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When will Mortgage Rates Hit 5%?

by Michel Delos Santos

When Will Mortgage Rates Hit 5%?

Posted: 26 Nov 2013 04:00 AM PST

blue interest ratesThe big question for homebuyers is when interest rates will begin to rise to the 5% mark. The effect of a rise in mortgage rates could be a dramatic increase in the monthly mortgage payment when purchasing a home. In an article last week,HousingWire quoted two different sources regarding this issue.

Most experts are projecting that rates will rise when the Fed decides to taper the purchase of bonds which has acted as a stimulus to the housing market by keeping long term mortgage rates at historic lows.

In the article, Sterne Agee’s managing director and chief economist Lindsey Piegza pointed out:

"Federal Reserve officials said they might reduce their monthly bond buying program from $85 billion 'in coming months' as the economy continues to improve."

The article also quotes Frank Nothaft, chief economist with Freddie Mac:

“By the end of 2014, rates will probably approach and perhaps touch 5%. A reason we see the uptick in rates is that I do think some point the Federal Reserve will start to taper and scale back its very active purchase on long-term Treasuries and mortgage-backed securities.”

Rates will hit 5% sometime in 2014. It might be better to buy sooner rather than later.

5 Reasons to Buy a Home Now Instead of Spring

by Michel Delos Santos

5 Reasons to Buy A Home Now Instead of Spring

Posted: 25 Nov 2013 04:00 AM PST

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:

Supply Is Shrinking

With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

Price Increases Are on the Horizon

Prices are projected to appreciate by over 25% from now to 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.

Owning a Home Helps Create Family Wealth

Whether you are rent or you own the home you are leaving in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Fed, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.

Interest Rates Are Projected to Rise

The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the end of 2014. That is an increase of almost one full point over current rates.

Buy Low, Sell High

We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.

Thanksgiving

by Michel Delos Santos

 

Thanksgiving is Always in Season

 

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Most school children would probably say that Thanksgiving dates back to the Pilgrims at Plymouth as early as 1621. By the late 1660’s, it had become traditional to hold a harvest festival in New England.

 

President George Washington declared the first nation-wide thanksgiving in 1789 “as a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many and signal favours of Almighty God.”

One hundred fifty years ago during the Civil War, in October, 1863, President Abraham Lincoln proclaimed the first national day of Thanksgiving.

William Seward, Lincoln’s secretary of state, drafted the proclamation: “No human counsel hath devised not hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God…they should be solemnly, reverently and gratefully acknowledged as with one heart and one voice by the whole American People.”

Even though the country was in the middle of the costly Civil War, the people of America started an enduring tradition to give thanks. In 1941, Congress determined that Thanksgiving will be celebrated on the fourth Thursday in November.

New Smyrna Beach Homes for Sale in Sugar Mill Country Club under 250K

by Michel Delos Santos

* Homes for Sale in Sugar Mill Country Club under 250K. *

  1. 553 Bottlebrush, 3/3, 225K.
  2. 215 Live Oak Lane, 3/2/1, 175K.
  3. 1052 Red Maple, 2/2, 199K.

Click on the blue link in the title to preview all these properties.

If you are thinking about buying or selling a home or condo, give us a call at (386) 689-4684 or send us an email to explore your options and to find out when is the best time for you to make a move.

Average Days on the Market

by Michel Delos Santos

Average Days on the Market [INFOGRAPHIC]

Posted: 22 Nov 2013 04:00 AM PST

Zillow-Cities-Title

Home Buying for Umarried Couples.

by Michel Delos Santos

Home Buying for Unmarried Couples

Posted: 21 Nov 2013 04:00 AM PST

 

Throughout the home buying process there can be various hurdles to jump over to make sure everything goes smoothly.  In today’s culture, we are finding more often unmarried couples are purchasing their first homes together.  Although this sounds like a great plan, there are precautions that need to be taken in order to make sure the process is done right.  Doing your research beforehand can alleviate any headaches. From a financial sense it is more difficult to break the co-ownership of a house, than it is to get a divorce, if things turn sour.

When making the decision to purchase a home with your significant other, you and partner must know that just like with marriage, a property agreement is a legal contract. One of the more important aspects of purchasing a home together is knowing how the investment will be split.  In many cases, one partner may initially invest more money into the home than the other.  This may cause issues in the future if things don’t work out due to the fact that legally one person may end up owning more of the house than the other.

