Navy Fellas Realty Group

Real Estate, Residential sales and purchase

The Pros and Cons of Mortgage Rate Locks

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The Pros and Cons of Mortgage Rate LocksIf you’re just jumping into the game of home purchasing, you are likely considering all of your loan options and may even have heard the term mortgage rate lock. For those who don’t like to gamble, a mortgage rate lock can offer a bit of reassurance, but there are also some downsides to this type of protection. Before signing off on this, here are the details on rate locks so you can make an informed decision.

What Is A Rate Lock?

For many people who are buying a home in such a tumultuous market, the idea of interest rates can make the heart race a little faster, but this is the purpose of rate locks which offer consistency in a market in flux.

Instead of having to deal with day-to-day fluctuations of the rate which increases or decreases what you owe a rate lock is a lender promise that you will be held to a specific rate or your rate will not rise above a certain number.

Easy Balancing Of The Budget

The easy thing about utilizing the rate lock, especially for a buyer who is less familiar with the market, is that it will enable you to instantly determine your monthly payments based on that rate. Instead of having to pay more per month, you’ll be able to estimate exactly what your payment will be and it won’t rise above the limit you’ve set for yourself. While daily fluctuations can be a drag, a mortgage lock takes the guesswork out of the day-to-day.

The Added Cost Of Security

It might seem like a rate lock is an option that everyone would utilize, given the stability, but lenders charge for this type of offer because of the risk factor. While lenders can certainly stand to gain if your rate lock is higher than the interest rates, in the event that they rise beyond this point, they will end up losing money. So, while a 30-day rate lock may not end up costing you, this type of lock stretched over a longer period may actually end up costing you more than fluctuating rates.

If you’re not familiar with the world of investing and interest rates, a mortgage rate lock can sound like a great idea; however, there are downsides to this offer and they’re worth considering before getting locked in. If you are currently on the hunt for a home, contact your local real estate professionals for more information.

Understanding ‘Disposable Income’ and How This Will Impact Your Mortgage Approval

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Understanding 'Disposable Income' and How This Will Impact Your Mortgage ApprovalThere are few things more exciting than finding your ideal home, but with the rising cost of housing, a person’s dream home can often come with a very high purchase price. If you’re wondering how much home you can truly afford and how your cost of living will fare for your mortgage approval, here are some of the details on what you can expect when it comes to finding a home at an affordable price.

What Is Your Debt-to-Income Ratio?

Before deciding if a home is right for you, it’s important to calculate what your debt-to-income (DTI) ratio is to determine how much house you can afford. The debt amount will include any credit cards, existing mortgages and other loan payments that you pay down each month. To determine your maximum monthly payment, multiply your gross income by 0.36 and divide it by 12. This will give you the expenditure of debt, including your housing payment, that you should not exceed each month.

Determining Your Down Payment

There’s a lot of talk around the ideal amount you should put forward for a down payment, but this percentage can directly impact the amount of the house you can afford. If you are able to put down 20% of the purchase price of your home, this means your monthly mortgage payments will be minimized and this will decrease your DTI ratio. While a home may be out of your reach if you can only put 10 or 15% down, 20% down will ensure a higher amount of disposable income on a monthly basis, making your application more feasible.

Determine Your Lifestyle

While a lender may not reject your application outright if your debt-to-income ratio is higher than suggested, it’s important to know what kind of spending choices make sense for you so that you can make your monthly payments. If you have limited expenses above your mortgage and enjoy a Spartan lifestyle, it’s entirely possible that you’ll be able to manage a higher monthly amount. However, if you don’t have stable employment and are struggling each month, it may be a good idea to consider a less expensive property.

The monthly mortgage payment for your dream home may look like it’s manageable on the surface, but if your DTI ratio exceeds what is suggested, there may be issues with acceptance of your application. If you’re currently in the market for a new home, contact your local real estate professionals for more information.

5 Mistakes That Will Instantly Turn a Home Buyer Away – and How to Avoid Making Them

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5 Mistakes That Will Instantly Turn a Home Buyer Away - and How to Avoid Making ThemIf you’re preparing to sell your home you’ve likely heard many tips and tricks to help close quickly, however few people will ever tell you what you’re doing wrong.

