Thursday, December 12, 2013

What to do if you want to buy a home next year...

3 things you need to do now to buy a home next year

 
  


With big changes coming to the mortgage industry at the beginning of next year, many consumers will want to evaluate their home-buying plans.
With big changes coming to the mortgage industry at the beginning of next year, many consumers will want to evaluate their home-buying plans. Regulations drafted by the Consumer Financial Protection Bureau will change the definition of a qualified mortgage for any loan applications received on and after Jan. 10, and many consumers may find themselves unable to meet the new requirements.
Qualified mortgages are loans that meet certain standards designed to ensure that borrowers are highly likely to be able to pay back the amount in question.
Facing this challenge, it’s up to the hopeful homeowner to improve their chances of mortgage approval by doing the necessary research, improving their credit profiles and meeting the qualified mortgage standards well in advance of filling out loan applications.
[Thinking about getting a mortgage? Click to compare interest rates from multiple lenders now.]
It’s important to meet qualified mortgage standards because government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac have said they won’t buy non-qualified mortgages starting next year, said Joshua Weinberg, senior vice president of compliance with First Choice Lending/Bank. Fannie and Freddie don’t lend to homeowners directly, rather they purchase mortgages from banks and then bundle them into securities and sell those securities to investors.
For lenders that originate mortgages with the intention of selling them to the GSEs, as many do, originating non-qualified mortgages won’t be feasible. Other lenders own the mortgages they originate, meaning they don’t have to worry about selling them to GSEs, and such larger portfolios could probably take on non-qualified mortgages.
What’s Changing?
Mortgages must pass tests of sorts to meet the standards of a qualified mortgage: The APR must be within 150 basis points (1.5 percentage points) of the annual prime offer rate, the loan term cannot exceed 30 years, points and fees cannot exceed 3% of the loan balance and there can be no negative amortization or interest-only payments.
Under these conditions, the mortgage qualifies for safe harbor, meaning the lender is not at risk of being sued by a borrower who is unable to repay the loan. There’s a class of loans called higher-priced qualified mortgages, in which the APR exceeds the 150 basis-point limit, and in those cases, the loan falls under rebuttable presumption, meaning the lender is assumed to have complied with ability-to-pay requirements, unless a borrower or attorney argues otherwise. Loans with rebuttable presumption will likely come at an additional premium, said Cameron Findlay, chief economist at Discover Home Loans, though the price of that premium is unclear at this point.
The ability to repay comprises a series of requirements that must be met by the borrower and verified by the lender, including income and debt levels. All of these CFPB regulations are aimed at protecting consumers from mortgages they can’t reasonably expect to repay, because such faulty loans triggered the recent financial crisis.
Given these limitations, and some new restrictions on lenders that also go into effect in January, some have suggested that consumers may find themselves struggling to acquire a mortgage. Weinberg described it this way: Originating a mortgage has been a process that blends science and art. The science includes the regulations that give clear guidelines for what does and does not meet qualified mortgage standards. The art comes in when an originator decides to approve or deny a mortgage application, even if a borrower doesn’t meet every requirement in the book, because his or her experiences can give important context to a case that numbers and rules cannot.
“With this QM rule we’re seeing an elimination of the art and a focus on the science,” Weinberg said. “The way the points and fees will be calculated is now a pretty defined standard. My gut says because of the shrinking art component and the emphasis on the science, fewer people are going to qualify for loans.”
