Jul 17, 2013 | Home Financing Tips
Getting the best mortgage financing for your new home can sometimes be a complicated process and, unfortunately, things can go wrong. Using a licensed and trusted mortgage loan specialist can help alleviate many of these challenges.
There are certain mistakes that many homebuyers make when applying for their mortgages that can seriously damage their chances of being approved. If you are aware of the most common mortgage issues, you will be better able to prevent them when applying for your own mortgage.
Make sure that you keep the following tips in mind when applying for a mortgage:
Making Large Purchases Before Closing On The Mortgage
Many homebuyers think that they are in the clear once the mortgage deal is approved and they move forward on another large purchase such as a car or home furnishings. However, it is best to hold off on all major purchases until the mortgage is finalized, as additional debt will change your “debt-to-income ratio” which could mean that you no longer qualify for the loan.
Many lenders pull your credit information right before funding, so avoid any big-ticket items until you have signed on the dotted line.
Switching Jobs During The Mortgage Loan Process
When deciding whether or not to approve your loan, the lender will look at your salary and your job stability. If you make a career move during the process of applying for the loan, this could make your income seem unstable and could cause the bank to decline your loan.
Stay in your job through your home closing date to reassure the bank that you have a stable income; you can always switch careers later.
Having No Credit Card
You might think that the fact that you have gotten by without a credit card for this long would be a positive thing in the mind of lenders. However, having no credit history at all makes lenders nervous, as they don’t know how you will handle credit when you have it.
Instead, get a credit card that you repay in full every month, which will help to show them you can manage your credit responsibly.
These are just a few examples of major mistakes that home buyers make when applying for a mortgage. If you can avoid these issues, you will find it much easier to buy a Worcester County area home.
As always, call your trusted real estate professional today to discuss your personal situation and get the best advice on your upcoming home purchase!
Jul 16, 2013 | Around The Home
Just like fashion designs and hair styles, home decor trends are constantly changing and evolving. Each new season brings a new must-have feature for your home.
In order to keep your home looking fresh and chic, what are the hot trends for 2013 that you can incorporate into your decor?
Here are a few ideas:
Bright Paint Colors
Vibrant (and even neon) hues are very popular in fashion at the moment and they also look really chic on your walls. If you are looking for a way to freshen up a dull room, a bright pop of color can really do the trick.
It doesn’t have to be overwhelming if you keep the rest of the room neutral and use the bright color as an accent.
Original Artwork
Decorating your home with unique and original works of art from funky local artists is a hot trend this year. You could find such pieces at a local art fair or on online craft auction websites.
You could also check out a local art school or university art program in your area, where you can buy some student artwork at cheap prices.
1920s Inspired Designs
With the Roaring 20s being revitalized on the silver screen in the show Boardwalk Empire and the film The Great Gatsby, designs from the 1920s are becoming more popular. Why not incorporate some gorgeous Art Deco furniture or decoration into your home?
Check out auctions to find authentic vintage pieces for cheap prices.
Simple Wood
Another hot trend for 2013 is unfinished exposed wood furniture, with a very natural texture and feel. These simple wood pieces give your home a natural beauty that compliments any color. It works well with neutral accents to give the home a very peaceful and welcoming atmosphere.
Stripes and Graphic Prints
Crisp patterns, graphic prints and stripes are popular at the moment in everything from fabrics to wallpaper to furniture. If you really want to make your home décor look cutting edge, incorporate some of these eye-popping graphic designs into your décor.
These are just a few of the hottest home décor trends of the year 2013. Which ones will you incorporate into the décor of your home?
For more information about buying or updating your Massachusetts home, please contact your trusted real estate professional today!
Jul 15, 2013 | Housing Analysis
The Fed’s release of the minutes for the June FOMC meeting was the most noteworthy economic event last week; the minutes repeated the Fed’s recent statement concerning the wind-down of its current monetary easing policy.
The minutes indicated that about half of meeting participants wanted to end the quantitative easing (QE) policy by year end, while “many others” preferred to end the program in 2014.
This split suggests that days are numbered for the Fed’s monthly purchase of $85 billion in Treasury securities and mortgage-backed securities (MBS). The minutes also revealed that the Fed would not be selling off MBS as QE is ended. This would likely prevent additional potential for mortgage rates to increase as demand for bonds would decline when the Fed stops its monthly purchases.
Mortgage Rates Typically Rise When Bond And MBS Prices Fall
U.S. financial markets showed little reaction to the Fed minutes. The Dow Jones Industrial Average saw a quick gain of about 40 points that quickly retreated. The Wall Street Journal interprets the lackluster response to the Fed minutes as investors growing accustomed to the eventual end of the QE program; it’s also possible that the markets interpreted the FOMC minutes as “old news,” as the minutes contained information included in the Fed statement given after June’s FOMC meeting.
The FOMC minutes reported that details of tapering the QE program will be given by Chairman Ben Bernanke during his customary press conference after the Fed presents the FOMC meeting statement. The minutes also asserted that the Fed will closely monitor economic and financial developments as part of their decision-making for ending QE.
The minutes stated that the current Federal Funds rate of 0.00 to 0.25 percent will remain in place for some time after QE is ended.
