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If a Mortgage Lender Reaches Out to You, Reach Out to Other Lenders

Posted on November 9th, 2020

A lot of homeowners are looking to refinance their mortgages at the moment. That’s abundantly clear based on the record volume of refis expected this year, per the MBA.

And while mortgage rates are in record low territory, thus making the decision to refinance an easy one for most, it still pays to shop around.

I think we all have a tendency to care less about prices when something is on sale, but there’s no reason you shouldn’t strive for even better, regardless of how cheap something is.

Look Beyond Your Current Mortgage Lender

  • New technology is making it easier for lenders to improve borrower retention rates
  • This means using the same lender for life even if their interest rates aren’t the lowest
  • But like most things loyalty often doesn’t pay when it comes to a home loan
  • So take the time to shop around and negotiate like you would anything else

Thanks to emerging technology, it has become easier for mortgage lenders, mortgage brokers, and loan officers to improve their customer retention.

This means if and when a past customer looks to refinance their home loan or purchase a new home, they might be notified if they pay for such services.

There are companies that can keep an eye on your data over time to see if you’ve applied for a home loan elsewhere, if your home equity has increased, or if your debt load has gone up.

The same goes for your credit score, which if it’s improved enough, may prompt a call or email from a lender or broker you worked with in the past.

While this in and of itself isn’t necessarily a bad thing (sure, data collection is getting a little aggressive), it’s how you react to the sales pitch if and when it comes your way.

Ultimately, if you receive an inbound call or email regarding a mortgage refinance, HELOC inquiry, or even a referral from a friend or family member, don’t stop there.

They are just one of the many individuals/companies you should contact and consider before finalizing your home loan decision.

What If You Receive a Mortgage Mailer?

  • Consider an inbound solicitation a starting point if you’re considering a refinance
  • Don’t simply call the individual/company back and call it a day because they can offer a low rate
  • There are hundreds of mortgage companies out there and competition is fierce
  • Your mortgage will be paid for decades so every little bit matters if you care about saving money

I get mortgage solicitations all the time – and they’re often from a broker, lender, or loan servicer I worked with in the past.

They’re certainly appealing, don’t me wrong. Who doesn’t want to save potentially hundreds a month for simply redoing their home loan, especially if it’s from a trusted source?

But why stop at that mailer? Why not use that as a stepping stone to reach out to other lenders and get additional pricing and offers, then make your decision?

When we’re talking about something as important as a mortgage, which you pay each month for decades, the price you pay matters.

And even a small difference of say an eighth of a percent can equate to thousands of dollars over the life of the loan term.

As noted, companies are getting smarter every day when it comes to customer retention. Unfortunately, a customer retained is likely to miss out on even bigger savings elsewhere.

Don’t simply take the path of least resistance. Put in the time and you should save money.

This is even more critical for low-credit score borrowers, as a wider range of mortgage rates are quoted for those with lower scores.

But all homeowners can benefit from multiple mortgage quotes, as pointed out in a survey from Freddie Mac.

Those who gather just one additional mortgage quote can save between $966 and $2,086 over the life of the home loan, while those who take the time to get 5+ can save nearly $3,000.

So while your old company may make it easy for you to refi, you might be better served looking someplace else.

Read more: Mortgage Rate Shopping: 10 Tips to Get a Better Deal

Don't let today's rates get away.
About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

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Watch Out for Low Mortgage Rates You Have to Pay For

Posted on November 4th, 2020

Mortgage rates keep on marching lower and lower, with new records broken seemingly every week.

But with all the fervor surrounding mortgage rates, some lenders are playing the “how low can we appear to go” game.

For example, mortgage lenders may be talking about their lowest rates (with multiple points required), as opposed to offering their par rates, the latter coming at no extra cost to the consumer.

So instead of being presented with a mortgage rate of say 2.75% on a 30-year fixed, you may see a rate as low as 1.99%. Or even a 15-year fixed at 1.75%!

Here’s the problem; with mortgage rates breaking record lows time and time again, 10+ times so far in 2020, many homeowners are finding the need to refinance the mortgage twice. Or even three times.

And those who chose to pay points at closing, only to refinance within months or a year, essentially left money on the table.

Or they decide not to refinance to an even lower rate, knowing they’ll lose that upfront cost that’s already been paid, which is also a tough situation.