While the new regulations are beyond consumer control, there are several things potential homeowners can do to prepare for buying residential property in 2014.
[Click to see what type of interest rate you would qualify for now.]
1. Ask Questions
If this all sounds a bit confusing, don’t worry. You’re not alone. Both Findlay and Weinberg acknowledged the complexity of the new rules and said there’s confusion among lenders. For potential homeowners who don’t understand what these changes mean for them, there’s no shame in asking someone to explain them.
There are a lot of components to mortgages that first-time homebuyers may not be familiar with. Say a lender instructs you to reduce your debt-to-income ratio — that means how much of your income is tied up in student loan payments, collections accounts, judgments and other existing loan obligations. You’ve just learned that points and fees can’t exceed 3% of the loan balance, but what’s a point? A point, for the record, is prepaid interest on the loan, with one point equal to 1% of the loan. If a borrower would rather have a lower interest rate than the one they’re offered then they can pay points to lower that rate.
There’s bound to be something that confuses the borrower, and no one should enter into such a large financial decision with uncertainty. Ask a lender to explain it to you, but understand that the lenders are nailing down the new processes, as well.
“It doesn’t bode well for the consumer when there’s this confusion,” Findlay said.
It’s important to shop around for mortgages, and consumers should know that they can concentrate their mortgage search into a few weeks in order to minimize the impact on their credit scores. Inquiries are a major factor in your credit scores, and too many inquiries can hurt your credit. Mortgage inquiries made within that short period (which varies by credit scoring model) will count as a single inquiry on their credit reports, and because multiple inquiries would normally ding credit scores, this allows consumers to find the best offer without harming their credit profiles. If you want to see how inquiries are affecting your credit, you can look at your free Credit Report Card, which grades you on important credit score factors and gives you free credit scores.
2. Tackle Debt
If you have debt, you should try to reduce it, and this is true for all consumers, not just those looking to buy a house. Potential homeowners, however, should be extra motivated to conquer their debt: Under new ability-to-repay requirements necessary to attain a qualified mortgage, a borrower’s debt-to-income ratio must be 43% or less, including the potential mortgage payment.
[Have you raised your credit score recently? Click to compare interest rates from a variety of lenders now.]
“Not only do we consider the debts that show up on your credit report, but we have to look at debts you may expect to pay in the future,” Weinberg said, giving the examples of child support and student loans in deferment. “They are also going to need to be comfortable and aware of managing that debt. They are going to be asked questions about that.”
Whether you’re looking to buy a home next year or in two years, make a plan to manage debts now. It can only help.
3. Start the Paperwork
Though these new requirements impact consumers, they also affect lenders, and no one wants to be the first to screw up. The ability-to-repay measures require a lot of documentation, which will need to come from you, the applicant.
“We’re really needing to get a very holistic perspective on the borrower in order to complete the analysis necessary to meet compliance,” Weinberg said. Borrowers should ask a lender exactly what they’ll need to provide, and in order to answer lenders’ questions, they should also take stock of their credit profile.
Consumers are entitled to a free annual copy of their credit report from each of the three major credit bureaus — Experian, Equifax and TransUnion. That’s three credit reports, so it’s smart to review at least one before starting the homebuying process.
No one is sugar-coating these changes — they’re a lot to handle. Changes are common in this post-crisis climate, so the best consumers can do is ask questions and do their part to prepare and educate themselves.
“If we’re making better loans, and the consumers are protected better, that’s better at the end of the day,” Weinberg said.


