Friday, January 30, 2015

The Truth About Your Mortgage Broker

Buying a house can be a really confusing and complicated process. It’s not just about finding a house, going to the bank, getting a loan and buying it. There’s a lot more steps in between including home inspections, real estate agents, renovations, among so many other things. So why should a mortgage broker be a step in between? I mean, why can’t you just go and find a mortgage loan on your own? There are so many tools online that can give you rates and compare for you right? 

Knowledge & Expertise
Sure, you could go to WebMD and try to diagnose yourself. You could figure out if that stabbing pain in your abdomen is a hernia or maybe kidney stones, but wouldn’t you rather go see an expert for that, maybe a doctor?  Yes, you can learn a lot about mortgage rates on your own by going online and doing a little bit of research. There’s tons of useful information out there for you but there are a lot of things to consider, things that may affect the rate that you’ll get based on your type of career. A mortgage broker’s job is to figure out how to get you the best fit for you as far as mortgage types go. This knowledge is priceless and can end up saving you thousands over the years. They help you navigate and narrow down what is best for you in the long run. Remember, a home is a long term investment!

Financial Planning
It’s incredibly how one little number can define you, your credit score can have a huge impact on the type of loan you can afford. It can be the difference between your dream home and a home that you’re just settling for because that’s all you were approved for. A lot of the time mortgage brokers will work with you to get the credit score that you need and that you deserve in order to get you that house that really want. Sometimes this process can take months and even then your mortgage broker does this just to get you the right home for you. They also look at all your finances and set expectations on what you realistically afford since it is easy to get carried away and get more house than what you actually need.

One Stop Shop
Mortgage brokers have spent years building a database of banks and lenders for their clients, and with that relationships with people in those places. These relationships can sometimes lead to better rates, acceptance letters and even mortgages that may not be available to the general public. This is something that a home buyer won’t be able to get just by walking into a bank or by visiting a website. Mortgage brokers shop around for you to get you the best deal possible, more importantly, the deal that is right for you. 

Buying a home is a wonderful experience but it can also be one that is very frustrating and stressful, this is why there are people out there to help you out including Real Estate Agents and Mortgage Brokers. They have been doing longer than you have and you should think of them as just another tool to get what you want.

Sunday, January 25, 2015

2015 Is The Year Where You Can!

   If you have banished the thought of purchasing a home because of your not so perfect credit, or deflated savings, think again!  Get started this year in checking out your options in home buying, because they’re expanding.
     Mortgage options are burgeoning these days, helping many people who thought purchasing a home wasn’t a reality into a tangible dream come true.  Currently borrowers have the option of putting down as little 3.5%, with talk of lowering that requirement even further to 3% up front.  Lots of people have good, steady incomes, but don’t have the financial swagger of saving the whopping 20% cost of a home.  This mortgage option makes purchasing a home available to those want-to-be home owners who are sick of paying rent and want to invest in their future.  For this low down payment option, there is a required mortgage insurance premium and in 2015, even THAT has lowered significantly saving home buyers hundreds of dollars a year.  The average premium has dropped by .4% or 40 bps.
     A big reason why some of these lenders are feeling more at ease in helping buyers get the money they need to purchase their home, is because new policies enforced by FHFA.  They've made it easier to understand when Fannie Mae or Freddie Mac would require lenders to buy back a loan that has defaulted.  Knowing when and why defaulted loans would be required to be repurchased by the financial establishment helps them make better bets on their clients.  This buy back issue has been a primary problem in people not getting the loans they need.
     These new low down-payment loans help low-income purchasers and first-time purchasers into the housing market that have previously been absent.  So re-think your financial plan in the upcoming future and take advantage of these prime conditions and new flexible options in buying your next home.

