Monthly Archives: January 2014

A Few Tips for the Mortgage Borrower!

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Mortgage rates are on the rise, and borrowers really can?t afford to wait long to take out a mortgage? Here are ten mortgage tips for borrowers in 2014 to keep you on top of your game!

?1.?Act quickly to get a good rate.?Interest rates are likely to rise in 2014. Lock in a low rate while you still can!

?2.?Look into refinancing now.?You may still have a chance to save money with a refinance. Check with a lender now to evaluate your situation.

?3.?Keep your records in order.?New regulations in 2014 will require lenders to examine borrowers more closely than in the past. You will need to have good financial records to show that you are able to make the mortgage payments.

?4.?Use the competitive market to your advantage when you buy.?Mortgage lenders are more dependent on new homebuyers for their business in 2014 than they?ve been in a while. As a buyer, this fact gives you a significant advantage as you encourage lenders to compete for your business.

?5.?Pay careful attention to your spending.?If you have too many obligations to pay, you could have trouble getting a mortgage. Watch your spending closely, and keep your debt payments as low as possible. Of all our mortgage tips for 2014, this may be the most important one.

?6.?Work on your credit.?A better credit rating always means a better deal on loans, so be careful with your credit score. Your best chance of obtaining a good deal on a mortgage is if you have a credit score of at least 720.

?7.?Know your rights before you borrow.?Borrowers in 2014 will enjoy enhanced rights due to new regulations. These rights may be useful to you, but you can?t assert your rights if you don?t know what they are!

?8.?Beware of FHA loans.?FHA loans can often be attractive for first-time homeowners, but watch out. If you carry an FHA loan you will have to carry mortgage insurance at additional cost for the life of the loan.

?9.?Keep your mortgage options open.?If you expect to keep your house for 10 years or less, consider taking out an adjustable-rate mortgage instead of a fixed-rate mortgage. This option is only viable if you know that you won?t be keeping the house long-term.

?10.?Relax and don?t overreact.?The threat of rising mortgage rates might indeed motivate you, but don?t let the pressure cause you to make a hasty decision. Choose your home carefully, and don?t buy a house until you are comfortable that it is the right one for you.

Choosing the Mortgage Term That is Right for You!

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Negotiating mortgages can certainly be a daunting task for first-time buyers. Many potential borrowers don?t fully understand a mortgage?s risks and costs, much less know exactly what mortgage type is right for them. 15-year mortgages can be very attractive because of their low interest rates when compared to 30-year mortgages, but that doesn?t mean they?re the right choice for everyone.

Different types of mortgages structure their payments differently, meaning that buyers need to consider not just what they are willing to pay for a loan but also what they will be paying over the long-term. Here we discuss some of the most essential questions you should consider before choosing a mortgage term:

1. Can you afford a 15-year mortgage?

Compared to a 30-year mortgage, a 15-year mortgage has a lower rate, but there?s a tradeoff there where you have to make higher monthly payments. Since 15-year borrowers have now promised to pay off their loan in 15 years, rather than in 30, each individual payment will be larger. In the long run, you do save on interest payments, because you pay off the balance faster, but the higher mortgage payments may make it harder to save for retirement, college funds, or other investments. Saving money long-term may just not be worth the price of financial strain for the next 15 years! If the higher mortgage payments are going to be difficult for you to scrape together each month, a 30-year mortgage may actually be the better choice for you.

2. Is this your first home?

For first-time buyers, a 30-year mortgage is often a smarter choice because of those lower monthly payments. Long-term mortgages can help take an expensive house and make it an affordable option for first-time homebuyers.

For homebuyers who are certain they will be reselling the house in a short amount of time, however, there?s also the option of taking out an adjustable-rate mortgage. This type of mortgage term has a low, fixed rate for a certain period of time. After that time expires, interest rates could rise and buyers could pay more. This type of mortgage is best for those who only plan to own the house for a few years before reselling it.

3. Are you looking to refinance?

Refinancing from a 30-year mortgage to a 15-year mortgage can be a good option for some people. If you?re keeping up well with your 30-year mortgage, it might be possible to refinance it to a 15-year mortgage with similar payments. This change might be a good option, especially right now, because of the difference between interest rates. In the past, the spread between the 30-year and 15-year fixed rate mortgages has been around a quarter percent, but the current spread is around 1% in some areas.

4. Will you be retiring soon?

Borrowers who take out 15-year mortgage are typically at least 40 years old. These borrowers prefer to pay off their mortgages faster, in the hopes of retiring with little to no debt on their house. Of course, as we mentioned earlier, higher monthly payments can make it difficult to set aside the money for retirement, so that should be taken into consideration as well.

5. Do you follow your savings plan strictly?

If you are a disciplined saver who follows their savings plan to the letter, you may be able to get past the higher monthly payments of a 15-year mortgage and be able to set aside enough money for long-term future plans. Many people, however, choose a 30-year mortgage term because their lower individual monthly payments mean they can be more flexible with their savings plan, and have less chance of having to dip back into their savings for emergencies.

