Archive for the 'Saving Money' Category
Home loans: Many leap without looking
April 29th, 2010
Written by Frost Mortgage
As buyers rush to take advantage of the homebuyer tax credit, an important fact is being highlighted: Moving too quickly can be costly. You may race to get the tax credit but end up losing more than that in a deal you haven’t fully thought through.
A survey on homebuying conducted by Zillow and reported on by the New Mexico Business Weekly found that
borrowers who obtained a home loan in the past five years spent just five hours reviewing their options and got just three quotes. Thirty-one percent spent two hours or less, despite the fact that a home is one of the largest investments people make in a lifetime …
If you’re feeling rushed or thinking you may not have all the information you need to make a smart choice, please contact one of our experienced loan officers for assistance. You’ll get sound, professional advice and information to help you make the best move, because at Frost Mortgage, we don’t just close loans, we open doors.
Discussion: 1 Comment »
Military housing shows resilience
April 14th, 2010
Written by Frost Mortgage
Military housing (subscription required) has been dented by the economy, but not as badly as the civilian sector, National Mortgage News reports. Moody’s Investors Services downgraded nine of 23 housing developments at bases around the country, largely the result of declining credit ratings of surety providers.
The news highlights the fact that, if you’re in the service, now’s a great time to capitalize on some of the benefits. As we mentioned recently, for instance, the homebuyer tax credit is about to run out for most of us, but military personnel will have an extra year to take advantage of it.
If you’re an active-duty service member or a veteran, please contact us today. We’re long-time supporters of those who serve our nation, with expertise in Veterans Administration loans as well, and we would be proud to assist you as you look for funding for your next home.
Discussion: No Comments »
Homebuyer tax credit extended for military personnel
March 31st, 2010
Written by Frost Mortgage
The homebuyer tax credit is about to run out for most of us, as we recently mentioned. Military personnel, however, will have an extra year to take advantage of it.
You can read more about the conditions at the National Realtors Association’s blogs and via the Internal Revenue Service itself, or you can contact us today. We’re long-time supporters of those who serve our nation, with expertise in Veterans Administration loans as well, and we would be proud to assist you as you look for funding for your next home.
Discussion: No Comments »
Home Affordable Refinance Program gets lifeline
March 25th, 2010
Written by Frost Mortgage
The Federal Housing Finance Agency this month extended a program that helps homeowners who can’t refinance because their home values have dropped, reports MortgageDaily.com (subscription required). The program would otherwise have expired this summer. It allows refinancing over 80% LTV (loan to value) without mortgage insurance for some. If you have special circumstances, Frost Mortgage may be able to help. Please contact us today to learn more.
Discussion: 1 Comment »
Home buyers can save today by not trying to “time the market”
March 4th, 2010
Written by Greg Frost
Though the jury’s out on where we stand in terms of an overall economic recovery, mortgage rates remain historically low and tax incentives remain intact. There’s arguably never been a better time to purchase a home. That being said, here are a few significant dates to keep an eye on:
- On March 31st, the Federal Reserve will discontinue purchasing Mortgage Backed Securities. Most economists believe we’ll see increased mortgage rates as a result.
- Those wishing to take advantage of home-buyer tax incentives must have a binding purchase contract in place no later than April 30th.
Today, I’d like to address a common mistake many home shoppers make – trying to ‘time the real estate market’. In other words, some shoppers try to make their purchase at or near the bottom. In theory, this seems like a good idea. However, the following illustration makes a powerful point:
Hypothetical Home-buying Situation A:
Alvin has his eyes on a home currently listed for $250,000. He’s pretty sure he can negotiate the seller down to $240,000, but right now, the seller’s stuck at $245,000. What if Alvin acts today and pays $245,000 for the home? Assuming he qualifies for a 30-year fixed mortgage with a 5.5% interest rate and puts 20% down*
- Alvin ends up financing $196,000 ($245,000 x .8).
- Alvin’s monthly payment (P+I) would be approximately $1,113.
- Over the 30-year loan, Alvin will pay $204,631 in total interest.
Hypothetical Home-buying Situation B:
Alternatively, let’s assume that Alvin hangs in there for 60 days and gets his target price of $240,000. He feels great because he saved himself $5,000! However, let’s also assume that in the 60 days that passed, the rate on 30-year fixed mortgages increased from 5.5% to 6.5%*. (This type of rate increase can sometimes occur in a week, let alone a 60-day period.) Alvin’s still prepared to put 20% down, so
- He’ll finance $192,000 ($240,000 x .8)
- However, because interest rates rose from 5.5% to 6.5%, Alvin’s monthly mortgage payment is $100 higher ($1,213) than in Situation A when he’d paid $5,000 more for the home!
- Furthermore, Alvin will pay over $40,000 more in interest ($244,885) in Situation B over the life of the loan!
As you can see, trying to time the market can be a risky proposition – and often backfires. If you or anyone you know is in the process of purchasing a home, please feel free to share this advice with them. As always, I’d be happy to conduct this analysis free of charge and am honored by the trust you’ve instilled in me as your mortgage advisor for life.
* By the way, for illustrative purposes I used hypothetical rates for the above scenarios. If you’d like to know what today’s mortgage rates are, please feel free to call me today!
Discussion: No Comments »
Get Extra Tax Deductions In 2008 — Pay Your Mortgage A Few Days Early
December 10th, 2008
Written by Christopher Frost
For most Americans, mortgage interest paid on a home loan is tax-deductible in the year in which it was paid.
With advance planning, therefore, homeowners can increase their 2008 tax deductions and limit their tax liability on April 15.
The key is to make the January 2009 mortgage payment before the New Year begins.
In making the payment in 2008, the payment’s mortgage interest is applied against this year’s tax deductions instead of next year’s. And lest you think you’re paying “in advance”, remember that mortgage interest is paid in arrears; a payment due January 1 accounts for interest that accumulated in December 2008 anyway.
Tax planning is a complicated issue and not all homeowners will qualify for mortgage interest tax deductions. Check with your tax professional before making tax planning decisions.
If you don’t have an accountant you trust, call or email me anytime; I’m happy to make a recommendation to you.
Discussion: No Comments »
