One of the more common methods that home loan applicants use to find the best loan program available is to compare interest rates, but choosing the lowest rate possible is not always the best option available. In fact, in some cases, it may be one of the least advantageous options when all factors are considered. With a closer look, home mortgage applicants may decide to review other factors in combination with the interest rate to make a more informed decision when applying for a new loan.
The Closing Costs Impact The Rate
It is important to note that lenders can increase or decrease the interest rate with adjustments to closing costs, and this means that some of the lowest interest rates available may also have some of the higher closing costs. In some situations, choosing the lowest interest and paying more in closing costs is acceptable. However, a loan applicant should be aware of this and should compare interest rates along with closing costs in order to find the best loan program available.
The Loan Term Affects The Rate
Generally, a shorter loan term will have a lower interest rate. However, even with the lower interest rate, the mortgage payment may be higher due to the shorter term. A higher mortgage payment can impact affordability as well as loan qualification in some cases, and there are instances when the higher interest rate associated with a longer term is most desirable.
The Interest Rate May Adjust
Adjustable rate mortgages typically have lower interest rates than fixed rate mortgages, but the interest rate with an ARM may adjust higher in the future. For those who only plan to own the home or to retain the mortgage for a short period of time, this may be acceptable and even desirable. However, for those who plan to own the home or retain the mortgage for a longer period of time, the potential for a rate adjustment in the future may not be preferable.
For individuals who are shopping around to compare interest rates and to find the best deal on a mortgage, there may be a desire to opt for the lowest interest rate, but this is not always the best strategy. The interest rate can reflect many aspects of the loan, and each of these points should be analyzed to find the best loan program. A mortgage broker can provide assistance comparing loan terms and helping loan applicants determine which is the best solution for their needs.
By the way, our Search Tool will help you find and locate properties of interest all over Northern Virginia. Kathy is always available to help you with your home search and/or home sale!”
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From the sales price to the general layout of the building, there are numerous factors that buyers will consider when touring homes. While there are specific factors that buyers may be searching for in a new house, there are also a few warning signs that home buyers should keep their eyes open for. The following are among the top red flags that may serve as warning signs.
Signs Of Poor Home Maintenance
It is reasonable to expect all homes to have some signs of wear and tear unless they are new construction. However, it is also reasonable to expect that sellers have taken some steps to improve the condition and look of the property before listing it. When a home appears to be poorly maintained on a superficial level, home buyers should pause to consider what other aspects of the home have also been poorly maintained that are not visible.
The Grading In The Yard
When a yard grades toward the house, issues with erosion and even flooding may be concerns. Everything from a brief, torrential downpour to snow melt can result in water running toward a property when grading is a concern. Home buyers should take time to review the yard carefully to determine how water may flow when it rains or when snow melts.
A Foul Odor
It is common for sellers to try to make their home smell appealing, and different types of deodorizers may be used to mask everything from food smells to pet odors. However, it is important for home buyers to pay attention to the underlying smells in a home. Everything from a musky or mildew-y smell to sewage smells and gas odors should be warning signs.
Repairs To One Wall
Homeowners may repaint walls to make the space look cleaner, brighter and more appealing, so a fresh coat of paint by itself is not a warning sign. However, if the paint is on just one wall or if the area under the fresh coat of paint appears to have been recently textured or repaired, these are signs that water damage or other damage may have been addressed recently.
Signs Of Pests And Rodents
Another warning sign relates to signs of pests and rodents. Even if bugs and rodents are not visible during the initial tour, things like a can of bug spray, mouse traps and other related items may indicate that the seller has had an issue with bugs and rodents.
Some warning signs will be obvious during an initial home tour, but others may require more skill and experience to see. Because of this, it is best for all home buyers to consider ordering a property inspection to learn more about the condition of the home before finalizing their buying plans.
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July 20th, 2015 categories: Market Outlook
Last week’s economic news included an encouraging report from the National Association of Home Builders, whose housing market index held steady with a reading of 60 in July. This was the 13th consecutive month for readings over 50, which indicate that more builders are confident about housing markets than those who are not. July’s reading was noteworthy as it was the highest since November 2005 prior to the recession.
Housing Starts, Building Permits Increase
The Commerce Department provided further evidence of stronger housing markets with reports on housing starts and building permits issued in June. Housing starts rose from May’s reading of 1.07 million to 1.17 million, which surpassed the expected reading of 1.11 million housing starts.
