End of Summer Checklist
Warm Summer months are coming to a close, and while you want to make the most of them with barbecues and days spent by the pool, there are some important home maintenance tasks you should tackle to make sure your home is functioning as it should. Read on for an end of summer checklist to keep your home in tip-top shape.
- Change your air filters.
- Test your carbon monoxide and smoke detectors.
- Clean your dishwasher by placing a cup of vinegar in the dishwasher and running it to cut down on grease.
- Clean your garbage disposal.
- Clean the inside of your oven.
- Schedule a service call to have your furnace checked
- Inspect your roof for soft spots and damaged shingles.
- Inspect your siding for any holes (may indicate an insect problem) and mold (may indicate water damage).
- Clean your gutters.
- Check your HVAC system for any smells or sounds that could indicate leaks.
- Repair any cracks in your driveway.
- Trim back any foliage that is around your home units, decks, and windows.
- Spray your garbage cans and recycling bins with a bleach cleaner and rinse them off with a hose.
- Sweep your deck, thoroughly clean the boards, and apply a new coat of sealant.
- Prep your lawn for the Fall months
Take advantage of the warm weather and longer days while you can and work on some simple home projects that will keep your house maintained and efficient!
What Does a Mortgage Closer Do?
After your loan is approved by the Underwriter, it moves to the Mortgage Closer. At this point the loan is approaching the finish line!
In this final step, the Mortgage Closer looks over all the paperwork to ensure the collected data is accurate, organized properly, meets state and federal regulations, and on track for the loan to be funded.
The Mortgage Closer coordinates the closing schedule with the title company and provides them with a settlement document for review and approval. Once they have given the okay, the Mortgage Closer provides them with the complete closing package which the buyer will sign at the closing. This package includes the final loan application, loan estimate and closing disclosure, title insurance documents, deed of trust, bill of sale, affidavit of title, and tax documents, among others.
Another responsibility of the Mortgage Closer is delivery of the final loan estimate and closing disclosure to the borrowers and real estate agents so everyone can review them prior to closing. Resolving any issues as soon as possible is important to get the loan closed on time.
Mortgage Closers are the communication center point between all parties involved in the transaction. While assisting the borrowers with the finishing touches on their loan process they answer questions, ensure everyone is on the same timeline, and keep everything moving forward according to plan.
The role of Mortgage Closer is important in making sure the mortgage process goes as smoothly as possible.
Things to Consider
3 Reasons Why Homebuyers Prefer Fixed Rate Mortgages
You have lots and lots of decisions to make as a current or prospective homeowner. Will you live in the city or somewhere more rural? Is a single-family home the best style for you and your family's budget and needs, or do you prefer the accoutrements that come with condo life? Are you interested in something that is move-in ready, or perhaps you're considering a fixer-upper?
And that's just the tip of the iceberg. However, when it comes to interest rates, there is one choice that is overwhelming in terms of popularity: fixed-rate mortgages. More often than not, when asked which they'd prefer, people select it over variable. Indeed, based on the most recent statistics available from government-sponsored enterprise Freddie Mac, 90% of homebuyers pick a fixed-rate loan.
It raises an interesting question, though: Why? What is it about FRMs that makes them the odds-on favorite to be selected over variable?
Here are three reasons industry experts believe fixed-rate mortgages are so consistently well-received:
1. Rates stay the same
It's said that the only constant in life is change; in short, it's the one thing that is guaranteed. But a rare exception to that truism are FRMs. No matter what, the interest rate you pick is locked in for the life of the loan term, which is usually 30 years.
There is great security and comfort in this fact. When the mortgage payment becomes due each month, you know exactly how much you'll spend on principal and interest. This predictability can help you with planning and budgeting for the week, month, or year.
The interest rate environment is subject to change, primarily due to market dynamics of the moment, the state of the U.S. economy and actions by the Federal Reserve. But for several years now, interest rates have remained solidly in affordable territory.
The numbers prove as much. Based on archived data maintained by Freddie Mac, 30-year FRMs never edged above 5% in the entirety of 2019. In fact, they stayed well below that figure for all 12 months, topping out at 4.51% the very first week of the year. They remained in the 4% territory or lower throughout 2018 and 2017 as well.
The same has been true in 2020. While everyone can attest to this being an unusual year with lots of changes, FRMs are in record-low territory, now hovering around 3% for the week ending June 4.
In short, people like to pay less, and generally speaking, FRMs are highly affordable given the fact rates have been low for so long.
This one just may be the main reason as to why FRMs are the overwhelming favorite in comparison to variable. People like the freedom of options, which may explain why homeownership is as popular as ever. In fact, according to a recent survey from the National Association of Realtors, which was conducted in May, nearly 60% of respondents considered buying real estate an "essential" service.
They not only expect to have the freedom to purchase a house at a time that is right for them, but appreciate the ability to pay down their mortgage in a manner that makes sense to them. FRMs offer this kind of flexibility, noted Sean Becketti, former vice president chief economist at Freddie Mac.
