The Pros and Cons of ‘Mortgage Before Marriage’ for Young Couples

The Pros and Cons of There was a time when a higher percentage of people were married before they committed to buying a home together, but it’s a lot more common to co-habit and invest in a home together. If you’re considering the commitment of a mortgage without being married, here are some things to be aware of before you start searching the market.

Relationship Status Won’t Affect Your Rates

It might seem like there are greater risks involved if two individuals purchasing a property are not legally bound, but it actually makes no difference to the mortgage lender. If two people are buying a home together, the lender is going to be assessing their credibility based on their individual credit reports and financial history, not on their relationship to each other. While it may seem like co-habiting will have an impact, the proof – as far as lenders are concerned – is in the numbers.

What’s Your Credit History?

Most people are aware of their credit history, whether they’ve had financial hiccups in the past or are still paying off a significant amount of debt. However, it is more difficult for some to know the financial background of their partner, and this can be more common when it comes to co-habiting. Because the lender will be looking at both credit scores, if you or your partner have had financial issues in the past, it can have an adverse impact on your application. While you may have a nearly perfect credit history, if your partner does not this can make mortgage approval more difficult.

In The Event Of Separation

Home ownership can involve significant hurdles after a divorce, but there will still be some legal and financial issues to wade through if you’ve never been married. Since it’s likely that you won’t want to continue to co-habit, there’s the possibility that one party will have to buy the other out, which can be a sizeable financial burden. While this type of situation may never come to fruition, it’s important to be aware of what might occur so you can be prepared.

There can be a lot of complexities involved in co-habiting whether you’re married or not, but it’s important to have an awareness of your partner’s financial history and be prepared for financial hurdles. If you’re currently on the market for a new home, contact one of our mortgage professionals for more information.

5 Major Red Flags to Watch for When You’re Touring an Open House

5 Major Red Flags to Watch for When You're Touring an Open HouseAn open house is one of the best opportunities a potential homeowner will have to take stock of a home and determine if it will work for them. However, it can also be a good opportunity to discover some glaring red flags that might make it a less worthwhile investment. If you’re currently perusing the open houses in your neighborhood, here’s some things you should make sure to watch out for.

A Selling Hot-Spot

It’s well and good if you love the home you visit, but ‘location, location, location’ is a popular phrase for a reason. If you’ve noticed a lot of homes for sale in the area, this could be a sign of neighborhood issues that are less than pleasing.

An Odd Smell

Baked goods or room spray are quite common when it comes to an open house, but it’s possible that they’re masking a less-than pleasant odor. Since this can point to a hard home fix-up, it’s worth checking out the closets or the basement where a strange smell can indicate mildew or mold.

A Bad Paint Job

Paint that’s peeling may mean that a few fresh coats are long overdue, but it can also indicate moisture issues in the home that have gone untreated. As this kind of repair can cost a pretty penny, it’s worth determining if there are sealing issues with windows or doors.

A Few Obvious Fix-Ups

A sticky door or a damaged wall may not seem so bad on their own, but if you notice a few things that need to be fixed around the home, it can be a sign that there’s more afoot. If a homeowner has cared for the property during their ownership, it will likely show in small details like this.

Incomplete Construction

It may seem like a good sign to see a house that’s undergoing a renovation, but it can actually be a risk to invest in a home that’s not complete. Instead of leaving this to chance, you may want to check with the construction contractor to determine the scope of the work and when it will be finished.

An open house may be a good time to decide if you’re interested in a home, but it can also be the perfect opportunity to search for deficiencies that may end up costing you.

What’s Ahead For Mortgage Rates This Week – January 2, 2017

Last week’s economic reports were in short supply due to the Christmas holiday. Events reported included Case-Shiller home price indices, pending home sales and weekly readings on mortgage rates and new jobless claims. Consumer confidence was also released.

