Mortgage 101: How the Federal Reserve's Moves Can Affect Your Mortgage

    Mortgage 101: How the Federal Reserve's Moves Can Affect Your Mortgage   Are you in the market for a new house? If you are planning on borrowing a mortgage to pay for the home, you are likely wondering about your interest rate and how it can fluctuate over time. In today's post, we will explore how the Federal Reserve's rate changes can trickle down into your mortgage interest rate.   Understanding The Federal Funds Rate      As you may know, the Federal Reserve is the government's banking arm and the financial institution responsible for overseeing nationwide economic health. While the "Fed" doesn't set mortgage or other interest rates, it does guide monetary policies which in turn affect these rates. By executing these policies, the Fed guides certain rates higher or lower.   One rate – known as the Federal Funds Rate – is significant in how it can affect mortgage interest rates. The Federal Funds Rate is the interest rate that banks use to lend money to each other on a short-term basis. If you hear about the Fed moving a rate up or down, this is probably it. And when this rate changes, it does tend to have trickle-down effects that cause changes to mortgage rates.   There Are Positives In Both Up And Down Moves   You might be surprised to learn that there can be positive effects for homebuyers whether the Federal Reserve moves up or down. If the Fed raises its rate guidance to a higher rate, mortgage interest rates may follow. However, in many markets, such a move also tends to lead to a decrease in home prices. Conversely, if the Fed lowers its rate guidance, mortgage rates may decrease. This means that if you take a mortgage out when the rate moves down, you will end up paying less in interest over the mortgage amortization period.   In short, there can be positives no matter which way the Fed moves.    Let Your Mortgage Professional Guide You   Staying abreast of the Federal Reserve can be an exhausting effort, especially when all you are interested in is buying a new home. Instead, leave the heavy lifting to your mortgage broker or advisor. They're able to parse through these changes to let you know what the actual impact on your finances will be.   Whether you're interested in buying a new home or refinancing your current mortgage, we can help. Contact our professional mortgage advisor team today and we'll be happy to share current interest rate trends and advice that best suits your financial situation.  

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Did You Know: Why New Construction Homes Are A Top Choice For Today's Home Buyer

  Did You Know: Why New Construction Homes Are A Top Choice For Today's Home Buyer   Are you in the market for a new house? If so, you may have been comparing your options when it comes to open listings on the local market. One decision you will need to consider: do you want to purchase an existing home or build a new one? Let's explore a few reasons why new construction homes are a popular choice for today's home buyers.   A Home Designed (By You) With The Future In Mind   Ask anyone who has recently invested in a brand-new home, and many will share that all of the built-in technology was an essential factor. Today's homes are designed with the future in mind. High-speed networking, better wireless connectivity, high-tech security and other features are all benefits that typically can't be found in older homes.   Of course, don't forget that you play a role in the design choices in a new construction home. It is your chance to design all of the features you would want in a dream house.   Energy And Cost-Efficient As you might imagine, homes constructed with modern designs and materials are vastly more energy than older homes. Tighter seals, better insulation and more efficient heating and cooling all translate to lower utility costs. Moreover, while the savings per day might seem small, over time, they add up. Leaving more money in your pocket for investment, saving or other purposes.   If you want to take it a step further, you may even decide to expand your new construction home with solar panels or other high-efficiency upgrades.   Less Maintenance Means More Free Time   Finally, you can sleep soundly knowing that a new construction home needs far less maintenance work than an older home. Of course, there will still be the occasional job that needs taking care of. So you will want to be diligent in fixing up any damage or issues that do occur so that the problem does not spread. But overall, you can expect to spend less of your free time repairing things and more of it relaxing and enjoying life.   These are just a few of the many great reasons to invest in a brand-new home. To learn more about new construction real estate opportunities in the local area, contact us today. Our professional team is happy to discuss your needs and help you find the perfect new home.  

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Can I Buy a Piece of Land and Build a House on It With a Mortgage? Yes -- Here's How

  Can I Buy a Piece of Land and Build a House on It With a Mortgage? Yes -- Here's How   Have you been hunting for a new house without finding one that suits your needs? If so, one option that you may want to consider is building a new construction home on a chosen piece of land. In today's blog post we will explore a few different mortgage options for those who are looking to build a brand-new home.    Qualifying For A Construction Mortgage   As with any mortgage product, the first step you will want to take is to begin the qualification process. As your lender does not have a completed house to use as collateral for your loan, qualifying can take a bit longer than usual. Your mortgage lender will gather information about the home you plan to build, including its size, features, and who is contracted to build it. The more information you can provide during the qualification process, the better. You might find it helpful to have your builder or general contractor involved as they will have many of the answers needed.   Construction-to-Permanent Mortgages   One type of new construction mortgage is known as a 'construction-to-permanent' loan. With this kind of mortgage, you only go through the closing process once. In many cases, while your home is being built you are only responsible for paying off the mortgage interest each month. Once your home is finished, your lender will convert this mortgage into a standard mortgage like any other. You can choose from a variety of amortization periods, interest rates, and more.   Standalone Construction Loans   A standalone new construction loan is a bit different. With this product, you borrow money to finance the construction of your home and then again as a permanent mortgage once the home is completed. These loan and mortgage combinations require you to go through the closing process twice and thus your fees may be a bit higher. However, if you are currently living in a home and won't have much cash until it is sold, this might be the right product for you.    As you can see, qualifying for a mortgage to build a new home on a piece of land is a bit different than a typical mortgage. To learn more about construction mortgages or to start the application process, contact us today. Our professional team is happy to share our expertise to set you up with the right mortgage.

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