Mortgage Rates Aren’t as Low as They Appear

  • In order to advertise lower mortgage rates lower than the competition
  • Lenders will often tack on discount points to their publicized rates
  • Meaning you’ll have to pay a certain amount upfront to obtain the low rate in question
  • Make sure you’re actually comparing apples to apple when mortgage rate shopping

Guess what? That absurdly low mortgage rate you saw advertised isn’t really as low as it seems.

Typically, when you see a rate that’s beating the pants off the national average, and all other lenders, mortgage points must be paid.

And when the rate is really, really low, it usually means multiple mortgage points must be paid.

In other words, you wind up paying a substantial amount of money, known as prepaid interest, to secure an ultra low, below-market interest rate.

Assuming your loan amount is $200,000, two points to obtain a rate of 1.99% on a 30-year fixed would set you back $4,000.

If the loan amount were $400,000, we’re talking $8,000 upfront to secure that super awesome low rate.

Tip: Watch out for lenders and mortgage brokers who quote you a low mortgage rate, but neglect to tell you that you must pay a point (or two) upfront to obtain it.

Often, this tactic is employed to snag your business, and once you’re committed, the truth comes out, which is why mortgage APR is so important.

Is Paying for an Even Lower Mortgage Rate Right Now the Smart Move?

  • When mortgage rates are already really low (record lows at the moment)
  • It becomes somewhat less attractive to pay points at closing
  • It could be pretty expensive to get just a slightly lower rate that will save you very little
  • And your money might be better served elsewhere, especially if inflation worsens

Here’s the thing. Mortgage rates are already so low that paying mortgage discount points to go even lower isn’t all that attractive.

There’s a great chance mortgage rates will surge higher in the future as inflation finally rears its ugly head. And at that point, you’ll already have an insanely low interest rate.

On top of that, you’ll be able to invest your liquid assets in other high-yielding accounts, likely something pretty darn safe with a rate of return that will beat your low mortgage rate.

So why keep going lower and lower if you’re already paying next to nothing on your home loan?

Additionally, you won’t want to spread yourself too thin, especially if you’re buying a new house.

There are a ton of costs associated with a new home purchase, so committing all your liquidity to an even lower rate could mean that you won’t have money for relocation costs, furnishings, necessary repairs, or an upgrade.

And as mentioned, mortgage rates do have the potential to move even lower than current levels, meaning it could make sense to refinance again, favoring those who didn’t pay much to anything at closing.

Or better yet, just went with a no cost refinance to avoid paying anything to the bank or lender.

As always, do the math to see what makes sense for you. If you’re super serious about paying off your mortgage early, then buying down your rate could be the right move.

It will certainly vary based on your unique financial situation, the loan amount, the cost to buy down the rate, and how long you plan to stay with the loan/home.

Certainly take the time to compare mortgage rates with and without points, but don’t just chase a low rate below an emotional threshold, like 2%.

And determine how long it’ll take to pay back any points at closing with regular monthly mortgage payments.

Personally, locking in a 30-year fixed rate below 3% seems like a tremendous bargain.

Investing the money elsewhere, such as in stocks or bonds or wherever else, could end up being a lot more rewarding than paying prepaid interest at closing.

Perhaps more importantly, you’ll have access to that money if and when necessary for more pressing matters.

Lastly, you can always pay extra each month if and when you choose to reduce your principal balance and total interest paid. So that’s always an option regardless of the rate you wind up with.

Read more: Are mortgage points worth the cost?

Don't let today's rates get away.

Source: thetruthaboutmortgage.com

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USA Mortgage Review: #1 Mortgage Lender in Missouri?

Posted on November 17th, 2020

If you live in the USA and need a mortgage, perhaps you’ve thought about applying at “USA Mortgage.” Makes sense, right?

It just so happens that USA Mortgage is located right smack in the middle of our fine country, in St. Louis, Missouri to be exact. Well, that’s pretty darn close to the midpoint…

Anyway, geography aside, they’ve been around for about 20 years now and actually operate under the name DAS Acquisition Company, LLC, which purchased the lender when it was a distressed company.

Today, it’s the largest privately held mortgage banker in the state of Missouri and employs more than 750 licensed loan officers and operations personnel.

