Mortgage 101: This Is How Mortgage Refinancing Works, in Plain and Simple Terms

Mortgage 101: This Is How Mortgage Refinancing Works, in Plain and Simple TermsThere are so many unfamiliar terms involved in the real estate market that it can be easy to be confused by the jargon. However, some words are more important to learn than others if they can end up benefiting you in the long run. Whether or not you’ve heard of mortgage refinancing, here are the basics on what this may mean for your home and whether or not it’s an option you should consider.

Acquiring A Lower Rate

If you’re new to refinancing, the primary reason that most homeowners choose this option is to get a lower interest rate and pay less on the overall cost of their mortgage. Because a lower interest rate means that a higher amount is paid on the principal each month, you may be able to pay off your mortgage at a quicker rate. While this may sound ideal, you’ll need a certain percentage decrease in your interest rate in order to make this option financially beneficial.

A Shorter Loan Term

While refinancing doesn’t necessarily mean that you’ll be paying less on your mortgage payment each month, it does mean that you may be able to take advantage of a shorter loan term. Since the overall amount you pay on your mortgage may be lowered with refinancing, you may be able to pay off your mortgage more quickly without it bumping up the amount of your monthly payment significantly. There may be a slight difference, but the benefits can definitely outweigh the drawbacks when it comes to paying less over time.

Weighing The Refinancing Option

The decision to refinance may very well end up being a boon for your financial well-being, but it’s important to consider the pros and cons ahead of time in order to make an educated decision. You’ll also want to make sure you’ll be staying in your home a while to reap the benefits of your equity. Because there will be fees associated with utilizing this mortgage option, like closing costs and application fees, it’s important to look over the numbers and ensure that it works out in your favor at the end of the day.

Refinancing your home to acquire a lower interest rate can be a great financial decision, but it’s important to determine whether or not the price is right before you move forward with this option. If you’re currently considering refinancing your mortgage, contact one of our mortgage professionals for more information.

Dusty Attic, No More: How to Convert an Attic Into a Usable Living Space

Dusty Attic, No More: How to Convert an Attic Into a Usable Living SpaceThe attic may be one of the spaces in the house that everyone prefers to avoid, but many people forget that an attic can be a great place for a bedroom or an additional living room. If you’re wondering how you can go about upgrading your attic for everyday use, here are some things to think about before you move forward.

Consider The Access Routes

In order for an attic to function as a truly livable space, you will need to have access to it and there will also need to be a fire escape route. This means that, in addition to a staircase that has a minimum clearance height, you will also require a window that will function as another means of exit. If you’re not interested in doing a lot of construction, fixing up your attic may not be worth the effort, but if you already have some of these features in place, you’re on the path to a space you can really use.

Supporting The Floor

Most of us have seen the visuals in movies or on television of someone crawling up to the attic only to fall through the floor, and it’s a familiar image for a reason. Because the attic floor will likely be relatively thin, it will need to be reinforced so that it can function as a space for consistent use. When it comes to making these changes, it’s important to keep in mind that how much floor you’ll add will also impact the available height in your attic.

Adding In Insulation

Whether you want to use your attic as a living room or an exercise area, one thing for certain is that you’ll need to install some insulation to keep the temperature consistent with the rest of the house. It will also be necessary to have heating and cooling units for cold winter weather and hot summer air, as these will ensure that you don’t have to deal with any moisture issues in the space. However upscale or down home you want your attic to be, you’ll need to consider how to control temperature.

Thinking About Investing in Real Estate? Here’s What You’ll Need to Get a Second Mortgage

Thinking About Investing in Real Estate? Here's What You'll Need to Get a Second MortgageThe decision to invest in a home is a big one for many people, but if you’re making the foray into real estate the second time around, it’s even more important to be financially aware and prepared. If you’re wondering what you’ll need in order to get approved for an investment property, here are some things that you’ll want to consider before deciding a second property is in your future.

