Tag: new hampshire

Posted on

7 Mortgage Rate Tips for Homebuyers

If you’ve been considering buying a house — or if you’re actually in the process — you’ve probably heard two things quite a bit lately:

  1. Rates are going up.
  2. They’re still historically cheap.

Yes, interest rates remain historically low, but that doesn’t negate the fact that they’re higher than if you had only recently purchased a home. Don’t grind your teeth…

Likely, rates and house values will drop in the near future, so wait just a little longer and you’ll see how well it pays off. Unfortunately, it appears that rates may rise even more in the near future, and home prices don’t appear to be on track to come down by much.

So, let’s look at some methods for managing increasing interest rates in order to make your payments as manageable as possible, and maybe even save money.

Credit. Clean it up. The better your credit is, the lower your interest rate will be. Check out your credit report to see if anything obviously wrong can be fixed. If anything looks strange to you, get advice from your mortgage rep or a credit repair professional on any issues they discover that you could fix, pay down, or reduce in order to raise that credit score.

Shop around. Check with a few lenders to find out who offers the lowest rate. Alternatively, go through a mortgage broker that has access to several lenders and can do the shopping for you. If one appears too good to be true, be mindful of the rates and charges. If you happen to know anyone that works at a credit union or is connected with one, ask them – they frequently have better rates since they lend their own cash and/or have a closer connection with their customers.

Buy discount points. Buying down your mortgage rate by paying “discount points” is a good idea. These are fees paid in advance to secure a lower mortgage interest rate. Buying a point will cost you 1% of your home loan and will typically reduce your interest rate by 0.25 percentage points, although this varies from lender to lender. Most offer a maximum number of points you can purchase, and they sometimes provide the choice of purchasing smaller than full point increments. If you want to stay in your home for an extended period, this is a great alternative.

Lock in that rate. Despite the fact that rates have already been on the rise, there’s a good chance they’ll rise even more. Rate locks are generally only given for 60 days, so if you want to buy soon, now is the time to lock in at current rates. Make sure to ask your lender how much a rate lock will cost you. Check to see whether they provide a “float down” option, which would allow you to take advantage of a lower rate than the one you locked in if rates drop before you close on your property.

Get an adjustable mortgage rate. Rates have been so low for so long that adjustable rate loans haven’t really appealed to consumers, since the 30-year fixed-rate mortgage was so cheap. However, as individuals strive to save money wherever they can, adjustable rate mortgages are making a comeback. Variable rate bonds give you the greatest chance of securing higher rates compared to fixed rate bonds. Variable term mortgages are normally more favorable with a greater interest rate at a predetermined period, but only for a limited time before they raise (as the name implies). Depending on what rates are when the opportunity arises, they might change up or down. To be safe, anticipate that the rate will be higher on that day. The period before the rate rises is usually 5, 7, 10, or 15 years. If you’re not thinking about living in your house for a complete 30 years, these are ideal. Consider how long you’ll stay in your house and pick one that won’t change rates before you move so you aren’t penalized. If you’re sure you’ll be moving in the next decade, a 10-year ARM may be the best option for you.

Make bi-monthly payments. If you pay half of your monthly mortgage payment every two weeks, you end up making an extra payment each year. This cuts years off your loan and saves you a lot of money in interest charges.

Re-fi when the rates move down. Keep an eye on interest rates. When mortgage rates fall significantly, refinance your mortgage at a lower rate.

You don’t necessarily have to accept whatever interest rates are offered. As a result, even if rates aren’t as low as they’ve been in the recent past, you still have choices and control over how much interest you’ll pay. You’re certain to save money if you utilize one or a combination of the techniques above!

Posted on

My Homebuyer Got Cold Feet. Here’s What Happened.

It happened. I’d hoped it wouldn’t happen, but it happened.

I had a buyer back out of the deal yesterday one day before the contract had to be done. They said a couple times in the last week, “I give up,” “Let the other offer take it,” and “I quit.”

Every time they wanted to jump ship, I sat with them, and helped weigh their options, and showed how we could make it easy to get the job done. I found a new lender and set them up. I helped go through documents to send to the lender. I drove to their house to pick up documents which I took to the office to scan because the buyer couldn’t send them properly.

Then, the morning of the home inspection, the buyer threw in the towel. Walking through the house that was going to be theirs, they started to focus on things like peeling paint and little stuff. And they seemed to be forgetting that we found a cottage that is walking distance to the Atlantic Ocean at a price 1/3 under market value of comparable homes. Fear of the unknown caused the buyer to throw in the towel.