Don’t be your own roadblock to success! Avoid these common seller-mistakes to ensure that your home leaves a lasting impression on buyers, instead of sending them running for the hills.

1) Dirt: It’s A Don’t

Perhaps one of the biggest turn-offs in real estate, dirt gives the impression that your property is not well maintained. A dirty home is simply not aesthetically appealing and can often be the root cause of other turn-offs, such as bad odors. Keeping a clean, clutter-free home will show potential buyers that your property is a beautiful, healthy place where they can live comfortably without any foul surprises.

2) It’s Nothing Personal

While you may love looking at family photos, funky trinkets from travelling, or your colorful assortment of bath products, personal items such as these should be stored away during an open house. Showings are for buyers to see if they can see themselves living in your home, which is difficult to imagine when there are someone else’s belongings scattered throughout the house. If you’re serious about selling, pack away any items that send the message that this is your space.

3) Old News

Most often when people are looking for a new home they’re looking for just that: a NEW home! Having old, dated fixtures in your house tells prospective buyers that your property is stuck in the past, rather than prepared for the future. Make your property a place that anyone can move forward in.

4) Street Style

You may have spent so much time and effort making the inside of your home immaculate for a sale that you’ve completely forgotten that the outside is equally as important. Curb appeal is the very first impression that your home will have on buyers, and it’s essential that your property looks just as nice from the street as it does inside.

5) Snoopy Seller

You know your home better than anyone else, and you want to sell it to someone who genuinely cares about your property. While this statement may be true, it is counterproductive for you to participate in showings, pointing out all the great features of your home to interested buyers and grilling them on their intentions for when they purchase it. Give buyers space they need to see if your home is the right fit for them, and you’ll be selling it in no time.

Interested in receiving more advice on selling your home? Contact your trusted real estate professional today.

What’s Ahead For Mortgage Rates This Week – September 19, 2016

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Last week’s economic news included reports on retail sales, inflation, and weekly reports on mortgage rates and new jobless claims.

Retail Sales Slip as Consumer Prices Inch Up

Retail sales dipped into negative territory in August with a reading of -0.30 percent as compared to expectations of -0.10 percent and July’s reading of +0.10 percent. Retail sales excluding auto sales were better at +0.30 percent. Analysts expected a reading of +0.20 percent based on July’s reading of -0.40 percent. August’s negative reading for retail sales was the first negative report since March.

Inflation fared better than retail sales with August’s Consumer Price Index reading at 0.20 percent. Analysts expected a reading of 0.10 percent; July’s reading was flat. Core Consumer Price Index readings for August are less volatile, as the Core CPI does not include readings for food and energy costs. August’s Core CPI reading was 0.30 percent. A reading of 0.20 percent was expected; July’s reading was 0.10 percent. It appears that inflation is creeping upward, but remains well below the Fed’s target reading of 2.0 percent.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates across the board last week. The average rate for a 30-year fixed rate mortgage rose six basis points to 3.50 percent; the average rate for a 15-year fixed rate mortgage rose one basis point to 2.76 percent and the average rate for a 5/1 adjustable rate mortgage rose one basis point to an average of 2.82 percent. Average discount points were 0.50 for 30 and 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Low mortgage rates have helped home buyers, especially first-time and moderate income buyers, meet affordability challenges. Home prices have risen due to low numbers of available homes and high demand for homes. If mortgage rates continue to rise, fewer buyers will be able to qualify for mortgages and or afford asking prices for available homes.

Next week’s meeting of the Fed’s Federal Open Market Committee is expected to bring news of a Fed decision on raising the target federal funds rate. If the Fed raises its rate, consumer interest rates for mortgages, vehicles and other goods can be expected to increase as well.

