Is A 15 Or 30 Year Mortgage Right For You?

Posted in Mortgage by Michigan Real Estate Expert on January 24th, 2020

Is A 15 Or 30 Year Mortgage Right For YouWhen someone is looking to purchase a house, they need to think about how long they want their mortgage to last. While a bank can structure a mortgage to last for any number of years, the most common lengths are 15 and 30 years. While a 30-year mortgage is typically more affordable, a 15-year mortgage is cheaper overall. 

When someone is trying to decide how long they want their mortgage to last, there are a few important tips to keep in mind.

The Benefits Of A 15-Year Mortgage

There are a few important benefits that everyone should know about a 15-year mortgage. Some of the biggest benefits include:

  • With a 15-year mortgage, people are going to pay off their home more quickly. This will free up cash to spend in other places. Those who are looking to retire without a mortgage may want to go with a 15-year mortgage. 
  • Next, a 15-year mortgage is going to come with a lower interest rate. Because the bank is going to get their money back more quickly, they are going to reward the borrower with a lower interest rate. Overall, the bank is taking on less risk.
  • Finally, a 15-year mortgage is also going to be cheaper overall. With a lower interest rate and a loan that is paid off more quickly, the bank is going to take less of someone’s money over the life of the loan. 

The Benefits Of A 30-Year Mortgage

A 30-year mortgage has some notable differences when compared to a 15-year mortgage. There are a few important benefits that people need to remember. These include:

  • The monthly payments are going to lower. Those who are planning on paying for their children’s college education, or who envision a car payment in the near future, may want to have extra cash on hand to fund them.
  • As someone pays off their mortgage the interest paid on the loan is tax-deductible. Since more interest is paid on a 30-year mortgage, there will be greater tax savings as well. This means that people will get some of their money back.
  • Finally, a 30-year mortgage is also more flexible. During the loan, people may elect to make extra payments. This allows someone to pay off their home more quickly.

These are a few of the most important points people need to remember when trying to decide between a 15-year and 30-year mortgage. 

If you are in the market for a new home or interested in listing your current property, be sure to consult with your trusted real estate professional.

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Eight Signs You’re Ready To Stop Renting And Buy A Home

Posted in Real Estate by Michigan Real Estate Expert on January 23rd, 2020

Eight Signs You're Ready To Stop Renting And Buy A HomeFor many people, owning a home is seen as a rite of passage. At the same time, purchasing a home is expensive. As a result, many people end up renting for an extended period of time.

Here are a few signs that someone is ready to stop renting and purchase a home.

1. Rental Prices Keep Going Up

Year after year, rental prices are going to keep going up. While the rental company is going to claim that these increases are consistent with the industry, they tend to be exorbitant. As a result, those who are tired of their rent being increased should think about buying property instead.

2. The Credit Score Has Gone Up

Someone’s credit score is going to play a major role in the mortgage approval process. Anyone whose credit score has gone up recently should think about buying property.

3. Debt Management Is Second Nature

Before taking out a mortgage, someone is going to have to be good at managing debt. A mortgage is simply another form of debt. It needs to be managed properly.

4. There Is A Liquidity Fund In Place

The cost of owning a home extends far beyond the mortgage. Anyone who is thinking about owning property is going to have to have money set aside to cover additional costs. These include repairs, maintenance, and homeowners’ insurance.

5. There Is Money For A Down Payment

There is going to be a large check due upfront. A down payment is essential when it comes to buying a home. In addition, be sure to set aside money for closing costs as well.

6. You’re Going To Settle Down

When someone is thinking about buying a home, they need to stay in the same place for an extended period of time. When someone buys and sells homes quickly, they are likely to lose money to closing costs.

7. A Major Life Change Is Happening

Many people elect to buy a home after a major life change. This might come in the form of marriage. This might also come on the back of having kids. These major life changes can trigger someone to settle down and buy a home.

8. Your Vision Of The Future Is Clear

Those who know where their life is headed in the near future are in a great position to buy a home. If the future is clear, you are ready for the responsibilities of homeownership.

Call your trusted real estate professional today to discuss the options for homeownership in your local marketplace.

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What Is A Short Sale?

