Williamsport Mortgage Guide

Homeownership and Mortgages  
The joys of Williamsport homeownership are many and the security of owning your own home can help you sleep better at night. No longer subject to unexpected moves initiated by your landlord, you can make long-term plans and enjoy the stability that a never-changing payment allows. Let's not forget the joy of writing off all those interest payments at tax time and watching your property's value increase over time. 

Most prospective Williamsport homebuyers have questions about homeownership. To help clear things up, we spoke with D. Shane Whitteker, owner and chief broker at Principle Home Mortgage in Williamsport, Pennsylvania.  
  

Avoid Becoming House Poor 
It's important not to fall into the trap of becoming “house-poor.” Prospective home buyers in Williamsport – and throughout Pennsylvania - often neglect to budget for the increased monthly costs that come with owning their own home. Besides the biggest expenses (mortgage and property taxes) many costs are overlooked. Utilities are often higher than you were used to as a renter, and new costs, such as regular maintenance can add up quickly. 
 
Are you willing to give up certain niceties that you currently enjoy? People often find themselves needing to reduce their regular expenditures after purchasing a new home. Date nights may entail a BBQ in the backyard, rather than a trip to your favorite steak house. The term “staycation” has become common during the pandemic, but spending vacation time at home has been a thing since the first home buyer signed on the dotted line. 

According to Whitteker, it’s best to plan ahead.  

“I think the number one thing to do is make sure you plan your purchase out properly. First, you must look at your budget so you don’t end up house poor, meaning your budget will be too tight because your housing expense is too high for you to comfortably manage,” Whitteker says.  

He recommends taking a comprehensive look at your expenses, as well as keeping an eye on the details.  

“Take things into consideration such as utility payments, cable, internet, heat etc,” Whitteker says. “Next, I think it is incredibly important to research the area you plan to purchase in. Make sure to consider recreation, shopping, school district, crime rate, noise level, etc.,” Whitteker says. “Do research to make sure there are no odor issues in your area as well - being close to a sewer plant can be a problem.” If you are buying something that is not your forever home, then make sure you understand that you have a longer-term plan and are taking steps to get where you would like to be." 
 
The Cheapest Home May Be Ok... Or Maybe Not 
When shopping for a home, you should take care in weighing the pros and cons of buying a fixer-upper. Enlist the help of a local mortgage broker to really get to the bottom of the situation. There's an old saying about buying the cheapest house in the best neighborhood as the way to go. This isn't always the case. Buying the cheapest house available to you can be a big mistake if you're not careful.  

There's a reason when a house is listed for sale cheap and it's not because the seller has a big heart. Cheap homes usually come with big problems. Unless you are a licensed contractor that loves to spend every weekend working on your own home, you may be better off spending a little more for a house in better condition. Buying a home in good condition is often cheaper than buying a fixer and making it nice. 
 
If you go the fixer route, be sure the “bones” of the home are strong. This includes foundation, roof, electrical system, and plumbing. These are all expensive fixes and need to be tended to immediately. Chance are, you're a little cash-poor after making such a big purchase as a home, but you'll need cash on hand to correct any serious problems. 
 
Low Mortgage Rates Impacting Inventory 
Mortgage rates have been historically low for a while now. The downside of the low rates has been an increase of prospective buyers, driving up the prices of the limited inventory of homes. Many existing homeowners have been able to refinance their mortgages in the past year, reducing their monthly payments often by hundreds of dollars per month. This trend appears likely to continue through the rest of the year and should further buoy the appreciation of properties. 

Let's not forget that rates also go up and there comes a time when refinancing to a lower rate is no longer an option. Even if rates have inched down a bit, the costs associated with refinancing can hamper your ability to lower your payments. The numbers need to make sense. If it costs $6,000 in fees to refinance to a lower rate, but you are only going to save $20 a month, it would take 25 years to recoup those fees. Crunch the numbers before refinancing. Your local Williamsport mortgage broker can do the work for you. 
 
When refinancing, try to keep the term the same as it now stands. If you've been paying on a 30-year mortgage for the last five years, refinance into a 25-year loan. So-called “no-cost” loans are a good deal if you can do it. In this scenario, you receive a slightly higher rate than a normal loan, but the lender pays all the fees associated with it. This requires rates to be quite a bit lower than you currently have. This is a good thing to ask your Williamsport mortgage broker about. 

According to Whitteker, there were several factors that made 2021 a good year to get – or refinance – a mortgage.  

“In general, the benefits in relation to mortgages have related to lower interest rates in 2021 and the deferment option that came out during COVID times.  A refinance to a lower rate or to possibly get a better rate and consolidate debt would have been a good option for many homeowners,” Whitteker says.  “This is still a good option currently and will most likely continue through the year.”   

In fact, Whitteker says a new program is being offered to specifically help more people become eligible to refinance their home’s mortgage.  

“In June, Fannie Mae announced that it will be offering a program called Refinow,” Whitteker explains. “The objective is to allow lower income homeowners to refinance. The person refinancing will need to be at 80% or less of the area median income (AMI). The loan to value maximum is set at 97%. The lender will offer a credit for the appraisal at the time of closing of up to $500, and the adverse market refinancing fee will be waived by Fannie Mae. The adverse market fee was assessed in 2020 to charge anyone refinancing a conventional mortgage .5% in cost.”   

Whitteker also notes the increase in many homeowner’s equity – and how to access it if need be. 

“Another thing to consider is that in the last twelve months homeowners have seen record amounts of equity growth in their homes,” Whitteker says. “Pulling home equity is an option to consider to pay off debts, buy an investment property or any number of things. All in all, 2021 should end up being a very good year for homeowners in general considering all options and data.” 
 
Is a 15-Year Mortgage Worth Considering? 
Some prospective homeowners consider a 15-year mortgage rather than the more popular 30-year version. A 15-year term needs to be paid back twice as fast as a 30 year, so the payment is significantly higher. It may be better to get a 30-year loan and simply pay extra when and if you want to. If you have a rough month, you can choose to pay the lower payment. 
 
Avoiding Buyer’s Remorse 
Buyer's remorse is a common term used to describe the regrets often experienced after buying a home. Did I pay too much? Can I afford this payment? What if I lose my job? The list goes on and on. 
Some of the worries are understandable, but many are just fear of the unknown. 
 
You can limit your anxiety over your new purchase with careful planning and common sense. If your home inspection spells out a significant problem, don't ignore it and feel pressured to continue with the deal. Try and negotiate the repair with the seller. If the seller balks at the request, maybe it's better to cancel the deal and find another home. Never buy a home without an inspection. Never. Most importantly, speak with a local Williamsport mortgage broker – they'll work with you to ensure you get the best home that you can afford. 

To learn more, contact Williamsport mortgage broker Principle Home Mortgage at (570) 980-9359.