The Top Home Maintenance Mistake’s You Must Avoid

The Top Home Maintenance Mistake's You Must AvoidIf you own a home, you understand just how important it is to take care of it. Even though a lot of people think that if it isn’t broken you should not fix it, that doesn’t mean you should not take care of it. Take a look at a few of the top home maintenance mistakes you need to avoid, and do not let your home fall into a state of disrepair.

Allowing The Dyer Lint To Build Up

Do not allow the dryer lint to build up. Allowing the dryer lint to build up can dramatically increase your chances of dealing with a house fire. Therefore, make sure you remove the dryer lint from the dryer after every load. Furthermore, make sure you clean the ductwork of your dryer annually. If you do not know how to do so, reach out to a professional who can do it for you.

Forgetting To Clean The Gutters

You might not be able to see the gutters from the ground level, but debris can build up in them from time to time. If you do not clean your gutters, they can get clogged. Then, water will have a difficult time draining, which means it will sit on your roof. This could increase your chances of dealing with a roof leak. Make sure you clean your gutters every few months. You may even want to install a device that can prevent leaves and branches from infiltrating your gutters.

Not Handling Winter Maintenance

No matter where you live, you must be on top of your winter maintenance. Make sure that your attic is properly insulated, and check your windows for any signs of leaks. You should drain your garden hoses as well, and don’t forget to make sure that your interior pipes are insulated. All of this is important because it can help you save money on your utility bills while also reducing your chances of dealing with a leak.

Invest In Routine Maintenance

These are a few of the most common mistakes that homeowners make. Your home is an investment, and you need to take care of it. Make a list of all the maintenance tasks you should perform, and stay on top of your maintenance schedule.

 

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Understanding the Principal Limit on a Reverse Mortgage and What Happens if You Reach It

Understanding the Principal Limit on a Reverse Mortgage and What Happens if You Reach ItIf you’re considering applying for a reverse mortgage, you’ll want to ensure you understand certain critical factors. One such factor is the principal limit. The principal limit will have a strong influence on your finances, which is why you’ll need to ensure you know – before applying for your reverse mortgage – what your principal limit is.

So how does a principal limit work, and how can you find out what yours is? Here’s what you need to know.

Principal Limit: The Maximum Amount You Can Borrow

Simply put, the principal limit is the maximum amount of money that you can borrow using a reverse mortgage. This maximum amount does not change if you pay off your reverse mortgage and then apply for a second one – rather, it’s a lifetime maximum that is calculated per-borrower. The principal limit is nationally legislated through the Federal Department of Housing and Urban Development.

Calculating Your Principal Limit Factor

Calculating your principal limit factor is fairly simple. The Department of Housing and Urban Development maintains a chart that shows you what your principal limit factor is. To look up your principal limit factor, all you need are your expected rate and the age of the youngest spouse in the home.

The principal limit factor is useful in determining what kind of a loan you can get. The size of the loan you can expect to receive is equal to your home’s value multiplied by the principal limit factor.

For example, a 72-year-old who owns a $300,000 home with a 10-year interest rate of 3% and a lender margin of 3% has a 6% “effective rate”. According to the table, a 72-year-old with a 6% effective rate will have a principal limit factor of 46.7%. That means the most this borrower can receive through a reverse mortgage is $140,100 – which is 46.7% of $300,000.

What Happens If You Reach The Principal Limit?

If you reach your principal limit, you will have exhausted all of the money available to you through a reverse mortgage – you will have used up all of your equity. A reverse mortgage is a non-recourse loan, which means your lender cannot pursue you or your heirs to recoup their money. In the event that you choose to sell the property, all of the proceeds will go to the reverse mortgage issuer – none of it goes to the homeowner.

A reverse mortgage can be an effective financial tool, but if you use up all of your equity, it may paint you into a financial corner. An experienced mortgage advisor can help you to determine if a reverse mortgage is an appropriate financing option for you. Contact your trusted mortgage professional today to learn more.

