Buying a foreclosure? Do your homework!

It’s a tempting proposition: A deeply discounted home in a neighborhood you like. Buying a foreclosure can be a great opportunity, but proceed with caution. There are many pitfalls that can turn your dream deal into an everlasting headache. If you are buying a foreclosure? Do your homework! Here are some things to think about before you take the plunge.

What Is A Foreclosure? There are three classes of sale that people commonly refer to as a foreclosure: a pre-foreclosure/short sale, a foreclosure, and a bank-owned property/real estate owned (REO). Each one presents an opportunity for buyers, although in the pre-foreclosure stage the current owners still have the option to make loan payments and stop further proceedings. If they decide to sell, and the lender agrees, the home will sell for less than the amount due on the current mortgage. The lender takes a loss, or is “shorted” on the sale. In a foreclosure situation, the property will be sold at auction. You’ll need to be prepared to pay cash – financing may not be an option – and you may not be able to have a professional home inspection. If the property doesn’t sell, it becomes bank-owned. You’ll be able to finance the home and have an inspection, but you will have to meet very strict contractual deadlines to close the purchase.

Know The Market. How will you know if you’re getting a good deal if you don’t know what other homes are selling for in the area? Do your online research. You can use sites like Zillow, Trulia and Realtor.com to compare listing prices and see price estimates. (Not all states disclose property sale prices so you may not be able to see what buyers actually paid.) On some sites, you can enter the search term “foreclosures” and find properties in this category.

It’s Going To Cost How Much? A foreclosure may look like a great bargain, but remember you will have expenses that can range from major structural repairs to cosmetic improvements. If you buy a foreclosure for $150,000, spend several months and another $100,000 renovating it, and the average price for a home in the neighborhood is $200,000, it may not be such a deal. Know what you can afford, set a budget and stick to it.

Expert Help. With what you’ve read so far, you’ll probably agree that you need all the expert help you can get to make this purchase work. Your team should include a lender, a Realtor®, and a home inspector. Depending on the circumstances, you may want to add a pest inspector or a well-water testing company, and other professionals as needed.

Lender. First things first. Start with a lender. No matter if you are making a conventional home purchase or following the foreclosure path, you need to know how much you can afford and what loan options are available. Even if you think you are going to pay cash at an auction, talk to a mortgage loan originator. Circumstances can change rapidly and you’ll want to be ready. Furthermore, you can show your Realtor® that you are a serious buyer – see the next point!

Realtor®. This is not the time to go it alone. You need to work with a real estate professional who understands foreclosures. Foreclosure specialists will not only know what’s on the market now, they’ll probably know what’s coming. How do you find a Realtor® who understands foreclosures? Go back to your internet search and see whose names pop up in association with foreclosure listings. As a plus, they’ll have recommendations for contractors and other tradespeople you’ll need to fix up the home.

Inspect, Inspect, Inspect. You can’t expect someone who is losing their home to focus on home maintenance. In addition, the property you’re looking at may have been vacant for months, or even years. Don’t take any chances. You’re buying the home on an as-is basis, which means the seller isn’t responsible for broken pipes, a leaky roof, or black mold. Spend the money on a home inspection so you know what’s wrong, and can decide if it’s worth fixing. (The inspector can’t tell you what repairs will cost, but armed with the inspection you can talk to contractors and get a better idea of the expenses you’re facing.) Need to find a certified inspector? Start here.

Title. Be aware that buying “as-is” can extend to the property title. Title may not be clear (property indisputably owned by the seller) when you buy, and issues, such as unpaid property taxes or HOA dues, could take months to resolve. Consult with a real estate attorney or title company before you buy to find out what you can do to protect your interest.

It may take more than one try to secure a foreclosure. Stay positive and keep looking if you don’t get the first one – or two – or three that interest you. Don’t be afraid to walk away, either. Whether you are buying it to live in, rent, or flip, it has to be the right choice for you.

