Archives for March 2014

Make Your Home Green This St. Patrick’s Day

Make Your Home Green This St. Patrick’s DayYou’re ready to make some changes to your home, but you want to be smart with your money and see a positive return on your investment.

While most homeowners don’t see that return until they sell their home, you can start seeing the benefits now through conserving energy by making your home green.

So in honor of the upcoming green holiday, stop searching for that pot of gold. Get inspired by St. Patrick’s Day to go green to cut your energy costs with the environmentally friendly renovations below. You’ll soon see the savings building up at the end of the rainbow.

  • Use Reclaimed Wood For Flooring
  • Instead of chopping down more green for your floors, reclaim wood that’s already been cut. While prices vary depending on they type of wood and how it was transformed, you can get a unique look and conversational piece that no one else will have.

    Just think, you could be standing on the Jackson’s old barn or a dismantled ship.

  • Green Your Latrine
  • Install a low-flow toilet, which according to www.ConsumerReports.org could save you money. Older toilets use about 3.5 gallons per flush, while newer low-flow toilets can use less than 1.3 gallons.

    If you don’t want to dish out the dough for a new toilet, then add pebbles or a sealed water bottle into the back tank to displace water and reduce consumption.

  • Install A Programmable Thermostat
  • This is something you can easily do on your own. Purchase a programmable thermostat at any home improvement store for around $50, shut off power to the room you’ll be replacing it in, unscrew your old one and connect the wires to the new one.

    Finished! Now you won’t have to worry about remembering to turn the air down at night and you’ll save money monthly.

  • Replace Old Kitchen Appliances
  • If your refrigerator or dishwasher is more than 10 years old, then consider replacing them with newer energy efficient models. Look for appliances that have Energy Star labels, as these machines have passed strict energy requirements.

    While this upgrade might cost you up front, you’ll quickly be saving energy and leaving more green in your bank account. Don’t get pinched this St. Patrick’s Day! Instead of just wearing green, surround yourself in it by making environmentally friendly renovations.

    By taking your home green, you’ll reduce your energy usage and see savings in your monthly bills!

    Legal Secrets For Homeowners

    Legal Secrets For HomeownersBeing a homeowner is exciting. It can be financially rewarding, too. Unfortunately, it can also put you in a tough legal position.

    Between the complexities of owning a house, having to deal with lenders and the risk that comes from owning something valuable, keeping yourself legally protected is a good idea.

    Here Are Some Risks And Some Ways To Handle Them

    1. HOAs. If you own a condo, townhome or other property in an association, the homeowner association is extremely powerful. Not paying their dues, violating their rules, or doing just about anything else to end up on the wrong side of them could leave you subject to fines or even foreclosure.
    2. Neighbors. Whether or not good fences make for good neighbors, bad neighbors make for legal problems. Before dealing with your neighbors, research your community’s laws to see what options you have to deal with their unlicensed backyard dog breeding facility, teenager that steals your oranges or their tree that keeps breaking your window. It’s good to know what your responsibilities are as a neighbor, as well.
    3. Legal Paperwork. Part of having a house is having paperwork. Keeping it in a safe place where you can get to it when you need it is always a good idea.
    4. Being A Landlord. If you’re thinking about moving out and turning your house into a rental, take the time to see if you can really do it. Your mortgage, your homeowner association bylaws and your community’s laws can all either prevent you from renting out your house or can impose conditions or extra costs.
    5. Financial Scams. When you own a house, you’re at risk of being the victim of mortgage scams. If you also have strong credit, you could also be a target for identity thieves that want to steal your good name to steal money.
    6. Insurance. Your insurance does more than pay if something happens to your property. It can also give you liability protection that pays off if you harm someone at or away from your home. Given that you could lose your house in a suit, this protection is particularly valuable.

    Being a homeowner requires more than just mowing the lawn and painting on occasion. You will also want to pay careful attention to your legal exposure and manage it.

    A little bit of care could save you a lot of money and trouble down the line.

