2018 Tax Reform Mortgage Updates

Businessman Notepad Property Value ConceptThe mortgage tax laws have been reformed for 2018. Here are some highlights to be aware of:

  • Interest from Home Equity Lines are no longer tax deductible
  • PMI will not be tax deductible
  • State/local/property taxes are limited to a maximum aggregate of $10,000
  • Mortgage interest deductions are limited to $750,000

If you have a HELOC Second Mortgage:
Prime is now up to 4.5% (compared to 3.75% a year ago) and the Federal Reserve is
expecting to raise short-term interest rates potentially 3 times in 2018. Now might be the time to roll your HELOC into a fixed mortgage with a refinance while first mortgage rates are still low!

Need more information? Contact Sibcy Cline Mortgage Services.

Have Student Loans? Yes, You Can Buy a Home!

Letter A, Report Card, Test Results.Thought about buying a home but are fearful that student loans will cause a problem with obtaining a mortgage? There is good news for you: Freddie Mac and Fannie Mae have loosened up 2018 guidelines on qualifying for conventional mortgages with student loans.

If you did not qualify for a mortgage in prior years, you may be able to qualify now with your income-based repayment schedule for your student loans.

Contact Sibcy Cline Mortgage Services to get pre-qualified today!

Creative Ideas to Save for a Down Payment for a Home

SaveMoney_DownPayment.jpgThinking about buying a home but do not have any savings for a down payment? Make a conscientious decision to start saving for that home. Here are some creative ways to save money:

Use Direct Deposit
Have money directly transferred from your pay check into your savings. You will not spend what you do not see in your checking account.

Monitor Daily and Weekly Expenses
Adjusting little spending habits can result in big savings. If you have a habit of buying coffee, lunch or even snacks from the vending machine, consider cutting those expenditures. That $2 (or more) cup of coffee ends up costing $10 in a work week or almost $500 in a year. Lunch out Monday through Friday at $7 is over $1800 in a year. Brown bag lunches will bring in a huge savings towards that down payment.

If you belong to an expensive gym, consider finding a more affordable membership or exercise for free in a park.

Loose Change
An easy way to save money is to empty your wallet weekly of loose change and dollar bills. Keep the money aside and turn it into savings every month or so.

No-Spend Day – A “Spend Diet”
Can you make it 24 hours without spending money? Challenge yourself! And if you are up to it, perhaps schedule several no-spend days throughout the month.

Avoid the ATM
If you tend to be a cash spender, allot yourself an allowance and stick to it. Some people like to take their cash and divide the money into envelopes – grocery, gas, entertainment, etc…

Stop Using Credit Cards
By always paying by credit card, you may lose track of how much you are actually spending. If you do prefer to pay via a credit card, keep a tally of how much you are spending on the side of an envelope that holds all of your receipts.

How Much Is Your Entertainment Costing You
If you monitor your budget, you should be able to easily analyze how much money you spend on entertainment: restaurants, happy hours, movies, concerts, cable television and such. Consider cutting this budget to save money.

Curtail that movie habit and enjoy films on Netflix and save about $500 for the year (two people going to the movies twice a month at $10 per person with no popcorn.) Or, if watching films in the theater is a passion – consider giving up the expensive concessions! Cut the cord with cable – and start saving your money.

If attending live performance theater is important to you, consider saving cash by sitting in less-expensive seats. (If you volunteer to be an usher, you can see performances for free!)

Plan social events that are free. Go hiking in a park with friends. Tour a museum on the free day. Take advantage of free outdoor concerts. Invite friends to socialize at your home and provide your own entertainment – cards, board games or movies. Read more from The Simple Dollar blog article titled 102 things to do on a money-free weekend.

Use the library and read books and enjoy DVDs for free. (Or swap books and DVDs with friends.) Cancel magazine subscriptions. Go to the library to read magazines instead.

