mortgage financing and programs

Archive for November, 2012

Your November Gardening Task List

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November gardening listFor homeowners who keep a garden, with the change of seasons comes a task list.

There are basic tasks for gardeners — for example, raking the leaves, sharpening your tools. And, there are advanced tasks, too, which includes identifying and removing plants and trees which may be dead, and covering compost to prevent rain storms from leaching nutrients.

For homeowners in frost-free areas, November is a good time to plant roses and azaleas; prune flowering trees; and, start your fall vegetable garden.

The cooler fall and winter months are terrific for leafy greens such as spinach and kale; and carrots. Protect plants with row covers, when necessary.

For homeowners in colder parts of the county, November is when you should circle evergreens with burlap and wrap the bottoms of young trees with mesh wire to protect from wildlife; and empty and roll up garden hoses for storage.

It’s also when bulbs should be planted. Tulips, crocuses and hyacinths are easy to plant and will welcome you come springtime.

For all homeowners, consider this list : 

  • Aerate lawns to improve root development and drainage
  • Check and clean gutters from fallen leaves, needles, and twigs
  • Perform a round of weeding

And then, to discourage weed growth throughout the winter, place down a pre-emergent, and mulch around bedding plants, shrubs, and trees.

If your temperatures in your area tend to go below freezing, be aware of your plants which are sensitive to de-icing salts. Consider buying sand or sawdust for traction purposes near these plantings instead.

Lastly, remember that the fall months are a terrific time to take note of what worked in your garden during the summer, and what didn’t. Use a notebook and put your findings to paper. Attention paid now will pay dividends next spring.

Mortgage Approvals : Documents You’ll Need For Your Lender

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Bank guidelines loosenAccording to the Federal Reserve’s quarterly Senior Loan Officer Survey, it’s getting easier to get approved for a home loan.

Between July – September 2012, fewer than 6% of banks tightened mortgage guidelines — the fourth straight quarter that’s happened– and roughly 10% of banks actually loosened them.

For today’s buyers and refinancing homeowners in , softening guidelines hint at a quicker, simpler mortgage approval process; one which gives more U.S. homeowners better access to today’s ultra-low mortgage rates. 

However, although banks are easing guidelines, it doesn’t mean that we’re returned to the days of no-verification home loans. Today’s mortgage applicants should still expect to provide lenders with documentation to support a proper loan approval.

Some of the more commonly requested documents include :

  • Tax returns, W-2s, and pay stubs : In order to prove income, lenders will want to see up to two years of income documentation. Self-employed applicants may be asked for additional business information. Borrowers earning income via Social Security, Disability Income, Pension or other means should expect to provide documentation.
  • Bank and asset statements : To verify “reserves”, banks will often require up to 60 days of printed bank statements, or the most recently quarterly reports. Be prepared to explain deposits which are not payroll-related — banks adhere to federal anti-money laundering laws.
  • Personal identification documents : To verify your identity, banks often require photocopies of both sides of your drivers license and/or U.S. passport, and may also ask for copies of your social security card.

In addition, if your credit report lists collection items, judgments, or federal tax liens, be prepared to discuss these items with your lender. Sometimes, a derogatory credit event can be eliminated or ignored during underwriting. Other times, it cannot.

The more information that you share with your lender, the smoother your mortgage approval process can be.

As the housing market improves and lender confidence increases, mortgage guidelines are expected to loosen more. 2013 may open lending to even more mortgage applicants.

When It Pays To Refinance Your Mortgage — Literally

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Why Refinance

To refinance a mortgage means to pay off your existing loan and replace it with a new one.

There are many reasons why homeowners opt to refinance, from obtaining a lower interest rate, to shortening the term of the loan, to switching mortgage loan types, to tapping into home equity.

Each has its considerations.

Lower Your Mortgage Rate
Among the best reasons to refinance is to get access to lower mortgage rates. There is no “rule of thumb” that says how far rates should drop for a refinance to be sensible. Compare your closing costs to your monthly savings, and determine whether the math makes sense for your situation.

Shorten Your Loan Term
Refinancing your 30-year fixed rate mortgage to a 20-year fixed rate or a 15-year fixed rate is a sensible way to reduce your long-term mortgage costs, and to own your home sooner. As a bonus, with mortgage rates currently near all-time lows, an increase to your monthly payment from a shorter loan term may be negligible.

