Homes, Mortgages and Interest – Oh My!
Spring is fast approaching, and Summer isn’t far behind, which means that in the next few months there’s going to be a shift in the housing market as people start putting their homes up for sale, and others are looking to buy them. Buying a home can be a daunting experience, especially if it’s your first time. Our Vice President of Mortgage Lending, Harry Stewart, wants to give you some information about mortgages and the housing market to help prepare you for this next step in your journey.
Q: What kinds of changes to you foresee happening in the future regarding mortgages and the housing market?
Harry: I think that short term rates might move lower, with a potential increase in refinance activity, but of course at this time I can’t say that with absolute guarantee. If rates drop an additional 100-150 basis points from where we are now, I think we would be really busy again. If that happens, that would mean there would be lower monthly mortgage payments and more opportunity to qualify for those looking to purchase a home. So far, the market is definitely looking up-beat this year.
Q: What are some mistakes that you often see home buyers making?
Harry: A big one that I see a lot is that they don’t choose the right lender or professional. With all the moving parts, it’s important that you take time to find the right one. I’ve seen some home buyers who chose to work with a part-time realtor instead of a full-time one, which isn’t beneficial. When you work with a part-time realtor, they don’t always have the time or wherewithal to really dedicate to jumping on a contract and helping you out.
Q: What is the importance of escrow, and is it really necessary when purchasing a home?
Harry: I would say for first-time buyers, escrow is absolutely a necessity, especially if you’re putting down less than 20%. You technically don’t need an escrow, but there are many moving parts when it comes to buying a home, having an escrow makes the process easier. You’re not going to want to worry about where or how you pay your taxes, and escrow can help with that. Each institution and state has its own rules about escrow, so be sure to ask about how it works in the area.
Q: What other kinds of advice would you give to a young person looking to buy their first home?
Harry: I think that a lot of people are usually on the fence about the rate, which is why you might hear some people repeat the phrase, “date the rate, marry the house.” It’s silly, but there is truth to it. The rates are something that’s relative, so when they do come down, you can always refinance. When you really think about it, even a 6% mortgage rate is better than 100% rent, where you’re really just paying for your landlord’s mortgage.
NuMark is currently offering free appraisals for every member of the credit union who’s looking to purchase a home* If you would like to discuss starting the process of finding a new home, give Harry and his mortgage team a call at 815-744-7497 or visit numarkcu.org.
*Free mortgage appraisal offer is non-transferable and is for mortgage applications received between 04/01/2024 and 05/31/2024 with financing secured at NuMark Credit Union and will be credited back at closing. Must close by 07/31/2024. Up to 95% loan to value. Not all borrowers will qualify. Loans subject to credit approval. Limited time offer. Some restrictions apply. Offer subject to change without notice. Credit Union NMLS #405831
