HOW TO KEEP FROM GOING HOUSE POOR

The only thing worse than not being able to buy a home when you want to is owning a home and not being able to do anything but sit inside because after your house payment, HOA fee, taxes, and household bills, there's nothing left.

A few smart strategies can help you avoid becoming house poor.

Think hard about that pre-approval amount

Just because the bank tells you that you can buy a $400,000 home doesn't mean you have to spend all $400,000. It might be that you're not comfortable with a payment that high if it means you won't have a cushion and can't continue to contribute to your savings.

Things you'll want to consider:

-Can you continue to invest the way you want to?

-Will you be able to keep up (or build) your emergency fund - "A savings account stuffed with six months expenses or more is a vital part of financial stability," said Money Under 30.

-Are you going to have enough money left over to establish a bank account buffer? "Whether you're 15, 25 or 65, if you're having trouble with your money and want to improve, the very first step you should take is to build a bank account buffer," said Money Under 30. "A bank account buffer is my name for what other people may call a cash cushion, mini emergency fund, rainy day fund or back-up savings. When you have a bank account buffer in place, you don't have to worry that a poorly timed Starbucks break you charged to your debit card will overdraw your account and trigger a $35 overdraft fee."

Calculate your ENTIRE payment

Principle and interest will only tell you part of the story. Same with principle, interest, taxes, and insurance. If you're not also taking into account any Private Mortgage Insurance you need to pay, your Homeowner's Association fee, and any special assessments, you're not looking at the whole picture.

Budget for additional expenses

This is not the place for that buffer referenced above, but, rather, a way to make sure you can really handle the home you want without living paycheck to paycheck or, even worse, going into even more debt just so you don't sink. If you don't currently have a yard or are renting, you may not be accustomed to paying landscaping fees. If your new home has a pool, don't forget to budget for that pool cleaner. If you're moving to a larger home, you may also have an increase in costs for your house cleaning service and utilities, and if your commute is longer, you may be paying more in gas and tolls. They are the little things that can creep up and affect your bottom line.

Don't do improvements right away

You might want to wait a few months to see how your expenses pan out before you empty your savings on a new kitchen. Ditto for buying a houseful of new furniture. The desire to fix up the house to your standards or pack it with all-new everything is strong. But a little patience can go a long way. Spreading out your purchases while you increase your savings and waiting for sales and zero interest credit offers can help keep your budget in check.

Be careful with an equity line

Having equity in your home is great if it means you made a smart investment. But using it irresponsibly can quickly make your budget spin out of control. The good news is that the number of homeowners who are under water is dropping - now about a third of the 2010 total. The bad news is that equity can be tempting, and stripping your home of it - and making not-so-smart decisions with the money - can create an underwater situation. If you take out a line with the intent on doing some updates or renovations, you'll want to make sure that you can comfortably afford the new payment and that the renovations you're making will provide a return on investment.

Get a home warranty

Experts are on the fence about this - some say you absolutely have to have one while others find it a waste of money. But if you're the type for whom coming up with thousands of dollars to replace the faulty air conditioner that's no longer conditioning anything or a refrigerator that's stopped refrigerating will be a hardship, the minimal monthly output is far outweighed by the peace of mind of knowing most of your large repairs will be covered.

Claim a homestead exemption

In some states, you can file a homestead exemption to lower your property taxes. Savings can add up to hundreds of dollars per year or more. You can get more information and learn who's eligible here.

Change your tax withholding

One of the great benefits of home ownership is the tax write-off. If you leave your withholdings alone, you may expect to get a big chunk of money back at the end of the year, as long as nothing else has changed. But by adjusting your withholdings, you can hold on to more of your money every month to help offset higher expenses.

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6 TIPS TO GET APPROVED FOR A MORTGAGE

What Are Your Options?

Everyone's financial situation is unique. With that in mind, here are six different options for making your homeownership dreams a reality.

1. Get a Cosigner

If your income isn't high enough to qualify for the loan you need and if you can find a cosigner with enough disposable income, part of that person's income can be considered toward your loan amount regardless of whether the person will actually be living with you or helping you pay the bill. In some cases, a cosigner may also be able to compensate for your less-than-perfect credit. Overall, the cosigner is guaranteeing the lender that your mortgage payments will be paid.

If you decide to go this route, just make sure that both of you understand the financial and legal obligations the cosigner takes on when he or she signs the loan documents. In the event that you default on your mortgage, the lender can go after your cosigner for the full amount of the debt. What's more, not only will your credit score plunge, but your cosigner's will too.