Joe Baio
jbaio@fcloans.com
Senior Vice President | Collateral Services

The Truth About Investment Properties

You purchased your dream home. All the pictures are hanging in precise alignment, the rooms are painted the perfect colors and now you can sit back and relax. But, wait… what’s that? You’ve been bitten! Bitten by the property bug. Like people who get one tattoo and then just want “one more,” the idea of purchasing another house is enticing. Not one to be your new home… you love what you have… but maybe one to rent or lease or use for platforms like airbnb.com or vrbo.com (or as we call them “non-owner occupied”). Before you start the home buying process all over again, be sure you know the truth about investment properties.

Truth: Patience Proceeds Profits.
You need to prepare yourself for what lies ahead. You likely have gone through the mortgage process before, so you can predict to go through a similar experience – with some variations. Before doing too much planning on what you may do with the potential income from the investment property, it’s best to be pre-approved. Every home loan transaction is different. Purchasing an investment property could have different requirements you didn’t encounter before. You can ask RJ Crosby, your lender for life, what those differences may be.

Truth: Research Required.
Before making a commitment of owning an investment property, be sure you know you’re ready for (or even able to take) the adventure. As when you purchased your home, you’ll want to consider the neighborhood and the home’s proximity to various community features. If you plan to use your investment home for short-term rentals, you may want to view homes near your city’s tourist attractions. If you’re targeting more long-term renters who have children, then you might want to consider nearby schools and parks. Also, investigate both the long- and short-term rental market in your city, specifically in the neighborhoods of homes you’re visiting. Is it saturated? Would you be able to charge the rental pricing you hoped for? Is a full home the way to go or is a condo or duplex more manageable and marketable where you are? Above everything else, you’ll want to ensure whatever community, building or development where the property is located allows for the home to be used in this manner. Conduct your own due diligence to ensure renting your property is allowed, checking with the condominium/community development guidelines and city ordinances.

Truth: Extra Expenses.
Even when you do close on the investment property, there is likely work to do. Rarely do you buy a home in perfect condition that is ready to rent or lease immediately. Some work may be merely cosmetic while other projects might require larger scale renovations. While investment properties can provide additional income, they typically are not a “get rich quick” type of situation. You’ll also have an additional mortgage payment. This can be off-set when renters occupy the property, but before that time and in between renters, those payments are still there. Then, the hot water heaters breaks or the roof leaks or the air conditioner breaks down. Just like in your primary residence, unexpected updates and maintenance is needed. When those instances occur, the responsibility is yours. Also, while security deposits may help cover repairs needed after your renters vacate the property, handling the logistics of having them made is on your “to do” list.

Truth: Marketing Mindset.
Renters come and go. The length of their stay varies on the agreement with your renters and how you use the property (short-term versus long-term). With this in mind, what tools do you have to use to market your investment property? Just like selling a home, curb appeal and professional photographs go a long way in helping others see themselves comfortable in your investment property – whether for a year-long lease or a weekend. Platforms that help promote short-term rental properties often have systems in place to market your investment home as well as vet out potential renters. For long-term rental properties, property management companies can help market your investment home and also help deal with supervise some of those necessary maintenance repairs mentioned earlier. Either way, your mind often needs to be set on making sure the home is occupied if you hope to profit from the investment, and that requires making sure people know about it.

It is true that investment properties can potentially prove to be a lucrative purchase. Going into this venture with blinders off and realistic expectations could help the experience be smoother than you imagined. The Crosby Team at First Choice Loan Services can answer whatever questions you may have about the process.

Bill Keezer
bill.keezer@fcloans.com
Senior Vice President | National Loan Solutions

Living in the Golden Years

As time passes, your home collects a lifetime of memories. Marks on door frames to track changes in height… retouched paint where a “young artist” took to the wall with a crayon… the window that annually frames the family Christmas tree… You could tell a story about every inch of your house. Also, as the years go by, a time arrives when starting stories in a smaller home or living situation makes more sense. Here are just a few option when you’re living in the Golden Years.

