Smart Ways To Create Equity Within Your Home

Home equity is the difference between what your home can sell for and what you owe on it. Generally, the longer you own your home, the more equity you build.

This is money you can use before you sell your home through a home equity loan. Just keep in mind that a home equity loan is secured with your home. If you can't make the payments, you can lose your home.

Use Your Home Equity In Smart Ways:

1. Remodel Your Home - If you've wanted to add on a family room or modernize your kitchen, consider using your home's equity to fund the project. Home improvements usually increase your home's marketability and value.
2. Make Needed Major Repairs - Your home's equity can be a funding source for major repairs like plumbing problems and re-roofs. Once again, this is an improvement for your home that will help keep its value up.
3. Buy Another Property - Real estate is still a safe investment. You can use your home equity to buy a second property when home values are down. When the market recovers, you can sell the investment property for a profit. This also works if you have to move out of town and are still trying to sell your home. If you can afford the payments, use your home's equity to purchase your new home until the current one sells.
4. Pay For Unexpected Medical Expenses Or Job Loss - You never know when a medical emergency or job loss will leave you in debt. A home equity loan can give you the money you need to get through this difficult time.

It's easy to build equity in your home when you find the right deal. Let me help you find your perfect home and negotiate a great price and terms for you. Contact your mortgage professional today.

What Are The Requirements To Sell A Home Using An FHA Loan?

Before an owner can market a property to buyers that want to use a FHA loan, he will want to familiarize himself with the FHA's standards. FHA won't insure loans on just any property.

While their standards aren't as stringent as they used to be, a home needs to be in relatively good condition to qualify for FHA financing.

Location And Lot

To qualify for FHA financing, the property has to be located on a road or easement that lets the owner freely enter and exit.

The access also has to be paved with a surface that will work all year a long dirt driveway that washes out in spring won't qualify.

The FHA also wants the lot to be safe and free of pollution, radiation and other hazards. For that matter, it also needs to provide adequate drainage to keep water away from the house.

Property Exterior

The FHA's requirements for making a loan start with the home's roof. To pass muster, the house must have a watertight roof with some future life left. In addition, if the roof has three or more layers of old shingles, they must all be torn off as part of the replacement process.

The property's exterior has to be free of chipped or damaged paint if the home has any risk of having lead paint. Its foundation should also be free of signs of exterior (and interior) damage. It also needs full exterior walls.

Property Interior

The property's interior also needs to be inspected. FHA standards require that the home's major systems be in good working order.

Bedrooms should have egress routes for fire safety and the attic and basement should be free of signs of water or mold damage.

The bottom line is that the FHA wants to make loans on homes that borrowers can occupy. This doesn't mean that a home has to be in perfect condition to be sold to an FHA mortgage-using borrower. It just needs to be a place that they can live.

What Is A Mortgage Pre-Approval?

When you are purchasing a home, your broker may recommend you obtain a mortgage pre-approval before you find the home of your dreams.

There are some benefits to being pre-approved before you find a home, but oftentimes, people confuse pre-qualifications with pre-approvals.

So the question many buyers have is what exactly is a mortgage pre-approval?

In a nutshell, it's when the lender provides you (the buyer) with a letter stating that your mortgage will be granted up to a specific dollar amount.

What Do I Need For Pre-Approval?

In order to obtain a pre-approval for your home purchase, you will have to provide your lender all of the same information you would need to show for qualifying for a mortgage.

This means providing tax returns, bank statements and other documents that prove your net worth, how much you have saved for your down payment and your current obligations.

What Conditions Are Attached To A Pre-Approval?

Generally speaking, a pre-approval does have some caveats attached to it. Typically, you can expect to see some of the following clauses in a pre-approval letter:

• Interest Rate Changes - a pre-approval is done based on current interest rates. When rates increase, your borrowing power may decrease.
• Property Passes Inspection - your lender will require the property you ultimately purchase to come in with a proper appraisal and meet all inspection requirements.
• Credit Check Requirements - regardless of whether it's been a week or six months since you were pre-approved, your lender will require a new credit report. Changes in your credit report could negate the pre-approval.
• Changes In Jobs/Assets - after a pre-approval is received, a change in your employment status or any assets may result in the pre-approval becoming worthless.

