Blog - Deidre Pfeifer

How to Go From Renting to Owning a Home

November 10, 2023 by Deidre Pfeifer Leave a Comment

Going from renting to owning a home can be a significant financial and personal milestone, but it requires careful planning and preparation. Here are some steps to take to make the transition from renting to owning:

Determine your budget: Calculate your current expenses and income to determine how much you can afford to spend on a home. Consider factors such as down payment, closing costs, monthly mortgage payments, property taxes, and homeowner’s insurance.

Save for a down payment: A down payment is typically required when purchasing a home, and the larger the down payment, the lower your monthly mortgage payments will be. Aim to save at least 20% of the home’s purchase price to avoid paying private mortgage insurance (PMI).

Check your credit score: A good credit score can help you secure a better mortgage rate, so it’s important to check your credit score and address any issues before applying for a mortgage.

Get pre-approved for a mortgage: Before starting your home search, get pre-approved for a mortgage. This will give you an idea of how much you can afford to spend on a home and will also make you a more attractive buyer to sellers.

Find a real estate agent: A good real estate agent can help you navigate the home-buying process, from finding the right property to negotiating the best deal.

Start house hunting: Once you have your budget and pre-approval in hand, start searching for your dream home. Consider factors such as location, size, amenities, and resale value.

Make an offer and close the deal: Once you’ve found the right property, make an offer, negotiate the terms of the sale, and complete the closing process.

Ultimately, the rental market is driven by supply and demand, and rent prices will fluctuate based on a variety of factors such as location, amenities, and competition. It’s always a good idea for renters to do their research and compare prices before signing a lease. If you think you are ready, remember that buying a home is a significant financial and personal decision, so it’s important to do your research and seek professional advice along the way.

Mortgage Rate Locks: When and How to Secure a Favorable Rate

November 9, 2023 by Deidre Pfeifer Leave a Comment

Securing a mortgage to purchase your dream home is a significant financial decision. One of the essential aspects of this process is locking in a favorable mortgage rate. A mortgage rate lock ensures that the interest rate on your loan remains the same for a specified period, protecting you from potential rate fluctuations. We will explore when it’s best to lock in a mortgage rate and provide a step-by-step guide on how to do it.

When to Lock in Your Mortgage Rate

The perfect time to lock in your mortgage rate depends on various factors, and it’s not an exact science. Here are some key considerations to keep in mind:

Market Trends: Pay attention to the current economic climate and interest rate trends. If rates are historically low, it may be a good time to lock in a rate.

Your Financial Situation: Analyze your financial stability. If you’re comfortable with the offered rate and have a steady income, it might be a good time to lock it in.

Closing Timeline: Consider your closing timeline. A longer period before closing may justify an earlier rate lock to protect against potential rate increases.

Personal Comfort: Ultimately, your peace of mind is crucial. If you’re satisfied with the rate and don’t want to worry about future fluctuations, locking in the rate early can provide peace of mind.

Steps to Secure a Favorable Mortgage Rate

Locking in a mortgage rate involves a few straightforward steps. Here’s a simple guide to help you through the process:

Choose Your Lender: Start by selecting a reputable lender. It’s essential to work with a lender you trust and feel comfortable with.

Discuss Rate Lock Options: Speak with your lender about rate lock options. They will provide you with details on available rates and terms.

Decide on the Lock Period: Determine how long you need the rate lock. Common lock periods are 15, 30, 45, or 60 days, but some lenders offer longer periods.

Request a Rate Lock Agreement: Your lender will provide a rate lock agreement that outlines the terms and conditions, including the locked rate, expiration date, and any associated costs.

Lock the Rate: Once you’re satisfied with the terms, sign the rate lock agreement. This action locks in your mortgage rate for the agreed-upon period.

Monitor the Expiration Date: Keep track of the rate lock’s expiration date. If your mortgage doesn’t close before this date, you may need to discuss an extension or accept the prevailing rate.

Keep Your Finances Stable: Maintain your financial stability during the rate lock period. Any changes in your financial situation could have an impact on your mortgage approval.

