The Three Essential Habits That Successful Home Buyers Must Embrace

Whether you are preparing to purchase your first home or it has been many years since you last walked through the home buying process, you may be starting to feel overwhelmed at the thought of all of the work that lies in front of you. From concerns about finding the right home to the physical act of relocating all of your belongings after the closing, there is certainly a lot to think about.

While each home buying transaction is unique, the most successful home buyers have typically adopted a few behaviors. You may keep these in mind to help you navigate through the process with success.

Keep An Eye On Your Budget

Financial stress when buying a home is common. You may have saved for years to afford your down payment, but there are various expenses that some may have not calculated or planned for.

It is important to leave extra funds available for unexpected expenses, such as paying for the appraisal up-front on the home you have fallen in love with. Likewise, keep a close eye on your budget so that you are aware of your financial situation at all times.

An important strategy to stay on budget is to sit down with your trusted mortgage expert to determine what you can afford before you go look at homes. This may save you from falling in love with a property that is well outside your budget.

Be Available And Flexible

It is imperative that you remain available and flexible as much as possible. Your real estate agent may call you at the last minute with a great new listing that has come on the market, and you may need to be flexible with your schedule to see this property before other buyers do. In addition, you may need to be flexible and accommodating with regards to contract negotiations, working with title company requests and more.

Seek Advice And Knowledge

Buying a home does not have to be stressful, but it also is not something that you do every day. There is a lot for even an experienced home buyer to learn, and you should be prepared to seek advice and to educate yourself along the way. Ask questions as necessary, and use the Internet for additional research.

Home buying is a process, and you may consider taking one day at a time as you proceed through the journey to reach your ultimate goal. A skilled real estate agent parnered with a trusted mortgage advisor can both guide you through the process and can help you to more successfully reach your goal. Reach out to a trustred mortgage expert today to begin looking for your new home by figuring out what you can afford.

Should You Be Worried About Skipping Multiple Mortgage Payments? Yes, and Here's Why

From time to time, a homeowner may struggle to make a mortgage payment on time. Most will be able to make the missing payment a week or two later when the next paycheck arrives. However, others may find themselves in a situation where they are unable to make multiple payments in a row.

If you are skipping multiple mortgage payments, you should be concerned about your financial situation. There are several important reasons why you may want to take action to improve your situation or to work out a payment arrangement with your mortgage company.

Falling Too Far Behind To Catch Up

A mortgage payment is generally among the largest expenses in a personal budget, and a considerable portion of your take-home income may be applied to a single payment each month. When you miss multiple payments, you may find that you have fallen too far behind to catch up with your payments.

This can effectively make it nearly impossible for you to improve your financial situation without taking drastic action, such as selling your home or borrowing money.

The Negative Impact On Your Credit Report

Late payments are reported to the credit bureaus as soon as the payment is at least 30 days past due. While your lender may charge you a late fee on your mortgage after the grace period expires, you still typically have extra time to make the payment that month without seeing an impact on your credit rating. However, when you have missed a second mortgage payment, your first missed payment has typically exceeded this 30-day mark. This means that you will likely see a negative impact on your credit rating.

The Potential For A Foreclosure

You are contractually obligated to make timely payments to your mortgage lender, and when you fail to do so, the lender has the legal right to begin foreclosure proceedings. This process can impact your credit rating. More than that, it can result in the loss of your home, including erasing any home equity that you have established in it.

As soon as you realize that you are unable to make a payment on a given month, you may consider reviewing financial options available to you. You may also speak with your lender about possibilities. A final option is to reach out to a mortgage professional to review refinancing options that may be available to you.

Thinking About Buying a Rental Property? 3 Reasons You'll Want to Get a Mortgage Pre-Approval

A rental property is a wonderful investment option to consider, and it can provide you with everything from considerable tax benefits to appreciation and monthly cash flow. While you may be eager to get started searching for a new rental property to invest in, a good idea is to take the initial step to get pre-approved for your mortgage.

There are several good reasons why a pre-approval is an important first step to take.

Determining What Sales Price to Consider

The mortgage rules and guidelines for an investment or non-owner occupied property are different than those for an owner occupied property. For example, a key difference is that most lenders will require you to make a larger down payment. When you get pre-approved for your mortgage, you can more easily narrow down your property choices so that you only consider those that are affordable for your budget.

Estimating Cash Flow

When you invest in a rental property, you will need to estimate the cash flow for the property to ensure that it is a good investment. This may include reviewing the monthly rents and operating expenses, and it also includes analyzing the mortgage payment. When you get pre-approved for your mortgage, you can estimate your monthly payment and determine which properties are a better investment opportunity for you and which will generate the largest profit for you.

