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Off-Season Workouts – What Young Players Can Learn

January 7, 2018 / Tom Bonetto

Chicago Cubs outfielder Kyle Schwarber had a down year in 2017 – he even spent some time in the minors after having struggled during the summer.

After the season, Schwarber decided that he would do whatever he could during the off-season to prepare for the 2018 season – and it began by getting his body in the best shape possible.

His mornings begin in the gym and end with him swinging a bat. In between, his diet has morphed into the most healthy of his career.

I’d highly recommend you check out each video on the ESPN site here…..

The video/article gives perfect examples of specific drills that Schwarber does to get himself ready for the 2018 season.

Of course, Kyle is a professional athlete and has the time and resources to make this happen (and I completely understand that most youth and high-school players do not) – but don’t miss the point here.

Schwarber has a detailed plan and sticks to it months prior to the season. He’s set goals for himself and will not be denied.

It’s this mindset and willingness to plan ahead that will put him in the best position to succeed next season.

Do you have a plan to get ready for 2018? Strengthening, conditioning, flexibility, as well as skill related work?

There are plenty of options online to help you get started – you can click here for my Lending Coach site under the “Baseball” category to find more training related articles and blog posts.

2018 Housing Forecast – Sales and Appreciation

January 2, 2018 / Tom Bonetto

Now that 2018 is here, let’s take a look at what we can expect in the housing market. Experts are predicting some positive shifts moving into 2018, including an ease in the housing inventory shortage.

The latest report from realtor.com shows the market will begin to see more manageable increases in home prices and a modest acceleration of home sales. Analysts from the real estate listings website also predict Millennials will begin to increase their market share of homeownership in 2018.

Here’s the 2018 Housing Appreciation Forecast from the experts at the MBS Highway:

Here’s the forecast from the National Association of Realtors:

A few highlights:

Inventory shortages will drive the housing market

Low inventory will continue to push up home prices and potentially be a barrier for first-time homebuyers who struggle to save for a down payment. With that said, many low-down payment programs will help this segment.

Many homeowners will remodel rather than sell

In addition to higher housing starts, some experts are saying more homeowners will sell their homes and partially alleviate low inventory issues.

Some homeowners, despite having high confidence about being in a seller’s market, will continue to stay put. Instead of buying a new home, homeowners will refinance and invest in remodeling efforts to make their current homes feel and look brand new.

Builders will turn their focus to entry-level homes

Economists have said over and over again that increased residential housing starts, especially at the starter home level, are the key to bringing home prices down.

Housing starts have been well below the 50-year average of 1.2 million, but many economists expect builders to finally hearken to the call of first-time and lower- to middle-income buyers yearning for more affordable options.

If you have more questions about getting into that new home in 2018, don’t hesitate to contact me, as it would be my privilege to help!

Tips on Interest Rates and Mortgage Shopping

December 26, 2017 / Tom Bonetto

During the home buying process, one key component for borrower consideration is the mortgage interest rate. As many know, rates vary widely from lender to lender.

You might wonder if the lowest rate is the best way to go…but please know there are other factors to take into consideration besides an advertised rate.

With that in mind, here’s a list of tips to help give the buyer confidence as they enter down the path of home ownership or refinancing a current home loan. The single best thing a potential borrower should do is to reach out to a trustworthy mortgage lender!

Do Your Research as You Compare Lenders

Be wary of rates that seem too good to be true. If a rate is far lower than most others, there may be significant extra costs involved – remember, there’s no such thing as a free lunch!

Be skeptical of lenders that have little to no reputation. Check the web for testimonials, run some Google searches and find out mor about them and the firms they work with. Consider how many years the lender has been in business and any complaints or bad reviews online.

If your lender can’t provide you with a solid list of references and referrals, they might not be the right one for you!

Education is Key: Learn About Loans and Rates in Order to Compare Them

It’s important that buyers decide what their goals are regarding that home purchase and whether you need a fixed or adjustable interest rate. A fixed interest rate means that the rate stays the same throughout the life of the loan. An adjustable rate starts off lower and then increases gradually, usually annually, but not beyond a maximum amount.

Talk to trusted industry experts, then with family or friends about what types of home loans they have had and what their experiences were with each type of loan and lender to get a better idea of what might work well for your situation.

Look Beyond the Actual Percentage Rate

Learn about the Annual Percentage Rate (APR) and points. The APR is the cost of credit, expressed as a yearly rate including interest, mortgage insurance, and loan origination fees.