Posted in Real Estate by Michigan Real Estate Expert on January 22nd, 2020

What Is A Short SaleNobody enters into a mortgage assuming they are going to fall short on their payments; however, life happens and borrowers might need a way out. In serious situations, lenders may elect to foreclose on homeowners who are unable to make their mortgage payments. Fortunately, there might be another way out. This is called a short sale.

A short sale can be used to help homeowners who are struggling cater to those who are looking to buy a home. At the same time, there are risks to both parties. Therefore, there are a few important points to keep in mind.

What Is The Structure Of A Short Sale?

If someone owes more on their mortgage than the property would otherwise sell for, this is called a short sale. In this situation, the lender accepts the money coming from the sale of the home rather than that money going to the homeowner. This is because the homeowner still owes a significant amount of money on their mortgage.

Take, for example, someone who owes $300,000 on their mortgage. In a short sale situation, he or she would sell the home for $250,000 in a short sale. In this fashion, the lender agrees to accept a smaller amount of money for the home than he or she would get otherwise. In essence, the lender is then short $50,000. This is where the name comes from.

This is different from a foreclosure. A foreclosure happens when the borrower falls so far behind on payments that the lender reclaims the property.

The Benefits Of A Short Sale

The biggest benefit of a short sale is avoiding foreclosure. A foreclosure is a disastrous event for someone’s credit score. When someone agrees to a short sale process instead, he or she will often buy a more affordable home shortly thereafter. 

Buying A Home In A Short Sale

On the buyer side, the biggest benefit of targeting a short sale home is that there is usually a great deal on the price. The lender is already not getting their money on a regular basis and is often motivated the sell the home quickly to recoup their money.

On the other hand, short sales often take longer to proceed. The lender has to approve the sale and price, which might lead to delays. The condition of the house may also not be in good shape. Therefore, be sure to get a home inspection.

Calling your trusted real estate agent and mortgage loan professional is the best thing to do if you have questions regarding your home and a possible short sale.

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What’s Ahead For Mortgage Rates This Week – January 21st, 2020

Posted in Financial Reports by Michigan Real Estate Expert on January 21st, 2020

What’s Ahead For Mortgage Rates This Week – January 21st, 2020Last week’s economic reports included the National Association of Home Builders Housing Market Index along with readings on consumer sentiment and weekly reports on mortgage rates and new jobless claims.

NAHB: Builder Confidence d in Housing Markets Drops 1 Point in January

Homebuilder confidence in overall housing market conditions dropped one point in January, but analysts said that a new trade deal would likely benefit builder interests. The National Association of Home Builders Housing Market Index dropped to an index reading of 75 from December’s reading of 76; December’s reading was the highest since 1999.

The reading for builder confidence in January 2019 was 58; while any reading over 50 is considered positive, builder confidence increased significantly year-over-year.

Sub-index readings used to calculate the overall housing market index reading were mixed;  builder confidence in current housing market conditions fell -3 points to an index reading of 81.

Homebuilder confidence in market conditions over the next six months was unchanged at a reading of 79. Homebuilder confidence in buyer traffic levels in new housing developments rose one point to 58; index readings over 50 for buyer traffic are unusual.

NAHB reported mixed readings for homebuilder sentiment regionally. Builder confidence in market conditions in the Western region rose four points; builder confidence in the Northeastern region rose three points and builder confidence readings for the South were unchanged. Builder confidence in housing market conditions in the Midwest fell seven points.

Factors contributing to high builder confidence in housing markets include high demand for homes and a potential easing of materials prices due to recent trade agreements. Builders continue to battle high materials and labor costs that reduce their profit margins. Analysts note that narrower profit margins contribute to builders’ongoing focus on building high-end homes.

Mortgage Rates Rise; New Jobless Claims Fall

Average mortgage rates rose incrementally last week; Freddie Mac reported a one basis point gain for 30-year-fixed-rate mortgages to 3.65 percent. Rates for 15-year fixed-rate mortgages averaged 3.09 percent and were two basis points higher. Rates for 5/1 adjustable rate mortgages averaged 3.39 percent and were nine basis points higher.

New jobless claims were lower than expected with 204,000 initial claims filed. Analysts expected 220,000 new claims and 214,000 new claims were filed the prior week. Initial jobless claims fell for the fifth consecutive week, which indicates a strong labor market.

