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Financing Options For Home Improvement Projects: What To Know

July 12, 2022 by Coleen TeBockhorst

Financing Options For Home Improvement Projects: What To Know Are you planning on updating your house? A home improvement project can be expensive, but you don’t necessarily need to pay for the entire cost upfront. There are several loan options that can make it easier for you to get your home improvement project started right now. What are your options?

A Personal Loan

One of the most common options people use to finance a home improvement project is a personal loan. This could be a great option for you if you don’t want to use your home as collateral or if you don’t have enough equity in your home to use one of the other options available. The downside of this option is that you might have to pay a higher interest rate because a personal loan is not necessarily collateralized.

A Cash-Out Refinance

Another popular option is a cash-out refinance. In this option, you will refinance your mortgage, replacing your current loan with a new loan. Then, you will withdraw some of the equity in your home. You will increase the balance you have to pay back, but you will have a lump sum of cash you can use to cover the cost of your home improvement project. If interest rates have gone down since you took out your first mortgage, you might be able to keep your monthly payment the same. If you can’t get a lower interest rate, you might extend the length of the mortgage to prevent your monthly payment from going up.

A Home Equity Line Of Credit

Finally, you should also consider a home equity line of credit. As long as you have enough equity in your home, you can withdraw some of the equity and use it to finance the home improvement project. Essentially, it is a second mortgage, but it has a lower interest rate than a personal loan because you use your home as collateral.

Get Ready For Your Home Improvement Project

You need to think carefully about every financing option available to you. They each have their benefits and drawbacks, and you should get your finances in order before you decide to apply for a loan. Consider reaching out to a professional who can help you.

You Closed On A House: Do You Or Your Lender Own It?

July 8, 2022 by Coleen TeBockhorst

You Closed On A House: Do You Or Your Lender Own It? You were able to find a house and successfully close on it, so congratulations on becoming a homeowner! Then, you pause for a second and think: does your lender own your house? Some people believe that if they only put 20 percent down on a house, the lender actually owns the other 80 percent. Does this mean that your lender still owns a large portion of your house? This is not the case, but there are some caveats that you need to keep in mind.

Your Name Is On The Title

First, you are the one who owns the house. Your name is on the title, so you assume all of the benefits of owning the home. For example, if your home goes up in value between now and when you sell your home, you alone benefit from the capital appreciation of your home. Your lender isn’t suddenly entitled to more money just because your home is more valuable. You are the owner of your home, and your lender’s name should not be one anywhere on the title.

You Are Under A Legal Obligation To Pay Back Your Loan

Even though you own your home, your lender still has an important legal interest in your home. You are under a legal obligation to pay back your lender, and your lender can start legal proceedings if you do not pay back your loan. For example, if you fall behind on your mortgage payments, your lender can take legal action to repossess your house. This is called foreclosure, and you can be forcefully stripped of the title of your house. Stay on top of your mortgage payments to prevent this from happening.

After The Mortgage Is Paid Off

After the mortgage is paid off, your lender can no longer start the foreclosure process because you do not owe any additional money. On the other hand, other entities could foreclose on you if you do not pay your bills. For example, the government could take your home if you do not pay your real estate taxes from time to time. The laws vary from state to state, so try to familiarize yourself with the laws in your area.

First Time Home-buyers: How to Properly Research Your Mortgage Options

July 7, 2022 by Coleen TeBockhorst

First Time Home-buyers: How to Properly Research Your Mortgage Options For most consumers, buying a house is the largest purchase you’ll make in your life. That’s why it’s important to ensure that you have the best mortgage terms available. With so much at stake, it’s important to have full confidence in both your lender and your mortgage.

So how can you ensure that the mortgage you choose is the right one for you? Here’s how you can evaluate your mortgage options and find the best option for your individual circumstances.

Make Sure You Actually Do Shop Around

According to the Consumer Financial Protection Bureau, half of borrowers consider just one lender before applying for a mortgage, while 70% of borrowers only apply to one lender. While a broker or your bank can be a good source of information about mortgages and may offer great rates, that’s not always the case. The best way to get a great deal on a mortgage is to shop around and see what’s available.

