On Time, Every Time: How Being Late on Monthly Payments Can Affect Your Mortgage

On Time, Every Time: How Being Late on Monthly Payments Can Affect Your MortgageAre you the type of person that struggles with remembering to pay their bills on time? You’re not alone. People across the country regularly submit late monthly payments, inflicting terrible damage to their credit. Let’s take a quick look at how paying your loan or other monthly payments late can have a negative impact on your mortgage.

Your Credit Score Is At Risk

As you already know, almost all banks, credit cards, mortgage companies and other lenders rely on your credit score to help assess the risk of lending money to you. Paying any of your payments late – even something as small as your mobile phone bill or a department store credit card – can result in negative marks showing up on your credit report. If you are late enough times or fail to repay the late payment in full, then your score will start to drop.

Refinancing Can Be Affected

If you already have a mortgage, then a lower credit score can be a problem when you try to refinance. The process of refinancing involves taking out a new mortgage, in which your lender will reassess your risk using your credit score as one of the indicators. If you have been making late payments, you might end up having to settle for a higher interest rate or you may even be declined for the new mortgage.

Making A Late Payment? Contact Your Lender

If you are caught in a bind and have to make a late payment, it is best to get a call in to your lender as soon as possible. First, there may be a grace period in which you can be a few days late without any penalty. If that little bit of breathing room is all you need to get caught up, you’re set. If not, you can let them know your circumstances and discuss what options you have.

It is essential to pay your monthly payments on time, even if it means making some small sacrifices in other areas. The better your credit score looks, the more opportunities you will have to make positive financial moves in the future. To learn more about monthly mortgage payments or to take out a mortgage on a new home, contact us today. Our team of mortgage professionals is here to help you find a mortgage to buy the home of your dreams.

Can I Buy a Piece of Land and Build a House on It With a Mortgage? Yes — Here’s How

Can I Buy a Piece of Land and Build a House on It With a Mortgage? Yes -- Here's HowHave you been hunting for a new house without finding one that suits your needs? If so, one option that you may want to consider is building a new construction home on a choice piece of land. In today’s blog post we will explore a few different mortgage options for those who are looking to build a brand-new home.

Qualifying For A Construction Mortgage

As with any mortgage product, the first step you will want to take is to begin the qualification process. As your lender does not have a completed house to use as collateral for your loan, qualifying can take a bit longer than usual. Your mortgage lender will gather information about the home you plan to build, including its size, features and who is contracted to build it. The more information you can provide during the qualification process, the better. You might find it helpful to have your builder or general contractor involved as they will have many of the answers needed.

Construction-to-Permanent Mortgages

One type of new construction mortgage is known as a ‘construction-to-permanent’ loan. With this kind of mortgage, you only go through the closing process once. In many cases, while your home is being built you are only responsible for paying off the mortgage interest each month. Once your home is finished, your lender will convert this mortgage into a standard mortgage like any other. You can choose from a variety of amortization periods, interest rates and more.

Standalone Construction Loans

A standalone new construction loan is a bit different. With this product, you borrow money to finance the construction of your home and then again as a permanent mortgage once the home is completed. These loan and mortgage combinations require you to go through the closing process twice and thus your fees may be a bit higher. However, if you are currently living in a home and won’t have much cash until it is sold, this might be the right product for you.

As you can see, qualifying for a mortgage to build a new home on a piece of land is a bit different than a typical mortgage. To learn more about construction mortgages or to start the application process, contact us today. Our professional team is happy to share our expertise.

Buying a Rental Property? These 4 Key Tips Will Ensure You Buy One That Turns a Profit

Buying a Rental Property? These 4 Key Tips Will Ensure You Buy One That Turns a ProfitAre you starting to grow bored of watching your money go nowhere sitting in a bank account? With today’s interest rates doing little to encourage saving, many individuals are looking elsewhere for new investment opportunities. In today’s blog post we’ll share four essential tips for buying a profitable rental property. Let’s get started.