Rightsizing

When your children are grown and living on their own, downsizing, or as we like to say, “rightsizing” your home can be a logical step. All the space of your current home may seem unnecessary. Finding a smaller house, condominium or town home could be a great adjustment. A smaller home can be more easily managed, often requiring less time to clean. They also tend to be less demanding of your utilities, thereby saving you some money. Money can also be saved since smaller living situations require less furniture and décor. In a condominium or town home, you may have to get accustomed to sharing a wall and other common outside areas, but the benefits could make it all worth it. Besides, your new neighbors close by could be your new best friends!

Multigenerational Living

It is very common now for homes to be built or renovated to accommodate multiple generations living. A section of the home can be designed almost as an independent apartment with a separate kitchen and entrance. Tangible benefits include saving costs of a completely separate home as well as sharing expenses for utilities and groceries. Intangible benefits are many. There’s peace of mind that additional care and help can be given as the older generation ages. Grandparents can enjoy more time with their grandchildren while maintaining their independence. Parents can have easy access to eager and loving babysitters. Perhaps best of all, grandchildren can know and learn more from their grandparents and carry on family traditions for many more generations.

Senior Adult Communities

Over the years, not only have more senior adult communities been built, they have evolved into active and exciting places to live. When considering rightsizing, you may prefer to live around other senior adults and share in social interactions with those from a similar time. If you are looking into this option, here are a few good things to consider:

1.What ages are invited to live in the community? Age is just a number, but sometimes that number makes a difference. Some communities open up to residents starting at 50 years old. Find out the average age of the residents and gauge your comfort level. Would you want to be an 80-year old in a community with the average age of 55 (or vice versa)?

2.What do you have in common with the residents? As you already know, just because you’re the same age as someone else doesn’t mean they’re your kind of people. Age says nothing about common interests. When looking at a senior adult community, consider if there is one built around a common interest and/or profession with which you are connected. You could make fast friends with built in conversation starters.

3.How will you stay active? One good way to determine if you’re a fit with a senior adult community is to look at the recreational programs. How active are they? Do they fit your lifestyle? There’s a big difference between playing tennis and playing bridge. Also, what outings are planned and available? Typically, communities near college campuses have quick and easy access to the university’s theater, art shows, concerts, and scholarly speeches. The world is still out there, so how will you participate in it?

4.What about your special visitors? Nothing quite brings joy to a heart like a visit with the grandparents. How is this community set up for your very important visitors? Is there a pool or playground nearby? Does the community have a cap or limit on the number of nights visitors are allowed? If unlimited visits are important to you, be sure you choose a community that has no restrictions.

5.Are there any hidden charges? Be sure you understand your full monthly payments and dues and verify everything it includes or doesn’t include. There may be an on-property gym but are special classes like yoga extra? Senior living often means living on a fixed income so ensuring there are no hidden fees or charges is vitally important for you to live comfortably.

6.Can you age in place in the community you choose? Depending on if and when you decide to move to a senior adult community, how long could you realistically live there? What services are available to those in more need? You may be running 5 miles a day and driving all over town presently. What if a day comes when those are no longer options for you? Does the community provide help for those in need of more assistance? It might be something to consider when thinking long term for yourself.

Wherever you decide to live your golden years, choose the place and situation that’s best for you! You deserve it! The Crosby Team at First Choice Loan Services is here to help you rightsize just right!

Five Ways to Maximize your House Hunting Time

The kids are back in school. Between that, their extracurricular activities and outside clubs, it probably feels you’re in your car more than in your home. Plus, you still have meals to prepare, groceries to buy and laundry to do. OH – and then there’s your job. Time is precious. When you are looking for a new home, combined with all that, it can be hard to do it all. That’s why we wanted to share these five ways to maximize your house hunting time.

