Blog – CTeBockhorst's Blog

Qualify For A Larger Mortgage With A Co-Signer

May 15, 2020 by Coleen TeBockhorst

There are numerous steps involved in the process of buying a new home. It is important to go through the mortgage qualifying process before looking at dream houses. This gives people an idea of how big a house they can afford. Sometimes, individuals looking for a house might not get a loan that is big enough to cover their dream house. There are ways to qualify for a larger loan; however, one of the fastest methods is to use a co-signer.

What Is A Co-Signer?

A co-signer is someone who signs onto a potential home loan with the homebuyer. Essentially, the co-signer is saying that he or she is willing to be on the hook for the loan in the event that the primary homeowner is unable to make his or her mortgage payments.

This is a big commitment from the co-signer because he or she is exposing himself or herself on behalf of the primary borrower. On the other hand, the co-signer is also providing a vote of confidence on behalf of the primary borrower. Parents often act as co-signers for their children when they purchase their first home.

Vetting The Co-Signer

When someone is going through the home loan process, they are asked to produce tax returns, proof of income, credit reports, bank statements, and more. The co-signer is going to go through the same process. The bank wants to make sure the co-signer is actually adding something of value to the buying process.

The income and debt of the co-signer will be added to the primary borrower. Then, the two will be combined to be approved for a larger home loan. This can help someone purchase the home of his or her dreams.

An Important Note On The Co-Signer

If the co-signer goes to apply for a home loan or car loan in the future, the loan for which they co-signed will show up. This could limit the ability of the co-signer to qualify for a loan down the road. Even though having a co-signer can increase the size of the loan for the primary borrower, this is not without risk to the co-signer. Consider this carefully!

3 Signs It Is Time For You To Refinance Your Mortgage

May 14, 2020 by Coleen TeBockhorst

3 Signs It Is Time For You To Refinance Your Mortgage If you are looking for ways to save money on your mortgage, refinancing might be a good option. For those who might not know, refinancing can help a homeowner reduce monthly mortgage payments by switching to a lower interest rate.

Basically, the homeowner takes out one loan at a lower interest rate to pay off the old loan, which is at a higher interest rate. While the homeowner may have to pay closing costs a second time, this could save someone hundreds of thousands of dollars over the life of the loan. Furthermore, those who want to pay off their loan more quickly may be able to do this as well. There are a few signs that someone should refinance their home loan immediately.

1. Current Mortgage Rates Are Significantly Lower

One of the biggest signs that someone should refinance is that current home loan interest rates are way lower than what they have. While everyone’s financial situations are different, if the current average interest rate is more than a point lower than your current interest rate, you should consider refinancing

While not everyone is going to qualify for the current average interest rate, some people might. This means that this is a possibility worth examining. If you can qualify for a much lower interest rate, it is time to refinance.

2. Your Credit Is Good

In order for you to qualify for home loans with lower interest rates, your credit has to be in good shape. There are ways for you to improve your credit score. Paying off credit card debt, paying your bills on time, and fixing errors on your credit report are all great ways to raise your credit score. If your credit score is good, it might be time to refinance.

3. You Are Not Moving Any Time Soon

As mentioned above, you may have to pay closing costs when you refinance. Therefore, if you plan on staying in that house for a while, this could be a good time to refinance. On the other hand, you don’t want to pay closing costs just to move again next year.

These are a few of the biggest signs that indicate it is time for you to refinance. Don’t pass up this chance to save money!

How To Pay Off Your Mortgage Early: 4 Methods That Work

May 13, 2020 by Coleen TeBockhorst

How To Pay Off Your Mortgage Early 4 Methods That Work While a mortgage is a necessity for many people who have the dream of owning a home, it is also a form of debt. Most people do not like owing money to someone else. Therefore, homeowners might be looking for ways to pay off their mortgage early. The reality is that people are charged interest for having a mortgage. If a mortgage is paid off early, this is less money than the bank will take and more money in the pockets of homeowners.

There are a few methods people can use to pay off their mortgage early.

Make Extra Payments

At the beginning of a mortgage, the vast majority of the money that people send the bank goes toward interest. In the end, most of the payment covers the principle of the loan. If someone is willing to make extra payments, these added payments are going to directly attack the principle. When the principle shrinks, there is less interest that accrues. Making extra payments is the most direct way to attack a home loan and pay it off more quickly.

Refinance The Mortgage

Another option people should consider is refinancing the mortgage. Essentially, a homeowner takes out a second home loan that pays off the first home loan; however, the new home loan has a lower interest rate. This may allow people to pay off the loan more quickly. Furthermore, people can refinance to a shorter-term, allowing them to pay off the loan more quickly.

