The Pros and Cons of a Large Down Payment When Buying a Home

The Pros and Cons of a Large Down Payment When Buying a HomeIf you are in the market for a new home, one of the considerations you will need to make is how much to invest in your down payment. Let’s take a quick look at some of the pros and cons of making a large down payment when buying your next home.

A Large Down Payment Has Its Benefits

If you have the funds available, you may find a bit of an advantage in a large down payment. The following are a few potential benefits that you may realize.

You Can Afford More ‘House’ – if you are aiming for a large, luxurious home a significant down payment can help you get there. As long as your credit is in line with your needs, a large down payment leaves more room in your mortgage.

You May Pay Less Interest – conversely, if you don’t need to carry a big mortgage you can choose a shorter amortization period for your mortgage. A shorter loan period means that you are likely to pay less in interest.

You Might Not Need PMI – if you can afford to invest more than 20 percent of the home’s value in your down payment, you may not be required to purchase private mortgage insurance.

A Few Of The Downsides

Of course, there are some potential downsides to using a large portion of your available cash as a down payment:

Do You Have The Money? – a large down payment doesn’t make a lot of sense if your finances can’t tolerate that hit right now. If you have your down payment and little else, you might want to reconsider.

You Will Be Less Liquid In The Short Term – keep in mind that once you sign the closing paperwork, your down payment cash is gone. This will leave you a bit less liquid in the short term since you would need to sell your home to get that cash back out.

You Can’t Invest That Money Elsewhere – you won’t be able to use these funds for other investment purposes. Of course, real estate is an investment itself so this may be less of a concern.

Still Have Questions? Get In Touch

Choosing the right amount for a down payment is a decision best made with professional help. Contact your trusted mortgage professionals and we will be happy to share our experience and insight.

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Posted in Home Mortgage Tips | Tagged , ,

What’s Ahead For Mortgage Rates This Week – December 11, 2017

Last week’s economic reports included readings on projected top housing markets for 2018, weekly readings on mortgage rates and new jobless claims. Labor sector readings on private-sector job growth, private and public-sector job growth and the national unemployment rate were released. Projected top housing markets in 2018 were also released.

Realtors Release Projections for Top Housing Markets in 2018

Prospective homebuyers and retirees facing home affordability issues in metro areas such as New York City and the West Coast are seeking affordable housing markets according to data released by the National Association of Realtors®.

The top three housing markets for 2018 are expected to be Las Vegas, Nevada with a median home price of $285.405 and expected annual price growth of 6.90 percent. Dallas Texas held second place with a median home price of $339,000 and expected annual home price growth of 5.60 percent. Deltona, Florida held the third position for top housing markets in 2018. Deltona is located between Daytona Beach and Orlando, Florida. Within the city of Deltona, home prices average $159,000 in Deltona and $275.000in the metro area. Home prices are expected to grow at an annual rate of 6.0 percent.

Home prices continue to be driven by low supplies of homes for sale. High demand is causing prices in many metro areas to rise to unaffordable levels/ Retirees who are no longer tied to pricey metro areas are moving to less costly neighborhoods.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher mortgage rates across the board. The average rate for a 30-year fixed rate mortgage rose 0.04 basis points to 3.94 percent. 15-year fixed mortgage rates averaged 0.06 basis points higher at 3.36 percent. The average rate for a 5/1 adjustable rate mortgage was 0.03 basis points higher for an average rate of 3.35 percent. Discount points average 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week, with 236,000 new claims filed against expectations of 240,000 new claims filed and the prior week’s reading of 238,000 new jobless claims filed. According to November’s federal Non-Farm Payrolls report, government and private sector payrolls grew by 228,000 jobs as compared to expectations of 200,000 new public and private sector jobs added and the prior month’s reading of 244,000 jobs added.

ADP reported 190,000 private-sector jobs added in November as compared to 235,000 new jobs added in October. The national unemployment rate held at 4.10 percent, which was the lowest level in almost 17 years.

