Provided By Realty Times
After slight movement early last week, mortgage rates ended up looking better for borrowers with a decrease of .125% for conforming 30 year and 15 year mortgage interest rates making them more competitive with FHA mortgage rates.
FreeRateUpdate.com's daily survey of wholesale and direct lenders show that current 30 year fixed mortgage rates are at 4.750% and 15 year fixed mortgage rates are at 4.125%. 5/1 adjustable mortgage rates are at 3.250%. Still remaining below 5%, these are the best mortgage rates available with 0.7 to 1% origination fee to well qualified borrowers who can also meet lender approval.
FHA 5/1 adjustable mortgage rates increased .125% and are at 3.625%. >FHA 30 year fixed mortgage interest rates are at 4.625% and FHA 15 year fixed mortgage interest rates are at 4.000%, both remaining the same.
FHA mortgage loans continue to attract borrowers for the benefits they offer such as the low down payment requirement although FHA closing costs (APR) are higher due to the upfront mortgage insurance premium and other applicable FHA fees. Coming April 18th, FHA is increasing the annual mortgage insurance premium by .25% for FHA 30 year and FHA 15 year fixed rate mortgage loans.
Jumbo 15 year fixed mortgage rates saw the biggest jump increasing .250% and are at 5.250%. Jumbo 30 year fixed mortgage rates are at 5.500% and jumbo 5/1 ARM loan rates are at 4.125%, both remaining the same. Jumbo mortgage loans are available for borrowers in need of financing above the conforming loan limit which is $417,000 to $729,250 depending on location. Available with 0.7 to 1% origination fee, these low jumbo mortgage rates can still be obtained by borrowers who have outstanding credit.
MBS prices (mortgage backed securities) have fluctuated each day this past week depending on the news and investor reaction. Mortgage rates increase and decrease in the opposite direction of MBS prices. After Tuesday's mixed results, mortgage rates stabilized for the rest of the week upon the release of the producer price index,, the consumer price index and housing starts which all came in better than expected.
To determine what your mortgage rate will be give us a call at 972-772-7000 or email us at rockwall@kw.com.
Showing posts with label home buying. Show all posts
Showing posts with label home buying. Show all posts
Wednesday, March 2, 2011
Monday, January 17, 2011
Buying Your First Home
Finding the right first home starts with a price range and a short list of desirable neighborhoods. But there are many other factors you'll need to consider before investing in what may be your biggest asset.
Provided By Yahoo! Real Estate
Before You Start:
•Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
•Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
•Think about your lifestyle and how it might affect your choice of home and neighborhood.
•Do a little research on current home prices in the neighborhoods you plan to target.
Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.
Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.
Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.
How Much Mortgage Can You Afford?
Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.
The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28 percent of your monthly gross income.
The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36 percent.
Many home buyers choose to arrange financing before shopping for a home and most lenders will "pre-qualify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.
In addition to qualifying for a mortgage, you will probably need a down payment. The 28 percent to 36 percent debt ratios assume a 10 percent down payment. In practice, down payment requirements vary from more than 20 percent to as low as 0 percent for some Veterans Administration (VA) loans. Down payments greater than 20 percent generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.
How Much Home Can You Afford?
Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28 percent yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).
Their total debt ceiling of 36 percent is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.
Costs of Buying a Home
Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price.
Ongoing Costs
In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.
Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.
Choosing a Neighborhood
Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.
Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.
Finding a Broker
If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.
Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5 percent to 7 percent and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.
Home Buying Costs
Down Payment 0% - 20% of purchase price
Home Inspection $200 - $500
Points $1,000 and up for 1% - 3%
Adjustments 3% - 8% of purchase price
Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.
Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.
Summary:
•Buying a home can mean building significant value through the years.
•Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
•Pre-qualifying with your lender is a good way to determine how much house you can afford.
•You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
•In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
•Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
•Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
•Remember to consider resale value when buying your home.
If you are ready to buy your first home, give us a call at 972-772-7000 or email us at rockwall@kw.com.
Provided By Yahoo! Real Estate
Before You Start:
•Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
•Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
•Think about your lifestyle and how it might affect your choice of home and neighborhood.
•Do a little research on current home prices in the neighborhoods you plan to target.
Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.
Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.
Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.
How Much Mortgage Can You Afford?
Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.
The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28 percent of your monthly gross income.
The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36 percent.
Many home buyers choose to arrange financing before shopping for a home and most lenders will "pre-qualify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.
