Navy Fellas Realty Group

Real Estate, Residential sales and purchase

How the Purchase and Refinance Mortgage Process Works

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How the Purchase and Refinance Mortgage Process WorksThe purchase and refinance mortgage processes are similar in many ways, but there are also some important differences. Here is a general overview of how each process typically works:

Purchase Mortgage Process

Determine your budget: Before you start shopping for a home, you need to figure out how much you can afford to spend. You can do this by calculating your monthly income, expenses, and debt, and getting pre-approved for a mortgage.

Find a property: Once you know your budget, you can start looking for homes that fit your criteria, whether that’s size, location, or other factors.

Make an offer: When you find a property you like, you can make an offer to buy it. This offer will include the price you’re willing to pay and any contingencies, such as inspections or financing.

Get a mortgage: If your offer is accepted, you’ll need to apply for a mortgage loan to pay for the property. You’ll need to provide documentation about your income, assets, and credit history.

Close the loan: Once your mortgage is approved, you’ll need to attend a closing to finalize the sale. This involves signing a lot of paperwork and paying closing costs, such as appraisal fees and title insurance.

Refinance Mortgage Process

Determine your goals: Before you start the refinance process, you need to determine why you want to refinance. Some common reasons include lowering your monthly payments, shortening your loan term, or cashing out equity.

Gather documentation: To refinance, you’ll need to provide documentation about your income, assets, and credit history, just like you did when you applied for your original mortgage.

Choose a lender: Once you have your documentation in order, you can start shopping around for a lender who offers the type of refinance you want, such as a rate-and-term refinance or a cash-out refinance.

Apply for the loan: After you choose a lender, you’ll need to submit a loan application and provide documentation to support your refinance goals.

Close the loan: Once your refinance is approved, you’ll need to attend a closing to finalize the loan. This involves signing paperwork and paying closing costs, such as appraisal fees and title insurance.

The purchase and refinance mortgage processes involve similar steps, but the specifics can vary depending on your situation and the type of loan you’re applying for. It’s important to work with a trusted lender who can guide you through the process and help you make informed decisions about your mortgage.

What are the Differences Between Purchasing and Refinancing a Home

While purchasing a home and refinancing a home both involve obtaining a mortgage, there are several key differences between the two processes. The primary goal of purchasing a home is to buy a property to live in or as an investment. The primary goal of refinancing a home is to replace an existing mortgage with a new one that offers more favorable terms.

The purchase process involves finding a property, making an offer, and going through the home buying process. Refinancing involves working with an existing mortgage lender or a new lender to replace an existing mortgage with a new one.

The timing of a home purchase is largely determined by the real estate market and the availability of properties that meet the buyer’s criteria. The timing of a refinance is largely determined by the borrower’s financial goals and the current interest rate environment.

Ultimately, the best decision for you will depend on your individual financial situation and goals. It is recommended to reach out to a real estate agent or mortgage originator who can provide personalized advice and guidance based on your specific needs and circumstances.

Improve Your Curb Appeal With Low Maintenance Landscaping

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Improve Your Curb Appeal With Low Maintenance LandscapingLow maintenance landscaping can be a great way to improve your home’s curb appeal without having to spend a lot of time and money on upkeep. Here are some ideas for low maintenance landscaping:

Plant native species: Native plants are adapted to the local climate and require less water and maintenance than non-native plants.

Use mulch: Mulch helps to retain moisture in the soil and suppresses weed growth. Plus, it looks neat and tidy.

Decorative Concrete: Decorative concrete is a type of concrete that has been designed to enhance the appearance of surfaces such as floors, walls, and countertops. It is achieved through the use of various techniques and materials to add texture, color, and pattern to the concrete.

Install hardscaping: Hardscaping elements like stone paths, pavers, and retaining walls require little to no maintenance and can add visual interest to your landscape.

Artificial Turf: Artificial turf, also known as synthetic grass, is a type of surface that is designed to look and feel like natural grass. It is made from synthetic fibers, typically polypropylene, nylon, or polyethylene, that are woven or tufted onto a backing material. Artificial turf has become increasingly popular in recent years due to its low maintenance requirements and ability to maintain a green appearance year-round, even in areas with extreme weather conditions.

Use containers: Container gardening is a great way to add color and interest to your landscape without the hassle of maintaining a large garden. Plus, you can easily move containers around to change the look of your landscape.

