What is Mortgage Insurance and Mortgage Insurance Premium (MIP)
Mortgage Insurance – A contract that insures the lender against loss caused by a borrower’s default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan.
Mortgage Insurance Premium (MIP) – The amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.
These costs can be avoided with a 20% downpayment.
Posted on July 10, 2014 at 1:13 pm by John Cantero (918) 313-0408
What is a HUD-1 Settlement Statement
HUD-1 Settlement Statement – A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized numbering system. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. The blank form for the statement is published by the Department of Housing and Urban Development (HUD). The HUD-1 statement is also known as the “closing statement” or “settlement sheet.”
Posted on at 1:06 pm by John Cantero (918) 313-0408
What are closing costs
Closing costs are various expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include items such as broker’s commissions, discount points, origination fees, attorney’s fees, taxes, title insurance premiums, escrow agent fees, and charges for obtaining appraisals, inspections and surveys. Closing costs will vary according to the area of the country. Lenders or real estate professionals often provide estimates of closing costs to prospective home buyers even before the HUD-1 settlement statement is delivered.
Posted on at 12:59 pm by John Cantero (918) 313-0408
Haikey Creek flood-mitigation project to affect traffic on 131st Street
Motorists driving 131st Street east of Mingo Road should prepare for a few months of delays.
Traffic along 131st Street between Mingo and Garnett roads in Bixby will be interrupted for the next few months as the city begins Phase 1 of its Haikey Creek flood-mitigation project.
The project includes construction and replacement of bridges on 131st Street and along a flood plain relief channel running south from 131st Street to the Arkansas River, construction of levees west of Haikey Creek, the widening of Haikey Creek, and construction of the flood plain relief channel west of the creek.
Currently, the relief channel is little more than a ditch. The bridges will be expanded to accommodate the widening of the channel.
Construction of the two bridges between Mingo and Garnett is scheduled to be complete by mid-July. A third bridge west of Mingo Road on 131st Street will be worked on from mid-July to mid-August.
“What we are trying to do is get 131st Street entirely done before school starts,” said Bixby City Engineer Jared Cottle.
The $12.2 million flood-mitigation project is being funded with Vision 2025 funds.
Cottle said the primary benefit of the project is that it will take property out of the flood plain.
“This project will bring over 900 acres of land for development out of the flood plain,” he said.
All phases of the project are expected to be completed within two years.
Kirby Crowe with Program Management Group, which oversees the Vision program for the county, said the project has been funded for a while but has been waiting for the city to acquire needed rights of way and to complete and obtain regulatory approval.
By KEVIN CANFIELD World Staff Writer
Posted on May 29, 2014 at 2:02 am by John Cantero (918) 313-0408
Free Summer Fun in Tulsa Area
Summer in Oklahoma isn’t for the faint of heart. Between the heat, the never-ending hours of sunshine, and the kids climbing the walls at home, it’s easy to start filling your calendar with trips to the nearest lake and evenings alone with your air conditioner. Not that there’s anything wrong with that. But between road trip ideas, activities the kids will love, and opportunities for some adults-only fun, there’s just too much to do in Oklahoma this summer to fall into an entertainment rut. Whether it’s Bigfoot, dinosaurs, the stars, or even just some popcorn and a good movie that you seek, you’ll find the trail that leads to some of the best things to do in Oklahoma this summer right here. Free Summer Fun in the Tulsa area.
1. 5.2 million kids can’t be wrong. Like them, you can get bowled over—for free—at Andy B’s in Tulsa and Broken Arrow Lanes in Broken Arrow. Register at kidsbowlfree.com for two free games of bowling every day all summer long, a value of over $500 per child.
2. Indulge in a range of silver-screen classics, from King of Comedy to Clueless, shown free as part of the Movie in the Park series at Guthrie Green.
3. Meet some 500-year-old trees on a hike at the Keystone Ancient Forest Preserve, a section of the cross timbers open west of Sand Springs on the second Saturday of each month.
4. Listen to Tulsa’s Starlight Band as they play out the stars. All of the Concerts on the River are free to attend, with a new theme for each: the Greatest Hits of the Big-Band Era, Americana Night, A West Coast Jazz Evening, and more.