In addition to qualifying for a mortgage, you will probably need a down payment. The 28 percent to 36 percent debt ratios assume a 10 percent down payment. In practice, down payment requirements vary from more than 20 percent to as low as 0 percent for some Veterans Administration (VA) loans. Down payments greater than 20 percent generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.
How Much Home Can You Afford?
Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28 percent yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).
Their total debt ceiling of 36 percent is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.
Costs of Buying a Home
Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price.
Ongoing Costs
In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.
Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.
Choosing a Neighborhood
Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.
Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.
Finding a Broker
If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.
Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5 percent to 7 percent and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.
Home Buying Costs
Down Payment 0% - 20% of purchase price
Home Inspection $200 - $500
Points $1,000 and up for 1% - 3%
Adjustments 3% - 8% of purchase price
Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.
Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.
Summary:
•Buying a home can mean building significant value through the years.
•Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
•Pre-qualifying with your lender is a good way to determine how much house you can afford.
•You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
•In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
•Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
•Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
•Remember to consider resale value when buying your home.
If you are ready to buy your first home, give us a call at 972-772-7000 or email us at rockwall@kw.com.
Monday, December 6, 2010
2011 Dallas Real Estate Market Recovery
Provided By Old Republic
Source Buy and Sell Dallas
The Dallas real estate market is showing positive signs with many reports hinting toward a recovery in 2011. Dallas home inventory has decreased to a more balanced level, pending home sales are increasing, and home sale prices are steadily on the rise. These are just a few of the variables needed to bring a wounded real estate market back on its’ feet. The Dallas real estate market is on the right track with consumer confidence increasing and home sales reports showing positive signs of stability. 1st time home buyers, repeat buyers, and investors are jumping off the fence to take advantage of the buyer’s market before interest rates rise and inventory decreases.
Dallas Morning News recently reported Dallas pre owned home sales increased 12.38% in August compared to 2009. Many of the areas surrounding Dallas also experienced an increase in existing homes sales over previous year transactions including Fort Worth at 14.9%, Irving at 20.32%, and Garland at 20.77%.Although home sales are up and confidence has increased, but home sellers are still weary of placing their home on the market. High foreclosure and short sale inventory is still plaguing the entire U.S. market including the DFW area. Home sellers are still unable to compete with low dollar per square foot selling prices on bank foreclosures including FHA, VA and REO short sales and auctions. Sellers are waiting for home values to rise and foreclosure inventory to fall to avoid selling their most valuable investment at a loss.
The Dallas Fort Worth real estate market is on the road to recovery, but there is still a long way to go with many obstacles to overcome. One thing for sure is, the U.S. real estate market is improving, consumer confidence is increasing, and Dallas is one of the top markets leading the way!
Are you looking to buy a home? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Source Buy and Sell Dallas
The Dallas real estate market is showing positive signs with many reports hinting toward a recovery in 2011. Dallas home inventory has decreased to a more balanced level, pending home sales are increasing, and home sale prices are steadily on the rise. These are just a few of the variables needed to bring a wounded real estate market back on its’ feet. The Dallas real estate market is on the right track with consumer confidence increasing and home sales reports showing positive signs of stability. 1st time home buyers, repeat buyers, and investors are jumping off the fence to take advantage of the buyer’s market before interest rates rise and inventory decreases.
Dallas Morning News recently reported Dallas pre owned home sales increased 12.38% in August compared to 2009. Many of the areas surrounding Dallas also experienced an increase in existing homes sales over previous year transactions including Fort Worth at 14.9%, Irving at 20.32%, and Garland at 20.77%.Although home sales are up and confidence has increased, but home sellers are still weary of placing their home on the market. High foreclosure and short sale inventory is still plaguing the entire U.S. market including the DFW area. Home sellers are still unable to compete with low dollar per square foot selling prices on bank foreclosures including FHA, VA and REO short sales and auctions. Sellers are waiting for home values to rise and foreclosure inventory to fall to avoid selling their most valuable investment at a loss.
The Dallas Fort Worth real estate market is on the road to recovery, but there is still a long way to go with many obstacles to overcome. One thing for sure is, the U.S. real estate market is improving, consumer confidence is increasing, and Dallas is one of the top markets leading the way!
Are you looking to buy a home? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Wednesday, November 17, 2010
Down Payment Options
Provided By iforma Research Services
Source Yahoo! Real Estate
One of the components a lender uses to help determine what loan amount to approve is your down payment. A down payment not only serves as a commitment on a borrower.s behalf to make good on a loan, but acts as a lender.s guarantee to minimize risk in case a borrower defaults on a loan. The more of your own cash that you can put down for a loan, the easier it is to qualify for a higher loan amount or a lower mortgage payment.
