Kathy Colkitt's Mortgage Group. A
DBA of American Pacific Mortgage Corporation

5 Questions to Ask Your Potential Real Estate Agent

Buying a home is undoubtedly one of the most difficult decisions you’ll make. After debating the pros and cons of homeownership — and there are many — you’ll have a whole new set of questions that will keep you up at night. Yes, you’ll have tons of question to ask of your real estate professional. If you’re lucky, you’ll find a knowledgeable, credible agent who may even answer those late-night questions before you tap snooze the next morning. Finding a real estate agent that fits your needs is imperative to the home-buying process. So, where do you start?


questions_to_ask_agent_blog.jpgHere are five questions you may consider asking real estate agents when you begin your search.


1. “What neighborhoods are you most familiar with?”

As we know, real estate is all about location, location, location. This question will give you an idea of your agent’s area of expertise. The ideal agent will be able to spout off information about the neighborhood, recent sales and listings, trends, crime and schools. This intel is invaluable.


2. “Will I be working directly with you or one of your associates?”

The relationship between you, a homeowner-in-waiting, and your real estate agent, will be filled with questions. For those who prefer a more hands-on approach, it is important to know if your agent will work directly with you, or, hand off some of the lifting to an associate. So, if you plan to send a lot of emails and texts with late-night questions, be sure to work with a professional who will have your file within reach.



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Managing Your Spending When Buying a Home

If you’re thinking about buying a home, you’ve probably crunched the numbers time and time again. Undoubtedly, you know a thing or two about the components of a mortgage payment, including the principal and interest you will pay. While it’s prudent to know about your monthly mortgage bill, there are other expenditures associated with homeownership that you’ll pay before and even during the life of your loan.


managing_your_expenses_when_buying_a_home_blog.jpgThe good thing is that these expenditures need not be intimidating. With the right planning and budgeting, these costs are manageable. So, what are they? Let’s breakdown some of the costs of buying a home


When you enter into a contract to buy a home, the deal will likely include a contingency that must be cleared before moving forward. Mortgage lenders will typically require an appraisal before signing off on the loan. Because the property is the asset that will act as collateral, a bank wants to make sure the home is worth the asking price. Typically costing several hundred dollars, the appraisal will be paid during the closing process. Bear in mind, there will be additional cost if the appraisal and selling price do not line up.


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4 Tips to Help Improve Your Credit Score Long-term

If you are ready to become a first-time home buyer, the initial step is to get pre-approved for a home loan. To do that, you will need to get a handle on your credit history and credit score. If your credit is challenged, you may want to consider methods of increasing your score so that you can begin the process of buying your first home.


The key factors that go into a credit score are payment history, total amount owed, length of credit history, types of credit in use and new credit accounts. Improving your credit score takes time, effort and focus and can be a really gratifying experience. Here are four tips on how to improve your score.

Use Your Existing Credit

In most cases, using your existing credit responsibly is one of the best ways to improving your credit score. The general rule of thumb is to use your credit card every month and keep the balance low. Ideally, you want your ratio to be 30 percent or below. For the maximum impact on your FICO score, you will want to be using only 10 percent of your allotted credit line. Also, keep in mind that maxing out a low-limit card each month, even if it represents a fraction of your credit, can hurt your score.

Think about using your credit for the purchases you must make on a regular basis like groceries or gas for your vehicle. These are purchases you will be making anyway, and as long as you are consistently paying off those purchases on a monthly basis you will be improving your credit score.

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The Top 5 Home Buying Myths

Does it seem like all your friends are in the process of buying a home? You may be at the point in your life when all of your friends are transitioning into the homeownership realm. There will likely be no bigger or exciting purchase in your life than a new home. Maybe it’s your turn too?


top_5_home_buying_myths_blog.jpgPurchasing a home is a big adventure and with any great adventure, comes myths. We have compiled a list of five of the most common myths and concerns for first-time home buyers.

Myth 1: It’s just cheaper to rent

Reality: When you look at what you would be spending on owning a home vs. renting a home over a 30-year period, according to a Trulia study, owning is 35 percent cheaper than renting in some regions. This figure was established by using estimates of median rents and for-sale prices based on an area’s housing stock; initial total monthly costs of owning and renting; one-time costs and proceeds; and net present value to account for opportunity cost of money. Not only this, but a home will eventually become an asset that can pay you in the long run. For more on this, check out our blog on “Why homeownership can be a smart decision.”

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The Ins and Outs of a Credit Score

A credit score is more than just a financial “grade.” The rating represents something much more important, and could have a big impact on your wallet. Many first-time homebuyers are curious about improving credit scores, and how that will come into play when applying for a loan.


Credit bureaus like Experian, TransUnion and Equifax, crunch your personal financial data using an algorithm, or a financial model, to determine your creditworthiness. This analysis, in theory, can predict your ability, or inability, to pay your future debts. Understandably so, the information is invaluable when applying for loans.


Unlike the suggested movies “you might like” on Netflix, this algorithm output cannot be ignored. The score is a direct reflection of your credit history, which is a financial inventory of things you’ve paid for. Credit cards, past loans, government information are all sources that make up your history. Other information includes the number of credit cards and loans you have and if you pay your bills on time.


Your credit report is a little different. It includes personal information, including your social security number, the amount you owe and if you have been late, or delinquent, on a payment. Businesses and lending institutions want to know all about your creditworthiness and your credit score.

