Monthly Archives: August 2011
Try Before You Buy: Learning About Your Home Before You Move In
| August 24, 2011 | Posted by Tammy under Mortgage News |
In the ideal world, it would be possible to spend a few days or even a few weeks living in the home that you intend to buy before you close the deal. This would allow you to learn all of the pros and cons of the home as it pertains to your lifestyle. In reality, this is not an option in a conventional real estate transaction, but that does not mean you cannot get to know your prospective home before putting in an offer to buy.
Doing Your Homework is A Must
Do your due diligence before you purchase so you know if you and your family are truly well-suited for the home. The following will help you ensure you make the right decision:
- Scout Out the Neighborhood – To get a feel for the neighborhood, you can tour the area and take advantage of new technology that can give you more information to work with. Google Maps now offers a ‘street view’ feature that allows you to see satellite images up close. By looking at the street view you will be able to see how well the neighbors take care of their homes (which can affect your property value), if there are neighbors with pools, and more. These are things that you may not see when simply taking a quick tour of the area in person.
- Verify the Sound Levels – If your prospective home is near a busy street, visiting at various times per day will help you determine just how noisy it will be. Remember to open the windows, particularly in the bedrooms. Sometimes in the excitement of looking at a beautiful home, obvious steps like this can be overlooked.
- Speak to People That Live Nearby – Typically, new neighbors will tell you everything you need to know about the area and more once you move in. They may be equally as open if you just try to initiate a conversation before you purchase. If you don’t feel bold enough to approach the neighbors, visit local stores and speak with the staff.
Scouting out the area and doing some homework before you make an offer is the closest you can get to trying before you buy, and it can ensure that you are satisfied with your decision for the long-term.
Mortgage Outlook for the Week of August 22, 2011
| August 22, 2011 | Posted by Tammy under Mortgage News |
Last week set all time record lows for mortgage rates in the United States. Factors in rates moving lower and lower over the past few weeks have been disappointing economic data and uncertainty about the health of European markets and banks.
Since investors move money from equities into bonds in times of uncertainty, the end result is that mortgage rates just don’t get any better than where they are at. This means that the question is not if, but when mortgage rates will move up. The general expectation is that when they do move up, they will do so swiftly.
The Ben Bernanke Watch is On
All eyes are on Ben Bernanke this week, with the widely held expectation that he will announce additional measures to help stimulate the economy. Bernanke will be speaking on Friday at the Kansas City Fed conference in Jackson Hole, Wyoming. In a spooked and volatile market like this, the week ahead may very well be jumpy as rumor and speculation about what Bernanke may or may not say are likely to abound.
Economic Calendar for Week of August 22, 2011
- Monday – Global Central Bankers Conference
- Tuesday – Redbook, New Home Sales
- Wednesday – Durable Goods Orders
- Thursday – Fed Balance Sheet, Money Supply, Initial Jobless Claims
- Friday - Ben Bernanke speaks, GDP, Consumer Sentiment
Limited Opportunity: Mortgage Rates Setting All Time Record Lows
| August 19, 2011 | Posted by Tammy under Mortgage News |
It isn’t every day that mortgage rates set record lows like they have this week. In fact, the lows that have been reached this week have NEVER been seen before in the United States, ever!
This means that there is historic opportunity for existing and future homeowners looking lock in all time low mortgage rates.
Why Are Mortgage Rates Setting All Time Record Lows?
The markets of the United States and the world are in turmoil and extremely volatile. Consistently bad economic data has shown that recovery is not occurring at the pace expected or at all. Concerns about inflation, unemployment and other key indicators are driving fears of a double bottom recession, an extended recovery and an all around weak economy despite stimulus attempts.
When markets are driven by fear, investors take money from equities (think stocks) and place them in safer but lower yielding vehicles like bonds. Money flowing into bond markets help push rates down. This means that bad news for the stock market is generally good news for mortgage rates.
What Does This Mean For Me?
You may have heard the phrase “never try to pick a bottom” when speaking to a financial adviser or in conversations regarding the stock market. The saying holds true for mortgage rates as well. The markets move too fast to truly pick a bottom and when rates do rise, they will move quickly, meaning that once they move upward, it will be too late for you to get the rates that are available today.
Now is the time to lock in record low rates, holding off in the hope of squeezing a tiny bit more out of the market is a gamble with very high risk and very low reward. We can help, now is the time.
Qualifying For a Mortgage When You Are Self-Employed
| August 17, 2011 | Posted by Tammy under Mortgage News |
When you are self-employed, qualifying for a mortgage can be more challenging since more documentation may be needed. The reason for this is that there are some facets of being self-employed and verifying self-employed income that that banks consider to be higher risk.
Since it is true that individuals with salaried jobs are also at risk of losing them at any time, there is no such thing as a totally secure borrower, but being self employed does have a few documentation requirements.
Self-Employed Documentation Requirements
There are a number of things that you will likely need as a self-employed individual. These items will vary depending on the lender and program:
- Proof of income / tax returns for the first 2-3 years your business has been operating
- 3 or more months of bank statements
- Proof of assets / reserves
- Letter from CPA / Your business registration details to support the existence of a business for 2 or more years
- Income statement for your business
Self-Employed Income Calculation
Be aware that your lender may choose to take an average of your first 2-3 years in business and not use your actual income today to calculate your approval amount.
If you have made substantial business deductions against your tax returns, bring additional documentation or mortgage lenders may look at your net income only. You want to do what you can to prove the true extent of your income if it is required to get the kind of mortgage you want.
If you are self-employed and the sole income earner in your family, with an understanding of the process, you can ensure that you get yourself a mortgage and step onto the first rung of the property ladder. Many lenders do offer special mortgages for the self-employed that can allow you to work around the traditional system so your entrepreneurial nature does not hold you back. Looking into these options can also help you with the process.
Turbulent & Volatile Markets = Record Low Mortgage Rates
| August 15, 2011 | Posted by Tammy under Mortgage News |
Turbulent. Volatile. New Record Low Mortgage Rates. These all describe the market last week. Last week saw mortgage rates set new lows for 2011 and break the previous all time low set in October of 2010.
Last Week Was Marked By:
- Increased concern over the stability of European markets
- The S&P downgrade of the United States’ credit rating
- A less than positive outlook from the Fed, which decided to keep the existing Fed Funds Rate at its existing rate
- Volatile movement in the markets with the Dow losing over 600 points in a single day
- Consumer confidence reaching the lowest level since May of 1980
What Will Mortgage Rates Do This Week?
Will rates go up, down or stay the same this week? The truth is that nobody knows where rates will be tomorrow or even later today. This is a VOLATILE market and the opportunity to take advantage of these low rates can and very well may likely disappear in a handful of hours as a fast move up is expected when they do move. Now is the time to lock in record low rates, holding off on a lock now is gambling.
Economic Calendar for Week of August 15, 2011
- Monday: Housing Market Index, Dennis Lockhart from the Fed speaks
- Tuesday: Housing Starts, Building Permits
- Wednesday: Producer Price Index, Richard Fisher from the Fed speaks
- Thursday: Jobless Claims, Existing Home Sales, William Dudley from the Fed speaks
- Friday: William Dudley and Sandar Pianalto from the Fed speak
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