Archives for July 2013

3 Common Home Financing Problems And How To Avoid Them

3 Common Home Financing Problems And How To Avoid ThemGetting the best mortgage financing for your new home can sometimes be a complicated process and, unfortunately, things can go wrong. Using a licensed and trusted mortgage loan specialist can help alleviate many of these challenges.

There are certain mistakes that many homebuyers make when applying for their mortgages that can seriously damage their chances of being approved. If you are aware of the most common mortgage issues, you will be better able to prevent them when applying for your own mortgage.

Make sure that you keep the following tips in mind when applying for a mortgage:

Making Large Purchases Before Closing On The Mortgage

Many homebuyers think that they are in the clear once the mortgage deal is approved and they move forward on another large purchase such as a car or home furnishings. However, it is best to hold off on all major purchases until the mortgage is finalized, as additional debt will change your “debt-to-income ratio” which could mean that you no longer qualify for the loan.

Many lenders pull your credit information right before funding, so avoid any big-ticket items until you have signed on the dotted line.

Switching Jobs During The Mortgage Loan Process

When deciding whether or not to approve your loan, the lender will look at your salary and your job stability. If you make a career move during the process of applying for the loan, this could make your income seem unstable and could cause the bank to decline your loan.

Stay in your job through your home closing date to reassure the bank that you have a stable income; you can always switch careers later.

Having No Credit Card

You might think that the fact that you have gotten by without a credit card for this long would be a positive thing in the mind of lenders. However, having no credit history at all makes lenders nervous, as they don’t know how you will handle credit when you have it.

Instead, get a credit card that you repay in full every month, which will help to show them you can manage your credit responsibly.

These are just a few examples of major mistakes that home buyers make when applying for a mortgage. If you can avoid these issues, you will find it much easier to buy a home.

As always, call your trusted home mortgage financing professional today to discuss your personal situation and get the best advice on your upcoming home purchase!

What Are the Hot Home Decor Trends for 2013?

Hot Home Decor Trends 2013Just like fashion designs and hair styles, home decor trends are constantly changing and evolving. Each new season brings a new must-have feature for your home.

In order to keep your home looking fresh and chic, what are the hot trends for 2013 that you can incorporate into your decor?

Here are a few ideas:

Bright Paint Colors

Vibrant (and even neon) hues are very popular in fashion at the moment and they also look really chic on your walls. If you are looking for a way to freshen up a dull room, a bright pop of color can really do the trick.

It doesn’t have to be overwhelming if you keep the rest of the room neutral and use the bright color as an accent.

Original Artwork

Decorating your home with unique and original works of art from funky local artists is a hot trend this year. You could find such pieces at a local art fair or on online craft auction websites.

You could also check out a local art school or university art program in your area, where you can buy some student artwork at cheap prices.

1920s Inspired Designs

With the Roaring 20s being revitalized on the silver screen in the show Boardwalk Empire and the film The Great Gatsby, designs from the 1920s are becoming more popular. Why not incorporate some gorgeous Art Deco furniture or decoration into your home?

Check out auctions to find authentic vintage pieces for cheap prices.

Simple Wood

Another hot trend for 2013 is unfinished exposed wood furniture, with a very natural texture and feel. These simple wood pieces give your home a natural beauty that compliments any color. It works well with neutral accents to give the home a very peaceful and welcoming atmosphere.

Stripes and Graphic Prints

Crisp patterns, graphic prints and stripes are popular at the moment in everything from fabrics to wallpaper to furniture. If you really want to make your home décor look cutting edge, incorporate some of these eye-popping graphic designs into your décor.

These are just a few of the hottest home décor trends of the year 2013. Which ones will you incorporate into the décor of your home?

For more information about buying or updating your  home, please contact your trusted mortgage professional today!

What’s Ahead For Mortgage Rates This Week – July 15, 2013

What's Ahead For Mortgage Rates July 15 2013The Fed’s release of the minutes for the June FOMC meeting was the most noteworthy economic event last week; the minutes repeated the Fed’s recent statement concerning the wind-down of its current monetary easing policy.

The minutes indicated that about half of meeting participants wanted to end the quantitative easing (QE) policy by year end, while “many others” preferred to end the program in 2014.