5. Scope out the various foo-foo pups and designer lawn blankets at the Summer’s Fifth Night free concerts series in Tulsa’s Utica Square. Featuring on stage every Thursday night are local mainstays from Mid-Life Crisis to Grady Nichols.
6. Trade the tennis courts and the running trail for The Gardens at LaFortune Park in Tulsa, the venue for the free First Friday Concerts. May through September, 7-9 p.m.
7. Take nature up on her offer for a summer stroll at Redbud Valley Nature Preserve, where admission is always free.
8. Tulsa is cut through with bike trails, and not a one of them is a toll road. Get a map of Tulsa trails. No wheels? Bikes rent free as part of the RiverParks Trails system.
9. Parking is scarce in the Brady Arts District on the first Friday night of the month—that’s because the monthly First Friday Art Crawl event blows open the doors of every museum, art gallery, and music venue in the district—but why would you care? You’ve got your sneaks.
10. Tell some stories and hear some new ones in return at the open-mic night at Gypsy Coffeehouse and Cyber Café in downtown Tulsa, probably the state’s longest-running weekly open-mic event.
11. Visit the grave of Bob Wills, the king of Western Swing, the man credited for putting Tulsa’s Cain’s Ballroom on the map. Find it in Memorial Cemetery Park.
12. Take a long lunch and hike the Turkey Mountain Urban Wilderness Area, where the trailhead is just seven miles from downtown Tulsa.
13. Sing the National Anthem before the first post time at the horse races at Fair Meadows in Tulsa. Your back-up singer will be Whitney Houston, whose cassette-tape recording crackles from the loud speakers just as the sun begins to set. Make Oklahoma better. Subscribe to This Land and support local journalism in your community.
14. Make sure the acoustics of the Center of the Universe, in downtown Tulsa just north of the BOK Tower, are in good working order. Be sure to visit the Artificial Cloud, too.
15. Eat too much popcorn with the kids at the free KIDS FIRST! Film Festival, held at Circle Cinema in conjunction with the Kendall Whittier Library Summer Reading Program.
16. Find a whole herd of flowers at the Tulsa Rose Garden and the neighboring Linnaeus Teaching Garden, home of the largest collection of roses in the state and a sprawling heirloom vegetable garden. Free Summer Fun in Oklahoma City
17. Second Friday Circuit of Art is a monthly, citywide celebration of art in Norman. Whether it’s dance, painting, photography, or music that’s your thing, it’s free at this monthly art crawl.
18. Drinks, music, shopping, and sometimes a Bigfoot-call contest. LIVE on the Plaza, a celebration of the revitalized Plaza District in OKC, serves it up once a month, free and open to the public.
19. Lend your ears as the Sunday Twilight Concert Series, held every Sunday, plays the sun to sleep. Bring blankets, chairs, picnic baskets, and the kids along.
20. Art is wherever you are. And thanks to the Art Moves series of daily art stops in OKC, it’s also free.
21. Whispers come in a world’s worth of accents at the Oklahoma City National Memorial. Add yours.
22. Hum with the 8,000 bees who make their work and their home in Oklahoma City’s first observation beehive, at Martin Park Nature Center in northwest OKC. It’s said that, when content, they buzz in the key of A.
23. Petunia No. 1 is plugged, but what’s perhaps the state’s most famous drilling rig is still accepting visitors from her spot on the front lawn of the Oklahoma State Capitol building. 2300 N. Lincoln Boulevard is still the only state capitol boasting active oil rigs.
24. Stand under the flags of each of the 36 tribal governments with headquarters in Oklahoma, flying above Tribal Flag Plaza on the grounds of the Oklahoma State Capitol. The bare flagpole represents the Kickapoo tribe, whose tradition prohibits the use of flags.
25. Admission is free on the first Monday of each month at the Sam Noble Oklahoma Museum of Natural History, home of the largest Apatosaurus skeleton, a bison skull that’s the oldest painted object in North America, and the skull of a Pentaceratops, the largest-known skull of a land vertebrate.
26. Ask to swim in the Oklahoma-shaped pool at the Governor’s mansion (hey, it never costs anything to ask).
27. Ogle a Van Gogh (and a Pissarro, a Renoir, a Monet, and a Giordano) at the Fred Jones Jr. Museum of Art, where admission is always free. 28. Admission and events are always free at the 45th Infantry Museum, home of artifacts from what General George S. Patton called “one of the best, if not the best division in the history of American arms.”
