2 Creative Mortgage Tools You May Not Have Considered

Many consumers are missing out on genuine opportunities, as they aren't aware of the benefits of these 2 lesser-discussed mortgage products: Reverse Mortgages and FHA 203K Loans.

While these mortgage types may have had somewhat of a bad rap, they actually can be highly beneficial for a variety of clients with different backgrounds, when taken on with a bit of knowledge and care.  Here is what you should consider.

Reverse Mortgages

Reverse mortgages are beneficial typically to homeowners who have substantial equity in the home and are without other primary sources of income.  Aging homeowners typically find this type of mortgage suitable to their situation.  Here are some of the reasons why you may want to look into a reverse mortgage:

• Seniors over the age of 62 have the ability to use a reverse mortgage to access the equity of their current residence AND to purchase a new home (in most US states)
• Older adults, particularly in their 80s and 90s, are taking advantage of the market and are liquidating their primary residence in order to seek out senior living communities, making a reverse mortgage a great option for these homeowners

The Cost of Waiting to Buy (Infographic)

Did you wait to buy a place? According to our friends and collaborators at Keeping Current Matters, here is the impact it had on your monthly payment:

As you can see, waiting a year had a relatively significant impact on the affordability of your home.  Mortgage interest rates accompanied by a rise in the in the average price of a home have been shown to add approximately $200+ to your monthly payment, only a year down the road.

In July we told you that Waiting to buy Could Be Costly.
In August we told you to Buy Now Not Later.
In September we told you Waiting for Interest Rates to Come Down Could be Costly.

CES Introducing the Wi-Fi connected, Long-Lasting "Smart Light-Bulbs" from Phillips

The International Consumer Electric Show (CES) generated a lot of buzz this year due to one new specific category: home automation, and one specific product line: smart light bulbs.  These fancy bulbs respond to your smartphone while you're away on vacation, sense your presence as you walk in the door, can let you know if you're getting a phone call... oh, and can have an energy life of over 20 years.

Smart bulbs can, obviously, be great for a homeowner, but real estate agents are intrigued about these developments themselves.  No need to worry about showing up to a home early to turn all the lights on for an inviting entrance.  Also, set the mood with the lightbulbs individually, with a spotlight here and there or a warm ambiance there.

So, what are some specs of smart light bulbs?  

2014 Design Trends for Your Home

The new year brings many homeowners the excitement of renovating their home.  If you're thinking about renovating your home in 2014, here are the design trends of the new year, according to Zillow Blog.

Kitchen

The kitchen is looking sleek and bold in 2014, with these design trends:

• Black countertops
• Open shelves or glass-front cabinets (to display dinnerware)
• Darker paint tones (black, deep brown, dark red, rich copper)

The Real Impact of Increasing Mortgage Interest Rates on Home Prices

Economists have been stressing the rise of mortgage interest rates, especially in the face of the Fed tapering the stimulus package.  According to the KCM blog, however, housing prices may not be affected as extremely as originally projected

History has shown that increasing mortgage interest rates have not necessarily affected home values negatively in the past.  Four times over the past 30 years have yielded a dramatic increase in housing prices.  Here is the data we have, provided by KCM blog:

So, what does this mean for prospective homebuyers?

A rise in housing prices alongside a rise in mortgage interest rates may not necessarily be something to expect for certain.  However, buying sooner rather than later is still highly advisable, as affordability becomes farther out reach for most homebuyers while mortgage interest rates increase.

Beginning your home search?  Unsure what the market conditions mean for your process?  Send me an email or give me a call and I will be happy to discuss.

Stimulus Package Expecting to Taper in 2014 - Mortgage Interest Rates Will Rise

Reproduced with the permission of Mortgage-X.com

The Fed has officially announced that their stimulus package will be pulling back slightly come 2014, according to the KCM blog.  The stimulus package definitely helped the housing market nationwide as mortgage interest rates dropped and remained low, but with this new pull back, buyers can expect these low mortgage interest rates to rise.

What do the rising mortgage interest rates mean for buyers?

The earlier in 2014 buyers can make the move, the better.  The rates should increase incrementally as the year progresses.

Lawrence Yun, the chief economist at NAR, agrees with this philosophy, stating that sellers who are planning to move to a better neighborhood or into a better home should "realize that it could be more challenging a year from now."

The average 30-year mortgage rate, according to Yun, is currently around 4.3%, but could move as high as 5.5% next year.

Buyers note: Just because rates are rising, does NOT mean home prices will drop