Category: Mortgages

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Homebuying Tips Interest Rates Loans Market Analysis Mortgages

What Does This Market Analysis Say About Mortgage Rates?

Mortgage rates are down, which can be an incentive for those looking to purchase or refinance a home. In fact, they’re some of the lowest rates we’ve seen in years! We talked to our resident expert employee, Jeff Angew, who provided some insight into how the current climate has impacted these opportunities for homeowners and homebuyers. 

Why Have Mortgage Rates Fallen?

With the onset of COVID-19 in March, part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was to allow consumers to skip or lower mortgage payments for up to six months, a concept called mortgage forbearance. While beneficial for consumers, this component of the CARES Act incited something close to panic in the mortgage market. 

Because many in the market believed that a reduction in mortgage payments meant a significantly lower return for investors, mortgage rates began to skyrocket and investors in mortgage-backed securities began to exit the space. 

Enter the Federal Reserve, which, to help financial markets, lowered the federal funds rate to 0%-.25%, causing interest to fall significantly. However, this still did not help liquidity in the markets. 

In April, the Federal Reserve again stepped in, this time to purchase mortgage-backed securities; thus, causing them to be the largest holder of these securities and return a level of security to the market. This resulted in the lowest rates seen in the mortgage market to-date, causing something of a refinance boom. 

What are the Current Rates?

The current 30-year rate, as reported by Bankrate, is at 3.08%. The last time it was this low was in September 2016, at 3.32%. 

Learn more about the rates and APR in your state here! 

What Will Future Mortgage Rates Look Like?

The Federal Reserve plans to keep the federal funds rate at or near 0% through 2021 and will continue to purchase mortgage-backed securities. However, the presidential election in November could cause a change in the market, depending on who is elected. 

Currently, there are an estimated 19 million highly qualified refinance candidates who could lower their rate by at least .75%, adding to the strain on mortgage originators and causing rates to stay in this range. 

How Can You Take Advantage of These Low Rates!

While these rates are near historic lows, they won’t last forever. Whether you’re looking to purchase a house or refinance your current home, we’re here to help! Call us at 205.776.8401 to lock in your low rate today!

If you’re ready for a quote or a pre-approval, click the buttons in the top right corner of our home page. 

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Homebuying Homebuying Tips Loans Mortgages Purchase

Buying a Vacation Property? What to Consider When Investing in Your Home-Away-From-Home.

As the number of people purchasing vacation homes is on the rise – many a result of the social limitations caused by the coronavirus pandemic – we offer this helpful guide for those looking to buy a getaway property of their very own. 

Benefits of a Vacation Home

If you’re a frequent traveler and enjoy escaping to one very special spot each year, investing in a vacation home can save you money in the long run. Even better, properties in popular vacation areas often increase in value over time. 

Making such a purchase all the more attractive, you may also be eligible for a tax break from the mortgage on your second home. 

And should you choose to move when you retire, your vacation home could become your primary residence in that special location you already know and love. 

Simply put, vacation homes are a great idea. But what should you consider before investing in one? 

What’s Your Budget?

We aren’t saying it’s all about the money, but, of course, the cost of a second home is one of the most important factors to consider. In addition to a second mortgage, you will also need to factor in the cost of taxes, insurance, utilities, possible HOA fees, and furnishings for the home. 

And that’s just the beginning. As you maintain your vacation home, you may want to consider how it will be cared for when you’re away. Will you need landscaping services? Will you want a security system to protect your unattended home? And don’t forget the cost of traveling there and back. 

While these costs aren’t supposed to discourage you from investing in a vacation home, they are essential considerations when looking for the home that’s right for you and your budget. 

To get a better idea of what your payments will look like, check out our mortgage calculator! 

Where Do You Want to Rest and Relax?

Location is another essential part of finding the perfect vacation home. Where do you picture yourself escaping for a week away? Where do you want to spend your weekends? You may love the beach, or the city, or the mountains, but do you like that locale enough to spend the majority of your vacations there? You want to choose a place that won’t lose its appeal after a visit or two. 