29. Ride on a real passenger train at the Oklahoma City Railway Museum. Rides are available the first and third Saturday starting in April and ending in August.
30. Go fish. Oklahoma anglers are invited to wet their lines free, without requirement of a fishing license, during Free Fishing Days.
31. Picnic under the monkey tree and swim in the waterfalls (there’s one called Little Niagra) at the Chickasaw National Recreation Area, a national park which is actually two—the Platt Historic District and the Lake of the Arbuckles—in one.
32. Dip your toes or get wet as a lake at one of the 17 spraygrounds in OKC (they open Memorial Day weekend or one of the 29 splash pads and water playgrounds in Tulsa.
33. Walk the moonscape that is the Great Salt Plains State Park in Jet, the evaporated remains of an ancient ocean that once covered the state. It’s now a prime spot for birding and crystal digging.
34. See Kenton before it’s gone.
35. Retrace Oklahoma’s stretch of Route 66, where you’ll be able to drive more of the original road than in any other state. Make sure the Blue Whale, the Blue Hippo, and the Round Barn are on your list.
36. Make like Jesse James and Belle Starr and find the perfect hiding place at Robbers Cave in Wilburton, just off the Talimena National Scenic Byway.
37. See where one of northeast Oklahoma’s major natural wonders spreads and folds under the horizon around you. A drive through the Tallgrass Prairie Preserve doesn’t cost a thing. The buffalo sightings are free, too.
38. The Oklahoma Department of Wildlife Conservation offers free summer fishing clinics. Kids and adults alike can learn how to catch, clean, and cook fish at the Jenks Casting Pond, the Arcadia Conservation Education Area Kids Pond near Edmond, and beyond. Be sure to pre-register.
39. Embark on a Saturday family-friendly hike through part of the 15 miles of trails at the Wichita Mountain Wildlife Refuge, where chances are good that you’ll see bison, elk, prairie dogs, or the endangered black-capped vireo.
40. Visit a waterfall. Oklahoma is home to several, but the ones at Natural Falls State Park near West Siloam Springs and Turner Falls Park in Davis are the largest, both measuring 77 feet.
41. It’s always free to argue. Debate the facts at Heavener Runestone Park, where the result of either a clever trick or a long-lost visit from the Vikings is carved into a cave.
42. Witness the birth of fresh ice cream, cookies, and milk on a free tour of the Processing Plant and Bakery on Braum’s Family Farm in Tuttle. Be sure to make reservations.
43. Settle your gaze on where the corners of four states meet, viewable from the state’s highest point at Black Mesa State Park. Black Mesa is also home of the best stargazing around.
44. Float the 60-mile Illinois River, a time-honored rite of passage for the youth of Oklahoma. The kayak is on your.
45. Visit the home of the inventor of the Cherokee syllabary. Find Sequoyah’s Cabin in Sallisaw.
46. See 10,000 guns daily at the J.M. Davis Gun Museum in Claremore, home of the largest private gun collection in the world.
47. Hike the trails at Ouachita National Forest.
48. Wet your toes in one of the three natural springs at Roman Nose State Park in Watonga, one of the original seven Oklahoma state parks. If you’re staying overnight, forego the cabins and rent a teepee for your lodging.
49. Touch the robe of Jesus, a larger-than-life statue of whom is perched over the Holy City of the Wichitas in the oldest mountains in North America.
50. See how many of the 600 miles along the shore of Lake Eufaula you can hike without having to scale a cliff, snorkel, or change shoes.
51. Sample Oklahoma’s largest (and the nation’s third-largest) collection of barbed wire at the Hinton Historical Museum & Parker House, which doubles as the home of the largest buggy collection.
52. Dorothy is now accepting visitors at Twister: The Movie Museum in Wakita. Dorothy was the star prop in the 1995 film, and the museum building itself served as the film’s production company on-location office, set dressing, and art department.
53. After scuba diving in the crystal-clear Broken Bow Lake, dry off under the canopy of oaks and 100-foot pines at Beavers Bend State Park.
