An adjustable rate mortgage (ARM) is a type of mortgage in which the interest rate can fluctuate over time. The key advantage of an ARM is that its initial interest rate is usually lower than that of a similar fixed-rate mortgage, making your monthly payments more affordable initially. Depending on the terms of the ARM, these lower payments can last for several years or even a decade. This makes it a good option for those who plan to stay in their home for a short period of time, and move before the ARM resets to a variable rate. As interest rates rise, payments will also increase. ARMs can also be beneficial if you anticipate a significant increase in income or assets in the future. When the ARM resets, you will be able to pay off the loan or refinance into another mortgage. Additionally, choosing an ARM can be a wise strategy when interest rates are on the rise, but haven’t reached their peak yet. This allows you to lock in a rate that protects you from further increases. By the time the ARM resets, interest rates may have dropped, making it possible to refinance into a lower fixed-rate mortgage. Here are some general requirements (but these are guidelines and check with us for specific details) For a conventional ARM the credit score will generally need to be at least 620 (FHA and VA may be lower). ARM DTI (Debt-to-Income ratio) generally can’t exceed 50% ARM down payments are generally at least 5% on conventional loans and lower for FHA. Schedule a free consultation with us on our website and we can review your specific situation to see what best fits your needs.
Owning a house can come with many advantages, including an increase in property value when the real estate market is rising. Not only does this mean a profit when you put your home up for sale, but also grants you the ability to leverage equity as needed. If you have equity and are unsure of how to take advantage of it, here are 5 options.
Debt Consolidation – with interesting rates rising, the interest payments on credit cards and personal loans can be big part of the payment. If you have equity a loan to consolidate the debt into a lower interest rate may be worth considering (of course be careful not to incur too much new credit card debt).
Higher Ed – if you have children getting ready for college – a HELOC or home equity line of credit may offer a lower rate than student loans.
Medical Expenses – If you have outstanding medical bills a HELOC can potentially offer a lower rate and avoid credit score issues with late or missed payments
Home Improvements – if your home has increased in value, one of the most popular uses of equity is a home improvement office – this can be as large as a new edition, a kitchen remodel or a bathroom upgrade.
Of course, please schedule an appointment with us if you are considering leveraging your equity and we can advice you on your specific situation.
A good credit score is part of getting approved for a mortgage, it will also help you get a lower interest rate.
Here are some quick things to do to check and possibly improve your score.
Before we get started though, the first thing you should do is get your credit report!
You can order it free here – https://www.annualcreditreport.com Now that you have your report lets get to those tips! 🤓
1. Check for Errors! You want the report to be clean and mistake free. Check if there are misspellings of your name or addresses. Other things might be duplicate accounts, incorrect account information, closed accounts that are still listed as open, fraud etc!
2. Clean up the Errors! If you found something wrong the next step is to get the errors fixed. You can contact the major three bureaus directly to fix any errors! Be prepared with paperwork to back up your case! Here are links to the three bureaus on how to address errors: https://www.experian.com/blogs/ask-experian/credit-education/faqs/how-to-dispute-credit-report-information/ https://www.equifax.com/personal/credit-report-services/credit-dispute/ https://www.transunion.com/credit-disputes/dispute-your-credit
3. Pay Late Or Past Due Accounts This is important! Pay these off whenever possible. Here is a pro-tip: if you have an account with a late fee or in collection – contact them before paying and ask them to remove the record entirely if you pay the account off. This will really help your score!
4. Pay On Time Ok this is obvious but its important too – even if its the minimum payment make sure you get the payments in on time.
5. Open New Accounts Or Increase Your Limits This will help your credit to improve your credit utilization rate – how much of your available credit you use. The lower the rate used the better so don’t open a new card and max it out – just open it and use it a little and pay it off monthly if possible.
These are five quick tips that can really help boost your credit before you apply for a mortgage. If you are ready to apply contact us today and we will be glad to review the options with and see what best fits your needs!
Many Americans have considered moving in the last few years. Some are lucky enough to work remotely, others may be lured by housing prices. If you are considering moving here are seven things to consider.