What‘s Ahead

This week’s economic news includes the NAHB Housing Market Index, Commerce Department reports on housing starts and building permits issued and a Fed Statement at the conclusion of its Federal Open Market Committee meeting on Wednesday. Fed Chair Janet Yellen is also slated to give a press conference after the FOMC statement. The National Association of Realtors will also release a report on sales of previously owned homes.

Moving with Children? Here’s How to Quickly Assess Whether a Community Is Family Friendly

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Moving with Children? Here's How to Quickly Assess Whether a Community Is Family FriendlyIf you’re looking for a home that’s in a family-friendly neighborhood, there are a few key things you can look for to make sure your new house is a good fit for both you and your children.

Quality Public or Private Schools

Are there good public schools nearby? If so, do they span from kindergarten all the way to high school? Finding a home in an area with a great elementary school can be a good fit for several years, but if you’re looking for a home that will be convenient in the long-term it’s important to consider your proximity to both primary and secondary schools.

Parks And Other Relaxing Green Spaces

If you’re looking for a family-friendly neighborhood with free sources of entertainment, make sure that there is at least one park or playground nearby. Playgrounds can provide endless amusement for younger children, whereas a park can offer entertainment for kids of any age. Either way, have a park in the area will help boost the quality of your family’s leisure time.

Recreation Facilities And Other Amenities

For even more great leisure opportunities, check out the local recreational facilities. Public swimming pools, community centers, and recreation centers often offer a wide variety extracurricular activities and programs. These can be a great support when it comes to supplementing what your kids’ education with skills that are learned outside of school, and can encourage a healthy lifestyle as well.

Shopping & Services

If you’re looking for a convenient lifestyle, perhaps one of the most important factors to consider is what stores and businesses are located nearby. Is there a grocery store, doctor’s office, cafe, drug store, gas station, or other essential businesses nearby? Make your life easy! If there are stores nearby that meet your needs it will help boost your neighborhood satisfaction for years to come.

A Short (Or At Least Tolerable) Commute

If you commute to work, it is also valuable to consider how long of a drive it is between your place of employment and potential new home. The less time you have to spend on the road, the more time you’ll have with your family.

Neighbors You Will Enjoy Associating With

Finally, it is important to consider who else lives in the area. Is the neighborhood you’re looking at full of other young families? Are there other children for your kids to play with? Does it seem like a close-knit community?

Although you can’t predict how relationships will blossom in a new home, you’ll set yourself up for success if there are people with similar interests and lifestyles as you. If the people seem great, chances are the neighborhood is, too!

Ready to find the perfect home to raise your family in? Contact your trusted real estate professional today.

Selling Your Home This Autumn? Try Boosting Your Curb Appeal with These Inexpensive Upgrades

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Selling Your Home This Autumn? Try Boosting Your Curb Appeal with These Inexpensive UpgradesCurb appeal is the first impression that your home will have on potential buyers, so it’s important to make it a good one. Try these simple budget upgrades to give your home the “WOW” factor that buyers are looking for!

Crystal Clean

As simple as it sounds, it is extremely important to make sure that your house is nice and clean on the outside. This is overlooked by sellers more than you’d think as they become so focused on perfecting the inside of their home that they forget about the exterior!

Dirt streaks running down stucco or siding give the impression that your home isn’t well kept, and smudges on windows will prevent them from sparkling in the sun. Remember: you want your home to be their dream home. Spruce up the outside to impress buyers before they even set foot in the door.

Knock Knock

Another important design feature of your outer home is the front door as it is one of the only features of the exterior that buyers will be forced to look at up-close. A new door will not only look great from the curb, the details of its quality will inevitably be seen by anyone who enters the home. Make sure your door is in tip top shape before you start your showings!

Raise The Roof!

If your roof isn’t in good condition;or looks like it isn’t in good condition, then upgrading it is an absolute must. Most buyers are quickly turned off when they see a roof that’s in poor condition because it can be an expensive fix. It’s important that when buyers first see your home they don’t see more dollar signs than they expected.

Fantastic Furniture

Patio furniture is an easy and inexpensive way to differentiate your home from the rest! Add a pop of color to a neutral-colored house by placing vibrant chairs and planters on the front porch as featured pieces, or add a cute table and chairs to your lawn to show how useful the space can be.