The second consideration with the location regards distance – in addition to how much it costs to get there, consider travel time. You may choose a vacation home in your DREAM location, but if it takes a half day’s drive to get there, or you need to catch a flight every time you want to visit, then you may not end up spending as much time there as you intended. So, the takeaway here? Decide on a getaway that’s not too far from home!

Is Rental Income a Must?

Many people consider buying a vacation home and then look to rent it out when they aren’t using it. While renting can bring in extra income, it does offer a few challenges. For instance, sometimes renting out your property can have implications for financing and taxes, or homeowner associations may have rules and limitations for renters. 

Also, if you plan to occupy the home during the typical vacation months, consider that there may be fewer available renters during the “off-season.” Renting your property also comes with additional considerations, like how to advertise and who will take care of any significant issues that occur while guests are present. 

If consistent rental income is a must, then do your research on what to expect given your budget and vacation schedule. 

Finding the Vacation Home That’s Right for You

Purchasing a vacation property is an exciting venture, and the professionals at MortgageRight are dedicated to making the home-buying process an easy one – whether it’s for your primary residence or that perfect vacation getaway. Whether you’ve just started looking or you’re ready for a quote, we can help!

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Home Inspections Mortgages

Buying a Home? 10 Things You Should Know About a Home Inspection

Home inspections can be intimidating. While the seller is worried about unexpected issues, the buyer is worried that these issues may make their dream home not so “dreamy.” But worry not! We talked to expert home inspectors to gather tips on how to ensure your home inspection is a success. Read more from a home inspector’s perspective on this recent post from guest blogger and Certified Home Inspector, George Sadwoski.

1. Inspections Are Optional

Home inspections are not a requirement. However, having one can give you greater insight into issues you may not have considered. Sometimes, an inspection can even be the deciding factor for whether the home is right for you.

2. Find the Right Home Inspector

Home inspectors examine the property and inform you of potential issues. As the homebuyer, choosing the home inspector is your decision. Your real estate agent can be the best resource, but make sure the inspector’s company is insured and does not also sell home repair services, as that may present a conflict of interest.

3. Benefits Outweigh the Costs

Most home inspections will cost you a few hundred dollars. While you can compare the costs between different inspection companies, purchasing a home is a major investment — so making sure you have a thorough and expert inspector may be worth a higher price.

4. Bring a Notepad, Pen, and Camera

Attend the inspection, even though it’s optional. Not only can you hear the insight firsthand, but you’ll be able to ask questions on anything you are unsure about. You also have the opportunity to make notes on areas that you would like to focus on after buying your home.

5. Not Everything Is Included

Since every property is different, each home inspection varies slightly. Generally, as suggested by the American Society of Home Inspectors (ASHI), qualified inspectors will check the home’s:

  • Foundation and structural components
  • Basement, attic, and insulation
  • Heating and cooling system
  • Interior electrical system
  • Interior plumbing system
  • Condition of windows, doors, door frames, walls, and floors

Additional structures (ex. sheds), inside the walls, chimneys, and roofs are not always included in the home inspection.

6. Ask About the Roof

Many home inspections do not include checking the roof, sometimes due to its height and steepness, or bad weather conditions. However, it is worth the extra time and money to hire a certified roof inspector. One-third of real estate inspection claims and almost 40% of homeowner’s insurance claims relate to problems with the roof.

7. Asbestos? No Thank You

If you are purchasing a home that was built before 1980, you want to have it checked for asbestos. Checking for that, as well as radon, lead paint, and other hazards will likely need to be done by a specialized inspector, or may come at an additional cost. Even if your home is newer, checking for these hazards is a smart preventative measure.

8. Get an Inspection Report

After the inspection, the home inspector is required to provide you with a report. In this report, they should detail their findings from the walkthrough and provide any relevant photos. Review the report to make sure you have a good understanding of the home.