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Using Discount Points to Lower Your Interest Rate

Lenders offer discount points to buyers to lower the mortgage rate and make the mortgage more affordable. The point you care about the most is the discount. Just as it sounds, a discount point is like prepaying interest for a lower home loan interest rate. One point usually translates into .25 percent less on your loan rate. Another consideration: discount points are tax deductible.




By paying an up-front fee, you can lower your monthly payment and the amount of interest you’ll eventually pay. Essentially, purchasing points is a long-term savings plan rather than a short-term savings plan because the upfront costs will far outweigh the savings if you do not plan to stay in your home for a long time.

Here is why. Say you have a $200,000 loan, 1 discount point would generally cost $2,000, .5 discount points would generally be $1,000 and .25 would be $500, etc. When determining how many discount points you would like to purchase, you will want to consider what the “break-even” point is. What that means is how long it will take you to recoup that upfront cost over the long-term. Though it may vary, consider that spending $1,000 on discount points could translate into around $16 of savings on your monthly mortgage payment. It would take around 63 months to reach that $1,000 point.

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Answers to Your Questions About Locking in an Interest Rate

Interest rates fluctuate and are impacted by economic data, inflationary pressure, the stock market, the federal reserve, geo-politics and other global events. Therefore, you may have questions as to whether now is the right time to lock in that rate though. American Pacific Mortgage is here to answer those questions.

Below are four questions answered that will help guide you as you decide when to lock in your interest rate.

1.What is the most common misconception about locking in an interest rate?

Sometimes buyers think that if interest rates go lower after they lock in their rate they can get the lower rate with the same lender. That may not be the case. Once the borrower locks in their rate, the lender simultaneously locks in that amount of money at that rate within the mortgage-backed security market. It is a commitment on the buyer’s part. If the rates go higher they are safe, but that doesn’t generally mean that they can get a lower rate if they go lower.

Some lenders such as American Pacific Mortgage, do however, offer a float down option, which means if there is improvement in the market, the borrower can exercise a one-time“float down” (i.e., lower rate) option.

2. Is there a “right time” to lock in a rate?

The time to lock will depend on individual circumstances and the borrower should work closely with the lender to make that decision. A borrower may consider waiting to lock in a rate until there is a ratified contract, however. It should also be noted that interest rates may change because they are tied to the mortgage-backed security market, which can be just as volatile as the stock market.



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The Steps to the Mortgage Loan Process, a Timeline

The mortgage loan process doesn’t need to be complicated for you as a first-time homebuyer.

We’ve put together this timeline to show how it all works, and how simple it really can be if benchmarks are met and there is a clear understanding going into the process.


Step 1: Get Pre-Approved

A great starting point is getting pre-approved for a loan. When you place an offer on a home, having a pre-approved loan in hand gives you an automatic edge over any other potential bidders and provides a clear estimate of your budget.


Step 2: Select Your Loan Program

Choosing the right loan program for your individual circumstances is a must. A loan advisor can help you choose the ideal mortgage, with the most competitive rates available.



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Now is the Time to Buy

NOW Could Be the Time to Buy

Setting down some roots in a home and a neighborhood that is right for you can be one of the most important decisions you ever make. If you are wondering what a good time to buy is, it may be now. With the sun shining, it is the perfect time to pack up those boxes and start your future.


But before you load up that moving truck, you have to find the right home.Here are four reasons why now could is the time to buy.

Home Prices Going Up

In the first quarter of 2016, home prices rose 87 percent, according to the National Association of Realtors. It is expected that this trend will only continue as inventory remains low (we will get to that shortly) so now may be the best time to jump into the market and secure a price that works for you. In the western U.S., the median home prices have increased 40 percent over the last three years, according to Money Magazine. Waiting may result in prices going up even further and some buyers may risk being priced out of the market.

Low Interest Rates

Oil prices and nervousness over the global economy has pushed mortgage rates to a three-year low,according to The Washington Post. The Washington Post states that the 30-year fixed-rate average rate is now at 3.58 percent – the lowest since May 2013. So even though prices are climbing, lower interest rates are helping to make purchasing enticing for first-time home buyers. The recent “Brexit” vote may have also opened the door to favorable interest rates.


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How to Buy a Home in Your 20’s

Whether you are just finishing up college or have been out for a few years, getting your feet underneath you with a new career is typically priority number one! But as time moves forward some millennials could consider making a financial investment in their futures by becoming a home buyer. It’s not as intimidating as some may think.



Here are some questions someone in their 20s could consider asking themselves to understand if they are ready to become a homeowner.

  • Do I know where I want to live long-term? Purchasing a home is a big commitment. This is where you may live for several years. Think about if you have a city and neighborhood in mind where you see yourself living in for a long time.
  • Do I have a down payment saved up? A down payment for a home purchase generally ranges from 3-20% of the price of the home. Think about how much you have and how much you may have in the coming year.
  • Do I know what my credit score is? Excellent credit is generally a score of 720 and above; good credit is 660 to 719; fair credit is 620 to 659 and anything 619 and below is considered poor standing.


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All it takes is a quick phone call to find out if you are approved.

Contact Kathy Colkitt
Branch Manager~Loan Officer

Office: 509-999-6464
e-mail: kathy@kcmgloans.com
Kathy Colkitt's Mortgage Group
is dba American Pacific Mortgage Corp. NMLS - 1850
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