Low Mortgage Rates

Low Mortgage Rates

The recent drop in mortgage rates may have you dreaming of buying a new home or refinancing your current house. You’re not alone. Today’s low interest rates are providing a break to new homeowners, making homeownership more desirable and achievable at the same time. Freddie Mac explains, “The combination of very low mortgage rates, a strong economy and more positive financial market sentiment all point to home purchase demand continuing to rise over the next few months.” There’s a current narrative that owning a home today is less affordable than it has been in the past. The reason some are making this claim is because house prices have substantially increased over the last several years. It’s not, however, just the price of a home that matters. Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by approximately 3% over the last year. The chart below is featured from FRED Economic Research. It shows the 30-Year Fixed Rate Mortgage in the United States from 1980 to current times. Look at that drop, how crazy! In just 40 years, mortgage interest rates have dropped almost 15%! What an incredible cost savings! The National Association of Realtors (NAR) releases a monthly Housing Affordability Index. The latest index shows that home affordability is better today than at almost any point over the last 30 years. The index determines how affordable homes are based on the following: “A Home Affordability...
10 Things to Avoid Before Closing on Your Home

10 Things to Avoid Before Closing on Your Home

So you’ve been pre-approved for your first mortgage loan, and you’ve found the perfect starter home. Your offer was accepted, the home inspection has been negotiated and your loan officer locked you in at a competitive rate. You likely think you’ve all but sealed the deal. You won’t officially be a homeowner for maybe another 20-30 days, give or take, so don’t get careless. Because guess what? Your lender will check your credit again just before your closing date, prior to granting you the funds. Your lender might also need additional information from you while processing your loan application. That means that keeping your finances stable and being readily available to answer any questions over that 30-day time period is pretty important. Here are 10 things you should avoid doing before closing your mortgage loan. DO NOT…. Buy a big-ticket item: a car, a boat, an expensive piece of furnitureQuit or switch your jobOpen or close any lines of credit (NONE!)Pay bills lateIgnore questions from your lender or brokerLet someone run a credit check on youMake large deposits to your accounts outside of your paycheckCosign a loan with anyoneChange bank accountsTake out any payday loans Depending on your personal situation, you might want to take some time to get comfortable with your new mortgage payment — and after that, it’s probably okay to splurge on that new kitchen table, go on a long vacation or open a new line of credit. But doing so before you close could potentially put getting your home in jeopardy.  Bottom Line It’s now more difficult to get a mortgage loan. As a homebuyer, you don’t want anything...
Property Tax Exemptions

Property Tax Exemptions

The Property Tax Exemption Deadline in Indiana is Approaching! Are You Entitled to a Property Tax Exemption? If you purchased a house, changed the deed, or refinanced on your mortgage, you should make sure the correct exemptions are filed on your home. The Romanski Group of Keller Williams Realty wants to remind you to file your property tax exemptions by the end of the year!  If exemptions aren’t filed or confirmed by December 31 your taxes could go up substantially.  Below is a summary of common exemptions along with contact information for each county below. Homestead Deduction – If you own a home or are buying on a recorded contract, and use it as your primary place of residence, your home could qualify for a homeowner’s deduction. A taxpayer cannot receive the Homestead Deduction in multiple states as the homestead is considered the “principle place of residence”. The deduction is either 60% of your assessed valuation or a maximum of $45,000. Mortgage Deduction – If you are buying property on a recorded mortgage or a recorded contract, and you are a resident of the State of Indiana, you could qualify for a mortgage deduction. The value of the deduction may not exceed the amount of the indebtedness. The deduction is either one half of your assessed valuation or $3,000, whichever is less. A person owning more than one property may not receive mortgage deductions totaling more than $3,000. There are several other property tax exemptions that may be available to you as well which you may want to inquire about. Please find your county below and file your homestead...
Home Sales Expected to Continue Increasing In 2020

Home Sales Expected to Continue Increasing In 2020

With a decline in interest rates as well as home price and wage appreciation, many are wondering what the predictions are for the remainder of 2019. Freddie Mac, Fannie Mae, and theMortgage Bankers Association are all projecting home sales will increase nicely in 2020. Below is a chart depicting the projections of each entity for 2019, as well as for 2020. If you’re a homeowner who has considered selling your house recently, now may be the best time to put it on the market. Here’s what some of the experts have to say: Ralph McLaughlin, Deputy Chief Economist for CoreLogic “We see the cooldown flattening or even reversing course in the coming months and expect the housing market to continue coming into balance. In the meantime, buyers are likely claiming some ground from what has been seller’s territory over the past few years. If mortgage rates stay low, wages continue to grow, and inventory picks up, we can expect the U.S. housing market to further stabilize throughout the remainder of the year.” Lawrence Yun, Chief Economist at NAR “We expect the second half of year will be notably better than the first half in terms of home sales, mainly because of lower mortgage rates.” Freddie Mac “The drop in mortgage rates continues to stimulate the real estate market and the economy. Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months…The benefit of lower mortgage rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity.” In Summary The housing market will be...
‘Black Friday’ of Homebuying

‘Black Friday’ of Homebuying

“Every year, ‘Black Friday’ is a highly anticipated event for eager shoppers. Some people prepare for weeks, crafting and refining a strategic shopping agenda, determining exactly when to arrive at each store, and capturing a wish list of discounted must-have items to purchase. But what about buying a home? Is there a ‘Black Friday’ for the home-buying process? Believe it or not, there is. According to a new study from realtor.com, the week of September 22 is the best time of year to buy a home, making it ‘Black Friday’ for homebuyers. After evaluating housing data in 53 metros from 2016 to 2018, realtor.com determined that the first week of fall is when buyers “tend to find less competition, more inventory, and the biggest reductions on list price.” The report explains, “During the first week of fall, buyers tend to face 26% less competition from other buyers, and they are likely to see 6.1% more homes available on the market compared to other weeks of the year…nearly 6% of homes on the market will also see price reductions, averaging 2.4% less than their peak.” What’s so different about the first week of fall? George Ratiu, Senior Economist with realtor.com says, “As summer winds down and kids return to school, many families hit pause on their home search and wait until the next season to start again…as seasonal inventory builds up and restores itself to more buyer-friendly levels, fall buyers will be in a better position to take advantage of today’s low mortgage rates and increased purchasing power.” Learn more about how prices, listings, and buyer competition stack up during the first week of fall in your metro area. Bottom Line If you...
8 Things You Shouldn’t Do After Applying for a Mortgage!

8 Things You Shouldn’t Do After Applying for a Mortgage!

Congratulations! You’re finally ready to apply for a mortgage or have gotten pre-approved. While this understandably provides a sense of relief, it’s not a done deal until you sign your closing papers. Whether you’re buying a new home or refinancing your current one, there are certain things you can do that could give the underwriter the impression that you will not repay your loan and could jeopardize your loan status. Before you make any big purchases, move any money around, or make any big-time life changes, consult your loan officer. They will be able to tell you how your decision will impact your home loan. With that in mind, here are EIGHT things you should never do right before or after you apply for a mortgage: 1. DON’T: Change jobs!  Proof of a steady income, especially in the same industry, is one of the most important aspects of a mortgage approval. Avoid switching jobs until your loan has closed, if at all possible. If you must switch jobs, be sure your new job is in the same industry as your old one. 2. DON’T: Deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer. 3. DON’T: Make large purchases on credit.  While it can be tempting to want to furnish your new home or park a brand new car in your new driveway, avoid making any large purchases on credit. This raises your DTI. It also adds inquiries to your credit report, which...