Alternative sources of funding
Since most borrowers do not have large cash reserves on-hand for a down payment, there are other alternative sources for funding. Besides tapping into your own savings accounts, other resources may include friends, relatives, 401(k) plans, proceeds from stock sales, appraised assets, even a co-signer.
Many cities, looking to expand their communities, even offer their own down payment subsidy programs for cash-strapped buyers. It.s not uncommon to be gifted $5,000 to $10,000 without expectation of re-payment.
Loan-to-value ratio
A down payment is always expressed as a percent of the sales price and often referred to by lenders at the .loan-to-value ratio. or LTV. For instance, a $250,000 mortgage with an LTV of 80 percent would require 20 percent down or $50,000. Using a down payment calculator can help you see what influence a different down payment can have on your monthly mortgage.
Other down payment options
Some banks even offer zero-down percentage loans which require no down payment. These types of loans are typically directed at first-time buyers with good credit who are qualified to make the monthly payment but cannot come up with a down payment. However, without a down payment the buyer has no equity in the house and the lender is at greater risk, so the interest rate could be higher.
Another alternative to buying a home without committing to a down payment is to consider a lease option to buy. As a renter, you have an option anytime during the term of the lease, to buy the property at an agreed upon price from the owner. In some instances, the money you.ve put toward rent can be fully or partially applied toward the down payment.
Sellers can also assist buyers with their down payment. By offering a carry-back mortgage, sellers can sell their house faster in a competitive market and buyers can purchase a home they otherwise might not be able to afford.
Do you have questions about all your down payment options? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Source Yahoo! Real Estate
One of the components a lender uses to help determine what loan amount to approve is your down payment. A down payment not only serves as a commitment on a borrower.s behalf to make good on a loan, but acts as a lender.s guarantee to minimize risk in case a borrower defaults on a loan. The more of your own cash that you can put down for a loan, the easier it is to qualify for a higher loan amount or a lower mortgage payment.
Alternative sources of funding
Since most borrowers do not have large cash reserves on-hand for a down payment, there are other alternative sources for funding. Besides tapping into your own savings accounts, other resources may include friends, relatives, 401(k) plans, proceeds from stock sales, appraised assets, even a co-signer.
Many cities, looking to expand their communities, even offer their own down payment subsidy programs for cash-strapped buyers. It.s not uncommon to be gifted $5,000 to $10,000 without expectation of re-payment.
Loan-to-value ratio
A down payment is always expressed as a percent of the sales price and often referred to by lenders at the .loan-to-value ratio. or LTV. For instance, a $250,000 mortgage with an LTV of 80 percent would require 20 percent down or $50,000. Using a down payment calculator can help you see what influence a different down payment can have on your monthly mortgage.
Other down payment options
Some banks even offer zero-down percentage loans which require no down payment. These types of loans are typically directed at first-time buyers with good credit who are qualified to make the monthly payment but cannot come up with a down payment. However, without a down payment the buyer has no equity in the house and the lender is at greater risk, so the interest rate could be higher.
Another alternative to buying a home without committing to a down payment is to consider a lease option to buy. As a renter, you have an option anytime during the term of the lease, to buy the property at an agreed upon price from the owner. In some instances, the money you.ve put toward rent can be fully or partially applied toward the down payment.
Sellers can also assist buyers with their down payment. By offering a carry-back mortgage, sellers can sell their house faster in a competitive market and buyers can purchase a home they otherwise might not be able to afford.
Do you have questions about all your down payment options? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Wednesday, October 27, 2010
Understanding Points, Rates and Fees
Provided By Quicken Loans
Source Yahoo!
Not only do you have to understand what type of mortgage you should choose, you have to understand the costs associated with your mortgage. All of these costs will be paid upon closing your mortgage.
Purchase Points
Purchase points, also known as a "buy-down" or "discount points," are an up-front fee paid to the lender at closing to buy-down or lower your interest rate over the life of the loan. Each point is equal to one percent of your total loan amount. If you have a $100,000 loan, one point would equal $1,000. The more points you buy, the lower your interest rate, but the more money you'll need at closing.
How do you decide whether you should buy points and if so, how many? Well, the decision should be based on how long you plan on living in your home and what you can afford to pay each month toward your mortgage. If you plan on living in your home for more than five years, it's probably a good idea to purchase points. The longer you live in your home, the more you can save on interest over the life of the loan.