    Legal Secrets For Homeowners

    Legal Secrets For HomeownersBeing a homeowner is exciting. It can be financially rewarding, too. Unfortunately, it can also put you in a tough legal position.

    Between the complexities of owning a house, having to deal with lenders and the risk that comes from owning something valuable, keeping yourself legally protected is a good idea.

    Here Are Some Risks And Some Ways To Handle Them

    1. HOAs. If you own a condo, townhome or other property in an association, the homeowner association is extremely powerful. Not paying their dues, violating their rules, or doing just about anything else to end up on the wrong side of them could leave you subject to fines or even foreclosure.
    2. Neighbors. Whether or not good fences make for good neighbors, bad neighbors make for legal problems. Before dealing with your neighbors, research your community’s laws to see what options you have to deal with their unlicensed backyard dog breeding facility, teenager that steals your oranges or their tree that keeps breaking your window. It’s good to know what your responsibilities are as a neighbor, as well.
    3. Legal Paperwork. Part of having a house is having paperwork. Keeping it in a safe place where you can get to it when you need it is always a good idea.
    4. Being A Landlord. If you’re thinking about moving out and turning your house into a rental, take the time to see if you can really do it. Your mortgage, your homeowner association bylaws and your community’s laws can all either prevent you from renting out your house or can impose conditions or extra costs.
    5. Financial Scams. When you own a house, you’re at risk of being the victim of mortgage scams. If you also have strong credit, you could also be a target for identity thieves that want to steal your good name to steal money.
    6. Insurance. Your insurance does more than pay if something happens to your property. It can also give you liability protection that pays off if you harm someone at or away from your home. Given that you could lose your house in a suit, this protection is particularly valuable.

    Being a homeowner requires more than just mowing the lawn and painting on occasion. You will also want to pay careful attention to your legal exposure and manage it.

    A little bit of care could save you a lot of money and trouble down the line.

    What Financial Preparations Should I Make Before Applying For A Mortgage?

    What Financial Preparations Should I Make Before Applying For A Mortgage?Getting a mortgage isn’t an easy thing to do. Before a lender will put down tens of hundreds of thousands of dollars, it wants to know that the borrower can handle the loan so that it will get paid back. to this end, there are three things that a potential homebuyer can do to prepare for the mortgage approval process.

    Managing Debts

    For many homebuyers, managing their credit score is the biggest challenge. Mortgage lenders like buyers with strong credit. While getting strong credit usually isn’t something that can be done overnight, paying bills on time, all of the time can help to build a positive profile.

    Using as little credit as possible is also helpful, since high utilization of existing credit lines can harm a borrower’s score. Having less debt can also reduce monthly payments, making it easier to qualify for a larger mortgage.

    Managing Income

    Lenders look for two things when it comes to a borrower’s income:

    • Stable incomes are preferred, so being able to prove the income with a W-2 form or other documentation is usually required. Self-employed people will typically need to prove their income with their tax returns, so taking high write-offs can make it harder to qualify.
    • A borrower’s income should be significantly higher than his total monthly debt payments. Lenders divide a borrower’s monthly payments including their proposed mortgage into the gross monthly income. If the payments exceed a set percentage, the lender will shrink the mortgage until it considers the payment affordable.

    Managing Paperwork

    To qualify for a mortgage, borrowers typically need to submit a comprehensive file of supporting documentation. This can include tax returns, pay stubs and bank and investment account statements.

    Since lenders frequently want some historical data, it can be a good idea for people considering applying for a mortgage to start collecting documentation months before they actually begin the mortgage application process. That way, they will have everything the lender wants and when the lender needs it.

    How Do Mortgage Lenders Decide How Much You Can Borrow?

    How Do Mortgage Lenders Decide How Much You Can Borrow?When you visit your lender to get a mortgage for your home, they will tell you the maximum amount that you are allowed to borrow. But how do they reach this total and what factors do they take into consideration?