Whats Ahead

This week’s economic readings include releases on inflation, the Fed’s FOMC post-meeting statement, Fed Chair Janet Yellen’s press conference along with weekly readings on mortgage rates and new jobless claims. 

Posted in Mortgage Rates | Tagged

‘Pine’-ing for a New Look? 3 Ways You Can Use Wood Features to ‘Spruce’ up Your Home

'Pine'-ing for a New Look? 3 Ways You Can Use Wood Features to 'Spruce' up Your HomeWhether you are renovating an older home or putting the finishing touches on a new one, you would be amiss if you did not consider how to include furniture and other items made of wood. With a diverse range of colors and textures, wooden features are a must-have for any modern home design. Let’s take a look at three ways that you can use wood to add a little spice to your home decor.

Try A Visually Striking Wood Wall

If you are looking to add some ‘pop’ to a room, consider an offset or patterned wall made of wood. Your options are limitless when it comes to adding wood to a wall. Consider horizontal slats with a lighter wood like pine for a warm, modern feel. Alternatively, try a flat wall made of hardwood boards of a darker color than the room’s paint.

Go Rustic With A Farmhouse Dining Table

Does your dining room feel a little boring with your standard table and chairs? A rustic farmhouse dining table is an excellent way to breathe some life into your dining area. In addition, hardwood tables like these are sturdy and can suffer a lot of punishment. They are the perfect choice for families that are used to hosting large dinners or having company over.

If you are so inclined, you can build a table like this in just a few hours. Search around online for plans and head down to your local hardware store to get things started.

Reclaim And Refinish For Timeless Beauty

Finally, give some thought as to how you can use reclaimed wood in your home. Consider replacing tile or linoleum with a some “rip and refinish” hardwood flooring reclaimed from another house. Or if you would rather have wooden furniture, you can get chairs or side tables that are made of reclaimed wood. If you are located near the coast or beach, look around for large pieces of driftwood that can be turned into furniture by a local tradesman. While we cannot help you choose your wooden furnishings, we can help you find the best mortgage for your new home to put them in.

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Did You Know: Why New Construction Homes Are A Top Choice For Today’s Home Buyer

Did You Know: Why New Construction Homes Are A Top Choice For Today's Home BuyerAre you in the market for a new house? If so, you may have been comparing your options when it comes to open listings on the local market. One decision you will need to consider: do you want to purchase an existing home or build a new one? Let’s explore a few reasons why new construction homes are a popular choice for today’s home buyer.

A Home Designed (By You) With The Future In Mind

Ask anyone who has recently invested in a brand-new home, and many will share that all of the built-in technology was an essential factor. Today’s homes are designed with the future in mind. High-speed networking, better wireless connectivity, high-tech security and other features are all benefits that typically can’t be found in older homes.

Of course, don’t forget that you play a role in the design choices in a new construction home. It is your chance to design all of the features you would want in a dream house.

Energy And Cost Efficient

As you might imagine, homes constructed with modern designs and materials are vastly more energy than older homes. Tighter seals, better insulation and more efficient heating and cooling all translate to lower utility costs. Moreover, while the savings per day might seem small, over time, they add up. Leaving more money in your pocket for investment, saving or other purposes.

If you want to take it a step further, you may even decide to expand your new construction home with solar panels or other high-efficiency upgrades.

Less Maintenance Means More Free Time

Finally, you can sleep soundly knowing that a new construction home needs far less maintenance work than an older home. Of course, there will still be the occasional job that needs taking care of. So you will want to be diligent in fixing up any damage or issues that do occur so that the problem does not spread. But overall, you can expect to spend less of your free time repairing things and more of it relaxing and enjoying life.

These are just a few of the many great reasons to invest in a brand-new home. To learn more about financing a new construction home, contact us today. Our professional team is happy to discuss your needs.

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Downsizing? Here’s What You Can Expect When You Move From a House to a Condo

Downsizing? Here's What You Can Expect When You Move From a House to a CondoWhether the kids have moved out or you just aren’t using the extra bedrooms, having a house that feels ‘too big’ is rarely fun. In today’s post, we will share a few changes you can expect when you downsize from a large house to a smaller apartment or condo.