That being said, be careful not to overdo it, as too much patio furniture or potted plants may give the illusion that your home is cluttered, which is a major no-no in the real estate world.

Need more advice on how to better prepare your home for a sale? Contact your local trusted real estate professional today.

Growing Your Wealth: 3 Reasons Why Real Estate Is the Ultimate Long-Term Investment

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Growing Your Wealth: 3 Reasons Why Real Estate Is the Ultimate Long-Term InvestmentWhile many people may be hesitant to consider real estate as a viable long-term investment, owning property has a steady historical track record and isn’t as volatile as other investment markets can be.

Any investor who hasn’t seriously considered it as an option should take a closer look at the benefits of owning real estate and why it is the ultimate long-term investment strategy.

It Becomes A Consistent Source Of Income

Investing in rental property has the added benefit of being able to show regular returns in the form of rental income. Unlike other long-term investments that require a level of patience in order to profit, real estate can provide a large sum return in the future while still providing financial benefits on a monthly basis.

An Investment That Anybody Can Participate In

Many forms of investment require a level of skill or familiarity in order for first timers to jump straight into it with any level of confidence. Real estate is one investment that anybody can enjoy, thanks in part to the insight that can be gained from family and friends who have gone through the same process.

The level of knowledge that’s required to invest can be gained with some simple investigating to learn more about local areas that have increased in value and the kinds of homes that are popular. A real estate professional can take that information and add to it, providing invaluable expertise to the process.

Consider It To Be A Guaranteed Retirement Plan

Saving for retirement has become harder to commit to as each year goes by. Money being left in a savings account or an easy to sell investment can be dipped into at any point, leaving very little when retirement starts to roll around.

Using property as a long-term retirement plan requires a level of commitment to the investment and upkeep to the property that guarantees there will be something tangible to bank on later in life.

While investing in real estate may seem simple, especially when compared to other investment markets, it’s still recommended to consult with a professional before making any decisions. A local real estate professional will have a level of knowledge about which areas will be the wisest to invest in depending on how long in the future you are looking to sell. If you are interested, contact a local real estate professional in your area today for more information.

Feeling the Squeeze of Rising Rents? Here Are 3 Reasons You Should Consider Buying a Starter Home

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Feeling the Squeeze of Rising Rents? Here Are 3 Reasons You Should Consider Buying a Starter HomeWith real estate becoming more affordable, new homes being sold in a range of prices and the cost of rent going up, there has never been a better time to consider buying a starter home.

Put That Rent Money Into Your Own Property

People who live in areas that have become trendy know the pain of rising rent rates. At what point is the amount of money being spent on rent more advantageous to put into a new home?

Starter homes are not the crazy investment they used to be. With the increase in condo developments and the lower entry price for smaller homes, it’s never been easier and less expensive to put a down payment on a new home and put that rent money into a place that you actually have a financial stake in.

A Starter Home Is Not A Fixer Upper

There was a point in time when starter homes were considered to be houses that required a lot of work to renovate them to a point where they could be sold for a profit. This was before really affordable condo developments started to spring up in every city and began to provide younger people the opportunity to own a home.

Some people still think of a starter home as a fixer upper, an old house that will require a substantial investment and time, something that most first-time home owners do not have an abundance of. In today’s market, starter homes can be brand new and will be in the best condition imaginable.

It Can Act As A Source Of Income

Some homeowners find that when it’s time to finally make the move from their starter home into their forever home, they no longer need to sell. In some cases they prefer to hold onto it and use it as a rental property to bring in a second source of income to help with the new house.

This is more common with condos in neighborhoods that have experienced tremendous growth around them in the years after the purchase. When the price of rent skyrockets in these areas, the investment actually has more value as a rental property until the time is right to sell.

There are many reasons to invest in a starter home and the area you want to buy will change depending on your own reasons. Contact your local real estate agent so you can pinpoint what you want out of a starter home and receive some valuable insight into the kinds of homes you should be considering.