 

CaseShiller Readings Indicate No Slowdown in Home Price Gains

Case-Shiller’s October readings for its home price indices showed continued growth in home prices. In spite of rising home prices and mortgage rates, high demand for homes and slim supplies of homes for sale continued to fuel higher home prices.

According to Case-Shiller’s national home price index for October, home prices rose 5.60 percent on an annual basis as compared to September’s reading of 5.40 percent. The 20-city home price index rose to 5.10 percent from September’s reading of 5.00 percent. Case-Shiller’s 10-city index also gained 0.10 percent in October with a reading of 4.30 percent year-over-year.

Seattle, Washington, Portland, Oregon and Denver, Colorado had the highest year-over-year home price gains in October with readings of 10.70, 10.30 and 8.30 percent respectively. David M. Blitzer, Managing Director and Chairman of the S&P Indices Committee, said that “Home prices and the economy are both enjoying robust numbers,” but he also cautioned that rising mortgage rates and home prices growing faster than wages continue to pose obstacles for some home buyers. The Federal Reserve is expected to raise its federal funds rate in 2017, which is expected to prompt rising mortgage rates.

 

Mortgage Rates Mixed, Pending Home Sales Fall

Pending home sales fell 2.50 percent in November. Analysts said that post-election reaction helped to drive mortgage rates higher, which made homes less affordable for first-time and moderate-income buyers; Sellers and buyers may have postponed decisions to sell or buy as they waited for volatile post-election responses to ease.

According to the National Association of Realtors®, pending home sales fell to their lowest level in almost a year with an index reading of 107.30 in November. September’s reading was 110.00. The holiday season and rising mortgage rates were seen as contributing to fewer pending home sales.

Freddie Mac reported the ninth consecutive week that fixed rate mortgages rose. In the final mortgage rates survey for 2016, the average rate for a 30-year mortgage rose two basis points to 4.32 percent; the average rate for a 15-year fixed rate mortgage was three basis points higher at 3.55 percent. 5/1 adjustable rate mortgage rates averaged 3.30 percent, which was two basis points lower than the prior week. Discount points averaged 0.50 percent for all three mortgage types.

New jobless claims were lower last week with a reading of 265,000 new claims filed. Analysts had expected 270,000 new claims filed based on the prior week’s reading of 275,000 new claims filed.

In spite of rising home prices and mortgage rates, consumer sentiment was higher than expected in December with a reading of 113.70 as compared to expectations of 110.00 and November’s reading of 109.40.

 

Whats Ahead

Next week’s scheduled economic reports include Labor Department releases on Non-Farm Payrolls, and the national unemployment rate. ADP payrolls and weekly readings on mortgage rates and new jobless claims will also be released. Financial markets will be closed on Monday in observance of New Year’s Day.

Selling Social: How to Leverage Your Social Network to Sell Your Home Faster

Selling Social: How to Leverage Your Social Network to Sell Your Home FasterThere were days when the marketing of a home involved plunking a sign into the front yard, but with the power of the Internet, there are many mediums through which home sellers can find potential buyers. If you’re currently looking at ways to use the power of social media in order to get your ideal purchase price, here are some things you can do to best harness its capabilities.

Make A Facebook Page

According to the social market service provider, Postling, approximately 80% of real estate agents are now using Facebook in order to market and sell their properties. This means that Facebook is not only a great tool for agents, it can be an ideal means of marketing for you. By creating a Facebook page for your home that is professional looking and informative, you may be able to tap into a unique base of people without having to do a lot of legwork.

A Picture Says A Thousand Words

Open Houses can have a huge impact on finding the right buyer for your home, but a good picture can also be a great way of drawing in interested parties. Instead of creating a video or a website, you may want to try making a Pinterest account that highlights the rooms of your house and any special details that may work to entice homebuyers. It’s just important to make sure your pictures show your house in its best light so you can get people through the door.