Look For Information From Reputable, Independent Sources

When you’re looking at mortgage terms and evaluating lenders, it’s important that you remain skeptical. Lenders always have an agenda – to earn money on your debt. While lenders can indeed offer you expert information on the mortgage industry, they’re not exactly objective – so make sure that when you consider their offers, you refer to independent experts when deciding if you’re getting a good deal.

Compare Loan Terms, Not Bonus Incentives

Quite often, banks will offer their clients extra mortgage incentives available only to clients. These incentives can include things like free savings bonds or a free credit card limit increase. But just because you’re getting a freebie, that doesn’t necessarily make the mortgage a good deal.

It’s important to consider both the value of the incentive and the cost difference between mortgages. If your bank’s mortgage would cost you an extra $5,000 over the life of the loan compared to a third party mortgage, then your bank would need to give you $5,000 worth of free services in order to make your bank’s loan worth your money. Don’t be fooled by flashy freebies – look at the actual terms.

Finding the right mortgage can be a struggle, especially if you’re trying to do it on your own. That’s why it helps to consult an independent mortgage professional who can advise you on industry standards and help you to get the best terms. For more information or to schedule a consultation, contact your local mortgage advisor today.

An Overview Of A Drive By Appraisal

July 6, 2022 by Coleen TeBockhorst

An Overview Of A Drive By Appraisal If you are applying for a home loan of any kind, there is a high likelihood that your lender will require a home appraisal. An appraisal is done to figure out how much your home is actually worth because the lender does not want to lend you more money than you could theoretically sell the home for in the future. There are some situations where the lender might be fine with a drive/by appraisal. What does this mean?

Comparing A Traditional Appraisal To A Drive By Appraisal

A traditional appraisal is a very thorough process where the appraiser comes to the home and inspects almost every portion of the home. This includes the interior and exterior. Then, the appraiser uses the information to calculate an estimate of the value of the home.

In a drive-by appraisal, the appraiser will only look at the exterior of the home. Then, the appraiser will compare this to the exterior of similar homes in your area, such as in your neighborhood, to get a better idea of how the value of your home compares to similar homes near you. Then, the appraiser uses this to figure out the value of your home.

When Is A Drive By Appraisal Permitted?

Ultimately, a drive-by appraisal is permitted at the discretion of the lender. Typically, if you are applying for a new home loan, the lender will want a full appraisal; however, due to the pandemic, some lenders have become more lax and have been allowing drive-by appraisals for safety purposes. In addition, if you are applying for a refinance, the lender might not require a full appraisal. This is likely dependent on the time between your original home loan and the current refinance. It might also be dependent on your financial situation.

Do I Want A Drive-By Appraisal?

There are a few advantages to you if the lender allows a drive-by appraisal. The process is usually faster, so it could help you expedite the closing process. In addition, if someone occupies the home currently, a stranger doesn’t have to enter the home to inspect every nook and cranny. If your lender requires a home appraisal, be sure to clarify what type of appraisal has to be done to get you to the closing table.

What’s Ahead For Mortgage Rates This Week – July 5, 2022

July 5, 2022 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - July 5, 2022 Last week’s scheduled economic news included reports on home prices, pending home sales, and inflation. Weekly readings on mortgage rates and jobless claims were also released.

S&P Case-Shiller: National Home Price Growth Ticks Down in April

Home price growth slowed in April according to the S&P Case-Shiller National Home Price Index as growth slowed by 0.20 percent to a 20.40 percent gain year-over-year. Slower growth in home prices suggested that affordability concerns have caught up with the rapid home price growth seen during the pandemic.

The S&P Case-Shiller 20-City Home Price Index reported that Tampa, Florida home prices gained 35.8 percent year over year in April followed by a 33.3 percent price gain in Miami, Florida. Home prices in Phoenix, Arizona grew by 31.3 percent year-over-year.

