March, 2016 | Arizona Mortgage

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Rookie Mistakes: Don’t Make These 4 First-Time Homebuyer Mistakes

Rookie Mistakes: Don't Make These 4 First-time Home-buyer Mistakes Buying your first home is exciting. Many young people view homeownership as the definitive mark of adulthood, the final milestone on a decades-long journey. And while becoming a homeowner is cause for celebration, you’ll want to ensure you keep your enthusiasm in check just a little while longer.

Keep a level head and you’ll easily avoid these common mistakes first-time buyers make.

Don’t View Your Home As An Investment

First-time buyers commonly think that they can invest everything they’ve saved into a home, fix it up, and then sell it for a large profit in a few years. However, a home is a fixed asset that can be hard to sell off quickly. Economics professor Art Carden says “for people looking to start an investment, a stock or bond is a better option than a house, as I’ve never had to call a plumber because a mutual fund started leaking.”

Don’t Skip The Home Inspection

The American Society of Home Inspectors says 10 percent of home purchases happen without an inspection. Quite simply, buyers decide it’s better to save the fee for the down payment – but often, issues arise later that can result in multi-thousand-dollar repair bills. Foundation problems can be especially nasty, sometimes requiring a teardown.

Before signing a contract, make sure you have a licensed home inspector view the property.

Don’t Believe Everything You Read On The Internet

While it’s good to start researching neighborhoods, mortgage terms, and home valuations online, keep in mind that online estimates are just that – estimates. Not all mortgages are created equal, and the many differences between loans can result in significant changes in the overall cost. For example, just because a lender is giving you a mortgage without an origination fee, that doesn’t make it a good deal – you could be paying a lot more in interest rates.

Always make sure you thoroughly check and understand loan terms before signing anything.

Don’t Go For The Most Expensive House You Can Afford

When you qualify for a mortgage, your lender will tell you the maximum home purchase price they’ll fund, based on your annual income as well as your debt-to-income ratio. However, just because you can afford a $500,000 two-story townhouse, that doesn’t necessarily make it a good idea to buy said townhouse. You’ll want to give yourself a cushion in the event that you lose your job, have children, need to pay medical expenses, or go back to school.

First-time buyers often make a variety of mistakes when buying a home, but a mortgage advisor can help you to make the right decisions – decisions that set you on the best possible path toward homeownership. Contact your local mortgage professional today to learn more.

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Case-Shiller Report Shows Home Prices Rose in January

Case-Shiller Report Shows Home Prices Rose in January Home prices were 5.70 percent higher year-over-year in January according to S&P Case-Shiller’s 20-City Home Price Index. Top year-over-year gains were posted by Portland, Oregon at 11.80 percent, San Francisco, California at 10.80 percent and Seattle Washington posted a year-over-year gain of 10.70 percent. Denver, Colorado, which had top gains in recent months, posted year-over-year home price growth of 10.20 percent.

Lowest year over-year gains for January were posted by Chicago, Illinois at 2.10 percent, Washington, D.C at 2.20 percent and New York, New York at 2.80 percent.

Average home prices remained about 12 percent below their summer 2006 peak, but have recovered to 2007 levels.

Rising Home Prices and Short Inventory of Homes Impacts Buyers and Sellers

David M Blitzer, Managing Director and Chair of the S&P Indices Committee expressed concerns over rapidly rising home prices and the shortage of available homes. Mr. Blitzer said “would-be sellers seeking to trade up are having a hard time finding a new larger home.” Analysts also noted that home prices are escalating faster than wages, which were growing at a rate of 2.20 percent annually as of February.

New construction is not keeping up with demand; the current supply of available homes is below the normal six month inventory. Mr. Blitzer said that home building is the segment of the housing sector that creates economic growth.