STOP!
HELP ME FILL 50 BOXES OF FOOD FOR FAMILIES IN NEED THIS HOLIDAY SEASON

 

I would be very happy to get your information.
Just Call or send me an Email and let me know that your in.
I will tell you where to drop off boxes so I will give them to CCV .

"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty
 

Tuesday, December 3, 2013

Fed Meeting Minutes Show Hope In Economic Growth

Fed Meeting Minutes Show Hope In Economic GrowthThe minutes of the Federal Reserve’s Federal Open Market Committee meeting held October 29 and 30 were released Wednesday. The meeting began with a report from the Manager of the System Open Market Account and included updates on developments within domestic and foreign financial markets.
According to the report, no intervention by the Federal Reserve was required on foreign currencies during the period between the last and current FOMC meetings.
FOMC: Key Data Delayed by Shutdown
The FOMC noted moderate economic growth in the period since its last meeting, but also noted that several federal agencies delayed release of key statistics due to the government shutdown in early October. The FOMC minutes included updates on several economic sectors including:
Labor: Private non-farm payrolls for September increased at a slower rate than for August and the unemployment rate remains high at 7.20 percent. The FOMC has set a target unemployment rate of 6.50 percent as a benchmark for considering changes to the Fed’s quantitative easing program, which supports lower long-term interest rates and mortgage rates.
A high rate of part-time employment and a slight drop in full-time employment may indicate why would-be home buyers remain on the sidelines. FOMC members noted that while weekly unemployment claims rose during some weeks in October, this was likely fall-out related to the government shutdown.
Manufacturing: Production rose slightly, but was flat other than for motor vehicles. The committee expected to see gains in production in the near term.
Personal Consumption Expenditures: This sector rose in August and retail sales excluding autos were significantly higher in September. Factors impacting consumer spending were mixed. Homeowners enjoyed increasing home prices and home equity, but overall consumer sentiment declined even as disposable income increased in August.
Housing: The committee said that little current data was available for the housing sector due to the shutdown. Building permits and housing starts for single family homes rose in August. After a significant drop in July, sales of new homes rose in August while sales of existing homes fell. Pending home sales also fell during August and September.
Quantitative Easing: FOMC members decided not to alter its current QE program during its September meeting; this caused investors and analysts to revise their expectations for the Fed taking action to reduce its current pace of $85 billion in monthly bond purchases.
Expectations for the total amount of asset purchases under QE were revised upwardly, which suggested that no major changes in current Fed monetary policy is anticipated.
Overall, the minutes of October’s FOMC meeting echoed the committee’s recent perception of moderate economic growth as expressed during its 2013 meetings, and its intention to maintain asset purchases and the target federal funds rate at current levels in the coming months.


STOP!

Would you like to know what is happening in your neighborhood?
Would you like to know the value of your home?
Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

I would be very happy to get you that information.
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"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty

Email: ArizonaHomeBuying@gmail.com

Quick Tips To Prepare Your Home For The Winter

Quick Tips To Prepare Your Home For The Winter

Quick Tips To Prepare Your Home For The WinterThe calendar has turned and with that we receive less sunlight, colder temperatures, and shorter days ahead, it’s an opportune time to cross those last-minute maintenance items off your homeowner to-do list.
Practicing preventive care – both inside and outside your home – can save thousands of dollars in repairs come later this winter. What follows is a brief checklist to get you started.
For Outside The Home:
  • Inspect exterior lights and outlets. Be sure that none of the outlets are cracked or broken, or have exposed wires.
  • Clean gutters and clear all blockages. If leaves are falling, redo after leaves are off all trees.
  • Inspect and test outdoor railings and stairs.
  • Have problem trees trimmed, including those that may damage your home in a storm.
  • Protect outdoor water faucets from freezing. Consider using foam cups, sold at hardware stores.
For Inside The Home:
  • Change batteries in all smoke detectors and carbon monoxide alarms, whether they’re “dead” or not.
  • Vacuum refrigerator condenser coils, plus the front bottom grill. Empty and clean the drip pan.
  • Inspect wood stoves and fireplace inserts. Hire a certified chimney sweeper to clean the chimney, if needed.
  • Insulate bare water pipes running through your home to prevent freezing and to limit condensation on cold-water lines.
  • Inspect automatic garage door opener. Lubricate chains according to manufacturer’s instructions. Make sure bolts and screws are properly tightened and secured.
As a constant series of chores, home maintenance is a four-season job and one which should not be taken lightly. The tasks of each season are unique and this month is mostly preparatory in advance of colder weather.
If your routine maintenance uncovers larger issues including a faulty HVAC unit, or a leaking faucet, for example, seek professional help to make the repair.


STOP!

Would you like to know what is happening in your neighborhood?
Would you like to know the value of your home?
Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

I would be very happy to get you that information.
Just hit Reply and let me know.


