3 Reasons to Avoid Giving Wrong Information on Your Mortgage Application

3 Reasons to Avoid Giving Wrong Information on Your Mortgage ApplicationA mortgage application is typically several pages in length, and it requires you to provide a considerable amount of information about your personal, professional and financial life. Some mortgage applicants may not have access to all of the information when completing the application, and others may simply skim over the form and provide incomplete answers. These are only a few of the reasons why information on the mortgage application may not be accurate, but there are several key reasons why applicants should avoid giving inaccurate information.

Loan Approval is Based on It

The initial loan application will usualy serve as a basis for the pre-qualification of the mortgage request. The applicant may make a decision to move forward with an offer to purchase a home based on this pre-qualification, but the pre-qualification is based on the accuracy of the information that is initially provided to the lender in the loan application. If the information is incorrect then an applicant may not be able to qualify for the loan and the deal could fall through. 

Information Will Be Verified

The majority of the information that is provided by the applicant in the loan application will be verified at various points throughout the loan process. For example, a credit report may be pulled very early on in the loan process, and it may be used to document the accuracy of the debts and monthly payments that the applicant wrote on the loan application. Tax returns, pay stubs and other related documentation may also be required. Essentially, the lender will eventually have access the accurate data, so there is little benefit to provide inaccurate information up-front on the loan application.

It Is Against the Law

A final reason why it is not advisable to provide inaccurate information on the application is because this is illegal. There is a disclaimer on the standard mortgage application that goes into detail about the law regarding providing false information on a loan application. There are also disclosures that are signed before and during closing that relate to this.

Completing a loan application is among the first steps mortgage applicants take when applying for a loan, and it is easy to overlook the importance of providing accurate and detailed information at this stage in the process. It is best to take time complete the loan application as thoroughly and accurately as possible since it is a legal requirement and because of many other negative consequences. Those who have questions about how a loan application works or who would like to begin the loan application process can reach out to their trusted mortgage professional for assistance.

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Surprising Secrets Of Successful Home Staging

surprising secrets of successful home staging Before you let a potential buyer see your home, take the following steps to ensure a great showing. These surprising secrets of successful home staging will help.

Maximize Horizontal Space

Horizontal space gives the illusion of spaciousness. Nearly every homebuyer wants to buy a home with lots of living space. The horizontal space you create doesn’t even need to be utilized. You can create the horizontal space by:

  • Clearing surfaces like countertops, tables and desks
  • Hanging floating bookshelves with nothing on them
  • Clearing the tops of kitchen cabinets

Invest In Fresh Flowers And Plants

Fresh flowers and plants evoke feelings of vitality and health. Homebuyers will respond positively when you use this tip. Place arrangements of fresh flowers and plants at strategic locations throughout the home. Be sure to avoid undoing your horizontal space clearing. Instead, consider placing fresh flowers and plants atop corner occasional tables, on outdoor decking, on each side of the front door, etc.

Stick To Neutral Paint Colors

Your bold tastes in color might not appeal to homebuyers. If you do need to paint a room to make it show-ready, stick to neutral colors. If your teen has painted their room black or some gaudy or bright color, it’s worth it to paint over it with a neutral tone. Otherwise, colors may be all your prospective homebuyers will remember about your home.

Rent A Storage Unit

Decluttering is a necessary step in staging. Buyers don’t want to see your assortment of desk accessories, perfume bottles, or family photo walls. Less is more. Gather all the excess clutter you can and box it up or hide it in drawers. Takedown wall decor, fold-up sofa throws, and corral kitchen appliances. Put all the clutter into boxes and bring it to a storage unit.  Afterward, your home will look more airy and spacious.

Hire Professional Cleaners

Hire professional cleaners to come in and get everything sparkling clean. Every home looks better when it’s clean. Even though you could do this yourself, professional cleaners will do a better job. This will save you the stress and still get your home in picture-perfect condition.

