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Buying a Home? 4 Steps You Can Take to Ensure You Start out with a Low Monthly Mortgage Payment

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Buying a Home? 4 Steps You Can Take to Ensure You Start out with a Low Monthly Mortgage PaymentAre you thinking about buying a new house or condo? If so, you’ve likely given some thought to your mortgage and as to how you can pay as little as possible in order to own your new home.

Below we’ll share four easy steps that you can take to ensure you start out with an affordable monthly mortgage payment.

Make A Large Down Payment On Your Home

The easiest way to reduce your monthly payment is to invest as much as possible in your down payment. The less you have to borrow, the less you’ll be required to pay back.

If you can put a sizeable amount down on your home you’ll find that your monthly payments are going to be very manageable. You’ll also save a lot of money in interest.

Maintain A High Credit Score

When a lender assesses your financial history they’ll take an in-depth look at your credit score in order to determine how much risk you present to them. If you’ve kept a clean credit rating and have a high score, it’s likely that you will qualify for a lower interest rate than someone with a lower credit score – even if you both have the same monthly income.

Buy A Smaller, More Efficient Home

When you’ve made your short list of homes and you’re scheduling your viewings, ask yourself – do you need a home this big, or this expensive? If you can do with a smaller, more efficient home you can reduce the amount of mortgage financing that you require and this will in turn reduce the amount that you need to pay each month.

Consider A Longer Mortgage Term

Finally, if you need to reduce your monthly payment at any cost you can stretch out your mortgage repayment period by a few years. Note that while this can reduce your payment amount it will actually increase the total amount that you end up paying back as you’ll pay more in interest.

While the above are general tips for reducing your mortgage payment, it’s likely that there are other strategies that are unique to your financial situation. Contact your local mortgage professional at your convenience and they’ll be able to share insights that are relevant to your income, your credit and the price range you’re looking to buy into.

How Much House Is Too Much House: A Mortgage Calculation Guide

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How Much House Is Too Much House:When it comes to finding a home, this is an exciting time. Many people love looking at houses; however, the reality is that people also need to think carefully about how much house they can actually afford. Buying a home is a big decision and for many people this is going to be the most expensive purchase they ever make in their lives. Therefore, it is important to take the time to get this decision right. There are plenty of ways for people to calculate how much house they can actually afford. With a budget in mind, this will make the shopping process easier.

The 28 Percent Rule

One of the top ways that people can figure out how much house they can afford is called the 28 percent rule. This is a simple formula that states that the house should only spend 28 percent of their gross income on expenses related to homeownership. This includes:

  • The mortgage, including the principal and interest
  • Real estate taxes
  • Homeowner’s insurance
  • Private Mortgage Insurance (PMI), if this applies
  • HOA dues

Keep in mind that this is the gross monthly income, meaning that this is before taxes.

The 36 Percent Rule

Another key rule that people need to keep in mind is called the 36 percent rule. This is a rule that states that that people should not spend any more than 36 percent of their gross monthly income on debts. This might include housing expenses (such as the ones above), loan payments (including car loans and student loans), child support, alimony, and credit card debt. Therefore, those who have more of these expenses are going to have less money to spend on a home.

Find The Right Budget For A Home

This is a short overview of how people can figure out how much house they can afford. Once people know how much they can spend each month on a home, they should be able to calculate backward to figure out how big of a loan they can actually take out. Of course, it is always important to remember that there are trained professionals who can help people figure out exactly how big of a house they can afford.

What’s Ahead For Mortgage Rates This Week – October 12, 2020

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What's Ahead For Mortgage Rates This Week - October 12, 2020Last week’s economic reporting included readings on inflation,  job openings, a speech by Fed Chair Jerome Powell on the economy, and the latest Consumer Sentiment Index from the University of Michigan. Weekly reports on new and continuing jobless claims and mortgage rates were also released.

Hiring Surge and Job Separations Ease in August

The U.S. Department of Labor reported fewer job openings in August with 6.49 million job openings reported as compared to July’s reading of 6.70 million jobs available. Analysts noted that this indicated a slowdown in hiring after businesses re-opened when COVID-19 restrictions lapsed. Job separations, which include quits, layoffs. and terminations were also lower with 4.50 million job separations reported in August as compared to 4.99 million separations reported in July.

Fed Chair Says Economy Needs More Fiscal Support

Federal Reserve Chairman Jerome Powell said that the U.S. economy could use more support in a speech made to members of the National Association for Business Economics. Mr. Powell said, “Too little support would lead to a weak recovery, which would lead to  creating unnecessary hardships for households and businesses.”

Mr.Powell said that if too much assistance was provided, it would not go to waste; he also said that the economic recovery would be stronger and move faster if monetary policy and fiscal policy continue to work side by side to support the economy until it is clearly out of the woods. Forecasts of increased COVID-19 cases during fall and winter indicate the importance of additional economic relief measures.

Mortgage Rates Little Changed; as Jobless Claims Fall

Freddie Mac reported incremental changes in average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.87 percent and were one basis point lower. The average rate for 15-year fixed-rate mortgages was one basis pint higher at 2.37 percent. The average rate for 5/1 adjustable rate mortgages fell by one basis point to 2.89 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 0.20 percent.

New jobless claims fell to 840,000 claims filed as compared to 849,000 initial claims filed in the prior week. Continuing jobless claims also fell last week. 10.98 million continuing jobless claims were filed as compared to the prior week’s reading of 11.98 million ongoing jobless claims filed.