1. Get Pre-Approved for a Mortgage. You may think, “Wait… I’m just looking for a house. I don’t want to start all that yet. Besides, this is a blog for a mortgage company so of course you’d say that.” Okay, well, true – we are a mortgage company, but we’re not the only ones who think this is one of the best uses of your time in the house hunting process. Getting pre-approved for a mortgage will let you know which homes are in your price range. This will help you avoid spending time viewing homes that do not fit in your budget. Being pre-approved by a mortgage lender can also help provide strength to your offer. When sellers receive multiple offers, those with the backing of a pre-approval from a reputable mortgage lender tend to be taken more seriously.

2. Choose an Exceptional Realtor®. I wouldn’t do my own dental work. I wouldn’t cut my own hair (the little that’s left). And, I wouldn’t act as my own real estate agent. For jobs that are out of my realm of expertise, I trust those who are experts in their fields. A well-seasoned Realtor® will have familiarity with the local market, knowing the benefits and drawback of the various neighborhoods as well as which properties are fresh on the market. They’ll also be able to guide you on comparable and realistic pricing expectations. They do this every day, so they’ll provide up to date and valuable information that only a professional in the real estate industry can.

3. Know What You Want. How many bedrooms do you need? How many bathrooms will you require? Do you want a pool (or a backyard that provides the option for one)? How many stories do you want? Where in the city do you want to be located? Hundreds of questions pop up when you are deciding on your next home. Thankfully, you have the answers! Sit down and make a list of what you require and what is optional. Distinguish between your needs and your wants. Know your non-negotiable features. Provide this list to your Realtor® who will be able to narrow down the list of options even more so that when it comes time to view the different homes, you’re sure to see only the ones that check off the list.

4. Plan Your Path. On the days that you do view homes with your Realtor®, look at a map and plan the order of the homes you’ll see. There’s no need to go from one end of town to another and then back again. See them in an order that makes sense. Also keep in mind the time of day and potential traffic that might hit certain areas of town. School zones and five o’clock traffic could eat up time in between. Consider seeing the newly listed homes first; they may be gone before you know it. As part of the plan, build in time to return to the ones that stand out to you. A second look may be all you need to decide it’s your first choice!

5. Take Good Notes. Whatever will help you remember, do that. After seeing the third or fourth house, they might start to blend together a bit. In your head, you might remember a room connected to a different home or place the house in a different neighborhood. Write things down. Give the homes nicknames like on some of the popular shows on HGTV. Use your smart phone to take good notes and pictures. Consider also just filming your walkthrough so that the layout is more clear to you and you can hear your initial reactions to what you see. Use whatever tools you have to help keep your options clear in your mind.

The world is a busy place, and when you have a move looming, it gets even busier. These few steps can help you move navigate your house hunting journey a bit quicker. When you’re ready to start with #1, contact us at First Choice Loan Services. We’ve love to help you on your exciting journey home!

Chad Peterson
chad.peterson@fcloans.com
Senior Vice President | Communications

How to Avoid Closing Day Surprises

This is it! The big day has arrived. You have almost completed the home buying and home loan process. Today’s the day you sign your final papers, get your keys and…uh-oh. Those are two words you do not want to hear on closing day. What should you do to keep your closing on track? And maybe more importantly, what shouldn’t you do? Here are a few thoughts on how to avoid closing day surprises.

No New Credit. You saw the greatest deal on a TV that would be perfect for your new family room, and the store will cut the price even more if you open a store credit account. Stop. Do not proceed. Your lender will pull your credit shortly before closing, and if you open a new account (even if you don’t charge anything right away), or add major debt to existing credit cards, your debt-to-income ratio may change to the extent that you will no longer qualify for your loan. This rule applies to co-signing a loan, too. Don’t let anyone other than your lender check your credit until after closing.

Keep Credit Accounts Open. This one is going to sound counterintuitive, so stay with me. You might think that you could improve your credit score by closing a little-used account, but’s that’s not the case. Here’s why: Part of your credit score is based on the length of time you’ve had credit. If you close that old department store account because you never use it, and it’s the account you’ve maintained for 10 years, guess what? Your credit score could go down, affecting your loan. Think status quo – no changes while your loan is in process.