Getting pre-approved for a home mortgage may allow you more negotiation power with sellers and may help streamline the entire loan process.

It is important however to keep in mind there are still things that may have a negative impact on actually getting the loan.

It is important to make sure you keep in contact with the lender, especially if interest rates increase or your employment status changes after you are pre-approved.

What's Ahead For Mortgage Rates This Week - February 18, 2014

Last week's economic news was dominated by the first address by the new Fed chairperson, Janet Yellen.

Tuesday's news included the Jobs Openings report for December 2013, which matched November's reading of 4.0 million jobs available.

This information was taken from a gauge of competition for available jobs; in December, competition for job openings fell to its lowest level in five years.

Fed Chair Janet Yellen's First Address to House

Janet Yellen addressed the House Financial Services Committee for the first time on Tuesday as Chair of the Federal Reserve.

Ms. Yellen indicated that she expected "a great deal of continuity" in terms of Federal Open Market Committee (FOMC) monetary policy direction, and noted that markets should expect the FOMC to continue its support of low interest rates.

Chairman Yellen emphasized that the FOMC's current tapering of its quantitative easing program was expected to continue, but is not on a pre-determined course.

If economic conditions change, the Fed's monetary policy would be adjusted according to such developments.

Mortgage Rates Mixed According To Freddie Mac

According to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS), the average rate for a 30-year fixed rate mortgage rose to 4.28 percent from the prior week's 4.23 percent.

The average rate for 15-year fixed rate mortgage mortgages was unchanged at 3.33 percent. The average rate for a 5/1 adjustable rate mortgage dropped from 3.08 percent to 3.05 percent.

Discount points for each category were unchanged at 0.70 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

In other news, Weekly Jobless Claims were higher last week at 339,000 against a forecast of 330,000 new jobless claims and the prior week's reading of 331,000 new jobless claims.

Analysts cited bad weather and the possibility of slower economic growth as factors, but said that it was too soon to tell if economic growth is slowing down.

The University of Michigan's Consumer Sentiment Index beat expectations with a reading of 81.2 against expectations for a reading of 80.0. February's reading was unchanged from January.

What's Coming Up

This week's economic news includes the NAHB Home Builder's Housing Market Index on Tuesday. Wednesday's events include Housing Starts and the minutes from January's FOMC meeting.

In addition to Freddie Mac's PMMS, Thursday's scheduled reports include Weekly Jobless Claims, the Consumer Price Index (CPI) and Core CPI. Leading Economic Indicators (LEI) for January will also be released.

The National Association of REALTORS® will release data for existing home sales in January on Friday.

What To Consider When Buying A Fixer-Upper

In your imagination it seems like a great idea – you purchase an older run-down property and you have the chance to fix it up and turn it into the home of your dreams.

To Renovate, Or Not To Renovate

However, the renovation project that is simply a quick montage in your imagination will actually take several months or years and thousands of dollars in real life.

The concept of renovating a "fixer-upper" property is exciting, but the reality is a lot of work and investment. How can you make sure that you are making the right choice for you?

One of the main advantages of buying a fixer-upper property is that you will usually be able to get the property for a much cheaper price. But is it worth it for the amount of time and money you will need to invest in the property?

Here Are Some Questions You Should Be Asking Yourself When Making Your Decision:

• Do you (or your friends and family members) have the skills to be able to perform most of the renovations yourself? If you do the labor yourself, you will be able to save thousands of dollars that you would have spent hiring contractors, which will make the renovation a much more profitable project.
• Are you comfortable with the idea of living in a construction zone, perhaps for several months or more? There will be dust and noise everywhere and you might have to cope without a kitchen or a shower for a while.
• Make sure that you have a thorough inspection of the home performed so that you can see whether the home has a sturdy foundation, good wiring and plumbing, etc. If your inspection reveals any structural issues or water damage, you might be in for more than you bargained for. You need to start with a house that has "good bones".
• If the home has serious structural, plumbing or wiring problems you should stay away – these repairs are very expensive but "invisible", so you are unlikely to recoup your costs when you sell the home.
• Add up the estimated costs for renovating the property along with the cost of the home – does it still work out to be a better deal or would you be better off buying a new property.
• What is your strategy for financing the renovations? If your only option is putting it on the credit card, you might want to think twice because this is a very high interest option.