Create A Twitter Account

It may seem a bit strange to create a Twitter account for your home, but it can actually be a fun and simple way to attract a broad mix of people and show what your home has to offer. Because a Tweet must engage people in 140 characters or less, it can be a great opportunity to articulate the benefits of your home in a concise, clear way. In addition, it’s an easy and affordable means of getting your home out there without having to invest money or time into marketing materials and a website.

From marketing material to a savvy real estate agent, there are a variety of ways to sell a home. However, with the power of social media, many home sellers have the opportunity to do the legwork without putting in a great deal of effort.

Did You Know? A Mortgage Professional Can Save You a Lot of Money. Here’s How

Did You Know? A Mortgage Professional Can Save You a Lot of Money. Here's HowMany people forego a mortgage broker and decide to go through the application process on their own, but a mortgage professional can actually work to save you money when it comes to your biggest investment. Whether you’re new to the market and are looking for tips or are just a prospective buyer in need of advice, here are a few reasons you may want to consult a broker to make for an improved real estate investment.

Liaising With The Lender

If you go it alone without a lender, you may be able to find a good loan opportunity, but because a mortgage broker knows the ins and outs of the market, they may be able to assist you in acquiring a better deal. Since brokers have a business relationship and a history with many lenders, they will be able to get you in the door and perhaps broker a deal you would not have been able to find without them.

It’s A Free Service

Many people think that a broker adds even more expenditure to an already expensive investment, but mortgage brokers can you save you time and money in the long run. While this can be a financial boon on its own since you can tap into their knowledge and experience for free, it’s also worth realizing that the lender pays a broker and has a responsibility to them as well as you. It may be free, but it’s worth doing a little digging to find the professional that can best meet your needs.

Navigating The Application Process

For those who are new to the market, the paperwork and discussion around getting a mortgage can be a significant deterrent in putting money down. Since a mortgage broker is familiar with the process, they can help you compile the correct documentation and you can trust their knowledge of the process. While it’s important to do some of your own research about mortgage rates and lenders, a broker can help you save time and seal the deal.

Many people are hesitant to consult with a mortgage broker when it comes to their home purchase, but as a free service that can make the process a little clearer, it can be well worth the consultation. If you’re currently in the market for a home and are confused with all of the associated details, contact one of our mortgage professionals for more information.

Case-Shiller: Home Price Growth Continues

Home increased in October according to Case-Shiller’s 20City Home Price Index. Home prices rose from September’s annualized reading of 5.40 percent to 5.60 percent. Factors contributing to rising home prices include stronger economic conditions and outlook along with short inventories of available homes coupled with high demand. On average, October home prices rose 5.10 percent on seasonally adjusted annual basis, which was unchanged from September’s reading.

West Continues to Lead Home Price Growth

Top home price growth rates were in Seattle, Washington at 10.70 percent, Portland, Oregon at 10.30 percent and Denver, Colorado with a seasonally-adjusted annual price increase of 8.30 percent. New York, New York had the lowest home price growth in October with a reading of 1.70 percent.

In a separate report, December consumer confidence exceeded expectations with an index reading of 113.70 as compared to an expected reading of 110.00 and November’s reading of 109.40. This was the highest reading for consumer confidence since 2001. Analysts said that the strong reading for consumer confidence was a sign that consumers will increase their spending in 2017, but what will happen with mortgage rates is a big question.

Rising Mortgage Rates May Slow Home Prices, High Demand for Homes

With the Federal Reserve’s decision to raise its target federal funds range in December comes a question of how rising mortgage rates will affect housing markets. Rising fed rates typically lead to increases in consumer lending rates including rates for home loans and refinancing. Combined effects of rising home prices and mortgage rates create challenges for first-time and moderate income home buyers. While higher mortgage rates have not impacted buyer demand so far, rising mortgage rates could sideline some buyers.