Don’t Change Jobs Or Compensation Type. Getting a home loan and changing jobs do not go together. Lenders want to see a stable employment history. You’re borrowing a lot of money; the lender wants to know that you can repay it. Changing companies or changing the way you are compensated (salary to commission, for example) at the same company can cause problems and delays. If you get an amazing offer or your employer says your compensation method must change, talk to your mortgage loan originator right away.

Funds At The Ready. If you will need cash to close, be sure those funds are available well in advance of closing. You will need to either wire the money to the title company or present a cashier’s check at closing. No personal checks and no cash. If you’re not sure of the exact amount but you want to be certain that your wire arrives in time or you have adequate time to get your cashier’s check, take more than you think you’ll need. You’ll receive a refund after closing.

You Know Who I Am. Be prepared to show ID at the closing. Make sure to ask what form(s) of identification will be required to sign your documents.

That Big PayPal Deposit. Your lender may need to see your most recent bank, savings or brokerage account statements close to your closing date. If you have a large, unexplained deposit, it will put the brakes on your loan. Lenders have to know where your money is coming from – it’s a Federal banking regulation. One borrower almost failed to close because he sold an expensive bicycle he wasn’t using and deposited the proceeds. If you’re expecting any deposits outside of your usual run of business, talk to your mortgage loan originator in advance.

I Can Close In Paris, Right? Maybe. What you can do and who can act for you varies across the country. Don’t assume that you can give someone your power of attorney to sign your closing documents. In one case, a borrower who worked abroad had two choices for his refinance: Close at the nearest US Consulate and pay a small fortune to a notary, or fly home. He decided to fly home, with the added bonus of seeing his family. In another instance (in a different state), a couple buying a home gave her mom power of attorney and she closed for them while they were out of the country. Always check well in advance.

Buying a home (or refinancing) is exciting, but don’t get carried away. Talk to The Crosby Team at First Choice Loan Services Inc. before you make any changes that could affect your loan. And think of all the fun you’ll have after you close!

Anna Maria Lepore
alepore@fcloans.com
Senior Vice President | Closing & Funding

July 2018 Housing Market Recap

July existing home sales dropped for the fourth month in a row, and hit their lowest rate in over 2 years. Prices increased again, as they have for over 6 years. The pace of sales was one day slower than it was in June, but homes are still selling quickly, with days on the market below 30. There are some regional variations in sales, but the overall picture shows a very tight market. I hate to say it, but lack of inventory has become the never-ending story. In a nutshell, the July 2018 Housing Market Recap: Sales Drop, Prices Rise.

July existing home sales dropped by 0.7 percent compared to June, and were 1.5 percent lower than July 2017, according to the National Association of Realtors® (NAR) July Existing Home Sales Report, released August 22nd. This is the fifth month of year-over-year decreases.

Inventory fell from June to July by 0.5 percent, and was unchanged from a year ago. At the current sales pace, the supply of unsold inventory was 4.3 months, the same as a year ago.

Home prices continued to increase year-over-year. The median price of existing homes sold in July was $269,600, an increase of 4.5 percent from July 2017 ($258,100). We’ve now reached 77 consecutive months of year-over-year increases.

Days on the market (DOM) were up slightly from June, moving from 26 to 27, but that’s not much of a difference. A year ago, homes typically stayed on the market for 30 days, so the sales pace has increased slightly year-over-year.

According to NAR chief economist Lawrence Yun, “Listings continue to go under contract in under month, which highlights the feedback from Realtors® that buyers are swiftly snatching up moderately-priced properties,” said Yun. “Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.”

