5 Smart and Easy Home Upgrades for Prospective Borrowers
A home is more than just a place to hang your hat. It’s also the single largest investment most people will make in their lives. Protecting and adding to the value of that investment is simply a smart economic decision — one that more and more borrowers are interested in pursuing. The Joint Center for Housing Studies at Harvard University estimated that remodeling projects are on the uptick and will continue to rise. More than $337 billion is spent annually on renovation and repair of owner-occupied housing in the U.S. Focus on Changes That Make Homes More Desirable, Modern, and Valuable The first thing most borrowers do once the papers are signed is start making the fixes that the previous owner neglected or adding on features the building is lacking. It’s important to find out which upgrades, improvements, and renovations boost home equity the most and net the greatest return. Some upgrades, like finishing a basement or building an addition, unquestionably add a great deal of value but can be extremely expensive and time consuming. In the wake of the pandemic, with an increase in demand for home building supplies and the headaches of a global supply chain crisis to contend with, some of those major upgrades are coming at…
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How Inflation Affects Mortgage Interest Rates
Even people that don’t pay very close attention to broad economic trends taking place across the country can’t help but notice that the past few months have seen some big shifts. The housing market hit historic highs and interest rates for new mortgages were at historic lows for a very long time. But, reports of rising inflation and a potential recession started splashing across headlines everywhere in late 2021, and they have begun to have a very real impact on individuals hoping to finance a home. Many prospective homebuyers are now wondering what exactly inflation is, how it’s connected to mortgage interest rates, and how it will affect their homebuying experience. What is Economic Inflation? In short, inflationary periods are those in which the price of goods and services steadily rise, meaning the same amount of money buys fewer goods and services today than it did in the same period a year ago. The annual inflation rate in the U.S. hit 8.5% in 2022, the highest it’s been in over 40 years. According to Freddie Mac, the average mortgage interest rate for a 30-year fixed-rate loan rose to 5% in April, which is a ten year high. Higher mortgage interest rates aren’t directly caused by higher inflation, but there is…
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Condos and Co-ops: Understanding the Differences and Deciding Which Is Right for You
When it’s time to buy a home, some borrowers choose a freestanding house, but others opt for an apartment. Buying a home within a larger building or complex is similar to buying a single-family house, but there are some differences. There are two broad types of apartment units: Condos (short for condominiums) and Co-ops (short for housing cooperatives). Here’s FSB Mortgage’s guidance on deciding which type will best fit your needs. Condos Of the two apartment types, buying a condo is more similar to buying a house. Like a house, a condo is a piece of real estate that the buyer is purchasing. A co-op, by contrast, is not technically real estate. Co-op buyers aren’t actually buying ownership of their apartment. Instead, they are purchasing shares in a corporation that owns the entire building their apartment is in. Their investment buys them the right to live in the building in the form of a proprietary lease. Condo owners, however, do own their properties — just not all of it. Specifically, they own the interior space of their unit, but not the whole building or its common areas. Everything else, including the exterior of the building, is owned by a condo association, which functions similarly to a Homeowners Association (HOA) in…
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Short or Long-term Rental Properties: Which is the Better Investment?
Real estate investing has always proven to be an excellent way to build wealth. The U.S. Vacation Rental industry is projected to reach $15 million in 2021. Nearly half of investment property buyers choose to generate rental income from their properties instead of flipping them. With the rising popularity of Airbnb, is long-term renting still the way to go, or has it been replaced? Let’s look at them both within the categories of risk, passiveness, cost, predictability, and income to see which is the best choice. Risk Which poses the greater risk for the borrower? Long-term renting is less risky overall. With long-term, there is a signed lease stating the length and terms of occupancy. In addition, there is a set monthly amount that will be received from the tenant, so there isn’t any worry about keeping the property booked. With short-term, there is no worry about evictions or getting caught up in legal issues with renters over delinquent payments or general negligence. Technology has made it easy to book an Airbnb, and payment is usually received before their stay. Since Airbnb is dependent on the travel industry, a downturn in the economy or a crisis such as Covid could affect the number of stays you could acquire. Passiveness How…
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5 Mortgage Myths Your Borrowers Need To Be Informed About
Buying a home doesn’t have to be a miserable experience. A lot of misinformation about getting a loan is constantly circulating, and it can lead to anxiety and sometimes even derail the process. Myth #1: Your down payment needs to be at least 20% This might have been the case several years ago, but now your down payment can depend on many other factors. Your financial health — like your credit history, income, and debt — plays a significant part in determining what monthly payments and interest rates you will receive. You can apply for down payment assistance or take advantage of mortgage insurance to increase your buying power. Myth #2: You need to have excellent credit A good credit score is always helpful when trying to attain a home loan, but having excellent credit isn’t required. It is still possible even with an average score. Certain lenders may be willing to work with you and your situation. You can qualify for certain government loans with an average score and put only 10 percent down. Anything above 620 means you can apply for a conventional loan and you won’t need any government assistance. Myth #3: You need to have all your debt paid off before applying The home market has…
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