May’s reading for housing starts was revised from 1.04 million to 1.07 million an annual basis.
Construction of apartments and other multifamily housing complexes attained their highest level since 1987, which supports reported trends that millennials who prefer to live in larger cities are renting rather than buying homes. Housing starts gained nearly 10 percent between May and June. Would-be home buyers are also renting due to tighter mortgage approval standards; others may be “sitting on the fence” as they wait for further indications of stronger labor markets and improvements in overall economic conditions.
Building permits issued in June supported trends in housing starts, with permits for multi-family housing units higher by 16. 10 percent and was the highest reading for multi-family building permits since 1990. Analysts said that the increase in multifamily building permits was in caused by the pending expiration of a tax credit for builders in New York State that was set to expire June 30.
Permits for single family homes rose only 0.90 percent in June, to an annual pace of 689,000 but this was still the highest reading for single family housing permits since 2008.
Mortgage Rates Rise, Jobless Claims Fall
Freddie Mac reported that average mortgage rates rose last week. The rate for a 30-year fixed rate mortgage averaged 4.09 percent and was higher by five basis points. The average rate for a 15-year mortgage was also five basis points higher at 3.25 percent. The average rate for a 5/1 adjustable rate mortgage was up by three basis points to 2.96 percent. Discount points were 0.60 percent for 15 and 30 year mortgages and 0.50 percent for 6/1 adjustable rate mortgages.
New jobless claims fell to 281,000 last week against the prior week’s reading of 296,000 new claims and an expected reading of 285,000 new jobless claims. Analysts said that the current reading indicates that last week’s spike in new unemployment claims was a false alarm. Seasonal anomalies and re-tooling at some auto plants were cited as causes for the prior week’s high reading. New jobless claims have remained under the benchmark reading of 300,000 since February for the longest consecutive period in 15 years.
Last week’s reports ended with the University of Michigan’s Consumer Sentiment Index, which fell from June’s reading of 96.1 to 93.3; analysts expected a reading of 95.0.
Scheduled economic reports for next week include new and existing home sales, and FHFA home prices along with weekly reports on mortgage rates and new jobless claims.
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July 17th, 2015 categories: Home Mortgage Tips
When applying for a new mortgage or after closing, many may have the option to choose between a single monthly mortgage payment or smaller bi-weekly payments. There are benefits and drawbacks associated with both options, and some personal financial considerations may need to be reviewed in order to make a decision that is best for the individual. With a closer look at the pros and cons of both options, homeowners or home mortgage applicants can make a more informed decision.
Easy Budget Management For Some
With a single monthly mortgage payment, there is often a need for those who get paid two or more times per month to properly budget so that they can comfortably manage the large mortgage payment with all of their other expenses throughout the month. With bi-weekly payments, the two smaller payments may be easier for some who are paid multiple times per month to manage and budget for. When an individual gets paid one time per month, the individual pay prefer to make the single payment each month.
Faster Debt Reduction
With a monthly payment schedule, 12 full payments will be made per year, and this is in contrast to a bi-weekly schedule which will result in the equivalent of 13 full payments being made per year. Essentially, the extra full payment that will be made with a bi-weekly payment schedule will result in faster debt reduction and in greater accumulation of equity over time. This can improve the homeowner’s financial standing over time.
Lower Interest Charges Over The Life Of The Loan
Because the principal balance will be reduced at a faster rate over time with bi-weekly mortgage payments, the total interest that is assessed on the loan will be reduced in comparison to monthly payments. Depending on the size of the loan and the interest rate on the loan, this may equate to a savings of tens of thousands of dollars or more in some cases.
Each homeowner’s or home applicant’s financial situation will be unique, and factors related to income, payment schedule, the desire to increase equity quickly and more should all be carefully considered. Bi-weekly payments often can be established during the loan application process, but they may also be set up after closing. Those who are interested in establishing affordable mortgage payments can speak with a mortgage representative about some of the different options available.
By the way, our Search Tool will help you find and locate properties of interest all over Northern Virginia. Kathy is always available to help you with your home search and/or home sale!”
