Patrick Jones

Mortgage Lender

Buying a Home This Fall? Here’s How Your Choice of Neighborhood Will Impact Your Mortgage

Buying a Home This Fall? Here’s How Your Choice of Neighborhood Will Impact Your MortgageIf you’re planning to buy a home in the next few months, you’ll want to ensure you choose a great neighborhood to live in – not just because it can improve your quality of life, but also because it can help you get a mortgage. Neighborhood is a factor that lenders consider when you apply for a mortgage, which is why you’ll want to consider a neighborhood’s mortgage implications as well. Here’s what you need to know about how the neighborhood you buy into affects the kind of mortgage you can get.

A Neighborhood Full of Foreclosed Homes Decreases Your Property Value

Buying a home in a neighborhood full of foreclosures can seem like a great deal, as the owners may be willing to accept a lower price so that they can move into a better area. But buying in a foreclosure-fraught neighborhood brings with it a variety of complexities when it comes to getting a mortgage.

The biggest issue is that being surrounded by foreclosures significantly decreases a property’s value. Foreclosed homes tend to attract a criminal element and increase property taxes due to the need for more emergency services in the area. When it comes to getting a mortgage, this limits the amount you can borrow – no lender will give you more than what the property is worth, no matter what the property sells for.

Better Neighborhood Amenities Help You Get a Mortgage

Mortgage lenders look at a variety of factors when deciding whether to issue a mortgage, and one of them is the property’s saleability. Simply put, saleability refers to the likelihood that the lender will be able to sell the property in the event that the homeowner defaults on the mortgage.

If you take out a mortgage and then go into default, your lender will need to sell the property in order to recover its investment. Great amenities like parks, schools, and fitness centers make a neighborhood and the houses in it more desirable to buyers, which means the bank will have an easier time selling the home – and will be more likely to issue you a mortgage.

Buying into a good neighborhood can help you to get a great mortgage at a great rate. That’s why you’ll want to enlist the aid of a professional mortgage advisor to help you to determine the best neighborhoods for buyers. Call your local mortgage professional to learn more.

How Much Should You Budget for Closing Costs? Let’s Take a Look

How Much Should You Budget for Closing Costs? Let's Take a LookIf you’re in the market for a new home, you’re probably trying to budget for all of the expenses that come with a home purchase. After all, the asking price isn’t necessarily the entire amount that you’ll pay – there are other expenses that will factor in to the final price. One such expense is your closing costs.

Closing costs are the miscellaneous fees you’ll pay when you sign the deal to buy your home. But how much do you need to save up for closing costs? Here’s what you need to know.

The General Guideline for What to Expect

Most mortgage advisors will tell you that you should expect to pay about 3 to 5 percent of your mortgage in closing costs. By law, your mortgage provider is obligated to give you a Loan Estimate form which is designed to help you understand the key features, costs, and risks of the mortgage loan. Three business days before the loan closes your mortgage provider will also give you a Closing Estimate form to review all of the costs of the transaction including all closing costs.

How Your Closing Costs Break Down

Your lender will give you a breakdown of costs in your Loan Estimate and Closing Estimate. But in general, there are certain closing costs you can expect to pay.

One cost that most lenders include is the loan origination fee, a small charge to compensate the lender for the time it takes to prepare the initial loan documents. There will also typically be a loan application fee, which can vary per lender.

Your lender may require you to get private mortgage insurance depending on your situation. The title search and title insurance to protect your lender from title fraud is another fee you should consider, and you’ll also likely want to buy title insurance to protect yourself.

There are also several other closing costs to keep in mind, like escrow fees, notary fees, pest inspections, underwriting fees, and the mortgage broker’s commission. All in all, you’ll want to budget approximately $5,000 in closing costs for every $100,000 you borrow.

Closing costs can be quite expensive, which is why you’ll want to make sure you budget appropriately when you buy your new home. A mortgage professional can help you to figure out how much you need to budget for closing costs. Call your local mortgage advisor today to learn more about budgeting for the home buying process.

What’s Ahead For Mortgage Rates This Week – October 13, 2015

Whats Ahead For Mortgage Rates This Week October 13 2015Last week’s economic reports included the Federal Open Market Committee Meeting Minutes and Weekly Jobless Claims. Also, the new mortgage TRID rules went into effect. Here are the details:

TRID (TILA-RESPA Integrated Disclosure) Goes Into Effect

TRID, or TILA-RESPA Integrated Disclosure, which is also known as the “Know Before You Owe” rule will change the mortgage process by altering some standard loan forms and practices. Originally slated to go into effect August 1, the Consumer Financial Protection Bureau (CFPB) actually took effect on October 3.

On Wednesday, October 7, 2015, the House of Representatives approved HR 3192, “The Homebuyers Assistance Act”, which would provide a safe harbor for lenders who act in good faith to comply with the new TRID mortgage disclosure requirements. The bill will still need to be passed by the US Senate and signed by the President in order to become law.

Home buyers can expect to be using two new forms under TRID — the Loan Estimate and the Closing Disclosure. These two new loan forms are easier to understand and consolidate the earlier standard forms. The forms are also designed to work in combination with each other, which wasn’t happening with the previous forms.

The new forms clearly detail the loan amount, its terms, whether the amount can increase after closing for each section, and the feature of the loan, such as whether there is an early payment penalty or not.

The forms are designed to provide the buyer with more time to review the costs associated with the mortgage. The Loan Estimate document is due to the buyer three days after applying for the loan, while the Closing Disclosure must be presented three days before closing.

The CFPB has offered a special guide for real estate professionals.

Real Estate Professionals Guide (http://www.consumerfinance.gov/know-before-you-owe/real-estate-professionals/)

Mortgage Rates Tick Downward

Freddie Mac reported that the average mortgage rate for a 30-year fixed rate mortgage dropped lower to 3.76 percent from 3.85 percent the previous week; the average rate for a 15-year fixed rate mortgage was also lower at 2.99 percent. The average rate for a 5/1 adjustable rate mortgage was unchanged at an average rate of 2.88 percent. Average discount points for both fixed rate products was.6 percent while the discount points for the adjustable product was.2 percent.

Jobless Claims Fall To 42-Year Low

New unemployment claims dropped to 263,000 against expectations of 271,000 new jobless claims and the prior week’s reading of 277,000 new jobless claims. Some experts argued that the drop may have had to due with seasonal employment trends. The U.S. labor-force participation rate was reported at a 38-year low at 62.4 percent in September.

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