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July 16, 2020August 4, 2020

Mortgage Secret That Could Save You Thousands

[CAUTION: Before you start making that extra payment, you’ll want to make sure it’s allowed. Some lenders either don’t facilitate the process or don’t credit the payment more than one time per month. Many lenders decide to hold partial payments in an account until the rest of it is received.]

Should you be refinancing right now with sub-3% rates? Probably. But are there other ways to save on your mortgage that you might not know about? Definitely. A little-known mortgage payment trick could save you thousands over the life of your loan.

So what’s the big secret? Paying your mortgage twice per month.

We know what you’re thinking: “How does paying double save me money?” Let us explain. Paying twice per month doesn’t mean making the entire monthly payment twice. It means paying half of the total every two weeks.

“The practice is called bi-weekly mortgage payments, a strategy where mortgage loan customers pay their mortgage loan every two weeks, instead of once a month,” said Experian. “The idea is to chop down your mortgage payment more quickly, and in the process, lower the amount of interest you pay on your mortgage overall.”

So how does paying every two weeks cut down on your total amount and save you big time? When you pay monthly, you make 12 payments per year. Pay every two weeks, and you actually end up making 13 full payments. And that one extra payment is directed toward the loan’s principal.

“Since the homeowner is reducing the amount of the loan balance quicker, they are also reducing the amount of interest charged over the life of the loan,” said MortgageCalculator.org.

What to ask your lender

Before you start making that extra payment, you’ll want to make sure it’s allowed. Some lenders either don’t facilitate the process or don’t credit the payment more than one time per month. “Many lenders decide to hold partial payments in an account until the rest of it is received,” said MortgageCalculator.org.

Other companies may allow bi-weekly payments but charge a fee. “Rarely, some lenders will charge you to make biweekly payments, since it’s essentially twice as much work for them to process,” said Magnify Money. “If your lender does this, it may be better to stick with your normal monthly payment plan. If you want to make biweekly payments, you can still do so manually for free by setting aside a portion of your paycheck on your own, paying your normal monthly payment, and then submitting an extra payment once per year.”

How much can you save?

This scenario illustrates the type of long-term savings that make bi-weekly payments attractive. “Say you have a 30-year fixed-rate mortgage for $250,000 with a 4 percent interest rate. Your monthly payment would be about $1,194, and the total interest paid over the life of the loan would be $179,673,” said Bankrate. “In the same scenario, using a biweekly mortgage calculator, your total interest paid over the life of the loan on a biweekly plan is $150,450.40. That means you’d save more than $29,000, and pay off your loan in 25 years instead of 30.

Another alternative

If making a payment every two weeks isn’t feasible, consider a lump sum payment once a year. Maybe you get a Christmas bonus, a merit bonus, or a tax refund. Using this windfall and allocating the equivalent of one mortgage payment would make a huge dent in your principal. “By paying one extra payment of $1,285.33 each year” on a “25-year loan of $250,000 with interest at 3.75%…the loan amortization schedule with extra payments shows that you would repay the loan 2 years and 11 months earlier and save $17,381.35 in interest,” said Interest.com.

Message me if your thinking about buying or selling a Fort Collins or Loveland home at m.me/EdPowersRealEstate

Ed Powers Real Estate 970-690-3113 ed@EdPowersRealEstate.com www.EdPowersRealEstate.com

July 15, 2020July 20, 2020

Preparing Your Home for Sale During the Pandemic

Despite the ongoing coronavirus pandemic, the real estate market must go on. Homeowners still need to sell, house-hunters still need to buy, and real estate agents still need to make a living. But the typical home selling process involves frequent contact with strangers—which is not recommended during this time of social distancing.

By now, you’re probably getting pretty good at making adjustments in your everyday life to protect the health and safety of yourself and those around you. Along the same lines, there are steps you can take to show your home to potential buyers without risking your health or hurting your chances of a sale. Here are some tips to prepare your home for sale in the coronavirus era!

Get Help with Staging

According to The Mortgage Reports, staged homes sell an average of 73% faster than non-staged homes. Staging involves eliminating clutter, incorporating decorative elements, and adjusting the layout of your furniture to improve the flow of your home. The overall goal is to make your home appear bigger, brighter, and more inviting to potential buyers. Fortunately, some staging steps are easy to tackle on your own, such as cleaning, decluttering, and depersonalizing. These steps will help buyers picture themselves living in your home instead of feeling like intruders in someone else’s space.

When it comes to décor, however, it’s best to hire a professional. An interior designer can help you stage your home to effectively show off key aesthetic elements as well as the features that make your space functional. You can easily find freelance interior designers on job boards like Upwork. To keep yourself and your designer safe, make sure they have adopted special procedures to conform with CDC recommendations for COVID-19.

Don’t Neglect Your Curb Appeal

Don’t let your home preparations stop at your front door! Even if buyers aren’t visiting your home in person, they will still want to see your home exterior. In fact, a picture of your home exterior will likely serve as the bait that draws potential buyers to your online listing. Don’t neglect your curb appeal!

Tool Review Lab recommends several ways to boost your curb appeal—even if you’re on a tight budget. For example, you could power wash your front porch and siding, install a new mailbox, hang modern house numbers, and do some basic lawn maintenance.

When it comes to your front yard, make sure your lawn is lush, freshly mowed, and free of weeds and dead spots. Consider planting new flowers and remember to weed and mulch the beds to keep everything looking neat. You may even want to hire a professional to give the trees and shrubs around your yard a good trim.