Of course, you shouldn't take this route if you know you aren't responsible enough to pay the mortgage on time or can't afford the monthly payments, but if you have income that a lender isn't willing to consider (such as self-employment income from a new business that has been very successful) and you and your cosigner are both confident that you can make the payments on your own, then getting a cosigner may be a good option.

2. Wait

Sometimes conditions in the economy, the housing market or the lending business make lenders less generous with loans. If you're in a climate where everyone is panicking, then it may be best to wait things out. When conditions improve, lenders may become more accommodating.

In the meantime, you can work on improving your credit score, reducing your debt and increasing your savings. While you're waiting, home prices or interest rates could drop. Either of these changes could also improve your mortgage eligibility. On a $290,000 loan, for example, a rate drop from 7% to 6.5% will decrease your monthly payment by about $100. That may be the slight boost you need to afford the monthly payments and qualify for the loan.

3. Set Your Sights on a Less-Expensive Property

If you can't qualify for the amount of mortgage you want and you aren't willing to wait, switching to a condo or townhouse instead of a house, accepting fewer bedrooms or bathrooms, or moving to a less attractive or more distant neighborhood may give you more options. As a more drastic option, you could even move to a different part of the country where the cost of home ownership is lower. When your financial situation improves down the road, you might be able to trade up to the property, neighborhood or city where you hope to end up.

4. Ask the Lender for an Exception

Believe it or not, it is possible to ask the lender to send your file to someone else within the company for a second opinion on a rejected loan application. In asking for an exception, you'll need to have a very good reason, and you'll need to write a carefully worded letter defending your case. Your letter should avoid excuses and sob stories and focus only on the facts. Explain how the incident that is preventing your loan from being approved, such as a charged-off account, was a one-time event that will never occur again. This one-time event should have been caused by a catastrophe such as a large and unexpected medical expense, natural disaster, divorce or death in the family. The blemish on your record will actually need to have been a one-time event, and you'll need to be able to back your story up with an otherwise flawless credit history.

5. Try a Different Lender

Sometimes one lender will say no while another will say yes. If the first lender you approach rejects you, there's no reason not to try out a few other options. If every lender rejects you for the same reason, though, you'll know that it's not the lender that's the problem, it's your financial situation. Your only choice at this point is to fix the problem.

When shopping for a second opinion, don't give lenders any inkling that you are feeling even remotely desperate for a loan or they may take advantage of you by tacking higher fees onto your loan or raising your interest rate. Of course, if you are a higher-risk borrower, you may encounter some of these fees no matter what.

Be careful to avoid loan sharks, too. Remember, you don't want just any loan, you want a reasonable loan. One major potential benefit of homeownership is the financial security it can bring, but if you get a bad loan, that aspect of homeownership disappears. In a worst-case scenario, a bad loan could result in your losing the home, as it did for many who bought homes during the carefree lending days of the housing bubble.

6. Team Up With Someone Else

Two incomes are better than one, so if you can't qualify on your own, perhaps you have a family member or friend that you trust enough and like enough to make a major purchase with and live with. It won't be enough to just put them on the loan, of course - they'll need to actually help with the mortgage payments to make it work, and chances are they won't want to pay half the mortgage unless they're living in the new home with you.

Conclusion

To go from rejected to preapproved, it's important to know what lenders are looking for in an applicant. If you've been turned down for a mortgage, make sure to ask the lender plenty of questions about things you could do in your specific situation to make yourself a more attractive loan candidate. With time, patience, hard work and a little luck, you should be able to turn the situation around and become a residential property owner.

9 LITTLE THINGS THAT CAN MAKE OR BREAK YOUR HOME PURCHASE

When it comes to buying a home, we always think about the big things: sales price, location, mortgage qualification. But it's often the little things that rise up to make living in that home a great joy or a huge letdown.

Your welcome to the neighborhood

There are neighbors who bring warm cookies to welcome you to the neighborhood and then there are the Homeowners' Associations that welcome you with a stern warning to move your storage unit immediately even though it's only been in your driveway for a few hours and you haven't even arrived from your cross-country drive (true story).

The friendliness of your neighbors

Beyond your initial impression, is living in your neighborhood going to give you the kind of lifestyle you want? In many cases, you won't know until after you've moved in. Spending some time there and getting to know your potential neighbors/asking questions before you purchase may give you the info you need.

Where to put the dog bowl

Does it seem like a frivolous thing to be considering when buying a home? Only until you move in and realize there's nowhere to put the food and water bowls that won't end up spilled, kicked over, or constantly in the way.