Technically, USA Mortgage is a full-service mortgage broker, meaning they can offer loan programs from various lender partners at wholesale prices.

USA Mortgage Fast Facts

  • Employee-owned direct-to-consumer mortgage lender located in St. Louis, MO
  • Founded in 2001 by current president and CEO Doug Schukar
  • Originally acquired as a distressed asset by DAS Acquisition Company, LLC
  • Has been #1 mortgage lender in metro St. Louis since 2012
  • Funded nearly $2.5 billion in home loans during 2019
  • More than half of total loan volume came from their home state of Missouri
  • Currently licensed to do business in 41 states and D.C.

If you live in Missouri, there’s a good chance you’ve heard of USA Mortgage. They did more than half their business in The Show-Me State last year.

They also funded hundreds of millions in mortgages in the states of Texas, Washington, and Ohio.

At the moment, they’re licensed in 41 states and the District of Columbia.

They don’t appear to be available in Delaware, Hawaii, Montana, Nevada, New York, North Dakota, South Dakota, Vermont, or Wyoming.

How to Apply for a Home Loan with USA Mortgage

  • You can apply for a home loan directly on their website in minutes without human interaction
  • Or get in contact with a loan officer at one of their many branches nationwide
  • Their digital mortgage application is powered by fintech company Ellie Mae
  • They also offer a free smartphone app that lets you complete most tasks remotely

It’s super easy to apply for a home loan with USA Mortgage. Simply surf on over to their website and click on “Apply.”

From there, you’ll need to fill in a digital mortgage application powered by Ellie Mae.

You can complete much of the process online, including the ordering of a credit report and the eSigning of disclosures.

If you are currently working with a loan officer, there is a box you can check, at which point you’ll be able to select that individual.

If not, simply click the “no” box and someone will be assigned to you automatically.

Once your mortgage application is submitted, you’ll receive status updates about loan progress and a to-do list for remaining conditions.

It’s also possible to download the free USA Mortgage smartphone app, which allows you to run calculations, scan and upload docs, contact your loan officer, and check loan status.

All in all, USA Mortgage provides a digital process from start to finish that is both convenient and easy to follow.

Loan Types Offered by USA Mortgage

  • Conventional loans backed by Fannie Mae and Freddie Mac
  • Government-backed loans: FHA, USDA, and VA loans
  • Jumbo home loans
  • Home renovation loans (203k, VA renovation, and Fannie Mae HomeStyle)
  • New construction loans
  • Bank statement programs (stated income)
  • Reverse mortgages
  • Doctor mortgages
  • Bridge loans
  • State bond programs, down payment assistance
  • Non-warrantable condos are OK

In terms of loan programs, USA Mortgage offers the whole gamut from conventional loans to government-backed loans and even bank statement programs (a newer version of a stated income mortgage).

You can get financing on a primary residence, second home, or an investment property.

It’s possible to take out a home renovation loan, such as a FHA 203k, or a new construction loan if you’ve got the lot but have yet to build the property.

Seniors who are 62 years of age and older can also take out a reverse mortgage in order to tap equity without monthly payments.

They also got a lock and shop program that allows you to lock in a mortgage rate up to 120 days in advance with no upfront lock fees.

You can choose between all the popular fixed-rate and adjustable-rate mortgage options available on the market today, such as 30-year or 15-year fixed, or a 5/1 and 7/1 ARM.

USA Mortgage Rates

USA Mortgage does not advertise its mortgage rates on its website or elsewhere to our knowledge.

In order to get pricing, you’ll need to contact a loan officer directly and/or begin the loan application process.

If on the USA Mortgage website, simply click on “branches” to find a loan officer near you, then you’ll find their contact info to inquire about pricing.

The same goes for lender fees – once you reach out to someone, ask them what fees they charge when comparing mortgage rates, such as a loan origination fee if applicable.

You should know both the interest rate and lender fees, which collectively make up the mortgage APR, an important figure to use when shopping lenders.

USA Mortgage Reviews

USA Mortgage has a pretty amazing 4.98-star rating out of 5 on Zillow based on more than 2,500 customer reviews.

Clearly that’s quite impressive given the number of reviews and the near-perfect rating.

Similarly, they have a 4.90-star rating out of 5 on SocialSurvey from over 30,000 reviews. Again, pretty close to perfection here.