Regional variations. The Northeast took the biggest hit in home sales, dropping by 8.3 percent from June, and 1.5 percent from a year ago. The West was the one region where sales increased, rising by 4.4 percent from June but falling 4.0 percent compared to July 2017. Prices rose year-over-year in every region, up 2.5 percent in the Midwest, 2.7 percent in the South, 5.1 percent in the West, and 6.8 percent in the Northeast. Midland, TX remained at the top of the hottest metro areas list (measured by days on the market/listing views per property). The rest of the Top 10 are Fort Wayne, IN, Boise City, ID, San Francisco-Oakland-Hayward, CA, Columbus, OH, Colorado Springs, CO, Detroit-Warren-Dearborn, MI, Racine, WI, Vallejo-Fairfield, CA, and Las Vegas-Henderson-Paradise, NV.

I want to buy a home! Don’t be discouraged; be prepared. Think financing first. Give The Crosby Team a call to find out what loan options are available to you. Work with a Realtor® who knows the area where you want to buy a home, if you don’t have a Realtor® we’d be happy to refer one of our trusted partners. Internet searches are popular and valuable, but if you rely solely on online information, your dream home may be gone before you can view it.

Timothy M. Sheahan, Jr.
tsheahan@fcloans.com
Executive Vice President | Secondary Marketing

Home Buyers Be Aware

The team at First Choice Loan Services Inc. loves providing you with a seamless mortgage experience. There’s a special thrill when you close on your home, for everyone involved. Sometimes, there are other people who also may be excited about your loan closing, but they were not involved in your mortgage transaction. Unfortunately, when a loan is closed, some of your contact information becomes public record. Outside vendors obtain this information and use it to market to you. Some will even do so using our name, misleading you that it comes from First Choice Loan Services. That’s why it’s good for home buyers be aware.

Please note, First Choice Loan Services does not sell your information to anyone. We highly value you and want to help you work diligently to protect your information. While we are unable to prevent unscrupulous vendors from using public information for their gain, we can provide you a few ways to protect yourself by being taken advantage of by them.

Look Out. Any marketing or communication you receive directly from First Choice Loan Services will include our logo and should use an email address with “@fcloans.com” in it. If both of those are not included, then be careful. It’s likely from an unapproved outside vendor. Also, there have been reports of companies requiring the purchase of a gift card before completing a loan application. This is not a practice ever done by First Choice Loan Services and is a misrepresentation of our process.

Do Not Call. Remember to visit the national Do Not Call registry at https://www.donotcall.gov/ where you are able to register your phone numbers on a list of phone numbers vendors are not to call. This process takes up to 30 days. If solicitation calls still continue, you are able to use this website to also report unwanted calls.

Opt-Out. At the bottom of email solicitations, you should see an “opt out” link. You can follow that to prevent future emails from that particular vendor. On a grander scale, you are able to visit https://www.optoutprescreen.com/ (or call 888-5-OPTOUT) for an opt-out process in which you can remove yourself from receiving prescreen offers of credit and insurance for 5 years or permanently. This process takes up to 5 days to take effect.

You are important to us, and so is your information. Although we can’t stop the access of public information, we hope you still take these easy steps to prevent any confusion.

Contact The Crosby Team at First Choice Loan Services today if you need any clarification or have any questions about protecting yourself!

Chad Peterson
chad.peterson@fcloans.com
Senior Vice President, Communications

Back to School Season is Here

Back to school. Those words can bring dread to students and relief to parents. Depending on where you are located in the country, the first day of school is approaching or may have just recently arrived. As we venture into the middle of August, we can’t deny it; the back to school season is here.

To add to the back to school tips we’ve shared before, we wanted to provide more ideas about how to make the transition into this school year successful for the entire family!

1.Watch your language. We all have opinions, especially when it comes to thinking about our personal feelings or experiences in school. As best you can, allow your children to develop their own thoughts on the subject. Emphasize the excitement of beginning a new grade with friends over stressing the end of a summer fun. Instead of painting it in a bad light or as something that should be dreaded or feared, highlight all there is to look forward to. It’s amazing the impact your tone on the subject has. Let your optimism be contagious and build their confidence in the year ahead.