What’s Ahead For Mortgage Rates This Week – September 12, 2016

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Few economic reports were released last week due to the Labor Day Holiday. The Federal Reserve released its Beige Book Report, which documents anecdotes shared with the Fed by its regional business contacts. A job openings report, weekly jobless claims and Freddie Mac’s survey of mortgage rates was also released.

Fed’s Beige Book: Approaching Election Dampens Business Growth

According to the Federal Reserve’s survey of business contacts within its 12 districts, November’s election is causing business owners to take a “wait and see” position regarding expansion plans. Commercial real estate contacts in several Fed districts cited modest projections for sales and construction for the second half of 2016. The Bank of Canada supported Fed contacts’ view of modest growth; it characterized U.S. business growth as “less certain.”

Analysts review the Beige Book report for indications of how the Fed may adjust its monetary policy including whether or not to raise the target federal funds rate. The Beige Book report did not reveal any compelling evidence for the Fed to raise rates before year-end, but Fed Chair Janet Yellen said in a recent statement that economic conditions were strengthening and favored a rate hike before year-end.

November’s election will likely delay any rate hike until December. Fed policymakers have repeatedly said that a combination of economic trends, current readings and news reports contribute to decisions relating to interest rates and other monetary policy issues.

Job Openings Rise, New Jobless Claims Drop

July job openings rose from June’s reading of 5.60 million openings to 5.90 million openings to hit an all-time high.  New jobless claims fell from 263,000 new claims to 259,000 new claims. The Labor Department also reported that hires increased from 5.17 million to 5.23 million in June. These readings are further indications of strengthening job markets and general economic growth.

Mortgage Rates Lower

Freddie Mac reported lower average mortgage rates last week; the average rate for a 30-year mortgage was two basis points lower at 3.44 percent; the average rate for a 15-year fixed rate mortgage was one basis point lower at 2.76 percent. The average rate for a 5/1 adjustable rate mortgage was two basis points lower at 2.81 percent. Discount points averaged 0.60, 0.50 and 0.40 percent respectively.

What’s Ahead

Next week’s scheduled economic reports include readings on retail sales, national inflation and consumer sentiment.

Can You Use a Reverse Mortgage to Buy Your Next Home? Yes, and Here’s How

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Can You Use a Reverse Mortgage to Buy Your Next Home? Yes, and Here's HowMost people who have been on the market for a home are familiar with what the term ‘mortgage’ means, but many have not heard of a reverse mortgage and aren’t aware of how this product can benefit them. If you’re nearing retirement and are contemplating a new home or even relocation to another community, here are the details on a reverse mortgage and how this option may benefit you.

What Is A Reverse Mortgage?

While many homeowners may not have the net worth to be able to buy another home without selling their current one, a reverse mortgage enables the buyer to borrow money against the value of their home. Created in 2009 as the Home Equity Conversion Mortgage for Purchase (HECM), this type of mortgage can enable those older than 62 to relocate to a new house or move closer to their family without having to sacrifice the money they’ve saved or their fixed monthly income.

What Are The Requirements?

Beyond the minimum age requirement of 62 years of age, those who would like to utilize a reverse mortgage must either own the current property they are living in or have a high amount of equity in the property. They must be able to pay all of the costs associated with ownership of the home and the property they are purchasing must be able to pass the standards held by the Federal House Administration (FHA). In addition, applicants will have to go through a financial assessment to ensure they can make insurance and property tax payments.

The Benefits And Drawbacks Of Reverse Mortgages

A reverse mortgage can be a great benefit in that it enables those who are in their senior years to purchase a new home without having to utilize a portion of their fixed monthly income. However, because a reverse mortgage includes this benefit, it also comes in tandem with a higher loan balance and this higher balance means that interest will accrue more quickly. Dependent on this amount, this can actually diminish the equity in the home.

While the opportunity for a reverse mortgage has been around for a number of years, this alternative for purchasing a home has not been utilized by many homeowners since its inception in 2009. If you’re approaching your senior years and are considering the benefits of purchasing a new home, you may want to contact your local real estate professional for more information.