Convert ARM To Fixed Rate Mortgage
Homeowners with adjustable-rate mortgages may want the comfort of a fixed-rate payment. Mortgage rates for fixed-rate mortgages are often higher than for comparable ARMs so be prepared to pay more to your lender each month.

Access Equity For Projects, Debts, Or Other Reasons
Called a “cash out” refinance, homeowners can sometimes use home equity to retire debts, pay for renovations, or use for other purposes including education costs and retirement. Lenders place restrictions on loans of this type.

A refinanced home loan can help you reach specific financial goals or just put extra cash in your pocket each month — just make sure that there’s a clear benefit to you. Paying large closing costs for small monthly savings or negligible long-term benefit should be avoided.

Many lenders offer low- or no-closing costs options for refinancing. Be sure to ask about it.

For November : Home Maintenance To-Do List

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Seasonal Home MaintenanceThe calendar has turned to November; the month during which we transition from fall into winter.

With less sunlight, colder temperatures, and shorter days ahead , it’s an opportune time to cross those last-minute maintenance items off your homeowner to-do list.

Practicing preventive care — both inside and outside your home — can save thousands of dollars in repairs come later this winter. What follows is a brief checklist to get you started.

For outside the home :

  • Inspect exterior lights and outlets. Be sure that none of the outlets are cracked or broken, or have exposed wires.
  • Clean gutters and clear all blockages. If leaves are falling, redo after leaves are off all trees.
  • Inspect and test outdoor railings and stairs.
  • Have problem trees trimmed, including those that may damage your home in a storm.
  • Protect outdoor water faucets from freezing. Consider using foam cups, sold at hardware stores.

For inside the home :

  • Change batteries in all smoke detectors and carbon monoxide alarms, whether they’re “dead” or not. 
  • Vacuum refrigerator condenser coils, plus the front bottom grill. Empty and clean the drip pan.
  • Inspect wood stoves and fireplace inserts. Hire a certified chimney sweeper to clean the chimney, if needed.
  • Insulate bare water pipes running through your home to prevent freezing and to limit condensation on cold-water lines.
  • Inspect automatic garage door opener. Lubricate chains according to manufacturer’s instructions. Make sure bolts and screws are properly tightened and secured.

As a constant series of chores, home maintenance is a four-season job and one which should not be taken lightly. The tasks of each season are unique and November’s jobs are mostly preparatory in advance of colder weather.

If your routine maintenance uncovers larger issues including a faulty HVAC unit, or a leaking faucet, for example, seek professional help to make the repair. 

Questions First-Time Home Buyers Should Ask

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First-time home buyer questionsNationwide, mortgage rates are low in delaware and home prices remain relatively low, too. This combination, plus rising rents, is pushing renters in some cities toward first-time homeownership.

Buying your first home can be exciting, but you should also do your research to make sure that you ask the proper questions of the process, and make the best choices for yourself and your household.

For example, recommended questions for first-time buyers to ask home sellers include :

What major repairs have been made to your home?

Although standard disclosure forms are supposed to provide information regarding past damage and renovation to the property, there are occasionally repairs that are omitted or otherwise forgotten.  Be proactive and ask pointed questions about the roof, the foundation, and the electrical system. Some home issue have a way of resurfacing many years later and it’s best to know in advance. •

To which school district does the home belong?

As a first-time homebuyer, you may or may not have school-aged children. However, in many areas, public school rankings positively (or negatively) affect home values. Ask your real estate agent for school district data. Consider asking the seller for feedback, too.

Is this a “distressed” property, and what does that mean to me?

For many home buyers, the allure of a foreclosed home or a home in short sale can be large. Prices are discounted as compared to comparable real estate — sometimes by as much as 20%. However, many distressed properties are sold as-is,” with little room for negotiation. This means that homes may be defective or, worse, uninhabitable. Ask your real estate agent for help with distressed homes and their suitability to your home buying needs.

After asking the above questions, and other questions, too, it’s important to remember that buying a home can be an emotional decision; and one that requires using your “brain” as much as your “heart”. Try to keep emotions in check so that you don’t overpay for a home that’s unsuitable, for example.

Improving Market Index Swells To 125 In November

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Improving Market Index 125 MarketsThe U.S. economy continues to improve.

The National Association of Homebuilders released its Improving Markets Index Tuesday. The report attempts to identify U.S. metropolitan areas in which the economy is improving, demonstrating “measurable and sustained growth”.