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Mortgage Shopping And Your Credit Score

Mortgage Shopping And Your Credit ScoreThe vast majority of people have to take out a home loan to purchase a house. This means applying for a mortgage. Unfortunately, shopping for a mortgage can actually hurt your credit score. Any potential lender will probably have to do a hard pull on your credit. This could temporarily reduce your credit score by a few points. Those few points could make the difference between qualifying for a mortgage and getting denied one. Fortunately, there are ways for you to shop for a mortgage without hurting your credit.

Check Your Credit Score First

First, you need to check your credit report before you start shopping for a mortgage. By law, the major credit bureaus are required to give you at least one free credit report every year. This is your opportunity to take a look at your credit report and correct any inaccuracies that might be present. That way, you can correct these issues before you apply for a mortgage instead of after. This can save you a significant amount of time during the shopping process. 

Get Pre-Qualified For A Home Loan

You should also get pre-qualified for a home loan before you start shopping in earnest. When you get pre-qualified for a mortgage, you receive an estimate of how much money you can borrow to purchase your home. This means that the lender will run a soft inquiry on your credit report, which will not impact your credit score. Pre-qualification is not as strenuous as the full approval process, and you will eventually have to go through the full application process to get your mortgage; however, getting pre-qualified is a great starting point.

Submit All Applications Rapidly When You Find The Right Home

After you apply for your first mortgage, you will have 45 days to talk to other lenders. As long as all of your other hard credit pulls take place within about six weeks, subsequent applications should not have an impact on your credit score. This means that you need to have all of your documents together, which will allow you to expedite the process. That way, you can find the best deal you can on a mortgage without unnecessarily impacting your credit score. 

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What To Know About a 40-Year Mortgage

What To Know About a 40-Year MortgageIf you take a look at your mortgage options, you might find an option for a 40-year mortgage. Now, most lenders do not offer this as an option, but if you find yourself struggling to keep up with your mortgage payments, the lender may offer to restructure your loan into a 40-year term. Is this a smart move, and what do you need to know about this choice?

Your Monthly Payments Get Smaller

One of the top benefits of restructuring your loan to a 40-year term is that you shrink your monthly payments. By spreading out the loan over 40 years instead of 30 or 15, you don’t need to pay as much money every month. If you are struggling to keep up with your payments, you can make them smaller without falling behind by going with a 40-year mortgage.

You Free Up Cash

Another benefit of a 40-year mortgage is that you can free up some cash. This is cash that you can use to pay off other debts, save for retirement, or invest in other areas. Because you won’t owe as much money every month, you will have more money to play with, which can ease your financial burdens.

You Pay More Interest And Slow Your Equity Buildup

On the other hand, you need to think about the downsides of a 40-year mortgage as well. If you increase your payments to 40 years, you will pay more money in interest overall. In addition, you will slow the rate at which you build equity, which means that you might not walk away with as much cash when you sell the house. You need to balance these risks with the benefits of a 40-year loan.

Think Carefully About Your Loan Options

In the end, a 40-year mortgage is not always a smart move, but if the alternative is foreclosure, it is something to consider. While this type of mortgage can help you reduce your monthly payments, it could also increase the total interest you pay while slowing the rate at which you build equity. You should talk to a professional to ensure you consider all of your options before you decide if this is the right move for you.

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What To Know About a 40-Year Mortgage

What To Know About a 40-Year MortgageIf you take a look at your mortgage options, you might find an option for a 40-year mortgage. Now, most lenders do not offer this as an option, but if you find yourself struggling to keep up with your mortgage payments, the lender may offer to restructure your loan into a 40-year term. Is this a smart move, and what do you need to know about this choice?

Your Monthly Payments Get Smaller

One of the top benefits of restructuring your loan to a 40-year term is that you shrink your monthly payments. By spreading out the loan over 40 years instead of 30 or 15, you don’t need to pay as much money every month. If you are struggling to keep up with your payments, you can make them smaller without falling behind by going with a 40-year mortgage.

You Free Up Cash

Another benefit of a 40-year mortgage is that you can free up some cash. This is cash that you can use to pay off other debts, save for retirement, or invest in other areas. Because you won’t owe as much money every month, you will have more money to play with, which can ease your financial burdens.