Rapidly rising home prices and low inventories of available homes are potentially sidelining first-time and moderate income buyers. This trend also sandwiches homeowners who want to buy larger homes between a short supply of available homes and finding qualified buyers for their current homes. Mr. Blitzer said that high amounts of education debt and consumer debt are contributing to younger buyers’ inability to qualify for mortgages. Mortgage lenders have loosened mortgage qualification requirements somewhat, but Mr. Blitzer said that lenders haven’t forgotten what happened 10 years ago; they remain reluctant to further ease lending requirements.

Pending Home Sales Rise in February

In related news, the National Association of Realtors reported that pending home sales rose 3.50 percent in February as compared to an expected reading of 1.80 percent and January’s negative reading of -3.0 percent February’s reading for pending home sales was the highest in seven months.

Analysts and real estate pros use pending home sales readings s as indications of future closings and mortgage loan activity.

NAR Chairman Lawrence Yun cited lower mortgage rates as the driving force behind February’s jump in pending home sales. Mr. Yun said that building more homes is essential for boosting home sales; he cautioned that failure to increase the current supply of available homes could cause home sales to “plateau.”

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The Top 5 Mortgage Calculators on the Web and the Pros and Cons of Each

The Top 5 Mortgage Calculators on the Web and the Pros and Cons of Each If you’re shopping for a great mortgage, you’ll want to use a mortgage calculator. Mortgage calculators keep getting more accurate and more complex, allowing you to explore the various details involved in a mortgage. Try one of these mortgage calculators to learn what you can expect.

ML Calc: A Simple, Straightforward Calculator With Current Rates

ML Calc (mlcalc.com) is a simple mortgage calculator powered by mortgage software company Arsidian. And just one click, you can open up a new window that shows you the current mortgage and refinancing rates in your city. However, the user interface is outdated and simplistic, making it difficult to assess data if you’re a visual learner.

The Zillow Calculator: Beautiful Graphics For Visual Learners

Zillow’s intuitive mortgage calculator is fantastic for those who learn best through graphics. Upon inputting your details, Zillow will generate a graphical breakdown of your mortgage payment. You can also view a payment schedule graph that shows you when your loan will be paid off.

The only problem? It doesn’t allow you to compare different mortgages.

Mortgage Professor: A Full-Service Suite of Powerful Calculators

Mortgage Professor is a full suite of 53 unique calculators that investigate everything from refinancing to APR to down payments to mortgage insurance to consolidation. The site can give you data like when your mortgage point payments will break even, whether it’s less expensive to piggyback a second mortgage, and what your best option for a reverse mortgage is.

Mortgage Professor offers a lot of flexibility and options, but the struggle many users face is not knowing where to start – the calculator doesn’t indicate which calculation is the best one to begin with.

BankRate: Get Real-Time Estimates From Actual Lenders

BankRate’s mortgage calculator offers much of the same standard features you’d expect to find, but the one unique feature is its listing of lenders. By inputting details like your mortgage term and amount, your down payment size, and your credit score, you can see real-time quotes from lenders – and immediately contact them.

Bankrate doesn’t include taxes, though, and understanding its specialized symbols can be a challenge given the poor user interface.

Realtor.com: Location Options And VA Mortgage Options For Military Families

Realtor.com’s mortgage calculator is a great tool for those who want a variety of unique options like location-specific home prices and VA benefits. It also uses easy-to-understand visuals, and even shows nearby homes in your price range – plus a variety of articles about mortgages. However, the calculator only allows users to view payment estimates one year at a time.

Finding a mortgage that suits your needs can be a struggle, but a qualified mortgage professional can help. Contact your local, trusted mortgage advisor to get the most accurate information for your unique situation.

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What’s Ahead For Mortgage Rates This Week – March 28, 2016

What's Ahead For Mortgage Rates This Week - March 28, 2016 Increasing Home Prices Good For Sellers

The National Association of Realtors (NAR) reported lower sales of pre-owned homes in February. Would-be buyers were discouraged by rapidly rising home prices. Short supplies of available homes sidelined potential buyers as higher home prices and cash buyers squeeze out buyers who need mortgages to buy homes. Multiple offers resulting in bidding wars have also deterred buyers in high demand markets. According to NAR’s February report, sales of existing homes fell 7.10 percent to their lowest level since November.

