Home Loans by Sean Young

Colorado Home Loans | NMLS: 191647

Rent-To-Own Opportunities For Those With Bad Credit

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Rent-To-Own Opportunities For Those With Bad CreditFor those who have less than a stellar credit history; yet, who still want to have their own home, a rent-to-own option is worth considering. A rent-to-own (RTO) agreement is a hybrid between buying a home and renting a home.

Usually, RTO deals require a significant down payment that applies towards the home purchase. An RTO tenant/buyer gets the option to buy the home for a certain price at some date in the future. The down payment is lost if a tenant/buyer does not go forward with the home purchase.

Another common characteristic of RTO deals is that a portion of the rent applies to the home purchase.

The Pros Of Rent-To-Own Deals

The significant down payment on an RTO deal is usually more than would be required as a security deposit for a lease agreement on a home of a similar type. This down payment gives the home seller/landlord the financial security needed to let a person occupy the home even if they have a bad credit history.

In some cases, the party offering an RTO sale does not even bother to run a credit history check on the RTO buyer.

The seller/landlord gets to keep the down payment no matter what happens. Usually, a person putting down a significant amount is a good tenant in spite of having bad credit. Having money invested in the property gives the tenant/buyer a strong incentive to take better care of the property than if renting or leasing.

Another advantage for the tenant/buyer is the ability to lock in a home purchase price for a sales transaction completed far in the future.

Typical RTO deals last for two years or longer, with the average being five years. This gives the tenant/buyer time to improve credit records and to qualify for the financing needed to consummate the home purchase.

The Cons Of Rent-To-Own Deals

If property values go down in the area where the home is, the value of the RTO deal can suffer. A few years later, the home may not be worth the price for buying it that is in the RTO agreement.

If any life circumstances change, the tenant/buyer may lose the down payment by having to forgo purchasing the property. If the tenant/buyer does not consummate the purchase they lose the down payment plus any portion of the rent applied to reduce the purchase price.

The tenant/buyer in the RTO transaction typically has to take on full responsibility for the home after they occupy it. This is an advantage for the seller/landlord but a disadvantage for the tenant/buyer who becomes responsible for all the maintenance, repairs, and upkeep of the property.

Summary

Rent-to-own deals are quite popular and effective for both sides in the deal under certain circumstances. Certainly for those that have a poor credit history an RTO deal is a convenient way to reduce the waste of paying rent and gain some potentially valuable home ownership instead.

Please consider meeting with your trusted real estate and mortgage professionals to discuss your options before entering into a risky financial agreement.

What’s Ahead For Mortgage Rates This Week – July 8th, 2019

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What’s Ahead For Mortgage Rates This Week – July 8th, 2019Last week’s scheduled economic news included readings on construction spending and reports on public and private sector  jobs. Monthly readings for public and private sector jobs and the national unemployment rate were released along with weekly reports on mortgage rates and initial jobless claims.

Construction Spending Dips in May

May construction spending fell to a seasonally-adjusted annual rate of 0.80 percent growth at a pace of $1.3 trillion as compared to April’s reading, which was adjusted to 0.40 percent growth after reports of a flat reading. Year-over-year construction spending  was 2.30 percent lower in May.  

High materials costs and shortages of workers continued to dampen builder sentiment as shortages of available homes added to buyer concerns. Slower home price growth and shortages of affordable homes also impacted housing markets, but low mortgage rates encouraged qualified home buyers to lock in low rates.

Recent news reports suggest that economic growth may be slowing along with home price growth, but public and private-sector jobs grew in June after low readings in May. The Commerce Department’s Non-Farm Payrolls report showed 224,000 public and private sector jobs added in June; ADP reported 102,000 private-sector jobs added in June after May’s lean reading of 41,000 jobs added. The national unemployment rate ticked up to 3.70percent in June as compared to May’s reading of 3.60 percent.

