Blog – CTeBockhorst's Blog

Insufficient Property Appraisal: What to Do When the Appraisal Falls Short

July 14, 2023 by Coleen TeBockhorst

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

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

Understand the Appraisal Process:

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

Review the Appraisal Report:

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

Communicate with the Appraiser:

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

Gather Additional Evidence:

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

Request a Reappraisal:

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

Renegotiate or Seek Alternative Financing:

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

While an insufficient property appraisal can be frustrating and present challenges, it’s important to approach the situation calmly and rationally. Review the appraisal report, communicate with the appraiser, gather additional evidence, and explore options like reappraisal or renegotiation. By taking proactive steps and maintaining open lines of communication, you can navigate through the process and work towards a satisfactory resolution.

Remember, real estate transactions often involve multiple parties, and finding a mutually beneficial solution is key to moving forward successfully.

Smart Home Upgrades That Save Energy and Money

July 13, 2023 by Coleen TeBockhorst

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

Smart Thermostats

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

Energy Monitoring Systems

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

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

Smart Lighting

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

Smart Power Strips

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

Water-saving Devices

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

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

How Long Does It Take to Get a Mortgage Approval?

July 12, 2023 by Coleen TeBockhorst

How Long Does It Take to Get a Mortgage Approval? When you’re in the process of buying a home, one of the most important steps is obtaining a mortgage approval. This approval signifies that a lender is willing to offer you a loan to finance your dream home. The timeline for getting a mortgage approval can vary depending on several factors.

Initial Preparations:

Before you start the mortgage approval process, it’s crucial to gather all the necessary documentation. This typically includes proof of income, employment history, bank statements, tax returns, and details about your assets and liabilities.

Application Submission:

Once you have your documents ready, you’ll need to submit a mortgage application to the lender. This can be done online or in person at a bank or mortgage lender’s office. The application will require information about your financial situation, employment, and the property you intend to purchase.

Credit Check and Verification:

After submitting your application, the lender will perform a credit check to assess your creditworthiness. This process involves examining your credit history, credit score, and any outstanding debts. The time required for this step will usually take a few days to a week.

Property Appraisal and Inspection:

As part of the mortgage approval process, the lender may require a property appraisal to determine its value. They want to ensure that the property’s worth aligns with the loan amount. In addition, a home inspection may be necessary to assess the property’s condition. This process takes anywhere from a few days to a couple of weeks, depending on the availability of appraisers and inspectors.

Underwriting and Decision:

Once all the necessary information is collected and verified, your application will enter the underwriting stage. Here, the lender’s underwriters review your financial information, documentation, and the property appraisal report. This step takes anywhere from a few days to several weeks, depending on the complexity of your application and the workload of the underwriting team.

Mortgage Approval:

Once the underwriting process is complete, the lender will communicate their decision to you. If your application is approved, you will receive a mortgage commitment letter, indicating the terms and conditions of the loan. This letter will specify the mortgage amount, interest rate, repayment terms, and any other pertinent details.

The timeline for getting a mortgage approval can vary depending on several factors. This includes your financial situation, the lender’s workload, the complexity of your application, as well as the property appraisal and inspection process. On average, the entire process can take anywhere from two to six weeks. To ensure a smooth and timely approval, it’s crucial to have all your documentation prepared, respond promptly to any requests from the lender, and work closely with your mortgage broker or loan officer throughout the process.

The Impact of Your Employment History on Mortgage Approval

July 11, 2023 by Coleen TeBockhorst

The Impact of Your Employment History on Mortgage Approval When it comes to applying for a mortgage, lenders take various factors into account to determine your eligibility. One crucial aspect they consider is your employment history. Your employment history provides lenders with valuable insights into your financial stability, income consistency, and ability to repay the loan.

Lenders evaluate your income consistency to ensure that you have a reliable source of funds to cover your mortgage payments. They typically request pay stubs, W-2 forms, and tax returns to verify your income. If you have been in the same job or industry for a considerable period and have a consistent or increasing income, it strengthens your mortgage application. However, if you recently started a new job or have irregular income due to freelancing or self-employment, it may require additional documentation and thorough evaluation by the lender.

Self-Employment Considerations:

If you are self-employed, the mortgage approval process may be slightly different. Self-employed individuals often face more scrutiny as their income can be less predictable compared to those with traditional employment. Lenders typically review your business financial statements, tax returns, and bank statements to assess your income stability and the overall financial health of your business. Providing a history of consistent income, strong financial statements, and a healthy credit score can improve your chances of mortgage approval.