Think about it in terms of a car purchase. You might not notice the number/placement of drink holders in the new car you're buying, but you're sure going to notice how lacking they are when you're driving a carful of people around in the 100-degree summer and there's nowhere to put your Big Gulps. When your pets are a part of your life, considering where they will graze (and sleep and run) may help you make the best decision.

Closet space

Closet space isn't necessarily a small thing (for many of us, it's an absolute necessity!). But, it can also be one of those things that is easily overlooked when seduced by a big kitchen or a pool in the yard. If the closet space seems like it may be a problem when you tour the house, it most likely will be a problem when you're living in the house.

Placement of the laundry

Is it a deal breaker if your laundry room is downstairs and the bedrooms are upstairs? Probably not, but it does make things more challenging. If you're trying to decide between a couple of homes, this may be one of the little things that helps you finalize your decision.

Commute time to and from work

Your daily commute is something you've probably spent considerable time thinking about, especially if you're considering moving farther from work. But even if you're not moving far from your existing home, the commute could be very different. And it's not something you want to discover AFTER you've moved. Doing a few test runs before you make an offer can help.

The schools aren't great

If you don't yet have kids, or they're babies, or already grown, or you don't plan on kids, the quality of the schools may not seem like a big deal in relation to other items on your must-have list. But, you never know how long you might live there. A "starter" home that's supposed to be a springboard to a large home in a few years may not end up springing you so quickly. And studies show that good schools can help home values, so even if you're not packing lunches and preparing backpacks, being near people who are might be a good move.

Positioning of the house

Everyone wants a house that's light and bright, but what you might not want is a sun that sets right in your living room. If you're in a warm climate, you can plan on being hotter than you'd like to be in that room during the summer and having higher electric bills.

Really high ceilings

This is another feature people tend to want in their home... until they actually have them and realize:

It's cold in the winter since all the warm air gets sucked up.

It's hot in the summer since conditioned air has a hard time doing its thing in such a vast space.

You'll never be able to paint the room without renting scaffolding

Ditto for changing light bulbs

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BUYING A HOME? 6 QUESTIONS TO ASK YOURSELF

Buying a home is a major decision. Whether you’re a first time home buyer or you’ve owned dozens, you always have to ask yourself certain questions before moving forward. While you shop and compare mortgage rates, there are things that you may not consider about purchasing a home. Some of these things can affect the experience and your ability to get the home that you want, or to keep it once you do get it. These questions are easy to answer and knowing the answers can help you to stay financially secure and on the right path.

Are You Ready?

Not everyone is ready for homeownership. If this is your first home, you may not know what it takes to own a home. Look into the costs associated with homeownership and the responsibilities that come with owning one. It is not as simple as some people might think. On top of that, the search itself can cause a large amount of stress. Some people underestimate the amount of effort, time, and money that goes into this. They might think that they will get their new home within days, or that owning a home is a breeze. While some people might find both of these easy, and might get their dream home almost immediately, that is not the case for most homebuyers. Before starting on this adventure, know what to expect.

 

Do You Know How Much It Costs?

Homeownership is expensive. The cost of buying and paying for a home is sometimes immense. It is the price of the home itself, closing costs, mortgage, insurance, and various other fees. While you may own a home, you still have to pay several people to stay in it. There is also the price that you will have to pay to take care of the home in repairs and maintenance. The bigger the home and the more it offers, the more you will have to pay for everything. Pools cost money, yards cost money, property costs money, heating costs money, and nearly everything else you can think of will cost money. When you look into homes, estimate the total cost you would have to pay per year on it.

Do You Know How Much You Can Afford?

On top of knowing what a home costs, you should know what you can afford. Calculate how much you earn, monthly or yearly. Calculate how much a home will cost you in the same period. The home should not go over or come too close to the amount that you earn. Remember, you have to manage the home, utilities, food, gas, new items, and luxuries while still having some money to save. Everything that you plan to spend and put away each month should go into your calculations. If it looks like you will have to live paycheck to paycheck, you should go for a home that you can afford comfortably.

When first moving in, you should also make sure that you have several months’ worth of bills saved for emergency purposes. This avoids any unknowns and financial dangers.

What Will You Put Down?

Your down payment is essential for getting a home. The down payment amount is not the same for everyone. Some people might put down 5%, while others might put down 25%. How much you can put down depends on your income and mortgage. The more that you can put down right away, though, the lower that your mortgage is. You want to make sure that you put a lot of thought into the down payment of your home.

