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Kurt Spoerle - Realtor®
Office: (317) 566-2399
Cell: (317) 366-4000

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Wondering what type of mortgage you quality for?

What Type of Mortgage Do You Qualify For?

When it comes to home mortgages, there is no such thing as "one size fits all." There are many different circumstances that will effect what mortgage rate a buyer will qualify for. Luckily, there are several options to choose from, so with good financial standings you will be able to find a rate that works best for you. 

Here is a brief overview of the types of mortgages available today:

  • Adjustable-rate mortgages, or ARMs, are a type of mortgage in which the interest rate paid on the outstanding balance varies according to a specific benchmark. The initial interest rate is normally fixed for a period of time after which it is reset periodically, often every month. The interest rate paid by the borrower will be based on a benchmark plus an additional spread, called an ARM margin.

    An adjustable rate mortgage is also known as a "variable-rate mortgage" or a "floating-rate mortgage".

  • Fixed-rate mortgages A mortgage that has a fixed interest rate for the entire term of the loan. The distinguishing factor of a fixed-rate mortgage is that the interest rate over every time period of the mortgage is known at the time the mortgage is originated. The benefit of a fixed-rate mortgage is that the homeowner will not have to contend with varying loan payment amounts that fluctuate with interest rate movements.
  • Conventional mortgages are not guaranteed by the government. They are insured through private companies. The fees and additional costs associated with a conventional loan will vary depending on the mortgage lender.
  • Government loans, such as FHA and VA are guaranteed by government-sponsored insurance. An FHA loan is insured by the Federal Housing Administration (FHA).An FHA loan is a great option if you do not have a lot to put down at closing. It only requires 3.5% down payment. A VA loan offers long-term financing to eligible veterans or their surviving spouses. The intention of this loan is to offer veterans eligiblity for a loan where private financing is not available. It also allows veterans to purchase a home without a down payment.
  • Jumbo loans are often securitized by institutions other than Fannie Mae or Freddie Mac. These securities carry more credit risk than those issued by Fannie Mae or Freddie Mac, and therefore, trade at a yield premium which translates into slightly higher interest rates.

There are other specialty loans available to certain types of home buyers. Your lender will be able to go into more detail about those specialty loans. If you are thinking about purchasing a home, you should get pre-approved and not just pre-qualified. Getting pre-qualified is the first step but it is fairly simple. A lender can usually pre-qualify you over the phone by just getting your overall financial situation and there is usually no cost involved. Getting pre-approved is a more in depth process. You will provide your lender with necessary documentation for an extensive check on your financial background and credit check. This will allow the lender to determine a specific mortgage amount for which you are approved.

If you are interested in speaking with a lender and don't know who to call, we have several lenders that we work closely with and highly recommend. Give us a call and we would be happy to get you in touch with them!

Looking For Something to Do This Weekend?

With almost fall like weather, it is a great time to get outside and enjoy events going on around town this weekend! We have come up with a few suggestions on weekend activities that are guaranteed to be a good time!

1. Indiana State Fair

If you haven't been to the fair yet, this is your last chance! The fair will be ending this Sunday, August 18th. The fair has something for people of all ages. From visiting the animals (isn't seeing the world's largest pig a must every year?) to endulging in anything fried to attempting to win that cute little goldfish. There is even the Pioneer Village where children are able to watch common farm practices such as grain threshing and wood sawing. The fair has it all! Click the link below to see the deals for each day, including a voucher for $5.00 admission for Friday, the 16th.


2. IndyFringe 2013 began today! For those of you who do not know what Fringe is, it is a theater celebration that lasts 11 days and takes place around Mass Ave downtown. It first came to Indianapolis 8 years ago and ever since it has been a main attraction. With 8 venues and 64 groups, Fringe has something for everyone! Check out the link below for the full 2013 schedule.


3. The 9th Annual Sausage Fest is this weekend as well. This takes place at St. Thomas Aquinas (4600 N Illinois Street, 46208). This annual festival features local food and live music. Over 21 guests can enjoy the wine garden featuring wines from Crossroads Vinters and beer from Sun King Brewery.  There will also be adult gaming and children's activities. Sausage Fest is open 6pm-midnight both Friday and Saturday and admission is free. This is a great event for you and your friends or bring the family!

Your Home Maintenance Checklist for August

Summer has flown by and we are now into August. Kids are heading back to school and you may find yourself with a little extra free time. Check out the list below for a few helpful tips to keeping your home in tip top shape!

1. Pamper the lawn
Homeowners can’t successfully emulate the tightly trimmed golf-course look because they don’t have a golf course’s budget and army of maintenance professionals. Instead, the best thing you can do to achieve a good-looking lawn is to mow frequently and high (three inches or more – or just set your mower blades as high as they’ll go). This discourages weeds and trains the grass to grow in thickly. High, frequent cutting encourages roots to grow deep and retain water, so you’ll need to water less frequently. Let the clippings fall onto the lawn to add nourishment.

2. Clean sink drains
If you’ve got a slow-draining sink, take action. First, try a homemade drain cleaner. Onthehouse.comrecommends mixing a solution of equal parts of salt, baking soda and vinegar. Pour it into the drain and chase it down with two quarts of boiling water. You can use this solution monthly. Avoid chemical drain cleaners; they can damage the pipes and create toxic exposure for you and your family.

