You likely heard the the Federal Reserve Board increased the federal funds rate by three quarters of a percentage point this week, in response to rising inflation (most obviously felt when going to the gas station!). The Fed wants to combat too much liquidity by making borrowing more expensive. As a result mortgage rates have increased from near record lows of the last few years. With higher rates more borrowers are looking into adjustable rate mortgages (ARMs). ARMs were not a favored option with record low rates, but now they are looking more appealing to many borrowers.

As we know the Fed is reacting to a number of factors, as mentioned trying to reign in liquidity, as well as global events that were not anticipated (Russia invading Ukraine the primary one, as well as supply chain issues). The Fed is attempting to cool down the economy now. If you are looking to purchase a new home there a still a number of loan options. Fill out our loan finder or schedule a consult our website to see what options are best for you.

As we’ve seen an uptick in interest rates, many homebuyers are now looking into adjustable-rate mortgages (ARMs). ARMs were very popular in the early 2000s but with our extremely low rate recent history, very few home buyers were choosing ARMs. Now with higher rates many home buyers are looking into ARMs again.
First a brief overview on what ARMs are – unlike your traditional fixed rate mortgage, ARM loans have interest rates that can change. Normally with lower initial interests for a few years that then “adjust” based on the current market rate. So a 3/1 ARM will have a lower fixed rate for three years and then adjust annually after that. A 7/1 ARM is for seven years etc.
The primary benefit of ARMs are the lower initial interest rate and thus lower initial monthly payments. ARMs are attractive if you aren’t planning on living in the house for a long period. ARMs are a popular option on jumbo loans as well. Of course you’ll need to be comfortable with the risk and uncertainty of higher possible rates in the future. If you want to know more about ARMs and your options schedule a consultation on our website.

As we enter beach and pool season – a lot of people ask if a swimming pool will add value to their home (to be clear we are talking about in ground pools here). The answer is it depends.
Studies show that it can add 5% or more to the value of your home (but these studies are pre-Covid). If you are in a warmer climate like Texas or Florida, pools can add more value and be more desirable. In fact if your home is in a high-end area where most homes have pools then it can lower your home’s value if you do not have one. Of course you have to take into account building and maintenance costs, as well as if your yard has enough space to accommodate a pool and still have enough area left over. It’s probably a good idea to want a pool for enjoyment rather than just building one to increase resale value. If you want to get more feedback on your property and how it fits in the market feel free to schedule a consultation with us on our website for more details and the latest market conditions.

If you are a first time home buyer and looking for help with your down payment and closing costs, there are actually a number of grant programs both nationally and on the state and local level.
Grants are not loans and not required to be paid back. Qualifying for different grant programs varies, it often requires you to be a first time home buyer and you must live in the residence (not rent it out).
You may also need a minimum credit score as well as fit income criteria.
Give us a call or schedule a consultation on our website and we can see what grants and programs may be available to you.