9. Negotiate, Reasonably

Because you have made an offer on the house but have not yet closed the deal, you can use findings from the home inspection to negotiate. You can request the seller have the repairs done, or can ask for a price reduction and do them yourself. Make sure to highlight the main issues, and aim for what is fair for both parties.

10. Don’t Be Afraid to Walk Away

If you aren’t satisfied with the results, do not feel pressured to close on a home that’s not right for you. Officially, the seller has the right to refuse to make any repairs. If they refuse or you are unsatisfied with the deal, you can rescind your offer on the home.

Whether it is your first home or your fifth, homebuying is an exciting process. Home inspections are just one important part of this journey. No matter what surprises were thrown in along the way, we want to make sure you’re ready for your home inspection, so your home is ready for you.

Got questions about matters involved in purchasing a home? We can help. Contact us at Contact@MortgageRight.com or call 205-776-8401.

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Mortgages

Celebrating MortgageRight’s 15th Anniversary

On July 29, 2020, MortgageRight celebrates its 15th Anniversary as a company! As we approach this milestone, we wanted to take some time and reflect on fifteen years of growth and amazing support from the communities we serve. 

TJC Mortgage, Founded in 2005

In the summer of 2005, three friends created a local business focused on making the mortgage process faster, more efficient, and as easy as possible for homebuyers in Birmingham, AL. Tanner Allen, Joe Meadow, and Chris Carter combined their industry expertise and work ethic to build TJC Mortgage. The Birmingham community welcomed TJC with open arms and helped the company grow, encouraging these partners to seek out what was next for the company. 

Introducing Mortgage Right

Fast-forward to 2018, after opening more offices in the southeast, the TJC Mortgage team saw the opportunity to take the company a step further. Based on our desire to establish a national appeal for the company, we changed the company name to MortgageRight and launched a new brand. With this new name and the same exceptional service, MortgageRight continued to grow, adding new markets and customers. 

Just 2 Years Later. . . 

MortgageRight now has 30 branches with licenses in 34 states. One of our most significant accomplishments is helping 3,989 veterans access resources and programs to pursue the dream of homeownership since 2014. Joe Meadow, a veteran who served our country as a US Army paratrooper in Iraq, has spearheaded this effort based on his passion for helping soldiers acclimate back into society.

Thank You

We are filled with gratitude when we consider how far we have come over the last 15 years. We couldn’t have traveled this remarkable path from our first branch in Birmingham to a nationally recognized business without our incredible team and our wonderful clients. Thank you!

We look forward to many more years of serving you! 

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Home Inspections Mortgages

An Inside Look Into Home Inspections

Home inspections are an important part of both buying and selling a home. We are featuring guest blogger George Sadwoski from By George Inspections to get an expert perspective on everything you need to know about home inspections.  

Introducing: George Sadwoski

I am a member of InterNACHI, AHIO, the Birmingham Association of Realtors, BNI, and the BBB. By George Inspections has been in business for almost five years. In that time, I have completed thousands of inspections for clients, all with 5-star reviews on my website and Facebook.

Introducing: Home Inspections

It is important to pick a reputable inspector. Use a home inspector certified as a licensed inspector with the state. Make sure your inspector is insured with E&O and Liability Insurance.

It is also important to clarify what your inspection includes. A home inspection is not a warranty for the home. It is an agreement to provide a client with a written report identifying issues the inspector observed, and problems deemed defects. These comments will not comprise the report. They are supplementary to the seller’s disclosure. 

An inspection is a non-invasive and issues fall into four categories:

  • Major defects, such as structural failure
  • Issues that can lead to major defects, such as a small leak on the roof
  • Things that may hinder your ability to finance, legally occupy, or insure the home if not immediately rectified
  • Safety hazards, such as exposed or live bus bars

Most sellers are honest and are often surprised to learn of defects uncovered during an inspection. It is important to realize that sellers are under no obligation to repair everything mentioned in an inspection report. No house is perfect, so keep this in perspective as you move into your new home.