Buy A Property With Year-Round Potential

Many real estate investors agree that the best rental properties are those that generate income every day of the year. The most straightforward situation to manage is one where you have stable, long-term tenants in place that aren’t going to move or change often. Browse local property listings around schools, colleges, and large employers to see if there are any suitable homes for sale.

Once you gain experience and invest in other properties, consider branching out into vacation or short-term stay homes. But to get started, aim for stability.

Predict Your Income And Expenses

Next, you will want to craft a budget. Have a look through rental listings in your target communities to see what renters are currently paying. This will give you some idea of your potential rental income for a similar-sized home. You can then compare this to your estimated monthly mortgage payment, taxes, utility costs, and repairs. It is impossible to predict precisely how much you will need, but this exercise can quickly prove whether this area is likely to be profitable.

Treat Your Rental Properties Like A Business

Since you have already taken the first steps with a budget, you might as well continue down the path to a full business structure. Most real estate investors set their portfolio up in an incorporated or limited-liability company, which reduces personal exposure. It can also be an efficient way to manage any legal issues that arise as your investments grow. Also, there will be significant tax advantages, including being able to write-off expenses such as repairs, contractor work, and renovations.

Work With Experienced Professionals

Speaking of contractors, it’s worth reminding to only work with experienced professionals who are licensed, certified and have references. Paying for quality work up-front ensures that you won’t have to deal with hefty repair bills due to shoddy workmanship.

When you are ready to invest in rental properties, give us a call. Our professional mortgage team is happy to financing options that are perfect for investment and rental properties.

What’s Ahead For Mortgage Rates This Week – January 2, 2018

Last week’s economic readings included Case-Shiller Home Price Indices, pending home sales and consumer confidence. Weekly readings on mortgage rates and new jobless claims were also released.

CaseShiller: Home Prices Continue Growth

Case-Shiller Home Price Index reports indicated incremental growth in October with home prices growing month-to-month 0.70 percent for the S&P Case-Shiller 30-City Home Price Index. The 20-city index posted 6.20 percent gains year-over-year. Western cities continued to post the largest gains; Seattle, Washington led with a year-over-year growth of 12.70 percent. Las Vegas, NV and San Diego, California rounded out the top three with year-over-year home price growth of 10.20 percent and 8.10 percent.

Pending Home Sales Subject to Slim Inventory of Available Homes

Homes under purchase contract rose by 0.20 percent in November as compared to an increase in pending sales of 3.50 percent in October. Analysts expected pending sales to rise by 0.50 percent in November. Extremely low inventories of available homes continued to dampen home purchases in November. The National Association of Realtors® said there was a 3.40 months’ supply of homes for sale as compared to an average reading of a six months supply.

Small inventories of homes for sale constrict sales by driving up prices, increasing buyer competition and challenging buyers to find homes they want buy among limited choices.  Pending sales varied by region with the Northeast posting a 4.10 percent increase in pending sales; the Midwest posted an increase of 0.40 percent in pending sales The South posted a decline in pending sales of -0.40 percent. The West posted a decrease of 1.80 percent, which could indicate that rapidly rising prices in Western markets are topping out. Analysts said that the disparity between pending home sales and completed sales of pre-owned homes made it difficult to accurately assess the future housing market trends.

Mortgage Rates Rise, Consumer Confidence Highest in 17 Years

Freddie Mac reported higher average mortgage rates last week. Rates for a 30-year fixed rate mortgage averaged five basis points higher at 3.99 percent; the average rate for a 15-year fixed rate mortgage was six basis points higher at 3.44 percent. The average rate for 5/1 adjustable rate mortgages was eight basis points higher at 3.47 percent. Discount points were unchanged on average at 0.50 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Analysts had forecast a hike in mortgage rates after the Fed raised its target federal funds rate.

Consumer confidence rose to its highest rate in 17 years in November. December’s month-to-month index reading was 122.10 as compared to an expected reading of 127.5 and November’s reading of 128.6.  Although confidence dipped in December, analysts said that consumers are confident about jobs and the economy.