This split suggests that days are numbered for the Fed’s monthly purchase of $85 billion in Treasury securities and mortgage-backed securities (MBS). The minutes also revealed that the Fed would not be selling off MBS as QE is ended. This would likely prevent additional potential for mortgage rates to increase as demand for bonds would decline when the Fed stops its monthly purchases.

Mortgage Rates Typically Rise When Bond And MBS Prices Fall

U.S. financial markets showed little reaction to the Fed minutes. The Dow Jones Industrial Average saw a quick gain of about 40 points that quickly retreated. The Wall Street Journal interprets the lackluster response to the Fed minutes as investors growing accustomed to the eventual end of the QE program; it’s also possible that the markets interpreted the FOMC minutes as “old news,” as the minutes contained information included in the Fed statement given after June’s FOMC meeting.

The FOMC minutes reported that details of tapering the QE program will be given by Chairman Ben Bernanke during his customary press conference after the Fed presents the FOMC meeting statement. The minutes also asserted that the Fed will closely monitor economic and financial developments as part of their decision-making for ending QE.

The minutes stated that the current Federal Funds rate of 0.00 to 0.25 percent will remain in place for some time after QE is ended.

Mortgage rates rose last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage moved to 4.51 percent from last week’s 4.29 percent. The average rate for a 15-year fixed rate mortgage rose to 3.53 percent from 3.39 percent. Discount points for both types of loans rose from 0.70 percent to 0.80 percent.

Rising mortgage rates suggest that borrowers may soon return to adjustable rate mortgages or hybrids such as the 5/1 adjustable rate mortgage, which was reported at an average rate of 3.26 percent with discount points of 0.70 percent.

What’s Coming Up

On Monday, retail sales for June will be released. This is an important indicator for the general economy. Tuesday’s news includes NAHB/Wells Fargo Housing Market Index for July.

On Wednesday, Housing Starts for June will be released. Thursday’s news includes weekly Jobless Claims and Leading Economic Indicators. No economic news is scheduled for Friday.

Can That Killer Home Theater Add Value To Your Home?

Can A Killer Home Theater Add Value To Your HomeMany home owners dream of having a home theater – an entire room of the home dedicated to enjoying television and film. These rooms are usually equipped with a large flat screen television or projector, comfortable seats, mood lighting and perhaps even a bar or a snack fridge.

They are very comfortable and the perfect place to relax after a hard day. They are also lots of fun for entertaining, as you will be able to watch the big game or the hottest new release with your friends in style.

However, will spending the money on renovating your home to create a theater room be a smart investment? Does this type of home improvement add a lot of value to the property, or will it turn off potential buyers?

Buyers Interested In Tech-Equipped Homes

These days luxury home buyers are becoming much more tech-savvy and they are demanding more networked or ‘smart’ homes than ever before. They are looking for a house which is outfitted with the latest in technology, so a modern home theater will be a desirable selling point. If you are targeting your home to this luxury market, the home theater could give you an edge over the competition.

It is difficult to determine the amount that the home value is affected when you add a high tech home theater, but most real estate professionals will agree that when there are many houses for sale at any given time, the one with an impressive home theater room will be more likely to sell first.

Don’t Take Over Valuable Home Space

The only situation in which the home theater could detract from the value of the home is if it overpowers a medium sized or smaller home that just barely had enough space in the first place. If your home cannot spare the extra room, taking up a lot of space with a home theater will mean fewer bedrooms or living spaces and a potential decrease in value.

However, you might be able to get around this problem with clever solutions that allow you to conceal the home theater unless it is being used. You could hide the large screen behind specially designed cabinets and set up the furniture so that the room can be a living space when not in use as a theater.

Remember that a home theater system is something that will generally only increase the value of your home for certain buyers, as opposed to something like a bathroom renovation or a garage which will be valuable to almost every buyer.

To find out more about upgrades that affect the value of your home, contact your trusted home financing professional today.

FOMC Minutes Reveal Fed May Curb Economic Support Program Before Year End

FOMC Minutes Reveal Fed May Curb Economic Support Program Before Year EndFOMC Minutes Suggest QE Tapering by Year-End

The minutes for June’s meeting of the Federal Open Market Committee (FOMC) suggest that committee members are mostly in agreement that the current quantitative easing program (QE) should begin winding down by year end, but the committee minutes are very clear concerning the committee’s intention to monitor inflation and ongoing economic and financial developments before taking action to reduce the current rate of QE.

