How to Get Approved for the Best Mortgage

Sunday, January 10, 2016

How will the Federal Reserve Raising Interest Rates Impact You?

On December 16^th, 2016 Chairman Janet Yellen announced that The Board of Governors of the Federal Reserve (Head of the Bank of the Banks) were raising interest rates.

http://www.federalreserve.gov/newsevents/press/monetary/20151216a.htm

Chairwoman Janet Yellen is the first woman to hold this position. Chairwoman Yellen took over the position from Ben Bernanke and was sworn into her office on February 3^rd, 2014 after the senate confirmation in January 2014.

The Prime Rate adjusted in sync with the announcement. However, most of the loan market already expected this and mortgage interest rates had risen about 0.25% in the 10-14 days before the announcement in anticipation, so there was actually little movement in long terms rates at the time of the announcement.

But, what does this mean for you? What does this mean for your clients? What is the actual cost?

The Federal Reserve has already raised interest rates by 0.25% and plan to continue raising rates 0.25% until next December so there will be a full 1% increase in interest rates. That doesn't sound like much, but for most people it actually adds up. Take a $300,000 home for instance. For each 0.25% increase in the interest rates on a $300,000 loan, that's an extra $43.56 a month. So over, the next year, if you are buying a $300,000 and the interest rates go up by 1%, that's an extra $174.24 a month in interest you'll be paying. That's easily a student loan payment, a car payment or a nice dinner out. If you look at it on an annual basis, it's over $2,090 a year in additional interest costs, which is over $10,400 over the next five years!! Now, you may think, well, that’s more of a tax deduction for me since it’s interest. Be sure to check with your CPA to see how that change will really impact your bottom line. But I say, a penny earned is a penny save, and even more important, $2,000 saved is by buying now is free money!

So, if you are considering buying a home, do it now! Get pre-approved and start planning now.

These interest rates are for the purposes of example only. You are not guaranteed these rates, you may or may not qualify for a loan.

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Sunday, November 1, 2015

How do interest rates really impact your buying power?

What can you really buy for your money? Well, it depends on where you are buying and what type of property you are buying. This can vary greatly from state to state as well as from the city to the suburbs. I'm a big proponent of considering your future housing needs as well as your current financial situation before you decide to get pre-qualified and start your new home hunting. There are so many factors to consider, such as how long you are going to stay in your area, do you plan on starting or growing a family and how much disposable cash you have for a down payment.

Obviously, the lower th einterest rate, the more home you can buy. But by how much? Well, for a $300,000 loan, the principal and interest payment for a 30 year fixed rate of 4.0% is $1432.25. For every change in 0.125% in interest rate, the monthly payment changes by $21.54. Not as much as you thought, huh? Yeah, people tend to be a bit over dramatic when it comes to interest rate. In my humble opinion, the most important thing to consider is, "Can you afford the payment comfortably?"

There's also a great article today that addresses that, On The House: On mortgage rates and what gets people to buy

These interest rates are for the purposes of example only. You are not guaranteed these rates, you may or may not qualify for a loan.

For more information, pick up my #1 Best Selling Book at ElysiaStobbeBooks.com

For more mortgage tips check out our website www.bestmortgagebook.info
For video mortgage tips and tools subscribe to our YouTubeChannel: https://www.youtube.com/c/ElysiaStobbeMortgage
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Tuesday, September 29, 2015

TRID! What does it mean to you?

TRID execution is quickly approaching! What is TRID? TRID stands for TILA (Truth-In-Lending) RESPA (Real Estate Settlement Procedures Act) Integrated Disclosure. TRID was delayed earlier this year, pushed back from an August 1, 2015 start to this week.

What does this mean to you? TRID brings with it additional timelines designed for consumer protection and new forms. Expect your home purchase process to slow down a bit. From what I'm hearing, expect the typical closing time to slow from 30 to 45 days.

On October 3, 2015, new documents will replace the GFE and HUD-1. The GFE will be replaced by the Loan Estimate. The HUD-1 will be replaced by the Closing Disclosure.

For more information, pick up my #1 Best Selling Book at ElysiaStobbeBooks.com

Monday, September 21, 2015

Published again! Here are 5 Common Rent To Own Mistakes You Don't Want to Make courtesy of Ivestopedia

Published again! Here are 5 Common Rent To Own Mistakes You Don't Want to Make.
http://www.investopedia.com/articles/personal-finance/083115/avoid-5-most-common-renttoown-mistakes.asp

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For more mortgage tips check out our website www.bestmortgagebook.info

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Sunday, September 13, 2015

Will the Federal Reserve Raise Interest Rates This Week? What does this mean for you?