Recast The Mortgage

Recasting the mortgage is a little bit different than refinancing. In recasting the loan, people throw a lump sum at the principle in exchange for a new amortization schedule based on that lump sum. This means that people will have a new schedule that reflects the principle that is left, often resulting in a shorter payment schedule.

Split The Monthly Payment In Two

Finally, many people are paid biweekly. Therefore, it might be easier for people to pay their mortgage biweekly. If someone pays their mortgage biweekly, they are making 26 half-payments per year or 13 monthly payments per year. The effect is that someone makes one extra monthly payment per year. This payment attacks the principal directly, helping people pay off their mortgage faster.

Home Maintenance Projects That Could Save You Thousands On Repairs

May 12, 2020 by Coleen TeBockhorst

Home Maintenance Projects That Could Save You Thousands On Repairs Owning a house comes with major responsibilities and one of the most important is routine maintenance. While many people like to skip routine maintenance in an effort to save money, the reality is that these routine maintenance is going to save people down the road. The reality is that maintenance is a homeowner’s first line of defense when it comes to protecting their most valuable investment, which is their home.

There are a few projects that may save homeowners thousands of dollars down the road.

Inspect The Plumbing Connections

It is easy to forget about the plumbing system because many people don’t even see their pipes until problems arise. The idea behind expecting the plumbing system is that problems can be spotted before they cause a house to flood. Some of the appliances that people need to think about include refrigerators, faucets, dishwashers, and washing machines. All of these devices have hoses that connect to the water supply.

If these hoses tart to crack, leaks can develop slowly. Eventually, this water is going to get behind the walls, causing mold to grow, and it may also get underneath the floors, causing them to warp. It is important for people to take a look at these pipes from time to time. If leaks are identified, they can be repaired.

Clean The Dryer Ducts And Vents

Many homeowners overlook their ductwork; however, people need to take the time open up their dryers and change their filters between every load. The vents that people use to remove lint from their clothes will clog up quickly. If the dryer is unable to suck air through this vent, it is going to have to work harder to dry the clothes. This is going to cause the dryer to overheat. It might even lead to a housefire. In order to prevent this from happening, homeowners should change their dryer lint filters after every load.

Routine Maintenance Is Critical

These are a few of the most important points that homeowners need to remember when it comes to routine maintenance. Homeowners need to have a regular schedule that they follow to ensure that none of these tasks are overlooked. It can prevent disaster from happening.

What’s Ahead For Mortgage Rates This Week – May 11th, 2020

May 11, 2020 by Coleen TeBockhorst

Last week’s economic releases included readings on public and private sector employment, the national unemployment rate.

Economic Destruction Continues as Coronavirus Spreads

ADP reported 20.2 million private-sector jobs lost in April as compared to 149,000 jobs lost in March. The government’s Non-Farm Payrolls report showed -20.5 million public and private-sector jobs lost in April as compared to -870,000 jobs lost in March. Both of these jobs reports typically show job growth, but they now report jobs lost due to the coronavirus pandemic and efforts to control it.

Likewise, the national unemployment rate grew in April to 14.70 percent as compared to the normal reading of 4.40 percent in March.

Mortgage Rates Mixed as New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates for 30-year fixed-rate mortgages, which were three basis points higher at 3.26 percent. The average rate for 15-year fixed-rate mortgages fell by four basis points to 2.73 percent. Rates for 5/1 adjustable rate mortgages rose by three basis points to 3.17 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 3.17 million claims, which exceeded expectations of 3.10 million new claims filed. While new jobless claims were lower than the prior week’s reading of 3.85 million initial unemployment claims, the millions of claims filed were far above normal readings in the hundred-thousands. While jobless claims remain high, they are lower than the seasonally-adjusted peak of 6.90 million initial claims filed in March.

Analysts said that unemployment figures would increase as small business claims increase.

Credit Card Use Falls In March

Consumers stopped using credit cards in March as the coronavirus took hold and the economic shut-down limited shopping, travel, and dining out. Credit card companies tightened lending standards and reduced credit lines as unemployment rates rose. Credit card use fell by nearly 31 percent to – $28.20 billion in March; installment loans including education and vehicle loans rose by 6.20 percent to $16.1 billion.

Auto dealers offering attractive incentives including low to no interest rates encouraged consumers to purchase vehicles. Home loans were not counted in the reading for installment loans.

What’s Ahead

This week’s scheduled economic releases include readings on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.

The 5 Best Power Tools For Home Improvement On The Market Today

May 8, 2020 by Coleen TeBockhorst

The 5 Best Power Tools For Home Improvement On The Market Today For most people, their home is the most valuable investment they are ever going to make. Therefore, it should make sense that people will want to improve its value over time. In this case, people are going to need to invest in power tools. Those who are interested in home improvement projects need to know about the five most important power tools available in today’s market.