Mortgage Rates Rise, New Jobless Claims Fall

Average mortgage rates rose last week according to Freddie Mac. Rates for a 30-year fixed rate mortgage averaged  two basis points higher at 3.78 percent. 15-year fixed mortgage rates averaged two basis points higher at 3.18 percent. The average rate for 5/1 adjustable rate mortgages rose six basis points to 3.45 percent.

Discount points averaged 0.60 percent for 30-year fixed rate mortgages and 0.50 percent for 15-year fixed rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent.

Initial jobless claims fell to 221,000 new claims filed last week as compared to the prior week’s reading of 229,000  initial jobless claims.

What‘s Ahead

This week’s economic reports include testimony by Jerome Powell, chairman of the Federal Reserve and release of minutes of the Fed’s Federal Open Market Committee meeting held in June. Reports on inflation and weekly readings on mortgage rates and first-time jobless claims will also be released.

How Color Can Affect Your Home and Psyche

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How Color Can Affect Your Home and PsycheAre you dreaming in color of your future new home? You probably can’t wait to get your hands on a paintbrush and a bucket of beautiful new paint. But how will you choose the colors to decorate your new home?

If you’ve been to a paint store recently, you know there are thousands upon thousands of shades to choose from. Choose wisely, because color can affect your home and psyche.

Shades of Purple

Whether you call it purple or eggplant or violet or plum, purple evokes feelings of warmth and vitality in a home. The dustier shades of plum are ideal for walls in the dining room, where taste buds are tantalized. Light lavenders and lilacs are perfect for a little girl’s room, perhaps dotted with white and yellow daises as a border around the baseboard.

Crimson Reds

Red is a dramatic color to use in the home, yet it works in many contexts. Try dark red in a bathroom with dark wood cabinets for a sophisticated look. Burnt red in the bedroom is sultry and inviting. A statement wall of red in a home office denotes serious business and power.

Bluesy Blues

Blues can evoke serenity and peace, but they can also spark creative thought. Blue green colors are ideal for vintage kitchen themes, whereas navy blue in a boy’s bedroom is a classic look. Try white tinged with blue for your new home’s ceiling; it’s said to make a room feel more spacious because it simulates the sky.

Going Green

Kelly green isn’t a color that most people would use in the home, but sage green is perfect for a bedroom in which you want to instill tranquility. Sea foam green is a classic choice for a bathroom even if your home is miles from the ocean. Lime green can be surprisingly uplifting, especially when used in the kitchen. 

Pinkies

Though little girls seem to adore pink, it’s been psychologically shown to be a color that induces upset. It’s not a particularly passive color, but in pastel shades, pink can be soothing, especially when combined with calmer colors like beige or blue. 

Sunny Yellow

If you want a room to feel happy, consider painting it a shade of yellow. Yellow makes you smile; it’s cheery and friendly. Of course, if you get into the neon shades of yellow, it can have the opposite effect, so to stay safe, stay on the lighter side of yellow.

Color can certainly affect the way your home looks and feels, and how you feel in it. The wonderful thing about paint is that it’s an easy way to make a house a home.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted mortgage professional.

How To Turn A “Dumb” Home Into A Smart Home

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How To Turn A Dumb Home Into A Smart HomeHaving a “smart home” is a trend that is popular. What does it actually mean? Smart home technology improves energy-efficiency, increases security, and creates more convenience for the home’s occupants.

Innovative smart home technology improves with the deployment of the Internet of Things (IoT), 5G wireless broadband, and the use of artificial intelligence (AI) programming. Many things that an owner and/or occupant of a home needs or wants may be done for them by smart home technology.

Energy-Efficiency

Green energy systems include installing energy-efficient windows and perhaps solar panels along with battery storage. Moreover, by managing micro-zones within a home, money is saved by not wasting it on heating or cooling when not needed.

Management of temperature control is possible with smart home technology that allows the heating and air-conditioning system to direct hot or cold air to the rooms that need it, only when occupied. These systems turn off the zone when the room is not in use.