Pending home sales rose by 0.70 percent in May as compared to April’s reading of -0.40 percent. Analysts expected pending home sales to fall by 0.40 percent in May.

Fixed Mortgage Rates, Jobless Claims Fall

Freddie Mac reported lower fixed mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by 11 basis points to 5.70 percent. Rates for 15-year fixed rate mortgages averaged 4.83 percent and were nine basis points lower than in the prior week. The average rate for 5/1 adjustable rate mortgages rose by nine basis points to 4.50 percent. Discount points averaged 0.90 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 231,000 claims filed last week as compared to 233,000 initial claims filed in the prior week. Continuing jobless claims were unchanged with 1.33 million ongoing claims filed last week.

In other news, the federal government reported that the Consumer Price Index rose by 8.60 percent year-over-year in May. This was the highest reading since 1981. Rising inflation was largely caused by rising food and fuel prices. The month-to-month reading for the Consumer Price index rose to 0.60 percent in May as compared to April’s month-to-month reading of 0.20 percent growth. Analysts said that the economy is slowing due to rising consumer prices and interest rates; the Federal Reserve recently rose its key interest rate range to 0.75 to 1.00 percent to ease rapidly rising inflation.

What’s Ahead

This week’s scheduled economic reports include labor sector data on job growth, the national unemployment rate, and job openings. Weekly readings on mortgage rates and jobless claims will also be released.

Case-Shiller: Home Price Growth Slows in April

July 1, 2022 by Coleen TeBockhorst

Case-Shiller: Home Price Growth Slows in April

U.S. home price growth continued but slowed in April according to the S&P Case-Shiller Home Price Indices. The national home price index posted year-over-year home price growth of 20.4 percent in April as compared to the corresponding home price growth rate of 20.6 percent in March. Analysts said that diminishing affordability was slowing rapid gains in home prices seen during the pandemic.

20-City Home Price Index: Florida and Arizona Report Top Home Price Growth Rates

The top three cities for year-over-year home price growth in April’s 20-City Home Price Index were Tampa, Florida with a reading of 35.8 percent; Miami, Florida reported 33.3 percent growth and Phoenix, Arizona reported a year-over-year home price growth rate of 31.3 percent.

Nine of the 20 cities included in the index reported higher price gains in April as compared to March. All 20 cities reported higher home prices in April than in March. While analysts noted the slower pace of home price growth, they cautioned against expecting falling home prices any time soon. Craig J. Lazzara, managing director of S&P Dow Jones Indices said that April’s increase in home prices ranked in the top 20 percent of historical experience for every city, and in the top 10 percent for 19 of the cities included in the 20-City Home Price Index.

FHFA House Price Index: Home Prices Rise in April

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported a year-over-year home price growth rate of 18.8 percent for single-family homes owned or financed by Fannie Mae or Freddie Mac. Home prices of homes owned or financed by Fannie Mae and Freddie Mac rose at a month-to-month pace of 1.6 percent in April.

The FHFA Home Price Index reports on home prices across the nine Census divisions; month-to-month home price growth ranged from 0.3 percent in the East South-Central division to 14.1 percent in the Mid-Atlantic division to 23.5 percent in the South Atlantic division. The FHFA Home Price Index is based on single-family home sales data from more than 400 cities in all 50 states.

The Quick and Easy Guide to Understanding the Math Behind Your Mortgage Closing Costs

June 30, 2022 by Coleen TeBockhorst

The Quick and Easy Guide to Understanding the Math Behind Your Mortgage Closing Costs It’s amazing that in a year with extremely low mortgage rates being reported around the country, closing costs are up by as much as 6% from the previous year. Part of the reason for this is that the stricter regulations on loans have increased the costs to banks, and they always find a way to pass on new costs to the consumer.

Understanding Third-Party Closing Costs

When closing on a mortgage the borrower will notice a long list of additional fees that they are expected to pay for. These can range from insignificant into the thousands of dollars depending on the state and the deal. When looking at these fees you will notice that some are third-party fees.

