Monthly Archives: January 2016

//January
27 01, 2016

Fixed Rate Mortgage vs. Adjustable Rate Mortgage

January 27th, 2016|Blog, Buying a home, Home Finances, Mortgage 101|

iStock_000057655080_Small

When you are purchasing a home, one of the first decisions you will be faced with is choosing the type of mortgage that is right for you. There are two major mortgage loan types to choose between – fixed rate mortgage and adjustable rate mortgage. Each has their benefits, but it is important to choose the one that works best for you and your financial situation.

Fixed Rate Mortgage

With a fixed rate mortgage, the interest rate remains the same for the duration of the loan. The interest rate on this loan is set when you take out the loan and will not change, regardless of how interest rates change in the marketplace.

Pros:

  • Locks in your best interest rate for the term of the loan.
  • Your month payment remains the same even if your principal and interest rates change.
  • The initial loan payments are applied to your interest and less to the principal, this reverses over time.

Cons:

  • Principal and interest payments are usually higher than most adjustable rate mortgages, at least in the first couple years.
  • If you want to take advantage of an interest rate decrease, you would have to refinance.

Who would this type of mortgage loan be the right fit for? People who preferred to have the same principle and interest payments that do not increase if interest rates rise. Also those are planning to stay in their home for 10 or more years.

Adjustable Rate Mortgage (ARM)

The interest rate on adjustable rate mortgages can go up or down, as it explains in the name. Typically, ARMs will have a lower rate to begin with than fixed rate mortgages. However, after this introductory period ends, your interest rate unlocks and adjusts periodically based on outside index. Therefore your monthly rate may increase and there is no guarantee on […]

19 01, 2016

Advantages to Buying a Home During Winter Months

January 19th, 2016|Blog, Buying a home, Home Finances|

Home For Sale Real Estate Sign in Front of Beautiful New House in the Snow.

An analysis of sales statistics shows that central Ohioans get a better deal buying a home in the winter, rather than the summer. The median sale price of a central Ohio home in the three winter months averaged $130,630 over the past five years compared with $156,201 during the summer months. The average price per square foot dropped from $96.81 in the summer to $82.36 in the winter.

Another advantage is that a deal is likely to close more quickly because lenders, title companies, appraisers and others are not as busy during these months. This is fortunate for anyone who is trying to move quickly through the buying process. Central Ohio home sales, along with those nationally, drop precipitously during winter. During the past five years, an average of 1,456 Columbus-area homes sold during the three winter months, compared with 2,559, during the summer months.

Why are the prices lower in the winter? People marketing homes in the winter often must sell, experts say, and therefore tend to be receptive to offers, especially with fewer people buying homes during this time. If a home is on the market over the holidays or middle of January, a person typically has to sell it, limiting negotiating leverage. If seller do not have a specific timeline, then they will hold out till spring or summer when the market is better.

The advantage of buying in the winter has risen as the housing market has recovered. If you are looking to buy during these winter months or any month we want to help! Contact us here today.   

15 01, 2016

Reasons for Refinancing

January 15th, 2016|Blog, Home Finances, Uncategorized|

hand press on refinancing button on virtual screen

The Federal Reserve announced in December that for the first time since the before recession that interest rates will go up gradually. Even though lenders are offering lower interest rates now experts believe they will begin to increase. So it may be time to think about refinancing your mortgage. Besides saving money, here are some reasons to refinance your home.

If you have an interest rate of 4.1% on a 30-year loan but you can get a 3.3% interest on a 15-year loan, the amount of time it will take to pay off is half of that while only adjusting your payments slightly each month. If this is in your budget then it might be a good time to refinance.

If you have an adjustable rate mortgage, it may be time to switch to a fixed rate.  The rate may not change but the payment would be stable allowing you to save money over the course of the loan. Locking in a low rate now will ensure savings as opposed to ARM going back up over the next several years.

If you have equity, refinancing could allow you to access cash to pay off higher rate loans such as credit cards or student loans. You could also use the extra cash to start a business or invest in rental property.

If you have a second mortgage on the home, or a home equity line of credit, you can use your refinance to combine the two therefore getting rid of the home equity line of credit. Borrowers may do this if they are fearful of rates going up in the future on the equity line.

If you are facing a family issues, like divorce or needing money to help a family member out […]

5 01, 2016

Predictions for the 2016 Housing Market

January 5th, 2016|Blog, Buying a home, Home Finances|

FirstOhio-blog1.15.16

The New Year brings fresh expectations for just about everything and, of course, that includes the housing market. When buying a house location is always important, this is not changing in 2016. For most people, location, cost and nearby amenities will remain the most important criteria when searching for the perfect home.

We also expect to see more first-time home buyers looking at suburbs, preferably ones that are more densely populated and walkable. If this proves true, it will likely increase condominium sales in 2016.

A year or so ago, 2015 was predicted to be the year for Millennials to begin buying homes since they were older and the real estate market was more recovered. But that did not seem to be the case. For 2016, we aren’t expecting much different. Millennials will become a bigger and bigger force in the market going forward, but it is unlikely that we will see a flood of home buying activity from them in 2016. The millennials will trickle in when they see fit. They are taking their time getting into the housing market because they are getting married and having children later in life. They want their home buying decisions to support these prominent milestones in life – and rightly so!

New Year’s predictions for 2016 wouldn’t be complete without a quick look at new housing trends. In 2016, for the first time since 2006, total sales for existing and new homes will reach 6 million; this resulted from a strong gross domestic product increase of 2.5 percent and continued job creation. The new construction market will continue to see more significant gains in 2016 as new home starts increase 12 percent year over year and new home sales grow 16 percent year over year. The improvement […]

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