Blog – CTeBockhorst's Blog

Consider A Home Renovation Loan To Navigate A Challenging Housing Market

September 1, 2022 by Coleen TeBockhorst

Consider A Home Renovation Loan To Navigate A Challenging Housing Market Today, there are many people who are having a difficult time purchasing a house. Even though interest rates have gone up, sales are still happening quickly. Therefore, it can be difficult for people to qualify for a mortgage, purchase a house, and get to the closing table before the property is sold. One potential way to get around the hot housing market is to consider a home renovation mortgage. How can a home renovation mortgage help you?

A Renovation Loan Can Help People Buy A Less Desirable Home

If you want to close on a home, you might be interested in a house that is not as desirable as some of the others. That way, you don’t have to worry about a bidding war. A renovation loan can help you purchase a less desirable home. If you are interested in buying a home that requires some repairs, but you do not have a lot of cash available for repairs, a renovation mortgage is a special loan that gives you the money you need to repair the house.

How Does A Renovation Loan Work?

Typically, the amount of money you can borrow for a renovation loan will depend on the value of the home after the renovations are completed. Therefore, the appraisal process is a bit different. This is the only type of mortgage that will give a homeowner credit for the future value of the property. Therefore, you can borrow more than you would be able to with a traditional mortgage. You can use the extra cash to perform repairs, which can increase the value of the home.

How Many Renovation Loans Are There?

Just as there are different types of conventional loans, there are different types of renovation loans as well. Each has a different set of requirements, but all of them require you to use the extra money to repair the home. Furthermore, all the work you do on the house has to add to the value of the property. If you have questions about how you can use the money that comes with a renovation loan, you should reach out to a professional who can help you.

Expenses To Consider When Buying A Home

August 31, 2022 by Coleen TeBockhorst

Expenses To Consider When Buying A Home When you are in the process of buying a home, it can be intimidating to take a look at so many factors. A home has a big price tag, and you need to make sure that you budget accordingly. Fortunately, this is not a process that you have to go through on your own. There are several items that all experts will say that you have to consider as you budget for your next home purchase.

The Down Payment

Your biggest expense is probably going to be your down payment. In general, it is a smart idea to put 20 percent down on your house. That way, you can avoid having to purchase private mortgage insurance. If you are purchasing a house for the first time, you might be able to put less money down, but you might face a higher interest rate and private mortgage insurance (PMI) payments if you do so.

The Earnest Money Payment

You should also be prepared to put down some earnest money. The exact amount of earnest money, also called due diligence money, that you have to put down will vary depending on the market. You should have a trusted professional who will let you know how much earnest money you should include with your offer. This is money that you use to hold the house in your name as you decide whether you want to go through with the purchase. If you end up buying the house, your earnest money will be put toward your down payment.

Closing Costs

You should also budget money for closing costs. Some of the items that will be included in your closing costs include a loan origination fee, a title examination, title insurance, an attorney’s fee, an escrow deposit, and a possible survey. In general, you should plan on budgeting approximately two percent of the loan’s value for closing expenses.

Don’t Forget About Possible Home Repairs

After the inspection, you may have a few items that you need to repair. You may want to have some extra money on hand to cover some quick repair costs. If you budget accordingly, you can streamline the process of buying a home, helping you get to the closing table more quickly.

The Different Foundation Options For Your House

August 30, 2022 by Coleen TeBockhorst

The Different Foundation Options For Your House Are you thinking about purchasing a home in the near future? Or, are you thinking about building one? If so, you must think carefully about the foundation of the home. It is responsible for supporting the rest of the structure, so you need to find the right foundation to meet your needs. What are a few of the top options available?

Basement

One of the first options you should consider is a basement foundation. This is a popular choice because it can create additional living space in your home. It can also act as an additional entrance, which can be useful in some situations. On the other hand, a basement does not always contribute to the square footage of your house. In addition, it can be a bit more susceptible to leaks when compared to other types of foundations. You must make sure you take care of your basement to prevent mold and mildew from growing.

Crawl Space

Another very common type of foundation you may encounter is a crawlspace foundation. A crawl space is not nearly as tall as the basement, so it does not provide any additional living space. On the other hand, it can be used as additional storage space, and it can provide some protection against environmental hazards. You must make sure the crawlspace is ventilated to prevent mold and mildew from growing. Furthermore, it requires routine maintenance to provide structural issues from developing with the house. Always take a look at the quality of the crawl space before you decide to make a purchase.

Slab Foundation

You should also consider a slab foundation for your house. A slab foundation is very quick to build, very difficult for infestations to access, and incredibly durable. The biggest downside is that it does not provide you with any additional storage space. In addition, it may make it hard to access the plumbing if there is a problem that has to be addressed.

