buying a home
Why You Should Be Paying Attention to The FED Rates
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As you know the Federal Reserve just announced that interest rates are holding steady! The goal of the committee is to maintain the target range for the Federal funds rate. This is to support the expansion of economic activity, strong labor market conditions, and favorable inflation.
Why should YOU pay attention to this?
A couple of reasons:
- You’ll be informed on the state of the economy
- You’ll gain knowledge on the state of the job industry
- Paying attention will keep you up to date on the rate of inflation
- If you own a home, it lets you know if you can be saving money by refinancing to get a better interest rate
- If you are looking to purchase a new home, you want to purchase while rates are low
The next meeting is on March 17th & 18th.
The Benefits of Purchasing a Home in The Winter
Michigan winters can be brutal! The cold weather and snowy conditions make everyone want to stay inside and cozy up next to a fire. Needless to say, looking for a house isn’t typically on the winter activity list.
Traditionally, spring and summer are the prime times to purchase, but new studies show that winter can be a great time to buy as well.
Here are a few reasons why:
You can bet that there are a lot of people not willing to go house looking in the dead of winter. Use that to your advantage by getting in contact with an agent and taking a few house tours. Fewer people mean less competition for your dream home. The low demand will work in your favor because you don’t have to worry about outbidding anyone.
If there is a home that goes for sale in the winter, more than likely, that seller REALLY wants to sell. This opens the door for negotiations! The seller may be willing to lower the price, discount closing cost, or even offer other incentives like appliances to be included with the home sale.
Everything in the winter months slows down. That means realtors may have less clientele and can give you extra attention around this time of year. They are more willing to go to bat for you and work a little harder to get you the best deal possible!
Are you interested in purchasing a new home this winter? Contact our mortgage experts HERE!
New Year’s Resolution: Become A Homeowner!
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Its that time of year again when everyone is setting their sights on new goals. From being healthier to save money to try new things, January 1st is when we all want to set ourselves up for a successful year.
One major goal many people have is to become a homeowner. This is a huge goal but very attainable. With Hall Financial, we can make it very simple and easy for you to obtain a mortgage.
Here is a step by step list of everything you need to make your homeownership dreams come true:
- Obtain preapproval from Hall Financial, you will need:
- Two years of W2s
- Your most recent pay stub
- Two months of bank statements
- Copy of driver’s license
- Credit Report
- Start house shopping
- Need a realtor? No problem, Hall Financial has preferred partners.
- Find a house. Put an offer in, and get it accepted!
- Loan documents
- Sign all documents
- Obtain homeowner’s insurance and provide to your processor.
- Review closing documents.
- Schedule closing with your processor.
- Confirm closing date, time, and place with your realtor and processor.
- Sign all final documentation.
Enjoy your new home!
3 Tips for First-Time Homebuyers
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Buying home is one of the biggest commitments you will ever make. Not to mention it is pricey, time-consuming and can be very intimidating. If you are a first-time homebuyer and don’t know where to start, these 3 tips could help you prepare yourself for the process.
Tip #1: Be picky about your Mortgage Lender
This is a major purchase and commitment! You need to be completely comfortable with your lender. Find a lender that is in tuned to your request, concerns and anxieties. You should never feel like you are being pitched some sales tactic and what you feel doesn’t matter. You will spend many long hours communicating with this company and they should be all about catering to you and showing you MORE PERSONAL ATTENTION.
Tip #2: Take your time!
The mortgage process can be extremely daunting. From picking a real estate agent, to your dream home, to the mortgage lender…there is a lot of decisions to make and you shouldn’t rush making any of them! Take your time throughout this entire process. If you aren’t loving the way your real estate agent is communicating with you, get a new one. Or you aren’t loving any of the houses in the current market for sale, wait till you find what you want!
Tip #3: Have money saved
Not only is it nice to have a good amount of cash saved for your down payment but, there are tons of other expenses to consider. Once you get approved for that new home, you are going to want to furnish it and fill it with things you like! Also, since buying a home is so expensive, you need buffer money, just in case some random expense occurs.
Low Rates & Increasing Home Prices
Mortgage Bankers Association is forecasting that we will see a three-year-high in mortgage originations since 2016. In 2016 the industry saw $2 trillion and in 2019 MBA is predicting that we will land around $1.9 trillion.
Since the FED cut rates not once, but twice this year we have seen an increase in refinances. MBA is predicting that 35% of that $1.9 trillion will be attributed to those refinancing; which reflects Fannie Mae’s projection of refinances also being at a three-year-high.
If you are someone who follows along and have been on the fence about refinancing keep in mind that your credit score will affect the rate you get locked in to. The industry has been seeing a wide range of interest rates for credit scores of 620 through 639; anywhere around 1.33% in difference. However, if you can, you can buy down your interest rate.