Interest Rate
When you get a mortgage, you are charged an interest rate.this is the rate which the lender charges you for using their money to buy a home. It determines how much your monthly payments will be. Generally speaking, the higher the interest rate, the higher your monthly payment.
Mortgage interest rates change constantly.daily, even hourly. If you speak to a lender and are quoted a specific interest rate, that's not to say you'll necessarily get that rate when you close on your loan. Not unless you formally lock-in that rate with the lender.locking in an interest rate will guarantee you get your loan with a particular interest rate. Lenders will allow you to lock in for 15, 45 or 60 days. But the longer you lock in, the more expensive it will be, since it's more of a risk to lenders.
Fees
There are always fees associated with getting a mortgage, these fees cover the cost of processing and underwriting the loan. These fees can include charges for ensuring the title to the home is free and clear; paying for a land survey; or paying for a home appraisal which gives you the estimated value of the property (lenders require an appraisal to close on your mortgage).
Deciding which mortgage to get may depend on what each lender does because different lenders may charge different amounts. Some may charge lesser closing fees to lure you in, but may charge you a higher interest rate, which means you may pay more in the long run. But everyone has different needs.you may or may not be able to afford to pay more at closing and are willing to pay more over the long term.
Before it comes time to close, do your homework, make sure there are no hidden fees, and ask your lender lots of questions so that you understand all the costs involved with your mortgage.
If you have questions about buying a home, call the realtors who know the answers at 972-772-7000 or email us at rockwall@kw.com.
Source Yahoo!
Not only do you have to understand what type of mortgage you should choose, you have to understand the costs associated with your mortgage. All of these costs will be paid upon closing your mortgage.
Purchase Points
Purchase points, also known as a "buy-down" or "discount points," are an up-front fee paid to the lender at closing to buy-down or lower your interest rate over the life of the loan. Each point is equal to one percent of your total loan amount. If you have a $100,000 loan, one point would equal $1,000. The more points you buy, the lower your interest rate, but the more money you'll need at closing.
How do you decide whether you should buy points and if so, how many? Well, the decision should be based on how long you plan on living in your home and what you can afford to pay each month toward your mortgage. If you plan on living in your home for more than five years, it's probably a good idea to purchase points. The longer you live in your home, the more you can save on interest over the life of the loan.
Interest Rate
When you get a mortgage, you are charged an interest rate.this is the rate which the lender charges you for using their money to buy a home. It determines how much your monthly payments will be. Generally speaking, the higher the interest rate, the higher your monthly payment.
Mortgage interest rates change constantly.daily, even hourly. If you speak to a lender and are quoted a specific interest rate, that's not to say you'll necessarily get that rate when you close on your loan. Not unless you formally lock-in that rate with the lender.locking in an interest rate will guarantee you get your loan with a particular interest rate. Lenders will allow you to lock in for 15, 45 or 60 days. But the longer you lock in, the more expensive it will be, since it's more of a risk to lenders.
Fees
There are always fees associated with getting a mortgage, these fees cover the cost of processing and underwriting the loan. These fees can include charges for ensuring the title to the home is free and clear; paying for a land survey; or paying for a home appraisal which gives you the estimated value of the property (lenders require an appraisal to close on your mortgage).
Deciding which mortgage to get may depend on what each lender does because different lenders may charge different amounts. Some may charge lesser closing fees to lure you in, but may charge you a higher interest rate, which means you may pay more in the long run. But everyone has different needs.you may or may not be able to afford to pay more at closing and are willing to pay more over the long term.
Before it comes time to close, do your homework, make sure there are no hidden fees, and ask your lender lots of questions so that you understand all the costs involved with your mortgage.
If you have questions about buying a home, call the realtors who know the answers at 972-772-7000 or email us at rockwall@kw.com.
Monday, August 23, 2010
Improve Your Credit Score
Written By Carla Hill
Provided By Realty Times
Healthy credit scores have never been more important. As banks tighten their lending standards, it's important to have your score as high as possible.
A FICO score is a number, in general from 300 to 850, that is formulated from your payment history, including such things as amounts of money owed, length of your credit history, new credit accounts open, and how you have used your credit. Age, salary, race, education, and religion do not affect your score. You can't buy a good score; you can only build one over time by demonstrating that you are a responsible borrower.
To improve your credit score, start with these steps.
1. Pay your bills on time. This seems like a simple enough feat, but in hard economic times, more and more borrowers are finding themselves hard-pressed with the decision of what bill to pay. If you find yourself having a hard time paying bills, be sure to talk with the lender or company you owe. They may have programs or suggestions that will help you avoid having your bill sent to collections.