125 U.S. markets are qualified as “improving” this month, a 22-market jump from the month prior and and all-time high for the index which launched late last year.

Compared to November 2011, this month’s IMI has climbed more than four-fold, rising from last year’s reading of 30. This jump suggests that housing recovery is firmly taking root, helping to generate needed jobs and economic growth across much of the country.

So what qualifies a market as “improving”? The NAHB uses strict criteria.

First, the group gathers data from the three separate, independent sources :

  1. Employment growth from the Bureau of Labor Statistics
  2. Housing price appreciation from Freddie Mac
  3. Single-family housing permits growth from the U.S. Census Bureau. 

Next, for each of the above data sets, the National Association of Homebuilders separates for local data in each U.S. major metropolitan area.

And, lastly, armed with data, the NAHB looks for areas in which growth has occurred for all three data points for six consecutive months; and for the most recent “bottom” is at least six months in the past.

In this way, the Improving Market Index doesn’t just measure housing market strength — it measures general economic strength. 

Of the 22 markets added to the Improving Market Index in November, the following cities were included : San Diego, California; Gainesville, Florida; Omaha, Nebraska; Louisville, Kentucky; and Charlotte, North Carolina.

Several markets dropped off the list, too, including Hanford, California; Orlando, Florida; Terre Haute, Indiana; and Greenville, North Carolina.

The complete list of 125 metropolitan areas on November’s IMI, plus breakouts of the metropolitan areas newly added and dropped is available online at http://www.nahb.org/imi.

October Jobs Report Blows Away Estimates; Mortgage Rates Falling

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U.S. Non-Farm Payrolls 2010-2012

Another month, another good showing for the U.S. economy.

Mortgage rates are performing surprisingly well after Friday’s release of the October 2012 Non-Farm Payrolls report. The Bureau of Labor Statistics’ monthly report beat Wall Street expectations, while also showing a giant revision to the previously-released job tallies of August and September.

171,000 net new jobs were created last month against calls for 125,000 and revisions for the two months prior totalled 84,000.

October also marked the 25th consecutive month of U.S. job growth — a period during which 3.8 million jobs have been reclaimed. This sum represents more than half of the 7.3 million jobs lost between 2008-2009.

Nationally, the Unemployment Rate rose by one-tenth of one percent last month to 7.9%. It may seem counter-intuitive to see unemployment rates rise even as job growth soars. However, it’s a sign of economic strength.

October’s rising Unemployment Rate is the result of more workers entering the U.S. workforce and actively looking for jobs, a manifestation of rising consumer confidence levels and optimism for the future.

Typically, mortgage rates in delaware would worsen on a strong jobs report like this. This month, however, rates are improving. This is mostly the result of Hurricane Sandy, which is expected to create a drag on the U.S. economy with its $50 billion damage tag.

The storm has Wall Street looking past the strong jobs report, positioning itself for the next few months. Investors are moving into less risky assets until the uncertainty surrounding the storm’s effects subside. Mortgage-backed bonds are considered “safe” and are benefiting from this safe haven buying pattern.

For home owners and buyers nationwide, the shift is yielding an opportunity to lock mortgage rates at artifically-low levels. 30-year fixed rate mortgages remain well below 3.50% for borrowers willing to pay discount points, and home affordability is approaching an all-time high.

Home values are expected to rise through 2013 so consider this week’s low rates a gift. If you’re in a position to go to contract and/or lock a mortgage rate, you may want to take that step today.

HOA : The Role Of Homeowners Associations In Housing Communities

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Homeowners Associations (HOA)Homeowners associations (HOA) are legal corporations formed by a real estate developer to market, to manage, and to sell homes and lots in a residential subdivision.

They’re most commonly formed for condominiums and planned urban developments (PUDs), a category which includes suburban communities. 

HOA Articles of Incorporation typically grant developers privileged voting rights in governing the association during its infancy, while providing the means for the developer to exit financial and legal responsibility for the organization, transferring ownership to the homeowners of the association.

This transfer typically occurs after a predetermined number of units have been sold — often two-thirds of the available lots and/or units.

Each homeowners association enforces its own governing documents in the form of restrictive covenants, by-laws, architectural guidelines and regulations. Together, the “rules” of an HOA are meant to define the community standards for the purpose of protecting property values.

Restrictive covenants vary widely from homeowners association to homeowners association. Covenants may include guidelines on issues as varied as where parking is permissible; planned architectural improvements; and, landscaping.