They are Better Business Bureau accredited, and have been since 2010, with a current ‘A+’ rating based on complaints history.

All in all, they appear to offer stellar customer service to their clients, which would explain the almost-perfect scores they enjoy on several ratings websites.

Another plus is the wide range of loan programs offered, along with their access to wholesale mortgage rates.

USA Mortgage Pros and Cons

The Pros

  • Can apply for a home loan directly from their website without a loan officer
  • Offer a digital mortgage loan process
  • Tons of different loan programs to choose from
  • Excellent reviews from past customers
  • A+ BBB rating (and an accredited company)
  • Free mortgage calculators
  • Free smartphone app

The Cons

  • Not licensed in all states
  • Do not publicize mortgage rates or fees
  • Do not service their own loans
Don't let today's rates get away.

Source: thetruthaboutmortgage.com

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When to Refinance a Home Mortgage: Now, Later, or Never?

Posted on October 28th, 2020

Mortgage Q&A: “When to refinance a home mortgage.”

With mortgage rates at or near record lows, you may be wondering if now is a good time to refinance. Heck, your neighbors just did and now they’re bragging about their shiny new low rate.

The popular 30-year fixed-rate mortgage slipped to 2.80% last week, per Freddie Mac, well below the 3.75% average seen a year ago, and much better than the 4-6% range seen years earlier.

Historically, mortgage interest rates have never been lower, making a mortgage refinance a veritable no-brainer for many homeowners out there.

In other words, there’s a good chance you won’t be holding off from refinancing because interest rates are too high (unless you just recently refinanced).

But even if you did, there’s a possibility it could make sense to refinance a second time.

Should I Refinance My Mortgage Now?

should i refinance

  • Consider your current interest rate relative to today’s available rates
  • Along with required closing costs and how long it will take to break even
  • Think about how long you plan to keep the mortgage/property
  • And any other factors like removing mortgage insurance or shortening your loan term

Well, the answer to that question depends on a number of factors that will be unique to you and only you.

First, what is the interest rate on your existing mortgage(s)? Is it higher or lower than current mortgage rates?

If it’s higher, how much higher? If it’s lower, is your current loan adjustable? Or do you want to refinance for another reason, perhaps to tap equity?

Once you’ve got those basic questions answered, let’s talk about the new loan. What will the rate and closing costs be on the new mortgage?

Have you started shopping rates yet? Do you even know if you qualify?

How long do you plan to keep this new mortgage? What about the house? Are you sticking around for a while?

Assuming you’re still here, it might be a good time to take a look at a common scenario to illustrate the potential savings of a refinance.

Let’s look at a quick home refinance example:

Loan amount: $200,000
Current mortgage rate: 4.25% 30-year fixed
Refinance rate: 2.75% 30-year fixed
Closing costs: $2,500

The monthly mortgage payment on your current mortgage (including just principal and interest) would be roughly $984, while the refinanced rate of 2.75% would carry a monthly P&I payment of about $816.

That equates to savings of roughly $168 a month if you were to refinance. Not bad. But we aren’t done yet.

Now assuming your closing costs were $2,500 to complete the refinance, you’d be looking at about 14 months of payments, give or take, before you broke even and started saving yourself some money.

Yes, you need to consider the cost of the refinance too…

So if you happened to refinance again or sold your home during that window, refinancing wouldn’t make a lot of sense.

In fact, you’d actually lose money and any time you spent refinancing your mortgage would be wasted as well.

But if you plan to stay in the home (and with the mortgage) for many years to come, the savings could be substantial. Just imagine saving $168 for 200 months or longer.

This “break-even” point is key to making your decision, at least financially speaking.

You also need to consider whether it makes sense to buy down your interest rate by paying points, which will increase the time to this break-even point.

For example, those who paid upfront points on their refinance a year ago might be kicking themselves, knowing they’ll benefit from a subsequent refinance thanks to today’s even lower rates.

So sit down and determine your future housing plans before you decide to refinance to determine if it’s the right move.

If you don’t know what your plan is for at least the next few years, you may want to hold off until you do.

[The refinance rule of thumb.]