Advanced systems learn the occupant’s typical home-use patterns and anticipate them. For example, if a person comes home around the same time each day, the house prepares the rooms for that person in advance of their arrival.

Advanced systems link vehicles with the home. For example, the climate control system may receive the GS location of the vehicle over the IoT. Then, the AI software of the house can determine the distance the car is from the home and the direction it is traveling. The AI guesses if the person is driving home and adjusts the home accordingly.

Increased Security

This is one of the best reasons to install smart home technology. Increased security may help to reduce risks of burglary, home invasion, and damage caused by unavoidable disasters.

Home security may use biometrics, such as facial recognition, fingerprints, iris scans, and others, to authorize entry for specific people and prevent unauthorized intruders.

Video surveillance of the property, inside and out, keeps a record of what is happening. Innovation in AI detects camera images that are not appropriate, such as someone trying to break into the home and alert the homeowners as well as law enforcement.

Alarms trigger for many things such as a break-in of a door or window or someone coming to the front porch to steal a delivered package.

Sensors, which are much more sophisticated than a basic smoke alarm, may warn of smoke, fire, natural gas leaks, carbon monoxide levels in a garage, and even plumbing problems. With nanny cams, monitoring of babies and children is helpful for their safety.

Convenience

Smart Home technology can respond to the occupants’ use automatically or be manually chosen. For example, the coffee maker can turn on automatically in the morning to have the perfect brew ready for those who wake up. The dog door can be unlocked from bed for the dog to go outside in the morning.

A real-time inventory, using the barcodes of foodstuffs, automates the re-ordering of regularly used items when depleted.

The car can be started remotely and warmed up or cool before the driver and passengers enter it. During wintertime, entry steps can be heated to melt ice and snow just in time for people’s arrival. A hot tub can be turned on remotely so that it is fully heated up and ready for use when the owner’s come home.

Summary

There are so many innovations in smart technology already available and more on the way. Homeowners who invest in this smart technology may not only get to enjoy their home more, they may save on energy bills, and might also get a higher resale value for the “smart” home when selling it. It’s worth considering.

If you are in the market for a new property or interested in refinancing !

4 Tips To Ensure A Successful Closing

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4 Tips To Ensure A Successful ClosingAs you come up to the date of your closing, there’s time to reflect on everything that led to this step. Your real estate agent, mortgage broker, title company and others all work hard to ensure a successful closing for you. They’re all in your corner, hoping for the same outcome as you. They’ve had to do a lot of work behind the scenes that you may not even be aware of. Their diligence and professionalism has already benefited you.

But did you know that it’s not all riding on your team of real estate professionals? There are things you can do to ensure a successful closing, too. 

1. Bring Your Checkbook

In other words, have extra funds available to cover unexpected costs. Anything could happen at the closing table. If there was an error in calculations, or the seller all of a sudden asks for some kind of additional compensation, you could all go home empty-handed. If you bring your checkbook, all those problems could go away and you end up with a successful closing. 

2. Don’t Forget Your ID

You probably don’t need to be reminded to bring your driver’s license with you when you drive. But did you know you’ll probably need to present your ID at the closing table? Funnily enough, people do forget, especially if you’re a woman and you’ve changed purses recently. Before you head to the closing table, double check that you have two forms of ID on you to be on the safe side.

3. Preview The Paperwork

Although everyone’s a professional, human error does occur. If possible, ask to preview the paperwork associated with the closing. Your real estate agent can help you with this step. Read through everything with a fine-toothed comb. Look for spelling errors, mistakes in addresses, and even transposed numbers. The earlier you can review paperwork, the longer the available time to get any errors corrected before the closing.

4. Bring Extra Documents With You

You don’t have to carry your filing cabinet to the closing. But it’s wise to bring relevant financial documents with you and leave them in your car. Lenders may ask for things last minute like old bank statements, a certain cancelled check or something else. 