Or you can apply some elbow grease and fix slow drains by cleaning out the drain and trap  – the U-shaped pipe that’s directly under the sink. Position a bucket under the trap to catch falling water and gunk and keep a pile of rags at hand for cleaning up. This can be a messy job – you may also want to wear rubber gloves.

Loosen and remove the couplings that hold the trap to the straight pipes that run from the sink and to the sewer. You may need to use a plumber’s wrench. If the pipe is plugged, all kinds of messy stuff will fall into the bucket and must be removed from the trap. If possible, take the trap outside and shoot a stream of water from the hose through it. Rinse it out thoroughly. Use a snake or wire from a coat hanger to remove built-up debris from the pipes.

3. Fix leaky faucets
Check faucets for leaks and install new rubber gaskets by unscrewing the faucet end, removing the old gasket and reassembling it. Also fix dripping faucets. First, shut off the water under the sink. For sinks with independent hot and cold water faucets, dismantle each faucet, removing the washers (rings made of rubber, plastic or brass). Put the washers in a sandwich bag and bring them to the hardware store to look for replacements. Reassemble the faucets and turn the water back on. For a single-arm faucet, fix leaks by replacing the faucet’s inner workings. That’s not hard, because you can just note the brand and buy a faucet rebuild kit (about $50 at hardware stores). Dismantle the faucet, laying out the pieces on a paper towel. Shoot a photo or make a sketch to refer to when assembling it. Put the faucet back together and turn the water back on.

4. Get a furnace inspection
Have your heating system inspected and serviced by a professional. Call the company that sold it to you or your fuel distributor to get recommendations for servicers.

5. Inspect and maintain the water heater
Have your water heater professionally serviced once a year. Inspect the water heater thoroughly and check the walls and floor around it for evidence of leaks, rust or corrosion. Also check the lines and connections to the heater. Even a small amount of moisture can rot the flooring and subfloor. Lie on the floor to look at the bottom of the heater from underneath, using a flashlight. If you find leaks, replace the water heater.

US new home sales jump to highest level in 5 years

Americans snapped up new homes in June at the fastest pace in five years, a sign the housing recovery is strengthening.

The Commerce Department said that sales rose 8.3% last month to a seasonally adjusted annual pace of 497,000.  That's up from an annual pace of 459,000 in May.

While sales are still below the 700,000 pace consistent with healthy markets, they have risen 38% in the past 12 months.  That's the biggest annual gain since January 1992.

Home sales and prices have climbed since early last year, buoyed by solid hiring and low mortgage rates.  Housing has helped drive economic growth this year at a time when other parts of the economy have languished, such as manufacturing and business investment.

New-home sales make up only a small part of the market but have a large impact on the economy.  Each home built creates an average of three new jobs and generates about $90,000 in tax revenue, according to data from the National Association of Home Builders.

One concern is that rising mortgage rates could slow sales in the coming months.  The average rate on the 30-year fixed was 4.37% last week- a full percentage point higher than in early May.  At the same time, mortgage applications to puchase homes have fallen in the past few weeks.

Rates surged after Chairman Ben Bernake said the Federal Reserve could slow its bond-buying program later this year if the economy continues to improve.  The Fed's bond purchases have kept long-term interest rates low, encouraging more borrowing and spending.

Still, other indicators suggest housing should continue to support the economy this year.

Sales of previously occupied homes slipped in June to seasonally adjusted annual rate of 5.08 million but stayed near the 3.5-year high reached in May. 

Homebuilders are more confident about the housing recovery than at any time in the last seven years, according to a survey by the National Association of Home Builders/Wells Fargo.  That suggests home construction should keep increasing.  Customer traffic and builders' outlook for single-family home sales over the next six months are at the highest levels since the housing bubble burst in 2006. 

Rising Interest Rates: Why NOW is the Time to Buy

We're keeping a close eye on mortgage rates.  After years of historic lows, rates are on the way up and will likely close in on 5% by mid-2014 and go even higher in 2015, from an average 3.5% in early 2013.  That is unwelcome news for buyers, and we can expect some households to be pushed out of the market as a result. 

For example, there are about 17.8 million renter households with sufficient annual income - at least $36,000 - to buy a $177,000 home at a 3.5% mortgage rate, compared to 14.9 million at a 5% mortgage rate.

One major factor can blunt the harm of rising rates: the return to normal underwriting standards.  In fact, lenders, sitting on portfolios of healthy loans, started making financing more available in recent months, and the trend is continuing.  It's estimated that 15-20% more households will qualify for safe, affordable mortgages as lenders offer conventional conforming loans to households with credit scores in the 720 range, down from 760-770 in the last several years, and making FHA loans available to borrowers with scores in the 660 range, down from 680-700.

What can also spur more buying is improving employment.  Job growth reached 2 million over the last 12 months and the same rate is expected in the year ahead. 

Additionally, the much improved performance of Fannie Mae and Freddie Mac should lead to a reduction in the fees they've been charging over the past few years to recoup their losses from the housing bust.  Because of their strong portfolios and the fee increases, they're making healthy profits.  Their priority should be to repay the taxpayer funds they received after the bust, and when that obligation is satisfied, the GSEs should cut their fees.  Not only is that the right thing to do as taxpayer-owned entities, but it could help households who otherwise might not be able to buy in today's rising interest-rate environment.   

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