Blog – Mortgages For America

5 Home-Buying Pitfalls To Avoid

November 16, 2018 by Ken Burrows

5 Home-Buying Pitfalls To Avoid Buying your home can be nerve-racking, especially if it’s the first time. The buying process is exciting and often complex. The chances of making a mistake are relatively high.

In today’s real estate market where demand surpasses supply, you can’t afford to make mistakes. And this is just the tip of the iceberg. If you are in the market to buy a house, here are five pitfalls avoid.

Not Doing Your Homework Well

Fortune favors the prepared in real estate. And preparedness begins with understanding your finances. A wise buyer examines assets, analyzes debts and gets finances pre-approved before jumping into the house hunt.

Know the neighborhood well, since you’re also buying a location. It’s paramount to research about the quality of schools, upcoming zoning issues and crime level. Not all suburb spots are ideal to live in.

Picking The Wrong Mortgage

Getting your loan preapproved puts you in a better position to negotiate. Find out how much property you can afford. Don’t rely on your bank’s internet site only. Instead, use calculators and consult with your trusted mortgage professional to find out how much you can borrow.

It’s worth noting that what banks show they can lend can differ with what they will lend. As such, it’s imperative to choose your mortgage carefully. Compare offers from various banks or consult an independent finance broker.

Going With The Market Flow

Resist the temptation to flow with the market rather than your needs. The real estate market goes in cycles. There are times suitable for buyers, and times suitable for sellers.

However, don’t gamble with your future by sitting and waiting for the right time. Once you know your budget, get your finances organized, think about your needs now and in future. Then use short term market conditions to make long-term lifestyle choices.

Exceeding Your Budget

Most homebuyers fall for the trap of picking more appealing properties that cost more than their budgets. Falling into this pitfall can derail your future finances.

Although it’s human nature to yearn for more than we can afford, resist the desire. Surpassing your budget exposes you to potential financial shocks with bigger payments, property taxes and more.

Falling In Love

If you find the perfect house, keep it to yourself. Don’t let the sellers read your emotions. If they do, they may use them against you while negotiating.

Wise buyers know there are several homes out there, and there is one that’s right for them. And if you can’t afford one or your offer isn’t accepted, keep looking and move on.

Buying a home is rejuvenating. However, if you’re not careful, you can make mistakes you may regret later. Consult with your trusted real estate expert and trusted mortgage professional to get the best advice for your situation.

5 Creative Ways To Buy A Foreclosure

November 15, 2018 by Ken Burrows

Buying a foreclosed home is easy, right? After all, they sell for pennies on the dollar, right? Well, that could be a false assumption. Buying a foreclosed property appears easy on TV, but in reality, it can be overwhelming.

Foreclosure sales continue to decline in the market from 38.6 percent in 2011 to 14 percent in 2017 but ticking up a bit in 2018 according to Attom Data Solutions, a national property data company. As foreclosure sales drop, competition for these properties become stiffer and more complex. And as home prices increase in most cities, buyers often turn to foreclosures as affordable alternatives for landing their dream home

Foreclosures usually occur when homeowners can no longer pay their mortgages and the mortgagees seize the properties. Once former owners vacate the properties, lenders typically put it on sale at discounted price or auction to the highest bidder.

Foreclosures give homebuyers the opportunity to get great deals. While foreclosures can save you thousands of dollars, it may come with risks. Having a stomach of steel can help when pursuing a foreclosure.

5 Creative Ways To Buy A Foreclosure To mitigate the risks involved, keep the following hacks and tricks in mind.

Budget Carefully

Don’t allow a small price tag to entice you into a quick deal. Ask yourself the following:

Do you have sufficient dollars for extensive repairs?
Do you have a team ready for any required repairs or are you handy at doing them yourself?
Can you find a tenant if you intend to rent?

If you conduct thorough research, you’ll minimize the risks.

Get A Home Inspection

Though foreclosures are usually sold “as is”, you need to know the property deficiencies. The home seller can allow you to bring in a competent home inspector. Your inspector will give you a list of what the property lacks and the cost estimates needed to complete the renovations. You may even want to hire a home inspector after purchasing a foreclosure just to get a thorough review of the property.