How Long Have You Had Your Existing Mortgage?

when to refinance

  • You also have to consider how long you’ve had your current home loan
  • This can play a big role in determining whether a refinance makes sense
  • Take note of how much it has been paid down since that time
  • And how much of each payment is going toward interest

Here’s another consideration. If you’ve already paid down your mortgage substantially, it might not make sense to refinance, assuming you want to pay the thing off.

Even if rates are super low, as there’s a good chance you’ll pay more interest overall if you “reset the clock” and start your full loan term over again. But this isn’t always the case.

To determine if a refinance is still the right move, get your hands on an amortization calculator.

That way you can see what you’ll pay in interest if you keep your mortgage intact versus what you’ll pay in interest with the new mortgage, factoring in what you’ve already paid on the old mortgage.

You can also use my refinance calculator to plug in all the pertinent numbers, including what we discussed above, to get a quick answer.

If your calculations reveal that you’ll pay more interest over the entire term of the refinance mortgage, there’s an easy strategy to reduce both interest paid and the term of the new mortgage.

Simply make the same monthly mortgage payment you were making before the refinance, with the excess going toward principal each month.

This will shorten the loan term and could save you a lot of money. I explain this method on my mortgage payoff tricks page, which you can read about in more detail.

If you can afford it, you may also want to look into shortening the loan term by going with a 15-year fixed mortgage.

For example, if you’re already 10 years into your 30-year mortgage, reducing the term to a 15-year fixed will ensure you don’t extend the aggregate term.

And with mortgage rates so low, you may be able to retain your low monthly mortgage payment and pay the mortgage off even earlier than expected.

Also, 15-year mortgage rates are lower than those on the 30-year fixed.

Other Mortgage Refinance Considerations…

  • Even if interest rates are comparable to what you already have
  • It could make sense to refinance out of an ARM or an interest-only loan
  • The same is true if you want to get rid of mortgage insurance
  • Or if you’d like to consolidate two mortgage loans into one

If you’re currently in an adjustable-rate mortgage, or worse, an option arm, the decision to refinance into a fixed-rate loan could make a lot of sense.

Even if the monthly savings aren’t tremendous, getting out of a risky product and into a stable one could pay dividends for years to come.

Or if you have two loans, consolidating the total balance into a single loan (and ridding yourself of that pesky second mortgage) could result in some serious savings as well.

You’ll have one less mortgage to worry about and ideally a lower combined monthly payment.

The same might be true if you have mortgage insurance and want to get rid of it. Many homeowners will execute an FHA-to-conventional refinance to drop MIP and reduce monthly payments once they’ve got some equity.

Additionally, you might be able to get your hands on a no cost refinance, which would allow you to refinance without any out-of-pocket costs (the rate would be higher to compensate).

In this case, if the rate is lower than your existing rate, you start saving money immediately.

As mentioned earlier, a cash-out refinance could also contribute to your decision to refinance if you are in need of money and have the necessary equity.

Heck, with mortgage interest rates this low you could even make the argument to tap equity and invest it elsewhere for a better return.

Again, you’ll want to aim for a lower rate and cash back, but there could be a scenario where borrowing from your home is the best deal, even if you don’t save much or anything mortgage payment-wise.

This is really just the tip of the iceberg. There are countless reasons to refinance your home loan, including many seemingly unconventional ones you may have never thought of.

Whatever the reason, be sure to put in the time (and the math) to ensure it’s a good decision for you and not just the bank or a loan officer pushing you to do it!

Don't let today's rates get away.

Source: thetruthaboutmortgage.com

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Buying a Home in 2021? 11 Tips to Get It Done!

If you’ve yet to enter the housing market, but are thinking of buying a home in 2021, there’s a lot you need to know.

As I once pointed out, this isn’t your older sibling’s housing market. Not just anyone can get a mortgage these days. You actually have to qualify. But we’ll get to that in a minute.

Let’s start by talking about home prices, which have soared in recent years. The good news is mortgage rates remain very low, and may even break new record lows this year, which can keep affordability within reach.

1. Prepare for More Sticker Shock

Yes, if you’re prepping to buy a home in 2021, expect to be shocked, and not in a good way. At this point in the cycle, home prices have eclipsed old all-time highs in many parts of the country.

And even if they haven’t yet, there’s a good chance you’ll be paying more than the Zestimate or Redfin Estimate for the property in question due to limited inventory and strong home buyer demand.

The bad news for renters is home prices are expected to rise another 10% this year, so things are just getting more and more expensive.