    How do they determine that one borrower can take on a bigger mortgage than the next? This decision is made by mortgage companies by considering a wide range of factors, including your credit information, your salary and much more.

    Here Are Some Of The Common Ways That Lenders Determine How Much You Can Borrow:

    1. Percentage Of Gross Monthly Income

    Many lenders follow the rule that your monthly mortgage payment should never exceed 28% of your gross monthly income.

    This will ensure that you are not stretched too far with your mortgage payments and you will be more likely to be able to pay them off. Remember, your gross monthly income is the total amount of money that you have been paid, before deductions from social security, taxes, savings plans, child support, etc.

    2. Debt To Income Ratio

    Another formula that mortgage lenders use is the “Debt to Income” ratio, which refers to the percentage of your gross monthly income that is taken up by debts. This takes into account any other debts, such as credit cards and loans. Many lenders say that the total of your debts shouldn’t exceed 36% of your gross monthly income.

    The lender will look at all of the different types of debt you have and how well you have paid your bills over the years. By using one of these two formulas, your mortgage lender calculates the size of a mortgage that you can afford.

    Of course, there are many other factors that need to be considered, such as the term length of the loan, the size of your down payment and the interest rate.

    Remember that when factoring in your income, you usually have to have a stable job for at least two years in a row to be able to count your income. If you want to increase your chances, you could consider paying down your debts or buying with a co-borrower, which will improve your debt to income ratio.

    For more info about mortgages and your home, contact your mortgage professional.

    What’s Ahead For Mortgage Rates This Week – March 10, 2014

    Whats Ahead For Mortgage Rates March 10 2014Last week’s economic news included construction spending and the CoreLogic Home Price Index for January.  Reports for February included ADP Employment, Non-Farm Payrolls and national unemployment data.

    The Federal Reserve’s Beige Book report and weekly reports on mortgage rates and new unemployment claims rounded out the week’s economic news.

    Highlights for last week include:

    Consumer spending gained 0.40 percent for January. The expected reading was 0.20 percent and the reading for December was flat.

    The Commerce Department reported that increased spending was less an indicator of consumer discretionary spending than an indicator of high utility costs caused by severe winter weather.

    Construction spending ticked upward in January with gain of 0.10 percent as compared to expectations of -0.40 percent and the prior month’s reading of 0.10 percent.

    January’s reading translates to a seasonally adjusted annual figure of $943.1 billion.  

    Federal Reserve: Winter Weather Obscures Accurate Economic Outlook

    According to the Fed’s Beige Book report, much of the U.S. economy was impacted by severe winter weather. The report is based on anecdotal information provided by business contacts and industry leaders throughout the 12 regions of the U.S. Federal Reserve System.

    Eight regions reported slow economic growth. Janet Yellen, chairwoman of the Fed, noted that winter weather was not expected to alter the Fed’s plan to continue reducing its asset purchases under its quantitative easing program. She also said that it may be months before accurate economic readings can be obtained in the aftermath of winter weather conditions.

    Freddie Mac’s Primary Mortgage Market Survey brought good news on Thursday as mortgage rates fell across the board and discount points were also lower in most cases.

    Average mortgage rates were down nine basis points for a 30-year fixed rate mortgage at 4.28 percent. The average rate for a 15-year fixed rate mortgage was 3.32 percent, a decrease of seven basis points.

    The rate for a 5/1 adjustable rate mortgage was 3.03 percent, down by two basis points from the prior week. Discount points were unchanged for 30-year fixed rate mortgages at 0.70 percent, but dropped to 0.50 percent for 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

    Employment Sector: Surprise Results

    The ADP payroll report showed a reading of 139,000 jobs added in February as compared to the prior month’s 127,000 jobs. ADP tracks private sector jobs. The BLS released its Non-Farm Payrolls report for February, which also surpassed expectations.

    175,000 jobs were added against expectations of 140,000 jobs added and January’s reading of 129,000 jobs added. The national unemployment rate rose to 6.70 percent against an expected drop to 6.50 percent from January’s reading of 6.60 percent. Once again, foul weather was seen as a major influence.

