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How to SAVE Thousands of Dollars in Interest on Your Mortgage| Golden Lenders

How to SAVE Thousands of Dollars in Interest on Your Mortgage| Golden Lenders
One of the most common loans you can get to buy a home is a 30-year fixed rate mortgage. If the thought of paying for your home over the course of 30-years seems daunting, here are some easy ways to shorten that term which will actually end up saving you money over the life of your loan.
Any additional payments to the principal amount (the original sum of money borrowed in a loan), helps to cut down the amount of interest that you will pay over the life of your loan and can also help to shave years off the loan as well.
When you make ‘extra’ payments toward your loan, the key is to let your lender/bank know that you want the extra funds to go toward your principal balance as they will not automatically do this for you.
You don’t have to double your mortgage payment to make a big difference either!
If you have a 30-year mortgage on a median-priced home ($250,000) with a 5% interest rate, you’ll be responsible for a $1,342.05 monthly principal and interest payment. Over the course of the loan, if you pay your exact monthly payment, you will have paid $233,133.89 in interest alone!
Paying a Little Extra Can Pay Off Big
1. Pay an additional 1/12th of your mortgage payment every month
Benefit: In the example above, adding $111.84 to your monthly mortgage payment might not seem like a lot, but each year you will have paid one extra month’s worth of payments which will shorten the term of your loan by 4 years and 8 months, all while saving you $42,000 in interest!
2. Pay an additional $50 per month towards your mortgage
Benefit: Fifty dollars might not seem like enough to make a difference on the term of your loan, but that small amount will save you over $21,000 in interest and will take over 2 years off the end of your loan. Twenty-eight years from now, you’ll be happy to pay off your loan that much sooner!
3. Make one-time lump sum payments when you can
Benefit: If you find yourself with a little extra money after a yearly bonus, a tax return, or from investment dividends, paying that money towards the principal can cut your costs. This option, however, is less predictable than the extra monthly payments.
If you have higher interest debts, like credit cards, consider using any extra funds you have to pay those debts down before applying that money towards your mortgage. Also, if you do not plan on staying in your home for more than 10 years, paying extra toward your mortgage might not make sense.


Bottom Line
Call Golden Lenders if you’re wondering what strategies would work best for you to shorten the term of your loan.

Further Proof It Is NOT 2008 All Over Again

National home prices have increased by 5.4% since this time last year. Over that same time period, interest rates have remained near historic lows which has allowed many buyers to enter the market and lock in low rates.
As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price but instead about the ‘long-term cost’ of the home.
The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Insights Report, home prices will appreciate by 4.8% over the next 12 months.
What Does This Mean as a Buyer?
If home prices appreciate by 4.8% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

MORTGAGE INTEREST RATE PAYMENT P&I
TODAY $250,000 4.8% $1311.66
2019 $250,000 5.3% $1454.90
DIFFERENCE IN MONTHLY PAYMENT $143.24
MONTHLY ANNUALLY OVER 30 YEARS
$143.24 $1718.88 $51,566
Bottom Line
If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

Denver’s one of nation’s hottest housing markets for 2018, says Zillow

Denver will be one of the nation’s top 10 “hottest” housing markets in 2018, according to Zillow. The Seattle online real estate company predicted Denver will be the seventh-“hottest” housing market in the country. It used criteria to define “hottest” including “quickly rising home values and rental prices, low unemployment rates, steady income growth and strong job opportunities with lots of people moving to the area.” San Jose, California will be the nation’s hottest real estate market this year, according to Zillow, followed by Raleigh, Virginia, Seattle, Charlotte, North Carolina, San Francisco and Austin, Texas. “The tech industry continues to roar, attracting thousands of new residents per year to tech-dominant markets like Seattle, Denver and the Bay Area. The higher cost of living in these areas is offset to a large degree by well-paying tech jobs,” said Aaron Terrazas, Zillow senior economist, in a statement. Zillow was correct that lots of people are moving to the area because last week, it was reported that Colorado ranked among the top 10 states for inbound migration in 2017, according to United Van Lines. And last year, it was reported that Denver had one of the lowest unemployment rates in the country.
By Ben Miller – Contributing Writer

Fewer Homes Selling Faster

Denver: fewer homes selling faster. Decline continues in homes for sale and time on market. If you are looking to purchase a home in Denver, your choices and your window of opportunity are shrinking. If you’re looking to sell, the market may be in your favor. According to a March 17 report on national housing published by RE/MAX, an international real estate company headquartered in Denver, Denver ranked in the top three for lowest number of homes for sale and days those homes were on market in February 2017. Nationally, the number of homes for sale in February was down 2.2% from January 2017 and a sizable 17.9% down from February of last year. According to RE/Max, a 6.0-month supply indicates a market that is equally balanced between buyers and sellers. A supply above 6.0 can be considered a buyer’s market. In February, Denver had a 1.0 supply, tying with Seattle, WA for the lowest supply of inventory. San Francisco, CA edged into second place at 1.1. Homes for sale in Denver were on the market for an average of just 38 days in February. Homes in San Francisco and Omaha, NE were snatched up just slightly faster at 32 and 34 days, respectively. Nationally, homes for sale spent an average of 68 days on the market, up from January 2017’s 66 days, but a full week shorter than the February 2016 average. For RE/MAX’s reporting, Days on Market is calculated as the number of days between when a home was first listed and when a sales contract was signed.

What Your Salary May Buy

How much do I need to earn to afford an average house in the Denver metro?

That’s a question a report out this month from HSH.com® aims to tackle along with the salaries required to afford median-priced homes in 26 other U.S. metro areas.

The report calculates that to afford everything that makes up a mortgage payment (home loan principal, interest, taxes, and insurance payments) for a median-priced Denver metro area home a homebuyer needs to earn a salary of $72,772. The median price for a home in the Denver metro area was $381,600 in the fourth quarter of 2016.

The salary needed to purchase a median Denver metro home increased $2,031 from the third quarter of 2016. That is slightly more than the national average increase in salary needed of $1,583 over that same time period.

The salary calculation is based on a 3.97 percent 30-year fixed mortgage rate and monthly payments of $1,698 and assumes a 20 percent down payment. If a homebuyer were to put down only 10 percent, the required salary would increase to $85,948.

Denver is ranked 20th out of the 27 metro areas for salary needed to afford a median-priced home, between #19 Portland at $70,895 and #21 Washington DC at $80,230. Pittsburgh required the lowest salary at $32,374 for a $130,000 home. The highest salary required was $160,590 for a median home price of $837,500 in San Francisco.

The national median home price is $235,000 with monthly payments of $1,212, requiring a salary of $51,963. The salary needed to purchase median homes rose in all but five of the 27 markets.