NAR has predicted that rapidly rising home prices would eventually damage housing markets. While analysts weren’t certain whether February’s report indicated a temporary lull due to weather and anomalies related to new closing regulations and seasonal influences, NAR Chief Economist Lawrence Yun said, “The main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers.”

During the housing bubble, buyers jumped into the market as speculators or to buy before home prices increased beyond their reach. NAR surveyed renters last week and found that the percentage of renters who believed that it’s currently a good time to buy a home decreased.

Respondents to Fannie Mae’s February Home Purchase Sentiment Index forecasted a 1.70 percent increase in home prices year-over-year. One year ago, respondents expected home prices to increase by 2.50 percent year-over-year. This may suggest that home prices are cooling. This can be expected as the number of buyers declines as home prices become increasingly unaffordable.

New Home Sales Up in February

New home rose in February according to the Commerce Department. Based on a revised reading of 502,000 new home sales in January, February’s reading was 2.00 percent higher than January’s reading, but was 6.10 percent lower than for February 2015.

Builders have held back on increasing construction due to concerns about ups and downs in the economic recovery. Short supplies of labor and available land have also kept home builders from meeting current demand.

Mortgage Rates Trend Lower

According to Freddie Mac, average mortgage rates fell across the board last week. The rate for a 30-year fixed rate mortgage fell by two basis points to 3.71 percent; the rate for a 15-year fixed rate mortgage fell three basis points to 2.96 percent and the rate for a 5/1 adjustable rate mortgage fell four basis points to 2.89 percent.

New jobless claims rose to 265,000 from the prior week’s reading of 259,000 new claims. Last week’s reading matched analyst expectations.

What‘s Ahead This Week

This week’s scheduled economic news includes reports on inflation, pending home sales, Case-Shiller’s Home Price Index reports and government and private sector employment data. Weekly reports on mortgage rates and new jobless claims are also scheduled.

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Working from Home? Learn How to Create the Perfect Office with Any Spare Room

Working from Home? Learn How to Create the Perfect Office with Any Spare Room With the increasing flexibility of the modern workplace, there are many more businesses offering their employees the opportunity to work from home. While this shift in the job market has created a bevy of new options for freelance workers, it can also be a good reason to turn a spare room into a spanking new office. If you’re working from home, here are some tips for a stylish transition.

Prime It With Paint

Outside of lighting, the color and upkeep of the walls is going to have a huge impact on the way your spare office will look. Before even considering placing furniture or putting up pictures, decide on the perfect shade of paint that will keep you inspired and will go with the rest of your house. This will easily brighten the room, and prep it for its future purpose.

Start With Good Lighting

There are few things that will change the ambiance of a room like light, so make sure the room your changing up has a great set of windows or the kind of fixture that will provide effective illumination. Since many people have a hard time focusing in the orange or bright light that can come in certain work settings, a well-lit place may make all of your work seem a little bit easier.

Decide On A Desk

Many people put any old clunker of a desk in their spare office since it will do the trick, but if you’re making the decision to renovate your spare room for work, it will be worth it to choose a desk you’ll want to work at. Before going desk shopping, measure out the length and width of your spare room so you can make a desk purchase that will work for your new office.

What’s On The Wall?

Beyond the supply of pens, paper and a computer, it might seem like the extras of your office situation can be kept out of the equation, but a few pictures can add a lot. While you may want to add some photos of family and friends, it might also be helpful for your work-time diligence to put up a picture that adds a shot of color and will inspire your best work.

There are a lot of great options for a spare room, but if you work from home an office can be the ideal renovation. If you happen to be sprucing up your spare room to and would like to find out financing options, you may want to contact your local mortgage lender for more information.

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How the Truth in Lending Act Protects You When You Take Out a Mortgage

How the Truth in Lending Act Protects You When You Take Out a Mortgage If you’re planning to get a mortgage, it’s critical that you know your rights under the law. The Truth in Lending Act (TILA) is a piece of federal legislation that governs how mortgage lenders can and cannot operate their businesses.

