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Buying a Home

There's no doubt about it--owning a home is an exciting prospect. After all, you've always dreamed of having a place that you could truly call your own. But buying a home can be stressful, especially when you're buying one for the first time. Fortunately, knowing what to expect can make it a lot easier.  How much can you afford? According to a general rule of thumb, you can afford a house that costs two and a half times your annual salary. But determining how much you can afford to spend on a house is not quite so simple. Since most people finance their home purchases, buying a house usually means getting a mortgage. So, the amount you can afford to spend on a house is often tied to figuring out how large a mortgage you can afford. To figure this out, you'll need to take into account your gross monthly income, housing expenses, and any long-term debt. There are many real estate and personal finance websites on the Internet that can help you with the calculations. Should you use a real est ...

Should You Pay Off Your Mortgage or Invest?

Owning a home outright is a dream that many Americans share. Having a mortgage can be a huge burden, and paying it off may be the first item on your financial to-do list. But competing with the desire to own your home free and clear is your need to invest for retirement, your child's college education, or some other goal. Putting extra cash toward one of these goals may mean sacrificing another. So how do you choose? Evaluating the opportunity cost Deciding between prepaying your mortgage and investing your extra cash isn't easy, because each option has advantages and disadvantages. But you can start by weighing what you'll gain financially by choosing one option against what you'll give up. In economic terms, this is known as evaluating the opportunity cost. Here's an example. Let's assume that you have a $300,000 balance and 20 years remaining on your 30-year mortgage, and you're paying 6.25% interest. If you were to put an extra $400 toward your mortgage each month, you would sa ...

Survey: Mortgage Borrowers Want Both Technology and In-Person Services

A majority of Americans (60 percent) agree that while they use online resources for research, they prefer to apply for a mortgage in person, according to a new survey from the American Bankers Association. Seventeen percent said they would prefer to apply for a mortgage online, while 23 percent were unsure. “Banks invest billions of dollars to offer their customers the latest technology,” said Bob Davis, ABA executive vice president of mortgage markets, financial management and public policy. “But at the end of the day, nothing compares to sitting across the table, face-to-face with a banker when you’re making the single most important investment of your life.”  Consumers also indicated, though, that mobile or online services are important when it comes to obtaining a mortgage or making mortgage payments. Sixty-one percent of respondents consider mobile and online services very important or somewhat important, while 23 percent said they were not important.&nb ...

Millennials Are Ready to Buy: Let’s help them Achieve Home Ownership!

By Dawn Laumann, First Bank Home Loan Consultant p: 314-749-4898 e: Dawn.Laumann@fbol.com Do you have a son, daughter, niece, or nephew that makes up the millennial generation (ages 18-34)? According to the U.S. Census Bureau, millennials make up the largest generation in our nation’s history; shockingly, even larger than baby boomers. As this group continues to secure gainful employment and decides it’s time to enter the home ownership stage of life, their buying power will be significant and impactful. Research suggests that millennials have chosen to live at home with parents longer than previous generations. Many factors have played into this scenario, including the post-recession employment rate, student-debt ratio, lower wages, and a reduced emphasis on reaching major adulthood milestones, like marriage and home ownership. However, as economic conditions continue to improve and change, most millennials are anticipating a bright future with homeownership just two to five years awa ...

Education Plays a Role in the Real Estate Market

It’s no secret the importance education is to families, the economy and to communities as a whole. Education also impacts the real estate market. Although many factors, including square footage, number of bedrooms, and garage size, all impact homebuyers’ decisions, there are also other contributing factors. School quality and rating, along with the academic schedule, is just as important to many buyers as is the size, price and location of the home. In fact, one out of every three homebuyers would buy a smaller house than desired, just to be in a choice school district. “Since home and resale values are both impacted by school quality, homebuyers with or without children are going to seek homes in the best school districts,” said Morgan Jerabek, a home loan consultant at First Bank. Schools may also determine when sellers list their home. “Savvy sellers  ...