Structuring A Stronger Offer

By getting pre-approved, your mortgage professional will provide you with a pre-approval letter. This letter can be given to a seller when you structure your offer, and essentially this will strengthen your offer and make you look like a more serious and qualified buyer. When you are in a bidding war, this letter can make a big difference in your success. Furthermore, it can streamline your mortgage process once your offer is accepted by the buyer, and it will enable you to create a more realistic closing date on your offer.

While you may be ready to jump head first into your property search, you may benefit from taking time to get pre-approved for your mortgage. This process takes very little time to do, and it will facilitate the entire process. From searching for a great property and analyzing its strength as an investment opportunity to helping you pass through the loan process, you will benefit in a number of ways. You can reach out to a mortgage professional today to begin the pre-approval process.

The Pros and Cons of Putting in More Than 20 Percent as a Down Payment on Your New Home

One of the most common questions home buyers ask today relates to how much money they need to put down on a home. There are mortgage requirements in place that establish minimum down payment requirements, and some home buyers will barely have enough to pay the minimum down payment as well as closing costs. However, if you have access to more money, you may be wondering if you should make a larger down payment. There are several points to consider to determine if making a larger down payment is right for your financial situation.

Having Liquid Assets Available After Closing

It is important to consider how much available cash you will have access to after closing if you do make a larger down payment. There are many costs associated with home ownership to think about, such as unexpected repair costs, paying a homeowners' insurance deductible if a mishap occurs and even furnishing your new home. Once your funds are invested in your home, you will only be able to tap into those funds by refinancing. You may consider placing extra cash into a more liquid asset if you do not have a lot of extra cash available to you.

Qualifying for a Lower Interest Rate

Depending on your loan program, you may be able to qualify for a lower interest rate if you place more money down with your new mortgage. This is not always the case, so you will want to review this option with your mortgage representative. Keep in mind that interest will impact your mortgage payment as well as the amount of your mortgage interest tax deduction at the end of the year.

Having a Lower Mortgage Payment

When you obtain a lower loan amount with your mortgage, your mortgage payment will be lower. This can make your budget more affordable going forward. Because a mortgage payment is generally one of the higher expenses in a budget, the importance of this cannot be understated. An alternative to this is to establish the loan on a shorter term. Using a shorter term option generally makes your payments higher, but with a larger down payment, it may be easier for you to manage a shorter term length and to pay your mortgage off more quickly.

Using Funds for Other Purposes

You should also consider other ways that you could use your additional funds. For example, you may have high interest rates debts that you could pay off, or you may be able to invest the additional funds in the stock market. For some, tying funds up in a home is practical, but it is not always the best option available.

There is no catch-all answer regarding how much money you should use as a down payment. Each situation is unique, and you should speak with your mortgage representative to discuss the pros and cons of a larger down payment with your specific loan application.

What's Ahead For Mortgage Rates This Week - April 20, 2015

Last week's economic reports included the NAHB Wells Fargo Housing Market Index, Housing Starts, and Freddie Mac's weekly survey of mortgage rates. Other news included the weekly jobless claims report and consumer sentiment for April.

Mortgage Rates, Jobless Claims Rise

Mortgage rates moved up according to Freddie Mac. The average rate for a 30-year fixed rate mortgage increased by one basis point to 3.67 percent. The average rate for a 15-year fixed rate mortgage also increased by one basis point to 2.94 percent.

The average rate for 5/1 adjustable rate mortgages rose by five basis points to 2.88 percent. Discount points rose from 0.60 percent for 30-year fixed rate loans to 0.70 percent and fell from 0.60 percent to 0.50 percent for 15-year fixed rate mortgages. Average points for a 5/1 adjustable rate mortgage held steady at 0.50 percent.

Weekly jobless claims rose to 294,000 against expectations of 281,000 new claims filed and the prior week's reading of 282,000 new jobless claims filed.

Last week's reports ended on a positive note with April's Consumer Sentiment report. The April reading rose nearly three points to 95.9 as compared to the projected reading of 93.5 and March's reading of 93.0.

Home Builder Confidence Increases, Housing Starts Up

The National Association of Home Builders Wells Fargo Housing Market Index (HMI) rose to a reading of 56 against the March reading of 52. Builder confidence rose in all three components comprising the HMI. Low mortgage rates and improved labor markets were cited as factors influencing builder confidence.