This is not out of the ordinary and you are not being taken advantage of. These costs are for services rendered by outside companies at the request of the mortgage lender to make sure everything is in order with the property.

Closing Costs You Can Expect To Pay

Anybody going through the mortgage process for the first time should expect to see several odd sounding terms on the bill. The first is ‘origination’ or ‘processing’ which is the primary fee the lender charges for creating the mortgage.

Other fees include discount points, flood certification, title insurance, credit report and appraisal. These are all necessary for buying a home and should be expected to appear when closing.

The Trick Behind Zero-Closing Cost Mortgages

With closing fees adding up it may seem like a good idea to opt for a mortgage that has absolutely no closing costs if it’s offered. While no money will be required up front, it adds up in the long run.

This is because the lender is making a deal. They agree to pay all the closing costs for the borrower in exchange for a slightly higher interest rate, which will pay out for them over the course of the mortgage.

The amount you can expect to pay really depends on the cost of living and real estate market where you’re buying. A mortgage specialist will be able to talk to you in advance of applying for your mortgage to give you a better idea of what you are looking at paying for closing costs. Contact one today for more information on why you have to pay closing fees and the amount you should be budgeting for.

You Are A Serious Buyer: How To Show It

June 29, 2022 by Coleen TeBockhorst

You Are A Serious Buyer: How To Show It Today, the housing market is as hot as it has ever been. There are many people who are missing out on their dream homes because they are having a hard time competing with countless other people who are in the same position as them. If you want to put yourself in the best position possible to win a bidding war, you might be thinking about paying cash for your home; however, not everyone is in the same financial position. There are a few other ways for you to show a seller’s agent that you are serious about your offer.

Get A Pre-Approval Letter

This is arguably the most important step you need to take if you want your offer to be taken seriously. One of the reasons why sellers like cash offers is that they know that they do not have to worry about the buyer’s financing falling through. If you get a pre-approval letter from a lender, the buyer will know that you already have financing in place. If you want to go the extra mile, get a pre-approval letter from a local lender. If you get a better loan offer from a different lender down the road, you can always switch lenders at that time.

Be Prepared To Pay Some Closing Costs

Traditionally, the seller is responsible for paying closing expenses; however, if you want the seller to pick your offer, consider shouldering some of those closing expenses. This will not have a long-term impact on your mortgage rate or monthly payment, but it could help you secure your dream home. You do not necessarily need to pay all of the closing expenses, but even paying a small percentage could go a long way.

Put Down More Earnest Money

A lot of sellers are nervous about what the inspection might show. They don’t want a buyer to back out at the last minute. If you put down more earnest money, you can show a seller that you are serious because there will be a lower chance of you pulling your offer if the inspection reveals a few repairs. You should talk to a real estate professional about how much earnest money you should include for your offer to be considered competitive.

The Top Things To Know When Refinancing Your Home

June 28, 2022 by Coleen TeBockhorst

The Top Things to Know Whne Refinancing If you are thinking about refinancing your home in the near future, you probably know that this is a great way to shorten the term of your mortgage while also saving money. At the same time, refinancing your home does not come without risks. Take a look at some of the top things you should do and what to avoid before you go through the refinancing process.

Do Check Your Credit Score

Always check your credit score before you begin the refinancing process. A surprising number of credit reports contain errors, and you need to correct any errors on your credit report before you apply for a new home loan. If you do not correct the mistakes ahead of time, you could end up with a higher interest rate on your new home loan than you should.

Don’t Forget To Think About Closing Costs

You need to consider closing costs before you apply for a home refinance. Just because interest rates have gone down doesn’t necessarily mean you will save money. In general, if you can get a home loan that is at least a half of a percentage point lower, you should save money when compared to the closing costs you will owe; however, you should always do the math to calculate your break-even point.