Ask For Vacancy Duration

Ask how long the house remained vacant. In most cases, long vacancy means more damages. For example, plumbing seals may dry out, bugs get into the house and sewer gases back up.

Don’t Ignore The Landscaping

Neglected landscaping contribute to house deterioration. Tree seedlings grow roots into the foundation and vines crawl into the windows. Small trees can also mess up pavers, and dead branches can break and crash into the house.

Be Cautious With Auctions

Although auctions are common with foreclosures, it’s best to avoid them. And if you can’t, be vigilant when bidding. Competitive bidding can raise the value so high that you end up losing money after the cost of repairs.

It’s always best to work with your trusted local real estate professional to find foreclosure properties. They are experienced in determining the quality of the properties and can help you through the tenuous foreclosure purchase process.

Another key partner is your trusted mortgage professional. If your good credit and pre-approval are in place, you will be on your way to making an offer as soon as the right property comes along.

3 Things You Should Know About Land Surveys

November 14, 2018 by Ken Burrows

3 Things You Should Know About Land Surveys One thing to think about when purchasing a home or parcel of land is to have an updated land survey conducted. While property deeds generally include detailed information, many are outdated for a variety of reasons that include nature, weather conditions, and adjustments in floodplain maps among others.

Even when the information about the property is spot-on at the closing, human perception of where your property begins and ends can lead to some unenviable outcomes. Given that buying real estate ranks among the largest personal investments for most people, these are three things you may want consider about land surveys.

Good Fences Make Good Neighbors

The old Robert Frost poem “Mending Wall” ponders the reasons that people erect property line fences and why they fix them each spring. The reason is a simple one, setting boundaries avoids unnecessary disagreements and allows people to get along.

Land disputes can turn otherwise friendly neighbors into hostile abutters because there is a pervasive sense that someone is stealing from you. Good fences are the product of clearly identified boundary markers and professional surveyors are the people who measure and certify them. If you plan on buying or recently purchased a parcel of land, updating the land survey may be in you and your neighbor’s best interest.

Squatters Can Take Your Land Through Adverse Possession

Many states continue to allow the practice of adverse possession. In some places, it’s known as “squatters rights.” If someone who does not rightfully own a piece of land can maintain or utilize it for a period of time, they may be able to put in a claim.

Although many people consider this an outdated and unfair practice, it remains too common in rural and suburban areas. Misplaced fences are often the basis of such claims. When abutters work your land or use it to access their own, that can be the basis of a claim to get a permanent easement or take it from you.

Land Surveys Can Be Used For Insurance Purposes

The severe weather storms that struck communities across the country have prompted organizations to update their floodplain maps. Property owners who were not previously required to purchase flood insurance may now find themselves considered “at risk.”

But that designation can be considerably more complex than just owning a home or residential property inside the flood zone. These updated maps do not necessarily consider the elevation of each and every property. In order to be properly listed, you may need to have an elevation certificate to petition FEMA and others that your property is not at risk. That means having a professional land survey conducted.

There are numerous reasons why current land surveys can prove valuable to real estate buyers and sellers. Without one, you are operating without critical information about a significant investment. Your trusted home mortgage professional can refer you to appraisers and land surveyors in your area. Be sure to rely on this valuable resource during your new home purchase.

What’s Ahead For Mortgage Rates This Week – November 13th, 2018

November 13, 2018 by Ken Burrows

What’s Ahead For Mortgage Rates This Week – November 13th, 2018 Last week’s scheduled economic news was slim last week. The Federal Open Market Committee of the Federal Reserve issued its post-meeting statement, weekly readings on average mortgage rates and first-time jobless claims were also issued.

FOMC: Fed Target Rate Unchanged, but Expected to Rise in December

The Federal Open Market Committee of the Federal Reserve announced that it did not raise the target federal funds rate but set the stage for raising the benchmark rate n coming months. The current range for the Fed rate us 2.00 percent to 2.00 to 2.25 percent. The Fed expects to increase rates three times in 2019 provided that strong economic conditions prevail.