You Pay More Interest And Slow Your Equity Buildup

On the other hand, you need to think about the downsides of a 40-year mortgage as well. If you increase your payments to 40 years, you will pay more money in interest overall. In addition, you will slow the rate at which you build equity, which means that you might not walk away with as much cash when you sell the house. You need to balance these risks with the benefits of a 40-year loan.

Think Carefully About Your Loan Options

In the end, a 40-year mortgage is not always a smart move, but if the alternative is foreclosure, it is something to consider. While this type of mortgage can help you reduce your monthly payments, it could also increase the total interest you pay while slowing the rate at which you build equity. You should talk to a professional to ensure you consider all of your options before you decide if this is the right move for you.

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What’s Ahead For Mortgage Rates This Week – August 15, 2022

What's Ahead For Mortgage Rates This Week - August 15, 2022Last week’s economic reporting included readings on inflation and consumer sentiment along with weekly readings on mortgage rates and jobless claims.

Inflation Rate Unchanged in July

According to the government’s Consumer Price Index, month-to-month inflation did not rise in July as compared to June’s reading of 1.30 percent growth. Analysts expected a reading of 0.20 percent inflationary growth. Inflation rose by 8.50 percent year-over-year against expectations of 8.70 percent year-over-year growth and June’s year-over-year inflationary growth of 9.10 percent. Core inflation, which excludes volatile food and fuel sectors, rose by 0.30 percent month-to-month in July. Analysts expected a core inflation rate of  0.50 percent month-to-month in July based on June’s reading of 0.70 percent growth. 

Core inflation rose by 5.90 percent year-over-year in July; analysts expected a reading of 6.10 percent based on June’s year-over-year reading of 5.90 percent.

Lower gas prices contributed to slower inflation, but analysts said there were no guarantees of ongoing reductions in fuel prices.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by 23 basis points to 5.22 percent. The average rate for 15-year fixed-rate mortgages rose by 33 basis points to 4.59 percent and the average rate for 5/1 adjustable-rate mortgages rose by 18 basis points to 4.43 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.00 percent for 5/1 adjustable-rate mortgages.

Initial jobless claims rose to 262,000 new claims filed as compared to the expected reading of 264,000 first-time jobless claims filed. and the previous week’s reading of 248,000 initial claims filed. Continuing jobless claims also rose with 1.43 million ongoing jobless claims filed as compared to 1.42 million continuing jobless claims filed in the previous week.

The University of Michigan published its preliminary consumer sentiment index for August. Consumer sentiment rose to an index reading of 55.10 as compared to the expected reading of 52.50 and July’s index reading of 51.5. Index readings above 50 indicate that a majority of consumers surveyed had a positive view of current economic conditions.

What’s Ahead

This week’s scheduled economic releases include readings on home prices, sales of previously-owned homes, along with reports on building permits issued, housing starts, and data on retail sales. Weekly readings on mortgage rates and jobless claims will also be published. 

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The Top Reasons To Downsize When You Retire

The Top Reasons To Downsize When You RetireIf you plan on retiring in the near future, you might be thinking about moving. The kids might be grown, and you might not want to take care of such a large house. If that is the case, you should consider downsizing. When you downsize your home, you trade in your larger home for a smaller one. What are some of the top reasons why you should do so?

1. Bulk Up Your Retirement Account

The first reason why you should downsize is that you will free up more resources you can contribute to your retirement accounts. If you have been in your house for a long time, there is a great chance that you have paid off almost the entirety of your mortgage. Furthermore, your home may have even gone up in value by tens of thousands of dollars. Therefore, when you sell your house, you should receive most of the proceeds from the sale. You can use the proceeds from that sale to buy another house with cash and still have money left over to add to your retirement account. 

2. Reduce Your Overhead Expenses

You can also reduce your overhead expenses if you downsize your home. Your home insurance and property taxes should go down if you purchase a smaller house. You will probably have to spend less money on utilities, routine maintenance, repairs, and upkeep if you trade in your larger house for a smaller one.