Mortgage rates rose last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage moved to 4.51 percent from last week’s 4.29 percent. The average rate for a 15-year fixed rate mortgage rose to 3.53 percent from 3.39 percent. Discount points for both types of loans rose from 0.70 percent to 0.80 percent.
Rising mortgage rates suggest that borrowers may soon return to adjustable rate mortgages or hybrids such as the 5/1 adjustable rate mortgage, which was reported at an average rate of 3.26 percent with discount points of 0.70 percent.
What’s Coming Up
On Monday, retail sales for June will be released. This is an important indicator for the general economy. Tuesday’s news includes NAHB/Wells Fargo Housing Market Index for July.
On Wednesday, Housing Starts for June will be released. Thursday’s news includes weekly Jobless Claims and Leading Economic Indicators. No economic news is scheduled for Friday.
Jul 12, 2013 | Around The Home
Many home owners dream of having a home theater – an entire room of the home dedicated to enjoying television and film. These rooms are usually equipped with a large flat screen television or projector, comfortable seats, mood lighting and perhaps even a bar or a snack fridge.
They are very comfortable and the perfect place to relax after a hard day. They are also lots of fun for entertaining, as you will be able to watch the big game or the hottest new release with your friends in style.
However, will spending the money on renovating your home to create a theater room be a smart investment? Does this type of home improvement add a lot of value to the property, or will it turn off potential buyers?
Buyers Interested In Tech-Equipped Homes
These days luxury home buyers are becoming much more tech-savvy and they are demanding more networked or ‘smart’ homes than ever before. They are looking for a house which is outfitted with the latest in technology, so a modern home theater will be a desirable selling point. If you are targeting your home to this luxury market, the home theater could give you an edge over the competition.
It is difficult to determine the amount that the home value is affected when you add a high tech home theater, but most real estate professionals will agree that when there are many houses for sale at any given time, the one with an impressive home theater room will be more likely to sell first.
Don’t Take Over Valuable Home Space
The only situation in which the home theater could detract from the value of the home is if it overpowers a medium sized or smaller home that just barely had enough space in the first place. If your home cannot spare the extra room, taking up a lot of space with a home theater will mean fewer bedrooms or living spaces and a potential decrease in value.
However, you might be able to get around this problem with clever solutions that allow you to conceal the home theater unless it is being used. You could hide the large screen behind specially designed cabinets and set up the furniture so that the room can be a living space when not in use as a theater.
Remember that a home theater system is something that will generally only increase the value of your home for certain buyers, as opposed to something like a bathroom renovation or a garage which will be valuable to almost every buyer.
To find out more about upgrades that affect the value of your Massachusetts home, contact your trusted home sales professional today.
Jul 11, 2013 | Federal Reserve
FOMC Minutes Suggest QE Tapering by Year-End
The minutes for June’s meeting of the Federal Open Market Committee (FOMC) suggest that committee members are mostly in agreement that the current quantitative easing program (QE) should begin winding down by year end, but the committee minutes are very clear concerning the committee’s intention to monitor inflation and ongoing economic and financial developments before taking action to reduce the current rate of QE.
The Fed currently purchases $85 billion monthly in Treasury securities and mortgage-backed securities (MBS). Investors fear that if the Fed rolls back QE too soon or too fast, it could cause long term interest rates such as mortgage rates to rise faster.
The Fed minutes indicate that factors the Fed will continue monitoring before making changes to QE include:
- Labor market conditions
- Indicators of inflationary pressures
- Readings on financial developments
FOMC members also agreed that the Fed would not sell MBS it has accumulated after the economic support program ceases. When the Fed ceases QE, demand for mortgage-backed securities is expected to fall. If the Fed were to sell off MBS holdings in addition to stopping QE, MBS prices could fall sharply. In general, when MBS prices fall, mortgage rates rise.
The FOMC minutes indicate that the Fed intends to maintain the Federal Funds rate at 0.000 to 0.250 percent “for a considerable time after the monthly asset purchases cease.” To be clear, the minutes do not reveal any specific dates for starting to wind down the program.
Concerns over financial conditions in Europe highlight the Fed’s intention to monitor global economic developments were discussed. Potential “spillover” of negative sentiments in response to Europe’s economic woes to U.S. financial markets were seen as a potential threat to the U.S. economic recovery.
Committee members found that although the economy showed moderate improvement since its last meeting, the national unemployment rate remains high at 7.60 percent. Members also noted that the numbers of long-term unemployed and those working part time jobs but wanting full time jobs remain higher than average. These conditions traditionally keep consumers from buying homes.
Housing: Upside-Down Mortgages Decreasing
Due to rapid increases in home values, the committee noted that fewer homeowners were under water on their mortgage loans. This is good news as homeowners can rebuild household wealth as their home equity increases. Having home equity also provides homeowners with the flexibility to sell or refinance their homes.
While housing is driving the economic recovery, high unemployment will likely keep the Fed from changing its QE policy in the short term.
Now may be a very good time to take advantage of still historically low mortgage interest rates before they rise. If you have specific questions on purchasing or refinancing your home mortgage loan and how these changes may affect you, please contact your trusted real estate professional today.