What’s Ahead

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

Four Ways You Can Enhance Your Home’s Value Before You List It for Sale

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Four Ways You Can Enhance Your Home's Value Before You List It for SaleWhether you’ve decided it’s time for an upgrade or you’re moving on to a new city, if you’re selling your home you may be wondering how you can boost its value before listing it up for sale.

In today’s blog post we’ll share four ways that you can spend a bit of time and money upgrading your home before it hits the local real estate market.

Spruce Up Your Landscaping

You’ll want your home to make a great first impression, and as such a great place to start is by sprucing up your lawn, gardens and other landscape features. Your grass should be a healthy green, free of weeds and freshly trimmed.

If you can, look to add seasonal flowers in your front gardens as this can add a bit of color to your home. Keep any shrubs or trees trimmed away from the home so that buyers can get a good look.

Apply A Fresh Coat Of Paint

Another excellent way to increase your home’s “curb appeal” is by applying a fresh coat of paint to the house, the trim around the windows and the front door.

Of course, painting a house is a big job so this might be one that is best left to a team of professionals. For added effect, replace the fixtures on the front door and pick up new house numbers.

Upgrade Your Kitchen Appliances

Many buyers will focus intently on your kitchen and the condition of everything from your flooring to your cupboards. If you have an older refrigerator or stove you’ll want to replace those with newer stainless-steel models.

You’ll also want to ensure that you have quality countertops – if you’re replacing them, consider going with granite as it’s popular with younger buyers.

Install A New Set Of Bathroom Fixtures

Finally, if you haven’t renovated your bathroom recently you’ll want to invest in modernizing your faucets, mirrors and other fixtures. The decor of your bathroom should match that in the rest of your home, but also stand out in its own unique way.

If you have an old bathtub with stained porcelain, consider replacing it with a glass-enclosed waterfall shower. Don’t forget about your light fixtures; if you find the bathroom is a bit dark, replace these with something that adds brightness.

For more information about the home staging and selling process, contact a local real estate professional today. Real estate agents are your best source for expert advice when selling a home, so don’t hesitate to pick up the phone and call if you have questions.

4 Ways COVID-19 Has Had An Impact On The Home Lending Process

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4 Ways COVID-19 Has Had An Impact On The Home Lending ProcessThe COVID-19 pandemic has impacted everyone and this includes the real estate industry. One of the biggest impacts that this pandemic has had involves the home lending process. Because many people are looking for ways to buy a home while engaging in proper social distancing measures, the industry has had to adapt. Learn more about some of the changes the COVID-19 pandemic has forced on the home lending process.

Homes Are Getting More Affordable

The demand for homes right now is high; however, homes are still more affordable than they have been in the past. Lenders are trying to find ways to encourage people to purchase homes because they have seen a drop in their business as well. As a result, many lenders are willing to provide potential homeowners with great offers and opportunities to purchase a dream home.

Online Applications Are Becoming More Common

Next, online applications are becoming more common as well. In order to help people buy a home while still engaging in social distancing, it is possible to complete the home application process online. This is usually provided through an intuitive system that provides clear instructions on what has to be submitted for the application process.

Buying Power Is Going Up

Because many homeowners and potential home buyers are realizing that now is a great time to buy, they are learning that they have a lot more power. They might be able to afford a larger home or carry out a home improvement project after buying their home. This provides more flexibility for homeowners.

Refinancing Is Becoming More Common

In addition to changes in the home buying process, there are changes taking place in refinancing as well. Many current homeowners are realizing that they have a unique opportunity right now as well. As a result, they are taking advantage of the opportunity to complete a refinancing deal to save money.

Home Lending Is Changing

These are just a few of the major changes that have taken place in the home lending process due to the COVID-19 pandemic. Anyone who owns a home or is thinking about buying a home should consider looking at their available options as well. There could be opportunities to save money.

Juggling Priorities: How to Manage Buying a New Home and Selling Your Old One at the Same Time

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Juggling Priorities: How to Manage Buying a New Home and Selling Your Old One at the Same TimeAre you a homeowner who is thinking about selling their current home and making an upgrade to a newer, larger home?

If you’re facing the prospect of having to manage a home purchase and a home sale at the same time you’ll find that there are numerous priorities that are begging for your attention.

In today’s blog post we’ll share a few tips for how to manage a buying and selling transaction simultaneously without being overwhelmed by them.

Start By Getting Your Finances In Order

Before you start the hunt for a new home you’ll want to ensure that your finances are in order and that you’re fully prepared for the many costs that you’ll face.

If you are currently paying off a mortgage on your home, you’ll either need to be approved for a second mortgage to buy your new home or you’ll need to sell your current home first.

You’ll also need to have your down payment lined up for the new home, as well as some money set aside to cover your closing costs. If you plan on selling first and then buying afterwards you may want to have a “transition fund” set aside to cover any rental or other costs if it takes a month or two before you get into a new home.

Selling First Is Typically Far Easier

It’s worth noting that selling your home first and then buying is far easier than buying first and trying to sell. There is a lot of uncertainty in the selling process, especially if you’re in a slower real estate market. Conversely, once you find that perfect new home you can typically get an offer in and close on it quickly if you’re the only bidder.

Begin The Hunt For Your New Home Immediately

Although you may want to wait before you buy your new home, you’ll want to get your house hunt started as soon as you decide to make your move. The more time you give yourself to find a new home, the better the chance you’ll get one in your target community and with the features you’re after.

Leverage Professional Expertise To Help You Manage It All

Trying to manage both selling your current home and buying a new one at the same time will be a significant challenge – one that can be made far easier by working with an experienced real estate agent who knows the ins and outs of the local market. Contact your real estate agent before getting started and they’ll be able to advise you how to best proceed.