Have You Readied the Other Fees, Too?

Along with a down payment, you have to get closing costs and other fees ready. Buying a home is not just about getting the mortgage in line; you have to pay several amounts right away. These are not amounts covered by your mortgage, but you can get help from some lenders. There are certain lenders and systems in place for people who need help paying. Look into these if you cannot afford the down payment or the other fees you have to pay.

Have You Checked Out Your Finances and Credit?

Before you attempt to get a mortgage, make sure that you look into your financial history and your credit score. A mortgage is a loan, after all, and your history with money is important to get one. If you have a poor history, you might have to pay considerably more money to receive a mortgage, through either interest or a down payment or both. Try to fix up your credit history by removing items that should not be there, by paying off or down debts, and by trying to increase your credit score. Doing all of this will make you more likely to receive a good mortgage loan from a trusted lender. It makes buying a home easier and more affordable for you.

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HOW WILL THE FED IMPACT THE HOUSING MARKET?

When we look at the news headlines in the financial markets, we can see that most of the attention is placed on the multi-year rally that is still unfolding in the major stock benchmarks.  There is good reason for this but those that are more interested in real estate investments might be wondering if the same opportunities exist in property investments.

This is a complicated question, to be sure.  But it should be understood that all financial markets are cyclical in nature -- and this means that periods of low price valuation cannot last forever.  And since stocks have already made most of their recovery, it is a good idea for investors of all asset classes to consider adding more exposure in real estate.

 Potential For Rising Mortgage Costs

 The first issue at hand here is when (and to what extent) the Federal Reserve will start raising interest rates.  This can produce a drag on the real estate market because it suggests a growing potential for rising mortgage costs.  At the moment, the trends are still positive.  Overall, home sales figures are still showing robust trends, according to data collected by Mobile Home Insurance Quotes.  This is encouraging because when home sales are strong in these areas, it tends to bode well for the rest of the real estate space.

 Going forward, we will need to pay special attention to speeches made by voting members at the Federal Reserve.  This will be the best indicator in determining the degree to which the Fed will influence trends in the housing market.  Higher rates raise costs for potential homebuyers, and this can produce obstacles for the number of homes that will likely be sold on a quarterly and yearly basis. 

 There is still strong potential for growth, however, and this is because real estate is still looking very attractive on a relative valuation basis.  Stock markets have been rallying strongly for the last five years but since this has not been the case in real estate, we can assume that there is still some very strong upside for investors that are able to buy in before these trends unfold.  There is always going to be the possibility that higher interest rates from the Fed would slow down some of this potential for growth.  But the underlying trends still look relatively clear in terms of direction and in the likelihood for making gains.  

DOES HAVING A GYM IN YOUR HOME ADD VALUE TO YOUR HOME?

It's that time of year of again. Seemingly everyone is dedicating the next few days, weeks, and months to getting in better shape. That being said, traditional gyms are absurdly crowded right now and will most likely be for the next few months.

So how about just building one in your home? Sounds expensive and it probably will be as exercise equipment is both pricey and difficult to move. That being said, as a society we are very unhealthy and many of us are overweight. To combat this there has been a plethora of movements to help prevent obesity. One such movement has been the increase in home gym ownership.

So we have to ask ourselves, "Does having a home gym truly increase the value of my home?"  The short answer is absolutely not! In spite of this, it most certainly will increase the desirability of your home to a certain set of buyers. Think of it like a pool.  Study after study has revealed that even if you live in Arizona, it still will not increase the real value of your home, only the perceived value. That being said,  geography does matter and much like having a pool when it can be over 110 degrees is equivalent to not having to worry about driving to the gym when its -5 degrees outside. For starters I have slipped on ice and knocked myself out walking to the gym. No such worries if you have your own gym!

The fact is that by having a home gym the appeal of your home will increase to a certain subset of buyers. In essence, it's simply a differentiator. The only positive investment would be that of your health. It's one of the few things in life that you can actually control.

Ideas for an ideal exercise room:

First off, it is probably a good idea to get a cardiovascular machine such as a Treadmill, Stairmaster, or an Elliptical machine to get off to a good start as they are by far the most popular machines. Stationary bikes are good as well but they involve sitting which most of us do enough in a day. A yoga mat is an excellent choice as well. A kettle bell, a couple sets of dumbbells, a medicine ball and maybe even a Bowflex (It Really Does Work!) would be more than enough to start your own setup!

