One of the most important documents in the home buying process

52807763 - man to sign a real estate contractNo one likes to read mounds of paperwork when buying a home. But there’s one form you definitely don’t want to gloss over. The closing disclosure form is one of the most important documents you’ll review when buying a home. It explains the terms and costs of your mortgage.

Lenders must provide the closing disclosure form — CD for short — at least three business days before closing. The CD is the final report of the fees you will pay on your home loan. It’s a follow up to the good-faith estimate or loan estimate — LE for short — that was provided as an estimate when you first applied for your mortgage.

Here’s a sample of the closing disclosure form. Before August 1, 2015, the CD was known as the HUD-1 settlement form. The CD is designed to be a new and improved version of the HUD-1. It was created to be less confusing and easier to understand. It’s also required that it be provided to home buyers three days before closing, compared with the day of closing for the HUD-1.

It’s extremely important that you read your closing disclosure form and compare it to what you saw on the loan estimate. In most cases, the fees and terms of your loan should be close or the same as when you first applied for your loan. In other cases, there will be some significant differences, which can be explained by your loan officer. Here are some other items the Consumer Financial Protection Bureau recommends you should review:

Loan amount: This is the total amount you’re borrowing.

Interest rate: Make sure the rate is the same as the rate you locked in.

Monthly Principal & Interest. This is the amount you’ll pay each month in principal and interest only. This amount does not include homeowners insurance, mortgage insurance, homeowners association dues (if applicable) and property taxes. Those are included in Estimated Taxes, Insurance & Assessments.

Estimated Total Monthly Payment: Your total monthly mortgage payment, with principal, interest, insurance and taxes.

Loan term: The term of your loan in years. The most common loan term is 30 years.

Loan type: Check to see that your loan type (fixed rate or adjustable) is correct.

Cash to close amount: This is how much money you need to bring on closing day in down payment and closing cost funds.

Closing costs: Generally, home buyers pay an estimated 3 percent to 4 percent of the home’s sale price in closing costs.

Estimated total monthly payment: Your monthly payment may change over time as your property taxes and homeowners insurance costs increase. If your loan has an adjustable rate, your monthly payment also can change when the loan rate adjusts.

Once you’ve received your closing disclosure, it’s important to take the time to review it and ask any questions. Don’t hesitate to ask questions! At Primary Residential Mortgage, we believe home buyer education is extremely important. Asking questions is the key to becoming an educated home buyer and feeling comfortable with your purchase.

Is a fixed-rate home loan or ARM right for you?

90443453_MWhen buying a home, you have the option of selecting a fixed-rate home loan or one with an adjustable rate. ARMs are attractive to some home buyers today because the introductory rates — and monthly payments — often are lower than for fixed-rate loans.

With a fixed-rate mortgage, your rate remains the same over the entire term of the loan. With an ARM, you get a fixed rate for 3, 5, 7 or 10 years — depending on the type of ARM you choose — before the mortgage becomes adjustable. ARM rates can go up or down each year after the introductory period based on a particular index value. Most ARM rates are based on the Cost of Funds Index (COFI), the one-year Treasury yield or the London Inter-bank Offered Rate (LIBOR).

With an ARM, you could save money each month in the early years of the loan because the introductory rate on ARMs is lower than with fixed-rate loans. But you run the risk of having your mortgage rate increase after the introductory period ends. Most people who take out adjustable-rate mortgages are betting that they will have sold their home before the rate adjusts.

Still, there’s a chance you may still be in the home at that point. According to the National Association of Realtors, the average homeowner remains in his or her home for 10 years. That’s why you want to know before taking out an adjustable rate mortgage how soon and how frequently your mortgage rate and monthly payment could go up, how high your mortgage rate and monthly payments can go with each adjustment and if there is a limit on how low your interest rate could go.

Questions? We’re here to help you evaluate all of your financing options.

The right time to lock your mortgage rate

45603822Mortgage rates are on the move. When is the best time to “lock” your mortgage rate? And for how long should your lock be effective? If you’re buying or building a home, you’ll have to answer both of these questions.

Unfortunately, there’s not a one-size-fits-all answer to either one. You’ll want to work closely with your loan officer to determine the timing of your rate lock. With an existing home, many buyers wait until the seller has accepted their offer to lock in their rate. With a new home that could take several months to build, deciding when to lock in your rate gets a bit trickier. You’ll want to discuss the matter with your builder and lender before making the decision.