Gifts and Windfalls
Giving gifts can add up. Set limits on your budget. Purchase gifts on sale by planning ahead. If you are on the receiving end of a gift (and if it is appropriate) ask for a “house funding” gift in lieu of a sweater or other item.

If you receive a windfall of money (work bonus, tax refund, etc…), be sure to add that unexpected money into your savings.

Avoid Big Purchases
Although you may want a new 50-inch television, if your current TV is in working order, don’t buy it. The same goes for your car. Instead of a luxury hotel for a week of vacation, consider a “stay-cation” and have lots of fun and no hefty hotel bills.

Change Shopping Habits
Be a smart shopper. Do not buy things on impulse. Look for sales and use those coupons. If you are tempted by store email lures, unsubscribe to them. If you have online retail accounts, remove your credit card numbers. Place a sticky note on your credit card that says, “Do I really need this?”

When going shopping, make a list and stick to it. Another way of looking at a purchase is to ask yourself: “How many hours do I have to work to pay for this item?”

If you tend to be a stress spender – find another way to decompress. Do yoga or meditate at home. “Pin” things on Pinterest instead of actually buying them.

A Side Gig! Earn Extra Cash
Consider side jobs to save money. Do you have a hobby or skill for which people are willing to pay? Earn cash by becoming a dog walker – and get exercise while earning money. House sitting is another way to earn money.

Have Stuff?
Sell your unwanted or needed items on Ebay or Craig’s List. Read more about selling unwanted items.

Drive and Make Money
If you have a car that qualifies, you can make money by turning it into a mobile billboard via a car wrap. Or, speaking of cars, become an Uber or Lyft driver!

Move Back Home
If your parents are willing, you may want to consider moving back home in order to save on rent and utilities.

Research Lender Programs
There are programs that offer lower or no down payment on homes. Sometimes these programs involve certain circumstances such as a cap on income or being a first-time buyer. A few programs will require a length of residency in the home in order to have the assisted down payment forgiven. It’s always a good idea to check with your mortgage loan officer to see what programs are available.

By following these creative tips, you should be saving money. In no time, you will have enough funds for the down payment on a home!

 

Sibcy Cline Mortgage Services has a New, Mobile-Friendly Web Site!

SCMortgageWebsite.pngSibcy Cline Mortgage Services has transformed its website with a new look that is also mobile optimized. The site looks very fresh and current. Here is what you will find:

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Mortgage Calculators
Five easy-to-use calculators are featured on the site: How Much Can I Afford; Monthly Payment; FHA Monthly Payment; Refinance; and Rent vs. Own.

Built especially for Sibcy Cline, these calculators are some of the most comprehensive tools on the market providing not only just a principal and interest payment, but a full PITI (principal, interest, taxes and insurance) including mortgage insurance if the down payment is less than 20%.

The Rent vs. Own calculator includes average rate of return, inflation, opportunity costs and closing fees into its design and is updated to stay current. This is a great tool for current renters.

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Shop Local
Sibcy Cline is all about being local and 100% of Sibcy Cline Mortgage Services’ loan process is local. The interactive regional map allows potential home buyers to easily find a loan officer in their own neighborhood who in turn will refer those buyer leads to our local Sibcy Cline agents.

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Loan Product
Browsers on the site can learn all about the various loan products available from Sibcy Cline Mortgage Services. They can “like” the products of interest and opt to have more information emailed to them.

 

The Surprising Benefit that Comes with Higher Mortgage Rates

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Homebuyers in today’s market definitely face some shifting conditions. The improving economy is bringing mortgage rates up from some of the lowest levels ever observed in the housing market, and more buyers are creating increased competition for a limited inventory, driving prices up as well. This declining affordability may actually be good news for buyers because it will encourage a major change among lenders.

How is That Helpful?
The good news for buyers is that as mortgage rates rise, it becomes more difficult for current homeowners to justify refinancing their mortgages. When rates were low – and they hovered in the three percent range for almost all of last year – it encouraged owners to cut their rates, keeping lenders in a steady mortgage environment without broadly making home loans more available to new buyers. As rates rise, lenders will see their origination numbers drop off, and experts have long predicted that this will lead to an increase in mortgage credit availability for buyers.