The University of Michigan reported a lower index reading for its Consumer Sentiment Index in January. The monthly reading fell to 99.1 from December’s reading of 99.3; the projected reading for January was 99.6. The Consumer Sentiment Index reflects consumers’ attitudes toward their personal finances along with their views of overall business and buying conditions.

What’s Ahead

This week’s scheduled economic reports include sales of previously-owned homes and the Chicago Fed’sNational Index report; weekly readings on mortgage rates and new jobless claims will also be released.

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3 Crucial Questions To Ask Before You Co-Sign A Mortgage

Posted in Mortgage by Michigan Real Estate Expert on January 17th, 2020

3 Crucial Questions To Ask Before You Co-Sign A MortgageA mortgage is a significant responsibility. For this reason, many people have someone co-sign with them on their mortgage. Before agreeing to co-sign on any mortgage, it is important to ask the right questions. There are several crucial questions that everyone should ask before they co-sign on someone else’s mortgage.

What Does It Mean To Co-Sign On A Mortgage?

Before signing that piece of paper, it is important to understand the responsibilities involved. Co-signing on a mortgage is a little bit different than co-signing for a credit card.

The person who is buying the home, the primary signer, lives in the property in question. The co-signer, typically, does not. On the other hand, both people signing the mortgage take on the financial risk of the mortgage. Before co-signing, understand the financial risk involved.

Is It Smart To Trust The Borrower?

One of the most important questions to ask is whether or not the borrower can be trusted. Remember, if the primary signer cannot make the payments on the mortgage, the co-signer is on the hook for those payments. Before placing any financial assets on the line, make sure the borrower can be trusted to maintain gainful employment, make smart financial decisions, and keep up with the mortgage payments.

What Are The Risks Involved?

There are a few risks that people need to think about when it comes to co-signing a mortgage. First, think about the risk to the credit score. If the primary signer makes late payments, these can impact the co-signer’s financial health and credit score as well.

In addition, there are relationship risks that everyone should think about. Most people co-sign a mortgage for a family member or friend. Having this type of financial arrangement can complicate relationships among loved ones.

Understanding The Process Of Co-Signing A Mortgage

These are only a few of the many questions that people need to ask when they are thinking about co-signing on a mortgage. Everyone who is considering co-signing must consider the financial health and responsibility of the primary signer in addition to the risks they will be taking on. Co-signing on someone else’s mortgage is a big decision. Consider the various factors involved in this decision.

As always, speak with your trusted real estate and mortgage finance professional for advice on your personal situation.

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10 US Cities With Highest Mortgage Denial Rates

Posted in Mortgage by Michigan Real Estate Expert on January 16th, 2020

10 US Cities With Highest Mortgage Denial RatesFor many, owning property is seen as a rite of passage. At the same time, for most people, accomplishing this dream is largely dependent on the approval of a mortgage. For this reason, it is important for people to think carefully when deciding who to ask for a mortgage. Some cities have a higher mortgage approval rate than others.

Identifying Problems With A Mortgage Application

Before applying for a mortgage, it is important to think about the most common reasons why someone might be rejected. First, if someone has a debt to income ratio that is too high, they are more likely to be turned down for a mortgage.

It is understandable that if someone already has too much debt, they are unlikely to be able to handle the added burden of a mortgage. Another possible reason for being turned down might be out of someone’s control entirely. This has more to do with geography.

Application Problems In The Sunshine State

For those who might not know, the sunshine state is Florida. Many of the cities with the highest rejection rates are right here. For example, Miami, Jacksonville, Tampa Bay, and Orlando are all among the cities with the highest rejection rates on mortgage applications.

Some of the other cities on the list include New York, San Antonio, San Jose, Detroit, Birmingham, and Houston. Those who live in these cities need to make sure that their mortgage applications are in excellent shape. Otherwise, it could end up in disappointment.

Take, for example, Miami, Florida. More than one in nine mortgage applications are rejected. The most common reason why someone might be denied a mortgage in this major city is debt to income ratio.

Another common reason why those applying for a mortgage in this city might be denied is a lack of collateral. Florida has a reputation for attracting retirees; however, most of the jobs in this state have to do with hospitality. This is an industry that is largely seasonal and has low wages, contributing to a high rejection rate on mortgage applications.