Part of the decision of when to lock in a rate depends on how long your lock will be effective. Typically, borrowers are given the option of locking in for 30, 45, 60 or in some cases, even 90 days or more. Locking in a rate for longer periods of time, however, can come at a cost.

Loan lock provisions can vary, so make sure you understand your own. What is the effective date and expiration date of your lock? Read the fine print and ask for clarification if there’s something you don’t understand. Do you know what happens if there’s a delay and you aren’t able to close on your home before your lock expires? More questions? Just ask!

Which remodeling projects offer the greatest ROI?

71836378 - couple looking at paint swatches for decoratingA home equity loan or line of credit from Primary Residential Mortgage can be a great way to fund your next home renovation project. But which projects offer the greatest return on your investment when it comes time to sell your home? You can get a pretty good idea of which upgrades offer a better ROI than others by taking a look at Remodeling Magazine’s Cost Vs. Value Report.

The report shows, on average, how much of the cost of 21 popular remodeling projects you may be able to recoup when a property is sold. Data is available on a national and regional basis, as well as for cities. The report can help you home in on individual projects that provide the biggest bang for your buck.

According to the report, homeowners on average stand to recoup 98.3% of the cost of replacing a garage door, while the installation of a steel entry door returns on average 91.3%. The addition of a wood deck has an average return on investment of nearly 82.8%, followed by minor kitchen remodel (81.1%); siding replacement (76.7%); new vinyl windows (74.3%) and bathroom remodel (70.1%). Some of the most costly projects offer the lowest return on investment, such as the installation of a backyard patio (47.6%) and major kitchen remodel (59%).

The report doesn’t take into account, of course, the enjoyment you and members of your family get from the remodeling project while you still live in the home. If you’re planning to stay put in your home for a long time, remodeling might be less about return on investment and more about how much pleasure it brings to your daily life. For more information on the Cost Vs. Value report, go to this link.

Your home-buying priorities

93598665What are the features you want to see in your next home? The National Association of Realtors recently surveyed home buyers nationwide on the home features that are most important to them. They found that the typical home buyer currently is looking for a three- bedroom, two-bathroom home with a garage and updated kitchen.

The study also found that home buying needs and preferences vary by age. According to the survey, family needs were the biggest factor in prioritizing home amenities for home buyers under the age of 55. For many families with small children, for example, features such as the number of bedrooms, school quality and yard size can be important considerations. For those 55 years and older, privacy—having a space solely their own—was the main goal. In that age group, the number of bedrooms and lot size are not as important for many home buyers.

Contemporary and colonial homes were the preference of Millennials, while ranch homes, which typically have a single level and no stairs, are the most popular home style for buyers 55 and older. Lastly, while many home buyers age 55+ are moving from other homes, many Millennials are moving from rentals and purchasing their first homes. In fact, the survey shows that rent increases are driving many Millennials to become homeowners this year.

Finding the right residential mortgage company makes all the difference when buying a home. Whether you’re a first-time home buyer or moving up, our in-house financing, wide variety of loan options and five-star customer service are designed to make your financing experience as stress-free as possible.

The first step toward homeownership

76765603_MAre you ready to purchase a home, but you’re not sure if you qualify for a mortgage? In the latest Housing Opportunities and Market Experience survey by the National Association of Realtors, non-homeowners were asked about what they believe would prevent them from purchasing a home. Limited income was No. 1 (47 percent of respondents), followed by student loan debt (30 percent), rising rent (28 percent) and health and medical costs (14 percent).

Non-homeowners were also asked the potential reasons why qualifying for a mortgage would be difficult. Again, income was the top factor (45 percent), followed by less-than-perfect credit (34 percent) and too much debt (26 percent). Another 29 percent said they lacked the financial knowledge or did not know the first step needed to qualify.

If you want to purchase a home, but you’re not sure if you are in the right financial situation to do so now, it’s never too early to visit Primary Residential Mortgage and discuss your financial situation. Visiting us early can provide you with the information you need to be a better home loan candidate and can provide an outline of what you need to do to be in a position to buy a home. You can learn about the wide variety of home loan programs available. To qualify for a mortgage, you might need to work on increasing your credit score, pay down some student debt or do a better job of keeping your expenses under control over a period of time leading up to applying for a home loan. Put yourself on the path to homeownership, Visit us today.

