Buying A House-What I Wish I Knew Then

Someone recently asked me, "What is one thing you wish someone had told you when you first bought a house?”

I thought about it and this was my response:

 

"I wish someone had told me that debt was a bad thing.  Instead of using my house as a credit card I should have been focused on paying it off as soon as possible.  Times were different and values were escalating quickly."

 

Even though we lend money (create debt) for a living, we should make sure people understand that debt, any debt is just that, a liability on your personal balance sheet that is costing you money every minute you owe it.

 

Not only is it our goal to help you find the house of your dreams at the best interest rate, we also want to make sure our customers know the difference between what they qualify for and what they are comfortable paying.  Among other things, we want our customers to know how much property taxes can affect the monthly payment so you can budget accordingly.  We will even give you tips on how to pay down the loan more rapidly.  And of course, educate our buyers on special programs and funds for those who qualify.  We walk you through every step of the process, because the last thing we want to hear from our clients if asked the same question is: "I wish someone had explained the entire process up front."

 

What do you wish someone had told you before you bought a house???

 

 

 

 

 

 

 

 

The Damage Has Been Done

I never like to be the bearer of bad news.  Well, I have good news and bad news.  The good news: the June jobs report showed job creation was better than expected.    The bad news?  It affects mortgage rates. 

 

 Why does the jobs report affect mortgage rates?  It is confusing, but was put perfectly in an article I read today (link below):

 

     "The connection between mortgage rates and job creation is the Federal Reserve. That is, as the labor market picks up, the central bank will begin to reduce its support for the economy. And because its support for the economy consists, in large part, of bond purchases, its retreat will result in higher interest rates."

 

So, as predicted, the damage from the Jobs report has been done. The trend for interest rates is up, although based upon most predictions we are at the high end of where rates will be for 2013. They should remain constant in a .25% trading range for the rest of the year. 

That being said, inventory is shrinking and if you want a great house you are going to have to be ready and able when it comes on the market. Get pre-approved and be prepared to offer full price. Getting houses on a discount will not work in this market unless the house has been for sale for over 30 days. 

 

Please feel free to contact me if you have questions, or to find out how you can get pre-approved. 

 

All the best,

Chris

Your Residential Lending Team

 

http://www.fool.com/investing/general/2013/07/06/fridays-catastrophic-surge-in-mortgage-rates.aspx

Taxes in June?!?!?!

Tax season is over, whew!  So why bring up this subject in June?!?!

Though it will be another 10 months before the looming April deadline rolls around,  it is important to pay attention to laws and changes, so that you can proactively save receipts and know what to expect.

If you have never itemized your taxes, or if this is the first year you will own a home, you may not know what deductions you are eligible for. 

The most common deductions for homeowners in 2013:

·        property tax

·        mortgage interest

·        points paid on a home loan

·        mortgage insurance

·        charitable contributions (cleaning out your closet or garage and donating)

                                                                                            

Don’t forget about the ”fiscal cliff bill” passed in Jan. 2013.  It will allow you credit for energy efficient improvements which include, but are not limited to:

Windows, insulation, a/c, heat pumps, furnaces, water heaters, roofs, and air sealing and duct sealing.  To see if an improvement qualifies check out the IRS website, or these websites below:

Home Heating & Cooling Equipment
http://www.energytaxincentives.org/consumers/heating-cooling.php
Home Shell: Insulation, Windows, Sealing
www.energytaxincentives.org/consumers/insulation_etc.php

Manufactures and retailers should be able to help you figure out whether a specific product qualifies, also.

 Other overlooked deductions are home improvements, or items that add value to your property. 

Though you can’t write off home improvements per say, keeping the receipts and invoices can help when the property is sold so you can offset any gains (calculated by taking your selling price minus original purchase price & provided you have lived in the property for at least three of the five years prior to the sale). 

Before remodeling or making home improvements check out what you can write off at:   http://www.irs.gov/taxtopics/tc701.html

Make sure you consult with your accountant or tax preparer because laws constantly change and are very complex.  They can help you understand how they affect YOU.  But this should help get you started.

