Renovation Financing Via Credit Card?

Saturday, July 1st, 2017

Maybe those credit card rewards are just too tempting.  A 2017 Wall Street Journal survey found that many homeowners plan to use credit cards to pay for renovation projects.  In the survey from earlier this year, 32% said they would pay with plastic, up from 26% in 2016. For those able to pay off the bill in full when it arrives, using a credit card is not a bad option since no balance will be maintained and they’ll likely receive the benefit of getting airline miles or other rewards. But for those who maintain a balance, paying by credit card […]

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When The Buyer Gets Cold Feet

Thursday, June 1st, 2017

The offer has been accepted and the mortgage has been approved. What happens when the buyer gets cold feet and wants to back out of the deal? According to an online survey of 2,241 adults conducted for finance website earlier this year, homebuyer’s remorse isn’t uncommon. Nearly half (49%) of homeowners who responded said they would do something differently if they had to go through the process again. Broken down by age group, 61% of Generation Xers (the mid-1960s through the 1970s) and 57% of millennial homeowners (born in the early 1980s through about 2004) indicated they had regrets. […]

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Tapping Home Equity Without Payments

Monday, May 1st, 2017

A company on the west coast called Point Digital Finance is shaking things up in the Home Equity market.   Like many lenders, they typically buy an equity stake of about 10% of the current value of a home in exchange for cash.  But unlike regular home equity loans, homeowners make no monthly payments. Instead, when the home is sold or refinanced, Point takes back the amount it paid to the owner—10% of the home’s value at the time of the original transaction—plus a larger than 10% share of any appreciation in the home since then, meaning it ends up with more than 10% of the home’s […]

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Hybrid Adjustable Rate Mortgages Are Heating Up

Monday, April 3rd, 2017

With interest rates on the rise, it may be time for home buyers to take a fresh look at some alternatives to the 30 year fixed rate mortgage, which has dominated the mortgage market since the 2008 financial crisis. While many non-traditional loans got a black eye after the housing collapse, today’s versions lack the toxic features—such as negative amortization and prepayment penalties—that tripped up many borrowers during the housing bubble a decade ago So-called hybrid adjustable-rate mortgages, or ARMs, are especially suitable for borrowers who expect to move before any rate increases can wipe out the savings in the early years. They’re also […]

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Beware the Ides of March?

Wednesday, March 1st, 2017

The Federal Reserve would like investors to beware the Ides of March, but so far investors are taking the warning about as seriously as Caesar did. Minutes from the Fed’s latest meeting, released last week, suggested that the central bank could raise rates “potentially at an upcoming meeting,” the possibility that the Fed will lift rates at its meeting ending on March 15 has gotten stronger. The most recent reports on jobs, inflation and retail sales were all stronger than economists expected. Markets have risen with stock valuations reaching their highest levels in over a decade. But futures prices show […]

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How to Get an FHA Loan For a Commercial Property

Wednesday, February 1st, 2017

FHA home loans are not just for typical residential homes.  FHA insured mortgages are available for condos, multi-family and manufactured homes. They are also, in some cases, available for property with commercial use. In some cases, a borrower might be interested in buying a home that is zoned in a commercial district, or there might be a need for a small storefront or commercial office space. FHA requirements do allow for such purchases as long as they fall within certain guidelines. According to the FHA, “Properties zoned for commercial use are acceptable only if they are predominately residential in nature”. […]

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Real Estate Industry Braces for Tax Upheaval

Tuesday, January 3rd, 2017

The real estate industry will face a fight in 2017 about how federal tax law applies to residential property. According to the Wall Street Journal, a sweeping blueprint for overhauling most of U.S. tax law made in June by House Republicans appears to have a better chance with a Republican in the Oval Office. Among other things, the GOP blueprint calls for the elimination of the deduction for state and local property tax. Industry executives also worry the plan could severely cripple the mortgage interest deduction—long considered a sacred cow of U.S. tax policy. The blueprint proposal released in June […]

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Trump Win Juices Mortgage Rates

Thursday, December 1st, 2016

So much for that refi. Mortgage rates have spiked in the wake of Trump’s election victory, as investors respond to increased chances of fiscal stimulus next year. Investors have calculated that large tax cuts, increased deficit spending and the rollback of regulations should boost economic growth in the coming years. The average rate on a 30 year fixed rate confirming mortgage has risen to 4.125%, according to the Mortgage Bankers Association (MBA), up from post-Brexit lows around 3.5%. If rates keep moving up it could affect demand for homes.  Rates are low relative to long-term averages, but a better gauge […]

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APR – Not the Best Way to Compare

Tuesday, November 1st, 2016

Whenever lenders disclose a rate quote, they must also disclose APR. The reason for the central role of the APR is that it pulls together the interest rate and a wide range of origination charges into a single comprehensive measure of cost of credit to the borrower.  The regulatory premise is that borrowers can use APR to compare loans of different types and features, and loans offered by different providers.  If only it were true!  For most borrowers, it isn’t… Aside from lenders who omit APR related costs or use gimmicks to make their APR percentage look more attractive (like lenders who disclose only 1 day of […]

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How to Buy a Home with a Friend

Monday, October 3rd, 2016

Before buying a vacation home with a friend or relative, work out all the details, such as how to finance the purchase, divide expenses and schedule getaway time slots. Most important, decide what happens if one side wants out. Failing to negotiate these issues ahead of time can lead to disputes that can turn friends into enemies. To head off trouble, you should consider drafting an equity-share agreement to help prevent conflicts.  Regardless of how close you are, things can change. The agreement should spell out monthly and annual expenses, such as property taxes, insurance, utility bills and repairs. The […]

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