A recent compilation of the most expensive places to live in America illustrates the imbalance of home prices as compared to consumer incomes. Brooklyn, NY topped this list with a reading of 127.70 percent of average household income earned in Brooklyn to buy an average priced home in Brooklyn. Analysts reporting this data noted that many Brooklyn homeowners work in Manhattan and earn more than those who work in Brooklyn. Disparities in average home prices and home buyer incomes could “trickle down” to less expensive areas if mortgage rates and home prices continue to rise.

Meanwhile, builder confidence is strong and is expected to lead to higher levels of home construction in 2017.

3 Things You Must Do after Inheriting a Home

3 Things You Must Do after Inheriting a HomeThere can be a lot of excitement when it comes to the realization that you’ve inherited a home, but simply because it’s an inheritance doesn’t mean there aren’t a few strings attached. Whether you’re expecting to be gifted with a home in the future or you’re currently going through this process, here are a few things you may need to watch out for.

The State Of The Mortgage

Once a home has been effectively handed over to you, it’s important to determine the status of the mortgage with the lender and if anything is still owed. While you have the option of taking over the mortgage in a lot of cases, in the event that there’s a reversible mortgage or you’re choosing to rent it out as a second property, you may not be able to transfer the mortgage. While this can often be a rather seamless process, if money is owed there can be other factors to consider.

Determine If You Want It

If you already have a first home and don’t want to take care of your second property as a rental unit, it’s important to realize that keeping the home may not be the best decision for you. While you have the option of organizing a short sale if you’d like to get it off of your hands, you can also contact a real estate agent who will be able to provide you with advice on how to proceed if you’re unwilling (or unable) to take control of the property.

Is It In Good Condition?

Whether you want to keep the home or not, there can be cases where it’s not even a question if it’s a home that you’re going to end up investing money into without much return. In the situation that a lot of money is owed on the house or there are serious issues with its general condition, you may want to release yourself from the inheritance and move on with your financial situation still intact.

There can be an instant feeling of acquired wealth in the event that you’ve inherited a home, but a home in bad condition or that you don’t want to take care of can end up being more of a headache than anything else.

What’s Ahead For Mortgage Rates This Week – December 26, 2016

Last week’s economic news included readings on consumer spending, core inflation new home sales and regularly scheduled readings on mortgage rates and new jobless claims.

Consumer Spending Dips in November

Commerce Department reports on consumer spending in November indicated that consumer spending was lower in November with 0.20 percent growth as compared to October’s reading of 0.40 percent growth. November’s reading for core inflation, which excludes volatile food and energy sectors, was flat as compared to expectations of 0.10 percent growth and October’s reading of 0.10 percent growth.

New Jobless Claims Rise to 6Month High

New jobless claims jumped to 275,000 last week as compared to an expected reading of 258,000 new claims and the prior week’s reading of 254,000 new claims. New claims typically rise during the holiday season due to school and other workplace closures.

There was good news as new jobless claims remained below the benchmark of 300,000 new claims for 94 consecutive weeks. This streak of new claims below 300,000 new claims is the longest since 1970. Increasing numbers of “contingent” workers contributed to volatility in employment; The Rand Corporation reported that 10.10 percent of the workforce was contingent workers in 2005; the percentage of contingent workers increased to 15.80 percent of the U.S. workforce in 2015.

Mortgage Rates, New Home Sales Rise

Freddie Mac reported a jump in mortgage rates last week; the average rate for a 30-year fixed rate mortgage was 14 basis points higher at 4.30 percent. The average rate for a 15-year fixed rate mortgage was 15 basis points higher at 3.52 percent; the average rate for a 5/1 adjustable rate mortgage rose 13 basis points to 3.32 percent. Analysts said that the 10-year Treasury rate rose 10 basis points in response to the Fed raising its target funds rate. New home sales gained in November with a seasonally adjusted annualized reading of 582,000 sales as compared to 285,000 expected sales and October’s annual rate of 563,000 sales of new homes. This was the second highest reading for new home sales since early 2008. Builders will be watching mortgage rates and new home sales in the New Year to determine how rising mortgage rates will impact new home sales.