Locking in a favorable mortgage rate is a crucial step in securing your home loan. By considering market conditions, your financial stability, and your personal comfort, you can make an informed decision on when to lock your rate. The steps involved in securing a rate lock are relatively straightforward, and your lender will guide you through the process. Ultimately, a rate lock provides peace of mind, ensuring that your interest rate remains consistent, regardless of market fluctuations.

Understanding Assumable Mortgage Loans

November 8, 2023 by Deidre Pfeifer Leave a Comment

Mortgage loans are an essential aspect of financing the purchase of a property. Among the various types of mortgages available, one option that may be advantageous for both buyers and sellers is an assumable mortgage loan.

An assumable mortgage loan is a type of home loan agreement that allows a homebuyer to assume the existing mortgage of the seller when purchasing a property. In other words, the buyer takes over the seller’s mortgage terms and conditions, including the interest rate, repayment schedule, and remaining balance.

Benefits of an Assumable Mortgage Loan:

Favorable Terms: Assumable mortgages often carry lower interest rates than current market rates. By assuming an existing mortgage, a buyer may secure more favorable terms compared to obtaining a new loan, potentially resulting in significant savings over the long term.

Reduced Closing Costs: Since an assumable mortgage involves taking over an existing loan, the buyer can avoid certain closing costs associated with originating a new mortgage, such as loan application fees, appraisal costs, and title insurance premiums.

Streamlined Approval Process: Assuming a mortgage can simplify the home buying process as the buyer bypasses the extensive underwriting process typically required for a new loan. This can save time and effort, especially if the buyer’s financial situation is not ideal for securing a traditional mortgage.

Considerations and Limitations:

Lender Approval: While assumable mortgages can offer advantages, it’s important to note that not all mortgages are assumable. The terms and conditions of the original mortgage agreement, as well as the lender’s policies, will dictate whether assumption is allowed. Obtaining approval from the lender is a crucial step in the process.

Qualifying Criteria: The buyer assuming the mortgage must still meet the lender’s qualifying criteria. The lender will assess the buyer’s creditworthiness, income stability, and other relevant factors to ensure they can meet the financial obligations associated with the mortgage.

Liability for the Seller: Although the buyer assumes the mortgage, the seller may still remain partially liable for the loan. Depending on the specific terms of the agreement, the seller may be held responsible if the buyer defaults on the loan, potentially impacting their creditworthiness.

The Assumption Process: Assuming a mortgage typically involves several steps:

Identify Assumable Mortgages: Buyers should inquire whether the seller’s mortgage is assumable and review the terms and conditions outlined in the original mortgage agreement.

Obtain Lender Approval: The buyer must apply with the lender to assume the mortgage. This involves submitting financial documentation, undergoing a credit check, and meeting the lender’s criteria.

Execute an Assumption Agreement: Once approved, the buyer, seller, and lender enter into an assumption agreement, detailing the terms and conditions of the transfer.

Closing and Transfer: The buyer assumes the mortgage during the closing process, which involves transferring ownership of the property and assuming responsibility for the mortgage payments.

It’s important to note that assuming a mortgage can be a complex process and may not be the best option for every buyer. Buyers should carefully review the terms of the mortgage and assess the risks before agreeing to assume the loan. Additionally, buyers may want to work with a real estate agent or attorney to help navigate the process.

The Role of A Down Payment: How Much Should I Save?

November 7, 2023 by Deidre Pfeifer Leave a Comment

Buying a home, a car, or any significant investment often involves making a down payment. The down payment is a crucial part of the purchasing process, as it can impact your loan terms, interest rates, and monthly payments. But how much should you save for a down payment, and why is it so important?

Understanding Down Payments

A down payment is a portion of the purchase price that you pay upfront when buying a house, a car, or making a large investment. It’s a way to demonstrate your commitment to the purchase and reduce the risk for the lender or seller. Down payments are commonly associated with:

Homebuying: When purchasing a home, a down payment is typically required by mortgage lenders. The amount can vary but is often around 20% of the home’s purchase price.

Car purchases: Down payments for cars can also range, but they often hover around 10-20% of the vehicle’s price.

Large investments: In other scenarios, such as starting a business or investing in a big-ticket item, a down payment may be necessary to secure financing.

Importance of Down Payments

Lowering Monthly Payments: A larger down payment reduces the amount you need to finance, resulting in lower monthly payments. This can make your financial burden more manageable in the long run.