2. Don't let items go to collections. Once an item is sent to collections, your credit report will suffer. This ding will stay on your report for seven years.
3. Don't open other new credit lines when applying for a home loan. You may want the new car or living room set, but the home buying process is not the time to open multiple new accounts. This is a sure-fire way to temporarily reduce your credit score. If you do this before finalizing your mortgage, you many find yourself stuck with a higher interest rate.
4. Monitor your report on a regular basis for errors and cases of identity theft. Errors do happen. To get them corrected quickly, be sure to contact both the organization that provided the erroneous information, as well as the credit bureau. Identity theft happens. And it is your responsibility to identify it and address it!
5. Pay down credit cards. Carrying high balances on credit cards can severely affect your credit score. Think of it this way. If you have a grand total of $10,000 worth of credit limits available, but you owe $5,000 on all of your cards put together, you are using half of your available credit!
The best loans and mortgages are available to borrowers with FICO scores 700 and above. Experian, one of the major credit reporting agencies, reports that the average credit score is 693.
For a look at your credit report, visit the government sponsored site, myannualcreditreport.com. You may access your report three times a year free of charge.
Would you like information on how your credit score affects purchasing a home? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Provided By Realty Times
Healthy credit scores have never been more important. As banks tighten their lending standards, it's important to have your score as high as possible.
A FICO score is a number, in general from 300 to 850, that is formulated from your payment history, including such things as amounts of money owed, length of your credit history, new credit accounts open, and how you have used your credit. Age, salary, race, education, and religion do not affect your score. You can't buy a good score; you can only build one over time by demonstrating that you are a responsible borrower.
To improve your credit score, start with these steps.
1. Pay your bills on time. This seems like a simple enough feat, but in hard economic times, more and more borrowers are finding themselves hard-pressed with the decision of what bill to pay. If you find yourself having a hard time paying bills, be sure to talk with the lender or company you owe. They may have programs or suggestions that will help you avoid having your bill sent to collections.
2. Don't let items go to collections. Once an item is sent to collections, your credit report will suffer. This ding will stay on your report for seven years.
3. Don't open other new credit lines when applying for a home loan. You may want the new car or living room set, but the home buying process is not the time to open multiple new accounts. This is a sure-fire way to temporarily reduce your credit score. If you do this before finalizing your mortgage, you many find yourself stuck with a higher interest rate.
4. Monitor your report on a regular basis for errors and cases of identity theft. Errors do happen. To get them corrected quickly, be sure to contact both the organization that provided the erroneous information, as well as the credit bureau. Identity theft happens. And it is your responsibility to identify it and address it!
5. Pay down credit cards. Carrying high balances on credit cards can severely affect your credit score. Think of it this way. If you have a grand total of $10,000 worth of credit limits available, but you owe $5,000 on all of your cards put together, you are using half of your available credit!
The best loans and mortgages are available to borrowers with FICO scores 700 and above. Experian, one of the major credit reporting agencies, reports that the average credit score is 693.
For a look at your credit report, visit the government sponsored site, myannualcreditreport.com. You may access your report three times a year free of charge.
Would you like information on how your credit score affects purchasing a home? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Monday, July 12, 2010
How much home can you afford?
Published By Morris Communications
Provided By Dallas Morning News
Whether you can afford the home you've always wanted will boil down to a simple factor: How much you make versus how much you owe.
Lenders are not eager to extend loans to borrowers who will become overloaded by taking on more debt, so there are some general guidelines to keep in mind when pursuing a home loan.
Determine your monthly gross income, which includes regular monies that can be documented. Remember that income that can't be documented can't be used to qualify for a loan. However, unearned sources, such as alimony and lottery payments, can be used as well as income-producing assets, such as stocks or real estate. If you have questions, ask a loan officer to help you with the rules.
After you've figured how much you make, calculate how much you owe. This is all monthly debt obligations such as credit cards, installment loans, personal debts or other monthly obligations such as alimony or child support. Debts that will be paid off in fewer than six months don't have to be considered.
Although each lender has his or her own formula, generally speaking, monthly housing expenses, including monthly payments for taxes and insurance, shouldn't be in excess of 28 percent of the gross monthly income. Additionally, the proposed monthly housing expense and total debt obligation can't exceed 36 percent of the gross monthly income. If it does, the loan may not be approved.