Posted on May 2, 2014 at 9:43 pm by John Cantero (918) 313-0408
Our Bixby High School robotics team headed to world championship
The robotics team at Bixby High School headed to the Oklahoma Regional FIRST Robotics Competition last month with the goal of cracking the list of Top 25 teams.
They left as the champions.
The club’s 22 student members, along with their sponsors, are now headed to the world championship April 23-26 in St. Louis.
“It was amazing,” Alec Schalo, the team’s co-captain, said of their win. “We all lost our voices.”
Nic George, the team’s other co-captain, said the win was unexpected.
The team, which they’ve named the “Bixby Robot Mafia,” was ranked 24th out of about 60 teams before the finals. Then they were chosen by one of the top 8 teams as part of their “alliance” and went on to win the tournament.
George said he thinks part of the reason the team was chosen by one of the finalists was because it had been able to problem-solve well and practically redesigned its robot on the spot between rounds.
The challenge this year, called “aerial assist,” involved teams working together to get their robots to score in a game resembling basketball. A robot has to be programmed to play autonomously on its own for the first 30 seconds of each match. Then, for the remaining two minutes, the team can use controls.
The Bixby club has worked on its robot which is about 50 inches tall, 112 inches in perimeter and about 80 pounds since January, when the challenge was announced.
George joined the club in his sophomore year. When the seniors on the team graduated that year, he was one of three members remaining.
In the two years since then, George has recruited more members, and the team now has 22 students. He and Schalo, who are both graduating this year, intend to come back next year as mentors.
“I just like making things, coming up with the designs, building the robots,” he said.
Ryan Harris, a sophomore in the club, said he was drawn to it because of the opportunity to design and build robots and “how cool it is to make something from nothing.”
Many of the students in the club are interested in entering the engineering field and say the club either helped spark or solidify their interest.
Jordan Fox, a senior, said she joined the club because she likes math and robotics is a way to apply math concepts.
“I like using my skills to create real-world experiences,” she said.
Fox said the competition itself is a big part of the club’s appeal. “Competition is amazing,” she said. “It’s so different then anything I’ve ever done.”
Fox, who also plays soccer, said being a part of the competition is “kind of like watching sports.”
Thor Gunnarsson, a junior on the team, said the club is a great place to learn a variety of skills, such as budgeting and teamwork.
Way to go Bixby!
By NOUR HABIB World Staff Writer
Posted on April 11, 2014 at 8:38 pm by John Cantero (918) 313-0408
The Five Biggest Turn-offs For Homebuyers
A lot of sellers don’t listen to their real estate agents, so I’ll tell you what your agent wants to say, but can’t say to you and this is it – your agent can’t get you the price you want unless your home is in pristine move-in condition.
That means no sticking drawers in the kitchen. No leaning fences. No rust-stained plumbing fixtures. I could go on, but maybe I need to make it clear. If you have even one of following “turn-offs,” your home will be difficult to sell at full market value.
Buyers can get instantly turned off. Here are their five biggest turn-offs:
1. Overpricing for the market
2. Smells
3. Clutter
4. Deferred maintenance
5. Dark, dated décor
Overpricing your home
Overpricing your home is like trying to crash the country club without a membership. You’ll be found out and escorted out.
If you ignored your agent’s advice and listed at a higher price than recommended, you’re going to get some negative feedback from buyers. The worst feedback, of course, is silence. That could include no showings and no offers.
The problem with overpricing your home is that the buyers who are qualified to buy your home won’t see it because they’re shopping in a lower price range. The buyers who do it will quickly realize that there are other homes in the same price range that offer more value.
Smells
Smells can come from a number of sources – pets, lack of cleanliness, stale air, water damage, and much more. You may not even notice it, but your real estate agent may have hinted to you that something needs to be done.
There’s not a buyer in the world that will buy a home that smells unless they’re investors looking for a bargain. Even so, they’ll get a forensic inspection to find out the source of the smells. If they find anything like undisclosed water damage, or pet urine under the “new” carpet, then they will either severely discount their offer or walk away.
Clutter
If your tables are full to the edges with photos, figurines, mail, and drinking glasses, buyers’ attention is going to more focused on running the gauntlet of your living room without breaking anything than in considering your home for purchase.
Too much furniture confuses the eye – it makes it really difficult for buyers to see the proportions of rooms. If they can’t see what they need to know, they move on to the next home.