"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty

Email: ArizonaHomeBuying@gmail.com

4 Tips To Save For That Down Payment

4 Tips To Save For That Down Payment

4 Tips To Save For That Down Payment In order to save up a huge amount of cash for the down payment on your first mortgage, you need a solid savings plan!
When you take out a mortgage on your new home as a first time homebuyer, the more you can pay as a down payment the better. The down payment on a mortgage reduces the principle of the loan and means that you will be paying tens of thousands less in interest payments over the life of the loan.
Most financial experts recommend that you should save up at least 20% of the value of the home as a down payment. Depending on the value of the home that you want to buy, this can be a serious chunk of money.
The conventional saving tricks of skipping your morning latte and eating dinner at home just aren’t going to cut it when saving up this much money! You will need some strategies for saving big.
Here are some tips to help you get closer to that down payment:
Make A Separate Savings Account
No matter how much you have already saved for your down payment, create a new savings account to put the money in. When the money is in your personal account it is so much more tempting to spend it on day to day expenses. Also, a savings account will give you a better rate of interest so that you can help you money grow.
Pay Off Your Credit Cards First
If you have credit card debt, you will be paying interest charges to the credit card company every month. These charges can really add up, especially if you are only paying the minimum on your loans. If you can pay down this debt you will have extra money every month to put into your savings instead.
Get A Part-Time Job
If you want to accelerate yourself towards having your down payment saved up, you could consider taking on a part-time job in addition to your full-time job on a few evenings and weekends.
It doesn’t have to be something that you do forever, but even sticking with it for six months to a year will give you thousands in extra income that you can put straight towards your down payment.
Make A Backwards Budget
Do you find that after you have paid all of your bills and your living expenses, there is nothing left over to save? Rather than calculating all of the money that you use on your monthly expenses and then saving whatever is left afterwards, why not make your budget the other way around?
Start off with how much you want to be able to save per month then subtract that amount from your net income. The number you have left is what you have to live off.
You will find that you naturally change your habits to make this amount of money work for you and if it if not enough you can increase your income by getting a side gig. These are just a few ways that you can save up for a down payment on your first home in order to save money over the years on your mortgage.


STOP!

Would you like to know what is happening in your neighborhood?
Would you like to know the value of your home?
Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

I would be very happy to get you that information.
Just hit Reply and let me know.


"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty

Email: ArizonaHomeBuying@gmail.com

Distressed Property Report - November 2013

Distressed Property Report - November 2013

Gathering intelligence on Short Sales and Foreclosures is now easier with the Distressed Property Report. This report contains three interactive maps: short sales, foreclosures and a map of all distressed properties. Each map is a snapshot of the active distressed property aggregated by ZIP code. The October 2013 Distressed Property Report can be found here.

There are no "from" and "to" dates on the Distressed Property Report because the data is Active properties in the system on the day the report is published. The "Percentage of Actives" shows what percentage of Active listings are distressed in each ZIP code. Each map is displayed below:

Clicking a dot on any map will display more information (example). Just like a Google Map, the maps below can be zoomed, panned and moved.

SHARE THIS REPORT:
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 Short Sales as of 11/30/2013:


 Foreclosures as of 11/30/2013:


 All Distressed Properties (Short Sales and Foreclosures) as of 11/30/2013:


Copyright© Arizona Regional Multiple Listing Service, Inc.
 

STOP!

Would you like to know what is happening in your neighborhood?
Would you like to know the value of your home?
Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

I would be very happy to get you that information.
Just hit Reply and let me know.


"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty

Email: ArizonaHomeBuying@gmail.com

Sunday, November 24, 2013

Feeding families for the 2-week winter break


Feeding families for the 2-week winter break


With 1 in 4 children living in poverty, Arizona has the 4th highest rate in the nation. Family to Family is our response to this problem.
Our goal is to provide 10,000 food boxes for the 2-week winter school break — a time when many children go hungry. This campaign will benefit 5,000 families across 100 schools valleywide.
Which schools are involved?

Get Involved

1 Pick up empty boxes
Pick up your boxes during these weekend services
  • 11/23-24
  • 11/30-12/1
  • 12/7-8
2 Fill boxes
Follow the shopping list exactly. Don't add anything additional or use glass containers.
Text CCVFAMILY to 41411 to have the shopping list sent to your phone   or    Download Shopping List (PDF)
 
3 Drop off filled boxes
Leave filled boxes behind your car during these weekend services. Campus locations & Service Times
  • 12/7-8
  • 12/14-15
 
STOP!
HELP ME FILL 50 BOXES OF FOOD FOR FAMILIES IN NEED THIS HOLIDAY SEASON

 

I would be very happy to get your information.
Just Call or send me an Email and let me know that your in.
I will tell you where to drop off boxes so I will give them to CCV .