Whats Ahead

This week’s economic readings include releases on construction spending, ADP and Non-farm payrolls and the National unemployment rate. Weekly readings on mortgage rates and first-time jobless claims will also be released

3 Dog Breeds That Are Perfect for the Allergy-Prone Pet Lover

3 Dog Breeds That Are Perfect for the Allergy-Prone Pet LoverDo you find yourself itchy and sneezing after an encounter with a friendly, furry dog? You are not alone. The CDC estimates that around ten percent of Americans suffer from allergies related to dogs or cats. But, of course, that is no reason not to enjoy the love of a dog. So, if you are ready to push your suffering aside and adopt a furry pal, below are a few breeds that are perfect for those prone to allergies.

What Causes Dog-Related Allergies?

Do you know what the primary causes of pet-related allergies are? Many people believe that reactions are triggered by hair that has been shed, but this isn’t entirely accurate. Shed hair carries flakes of dead skin known as dander, and it is this dander which causes most typical dog-related allergic reactions.

In an allergy-prone individual, this dander is treated as a harmful invading virus or bacteria. The body issues an immune response with symptoms like sneezing, watery eyes, hives and coughing which can be treated with antihistamines.

Note that it is not just a dog’s dander that can cause a reaction. Dog saliva and urine are also known to carry the proteins that can trigger allergic reactions.

3 Breeds Perfect For Allergy Sufferers

The Poodle – if you are the energetic type that likes to get out and walk, a Poodle might be the right fit. Poodles are recognized as a cleaner dog as they do not shed much fur. They love to get outside and can be trained easily.

The Schnauzer – if you are more of an introvert or have a quiet side, you might find a Schnauzer to be a better companion. These are smaller dogs that aren’t going to beg you to run around for a few miles each day.

The Bichon Frise – this breed is an excellent choice for first-time dog owners and those who prefer smaller dogs. Bichon Frise are happy, friendly dogs that are very sociable. They are not incredibly high maintenance, but they do need daily grooming.

Renting A Home That Doesn’t Allow Pets?

If you are thinking about how great it would be to have a dog but can’t get one due to your current rental situation, contact us today. Our friendly mortgage professionals are happy to introduce financing options for a pet loving home.

Case-Shiller: Home Prices Rise in October

According to Case-Shiller national and 20-city home price indices for October, home prices continued to rise.  National home prices rose 0.70 percent for the three months ending in October. Year-over-year, national home prices increased by 6.20 percent. The 20-City Home Price Index also rose by 0.70 percent in October and reported a year-over-year increase of 6.40 percent.

The top three metro areas in the 20-City Index were Seattle, Washington with a year-over-year increase of 6.40 percent; Las Vegas Nevada followed with year-over-year home price growth of 10.20 percent. San Diego, California had the third highest home price growth rate at 8.10 percent year-over-year.

The year-over-year percentage increase was 1.30 percent below the all-time high reading for the 20-City Index.

Home Price Growth, Sales Could Face Headwinds in 2018

David M. Blitzer, CEO of the S&P Indices Committee, said that 2018 may bring challenges to home price growth. Mr. Blitzer said that while strong labor markets, economic growth, and low mortgage rates were major factors driving home price growth, higher mortgage rates are expected next year. Rising rates would make buying a home less affordable for some. Home price growth continued to outstrip inflation and income growth.

Mr. Blitzer cited an Urban Institute report that indicated that high-priced metro areas may compel would-be home buyers to consider renting. High-demand metro areas are subject to high rates of buyer competition and bidding wars can drive affordable home prices beyond the reach of first-time and moderate-income buyers.  Significant numbers of buyers turning to rentals could drop the demand for homes and possible ease the rate of home price growth.

Analysts expected home prices to continue increasing due to low supplies and high demand. Millennials are entering their home-buying years and relatively low mortgage rates have supported affordability, but higher mortgage rates and continued competition from investors and cash buyers could stifle demand for homes in the new year.

Landlord Squeezing You for yet Another Rent Increase? It’s Time to Buy a Starter Home

Landlord Squeezing You for yet Another Rent Increase? It's Time to Buy a Starter HomeDid you recently receive your annual notice that the rent is going up? If so, you’re not alone. Millions of renters are seeing more and more of their income drained away due to higher rents. To make matters worse, every dollar in rent is one that you are not saving, investing or using to build your net worth. If you’re feeling the pinch of higher rents, it might be time to buy your first starter home.