FOMC members watch inflation, financial markets and domestic and global news to determine how or if to adjust the Federal Reserve’s target interest rates range.

Although FOMC releases projections based on current events and financial developments, changes to financial markets or global events could cause the Fed to hold off on raising interest rates.

Mortgage Rates, Hit Seven-Year High, New Jobless Claims Fall

Freddie Mac reported higher average mortgage rates that pushed current mortgage rates to their highest levels in seven years. Rates for a 30-year fixed rate mortgages rose 11 basis points to an average of 4.94 percent; 15-year fixed rate mortgage rates averaged 4.33 percent, which was ten basis points higher than the prior week.

Rates for a 5/1 adjustable rate rose by 10 basis points to an average of 4.14 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell by 1000 new claims to 214,000 new claims filed. Analysts expected 210,000 new claims filed based on the prior week’s reading of 215,000 first-time jobless claims filed.

What‘s Ahead

Next week’s economic reports include readings on inflation, retail sales and weekly reports on mortgage rates and mortgage rates.

5 Trends Shaping Green Homes

November 9, 2018 by Ken Burrows

5 Trends Shaping Green Homes Think green home design is a fad? Well, think again. Sustainable home designs are gaining popularity at a breakneck speed. In 2017, green homes accounted for more than 60 percent of family home builder’s portfolios, according to a survey conducted by the National Association of Home Builders.

But what is really driving green home designs? In this post, we explore five trends shaping sustainable homes.

1. Energy Efficiency

Home designs that cater to consumers’ need to reduce utility bills continue taking center stage. From net-zero energy homes to energy conserving products, home buyers want to save money. Moving forward, industry experts predict that ultra-efficient building designs like net-zero-energy or passive home designs will continue dominating the industry.

2. Health

Most home buyers are more aware of the dangers of chemicals than before. As such, most of them are seeking non-toxic interior products. The manufacturing industry trend is leaning towards healthier materials. As the demand rises and prices stabilize, these products are more likely to be game changers. Most home designs will probably focus on eliminating troublesome chemicals such as VOC paints and phthalate free flooring.

3. Home Performance And Monitoring

Home energy audits are major factors considered by consumers, and home performance is key. Some cities like Austin expect new homes to undergo performance tests before recommendation for resale.

Energy software programs allow home builders and remodelers to monitor how slight changes in home designs can save thousands of dollars in utility bills. Homeowners are also benefiting from energy monitoring devices to track their household energy consumption.

4. Water Efficiency

80 percent of American states anticipate water shortages in a few years, says a Government Accountability Office survey. Therefore, wise water usage is becoming crucial as consumers demand for water efficient homes. Most builders are already getting their homes HERS Rated as consumers look for ways to save dollars from rising water prices.

5. Biophilic Home Designs

Nature is beneficial to us biologically, physically and psychologically. However, in the last century, home designs separated us from nature. Today, biophilic designs (connected to nature) strive to reverse that by integrating nature into homes. Modern building can capture the sun’s movement using windows, architectural details and patterns, connecting us to the season, time of day and our inner biorhythms.

If you are in the market for a green home, be sure to contact your trusted mortgage professional for a financing pre-approval!

3 Millennial Home-Buying Trends Sellers Should Know

November 7, 2018 by Ken Burrows

3 Millennial Home-Buying Trends Sellers Should Know After five consecutive years of Millennials outpacing all other home-buying demographics, sellers would be wise to wrap their thinking around what makes this generation tick.

According to a 2018 Home Buyer and Seller Generational Trends research study, Millennials purchased more than one-third of all homes in 2017. With home purchases totaling approximately 36 percent of the market in 2018, this class of buyer has increased its market share from 34 percent in 2017.

Taken as a whole, the previously formidable Baby Boomers ranging from 52-70 years old enjoyed only a 32-percent market share. GenXers declined from 28 percent in 2017 to 26 percent in 2018.

With the relatively young Millennials still not fully engaged in the real estate market, expectations are that this group could set the tone for decades.