Qualifying for Loans: A substantial down payment can help you qualify for loans with more favorable terms and lower interest rates. Lenders often see a larger down payment as a sign of financial stability.

Building Equity: With a significant down payment, you’ll start building equity in your asset from day one. Equity is the portion of the property or asset you own, and it can grow over time, giving you more financial security.

How Much Should You Save for a Down Payment?

The ideal down payment amount can vary based on what you’re buying and your financial situation. Here are some general guidelines:

Homes: As mentioned earlier, a down payment of 20% is often recommended for purchasing a home. However, there are mortgage options that allow for lower down payments, such as FHA loans, which require as little as 3.5% down. The key is to balance a lower down payment with the added cost of private mortgage insurance (PMI) and potentially higher interest rates.

Cars: For buying a car, a down payment of 10-20% is a good range to aim for. This will help reduce the overall cost of the car loan and lower your monthly payments.

Large Investments: The down payment for investments can vary widely, so it’s essential to assess your specific financial goals and risks. In this case, consult with a financial advisor to determine the right amount.

How to Save for a Down Payment

Saving for a down payment may seem daunting, but with a clear plan, it’s achievable. Here are some steps to help you get started:

Create a Budget: Review your finances, set a budget, and identify areas where you can cut back on spending to save more.

Open a Dedicated Savings Account: Consider opening a separate savings account exclusively for your down payment fund. This will help you track your progress and keep the money out of sight and out of mind.

Automate Savings: Set up automatic transfers from your checking account to your down payment savings account. This ensures that you save consistently.

Increase Income: Explore opportunities to increase your income, such as taking on a part-time job or freelancing, to boost your savings rate.

Reduce Debt: Pay down high-interest debts like credit cards to free up more money for saving.

The role of down payments in major purchases cannot be overstated. They play a vital role in reducing the financial burden of loans, helping you secure better loan terms, and building equity in your assets. While the ideal down payment amount can vary, it’s essential to set a clear savings goal and follow a strategic plan to achieve it. With discipline and patience, you can save for a down payment and take a significant step toward achieving your financial goals.

What’s Ahead For Mortgage Rates This Week – November 6, 2023

November 6, 2023 by Deidre Pfeifer Leave a Comment

The most important data of the quarter was released, signaling the direction for many markets and where economic policy may be headed. Jerome Powell as well as other members of the Federal Reserve spoke about the state of economic policy, informing many parties about their decisions to remain hawkish or dovish in their approach. Further rate hikes could tell a story that inflation is not yet under control and the Federal Reserve feels the need to continue these rate hikes, which will have a significant impact on the lending markets as a whole.

FOMC Rate Decision
While Fed Chair Jerome Powell emphasized uncertainty over whether the Fed has tightened enough to bring down inflation, skeptics still believe policymakers have finished hiking rates. Jerome Powell had several opportunities to make his intentions clear about further rate hikes but had passed on most of them. Analysts largely agree that their recent dovish approach is signaling the end of rate hikes.

Central bank’s policy rate remains in the 5.25%-5.50% range.
The Fed says the economy grew at a ‘strong’ pace in the third quarter.

Key point: Two rate decision meetings without a hike may signal a period in which the economy shows the reduction in inflation the FED has been seeking, and relief in interest rates for lending parties.

Primary Mortgage Market Survey Index

15-Yr FRM rates seeing a week-to-week increase by 00% with the current rate at 7.03%.
30-Yr FRM rates seeing a week-to-week decrease by -0.03% with the current rate at 76%

MND Rate Index

30-Yr FHA rates increased week to week seeing a -0.61% decrease for this week. Current rates at 71%
30-Yr VA rates increased week to week seeing a -0.63% decrease for this week. Current rates at 70%

Nonfarm Payrolls
Nonfarm Payrolls measure the change in the number of people employed during the previous month, excluding the farming industry.

Nonfarm payrolls increased by 150,000 for the month, against the consensus forecast for a rise of 170,000. That was a sharp decline from the gain of 297,000 in September.

Job Claims
The weekly jobless claims report from the Labor Department on Thursday showed unemployment rolls rising to a six-month high.

Initial Claims have increased by 217,000 compared to the expected claims of 214,000. The prior week was 211,000.

