You may have heard that in the most recent meeting of the Federal Reserve Board, they voted to increase the federal funds rate by half a percentage point.
While fixed rate mortgages are not directly connected to the Fed’s rate (rather the 10 year Treasury rate, the fed rate is directly tied to short term loans such as credit card borrowing and adjustable rate mortgages) mortgage rates are influenced by the rate as well as other Fed monetary policies.
The Fed is focused on lowering inflation and has indicated there may be more rate increases in the next year, other factors such as the war in the Ukraine affecting oil prices as well as lock downs in China affecting the supply chain will be closely watched.
If you are looking at applying for a mortgage, you may want to lock your rate in, give us a call or apply on our website and we can see what best fits your needs.

Published Date 4/11/2022

Cause and effect: interest rates go up and those holding off on listing their homes sit up and finally pay attention. Fear of missing out (FOMO) regarding getting the prices they want for their homes is now being tempered by the idea that fewer and fewer buyers can afford them as rates continue to rise to curb inflation.

According to Mansionglobal’s Ayce Kelce, more sellers have been listing their homes, providing a breath of fresh air to the U.S. real estate market that has been struggling with low inventory levels since the beginning of the pandemic. “The number of homes listed in the week through Saturday increased by 8% compared to the same time in 2021 after decreasing in the prior four weeks, according to a Realtor.com report published on Thursday,” says Kelce.

She goes on to say that the median price of homes in the U.S. surged 15.3% over the last year, with active inventory down 13%. However, the boost in new listings alongside increasing mortgage rates cooling demand indicate a possible return to a more stable housing market. Reports also project that for the first time in three years, the number of homes for sale could start to grow on a year-over-year basis by this summer.

The best time to list? Realtor’s research says it’s THIS WEEK (April 10-16) based on data indicating surging buyer demand, high home prices, quick sales and less competition from other sellers compared to 2021 numbers. “We are in the stage of the home-buying season when inventory typically starts rising from the year’s low point,” Danielle Hale, Realtor.com chief economist, said in the report.

However, even with ever-growing median listing prices and surging demand, more sellers have been dropping their asking prices — good news for buyers. “Around one in every 10 listings, or roughly 12% homes currently listed, had a price drop during the four weeks ending Sunday, which was up from 9% at the same time in 2021 and the highest share since early December, according to a separate report released by Redfin on Thursday,” says Kelce.

“Price drops are still rare, but the fact that they are becoming more frequent is one clear sign that the housing market is cooling,” Daryl Fairweather, Redfin chief economist, said in the report. “It goes to show that there’s a limit to sellers’ power. There is still way more demand than supply, and buyers are still sweating, but sellers can no longer overprice their home and still expect buyers to clamor at their door.”

With today’s hot real estate market, many people are moving to new areas – sometimes across the country, sometimes across town, either way here are ten things to look for when considering a new neighborhood.
1. Property Taxes – you should look at property taxes and also how much they’ve increased in the last five years and if any increases are planned. It’s a good idea to build this into your budget too.
2. Amenities – check what’s nearby based on your interests, restaurants, groceries stores, houses of worship etc.
3. Future development – it’s a good idea to check and see what future development is planned – it might be a good or bad thing but either way its worth checking.
4. Crime rates – you can check local crime rates online or even contact the local police department to get a better feel.
5. See the area for yourself – its best to hang around the area especially at different times of the day to get a feel for what its really like.
6. Commute times – you probably already thought about this but make sure to check the times during rush hour too.
7. Schools – if you have kids, you already thought about this. But good schools can also be a good sign of a well-kept neighborhood.
8. Housing Values – check the current values and compare them with five and 10 years ago.
9. Walkability and activities – depending on your tastes see what activities are nearby.
10. Personal Fit – everyone has different tastes so try to match the neighborhood with yours – new or old, tight-knit or independent, quiet or bustle, these are individual fits but finding the right one will help you enjoy your home that much more!
And of course reach out to us with questions and if you haven’t gotten pre-qualified yet make sure you do 🙂

Last week the Federal Reserve announced it was raising the Federal Fund rate by a quarter percentage point rate, the first rate increase in three years. You are probably wondering what that actually means for homeowners.

Although not officially connected this normally means mortgage rates go up, and rates have increased recently. The Fed has also indicated that it will increase rates even more in the coming months as inflation is one of their top priorities.

If you are currently on a fixed interest rate mortgage, this won’t affect your rate or your mortgage payments. If you have an ARM variable rate mortgage, then it will be affected and you may want to consider locking into a fixed rate mortgage before rates go higher. If you are under contract on a new loan, you may want to consider locking in your rate to avoid further rate increases. Everyone has a unique situation so feel free to contact so we can see what if any course of action best fits your needs!