These home staging secrets will enable you to ensure that your home looks its best during showings. Remember, you have only one chance to make your home shine for buyers.

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What’s Ahead For Mortgage Rates This Week – June 28, 2021

What's Ahead For Mortgage Rates This Week - June 28, 2021Last week’s economic reports included readings on sales of new and previously-owned homes.  Weekly readings on mortgage rates and jobless claims were also released.

New Home Sales Fall in May

New home sales dropped to their lowest reading in a year in May with 769,000 new single-family homes sold on a  seasonally adjusted annual basis.  May’s reading was 5.90 percent lower than April’s reading of 817,000 sales but was 9.20 percent higher year-over-year.

May’s decline in new home sales was caused by a 14.50 percent decrease in sales in the South; Sales rose by 33 percent in the Northeast and 4.80 percent in the West. The sales pace for new homes in the Midwest was unchanged.

Multiple factors caused fewer new home sales during what is typically a busy home-buying season. Rising costs of lumber, along with high demand for homes and affordability challenges presented obstacles to first-time and moderate-income buyers in recent months, but lumber prices fell in May. High demand for homes created opportunities for cash buyers who sidestepped making purchase offers contingent on mortgage approvals.

Analysts said that falling lumber prices will eventually provide relief for homebuyers, but short inventories of available homes coupled with high home prices continued to sideline first-time and moderate-income buyers. The median price for new homes rose to $374,000 as compared to $369,000 in April. Real estate pros reported a 5.1 month supply of available homes in May, which was the highest reading in a year.

Existing Home Sales Lower in May as Market Slows

Sales of previously-owned homes also fell in May; this was likely due to low inventories of available homes and the covid induced home-buying frenzy easing. Would-be home buyers have also left the market due to affordability challenges.

Lawrence Yun, chief economist for the National Association of Realtors® said: “Home sales fell moderately in May and are now approaching pre-pandemic activity.” Mr. Yun identified low inventories of available homes and affordability as the main obstacles facing prospective home buyers.

Mortgage Rates Rise; Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week; average mortgage rates surpassed three percent for the first time in 10 weeks. Rates for 30-year fixed-rate mortgages rose nine basis points to 3.02 percent; the average rate for 15-year fixed-rate mortgages rose 10 basis points to 2.34 percent. Rates for 5/1 adjustable rate mortgages averaged 2.53 percent and were one basis point higher. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 411,000 claims filed last week as compared to the prior week’s reading of 418,000 first-time claims filed. Continuing jobless claims also fell with 3.39 million ongoing claims filed as compared to the prior week’s reading of 3.53 million continuing claims filed. 

What’s Ahead

This week’s scheduled economic news includes readings from Case-Shiller Home Price Indices, and reports on pending home sales, construction spending, and consumer confidence. Weekly readings on mortgage rates and jobless claims will also be published.

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Dealing with the Summer Heat? How to Keep Your Home Cool Without Using a Ton of Energy

Dealing with the Summer Heat? How to Keep Your Home Cool Without Using a Ton of EnergyMany 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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What Are The Top Ways To Win A Bidding War?

What Are The Top Ways To Win A Bidding War?Right now, there are not a lot of houses for sale, as inventory and new home construction continue to lag behind buyer demand. In addition, low mortgage rates are accelerating demand, meaning that in many situations the sellers are receiving multiple offers. Therefore, it is important for potential buyers to do everything they can to win a bidding war. What are a few ways buyers can give themselves an advantage?

Get Pre-Approved For A Home Loan

The first thing interested buyers need to do is to get pre-approved for a home loan. Because many sellers have options, they might be more willing to take a cash offer because they know the money is going to be there. In order for potential buyers to compete with cash offers, they need to get pre-approved for a home loan, which tells the seller that the buyer has already been approved for a home loan by the lender. Getting pre-approved can make buyers more competitive.

