Josh's Mortgage Report

Housing and the economy is gaining momentum after a dismal winter. Sales of existing homes are at their fastest pace in six months and sales of new homes are at a six year high. U.S. consumer confidence is also at a six year high with more households feeling optimistic about the labor market.

Home prices continued to rise in April although at a slower pace, 10.8% annual growth vs 12.4% in March. While slower price appreciation isn’t the best news for current homeowners, it is helping to boost purchasing power for many homebuyers.

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If you have been through the mortgage process lately you already know that you are required to provide a great deal of paperwork to your lender. This is required by law by all mortgage lenders which is used to determine your ability to repay the mortgage loan. Three major areas of your finances that lenders will be reviewing include credit, capacity, and collateral.

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Points, or discount points, in the mortgage industry are an upfront fee that you pay to lower your mortgage interest rate. One point equals one percent of the loan amount, so one point of a 200,000 loan would be $2,000.

For each point you pay, your rate will lower by 0.25%. A quarter point may not sound like much but it could save you hundreds of dollars in interest annually. Determining if you should pay down your interest rate with discount points will be based on your personal finances and whether you can afford to make an upfront payment, as well as how long you plan to stay in the home.

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When considering a refinance you want to make sure it’s the right move by comparing interest rates, weighing the cost, and analyzing your finances to determine what you can afford.

What is Your Current Rate?
If you are looking to refinance to save money on interest, compare your current rate to today’s rate. Utilize the mortgage calculator on my website to determine your interest savings.

How Long Do You Plan on Staying?
It is important to know how long you plan to stay in your home if you are considering a refinance because refinances come at a cost. You want to make sure you will break even before you sell the home.

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Whether you have always dreamed of buying a fixer upper or it’s the only way you can afford the size home in the neighborhood you want, there are many things to take into consideration before the price tag makes the decision for you. Analyze the situation carefully as fixer-uppers can often end up being a money pit if not thoroughly planned.

Assess the Home
First off you want to arrange a home inspection which will help you identify any problems in the home that are not visible to the average person. Unless you’re a contractor yourself or have a large budget, you typically are going to want to purchase a fixer upper that primarily only needs cosmetic work as major projects such as foundation issues, plumbing, or electrical will require hiring professionals.

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Shopping for a mortgage rate can be challenging especially because rates change daily, often several times a day. It can be difficult to know when the best time to lock in mortgage rates because there is no special formula that determines where rates are headed. By working with an experienced professional you will be sure to make the right decision when it comes to purchasing or refinancing a home.

Mortgage rates are based on the MBS market or Mortgage Backed Securities and can change upon many factors including the weekly economic reports, Federal Reserve policy changes, as well as global economic news.

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According to a survey conducted by Redfin in March, 25% of homeowners said they would not buy their current home again if they had to do it over. Today’s homebuyers are facing pressure due to price jumps, inventory constraints, and bidding wars, all of which can have an effect on a homebuyers decision making process. A similar survey recently conducted by Chase, revealed that nearly 40% of respondents said that they would have bought a different size or different priced home.

If you are in the market for a new home you can avoid home buyer’s remorse by taking your time and keeping a level head. Take the tips below into consideration when going through the home buying process.

Before you start a remodeling project in your home you should determine what you’ll get back on your investment. This will depend on several things such as the value of your house as well as other homes in your neighborhood, the quality of the project, and factoring in how soon you plan to sell after making the improvements.

According to the Remodeling 2014 Cost vs. Value Report, replacement projects are performing better in resale value than remodeling projects by 8.6%. Some of the top replacement projects include entry door, garage door, siding and window replacement. These projects are high value because they are relatively low cost. Replacements like these will increase your curb appeal, drawing the buyer in, as well as improve quality of life with low operational/maintenance costs for the buyer.

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If you are looking for a home that is easy on the environment you may want to check out St. Charles or Humboldt Park. These two neighborhoods are atop of the list of homes with the greatest number of green features, according to Redfin.

Homes with green features may include solar panels, energy efficient lighting and appliances, high-performance windows, low-flow water systems, high efficiency heating and cooling equipment, or environmental ratings and certification programs.

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While there are many aspects of the mortgage process that are out of your control, there are steps you can take to speed up the process. For starters you can educate yourself on what your lender will need from you ahead of time.

If you have been through the mortgage process before then you know there is a lot of paperwork involved. Be prepared to provide your lender with all your financial documents including W-2 statements and federal tax returns from the past 2 years, pay stubs from the past 30 days, account statements for all checking, savings, investment and retirement accounts for the past 60 days, liability summary for all outstanding debts: car loans, credit cards, student loans, child support, etc., letter of explanation for any recent credit inquiries or derogatory items, and divorce decree, if applicable.

Another way to speed up the loan process is to get pre-approved for a loan. Before you begin house hunting you want to have a pre-approval, not only so you know how much you can afford but also because it will save you time during the approval process. A pre-approval is like a dry run mortgage approval because a complete loan application is taken and your income and assets are verified, the only thing missing is a property address.

The last thing you can do to push the process along is make sure you are working with an experienced loan officer. The right mortgage professional will help you do everything possible to ensure the process is smooth and efficient.