Deferred maintenance
Deferred maintenance is a polite euphemism for letting your home fall apart. Just like people age due to the effects of the sun, wind and gravity, so do structures like your home. Things wear out, break and weather, and it’s your job as a homeowner to keep your home repaired.
Your buyers really want a home that’s been well-maintained. They don’t want to wonder what needs to fixed next or how much it will cost.
Dated décor
The reason people are looking at your home instead of buying brand new is because of cost and location. They want your neighborhood, but that doesn’t mean they want a dated-looking home. Just like they want a home in good repair, they want a home that looks updated, even if it’s from a different era.
Harvest gold and avocado green from the seventies; soft blues and mauves from the eighties, jewel tones from the nineties, and onyx and pewter from the oughts are all colorways that can date your home. Textures like popcorn ceilings, shag or berber carpet, and flocked wallpaper can also date your home.
When you’re behind the times, buyers don’t want to join you. They want to be perceived as savvy and cool.
In conclusion, the market is a brutal mirror. If you’re guilty of not putting money into your home because you believe it’s an investment that others should pay you to profit, you’re in for a rude awakening. You’ll be stuck with an asset that isn’t selling.
Posted on April 3, 2014 at 2:20 pm by John Cantero (918) 313-0408
How to Calculate a Home’s Square Footage (Tulsa Real Estate Information)
Question: Is there a standard formula to calculate a home’s square footage? I have seen different publications with different square footage for the same house. For example, the county land records will say a house has 3,000 square feet, but a sales brochure will say the same house has 3,500 square feet. Are finished basements allowed in a calculation? What about hallways? I don’t know what or who to believe. It seems misleading.
Answer: I doubt if anyone is purposely trying to mislead the public, but it’s true that not everyone in the real estate business calculates square footage the same way. In fact, it may be different from one geographic area to the next.
The square footage listed in the city and county records for condominium units are typically not questioned. These numbers are taken from the original condominium documents and are generally accurate. Unlike detached homes, square footage is less likely to change on a condominium as a result of additions and improvements.
For attached and detached single family homes, there are different ways you can calculate square footage.
Most real estate appraisers measure the exterior of the home to calculate the gross living area. For example, a two-story home that measures 25 feet by 25 feet would have 625 square feet on each floor, so the appraiser would say the house contains 1,250 square feet. Since he is measuring from the exterior, the calculation includes hallways, stairwells, closets and wall space.
The appraiser will also consider the size of the basement and determine how much of the basement has been finished as living area. Instead of totaling the square footage of a basement’s living area, he will make value adjustments based on other comparable homes. For example, a home with a full finished basement that includes a den, bathroom and bedroom might be credited $15,000 or $20,000 in value compared to a similar house with an unfinished basement.
In some cases, even if the lowest level is completely above grade, an appraiser may treat it as a basement. Consider an attached townhouse that has a lower level used as a garage and a den or mud room. An appraiser might consider such a room as a basement.
It gets more complicated. What if the house in our example has a vaulted ceiling in the family room with a second story balcony? This would clearly result in the second floor having less than 625 square feet of actual floor area. Most appraisers won’t subtract the space left out of the second floor to make room for the vaulted ceilings. Why? Because such a floor plan often enhances the market value of the home because it’s a popular feature to have. Remember that an appraiser’s job is to determine the market value of the home. The total size of the living area is only part of the equation. Imagine a 3,000 square foot house that contains 20 small rooms each consisting of 150 square feet. Such a build out would not be very popular for a typical family.
Many real estate agents and builders will include all finished “walkable” areas when totaling the square feet of a house. It’s certainly not misleading. A lot of prospective home buyers would want to know the total living area, regardless of whether some of it is below grade.
Other real estate agents will use the square footage that’s listed in the county tax records in their marketing materials. Unfortunately, this information is often incorrect, especially with older homes. Over time, basements get finished and additions are constructed, increasing the chances that tax records will be outdated and inaccurate. It’s for this reason that some agents simply choose to omit the square footage in the listing report. You’ve probably seen a disclaimer similar to this on a house listing: “Information deemed reliable but not guaranteed. Buyer to verify square footage.”
The bottom line? Calculating the square footage of a home is more of opinion than exact science. If you’re interested in buying a particular house and want to know the size expressed in square feet, my advice would be to make an appointment to visit the home and bring your tape measure, pen, paper and calculator.