With the help of your trusted real estate agent and home mortgage professional, your closing will likely go off without a hitch. But, just in case, keep these tips in mind.

 

 

 

What’s Ahead For Mortgage Rates This Week – July 1st, 2019

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What’s Ahead For Mortgage Rates This Week – July 1st, 2019Last week’s economic reports included readings on home prices, sales of pre-owned homes and pending home sales. Weekly readings on mortgage rates and first-time jobless claims were also released.

Case-Shiller Home Price Index: Home Price Growth Slips in April

Case-Shiller reported slower home price growth in April; home prices were 0.20 percent lower at 3.50 percent. Increasing inventories of homes for sale provided buyers with more choices and eased demand, which increased in recent years due to severe shortages of available homes.

Cities on the west coast previously dominated home price growth, but the top three cities with highest home prices reported in April were sunbelt cities located east of high-priced west coast cities. Las Vegas, Nevada reported the highest rate of home price growth with 7.20 percent year-over-year.

Phoenix, Arizona followed with 6.00 percent growth and Tampa, Florida home prices grew by 5.60 percent year-over-year in April. Home values in all three cities were hard hit during the recession and are recovering, but not at the double digit rates seen in prior years.

New Home Sales Fall in May

Sales of newly-built homes fell to a five-month low in May according to the Commerce Department. New homes sold at a seasonally-adjusted annual rate of 626,000 homes as compared to April’s rate of 679,000 new homes sold. May’s reading was 3.70 percent lower than April’s revised reading.

There was a 6.40 month supply of new homes available at May’s sales pace. Real estate pros consider a six-month supply of available homes as average. Sales of new homes were 4.00 percent higher than for the same period in 2018. The median price of new homes sold in May was $308,000 and was 2.70 percent lower than a year ago.

Pending home sales rose in May from April’s negative reading of -1.50 percent to a positive reading of 1.10 percent. This reading lines up with the increase in homes for sale.

Mortgage Rates, New Jobless Claims

Freddie Mac reported lower mortgage rates last week with the average rate for a 30-year fixed rate mortgage 11 basis points lower than for the prior week. Average rates for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages fell nine basis points to 3.16 percent and 3.39 percent respectively.

Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. Mortgage applications rose 5 percent from the prior week due to the dip in home loan rates.

Initial jobless claims rose last week to 227,000 new claims filed as compared to 216,000 new claims expected and 217,000 first-time claims filed the prior week. Analysts sad that new jobless claims remain low and that last week’s rise in claims did not reflect weakening in labor markets.

The University of Michigan Consumer Sentiment Index dropped to an index reading of 98.20 in June from May’s reading of 100. Consumer sentiment dropped due to concerns over recent tariffs and resulting increases in consumer prices

What‘s Ahead

This week’s scheduled economic news includes releases on construction spending and labor sector reports on public and private sector jobs and the national unemployment rate. Weekly reports on mortgage rates and new jobless claims will also be released.

Home Staging Tip – Urban Gardening in Small Spaces

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Home Staging Tip - Urban Gardening in Small SpacesHome staging means getting a home ready for sale with the goal to maximize the sale price and close a sale as fast as possible. Some home staging tasks are very dreary, like having to get the place sparkling clean. That is really not fun work. It may be better, if it is affordable, for the homeowner to hire professionals to do that grunt work.

Another part of home staging is really fun and even can start long before putting a home on the market for sale. Children like to participate in this as well. It is creating an urban garden.