If you choose to buy all of the equipment brand new, expect to spend at least $1,500 for lower end equipment. For top of the line gear expect to spend at least double that. Should you buy used equipment, the cost will be much lower.  However, shiny equipment would be more enticing to the potential buyer psychologically. As mentioned, it is a great differentiator and that can be the difference between a quick sell and a prolonged and expensive one.

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HOME RENOVATION PROJECTS THAT PROVIDE THE BEST RETURN ON INVESTMENT

It's not hard to daydream about shiny new countertops and fancy new appliances and one of those spa baths with a dozen sprayers and a chic soaker tub, but when it comes to home renovations, the sleek and sexy often take a back seat to the basic and boring. "Basic maintenance, such as the roof and exterior painting, are frequently more important than an awesome kitchen," said HGTV.

That's the takeaway (again) from the latest Cost vs. Value Report from Remodeling Magazine, which tracks average costs and return on investment (ROI) for popular remodeling projects. The top 2016 renovation in terms of money recouped: fiberglass attic insulation, which came in at well over 100% ROI.

"For the first time, a fiberglass insulation attic upgrade was included among the list of 30 home renovation projects evaluated and proved to add the greatest value to the home at 117% of the cost of the project, according to Hanley Wood, publisher of Remodeling Magazine," said KCEN TV.

Sound like a snoozer? Only if saving money - and energy - puts you to sleep.

"This is great news for homeowners, who know that insulation improves the comfort and energy efficiency of their home, but may not know that it adds value as well," said Curt Rich, President and CEO of the North American Insulation Manufacturers Association on KCEN. They estimated that this project would cost "an average of $1,268 nationwide. Real estate pros, meanwhile, estimated the project would increase a home's retail value by an average of $1,482. That's a $116.90 return for every $100 invested."

Key Trends in the 2016 Cost vs. Value Report

Manufactured stone veneer was new to the project list last year and came in at No. 2. It finished in the same position on the 2016 report, with an ROI of 92.9%. Next were:

Midscale garage door replacement (91.5% ROI)

Steel entry door replacement (91.1% ROI and falling from last year's top spot)

Upscale garage door replacement (90.1% ROI)

Notice what they have in common? These four projects are all exterior, which highlights the importance of curb appeal. In fact, "12 of the 15 highest-scoring projects" in this year's report were for "work done on the exterior of the home."

Reflection of the Real Estate Market

Remodeling projects follow the logic of the real estate market overall. Remodeling notes that, "Gains in the new-home market are helping lift the value of remodeling projects even as costs rise." With more money and equity can come more complex undertakings, so some "bigger and more expensive projects" also saw gains this year," they said.

A minor kitchen remodel that costs $20,122 comes in at 83.1% ROI, up from 79.3% last year. A family room addition at a cost, on average, of $86,615 will bring a return of 67.9%, up from last year's return of 64.1%.

But, overall, returns on these more expensive and more extensive projects were limited. By and large, upscale projects are still not providing the kind of return that would compel many homeowners to renovate if they have their eye solely on the bottom line. Among the five projects with the worst returns were:

Midrange bathroom addition (56.2% ROI)

Upscale bathroom addition (56.7% ROI)

Upscale master suite (57.2% ROI)

Upscale bathroom remodel (57.5% ROI)

Not surprisingly, the projects that are easier to accomplish and make the lowest impact on a bank balance continue to dominate the list. "As a general rule, the simpler and lower-cost the project, the bigger its cost-value ratio. Four of the five projects that cost less than $5,000 for a pro to do were ranked in the top five for cost recouped, and the remaining one was the cheapest project in the $5,000-to-$25,000 price range," they said.

"No project costing more than $25,000 ranked better than 15th. This is in part because the simpler projects tend to require less time and skill by a professional remodeler. It stands to reason that it's far easier to replace a steel entry door than it is to design, source, and build a two-story addition."

WHAT ARE THE BEST KITCHEN COOKING LAYOUTS?

What are The Best Kitchen Cooking Layouts?

The single-guy-who-nukes-his-dinner-every-night crowd probably does not care about a great kitchen. To the rest of all of us, the kitchen can make or break a real estate offer. To a lot of people a kitchen is not just a space in which to prepare dishes. It is a homework area, a place to sit with a neighbor over a cup of coffee, and, in the case of the country kitchen, an area where the family gathers to share the day's experiences. If you're not that single guy with a microwave oven, evaluating kitchens will be an important aspect of your house hunt.