"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty
 

Friday, November 22, 2013

November 2013 Market Report

November 2013 Market Report...
Report overview
 
This report includes MLS data for the past 36 months in Maricopa County only as provided by the FlexMLS system.  Please note that searches fluctuate daily when running these reports; these figures were obtained on 11/3/2013.

A reminder that you need to meet with a real estate professional to see how statistics impact the area where you are considering selling or buying – blended statistics will not be as accurate as a more detailed report that your real estate professional can provide to help you with your decision making.

(click any graph for larger image)


 
 Closed Sales Report Analysis:

Sellers:
The month of October showed another decrease in the number of closed sales when compared to the prior month. The statistics show that we had 5,411 residential homes sell in October in Maricopa County compared to 5,608 in the month of September, a 3.5% decrease. This is the fifth month in a row that we have seen this number decrease. Sellers should pay attention to this, as it means fewer sellers are having success getting their home sold.

Buyers:
For buyers, this means that fewer homes successfully closed last month than in prior months. As prices and interest rates continue to rise, it is very important for buyers to monitor the impact of rising interest rates.  A close eye should also be kept on changes that will be coming in 2014 related to loan qualification requirements.





Average Sales Price Analysis:
Sellers:
Last month saw the average sales price increase 2.9%, from $244,208 to $251,328. This is the highest average sales price in the 36-month reporting period AND the highest average sale price we have seen since July of 2010.  Although this is great news for sellers, sellers also need to pay careful attention to the current market, as we are seeing inventory increase and homes remain on the market longer. This could eventually mean that prices will need to adjust for buyers to maintain interest.  Sellers need to remain diligent about pricing homes according to the current market and to understand how this increase impacts individual homes.  Sellers are encouraged to spend time with their real estate professional to determine what is happening in their local market.

Buyers:
This statistic is an indicator that buyers still continue to pay more for homes than they have in the past 36 months. Educated and savvy buyers understand that a competitive market gives them fewer options for home choices, negotiating on price and looking for concessions from a seller.  Although this may vary from area to area and from price range to price range, buyers need to make sure they are fully informed regarding the individual market in which they have an interest.  This will give them the best chance of being competitive in the search for a home.



 
Average List to Sales Price Ratio Analysis

Sellers:
This is the ratio calculated when comparing the price for which a home sells against the price for which it was listed.  The higher the number, the closer the final sales price is to the listing price.  Last month saw this number decrease nearly a full percent, from 98.0% to 97.13%.   This means sellers who have priced their homes according to the market are, on average, receiving just over 97% of the asking price.  Continue to watch this trend, as it will continue to impact how homes should be priced in the current market in order to appeal to the buyers.

Buyers:
Buyers need to pay attention. As this average remains very close to 100% on lower priced/highly desirable properties, buyers are finding that they may have to pay above list price as they are competing with investors who are bringing cash to the transaction.
Since a home must appraise in order to obtain a loan, underwriters are still looking very closely at prices and making sure that homes are selling at or below market value. This could mean that investors have an advantage if they are willing to pay higher than the list price.
Make sure your real estate professional helps you understand the competitiveness of the list price of the home you want to purchase.  Be sure to review the sales activity in the area where you want to buy and how the offer you are making competes within that market and its trends.




 
Distressed Sales Analysis

A bank owned/foreclosure home is one that the seller no longer owns – it has been taken over by the lender(s) who had a note on the home. Short sales are homes where the seller is negotiating with the bank to “forgive” a portion of the debt in order to avoid foreclosure.

The market saw a continued increase in the percentage of what we call traditional or non-distressed sales.  Bank-owned sales decreased slightly from 7.3% to 6.2% of closed sales, and short sales decreased from 8.9% to 8.4%.  The result was an increase in the number of traditional sales from 83.8% to 85.4%.  Sellers and buyers need to monitor this trend to see how the market continues to respond to the current inventory.


STOP!