Employment Gaps:

Extended gaps in employment can be a concern for lenders, as they may question your ability to meet your financial obligations. However, not all gaps are viewed negatively. Lenders may be more understanding if you can provide a reasonable explanation for the gap, such as furthering your education, caring for a family member, or recovering from an illness. It’s crucial to provide supporting documentation and demonstrate how you managed your finances during the gap period.

Changing Industries:

Switching careers or industries can be seen as a risk by lenders, as it may imply a learning curve or potential income instability. However, this doesn’t mean that changing industries will automatically disqualify you from getting a mortgage. If you can demonstrate that the change has resulted in an increase in income, improved job prospects, or enhanced skill sets, it can work in your favor. Strong references from your previous and current employers can also help alleviate concerns about the industry switch.

By maintaining a stable employment record, providing proof of consistent income, and addressing any gaps or career changes with supporting documentation, you can strengthen your mortgage application and improve your chances of approval. Remember to consult with a mortgage professional who can guide you through the process and provide personalized advice based on your specific situation.

What’s Ahead For Mortgage Rates This Week – July 10, 2023

July 10, 2023 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - July 10, 2023 Last week’s scheduled economic reporting included readings on construction spending, June’s FOMC meeting minutes, and reports on jobs and the national unemployment rate. Weekly readings on mortgage rates and jobless claims were also released.

Construction Spending Increased in May

The Commerce Department reported spending for construction rose to 0.90 percent in May as compared to a month-to-month increase of 0.40 percent posted in April. The year-over-year reading showed $1.93 trillion in construction spending in May. April’s data was revised downward from the original reading of 1.20 percent growth to 0.40 percent growth in construction spending.

Readings for construction spending include all phases of government and private construction projects. When construction spending increases. It indicates overall growth in the economy. Year-over-year construction spending was 2.40 percent higher in May.

Private-Sector Job Growth Exceeds Expectations in June

The Commerce Department reported the largest increase in private-sector job growth since July 2022. 497,000 jobs were added in June 2023, which surpassed analyst expectations of 220,000 jobs added. 267,000 jobs were reported in May’s reading. The increase in available jobs countered forecasts that the Federal Reserve’s recent series of interest rate hikes would slow inflation and dampen economic growth.

The national unemployment rate fell from 3.60 percent from 3.70 percent in May to 3.60 percent in June. In related news, weekly jobless claims rose to 248,000 claims from the previous week’s reading of 236,000 jobless claims filed. Analysts expected a reading of 220,000 claims filed.

Minutes of Federal Reserve Meeting: Fed Holds Federal Rate Range Steady in June

Members of the Federal Reserve’s Federal Open Market Committee voted to hold the Fed’s interest rate range at 5.00 percent to 5.25 percent. Committee members cited the tight labor market and current economic conditions that exceeded expectations. Fed Chair Jerome Powell said that the Fed would likely raise its rate range two more times during 2023.

Freddie Mac reported higher average mortgage rates last week’s the rate for 30-year fixed-rate mortgages rose by 10 basis points to 6.81 percent. Rates for 15-year fixed-rate mortgages averaged 6.24 percent and 18 basis points higher.

What’s Ahead

This week’s scheduled economic reports include month-to-month and year-over-year readings on consumer inflation; the final monthly reading on consumer sentiment will be released along with weekly readings on mortgage rates and jobless claims.

Concerns To Address When Choosing The Right Mortgage Lender

July 7, 2023 by Coleen TeBockhorst

Concerns To Address When Choosing The Right Mortgage Lender Choosing the right mortgage lender is a crucial decision when you’re considering purchasing a home or refinancing your existing mortgage. With numerous lenders available in the market, it’s important to carefully evaluate your options to ensure you select a lender that suits your needs and financial goals.

Interest Rates and Terms:

One of the primary factors to consider is the interest rate offered by the lender. A lower interest rate can significantly impact your monthly mortgage payments and overall affordability. Compare rates and terms from different lenders to determine the most favorable options for your financial situation.

Lender’s Reputation and Credibility:

When dealing with something as important as a mortgage, it’s crucial to work with a reputable and trustworthy lender. Research the lender’s reputation, read customer reviews, and check if they have any disciplinary actions or complaints lodged against them. Choose a lender with a solid track record, excellent customer service, and a history of fulfilling their commitments.

Loan Programs and Options:

Every borrower has unique financial circumstances, so it’s essential to choose a lender that offers a variety of loan programs and options. Whether you’re a first-time homebuyer, self-employed, or have a less-than-perfect credit score, look for a lender who specializes in providing loans tailored to your specific needs.