Present The Best Offer First

Because many properties are receiving multiple offers, buyers need to be ready with their best offer at the outset. If they can convince the seller to forgo listening to other offers, they have a better chance of securing the home. Therefore, buyers have to work with experienced professionals who can help them figure out what their budget is, what comparable homes are selling for, and how they can make a competitive offer that could convince the seller to say yes quickly.

Act As Quickly As Possible

Finally, buyers have to be ready to act fast. Properties are not staying on the market as long as they once did. For example, one site says that homes are spending 20 days fewer on the market now than they did one year ago. Therefore, buyers do not have time to wait. If they have trouble getting their work schedules set, traveling to the area, or lining up a showing, the home could be off the market by the time this is done. Buyers must act as quickly as possible.

Get Ready To Win A Bidding War

These are just a few of the most important steps buyers need to take in order to win a bidding war. While the market is hot, it is possible to find a home at a fair price.

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Where Is The Housing Market Going Next?

Where Is The Housing Market Going Next?There are many people wondering where the housing market is going next. While interest rates might be low, attracting a lot of buyers, there are some potential homeowners who are concerned about the current demand in the housing market. This could be driving up home prices, causing some people to pause. Furthermore, some people might be hesitant to sell because they are worried they might have a hard time finding a new home in the current market.

What do the experts have to say?

Homes Might Start To Sell Faster

As the weather begins to warm up, the traditional moving season is unfolding. A lot of people like to wait until the late spring and early summer to move because they are worried about pulling their kids out of school. Therefore, there is a great chance that homes may sell faster between now and the middle of the summer.

The Impact Of The Pandemic

During the past year, a lot of sellers have been hesitant to list their homes because they were concerned about their personal safety. They wanted to expose themselves to as few people as possible. Now that many people are getting vaccinated, some experts believe that sellers might be more open to selling their homes now. As a result, more inventory could come on the market, helping to deal with the demand.

Competition Could Start To Ease Up With New Home Construction

Another trend that many experts are looking at involves new home construction. During the pandemic, global supply chains were strained, making it hard for construction workers to get the materials they needed to build new homes. Now that many businesses are starting to open up again, it is possible that new home construction could start to catch up with current demand. This might also help to ease competition among buyers, adding to the supply.

The Future Of The Housing Market Is Bright

Regardless, the future of the housing market is bright for buyers and sellers alike. Right now, there are a lot of people who are looking for homes, which is great for sellers. As more inventory arrives on the market, buyers will have more options available as well.

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Is Now The Time To Move Into A Retirement Home?

Is Now The Time To Move Into A Retirement Home?There are thousands of people who turn 65 every day, which is the typical retirement age. Before the development of the pandemic, most people had to wait to retire before they could move to their retirement homes. Due to the pandemic, a lot of people are working remotely, giving them a chance to move to their retirement homes before they actually retire. Is it a smart idea to move before retiring? If the next phase of life is calling, now might be a time to make the move to a retirement home, whether this is a home on the beach or a sprawling property located in the countryside.

Workers Can Be Just As Productive Working From Home

While the pandemic was unexpected, workers have been gradually becoming more remote during the past few years. The pandemic simply accelerated this trend, showing that employees can be just as effective working from home. Therefore, you may see more people buying retirement homes before they actually retire. A lot of people who retire have paid off their current homes, allowing them to make a significant profit if they decide to sell now and relocate to their retirement home using the equity they already have. If they are able to work remotely from there, it might be possible for people to move to a retirement home before they actually retire.

Many Homeowners Are Moving To Their Retirement Homes Now

Due to the health crisis that just happened, many people have become acutely aware of the importance of spending time with family members and friends. Many have not seen their family members and friends since the pandemic started, and moving closer to them is one of the biggest reasons why people relocate. In addition, making the move to a retirement home now can reduce expenses, start a new phase of life, and provide access to better weather.

