Follow Up: More Sources Saying 'It is time to buy'

Our blog post on June 9th referenced a recent Wall Street Journal article touting the positive reasons to purchase a home. As a follow up to that post, here are three more articles, each with a similar message: 'buying a home now, makes sense'.

CBS Money Watch: Why the Time to Buy is Now

Forbes Magazine: 9 Reasons to Buy a House Now

National Public Radio: For Many, It's Still a Good Time to Buy a Home

 

 

What is your mortgage IQ?

When it comes to your knowledge of home financing, do you feel there may be something you are missing? According to a recent survey published by Zillow.com, 44 percent of homebuyers admitted they are not confident in their knowledge of mortgages or the mortgage process.

 

The Zillow® Mortgage Marketplace survey, also stated "more than half (55 percent) of prospective home buyers in the study do not understand that mortgage rates vary throughout the day."

 

To read the report's complete findings, please click here.

 

At Coach Realtors, our team of more than 600 real estate sales professionals is backed by our home finance partner Residential Mortgage Division, an affiliate of Wells Fargo Home Mortgage.

 

Our mortgage partner provides our buyers, sellers and sales agents with the expert information needed whether financing a first home, next home, newly built house, or refinancing a current mortgage, lowering monthly payments, or turning equity into cash.

 

Residential Mortgage Division is dedicated to providing you with top customer service and assistance in finding the tailored solution that meets your home buying or refinancing needs. Their innovative financing programs can help you buy your very own piece of the American Dream, and establish long-term financial security for you and your family.

 

FICO to walkaways: You're on our screen

Fair Isaac, developer of the ubiquitous FICO score, has a new warning for homeowners plotting a strategic default or walkaway: We can now spot you in advance. FICO has developed a black-box risk-identification tool that enables lenders and mortgage servicers to tag you months in advance -- and then pursue their own strategic measures to intervene.

 

READ COMPLETE ARTICLE HERE

For Buyers:The Financial Opportunity of a Lifetime?

Today's blog post is an informative (and borrowed) article regarding the opportunity facing today's buyers.

 

The following article is from KCMBlog.com:

 

We often point out that a buyer should be more concerned about the COST of a home rather than the PRICE. Price obviously is a component of cost. However, unless you buy all-cash, you must also be concerned about the financing of the purchase. The price and the financing together determine the cost of a home. Today, we want to look at only the financing piece.

 

An opportunity exists today because of recent government involvement; an opportunity that may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future:

 

Historically low interest rates.

 

The ability to lock in these rates for thirty years.

 

Interest Rates:

Because of the financial crisis, the government stepped in and instituted a series of programs which pushed mortgage interest rates to historic lows. If we look at 30 year mortgage interest rates before and after government intervention we see the impact these programs had (see chart below). Click here to read the full article

 

Information about Real Estate Short Sales

No matter where your financial status falls in today's wide economic spectrum, an understanding of real estate short sales and how they affect the value of all homes within our community is becoming more and more important.

"Hardly a day goes by without at least one person asking me about the implications of short sales--either in terms of how it affects them as a home seller, or what it means to them as a buyer looking for a great opportunity," says Lawrence Finn, Jr., CEO Owner/Broker of Coach Realtors . "That's why our company and its sales associates believe it's critical to proactively communicate accurate information about short sales."

Here are three links to informative articles about different aspects of real estate short sales:

What can I expect during the short sale buying process?

 

Will a short sale save my credit?

 

 7 tips to buying a short sale.

 

 

Loan Pre-Approval Process and Checklist

The house shopping process can be somewhat complicated and the same can be said for the loan shopping experience. Before you get to the fun of house touring and decision-making for your new life, a prospective home buyer needs to be pre-approved and fully understand what the pre-approval process entails.

"Pre-approval is more involved than just having a discussion with a lender," says Lawrence Finn, Jr., CEO Owner/Broker of Coach Realtors. Getting pre-approved for a mortgage loan is a review of your financial status and lets you know exactly how much you can spend on a home. The pre-approval letter given to you by the lender after the appointment, shows prospective sellers and real estate agents that you're a serious buyer. In addition, many sellers will require a pre-approval letter prior to reviewing your offer. "So lining up your financing ahead of time is a very important initial step towards buying a home", adds Mr. Finn.

At the time of the appointment with a mortgage lender, you will need to bring certain documents with you to verify your identity, assets and expenses. The lender needs to gather all of the required information in order to offer you a loan, and your credit report will need to be checked. A pre-approval letter in not an obligation to borrow with a specific lender.

Some of these documents needed for your meeting include:

A most recent W-2 (or entire tax form if self-employed)

A copy of a recent bank statement (including any money market or savings accounts)

Proof of IRAs, retirement accounts, stocks or mutual funds

Your driver's license

A recent paystub from work

Current expenses such as auto loans

To download a complete document checklist, please click here.

Whether you're all set to buy or just trying to figure out what you can buy, choosing a lender who listens carefully, has products for your needs, responds promptly, and treats you with respect is critical. The loan officers at Residential Mortgage Division, the official mortgage partner of Coach Realtors, are trained to ask questions that will give them a clear picture of both your current needs and future goals. They can help you customize a home financing program that will not only help you buy a home now, but one that can also start you on the road to overall financial success.

Remember: just because you are pre-approved does not mean you are guaranteed to receive a loan from that lender. The actual loan is granted after the bank conducts an appraisal on the home your intend to purchase to make sure you aren't paying more than the house's value. This prevents you from over-paying and protects the bank against any buyers who may default on the loan in the future.

Loan Option that is Best for You?

For new buyers, the world of mortgages may be a little confusing and entirely overwhelming. If you are mortgage shopping for your first new home, you definitely want to get the lowest possible rate that your credit score will grant.

While comparing rates and deals from various lenders, there are a few options and facts every consumer should consider. "Percentage points are extremely important to consider, and buyers should absolutely seek the lowest possible rates they can find," says Lawrence Finn, Jr., CEO Owner/Broker of Coach Realtors.

A 30-year fixed-rate mortgage of $400,000 at 4.3% would cost $1,979 per month, while the same loan balance at 5.3% costs nearly $2,221, according to numbers from Coach's mortgage partner Residential Mortgage Division, an affiliate of Wells Fargo Home Mortgage - a difference of almost $250 per month. Over one year, that 1% difference equals out to $3,000.

"Even small adjustments in mortgage rates can make a quite significant difference in monthly payments," says Mr. Finn.

A 30-year fixed rate mortgage is a great starter mortgage for first-timers, but it is still recommended that consumers to see what will work for them. A home mortgage consultant from Residential Mortgage Division can show you exactly how the numbers will play out; web-based mortgage calculators are also helpful.

If borrowers want to pay off their loans quicker than the standard 30 years, other options do exist, such as the 15-year fixed-rate mortgage. Adjustable-rate mortgages often have the lowest rates, but vary as the years go by. Most borrowers prefer the certainty of a fixed-rate. Borrowers with a higher credit score, usually receive the lowest rates. Lenders also look at a debt-to-income ratio of applicants.

"If you are not pleased with the mortgage rates you are receiving, work on raising your credit score and paying off some debt before applying," says Lawrence Finn, "Remember, every percentage point counts."

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