Blog – Mortgages For America

Buying A Home Virtually

December 3, 2020 by Ken Burrows

Buying A Home Virtually During the past few months, everyone has been going through unprecedented times. Every industry has been impacted and this includes the real estate sector. There are lots of people who are still trying to buy and sell a home during an era of social distancing. This can make it hard to look at a prospective property in person. The good news is that there are still ways for people to buy a house virtually. There are a few tips that everyone should keep in mind.

Go On A Virtual Tour

Of course, everyone wants to take a close look at a home before they decide to buy it. Even though it is challenging to schedule live tours, virtual tours can still be helpful. With virtual real estate software, it is possible to take a virtual, walking tour the home. Furthermore, if tours have been recorded using drones, then a virtual tour might provide everyone with a new perspective on a potential home.

Ask The Right Questions

It is important for everyone to make sure they ask the right questions. Even if someone is not going on a tour of a home in person, it is still important to ask the same questions. For example, ask about the age of the roof, the age of the HVAC system, and other pertinent questions to the property. This will help everyone make sure they understand exactly what they are buying.

Know What Is Not Seen Virtually

When it comes to asking questions, it is also important to think about items that cannot be seen virtually. For example, it might be difficult to judge noise levels outside of the home from a virtual tour. It might also be challenging to figure out where puddles tend to form during thunderstorms. These are important topics that have to be discussed as well.

Prepare Early To Buy A Home Virtually

Even if people cannot see a property in person, the real estate market can still be relatively active. Therefore, anyone who is looking to buy a house in this market has to make sure they stay on top of their information. This will help them remain competitive when they are trying to buy the perfect house for their needs.

Buying an Investment Property? 3 Key Home Features That Will Help Ensure You Turn a Profit

December 1, 2020 by Ken Burrows

Buying an Investment Property? 3 Key Home Features That Will Help Ensure You Turn a Profit If you’re entering the real estate investment market for the first time, you’re embarking on a great adventure – and with a solid plan, you can turn a tidy profit on your investment.

The key to a successful real estate investment is choosing the right property. A great property will reap dividends for years to come. Look for these three features in your next investment property and you’ll have no trouble finding one that turns a profit.

Location: More Important Than You Think

The location of your investment property will be critical in determining how much you earn on it and how long you’re able to keep tenants. And as the saying goes, you can change the color of the walls, you can change the type of flooring, and you can change the layout of the home, but you can’t change the location. So before you do anything else, make sure your new investment property is in a good location.

High cash flow investment properties tend to share certain location characteristics. They tend to be in neighborhoods with great schools and great amenities like pools, parks, movie theaters, and public transit. They also tend to be in an area with quiet, low-traffic, well-kept streets. Great neighborhoods have a low crime rate and don’t mix housing types.

Average Rent Price & Vacancy Rate: Look For Marketability

Aside from local amenities, you’ll also want to consider the average vacancy rate and rent price in your neighborhood. If you can’t cover your costs by charging the neighborhood’s average rent, then the home is a poor investment.

Keep an eye on vacancies in the neighborhood. If there are a high number of vacancies in the area, it could mean that the area’s rental market is seasonal or that renters are no longer interested in it. A low-vacancy area will allow you to charge more rent, and you’ll be more likely to find renters.

Floor Plan: Know The Trends And Buy Accordingly

There are a lot of things you can change if you don’t like your home, but the floor plan is a challenge to rearrange. That means in order to make your property competitive on the market, you’ll want to choose a property with a modern floor plan. Watch the trends and buy a home with a floor plan that’s in demand – you’ll have an easier time finding tenants.

Buying an investment property is a great choice for smart investors, but it’s important to make sure you are in the right position to turn a profit. An experienced mortgage professional can help keep your costs down on your mortgage so that your profits stay high. Contact your trusted mortgage professional today to learn more about what mortgages would work best for your situation.

Home Expenses Include Far More Than Just the Down payment

November 25, 2020 by Ken Burrows

Home Expenses Include Far More Than Just the Down payment If you are thinking about purchasing your first home in the near future, then you need to be aware of the costs that you are going to take on. When you are looking at the cost of a home, it is very tempting to focus on the sticker price of the home. Even though the down payment is going to be the largest check you are going to write, this is not the only cost that you are going to pay.

There are numerous other costs for which you need to budget as well. By thinking about all of these costs ahead of time, you can make a smart financial decision for you and your family.

Think About The Real Estate Taxes

Depending on the part of the country in which you live, real estate taxes can be significant. For example, it is not unusual for even a modest home to cost thousands of dollars in real estate taxes per year. Therefore, even though you have budgeted for your monthly mortgage payment, make sure that you have budgeted for real estate taxes as well. Usually, your mortgage lender is going to hold your real estate taxes in escrow for you so you don’t end up having to write a large check at the end of the year.

