You Can Take Control of Some of What Affects Your Home Loan Interest Rate

House and Percentage Symbol

Interest rates are at the top of everyone’s minds right now, especially if you are in the market for a home. But your interest rate isn’t set in stone. Several factors play into the interest rate on your loan, and you are in control of a lot of what affects it. Here are some of the things that can affect the interest rate on your home loan. Let us know if we can help you determine what your home loan may look like.

1. Credit scores
Borrowers with higher credit scores generally receive lower interest rates than borrowers with lower credit scores. Lenders use your credit scores to predict how reliable you’ll be in paying your loan. Credit scores are calculated based on the information in your credit report, which shows information about your credit history, including your loans, credit cards, and payment history. If you’re considering buying a home now or later, check your credit score and do what you can to get it as high as possible.

2. Home location
Your home loan’s interest rate may be impacted by the in which you are purchasing. Part of this could be due to the health of the housing market in your state or county. If the housing market is healthy, the lender is less likely to risk default on the loan, so the interest rate may be lower.

3. Down payment
The more money you put down on your home, the lower your interest rate will likely be. You don’t have to put down 20 percent to get a loan, but if you do, you may get a better interest rate.

If you cannot put down 20 percent or more, you will be required to purchase private mortgage insurance (PMI). PMI protects the lender in the event a borrower stops paying the loan. The cost of PMI is added to the overall cost of your monthly mortgage loan payment. You may be offered a slightly lower interest rate with a down payment just under 20 percent, compared with one of 20 percent or higher. Why? You’re paying mortgage insurance, which lowers the risk for your lender.

When determining your down payment and subsequent interest rate, keep in mind the overall picture of what you are borrowing. The larger the down payment, the lower the overall cost to borrow. Getting a lower interest rate can save you money over time. But even if you find you get a slightly lower interest rate with a down payment less than 20 percent, your total cost to borrow will likely be greater since you’ll need to make the additional monthly mortgage insurance payments.

Look at the overall loan and payments, not just the interest rate, when getting a home loan.

4. Loan term
The term of your loan is how long you have to repay it. In general, shorter term loans have lower interest rates and lower overall costs, but higher monthly payments.

5. Interest rate type: fixed or adjustable
There are two general types of interest rates: fixed and adjustable. Fixed interest rates do not change over time. Adjustable rates may have an initial fixed period, after which they go up or down each period based on the market.

Your initial interest rate may be lower with an adjustable-rate loan than with a fixed rate loan, but that rate might increase significantly at a later date.

6. Loan type
There are several broad types (categories) of mortgage loans, such as conventional, FHA, USDA, and VA loans, all of which have different eligibility requirements. Interest rates can be different depending on what loan type you choose. Your lender will discuss different options with you and will help you choose the right loan to keep you and your family financially secure.

7. Discount points
Points, or discount points, lower your interest rate in exchange for an upfront fee. By paying points, you pay more upfront, but you receive a lower interest rate and therefore pay less over time. Points may be a good option if you will keep the loan for a long time. There are also tax benefits for discount points for the purchase of your primary residence. Talk to your accountant or attorney about this.

Getting a home loan is about more than just the cost of the house or the interest rate. There’s a lot to understand, and it is our privilege to help you navigate the home buying process. Please contact us if we can answer any questions.

You Budgeted to Buy a House – Now Budget as a New Homeowner

Save money for home cost

Most of us budget when we want to buy a house, but budgeting after we are homeowners, that’s another story. After you’ve signed the papers and the movers have unpacked your last box, you still need to have a budget for “what’s next.” Without this, you may find yourself with some unexpected needs and no way to pay for them. Here are a few pointers. 

Account for new regular expenses
Even as a renter, you probably had some bills you’ll continue to cover as a homeowner – electricity, water, gas, internet, etc. But when you buy a home, there are new expenses to add to this list.