The Fed currently purchases $85 billion monthly in Treasury securities and mortgage-backed securities (MBS). Investors fear that if the Fed rolls back QE too soon or too fast, it could cause long term interest rates such as mortgage rates to rise faster.

The Fed minutes indicate that factors the Fed will continue monitoring before making changes to QE include:

  • Labor market conditions
  • Indicators of inflationary pressures
  • Readings on financial developments

FOMC members also agreed that the Fed would not sell MBS it has accumulated after the economic support program ceases. When the Fed ceases QE, demand for mortgage-backed securities is expected to fall. If the Fed were to sell off MBS holdings in addition to stopping QE, MBS prices could fall sharply. In general, when MBS prices fall, mortgage rates rise.

The FOMC minutes indicate that the Fed intends to maintain the Federal Funds rate at 0.000 to 0.250 percent “for a considerable time after the monthly asset purchases cease.”  To be clear, the minutes do not reveal any specific dates for starting to wind down the program.

Concerns over financial conditions in Europe highlight the Fed’s intention to monitor global economic developments were discussed. Potential “spillover” of negative sentiments in response to Europe’s economic woes to U.S. financial markets were seen as a potential threat to the U.S. economic recovery.

Committee members found that although the economy showed moderate improvement since its last meeting, the national unemployment rate remains high at 7.60 percent. Members also noted that the numbers of long-term unemployed and those working part time jobs but wanting full time jobs remain higher than average. These conditions traditionally keep consumers from buying homes.

Housing: Upside-Down Mortgages Decreasing

Due to rapid increases in home values, the committee noted that fewer homeowners were under water on their mortgage loans. This is good news as homeowners can rebuild household wealth as their home equity increases. Having home equity also provides homeowners with the flexibility to sell or refinance their homes.

While housing is driving the economic recovery, high unemployment will likely keep the Fed from changing its QE policy in the short term.

Now may be a very good time to take advantage of still historically low mortgage interest rates before they rise. If you have specific questions on purchasing or refinancing your home mortgage loan and how these changes may affect you, please contact your trusted mortgage professional today.

Is It Possible That Your Gender May Influence Your Home Mortgage Approval?

Is It Possible That Your Gender May Influence Your Home Mortgage ApprovalIf you are applying for a joint mortgage on your property with your spouse or partner, the name that goes first could have more of an impact than you might think.

A 2010 study by the Woodstock Institute showed that mortgage lenders were inclined to show favoritism when men were the lead borrowers on joint applications. The study was undertaken within the Chicago area and it tracked joint applications for refinancing as well as home purchases. Over 250,000 applications were studied in the year 2010.

Surprisingly, the study showed that home purchase applications that listed the female partner as the primary borrower were 24 percent less likely to be approved.

When it came to mortgage refinancing, the application would be 39 percent less likely to be approved if a woman was in the primary position. The study was controlled in order to account for the size of the loan and the borrower’s income.

What Does This Mean?

The researchers at Woodstock are still carrying out more studies and analyzing their findings, but they say the results so far are quite troubling. They theorize that the discrimination might be totally unconscious and a symptom of wider discrimination against women.

Many lenders have declined to comment, but Terry Francisco, President of Bank of America, claimed that there was no policy in the mortgage underwriting process that would differentiate based on the order of the applicants names in the documents.

The findings are not complete enough at the moment to draw any conclusions. Additional data will be collected, such as age, credit scores, property values and much more in order to provide a more full and complete picture.

Increase Your Chances of Getting Approved

Regardless of the findings of this study, there are a number of ways that you can make your mortgage application more likely to be approved no matter what your gender. Here are some tips to keep in mind:

  • Don’t change jobs right before applying. Lenders want to see financial stability, so it is better if you have been with the same employer for as long as possible.
  • Repay your other debts, including your store cards, credit cards, overdrafts and more.
  • Check your credit report. If there are any errors that are making your credit score lower than it should be, you may be able to correct them.
  • Avoid making any large purchases on your credit cards while you are applying for a mortgage. When the lender looks at your credit, this could affect their calculations of your debt to income ratio.