There are a lot of mortgage terms that we have heard a lot, but we don’t always 100% know what they mean. Today we’ll explain what home equity really is and how you could use it.
To put it simply home equity is the amount of your house that you own. So for example if you have a mortgage loan balance of $100,000 and your home’s value is $300,000 then you have $200,000 in home equity. You calculate home equity by subtracting your mortgage balance from the appraised value of the home.
Your home equity is an asset and you can use it for things like cash-out refinancing, home equity lines of credit (HELOC) perhaps if you have paid your mortgage off you can also get a reverse mortgage.
If your home value has increased in recent years and are looking to use your equity, use our 60 second analysis on our website to see your options.

If you are considering refinancing before rates go up to pay off other debts like credit cards, here is a quick overview.
The average American has nearly $40,000 in debt not including home loans so today we ask if you consider a cash-out refinance to pay off other debts like credit card debt. Credit card interest rates are normally much higher than mortgage interest rates and if you are carrying high credit card debt while making minimum payments, there is an opportunity to save a lot in monthly credit card payments that are primarily going to pay high interest rates on the debt. First you will need enough equity in your home to get a cash-out refinance.
With real estate values rising many people have seen their home value rise so they may qualify for cash-out. You’ll still need to maintain equity in the home at 80-90% to avoid paying mortgage insurance and you will have to get an appraisal and pay closing costs which will be subtracted from the cash out amount.
Contact us to see if a cashing out to pay off your debt makes sense for you. And remember you’re not actually eliminating the debt you’re just saving on high interest payments so be careful not to start spending again on the credit cards and getting caught in a debt cycle loop.

In today’s market of rising home prices, many people are considering buying a fixer-upper.
We’ve all seen the home make-over shows with amazing before and afters but should you do it?
Here are a few things to consider:
1. Know Your Limits How much of the work can you do. How much time do you have to put into renovations. Are you prepared to live in a work zone for a while
2. Work Out Costs In Advance Have a contractor walk through the inspection with you and get a written estimate for work he would do. If you are doing the work yourself price the costs of supplies, either way add 15% to the costs because surprises are likely.
3. Check Permitting Costs and Procedures Check with local officials to see if the work requires a permit and the permit costs.
4. Be Extra Careful with Structural Issues If the house requires structural repairs then double check the work and pricing. Hire a structural engineer to do an inspection and if structural work needs to be done make sure your bid discounts this work
5. Include Inspection Contingencies Make sure you hire professional inspectors and check for hidden issues like mold, piping issues, pest damage etc. And if things come up ask for discounts. And if too many red flags come up or the seller won’t properly discount the costs for repair then you may want walk away and keep looking!

Happy New Year 2022! 🎉
We wish you and your family a peaceful, prosperous, and healthy new year! A New Year and New Beginnings!

The 30 year mortgage is the default standard for home owners, but many ask about 15 year mortgages as well.
You may have noticed rates on a 15 year mortgage are amazingly low. A lower rate is better right? Well its not quite that simple.
Most people of course get a 30 year mortgage. Lets review the pros and cons. The main pros of a 15 year mortgage are the aforementioned lower rate. You are also paying less in interest over the lifetime of the loan. For example a $200,000 mortgage at 15 years with today’s current rates you’d be looking at less than $45,000 in interest. While the same loan at 30 years you’d pay over double that, over $100,000 in interest over the life of the loan. You also have the benefit of paying of the loan free and clear in half the time. Sounds great, why don’t people do it more? Well the kicker is higher monthly payments. Most people are looking for lower payments (especially with higher real estate prices). The above loan for 30 years would have a monthly payment around $850, while the 15 year loan would have a monthly payment of over $1300. That’s a big difference to most people. If you’re already saving comfortably for retirement, college, have savings and little other debt then the 15 year might be the call. But most people are looking for financial flexibility and the much lower monthly payment, hence the popularity of the 30 year term. But either way rates are low and we recommend taking advantage, so fill out the free consultation on our website and we can review your situation and see what program best fits your needs!

Buying the right house for you might be at the top of your list, but the neighborhood is important too. Here are a few tips to consider:
HOA and Property Taxes – these can actually vary widely between one area and the next so make sure to check them and if there is an HOA check the rules in advanced!
Schools – we probably don’t need to mention this – if you have kids or are planning to, then you probably already have this in mind.
Neighbors – this can be a little tricky but it’s a good idea to get a feel for your neighbors. You may want to try an old fashioned hello and ring the doorbell of a neighbor and introduce yourself.
Area Attractions – this can range from grocery stores to parks to restaurants. Think about your lifestyle and what’s nearby (or how long it takes to get to those places)
Future – see what the future plans are for the area is there new development being planned – is it an area where property values will likely go up, etc.
Down Sides – Look into things like traffic, cell phone reception make sure there aren’t any shocks later!

Finally visit the area at different times of the day and during the week and weekend to get a better overall feel for the area.