Avoid these things after you apply for a mortgage

Things to Avoid After Applying for a Mortgage

Things to Avoid After Applying for a Mortgage | MyKCM

Congratulations! You’ve found a home to buy and have applied for a mortgage! You’re undoubtedly excited about the opportunity to decorate your new home, but before you make any large purchases, move your money around, or make any big-time life changes, consult your loan officer – someone who will be able to tell you how your decisions will impact your home loan.

Below is a list of Things You Shouldn’t Do After Applying for a Mortgage. Some may seem obvious, but some may not.

1. Don’t Change Jobs or the Way You Are Paid at Your Job. Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.

2. Don’t Deposit Cash into Your Bank Accounts. Lenders need to source your money, and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

3. Don’t Make Any Large Purchases Like a New Car or Furniture for Your New Home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios…higher ratios make for riskier loans…and sometimes qualified borrowers no longer qualify.

4. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payments against you.

5. Don’t Change Bank Accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer any money, talk to your loan officer.

6. Don’t Apply for New Credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Don’t Close Any Credit Accounts. Many clients erroneously believe that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants in your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.

Are Home Values about to Sink?

What Is the Probability That Home Values Sink?

What Is the Probability That Home Values Sink?| MyKCM

With the current uncertainty about the economy triggered by a potential trade war, some people are waiting to purchase their first home or move-up to their dream house because they think or hope home prices will drop over the next few years. However, the experts disagree with this perspective.

Here is a table showing the predicted levels of appreciation from six major housing sources:What Is the Probability That Home Values Sink?| MyKCMAs we can see, every source believes home prices will continue to appreciate (albeit at lower levels than we have seen over the last several years). But, not one source is calling for residential real estate values to depreciate.

Additionally, ARCH Mortgage Insurance Company in their current Housing and Mortgage Market Review revealed their latest ARCH Risk Index, which estimates the probability of home prices being lower in two years. There was not one state that even had a moderate probability of home prices lowering. In fact, 34 of the 50 states had a minimal probability.What Is the Probability That Home Values Sink?| MyKCM

Bottom Line

Those waiting for prices to fall before purchasing a home should realize that the probability of that happening anytime soon is very low. With mortgage rates already at near historic lows, now may be the time to act.

5 Reasons to Sell This Fall

5 Reasons to Sell This Fall | MyKCM

Below are 5 compelling reasons listing your home for sale this fall makes sense.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase…and are in the market right now. More often than not, in many areas of the country, multiple buyers are competing with each other to buy the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply that is needed for a normal market. This means that in the majority of the country, there are not enough homes for sale to satisfy the number of buyers.

Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

Many homeowners were reluctant to list their homes over the last couple years, for fear that they would not find a home to move to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and simpler, as buyers know exactly what they can afford before shopping for a home. According to Ellie Mae’s latest Origination Insights Report, the time needed to close a loan is 43 days.

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up. There is currently ample inventory for sale at higher price ranges. This means if you’re planning on selling a starter or trade-up home and moving into your dream home, you’ll be able to do that in the luxury or premium market.

According to CoreLogic, prices are projected to appreciate by 5.2% over the next year. If you’re moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage) if you wait.

5. It’s Time to Move on with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Not to worry about 2008

Everybody Calm Down! This Is NOT 2008

Everybody Calm Down! This Is NOT 2008 | MyKCM

Last week realtor.com released the results of a survey that produced three major revelations:

  1. 53% of home purchasers (first-time and repeat buyers) currently in the market believe a recession will occur this year or next.
  2. 57% believe the next recession will be as bad or worse than 2008.
  3. 55% said they would cancel plans to move if a recession occurred.

Since we are currently experiencing the longest-ever economic expansion in American history, there is reason to believe a recession could occur in the not-too-distant future. And, it does make sense that buyers and sellers remember the horrors of 2008 when they hear the word “recession.”

Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:

“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”

Most experts, however, believe if there is a recession, it will not resemble 2008. This housing market is in no way the same as it was just over a decade ago.

Zillow Economist, Jeff Tucker, explained the difference in a recent article, Recessions Typically Have Limited Effect on the Housing Market:

 “As we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what’s different about the housing market today. Rather than abundant homes, we have a shortage of new home supply. Rather than risky borrowers taking on adjustable-rate mortgages, we have buyers with sterling credit scores taking out predictable 30-year fixed-rate mortgages. The housing market is simply much less risky than it was 15 years ago.”

George Ratiu, Senior Economist at realtor.com, also weighed in on the subject:

“This is going to be a much shorter recession than the last one, I don’t think the next recession will be a repeat of 2008…The housing market is in a better position.”