Would you like to know what is happening in your neighborhood?
Would you like to know the value of your home?
Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

I would be very happy to get you that information.
Just hit Reply and let me know.


"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty
Email: joseph_dambrosio@westusa.com
Email: ArizonaHomeBuying@gmail.com

Thursday, November 21, 2013

What’s Ahead For Mortgage Rates This Week – November 18, 2013

What’s Ahead For Mortgage Rates This Week – November 18, 2013

What's Ahead For Mortgage Rates This Week- November 18,2013The Veterans Day holiday on Monday contributed to a quiet week for economic news. On Wednesday the reading for the federal budget deficit for October fell from September’s reading of -$120 billion to -$92 billion.

Freddie Mac Released Its Primary Mortgage Market Survey On Thursday

The average mortgage rates increased across the board, but remain below historical levels. The rate for a 30-year fixed rate mortgage rose by 9 basis points from 4.16 percent to 4.35 percent with discount points decreasing from 0.80 percent to 0.70 percent.

The average 15-year mortgage rate rose from 3.27 percent to 3.35 percent with discount points the same at 0.70 percent. The rate for a 5/1 adjustable rate mortgage increased from 2.96 percent to 3.01 percent with discount points moving from 0.50 percent to 0.40 percent.

Weekly Jobless Claims were released Thursday and were reported at 339,000 new claims. This was higher than the expected number of 335,000 new claims, but lower than the prior week’s reading of 341,000 new claims.

In other news, Janet Yellen, the President’s choice for chairing the Federal Reserve, defended the Fed’s quantitative easing policy during her first confirmation hearing before the Senate Banking Committee. QE, which involves Fed purchases of $85 billion monthly in Treasury and mortgage backed securities, was designed to keep long-term interest rates and mortgage rates low.

Credit Reporting Agency: Mortgage Defaults Reach 5-Year Low In Q3 2013

TransUnion, one of three major credit reporting agencies in the U.S., reported that mortgage defaults fell to a five-year low to a reading of 4.09 percent for the third quarter of 2013.

This reading is lower year-over-year than the revised reading of 5.33 percent for the third quarter of 2012. The reading for third quarter 2013 mortgage defaults is also lower than the reading of 4.32 percent for the second quarter of 2013.

A mortgage default is defined as a home loan that is at least two months past due on payments.

Analysts cite moderate but stable job gains, comparatively low mortgage rates and a short supply of available homes as factors contributing to improvements in the housing sector. Analysts noted that mortgage defaults have declined during the past five quarters.

As defaulted mortgage loans made before the economy crashed are foreclosed, mortgage defaults were expected to continue falling. TransUnion reported that it expects mortgage defaults to fall below 4.00 percent by year-end.

What’s Coming Up: NAHB Index, FOMC Minutes

This week, the National Association of Home Builders is scheduled to release its Home Builder Confidence Index for November.

Along with the weekly releases of Jobless Claims and Freddie Mac’s PMMS report on mortgage rates, the FOMC is expected to release the minutes of its last meeting. Existing Home Sales for October are also set for release.

 If you have questions regarding Loans, Financial Information, buying or Selling your Home or Real Estate. Please give me a call  My group of network Professionals are looking forward to helping you with your needs. 

 
Thank you
Joseph D’Ambrosio
Joseph D'Ambrosio
Real Estate Consultant / Realtor
West USA Realty
623-204-2138
 
STOP!

 Would you like to know what is happening in your neighborhood?

Would you like to know the value of your home?

Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

I would be very happy to get you that information.
Just Reply and let me know.

"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty
Email: joseph_dambrosio@westusa.com
Email: ArizonaHomeBuying@gmail.com

Monday, November 18, 2013

15-year loan over a 30-year loan

Save big when you choose a 15-year loan

If you want to pay down your mortgage at a faster rate, here are some tips to help you speed the payment process.


By Tony Moton November 7, 2013 9:20 PM

Perhaps you thought there was only one type of fixed-rate mortgage: the 30-year. Well, believe it or not, there is a wide variety of fixed-rate mortgages out there - and some yield huge savings.

And, choosing a shorter term could really pay off.