Millennials Have Improved Buying Power

If you accept the Pew Research Centre definition of Millennials, then they were born between 1981 and 1996. That means the entire population is currently at or past the age of college graduation.

Other research indicates that they enjoy an average annual income that has trended up from $82,000 in 2017 to $88,000 in 2018. That means their overall income outran the estimated inflation rate of about 2.1 percent. Not every group can boast that claim.

With the older end of the group now over 30 years old and the younger swath advancing into careers, sellers may want to plan for spare-no-expense Millennial buyers. The average home they purchased in 2017 was $205,000. In 2018, the average rose to $220,000. They apparently are not shy about spending more on a house they like.

Single Millennial Women Are Buying More Homes

Young single females are making a run at home-buying supremacy. According to recent data, single women purchased approximately 18 percent of all homes in 2017. The figure is more than double that of single males, although married couples remain in the top spot.

The average age of single female buyers stands at 28 years old, and their home loans exceeded $175,000. Appraised values reportedly topped $210,000. Sellers may want to consider a more single female-oriented aesthetic moving forward.

Millennials Willing To Pay For More Space

There are two telling reasons why many Millennials are inclined to bypass traditional starter homes and pay for larger ones.

The first reason goes to the age of the older Millennials. At about 36 years old, they entered into adulthood during a painful economic period. High unemployment and a sluggish economy persuaded older Millennials to either wait or hunker down in a small starter home. That group now has equity in the property or money in the bank. With a hot economy and rising wages, larger homes make affordable sense.

Younger Millennials, by contrast, are entering the workforce during a full-blown economic revival. Jobs are plentiful, and employers are competing with wages to secure workers. The robust economic landscape allows many young professionals to afford larger homes. With that in mind, sellers may want to upgrade outdoor patios and consider taking down a wall or two to create an open floor plan.

If you are a homeowner interested in listing a property, speak with a real estate professional about what Millennials in your area want in a home. Millennial home buyers are changing the industry. If you are a Millennial in the market for a property, be sure to contact your trusted mortgage professional for a pre-approval!

3 Important Factors That Affect Your Real Estate Transaction

November 6, 2018 by Ken Burrows

3 Important Factors That Affect Your Real Estate Transaction The real estate market is quite different from other markets and can be confusing for even the most experienced buyers and sellers. You will need the help of a real estate agent whether you are an experienced buyer or doing it for the first time.

Even with the help of an agent, you can educate yourself on some of the basic elements of a real estate transaction in order to make yourself more comfortable throughout the process.

Here are 3 things that you should be aware of before you start a real estate transaction:

Market Demand And Sales Price

There are many factors that determine the appropriate sales price at which you sell or buy a piece of property. Among them is the market demand and other recently sold homes in the immediate area that match the characteristics of your home. Real estate agents can prepare a comparative market analysis (CMA) to help you understand the recent activity in your market and the best price to list your home at.

If you’re a buyer, you can ask your agent to run a property listing report to show you all of the comparable homes that are currently listed in your area. You can even get set up on an automatic email update of any home that meets your criteria as soon as it comes on the market or there is a change in the listing price.

A professional real estate agent can be of great help when it comes to finding customers for your property. As a buyer, you can seek for the services of a real estate agent that will help you in getting a property at affordable prices.

Absorption Rate

This term is quite common among real estate agents, however a lot of consumers haven’t ever heard of it. It is the amount of time taken to sell a piece of property that is listed in a particular market based on the total housing inventory and the average monthly properties sold. The absorption rate can guide you if you are planning to make investment in a particular area or if you are planning on selling your home.

For instance, if you know the average time on the market for a home similar to yours is 90 days you can plan approximately when to list your property in order to move at a specific time. It’s important to understand that many factors determine whether a particular home sells within the average time frame, but it can be useful as a guide. A professional real estate agent is your best resource to find out the details on your local market absorption rate.

Escrow

There are many buyers and even sellers that have seen funds mishandled when making a private real estate transaction. The best way to prevent this from happening is by opening an escrow account. This account is virtually always opened with an independent third party on behalf of the buyer and seller at the beginning of the transaction.