What you need to know about the earnest money deposit

29909069 - business woman prepare writing a checkWhen making an offer on a home, you’ll need to decide how much you’re going to offer for the property and how much to offer in earnest money. The earnest money deposit is an important part of the home buying process. It’s an amount of money that is used to show sellers that a buyer is serious — or ‘earnest’ — about buying their home. Sellers rarely accept offers that don’t include an earnest money deposit.

Your real estate agent will help you decide how much earnest money to offer. In some cases, you’ll offer a set amount, such as $1,000. In other cases, a percentage of the amount offered on the home — such as 1% to 2% — is more appropriate. In the many competitive housing markets, an earnest money deposit of as much as 3% to 4% or more might be warranted. If you end up purchasing a home, your earnest money is typically held by a title company or the seller’s broker — depending on the state in which the transaction is taking place — and will be applied toward your down payment and closing costs.

Larger earnest money deposits — especially in competitive housing markets and in multiple offer situations — can signal to a seller that you’re serious. What happens to that money if the home sale doesn’t go through? A purchase contract should spell out instances in which an earnest money deposit would be refunded, such as if the buyer’s financing falls through, a home inspection finds a costly hidden defect or the home in deemed uninsurable.

PRMI loan officers recognized for outstanding customer service

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At Primary Residential Mortgage, we are dedicated to providing the very best home loan experience possible for our customers. That’s why we’re happy to announce that one dozen PRMI loan officers have been recognized nationally for the outstanding customer service they provide to their customers.

PRMI loan officer Kaley Giessing, ranks in the top 10 on a list compiled by online marketing firm SocialSurvey. In the top 50 are PRMI loan officers Billy Leopold, David Lesjak, Jim Conway and Steve Wilcox. In the Top 100 are: Craig Pollard, Jeff Senker, John Thomas, Jon Wald, Kyle Travers, Lane Baron and TJ Jager.

To compile its list of the top 100 U.S. loan officers nationwide, SocialSurvey collected feedback from 200,000 customers of 20,000 loan officers.

We know that a happy work environment and a great customer experience go hand-in-hand. When we enjoy what we do, it’s easy to deliver a knockout experience. Learn more about what makes PRMI such a great place not only to get a home loan but to grow your career.

What are you waiting for?

48217628_MThinking of waiting another year or two to buy a home? If home prices and mortgage rates increase in the next year or two, home buyers could end up with significantly less buying power than they have today.

Today’s mortgage rates are near historic lows. But they aren’t expected to stay that way. Various housing groups and economists are predicting mortgage rates will rise to between 4.5% and 5% by the end of the year.

The National Association of Realtors also is expecting home prices to increase in 2018 by an average of 3.2 percent nationally, with the highest appreciation predicted in the lower price ranges, which are in high demand. The combination of higher home prices and higher mortgage rates could make for a mortgage payment that’s significantly higher than it would be if the home were purchased now.

There are, of course, many other factors that come into play in the decision to buy a home, such as how long you plan to stay in your home, the stability of your job and how much money you’ve saved up for a down payment.

As an industry leader, Primary Residential Mortgage has helped more than 225,000 valued customers achieve the American dream of homeownership. As mortgage professionals, we make home buying easier for you with our broad range of custom loan programs.

What are you doing with your tax refund this year?

71837107 - ecstatic young couple celebrating their new homeIt’s tax season again, and many Americans are getting tax refunds. Big refunds. According to the IRS, the average U.S. tax refund is more than $3,000, with some families getting thousands more. A large refund could be a nice addition to a downpayment savings fund. If you haven’t started saving for a home yet, it’s a great way to get started.

How much do you need to save? Visit us and we’ll crunch some numbers for you. Surveys show that many first-time home buyers overestimate the amount of money they need to be able to buy a home. The median U.S. downpayment last year was 10 percent, according to the National Association of Realtors. There is a variety of low-downpayment and even some no-downpayment home loan programs available that can help reduce the amount of money you’ll need to bring to the closing table.

If you’re ready to take the next step toward owning your own home, work with a team that can provide the personal attention you deserve. At Primary Residential Mortgage, we’ve helped more than 200,000 borrowers fulfill their dream of home ownership. We’d love to help you, too!