2.Like every holiday or season, the commercials around this time of year remind you there’s shopping to do. It’s important to remember that you may not have to spend as much as you think. There are ways to save all around. You can save quite a bit by buying in bulk at stores like Costco. For parents with more than one child heading back to the classroom, this could help out a lot. Another opportunity for those with more than one student in the family is the ability to reuse items that might be required. If your home desk or office space is anything like mine, you have a good number of pens, pencils and other items that might be one the list of supplies. Before going shopping, see what can be repurposed for the school year ahead. That includes notebooks; to help the student make it more customized for him or her, make an art project out of decorating the cover. Lastly, never forget the basics. Plenty of stores selling school supplies will have coupons available either in the newspaper (remember those?), through the mail and/or online.

3.We’re all motivated in different ways. Consider how your children are motivated as students and make a system where they are rewarded for their hard work. Just like every professional enjoys a paycheck after they complete their jobs and responsibilities, your students could want the same, although it doesn’t have to come in monetary form. Homework could be rewarded with TV time. Successful test scores earn a dinner at one of their favorite restaurants. Good grades might bring a fun outing to the bowling alley. As you set these goals, try to keep the measurements of “success” and “good” relative your child. Everyone has different learning styles and capacities. Challenge their limits while keeping the goals attainable.

4.With summer, a lot of time magically appears for students. Without the hours spent in the classroom, their schedules open up quite a bit. It’s during this season that many new activities and hobbies are picked up. It provides awesome opportunities for young people to learn new skills and also become aware of talents they possess. When school starts, though, it may be time to pull back on some of the extracurricular activities that filled their time during the summer. Ideally, one or two of the activities can stay on the calendar. Outside involvements can help your student develop into a well-rounded adult. It’ll be wise to ease outside activities gradually into the schedule instead of starting off the school year over-committed. No need to start off with stress and have burnout by Halloween.

Education, like home ownership, is an exciting journey! Whatever grade your students are starting, we hope these four tips help them start the year off on the right foot on the path to success!

CHAD PETERSON
Senior Vice President, Communications
chad.peterson@fcloans.com

5 Reasons to Refinance

When you think of refinancing your home loan, what comes to mind? Saving money with a lower rate or shorter term may top the list. Maybe you’re in an adjustable rate mortgage and you’d like the predictability of a fixed rate loan. Perhaps you’d like to take money out to pay for college, a renovation or a new business venture but you’re wondering if it’s possible. With the continuing trend of rising home prices, you may have equity in your home that you can tap for important purposes. Here are 5 reasons to refinance your home.

1.Lower Your Rate. This is the first thing most people think of when they think of refinancing: I’ll refinance to a lower rate and save on my monthly mortgage payment. You may have heard that there’s a number to tell you when to do this, such as when rates are a certain percentage lower than your current rate. Guess what? There is no such number. Furthermore, if you just watch rates you may miss another opportunity. If your credit score has improved since you took out your current home loan, you may qualify for a lower rate. The only way to know if you can save money is to review your current home loan with an experienced mortgage loan originator.

2.Shorten Your Term. Refinancing to a shorter term has the potential to save you a lot of money over the length of your loan, even though you may have a higher monthly payment. It depends upon the length of time left on your current loan, among other factors. You may need to exercise greater financial discipline in the short term, but the long-term reward as you save on interest could be significant. How do you find out? Talk to an experienced mortgage loan originator. (You may be sensing a trend in this blog!)

3.Consolidate Debt. If you are carrying higher-interest debt, such as credit card balances or a personal loan, a debt-consolidation refinance could lower your monthly payments. However, you will need to make sure you don’t rack up a new round of debt in addition to your higher mortgage amount. That could place you in a worse financial position. A debt-consolidation refinance does not pay off your debt and there may not be enough equity to consolidate all of your bills. You may be required to close your credit accounts, so it’s not a move to take lightly. In addition to reviewing your situation with an experienced mortgage loan originator, be sure to consult your trusted tax or financial advisor regarding the effect of consolidating short-term debt into long-term debt.