In the past 23 years, there have been two national recessions – the dot-com crash in 2001 and the Great Recession in 2008. It is true that home values fell 19.7% during the 2008 recession, which was caused by a mortgage meltdown that heavily impacted the housing market. However, while stock prices fell almost 25% in 2001, home values appreciated 6.6%. The triggers of the next recession will more closely mirror those from 2001 – not those from 2008.

Bottom Line

No one can accurately predict when the next recession will occur, but expecting one could possibly take place in the next 18-24 months is understandable. It is, however, important to realize that the impact of a recession on the housing market will in no way resemble 2008.

How Property Taxes Can Impact Your Mortgage Payment

How Property Taxes Can Impact Your Mortgage Payment | MyKCM

When buying a home, taxes are one of the expenses that can make a significant difference in your monthly payment. Do you know how much you might pay for property taxes in your state or local area?

When applying for a mortgage, you’ll see one of two acronyms in your paperwork – P&I or PITI – depending on how you’re including your taxes in your mortgage payment.

P&I stands for Principal and Interest, and both are parts of your monthly mortgage payment that go toward paying off the loan you borrow. PITI stands for Principal, Interest, Taxes, and Insurance, and they’re all important factors to calculate when you want to determine exactly what the cost of your new home will be.

TaxRates.org defines property taxes as,

“A municipal tax levied by counties, cities, or special tax districts on most types of real estate – including homes, businesses, and parcels of land. The amount of property tax owed depends on the appraised fair market value of the property, as determined by the property tax assessor.”

This organization also provides a map showing annual property taxes by state (including the District of Columbia), from lowest to highest, as a percentage of median home value.How Property Taxes Can Impact Your Mortgage Payment | MyKCMThe top 5 states with the highest median property taxes are New Jersey, New Hampshire, Texas, Nebraska, and Wisconsin. The states with the lowest median property taxes are Louisiana, Hawaii, Alabama, and Delaware, followed by the District of Columbia.

Bottom Line

Depending on where you live, property taxes can have a big impact on your monthly payment. To make sure your estimated taxes will fall within your desired budget, let’s get together today to determine how the neighborhood or area you choose can make a difference in your overall costs when buying a home.



The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.Qu

Experts predict strong housing market for rest of 2019

Experts Predict a Strong Housing Market for the Rest of 2019

Experts Predict a Strong Housing Market for the Rest of 2019 | MyKCM

We’re in the back half of the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the predictions are for the remainder of 2019.

Here’s what some of the experts have to say:

Ralph McLaughlin, Deputy Chief Economist for CoreLogic

“We see the cooldown flattening or even reversing course in the coming months and expect the housing market to continue coming into balance. In the meantime, buyers are likely claiming some ground from what has been seller’s territory over the past few years. If mortgage rates stay low, wages continue to grow, and inventory picks up, we can expect the U.S. housing market to further stabilize throughout the remainder of the year.”

Lawrence Yun, Chief Economist at NAR

“We expect the second half of year will be notably better than the first half in terms of home sales, mainly because of lower mortgage rates.”

Freddie Mac

“The drop in mortgage rates continues to stimulate the real estate market and the economy. Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months…The benefit of lower mortgage rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity.”

Bottom Line

The housing market will be strong for the rest of 2019. If you’d like to know more about our specific market, let’s get together to discuss what’s happening in our area.

About the Boomerang Generation

Boomerang generation is a term used to describe the millions of young adults who, after graduating from high schoolresize or college and living on their own, return to the family home to live with their parents.

This ongoing trend occurs for a variety of reasons. Some young adults make the move simply because they want to, but most often it’s due to financial difficulties caused by things like job loss, a lack of financial skills, a relationship breakup, an inability to secure a high-paying job, increased debt, a lack of affordable housing, and costly student loan debt.

Recent studies suggest that young adults who have not completed college specifically are at an increased risk to boomerang back into the family home. So while college completion can lower their boomerang risk, high cost tuition and student loan debt can raise it again.

Sharing household expenses with parents provides adult children an opportunity to save money for their future while allowing parents an alternative to providing supplemental income to their children.

Reentering the home requires communication though and a great deal of thoughtful planning. It also requires young adults (and their parents) to change and adapt to new roles in the household as adults- no longer as children.