Buying a fixer-upper property can be a great investment and can give you the opportunity to transform a run-down old house into the property of your dreams. However, make sure you that you consider the choice carefully before making your decision.

For more information about home mortgage advice and how to get approved to buy a home, contact your trusted mortgage professional. 

What To Consider When Buying A Fixer-Upper

In your imagination it seems like a great idea – you purchase an older run-down property and you have the chance to fix it up and turn it into the home of your dreams.

To Renovate, Or Not To Renovate

However, the renovation project that is simply a quick montage in your imagination will actually take several months or years and thousands of dollars in real life.

The concept of renovating a "fixer-upper" property is exciting, but the reality is a lot of work and investment. How can you make sure that you are making the right choice for you?

One of the main advantages of buying a fixer-upper property is that you will usually be able to get the property for a much cheaper price. But is it worth it for the amount of time and money you will need to invest in the property?

Here Are Some Questions You Should Be Asking Yourself When Making Your Decision:

• Do you (or your friends and family members) have the skills to be able to perform most of the renovations yourself? If you do the labor yourself, you will be able to save thousands of dollars that you would have spent hiring contractors, which will make the renovation a much more profitable project.
• Are you comfortable with the idea of living in a construction zone, perhaps for several months or more? There will be dust and noise everywhere and you might have to cope without a kitchen or a shower for a while.
• Make sure that you have a thorough inspection of the home performed so that you can see whether the home has a sturdy foundation, good wiring and plumbing, etc. If your inspection reveals any structural issues or water damage, you might be in for more than you bargained for. You need to start with a house that has "good bones".
• If the home has serious structural, plumbing or wiring problems you should stay away – these repairs are very expensive but "invisible", so you are unlikely to recoup your costs when you sell the home.
• Add up the estimated costs for renovating the property along with the cost of the home – does it still work out to be a better deal or would you be better off buying a new property.
• What is your strategy for financing the renovations? If your only option is putting it on the credit card, you might want to think twice because this is a very high interest option.

Buying a fixer-upper property can be a great investment and can give you the opportunity to transform a run-down old house into the property of your dreams. However, make sure you that you consider the choice carefully before making your decision.

For more information about home mortgage advice and how to get approved to buy a home, contact your trusted mortgage professional. 

How A Mortgage Pre-Approval Can Help You Get A Better Deal On Your Home Purchase

Oftentimes, when you are searching for a new home, it may seem obtaining a pre-approval for your mortgage loan is a waste of time and energy. However, there are some significant benefits to a pre-approval which should not be overlooked.

In many cases, buyers can use a pre-approval for leverage when negotiating with sellers and may wind up buying a home for far less than what the listed price is.

Knowing Your Limitations

One significant benefit of a mortgage pre-approval is knowing exactly how much money you will be able to borrow. This means you will be looking at homes you know you can afford.

Whether you are working on your own or you've sought the assistance of a real estate broker, there will be no question in your mind how much money you can spend.

Approaching A Seller

When someone is attempting to sell a home, chances are they are either buying a new home or they are relocating. This means they may be facing certain time constraints which can be difficult when they list their home.

When sellers are faced with multiple offers, chances are the potential buyer who has a pre-approval will often be the offer that is accepted, even if it's slightly lower than other buyers.

Benefits For The Seller

It may seem the seller has nothing to gain if they are taking less money for their home simply because you have a pre-approval. However, this is typically not the case.

Keep in mind the usual process is the buyer makes an offer, they search for a loan and they may eventually get turned down for a mortgage. This means the seller has to start the process all over again; typically 30 to 60 days after they received the first offer.

A pre-approval can give you a great deal of negotiating power simply because your lender has already validated your credit information, your employment, debt and income.

This means when you begin negotiating with a seller, the time from signing a purchase and sale agreement to closing your loan is typically significantly shortened.