Homeowners’ Insurance And Utility Costs

In addition, you also need to think about homeowners’ insurance and utility costs. Some of the utilities that you have to pay for include internet, phone, cable, gas, electricity, and water. When this is added to your homeowners’ insurance expenses, this can also add up to several hundred dollars per month. Therefore, make sure that you can afford not only the mortgage payment but these recurring monthly expenses as well.

Budget For Your First Home Accordingly

Some of the other expenses that you might have to incur when it comes to your first home include maintenance and repair bills. Therefore, you should make sure that you sit down with an experienced planner and ensure that you can afford the combined expenses. Otherwise, you might end up being priced out of your first home before you realize it.

Important Advice For Locating The Right Neighborhood

November 24, 2020 by Ken Burrows

Important Advice For Locating The Right Neighborhood When people are thinking about moving, they want to make sure they find the right neighborhood. At the same time, it is not always easy for many homeowners to decide where they are going to live. Particularly if they are not familiar with the local community, there are a few important points that everyone should keep in mind. By thinking about these factors ahead of time, potential homeowners are going to place themselves in a position to be successful when they purchase their next home.

Consider The Importance Of The Schools

Many people who are moving are looking for a bigger house because their family is getting larger. Therefore, one of the most important factors that families need to think about involve the quality of the schools. Schools are going to play a major role in the pricing of the neighborhood. Think about whether the kids are going to go to public school or private school. For families that are going to send their kids to public school, they need to think about the quality of the public schools and what school system the neighborhood is zoned for.

Think About The Commute To Work

Another important factor that the family should consider is the commute to work. There are many people who are moving in an effort to shorten their commute or because they are getting a new job. Therefore, it is a smart idea to think about the traffic, the time it will take to work, and how challenging the driving route is going to be. This is going to play a major role and where the family is going to end up settling.

The Access To Amenities

Finally, it is also important to think about access to amenities. This could include parks, shopping, hiking trails, and even access to the airport. Families need to think about what is important to them and prioritize this during the housing search. It is also a great idea to think about any development that might be taking place in the local area that could influence housing prices in the future. All of these factors should be considered when families are considering which neighborhood they would like to move to.

What’s Ahead For Mortgage Rates This Week – November 23, 2020

November 23, 2020 by Ken Burrows

What's Ahead For Mortgage Rates This Week - November 23, 2020 Last week’s economic reporting included readings on housing market conditions, sales of previously owned homes, and housing starts and building permits issued. Weekly reports on mortgage rates and jobless claims were also released.

NAHB: Homebuilder Confidence Hits Record High in November

The National Association of Home Builders reported a fourth consecutive record high for builder confidence as November’s index reading of 90 exceeded October’s reading of 80. Any reading over 50 indicates that most home builders are confident about housing markets.

Component readings for the Housing Market Index also rose. Builder confidence in current market conditions rose six points to 96. Builder confidence in housing market conditions within the next six months rose one point to 89 and builder confidence in buyer traffic in new housing developments increased by three points to an index reading of 77. Readings of 50 or more for buyer traffic were rare until recent months. Factors driving builder confidence include high demand for homes and record low mortgage rates. High demand for single-family homes is rising due to relocation to suburbs and increased demand for larger homes.

Housing Starts Increase as Building Permits Issued Hold Steady

Commerce Department readings for October show that housing starts rose to 1.530 million starts on a seasonally-adjusted annual basis. Analysts expected a pace of 1.490 million housing starts based on 1.459 million starts reported in September. 1.545 million building permits were issued in October, which matched September’s reading.

Mortgage Rates Hit Another Record Low; Jobless Claims Data Mixed

Freddie Mac reported new record low mortgage rates for the fourth consecutive week. Rates for 30-year fixed-rate mortgages averaged 12 basis points lower at 2.72 percent; rates for 15-year fixed-rate mortgages averaged 2.28 percent and were six basis points lower. Rates for 5/1 adjustable rate mortgages dropped by 26 basis points to 2.85 percent on average. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.30 percent.

First-time jobless claims rose to 742,000 claims filed; analysts expected 710,000 claims filed based on the prior week’s reading of 711,000 initial jobless claims filed. Ongoing jobless claims fell to 6.37 million claims filed as compared to 680,000 continuing jobless claims filed in the prior week.

October sales of previously-owned homes rose to 6.85 million sales on a seasonally-adjusted annual basis as compared to September’s reading of 6.80 million sales of previously-owned homes.

What’s Ahead

This week’s scheduled economic reporting includes readings from Case-Shiller Indices on home prices; new home sales will also be released along with the University of Michigan’s report on consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.