Why Downsize At All?

As you might imagine, having too much space is the primary reason that couples and families downsize. Larger homes cost more to maintain and can feel empty if it’s just one or two people living there. In many cases, old items and clutter tend to build up as there is so much storage space. Downsizing to a smaller home helps to maintain a lifestyle that is more efficient but no less luxurious.

Ask Yourself: Are You Ready?

Another consideration that you will need to make: are you ready to move? If you are retired from work, then you likely have enough time on your hands to manage a move. Conversely, if you and your spouse are both working full-time and live near your workplace, you may want to source a smaller home nearby.

Don’t forget that if you own the house you are living in now, this might mean having to list and sell it while buying your new home. This is a common situation and isn’t a significant problem, but it will require a bit of scheduling and financial planning.

The Hardest Part: Choosing What To Keep

Ask any couple or family that has downsized their home about the toughest part, and many will share that it was choosing what stays and what goes. When space is at a premium, everything from shoes to appliances needs to be considered.

Spend some time going through each room in your house, taking an inventory of what you have. Are there any family heirlooms or other emotional items that you can’t part ways with? After that, is there anything that will be usable in your new home? Everything else should be considered fair game. Sell it, donate it or toss it out.

Moving to a smaller home can seem challenging at first, but it is a lifestyle choice that can pay significant dividends. When you are ready to make a move, contact our professional mortgage team.

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Buying in 2018? Get Your Down Payment Ready Now by Tapping These Helpful Sources

Buying in 2018? Get Your Down Payment Ready Now by Tapping These Helpful SourcesAre you in the market for a new house or condo in 2018? With the new year just around the corner, now is the time to get all of your financial details in order. As you may know, buying a home is a significant financial transaction. But it all starts with your down payment, which is the lump sum that you invest in order to purchase the home. In today’s blog post we will share a few sources of funds that you can tap into for help saving up your down payment.

Peer Into Your Financial Future

A helpful first step is to map out your financial future. Do you have any lump-sum payments such as an annual bonus or a tax return coming up? If so, those are excellent sources of funds to help build up your down payment.

Put A Stop To Unnecessary Spending

Anytime you want to save money, an obvious step is to cut as much unnecessary spending as you can. Invest the time in creating a strict monthly budget which includes setting money aside for your down payment. Be sure to watch for any daily habits that are eating away at your savings, such as high-priced specialty coffees or eating out regularly.

Research Local Homebuyer Assistance Programs

Don’t forget that you’re not alone in your quest for home ownership. There are numerous federal, state and municipal homebuyer assistance programs that offer financial help when buying a home. Your local real estate professional will be happy to share some insight.

Check In With Your Employer

Finally, don’t forget to check in with your employer to see if there are any home ownership grants or subsidies. Down payment and home-buying assistance programs are becoming more popular with companies as an extra perk to offer employees. Send a quick email or stop by the human resources department to let them know you’re in the market for a home and to see if any programs are on offer. If your workplace does have a program like this, it’s the perfect time to take advantage.

Having your down payment funds ready will make the buying process faster and show your mortgage lender that you’re prepared for home ownership. For more information, contact your trusted mortgage professionals. We’re happy to share some amazing listings that perfectly suit your needs.

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What’s Ahead For Mortgage Rates This Week – December 4, 2017

Last week’s economic releases included readings on new and pending home sales, Case-Shiller index readings for September, and construction spending. Weekly readings on new jobless claims and mortgage rates were also released.

Home Price Growth Driven by Shortage of Homes for Sale

Case-Shiller Home Price Indices reported 6.20 percent growth in home prices year-over-year in September as compared to August’s reading of 6.00 percent year-over-year growth for August. September’s reading was the highest for national home price growth since 2014.

According to the 20-City Home Price Index, Seattle, Washington held on to first position with 12.90 percent home price growth year-over-year. Analysts noticed that the month-to-month reading for Seattle home prices dipped by 0.30 percent, which could indicate that home price growth may be cooling. Las Vegas, Nevada achieved second position for home price growth with a year-over-year reading of 9.00 percent. San Diego, California held third position with year-over-year home price growth of 8.20 percent.