So how does the Truth in Lending Act protect you, and what are your rights under this legislation? Here’s what you need to know.

Your Lender Must Give You A Timely Loan Estimate

A Loan Estimate (previously known as a Good Faith Estimate) is a document your lender provides you that details information about what kind of a mortgage you’ve applied for. Your Loan Estimate includes terms such as your estimated monthly payment, your estimated interest rate, and whether or not your mortgage balance is able to rise even if you make payments.

Under the Truth in Lending Act, your lender is obligated to give you a good-faith Loan Estimate within three days of when you apply for your mortgage. If your lender fails to provide your Loan Estimate within three days or fails to fix reported errors within 60 days, you can sue for damages and report the lender to the federal government.

Your Lender Must Notify You Of Rate Changes

The Truth in Lending Act states that your mortgage lender is required to give you an annual percentage rate estimate within 1/8 of one percent of government guidelines. Your lender must use the government-approved mathematical formula to provide your rate estimate.

If your estimated rate may be subject to change, your lender is obligated to disclose the first possible change you’ll see to your interest rate, and the maximum degree to which it may change. Your lender is also required to disclose the maximum possible changes for subsequent rate adjustments.

There Are Strict Rules About How And When Lenders Can Charge Late Fees

If your lender typically administers fees for late payments, TILA will specify that your lender must notify you – in advance – the date on which a late fee will be imposed and how much the late fee will be. TILA states that no late fee can exceed 4 percent of the amount past due, and a payment is only considered late if it is 15 or more days past due (or 30 or more days past due if you prepaid your interest). Your lender also cannot charge you a late fee on top of a late fee.

TILA is a powerful consumer protection law that gives would-be homeowners a great deal of power. By knowing your rights under TILA, you’ll be able to confidently negotiate with lenders and avoid any unnecessary problems. Contact your local mortgage professional to learn more.

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5 Steps Towards a Better Credit Score You Can Take Today

5 Steps Towards a Better Credit Score You Can Take Today When it comes to finding the best mortgage, your credit score is a major determinant as to the kinds of rates and conditions you can get. Lenders quite understandably want to manage their risk. But for a number of potential homeowners, these practices and policies can be a barrier to home ownership.

The good news? If your credit score isn’t great, you can easily improve it and get better lending terms. Here are five steps you can take right now to give your credit a boost.

Get Your Annual Credit Report And Dispute Errors

Simply disputing errors on your credit report is one of the easiest ways to give your score a boost. The FTC says that 1 in every 5 Americans has errors on their credit report that have an impact on their score. By simply disputing errors on your credit report, you can give your score a small boost almost overnight.

Miss A Few Payments? Talk To Your Lender

If you’ve missed a payment and it’s more than 30 days past due, chances are your lender has already reported the missed payment. Once a missed payment is on your credit report, the fastest way to remove it is to talk to your lender. Get a written and signed agreement that if you pay the overdue balance, they’ll report the account as “paid in full.”

Ask For A Credit Increase

Your credit utilization ratio – the amount of credit you’ve used compared to the total amount available to you – makes up 30% of your FICO score. In general, experts say that using more than 30% of your available credit can harm your score. If you can’t immediately pay down your debt below that 30% threshold, one great way to improve your credit utilization ratio is to ask for a credit limit increase.

Get A Co-Signer To Help

Having someone with good credit co-sign your lending agreement is a great way to improve your credit. When you get a co-signer for your credit card or car loan, the better quality credit line may help boost your score. Just make sure you stay on top of payments – otherwise both you and the co-signer will see your credit scores fall.

Keep Good Debts On Your Report

While it is important to review your credit report and have any negative items removed, you’ll want to ensure that any positive entries – debts you’ve paid in full – stay on the report. When your credit report shows debts as paid in full, your score increases because it shows that you’re a responsible borrower.

Improving your credit score doesn’t have to take years. These five strategies can help you to boost your credit and qualify for better mortgage loan terms. Contact your local mortgage professional to learn more.

