Eric Mitchell Real Estate

  What To Do When Mortgage Rates Are High Compared to the interest rates over the last decade, especially the low rates that kicked off the housing boom of 2020, current interest rates may seem exorbitantly high. But the truth is that mortgage interest rates are simply nearing long-term  historical averages  of 8%, and are well below rate increases reached during other inflationary periods. As you wonder whether or not to buy a home with mortgage interest rates that have doubled over the past year, you may appreciate some perspective in accepting that your projected house payment will be hundreds of dollars higher than it would have been had you purchased the same home one to three years ago before home prices hit record highs. Higher mortgage interest rates have done little to temper demand for homes. Here’s how consumer interest rates really work. Interest rates rise or fall depending on how the government reacts to economic circumstances. In an inflationary environment...

Save for a Home with a Dollar-for-Dollar Match Program A federal program helps low-income families buy a home with a unique method meant to encourage saving: It matches dollar-for-dollar what they save to buy their first home. The Individual Development Account, or IDA, doesn’t offer a lot of money to help with a down payment — up to $2,000 in federal matching funds with more contributions possible from local IDA programs — but it’s a start. Participants can start by saving as little as $25 — matched to as much as eight to one, depending on the program, though most offer one-to-one matches. Income levels must be 200 percent below their state’s poverty level. With an 8:1 match, IDA participants can raise much more than the $4,000 total with federal matching, and could have $10,000 or so for a down payment on a house. Most IDAs are funded by the federal government and are run by nonprofit groups and financial institutions, and grantee programs are required to raise an equ...

Is Granite on its Way Out? According to the National Kitchen and Bath Association, granite countertops are in less demand today, while the use of quartz is on the rise. Why? For one thing, man-made quartz countertops are offered in a far greater range of looks and feels. Reason number two: it’s a bit easier to maintain over the long haul, and it’s deemed a better environmental choice because it emits lower levels of radon—a potentially cancer-causing agent. To be fair, the Environmental Protection Agency (EPA) maintains the radioactive materials in granite countertops are far too minuscule to pose a health threat. So what, exactly, is a quartz countertop? It’s made of engineered stone, composed of at least 90% ground-up quartz mixed with a binder (like resin) then molded into a slab. Because pigment is added during the manufacturing process, the sky’s the limit when it comes to color. And quartz is non-porous and fairly resistant to stains, mold and bacteria. Unlike grani...

Fast and Easy Ways to Improve Your Credit Within Months Improving your credit score can take a few months. So if you’re looking to get an auto or home loan, or want to apply for a new credit card, an early start can give you time to raise your credit score and then get a loan or new credit card at a better interest rate. Here are some ways to improve your credit within a few months: Pay your bills on time Payment history is the most important factor in FICO scores, accounting for up to 35 percent of a credit score. Paying your bills on time — from credit cards to utility bills — can help a lot. Late payments stay on a credit report for seven years. The longer ago they happened, the less they affect credit scores. If a bill goes unpaid long enough the debt can be sold to a collection agency, which will be reported to credit bureaus. Set up online alerts when a bill is due, look at your balances online and set automatic payments for a credit card. Low credit utilization...

The Home-Buying Equation Buying a home for the first time can seem daunting. One way to alleviate the process is to organize your finances before embarking on the house hunt. Unsure how to get yours in order? Remember A + B + C + D + E: Ask + Budget + Check + Differentiate + Estimate Before you start searching for a home , ask  a real estate professional for guidance. He or she will have expertise related not only to financing, but also to negotiating a deal in your favor. Next, set a  budget  that takes into account your down payment, your anticipated monthly mortgage payment (with interest), and your closing costs. These figures are all important considerations in the home-buying process. Prior to house-hunting,  check  your credit report and score. Your credit is a determining factor in a lender’s approval or denial of your mortgage loan application, as well as your mortgage interest rate. Take steps to correct any errors on your report, or im...

Your New Homeowner To-Do List You’ve handed over a sizable chunk of cash in return for those shiny new keys—and in the first flush of happiness over owning your own home, you want to be ready to show it off. But money may be tight, and you are facing bills—like water and trash pick-up—that you’ve never had to pay before. The financial advice team at Investopedia.com suggests five steps new homeowners should take: Watch your wallet . Don’t overspend on furnishings or remodeling during your first few months as a homeowner. Give yourself time to adjust to a new budget and to rebuild your savings. Friends and family will understand if you take your time to fix-up and decorate—and the stores will still be filled with new furniture when you are ready to spend. Don’t   ignore maintenance items . While you can hold off on furnishings, there’s no longer a landlord to call when simple repairs need to be made. Investing in a basic tool kit, if you don’t already have one, and/or in...