With that said, the APR isn’t necessarily the best benchmark to utilize – find out more about that here….there really are other factors that weigh into this equation.

It’s important to know whether points are included with the APR as it will affect your costs of the loan. A rate may be lower, but may include points, which you will pay for and should account for when comparing home loan interest rates.

Look into other fees that are included with the loan. These might include Lender Fees, Appraisal Fee, and Title Services Fee to name a few.

In Conclusion

Taking the extra step to educate yourself on interest rates and your potential lender will really help you gain a better understanding of the process and options available.

I would be happy to give you the tools and information you need to make wise choices during your home buying journey. Got questions? Don’t hesitate to reach out to me, as I’d be happy to answer any questions as you might have!

Down Payment Strategies for First-Time Home Buyers

December 18, 2017 / Tom Bonetto

For many would-be buyers, the down payment is the only thing keeping them from owning a home. Most have a good paying and consistent job – some are even working to pay down debt.

Right now, mortgage rates are remarkably low, home prices have been increasing steadily, and rental rates are getting out-of-hand.

With that said, it’s always best to first reach out to an experienced lender to find out more about the different options available.

Here’s a link to a great NerdWallet article from Hal Bundrick that outlines some strategies to break down this home buying barrier.

It doesn’t always take 20% down

If you’re a first-time home buyer, the down payment hurdle you have to clear may be quite a bit lower than you think. Traditionally, lenders have asked for 20% down, but there are many, many low down payment options are available, especially to first-time buyers.

Mortgages guaranteed by the Federal Housing Administration, Department of Veterans Affairs or Department of Agriculture can be “no-to-low” down payment loans.

In fact, mortgages backed by the VA and the USDA — for those who qualify — usually don’t require a down payment at all. A funding fee is charged on VA loans, but even that can be rolled into your monthly loan payment.

FHA-backed loans are available with as little as 3.5% down. With that said, buyers will have to pay mortgage insurance to help lenders defray the costs of loans that default.

Conventional loans, which aren’t backed by the government, also offer low down payment programs to first-time buyers. In, fact, down payments of just 3% are common, especially if you are a first-time buyer. Again, buyers really should reach out to lenders that understand these programs and how they work.

Find out more here:…Know Your Down Payment Options: From 0% to 20%

Family down payment gifts

Getting help from family members might be another way to go.

If you’re getting a cash gift for down payment, you’ll want to be sure that you “receive” your cash gift properly. Should you receive your gift improperly, your lender is likely to reject your home loan application.

It’s imperative, therefore, that you follow the rules of cash-gifting for a home.

The down payment gift rules are (1) the gift must be documented with a formal “gift letter”; (2) a paper trail must be shown for the gifted monies as they move from the giver’s account to the home buyer’s account; and (3) the gift may not be a loan-in-disguise. Home buyers are permitted to accept up to 6% of a home’s purchase price in the form of a cash down payment gift.

Using retirement accounts

If you have a retirement funds set aside, you should be able to tap a portion of it to help with the down payment. Employer-sponsored 401(k) plans often allow for penalty-free hardship withdrawals or loans.

One option used by many with a 401k is to take out a loan. Generally, your loan can be up to $50,000 or half the value of the account, whichever is less. As long as you can handle the payments (and yes, you have to pay back this loan), this is usually a less expensive option than a straight withdrawal. Though you will pay interest, you won’t pay taxes or penalties on the loan amount.

Contact your 401(k) plan administrator to find out more.

A few things to know about 401k loans:

Since you’re incurring debt and will need to make monthly payments on the loan, your ability to get a mortgage may be affected.
The interest rate on 401k loans is generally about two points above the prime rate. The interest you pay, however, isn’t paid to the company – it goes into your 401k account.
Many plans give you only five years to repay the loan. In other words, if you borrow a large amount, the payments could be substantial.
If you leave your company, you may be required to pay back the outstanding balance within 60 to 90 days or be forced to take it as a hardship withdrawal. This means you’ll be hit with taxes and penalties on the amount you still owe.
If payments are deducted from your paycheck, the principal payments will not be taxed but the interest payments will. Since you’ll be taxed again on withdrawals during retirement, the interest payments will end up being double-taxed.

State and local down payment assistance

There are programs in every state, implemented by government agencies, nonprofits, foundations and even employers. Assistance can have a geographic focus as wide as the nation or as narrow as a city — all the way to hyper-local initiatives targeted as tightly as neighborhoods, and even house by house.