Safety First

When performing an inspection, the inspector must first look out for his or her safety. If they see or detect mold, they are required to back out of the area and inform the client of the situation, as it can be very serious to them and the homeowner. If a roof is too steep or wet, I use binoculars to visually check the roof from a window. We also use drones to inspect hard to reach areas. This also avoids causing additional damage to the roof by walking on the shingles and abrading the sand from the shingles.

Crawl spaces and areas of confinement are tough to inspect, but I have a self-propelled robot crawler with cameras and lights to get into tight and confined areas. We have to look out for spiders, rodents, especially in these areas. Attics can be tough due to potential hazards like low headroom, deep insulation, and faulty wiring. 

An inspection is supposed to be non-invasive, meaning a lot of inspectors do not pull panels from electrical panels, but I always do a visual inspection to assess the gauge of the wiring, breaker amperage, and to see the amperage rating of the service.

A home purchase is one of the biggest investments most people make in their lifetime, and it is important to have an inspector that is certified. 

Remember my tag line, “Anyone else is just looking around.”

By George Sadowski
www.Bygeorgeinspections.com
205-907-4732

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Homebuying Tips Mortgages

Tips For Moving in a Time of Social Distancing

Tips For Moving in a Time of Social Distancing

Moving is never easy. Whether you are a DIY mover or hiring a crew, moving up the street or across the country, packing up a family or flying solo, re-locating is a difficult process. And let’s just say this pandemic isn’t making things any easier. 

So, how can you protect yourself and your family if you are planning on moving during the time of physical distancing? A little preparation can keep COVID-19 from wreaking too much havoc to your moving plans. Your moving checklist is going to be a tiny bit longer, but the good news is you can safely relocate with just a few precautions. 

Here are a few tips from the American Moving Association and the CDC to make sure your move is safe and simple.

Using Moving Services

Moving services, self-storage facilities, and moving truck rentals are all considered essential services and are available at this time. Many of these businesses have already implemented CDC-recommended guidelines including sanitization procedures and PPEs for staff. If you use a moving service, many businesses offer virtual consultations to provide a quote, lowering the risk of exposure. Make sure you communicate fully with your moving company about the protocols of physical distancing when you schedule your moving date. 

Packing ahead of time will protect everyone involved with your move…including you! Pack, seal, and sanitize your boxes at least 24 hours before your moving team arrives to ensure they are fully disinfected. Prepare a sink with soap and water that your movers can access. If this isn’t possible, have a supply of hand sanitizer for yourself and your movers. 

DIY Moving

Sadly, it may not be possible to bribe your friends with pizza and beer to help you move during this time. Utilize all the resources available with a moving truck to protect yourself when lifting heavy boxes or furniture. Don’t use recycled or free cardboard boxes! While it may be tempting, these are hotbeds for bacteria and viruses. Determine what supplies are needed to pack for your move and so that you can make one trip to the store to get what you need. 

Clean as you pack! Take this opportunity to dust, clean, and disinfect any items in your home that don’t often get scrubbed. If you don’t have disinfectant, one tablespoon of bleach in one gallon of water will do the trick. 

How to Protect Your New Home

Don’t bring anything into your new home that shouldn’t be there! Throw out or donate old furniture and household items you never use. Why move something that will just collect dust in a new space? 

Speaking of dust, clean and sanitize your new home thoroughly once the movers are gone. Immunocompromised individuals may also want to wait 72 hours before spending time in your house. Communicate health concerns to your moving team so that a plan can be made for your move. If your health is a serious concern, consider postponing or canceling your move for a later date.

With a little extra preparation and a little more time, it is still possible to safely move in the time of physical distancing.

Comprehensive Moving Guide

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Homebuying Homebuying Tips Loans Mortgages Purchase

Silver Linings: How to Make the Best of Buying a Home During a Recession

We are seeing the economic effects of COVID-19 in real-time. This “new normal” is going to be far-reaching, long-lasting, and will likely result in a lengthy recession. It’s not all gloom and doom, though. Markets fluctuate, but they are resilient. There are great ways to make the best of this bad situation, particularly if you plan on buying a home. 

