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Are You Ready for Home Ownership? Find Out by Answering These 4 Questions

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Are You Ready for Home Ownership? Find Out by Answering These 4 QuestionsHave you been dreaming about a larger, roomier or more luxurious living space? Or perhaps just want to experience the joy of owning your own home and building your net worth instead of renting? Let’s explore a few questions that can help to answer whether or not you’re ready for a new lifestyle as a homeowner.

Can You Realistically Afford To Buy A Home?

The first consideration to make is a financial one: can you afford it? Buying in a home is a significant financial investment. In most cases you’ll need to manage monthly mortgage payments for many years. The good news: owning a home is a more affordable than you might think. If you’re already a stable renter then you’re most of the way there.

Do You Have Your Down Payment Saved Up?

If you’re confident that monthly payments are no problem, then the next step is saving up enough to cover your down payment. This is a lump-sum investment that you make when you buy the home. Typically your down payment is around 20 percent of the home’s cost, but there are assistance programs which can reduce this further.

Do You Know What Type Of Home You Need?

Once you’ve cleared all of the financial hurdles, you will next need to decide exactly what kind of home you need. If you’re a single young professional, a condo or apartment might be the perfect starter home from which you can upgrade later. Or you might prefer something more rural which comes with more yard space, perfect for pets.

Are You Ready To Set Down Some Roots?

Finally, it’s worth taking some time to decide whether or not you’re ready to emotionally and physically invest in your local community. Is your career stable enough that you won’t be moving for at least a few years? What about that of your partner or spouse? If you don’t already, do you envision having children in the future? All of these are considerations that will help you choose the right neighborhood.

 

Four Pieces of Mortgage ‘Advice’ That You Should Take With the Proverbial Grain of Salt

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Four Pieces of Mortgage 'Advice' That You Should Take With the Proverbial Grain of SaltAre you in the market for a new home? If you have been talking to friends and family or researching online, you have likely come across quite a bit of mortgage-related advice. As with anything, there is low-quality advice out there which is essential to avoid. In today’s blog post we will share four pieces of mortgage-related advice that you should take with the proverbial ‘grain of salt.’

#1: Only Get A Mortgage From Your Bank

Have you heard that you should only get a mortgage from the major bank that you use regularly? Many people believe that working with a large bank that you have a history with provides advantages, but this is not always the case. The right advice here is to seek out a mortgage lender offering products that fit your current and future financial needs.

#2: Always Take The Lowest Interest Rate

The next piece of advice you might hear is to always take the mortgage product with the lowest interest rate. As you may know, rates vary based on a wide range of factors. Taking the lowest rate might mean that you miss out on some favorable mortgage terms. It is best to trust your mortgage professional to provide you with some options here.

Don’t forget that, over time, you will be able to refinance your mortgage if rates move in a way that is advantageous for you. So you can feel safe in choosing the right mortgage now and adjust later.

#3: Always Borrow As Much As You Can

Another questionable piece of mortgage advice is to always borrow as much as you possibly can. Keep in mind that a mortgage is a loan and that you are required to pay it back. The amount you borrow should be in line with your needs and financial goals.

#4: Don’t Bother With A Pre-Approval

Finally, you may have heard it suggested that you can avoid the mortgage pre-approval process. While it is possible, this is not a good idea. Many home sellers will require proof of your pre-approval before they will commit to selling their home. If there are other buyers trying to bid on that home, they are more likely to win the bid if they can prove their finances are in order. When you are ready to buy, a pre-approval can help.

These are just a few of the many bad pieces of mortgage advice that you might hear in conversation or read online. When you are ready to discuss your mortgage options with the experts, give our professional team a call. We would be happy to share our insight and experience to help you choose the best mortgage.

What’s Ahead For Mortgage Rates This Week – November 20, 2017

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Last week’s economic news included remarks by Fed Chair Janet Yellen about the diversity of opinions in the Federal Open Market Committee, readings on inflation, and the National Association of Home Builders Housing Market Index. The Commerce Department issued reports on housing starts and building permits issued; Freddie Mac and the Commerce Department issued weekly readings on mortgage rates and new jobless claims.

Fed Chair Discusses Pros and Cons of Diverse Opinions Among Policymakers

During a panel presentation of global economic leaders, outgoing Fed Chair Janet Yellen discussed the pros and cons of having 19 members on the Federal Reserve’s Federal Open Market Committee, which is responsible for the Fed’s policymaking decisions.

Chair Yellen said that it was “challenging” in terms of expressing diverse member opinions into a pat statement of Fed policy. She noted that multiple opinions on any aspect of the Fed’s decisions could be confusing for the public. She also said that individual and varied opinions were essential in considering all aspects of the Fed’s policy decisions: “The most important strength is that we avoid ‘group-think,’ which is a real pitfall for policy committees.”

NAHB: Home Builder Confidence Hits Eight–Month High

The National Association of Home Builders reported its highest housing market index reading in eight months. The monthly survey of home builders consists of readings on builder confidence in present housing market conditions, market conditions within the next six months and the volume of buyer traffic in new housing developments. Any reading over 50 indicates that more builders are confident about housing market conditions.

November’s reading of 70 was two points higher than in October; analysts expected a one-point decline to 67. Concerns over tax reforms potentially impacting homeowner tax deductions for mortgage interest were expected to impact builder confidence, but NAHB did not mention tax reform in their summation of builder confidence readings for November.

Component readings used to comprise the HMI reading were mixed. Builder sentiment increased two points to 77 for current housing market conditions. Builder confidence in market conditions over the next six months dipped by one point to 77 and builder confidence in buyer traffic in new home developments rose two points to an index reading of 50.

Builders have repeatedly cited concerns about shortages of lots and labor as well as increasing costs for building materials. NAHB said in a statement that November’s Housing Market Index reading was a “strong indicator that the housing market continues to grow steadily.”

According to the Commerce Department, October housing starts rose to 1.29 million on a seasonally-adjusted annual basis; analysts expected 1.20 million starts based on September’s reading of 1.14 million starts. 5.30 percent of housing starts were single-family construction.

Builders also took out more building permits in October; 1.30 million permits were issued against 1.23 million permits issued in September. The increased volume of building permits was partially attributed to reconstruction after hurricanes in Florida and Texas, but in the Northeast, building permits rose by 42 percent. The Northeast region is the smallest reported, but warm weather was cited as boosting permits issued.

Builder sentiment has been strong all year and was propelled by healthy job markets and lower mortgage rates.

Mortgage Rates, New Jobless Claims Rise

Fixed mortgage rates rose last week with the average rate for an average 30-year fixed rate of 3.95 percent; the average 15-year mortgage rate rose seven basis points to an average of 3.31 percent. The average rate for a 5/1 adjustable rate mortgage dipped one basis point to 3.21 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 249,000 last week as compared to estimates of 235,000 new claims and the prior week’s reading of 239,000 new jobless claims. Jobs lost and a backlog of first-time claims due to recent hurricanes were cited as the primary cause for the rise in new jobless claims.

What‘s Ahead

This week’s scheduled economic news includes readings on previously-owned home sales, minutes from the Fed’s last Federal Open Market Committee meeting. Weekly readings on mortgage rates and new jobless claims are also scheduled.

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