However, there are numerous types of loan programs available, and each one has different guidelines, so don't get discouraged by the process if your first choice doesn't work out. Keep shopping around.
Your down payment can have tremendous impact on your ability to qualify for a loan. The greater percentage of down payment that you can make, the smaller the monthly payment you will pay. Likewise, closing costs, which can vary from 2 to 5 percent of the asking price of the home, also are part of the financial obligation that comes with purchasing a home.
To determine how much you can afford:
-Determine your gross monthly income.
-Calculate your monthly debt obligations.
-Generally, monthly housing cost should not exceed 28 percent of gross monthly income.
-Proposed monthly housing cost and monthly debt obligations combined should not exceed 36 percent of gross monthly income.
-Questions? Ask a qualified loan officer for help.
-How much of a down payment can you afford? The more money down up front, the smaller the monthly mortgage payment.
-Ask about closing costs.
Do you have questions about buying a home, would you like quick and honest answers? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Provided By Dallas Morning News
Whether you can afford the home you've always wanted will boil down to a simple factor: How much you make versus how much you owe.
Lenders are not eager to extend loans to borrowers who will become overloaded by taking on more debt, so there are some general guidelines to keep in mind when pursuing a home loan.
Determine your monthly gross income, which includes regular monies that can be documented. Remember that income that can't be documented can't be used to qualify for a loan. However, unearned sources, such as alimony and lottery payments, can be used as well as income-producing assets, such as stocks or real estate. If you have questions, ask a loan officer to help you with the rules.
After you've figured how much you make, calculate how much you owe. This is all monthly debt obligations such as credit cards, installment loans, personal debts or other monthly obligations such as alimony or child support. Debts that will be paid off in fewer than six months don't have to be considered.
Although each lender has his or her own formula, generally speaking, monthly housing expenses, including monthly payments for taxes and insurance, shouldn't be in excess of 28 percent of the gross monthly income. Additionally, the proposed monthly housing expense and total debt obligation can't exceed 36 percent of the gross monthly income. If it does, the loan may not be approved.
However, there are numerous types of loan programs available, and each one has different guidelines, so don't get discouraged by the process if your first choice doesn't work out. Keep shopping around.
Your down payment can have tremendous impact on your ability to qualify for a loan. The greater percentage of down payment that you can make, the smaller the monthly payment you will pay. Likewise, closing costs, which can vary from 2 to 5 percent of the asking price of the home, also are part of the financial obligation that comes with purchasing a home.
To determine how much you can afford:
-Determine your gross monthly income.
-Calculate your monthly debt obligations.
-Generally, monthly housing cost should not exceed 28 percent of gross monthly income.
-Proposed monthly housing cost and monthly debt obligations combined should not exceed 36 percent of gross monthly income.
-Questions? Ask a qualified loan officer for help.
-How much of a down payment can you afford? The more money down up front, the smaller the monthly mortgage payment.
-Ask about closing costs.
Do you have questions about buying a home, would you like quick and honest answers? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Friday, March 20, 2009
10 Steps to Home Ownership
Step 1: Are You Ready?
You Know What You Want?
Whether you are a first-time home buyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy. Are you planning to move to a new community due to a lifestyle change or is buying an option and not a requirement? What would you like in terms of real estate that you do not now have? Do you have a purchasing timeframe?
Whatever your answers, the more you know about the real estate marketplace, the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the questions above and to then discuss them in detail when meeting with local REALTORS®.
Do You Have The Money?
Homes and financing are closely intertwined. (Financing is the difference between the purchase price and the down payment, commonly referred to as debt or the mortgage.) The good news is that over the years new and innovative loan programs have evolved which require a 5 percent down payment or less. In fact, a number of programs now allow purchasers to buy real estate with nothing down.
In addition to a down payment, purchasers also need cash for closing costs (the final costs associated with closing the loan). Several newly emerging loan programs not only allow the purchase of a home with no money down, but also underwrite closing costs.
Not everyone, however, elects to purchase with little or no money down. Less money down means higher monthly mortgage payments, so most home buyers choose to buy with some cash up front.
As to closing costs, in markets where buyers have leverage, it may be possible to negotiate an offer for a home that requires the owner to pay some or all of your settlement expenses. Speak with local REALTORS® for details.
Is Your Financial House in Order?
Those great loans with little or nothing down are not available to everyone: You need good credit. For at least one year prior to purchasing a home, you should assure that every credit card bill, rent check, car payment and other debt is paid in full and on time.
From realtor.com
You Know What You Want?