Do Think About The Equity You Will Have Left

If you complete a cash-out refinance, you need to calculate the amount of equity you will have left after the refinancing process is complete. While you might want to conduct a cash-out refinance to cover a major home repair or renovation, you do not necessarily want to completely deplete the equity in your home. You could end up with a very high-interest rate if you do so.

Don’t Forget To Talk To Your Lender About All the Options

When you refinance your home, you have multiple options available. You can tap into the equity in your home, reduce the size of your mortgage payments, or shorten the term of your loan. You should think about your goals and decide which option is best for your needs. Always talk to an expert before completing the refinance process.

What’s Ahead For Mortgage Rates This Week – June 27, 2022

June 27, 2022 by Coleen TeBockhorst

What's Ahead For Mortgage Rates This Week - June 27, 2022

Last week’s economic reporting included readings on home sales, Fed Chair Jerome Powell’s testimony on monetary policy to the House Financial Services Committee, and the University of Michigan’s Consumer Sentiment Index. Weekly reports on mortgage rates and jobless claims were also released.

New Home Sales Pace Rises as Pre-Owned Homes Sales Pace Slows

The Commerce Department reported a seasonally-adjusted annual pace of 696,000 new homes sold in May; analysts predicted a year-over-year pace of 587,000 new homes sold as compared to April’s year-over-year pace of 629,000 new homes sold. While the year-over-year pace of new home sales increased by 10.70 percent month-to-month in May, the year-over-year sales pace for new homes fell by 5.90 percent.

Increasing materials and labor costs continued to challenge home builders, but high demand for homes fueled sales of new homes even as mortgage rates and home prices rose. The median price of new homes sold in May fell to $449,000 from April’s record high of $454,700. The inventory of available homes fell by 7.20 percent in May, which equaled a 7.70-month supply of new homes for sale.

Regional results for new home sales were mixed; sales of new homes fell by -51.10 percent in the Northeast and were -18.30 percent lower in the Midwest. New home sales rose by 12.80 percent in the South and were 39.30 percent higher in the West.

In other news, Fed Chair Jerome Powell spoke on monetary policy before the House Financial Services Committee and explained the Fed’s strategy to ease inflation through a series of interest rate increases intended to cut into consumers’ purchasing power.

Mortgage Rates Rise; New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by three basis points to 5.81 percent. Rates for 15-year fixed-rate mortgages averaged 4.92 percent and were 11 basis points higher than in the previous week. The average rate for 5/1 adjustable rate mortgages was eight basis points higher at 4.41 percent. Discount points averaged 0.80 percent for 30-ye

ar fixed-rate mortgages and 0.90 percent for 15-year fixed-rate mortgages.

Initial jobless claims fell to 229,000 new filings last week as compared to 231,000 new claims filed in the previous week. Analysts expected 225,000 new jobless claims last week. Continuing jobless claims inched up with 1.32 million continuing claims filed as compared to the previous week’s reading of 1.31 ongoing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index fell to an index reading of 50.0 for June as compared to May’s reading of 50.2 and the expected June reading of 50.2. Consumer concerns over fuel prices and rising inflation eroded consumer confidence in the economy. Readings above 50 indicate that most consumers have a positive outlook on current economic conditions.

What’s Ahead

This week’s scheduled economic reports include readings from Case-Shiller on home prices, pending home sales, and construction spending. Weekly readings on mortgage rates and jobless claims will also be released.

« Previous Page

Financing Options For Home Improvement Projects: What To Know

You Closed On A House: Do You Or Your Lender Own It?

First Time Home-buyers: How to Properly Research Your Mortgage Options

An Overview Of A Drive By Appraisal

What’s Ahead For Mortgage Rates This Week – July 5, 2022

Case-Shiller: Home Price Growth Slows in April

The Quick and Easy Guide to Understanding the Math Behind Your Mortgage Closing Costs

You Are A Serious Buyer: How To Show It

The Top Things To Know When Refinancing Your Home

What’s Ahead For Mortgage Rates This Week – June 27, 2022

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