Tag: mortgage

The Cost of Waiting: Interest Rates Edition

The Cost of Waiting: Interest Rates Edition [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Interest rates are projected to increase steadily heading into 2019.
  • The higher your interest rate, the more money you end up paying for your home and the higher your monthly payment will be.
  • Rates are still low right now. Don’t wait until rates hit 5% to start searching for your dream home!

The Mortgage Process: What You Need to Know

The first step in the home buying process? Knowing what you can afford by getting a loan pre-approval (or having a proof of funds letter from your bank, if you are a cash buyer).

The Mortgage Process: What You Need to Know [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Many buyers are purchasing a home with a down payment as little as 3%.
  • You may already qualify for a loan, even if you don’t have perfect credit.
  • Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.

View this previous post on the dos and don’ts when applying for a mortgage. 

Thinking of buying? Contact us today! (708) 529-5839


Whether You Rent or Buy, Either Way You’re Paying a Mortgage

Whether You Rent or Buy, Either Way You're Paying a Mortgage! | Keeping Current Matters

There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize, however, that unless you are living with someone rent-free, you are paying a mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage as opposed to paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.22% last week.

We’ve posted a lot about purchasing a home, important things that home buyers should know, including Steps in the Home Buying Process and Dos and Dont’s When Applying for a Mortgage.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

Contact us to learn more about your local market! (708) 529-5839 cell.

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What to Do After the Equifax Data Breach

(via Thefederalsavingsbank.com )

On Sept. 7, credit bureau Equifax announced it discovered a data breach, which gave hackers access to personal information on about 143 million U.S. consumers, plus that of some Canadian and U.K. citizens.

The data breach lasted from mid-May through July. Hackers could see names, dates of birth, addresses, Social Security numbers and some driver’s license numbers. Further, about 209,000 U.S. consumers’ credit card numbers and about 182,000 U.S. consumers’ dispute documents –
which contain personal identifying information – were accessed.

In short, hackers may have accessed enough information to open unauthorized accounts or lines of credit.

Consumers can protect themselves by taking matters into their own hands. Here’s what you can do to keep your personal and financial information under wraps:

Step 1: Find out if you were affected

Equifax created a website – www.equifaxsecurity2017.com – so consumers could determine if they were one of the 143 million whose personal information was accessed. The site requires your last name and the final six digits of your Social Security number.

Whenever you’re entering sensitive information – partial Social Security numbers, credit card numbers, or answering any security questions – it’s not wise to be on a public Wi-Fi network. Do this at home or on a secure network you trust; the hotspot at your favorite cafe doesn’t count.

Security blogger Brian Krebs wrote that some consumers found that, after entering the same information at different times, received different results. Krebs notes that it might be prudent to just assume that you are one of the many who were affected.

Step 2: Pull your credit report

There’s an easy way consumers can find out if someone has tried to open an account or line of credit in their name. This is through annualcreditreport.com, a website mandated by Congress so that consumers can access one free credit report every year from each of the major three credit bureaus: Equifax, TransUnion and Experian.

Everyone should make a habit of doing this anyway. Now is the perfect time to start if you aren’t doing this already.

Step 3: Sign up for credit monitoring

Equifax is offering free credit monitoring services to consumers through www.equifaxsecurity2017.com. Krebs explains that these types of services alert you if someone steals your identity, but doesn’t prevent the theft from occurring in the first place.

Still, it can help you take the right steps in the aftermath of identity theft.

Step 4: Initiate a credit freeze

A credit freeze prevents anyone who has your personal information (yourself included) from opening an account or line of credit in your name. This is the most secure way to protect yourself from fraud or identity theft.

According to the Federal Trade Commission, to initiate a credit freeze, you need to contact each of the three credit bureaus individually by phone. Here are their numbers:

Equifax: 1-800-349-9960
TransUnion: 1-888-397-3742
Experian: 1-888-909-8872

You’ll need to provide information like your name, Social Security number, address and birth date.

When you freeze your credit, you’ll receive a unique PIN. This is the key you’ll use to unlock your credit if you decide to open a new account. Keep this in a secure location.

If you have any questions about how this breach may affect the mortgage lending process, reach out to The Federal Savings Bank.

I specialize in helping clients purchase and refinance homes in all 50 states.
I can finance your primary residence, vacation home, and investment property.
Please call or email me today if I can help you or anyone you know!

 

Brian Kohlstedt PhotoBrian Kohlstedt
Senior Vice President, NMLS# 216947
direct:(312) 738-8440
fax:(312) 491-5303
[email protected]om
http://www.thefederalsavingsbank.com/briankohlstedt
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Number of Buyers Putting Down Less Than 10% Hits 7-Year High

Number of Buyers Putting Down Less Than 10% Hits 7-Year High | Keeping Current Matters

According to Black Knight Financial Service’s Mortgage Monitor Report, 1.5 million Americans have purchased a home with down payments under than 10% over the last 12 months. This is great news for buyers as this marks a 7-year high.

Many mortgage programs offered by agencies like Freddie Mac and Fannie Mae allow buyers to put down as low as 3% to purchase their dream homes. The strength of the housing market has aided buyers who used low-down-payment programs to buy. As a recent CNBC article points out,

“Defaults on recent low down payment loans, so far, are slow, but that is as much a factor of the good credit quality as it is the strength of the housing market. Home prices are rising incredibly fast, meaning those borrowers are gaining equity in their homes quickly.”