Consider Safer Showing Alternatives

While it’s clear that hosting an open house is off the table, you may also want to limit in-person showings. Offer your buyers no-contact alternatives! Shoot a video walkthrough of your home and upload it to your online listing so buyers can tour your home virtually. You could even schedule live video-chat showings with interested buyers so they can ask questions about your home or request specific shots of rooms or features.

Since buyers will form a first impression of your home based on your listing, make sure it does your home justice. Write a strong listing title, include a detailed and exciting description, and post plenty of high-quality photos. A great real estate agent can help you craft your listing so that it properly showcases your home’s best features. Your real estate agent can also help you navigate virtual showings! Take the time to find a professional who is well-versed in using online tools to connect with buyers.

Selling a home in the age of the coronavirus is bound to be a bit of a challenge. Thankfully, the real estate industry has been quick to adopt virtual alternatives to open houses and buyers are happy to continue their housing hunt online. With some special attention to staging and a solid virtual presence, you’ll have no problem closing a sale during the pandemic!

Message me if your thinking about selling your Fort Collins or Loveland home at m.me/EdPowersRealEstate

Ed Powers Real Estate 970-690-3113 ed@EdPowersRealEstate.com www.EdPowersRealEstate.com

July 14, 2020July 15, 2020

Things You Can Do to Help Your Property Appraise

When homeowners begin to consider refinancing an existing loan, the topic of property value is soon to come up. Refinancing an existing conventional loan means there are actually two different approvals. One for the borrower and one for the property. The borrower’s income, credit and employment will be evaluated among other things and the property must also pass muster.

First, the property must be in good condition with no deferred maintenance. While the appraiser does not perform a full physical inspection, that’s the job for a licensed property inspector, but can make note of any noticeable issues with the home. A sagging roof or foundation cracks come to mind. That said, the current property value must also be in line with the rest of the neighborhood. When a full appraisal is needed, the appraiser first does a little homework at the office before visiting the property. A bit of research is performed identifying homes in the area that have recently sold, primarily within the past six to twelve months. The appraisal is important to the lender because in essence the home is the lender’s collateral.

Most conventional loan programs allow for the loan-to-value, or LTV, with a refinance be as high as 90% of the current market value of the property for an owner-occupied home. If the value exceeds this 90%, the loan might not make it through the approval process. If for example the LTV is 92%, the borrowers must decide whether or not to move forward. Moving forward means paying the current loan balance down to the 90% level or requesting a second opinion from another appraiser.

With a purchase transaction, the appraiser has a head-start. The value of the property is the lowest the sellers were willing to accept meeting the highest price the buyers were willing to pay. The appraiser then begins the process with this information. With a refinance however, there is no such sales price. The appraiser must begin with recent sales in the area. What is the value the appraiser must look for?

On a mortgage loan application there is a space where the owner’s opinion what the current value should be. This is based upon knowledge of similar homes that have recently sold in the neighborhood. That’s a starting point. But if value may be a concern, there are some things homeowners can do to boost the value.

The first is to pay attention to curb appeal. How does the property look from the street? This “first impression” can play a key role in helping the property appraise. Is the lawn trimmed? Trees cared for? Is the property clean? Maintaining the landscaping and physically cleaning the exterior will help the property shine.

Next, the interior needs some treatment. The floors should be scrubbed and polished. New paint will help. Do the appliances sparkle or do they need a little love? You can give the interior of your home a thorough cleansing, but many choose to hire a professional team to give the inside a fresh, new look.

Finally, let the appraiser know of any recent ‘for sale by owner’ transactions. Such sales won’t be listed in the local multiple listing service. Appraisers count on this sales data to help arrive at a final value. A private sale could help boost the value of your home, so if this is the case, it’s important to point out that property to the appraiser.

July 13, 2020July 16, 2020

Support Anti-racism With Your Home Buying Or Homeowner Dollars

The country was rocked by the murder of George Floyd on May 26, and protests have been erupting all over the world ever since. In the aftermath of Floyd’s death, many companies have spoken out to decry racism and commit their dollars—and their activism—to equality.
In that vein, we’re posting a list of companies who have been outspoken in their support of racial equality. For the purpose of this article, we’re focusing on those that are in some way related to buying or selling a home, renovating, decorating, and even celebrating a purchase or home-related milestone. But you can track corporate donations and see a growing list of companies across nearly every type of industry who have taken a stand here.
This is not meant to be a comprehensive list, and we invite you to add anyone we missed in the comments.
Look to your lender Choosing between financial institutions for a purchase or refi? “Bank of America pledged $1 billion over four years to help communities across the country address economic and racial inequality and said the commitment
CONTINUED >>>

July 11, 2020July 11, 2020

June Real Estate Roundup

Mortgage Rates
U.S. averages as of July 2020:
30 yr. fixed: 3.13%
15 yr. fixed: 2.59%
5/1 yr. adj: 3.08%

Freddie Mac’s results of its Primary Mortgage Market Survey® shows that “After the Great Recession, it took more than ten years for purchase demand to rebound to pre-recession levels, but in this crisis, it took less than ten weeks. The rebound in purchase demand partly reflects deferred sales as well as continued interest from prospective buyers looking to take advantage of the low mortgage rate environment.”

• 30-year fixed-rate mortgage (FRM) averaged 3.13 percent with an average 0.8 points for the week ending June 25, 2020, down from last month when it averaged 3.15 percent. A year ago, at this time, the 30-year FRM averaged 3.73 percent.

• 15-year FRM this week averaged 2.59 percent with an average 0.8 points, down from last month when it also averaged 2.62 percent. A year ago, at this time, the 15-year FRM averaged 3.16 percent.

• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent this week with an average 0.5 points, down from last month when it averaged 3.13 percent. A year ago, at this time, the 5-year ARM averaged 3.39 percent.