Should You Borrow the Maximum a Lender Will Approve? When you apply for a mortgage, a lender will decide how much money it’s willing to give you to put toward the purchase of a house. That doesn’t necessarily mean that you should take out a loan for the full amount. In some cases, borrowing the maximum a lender will allow could leave you overwhelmed by debt. How Lenders Decide How Much You Can Borrow Lenders base their mortgage decisions on several factors, including credit score and length of credit history, but the most important factor is a borrower’s debt-to-income ratio. This is the sum of all debts, including a mortgage, credit card minimum payments, and vehicle, student, and personal loans. Most lenders want borrowers to devote no more than 28 percent of their gross income to a mortgage, property taxes, and homeowners and private mortgage insurance. They also want total debt payments to be no more than 36 percent of gross income. If your debt-to-income ratio is highe...

How to Save Big on Mortgage Costs While a myriad of expenses go into buying and owning a home, the biggest nut for most is the mortgage payment. Here are five great tips from Bankrate for reducing mortgage costs—both before and after you purchase a home. First, get pre-approved for your mortgage, not just pre-qualified. Preapproval involves the lender doing their due diligence by pulling your credit report, verifying your income and taking other steps to determine your maximum loan amount. For a preapproval, the lender also commits to making the loan if you buy the home within a set amount of time. The lender doesn’t review your information for a prequalification and, therefore, there’s no guarantee the loan will be approved. If you’re looking to buy a newly built home, ask about builder incentives, such as discounted upgrades or reduced closing costs when you use an affiliated lender. According to Bankrate, instead of cutting the price of a new home, the homebuilder will som...

Get to Know the Language of Lenders If you’re buying a house or condo, chances are you are going to need a mortgage, as having total cash on hand is rare. Most people know you should shop around for a strong rate and lender before agreeing to terms, but many don’t realize the different people involved. By understanding the lender community, you can get financing that makes the most sense for you. Here are some terms you should know: Mortgage Lenders:  This is probably what you immediately think of when you first hear talk of mortgages. Mortgage lenders are the ones that will provide the money you need to buy your home. Simply fill out some information on your financial background, and you’ll see what sort of mortgage interest rate you are eligible for. Mortgage Brokers:  Brokers don’t actually make loans, but they do deal with multiple lenders. You’re still utilizing a lender for the money, but the broker will help you find the one that will offer you the best...

3 Hot Spots for Your Next Vacation Home For many people, buying a vacation home in a favored location makes perfect sense. You get to spend your holidays with family and friends in a homey, laid-back location and, if you’re willing to rent it on a short-term basis, you can rake in some rental income besides. It’s a great strategy that can yield tax benefits depending on how many days you spend in your second home and how many days you rent it out—and, in most cases, there’s a fair return on your investment should you decide to sell. As with all investments, there’s an element of risk, but where you buy is a critical factor. Buying a second home in a luxury community is a good option if you want the safety and security of gated living, luxury amenities such as on-site spas and golfing, and a higher than average return on investment. But a report by Mashvisor, a provider of real estate investment data analysis, looks at three of the top hot spots for 2019 based on reasonab...

First Time Home Buyers Guide... Adulting is hard…but it’s a lot of fun! One of the most fun yet stressful things you’ll do in life is buy your first home. It’s a very exciting time in life that brings promise of what the future holds. The way to have the BEST possible experience is to be sure you’re well educated on the process so you can avoid pitfalls that are often very costly. Here’s a guide to help you along the way. Are You Read To Buy? The very first step is to be sure you’re ready to buy a house. Buying a house brings a lot of responsibility that includes, at the least, being able to pay the mortgage and bills as well as the maintenance and upkeep. Have you been saving for the down payment? Since the 2008-2009 market crash, many lenders now want buyers to have 20% of the purchase price for a down payment. There are still plenty of 95% loans available, but you need to be sure if that’s the most suitable finance plan for your situation. Regardless, you’re going to b...

Closing Cost Primer: Know Your Terms Buying a home is undoubtedly one of the most expensive ventures of your lifetime. But it’s important to understand that much more goes into budgeting for a new home than the price of the house itself—like closing costs. Closing costs are fees charged by the lender at the closing of your real estate transaction, and usually amount to thousands of dollars. Your real estate agent can explain and estimate what all of your particular closing costs will be, as they vary by state, but here is a handy list of terms and definitions from Bankrate.com to help bring you up to speed. Real estate lingo can be confusing, so becoming familiar with these terms in advance will help demystify the closing process. Origination, broker, lender or originator:  A fee charged to create a home loan. It's often a set percentage of the mortgage amount. Discount points:  A fee in the form of mortgage interest paid upfront. In exchange for this fee, the le...