Classic Kitchen Design: The Work Triangle

One aspect of classic kitchen style continues to be constant throughout the years: the work triangle. The triangle's three points are the fridge, the oven and the sink, and its purpose is to ensure effectiveness and great traffic flow. To visualize the triangle, think about how you work in the kitchen. When preparing a meal you move between the fridge, the stove and the sink. Good kitchen style places these elements in a triangle. Which element is at the apex of the triangle depends on the kitchen's layout. Generally there are four distinct kitchen styles, and within each of them the work triangle remains a constant: the galley, the "L" shape, the "U" shape and the "G" shape or peninsula. Within the kitchen triangle there must be a area for food preparation, such as a chopping block, counter top or isle. While the work triangle is a popular component of kitchen layout, many kitchen layouts either ignore it or have a significantly flawed triangle. When you're looking at a kitchen area, keep the work triangle in mind. Even small kitchen layouts can be functional and useful if the work triangle is perfectly integrated.                                                                                              

Kitchen Cabinets

Kitchen cabinets play a dual role in the kitchen area. They are both functional and, ideally, decorative. Deep cabinets are perfect for storage of seldom-used and oversize items, while shallow cabinets work best for small, frequently used items, such as spices. When looking at a house you're interested in purchasing, take a look inside each kitchen cabinet with an eye toward whether it will accommodate your kitchen equipment. The site of kitchen shelves is also important. You must be able to reach the pantry and cooking materials without having to deviate from the kitchen work triangle.

Kitchen Design Accessories

A number of features are wonderful surprises when house hunting, even if they are not essential to kitchen area layouts: Morning meal nooks Fridges and dishwashers concealed by cabinetry Garbage disposal units Kitchen isles Deep-set lighting Large pantries

Lighting can Enhance Kitchen Layouts

Avid cooks understand the importance of great lighting in the kitchen. Home buyers, on the other hand, appear to give it a casual glance. If you cook, even if it is just family meals, good lighting is important. Turn on the lights – all of them. Try to picture the space as it will be at night, while you're cooking dinner. If the light is insufficient, is there a means to add more light? Some of the big-box department and import stores carry low-cost under-counter lighting that you can easily install with just a screwdriver.

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HOW RATES MOVE & UNDERSTANDING RATE LOCK

Typically, when bond rates (also known as the bond yield) go up, interest rates go up as well. And vice versa. Don’t confuse this with bond prices, which have an inverse relationship with interest rates.

Investors turn to bonds as a safe investment when the economic outlook is poor. When purchases of bonds increase, the associated yield falls, and so do mortgage rates. But when the economy is expected to do well, investors jump into stocks, forcing bond prices lower and pushing the yield (and mortgage rates) higher.

So a good way to predict which way mortgage rates are headed is to look at the 10-year bond yield. You can find it on finance websites alongside other stock tickers, or in the newspaper.  If it’s moving higher, mortgage rates probably are too.  If it’s dropping, mortgage rates may be improving as well.

Conventional (Fannie Mae/Freddie Mac and Non-Agency investors) and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact us directly. We are among few mortgage companies who have access to live trading screens during market hours, in addition to pricing software that compares the top wholesale lenders in the market for pricing competition and comparison.

Q&A REGARDING RATE LOCKS

What is a rate lock?

A rate lock is a guarantee from a mortgage lender that they will give a mortgage loan applicant a certain interest rate, at a certain price, for a specific time period. The price for a mortgage loan is typically expressed as “points” paid to obtain a specific interest rate.  Your VMG Loan Consultant will show you several rates equating to optional buy-down or buy-up (lender credits) to determine what pricing is most favorable for your situation.

When do I lock an interest rate?

You’re in a position to lock in an interest rate when your application is received, loan approved, and purchase contract executed (or if a refinance immediately following application).

How much does a rate lock cost and what if my lock expires?

VMG does not charge any application or initial rate lock fees.  If the rate lock is going to expire, your Loan Consultant will discuss the extension or re-lock options with you which may impact lender credits (if applicable) or net costs vs. original lock terms.  Each investor holds a specific lock policy and calculation for any costs associated with lock extensions or re-locks.

What is a mortgage rate lock float down/renegotiation?

A mortgage rate lock with the option to reduce the locked interest rate if market interest rates fall during the lock period. A rate lock with a float-down option can provide the borrower with security against an increase during the rate lock period, while the float-down option allows the borrower to take advantage of a fall in interest rates during the lock period.  Due to the large number of investors VMG works with, each carry a unique rate lock renegotiation policy.  The option will only be exercised by the mortgagor after an internal adjustment to price and if available as a benefit to the borrower.  VMG always monitors pipeline for any opportunities.

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