Understanding the Difference Between a Mortgage Pre-qualification and a Pre-approval

November 20, 2020 by Ken Burrows

Understanding the Difference Between a Mortgage Pre-qualification and a Pre-approval If you’re in the market for a new home and you’ve been researching mortgages, you’ve likely come across the terms “pre-qualification” and “pre-approval”. While these terms are self-explanatory in some circumstances, they are quite different in regards to mortgage financing.

In today’s blog post we’ll explain the difference between a mortgage pre-qualification and a pre-approval.

Pre-qualification: an Initial Look at Your Mortgage Options

The first – and easiest – step on the way to receiving mortgage financing to buy a home is known as pre-qualification. During this process you’ll meet with a mortgage advisor or lender who will assess your financial history including your current income and any debts that you might have. Using these numbers they’ll perform a quick calculation that suggests how much mortgage financing you might qualify for when you’re ready to buy a home.

Your mortgage professional will also answer any questions that you might have about the process, including what interest rates you may qualify for, how much you’ll need to invest in your down payment and more.

Pre-approval: A Conditional Mortgage Commitment

After you’ve been pre-qualified for your mortgage and you’re ready to start looking for a new home you’ll go through the pre-approval process. At this time your mortgage advisor or lender will take a much deeper look into your current financial situation, including pulling a credit report to assess how much risk they will have in lending you money. You’ll also complete a full mortgage application as this will allow your lender to get a conditional approval for a certain amount or range. Finally you’ll be informed about the interest rate and the terms of the mortgage once you find your new home and complete the purchase.

The Final Step: Finding the Perfect Home

Now that you’ve been pre-approved and have received a conditional commitment from your lender, you’re ready to find that perfect new home. On top of having a better idea of your price range and what you can afford, you’ll find that sellers are far more receptive to your offers as having a pre-approval signals that you’re a serious buyer who is ready to make your move.

When you’re ready to buy your new house or condo, your local mortgage professional is ready to help. Contact them to learn more about pre-qualification, pre-approval and your financing options. Enjoy your new home!

Is Home Insurance Required When You Buy A House?

November 19, 2020 by Ken Burrows

Is Home Insurance Required When You Buy A House? For those who are thinking about buying a house in the near future, they are probably in the process of tabulating up all of their expenses. One of the common expenses is home insurance. Even though home insurance is certainly recommended, is it actually required? There are many situations where it is required. At the same time, even when it is not required, it is still a good idea. When it comes to homeowners’ insurance, there are a few important points to keep in mind.

Why Home Insurance Is Required By A Lender

For those who are taking out a mortgage to purchase a home, most lenders are going to require home insurance. This is because the lender wants to make sure that they are going to get their money back. Remember that the lender is taking a significant amount of risk as well. They want to make sure that they are going to get repaid for their loan. If something happens to the house and there is no home insurance policy, then they are going to lose a significant amount of money. Therefore, for those who are working with a lender, home insurance is probably going to be required.

Buying A Home Without A Lender

In some situations, people could be looking at buying a home without the help of a lender. Those who are purchasing a home in cash are not going to have anyone telling them that they need to get home insurance. At the same time, it is still a good idea. For most people, the most valuable investment they own is their house. They want to make sure it is protected. After all, people protect their cars with car insurance. Cars usually cost a fraction of the price of a home. Therefore, it doesn’t make sense to go without home insurance.

Get The Right Home Insurance Policy

It is important for people to make sure they get the right home insurance policy. The home insurance policy has to cover situations where a home could be completely destroyed. This includes fires, floods, severe storms, and even situations involving burglary. Compare a few options and make sure to get the right home insurance policy.

NAHB: Rising Demand for Homes Boosts Builder Confidence

November 18, 2020 by Ken Burrows

NAHB: Rising Demand for Homes Boosts Builder Confidence Builder confidence in housing market conditions reached a new record high in November according to the National Association of Home Builders. November’s index reading of 90 was five points higher than in October. Index readings over 50 indicate positive builder sentiment toward market conditions. Readings for the Housing Market Index fell below 50 in April and May as the COVID-19 pandemic grew.

Component readings for the Housing Market Index rose six points to 96 for current housing market conditions and one point to 89 for builder confidence in home sales in the next six months. Builder confidence in buyer traffic in new housing developments rose three points to 77. Readings for buyer traffic typically didn’t exceed 50 until recently. High demand for homes is associated with record-low mortgage rates and changing priorities created by the pandemic.

While demand for homes usually slows in the colder months, the pandemic has caused families to re-evaluate their housing needs as more people work from home and children attend school online or are homeschooled. Larger homes cost more, which contributes to home sellers moving to suburban or rural areas to accommodate the additional expenses of buying and maintaining larger homes.