  • Real estate taxes and homeowners insurance: These often are included in your monthly mortgage payment. If any of these change, even if you have a fixed-interest mortgage, your payment can fluctuate from year to year because of changes in taxes and homeowners insurance premiums.
  • Homeowners association: We see a lot of HOAs in today’s home market. These fees can be as high as several hundreds dollars a month. HOA dues may be payable monthly or annually. If you pay these annually, be sure to budget for them so you have the money to cover the costs when it’s time.
  • Home maintenance and upkeep: As a homeowner, you’ll want to stay on top of maintenance. One rule of thumb is to set aside 1% – 2% of your income to cover these costs. If your home is older, you may need to plan even a little more.
  • High cost repairs: If you have high cost or high value repairs, you’ll need to have budgeted even more. A new roof, deck replacement, or other big projects like finishing a basement or covering plumbing emergencies may cost more. Plan ahead.
  • Finally, make sure you continue to build your emergency fund. Three to six months of living expenses is what most financial planners recommend you always have in a ready-to-use savings plan. This is only for emergencies, but building it up should be part of your budgeting plan.

Being a homeowner is a great thing, and with all great things comes great responsibility! Be ready for anything, homeowner! 

 

Top Tips for Keeping Produce Fresh Longer

Family Outing to the Grocery Store

No one likes to throw food away. Groceries are expensive and when you can keep your food fresh longer, you can save a lot of cash. Here are some tips for keeping your fresh food fresher longer.

Keep your refrigerator clean. Leftover residue or mold spores can increase the spoilage of all your food in the refrigerator.

Click here for some tips to easily clean your refrigerator and keep it clean longer.

Don’t store fruits and vegetables near a gas stove. Natural gas has been shown to increase ripening. In addition, don’t store fruits or vegetable in areas that have smoke or heat, like the stove or toaster oven. The exhaust and heat from these can increase the amount of Ethylene gas that is produced and speed up the ripening process.

Store produce in special storage bags that you can buy from your grocer.

Don’t cut your fruits and vegetables until you will be using them. Cut fruit will spoil faster.

If you do cut your fruit or veggies sprinkle them with a little lemon juice to keep them fresh and cover them with plastic wrap.

Place fresh herbs and leafy greens in a jar or vase of water, just like you would a bouquet of flowers. They’ll last longer and you’ll have a beautiful, green arrangement.

Store dried green onions or chives after you chop them up in a plastic water bottle in the freezer. When you’re ready to use some, just pull this out and sprinkle.

Store potatoes with apples to keep the potatoes from sprouting, and keep them away from your onions. Onions will make apples go bad faster.

Keep your greens in the refrigerator in a bowl with a paper towel, and cover with plastic wrap. The paper towel will absorb the excess moisture and keep them fresh.

Clean berries, fruits, and greens in a mixture of 10 parts water and 1 part white vinegar. This will remove dirt and even pesticides, and help them last longer by preventing mold.

Bad apple in the bunch? Remove it immediately. The old saying “One bad apple will spoil the bunch,” is true.

Store fruit in the middle of the refrigerator or in the drawers to keep temperatures consistent.

Keep bananas away from your other produce, as they produce some of the highest amounts of Ethylene gas. Place plastic wrap around the crown of your banana bunch to keep them lasting longer. If you want them to ripen super fast, place them in a closed plastic bag. Since they emit so much Ethylene gas, they’ll ripen quickly when the gas is trapped by the bag.

Keep tomatoes at room temperature and away from sunlight. If you grow your own tomatoes, pick them as soon as they are ripe. Do not to store your tomatoes in plastic; this will trap moisture and increase the likelihood of spoilage.

Store nuts in the freezer or in a food safe jar to protect them from moisture and air.

It’s no fun to throw food away, and it’s always fun to eat fresh! Try a few of these tips and see if you’re not saving and using more food than you ever have before! 

Button Up Your House for Early Winter Prep: Cold Weather Hacks

Kids enjoy the snowfall

October is a good time to button up your house for winter. We still have days that are nice enough to get outside and take care of business, but we know that Old Man Winter will be knocking on our doors soon enough. Here are a few hacks to make winter-proofing your house easier. 