Plan Now

If the relationship were to end, a dividing of the assets needs to take place.  Although everyone in a relationship hopes for the best, preparing for the worst-case scenario will alleviate any hassle in the future. The best way to protect yourself is to come to an agreement as soon as possible while you both are still happy.  If there were to be any future issues, it could get real ugly resolving things if steps were not taken care of from the start.

Credit Scores

As an unmarried couple looking to purchase a home together, there are a few concerns you need to be aware of.  When the time comes to apply for a mortgage, the lender needs to run both of your credit scores.  This can backfire if one of you has a great credit score and one has a terrible score.  If this is the case, then you may not get the loan.

Legality

You will also want to check your individual state’s laws regarding an unmarried couple purchasing a home together, as some states don’t allow it.  You as the homebuyer need to know this because if you are planning on going through with the purchase and can’t legally, you will be extremely disappointed.

Protect Yourself

Having the right paperwork filed is another important step to take, because without it you could find yourself in trouble in the future.  One thing to do early in the home buying process is to file for a Joint Tenancy With Rights Of Survivorship (JTWROS).  A JTWROS allows for the home and assets to be passed to the surviving partner if the other were to pass away.  This lets the partner avoid inheritance taxes, as the home won’t go through an estate.  Married couples are automatically granted JTWROS whereas unmarried couples are not.  By doing this you can save yourself a great deal of potential stress in the future.

If you had filed for JTWROS with your partner and something went wrong with the relationship, you would need to fix your agreement. If you don’t adjust past agreements, then your soon to be ex is still entitled to the house and potentially your assets if you were to die. On paper if you had left everything all to your partner but intended to change that and never did, they are still legally getting everything.  This also goes for if one partner were to pass away and if you didn’t file for JTWROS, the family of the deceased partner may try to sell the house.  If the partner had made a will to leave everything to their family, it would not matter if the surviving partner wished to remain in the home.

What to Adjust After Getting Married

If down the line you and your partner decide to get married, there will be more papers that would need to be altered.  The biggest adjustment would need to be the title to the house.   After the title is adjusted, creditors cannot single out one of you for bad credit.  This is good due to the fact that they cannot add extra interest to that partners share.  If you and your soon to be married partner both have good credit, this can work out great if you were looking to refinance once everything is fixed.

As stated, there are precautions that need to be taken when purchasing a home as an unmarried couple.  As we all know, getting married is one of the biggest decisions we will make. Planning to buy a home together is a great decision as long as you are cautious about how you go about it.

Buying a Home? Consider COST not just Price

by Michel Delos Santos

Buying a Home? Consider COST not just Price

Posted: 18 Nov 2013 04:00 AM PST

bigstockphoto_Property_Prices_814896We have often talked about the difference between COST and PRICE. As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home. Let us explain.

Last month, the Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about one full percentage over the next twelve months. We also know that many experts are calling for home prices to also increase over the next year.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 even if home prices don’t increase:

Cost Waiting blog

5 Reasons to Sell before Spring

by Michel Delos Santos

5 Reasons to Sell Before Spring

Posted: 19 Nov 2013 04:00 AM PST

Vermont-AutumnMany sellers feel that the spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the fall and winter have their own advantages. Here are five reasons to sell now.

Only Serious Buyers Are Out

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere 'lookers'. The lookers are at the mall or online doing their holiday shopping.

There Is Far Less Competition

Housing supply always shrinks dramatically at this time of year. The choices for buyers will be limited. Don't wait until the spring when all the other potential sellers in your market will put their homes up for sale.

The Process Will Be Quicker

One of the biggest challenges of the 2013 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers.

There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 25% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with historically low interest rates right now. There is no guarantee rates will remain at these levels in years to come.

It's Time to Move On with Your Life

Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

Refinance to Remove a Person

by Michel Delos Santos

Refinance to Remove a Person

 

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Most people are familiar with the various reasons a homeowner refinances their home which generally result in two major benefits: saving interest and building equity. 

 

There is however another reason to refinance which may not be as common which is to remove a person from the loan. In the case of a divorce, when one party wants to keep the home and the other party wants their equity out of the home, it is possible for the remaining party to refinance the home. If the equity is sufficient to justify it and the remaining owner can qualify for the new loan, the refinance can provide the proceeds to buy out the other spouse.