Whether you are a first-time home buyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy. Are you planning to move to a new community due to a lifestyle change or is buying an option and not a requirement? What would you like in terms of real estate that you do not now have? Do you have a purchasing timeframe?
Whatever your answers, the more you know about the real estate marketplace, the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the questions above and to then discuss them in detail when meeting with local REALTORS®.
Do You Have The Money?
Homes and financing are closely intertwined. (Financing is the difference between the purchase price and the down payment, commonly referred to as debt or the mortgage.) The good news is that over the years new and innovative loan programs have evolved which require a 5 percent down payment or less. In fact, a number of programs now allow purchasers to buy real estate with nothing down.
In addition to a down payment, purchasers also need cash for closing costs (the final costs associated with closing the loan). Several newly emerging loan programs not only allow the purchase of a home with no money down, but also underwrite closing costs.
Not everyone, however, elects to purchase with little or no money down. Less money down means higher monthly mortgage payments, so most home buyers choose to buy with some cash up front.
As to closing costs, in markets where buyers have leverage, it may be possible to negotiate an offer for a home that requires the owner to pay some or all of your settlement expenses. Speak with local REALTORS® for details.
Is Your Financial House in Order?
Those great loans with little or nothing down are not available to everyone: You need good credit. For at least one year prior to purchasing a home, you should assure that every credit card bill, rent check, car payment and other debt is paid in full and on time.
From realtor.com
Friday, February 13, 2009
Making the Transition from Renting to Buying
Here are a few points to consider as you weigh the pros and cons of home ownership.
No doubt you've thought of how nice it would be not to write a rent check every month, but have you done the math? Nothing can make you feel more secure than owning your own house, unless buying a home will create financial problems of its own. Here's a discussion of the most important financial costs associated with home buying to stack up against your monthly rent check.
Instead of the standard deduction on your income tax return, most homeowners itemize their deductions, allowing them to deduct the following (and save on taxes): home mortgage interest, property real estate taxes, state income taxes, gifts to charity, medical and dental expenses over 7.5% of your income, personal property taxes, and most moving expenses.
Figure your monthly payments if you were to buy. Compare your monthly rent to a calculation of the following: purchase price and down payment of your home, your annual income (and debt!), property tax rate, home insurance rate, interest rate and length of loan. For best results, contact a home-buying specialist.
Other Costs
Expect other costs to homeowning. Along with your monthly mortgage and down payment, there's property tax and homeowners insurance premiums, and fees known as "closing costs." These include everything from a credit check to "points"- interest paid up-front in return for a lower interest rate. Others: title insurance fee, survey charge, attorney/escrow fees, and loan origination. So do your research!
Long-Term Equity
No discussion of home ownership is complete without considering the long-term benefits of owning. What your house will be worth when you sell depends on the state of your mortgage and the housing market, in particular. Consult with real estate professionals, read up, and do your math to get a realistic sense of your future home value.
Lifestyle and Mobility
Mobility is part of renting. Freedom to take the next job or move for a relationship is easy to come by when you rent a home. And when you do move, there's often more choice of specific location, and price, when you seek rental housing. Want an apartment near a park in western Philadelphia? You may find an easier time looking to rent than buy.
Many renters say they love knowing they're not tied down - and don't have to assume financial responsibility for their living space. This is of course a big difference from home ownership: who does the work.
Who Does the Work?
While you don't receive the joys of making a place truly "your own," you do have limited costs in renting. Landlords are responsible for general upkeep and safety, allowing you to focus on the fine points. Homeowning, in contrast, puts you in the driver's seat. You shoulder the expenses and reap the rewards of home improvement - both great and small. Think about whether you want to put in additional time and money.
Choices, Choices!
Whether you decide to take the step of home ownership is a personal choice with its own ups and downs. Hopefully we've helped dust off the magic ball a bit; what you see in your future is up to you!
Copyright © by Move, Inc.
No doubt you've thought of how nice it would be not to write a rent check every month, but have you done the math? Nothing can make you feel more secure than owning your own house, unless buying a home will create financial problems of its own. Here's a discussion of the most important financial costs associated with home buying to stack up against your monthly rent check.
Instead of the standard deduction on your income tax return, most homeowners itemize their deductions, allowing them to deduct the following (and save on taxes): home mortgage interest, property real estate taxes, state income taxes, gifts to charity, medical and dental expenses over 7.5% of your income, personal property taxes, and most moving expenses.