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Retiring Soon? Learn How a Reverse Mortgage Can Add to Your Retirement Security

Retiring Soon? Learn How a Reverse Mortgage Can Add to Your Retirement Security If you’re nearing retirement, you’re likely starting to think about your savings and retirement plan and how you can ensure a financially secure retirement. With your peak income-earning years largely behind you, you’ll need to work with what you have in order to ensure a livable retirement income. That’s where a reverse mortgage may be a sensible option.

How does a reverse mortgage work, and how can it help you to have a more financially secure retirement? Here’s what you need to know.

A Reverse Mortgage Is Tax-Free And Saves Your Social Security Benefits

Social Security benefits offer a basic form of income for senior citizens, but if you tap into your Social Security too early in your retirement, you could use up your available benefits in a short span of time. Deferring Social Security until later on in your retirement means that you’ll get an extra 7 to 8 percent per year you defer, which is why you’ll want to save your Social Security for as long as possible. But in order to do that, you need another income source to live on.

A reverse mortgage is a tax-free income source that you can use to fund the early part of your retirement, allowing your Social Security benefits to mature. Best of all, a reverse mortgage frees up your budget so you can invest more of your funds and collect returns later.

You’ll Never Owe More Than Your Home’s Value – And There’s No Set Repayment Date

A lot of loans have high interest rates and fixed repayment periods. This means that if you use credit cards or take out a personal loan, for instance, you’ll be locked into a set repayment date or won’t have a high enough borrowing limit – or if you do have a high borrowing limit, you’ll find that interest charges quickly add up.

Reverse mortgages have no set repayment date, which means that you can use the money from a reverse mortgage as needed without having to worry about repayment. You’ll also never owe more on your reverse mortgage than what your home is worth, so you’ll never find yourself underwater.

A reverse mortgage is a great way to ensure that you have a safe, stable retirement – and it can add an extra layer of security on top of your social security benefits. Are you considering taking out a reverse mortgage on your home? A qualified mortgage advisor can help – contact a mortgage professional near you to learn more.

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What’s Ahead For Mortgage Rates This Week – March 21, 2016

Housing Starts Up in February

Shortages of available homes are a major factor in rising home prices; shortages also make it more difficult for buyers to find homes they want. Housing starts in February rose, which is good news for the peak spring and summer home buying season. Other housing related news released last week included the Fed’s decision not to raise the target federal funds rate and Housing Starts and Building Permits reports issued by the Commerce Department. Consumer Sentiment was also released along with regularly scheduled releases on mortgage rates and weekly unemployment claims.

Builder Confidence Holds Steady, Real Estate Pros Call for More Construction

According to the NAHB/Wells Fargo Housing Market Index for March, home builder confidence held steady at a reading of 58. Analysts expected an uptick to 59 based on February’s reading of 58. Any reading above 50 indicates that more builders have confidence in housing market conditions than those who do not. The overall HMI reading is based on three components including builder perception of current market conditions, market conditions within the next six months and buyer foot traffic in new home developments.

Builder confidence in current market conditions held steady at a reading of 65. Builder confidence in market conditions within the next six months dropped three points to 65. Builder confidence in buyer foot traffic increased four points to a reading of 43. Confidence in buyer foot traffic has not topped a reading of 50 since 2005.

High demand for homes coupled with a short supply of affordable suburban single family homes compelled NAR Chief Economist Lawrence Yun to comment, “Imbalances in supply and demand and unhealthy levels of price growth in several metro areas have made buying a home an onerous task for far too many first-time buyers and middle class families.” Mr. Yun called for builders to double their focus on building single family homes.

Housing Starts Hit 9-Year High in February

Reports on housing starts and building permits issued indicate good news for the shortage of available homes.

The Commerce Department reported that housing starts rose from January’s reading of 1.120 million starts to an annual level of 1.178 million starts. Analysts expected a reading of 1.153 million starts. Building permits also increased from January’s reading of 1.120 million permits to 1.167million permits issued. Analysts forecasted a reading of 1.210 million in February.