Regional Housing Market Conditions Mixed in November

The NAHB reported gains in builder confidence in three of four regions. The Midwest led with a nine-point increase in builder confidence. The South and West also showed rising builder confidence, but builders in the Northeast reported a five-point drop in builder confidence.

Robert Dietz, chief economist for the NAHB said, “In the short run, the shift of housing demand to lower density markets such as suburbs and exurbs along with ongoing low resale inventory levels is supporting demand for home building.” Rising demand for homes as compared to low numbers of pre-owned homes available is creating additional demand for new homes.

Analysts said that the demand for new homes will last for quarters or years as it will take time for builders to catch up with the unusually high demand for single-family homes.

A seasonal slow-down in home sales coupled with a new and severe wave of COVID-19 cases may cause challenges for home builders in the coming months, but the current demand for homes could rise if city-dwellers continue to move to less congested areas. Recent positive news about COVID-19 vaccines could impact flight from cities to suburbs, but government approval, manufacture, and distribution of vaccines can’t happen immediately.

A Late Payment: Credit Score Impact

November 17, 2020 by Ken Burrows

A Late Payment: Credit Sore Impact This has been a difficult year for everyone. There are a lot of people who are worried that they might not be able to keep up with their mortgage payments. Small businesses have had to close their doors and numerous individuals have been laid off from work.

It is important for homeowners to understand that banks do not want people to foreclose on their homes either. Therefore, they are often willing to work out an alternate payment plan with homeowners who are struggling due to dire financial situations. Those who are late on a mortgage payment might be wondering how this is going to impact their credit score. The answer is that it depends.

How Does A FICO Credit Score Work?

Someone’s credit score is a conglomeration of multiple factors including payment history, the amount of money owed, the length of the credit history, and new credit. A late or missing mortgage payment is only going to impact one of these categories. Unfortunately, this also happens to be the largest factor, making up more than a third of the total credit score.

A Late Mortgage Payment

First, it is important for everyone to know that a late payment is not going to impact someone’s credit score until it is late by more than a month. At the same time, people need to remember that the lender can still access a late fee. If someone has a high credit score with a long credit history, this late payment is not going to hurt as much. On the other hand, someone with a poor credit score and a short credit history might feel the sting a little bit more.

Furthermore, it is important for people to note that a payment that is late by 60 or 90 days is going to hurt someone much more than a payment that is late by just one month. Therefore, even if a payment is going to be late, people should still try to pay it as early as possible.

Protect The Credit Score

It is important for everyone to try to do everything they can to protect their credit score. If they are worried they are not going to be able to make a mortgage payment, they should let the lender know and see what their options are.

What’s Ahead For Mortgage Rates This Week – November 16, 2020

November 16, 2020 by Ken Burrows

What's Ahead For Mortgage Rates This Week - November 16, 2020 Last week’s economic reporting included readings on inflation and consumer sentiment along with weekly readings on mortgage rates and jobless claims. Federal Reserve Chair Jerome Powell and Federal Reserve Board members addressed economic expectations resulting from the COVID-19.

Chair Powell said that there would be no quick fix for the economy and that the economy would suffer for four to six months until the pandemic slows. He also said that a COVID-19 vaccine would not be a panacea for the virus and said that “ the next few months could be challenging” as the virus spreads at a faster pace.

Inflation Stalls as Pandemic Progresses

The Commerce Department reported no growth in the Consumer Price Index and Core Consumer Price Index in October. The readings for both indices were identical with 0.00 percent growth, 0.10 percent growth expected, and September’s month-to-month growth of 0.20 percent. Medical experts predicted that COVID-19 cases would surge as cooler weather arrived.

The cost of living rose from June to October, but this was a recovery from deep dips in consumer prices as the pandemic took hold. The year-over-year inflation rate slowed to 1.20 percent in October from September’s reading of 1.40 percent. Annual inflation was growing by 2.30 percent before the pandemic.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages increased by six basis points to 2.84 percent. The average rate for 15-year fixed-rate mortgages rose by two basis points to 2.34 percent and rates for 5/1 adjustable rate mortgages jumped by 22 basis points to 3.11 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.40 percent.

First-time jobless claims fell last week to 709,000 filings. Analysts expected 731,000 new jobless claims based on the prior week’s reading of 751,000 initial jobless claims filed. Ongoing jobless claims were also lower last week with 6.79 million continuing claims filed. as compared to the prior week’s reading of 7.22 million ongoing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index posted a lower reading of 77.0 in November as compared to October’s index reading of 81.6 percent and the expected reading of 82.3. The dip in the Consumer Sentiment Index reflected increased consumer concern as covid-19 cases rose,

What’s Ahead

This week’s scheduled economic reporting includes readings from the National Association of Home Builders Housing Market Index, Commerce Department reporting on housing starts, and building permits issued. Data on sales of previously-owned homes will also be reported.

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