Down Payment Assistance (DPA) programs are designed to make new homes affordable for low to middle income buyers. These mortgage programs can be used whether you are a first time buyer or fifth time buyer (unless there is a state specific program that sets its own rules).

In general, it’s good to keep in mind that many of these programs are government based. Stipulations may be placed on your purchase like, a requirement that the unit remains owner-occupied or when you decide to sell the property or you may only be able to sell it to another qualified low to moderate-income buyer. Also, the interest rates for these programs are generally higher than other options.

Programs change often; they’re funded, defunded and sometimes re-funded.

Going old-school and saving

There’s always the spend-less-than-you-earn-and-save-it strategy to building a down payment fund.

More than likely, it may take a combination of strategies to get you into a home with a decent down payment — and still have a little left over to cover those unexpected home-ownership expenses. Make sure to reach out to me for more information!

Both Buyer and Seller Confidence Is Up: Now is a Great Time to Make That Home Purchase

December 11, 2017 / Tom Bonetto

Are you thinking of buying a home, but not sure if now is the right time to become a homeowner? It’s easy to dream about owning that new place….but it’s not always easy to know if your timing is on the mark.

The Data

New data shows rising confidence from buyers and sellers alike.

More players on either side of the residential real estate market feel that the time to act is now.

Knowing that many want to pull the trigger on a home purchase or sale can inspire others to do the same.

The link below is from Harvard University’s estimates for home prices in 2018 – I’d invite you to check it out…

Harvard University research: the future of home prices in 2018

Right now, it’s important to learn the facts about what you can afford and the mortgages available to you.

Find out more here from The Mortgage Reports and Erik Martin

Now IS the time, say 77 percent of Americans

Per Martin’s article, a recent survey by the National Association of Realtors (NAR) yielded some very interesting trends:

77 percent of people feel that right now is a good time to buy a home; 48 percent believe this strongly
62 percent of renters believe that now is a good time to purchase a home. That’s up from 52 percent tallied last quarter and 60 percent one year ago
80 percent of respondents who currently own a home, those older than age 55, those with incomes in excess of $100,000, those who live in rural areas, and those in the South and Midwest think that now is a good time to buy a home
78 percent think it’s currently a good time to sell a home. That’s up from 63 percent measured one year ago
Those owning in the West (83 percent) are most likely to believe that now is a good time to sell a home

Other reasons why confidence is up

The Mortgage Reports’ Martin also states that Robert Johnson, president/CEO of The American College of Financial Services, points out that there’s another reason people feel more confident about buying or selling today.

Image source: NAR and The Mortgage Reports

“They feel wealthier because the stock market has gone up over the past 10 years,” he says. “This gives them confidence that makes them believe now is a good time to buy or sell.”

Martin states that another factor is at play, too.

“Perhaps most significant for buyers is that interest rates have been near historically low levels for an extended period of time,” Johnson notes. “Many buyers fear that rates are likely to rise in the future. Thus, they believe that now is a good time to buy. They want to make a purchase before rates rise.”

A Call To Action

The news that more owners think now is a good time to sell should be music to the ears of would-be buyers.

“This could help loosen up inventory. It’s another reason to be optimistic, as housing supply continues to be tight in many markets,” says Jessica Lautz, the National Association of Realtors’ Managing Director.

She notes that many sellers will need to become buyers themselves after unloading their home. The fact that buyer confidence is up can make them feel more secure about selling and then purchasing.

Next Steps

To improve your chances of buying a home sooner, Lautz suggests a few tips.

“You want to get your DTI — debt to income ratio — down,” she says. DTI is a your total amount of recurring monthly debt payments, including credit cards, student loans, auto loans and mortgages, versus your gross monthly income.

“Many lenders prefer a DTI lower than 43 percent. You can lower your DTI by increasing your income and reducing outstanding debt.

“Also, check your credit report and make sure there are no surprises there. Correct any errors you see,” says Lautz.

“Be sure to consult with experts you can trust. Ask your Realtor and mortgage professional about affordable loan programs in your local community you may be able to qualify for,” she adds.

Final to-dos

In addition, be patient and realistic.

“Don’t rush into any decision you’re not sure of,” cautions Lautz. “Buying a home takes time. Make sure you look at prospective neighborhoods carefully and expect to have competition for that perfect home.”

Lastly, be prepared to make sacrifices and compromises.

“We often find that recent successful home buyers have to compromise on one or more things, including location, price or size of the home,” she says.

The Lending Coach