Preparing For The Application Process

Anyone looking to buy property, particularly in these cities, must make sure their application is in order. Getting approved for a mortgage is a critical part of buying a home. For this reason, try to maximize credit scores while minimizing outstanding debt. This can go a long way toward getting approved.

And as always, talk with your mortgage professional for personal guidance through the application process. They are experienced and have the best vantage point to make sure your application is set up for success.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.

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The Secrets Of Selling Real Estate

Posted in Real Estate by Michigan Real Estate Expert on January 15th, 2020

The Secrets Of Selling Real EstateWhen it comes to selling a home, there is a lot to think about. While most people know that the best time to list a home is in the Spring (due to the fervor of the summer), the real estate market keeps rumbling along no matter what time of year it is.

With this in mind, it is important to have a firm strategy in place. This comes in the form of a real estate professional. In addition to trusting the professionals, there are a few other important points to keep in mind.

Don’t Trust The Online Estimates

The internet has impacted almost every area of the economy. This includes real estate. Many homeowners love visiting sites to get an estimate of how much the home is worth. Unfortunately, these online estimates are often inaccurate.

There is not a real estate professional employed by these sites who is driving around taking estimates on homes. There is no way these sites can know what renovations have been done or what improvements have been made. These make a large difference in the overall value of a home.

Hiring A Trained Professional

Those who are looking to get the most out of their home need to hire a professional real estate agent. These agents have the training and expertise necessary to make sure a house sells for as much as possible. These agents also have access to additional selling tools that are not available to the general public.

Furthermore, a real estate agent is going to earn a commission on the sale of a house. For this reason, real estate agents have a lot of incentive to sell a home for as much as possible. It is important to trust the professionals for help.

Letting A House Sit On The Market

It is also important for people to know when to list their home and when to remove it. The longer a home sits on the market, the harder it is going to be to sell that home for what it is worth. As a home sits on the market, the excitement surrounding it is going to fade. Your agent is qualified to guide you through the process.

Call your trusted real estate professional today to see what your home is worth!

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Home Warranties: Are They Worth It?

Posted in Real Estate by Michigan Real Estate Expert on January 14th, 2020

Home Warranties Are They Worth ItOwning a home comes with major responsibilities and also offers major questions. One of the biggest questions that people will have to answer is whether or not they want to take out a home warranty. In order to decide whether a home warranty is worth it, it is important to first understand what a home warranty is.

What Is A Home Warranty?

A home warranty is not the same thing as home insurance. First of all, homeowners insurance is something that is required to purchase a home in the first place. Home insurance is in place to protect the homeowner, and the lender, from disaster.

In contrast, a home warranty is not required but might be offered by the lender or a third party. A home warranty is designed to cover the repairs that come with routine wear and tear on various home appliances. This includes items such as the HVAC system, plumbing, and electricity (but everyone needs to read the information on any home warranty policy to see exactly what is covered.) Therefore, what might not be covered by home insurance is covered by a home warranty and vice versa. 

The Benefits Of Having A Home Warranty

One of the biggest benefits that come with a home warranty policy is peace of mind. Every home appliance is going to break down at some point as a result of routine wear and tear. When this happens, it can create a large, unexpected expense.

When this expense arises, it is helpful to have a policy that covers the cost of repairs. People might be surprised to hear that homeowner’s insurance policies are not going to cover routine repairs on appliances resulting from wear and tear. This unexpected expense can cause a lot of stress for someone’s budget. The cost of this repair can be covered by a home warranty.

The Drawbacks Of A Home Warranty

On the other hand, there are also a few drawbacks to note. The biggest drawback of a home warranty is that people might end up paying for the cost of the repair simply via the cost of a home warranty. Many of the repairs that are not covered by homeowner’s insurance can be covered out of pocket. Therefore, having a home warranty policy might be redundant.

It is important to weigh the benefits and drawbacks of a home warranty before deciding whether or not the policy is worth it. Work with your trusted real estate professional to determine the best options for your personal situation.