    Whats Ahead This Week

    This week’s economic news schedule is relatively light with no releases set for today.

    Mortgage rates will be released by Freddie Mac on Thursday, along with weekly jobless claims. Retail sales and the University of Michigan consumer sentiment index round out next week’s schedule. 

    Don’t Make These Mistakes When You Want To Get A Home Loan

    Don't Make These Mistakes When You Want To Get A Home LoanGetting a home loan can be a challenging process, and a finicky one. Qualifying can be challenging and once a buyer gets approved, it can be surprisingly easy to derail the process. Here are some mistakes to be avoided:

    Not Pre-Checking Credit

    Once a borrower makes his application for a mortgage, his fate is largely sealed. One way to increase the chance of qualifying for a home loan is for a borrower to check his credit before applying. That way, he can address any issues before they become problems for the lender.

    Changing Jobs

    Lenders judge borrowers on their ability to repay the loan. While a borrower’s credit rating is a good indicator of past performance, his current job and income provides some assurances that he can make his payments.

    Changing jobs or losing a job interrupts the income, and can make a lender decide not to lend to that borrower.

    Taking On New Debt

    New debt can derail a mortgage in two ways. First, adding debt can lower credit scores from the inquiry that comes as well as worry lenders. Second, new debt increases monthly payments, which lower the amount that a borrower can take out on a home loan due to the limitations imposed by the lender’s debt to income ratio.

    Fudging The Numbers

    Some borrowers might be tempted to tweak some of the numbers on their mortgage applications to make them more attractive to the lender, but lying on a mortgage application is a very bad idea.

    First, lenders investigate what gets entered and they’re likely to catch it. Second, it is also fraud and could leave the borrower subject to prosecution.

    In general, people considering a home loan should remember the Hippocratic Oath that doctors take. Its message — do no harm — is a good rule of thumb for applying for a mortgage.

    Applicants that keep their financial status the same throughout the process without making any changes are more likely to emerge at the end with their new home and their original loan.

    How To Add Color To Your Home Decor Without Going Overboard

    How To Add Color To Your Home Décor Without Going OverboardThere is a fine line between adding color to your home décor and using too much color, so that you feel like you are living inside a rainbow.

    A little bit of color will add a lot of fun and interest to your home design, but too much color can be overwhelming. How can you achieve that perfect balance?

    Here Are Some Tips To Keep In Mind For Using Color In Your Home In A Subtle And Balanced Way:

    • Use Color Schemes

    Before choosing the colors for your décor, do a little bit of research into color schemes and how they work, so you know how to combine colors harmoniously.

    For example, you can choose a complementary color scheme with shades that are across each other on the color wheel – such as blue and orange or purple and yellow.

    Or you could try an analogous color scheme, which is a scheme where the colors are next to each other on the colour wheel – such as blue, green and purple.

    • Use The 60/30/10 Rule

    This is a rule that interior decorators use in order to use colors in a balanced way. Use the dominant color on 60% of the room, so that it will create a unifying look.

    Then, use the secondary color on 30% of the room in order to add visual interest. Lastly, use an accent color for 10% of the room to add that little extra.

    For example, you might use the dominant color for the walls and carpet, the secondary color for the upholstery and the accent color for some pillows, a wall hanging or a throw rug.

    • Try An Accent Wall

    Perhaps you have found a gorgeous paint color, but it’s just a little too bright and overwhelming to use for all four walls of a room.

    In this case, you can simply paint one wall with the color and the other walls with a neutral tone, so that you can enjoy the shade without it being overpowering.

    You could also simply use the color in one aspect of the room, such as the baseboards or the door jams.

    These are just a few of the ways that you can incorporate color into your home design, without it being overpowering. For more information, call your trusted mortgage professional.