Find all the places that cold air can leak in and warm air can leak out.
And then caulk these cracks so no more air can whisper through them. Check baseboards, windows and doors, ceiling light fixtures, electrical outlets… anywhere that the outside can meet the inside. When you block drafts, you have the potential to save between 5 and 30 percent in utility bills, according to the US Department of Energy.

Here’s your hack: At night, have a friend walk outside after you turn off your lights. Have your friend shine a flashlight along doors and windows. The light will illuminate large cracks. Those are your leaks. Here’s another hack, let your neighbors know you are doing this so they don’t call the police.

Check your heating system. You’ll save money on energy bills if your heater is running efficiently. Even if you have to call in a pro on this one, it’s a good idea to have your heater looked at. If you have gas fireplaces, get someone in to check those, too. Better safe than sorry when it comes to potential carbon monoxide leaks or other dangers.

Here’s your hack: Remove all of the vent covers and wash them in sudsy water and dust the heating returns. Let the covers dry all the way before putting them back on. This is one simple way to cut down on dust in your home.

Check smoke alarms and carbon monoxide monitors. You and your family are at greater risk when batteries aren’t working in your alarms. You should check these batteries twice a year, so now is a good time.

Here’s your hack: Make it a habit to check your batteries when we move our clocks forward or backward. This weekend’s your big day, and you’ll have time as we fall back on Saturday and gain in hour!

Clean your patio furniture. Rats! It’s that time of the year. You’re not going to be lounging lawn-side for a few months. When it’s clean, find a good place in the garage or basement to store it to keep it clean.

Here’s your hack: You can scrub your plastic furniture to a pristine clean with a Brillo pad and then give it a final rinse. Not up for that? You also can power wash your furniture.

Get your home ready now so you’re not scrambling in the cold to get ready later.

Saving for a Down Payment: Save More and Save Faster!

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Whether you’re planning to buy a house in a few months or not for a few years, you’re probably thinking about how you’ll save for a down payment or you’re already saving. No matter where you are in the process – or even if you’re already a homeowner and just want to save more – some reminders on how to save money are always appreciated. The biggest thing to remember is that saving takes time and discipline – and it means re-thinking your budget and maybe even earning additional money.

Remember: You may not need to put 20 percent down for your home. In fact, you may only need to put down 5 percent or 3.5 percent. Saving that amount will be a breeze! Your mortgage loan officer can share information with you about loan options and down payment assistance programs.

Get started saving today:

Transfer a fixed amount of money to savings automatically. Set up a savings account that has money automatically transferred into it each month, every two weeks or every week. Every time you get a paycheck, some of that money should be automatically deposited into this account – no questions asked. Your bank can set this up for you, but you have to be disciplined enough to not withdraw from the account!

Bank any extra unexpected income. Get a tax refund? Put it into the savings account. Get a gift of cash? Put it in the savings account. Bonus or large commission? Savings. If this adds up to hundreds or even thousands of extra dollars a year, good for you!

Lower your expenses. Get an antenna and get rid of cable. Stop buying fancy coffees and reduce your trips to restaurants. Lower your data plan on your phone. If you pay your own gas or electric bills, lower your heat in the winter and raise the temperature on your air conditioner in the summer by three degrees in each direction. Wherever you can make a small change, make a small change.

Monitor your online spending. With online shopping at your fingertips and online sellers that generously store your credit card for you, it’s easy to click and spend without even thinking about how much you’re spending or if you really need what you’re buying. Track this spending with an app or keep an old-fashioned spending ledger.

Shop your insurance. If it’s been a while since you checked rates for your car insurance, renter’s insurance, health insurance, look into those costs. You may be able to save hundreds or even thousands of dollars by making a few small changes.

Save your change! Save your pennies, nickels, dimes and quarters. Never spend your change. Get glass jar and start saving. When the jar is full, put the money in your savings account. This will add up fast!