Comparing Rent With A Mortgage

Have you ever done the math to understand how close your monthly rent might be to a mortgage payment? Here’s a quick and easy exercise. Multiply your monthly rent by twelve, and then multiply that number by 25. For example, if your rent is $1000 per month, that is $12,000 per year and $300,000 over 25 years. So if nothing changed from today, you could afford a $300,000 mortgage.

Homes Are More Affordable Than You Think

Many first-time home buyers are convinced that they can’t afford to enter the market, but that is not the case. There are homes available that fit almost every budget or price range. In fact, it is less important to worry about the total cost and more important to worry about location, size and local amenities like schools and parks.

Remember, when you buy a house you aren’t just locking yourself into a rental contract. You are investing in a home and property have the potential to gain in value over time.

A Few Other Considerations

Of course, there are some considerations that you will need to make as you start down the path to homeownership. The first is that your mortgage is unlikely to be your only monthly expense. You will also encounter property and other taxes, utility fees and if you buy a condominium or apartment, homeowners’ association fees. You will also be responsible for maintenance and upkeep since you own the home. But that also means that you are free to customize and renovate as you see fit.

Keep in mind that it is never too late to escape the rental trap. When you’re ready to start building your future by investing in your first home, contact us. Our experienced mortgage team is happy to share financing options that will suit your budget.

What’s Ahead For Mortgage Rates This Week – December 26, 2017

Last week’s economic reports included readings on NAHB homebuilder confidence, housing starts, building permits issued and sales of previously-owned homes. Weekly releases on mortgage rates and new jobless claims were also released.

Builder Confidence Rises, Housing Starts Increase

According to the National Association of Home Builders Housing Market Index for December, builder confidence in housing market conditions rose by four points to 74. This reading was the highest since 1999. Builder confidence increased based on strong labor markets, demand for homes and potential tax breaks resulting from proposed tax code revisions.

Housing and real estate industries continued to cite an imbalance caused by high demand for homes and few available homes for sale. Increasing production of new single-family homes is the only way to ease the discrepancy between supply and demand. Reducing demand for homes would also slow the pace of home price growth, which impacted the ability of first-time and moderate-income home buyers to purchase homes.

Commerce Department readings indicate that builder confidence aligned with housing starts in November. 1.297 million housing starts were reported as compared to expectations of 1,250 housing starts based on October’s revised reading of 1.256 million starts on a seasonally adjusted annual basis. Housing starts were 3.30 percent higher month-to-month and 12.90 percent higher year-over-year. Single-family starts were 5.30 percent higher for November. Analysts said that this indicated builder confidence in single-family home building increased.

Building permits issued in November were lower than in October, but home construction slows in the winter months. 1,298 million building permits were issued in November as compared to 1.316 million permits issued in October.

Demand Pushes PreExisting Home Sales in November

Sales of Previously-owned Homes rose to 5.81 million sales on a seasonally-adjusted annual basis as compared to October’s reading of 5.50 million sales of previously-owned homes. Pre-owned homes sales were 5.60 percent month-to-month and 3.80 percent higher year-over-year.

The National Association of Realtors® reported increased sales of pre-owned homes in all regions except the West, where high home prices may be topping out. The Northeast reported 6.70 percent growth in sales; the Midwestern region had the highest rate of sales with growth of 8.40 percent and the South reported 8.30 percent growth in sales of previously-owned homes. The West reported a drop of -2.30 percent in sales of pre-owned homes.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week. The rate for a 30-year fixed rate mortgage was one basis point higher at 3.94 percent; the rate for a 15-year fixed rate rose two basis points to 3.38 percent. The average rate for a 5/1 adjustable rate mortgage rose three basis points to 3.39 percent. Discount points for fixed rate mortgages averaged 0.50 percent for fixed rate loans and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were higher last week with 245,000 new claims filed as compared to last week; reading of 225,000 new jobless claims and expectations of 230,000 new claims.