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July 16th, 2015 categories: Around The Home
Many people look forward to the long, relaxed, sunny days of summer, but they also dread opening up their energy bills throughout the summer months. Cooling a home can be costly, and many are searching for convenient ways to lower cooling costs without sacrificing on comfort inside the home on the warmest days of the year. These are just a few of the cost-effective and convenient options that can help homeowners to reduce cooling costs throughout the summer.
Keep The Blinds Closed
A significant amount of heat can enter a home through the windows, and blinds and curtains provide an extra layer of insulation between the window glass and the interior of the home. Some types of blinds and curtains are more effective at blocking heat than others, and homeowners may consider making an upgrade for the best results. For example, wood blinds can block significantly more heat than thin, almost translucent sheers.
Run The Ceiling Fans
Another way to keep cooling costs lower throughout the summer months is to run ceiling fans regularly. Ceiling fans help to circulate the air, and this helps the central cooling system function more efficiently. In addition, ceiling fans also can make those who are in the room feel cooler, and this may mean that homeowners can keep the home’s thermostat set at a slightly higher level than it otherwise would need to be set at for comfort indoors.
Use Heat-Generating Features At Night
There are numerous appliances and types of equipment that may be used indoors throughout the summer that can generate a considerable amount of heat, and running these at night can reduce the need to run the central cooling system as much during warm days. Consider that everything from running the washing machine and dryer to using the dishwasher and oven or range can emit heat in the home, and these serve to counteract the work that the cooling system is doing. When possible, limit the use of these features to cooler nighttime hours.
Keeping the home cool throughout the summer is a top priority for most, and the good news is that there are easy ways to reduce the cost associated with keeping a home cool. These ideas all can be beneficial in a homeowner’s quest to reduce energy costs during the summer.
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Savvy home buyers who are preparing to make a real estate purchase should do their research and understand that they need to save money for not only the down payment, but the closing costs as well. The closing costs can account for as much as three to five percent of the sales price in some cases, so this can be a rather sizable amount of money. Some home buyers however, may not realize that the amount of closing costs can vary considerably based on the home that is purchased. With a closer look at why this is, home buyers can make a more educated decision when selecting a home to purchase.
Prepaid Taxes And Insurance
One of the most significant closing costs relates to prepaid taxes and insurance, and both of these expenses are directly tied to the location and value of the property. Consider that the property tax rate can vary based on the city, county, and state. Real estate insurance can also vary based on the type of construction of the home, if the home is located in a flood plain, and other factors. These are only a few examples of how the location and property type can impact these fees, and home buyers should consider the costs assoicated with the tax rates and insurance when selecting a property to purchase.
Third Party Reports
There are several third party reports that are commonly paid for at closing, and these include an appraisal, a survey, a pest inspection and a property inspection. The third party reports may vary in cost based on the size of the home, the amount of land that is being purchased, and even the condition of the property. Those who want to keep their closing costs lower may consider learning more about how these fees are calculated up-front before finalizing their plans to buy a specific home.
Title Insurance Fees
Title insurance fees are another typically sizable expense for home buyers, and this insurance offers protection to the lender if the title is not clean. Title insurance can increase based on the size of the property as well as different factors that are revealed with a title search. This information can be difficult to learn with an initial home search, but home buyers should be aware that title defects can increase closing costs.
The location, size, age and construction of a property all impact the closing costs. Those who are shopping for real estate may be inclined to make a decision that keeps closing costs down, and they can reach out to their knowledgeable mortgage professional for more assistance with their particular situation.
By the way, if you are considering either buying or selling a home in the Chantilly or surrounding area, please know we how we can help. We are always here for you.
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July 13th, 2015 categories: Market Outlook
Last week’s scheduled economic events were few due to the Independence Day holiday. Freddie Mac’s weekly survey of mortgage rates brought good news as mortgage rates fell across the board. The Federal Reserve released the minutes of its most recent Federal Open Market Committee (FOMC) meeting and weekly jobless claims rose.
Job Openings Rise to Highest Level Since 2000
The Labor Department reported that U.S. job openings rose from April’s reading of 5.33 million to 5.36 million job openings in May. This was the highest reading for job openings since the report’s inception in 2000. Private sector job openings rose to 4.85 million, an increase of 16 percent. Government jobs rose increased by 511,000 open jobs from April’s reading of 430,000 job openings. Based on the Labor Department’s report of 8.67 million unemployed workers, there were 1.60 job seekers for each job opening in May as compared to 2.10 job seekers for each job available in May 2014. There were approximately 1.80 job seekers for each job available when the recession started in December 2007.