Low down payments aren’t just great for first-time homebuyers. These programs have allowed homeowners who want to capitalize on the equity they have in their homes to use the profit from their sale to pay off high-interest credit cards, fund education or even start a business.

According to a new Census Report, the Annual Survey of Entrepreneurs , home equity was used to start 7.3% of all businesses in the United States, which equates to over 284,000! The industries that saw the most growth from home equity are accommodation & food services, manufacturing and, retail trade.

Bottom Line

Gone are the days of ‘20% down or no mortgage.’ What could you build with the equity in your house? Contact us today – (708) 529-5839 cell –  real estate professionals who can evaluate your ability to achieve your dreams. We work with many first-time home buyers.

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How Historically Low Interest Rates Increase Your Purchasing Power

How Historically Low Interest Rates Increase Your Purchasing Power | Keeping Current Matters

According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 3.47%. Rates have remained at or below 3.5% each of the last 16 weeks, marking a historic low. The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power. Purchasing power, simply put, is the amount of home you can afford buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget. The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments at or about $1,100 a month.

How Historically Low Interest Rates Increase Your Purchasing Power | Keeping Current Matters

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $6,250). Experts predict that mortgage rates will be closer to 4% by this time next year. Act now to get the most house for your hard earned money.

Thinking of Buying a Home? This Should Be Your First Step…

…getting a loan pre-approval so you know what you can truly afford (what you should know about the mortgage process.)

(or getting the proof of funds letter from your bank if you are not taking out a loan – cash buyer).

 In many markets across the country, the amount of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

What you should do (and not do) when applying for a loan.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

Mortgage Interest Rates Remain At Historic Lows

…but for how long?

Interest Rates Remain at Historic Lows... But for How Long? | Keeping Current Matters

The interest rate you pay on your home mortgage has a direct impact on your monthly payment; The higher the rate, the greater your payment will be. That is why it is important to look at where the experts believe rates are headed when deciding to buy now or wait until next year. The 30-year fixed mortgage rate has fallen half a percentage point since the beginning of the year and has remained at or below 3.5% for the last 11 weeks according to Freddie Mac’s Primary Mortgage Market Survey. The chart below shows how far rates have fallen this year (on the left), and uses an average of the projections from Freddie Mac, Fannie Mae, the Mortgage Bankers Association and National Association of Realtors (on the right). As you can see, interest rates are projected to increase steadily over the course of the next 12 months.

Interest Rates Remain at Historic Lows... But for How Long? | Keeping Current Matters

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly. According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.0% over the last year and are predicted to be 5.4% higher next year. If both the predictions of home prices and interest rate increases become a reality, families will wind up paying considerably more for their next home.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth. Meet with a local real estate professional to evaluate your ability to purchase your dream home.

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What You Need to Know About the Mortgage Process

The Mortgage Process

A pre-approval doesn’t always mean a loan approval. Make sure you don’t have any changes to your credit (big purchases, higher loan to debt ratio, change of jobs, etc. when you are trying to get a loan). Make sure to read this post and this post.

92% of Homes Now Have Equity

(via: Realtor®) Daily Real Estate News | Wednesday, December 16, 2015

About 256,000 U.S. homes regained equity in the third quarter of this year, bringing the total number of residential properties with equity to about 46.3 million, according to CoreLogic’s latest equity report. That equates to about 92 percent of all mortgaged homes.

The number of residential properties in negative equity dropped to 8.1 percent, or 4.1 million, in the third quarter, down 20.7 percent year-over-year, according to CoreLogic’s report. Negative equity refers to properties where borrowers owe more on their mortgage than their homes are currently worth.

“Home-price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market,” says Frank Nothaft, chief economist for CoreLogic.

In the third quarter, about 37.5 million borrowers had at least 20 percent equity, up from 35 million a year ago. In the last three years, the number of borrowers with at least 20 percent equity has climbed by 11 million, “a substantial uptick that is driving rapid growth in home equity originations,” Nothaft says.

The bulk of properties with positive equity is concentrated in the high-end housing market, CoreLogic’s report notes. Ninety-five percent of homes that are valued at $200,000 or more have equity compared to 87 percent of homes valued at less than $200,000.

Home prices are expected to rise at least 5 percent in 2016 and continue to build wealth among home owners in the new year, says Anand Nallathambi, president and CEO of CoreLogic.

The following 10 metros had the highest percentage of residential properties with positive equity in the third quarter:

  • Houston-The Woodland-Sugar Land, Texas: 98.2%
  • Dallas-Plano-Irving, Texas: 97.9%
  • Los Angeles-Long Beach-Glendale, Calif.: 95.4%
  • Minneapolis-St. Paul-Bloomington, Minn.-Wis.: 94.4%
  • New York-Jersey City-White Plains, N.Y.-N.J.: 94.3%

Meanwhile, the following metros had the highest percentage of residential properties with a mortgage that continued to be in negative equity:

  • Phoenix-Mesa-Scottsdale, Ariz.: 14.2%
  • Chicago-Naperville-Arlington Heights, Ill.: 13.8%
  • Riverside-San Bernardino-Ontario, Calif.: 11.4%
  • Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.: 10.8%
  • Atlanta-Sandy Springs-Roswell, Ga.: 9.7%

Source: CoreLogic