Costs and Fees:

Apart from the interest rate, it’s important to consider the various costs and fees associated with the mortgage. Lenders may charge origination fees, closing costs, appraisal fees, and other expenses. Request a Loan Estimate (LE) from each lender, which will provide a breakdown of the costs involved.

Customer Service and Support:

The mortgage process can be complex and time-consuming, so it’s essential to choose a lender who provides excellent customer service and support. A lender who is responsive and communicates clearly can help alleviate stress and ensure a smooth experience.

Prequalification and Preapproval Process:

Before you start house hunting, it’s advisable to get prequalified or preapproved for a mortgage. Evaluate the lender’s prequalification or preapproval process and the time it takes to complete it. A streamlined and efficient process can give you an advantage when making an offer on a property, demonstrating your readiness and seriousness as a buyer.

By evaluating interest rates, lender credibility, loan programs, costs, customer service, and the prequalification process, you can make an informed decision that aligns with your financial goals and preferences. Take the time to compare multiple lenders, gather all necessary information, and seek professional advice if needed. With the right mortgage lender, you can embark on your homeownership journey with confidence.

How To Beat High Inflation with a Home Purchase

July 6, 2023 by Coleen TeBockhorst

How To Beat High Inflation with a Home Purchase Inflation can erode the value of your savings over time, and one way to hedge against inflation is by investing in assets that appreciate in value over time. Real estate is often considered a good hedge against inflation, as property values tend to rise in line with inflation.

Here are some ways a home purchase can help beat high inflation:

Lock in a low-interest rate mortgage: High inflation often leads to higher interest rates, but if you lock in a low-interest rate mortgage when inflation is low, you can benefit from lower mortgage payments even if interest rates rise in the future. This can free up more money for other expenses and investments.

Appreciation: Real estate values tend to rise over time, especially in areas with high demand and limited supply. If you purchase a home in an area that is likely to appreciate, you can benefit from the increase in value over time.

Rental income: If you purchase a home as an investment property, you can generate rental income that increases with inflation. Rental income can provide a steady stream of passive income that can keep up with inflation.

Tax benefits: Homeowners can deduct mortgage interest and property taxes from their federal income taxes, which can help offset the costs of homeownership. These deductions can be especially valuable during times of high inflation when other deductions may lose value.

Diversification: Investing in real estate can diversify your investment portfolio, reducing the overall risk of inflation. Real estate has historically performed well during periods of inflation and can provide a valuable hedge against the erosion of purchasing power caused by inflation.

It’s important to note that buying a home should be a long-term investment strategy, and not a short-term solution to beat inflation. Real estate values can fluctuate over short periods of time, and it may take several years to recoup your investment. It’s also important to consider the costs of homeownership, such as maintenance, repairs, and property taxes, when evaluating the potential benefits of purchasing a home.

What’s Ahead For Mortgage Rates This Week – Juy 3, 2023

July 3, 2023 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - Juy 3, 2023 Last week’s scheduled economic news includes readings on inflation, new home sales, pending home sales, and consumer sentiment. Federal Reserve Chair Jerome Powell spoke at a banking conference in Spain. Weekly reports on mortgage rates and jobless claims were also released.

New Home Sales Rise as Pending Home Sales Fall

May readings for new and pending home sales showed mixed results for May. 763,000 new home sales were expected on a seasonally-adjusted annual basis. Analysts expected a reading of 675,000 sales based on April’s year-over-year reading of 680,000 new home sales. May’s increase in new home sales was the largest since February 2022.

New home sales increased for the third consecutive month. The supply of new homes for sale fell 11.80 percent between April and May to a 7-month supply of new homes available. Sales were strongest in the Northeast and West.

Pending home sales fell by -2.70 percent in May.

Mortgage Rates, Jobless Claims

Freddie Mac reported higher average mortgage rates last week. The average rate for 30-year fixed-rate mortgages rose by four basis points to 6.71 percent; the average rate for 15-year fixed-rate mortgages rose by three basis points to 6.06 percent.

Federal Reserve Chair Jerome Powell spoke at a banking conference in Spain. He discussed the U.S. economy and how the Fed addressed the financial downturn after the Great Recession and discussed current economic trends including the impact of higher mortgage rates on the housing sector and low unemployment.

Chair Powell also outlined the Fed’s goal of reducing inflation to 2.00 percent a year; it presently runs near 4.00 percent. Mr. Powell cited headwinds to lowering inflation including tighter credit requirements for individuals and businesses. Mr. Powell cautioned that further tightening may result from bank stresses that occurred in March.

June’s consumer sentiment index reading was nearly unchanged with an index reading of 64 for June as compared to May’s reading of 63.99. Index readings over 50 indicate that most consumers are confident about current economic conditions.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, public and private sector employment, and minutes of June’s Federal Open Market Committee meeting. Weekly reports on mortgage rates and jobless claims will also be released.