FOMC Minutes: Fed Issues No Firm Date for Raising Rates
On Wednesday, the Federal Reserve released the minutes of June’s FOMC meeting, during which nine of ten committee members indicated that they were not ready to raise the federal funds rate. One FOMC member indicated that they were willing to wait for another meeting or two to raise rates. While FOMC has hinted at the likelihood of raising rates this fall, committee members are wary of moving too quickly and cited developments in China and Greece as concerns that contributed to the committee’s current wait and see position. When the Fed does raise its target rates from 0.00 percent, consumers can expect higher mortgage and loan rates.
Freddie Mac: Mortgage Rates Fall, Jobless Claims Rise
Mortgage rates fizzled last week with Freddie Mac reporting average rates lower for all types of mortgages. The average rate for a 30-year fixed rate mortgage was four basis points lower at 4.04 percent and discount points unchanged at 0.60 percent; the average rate for a 15-year fixed rate mortgage was also four basis points lower at 3.20 percent. Average discount points for a 15-year mortgage fell from 0.60 to 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by six basis points to 2.93 percent with discount points unchanged at 0.40 percent.
According to the Labor Department, weekly jobless claims rose to 297,000 new claims filed as compared to 282,000 new claims filed the previous week. There were no estimates for last week’s jobless claims due to the holiday.
This week’s scheduled economic reports include Retail Prices, Retail Prices Except Automotive and the NAHB Housing Market Index. The Commerce Department is set to release monthly readings for Housing Starts and Building Permits. In addition to Freddie Mac’s report on mortgage rates and the Labor Department’s report on new jobless claims, the University of Michigan will wrap up the week with its Consumer Sentiment report.
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When a homeowner makes the decision to upgrade flooring in one area of the home or throughout the entire space, there are numerous materials that may be considered. While each material option has its unique benefits and advantages, many are drawn to hardwood flooring as an option. This is a material that has the potential to boost home value, and a closer look at its benefits will reveal why this is the case.
A Durable, Long-Lasting Material
With many flooring options, homeowners understand that the material will need to be replaced or upgraded over the years. With hardwood flooring, the timeless appeal and incredible durability of the material means that the floor may be an investment to enjoy for many long decades. In fact, with periodic maintenance and regular care of hardwood floors, some hardwood floors may provide the homeowner with 50 years or more of beautiful use in the home.
Numerous Stylish Options
More than that, there are numerous style options for homeowners to consider, and this provides the ability to easily select a material that is ideal for the look of your Chantilly home. In addition, hardwood floor generally has universal appeal that many desire, and this increases the desirability of the home to future home buyers. This is especially true when a more classic tone of wood is selected rather than a modern or trendy tone.
Improved Indoor Air Quality
Some flooring materials, such as carpet, may have a detrimental impact on indoor air quality, but this is not the case with hardwood flooring. The material is easy to clean, and this means that dust, dander and other allergens can easily be removed from the floor. This will have a direct and beneficial impact on indoor air quality that current owners as well as future home buyers can enjoy.
While hardwood flooring can be desirable and beneficial for current property owners, the appeal of the material will extend to future home buyers. When hardwood flooring is well-maintained by the owner, it is a true investment that will add true value to the home and that may help the owner to sell the property more quickly when the time comes.
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Last week’s housing-related economic events included the Case-Shiller Home Price Index reports for April, the Commerce Department’s Pending Home Sales report and a report on Construction Spending. In other economic news, Non-Farm Payrolls, the ADP Employment report and Consumer Confidence reports were released. Freddie Mac’s mortgage rates summary and the weekly unemployment claims report were released as usual.
Case-Shiller: Home Price Growth Slows in April
The Case-Shiller 20-City Home Price Index reported that year-over-year home prices slowed in April with a reading of 4.20 percent as compared to the March reading of 4.30 percent. David M Blitzer, chairman of the S&P Dow Jones Indices Committee, said that home prices continue to grow, but are not accelerating. According to the 20-City Index, home prices rose 1.10 percent from March to April and were bolstered by the onset of the spring selling season.