A Larger Down Payment

Due to the risk factor involved in taking on more than one loan, acquiring a second mortgage for an investment property will likely require you to put more money down up front. Because you’re already paying into your home and are taking on an additional loan, you’ll have to prove to the mortgage lender that you’re a viable choice and have the financial wherewithal to stick to your payment schedule.

Knowledge Of The Market

It’s well and good to want to invest in a property so that you can find renters and turn a profit, but you’ll need to have a good place at the right price to make the investment worthwhile. Before you decide on a place, make sure that you research the neighborhood and the type of home you’re looking to buy so you can ensure there’s a viable market. A rental property is good, but you’ll need to have reliable renters in order to make it profitable.

A Property Manager

If you’re planning on being the landlord and doing all the little fix-its, you may not need to worry about a property manager. However, it’s important to weigh the decision carefully beforehand and ensure what will work best for you. If you’re not prepared to do emergency work or basic property maintenance, you’ll need to look for a property manager you can trust.

A Mortgage Pre-Approval

Without a doubt, a second mortgage will require you to take on more risk, so it’s important to speak with a lender about pre-approval before getting too involved. If you’ve crunched the numbers, you may already have an idea of what you can and can’t afford, but a lender will be able to give you a price range that suits your financial position and income set.

Investing in a second property can be a financially lucrative decision, but it’s important to be knowledgeable about your investment and your finances before diving in. If you’re currently getting prepared to invest in a home, contact one of our mortgage professionals for more information.

Living With a Small Green Space: How to Make the Most of a Smaller, Intimate Yard

Living With a Small Green Space: How to Make the Most of a Smaller, Intimate YardIt’s great to have a yard in this day and age, but so many new developments in the city have limited green space for you to let your imagination run wild. If you’re wondering what you can do with your patch of green space or small yard, here are a few options for making it aesthetically appealing and still maximizing its potential.

Pick A Centerpiece

In order to stretch the look of your green space, try adding a centerpiece or focal point that will draw the eye and instantly improve your yard’s appeal. Whether you decide on a planter, a birdbath or an awning covered in vines, a unique piece will work to distract from the limitations imposed by your yard. A centerpiece may do nothing to expand your garden space, but by changing the way you view it, it will make all the difference in how you feel about it.

Make It Match

Your garden or back green space is going to look a whole lot smaller if it’s eclectic style diverges greatly from your home, so keep the two aligned. If there’s a selection of colors and style you use in the room that faces your yard, use them outdoors! It’s also important to make it something you’ll really use. As landscape architect Amber Freda of Amber Freda Home & Garden Design says, “A plain dining table with wooden chairs won’t entice you to use it very much, but really comfortable lounge seating will.”

Keep It Clean

It’s a well-known fact that clutter in any enclosed space will instantly make it look smaller, and it’s no different when it comes to your yard. Instead of jamming an excessive amount of stuff into your small space, keep it simple and decide exactly what you want to get out of the area, whether it’s a vegetable garden or a comfortable place to sit. In keeping with clutter free, you’ll also want to make sure you keep any invasive or aggressive plants from making themselves too comfortable!

It may seem limiting to have an undersized green space, but by deciding what you want to get out of it and creating a central point of interest, you’ll be well on your way to a comfortable place.

What’s Ahead For Mortgage Rates This Week – June 5, 2017

Last week’s economic releases included readings on inflation, core inflation pending home sales and multiple reports from the labor sector. Weekly readings on mortgage rates and new jobless claims were also released. Pending home sales were lower and weekly jobless claims rose, which illustrates continued volatility in the economic sector.

Inflation rose 0.40 percent in April, which matched projections and exceeded April’s reading of 0.30 percent. Core inflation, which excludes volatile food and energy sectors, grew by 0.20 percent and exceeded expectations of 0.10 percent growth based on a negative reading of -0.20 percent in March. The Federal Reserve has set an annual inflation rate of 0.20 percent as a benchmark for economic recovery.