Some escrow companies also handle the title research and title insurance elements of the real estate transaction. They hold all of the documents and money until the transaction has been completed. At the end of the transaction they balance all of the expenses and deposits and ensure that each party is compensated appropriately.

As always, working with a team of real estate professionals is the best way to navigate all of the elements of your next real estate deal. Another primary team member and important relationship is with your trusted mortgage professional. It’s important to make a plan for where you will live after your property is sold. Getting a pre-approval is a great way to ensure a smooth transition.

What’s Ahead For Mortgage Rates This Week – November 5th, 2018

November 5, 2018 by Ken Burrows

What's Ahead For Mortgage Rates This Week - November 5th, 2018 Last week’s economic news included readings for Case-Shiller Home Price Indices, Commerce Department readings on construction spending and the University of Michigan’s reading on consumer confidence. Labor sector reports on jobs growth and the national unemployment rate were posted along with weekly readings on mortgage rates and first-time jobless claims.

Case-Shiller: Home Price Growth Lowest in 20 Months; Construction Spending Falls

Home price growth hit its lowest pace in 20 months according to Case=Shiller’s 20-City Home Price Index for August. Home prices grew by 5.80 percent year-over-year as compared to July’s growth rate of 6.00 percent.

Sales have slowed in recent months due to rapidly rising home prices, high demand for homes and slim inventories of available homes. Increasing supplies of homes for sale are a sign that housing markets are balancing to accommodate prospective buyers.

Construction spending was flat in September at a seasonally-adjusted annual rate of $133 trillion. Analysts expected 0.20 percent growth in construction spending based on August’s growth rate of 0.80 percent. The slowdown in spending was likely due to seasonal dips in construction activity as winter approaches.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average mortgage rates last week; rates for 30-year fixed rate mortgages averaged three basis points lower at 4.83 percent. Rates for a 15-year fixed rate mortgage averaged 4.23 percent. Rates for 5/1 adjustable rate mortgages were 10 basis points lower at 4.04 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week with 214,000 new claims filed; analysts expected 212,000 new claims to be filed based on the prior week’s first-time claims 216,000 new claims filed. Reported. The Commerce Department reported 250,000 public and private sector jobs added in October. ADP added 227,000 private sector jobs in October. The national unemployment rate was unchanged at 3.70 percent.

The University of Michigan’s Consumer Confidence Index reported an index reading of 137.90 in October as compared to September’s reading of 135.30 and an expected reading of 136.40.

What‘s Ahead

This week’s scheduled economic reports include the post-meeting statement from the Fed’s Federal Open Market Committee along with weekly reports on mortgage rates and new jobless claims.

Last week’s economic news included readings for Case-Shiller Home Price Indices, Commerce Department readings on construction spending and the University of Michigan’s reading on consumer confidence. Labor sector reports on jobs growth and the national unemployment rate were posted along with weekly readings on mortgage rates and first-time jobless claims.

Case-Shiller: Home Price Growth Lowest in 20 Months; Construction Spending Falls

Analysts said that slowing growth of home prices could signal that home prices have reached their peak; Inventories of homes for sale are near the six-month inventory reading considered a normal inventory of homes for sale. Sales have slowed in recent months due to rapidly rising home prices, high demand for homes and slim inventories of available homes. Increasing supplies of homes for sale are a sign that housing markets are balancing to accommodate prospective buyers.

Mortgage Rates, New Jobless Claims Fall

The University of Michigan’s Consumer Confidence Index reported an index reading of 137.90 in October as compared to September’s reading of 135.30 and an expected reading of 136.40.

What’s Ahead

This week’s scheduled economic reports include the post-meeting statement from the Fed’s Federal Open Market Committee along with weekly reports on mortgage rates and new jobless claims.

What Does A Home’s Energy Rating Imply?

November 2, 2018 by Ken Burrows

Your home’s energy rating is an evaluation of your home’s overall energy efficiency. If your house’s rating is high, it means your potential for energy loss is also high. Bringing your rating numbers down means that your home is becoming more energy efficient.