Group plants with similar watering needs together: This will make it easier to water your plants efficiently and prevent overwatering or underwatering.

Incorporate landscape fabric: Landscape fabric can help to suppress weed growth and reduce the need for manual weeding.

Remember, the key to low maintenance landscaping is to choose plants and features that require minimal upkeep and to design your landscape in a way that is easy to maintain. By doing so, you can create a beautiful, low maintenance landscape that will enhance your home’s curb appeal for years to come.

 

Will Buying A New Car Impact The Ability To Buy A New Home?

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Will Buying A New Car Impact The Ability To Buy A New Home?Making major life decisions often involves a delicate balancing act. Among the most significant choices individuals face are buying a new car and purchasing a new home. Both ventures represent milestones in one’s life, bringing excitement and anticipation. However, there is a complex interplay between these two financial endeavors that can significantly impact a person’s ability to achieve their dream of owning a new home.  Here are some factors to consider:

Debt-to-income ratio: When you apply for a home loan, your lender will consider your debt-to-income ratio (DTI) to determine whether you qualify for a mortgage. Your DTI is the amount of debt you have compared to your income. High DTI ratios are a red flag for lenders as it indicates a greater risk of defaulting on the mortgage. Therefore, potential homeowners should carefully assess the impact of adding a car loan to their financial portfolio. If you take on a new car loan, it will increase your debt load and could make it more difficult to qualify for a mortgage.

Down payment: A new car loan will require a down payment, which means you’ll have less money available for a down payment on a new home. Lenders generally prefer borrowers to have a sizeable down payment as it demonstrates financial responsibility and lowers the loan-to-value (LTV) ratio, which affects the terms and interest rates of the mortgage. By prioritizing a home purchase over a new car, potential homeowners can better secure their financial position and increase their down payment amount.

Credit score: Taking out a new car loan can impact your credit score, which is an important factor in getting approved for a mortgage. If you have a high credit score, you’ll likely qualify for better interest rates and terms on a mortgage. However, if your credit score drops due to the new car loan, it could make it more difficult to qualify for a mortgage or result in a higher interest rate. Opting to purchase a new home before buying a new car allows borrowers to present a more robust credit profile, potentially resulting in a more favorable mortgage deal.

Overall, it’s important to consider how taking on a new car loan will impact your finances and your ability to buy a new home, and also important to make sure that the cost of the new car fits within your budget. If you’re already stretching your finances to make car payments, it may be more difficult to save for a down payment on a new home or make mortgage payments. It’s always a good idea to speak with a financial advisor or mortgage lender to understand how your financial decisions will impact your ability to achieve your goals.

Disputing Your Property Tax Assessment Can Save You Money

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Disputing Your Property Tax Assessment Can Save You MoneyProperty taxes can be a substantial financial burden for homeowners and property owners. Each year, local governments assess the value of properties to determine the amount of property tax owed. However, these assessments are not always accurate and can result in higher tax bills than necessary. Disputing your property tax assessment is a proactive way to potentially save money and ensure you’re paying a fair and equitable amount.

Reasons for Flawed Assessments:

Property tax assessments are not immune to errors and discrepancies. Several reasons can lead to an inaccurate evaluation of your property:

  1. Market Value Misjudgment: Assessors may rely on outdated or incorrect data, leading to the misjudgment of your property’s market value.
  2. Assessment Methodology: The methodology used to calculate property values might not consider all relevant factors, such as recent improvements or neighborhood changes.
  3. Comparable Properties: Assessors may use inappropriate comparables that lead to an inflated assessment that does not accurately reflect your property’s true value.
  4. Data Entry Errors: Mistakes can occur during the data entry process, resulting in incorrect information being used to determine your property’s value.

Steps to Dispute Your Property Tax Assessment:

If you believe your property tax assessment is flawed, follow these steps to initiate the dispute process:

  1. Review Your Assessment: Obtain a copy of your property tax assessment and thoroughly review it for any inaccuracies or discrepancies.
  2. Collect Evidence: Gather evidence to support your claim, such as recent property appraisals, photographs, or documentation of any property-related issues.
  3. Contact the Assessor’s Office: Reach out to the local assessor’s office to inquire about their specific procedures for filing a property tax appeal.
  4. File an Appeal: Submit a formal appeal with all the supporting evidence to the relevant authorities within the designated timeframe.
  5. Attend the Hearing: If a hearing is scheduled, be prepared to present your case and provide evidence to support your claim.
  6. Consider Mediation: Some jurisdictions offer mediation as an option to resolve assessment disputes. Mediation can be a less adversarial approach to reach an agreement.
  7. Consult with Professionals: If necessary, seek advice from real estate professionals, appraisers, or tax consultants to strengthen your case.