Housing Data Mixed

Case-Shiller released its 20-City Housing Market Index for March; Home price appreciation held steady at 5.90 percent on a seasonally-adjusted basis year-over-year. Month-to-month, home prices rose by 0.90 percent. Seattle, Washington had the highest pace of home price growth in March, with 12.30 percent. Portland, Oregon followed with 9.20 percent home price growth and Dallas, Texas had the third highest level of year-over-year home price growth at 8.60 percent. Month-to-month home prices grew at a pace of 0.90 percent.

Despite indications of high builder confidence in current and future housing market conditions, construction spending decreased by -1.40 percent in April. Analysts expected an increase of 0.50 percent in construction spending based on construction spending growth of 1.10 percent in March.

Builders have consistently cited concerns over affordable lots and skilled labor, but industry professionals are not sure why high builder confidence in housing markets doesn’t correspond to lagging construction spending rates. Building more homes is viewed as the only path to easing high demand for homes caused by a shortage of homes for sale.

The Commerce Department reported fewer pending home sales in April with a reading of -1.30 percent; the March reading was -0.90 percent. Pending home sales typically indicate further closed sales and trends in mortgage loans.

Mortgage Rates Mixed, New Jobless Claims Rise

Freddie Mac reported slight change in mortgage rates last week; the average rate for a 30-year fixed rate mortgage was one basis point lower 3.94 percent. Rates for a 15-year fixed-rate mortgage averaged 3.19 percent and was unchanged from the prior week. The average rate for a 5/1 variable rate mortgage rose four basis points to 3.11 percent. Discount points averaged 0.50 percent for all three types of mortgages.

New Jobless Claims Hit 5Week High

First-time claims rose from the prior week’s reading of 235,000 new claims to 248,000 new claims filed. Analysts had expected 239,000 new claims filed. Analysts said that higher claims were connected to the Memorial Day holiday and characterized last week’s higher number of claims as a “blip.”

In other labor-sector news, ADP reported 253,000 new private-sector jobs in May; the Commerce Department reported 138,000 new government and private sector jobs. This reading may be revised based on an expected 185,000 public and private-sectors jobs for May and April’s reading of 174,000 public and private-sector jobs.

National unemployment ticked down in May to 4.30 percent. Analysts had expected no change in April’s reading of 4.40 percent.

Whats Ahead

This week’s scheduled economic news includes readings on job openings, consumer credit along with weekly reports on mortgage rates and new jobless claims.

3 ‘Hidden’ Costs You’ll Uncover Buying Your First Home – and How to Plan for Them

3 'Hidden' Costs You'll Uncover Buying Your First Home – and How to Plan for ThemAre you about to become a first-time home buyer? If so, there’s a lot to get excited about. You’ll soon be a home owner, able to customize and improve your living space as you see fit.

Of course, buying a home is an investment unlike any other. To get the best deal on your home, you’ll need to be diligent. Let’s have a look at some of the hidden costs you may uncover when buying your first home.

#1: The Home Inspection (And What It Finds)

A major step before buying any home is the inspection. A licensed inspector will go over the home from top to bottom, looking for current or future issues. The inspection itself isn’t very costly. But any unresolved issues that come up may lead to expensive problems later.

If possible, try to ensure that the seller pays for any necessary repairs. When you take possession of the home, it should be in top condition.

#2: Taxes And Fees You’ve Never Even Heard Of

You already know about the major taxes, such as sales taxes that apply to a home’s sale price. Or property taxes, charged by local governments each year and based on your home’s assessed value. But depending on where you live, there may be a whole host of other taxes and fees involved. Many of which you’ve never even heard of!

For example, you may be subject to a Land Transfer Tax or Property Purchase Tax. These are taxes charged when a property changes hands. If you’re taking out a mortgage loan, the lender may require you to pay land survey or appraisal fees. These costs help the lender to ensure the risk involved with the mortgage is appropriate.

#3: Insurance, Insurance And More Insurance

Finally, don’t forget the cost of insurance. On top of regular home insurance, you may need mortgage insurance, title insurance, extra life insurance and more. It’s worth booking some time with an insurance professional to find out what kind of coverage you will need.