Figure your monthly payments if you were to buy. Compare your monthly rent to a calculation of the following: purchase price and down payment of your home, your annual income (and debt!), property tax rate, home insurance rate, interest rate and length of loan. For best results, contact a home-buying specialist.
Other Costs
Expect other costs to homeowning. Along with your monthly mortgage and down payment, there's property tax and homeowners insurance premiums, and fees known as "closing costs." These include everything from a credit check to "points"- interest paid up-front in return for a lower interest rate. Others: title insurance fee, survey charge, attorney/escrow fees, and loan origination. So do your research!
Long-Term Equity
No discussion of home ownership is complete without considering the long-term benefits of owning. What your house will be worth when you sell depends on the state of your mortgage and the housing market, in particular. Consult with real estate professionals, read up, and do your math to get a realistic sense of your future home value.
Lifestyle and Mobility
Mobility is part of renting. Freedom to take the next job or move for a relationship is easy to come by when you rent a home. And when you do move, there's often more choice of specific location, and price, when you seek rental housing. Want an apartment near a park in western Philadelphia? You may find an easier time looking to rent than buy.
Many renters say they love knowing they're not tied down - and don't have to assume financial responsibility for their living space. This is of course a big difference from home ownership: who does the work.
Who Does the Work?
While you don't receive the joys of making a place truly "your own," you do have limited costs in renting. Landlords are responsible for general upkeep and safety, allowing you to focus on the fine points. Homeowning, in contrast, puts you in the driver's seat. You shoulder the expenses and reap the rewards of home improvement - both great and small. Think about whether you want to put in additional time and money.
Choices, Choices!
Whether you decide to take the step of home ownership is a personal choice with its own ups and downs. Hopefully we've helped dust off the magic ball a bit; what you see in your future is up to you!
Copyright © by Move, Inc.
Monday, February 9, 2009
How to Choose a Home
Here are some tips to help determine which house is best for you:Once you've settled on a couple of neighborhoods for your search, it's time to pick out a few homes to view. Your wish list can remind you which features are absolute requirements and which amenities you'd like to have if possible. When narrowing down your home search, consider:
- Types of homes
- Home purchase considerations
- Home comparison chart
- What to do when you’ve found the right home for you
Types of homes: In addition to single family homes (one home per lot), there are other forms of home ownership:
Multifamily homes: Some buyers, particularly first-timers, start with multiple family dwellings, so they'll have rental income to help with their costs. Many mortgage plans, including VA and FHA loans, can be used for buildings with up to four units, if the buyer intends to occupy one of them.
Condominiums: With a condo, you own "from the plaster in" just as you would a single house. You also own a certain percentage of the "common elements" -- staircases, sidewalks, roofs and the like. Monthly charges pay your share of taxes and insurance on those elements, as well as repairs and maintenance. A homeowners association administers the development.
Co-ops: In a few cities, cooperative apartments are common. With those, you purchase shares in a corporation that owns the whole building, and you receive a lease to your own apartment. A board of directors supervises management. Monthly charges include your share of an overall mortgage on the building.
Home purchase considerations: Most buyers' first consideration, after neighborhoods are chosen, is the number of bedrooms. As you begin to view homes, keep the following purchase and resale considerations in mind:
- Weigh your needs, budget and personal tastes in deciding whether you want a home that’s a newly constructed home, an older home or a home that requires some work -- a "fixer-upper."
- One-bedroom condos are more difficult to resell than two-bedroom ones.
- Two-bedroom/one-bath single houses generally have less appeal than houses with three or more bedrooms, and therefore less appreciation potential.
- Homes with "curb appeal" (a well-maintained, attractive, and charming view-from-the-street appearance) are the easiest to resell.
- When resale is a possibility, don't buy the most expensive house on the street, or anything that is unusual or unique. The best investment potential is traditionally found in a less expensive, more moderately sized home on the street.
Home comparison chart: While house-hunting, it's a good idea to make notes about what you see because viewing several houses at a time can be confusing. Use our home comparison chart to help you keep track of your search, organize your thoughts and record your impressions.
When you’ve found the right home: Before you begin the home buying process, resolve to act promptly when you find the right house. Every REALTOR® has stories to tell about a couple who looked far and wide for their dream home, finally found it, and then revealed that "we always promised my Dad we'd sleep on it, so we'll make an offer tomorrow." Many times the story has a sad ending -- someone else came in that evening with an offer that was accepted.
Resolve at this point that you will act decisively when you find the house that’s clearly right for you. This is particularly important after a long search or if the house is newly listed and/or under-priced.
Copyright © by Move, Inc.
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