Kris Zeigler's Mortgage Report

Buying versus renting is a tough dilemma for a lot of people. This predicament doesn’t only face young people just starting out, but it also puzzles professionals relocating for a job and empty nesters who want to sell the big family home and get something smaller.

According to the real estate website Trulia, new research shows that homeownership is less expensive than renting in all of the country’s 100 largest metropolitan areas. Their data shows that the average cost of homeownership, including insurance, taxes, mortgage and maintenance is 38 percent less than the cost of renting.

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There are many things in your home such as your carpet or your choice of cleaner that may be harming your health. It’s time to protect yourself from potential toxins that could be in your home.

Air Filters – Homes aren’t built to have much ventilation; they’re designed to be energy-efficient. This leaves a lot of room for irritants like dust mites, mold, and pet dander to get trapped inside which could aggravate conditions such as allergies and asthma. To filter the air in the rooms in your house, get a disposable high-efficiency filter for your furnace and air-conditioning system. You should change your filters every three months, and leave the fan on your air conditioner so substances such as pollen don’t get stuck indoors.

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The number of homes for sale is growing which means it is no longer a seller’s market. Homes are staying on the market much longer than they did only six months ago. Home values are starting to cool as limited inventory and widespread investor demand are no longer driving price gains.

Markets, including Chicago, where the housing recovery was slow and the crash less dramatic, have seen better price gains in the past year than in 2012. On average property prices increase 3.5% per year, and since around the summer of 2013, they’ve gone up 6-8% each year.

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Over the next decade the entire baby boomer generation will be in retirement age. According to a study done by Harvard University, 60% of those between the ages of 50 and 64 had a mortgage in 1992 and by 2010 that number past 70%. Income levels generally start to peak in one’s late 40s and as retirement nears the costs of homeownership can consume a growing percentage of their income.

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If you purchased your home over a year ago, have a mortgage with mortgage insurance, or are thinking about doing some home improvement, then you may want to consider a refinance. The reason to refinance doesn’t always have to be for a lower rate than you currently have – but because you are thinking big picture. This may also be a good time for a cash-out refinance to do home improvements or pay off debt.

If you are looking to lower your interest rate, even a slight drop in rates can produce significant savings over time. For a median home worth $220k, a half percentage point decline can save you an estimated $600 a year.

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The purchase of a home is one of the largest investments you can make which is why it is so important to shop around in order to find the best deal. While mortgage shopping does lead to credit inquiries, the effect on your credit score is very minimal and if you shop smart you are likely to only see your score drop a few points.

While you are shopping for a mortgage you may have your credit pulled several times by different lenders as you compare rates and fees. You won’t have to worry about your credit score taking a big hit from this as credit bureaus allow home buyers a two week period where you can compare rates with multiple lenders and your credit report will only be charged with one inquiry. Also keep in mind that new credit makes up only 10% of your FICO score, so having a lender pull your credit report is estimated to lower your score by only five points.

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During the home buying process you will be working with several different business professionals including myself and your realtor. Because this can be an overwhelming time, I want to familiarize you with some of the other professionals that will come into play to make your homeownership dream a reality.

First off I will let you know who is on my team. While you may not come in contact with all of these people each one plays an important role. Once I have your loan application and proper documentation the Loan Processor will then prepare your loan information to present to the Mortgage Underwriter. The underwriters are the ones who will determine if your loan can be approved.

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The mortgage industry is continually evolving and it is important to be especially mindful of your finances when you are going through the home buying process. Before you start the purchase process you should be aware of some of the top things that could possibly keep you from getting a loan approved.

One of the most important things lenders have to review in order to qualify a borrower is the debt-to-income ratio (DTI). Your DTI determines the amount of debt divided by gross monthly income. Typically this figure needs to be at or below 45 percent to qualify so if you are above this number you will need to work on paying down debts to qualify.

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As the cold air moves in there are many projects and repairs that can be done to prepare your home for winter. Taking care of small problems now could save you a lot of money down the road in repair costs for things like water damage.

Speaking of water damage, as the leaves fall it is important to keep your gutters free of debris so water can flow to the correct place. When gutters are clogged water will spill over the sides and can cause flooding which can end up seeping into your house. When the water starts to freeze even more damage can ensue. Also, it is important to remember to shut off the water on your hoses when the time comes to prevent the pipes from bursting.

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Even though it’s a major financial move, owning a home has many advantages. Along with pride of ownership, more privacy and control over your own home there are also great financial benefits to owning.

Building Equity: Unlike renting when you own a home you’re paying down the mortgage each month instead of a landlord. As you pay your mortgage each month your equity grows. When it comes time to sell your home, depending on how long you plan to live in the property, you may have enough equity to sell for a profit.

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