Category Archives: Mortgage

First-Time Homebuyers: 6 Tips to Save for the House of Your Dreams

According to a 2015 BMO Harris report, 52 percent of Americans plan to buy a home in the next five years.  Saving for a down payment, typically between 5 to 20 percent of the home’s value, is one of the biggest challenges for those aspiring homebuyers. The American Bankers Association Foundation is highlighting six tips to help consumers cut costs and start saving.

“A down payment is often the largest single payment a consumer makes in their lifetime and saving for it isn’t easy,” said Corey Carlisle, executive director of the ABA Foundation. “However, with a few changes, consumers can put themselves on track to make their homeownership dream a reality.”

The ABA Foundation offers prospective homebuyers these saving strategies:

Develop a budget & timeline. Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to transition from renter to homeowner.

Establish a separate savings account. Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash. If you received a tax refund, consider putting all or a portion into this account.

Shop around to reduce major monthly expenses. It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.

Monitor your spending. With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.

Celebrate savings milestones. Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.

Look into state and local home-buying programs. Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants. Stock Yard’s Mortgage Banking Group can help you determine what types of offers are available in your area.

Information provided by the American Bankers Association.

9 Tips to Green Your Home and Save Money

1. Location, location, location efficiency. Carefully consider the location of your home. If you’re close to work, shopping and entertainment, you may not need a car. Without a car you would save money on gas, car insurance and maintenance, not to mention reduce pollution. If you’re thinking about moving further out, try to find something near public transportation and shopping.

2. Light up the house, not the electric bill. Replacing incandescent light bulbs with more energy efficient compact florescent light (CFL) bulbs will save you about $6 a year in electricity costs per bulb and more than $40 over its lifetime. According to ENERGY STAR, if every American home replaced just one light bulb, we would save enough energy to prevent 9 billion pounds of greenhouse gas emissions per year. Remember to recycle used CFL bulbs. Go to http://www.epa.gov/bulbrecycling for recycling locations.

3. Some like it hot, hot, hot…or cold, cold, cold. Closely monitor your thermostat. Adjusting it just a few degrees while you’re out can save energy and money. You can make it easier by installing a programmable thermostat. Use fans and close the blinds during the warm months and let the sun in for natural warmth in the winter. Also, change your filter every three months.

4. Make it mean-green-clean. Cleaning supplies can be expensive and are made with toxic chemicals. You can save money and the environment by making your own cleaning supplies. All you need are some basic household ingredients like vinegar, lemon juice, baking soda and borax to clean everything from windows to tile.

5. Reduce, Reuse, Recycle! Sticking to this mantra can help you save money around the house. Use a rag instead of paper towels. Buy products in bulk, concentrate or refillable containers to reduce packaging waste. Look for products made from recycled content. And don’t forget to recycle!

6. Win-dos for your windows. There are a number of ways you can make your windows more energy efficient without replacing them. For better insulation from the weather you can caulk exterior joints, put shrink wrap on them or hang blackout curtains.

7. Fan the green flames. To keep your refrigerator running efficiently, keep the fan clean. The motor won’t have to work as hard if the fan is clear of debris.

8. Decorate green. Houseplants are like living air-filters. English Ivy, rubber trees, peace lilies and red-edged dracaena can help clean the air and look pretty too.

9. Vampire energy is sucking you dry. On or off, anything plugged into the wall sucks energy. Vampire power costs U.S. consumers more than $3 billion a year, according to the U.S. Energy Information Administration. Unplug your electronics and appliances when they’re not in use.

Resource information provided by American Banker’s Association. For more green home solutions, visit: epa.gov/greenhomes

Buying vs. Renting

Buying a home is one of the biggest financial decisions you ever have to make.  You will be required to ask yourself questions about the kind of floor plan you like, the neighborhood or area of town where you would like to live, the price range you can afford, and your preferences regarding having a yard which will require regular work and maintenance vs. a maintenance free lawn provided through a condominium or patio home.  However, the most important question (the question you should ask yourself first) is should I rent a home or should I buy?

