Mortgage Applications on the Rise

  Mortgage rates have bumped up to the highest they’ve been this year, which is effecting how people react to the market.  Those that were on the fence have decided to strike while the iron is hot before it gets any hotter.  The highest increase of interest rates this year has caused an influx of mortgage and refinance applications. 

     Seasonally adjusted, mortgage applications have increased 8.4 percent, refinance applications by 7 percent and applications to purchase a home have gone up 10 percent, based on a recent article on CNBC.com. Traditionally an increase in rates shows a slight decline in applications but, in this case, it breaks a streak of weekly declines we’ve seen throughout May.  The average rate on a 30 year fixed loan is about 4.17%, the highest since November.  Job growth is credited for supporting the home buying market.

     Higher rates make home-buying more expensive, but buyers on the fence are making acting now before rates move even higher.  The market is expected to cool down after this initial sharp jump, but rates aren’t predicted to get any lower.

Weekly Mortgage Applications Jump as Rates Surge | CNBC.com via Reality Check 

Work Smarter, Not Harder: Part 2

     Whether you’re going for a conventional loan or FHA, it costs time and money to find the perfect house.  Last week I shared a tip on how to spot asbestos siding before spending money on an inspection.  This week I’ll share a few more things to look for and what it could mean for your contract before shelling out a penny.

     Lead-based paint is found in almost all older homes and may be present in any home built before 1978.  It peels in a very specific way, with vertical and horizontal peeling, creating peeling “squares.”  In most cases it will be painted over, which is a perfectly safe and legitimate way to mitigate the problem.  In an “as is” sale, such as a foreclosure, any exposed lead-based paint will not pass inspection.

     Any peeling paint or wood rot on the exterior of the home won't pass an inspection, either.  If it is very minimal, it may or may not be noted on the inspection, but is an inexpensive fix.  Repairing the peeling paint or wood rot on the exterior will be a requirement for any FHA loan.

          Seek out the hot water heater in the house.  Before you move into the home, purchase a pan and place it under to see if there are any leaks.  This is especially important if it’s located on an upper floor because any leaks will tear through the ceiling quickly.  Check for water damage indicated by dark spots showing on the floor or ceiling.

     Some of these things may seem like plain common sense, but as a potential buyer, it’s hard not to get excited when looking at a home.  Focus on the practical first, then start imagining your life within those walls once they meet your (and your bank’s) criteria.