Get Ready for Summer with Outdoor Home Improvements

The warmer temperatures and the smell of backyard grills are the tell-tale signs that summer has arrived in St. Louis. For many, this is a welcomed time of the year; however, if your backyard isn’t quite ready for guests, the fun may be delayed. Start now and still have time to enjoy this summer. We’re all aware that home improvements help increase a home’s value. Did you also know that outdoor enhancements can also help to increase the home’s value? Kory Kunze, First Bank Product Manager said, "Using a home equity line of credit can be a cost effective way to fund home enhancements, with rates lower than credit cards.  Borrowers can take advantage of attractive introductory rates if they plan on paying the loan off in a short amount of time.”  Outdoor Living Buyers love decks because they add outdoor living space. Excellent for entertaining, backyard decks averaged an approximate 55% return on investment (ROI). Consider the maintenance of the materia ...

Spring Selling is in the Air—Is Your House Ready?

Contributor: Dan Kraus, Home Loan Consultant Have you considered selling your home? If so, this is certainly a great time. Warmer temperatures during the spring bring more buyers out into the market to shop for a new home. According to the National Association of Realtors, homes are selling two weeks faster than they did even a year ago. Inventory is low and the local real estate market is hot, making conditions just right for a great home selling season. “In my experience, buyers are looking for value,” said Dan Kraus, a First Bank Home Loan Consultant. “The more items that are updated, the easier it is for a buyer to decide whether or not to write a contract.” Kraus said he truly believes buyers have a calculator in their heads and can add up all the things that need to be done. To help prepare your home for selling, we’re offering helpful tips to make your home more attractive to potential buyers: Half-Empty Closets: Home buyers in any market want to see ample sto ...

Get Ready Now to Buy a Home Later

As with the beginning of each year, nearly half of all Americans typically make at least one resolution. Some may include weight loss and getting in shape, while others may have made the resolution to get their finances in order and to start saving for a new home. Whatever your resolution this year, make a plan and stick with it. Although less than half of us carry our resolutions through year’s end, it’s estimated we’re 10 times more likely to achieve it if we explicitly declare, or even write down, our resolutions. We’d like to help you be a part of the elite few actually completing their resolutions when December rolls around. Although we aren’t in the fitness industry, we can certainly help flex your money’s muscles and get your finances in tip-top shape. How can we help? If your resolution is to purchase a new home soon, then setting up a solid budget and plan should be in order. Start by checking your credit score. Your credit history is an important factor ...

5 Important Questions When Choosing Your First Home

Moving into your own place can be exciting and frightening at the same time. The American Bankers Association (ABA) suggests considering the following questions when choosing your own home. 1. How much money do you have saved up?​ Start with an evaluation of your financial health. Figure out how much money you have for a down payment or deposit on a rental. Down payments are typically 5 to 20 percent of the price of the home. Security deposits on rentals are usually about one month of rent and more if you have a pet. But be sure to keep enough in savings for an emergency fund. It’s a good idea to have three to six months of living expenses to cover unexpected costs. 2. How much debt do you have? Consider all of your current and expected financial obligations—like your car payment and insurance, credit card debt, and student loans. Make sure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total rent or mortgage payments, plus utilities, to ...

Millennials Are Ready to Put Homebuying on their ‘To-Do’ List

If you’re between the ages of 18 – 34, then congratulations, you’re officially considered a millennial. What’s more, as of 2015, your age group now outnumbers the Baby Boomer generation, or those aged 51 – 69. According to research, as a millennial, the chances are higher you’ve attended college; are more adaptable to an increasingly complex world; strive to save more and earlier; and are managing your debt (including student loans) at a better rate than other generations. Well done, millennials! What’s more, the majority of you are planning and/or saving now to purchase a home of your own very soon. Good bye, rent! At First Bank Mortgage, we understand when millennials start the homebuying process, most of you will have already ‘done your homework’ online. You’re generally just looking for a home loan consultant to help you determine the best home loan product for you and get it closed – as quickly and efficiently as possible. We can do ...

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All First Bank blog information and content is strictly informational. It is not intended to be specific investment, tax, or legal advice. If you need detailed financial, investment, or tax advice, please contact a First Bank qualified professional. Please note, First Bank occasionally shares third-party content we find to be relevant and helpful to our audiences.