3. Find The Right Location

If you decide to downsize your house, you will also have more flexibility regarding where to live. It is easier to fit a smaller house in an ideal location than a larger one. If you are willing to purchase a smaller house, you should have more options available to you, and you can find the perfect location for your retirement.

Consider Downsizing In Retirement

If you are getting ready to retire soon, you should consider downsizing. This is a great opportunity for you to free up a bit of extra cash for retirement and find the perfect location for your home. Consider taking a look at some of the houses available in your local area, and don’t forget to reach out to a professional with any questions. 

 

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The Top Tips To Remember When Moving

The Top Tips To Remember When MovingIf you have recently purchased a home, you are probably excited to move into your new house; however, the moving process can be stressful. There are a few important tips you need to keep in mind if you are moving soon. Make sure to plan ahead, as there are several ways to save time and money.

Get Quotes From A Few Moving Companies

First, you need to get multiple quotes from multiple moving companies. If you have heavy furniture, it is better to hire a moving company to reduce the chances of your furniture getting damaged. When you talk to moving companies, make sure they can handle the items you have. If you have a grand piano, make sure the moving company is comfortable moving it safely.

Get Rid Of The Items You Do Not Need

Before you move, make sure you get rid of the items you do not need. You may want to start by dividing your items into three piles. Create a pile for items you want to keep, another pile for the items you will donate, and a third pile for the items you throw away. Get a receipt for the items you donate, as you might be able to deduct the value of the items from your taxes as charitable donations.

Pack Up Before The Movers Get There

While you might be able to ask the movers to help you pack, it is better to pack before they get there. Label the boxes so you know where they go in your new house. Movers usually charge by the hour, so if you can save them some time, you can save yourself some money. Remember that moving expenses could be tax-deductible, but talk to an account if you have questions about tax deductions.

Get Ready For The Moving Process

These are a few of the most important tips you need to keep in mind if you are moving soon. While the moving process can be a bit busy and frustrating, if you plan ahead, you can streamline the process. There might even be opportunities for you to save money. Remember that you should get quotes from multiple moving companies before you decide which moving company you go with.

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Call in the Pros: 4 Ways That Using a Mortgage Professional Will Save You a Lot of Money

Call in the Pros: 4 Ways That Using a Mortgage Professional Will Save You a Lot of MoneyIt may seem better to go it alone when it comes to acquiring a mortgage, but there are many benefits associated with using a mortgage professional that can make finding your dream home a lot easier. If you’re currently getting prepared to hit the market and are weighing your options, here are some reasons that a professional who knows the neighborhood will save you money.

Strong Market Knowledge

Many homebuyers can take a look at the MLS listings to find the price of properties selling in the area, but a mortgage professional will know the market without having to look at a book. This means that if you have an ideal house in mind, they’ll be able to determine the right offer for the home you’re interested in so you don’t end up spending time on research and paying more than you should.

Access To Lenders

It may seem like you can get in touch with any lender and they’ll be happy to provide you with a great deal, but because a mortgage professional will have a business relationship with many lenders, they will be able to get you a better rate. While you can approach lenders on your own, there’s a good chance you won’t get as competitive a rate.

Time Is Money

You may have set aside the time to invest into your home search, but trying to find the right home at the right price can end up taking a lot of time. You’ll also need to know the ins and outs of the procedures when it comes to making an offer and closing the deal. The benefit of a mortgage professional is they’ll already have experience at their disposal and will be able to do the legwork for you.

Closing Time

It’s great to find the house of your dreams on your own, but a mortgage professional will be well versed in closing the deal. Instead of having to go back and forth on any home inspection issues or final offers, they’ll be able to advise you so that you can get the home you want at the price you’re looking for.

While many people want to go it alone on the real estate market, using a mortgage professional can save you both time and money in finding the right place. If you’re preparing to buy a home, contact your trusted mortgage professionals for more information.

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The Type of Home You Want to Buy Determines Your Closing Cost and Here’s Why

The Type of Home You Want to Buy Determines Your Closing Cost and Here’s WhySavvy 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 associated 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.

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