Posted on March 5, 2014 at 11:31 am by John Cantero (918) 313-0408
Why You Should Work With a Real Estate Agent That is a REALTOR® (Tulsa Homes)
Not all real estate agents are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a real estate agent that is a REALTOR®.
1. You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.
2. Get objective information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.
4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.
7. REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.
8. Buying and selling is emotional. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.
9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.
Posted on February 21, 2014 at 2:24 pm by John Cantero (918) 313-0408
Top 10 mortgage tips for 2014 (Broken Arrow Homes For Sale)
These 10 mortgage tips can help you with your mortgage decisions in 2014.
1. Document your finances
Lenders will be extra diligent when underwriting home loans in 2014, as new mortgage regulations go into effect in January. The rules put pressure on lenders to verify that borrowers have the ability to repay their loans.
Keep good records of your finances, including bank statements, tax returns, W-2s, investment accounts and any other assets you own. Be ready to explain any unusual deposits to your accounts. Yes, the $500 that Grandma deposited in your account for Christmas could delay your loan closing if you can’t prove where the money came from.
2. Lock a rate as soon as you can
Rates will likely climb in 2014 as the Federal Reserve is expected to reduce the pace of the economic stimulus program that has long helped keep rates low. If you are planning to get a mortgage, lock in a rate as soon as you are comfortable with the numbers.
3. Refinance now — if you still can
Many homeowners lost the opportunity to refinance at a lower rate when rates jumped in 2013. But those who are still paying more than 5 percent interest on their home loans might still have an opportunity. If you think you may be able to save with a refinance, but you are not sure, it doesn’t hurt to try. Speak to a loan officer and take a look at the numbers to see if refinancing still makes financial sense for you after you consider how long it will take to break even with the closing costs.
4. Buyers, use your bargaining power
As mortgage rates climbed, lenders lost a big chunk of their refinance business. In 2014, they will turn their attention to homebuyers and will fiercely compete for their business. Buyers should take advantage of bargaining power they gain with that increased competition. Shop around for the best deal and look beyond the interest rate on the loan.
5. Learn your rights as a borrower
Mortgage borrowers will get many new rights as consumers this year when new mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014. If you run into issues with your mortgage servicer in 2014 or fall behind on your payments, make sure you are aware of your rights and put them to use.
6. Take good care of your credit
It’s nearly impossible to get a mortgage without decent credit these days. That will continue to be the case in 2014. If you are planning to get a mortgage, monitor your credit history and score until your loan closes. The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a score of 680, but lower scores will mean higher rates or higher closing costs.
7. Don’t overspend
Lenders don’t want to give out loans to borrowers who will have little money left each month after they pay their mortgages and other debt obligations such as credit cards and student loans. If that becomes the case, the lender will tell you that your DTI (debt-to-income ratio) is too high and you don’t qualify for a loan. Try to keep your monthly debt obligations, including your mortgage and property taxes, below 43 percent of your income.
8. Consider alternative mortgage options such as ARMs
Mortgage rates are rising, but there are alternatives to grab a lower rate, depending on your plans.
A homeowner planning to keep a house for seven to 10 years could take advantage of lower mortgage rates by choosing a seven- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Rates on adjustable-rate mortgages can be as much as one percentage point lower than on fixed-rate loans.
If you are not sure about how long you plan to keep the house, a fixed-rate loan is probably the better choice.
9. Considering an FHA loan? Reconsider
FHA loans have long been popular among first-time homebuyers because they require low down payments and have somewhat less strict underwriting standards than conventional loans. But they come at a price. Mortgage insurance premiums on FHA loans are likely to continue to rise in 2014, and after recent changes, the borrower is now required to pay for mortgage insurance for the life of the loan. Try to qualify for a conventional loan before you apply for an FHA mortgage
10. Don’t panic
Yes, mortgage rates will likely climb in 2014. But don’t panic, thinking you have to buy a home now to grab a low rate. If you are shopping for a home, do your best to move quickly, but remember that this is one of the biggest financial decisions of your life. Get your mortgage and buy your home when you feel ready.
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Posted on February 17, 2014 at 3:38 pm by John Cantero (918) 313-0408