Regional markets showed mixed results. Three month moving averages showed that builder confidence rose by one point to a reading of 56 in the South; the reading for the Northwest was unchanged at 42. And the Midwestern region lost two points for a builder confidence reading of 54. The West lost three points for a builder confidence reading of 58. The NAHB says that any reading over 50 indicates that more builders are confident about housing market conditions than those who are not.

Housing starts rose in March according to the Department of Commerce, but fell short of expectations. 926,000 housing starts were reported with expectations of 1.04 million starts. February's reading was 908,000 starts. Lingering winter weather conditions contributed to fewer than expected housing starts.

What's Ahead

This week's scheduled economic news includes reports on new and existing home sales, the FHFA Home Price Index and weekly reports on mortgage rates from Freddie Mac along with weekly jobless claims.

Pre-sale Painting: Color Combinations to Use - and Avoid - when Painting Your Home

One of the more common steps that homeowners will take when preparing to list their home for sale involves repainting the walls. Walls can easily give the home a worn, drab look when they have visible signs of dirty, smudgy fingerprints and other unsightly blemishes.

While repainting the walls can have a whitewashing effect that instantly makes the home look cleaner, brighter and more appealing, the color combinations that you choose for your home should be considered with care. You have a rainbow of possibilities for your space when preparing your home for sale, but you want to choose colors that will have broad or universal appeal to buyers and that will showcase your home in the best possible light.

Neutral or Muted Hues are Ideal

Many homeowners love to paint their walls stylish or trendy colors, and they may dislike the banal look of beige walls throughout their home. While this may or may not be what you prefer for your home, keep in mind that you are trying to transform your home so that it has broad appeal to the buyers. The colors you choose should not reflect personal taste or preference. Instead, they should be selected based on colors that may be more likely to appeal to most and that may go well with the color of furnishings most already own. Neutral or muted hues are ideal. These lighter colors can also make smaller rooms seem larger, and they can make your entire home seem cleaner.

Avoid Bold, Dramatic Color Combinations

You may have some colors on your walls that you absolutely love, and you may be sad to see them go. However, when you have a bold, dramatic color combination in a room, a buyer may instantly be taken aback by such an intense color scheme. The buyer's attention may then be focused on your interior design efforts rather than on the home itself, and this is not beneficial to your goal of selling your home. In addition, some may love your bold choices, but many may not. They may think about how those colors would not go well with their furnishings, and they may instantly start thinking about how they would need to work hard to repaint the walls after moving in. The last thing you want is for a buyer to think about your home as needing work.

If you are preparing your home to list for sale, repainting one room or several may be at the top of your to-do list. When you are selecting your paint colors, lean toward neutral hues that may have better appeal toward a larger group of home buyers.

Home Builder Confidence Rises in April

The National Association of Home Builders (NAHB) reported that April's Housing Market Index rose from a reading of 52 in March to 56 for April. This is in line with warmer weather and the peak home buying season in spring and summer. Readings over 50 indicate that more builders view market conditions as positive as those who do not. NAHB members cited lower mortgage rates and better labor market conditions as reasons they expect more home buyers to enter the market.

All Components of Builder Confidence Increase

The NAHB Home Builder Index is calculated from three components. The reading for confidence in current housing market conditions rose from 58 in March to 61 in April. Builder confidence for sales condition in the next six months rose from a reading of 59 to 64, which was the highest reading for 2015 so far.

Home builder confidence in buyer foot traffic moved from 37 to a reading of 41 in April. Lingering winter weather likely kept house hunters indoors in many areas. NAHB Chief Economist David Crowe said that the uptick in the NAHB Housing Market Index indicates that housing market conditions can be expected to improve throughout 2015.

Regional Housing Results Mixed, Fed Beige Book Cites Winter Weather

NAHB measures regional changes in housing markets on a three-month rolling average. April's results were mixed.

Builder confidence in the southern region increased from 55 to 56 in April. The northwestern region was unchanged from March to April at 42. Builder confidence in Midwestern housing markets fell by two points from 56 to 54. The western region saw builder confidence fall three points from the March reading of 61 to April's reading of 58.

In an unrelated report, the Federal Reserve also released its Beige Book report which is a collection of anecdotes from business contacts throughout the nation. Winter weather conditions were prominently mentioned in the Beige Book report and were seen as detrimental for housing conditions.

The Beige Book report also mentioned layoffs caused by low oil and gas prices. This could negatively influence housing market conditions in regions where oil and gas provide many jobs and contribute to local economies.