With the stronger economy bringing more buyers to the fore, it’s also important to note that even with higher rates and prices, today’s affordability is still competitive with pre-recession norms.

Loosening Credit in Action
The latest industry data shows that mortgage credit is becoming more widely available, in a way that it largely hadn’t before, according to the Mortgage Credit Availability Index from the Mortgage Bankers Association. In January – the most recent month for which data is available – the MCAI (Mortgage Credit Availability Index) rose to a reading of 177.1, up from 176 in December. That was the fifth straight month with an increase in the overall number.

In the recent past, credit access for jumbo loans (those much bigger than the national median home price) has been the biggest driver of these increases, which leaves many average Americans on the outside looking in. And while lenders continue to cater to more affluent consumers by easing that kind of credit access, availability for conventional loans is now creeping back upward on a consistent basis as well.

While mortgage credit availability will likely never return to the free and easy days before the recession (nor should they), continual easing of access will allow more buyers to come into the market and, potentially, encourage more real estate sales.

Interested in becoming pre-qualified for a mortgage loan to see how much home you can afford to purchase? Contact Sibcy Cline Mortgage Services.

Brought to you by HMS Home Warranty.  HMS is an industry leader with over 30 years of creating success for clients and providing peace of mind for customers.  To learn more click www.hmsnational.com.

Should Buyers Worry about Rising Mortgage Rates?

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Over the course of the year, mortgage rates hovered mostly in the mid- to low-3 percent range, giving consumers historically strong affordability for several months, even as home prices rose. But in recent weeks, real estate professionals – as well as buyers and sellers – have likely noticed mortgage rates spiking to 4 percent and beyond. There’s now concern among all those groups that this trend will continue for some time to come, and potentially reduce the number of real estate sales to start the new year.

The winter months are slow enough as it is for many agents, without the potential concern people may have when they see rates have risen nearly a full percentage point in a month and a half, according to CNBC. Already this seems to have reduced some sales numbers because people may not think they’ll be able to afford the higher rates. That might be particularly true among first-time buyers who don’t have a lot of experience dealing with the housing market.

What’s the perception?
To be fair to concerned consumers, rates have risen quickly and sharply, disrupting nearly a full year of rates being below 4 percent, the report said. In the past, even minor rate hikes have led to some reduction in mortgage activity nationwide – more often for refinances than purchases – but many industry insiders attributed that to the fact that so many people got accustomed to rates being near historical lows. That same issue may be true both now and in the near future.

“It’s kind of sad because you’re helping out a first-time buyer who is in need of these low rates and doesn’t have the personal liquidity to offset if the rates rise,” one lender in New York City told CNBC. “One is on the bubble, but one is almost a dead deal.”

What’s the reality?
However, it’s worth noting that the difference in actual monthly costs for a mortgage with even a 4.2 percent rate versus one in the 3.5 percent range isn’t actually that much money, according to the National Association of Realtors. Of course, that money adds up over the course of a year – and certainly across the life of a loan – but these higher rates don’t instantly make a mortgage unaffordable.

Moreover, if consumers are worried about paying more due to high rates, they should keep in mind that neither rates nor prices are likely to return to the levels seen in early 2016 any time soon. Both are more likely to keep rising than to retreat, and as a result the most affordable time to buy a home is “as soon as possible.”

Working with an agent throughout the sales process can go a long way for would-be buyers, particularly those who want to own for the first time. Experienced real estate pros can carefully explain the issues related to affordability that are likely to crop up over the next several months and beyond.

Talk to a Sibcy Cline Mortgage Services’ loan officer about mortgage rates.

Brought to you by HMS Home Warranty.  HMS is an industry leader with over 30 years of creating success for clients and providing peace of mind for customers.  To learn more click www.hmsnational.com.