With mortgage rates still very low, this could be a great time for workers nearing the retirement age to move into their dream homes. Then, they can continue to work virtually from there during the next few years, getting a head start on the next phase of life.

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What’s Ahead For Mortgage Rates This Week – June 21, 2021

What's Ahead For Mortgage Rates This Week - June 21, 2021Last week’s economic news included readings from the National Association of Home Builders on housing markets and  Commerce Department readings on housing starts and building permits issued. Weekly reports on mortgage rates and jobless claims were also published.

NAHB: Home Builder Sentiment Slips Amid High Materials Prices, Labor Shortages

The National Association of Home Builders Housing Market Index fell two points to a May index reading of 81. Readings above 50 indicate that most home builders are confident in market conditions, but builder sentiment has fallen from its peak reading of 90 before the pandemic. The NAHB Housing Market reached its lowest reading of 37 during the pandemic. Readings above 50 indicate that most builders surveyed were confident about housing market conditions.

Homebuilder confidence slipped due to higher home prices caused by high demand for homes. Builders have pulled back the pace of building homes due to rising lumber prices and potential buyers facing affordability concerns. While lumber prices remain high compared to pre-pandemic levels, they were 42 percent lower year-over-year.

Chuck Fowke, chairman of the NAHB, said, “These higher prices have priced new homes beyond the budget of prospective buyers,  which has slowed the strong pace of home building.” Low mortgage rates prompt buyers to enter the market, but home prices in many areas require mortgage loans that many buyers cannot afford.

Homebuilders continued to face shortages of skilled carpenters and other workers. These shortages also impact the price of homes and building pace. Shortages of new and pre-owned homes created high levels of buyer competition with multiple offers on available homes. In addition, some metro areas are seeing more cash offers, which make buying homes more difficult for buyers who depend on mortgages to purchase homes.

In related news, the Commerce Department reported 1.57 million housing starts in May on a seasonally-adjusted annual basis. 1.52 million starts were reported in April and 1.63 million starts were expected in May. Building permits issued in May fell to 1.63 million permits issued on a seasonally-adjusted annual basis. 1.73 million building permits were issued in April and analysts expected the same number of permits to be issued in May.

Mortgage Rates Fall; Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week with rates for 30-year fixed-rate mortgages averaging 2.93 percent and three basis points lower. Rates for 15-year fixed-rate mortgages were one basis point higher on average at 2.24 percent; rates for 5/1 adjustable rate mortgages were three basis points lower on average at 2.52 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

Jobless claims were mixed last week as new jobless claims rose to 412,000 first-time claims filed from the previous week’s reading of 375,000 initial claims filed. Continuing jobless claims were unchanged at 3.52 million claims filed.

What’s Ahead

This week’s scheduled economic news includes readings on sales of new and previously-owned homes, inflation, and the University of Michigan’s Consumer Sentiment Index. Weekly readings on mortgage rates and jobless claims will also be released.

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FOMC Statement: Fed Predicts 2 Interest Rate Hikes in 2023

FOMC Statement: Fed Predicts 2 Interest Rate Hikes in 2023The Federal Open Market Committee of the Federal Reserve said in its post-meeting statement that the Federal Reserve expects to raise its benchmark interest rate range twice during 2023. No rate changes will be made during 2022 as the economy continues to recover from the Covid-19 pandemic. The Fed’s current interest rate range is 0.00 to 0.25 percent.

Fed Expects “Transitory” Inflation

The Fed’s post-meeting FOMC statement said that although Committee members adjusted their forecast for raising the Fed’s benchmark interest rate range, members did not predict long-term inflation and described current upward inflation as “transitory.”

The Consumer Price Index reported that the cost of living jumped in May and drove inflationary growth to a 13-year high of five percent.