In short, expect to shell out a lot of dough if you want a home in 2021, and that could often mean paying over asking price, even if the original list price seems high.

2. Get Pre-Approved for a Home Loan Early

Speaking of that home being out of your price range, you may want to get pre-approved with a bank or mortgage lender ASAP.

First off, real estate agents won’t give you the time of day without one, especially in a red-hot market.

And secondly, if you don’t know how much house you can afford, you’re basically wasting your time by perusing listings and going to open houses.

This is especially true if the homes you’ve got your eye on are consistently going above asking since you’ll need even more purchasing power.

It’s not hard or all that time consuming to get a mortgage pre-approval, and it’ll give you more confidence and perhaps make you more serious about finally making the move.

Tip: Look for an online mortgage lender that lets you generate a pre-approval on the fly in minutes (and know you don’t have to use them if and when you proceed with a purchase!).

3. Check Your Credit Scores and Put Away Your Credit Cards

While you’re at it, you should check your credit scores (all 3 of them) and determine if anything needs to be addressed.

As I always say, credit scoring changes can take time, so give yourself plenty of it. Don’t wait until the last minute to fix any errors or issues.

And while you’re addressing anything that needs more attention, do yourself a favor and put the credit cards in the freezer (or somewhere else out of reach).

Lots of spending, even if you pay it back, can ding your scores, even if just momentarily. It can also increase your DTI ratio and limit your purchasing power. Ultimately, bad timing can create big headaches.

Additionally, pumping the brakes on spending might give you a nice buffer for closing costs, down payment funds, moving costs, and renovation expenses once you do buy.

4. Housing Inventory Will Be…Limited

It’s the same story in 2021 as it was in 2020, 2019, 2018, and heck, even as far back as 2012. There’s really been a lack of inventory since the housing market bottomed because homes were never for sale en masse.

During the prior housing crisis, borrowers got foreclosed on or deployed real estate short sales to move on, and banks made sure all that inventory never flooded the market.

Now we’ve got would-be sellers with nowhere to go, thanks to the massive price increases realized in the past few years. It’s hard to move up or downsize, so a lot of folks are staying put. That means less choice for you.

While we saw an uptick in inventory in 2019, it appeared to be short-lived and now housing supply is at an all-time low!

With near-record low interest rates and lots of Americans hitting the ripe first-time buyer age of 34, expect competition to intensify.

Again, this supports the argument of being prepared early so you’re ready to make an offer at a moment’s notice!

5. That Home Might Be a Fixer

You probably don’t have the same skill set as Joanna and Chip Gaines, but you might still wind up with a fixer-upper thanks to those inventory constraints. And that’s totally okay.

What I’ve learned from buying real estate is that you’ll typically never be content with the upgrades previous owners or developers make, even if they were super expensive and high quality. So why pay extra for it?

There’s a good chance you’ll want to make the home yours, with special touches and changes that distance yourself from the previous owner.

Don’t be afraid to go down that road, but also know the difference between superficial blemishes and design challenges, and even worse, major problems.

Especially this year, watch out for money pits that sellers can finally unload because real estate is just so very hot.

Those properties that could never sell may finally find a buyer, and you might not want that buyer to be you.

6. You May Have to Fight for It

What’s even more annoying is that you may have to fight to get your hands on the few properties that are out there, depending on the housing market in question.

In popular metros, bidding wars will still take place, and they even become the norm again as they were in previous years.

If the property is popular, there will always be someone willing to outbid you for that home they just must have. This is another reason why the fixer can be a winner, the hidden gem if you will.

That being said, it’s okay to pay more than asking (or even the fully appraised value), just keep in mind that there are plenty of fish in the sea.

Well, perhaps not plenty right now, but there’s always another opportunity around the corner.

Stay poised and don’t let your emotions get the best of you. Like anything else, it’s okay to walk away. Trust your gut.

7. Still Negotiate with the Seller

Just because 2021 will be a seller’s market once again, at least in popular markets, doesn’t mean you can’t negotiate. You can still get into a bidding war, win the thing, and then inspect the heck out of the house.

Inspections are key to determining what will need to be addressed once the home changes hands, and what the seller will need to do to compensate you for those issues.

