Hope Leitner, Realtor®, CRS

Two commonly known ways to lower your mortgage payments are to make a larger down payment especially if it eliminates private mortgage insurance and improve your credit score before applying for a mortgage. Another way to lower your payment would be to buy down the interest rate for the life of the mortgage with discount points.   A discount point is one percent of the mortgage borrowed.   Lenders collect this fee up-front to increase the yield on the note in exchange for a lower interest rate. A permanent buy down on a fixed-rate mortgage is available to borrowers who are willing to pay discount points at the time of closing. Let's look at two options on a $315,000 mortgage for 30 years at 4% interest with no points compared to a 3.75% interest rate with one-point.   The principal and interest payment on the 4% loan would be $1,503.86 compared to $1,458.81 on the 3.75% loan.   The $45.04 savings is available because the buyer is willing to pay $3,150 in poin...

We have all heard this expression that implies that had a person known earlier in life what they know now, they would have done things differently.   The subject possibilities are endless    While no one has a crystal ball to see into the future, it may be possible to learn from people who have experienced similar situations. In the late sixties, mortgage rates hit 8.5% but before the decade had finished, the rates had come down to 7% where they stayed for some time.   Homeowners who purchased at the higher rate, could buy a larger, more expensive home for the same payment if they could get out from under the obligation of their existing mortgage. FHA and VA mortgages, up until the late 80's, could be assumed by anyone, regardless of credit worthiness.   Since these homes were purchased one or two years earlier, the sellers didn't really have much equity in them, and many homeowners were willing to "give" them to investors so they could qualify on a new, low...

The concern about inflation is the sustained upward movement in the overall price of goods and services while the purchasing value of money decreases.   Tangible assets like your home consistently become more valuable over time.   In inflationary periods, your home is a good investment and a hedge against inflation. Money in the bank loses purchasing power due to inflation and the interest you may be earning is almost always less than inflation. Home prices are going up but so is rent.   With mortgage rates near historic lows, the interest is, generally, less than the appreciation the property is enjoying.   Combine this with the leverage that occurs using borrowed funds to control an asset and your equity is most likely, growing at a faster rate than inflation. A 90% mortgage at 3.5% for 30-years on a $400,000 home that appreciates at 4% a year will have an estimated equity of $220,000 in seven years due to appreciation and amortization.   That is a 27.5%...

FINANCE, HOMEBUYERS The Real Mortgage Rate – Or Is It? Advertised rates look tempting, but don’t be fooled into thinking that’s the rate you’ll pay. You have to qualify to receive the best rates with excellent credit and work histories. According to BankofAmerica.com, interest rates are the annual cost of a loan to the borrower expressed as a percentage. The annual percentage rate or APR, is the annual percentage plus other fees, including mortgage insurance, many closing costs, discount points and loan origination fees. The Federal Truth in Lending Act requires lenders to disclose the APR in advertising and in loan agreements. When you apply for a mortgage loan, the APR will be listed in the loan estimate your lender is required to give you. ConsumerFinance.gov recommends that you get estimates from other lenders for the same loan, so you can compare fees. Compare the loan estimates by looking at page one under loan terms. You’ll find the APR on page 3 under “Comparisons.” APR...

Annual percentage rate is a calculation to accurately reflect the cost of the mortgage considering the note rate of interest, financing fees and charges based on the term of the mortgage. Annual percentage rate, APR, calculates the interest rate and loan fees over the life of the loan expressed as a rate.   A mortgage has a quoted interest rate plus a specified number of points which may be paid at closing or rolled into the loan, in some instances. For example, a $400,000 loan amount at 2.98% interest for 30-years with 0.7 points would have an annual percentage rate of 3.0349%.   While the mortgage rate is quoted at 2.98%, the borrower must additionally pay 0.7 points or slightly less than one percent of the amount borrowed as a fee to the lender in consideration of making the loan. This increases the yield to the lender on what they are earning by making this loan and is expressed as the annual percentage rate for the benefit of the buyer. Since the lender is require...

There is more to selling a home than you might think.  Superficially, a person might think that it will sell itself currently because, nationally, homes for sale receive 3.6 offers and they sell within 18 days.  Any business student can probably list the four Ps of marketing: product, price, place, and promotion.  It may appear that there isn't much to selling a home: put a price on it; photograph it; put a sign in the yard; and, put it in MLS but, on closer scrutiny, there is a lot more that the best agents provide. Long before the home goes on the market, the agent will create a detailed value and pricing study based on similar homes in size, price, proximity, and condition.  An overpriced home will sit on the market longer than it should.  The longer it stays on the market, buyers, as well as other agents, begin to wonder if there is something wrong with it. The agent will develop a staging and declutter plan to make the house show at its best because...