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What’s Ahead For Mortgage Rates This Week – January 13th, 2020

Posted in Financial Reports by Michigan Real Estate Expert on January 13th, 2020

What’s Ahead For Mortgage Rates This Week – January 13th, 2020Last week’s economic reports included readings on public and private sector jobs, the national unemployment rate and weekly readings on mortgage rates and new unemployment claims.

ADP: Private-Sector Job Growth Eases in December

Private-sector jobs increased by 202,000 jobs in December and exceeded expectations. November’s original reading of 60,000 new private-sector jobs was revised to 124,000 jobs.

Three and six-month average private-sector job growth rates were 159,000 and 151,000 jobs, but these growth rates fell short of 2018’s average monthly job growth rate of 218,000 jobs added.

Analysts said that private-sector job growth has settled into a more modest but steady pattern.

Non-Farm Payrolls: Public and Private-Sector Job Growth Slower in December

The Commerce Department reported 145,000 public and private-sector jobs added in December with 145,000 new jobs reported. Analysts expected 165,000 new jobs added, which was markedly less than 256,000 new jobs added in November.

Reduction in new jobs during December was likely due to slowing in holiday hiring and winter weather. Average hourly earnings for December rose by 0.10 percent and were lower than expectations of  0.30 percent growth. Slower wage growth contributed to predictions of slowing economic growth.

The national unemployment rate was unchanged at 3.50 percent in December.

Mortgage Rates, Weekly Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week; the average rate for 30-year fixed-rate mortgages fell eight basis points to 3.64 percent. Rates for 15-year fixed-rate mortgages averaged nine basis points lower at 3.07 percent.

Rates for 5/1 adjustable rate mortgages averaged 13 basis points lower at 3.30 percent. Discount points for fixed-rate mortgages averaged 0.70 percent and 0.30 percent for 5/1 adjustable-rate mortgages.

Freddie Mac predicted that rates for 30-year fixed-rate mortgages will average 3.80 percent in 2020 as compared to 4.00 percent in 2019.

Weekly jobless claims fell to 214,000 new claims; analysts expected 219,000 new claims filed. 223,000 first-time claims were filed the prior week.

What’s Ahead

This week’s scheduled economic reports include readings from the National Association of Home Builders on housing market conditions. Commerce Department readings on housing starts and inflation will also be released. The University of Michigan will post data on consumer sentiment; weekly reports on mortgage rates and new jobless claims will be posted as scheduled.

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Safety First! How Often Should You Clean Your Chimney?

Posted in Real Estate by Michigan Real Estate Expert on January 10th, 2020

Safety First! How Often Should You Clean Your ChimneyChimneys are as old as homes themselves. Yet, when it comes to chores, cleaning the chimney is one of the most neglected tasks. While people often think about yard work and housework, they often forget to clean the chimney.

When someone neglects to clean the chimney, they risk the development of mold. This can influence the efficiency of the chimney, causing debris to back up into the home. For this reason, it is essential for people to clean their chimneys on a regular schedule. 

Make Sure To Inspect The Chimney Properly

Chimneys are used seasonally. When the temperature starts to drop outside, people are going to start up the fireplace and use the chimney. Prior to lighting up the chimney for the next season, it is important to make sure they are properly inspected.

Cleaning grout and mold is an important part of making sure the chimney works properly. When someone is cozied up in front of the fireplace, it is important to note that there is an active fire happening. About 25,00 fires per year start due to an issue with the chimney. Make sure that all routine maintenance has been performed on the chimney for that year before firing it up.

Why Clean the Chimney In The First Place?

When it comes to fires, safety should always come first. This the biggest reason why chimneys need to be thoroughly cleaned. When someone cleans the chimney, they are working to prevent home fires. 

The more people use the fireplace, the more soot is going to build up in the chimney. The end result is flammable substances backing up in the chimney. This can be dangerous because it might lead to a fire when people least expect it. To prevent this from happening, be sure to clean the chimney on a regular basis.

How Often Should A Chimney Be Cleaned?

At a minimum, it is important to clean the chimney at least once per year. Annual maintenance on the chimney should be a readily accepted part of owning a home. This includes both cleaning the chimney and inspecting it for any structural flaws.

Some people may want to clean the chimney themselves. This is acceptable; however, it is also recommended to have a professional come in and take a look at the chimney. An extra set of eyes on the chimney may help prevent a fire from breaking out in the future.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.

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