Skip vacations for a year or two. Check out what’s happening in your community, your state and your neighboring states. If you can’t stand the idea of not going away for a year, plan a camping trip and borrow your friends’ equipment. Take the money you would have spent on vacation and add it to your savings account.

Sell things. You’re probably going to purge before you buy your home anyway, so why not sell some things now. That bike you never ride? The extra set of pots and pans you never use? What do you have that has value to someone else? Sell it on Craigslist, Facebook Marketplace, Ebay… wherever there is a buyer for what you want to sell. Put anything you make into your savings account.

Lose the high interest credit card debts. If you’re not paying off your credit cards each month, you’re probably paying a lot in interest. Pay off your credit cards and either stop using them all together or use them minimally. Paying credit card interest will seriously cut into your savings. If you simply cannot pay them off, transfer your balances to a card with the lowest possible interest rate.

Get a second job. Earnings money working a second job can help you save money a lot faster. Even if you’re bartending or waiting tables 10 hours a week, driving for a car service, pet sitting or working in retail, if you take every dime of what you make working a second job and put it into savings, you’ll see your money add up quickly.

Refinance your student loans. Do some research and see if you can get a better interest rate on your student loans. You just might be surprised at what you can save. Whatever money you do save with the lower payment goes into your savings account.

Celebrate your savings successes. Create a savings graph and put it somewhere that you see it. Add to it regularly – at the end of every week. The more you see your savings grow, the faster you’ll get to your down payment. And we think you’ll want to continue making saving something you do regularly.

Do you have savings tips you want to share? Add them to the comments below!

Summer Vacation Means Summer Jobs for Kids

girl watering the flowers

It’s summer vacation. Don’t let your kids spend the summer on the couch watching TV. Encourage them to earn their own money and start saving today for things they want tomorrow. Here are six jobs that kids as young as age 10 can cut their teeth on and become young entrepreneurs. Some of them may require a little help and coaching from adults, but that’s part of the experience. Help kids get started with marketing – make and hang signs, go door-to-door, put flyers in mailboxes, post on neighborhood websites, or create ads for neighborhood newsletters.

Do Yard Work
If your kids are old enough to use a lawn mower, then mowing lawns is a great job from spring through fall. The beauty of lawn mowing is that kids can push the mower from house to house! If kids aren’t ready for lawn mowing yet there are lots of other jobs: rake leaves, plant seeds, pull weeds, water flowers, etc.

Open a Lemonade Stand 
Younger kids may enjoy setting up a lemonade stand. If the weather is right (hot!) a lot of passersby on their way home from work or out walking the family dog may be ready for a refreshing beverage. Make sure the table is set up on a safe corner that has some foot and car traffic and they can be in business. If you really want to make some money, sell dog treats for the pups that go by with their owners.

The next three jobs may require some adult supervision when kids first begin them.

Walk Dogs
Be a dog walker. Dogs love going for walks and people who work all day love knowing their four-legged friends are getting outside. This job may be easier to get if the kids have pets of their own that neighbors see them taking care of and tending to. Dogs need to be walked all year round, no matter the weather or the time of year, so this job can grown into a continuous business. And good dog walkers never forget to clean up after their pooches!

Watch Someone’s House
When neighbors go away on a vacation, they often need someone to either feed their pet, water their flowers or pick up their mail while they’re away. A good house sitter is hard to find! It has to be someone trusted. But when your child becomes a favored house sitter, like dog walking, this job can become year-round business.

Be a Mother’s Helper
When kids are too young to babysit, they can get some training and earn some money by being a “mother’s helper.” A mother’s helper makes life easier for moms when they are at home. out a mom with her young kids while she’s also at home. They may play with the kids and keep them entertained while their mom does other chores around the house. They may even be asked to help with simple chores themselves.

The earlier kids start working, the faster their savings and their work ethic will grow. And the good things about these jobs? They are close to home and if your kids get one or two good clients, they will keep getting more business!