High demand for homes coupled with the low inventory of homes for sale continued to drive home prices up in 16 of 20 cities charted in Case-Shiller’s 20-City Home Price Index.

New and Pending Home Sales Rise in October

Sales of new homes rose to 685,000 on a seasonally-adjusted annual basis to their highest reading in 10 years. The reading for new home sales year to date rose by 8.90 percent as compared to the same period in 2016. Analysts expected a reading of 620,000 new home sales as compared to September’s revised reading of 645,000 new homes sold. As of October, there was a 4.90 months supply of new homes for sale, as compared to September’s 5.20 months supply of new homes on the market.

The Commerce Department reported 3.50 percent growth in pending home sales in October as compared to September’s negative reading of -0.40 percent. In a further sign of confidence in housing markets, construction spending rose by 1.40 percent in October as compared to September’s reading of 0.30 percent and analysts” expectation of an increase of 0.40 percent in construction spending.

Mortgage Rates Mixed, New Jobless Claims

Mortgage rates were mixed last week with average rates for fixed rate mortgages dropping two basis points. A 30-year fixed rate mortgage averaged 3.90 percent; rate; rates for a 15-year fixed rate mortgage averaged 3.30 percent and rates for a 5/1 adjustable rate mortgage rose two basis points to 3.32 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims dipped by 2000 new claims to 238,000 initial claims filed. Analysts expected new jobless claims to hold steady at the prior week’s reading of 240,000 new claims filed.

Whats Ahead

This week’s scheduled economic releases include ADP payrolls, and Commerce Department readings on Farm Payrolls and the national unemployment rate. Consumer sentiment will be updated next week along with weekly readings on mortgage rates and new jobless claims.

Posted in Mortgage Rates | Tagged

Win the Bidding War With Our 5 Minute Guide to Making an Offer the Seller Won’t Refuse

Win the Bidding War With Our 5 Minute Guide to Making an Offer the Seller Won't RefuseAsk any experienced homeowner and you’ll learn that buying in a ‘hot’ real estate market can be challenging. A high supply of buyers competing for a low stock of available homes is a combination that can lead to bidding wars, price inflation, and other headaches. The good news: with some careful preparation and the right mindset, a bidding war is one that you can win. Read on to learn how you can beat out other bidders by making an irresistible offer.

Start With Strong Representation

Answer this question honestly: are you an experienced negotiator? Unless you have made a career out of buying and selling homes, you may find that your skills are lacking. The middle of a bidding war is a poor time to have this realization, so it’s best to start the process with strong professional representation. Invest the time in securing the services of an experienced real estate agent who has a history of successful home purchases and happy clients. We can recommend an excellent resource for you.

Get Pre-Approved For Your Mortgage Financing

Now that you have a good real estate agent on your side, you’ll want to move to the next step: meeting with a mortgage lender. Your goal is to secure pre-approval for your mortgage financing, which will show the seller that you’re both prepared and serious about buying their home. Gather up recent financial information like pay stubs, tax returns, and bank statements before meeting with a mortgage professional. Being prepared will make the approval process a bit easier.

Have The Appraisal And Inspection Team Ready

Once you have found your dream home, you will need to move quickly to have it appraised and inspected. As with your other professionals, it’s best to pre-book these companies ahead of time so they’re ready to go. Ask your friends and family for referrals now so you can chat with potential appraisers and inspectors.

Be Serious About A Quick Closing Process

Finally, if it isn’t already obvious to them, make it clear to the seller that you’re interested in closing quickly. Every home seller is interested in a fast, efficient close so they can move on. Pushing the pace a bit will demonstrate that you’re not going to reverse course.

When you are ready to buy your dream home, our professional mortgage team is here to help. Contact us today.