Disputing your property tax assessment is a proactive way to ensure you’re paying a fair amount of property tax and not overpaying due to inaccuracies or flawed evaluations. By taking the time to review your assessment, gather evidence, and follow the appropriate procedures, you can potentially save a considerable amount of money and promote fairness within the local tax system. 

What do Appraisers Consider When Valuing a House?

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What do Appraisers Consider When Valuing a House?Appraisers consider several factors when valuing a house to determine its fair market value. The goal of the appraisal is to provide an unbiased and accurate assessment of the property’s worth.

Here are the key factors appraisers consider:

Location: The location of the property is one of the most critical factors in determining its value. Proximity to amenities such as schools, shopping centers, parks, public transportation, and the overall desirability of the neighborhood can significantly influence the value.

Size and layout: The square footage and layout of the house play a crucial role in its valuation. Larger houses generally have higher values, but the layout and functionality of the space also matter.

Condition: The overall condition of the property, including both the interior and exterior, is essential. Appraisers look for signs of wear and tear, structural issues, and the general maintenance level of the house.

Upgrades and renovations: Recent upgrades and renovations can positively impact the value of a house. Appraisers take into consideration improvements such as kitchen upgrades, bathroom remodels, flooring changes, or any other updates that enhance the property’s appeal and functionality.

Comparable sales (comps): Appraisers use comparable sales data from recently sold properties in the same or similar neighborhoods to establish a benchmark for the subject property’s value. They compare factors like size, age, condition, and location to determine the market value.

Market trends: Appraisers consider the current real estate market conditions. If it’s a seller’s market with high demand and limited supply, the property’s value may be higher, and vice versa.

Age and condition of the property: The age of the house and its overall condition, including the age and condition of the roof, HVAC systems, and major appliances, will be assessed. Newer and well-maintained properties tend to have higher values.

Lot size and landscaping: The size and quality of the lot, as well as the landscaping and curb appeal, can influence the property’s value.

Views and natural features: Properties with attractive views or access to natural features like waterfronts, mountains, or green spaces may have higher values.

Environmental factors: Appraisers also consider any environmental issues or hazards that might affect the property’s value, such as proximity to industrial sites, flood zones, or other potential risks.

It’s important to note that the appraisal process may vary slightly depending on the specific regulations and guidelines in a particular region or country. Appraisers must remain objective and follow professional standards to provide an accurate and impartial valuation of the property.

What’s Ahead For Mortgage Rates This Week – August 14, 2023

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What's Ahead For Mortgage Rates This Week - August 14, 2023Last week’s economic reporting included readings on inflation, consumer sentiment, and weekly readings on mortgage rates and jobless claims.

Inflation Rate Holds Steady in July

Month-to-month inflation rose at a pace of 0.20 percent in July and met analysts’ expectations. There was no change in the pace of month-to-month inflation from June’s reading of 0.20 percent growth. The Consumer Price Index also reported that year-over-year inflation reached 9.10 percent, which was the highest reading since reaching a 40-year high in mid-2022.

Core inflation, which excludes volatile food and fuel prices, was unchanged from June’s month-to-month pace of 0.20 percent growth. July’s month-to-month reading matched analysts’ expectations. Year-over-year core inflation dipped slightly to 4.70 percent in July as compared to June’s reading of 4.80 percent year-over-year inflation.

Federal Reserve leaders said that they would continue monitoring domestic and global economic developments along with financial and economic data before determining whether or not to raise the Fed’s key interest rate range.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher mortgage rates for the third consecutive week. The average rate for a 30-year fixed-rate mortgage approached seven percent and rose by six basis points to 6.96 percent. Rates for 15-year fixed-rate mortgages rose by nine basis points to 6.34 percent.

248,000 initial jobless claims were filed last week, which surpassed expectations of 231,000 new claims filed and the previous week’s reading of 227,000 first-tine jobless claims filed.