A Power Drill

While this might seem obvious, many people do not own a power drill. This is almost always at the top of the list of the best power tools on the market. It is a versatile tool that can handle everything from hanging pictures to putting in a fence. People need to make sure they know about the various options for drills on the market and find the one that is right for their needs.

A Jigsaw

A jigsaw is a unique but versatile saw that can help people with a variety of home improvement projects. This type of saw is great for helping people cut shapes and curves as well as straight lines. Try to find a jigsaw that has a variety of orbital settings. This will provide the user with added accuracy and speed.

A Circular Saw

This is another saw that is important for homeowners to have. This is great for heavier cutting jobs. They have the ability to cut through thick materials easily. There are both cordless and corded options and they pack a punch. Cordless varieties are a bit heavier but they provide the user with access to tight spaces

A Cordless Screwdriver

Traditional screwdrivers can pose a bit of a challenge and get uncomfortable over time. This is where a cordless screwdriver is helpful. This removes a significant amount of effort and makes projects go by more quickly. These screws can be used to both tighten and loosen screws.

A Rotary Tool

Finally, a great power rotary tool is a must. This is used to help people with cutting, grinding, sanding, and more. This is great for performing a variety of tasks around the home and can help people with numerous accessories. Do not overlook the value of a powerful rotary tool.

What Is Pooled-Funds Investing?

May 7, 2020 by Coleen TeBockhorst

What Is Pooled-Funds Investing Under the Jumpstart Our Business Startups (JOBS) Act, which was signed into law by President Obama on April 5, 2012, the Securities Exchange Commission (SEC) relaxed the rules about advertising investments. This allowed the trend of crowdfunding to expand dramatically giving real estate investors more opportunities for pooled-funds investing.

What Is Polled-Funds Investing?

A pooled investment fund takes in money from a group of investors to use to acquire real estate for larger amounts than each investor’s money would support. Prior to the passage of the JOBS Act, these pooled investment funds were only accessible by large investors through private placements and private real estate investment trusts (REITs). The minimum investment might be up to $250,000 or more. High-net-worth individual investors and institutions were the only investors capable of the buy-in to gain access to these investments, which usually offered better and more stable returns.

After the JOBS Act came into being, the advertising of these pooled investment funds was possible under the new law. The phenomena of crowdfunding came out of this. Money from many investors creates a larger investment fund managed by a professional team, intending to obtain strong performance results.

Better Investment Opportunities For The Smaller Investor

These new investment opportunities allow the smaller investor to participate in a greater diversity of real estate than they could achieve on their own. Moreover, an investor can create a pooled fund to acquire a property with the help of other investors. To use this technique to buy real estate, it is helpful to work with a qualified real estate agent or broker who understands this concept of pooled investment funds.

Due Diligence Required

Not all investment pools succeed in producing decent returns for investors. The SEC is no longer regulating these polled investments carefully. This means that the challenge of due diligence falls on the individual investor. Before investing, it pays to conduct exhaustive research about the pooled investment fund, the cost of the fund management fees, the expertise of the fund’s management, and their past investment-performance history. Always remember past results are no guarantee of future performance and never invest any funds that you cannot afford to lose.

Summary

The relaxing of SEC regulations in 2012 allowed many opportunities for pooled investments to flourish. While there is the possibility of strong returns on investment, there is also some risk. Investors considering a pooled investment fund, such as a crowdfunding deal, should conduct thorough due diligence and get advice from a qualified REALTORS® in the market where the property will be located before making any investment.

4 Things Not To Do When Buying A Home

May 6, 2020 by Coleen TeBockhorst

4 Things Not To Do When Buying A Home There is a long list of things that people need to do when they are looking to buy a home; however, it is also important for people to know what to avoid as this process unfolds. There is a lot for people to remember and it is easy for people to get carried away when they start looking at their dream homes. Even though it is great to look at a bunch of houses and imagine living there, it is critical for people to stay grounded and know what to avoid.

Do Not Make Any Large Purchases During The Home Buying Process

One of the biggest mistakes people make when they are looking at buying a home is they open their wallets too big. If people end up taking on other big purchases, they end up accruing more debt. This is going to mess up their debt to income ratio and will make it harder for people to qualify for a home loan. Therefore, try to avoid making any other large purchases during the home buying process.

Do Not Take Out Multiple Credit Inquiries

While this might not sound real, the truth sometimes hurts. The more times people pull their credit report, the worse it looks. Therefore, by making multiple credit inquiries, people could actually hurt their credit score. It is important for people to pull their credit score at least once to fix any inaccuracies that might be present; however, people should not get carried away.