"A shorter term mortgage comes with a lower interest rate, which means you pay less in overall interest. This reduces the overall cost of home ownership," David Bakke, editor at Money Crashers, a website devoted to career and finance advice, says.

So let's explore refinancing to a shorter-term mortgage and what it could mean for you.

The Most Popular Short-Term Mortgage: 15-Year Loan


Even though fixed-rate mortgages come in a variety of sizes, the one that's been trending for the past few years is the 15-year, fixed-rate mortgage.

In fact, according to the "2013 Second Quarter Refinance" report by Freddie Mac, one of the nation's largest lenders, 31 percent of those who refinanced in the second quarter of 2013 shortened their mortgage term. And, the 15-year, fixed-rate loan was a popular one.

And while shorter-term mortgages often mean higher monthly payments, Bakke says that because of the historically-low interest rates, people can actually lower their monthly mortgage payment while lowering their overall term from 30 to 15 years (depending on what their existing rate is).

[Thinking about refinancing your mortgage? Click to compare interest rates from multiple lenders now.]

"One possible disadvantage to a shorter term mortgage is a higher monthly payment, but this really depends upon your current loan's rate of interest. If it's rather high, it's possible to get into a shorter term mortgage and lower your payment at the same time," he says.

Just How Much Can You Save?


So glad you asked, because that really is the question on most people's mind when they consider refinancing. So let's get down to dollars and cents.

Here's an example using a $300,000 mortgage. We'll compare a 30-year mortgage with a 5 percent interest rate, and a 15-year mortgage at the average interest rate as of October 24, 2013, according to Freddie Mac's "Weekly Primary Mortgage Market Survey®."

 

 
30-Year Mortgage 
15-Year Mortgage 
Interest Rate:
5 percent
3.24 percent
Monthly Payment:
$1,610
$2,107
Interest Over Life of Loan:
$279,767.35
$79,178.74

As you can see, if you can handle paying a little more every month, you could save a whole lot of money. In this example, the savings totaled over $200,000. And if you're refinancing from a 30-year mortgage with an even higher rate, your savings could be higher.

Own Your Home Sooner


When people explore the massive savings in interest a shorter-term mortgage could provide over the life of their loan, compared with a 30-year mortgage, they often forget that an equally attractive result is achieving home ownership in half the time.

And that, says Bakke, is a huge step toward more golden, golden years.

"A shorter-term loan is a great idea for someone planning for retirement. Getting a mortgage paid off before you retire is an excellent strategy to make financial management during retirement more feasible," he says.

[Time to refinance to a shorter-term mortgage? Click to shop around and compare interest rates.]

Jim Duffy, a mortgage banker with Cole Taylor Mortgage in Atlanta, Georgia, says this is the main reason he's done many more 15-year, and even 10-year, mortgages in the past few years.

"Baby boomers are seeing retirement just around the corner, and today's low interest rates make it possible for them to get a shorter-term mortgage and enjoy their retirement, even on a fixed income," he says.

More Security


Do you like your home? Are you planning to stay in it through retirement? A shorter-term mortgage could help ease your mind about how you're going to pay your mortgage once your income shifts.

And who can disregard the emotional value of your home, especially if your home is filled with cherished memories of sons catching their first baseball in the front yard, daughters having sleepovers, and holiday family gatherings.

Duffy says wanting to stay put during retirement is another reason a lot of his clients have switched to a short-term mortgage: They're working now, and would rather pay a little more every month while they're earning income in exchange for the ability to stay in their home during retirement.

"Then, they don't have to move to a smaller place or apartment because they can't afford their mortgage on a fixed income," he says. "It's a real sense of security."

 If you have questions regarding Loans, Financial Information, buying or Selling your Home or Real Estate. Please give me a call  My group of network Professionals are looking forward to helping you with your needs. 
 
Thank you
Joseph D’Ambrosio
Joseph D'Ambrosio
Real Estate Consultant / Realtor
West USA Realty
623-204-2138

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Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-204-2138
Real Estate Consultant / REALTOR 
West USA Realty
Email: joseph_dambrosio@westusa.com
Email: ArizonaHomeBuying@gmail.com