ISM Manufacturing Data
ISM Manufacturing Data was released this week, much of it impacting many sectors including manufacturing, home building, and commercial building. The Institute for Supply Management’s manufacturing survey rose to 49.0% last month from 47.8% in August. It was the third straight increase, and the index matched a 10-month high.

Production barometer increased 2.5 points to 52.5% and was positive for the second month in a row.
The prices index, a measure of inflation, fell 4.6 points to a fairly low 43.8%. Higher oil prices in the future may impact this statistic.
The index of new orders rose 2.4 points to 49.2%. So far the auto industry strike has had little impact.

What’s Ahead
We’ll have a relatively light week after the FOMC rate decision meetings and manufacturing release, with the only notable economic reports being Consumer Credit and Wholesale Inventories.

Ways To Be Financially Prepared for an Emergency

November 3, 2023 by Deidre Pfeifer Leave a Comment

It’s important to be financially prepared for emergencies so that you can handle unexpected expenses or situations without having to worry about your financial stability. Here are some ways to financially prepare for emergencies:

Build an emergency fund: Start by building an emergency fund that can cover at least 3-6 months of your living expenses. This fund should be kept in a separate savings account and should only be used for emergencies.

Create a budget: Create a budget and stick to it. This will help you identify areas where you can cut back on expenses and save more money.

Reduce debt: Try to pay off high-interest debts such as credit cards, personal loans, and other loans as quickly as possible. This will help reduce your financial burden and free up money for other expenses.

Get insurance: Make sure you have adequate insurance coverage for your health, car, home, and other assets. This will help protect you financially in case of any unforeseen circumstances.

Plan for retirement: It’s important to plan for your retirement as early as possible so that you can have a secure financial future. Consider investing in retirement accounts such as 401(k)s, IRAs, or other similar retirement plans.

Keep track of your finances: Make sure you keep track of your finances regularly by checking your bank accounts, credit card statements, and other financial accounts. This will help you identify any unusual activity and prevent fraud or identity theft.

Prepare a contingency plan: It’s a good idea to prepare a contingency plan for emergencies, such as job loss, medical emergencies, or natural disasters. This plan should include steps you can take to reduce expenses, sources of income, and other financial resources that can help you stay afloat during tough times.

How to Create an Emergency Budget

Creating an emergency budget can help you quickly adjust your finances during unexpected situations such as job loss, medical emergencies, or other unforeseen circumstances. Here are some steps to create an emergency budget:

Assess your current situation: Take a look at your current income, expenses, and debts. This will help you understand where you stand financially and what changes you may need to make.

Identify essential expenses: Make a list of your essential expenses such as rent/mortgage, utilities, groceries, and transportation. These are expenses that you cannot cut back on and will need to be prioritized in your budget.

Cut back on non-essential expenses: Identify non-essential expenses such as dining out, entertainment, and subscriptions that you can cut back on or eliminate completely. This will free up money that you can use for your essential expenses.

Prioritize debt payments: If you have debt, prioritize your debt payments and focus on paying off high-interest debt first. This will help reduce your overall debt burden and free up money for other expenses.

Consider additional income sources: Look for additional income sources such as freelance work or part-time jobs that can help supplement your income during tough times.

Monitor and adjust: Monitor your budget regularly and adjust as needed. This will help you stay on track and ensure that you are able to cover your essential expenses.

Remember, creating an emergency budget requires discipline and sacrifice, but it can help you weather tough times and avoid financial hardship.

Will Getting a Mortgage Help My Credit Score?

November 2, 2023 by Deidre Pfeifer 48 Comments

Getting a mortgage can potentially help your credit score, as long as you make your payments on time and in full each month. Payment history is one of the most important factors that influence your credit score, so consistently making your mortgage payments on time can have a positive impact on your credit score over time.

It is important to carefully consider the financial implications of taking on a mortgage and to ensure that you can afford the payments before proceeding. It is also important to keep in mind that taking out a mortgage will also result in a hard inquiry on your credit report, which can temporarily lower your credit score.

Credit Diversity

Credit diversity refers to the different types of credit accounts you have on your credit report. Having a diverse credit history can have a positive impact on your credit score, as it shows lenders that you are capable of managing multiple types of credit responsibly.