Whats Ahead

This week’s economic releases include the Case-Shiller Home Price Index, pending home sales and consumer confidence. Mortgage rates and weekly jobless claims will also be released.

Take Your Bathroom From ‘Drab’ to ‘Fab’ With These Do-it-Yourself Bathroom Renovations

Take Your Bathroom From 'Drab' to 'Fab' With These Do-it-Yourself Bathroom RenovationsDoes your bathroom look amazing? As one of the most used rooms in every home, the bathroom can almost always use a bit of a facelift. In today’s blog post we will share a few DIY renovations that will take your bathroom from drab to fab.

Embrace A New Color Palette

One of the best ways to start your bathroom makeover is to figure out a new color palette for the room. Do you like soft, muted colors like a powder blue, light gold or cream? Or maybe something a bit louder and more exciting like a merlot red or deep purple? Whatever your taste, a splash of color might be just what your bathroom needs.

Start with a fresh coat of paint on the bathroom walls and work outwards from there. If you have windows, consider how you want the trim to contrast with the walls. Baseboards or molding can also offer contrasting effects, helping them to stand out more.

And of course, don’t forget to take care of the smaller bathroom accessories. Your shower curtain, hand towels, and even your toothbrush cup can all be matched.

Take Your Fixtures To The Next Level

Once you have decided on colors, it is time to turn your attention to the fixtures around your bathroom. The towel racks, hooks, faucets, shower head and toilet paper holder should all match in some way. If you do not have a lot of cabinet space, investing in a mirror that includes storage might be the perfect solution. If you have items like a scale or plunger in plain sight, think on some creative ways to hide them.

Brighten Things Up With Better Lighting

While you do not need ‘selfie quality’ professional lighting in your bathroom, it might be time for a brighter, more efficient light fixture. Aim for a design that complements the rest of the accents in your bathroom while being large enough to cast a bright light. You can also spend a bit of time choosing the correct color temperature for your bathroom light bulbs. LED lighting can offer some bold whites, but be careful that you don’t go overboard.

Renovating your bathroom is a fun way to spend a weekend or two improving your home. If you are thinking about buying a new home, contact us. Our professional mortgage team is happy to help you find the perfect financing option.

How to Run a Quick Financial Health Check Before You Apply for a Mortgage

How to Run a Quick Financial Health Check Before You Apply for a MortgageAre you planning on using a mortgage to help cover the cost of a new home? If so, you will want to prepare your finances and figure out how you will manage all those wallet-draining monthly expenses. Let’s take a look at how to run a quick financial health check to ensure you are ready to apply for a mortgage.

Update (Or Start) Your Monthly Budget

First, it is essential to get the basics out of the way. If you haven’t already, it’s time to start a monthly budget to keep track of your income and expenses. Once you have a mortgage, it will be important to prioritize your monthly payments so that you don’t end up falling behind.

Starting a budget is easy and can be done with mobile apps, software, a spreadsheet or a pen and paper. List all sources of income so that you know exactly how much cash you are working with. Then, list out every one of your expenses. It can be tough to remember them all, so consider using debit and credit card statements from the past few months as a reminder.

Get A Copy Of Your Credit Report

Next, you will want to get a copy of your credit report so you can see what potential mortgage lenders will see when assessing your financial history. This is a free service that you can request once per year, so be sure to take advantage. Note that you will want to use government-approved websites for requesting your credit report. Be wary of scams.

Do You Have A Down Payment?

A down payment is not required for every home purchase, but having one saved up can make the buying process easier. The amount you will want to have saved up will depend on the cost of your home, whether you plan on carrying private mortgage insurance and a variety of other factors. If possible, try to save up an amount close to (or more than) twenty percent of the home’s purchase price.

Ready? Chat With A Professional

Now that you have run a quick financial health check, it is time to meet with a mortgage professional to discuss your options. Contact us today to book an appointment with one of our friendly expert advisors. We are happy to help you with financing so you can buy your perfect dream home.


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