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      Blog :: 09-2016

      4 Reasons To Buy This Fall

      4 Reasons to Buy This Fall | MyKCM

      It’s that time of year; the seasons are changing and with them come thoughts of the upcoming holidays, family get-togethers, and planning for a new year. Those who are on the fence about whether or not now is the right time to buy don’t have to look much further to find four great reasons to consider buying a home now, instead of waiting.

      1. Prices Will Continue to Rise 

      CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.5% a year for the next 5 years.

      The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

      2. Mortgage Interest Rates Remain at Historic Lows

      Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained at or below 3.5% for 13 consecutive weeks. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year.

      Any increase in rates will impact YOUR monthly mortgage payment. A year from now, the percentage of your income that you spend on housing will increase substantially if you choose to wait.

      3. Either Way, You Are Paying a Mortgage

      Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage - either your mortgage or your landlord’s. As a paper from the Joint Center for Housing Studies at Harvard University explains:

      “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

      4. It’s Time to Move on with Your Life

      The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

      But what if they weren’t? Would you wait?

      Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

      If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

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        Why Getting Pre-Approved Should Be Your First Step

        In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

        Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

        Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

        “It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

        One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

        Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

        1. Capacity: Your current and future ability to make your payments
        2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
        3. Collateral: The home, or type of home, that you would like to purchase
        4. Credit: Your history of paying bills and other debts on time

        Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

        Bottom Line

        Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

        How to Read Your Credit Report

        Part of being responsible for your credit involves understanding how to read your credit report. While the format of your report will vary from bureau to bureau, each will offer the same type of data – information about your payment history.

        Ideally, your credit report should be reviewed every six months; this can help intercept fraud and catch potential errors. When pulling your credit report it’s best you pull from all three bureaus (EquifaxExperian, and Transunion). Pulling your credit from all three bureaus will give you a well-rounded view of your credit. Additionally, not all creditors report to all three bureaus, some only report to one.

        The reports from each bureau will look different but these terms will assist you when reviewing your report. If you have received your report through Guaranteed Rate’s site, your report will provide additional information.

        Here are some of the terms you will see while reading any of the reports:

        Creditor:

        This is the company who has issued your credit card, car payment, student loans, mortgage etc.

        Account Number:

        The number shown on the credit report will not reflect the entire account number and, in some cases, it will not match your account number at all (this is done for your protection). Typically, only a portion of the number is listed and you will be able to match the second or first half of the account number.

        Reported:

        This date represents the last time the account status was reported to the credit bureaus.

        Last Active:

        This is the last time the account realized any activity; essentially the last time you made a payment. Last active, in most cases, is the same as the date it was reported. There are some instances when the dates will be different. For example, if you stop using a credit card then close it a year later, the reported date will be 12/11 and the last active will be 12/10.

        Opened:

        This is the date the account was opened.

        Limit/Highest Credit:

        This is the limit on your credit card or the initial amount of credit extended to you for a car or house etc.

        Amount Past Due:

        If you are late or are behind on any account, the past due balance will show in this area.

        Terms/Payment Amount:

        This indicates the amount of the monthly payment and how long you will pay on the debt. Credit cards typically have no term as it is on-going (or revolving) debt.

        Number of Months Revolving:

        This will tell you the number of months the account has been open.  If there are any late payments it will also tell you how many late payments and if you were 30, 60 or 90 days late.

        The end of the report will show details of any public records such as a bankruptcy, foreclosure or tax liens. Additionally, you will see your name aliases, companies that pulled your credit in the last two years and finally, some regulatory verbiage.

        If you’ve received a credit report from Guaranteed Rate, you’ll see additional information requested specifically for the purpose of processing your loan. For example, you will see:

        Fraud Alert:  

        The purpose of this alert is meant to confirm the validity of your social security number, address, phone number, the value of your home and confirm whether or not you own other pieces of real estate.

        ID Cross Check: 

        This compares the information your loan officer entered, against the information Equifax, Experian and Transunion have in their system – quite simply, a confirmation of accuracy.

        At the end of any credit report, you will be provided with the address and main phone number for each creditor listed on your credit along with the contact information for each credit bureau.

        If you find there are accounts which don’t belong to you or inaccurate information reported, you have the right to dispute inaccuracies or fraud.

        Visit Guaranteed Rate often for consumer-friendly mortgage education.

        Educate Yourself: Federal Trade CommissionU.S. Department of JusticeFair Credit Reporting Act Summary

        Info courtesy of GuarantedRate Mortgage Company

         

         

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