To find out more about getting the best home mortgage approval to buy or refinance your property, please feel free to contact your trusted mortgage professional today.

The Best And Worst Times Of The Year To Sell Your Home

The Best And Worst Times Of Year To Sell Your HomeDoes the time of year when you put your home on the market affect how well it will sell?  What about the final sales price?

According to many studies in housing trends, the answer is yes. The time of year when you sell your home can have an effect on how many people are interested and how much the home will sell for.

Of course, if you need to move and sell your home at any point of the year, you will still be able to find buyers and negotiate a price that works for you. In some areas of the country, the currently swift moving housing market can help overcome poor timing.

However, if you have the ability to plan for a more advantageous time, it makes sense to make the most of your flexibility.

The Best Times Of The Year To Sell A Home

One of the best times of the year to sell your house is in the late spring and early summer — like right now.

The school year is over for most families, and many people will be looking to purchase a home that they can move into over the summer and get settled before school begins again in the fall. Housing sales peak during this time, as studies show that 60% of people tend to move during the summer.

If you can sell your home during the spring or early summer period, it will typically be on the market for a shorter amount of time and you may have many more offers to choose from.

The Worst Times Of The Year To Sell A Home

One of the worst months of the year to sell a home is December. There are a number of reasons why trying to sell a home during the Christmas holidays can be difficult.

Most people aren’t thinking of moving this time of year. Their energies are focused on decorating their houses, preparing for the holidays, visiting friends and family and enjoying their time off work.

Another difficult time is the beginning of the school year, typically in September.

Children will have just started school and most families will not be considering moving at this point. If you attempt to sell your home during this time of year, you will be much less likely to get the the same pool of buyers that you might see in a more “move friendly” time of year.

Of course, these are just guidelines to help you plan your next home sale. No matter what time of year it is, if you need advice on selling your home, call your trusted real estate professional right away. 

What’s Ahead For Mortgage Rates This Week – July 8, 2013

What's Ahead For Mortgage Rates This Week July 8 2013Last week saw a relatively quiet week due to the 4th of July holiday, but there were some housing-related developments:

Monday: The Department of Commerce reported that overall construction spending increased by 0.50 percent in May to a seasonally adjusted annual rate of $874.9 billion. Residential construction grew by 1.20 percent, and May 2012 construction spending was 5.40 percent higher than in May 2012.

More spending in residential construction can indicate builder confidence in housing markets; added construction could help ease low inventories of available homes.

Tuesday: CoreLogic reported that May national home prices increased by 12.20 percent over May 2012, and grew by 2.60 percent in May including sales of distressed properties. Excluding distressed properties, home sales rose by 2.30 percent in May for a year-over-year increase of 11.60 percent.

States hardest hit in the economic downturn are showing good recovery; Nevada home prices rose by 26 percent year-over-year. While double-digit increases in home prices are good news, economists note that home prices remain approximately 20 percent below their peak in 2006.

Employment Data: More Jobs, Less Unemployment

Employment data are important for housing markets; employment is closely tied to home buyers’ ability to qualify for mortgage loans. Last week ended with several important jobs related reports:

Wednesday: ADP reported that 188,000 private-sector jobs were added in June for the highest increase in four months. This number surpassed expectations of 160,000 new jobs and May’s revised figure of 134,000 jobs added.

Freddie Mac’s mortgage rates survey had some good news as average rates for a 30-year fixed rate mortgage fell from 4.46 percent to 4.29 percent with discount points also falling from 0.80 to 0.70 percent. Average rates for a 15-year mortgage fell from 3.50 percent to 3.39 percent, with discount points moving from 0.80 percent to 0.70percent.

Friday: The Labor Department released Non-farm Payrolls and the national Unemployment Rate for June. Non-farm matched May’s level of 195,000 jobs added, which surpassed expectations of 155,000 jobs added. The unemployment rate remains at 7.60 percent, just over expectations of 7.50 percent.

The Federal Reserve has cited a benchmark unemployment rate of 6.50 percent as a criterion for raising the federal funds rate and reducing its current quantitative easing policy; this news may help slow mortgage rates as the Fed isn’t likely to modify its programs based on the current unemployment rate.