"Thirty-year fixed-rate loans are generally prepayable at any time without penalty," Becketti explained. " If the homeowner chooses to pay off the loan before maturity to refinance or sell the home, the homeowner can do so without paying an early prepayment fee."
He went on to note that this option is fairly exclusive to the U.S., as in other parts of the world, it's not unusual to be docked for paying off a loan ahead of schedule.
Another way in which FRMs increase flexibility is this structure can be used in many different loan types. As The Balance noted, they can be leveraged for conventional loans - which are not backed by the government - and also those guaranteed by the Federal Housing Authority or Department of Veterans Affairs for VA loans.
Additionally, while 30-year FRMs are the most common length homebuyers choose, 15 years if also available to them if they so choose. While monthly payments tend to run higher, you wind up spending less on interest overall because the term is significantly shorter. The rate itself is often lower than it is with the long-term option as well.
None of this is to say that variable rates aren't good. They have several positives to them as well. Nor is it to say that fixed rates don't have certain disadvantages. But these are some of the main reasons why FRMs are a smart choice and why so many pick them when given the choice.
For more information on FRMs or other aspects of homeownership, please contact RMS today.
MBA Education Path to Diversity Scholar Profile: Gabrielle Beck
Congratulations to Gabrielle Beck, RMS Investor Relations/Lock Desk Analyst, for participating in the MBA Education Path to Diversity Scholarship Program and for being featured in an MBA Newslink article!
5 Major Myths About FHA Loans
With so much data available, it's truly a great time in world history to be in the market to buy a home.
Aside from the fact that interest rates are highly affordable - and have been that way for a number of years now - there’s a ton of information about the process of purchasing a house. Thanks to the internet, never before has so much information been so easy to discover.
Still, there’s also a tremendous amount of disinformation out there. It's true in just about every aspect of life, even when it comes to certain mortgage types, such as those backed by the Federal Housing Authority, which are more commonly referred to as FHA loans. Who knows the reason why, but it may be due to the fact that the program has been around for so long - since the mid-1930s - and certain aspects of it have changed over the years.
Whatever the reason, if you're considering applying for an FHA loan, but aren't sure whether it's right for you due to mixed information, the following will help you set the record straight:
Myth No. 1: You need a sterling credit score to be approved
Everyone wants a high credit score. It gives you a greater number of options in terms of loan availability and can also help you borrow more.
But the notion that FHA loans require a perfect score is plain wrong. As noted by Forbes, people who have a credit score as low as 580 may still qualify for an FHA loan. Generally speaking, those with lower scores tend to pay more in terms of interest, but this isn't the same as eligibility.
Bottom line: You can have a very average credit score and still be extended an offer. Lenders take many different factors into account beyond only credit, such as what you earn, what funds you have available, how long you've been employed and several other financial considerations.
Myth No. 2: FHA loans are not available to self-employed people
The benefits of self-employment are innumerable, which may explain why 44 million workers in 2019 - nearly 30% of the country's workforce, according to Forbes - worked for themselves at one point or another during that 12-month period.
The ease with which self-employed people can obtain an FHA loan isn't one of those benefits, or so they say. As noted by FHA.com, while loan approval does tend to be a bit tougher, this reality is not unique to FHA loans. Many lenders have resources available at their websites, which provide details on what self-employed individuals should have with them to corroborate their financial ability. For instance, instead of a W-2 form, 1040 tax returns, must be obtained. These should include all schedules.
Your lender will want to see a few other items, but again, self-employment is not by any means a dealbreaker for FHA loan approval. Nor has that ever been the case. Just ensure that you have a paper trail, as transparency helps to increase communication and the understanding your lender needs to come to decision on what is right for you and your budget.
Myth No. 3: FHA loans are exclusive to single-family home purchases
Nothing could be further from the truth in this regard. While single-family residences are the most popular among buyers, you can apply and be approved for an FHA loan if you're interested in obtaining a condo. The same is true for multifamily units. Although housing starts fell in March and April due to the economic impact of the shutdown, multifamily permits actually rose by nearly 5% between February and March, according to the National Association of Home Builders.
Myth No. 4: You don't need mortgage insurance with an FHA loan
While some loan products don't require you to obtain mortgage insurance, an FHA loan does, despite what you may have been led to believe.
It's structured differently in terms of payment arrangement. For instance, in addition to paying the premium over time in a given year - usually on a monthly basis - there is also an upfront premium. This means a certain percentage of the policy is due at closing. The terms and conditions may differ, however, depending on the loan agreement.
Myth No. 5: FHA loans are only for first-time buyers
While there is truth to the notion that these mortgages are ideal for people who have never been in the market before, you can apply if this isn't your first purchase, too. They're also available to those who want to refinance their current loan.
This is hardly an exhaustive list, so if you have more questions, please let us know at RMS. We'll be happy to clear things up to separate fact from fiction.