What are Closing Costs??

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Many first-time home buyers may be unaware of some of the hidden costs associated with getting a mortgage, especially those that arise at closing. Often, homebuyers think that the best mortgage is one with the lowest interest rate, but this is not necessarily true. We discuss some of the hidden costs of closing here, to help both veteran and new home buyers alike.

Almost all of the ?hidden? costs from a closing relate to the set of fees that the mortgage lender is charged by other companies involved in the process. Usually, these fees are passed on to the buyer to deal with, though a few costs are assessed by the lender. Regardless, all of these fees are settled at closing, earning them the name ?closing costs.?

These costs usually account for 2% to 5% of the total, but that may vary. Costs and fees typically come from payment of:

? The credit report

? Loan-origination

? Legal fees

? Home inspection, appraisal, and survey(s)

? Title insurance and searches

? Deposit for escrow

? Recording fees

? Underwriting

Additionally, the purchaser may increase his or her costs by using discount points to lower the interest rate of the loan, which does lead to saving over the long term. The buyer pays the majority of the closing costs; however, in some cases, other parties may pay some or all of the costs. One example of this would be a Veterans Affairs loan.

Some lenders actually offer mortgages with no closing costs. However, it?s important that homebuyers recognize that these costs will likely be built into the mortgage itself. Either the buyer or seller will pay these fees eventually.

Closing costs can significantly increase the amount of money required to be on hand when the purchase is finalized. Consider this example: a home sells for $250,000 with the buyer paying an initial down payment of 10% (so, $25,000). The buyer will need additional money at closing?around 5% of the purchase price, or $12,500, making the total required $37,500. The costs associated with closing increase the amount the buyer must pay at closing by almost 50% in this example!

Fortunately, lenders are required by law to provide a good-faith estimate (GFE) of these costs shortly after the loan application is submitted. Legally, the final settlement cannot stray from the GFE by more than 105%, at most. It?s still important to recognize, though, that borrowers can get an unpleasant surprise if they?re unprepared to pay at least something on closing.

The New Age Real Estate Market

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Clearly the Internet, public demand for transparency and the push for information sharing has impacted all business sectors, but perhaps none more than the real estate industry. Thirty years ago, real estate agents could not envision a time when the real estate market data held close to their vest would be accessible with the click of a mouse. The term mouse paired with house conjured up a different image entirely…

The evolution from giant listing books dated soon after print and delivery to real-time data on the Web began slowly at first. While search engines were trying to gain a foothold in the real estate market, brokers continued to train newbies on traditional sales techniques and armed them with a briefcase full of listing presentation materials to bedazzle the customer and secure the agent’s position as the sole source of and savior from documents and details. The mystique that shrouded the real estate market was evident by proprietary market data, cautionary tales of competitive bids, and a language of its own. There was no Internet option to search comparable data, understand the concept of short sale, learn and compare mortgage options, research the credentials of inspectors and attorneys or access a satellite view of neighborhoods.
Today all of those options (and more) are available via the Internet. Agents can quickly and efficiently share data and information in real-time to buyers, sellers, lenders and all other parties involved. There is no doubt that the real estate market in the digital age has been challenging and rewarding. There always has been and will be FSBO (For Sale by Owner) properties, especially now that resources and tools are bountiful on the Web to support that effort.

Real estate professionals who felt threatened during the transition and resisted the new machinery most likely did not survive the change compared to those willing to keep up with the changing times and technology.

However, there is one thing that most definitely has not changed – the remaining?fact that real estate is about building relationships through quality customer service, commitment and loyalty to your clients.

New Year Greetings from Acuity!

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Join us as we welcome in 2014. We are looking forward to seeing what?s in store for the New Year. Friebert & Mattingly and Acuity National Real Estate Solutions LOVED 2013 and are just as excited for 2014!

This past year our company went through some major and very successful changes. Let?s take a minute to recap on all that we have to be thankful for in 2013.

Within the past year, we branded our national real estate solutions company, Acuity National Real Estate Solutions. With the establishment of our new company, we also launched a brand new, world-class website that speaks to our core beliefs, traditions, strengths and services. Feel free to take a look at www.ftgclosings.com. We?re proud of our new site, and think that you?ll appreciate it as well!

In addition to the release of our beautiful new website, we also progressed further into the digital age as we began our online branding strategy campaign. As of today we have 63 new Twitter followers and 120 Facebook fans. We also created an attractive new LinkedIn company page. Join us on social media! Twitter Facebook LinkedIn

We?re also proud to say that we opened two new company locations in Cape Coral and Coral Gables, Florida. What a year 2013 was!

As 2013 progressed, it brought us growth, success and happiness. We?re truly excited to see what 2014 will bring to us and to all of you! We at Acuity National wish every one of you a happy and healthy New Year and all the success we experienced in 2013!

Goodbye 2013, HELLO 2014!

All the best,

The Acuity National and Friebert & Mattingly team