If we can be of any assistance to you or someone you know, please contact us.  It is always our goal to make sure you can save money.  Follow me on Twitter @cscheer1961 to stay up-to-date on the latest changes in the market.  We are here to help!

Chris

Goodbye to 3% mortgage rates?

Mortgage rates have seen an increase this month.  In fact, they are at the highest levels since the beginning of April 2012.  With interest rates increasing by about 1/2% within the last few weeks. 

1/2% may not sound like much, but analysts have said rising mortgage rates could spur some homebuyers who have been sitting on the fence to make up their minds to buy . 

So does this mean you should rush your home search, or increase your urgency to refinance?  Rushing to a decision isn’t the answer, but being proactive and strategic is.  Here is why you don’t want to put it off: According to the Mortgage Bankers Association, by the end of 2013, the interest rate on a 30-year fixed mortgage will be at 4.4 percent. And by the end of 2014, they see the rate reaching 4.6 percent.  If you are looking to buy, it is important to get pre-approved at today’s most competitive mortgage rates. 

Consider this:
Earlier this year Yahoo! Homes took a historical look at interest rates.  They evaluated the difference between the cost of borrowing money today, as opposed to in 1981.They compared a 30-year, $300,000 fixed-rate mortgage with a 1981 rate of 18.45 percent to one with a February 2013 rate of 3.51.*

 

	1981 Mortgage	Feb 2013 Mortgage
Loan Amount:	$300,000	$300,000
Interest Rate:	18.45 percent	3.51 percent*
Monthly Payment:	$4,631.56	$1,348.81
Interest Over Life of Loan:	$1,367,362.81	$185,571.33

 Even though interests rates have crept up since February of 2013, you can see, we are not in the same boat as we were in the past.  In 1981, your monthly payment would have been almost four times as much!  To see the full article, click on the link at the bottom.

Continue to follow my Blog or find me on Twitter to stay connected and informed.  And please, don’t hesitate to contact me if you have any questions!

Chris

*According to the "Weekly Primary Mortgage Market Survey®" by Freddie Mac

http://homes.yahoo.com/news/low-mortgage-rates-013524692.html

 

Cornerstone Mortgage approved as a Proloan Lender

Proloan is a financing program that provides free extended protection against rising interest rates to buyers who are purchasing new homes built by skilled union craftsmen. Cornerstone Mortgage is one of only FIVE lenders in the St. Louis Region with the ability to offer this program. For more details, please contact a member of Your Residential Lending Team and visit:

http://www.proloan.com/index.html

Have a great weekend!
Chris

Cornerstone Mortgage recognized by MHDC

Cornerstone Mortgage has been announced as a 2012 Missouri Housing Development Commission (MHDC) Top-Producing Lender with over 100 MHDC loans closed last year! Additional congratulations to Sherry Cross of Cornerstone Mortgage for making the MHDC Top-Producing Loan Officers list.

MHDC provides first time home buyers with down payment assistance as part of their mission to strengthen communities and the lives of Missourians through the financing, development and preservation of affordable housing. As an MHDC Certified Lender, Cornerstone Mortgage and Your Residential Lending Team are proud to assist in this mission.

If you or someone you know could benefit from this program, please feel free to contact our Team for more information.



St. Louis County Residents: 2013 is a Reassessment Year

2013 is a Reassessment Year for St. Louis County. What this means is by law the county is required to update property values for all real estate in St. Louis County. Homeowners will receive a postcard in mid-March when preliminary values are posted online, but formal notices will not be sent until May. Most importantly: You will not get a change of assessment notice in the mail unless your property value has INCREASED.

So don't wait for a formal letter: take a look at your 2013 home value online beginning in mid-March:
http://revenue.stlouisco.com/ias. If something doesn't look quite right with your reassessed value, call (314) 615-4595 to schedule a conference with the Assessor's office.