    Highest Year-Over-Year Increase In Home Prices Since 2005

    Highest Year-Over-Year Increase In Home Prices Since 2005Two major indicators of home price trends showed a slowing momentum for home prices in December. The S&P Case Shiller 10 and 20 city indices reported that of 20 cities tracked, home prices were lower in December than for November.

    Case-Shiller’s seasonally adjusted month-to month reading showed that home prices rose by 0.8 percent as compared to 0.90 percent in November.

    David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said that “Gains are slowing from month-to-month and the strongest part of home price recovery may be over.” He also noted that seasonally adjusted data was showing a loss of momentum for home prices.

    December home prices posted a year-over-year gain of 13.40 percent, down from November’s year-over-year reading of 13.70 percent. December’s reading reflected the highest year-over-year increase in home prices since 2005.

    Analysts note that a slower pace of increasing home prices may allow more buyers to enter the market, and may also encourage more buyers to list their properties for sale.

    This would increase inventories of available homes and relieve pent-up demand for homes. Although home price growth is cooling off, average home prices remain 20 percent below their pre-recession peak in 2006.

    Home Prices Face Challenges In 2014

    Another factor in slower growth of home prices is regional differences in the rate of economic recovery. Cities including Dallas, Texas and Denver, Colorado recently set records for escalating home prices.

    Five states including Florida and Michigan accounted for almost half of foreclosures completed during 2013. Slow job growth and poor winter weather were also blamed for slower gains in home prices.

    New mortgage rules and relatively strict mortgage lending standards may continue to dampen housing markets, but there is some good news as some lenders are easing credit standards.

     FHFA: Home Prices Higher For 10th Consecutive Quarter

    The Federal Housing Finance Administration reported similar trends in December home price data for properties either financed or owned by Fannie Mae or Freddie Mac. Home prices rose by a seasonally adjusted rate of 0.80 percent in December as compared to November’s reading.

    Home prices were 7.70 percent higher for the fourth quarter of 2013 than for the same period in 2012. Adjusted for inflation, this reading indicates an approximate year-over-year increase of 7 percent.

    FHFA reported higher readings for 38 states in its fourth quarter 2013 Home Price Index, as compared with 48 states in in the third quarter of 2013.  In order of home price appreciation, the top five states with highest growth in home prices were Nevada, California, Arizona, Oregon and Florida.

    These calculations were seasonally adjusted and based on home purchases only.

    What Is A Mortgage Pre-Qualification?

    What Is A Mortgage Pre-Qualification?A mortgage pre-qualification is an initial estimate of what type of mortgage a borrower could get. It is limited, though, because it’s only based on what the borrower tells the lender, which might not be the same as what the lender finds out when it goes through a full process of analyzing the borrower and his credit.

    Steps Of A Pre-Qualification

    To get pre-qualified, a borrower starts by finding a lender. Typically, he will give the lender basic information on his ability to borrow. This includes his income, how much money he has in the bank, his current payments and an estimate of his credit worthiness.

    The lender takes the pre-qualification information that he gets and compares it to the loan programs of which he is aware. For instance, if he knows that a borrower doesn’t have a lot to put down, but the borrower mentions that he’s active-duty military, the mortgage broker might offer a VA loan as an option.

    Based on the programs he sees and the information the broker gets from the borrower, he will tell the borrower what kind of mortgage to expect. Typically, this gives the borrower a sense of the likely rate and of the amount he can borrow. Generally, this is enough to let a borrower start looking at listings with a realistic sense of what will be affordable.

    Mortgage Pre-Qualifications And Pre-approvals

    When it comes time to start writing offers, though, a mortgage pre-qualification might not be enough. A pre-qualification is missing one important factor — underwriting the borrower’s income and credit. When a borrower goes beyond a pre-qualification to get a mortgage pre-approval, he submits his credit for the lender to check.

    That way, his qualifications get confirmed and the lender can issue a more binding letter that not only lets him know what he can afford but also lets him show a seller that he is truly qualified to get a loan. With that letter, his offer may be viewed as stronger and he can be more likely to get the ability to buy the house he wants.