Do Not Skip The Pre-Qualification Process

Many people want to avoid filling out excess paperwork; however, the pre-qualification process is a good idea. When someone pre-qualifies for a mortgage, they get a budget ahead of time and immediately look like a serious buyer. This means that their offer looks more competitive to a potential seller. Finally, the pre-qualification process could also help someone qualify for a lower interest rate.

Do Not Be Anxious

The process of buying a home can be stressful even for those who have been through it before. Just remember to ask questions along the way and individuals will be set up for success. There are trained professionals who are willing to lend a helping hand to those in need.

How To Save Big Money On Your Next Home Renovation Project

May 5, 2020 by Coleen TeBockhorst

Every year, homeowners spend billions of dollars renovating their homes. It almost seems expected that homeowners are going to end up going over budget on any project. On the other hand, this doesn’t have to be the case. In reality, there are a few tips and tricks that homeowners can follow to help them save big money on that next home renovation project.

Serve As The General Contractor

Many homeowners hire a general contractor to control the staffing of each individual project. While this might reduce stress levels, it also costs more money. Hiring a general contractor adds an additional middle man to the project who might charge a premium for each individual project.

Homeowners that need to renovate the kitchen, replace the roof, and find a new water heater should hire professionals to handle these individual projects; however, they don’t necessarily need to hire a general contractor. Skipping this step can save money.

Seek Out Multiple Bids On Each Project

Some homeowners don’t like making phone calls and filling out paperwork to collect bids for various projects; however, collecting multiple bids can help homeowners save money. On any given home renovation project, try to collect at least three bids. For larger projects, it is better to collect even more.

Then, once all the bids are collected, they can be leveraged against each other for a lower price. Homeowners are often surprised by the wide range of bids on a project. Some proposals might even be thousands of dollars apart.

Take Advantage Of Sales

Just as food goes on sale at the grocery store, the materials needed to complete a home renovation project might go on sale from time to time as well. Taking advantage of sales at department stores can be a great way to reduce overhead costs. There might even be cheaper options online.

Reduce Home Renovation Costs

These are a few of the most important tips for reducing the cost of that next big home renovation project. Home renovation projects don’t have to break the bank! Be sure to collect multiple bids and leverage inventory sales.

What’s Ahead For Mortgage Rates This Week – May 4th, 2020

May 4, 2020 by Coleen TeBockhorst

Last week’s economic reports included readings from Case-Shiller Housing Market Indices, pending home sales, and inflation. Weekly readings on mortgage rates and first-time jobless claims were also released.

Case-Shiller: February Home Price Data Positive Before Coronavirus Impact

February data on home prices showed rising home prices; the Case-Shiller National Home Price Index showed 4.20 percent growth in home prices year-over-year as compared to January’s home price growth rate of 3.90 percent.

Case-Shiller’s 20-City Home Price Index rose by 0.40 percent from a year-over-year rate of 3.10 percent to 3.50 percent. Home prices increased in all of the 20 cities included in the Index; 17 of the 20 cities reported a greater rate of price growth than for January. Phoenix, Arizona led the 20-City Index with 7.50 percent year-over-year growth in home prices and home prices in Seattle, Washington grew by 6.00 percent year-over-year. Tampa, Florida, and Charlotte, North Caroline were tied for third place with home price growth rates of 5.20 percent.

Factors supporting continued home price growth included short supplies of available homes, strong demand for homes, and mortgage rates near all-time lows.

Fed’s Federal Open Market Committee Holds Fed Rate Range Steady

The post-meeting statement of the Federal Open Market Committee showed no change in the Federal Reserve’s target federal funds rate range of 0.00 to 0.25 percent. The committee expects the ongoing national health crisis to “weigh heavily on economic activity, employment, and inflation in the near term.” FOMC members voted to maintain an accommodative stance on monetary policy until economic conditions again support the Fed’s dual mandate of achieving maximum employment and price stability,

Inflation rates were quashed in March as the coronavirus spread in the U.S, The Consumer Price Index fell -7.50 percent in March as compared to February’s growth rate of -0.20 percent. Analysts expected a March inflation rate of -6.90 percent. Core inflation, which excludes volatile food and fuel sectors, fell by -0.10 percent and met expectations but was lower than February’s core inflation reading of -0.20 percent.

Mortgage Rates Fall to Record Lows, New Jobless Claims Fall

Freddie Mac reported the lowest mortgage interest rates ever recorded with rates for a 30-year fixed-rate mortgage 10 basis points lower at an average of 3.23 percent. Rates for 15-year fixed-rate mortgages averaged nine basis points lower at 2.77 percent.

The average rate for 5/1 adjustable rate mortgages fell by 14 basis points to 3.14 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell last week but remained well above numbers seen before the coronavirus pandemic. 3.84 million new jobless claims were filed, which surpassed expectations of 3.50 million new claims filed and the prior week’s reading of 4.40 million new claims filed.