Refinancing to remove a person from the loan could also involve a situation where two or more heirs jointly own a property and have differing opinions on when to sell. The same situation could apply to a rental property with multiple owners and the refinance would provide a way to buy out a partner.

Sometimes, it’s not about taking cash out of the home to buy out the other party. If a person’s name is on the mortgage, they’re responsible if it goes to default. One party may be willing to deed the home to the other party but it doesn’t necessarily relieve them of the liability of the mortgage they originated.

Many times, once a person has made their mind to move on, they’ll take the fastest and easiest way out. Removing a person from the deed or a mortgage is a reason to consider obtaining legal advice to protect your interests. Refinance Analysis calculator.

Reasons to Refinance

1. Lower the rate 
2. Shorten the term 
3. Take cash out of the equity 
4. Combine loans 
5. Remove a person from a loan

Ignoring Insurance Risks Can Be Costly

by Michel Delos Santos

Ignoring Insurance Risks Can Be Costly

 

Ignoring Insurance Risks Can Be Costly

Posted: 14 Nov 2013 04:00 AM PST

 

One of the first stages during the hunt for a new home is crunching the numbers to figure out your budget. And no matter how high or low that budget may be, prospective homebuyers should take into consideration the cost of insuring the home.

It's easy to overlook insurance, especially since you may be more worried about the number of bedrooms, the school district, or the size of the backyard. But before you can close on the purchase, your lender will require you to line up homeowners insurance. You may be hit with some sticker shock if the home you are about to buy ends up being a high risk- and therefore high cost- home to insure.

Once you’ve got a few homes in your sight, you should get some preliminary home insurance quotes on each property. Just as you will compare asking price and property taxes- figure your insurance costs into the equation as well. Even homes of similar size and style can vary greatly in terms of cost to insure.

Here are a few lesser known home features that affect insurance costs:

Location- The location of a home will have a huge impact on the insurance premiums due to the proximity to a fire station, the fire station ratings and the flood zone it’s located in.

  • When you shop for homeowners insurance you will be asked how close the home is to a fire hydrant and to a fire station. In the event of a fire, the quicker the fire department can respond to the home, the less damage will be incurred. The average claim for a residential fire exceeds $33,000, according to the Insurance Information Institute (III). Therefore insurers typically charge lower premiums for homes within a close proximity of each.
  • Fire stations in each community each have a specific fire protection class rating which also affects the home insurance premiums on a home.
  • Last but certainly not least, the specific type of flood plain that a home is located in may require you to carry a separate flood insurance policy in order to obtain a mortgage. Flood insurance is recommended for all properties, however, in certain high-risk flood plains a flood insurance policy is not only required- but the coverage could double your annual insurance spend.

Roofing- Ask your realtor about the home's roof. You'll want to know how old it is and the material it's made of. Roofs that are 20 or more years old can be considered high risk and may be expensive to insure. Replacing a roof also can be costly so you'll want to weigh the pros and cons. Newer roofs, built with impact-resistant material, are ideal. These roofs are made to withstand nature's harshest elements, and they can also qualify homeowners for more preferred home insurance policies.

Swimming Pool- You might be looking specifically for a house with a pool but you should know swimming pools can drive up your insurance premiums. Accidents frequently happen in and around pools so insurance companies see them as a high-risk home feature. Remember, you can be held liable even if a trespasser has an accident at your pool. For this reason, homes with swimming pools located on the property should meet all local safety codes and carry high limits of liability coverage.

Age- The age of the home can also affect your premium. Typically older homes have outdated electrical wiring and plumbing systems, which can lead to fires or water damage. If you are considering an older home, ask your realtor the age of the plumbing, HVAC and electrical systems. If they have been updated in recent years, this is important to note with your insurance agent. If not, make sure you know what this may cost you in additional premiums and to upgrade in the future.

Security equipment- Security equipment is a plus for obvious reasons- items such as burglar alarms, deadbolt locks, and smoke alarms can make your home a safer environment. In addition, insurance providers offer discounts for homes featuring these items. In fact, you could save 10% or more on your premium. Take note of the types of safety devices in the homes you are comparing so you can get accurate discounts figured into your insurance rates.

You likely won't make a decision on a house because of insurance factors alone. But it's best to have an idea of where you stand as you consider your options. Start by checking out average home insurance rates in your state. Then work with an agent you can trust to compare quotes on various properties. An educated search can help you find the home of your dreams and home insurance premiums that won't break the bank.

Displaying blog entries 1-10 of 15

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