Mortgage Rates Rise, Fed Holds Interest Rate Steady

The Federal Reserve announced its decision not to raise the target federal funds rate on Wednesday. The current rate is 0.250 to 0.50 percent. Policymakers cited concerns over global economic developments as a reason for their decision. This decision quickly showed an impact on Thursday. Freddie Mac reported average rates rose across the board. The rate for a 30-year fixed rate mortgage rose five basis points to 3.73 percent. 15-year mortgage rates averaged 2.99 percent, which was three basis points higher than the prior week’s reading. The average rate for a 5/1 adjustable rate mortgage rose by one basis point to 2.93 percent. Discount points averaged 0.50, 0.40 and.50 respectively.

Weekly jobless claims rose to 268,000 against expectations of 268,000 new claims and the prior week’s reading of 258,000 new jobless claims.

Consumer sentiment dropped to 90.00 in March against an expected reading of 92.10 and February’s reading of 91.70. Consumer outlook is important to housing markets as the decision whether or not to buy a home is typically based on potential buyers’ evaluations of job stability and affordability of available homes.

What’s Ahead This Week?

This week’s scheduled economic releases include reports on new and existing home sales as well as usual weekly releases on mortgage rates and new jobless claims.

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Smart Appliances Get Smarter: Here’s What We Saw at the 2016 Consumer Electronics Show

Smart Appliances Get Smarter: Here's What We Saw at the 2016 Consumer Electronics Show With technology advancing at a mile a minute, the 2016 Consumer Electronics Show is a great place to see what’s new to the market and what will be sure to turn heads in the year to come. If you couldn’t make it to the show yourself but are curious about the highlights of the event, here are some of the hottest items in technology that appeared in Las Vegas this year.

Make It Molecular With A Spectrometer

Designed by Consumers Physics, the SCiO is a modern, small-sized molecular sensor that can give you volumes of information about your food that you’ve never had before. Instead of consulting the nutritional information, you can easily obtain all of the products contained in your food (or any other product, really) by simply pointing it at the item in question. This information will then be transferred to the product’s associated app for you to review.

Forgot To Lock? Grab Your Phone!

We’ve all experienced the fear here and there of thinking we forgot to lock the door, but with the innovative Kwikset Premis door lock, you can easily put this former fear to rest. Instead of having to rush home with key in hand, the Kwikset allows you to easily control its locking mechanism with a PIN number using your smart phone. So, the next time you’ve think you’ve forgotten to lock the door behind you, you can instantly access your smartphone and put your mind at ease.

Wake Up To Your Favorite Scent

Waking up is often associated with the uncomfortable sensation of a beeping clock, but with the Sensorwake the first few minutes of the morning don’t have to seem like such a chore. Instead of beeping, you can insert an aroma module into your Sensorwake that will release the scent you choose, whether it happens to be espresso, croissant or peppermint. If you don’t think this will be enough to wake you up, you can also arrange for an audible alarm that will come on a little bit later.

The Consumer Electronics Show in Las Vegas is one of the best events of the year for interesting, new technology, but if you missed it there are plenty of exciting gadgets that will soon be available on the market.

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Archive for March, 2016

Rookie Mistakes: Don’t Make These 4 First-Time Homebuyer Mistakes

Related Articles:

Case-Shiller Report Shows Home Prices Rose in January

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The Top 5 Mortgage Calculators on the Web and the Pros and Cons of Each

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What’s Ahead For Mortgage Rates This Week – March 28, 2016

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Working from Home? Learn How to Create the Perfect Office with Any Spare Room

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How the Truth in Lending Act Protects You When You Take Out a Mortgage

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5 Steps Towards a Better Credit Score You Can Take Today

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Retiring Soon? Learn How a Reverse Mortgage Can Add to Your Retirement Security

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What’s Ahead For Mortgage Rates This Week – March 21, 2016

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Smart Appliances Get Smarter: Here’s What We Saw at the 2016 Consumer Electronics Show

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