University of Michigan Consumer Sentiment Survey

In other news, the University of Michigan released its monthly preliminary reading on U.S. consumer sentiment.

Consumer sentiment rose to an index reading of 72.0 in August as compared to the July reading of 71.6.  The majority of.consumers surveyed indicated that the economy improved in the three months leading up to the survey., Component readings included consumer sentiment index readings for current economic conditions and economic conditions within the next six months. The survey reading for consumer sentiment about economic conditions over the next six months fell to an index reading of  67.3 from the July reading of 68.3 Readings over 50 indicate that most consumers are confident about current economic conditions.

Joanne Hsu, the University of Michigan’s director of consumer surveys, said: “…In general, consumers perceived few differences in the economic environment from last month, but they saw substantial improvement relative to just three months ago.”

What’s Ahead

This week’s scheduled economic reporting includes reading on housing starts and building permits issued, the minutes of the Federal Reserve’s recent meeting of its Federal Open Market Committee, and weekly readings on mortgage rates and jobless claims. 

Will Pre-Approval for a Mortgage Hurt My Credit Score?

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Will Pre-Approval for a Mortgage Hurt My Credit Score?Obtaining a pre-approval for a mortgage is an important step when you’re planning to buy a home. It gives you an idea of how much you can afford, helps streamline the home-buying process, and strengthens your position as a serious buyer. However, many people worry that the pre-approval process might negatively impact their credit score. In this blog post, we’ll dive into the details to determine whether or not a pre-approval for a mortgage will hurt your credit.

Understanding Credit Inquiries

To understand how pre-approval affects your credit, we need to discuss credit inquiries. When you apply for credit, such as a loan or credit card, the lender typically pulls your credit report to assess your creditworthiness. These inquiries are categorized as either “hard” or “soft.”

Hard Inquiries: A hard inquiry occurs when you apply for credit, and it can impact your credit score. These inquiries are visible to other lenders and may suggest that you’re actively seeking credit.

Soft Inquiries: A soft inquiry, on the other hand, doesn’t affect your credit score. These inquiries occur when you check your own credit report or when a lender pre-approves you without your explicit consent.

Pre-Approval and Credit Inquiries

When it comes to mortgage pre-approvals, most lenders perform a hard inquiry to assess your creditworthiness accurately. While this hard inquiry might have a temporary impact on your credit score, the impact is typically minimal. Generally, a single hard inquiry will only result in a small dip in your score, typically around five points or less. The credit bureaus understand that consumers may shop around for the best mortgage terms and account for this in their scoring models.

The Logic Behind Credit Scoring

Credit scoring models are designed to account for consumer behavior related to loans and credit applications. They recognize that it’s normal for individuals to shop around for the best rates and terms when seeking a mortgage. To encourage this behavior, credit scoring models treat multiple mortgage inquiries made within a certain time frame (usually 30 days) as a single inquiry. This means that even if you get pre-approved by multiple lenders within that timeframe, it will be considered a single inquiry when calculating your credit score.

While a pre-approval for a mortgage may result in a temporary dip in your credit score due to the hard inquiry, it’s generally a small and short-lived effect. The benefits of obtaining a pre-approval, such as understanding your budget and strengthening your position as a buyer, far outweigh any minor impact on your credit score.

To minimize any potential negative impact on your credit score during the mortgage pre-approval process, consider the following tips:

Do your research: Before applying for a pre-approval, research lenders and their qualification criteria. Focus on a select few lenders who are likely to meet your needs to minimize the number of credit inquiries.

Time your applications: If possible, try to complete all your mortgage pre-approval applications within a short time frame, such as 30 days. This way, the credit bureaus will consider them as a single inquiry.

Monitor your credit: Regularly monitor your credit report to ensure accuracy and identify any potential issues. You can obtain one free credit report per year from each of the three major credit bureaus.

