Category: Financing

Mortgage Interest Rates Drop

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After months of high interest rates, mortgage rates are declining. This rate decline means good things for sellers. While it’s true that you should consider selling your home if the timing with the financial market andyour situation aligns, now is a great time to get your house on the market. A Mel Foster Co. agent can help you get started.

Interest rate cuts from the Federal Reserve Bank have begun and are expected to continue into 2025. This decline in mortgage rates is driving more buyers into the housing market. Mortgage rates have decreased significantly since the beginning of August 2024.

Home sales have also increased after months of declines. So, if you’re a homeowner thinking about selling, a spike in buyer activity works in your favor. Since the market has become more accessible to a wider range of buyers and there is more competition for available homes, these factors can lead to higher offers and your home may be on the market for a shorter period of time.

Work with your local Mel Foster Co. agent to make the most of increased buyer demand and get your house ready to sell. Focus on these projects first when preparing your house to sell:

  • Find a Mel Foster Co. agent and use their expertise from the start
  • Consider a pre-sale home inspection to determine any trouble areas to correct
  • Invest time in your home’s curb appeal
  • Declutter and tidy up storage areas like the garage, basement and closets
  • Do the deep clean
  • Gather warranties and user manuals to pass along at closing

Find more selling tips for homeowners.

How to Pay Off Your Mortgage Early

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Pay off your mortgage early

If you’ve decided you want to pay off your mortgage sooner than later, here are some ways to pay off your mortgage early.

Refinance with a Shorter-Term Mortgage
Pay off a mortgage faster by refinancing to a 15-year mortgage. Shorter-term mortgages typically have lower interest rates than longer-term mortgages. The sooner you can pay down on the principal of the home, the quicker the interest figures will drop.

Make an Extra Mortgage Payment
If you save a twelfth of a payment every month and then make an extra payment at the end of the year, you’ll be able to pay off a 30-year mortgage almost three years early. This method also gives you the flexibility to use the extra savings for any unexpected expenses that come up.

Pay Using any Bonus Money You Receive
If you receive an unexpected windfall of cash or a sizable tax return, consider applying that money toward your mortgage. This can be extremely cost efficient in the long run, as you will save by paying less interest over time. This can definitely help pay off your mortgage early.

Make Extra Principal Payments
Most mortgage lenders will allow you to make an extra payment and mark it “principal only.” Paying down on the principal can save you quite a bit in interest and will pay off the loan quicker as a result. Contact your lender to see if this is an option you can take advantage of.

Find more financial tools on our website.

How to Save for a Down Payment

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Do you have enough for a down payment?

You’re ready to leave your rental behind but don’t have enough down payment yet. Here’s how to start saving today to get you closer to moving into a home of your own.

Begin Saving Early

The sooner you’re able to start saving the better, especially if you’re able to invest some of your savings. The more you have saved, the more options you’ll have when looking for a home.

Follow a Budget

If you’re disciplined and able to stick to a budget, you should be able to set aside a specific amount of your paycheck to savings every month. You may have to cut expenses or seek additional income, but you will save in the long run by having lower monthly mortgage payments.

Save Windfalls of Cash

Start saving any extra money you come across. Tax returns, gifts and bonuses are perfect sources for your down payment. If you’re able to grow this money through investments, it will get you that much closer to your long-term goals.

Use Interest to Grow Your Savings

If you’re able to utilize high interest savings accounts or certificates of deposits (CD’s) you’ll automatically be putting your money to work for you. Seek out the best resources for earning more for your money.

If you’re wondering how much you need to save for a down payment, use this easy mortgage calculator

How Credit Score Information is Calculated

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Calculating your credit

Your credit score affects your ability to borrow money and influences the interest you’ll pay on that loan. Most people don’t know how these scores are calculated. Here’s what you need to know.

All Credit Scores are Not the Same

People often assume their credit score is a single three-digit number. In truth each of the three major credit bureaus, Experian, Equifax and TransUnion, score you differently since they don’t have the exact same data. Be clear where your ratings come from when sharing your scores. 

Closing Accounts Won’t Always Boost Scores

Closing old or inactive accounts may inadvertently lower your credit score because your credit history appears shorter. If you want to simplify, close newer credit accounts first.

Paying Off a Debt Doesn’t Remove it from Your History 

Once a debt goes to collection, or you’ve established a history of late payments, your credit score is impacted even if you pay off what you owe. While your score will get a boost if you pay off an old debt, it may not be by as much as you think. The best way to increase your credit score is to make payments on time every month.

Co-signing a Loan Impacts Your Scores

When you co-sign for someone else’s loan, you are ultimately responsible for the debt. If the person you’re co-signed with does not pay, your credit score will be impacted. Determine ahead of time if the person you’re co-signing with can afford the loan and if it’s worth the risk to your own credit score.

Not sure who to trust when making decisions that could affect your credit score? Refer to a Mel Foster Co. agent for guidance.

Is a Reverse Mortgage Right for You?

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Is a reverse mortgage right for you?
Is a reverse mortgage right for you?

Reverse mortgages are a great way for senior homeowners to generate a steady flow of income, or receive an immediate lump sum for expenses, if you qualify and determine this is the right option for you.

A reverse mortgage works exactly how it sounds. The bank pays you an upfront lump sum, monthly distributions, a credit line or a combination of all three. The upside is you don’t have to pay back the interest accumulated on the loan during your lifetime, unless you move out of the house.

To qualify, you must be at least 62 years old and own, or nearly own, a house. You also have to make sure your house is in good condition and have no other outstanding loans. If you meet these criteria, a reverse mortgage might work for you.

Be sure to consider the entirety of costs involved in getting into the agreement. Interest is accumulated over the course of the agreement, and when you move or pass away, interest is owed to the bank. The interest is deducted from your estate.

If you’re planning on leaving a substantial amount of money from your estate to friends or relatives, consider how much is going to be deducted due to the reverse mortgage interest payment.

Ask a preferred mortgage lender at University of Iowa Community Credit Union (UICCU) about a reverse mortgage, or contact the trusted lender of your choice.

Tips For Refinancing Your Mortgage.

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Refinancing Tips
Refinancing Tips

Refinancing your mortgage creates a great opportunity to lower your interest rate, but don’t forget these other tips when refinancing.

  1. Change your mortgage length

If you’ve recently come into a different financial situation, consider switching the length of your mortgage. If you started with a 30-year mortgage and have a stable financial situation, a 15-year mortgage will save you more money in the long run. You won’t be paying as much in interest, and you’ll build equity faster.

  1. Switch to a Fixed Rate

Adjustable rates are tempting due to their lower introductory rates, but changing to a fixed rate may be better in the long term. Fixed rates offer stability, allowing you to manage your budget more accurately.

  1. Consider a Cash-Out Refinance

Want a potentially lower interest rates plus extra cash? A cash-out mortgage refinance might be right for you. If you owe $80,000 on your $150,000 home, you can refinance the loan for $100,000 and receive a check for $20,000. Use this money for wise investments like home improvements, education, healthcare or investing. Otherwise, you might end up just taking on more debt.

  1. Consolidate Two Mortgages

When refinancing mortgages, find out if it’s possible to consolidate any previous mortgages you have. When interest rates are low, it’s often possible to pay less under one mortgage than you were before. One mortgage rate is easier to manage than two, and you’ll be saving yourself money.

Talk to a lender at University of Iowa Community Credit Union (UICCU) or a qualified lender of your choice to review your refinancing options.


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