Find The Right Foundation

Ultimately, these are just a few of the many options available if you are looking for a new house. Familiarize yourself with the benefits and drawbacks of different foundation types. Then, do not hesitate to reach out to a professional who can help you find the right house to meet your needs.

What’s Ahead For Mortgage Rates This Week – August 29, 2022

August 29, 2022 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - August 29, 2022

Last week’s economic news included readings on pending home sales, new home sales, and readings on monthly and yearly inflation rates. Weekly readings on mortgage rates and jobless claims were also published along with the University of Michigan’s final monthly and year-over-year readings on consumer sentiment.

Commerce Department Reports Fewer New Homes Sold in July

Sales of new homes fell by 12.60 percent month-to-month and were 29.6 percent lower year-over-year in July. The Commerce Department reported a year-over-year sales pace of 511,000 new homes sold in July as compared with June’s revised pace of 585,000 new homes sold. June’s reading was revised from its original year-over-year pace of 590,000 new home sales and was the lowest pace of home sales reported since January 2016.

Fears of rapidly rising inflation and mortgage rates impacted would-be homebuyers as construction costs and labor shortages contributed to rising home prices. Pending home sales decreased by one percent in July as compared to June’s reading of -8.9 percent fewer pending sales reported in June.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported higher average rates for fixed-rate mortgages as the average rate for 5/1 adjustable rate mortgages fell. Rates for 30-year fixed mortgage rates averaged 5.53 percent and 42 basis points higher. Rates for 15-year fixed-rate mortgages averaged 4.85 percent and were 0.30 basis points higher. The average rate for 5/1 adjustable rate mortgages was three basis points lower at 4.36 percent; discount points averaged 0.80 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 243,000 first-time claims filed as compared to the previous week’s reading of 245,000 initial claims filed.

Inflation readings for July showed the first decrease since April 2020 as the month-to-month reading decreased by 0.10 percent as compared to June’s month-to-month reading of a one-percent increase in inflation. The core personal consumption rate, which does not include food or fuel costs, rose by 0.10 percent as compared to the expected reading of 0.20 percent and June’s reading of 0.60 percent inflation.

Inflation rose by 6.30 percent year-over-year in July as compared to June’s year-over-year reading of 6.80 percent. Core inflation rose by 4.60 percent year-over-year in July as compared to June’s reading of 4.80 percent. Decreasing inflationary growth suggests that relief may be on the way for consumers.

What’s Next

This week’s scheduled economic reporting includes readings on home prices, construction spending, public and private-sector job growth, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.

The Importance Of Pre-Approval During The Homebuying Process

August 26, 2022 by Coleen TeBockhorst

The Importance Of Pre-Approval During The Homebuying Process If you want to buy a home in the near future, you are probably aware of just how competitive the housing market is. You need to put yourself in the best position possible to be successful by getting pre-approved for a home loan. This is a very important step, particularly when you compete against people making cash offers. Learn more about the importance of getting pre-approved below, and make sure your offer is taken seriously.

A Pre-Approval Letter Shows You Are Serious

The first reason why you need to get a pre-approval letter is that it will show any potential seller that you are serious about buying the home. One of the reasons why settlers like to accept cash offers is because they know the sale will go through. Without a pre-approval letter, the seller may not know if you will be approved by a reminder for a home loan. By showing a pre-approval letter, the seller will know that you will get financing for the home, and they do not necessarily need to worry about the sale falling apart.

Getting Pre-Approved Gives You A Budget

You also need to get a pre-approval letter because it will give you a budget with which to work. Even though it is fun to take a look at different houses and imagine what your life might look like, you need to know how much money you can spend on a house. The lender will let you know the maximum amount that you are approved for, and you can quickly narrow down your search and find the right home to meet your needs.

Get Pre-Approved Before You Start Your Housing Search

The housing market is constantly changing, so you need to take advantage of every opportunity given to you. If you want to make it easier to navigate a difficult housing market, you need to get pre-approved before you start the housing search. Remember that you do not necessarily need to get a loan from the lender that gave you a pre-approval letter, but the seller needs to know that you have been approved by at least one lender if you want your offer to be taken seriously. A pre-approval letter does exactly that.

Winter’s Coming: Learn How to Prepare Your Plants, Trees and Other Landscaping

August 25, 2022 by Coleen TeBockhorst

Winter's Coming: Learn How to Prepare Your Plants, Trees and Other Landscaping From the approaching holiday season to the New Year, there are a lot of things to prepare for when it comes to the winter. It’s important, though, not to forget about the needs of your lawn for the upcoming cold season. If you’re wondering how to ready your trees, your plants and your yard, here are some tips for saving your vegetation until the springtime.