If you have been patiently waiting for housing prices to go down, boy do we have news for you. There has never been a better time to buy. Historically low mortgage rates combined with motivated sellers make this a great buyer’s market. Job instability is a concern, but if you have a stable job situation and a little bit of money saved right now, it could be an opportune time to purchase a home. With less competition from other homebuyers and sellers willing to negotiate, this could be your chance to find your dream home. 

Here are some tips to put you in the best position to buy a home during a recession:

  1. Get pre-approved for a mortgage. Homebuyers who already have financing in place are in a better negotiating position. Having savings is always a bonus, but go ahead and get pre-approved before you start shopping so you can enter every conversation with confidence.
  2. Organize your finances. Don’t get too excited – just because a house is a good deal doesn’t mean you can afford it. Work on your budget. Make sure you take stock of all your assets and debts before you make any big decisions. 
  3. Do your research. With unstable markets, housing prices can fluctuate and give a false sense of value. Make sure you research your neighborhoods well! Knowing historic pricing for an area can give you a sense of objectivity when evaluating an offer.
  4. Get a home inspection. In uncertain times, sellers may be trying to offload homes with problems that are costly to repair. Be very thorough and make sure you’re not buying the home equivalent of a lemon! 
  5. Clear the title. Start with a clean slate. Sometimes the home of your dreams can be the property of your nightmares. Make sure that the property doesn’t have any liens from a contractor or a lending institution. Have a lawyer run the title of your new home to verify it will be transferred without risk.
  6. Use your bargaining power. Watch for motivated sellers. If the price has been reduced on the home several times over the last few months, it may be a signal that they have already moved and are holding the mortgage on two properties. In this situation, the seller may be willing to negotiate to cover closing costs and other fees in order to quickly complete the sale. 
  7. Avoid unnecessary fees. It’s your market right now! When houses move slowly, realtors will sometimes take a few percentage points off of a commission in order to get the deal signed. Negotiating these fees down before closing can benefit both the buyer and the seller, leaving everyone happy.
  8. Use logic. Have the emotional stability to walk away if it’s not the right deal for you. Wait until the right opportunity comes along before you commit.

Even with all these tips in mind, there is no such thing as a foolproof approach to the housing market. An unstable economy means there is risk involved in major purchases like a home, but fortune favors the bold. If you pay attention to these 8 tips, you may be able to find a tremendous deal by acting decisively while others are afraid to move.

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Credit Homebuying Tips Loans Mortgages

Understanding How Debt Affects Your Mortgage

When determining a target price range for purchasing a home, it’s important to consider your existing debt, as this will affect what kind of mortgage you will qualify for. Your debt to income ratio, or DTI, is one of the most important metrics after your credit score. In this post, we cover everything that a homebuyer needs to know about their DTI and the effect that this will have on the mortgage process. 

What is DTI?

The primary tool mortgage lenders use when considering your application is your DTI, or debt to income ratio. In simple terms, this is the percentage of your income that you must set aside each month toward paying off your debts. This number can be as important as your base income and your credit score when determining your eligibility for a loan. 

Calculating your DTI

To calculate your DTI, lenders will divide your monthly debt obligations by your gross income. This seems simple enough, but this equation fails to take into account taxes, food, utilities, health insurance, transportation costs, or childcare. You will want the lowest DTI possible, not just to ensure a good mortgage rate, but also to be able to still live comfortably while paying off your debts. 

Front-end vs. Back-end DTI

There are two kinds of DTI: front-end DTI and back-end DTI. Front-end DTIs only include housing costs like future mortgage payments, insurance, property tax, and homeowner costs compared with your gross income. Back-end DTIs include all your other debts like credit card debt, student loan debt, and car loans compared with your gross income. Most mortgage lenders will take both DTIs into account when considering your application. 

What is the best debt-to-income ratio?

In order to get approved for a conventional mortgage, your back-end DTI should be less than 43%, however, with excellent credit, you may be eligible for up to 50%. If your ratio is higher than this, you could pay more interest or be denied for a loan. 