Urban Garden

An urban garden fits in anywhere. The idea is to create space for plants to thrive even if there is no backyard or in-ground growing opportunities. Here are some easy ways to achieve this:

  • Window Planter Boxes: Any window that gets sunlight can have a window box. Install these boxes on the inside or on the outside of the window depending on the climate. These are perfect places to have flowers add color that is attractive. Transplant low-cost flowering plants into window boxes. Using this strategy, window boxes stay full of flowers, which are constantly in bloom.
  • Big Pots: Decorative large pots are a great thing to use to create a garden space. Strawberry pots made of clay are popular things to put on a balcony or a porch. Flower pots that line the walkway to the front door add to a home’s curb appeal.
  • Roof Gardens: For townhouses without a backyard, balcony, or a patio, there may only be an urban garden space available on a roof. If there is a good view as well, this is a real plus. Be sure to have a nice picnic table to sit around and enjoy the area.
  • Herbs: Herb gardens are very easy to start. Herbs of many kinds can grow in simple planters. One added advantage is, if growing aromatic herbs, they put a pleasant smell in the air.

Summary

Besides growing flowers, urban gardens may also provide fresh herbs and vegetables to eat. Many things are really easy to grow, such as the herb basil, and they add a nice flavor to a meal.

Start with a small herb garden. If you have children, get them involved. Soon, it will be so much fun growing plants that your house will fill with color, nice smells, and good things to eat.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional to discuss current financing options.

Case-Shiller: Annual Home Price Growth Slows for 13th Consecutive Month

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Case-Shiller Annual Home Price Growth Slows for 13th Consecutive MonthCase-Shiller’s 20-City Home Price Index for April showed further declines in home price growth with 2.50 percent year-over-year home price growth as compared to March home price growth of 2.60 percent. New York City home prices held steady month-to-month and Seattle, Washington’s home prices were unchanged year-over-year after posting 13 percent home price growth in 2018.

The top three cities with the highest rates of year-over-year home price growth were Las Vegas, Nevada with 7.10 percent growth; Phoenix, Arizona followed with 6.0 percent growth and Tampa, Florida reported 5.60 percent home price growth. All three cities were hard-hit during the recession. While U.S. home prices are rising, they aren’t rising as fast as in prior years. The fastest home price growth rates remained in single digits as compared to double digit home price growth rates posted in recent years.

Changing geography played a role in this year’s home price growth as San Francisco, California, Portland, Oregon and Seattle, Washington fell to sun-belt cities east of the west coast. Astronomical home prices and pronounced shortages of homes in many west coast cities caused home buyers to seek affordable homes elsewhere.

The Case-Shiller 10-City Home Price Index posted a year-over-year gain of 2.30 percent in April as compared to its March reading of 2.20 percent. Analysts said that slower gains for home prices indicated more normalized price conditions, but noted that home price growth remains about 1.50 percent ahead of inflation.

Buyers Benefit from Slower Home Price Growth, More Available Homes

First-time and moderate income home buyers were sidelined by competing investors and cash buyers as home prices rose quickly, but may find it easier to compete as market conditions achieve a balance of advantages to home buyers and sellers.

The flip side of easing home price growth may be that prospective buyers who are leery of buying at peak market prices will put off buying homes. Low mortgage rates continued to boost affordability and decreasing shortages of homes provided buyers with more options. Homebuyer sentiment is likely to vary according to economic trends, regional and personal circumstances.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional to discuss current financing options.

 

Simple Tips To Pay Off A Home Mortgage Loan Faster

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It is a major life decision to buy a home and yet many do not consider how much they will pay on the interest over the life of the loan. All they usually think about is if they can afford to pay the monthly mortgage payments.

It is helpful to learn how different loan structures impact the amount of money wasted on the interest paid for a home loan. Here is a comparison of different loan lengths and payment options to show some helpful ways to reduce the total interest paid.

Standard 30-Year Fixed Mortgage

For a buyer who has a good credit history, purchasing a median-priced home with a significant down payment usually helps get the best mortgage financing. A standard 30-year mortgage on a home requires 360 monthly payments to pay off the loan.

The total cost of the loan includes paying back the principal amount borrowed and all the interest. Over 30 years, the total interest paid can be as much as one-third or more of the principal amount borrowed, depending on the loan interest rate.