HOAs often enforce these common restrictive covenants, among others :

  • •Boats, utility trailers, RVs, and commercial vehicles may not be parked in driveways and streets
  • Homes may not be painted in “loud” colors
  • Yard signage may not be political in nature, nor defamatory
  • Lawn care must be performed routinely to prevent overgrowth
  • For condos with balconies, towels and clothing may not be draped on railing

For homes governed by an HOA, membership in the homeowners association is a condition of purchase; buyer are not permitted to opt-out.

Homeowners associations make their by-laws available upon request to existing, governed homeowners and will often make by-laws available to prospective home buyers as well. Review community guidelines before buying into a building or neighborhood, and before beginning a home improvement project. It’s important to know what actions are permissible and what actions are not.

In addition, most mortgage lenders require HOA by-laws as part of the mortgage approval process.  

How Choosing Kitchen Colors Can Affect Your Eating Habits

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Kitchen colors influence eating habitsHave you ever walked into your kitchen and instantly felt hungry?

Rarely do people think about the colors that they choose to paint their kitchens. They are often too busy worrying about whether the kitchen will match the rest of the home, or whether the colors will be satisfactory to the rest of the household.

However, when painting and decorating your kitchen, you may want to think about the process in a way many people do not — how the colors you choose will affect the way in which you eat. As behavioral psychologists have documented, the presence of specific colors your the kitchen can change your eating habits and your cravings for food.

Here are some examples :

  • The color red increases your appetite. This is why so many restaurants paint their walls red. Although associated with romance and passion, red is also a color which promotes hunger. Furthermore, it has been noted that the color red in your kitchen can influence high blood pressure.
  • The color blue is calming, which can slow your eating speed, and prevent you from over-eating. When decorating your kitchen and dining room, therefore, using blue wallpaper or blue paint; and blue placemats, for example, can result in “slower” eating and fewer feelings of fullness.
  • The color orange is a “stimulating” color; increasing oxygen supply to the brain and providing a mental boost. An orange-themed kitchen may stimulate your appetite, therefore, and make over-eating more likely.

Then, there is gray. Gray can be an ideal appetite-suppressing color for your kitchen. This is because, psychologically, gray is calming and relaxing, and it neutralizes anxiety. Gray can arrest binge eating and impulsive snacking. It’s also a color which home stagers recommend for its neutrality.

Whether you’re a home buyer , a home seller, or just getting ready to remodel, consider the influence of colors in your home. They do more than just “match the next room” — they affect your food and drink cravings as well.

Find A Mortgage Rate Strategy Ahead Of Friday’s Job Report

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Unemployment RateFriday morning, the government’s Bureau of Labor Statistics will release its Non-Farm Payrolls report, more commonly called the “jobs report”.

Depending on how the jobs data reads, FHA and conforming mortgage rates may rise, or fall. This is because today’s mortgage market is closely tied to the U.S. economy, and the U.S. economy is closely tied to job growth.

Economists expect that employers have added 125,000 net new jobs to their payrolls in October 2012, up from September’s tally of 114,000 net new jobs. Jobs have been added to the economy over 24 consecutive months leading into Friday’s release, and approximately 4.7 million jobs have been created in the private sector since early-2010.

So, what does this mean for home buyers and refinancing households ? It means that mortgage rates may get volatile beginning tomorrow morning.

Improving jobs numbers tend to push mortgage rates up, as it signals to investors that the U.S. economy is strengthening. If the actual jobs reports shows more than 125,000 net new jobs created, therefore, look for mortgage rates to rise.

Conversely, a weaker-than-expected report injects fear into the market, causing investors to purchase safer assets including U.S. Treasury bonds and mortgage-backed bonds. This moves mortgage rates lower.

Markets will also watch for the monthly Unemployment Rate. After falling to a 4-year low of 7.8 percent in September, economists anticipate that October’s unemployment rate will rise 0.1 percentage point to 7.9%.  

The good news for rate shoppers is that mortgage rates remain low. Freddie Mac’s weekly mortgage rate survey puts the 30-year fixed rate mortgage below 3.50% nationwide for borrowers willing to pay 0.7 discount points. Furthermore, a forecast from the Mortgage Bankers Association predicts that the 30-year fixed rate will remain below 4% for at least the next 8 months and low mortgage rates help to keep home payments low.

The Bureau of Labor Statistics releases the jobs report at 8:30 AM ET Friday.

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