I felt like I failed the buyer AND the seller agent, who happens to be a good friend. I was feeling like a fool when my friend called me a few minutes later. Here’s what she reminded me of:

disappointed young ethnic woman touching head while talking on smartphone

People get cold feet. It happens.

No matter the level of care we give, or the data you provide, there will always be some whose gut will tell them it’s not the right time. And it wasn’t. It wasn’t the right time for this buyer.

That’s a pretty amazing friend, right? She’s a rockstar agent, and I love that she knows what I need to hear when I need it. I like to be that friend for my clients too.

Buying a home is one of the largest purchases we make, and there will be feelings of “did I do the right thing?” Heck, in this market, it’s more like, “My offer was accepted??? Did I offer too much?? What’s wrong with the house?”

Go with your gut. Get help from your agent or real estate professional, and stay focused on the steps rather than get nervous about the whole picture. We’re here to help you.

So hang in there. It’s only life.

Posted on

What Do You Need To Budget To Buy A Home?

When it comes to purchasing a property, it might be difficult to know how much money you’ll need and where to get that information. You should understand, however, that you are not required to have all of the answers on your own. There are several reputable professionals who can assist you in understanding your finances and what you’ll require to budget for throughout the process. Here are some things experts recommend when it comes to planning ahead.

people holding miniature wooden house
  1. Down Payment

When it comes to saving for a home, you’re likely already thinking about your down payment. You may believe you must set aside 20% of the purchase price for your down payment, but that isn’t always the case. The National Association of Realtors (NAR) advises: “One of the most widespread misconceptions among housing purchasers is what the average down payment is and what amount is required to go into homeownership. Having this information helps you know where to save.”

The good news is that in some cases, you may be able to put as little as 3.5 percent (or even 0%) down. To learn more about your choices, speak with a qualified expert who can explain the many loan kinds, down payment assistance programs, and what they entail.

2. Earnest Money Deposits

Another item to consider is a down payment in earnest money. While it isn’t necessary, it is becoming increasingly popular as a way for your offer to stand out in a competition.

What is it, exactly? It’s money you pay as a sign of good faith when making an offer on a property. This deposit functions like a credit. You’re demonstrating your commitment and seriousness to the seller by using some of the money you saved for your purchase. It’s not an extra cost; it’s paying part of the down payment up front. First American describes what it is and how it works:

“The money paid by the buyer to the seller as part of an offer. This deposit is usually kept in trust by a third party and shows the seller that you are serious about buying their property. The money will generally be used to pay for your down payment or closing costs after closing.

In other words, the first check you’ll write towards your purchase may be an earnest money deposit. The amount varies by jurisdiction and situation. According to Realtor.com,

“The amount you deposit as earnest money will be determined by a variety of things, including your state’s regulations and limitations, the current market, what your real estate agent suggests, and whatever the seller requires. On average, you can anticipate to put down 1% to 2% of the total house price. ”

When it comes to selling your property, you want someone who can guide you through the process and get the most out of it. A real estate advisor will assist you in determining whether or not something may be a viable alternative for you.

3. Closing Costs

The next item to consider is your closing expenditures. Closing costs are defined by the Federal Trade Commission (FTC) as:

“The upfront expenses incurred when purchasing a mortgage loan. These may include, but are not limited to, a loan origination fee, title examination and insurance, survey, attorney’s charge, and prepayments for taxes and insurance.”

Closing costs, in a nutshell, cover the expenditures for various people and services connected with your deal. According to NAR, you should budget about:

“A home costs more than simply the sale price,” says the article. Closing expenses, for example, which represent between 2 and 5 percent of the purchase price, are a significant added cost… A mortgage lenders gives buyers with a Closing Disclosure at least three business days before closing to allow them to plan ahead of time for these additional fees.

The most important point to remember is that savvy purchasers budget for these fees ahead of time so they can enter the process prepared. As Freddie Mac puts it,

“If you’re looking to buy a house, your down payment is almost certainly at the top of your list. And rightfully so – it’s usually the most expensive element of house buying. However, it isn’t the only cost and you must know all of your expenditures before diving in. The more prepared you are for your down payment, closing fees, and other expenses, the better off you’ll be as a home buyer.”

Bottom Line

It’s critical to know how much you should budget for throughout the home buying process. To guarantee that you understand these and any other costs that may arise, give me a call. You’re not in this alone.