With the ultimate goal of financial independence, a predetermined plan should take into consideration the following:

By how much will household expenses increase with another occupant?
Where will the adult child be employed?
How much rent will the adult child be expected to pay?
How much will he put away into savings?
What rules might be implemented regarding risky social behaviors?
Who in the home will be responsible for which household tasks?
Will the adult child require a financial adviser, a credit counselor, a psychiatrist, or any other professional services?
How will the individuals within the home maintain their privacy?
Is this arrangement short or long term- what is the move out goal date?

Although these conversations may seem awkward or uncomfortable, communication is critical for the arrangement to be successful. Effective communication and planning will establish the boundaries and expectations for everyone involved so futures can be planned accordingly. Communication and planning can preserve the relationship between parent and child and pave the way for an adult child’s future financial success.


Building Home Equity

Because of depreciation, many assets lose value Home equitywhen you pay them off. Homes, however increase in value over time so building equity in your home is a great strategy for building wealth and financial security.


What is home equity?
Home equity is often considered a homeowner’s largest asset. It can be calculated by subtracting the total home loan(s) balance from the home’s market value. For example: if your current debt on your home is $200,000 and your home’s current market value is $250,000, you have approximately $50,000 in equity.

Why is home equity important?
Home equity is an asset so it’s part of your net worth. Having home equity can be extremely valuable as it can be used for:
– Making home improvements
– Purchasing another home
– As an emergency fund
– To pay down other high rate loans such as credit cards
– To invest

How is home equity built?
In order to build equity, a home’s loan balance must go down and the home’s value must go up.
To reduce loan balance:
– Make a large down payment
– Make extra loan payments
– Consider a 15 year mortgage vs 30 year
– Consider a refinance at a lower rate or for a shorter term

To increase the home’s value:
– Maintain the home properly
– Make high return on investment home improvements (indoors and outdoors)

Getting the Most from a Home Warranty

Unlike homeowner’s insurance that offers protection against perils such as weather and other natural disasters, Warranty househome warranties offer protection against major home system failures.

The protection of home warranties can offer homeowners peace of mind against major repairs and unforeseen expense by assigning the repair risk over to the warranty provider.

Resale homes, in particular are great candidates for home warranties as the used systems and appliances they contain already have wear and tear and often times limited life remaining.

Here are three important tips in getting the most out of a home warranty:

Know your coverage
Know what is covered and what isn’t. Home warranty coverages differ and the providers that offer them differ too. Most home warranties cover all major systems within a home including central heating and cooling systems, electrical components, plumbing systems, clothes washers/dryers, and kitchen appliances.
Home warranty providers offer coverage at an annual premium, but they also include deductibles and service call fees. Knowing what those costs are can help you to weigh the benefits of one plan over another.

Perform routine maintenance
Home systems must be “properly maintained” so knowing what a provider deems as proper maintenance is crucial in identifying any potential policy exclusions. Your maintenance performance as well as that of the previous homeowner before you will be evaluated by service technicians and relevant to your policy.

Choose a reputable warranty provider
Some warranty providers are prompt and professional and some are not. Researching a provider’s reviews as well as its service history is important to identify a reliable company. Home warranty providers typically have data available to reflect its performance and claim history. Use that data to compare and choose the provider that will offer you the peace of mind you deserve.

Is Mold Making You Sick

Mold is a type of fungus that grows in moist areas, both indoors and outdoors. For someone with a mold allergy, Moldyexposure to mold can cause the immune system to overreact resulting in uncomfortable symptoms.

The good news is that even if you have a mold allergy, mold is not likely to kill you. The bad news, however, is that it can make you extremely uncomfortable and potentially cause long term health problems such as asthma.

So… how do you know if mold is making you sick?

What are your symptoms-
Allergic reactions to mold are similar to those of other allergies and include symptoms like headache, sneezing, runny nose, throat irritation, itchy watery eyes, cough/congestion, skin rashes, and hives.

What are the conditions-
While mold is available year round, it’s more prominent during warm, humid conditions and is often found in wet or damp areas. If you have experienced any type of recent flooding, the conditions are ideal for mold growth which can happen very quickly. Any damp area within a home or commercial building should be properly cleaned and dried immediately.

Have you been tested-
Doctors can perform blood tests to look for antibodies in your immune system after exposure to mold. Skin tests are also available which include pricking or scratching the surface of the skin to identify mold allergies.

Many people can be exposed to mold with no effect, while many others can suffer significantly from its exposure. If you believe you or a family member may have a mold sensitivity or allergy, take precautions within your home by preventing the growth of mold.

– dry all wet areas immediately
– monitor indoor humidity levels and maintain sufficient air flow
– ensure proper slope and gutter drainage
– consider investing in mold resistant home products