When you apply for a mortgage, the lender will likely review your credit report to assess your creditworthiness. Having a diverse credit history, including a mix of credit cards, installment loans, and other types of credit accounts, can demonstrate that you are a responsible borrower and increase your chances of being approved for a mortgage.

Mortgages Get Reported

Mortgages are typically reported to credit bureaus and will appear on your credit report. This means that your mortgage payment history, including any late or missed payments, will be recorded on your credit report, and can impact your credit score.

Consistently making on-time mortgage payments can have a positive impact on your credit score, as it demonstrates that you are a responsible borrower. However, missing payments or defaulting on your mortgage can have a negative impact on your credit score and may make it more difficult to obtain credit in the future.

It’s important to regularly review your credit report to ensure that all information, including your mortgage, is being reported accurately. If you notice any errors or discrepancies, you should contact the credit bureau and the mortgage lender to have the issue resolved.

In summary, having a diverse credit history can be beneficial when applying for a mortgage, but it’s important to focus on maintaining a good overall credit profile, including making all payments on time and keeping your credit utilization.

Planning Your Mortgage Budget for the Holiday Season

November 1, 2023 by Deidre Pfeifer Leave a Comment

The holiday season is a time of joy and celebration, but it can also be a challenging time for your finances, especially if you’re juggling the responsibilities of a mortgage. However, with some thoughtful planning and budgeting, you can ensure that you enjoy the festivities without putting your financial stability at risk. I will provide you with essential tips and strategies to help you manage your mortgage budget during the holiday season.

Create a Holiday Budget
Set a specific budget for your holiday expenses. This budget should encompass everything from gifts and decorations to travel and entertainment. By creating a clear budget, you can ensure that you don’t overspend, keeping your mortgage payments on track.

Prioritize Needs Over Wants
It’s easy to get carried away during the holiday season, but it’s important to prioritize needs over wants. Make a list of your holiday expenses and identify which ones are essential and which ones are optional. Hint: Your mortgage payment should always be at the top of the list.

Set Realistic Expectations
The pressure to create the perfect holiday experience can lead to overspending. Set realistic expectations for your holiday celebrations and remember that meaningful moments don’t have to be expensive.

Take Advantage of Sales and Discounts
The holiday season is known for its numerous sales and discounts. Keep an eye out for deals on gifts and other holiday essentials. This can help you stretch your budget further and make the most of your money.

Consider DIY and Homemade Gifts
One of the best ways to save money during the holidays is by making homemade gifts. Not only do these gifts carry sentimental value, but they can also be more budget-friendly than store-bought items. Get creative and crafty to give your loved ones a meaningful and unique gift.

Monitor Your Spending
As the holiday season progresses, keep a close eye on your spending. Regularly review your budget and track your expenses to ensure you’re staying on track. This will help you make necessary adjustments if needed.

Plan for the Future
Once the holiday season is over, it’s essential to get back on track with your mortgage budget. Review your financial goals and create a plan for the coming year. Consider setting up a dedicated holiday savings fund for the next holiday season so you’re better prepared in advance.

The holiday season should be a time of joy and togetherness, not financial stress. By planning your mortgage budget for the holidays and implementing the strategies outlined, you can enjoy the festivities without jeopardizing your financial stability. Remember that moderation and mindful spending are key to a happy and financially responsible holiday season.

Enjoy it!

Halloween Safety: Protecting Your Family and Home

October 31, 2023 by Deidre Pfeifer Leave a Comment

Halloween is a thrilling time of the year, filled with spooky costumes, delicious treats, and endless fun. It is also important to remember that safety should always come first. Whether you’re a parent, homeowner, or someone simply looking out for your community, keeping your family and home safe on Halloween is a top priority. Here are some valuable tips to ensure that the holiday remains full of treats and without any tricks.

Home Security Matters: Securing your home is vital during Halloween. With increased foot traffic around your property, consider the following:

Ensure all doors and windows are securely locked.
Consider motion-activated lighting to deter unwanted visitors.
Test your home security system to make sure it’s functioning correctly.

Safe Decorations: Get into the spirit of Halloween by decorating your home, but do so safely:

Use flameless LED candles instead of real ones for Jack-o’-lanterns.
Place decorations in safe areas to avoid tripping hazards.