These are three of the possible costs involved in closing the purchase of a new home. For more information about closing costs, contact your trusted mortgage professional. We have the data and insight to help you make the best decision.

Can I Qualify for a Mortgage After Declaring Bankruptcy? Yes — and Here’s How

Can I Qualify for a Mortgage After Declaring Bankruptcy? Yes -- and Here's HowIt may feel like a very daunting task to consider buying a home after you’ve declared bankruptcy, and there’s no doubt that it’s an uphill battle. Fortunately, while you’ll have hard work ahead, there are things you can do in order to make your dream of home ownership a possibility. Whether you’ve just declared bankruptcy or some time has passed, here are some things you should consider before getting into the market.

Wait It Out

It might not be what you want to hear, but it’s, unfortunately, the case that you’ll have to wait at least two years before you purchase a home following bankruptcy. Since lenders will not want to take the risk on someone that has proven to have poor financial habits, they will require a waiting period in order for the credit risk you pose to improve. While this may seem like a long time, take the opportunity to improve your financial habits so you can be amply prepared when the time comes.

Build Up Your Credit

In order to own a home, you’ll need to develop some solid financial habits, and that means getting on top of your finances even in times when it feels like you have no leverage. Ensure you get a copy of your credit report and, if you notice any errors, reach out to the credit bureau for corrections. It’s also a good idea to consider applying for a secured credit card and ensure that you pay all of your bills on time. While it might feel like a lengthy task, developing good habits will have a positive impact on your credit over time.

Prepare For Your Payment

When it comes to a poor credit history, you’ll need to pull out every stop you can to that convince lenders that you’re a solid financial bet. Instead of wasting the time, write up a budget for yourself and save a sizeable sum for your down payment each month. It’s possible that 10 or 15% down will do, but a 20% payment will help you avoid private mortgage insurance (PMI) and will go further in convincing lenders of your reliability.

It’s more than a little disheartening to have to deal with bankruptcy, but by waiting it out and developing good financial habits in the interim, you’ll be well on your way to buying a home. If you’re currently preparing to purchase, contact your trusted mortgage professional for more information.

Yes, It’s Getting Easier to Get a Mortgage. Here’s How You Can Take Advantage

Yes, It's Getting Easier to Get a Mortgage. Here's How You Can Take AdvantageIt can be hard to stay on top of a changing real estate market from day-to-day, but it’s a matter of fact that there are more available mortgage products out there than ever before for many different kinds of homebuyers. If you’re wondering how you can take advantage of easier lending opportunities and strike while the iron is hot, here are some things to consider.

Take Care Of Your Credit

While many regulations on mortgage applications may have been loosened in recent years, it goes without saying that having a better credit score will still enable you to qualify for a mortgage more readily. Instead of risking it, ensure that you’ve obtained a copy of your credit score and are aware of where you stand as a financial risk. By working on your credit and correcting any errors on your report, it will be that much more likely to have your mortgage application approved.

Saving For A Down Payment

It’s often said that 20% is the ideal amount to put down in order to avoid private mortgage insurance, but it’s not the required amount in order to invest in a home. While it may save money, in the long run, to put more money down, for those who want to get into the housing market, there are many opportunities for putting a lot less down and still being able to purchase. It’s possible you may want to hold off until you can save up for your down payment, but possibilities exist for mortgages with as little as 3.5% down.

Dealing With Closing Costs

Saving up for a down payment and deciding to invest in a monthly mortgage payment is a significant commitment, but adding mortgage closing costs to that can be a bridge too far for many potential homebuyers. Fortunately, many lenders nowadays are offering the opportunity for closing costs like origination and attorney fees to be included in the total cost of the loan. While this will bump up the amount of your monthly payment, it can make a mortgage more feasible from the start.

For many people, there’s a lot of stress that goes along with applying for a mortgage, but with lower down payments required and closing costs included in the total price, getting approved has become a lot easier in recent years. If you’re currently in the market for a new home, contact your trusted mortgage professionals for more information.

