it can be surprisingly easy to derail the process. Here are some mistakes to be avoided:

    Not Pre-Checking Credit

    Once a borrower makes his application for a mortgage, his fate is largely sealed. One way to increase the chance of qualifying for a home loan is for a borrower to check his credit before applying. That way, he can address any issues before they become problems for the lender.

    Changing Jobs

    Lenders judge borrowers on their ability to repay the loan. While a borrower’s credit rating is a good indicator of past performance, his current job and income provides some assurances that he can make his payments.

    Changing jobs or losing a job interrupts the income, and can make a lender decide not to lend to that borrower.

    Taking On New Debt

    New debt can derail a mortgage in two ways. First, adding debt can lower credit scores from the inquiry that comes as well as worry lenders. Second, new debt increases monthly payments, which lower the amount that a borrower can take out on a home loan due to the limitations imposed by the lender’s debt to income ratio.

    Fudging The Numbers

    Some borrowers might be tempted to tweak some of the numbers on their mortgage applications to make them more attractive to the lender, but lying on a mortgage application is a very bad idea.

    First, lenders investigate what gets entered and they’re likely to catch it. Second, it is also fraud and could leave the borrower subject to prosecution.

    In general, people considering a home loan should remember the Hippocratic Oath that doctors take. Its message — do no harm — is a good rule of thumb for applying for a mortgage.

    Applicants that keep their financial status the same throughout the process without making any changes are more likely to emerge at the end with their new home and their original loan.

    How To Add Color To Your Home Decor Without Going Overboard

    Posted on by

    How To Add Color To Your Home Décor Without Going OverboardThere is a fine line between adding color to your home décor and using too much color, so that you feel like you are living inside a rainbow.

    A little bit of color will add a lot of fun and interest to your home design, but too much color can be overwhelming. How can you achieve that perfect balance?

    Here Are Some Tips To Keep In Mind For Using Color In Your Home In A Subtle And Balanced Way:

    • Use Color Schemes

    Before choosing the colors for your décor, do a little bit of research into color schemes and how they work, so you know how to combine colors harmoniously.

    For example, you can choose a complementary color scheme with shades that are across each other on the color wheel – such as blue and orange or purple and yellow.

    Or you could try an analogous color scheme, which is a scheme where the colors are next to each other on the colour wheel – such as blue, green and purple.

    • Use The 60/30/10 Rule

    This is a rule that interior decorators use in order to use colors in a balanced way. Use the dominant color on 60% of the room, so that it will create a unifying look.

    Then, use the secondary color on 30% of the room in order to add visual interest. Lastly, use an accent color for 10% of the room to add that little extra.

    For example, you might use the dominant color for the walls and carpet, the secondary color for the upholstery and the accent color for some pillows, a wall hanging or a throw rug.

    • Try An Accent Wall

    Perhaps you have found a gorgeous paint color, but it’s just a little too bright and overwhelming to use for all four walls of a room.

    In this case, you can simply paint one wall with the color and the other walls with a neutral tone, so that you can enjoy the shade without it being overpowering.

    You could also simply use the color in one aspect of the room, such as the baseboards or the door jams.

    These are just a few of the ways that you can incorporate color into your home design, without it being overpowering. For more information, call your trusted mortgage professional.