If you don’t get a quality inspection (or two), you will have a difficult time asking for credits for closing costs or even a lower purchase price. Take it very seriously, the return on investment can be staggering.

Also know that in some markets, buyers may have the upper hand in 2021. Not all real estate markets are red-hot anymore, so you might be able to bid below asking and still get money for repairs.

8. Do Your Mortgage Homework

While you might have your hands full with an overzealous real estate agent, it’s important not to neglect your mortgage homework.

Mortgages are often just mailed in, with little attention given to where they are originated.

Your real estate agent will have their preferred lender that you “really should consider using because they’re the best,” but you don’t have to use them or even speak to them.

I’ll typically say get a quote from them as a courtesy to keep things amicable, and to appease your agent, but also shop around with other banks, credit unions, lenders, and mortgage brokers.

At the same time, think about how you want to structure the mortgage, including down payment, loan type (FHA or conventional), and loan program.

The 30-year fixed isn’t always a no-brainer, though right now it’s a tough argument to go against it.

There are other loan programs that can make sense too, such as the 5/1 ARM, which often get swept under the rug. Make the choice yourself.

9. Expect a Very Good Mortgage Rate

If you’ve done your homework and are in good financial shape, you should be able to get your hands on a very low mortgage rate in 2021.

In fact, mortgage interest rates are historically amazing at the moment and could even reach new depths depending on what transpires this year.

Once again, the 2021 mortgage rate forecast looks excellent, so they may stay put for awhile longer or even hit new all-time lows.

In terms of financing, it’s still a great time to buy a home. Consider that the silver lining to an otherwise pricey and competitive housing market.

Of course, with home prices creeping higher and higher, even a low interest rate may not be enough to offset that growing monthly payment.

So always make time to shop to ensure you get the best rate and the lowest fees, even if financing is on sale.

Just because rates are cheap doesn’t mean you should just accept what’s thrown in front of you. Still complain, still negotiate, still ask for more!

10. The Best Time to Buy Might Be Later in the Year

Before you get too excited, or worried that time is running out, it might actually be in your favor to slow play this one.

Per Zillow, the best time to buy a home may be in late summer, including the months of August and September.

Basically, you’ve got the slow, cold months at the start of the year where there isn’t much inventory, followed by the strong spring housing market where everyone and their mother wants to buy.

Then you get a lull and perhaps even a dip in home prices during summer, which could be an attractive entry point.

You might even get lucky and snag a price cut with a lot less competition while other prospective buyers are on vacation.

That being said, get pre-approved NOW and set up your alerts for new listings ASAP and just be ready to pounce whenever.

11. Are You Sure You Want to Buy a Home?

Lastly, take a moment to ensure you actually want to buy a home as opposed to continuing to rent.

I constantly hear the old “throwing away money on rent” line and it never gets old. Then I proceed to fantasize about renting with not a care in the world.

Are you sure you’re throwing away money on rent? Renting can be pretty awesome.

You don’t pay property taxes, homeowners insurance, HOA dues, PMI, or mortgage interest. And you can leave whenever you want. That sounds like a sweet deal too.

Oh, and if anything goes wrong, you can just call your landlord or property management company.

With a home, the problem is yours, and yours alone to deal with. Broken water heater? You’re paying thousands out of pocket, not the landlord.

Consider the Effects of COVID-19

One extra thing to consider given the ongoing COVID-19 pandemic that reared its head last year.

As you might expect, it’s making the home buying and selling process a bit more complicated than usual, despite companies learning to adapt.

For example, home sellers are more reluctant to hold open houses or let anyone in their home, and prospective buyers are probably also a bit apprehensive entering a stranger’s house.

But it’s still very important to get a good look at a property you’re considering buying. The same goes for the home inspection and the home appraisal.

Both should still be taken very seriously, even if more difficult to complete.

A home purchase doesn’t necessarily have to be put on hold due to COVID-19, but it might require more thought given the increased uncertainty with the economy, demographic shifts (city vs. suburban living), and so on.

Also, think before you make a complete lifestyle change like moving out of the city and into the country, just because it’s on-trend. You might look back in a year or two and say what was I thinking?!

Ultimately, you should always give a home purchase a ton of thought though, so for me not much has changed.

Read more: When to look for a house to buy.

Don't let today's rates get away.

Source: thetruthaboutmortgage.com

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