Not sure what buying an interest rate means? Click here to talk to someone today!
In other news, we have been seeing an increase in home prices. Before, you cringe right now this news is good. With rates remaining low you still have the ability to get more house than you may have planned for and we are seeing an increase in inventory. Right now Detroit is sitting in the top six areas at 4.1% in year-over-year strength.
Ways to Save on Your Monthly Payments
The mortgage industry has been experiencing an amazing year so far. The Federal Reserve (FED) has continued to cut rates. Need proof? Last week the FED dropped rates another quarter percent, we are currently hovering at a 2-2.25% rate.
What does that mean for you?
Well if you are looking to purchase you have the ability to buy more home for your money; however, if you are looking to refinance you are looking at saving money over the life of your loan, on top of potentially being able to lower your term.
Refinancing is one of the various ways you can utilize to help save money overall; however, if you find yourself needing alternative options and are looking to be proactive in your home financing needs, here are a few out-of-box ideas.
- Buy a Cheaper House – this is self-explanatory, learning to live below your means is a valuable lesson to learn and helps you budget more efficiently.
- Choose a Bi-Weekly Payment Option – Most loan servicers provide this option. When you choose to go this route, you end up making 26 payments a year; which adds up to you paying 1 extra payment towards your principle each year.
- Choose an ARM – this option is great if you don’t plan on living in your home very long. What’s the point of fixing yourself in a 30-year term if this isn’t your forever home?
- Extend Your Repayment Term – Example if you are in a 15-year term you can switch to a 30-year; this doesn’t change the amount of your loan but will overall lower your payments because you are extending the term.
- Make a Larger Down Payment – This option would make your parents feel like you are listening to them. You grew up with them harping you to save for a 20% down payment and there is a good reason why: it helps keep your monthly mortgage payment LOW.
- Get Rid of Your PMI – this option takes some time if your purchasing and your sellers don’t want to pay this off while negotiating. To be able to get rid of your PMI you must gain at least 20% equity in your home; once you achieve that you can request that your lender drop PMI.
- Pay for Points – when you pay for points you are paying for a lower interest rate. There may be more you pay for upfront in closing costs; however, over the term of your loan you aren’t acquiring unnecessary interest.
HOMEOWNERSHIP = HAPPINESS
Recent studies have shown that 93% of homeowners say that having a house makes them happier than renting did.
Why is that?
Experts are coining it “The Homeownership Effect” explaining that owning a home can make you a better person because you naturally find yourself enjoying new hobbies like gardening, landscaping, cooking, and if you are a big spender maybe even remodeling.
Besides allowing you to find and create more hobbies for yourself, it has been said by the Consumer Financial Protection Bureau, that owning a home helps with financial responsibility and overall better well-being. These can be attributed to homeowners living in an affordable, comfortable home located in a connected neighborhood with a reasonable commute.
However, don’t think that owning a home is the magic key to happiness. There does take a level of preparation and making sure you can comfortably afford things like property taxes, insurance, and unexpected (but relatively normal) home repairs. If you are curious whether or not your family is ready for this next step – click here – to talk with someone today about your current situation.
Mortgage Market Update- 9/12/2019
Even though summer is coming to a close and purchase season is slowing down. Freddie Mac reported that the average interest rate for a 30-year fixed rate dropped to another 3-year low at 3.49%. And as the unemployment rate remains historically low, this means that homebuyer demand is improving along with affordability.
August brought some significant good news, so take a deep breath and find solace in our current economy. Why? Fannie Mae is also predicting that the economy should continue to support the current refinance activity. How do we know that? August’s refinance volume was 150% higher than it was last year, which is in correlation to the increase in the demand for homes and affordability.
And if you are still thinking about refinancing know that Black Knight is here to tell us that roughly half of the homeowners across the United States are sitting on a combined total of 6.3 trillion dollars in tappable equity. We haven’t seen eligibility this high since the early 2000s.
3% or 20% – What’s Best For Me?
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It is no secret that times have changed since our grandparents and even our parents have purchased homes. So much so, that with new programs and requirements, brokers/lenders have stated, you aren’t required to have the 20% down payment that you heard about growing up.
But now you are thinking… how much should I save for a down payment?
Here’s the good news it doesn’t have to be difficult, and you can do what works best for you and your family. To put it in perspective, if we were still required to put down 20% on a home loan, based on Mr. Cooper’s math, it would take renters nearly seven years to save for a 200K home on an average salary of 56K a year. Seven years!
However, there is a benefit to putting 20% down.
1. Right away, there is more equity in your home.
2. Lower monthly payment.
3. Lower rates.
4. You aren’t that high of a risk to your lender.
5. You won’t need mortgage insurance.
6. Future buying power.
Click here to calculate your ideal mortgage down payment.