Even if your back-end DTI is lower than 43%, only you can determine the debt to income ratio that makes sense for your situation. Just because you can be approved for a loan at a good rate doesn’t mean it’s a great idea. Some mortgage lenders do not have your best interest in mind. They just want to make the largest loan possible. Don’t be fooled! Make sure you do the math before you overcommit yourself to monthly mortgage payments. You know your household budget better than anyone. 

At the end of the day, we recommend paying extra on your debts and avoiding large purchases on credit to lower your DTI before you apply for a mortgage. This helps the mortgage process go smoothly so that you can have both your dream home and financial peace of mind.  

If you have questions about your financial situation or the mortgage process, feel free to reach out to any of our mortgage professionals at (205) 776-8401. 

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Loans Mortgages Refinance

Making the Most of Refinancing Your Home

It seems like a pain to go through the mortgage process AGAIN just a few years after purchasing your home. Loan applications, appraisals, closings…why bother if your current mortgage payments already fit comfortably into your budget? Are the savings and benefits worth it? Even if you’re not considering a move, the time could be right to refinance your home. 

Do you have a child in college? Are you interested in starting a business? Refinancing your home can be a strategic way to dip into your own personal piggy bank to help in many different life situations.

What is refinancing?

“Refinancing” is getting a new mortgage to replace your original one. Instead of throwing out the original mortgage, the first loan is paid off when the new loan is created. Refinancing can improve the interest rate and term of the loan. 

When is refinancing a good idea?

Like many things, it’s a numbers’ game. There are two metrics to weigh as you consider when to refinance: your home’s value relative to the amount owed on your current mortgage and current interest rates. Over time, the value of your home should increase, and there could be more incentives to refinance. You can’t control the fluctuations in interest rates, but you can monitor them to find strategic opportunities. When your home’s value is up and the interest rates are down, you will get the maximum benefit from refinancing your home. 

We’ve had historically low-interest rates for a long time, and it’s difficult to tell when they might start to creep back up. With the current state of the economy, we recommend making refinancing decisions based on your personal financial situation rather than holding out for a possible future rate improvement. 

Why is refinancing beneficial?

Apart from just lowering your monthly mortgage payments, refinancing gives you options to utilize the equity you’ve built on your home. You can utilize the cash equity built up in your home to pay off credit card debt, a car loan, a student loan, or even start a business, buy a second home or an investment property. 

Decreasing your interest rate today by even one percentage point might make a bigger difference than you think. A 1% improvement could save you more than $20,000 per $100,000 financed over the term of a 30-year mortgage. 

Should I refinance?

MortgageRight can help explore all the different possibilities that open up to you when you refinance your home. Our trained mortgage specialists can help you explore the benefits of refinancing based on your situation to determine if now is the best time for you to take action. 

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Homebuying Homebuying Tips Loans Mortgages Purchase

MYTH: Now is Not a Good Time to Buy

Real Estate has appreciated a lot lately and we have heard many potential homebuyers say they’re thinking about waiting until prices come down to buy a home. If rising home values are keeping you on the sidelines, you may be waiting longer than you ever intended.

For instance, should you try and wait it out, the market may have gone up 20% before there is a 10% correction. And while you’re waiting for months or years, you may still pay 10% more for your new home after paying rent when you could have started paying off a new mortgage.

The right time to buy your first home is when you are ready; both financially and emotionally. And significant life events (getting married, relocating, landing a great new job, having children) generally drive the decision to consider purchasing instead of continuing to rent.

At MortgageRight, our experience tells us you cannot time the real estate market when data becomes available many months after market events take place. This, along with so many other variables, makes pinpointing a perfect time to buy nearly impossible.

If you are ready to buy your first home, this may be the right time to buy a home. Competitive interest rates and a variety of home loan programs are currently available that will can meet your needs today.

Don’t let this myth is deter you. Instead of continuing to make rent payments to a landlord, start making payments on your own home.

Contact MortgageRight. Our helpful loan associates area always ready to explain the process and your options.

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