The Department of Commerce reported that pending home sales increased to their highest level in more than nine years in May. Pending home sales were 10.40 percent higher than they were in May 2014, which is a further indication of a stronger housing sector. Analysts consider pending home sales as an indicator of future closings and mortgage originations.
Construction Spending Lower, Mortgage Rates Higher
Construction spending dipped in May to 0.80 percent as compared to April’s reading of 2.10 percent; analysts had expected a reading of 0.50 percent in May. The outstanding news is that construction spending for manufacturing building is up by 70 percent year-over-year in May. While not directly connected to housing, this reading suggests that manufacturers are expanding their businesses and will likely expand hiring as well. Concerns over the labor market have kept many would-be home buyers on the sidelines, but improved hiring reports and wage increases are expected to compel more buyers to enter the housing market.
Freddie Mac’s weekly Primary Mortgage Market Survey brought another increase in average mortgage rates; the average rate for a 30 year fixed rate mortgage rose six basis points to 4.08 percent. The average rate for a 15-year fixed rate mortgage rose by three basis points to 3.24 percent and the average rate for a 5/2 adjustable rate mortgage rose by one point to 2.99 percent. Discount points for a 30-year fixed rate mortgage dropped from 0.70 percent to 0.60 percent and were unchanged for 16-year fixed rate mortgages at 0.60 percent and 0.40 percent for a 5/1 adjustable rate mortgage.
Non-Farm Payrolls Lower; ADP Employment
The Bureau of Labor Statistics reported that Non-farm Payrolls dropped to a reading of 223,000 new jobs added as compared to expectations of 225,000 new jobs added and 254,000 new jobs added in May. The ADP employment report, which tracks private-sector hiring, fared better with 237,000 new jobs posted as compared to 203,000 new private sector jobs added in May.
Weekly Jobless Claims Rise to Highest Level in Five Weeks
New claims for unemployment reached their highest reading in five weeks with 281,000 new claims filed against expectations of 275,000 new claims filed and the previous week’s reading of 271,000 jobless claims filed. The four week rolling average of new claims filed showed an increase of 1000 more claims filed for a reading of 274,750 new claims filed. Analysts said that new jobless claims remained below the 300,000 benchmark for the 17th consecutive week.
The Commerce Department reported that the National Unemployment Rate was lower at 5.30 percent as compared to an expected reading of 5.40 percent and May’s reading of 5.50 percent. June’s national unemployment rate was the lowest reading since 2008 and is a good sign that labor markets are steadily if slowly improving.
No economic reports were released Friday due to the Fourth of July holiday.
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June 25th, 2015 categories: Home Seller Tips
Curb appeal is important in the home sales process, and this is because it will impact the overall first impression that potential home buyers have about the property. Some homeowners can easily spend a small fortune and a considerable amount of time improving curb appeal, but others may be looking for faster and easier results. The good news is that boosting curb appeal is easy and affordable to do when these three tips are followed.
Spruce Up The Front Door
The front door and patio area are focal points for those driving by the home, and this area receives even more scrutiny by those home buyers who walk up to the home to take a tour of the interior. Re-staining or re-painting the front door can be highly beneficial to dressing up the look of this focal area, and this can give the impression that the home is well-maintained and stylish. In addition, consider replacing the front door mat and hardware on the door for improved results and added aesthetic appeal.
Power Wash The Exterior Of The Home
Beautification efforts for the front of the home would not be complete without spending time cleaning up the space, and one of the best ways to clean the exterior of a property thoroughly is by power washing it. Power washing the exterior may include cleaning the exterior siding material of the home, the patio, the driveway, the sidewalk and even the fencing. This can give the entire area a fresher and more appealing look.
Add Color To The Flower Beds
Some homeowners may not have funds or time available to fully revamp the landscaping, but showing the flower beds some attention can pay off. After weeding the flower beds, add some fresh, brightly colored blooms to the area to dress up curb appeal. Homeowners can finish off the look by spreading a new layer of mulch across the flower beds after the flowers have been planted. Remember to keep those new flower plants watered and fed in the Virginia summer heat.
Curb appeal is vital to selling a home quickly and for top dollar. Enhancing curb appeal can cost a small fortune and could take weeks to do, but even these small and affordable efforts can give homeowners great results with minimal time and money required.
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