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Make 2018 the Year You Escape the ‘Rental Trap’ by Buying Your Own Home

Make 2018 the Year You Escape the 'Rental Trap' by Buying Your Own HomeAre you growing tired of paying rent each month and not building your net worth? Being stuck in the ‘rental trap’ isn’t much fun, but if you are determined, you can break out. Let’s explore some of the steps that you can take to make 2018 the year that you become a homeowner.

Rent Money Is Lost Money

First – why homeownership? As you may already understand, money spent on rent is ‘lost’ money. Each month you pay your rent, but you do not build any equity, own any property or get any other benefits in return. When you own a house, the money you spend each month is being invested in the home. You are building value in the home over time which you can then realize if and when you decide to sell.

Choose Your Home And Location Wisely

Do you know where in the local area you want to live? And what kind of home you want to live in? If you are a single young professional, a condo or apartment might be the perfect starter home. However, if you are married and have a family, there will be other factors such as schools and amenities to take into consideration. Invest some time in going through local real estate listings and making a short list of communities that seem like a good fit.

Polish Up That Credit Score

Ask yourself: how is your credit score looking? Is it perfectly spotless? Or do you have some past issues that need cleaning up? It is worth checking in with one of the major credit reporting agencies to find out your credit score and if there are any blemishes that need to be taken care of. You can request a free credit report once per year, so take advantage today.

Get Your Down Payment Saved Up

Finally, if buying a home in 2018 is going to be realistic, you will need to ensure that you have your down payment saved up. Although it is possible to buy a house or condo with no down payment, there are pros and cons to this approach. If you can save 10 or 20 percent of the cost of the home, it will go a long way in helping to get your mortgage approved and the sale closed.

If you are ready to break out of the rental trap and start down the path to homeownership in 2018, contact us today. Our professional mortgage team is happy to share how we can assist you in becoming a homeowner.

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Case-Shiller: Home Prices Grow at Fastest Rate Since June 2014

Home prices continued to rise in September according to Case-Shiller National and 20-City home price index reports. According to the National Home Price Index, national home prices rose 0.70 percent month for the three months ending in September. The National Index regained its pre-housing bubble peak and surpassed it by 5.90 percent as of September.

The 20-City Home Price Index rose 0.50 percent from August’s reading. Analysts forecast a growth rate of 0.40 percent month-to-month. The 20-City Home Price Index indicates a home price growth rate 0f 6.20 percent year-over-year. The 20-City Index remained 1.50 percent below its peak in 2006.

The 20-City Home Price Index showed 16 of 20 cities posted gains in home price growth. Seattle, Washington, which has consistently held the top spot for year-over-year home price growth, posted slower growth for September. Seattle held on to its lead for year-over-year home price growth with a reading of 12.90 percent. Las Vegas Nevada held second place in the 20-City Index with a year-over-year home price growth of 9.00 percent. San Diego, California held third place with a year-over-year reading of 8.20 percent appreciation in home prices.

CaseShiller Home Prices: Not the Whole Story

Analysts caution that while Case-Shiller Home Price Index reports are intended as a tool for real estate investors, they may not reflect all factors impacting U.S. housing markets. An analysis published in May by Trulia indicated that only 38 percent of U.S, homes have recovered their post-recession values. Some analysts say that methodology used for calculating the Case-Shiller home price index readings does not reflect individual or local factors impacting home prices.

In an unrelated report, the Federal Housing Finance Agency reported that home prices for properties with mortgages sold to or guaranteed by Fannie Mae and Freddie Mac were up 6.50 percent from the third quarter of 2016 to the third quarter of 2017.

FHFA reported that the District of Columbia and all 50 states posted higher home price gains for the period between Q3 2016 and Q3 2017. The top three year-over-year home price gains were held by Washington, D.C at 11.60 percent; the state of Washington held second place with a gain of 11.50 percent and Hawaii and Arizona tied for third place with year-over-year home price gains of 10.00 percent.

FHFA reported home price growth in all 100 areas it tracks and said that the Seattle, Washington region held the highest year-over-year growth rate of 14.60 percent.

Posted in Home Values | Tagged