Costume Safety: If you or your family members are dressing up for the occasion, don’t forget about costume safety:

Choose flame-resistant costumes and avoid those that drag on the ground.
Make sure costumes and masks don’t obstruct vision or breathing.

Trick-or-Treating Safety: If you have little ones excited about trick-or-treating, ensure their safety with these guidelines:

Accompany young children when they go trick-or-treating.
Teach your kids to stick to sidewalks and cross streets at designated crosswalks.
Bring flashlights or glow sticks to increase visibility.
Inspect all candy before it’s consumed. Discard any unwrapped or suspicious items.

Driving Safely: If you’re driving on Halloween, remember to be extra cautious:

Drive slowly and carefully in residential areas, particularly where children are trick-or-treating.
Avoid distractions while driving and keep a keen eye out for pedestrians.

Emergency Plan: Safety doesn’t always mean preventing accidents; it also means knowing how to respond when they occur. Make sure your household is prepared:

Teach everyone in your family how to call 911 in case of an emergency.
Keep a first aid kit readily available for minor injuries.

Neighbor Awareness: Maintain communication with your neighbors. If you’re going out or notice any suspicious activity, it’s good to know you can rely on your community for support.
Home Alone: If you have older children staying home alone, make sure they’re informed about safety measures like not opening the door to strangers.
Halloween Decorations Removal: After Halloween, remove your decorations promptly. This not only prevents vandalism but also makes your home less appealing to potential pranksters.
Allergies: For those distributing treats, consider offering non-food items or allergy-friendly options for children with food allergies to keep everyone safe and included.

Remember, Halloween is all about fun and celebration. By taking these precautions, you can enjoy the festivities while keeping your family and home safe. So, dress up, carve those pumpkins, and let the spooky fun begin, knowing you’ve taken the right steps to ensure a happy and safe Halloween for everyone.

What’s Ahead For Mortgage Rates This Week – October 30, 2023

October 30, 2023 by Deidre Pfeifer Leave a Comment

This week’s most significant data offered preliminary numbers for manufacturing and services PMI (Purchasing Managers Index). Both can serve as a forward indicator for the economy while providing insight into the current state of the cost of living for the service industry. While manufacturing met an expected rise for the end of October, services saw a contraction, falling to 46.6 from 49.3. Readings below 50.0 can be a sign of a downturn for the economy, particularly given the time of the year.

Mortgage Applications & Rates Indices
MBA Mortgage Applications Index saw a reduction of -1.0% in applications for the week, with rates once again increasing again week over week.

Primary Mortgage Market Survey Index

15-Yr FRM rates are seeing a week-to-week increase by 0.11% with the current rate at 03%.
30-Yr FRM rates are seeing a week-to-week increase by 0.16% with the current rate at 79%

MND Rate Index

30-Yr FHA rates increased week to week with a -0.08% decrease for this week. Current rates at 32%
30-Yr VA rates increased week to week with a -0.11% decrease for this week. Current rates at 33%

Personal Income & Spending

Personal income increased $77.8 billion (0.3 percent at a monthly rate) in September, according to estimates released today by the Bureau of Economic Analysis (table 2 and table 3). Disposable personal income (DPI), which is personal income less personal current taxes, increased $56.1 billion (0.3 percent), and personal consumption expenditures (PCE) increased $138.7 billion (0.7 percent).

The PCE price index increased 0.4 percent.
Excluding food and energy, the PCE price index increased 0.3 percent.

Key point: Personal income increased in September and spending accordingly rose, moving into October. This increase in income and spending is expected moving into the Holiday season. This is a strong sign for the Advanced GDP numbers for the remainder of the year.

Job Claims
Those who applied for unemployment benefits last week fell to a nine-month low of 188,000, subverting expectations that layoffs would rise as the U.S. interest rates continued to increase.
Initial Claims were 210,000 compared to the expected claims of 210,000. The prior week was at 211,000.

What’s Ahead
This week’s scheduled economic reports include ISM manufacturing data, S&P U.S. Manufacturing PMI, and Job Openings. The stronger data points of U.S. non-farm payrolls are coming at the end of the week on Friday.

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