4.Combine Or Change Loans. If you have an adjustable rate mortgage, a home equity loan or line of credit in addition to a first mortgage, or a home loan with mortgage insurance, refinancing may give you the opportunity to save money or lock in a fixed rate. Deciding if refinancing is advantageous will require careful analysis with your trusted mortgage loan originator.

5.Cash For Important Projects. Home values have been rising steadily. Depending on when you purchased your home and the market you’re in, you may have significant equity that you can tap. Think carefully about what to do with the cash. Good uses might be paying for college to avoid or reduce student loan debt, creating the seed money for your own business venture, or renovating your home to add features or update it. (Remodeling so you can stay in your home longer as you age is very popular with Baby Boomers.) However, experts warn against refinancing for consumer purchases like a new car or a dream vacation. Think of the cash from a refinance as an investment in your future. It took a long time to build up that equity – don’t blow it on something that will lose value immediately.

While a refinance may be a good option, you’ll need expert advice to help you decide if it’s not only right for you, but also which refi program suits your situation. Let’s talk about refinancing to find out it if makes sense for you.

Matthew Martin
mmartin@fcloans.com
Senior Vice President, National Production

The Housing Market Where You Are

Our most recent monthly housing market recap showed that for the fourth consecutive month, housing sales remain on the decline. Certain factors help perpetuate this current state. New construction has fallen behind current demand, and resale inventory is at an 18-year low. While a bird’s eye view of the real estate market is always helpful, it may not apply to where you live or where you want to live. So, what about the housing market where you are?

Low housing inventory can often times lead to increased pricing, causing homebuyers to pause the process. Not every city is seeing this however. Some communities have experience circumstances (such as natural disasters, company closings or layoffs, economic downturns or a rare construction surplus) that have led to a decrease in overall home prices, year over year. Realtor.com provided information on the ten hottest housing markets where home prices saw declines.

For example, if you live in Santa Barbara, California, you’re winning! At 17.7%, that city saw the largest dip in home prices; unfortunately, wild fires and mudslides helped it get there. In second place is Pottsville, Pennsylvania with an 8.1% decrease, mostly fueled by a struggling economy. If you like wine country, you’ll be glad to learn that Napa, California saw home pricing drop 6.7%. If you feel like heading south, you’re in luck! Texas has three cities on the list of the top ten: Austin ranked fourth with a 4.3% dip in prices; College Station had a decrease of 3.6%, placing sixth on the list; and Corpus Christi sits seventh on the list with a 3.1% price drop. Other cities on the list include Beckley, West Virginia, ranking in between Austin and College Station at fifth place with a 4.2% drop; Anchorage, Alaska, sits at eighth place with a 3% decrease in home prices; Houma, Louisiana, boasts a 2.7% drop; and Bismarck, North Dakota rounds off the list at tenth place and a 1.8% home price drop.

None of these cities, however, rank in the top five of the hottest housing markets. According to Corelogic, countrywide, it is taking an average of 3.8 months to sell a home. Miami, Florida far surpasses that with a 9-month supply. Other cities like Philadelphia, Pennsylvania; Chicago, Illinois; Houston, Texas; Anaheim, California and Detroit, Michigan all sit above the national average as well. Some cities, however, fared better with shorter turn times, leaning more towards being a sellers’ market. Seattle, Washington; San Francisco, California, and Denver, Colorado, for example, had strong job growth which helped drive their average time to sell a home to roughly two months. Realtor.com shared the top five housing markets seeing the most action in June of 2018:

#5: Boise City, Idaho
#4: Fort Wayne, Indiana
#3: Boston, Massachusetts
#2: Columbus, Ohio
#1: Midland, Texas (for the third month in a row)

Almost anywhere you may be heading, The Crosby Team at First Choice Loan Services is ready and equipped to help you in practically every market. Contact us today so that we can help you on your exciting journey home!

James Iley
james.iley@fcloans.com
Executive Vice President, National Production