Fertilize For Grass Growth

It might seem like a waste of time to fertilize your grass going into the winter months, but this is actually the perfect time to prep it for spring. As fertilizer will provide much-needed nutrients to the grass in the months when there is less growth, it will actually stimulate improved growth down the road. It’s just important to ensure that you provide a consistent amount of fertilizer so a patchy-looking yard can be avoided. Since weeds scale back in winter, like most other varieties of plants, it can also be an ideal time to apply a herbicide.

Garden Plants And Perennials

While plant maintenance duties like pruning can be done in the spring or fall months, it can actually be a better idea to give your plants the summer months to grow before diving in. Cutting them back will enable the plant to focus its energy on maintenance through the cold winter months, so it’s a good idea to get to work in before the first signs of cooler air set in. If you happen to have plants that won’t last through the winter, you’ll want to compost them so they can be used for soil in the next gardening season.

Clearing Away The Wood

Beyond the garden and the lawn, it’s also worthwhile to provide a little care for your favorite trees before the winter hits. While you’ll want to be cautious about what you do and may want to consult with a gardening professional, clearing away dead branches can help your tree retain its health throughout the year. You may notice the difference in your trees when the spring rolls around again, as they’ll likely have a revitalized look and show signs of new growth.

Winter is a busy time for many people, but it’s important to make the time to fertilize your grass and prune your perennials so your yard will be ready for spring.

Expecting Children: How to Quickly Move into a Larger Home Before a Baby Arrives

August 24, 2022 by Coleen TeBockhorst

Expecting Children: How to Quickly Move into a Larger Home Before a Baby Arrives Starter homes are incredibly popular for young couples who plan to have a family in the future but don’t need a large place yet.

Life moves pretty fast sometimes and many couples find themselves expecting children before they have begun to look for the next home. This shouldn’t be a problem, as moving into a larger home before the baby arrives can be a lot easier than it appears.

Always Move Before The Baby Is Born

There is a choice when upgrading a home for children: moving beforehand and settling down in advance of having kids or waiting until after having the child and dealing with a move later on.

It may be tempting to wait until the stress of a pregnancy is over to move into a larger home. After all, selling and buying houses can be a tiring process for anybody, let alone expectant parents. Just remember, no matter how difficult or stressful the move is it will be one hundred times worse after having kids.

Work With A Professional To Help Coordinate The Move

There is nothing wrong with rushing through a purchase or the sale of a home, as long as everything is done correctly. A situation like this is never the right time to assume control and responsibility for every aspect of the move.

A real estate professional, once told of the situation, will know exactly how to handle everything. From preparing a current home for sale to finding a larger house in the right price range, a professional will have experience in coordinating the process.

Prepare For The Move In Stages

The best way to go about facilitating a quick move is to go in steps. Everything in the house that is not necessary to the staging should be boxed up and moved into temporary storage before the home is shown.

This is beneficial because it removes all clutter from the house and helps to make a quick sale and also allows for many personal items to be moved into the new house without having to wait for the current home’s sale to close. Instead of one gigantic move, the process can be broken down into several smaller moves to relieve some stress.

When there is a deadline on a move, you can increase your chances of selling your current home and buying a new one by using the services of a real estate professional. When things are done fast they need to be done right and a professional with experience can facilitate the entire process while making sure nothing slips through the cracks.

Assessing Your ‘Debt-to-Income Ratio’ and Why This Number Matters When Getting a Mortgage

August 23, 2022 by Coleen TeBockhorst

Assessing Your Debt-to-Income Ratio and Why This Number Matters When Getting a Mortgage If you are looking to buy a home, you may want to consider shopping for a loan first. Having your financing squared away ahead of time can make it easier to be taken seriously by buyers and help move along the closing process. For those who are looking to get a mortgage soon, keep in mind that the Debt-to-Income ratio of the borrower plays a huge role in the approval of your mortgage application.

What is a Debt-to-Income Ratio?

A debt-to-income ratio is the percentage of monthly debt payments compared to the amount of gross income that a person earns each month. Your gross monthly income is typically the amount of money you earn before taxes and other deductions are taken out. If a person’s monthly gross income is $2,000 a month and they have a monthly debt payments of $1000 each month, that person would have a DTI of 50 percent. The lower the DTI the better. 43 percent is in most cases the highest DTI that potential borrowers can have and still get approved for a mortgage.

What Debt Do Lenders Look At?

The good news for borrowers is that lenders will disregard some debt when calculating a borrower’s DTI. For example, utilities, cable, phone and health insurance premium would not be considered as part of your DTI. What lenders will look at are any installment loan obligations such as auto loans or student loans as well as any revolving debt payments such as credit cards or a home equity line of credit. In some cases, a lender will disregard an installment loan debt if the loan is projected to be paid off in the next 10-12 months.

What Is Considered Income?

