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An adjustable rate mortgage (ARM) is a type of mortgage in which the interest rate can fluctuate over time. The key advantage of an ARM is that its initial interest rate is usually lower than that of a similar fixed-rate mortgage, making your monthly payments more affordable initially. Depending on the terms of the ARM, these lower payments can last for several years or even a decade. This makes it a good option for those who plan to stay in their home for a short period of time, and move before the ARM resets to a variable rate. As interest rates rise, payments will also increase. ARMs can also be beneficial if you anticipate a significant increase in income or assets in the future. When the ARM resets, you will…

As we continue to see low inventory in the housing market and high rent prices, many home owners are adding ADUs (which stands for Accessory Dwelling Units). ADUs often called granny flats, are guest houses or rooms added to garages to create rental income for home owners. Home owners typically add ADUs to increase cash flow, as well as looking for their property value to appreciate. Whether ADUs are right for you, depends on a number of factors. ADUs often costs at least $100,000 to build so being in a high rent market helps to offset the initial investment. You’ll also need to make sure local ordinances allow them and what the regulations are. The old real estate adage about location stays true for ADUs as well. If you are…

If you’re in the market for a new house, you’ve probably heard that you want to get pre… qualified or pre-approved? What’s the difference anyways? There’s actually a big difference. Pre-qualified is more of a preliminary step. It gives you a general idea of much home you can afford. We will examine your credit, income, assets, and debts and you’ll have a general idea of the price range you’re looking for. You may also see that you need to increase your savings or lower debts before you buy. While pre-qualifying is an initial step, pre-approval is a deeper dive and being pre-approved carries more weight with sellers. To get pre-approved we will verify you income, assets, etc. and you will be more official (of course you still have to apply…

If you were recently denied for a mortgage application, it doesn’t mean you can’t get approved somewhere else. There are some application issues that are fixable. The first thing you’ll want to know is why you were denied. We can take a look and shop for other loans options. Credit issues are a common reason for getting denied. The first thing to do is to examine your credit report to see if there are any errors that can be fixed. There are also other loan programs if your score doesn’t fit conventional loans. Debt to income ration or DTI that is too high is another common reason to be denied. The first thing if possible, would be to pay down debt. Another common source of debt is student loans -…

As the Federal Reserve has indicated lowering inflation is a top priority and raising short term interest rates as its primary tool to do this, we have seen mortgage markets react with higher rates (mortgage rates are not directly tied to the Fed rate, but they often move in the same direction). The 30 year rate moved up to 5.89% this week accord B ing to Freddie Mac. While these rates are higher than pandemic lows, the still fall into the historic “normal” range. While the Fed is taking a strong position against inflation, we are seeing market conditions improve in some areas. As Dawit Kebede, an economist for the Credit Union National Association noted recently, “there are signs that some of the main drivers of inflation are easing, such…

If you are shopping for a new home and looking for some good market news, there is some in the increase of housing supply. After dealing with monthly price increases and bidding wars, because demand was far higher than supply, we are looking a somewhat more balanced market (but still a seller’s market in most areas). According to the National Association of Realtors the stockpile of homes in months of supply has dropped from a record low of just 1.6 month in January and has slowly ticked up to 3.3 months in July. So while it is still a seller’s market conditions are moving towards more balance – if you are looking, go to our website and fill out our pre-qual analysis to see how much you can qualify for…

PMI is private mortgage insurance. If you’re getting a conventional loan and are making of down payment of less than 20% of the purchase price, you generally need to purchase PMI. This insurance is designed to protect the lender in case of default on the loan and it also allows the borrower to buy a house when they can’t afford to make the traditional 20% down payment. PMI is provided by a third party, requirements and rates will be provided before the closing. Once you reach 20% equity in the home – either through mortgage payments or rising home values, the PMI will be terminated. PMI rates are generally between 0.5 percent and 1.8 percent of the original loan amount. According to Freddie Mac, it estimates that most borrowers pay…

As we enter beach and pool season – many people ask if a swimming pool will add value to their home (to be clear we are talking about in ground pools here). The answer is it depends. Studies show that it can add 5% or more to the value of your home (but these studies are pre-Covid). If you are in a warmer climate like Texas or Florida, pools can add more value and be more desirable. In fact if your home is in a high-end area where most homes have pools then it can lower your home’s value if you do not have one. Of course you have to take into account building and maintenance costs, as well as if your yard has enough space to accommodate a pool…

If you are a first time home buyer and looking for help with your down payment and closing costs, there are actually a number of grant programs both nationally and on the state and local level. Grants are not loans and not required to be paid back. Qualifying for different grant programs varies, it often requires you to be a first time home buyer and you must live in the residence (not rent it out). You may also need a minimum credit score as well as fit income criteria. Give us a call or schedule a consultation on our website and we can see what grants and programs may be available to you.

Looking to buy a home but short on cash? With our national DPA (Down Payment Assistance) program, you could be eligible for a grant of either 2% or 3.5% of the purchase price that can be used toward your down payment. Our DPA program provides a wide variety of eligible borrowers with down payment assistance in the form of a grant equal to 2% or 3.5% of the purchase price on eligible FHA home purchases. Our program can also be used with the FHA 203(b) program or many FHA renovation programs, as well as the FHA OneTime Close Construction-to-Permanent program (excluding 3.5% grant). Our program has no income limits for any borrower on the loan application who is a current, retired, volunteer, non-paid, or plans to become No Income Limits…