In most cases, the impact of a mortgage pre-approval on your credit score is minimal and short-lived. While the initial hard inquiry may result in a small dip in your score, credit scoring models are designed to account for shopping around for the best mortgage terms. The long-term benefits of obtaining a pre-approval far outweigh any minor impact on

Avoiding Becoming House Poor: A Path to Financial Security and Balance

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Avoiding Becoming House Poor: A Path to Financial Security and BalanceAs the housing market continues to evolve, it becomes increasingly crucial for aspiring homeowners to tread carefully and avoid falling into the trap of being house poor. The dream of owning a home should not come at the expense of financial stability and overall well-being. Here are some essential tips to steer clear of this precarious situation:

Setting a Sensible Budget:

Before even considering purchasing a house, it’s imperative to create a comprehensive budget that includes all your income, expenses, and financial goals. Be honest with yourself about what you can afford, considering not only the mortgage but also property taxes, insurance, utilities, and maintenance.

Prioritizing Emergency Savings:

Building a robust emergency fund should be a top priority. Life is unpredictable, and unexpected expenses can arise at any moment. Having a safety net of three to six months’ worth of living expenses can prevent you from becoming overwhelmed by financial burdens if an unforeseen situation occurs.

Saving for a Substantial Down Payment:

While it may be tempting to put down a smaller down payment to secure a house quickly, it’s wiser to save for a more substantial down payment. A larger down payment means borrowing less money and having lower mortgage payments, which can significantly reduce the risk of being house poor.

Consider All Costs:

Beyond the mortgage, homeownership involves additional expenses such as property taxes, insurance, utilities, and maintenance. Renters must consider renter’s insurance, utilities, and other costs.

Maintaining a Healthy Debt-to-Income Ratio:

Lenders often look at your debt-to-income ratio when considering your eligibility for a mortgage. Aim to keep this ratio as low as possible by paying off existing debts before taking on a mortgage.

Living Below Your Means:

It’s crucial to resist the temptation of purchasing the most expensive house you can qualify for. Instead, opt for a more affordable home that aligns with your budget and long-term financial objectives.

Anticipate Future Expenses:

Plan for the future and anticipate upcoming financial commitments such as career changes, education costs, and family planning. Being prepared for these events will ensure that your housing costs remain manageable even as your life circumstances change.

Shop Around for Mortgages or Rent:

If you’re in the market for a new home, don’t settle for the first mortgage offer you receive. Shop around and compare rates and terms from different lenders to secure the most favorable deal.

Avoid Making Big Financial Decisions:

Focus on stabilizing your housing situation first before taking on additional financial responsibilities.

Seek Professional Guidance:

If you’re uncertain about the process or worried about becoming house poor, consider seeking advice from a financial advisor or a reputable real estate professional..

Achieving the goal of homeownership or finding a suitable rental property should not come at the cost of your financial security and overall happiness. Remember, it’s not just about the house you live in; it’s about building a fulfilling life within your means.

Most Renters Are Paying Far More Than Their Landlord’s Mortgage

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Most Renters Are Paying Far More Than Their Landlord's MortgageIt is not uncommon for renters to pay more in rent than their landlord’s mortgage payment. This is because landlords are typically looking to make a profit on their rental properties, and they will often set their rent prices based on market rates rather than the cost of their mortgage.

There are several reasons why renters often pay more than a mortgage payment:

Renters are not building equity: When you make a mortgage payment, you are building equity in your home. Equity is the value of your home that you actually own. As you pay down your mortgage, you own more and more of your home. Renters, on the other hand, are not building equity in their homes. They are simply paying for the use of the property.

Renters don’t get tax benefits: Homeowners can deduct their mortgage interest and property taxes from their income taxes, which can save them a significant amount of money. Renters, on the other hand, do not get these tax benefits.

Landlords have to cover maintenance costs: When you rent a property, the landlord is responsible for maintenance and repairs. This includes everything from fixing a leaky faucet to replacing a roof. These costs are factored into the rent payment, so renters end up paying for these expenses indirectly.

Supply and demand: Depending on the area and the rental market, there may be more demand for rental properties than there is supply. This can drive up rental prices, making them higher than mortgage payments.

Location: In some areas, it may simply be more expensive to rent than it is to buy a home. This can be due to a variety of factors, such as high demand, limited supply, or a desirable location.

Overall, there are many factors that can contribute to renters paying more than a mortgage payment. It’s important to note that while renters may feel like they are paying more than their landlord’s mortgage, they are also benefiting from the convenience and flexibility of renting. Renters typically do not have to worry about property maintenance or repair costs, and they have the ability to move more easily than homeowners. Renting can still be a good choice for some people, depending on their financial situation and lifestyle.