A Costly Mistake for Mortgage Borrowers?

A Costly Mistake for Mortgage Borrowers?

Consumers could be leaving money on the table by failing to gather quotes from multiple lenders when shopping for a mortgage. In fact, borrowers stand to save an average of $1,500 over the life of a 30-year loan by just getting one additional rate quote when shopping for a mortgage. Multiple quotes could bring bigger savings, according to Freddie Mac’s April Insight report.

Eighty percent of borrowers who received one additional rate quote while shopping for a mortgage saved between $966 to $2,086 over the life of their loan. Borrowers who gathered five rate quotes saw an average savings of $2,914. Eighty percent of the borrowers who obtained five quotes saved between $2,089 and $3,904, according to Freddie Mac’s report.

Yet, nearly half of consumers fail to shop for better rates before taking out a mortgage to buy or refinance a home, according to Freddie Mac’s report.

“By shopping more than one mortgage lender, consumers are more likely to get a better interest rate and save money in both the short and long term,” says Len Kiefer, Freddie Mac’s deputy chief economist. “With lower monthly payments and lower fixed fees, the loan will be more affordable and thus safer, and consumers may have hundreds or thousands of dollars more in their pockets. Not a bad return for a few phone calls or clicks.”

Source: “​Why Are Consumers Leaving Money on the Table?”  Freddie Mac Insights (April 2018)

Still Renting?  We have a better options.

With interest rates at an all-time low, now is the time to buy.  More people than ever are turning to property and housing as a way to incest their income and watching it grow.  Whit a variety of loan programs available, it’s time to begin exploring home ownership options today.

Still Renting? We have a better options.

After taking a look at how much you will spend on rent over the years, wouldn’t you prefer to invest the money in a home of your own?

Credit Policy Changes Could Boost Scores

Credit Policy Changes Could Boost Scores

The three major credit reporting agencies are implementing policy changes for credit scoring that could lift the scores of some consumers. Equifax, Experian, and TransUnion will now exclude exclude all tax lien data from credit reports, which could raise some credit scores as much as 30 points, CNBC reports.

The agencies began this process last summer, removing nearly 100 percent of data on civil judgments and 50 percent of data on tax liens from credit reports. The firms now will strike the remainder of tax lien data, a policy that began taking effect Monday.

About 11 percent of the population likely will have a judgment or lien removed from their credit file, according to estimates from LexisNexis Solutions. “Analyses conducted by the credit reporting agencies and credit score developers FICO and VantageScore show only modest credit scoring impacts,” Eric Ellman, senior vice president of the Consumer Data Industry Association, said in a statement.

Credit scores are key for consumers who are applying for loans, such as a mortgage. FICO scores, for example, generally range from 300 to 850; anything above 700 is usually considered a good credit score.

Source: “Credit Scores May Jump This Month Thanks to New Scoring Rules Enacted After CFPB Study,” CNBC (April 16, 2018)

Time Buyers Retreat From Spring Market

Time Buyers Retreat From Spring Market

Builders are making efforts to ramp up construction, but a large portion of home starts are in luxury markets, leaving inventory shortages in lower price brackets that are helping to sideline many first-time buyers. In the first two months of 2018, first-timers made up 29 percent of all home buyers, down from 32 percent a year ago, according to the latest REALTORS® Confidence Index Survey. Nearly 44 percent of properties were listed at $250,000 or less in February, the survey shows. That’s a far cry from the 75 percent that were listed in that price point in May 2012, according to realtor.com® housing data.

Higher home prices have had a clear impact on buyers heading into the spring. Consumers’ average monthly mortgage debt-to-income ratio, after factoring in a 3.5 percent down payment, mortgage insurance, taxes, and maintenance costs, rises to 34 percent. That exceeds the 30 percent threshold that most financial analysts consider healthy. A 20 percent down payment would bring the debt-to-income ratios down to 27 percent, but that would cost buyers an extra $48,340 upfront, according to the National Association of REALTORS® Economists’ Outlook blog.

Saving for a down payment could be problematic for first-time buyers, since they have no equity to use. The average savings of non-homeowners was $5,200 in 2016, according to data from the Federal Reserve Board. The chart below uses realtor.com® data to show home prices across the country.

Source: “First-Time Buyers Sidelined by Lack of Supply and Rising Prices,” National Association of REALTORS® Economists’ Outlook blog (April 10, 2018)

FEMA Changes Encourage Private Flood Insurance

FEMA Changes Encourage Private Flood Insurance

In the absence of legislative reform by Congress, there’s only so much the Federal Emergency Management Agency can do to encourage the growth of private flood insurance. But FEMA, which oversees federal flood insurance, has come up with a few small but meaningful program changes that will make it easier for households to switch to private insurance if they can get a better deal that way.

First, the agency has lifted the requirement that households retain their federal coverage if they switch to private insurance before their coverage term is up. Prior to this change, households had to maintain their federal coverage even after switching to private coverage, which meant they had to pay two sets of premiums if they made the switch.

And second, insurance companies that offer federal coverage can now also offer private coverage as well, either their own or another company’s. Prior to this change, if a company offered the federal option, it was prohibited from providing a private alternative.

The agency has also made two other small changes to make life easier for homeowners who appear to be in a flood zone.

First, if a homeowner’s state uses what’s known as LiDAR technology to collect elevation data, owners can now use that data to demonstrate they don’t need flood insurance. That can save them as much as $2,000 on the cost of a separate elevation certificate. The downside here is many states are not yet using the new technology to collect elevation data, though Minnesota and North Carolina are two examples of those that do.

And second, FEMA’s procedures for newly mapped flood areas will be extended to apply to more properties. That means more owners will be able to start their premiums at a lower rate and only gradually reach responsibility for full premiums.

—Source …REALTOR® Magazine

Show Off a Home’s Outdoor Space

Show Off a Home’s Outdoor Space

Homeowners care about the entertainment value a backyard offers, and they’re devoting money to sprucing these spaces up, according to the latest Houzz Landscaping Survey, based on responses by more than 750 homeowners who are either in the middle of a landscaping project or planning one.

Homeowners are investing in several landscaping projects to make their outdoor areas more livable, such as adding more seating with lounge furniture, dining furniture, and benches. They’re also adding fire pits, ceiling fans, and patio heaters so they can extend the use of their outdoor space into more seasons. Owners also say outdoor string lights and rugs can improve the outdoor ambiance too, the survey showed.

More than a quarter of homeowners report that their usable outdoor area is significantly larger than the interior of their home, so they’re wanting to take advantage.

Technology is also being added more into the outdoors. Of the surveyed homeowners who added or upgraded entertainment systems outside, the majority opted to add an outdoor television or wired and solar speakers.

The majority of the outdoor projects are occurring in the backyard at 70 percent, but 39 percent of homeowners say they updated their front yards and 30 percent their side yards. Homeowners adding or updating items in their front yard said they were more focused on curb appeal, such as adding flower beds and borders, shrubs, and perennials.

The costs vary widely for how much homeowners are spending on their landscaping projects. More than half of homeowners who completed their outdoor renovation spent more than $10,000, and nearly one-third of homeowners spent less than $5,000.

More than half of homeowners say that since finishing their remodeling project they are spending more time entertaining outside, with the majority say they’re enjoying it by relaxing or gardening.

Source: Houzz