Looking Ahead

This week’s economic news includes today’s report on consumer credit. Tuesday brings Job Openings for May, and Wednesday brings the minutes from the recent FOMC meeting. The minutes should clarify exactly what the committee discussed concerning quantitative easing and their plans for modifying it.

Thursday, Freddie Mac will release weekly mortgage rates. The federal government will release weekly jobless claims and will update the federal budget. The week’s economic news will conclude with release of the Producer Price Index (PPI) and Core PPI for June, along with Consumer Sentiment for July.

Go Green By Faking It With Artificial Grass

Go Green By Faking It With Artificial TurfThe summer heat is starting to take its toll on you and your thirsty lawn. Homeowners spend hundreds of dollars every summer striving to grow healthy grass and keep it green.

If you’re sick of trying to maintain a manicured lawn, then you can go green another way. Install artificial turf.

The Grass is Always Greener

Today’s artificial grass is made out of polypropylene, nylon, or polyethylene threads that are sewn into a mesh backing that allows for water drainage. This is then usually laid on top of compacted gravel and tied down at the perimeter.

Modern artificial lawns can mimic many varietals of grass and some even have a thatch layer to give it a more realistic look.

Sick Of Maintenance

Homeowners have many reasons for wanting to be free of their demanding lawns, such as high summer water bills and the constant use of pesticides. With a fake lawn, you won’t have to water, which is especially good for high-heat areas, you won’t have to mow and you can quit worrying about how the weather will affect it.

Considering The Costs

While installing artificial grass can cost a bit up front, it’ll be maintenance free for the next 15 to 20 years. You won’t have to worry about water bills, purchasing grass seed, buying fertilizer or getting gas for the lawnmower, which can add up to a couple hundred dollars every year.

Potential Drawbacks

While a maintenance-free yard does have some appeal, there are a few drawbacks to take into consideration. Fake lawns don’t absorb pet waste, so you have to hose them off regularly.

They can also heat up in direct sunlight. Planting shade trees will help with this issue. And, artificial lawns cannot be recycled, which is an issue that the industry is looking to remedy.

Saving water and reducing the use of pesticides is great for the environment. However, you have to like the look of artificial grass and make sure you’re ready for the investment.

If you’ve been considering going green by switching to year-round green grass, talk with a local installer for grass options and cost comparisons.

7 Smart Tips To Painting Your Own Home This Summer

7 Smart Tips To Painting Your Own Home This SummerWinter may have taken a toll on your home’s exterior this year. You’ve been noticing the cracking paint for months, but you don’t want to shell out the big bucks to hire a professional painter.

Don’t fret! With the weather warming and the nice summer weekends, it’s the perfect time to tackle that project of painting your home.

While this might seem like an insurmountable task, especially if you have a multi-story home, it’s not. It just takes the right tools and a bit of hard work. Below are step-by-step instructions to having the outside of your house looking shiny and new.

Test For Lead

Homes built before 1978 could have used lead paint, so be careful if you have an older home. They make kits that test for lead paint. If your home tests positive, then ensure you take the necessary precautions to keep yourself and your neighbors safe.

Scrub It Up

You need to wash the exterior of your home before painting. Mildew thrives under new paint, so kill it with a solution of water and phosphate-free cleaner.

Scrape And Sand

Take a scraper to your home’s exterior to remove any peeling paint. Spraying water under the paint as you scrape helps speed up the process. Then sand down any rough spots, so that you have a smooth canvas.

Apply The Primer

Paint on the primer immediately after you’ve prepped the wood. This will provide and even base for your topcoat of paint.

Buy Some Caulk

You’ll need to caulk all the joints to prevent water penetration and air leakage. Plus, caulk does a great job of filling in blemishes in your siding.

Pick Out Your Paint

Choose a water-based latex paint. It’s easier than applying oil-based paints. However, if your home already has an oil-based paint, you’ll have to stay with it. Once you’ve selected your favorite paint color, just grab a brush or rent a sprayer to start painting your home.

Maintain your exterior.

Be sure to check your home annually for any potential problems. Replace cracked caulk, remove mildew and patch any peeling paint before it spreads.

Utilize the beautiful summer weekends to get started on painting your home. Understand that this process normally takes two weekends, so be patient. Plus, by not hiring a professional, you’ll save a significant sum of money and have bragging rights when you receive compliments on the condition of your home.