1. Housing and Cost of Living: Research the cost of housing, groceries, utilities, and other expenses in the area to ensure that you can afford to live there.
2. Job market: If you are moving for a job, make sure it is secure and that there are other job opportunities available in the area.
3. Education: If you have children, consider the quality of the schools in the area. You may also want to consider the availability of higher education institutions if you or a family member plans to continue your education.
4. Safety: Research the crime rate in the area and consider the overall safety of the neighborhood.
5. Climate: Think about whether the climate of the new area is one that you can tolerate.
6. Amenities: Consider what types of amenities are important to you and whether the new area offers them. This might include things like libraries, parks, recreation centers, shopping, and dining.
7 Quality of life: Think about what is important to you in terms of your overall quality of life, and whether the new area offers those things.
As we say goodbye to 2022, if you are planning on buying a home in 2023 here are 5 things to do.
Put Savings In A High-Yield Account
If you are planning on buying you will need your money to be “liquid” or relatively easy to access for a down payment.
Check Your Credit
You may have heard this before but it’s important, so we’ll say it again. Review your credit report to make sure there are not any errors or attempts at identity theft that can erroneously lower your credit score.
Down Payment or Closing Costs Assistance
It’s a good idea to check to see if you qualify for down payment or closing cost assistance or grants.
Monitor Your Market
Real estate is local as they say so keep an eye on the areas you are looking to buy to see if there are trends in prices and inventory
You can fill out our approval qualifier on our website and we’ll help you see how much you can qualify for and pre-approval, this will help you to know you’re buying range.
From Our Family To Yours
We wish you and your family a safe and happy holiday with plenty of good food and cheer!
As 2022 comes to end its a good idea to do a year end financial checkup.
1. Review your budget and savings plan
Analyze your spending and saving for the year. Your savings might not have gone to plan this year and that’s ok – focus on replenishing your emergency fund first if needed and recalibrate plan for 2023 if needed.
2. Maximize Retirement Plan Contributions
If you participate in a 401k make sure you maximize contributions before the December 31 deadline, you have until April for Roth contributions
3. Review Your Insurance Coverage
Check your insurance coverage in many parts of the country housing prices went up, make sure you home is covered under current market prices. Also check your liability coverage and consider getting an umbrella liability policy that covers all your assets, you can get a million dollar policy for a few hundred dollars a year!
4. Health Savings Account
Make sure you contribute to your health savings account (if needed) as there are great tax benefits. Also check to see if you need to reimburse yourself from the account for out of pocket payments you made during the year!
5. Charitable Contributions
Finally remember to give if you can! Even if you don’t itemize your returns you can still deduct up to $300 for charitable contributions!
While there have been some strong headwinds for the housing market this year, we’ve seen some room for optimism recently. Specifically, three pieces of positive news for home buyers. The first is that after a sharp run up in interest rates, we have seen rates fall sharply in the last two weeks after hitting a high in October.
The second piece is a softening of home prices. We are seeing a deceleration of rising prices and price points are not written in stone at this point.
Finally, there is higher housing inventory today, so home buyers have options!
If you are thinking about a purchase now or after the holidays, be sure to fill out our home purchase wizard on our website and we can see what best fits your needs!
The FHA announced the new loan limits for 2023 this week. The 2023 base line limit for single family homes in most areas is $472,030 an increase of over $50,000 from the previous limit. In high-cost areas the limit is actually over $1 million dollars for the first time!
The limits vary based on property type and area the single family home is the most common loan type, requirements vary but generally you’ll need a 580 credit score and a down payment of at least 3.5%. Call us or file out our online analyzer on our website and we can get you specific figures for your situation.
We often hear mortgage and real estate terms and we recognize the term and have a general idea what it is, but here is a detailed explanation of what home equity really means. In the simplest terms home equity is how much of your home you own. So if your home is valued at $500,000 and you have a mortgage balance of $300,000 then you have $200,000 in home equity. If your home’s value appreciated and you have more home equity then you can use the equity for thins like a home equity line of credit (HELOC) or if the mortgage is paid off you may also consider a reverse mortgage. In any case if you’re curious about your equity and options schedule a consultation with us and we can review your options.