What to Look For During Your Home Inspection

June 30, 2023 by Coleen TeBockhorst

What To Look For During Your Home Inspection Buying a new home is an exciting and significant milestone in anyone’s life. However, it’s essential to approach the homebuying process with caution and thoroughness to ensure that you’re making a sound investment. One crucial step in the homebuying journey is the home inspection. A home inspection is a comprehensive evaluation of a property’s condition, aiming to uncover any potential issues or concerns that could affect its value or safety. Below are some tips to remember when navigating a home inspection.

Roof and Exterior:

The roof is your home’s first line of defense against the elements, so it’s crucial to examine it closely. Look for missing or damaged shingles, signs of leakage, and the overall condition of the roof.

Structural Integrity:

A solid foundation and sound structure are vital for the long-term stability and safety of your home. Inspect the foundation for cracks, unevenness, or signs of settling. Look out for any sagging or uneven floors, as they could indicate structural issues.

Plumbing and Electrical Systems:

Faulty plumbing or electrical systems can lead to significant problems and costly repairs. Test the faucets, showers, and toilets to ensure proper water flow and drainage. Check for leaks under sinks and around toilets. In terms of electrical systems, inspect the circuit breaker panel and look for any exposed wiring, outdated systems, or potential fire hazards.

HVAC Systems:

Heating, ventilation, and air conditioning (HVAC) systems are critical for maintaining a comfortable living environment. Have the HVAC systems thoroughly inspected to determine their condition and efficiency.

Insulation and Energy Efficiency:

Good insulation and energy-efficient features can greatly impact your home’s comfort and utility costs. Check the insulation in the attic, walls, and crawl spaces to ensure they meet the recommended standards. Inquire about the home’s energy efficiency features, such as double-pane windows, energy-efficient appliances, or renewable energy installations.

Pest and Mold Inspection:

Pests and mold can pose health risks and cause extensive damage to a home. Look for signs of pests such as droppings, chewed wood, or insect nests. Ask the inspector about any past or present pest infestations and the steps taken to address them.

A home inspection is a crucial step in the homebuying process that helps you make an informed decision about your investment. By paying close attention to the areas mentioned above, you can identify potential issues and negotiate repairs or adjustments with the seller. A thorough home inspection can provide peace of mind and ensure that you’re buying a home that meets your expectations in terms of safety, functionality, and value.

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices Up

June 29, 2023 by Coleen TeBockhorst

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices Up April readings for S&P Case-Shiller’s Housing Market Indices showed gains in home prices throughout the U.S. Rising prices were caused by shortages of previously-owned homes for sale and increasing buyer demand as the average 30-year mortgage rate exceeded six percent. The southeastern region lost its top spot on S&P Case-Shiller’s 20-City Home Price Index as Chicago, Illinois, Atlanta, Georgia, and Tampa, Florida held the top three year-over-year home price growth rates for April.

Chicago, Illinois Breaks Southeast’s Lead on April Home Price Growth

The top three cities with the highest home price growth rates as reported in April’s S&P Case-Shiller’s 20-City Home Price Index were Chicago, Illinois with a year-over-year home price gain of 4.10 percent; Atlanta, Georgia posted a year-over-year home price growth of 3.50 percent. Tampa, Florida placed third in the 20-City Index with an average home price gain of 2.40 percent. All year-over-year readings for April home prices were seasonally adjusted.

Average home prices lagged in the West as the combined impact of high home prices and mortgage rates created affordability issues for would-be home buyers. Seattle, Washington saw average home prices drop by -12.40 percent year-over-year; San Francisco, California reported that year-over-year home prices declined by 11.10 percent in April. Home prices in Las Vegas, Nevada fell by 6.60 percent year-over-year.

Mortgage rates nearing 7 percent did not appear to impact home buyers to a great extent, but higher rates do increase the cost of home loans and monthly payments; current mortgage rates and rising home prices do not promote affordable opportunities for first-time and moderate-income home buyers.

FHFA House Price Index

In related news, the Federal Housing Finance Agency posted 0.50 percent month-to-month-home price growth in its House Price Index for April. This index reports on home prices for homes sold by the Government Sponsored Enterprises Fannie Mae and Freddie Mac. These homes were acquired through foreclosure and were subject to original loan limits established by FHFA for mortgages acquired or guaranteed by Fannie Mae and Freddie Mac The GSEs’ loan limits cause a more moderate range of home price growth reported in FHFA’s House Price Index as compared to data reported in the S&P Case-Shiller Home Price Indices.

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