This is a big week for economic news, particularly when it comes to interest rates. This Wednesday and Thursday, The Federal Reserve will meet to decide if the economy is stable enough to raise interest rates. The Federal Reserve has chosen NOT to raise short term interest rates for the last 7 years. Yes, 7 years! Why is there a buzz that The Fed will raise interest rates now? There are several signs that our economy has stabilized, the first of which is the unemployment rate. There's lots of buzz on this regarding if the unemployment numbers are accurate or not. The biggest concern is that people who are unemployed are no longer counted in the statistics after six months. So, if you have been unemployed for six months and 1 day you are not included in the unemployment numbers. That's some funny math.

Binyamin Applebaum wrote an interesting article for the New York Times, published today
entitled The Fed's Policy Mechanics Retool for a Rise in Interest Rates. Binyamin's article has some great points about how The Fed's plans may affect lending and our economy.

Seems to me if you are in the process of purchasing a home or refinancing, it's a good time to lock your interest rate!

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Monday, September 7, 2015

Should You Buy an Investment Property or Invest in a REIT?

How do you decide if you want to be a landlord or not? Well, there are several things to consider...first of all, how active do you want to be in your investments? How active should you be in your investments? If it's not your full time job, you still need to pay attention to your investments. This includes your stocks, bonds, retirement accounts, real estate investments, etc, where ever your money is kept. If you don't pay attention to it, who will? If it's not your full time job, even more reason for you to check in. This can be weekly, monthly or daily depending on what vehicle(s) you invest your money into. I have a third party property management company handle my rentals and I check in with them at least once a month. In addition, I review the #'s every month to make sure we are on track with rents and renewals. You may need to do this more or less depending on your preference, number of rentals and if you use a property management company or not. For the stocks that I actively trade, I check on daily. I also spend a few hours every month on my asset allocation and overall performance.

So, what does this mean to you? You need to do what is best for you. How much time do you have to devote to your investments? Do you want to add real estate to your investment portfolio? According to Barron's recent article, "The Allure of Mortgage REITS" by Amey Stone some REITS are paying up to 12% annual yields and the are on sale right now for deep discounts. So, this begs the question, if you can get 12% returns with little or no time investment, why would you build your own real estate portfolio?

A REIT can offer you a (hopefully) diverse portfolio. This can be across property types such as commercial or residential single family homes or multi family. Or it could be spread among properties in various markets across the country. Some REITS are traded like stocks, some require a minimum investment and can be difficult to get out of, so do your homework.

If you buy your own real estate investment properties you have a few models to choose from...buy and hold, fix and flip or a combination there of. Things to consider include available cash, available time, access to general contractors and construction teams (if you are considering fix & flip), opportunity to leverage, return on investment goals and much, much more. You can start with one rental or 2nd home that you rent out when you're not using it, see if you have a taste for being a landlord and go from there.

I don't suggest you jump into either real estate investing or a REIT without doing your homework. Real estate can be an amazing investment and it's not for the faint of heart.I hope you find this information thought provoking. If you have questions email me at info@bestmortgagebook.com.

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Tuesday, August 11, 2015

How Does Oil Impact Interest Rates?

How does the economy impact interest rates? Oil, stocks, bonds, Federal Reserve Chairman Yellen, flying monkeys...how do these factors play out in regards to interest rates? This is a hot topic right now, as reported by CNBC's Trading Nation this morning.

Well, you can watch a plethora of TV shows, read a ton of newspaper and blog articles. Or you can consider interest rate as merely one factor in your choice to buy a home.

I think that interest rate is an important factor while considering whether or not you will purchase a home. However, there are several other critical items to ponder. Obvious questions to ask yourself would be, "Can I afford the total monthly payment?" "What other bills may come up that I'm not anticipating?" "Will I need a new car in the near future, how much will that payment be?"

In addition to the economic piece of the equation, I think this is a very personal decision. I know that sounds obvious, but just as important as how hot the real estate market is or is not or where interest rates will go, is an individual's plans for the future.

I believe there are at least two sets of questions that we should ask ourselves when considering the purchase of a home. The first set of questions has to do with a person or family's plans. Am I going to stay in this city, this state, this neighborhood for 1-2 years? 3-5 years? How is my job stability? Do I love my job? Can I work from anywhere? Am I single or engaged? Am I planning on growing my family?

The second set of questions has to do with the economics. What do I need/want in my housing? Can I rent a luxury apartment or do I need a 4 bedroom house? What's the cost of renting vs. buying? What's the cost per square foot of renting vs. buying? Does it cost more or less to rent than to buy? Any excellent licensed loan originator as well as real estate agent should be able to help you with this calculation in your local area. Basically you take your total estimated monthly mortgage payment including property taxes, home owners insurance and any monthly home owners association or condo fees and compare it to the cost to rent something similar in location and size. To make it more complex, factor in your down payment and estimated closing costs spread over the time you think you will be in that location as well as any interest deduction your CPA thinks you would benefit from by owning. Other factors to consider are leverage and appreciation.

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