Whats Ahead

Next week’s scheduled economic news includes Case-Shiller Home Price Index reports, pending home sales and weekly readings on mortgage rates and new jobless claims. U.S. Financial markets will be closed Monday in observance of the Christmas holiday

After the Sale: The Next Steps and What You’ll Need to Do Before You Move Out

After the Sale: The Next Steps and What You'll Need to Do Before You Move OutGetting an offer on your home can certainly make it feel like the hard part is over, but even after the deal is sealed there’s still a lot to do when it comes to moving out. Whether you’re getting prepared for a future move or your buyer has just signed on the dotted line, here are the first steps to take once it’s certain your property is off the market.

Start The Packing

For many people, packing is something they would rather put off until the last minute, but boxing up your stuff is actually a great opportunity for a little spring-cleaning at any time of the year. Instead of procrastinating, get started early and ensure that you’re only packing up the items you will make use of. Whether you decide to pass the extras off to friends or donate them, this is a great way to make your next home clutter free.

Book The Moving Trucks

The day you have to be out of your home by will be set in stone, so it’s important to get ahead of this process and contact the movers as soon as you can. Moving companies have busier times of year and by booking in advance, you won’t have to comply with their loaded schedule. While you’ll want to make a reservation if you’re working under a time crunch, it still might be worth shopping around to see if you can find a better deal.

Complete The Last Minute Fix-Ups

In all likelihood, there’s a list of minor tasks the homebuyer will want you to complete prior to move-in. It’s important to prioritize these things so they’re not left until the last minute, so ensure you make a list and pick a day or a certain window of time to complete them. Whether you’ve agreed to paint a room or get the windows re-sealed, not making these fixes can end up costing you money so it will be worth the time you spend.

It’s a wonderful feeling to get your home off the market at the purchase price you were looking for, but there are still things that need to be done before the deal is sealed. By making a list of any outstanding maintenance and booking the moving trucks, you’ll be well on your way to your new home.

Understanding the HARP Program and How to Qualify for a HARP Mortgage

Understanding the HARP Program and How to Qualify for a HARP MortgageInterest rates may be relatively low, but if you’re a homeowner who is struggling with your monthly mortgage payment, it may be time to consider what re-financing options are available on the market. If you are looking for a lower interest rate to improve your financial health, here’s what you need to know about the HARP program so you can take advantage of a better rate.

What Is HARP?

The Home Affordable Refinance Program, which is commonly known as HARP, was created in the wake of the 2008 recession, which was brought on by the high amount of housing debt in the United States. As the program was created to simplify re-financing for those who needed a different mortgage option, it is a means of providing lower interest rates to those who possess a solid payment history but may be struggling with the financial burden of their monthly payments.

What’s Required For HARP Refinancing?

There are a variety of requirements the homeowner must meet so they can take advantage of the HARP program. In order to apply, the homeowner must have a mortgage that is owned by Freddie Mac or Fannie Mae and was purchased prior to May 21st, 2009. If this condition is met, the homeowner must prove their financial reliability by being up-to-date on their mortgage payments with no payment more than 30 days late in the previous six months. While you’ll want to check with HARP’s website or your mortgage adviser for details, eligible property types include a primary residence, a one-unit second home and a one-to-four-unit rental property.

What’s The Fine Print?

Utilizing the HARP program and acquiring a lower interest rate may seem like an instant benefit for your finances, but it’s important to find a lender who does not have high closing costs. If you have a lender at a high cost, it’s possible that even at the lowered interest rates offered by using HARP, the savings gain will not balance out with what you will be paying by sealing the deal.

If you’re a homeowner who is looking to refinance in 2017, HARP may be the ideal mortgage option for you to re-finance your mortgage and save money on a monthly basis. While it’s important to be aware of all of the details involved before choosing this option, if you’re considering HARP, reach out to one of our mortgage professionals for more information.