11 of 18 FOMC members currently expect two or more rate hikes in 2023; in March, seven members expected one rate hike in 2023. Former Treasury Secretary Larry Summers said that the Fed needs to reconsider its monetary policies based on the two stimulus payments provided to Americans. The Fed has held its benchmark interest rate range to 0.00 to 0.25 percent and continued its monthly purchases of $80 billion in Treasurys and $40 billion in Mortgage-Backed Securities in efforts to support the economy and stabilize financial markets.

The Committee will follow economic news and developments through readings on public health, labor market conditions, inflation, and financial and global news to determine monetary policy adjustments.

Fed Chair Suggests Future Tapering of Bond Purchases

Federal Reserve Chair Jerome Powell said in his post-FOMC meeting press conference that members had their first discussion of tapering the Fed’s bond purchases. Although the Fed has indicated it wants to see “substantial further progress” in the economy before it starts to taper its bond purchases, analysts expected further discussion of tapering bond purchases in FOMC’s July meeting. Reducing bond purchases is considered the first step in moderating the Fed’s accommodative stance on monetary policy.

Chair Powell said that the FOMC will continue to develop monetary policy in consideration of the FOMC’s dual mandate of achieving maximum and an annual inflation rate of two percent over the longer term. Inflation has run below two percent for some time before the pandemic; so a current inflation rate running above two percent would help raise the average inflation rate to the two percent requirement.  

The unemployment rate is improving as businesses and other employers open their doors and restore service to full capacity. Chair Powell cautioned that the economy remains strongly connected to how the Covid-19 virus progresses and said that monetary policy would be adjusted according to how the pandemic impacts the economy.

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Is an ARM Loan Right for You?

Is an ARM right for youIn today’s competitive housing industry, it’s important to find the loan that’s right for you. With the low-interest-rate environment, many buyers wonder if an ARM loan is the best choice. Here’s everything you should consider before choosing an ARM loan.

Understanding how an ARM Loan Works

An ARM loan offers an introductory rate. The rate remains fixed for the first few years. After the fixed period, the rate adjusts annually based on the index (such as LIBOR) and the chosen margin set by the lender.

Many buyers prefer the ARM because the initial payment is much lower so they can afford a larger loan. With the potential of increasing rates in the near future, many buyers are looking at the ARM for its lower cost. 

A fixed-rate loan, on the other hand, starts at one rate and remains the same. Your payment never changes unless you escrow your taxes and insurance, and those rates change throughout the time you own the home. 

Pros and Cons of the ARM Loan

 Pros:

  • Lower payment for the first few years
  • You may be able to pay more principal each month with the lower payment
  • Rates may decrease in the future

Cons:

  • Rates can increase significantly
  • Your monthly payment will change annually after the fixed period
  • It’s hard to predict your financial situation 5 to 10 years from now

Choosing Between an ARM Loan and Fixed Rate Loan

Because you don’t know where you’ll be 5 to 10 years from now, it’s hard to decide if an ARM loan or fixed-rate loan is right. Here’s what you should consider.

Will you Move Soon?

Think about your plans. Will you move in the next few years? If so, an ARM may make sense, especially if you can get one with a rate that will adjust after you sell the house.

Do you Think you’ll Refinance? 

Some people like refinancing whether to get the lowest rates or to tap into their home’s equity. If you’ve structured your loan so that you put money into the home now but will tap into it later, an ARM may save you money for a few years. If you refinance before the rate adjusts, you eliminate the risk of increasing rates. 

Do you not Like Risks?

No matter what your future plans may be, if you don’t like risks and uncertainty, a fixed-rate loan is a better choice. You’ll get more predictability and know exactly what your payment is each month. You’ll also know when you can afford to pay more principal and pay your loan down faster.

Choose the Right Loan Term for You

Look at your situation and choose the loan term that suits your finances now and in the future. Even if everyone around you is taking an ARM loan doesn’t mean it’s right for you. Know the terms, how much the rate can change, and what you are comfortable affording.

Talk with your loan officer and look at all scenarios, paying close attention to the loan’s total cost over the life of the loan before deciding.

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