Almost any source of income that can be verified will be counted as income on a mortgage application. Wage income is considered as part of a borrower’s monthly qualifying income. Self-employed individuals can use their net profit as income when applying for a mortgage, however, many lenders will average income in the current year with income from previous years. In addition, those who receive alimony, investment income or money from a pension or social security should make sure and include those figures in their monthly income as well when applying for a loan.

How Much Debt Is Too Much Debt?

Many lenders prefer to only offer loans to those who have a debt-to-income ratio of 43 percent or lower. Talking to a lender prior to starting the mortgage application process may help a borrower determine if his or her chosen lender offers such leeway.

A borrower’s DTI ratio can be the biggest factor when a lender decides whether to approve a mortgage application. Those who wish to increase their odds of loan approval may decide to lower their DTI by either increasing their income or lowering their debt. This may make it easier for the lender and the underwriter to justify making a loan to the borrower.

What’s Ahead For Mortgage Rates This Week – August 22, 2022

August 22, 2022 by Coleen TeBockhorst

Mortgage Rates August 22, 2022 Last week’s economic reporting included readings on home builder confidence in housing market conditions, Commerce Department readings on building permits issued, and housing starts along with readings on retail sales. Weekly readings on mortgage rates and jobless claims were also published.

NAHB: Home Builder Confidence Falls for 8^th Consecutive Month in August

The National Association of Home Builders reported an index reading of 49 for home builder confidence in August. Analysts expected a reading of 54 and July’s index reading was 55. Readings over 50 indicate that a majority of home builders surveyed viewed current housing market conditions as positive. Builders surveyed cited ongoing concerns including rising materials and labor costs and a lack of buildable lots, but rapidly rising mortgage rates and the resulting higher costs of buying a home increased home builders’ concerns about the U.S. housing market.

Builders reported making buyer concessions including lowering home prices and adding buyer incentives. 20 percent of home builders surveyed said that they reduced home prices within the last month.

Component readings for home builders’ confidence were also lower. Sales expectations for the next six months fell two points; the index reading for prospective buyer traffic fell by 5 points to 32 points. Regional readings also showed lower readings for builder confidence. The Western region reported 11 points lower builder confidence in July; home builder confidence in the Northeastern region fell by nine points and home builder confidence was seven points lower in the South. Home builder confidence in the Midwestern region fell by three points.

Mortgage Rates, Initial Jobless Claims Fall

Freddie Mac reported lower average mortgage rates last week as fixed-rate mortgages averaged 5.13 percent and were nine basis points lower. Rates for 15-year fixed-rate mortgages averaged 4.55 percent and four basis points lower. Rates for 5/1 adjustable rate mortgages averaged four basis points lower at 4.39 percent. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

Initial jobless claims fell to 250,000 initial claims filed as compared to 252,000 first-time jobless claims filed in the previous week. Analysts expected 260,000 initial jobless claims to be filed last week. Continuing jobless claims rose to 1.44 million claims from the previous week’s reading of 1.43 million ongoing jobless claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on sales of new homes and pending home sales, inflation, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published.

The Top Home Maintenance Mistake’s You Must Avoid

August 19, 2022 by Coleen TeBockhorst

If you own a home, you understand just how important it is to take care of it. Even though a lot of people think that if it isn’t broken you should not fix it, that doesn’t mean you should not take care of it. Take a look at a few of the top home maintenance mistakes you need to avoid, and do not let your home fall into a state of disrepair.

Allowing The Dyer Lint To Build Up

Do not allow the dryer lint to build up. Allowing the dryer lint to build up can dramatically increase your chances of dealing with a house fire. Therefore, make sure you remove the dryer lint from the dryer after every load. Furthermore, make sure you clean the ductwork of your dryer annually. If you do not know how to do so, reach out to a professional who can do it for you.

Forgetting To Clean The Gutters

You might not be able to see the gutters from the ground level, but debris can build up in them from time to time. If you do not clean your gutters, they can get clogged. Then, water will have a difficult time draining, which means it will sit on your roof. This could increase your chances of dealing with a roof leak. Make sure you clean your gutters every few months. You may even want to install a device that can prevent leaves and branches from infiltrating your gutters.

Not Handling Winter Maintenance

No matter where you live, you must be on top of your winter maintenance. Make sure that your attic is properly insulated, and check your windows for any signs of leaks. You should drain your garden hoses as well, and don’t forget to make sure that your interior pipes are insulated. All of this is important because it can help you save money on your utility bills while also reducing your chances of dealing with a leak.

Invest In Routine Maintenance

These are a few of the most common mistakes that homeowners make. Your home is an investment, and you need to take care of it. Make a list of all the maintenance tasks you should perform, and stay on top of your maintenance schedule.

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