What’s Ahead For Mortgage Rates This Week – May 30, 2017

Sales of new and previously owned homes were lower in April after reaching near-record levels in March. Mortgage rates were lower last week and new jobless claims were little changed.

New Home Sales Fall in April; March Reading Revised

New home sales were lower in April after moving higher in March. The Commerce Department revised March figures for new home sales to 642,000 sales on a seasonally-adjusted annual basis. April sales of new homes fell by 11.40 percent to 569,000 new home sales, which fell shy of 605,000 expected sales in April. Sales of new homes reported by the government are based on small samples and are frequently revised, so a month-to-month readings are subject to change. New home sales were 11 percent higher for the first four months of 2017 than for the same period in 2016.

Home prices are showing signs of cooling; the median price for a new home fell to $309,000 in April as compared to $318,700 in March. Lower prices increase affordability and may encourage more buyers into the market. In March, there was a 4.9 percent supply of available homes as compared to April’s 5.70 months inventory. Real estate pros typically consider a 6- month supply of available homes a good balance between homes available and prospective buyers.

The National Association of Realtors® reported fewer sales of pre-owned homes in April than for March. 5.57 million pre-owned homes were sold in April as compared to an expected reading of 5.60 million sales. Projected sales were based on 5.70 million sales of previously owned homes in March. Low inventories of homes for sale has stifled demand as would-be buyers wait for a larger choice of homes.

Mortgage Rates Lower

Freddie Mac reported lower mortgage rates across the board for the three types of mortgages reported. The average rate for a 30-year fixed rate dropped seven basis points to 3.95 percent; the rate for a 15-year fixed rate mortgage was eight basis points lower at 3.19 percent and the average rate for a 5/1 adjustable rate mortgage fell six basis points to 3.07 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose from the prior week’s reading of 233,000 new claims to 234,000 new claims filed last week.

Whats Ahead

This week’s scheduled economic news includes readings on inflation, core inflation, Case-Shiller Home Price Indices, and construction spending. Pending home sale and multiple labor-related reports will be released along with weekly readings on mortgage rates and new jobless claims.

Understanding What a “Piggyback” Mortgage Loan Is and How It Works

Understanding What a As a potential homebuyer who is new to the market, many of the terms and mortgage products available to you can be more than a little confusing. Piggyback loans might be a little less familiar than many other options, but if you’re ready to jump into the housing market this type of mortgage can be useful for you. If you’re hoping to invest in a home sooner rather than later, here are the details on this type of loan.

What’s A Piggyback Loan?

While most mortgage loans require one loan and one lender, a piggyback loan is used for homebuyers who don’t have 20% to put down but want to avoid private mortgage insurance (PMI). Because a mortgage with less than 20% down will require the homebuyer to pay PMI, a piggyback loan can assist in avoiding this. For example, in the event that the homebuyer is putting down 10%, their primary mortgage will cover 80% of the purchase price while the piggyback loan will cover the remaining 10%.

What Are The Requirements?

Since there have been many issues with piggyback loans in the past, there are more requirements for this type of loan than there used to be. While it varies from lender to lender, most homebuyers will be expected to put down at least 10% in order to qualify for this loan. In addition, they will be required to have a good credit score to ensure they are a good risk. While the debt-to-income ratio will fluctuate from lender to lender, potential homebuyers will have to prove that they can make their monthly payments.

Is This Loan Right For You?

It’s important before deciding on a piggyback loan that it’s the right choice for you. Since a piggyback loan will require you to pay down two different loans, it means that you will not be able to tap into your home equity in the event that you want to free up funds. It can also put home ownership in harm’s way if there are any financial setbacks. As well, while PMI can be canceled after the equity in your home is at 20%, a piggyback loan does not provide this option.

A piggyback mortgage can be a good option for homeowners who want to get into the market, but it’s important to determine if it’s a financially solid choice before wading in. If you’re currently getting prepared to buy, contact your trusted mortgage professionals for more information.