Your home’s energy rating is based on several things. When your energy company does a home energy audit, they are looking for ways that your home or its components are wasting energy. A low rating means that a home is more energy efficient than one with a higher number. For example, if a home is rated at 70 on the HERS Index, it is approximately 30% more energy efficient than a home built in 2006. There are many factors that are taken into consideration when determining a home’s energy rating.

Here are several things you can do to bring your numbers within an acceptable range.

Energy Efficient Appliances

All new appliances manufactured within the United States must now carry an energy rating label that states its efficiency and how much energy is required for it operate. The Environmental Protection Agency has determined that, in order to save as much energy as possible, appliances are to be manufactured to certain specifications that will allow them to be operated using as little energy as possible.

HVAC System

One of the biggest energy drains in your home is your HVAC system. With regular maintenance and prompt repairs, your heating and cooling system can operate at maximum efficiency for many years to come. Changing the filters every month and keeping the ductwork and vents properly cleaned can also help your HVAC system to function efficiently and may reduce any type of energy waste.

Insulation, Windows, And Doors

Other areas where energy can be lost is through the roof and the windows and doors. Adding more insulation to your attic may prevent energy from being lost through the roof. It can help to keep your home cooler during the summer months and warmer during the winter months. Replacing older windows with newer, more energy efficient windows can dramatically reduce energy loss and improve your home’s energy rating. The same is true for older doors that may have worn weatherstripping.

The government offers rebates on your federal taxes for each home improvement you make that improves your home’s energy rating. If you are interested in learning more about energy ratings, contact your local utility company to have an energy audit performed. They will provide you with the answers you’re looking for.

Whether you are in the market for a new energy efficient home or refinancing your current property, your trusted mortgage professional is available to discuss your best financing options.

How To Cut A Great Deal On A New Home Construction

November 1, 2018 by Ken Burrows

How To Cut A Great Deal On A New Home Construction Savvy home buyers often get great deals on new home constructions by asking for deals and discounts and doing some up-front research.

Home builders often dislike offering steep discounts in sales prices because they want everyone in the community to feel like they bought their property at a fair price. Maintaining sales prices also helps with future home appraisal values. It helps all of the buyers in a neighborhood to keep sales prices consistent and growing.

Fortunately, you can still get great discounts that can reduce the cost of your new home.

Ask the builder if they can do the following:

Settle Closing Costs

Closing costs vary depending on your state. On average, the costs can be as high as $10,000. In Colorado, for example, a standard closing is about 3 percent of the selling price.

It’s important to note that closing costs vary widely and can be structured in many ways. Make sure to consult a trusted mortgage finance professional to get the best information on your situation. But if the builder pays the bill, that money remains in your pocket. Isn’t it a great discount?

Buy Down Your Interest Rate

Although interest rates are low, if a builder is willing to buy down your rate further as part of the closing, it would reduce the amount you pay monthly in interest on your mortgage payment. That makes it manageable in the long run. Once again, your mortgage professional can give you the best details on this idea.

Offer Free Upgrades

Most homes have standard built in appliances. To get high-end appliances, home buyers normally have to pay for upgrades. Ask your builder if you can get the upgraded home appliances or other upgrades without paying extra. It’s a great strategy to move into an improved new home.

Additional Discounts

To sweeten the deal, home builders can throw in additional discounts such as automated garage doors, landscaping, finished basements and window coverings. These discounts are worth asking about.

Although these strategies are great, there are some situations that make it more difficult to get sales concessions. Therefore, as you negotiate, keep the following in mind:

If business is going great, deals become more unlikely as builders have little motivation to give discounts.
You may not end up with the perfect home you want since you may be buying a home that’s near completion or already built.
The best home locations may be taken because properties in prime lots are usually the first to sell.

Knowledgeable buyers are most capable to cut great deals. Therefore, research new construction homes in your preferred neighborhood, visit some homes and compare what deals you can get. Above all, don’t hesitate to ask questions of your trusted real estate and mortgage professionals.