Standard 15-Year Fixed Mortgage

Comparing a standard 30-year fixed mortgage with a standard 15-year mortgage shows a surprising result. The differences are that the length of the loan term is less and the monthly mortgage payments are higher. A standard 15-year mortgage on a home requires 180 monthly payments to pay off the loan.

The shorter loan period may reduce the total interest paid to less than one-half of a 30-year mortgage, depending on the loan interest rate. The savings can be in the tens of thousands of dollars.

Payment Techniques That Save Money

Simple Tips To Pay Off A Home Mortgage Loan FasterA simple way to save money is to pay an extra monthly payment each year and ask the lender to apply the extra payment to reduce the principal amount owed. On a 30-year mortgage, the loan pay-off date is more than two and one-half years sooner, reducing the total interest paid by about 10% percent.

A smaller savings amount is possible without even needing to pay more, just by paying more frequently. Instead of paying a mortgage once per month, make arrangements with the lender to pay half the monthly mortgage payment twice per month. The amount the lender receives monthly, in the two payments, totals the same amount that the lender would receive in one payment.

This technique works because there is a daily calculation of mortgage interest. By making payments more frequently, there are fewer days of use for some of the loaned funds. This tiny change in periodic repayments can be a nice way to save a few thousand extra dollars over the life of a loan.

In addition, since there are 26 two-week periods in one year, you’re getting an extra payment in over the longer months in the year. So you’re paying the equivalent of 13 monthly payments instead of 12. You might not feel it as much since you’re likely making more money in the longer months as well.

If you’d like to do this strategy and the lender won’t accept bi-weekly payments, then just divide the principal and interest portion of your mortgage payment by 12 and add that amount to each regular monthly payment. You’ll save a ton of interest over the life of the loan!

Summary

Think about interest paid as money that could have a better purpose. Choosing a shorter loan period for a home mortgage and increasing the mortgage payment frequency are important things to consider for the savings that they can produce.

Be sure to consult with your trusted home mortgage professional for answers to all of your financing related questions.

Fed Holds Key Rate Steady As It Watches Economic Trends

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Fed Holds Key Rate Steady As It Watches Economic TrendsFederal Reserve policymakers held the federal funds rate at its current range of 2.25 to 2.50 percent. Analysts speculated that the Fed may lower its key rate based on signs of slowing economic growth and the President’s encouragement to lower the Fed rate.

Federal Open Market Committee members cited “uncertainties” in support of their decision not to change the Fed’s key lending rate. A stiff month-to-month drop in jobs growth and worries over trade problems associated with recent tariffs assessed against China contributed to the Committee’s decision to hold rates steady and closely watch domestic and global economic trends.

Signs of slowing economic growth caused the Fed to adjust its forecast for achieving the benchmark inflation rate of 2.00 percent to 2021 and lowered expectations for inflationary growth from 1.80 percent to 1.50 percent.

Fed Chair: Fed “Closely Monitoring“ Economic Developments

After the FOMC statement, Federal Reserve Chairman Jerome Powell gave a press conference in which he further addressed the Fed’s response to slowing economic growth and current developments in global affairs. Chairman Powell said that it is important for policymakers to respond based on emerging economic trends rather than reacting to quickly shifting data.

Chairman Powell identified trade concerns and slowing global economic growth as factors impacting slowing domestic economic growth. Due to recent economic changes, Chairman Powell said that a “somewhat accommodative” policy stance was indicated. Uncertainty over supply chains due to tariffs was an example of factors causing concern over economic growth. Positive indicators centered around labor as job growth continued and employers reported a shortage of workers for available jobs.

Manufacturing declined globally and domestically as service-related-jobs expanded. When asked about Fed oversight over banks’ risk exposure due to lending policies, Chairman Powell said that large institutional holdings presented the greatest risk for banks, but did not say such risk was currently problematic. The chairman re-emphasized that FOMC members constantly assess economic data and global events to determine the Fed’s economic policies.

 

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