There are definitely advantages and disadvantages to both and it is important to consider the pros and cons before making the leap into homeownership.

Advantages to Buying a Home Include:

Equity or Savings

If you are renting, the money you spend each month pays for your place to live, but it does not provide any kind of long-term benefit or savings to you.  If you purchase a home and are paying your mortgage payment each month, you are building equity in your home.  The more you pay, the more equity or savings you have.  Homes typically increase in value, which also increases the equity or savings you have in your home.

Income Tax Deductions

You can deduct the amount of interest you pay through your mortgage payments as well as the amount you pay in annual property taxes.  Uncle Sam does not allow this deduction for rent payments.

Creative Freedom

You can paint every room a different color and decide on any carpet or floor covering you want if you own your home.  However, if you rent, your landlord most likely will have restrictions on painting and other creative ideas you have to make your home fit your personality.

Stable Housing Costs

With a fixed rate mortgage, your monthly housing costs will be more stable than rent which can increase from year to year.

Home ownership can also develop a sense of self-pride, which provides strong ties to the community in which you live.

Advantages to Renting Include:

Less Responsibility

Repairs to a home can be costly.  As a renter, the landlord will be responsible for any repair costs.

Flexibility

Since leases tend to be short term (a year or less), it is easier to move around if you rent.

Insurance Costs

Insurance as a renter is much less expensive than insurance as a homeowner.  You are only responsible for insuring your personal contents and not the home itself.

Purchasing a home or choosing to rent is a personal decision that you as an individual must make.  Owning a home is a financial responsibility that requires planning and commitment.  Home ownership is not for everyone.  Renting can be easier if you want to pursue job opportunities that may require frequent relocation.  However, home ownership makes sense if you plan to settle into an area or community and want to pay toward something you can eventually pay off and own outright.

Should you buy or should you rent?  It can be a tough decision to make.  We have qualified mortgage professionals that will be happy to assist you in this process. We have many programs, including down payment assistance, that can be tailored to meet your needs. Visit our website at www.syb.com for more information.

How to Buy Your First Place Like a Pro

So you want to buy your first home. Congratulations! Now, where to start? Melinda Golde from our Mortgage Banking Group was able to share some helpful tips for those looking to buy their first home.

Check Your Credit

Your credit score is one of the most important factors when purchasing a new home. It can affect the credit decision on the loan as well as the actual cost of the loan – the lower your credit score, the higher your interest rate may be. Your homeowner’s insurance premium can also be affected by your credit score Before applying, review your credit by accessing your information at annualcreditreport.com. Make sure there are no mistakes, unpaid or past-due accounts or collection accounts. If you have items on your credit report that need to be repaired, or you just have limited credit experience, you will need some time to work through and correct those issues – you should allow at least six months before shopping for a new home.

Organize Your Documents

As part of the home-buying process, your mortgage lender will require you to document your income and your assets. Make sure you have your two most recent pay stubs, the previous two years’ W-2s and tax returns, as well as your two most recent bank statements (all pages). Buying a home can be a long process, but having your documents organized can help.

Determine How Much Down Payment You Will Have

There are many loan programs available that do not require a down payment of 20% of the purchase price. Some programs require as little as 3% down with 0% down options available for rural properties or active and retired military personnel. You may even be eligible for down payment assistance. (A down payment less than 20% may require mortgage insurance that could affect the payment).

Review Your Cash Flow

Determine where your money is going each month and then compare that to how much you make (gross monthly pay). You may even go as far as tracking your spending for a couple of months. What kind of house payment are you comfortable with based on your current income and liabilities?

Get Expert Advice

A pre-approval is a valuable tool to have as you begin your search for your new home. At Stock Yards, there is no charge or upfront fee for this service. After you are pre-approved, work with a real estate agent that has knowledge of the area in which you’d like to purchase. Give the agent an idea of the type of home you are looking for and the amenities that are important to you, and they will do the leg-work.

Make sure to check out our website for more information regarding mortgage services. Just purchased your first place? What are some tips that we left off?