Monday, January 19, 2015

What 2015 Holds for Mortgage Rates

There are so many predictions by various different experts from various different fields about how mortgage rates will react in 2015.  In my opinion, they all sound about the same.  Whether the trend is predicted to go up or down, most experts are saying that there won’t be extreme changes in mortgage rates this year.  We’ve been experiencing the slowest recovery from economic downturn in the real estate arena since the depression, unless there are volatile changes in the economy or unemployment rates, mortgage rates will remain relatively stable.
As I previously blogged, mortgage insurance premiums doled out by the FHA have gone down, which naturally means that mortgage rates will decrease along with it.  This contributing factor along with continued economic weakness are another reason rates are predicted to stay down.  Employment rates are slowly rising, however, most of these employed Americans are still considered to be under-employed.  Consumers are still being extremely conservative during these times of financial recovery.  Other experts say that lenders aren’t ready for a surge in home-buying and therefore an increase in mortgage rates can’t be justified.  While still trying to implement and understand “Dodd-Frank” laws, closing a house in 30 days still proves difficult. 
Others are expecting an increase in rates.  The economy, albeit slowly, is improving and rising mortgage rates are a natural reaction to improved conditions.  The low rates that we’re experiencing now are not typical and are meant to stimulate interest in buying homes to improve the market.  However, rates can only increase so much before movement in the market comes to a halt and that usually tops off at about a 2% increase historically.  Some think that it won’t get that high because of rate at which our economy is recovering, and will come to a stand-still at about a 1.5% increase.
So, my friends, markets look stable and makes 2015 an excellent time to take advantage of these temporary low rates.  As the economy does continue to improve you can sit back and continue to enjoy your savings.  My one piece of advice is this; while it might be appealing to you to move during the warmer months this year, its appealing to everyone else, too.  That means that during the Spring and Summer rates always inevitably increase, so take advantage of the lowest rates you can now!

For more information on mortgage rate predictions, click here.

Saturday, January 10, 2015

One more REALLY good reason why 2015 is a good time to buy

On top of new affordable mortgage programs being provided for home buyers this year, those mortgage insurance premiums attached to these FHA loans are going down as well!
Title II mortgages has made home owning available for many Americans that just don’t have big wads of cash upfront for a down payment, offering home loans for down payments as little as 3%.  One of the ways this is made possible is by attaching Mortgage Insurance, lumped into your approved loan.  While this does protect the banks investment, it can also cover any losses if you default on your loan.
In effect on January 26. 2015,  the FHA is offering reduced rates on qualifying mortgages with terms equaling 15 years or greater.  The FHA is also temporarily approving all cancellation requests on active case numbers within 30 days of this activation date.  These lower rates are also available to you under refinancing as long as your current mortgage was approved after May 31, 2009.
If your current Mortgage Insurance Premium is 1.3% annually, or 130 bps (basis points), the new premiums the FHA is offering is .8% annually.  For example, if on a $100,000 loan, your rate is 130 bps, you’d be paying $1,300 annually on your mortgage insurance,  at the reduced rate, you’d only be paying $800 into it.  That’s nearly half, saving you a not so skimpy $700!

Take advantage this year of all the reduced rates and options in home buying.  These incentives are now being offered to improve even further an already recovering real estate market.  Its time to buy!

Monday, January 5, 2015

3 Reasons Why 2015 is a Good Year to Buy

Its hard to know when its the right time to pull the trigger on your future.  Investments can be scary.  However, if you’ve been thinking about owning your own home, here’s a few reasons why this year might be the year to go for it.

Rent is going up
2014 has shown a significant increase in rent from previous years nationwide.  About a 5% increase according to a Zillow report and sharper spikes in cities across the US.  This increase in rates begs the question, what am I getting for my money?  Buying is once again becoming a more attractive option, simply because the value of renting has decreased with its spike in cost.  You could be paying into your mortgage for only a little bit more, if not the same amount of money you’d spend on renting.

More affordable mortgage programs
20% down on a mortgage might seem as daunting as 50% down for first time buyers.  They just don’t have the cash up front.  Fannie Mae and Freddie Mac are offering new, affordable mortgage programs for as little as 3% down.  This will open up the market to many people, with good jobs and good credit, who just don’t have the cash to put down.  

Likelihood of mortgage rate increases in the future
At 4%, mortgage rates are still at an all-time low in this country.  With the market opening up to more buyers with affordable, low money down mortgage programs, tax incentives for new buyers and the increase in the US economy, an increase in mortgage rates is inevitable.

2015 has a lot of potential for home buyers.  With a lot of cash poor leasers sick of high rent, the new mortgage programs are very attractive.  Mortgage rates are still super low, but may or may not remain that way in the near future.  Take advantage of these prime market conditions in the upcoming year and do what’s best for you and your finances.