If you can't see the newsletter, or would like to view it online, use this link If you have received this newsletter indirectly and would like to be added to our distribution list, use this link
  Provided to you Exclusively by Gregory Pavlich
Gregory Pavlich
Gregory Pavlich
Resource Mortgage Corporation
Office: 303-444-1200
Mobile: 303-717-1359
Fax: 303-444-6817
Email: gpavlich@rmcboulder.com
Website: www.rmcboulder.com
  Resource Mortgage Corporation
For the Month of June 2022 --- Vol. 16, Issue 6
 
  In This Issue  
     
 

"Strategy is not the consequence of planning, but the opposite: it's the starting point." - Henry Mintzberg

What to Watch - Interest rates, inflation, supply chain fears, slowing economic growth, and runaway home prices.

Why Pre-Approval Matters - Find out why obtaining pre-approval for your mortgage can make you more appealing to sellers.

Make Sure You're Using the Right Sandpaper - Knowing what sandpaper grit you need can help your wood project turn out perfectly.

Q&A: What Is Home Equity, and Why Is It Important? - Learn about how home equity works and how to determine how much equity you have in your home.

Please feel free to forward this newsletter to friends, family or co-workers who may find it helpful.

 
 
  What to Watch  
     
 

Interest rates, Inflation, Slowing Growth, and Home Prices

The market volatility that was seen in May surprisingly saw the closely watched 10-year yield decline, the S&P 500 stock index ended unchanged while Mortgage Bonds saw slight gains. Even the 30-year fixed-rate mortgage has declined from the highs seen in mid-May.

But looking ahead ... "What's Not to Watch" should be the title. Geopolitical headlines, inflation pressures, rate hike fears, supply chain woes, slowing economic growth, runaway home price gains, and a cockeyed labor market are on the radar for the investing community to tackle.

Let's look at the job market. Currently, there are 11.4 million jobs available with 6.5 million unemployed. Weekly Initial Jobless Claims are at lows seen since 1970. The tech sector heavily laid-off workers in May. Talk about an upside-down jobs market.

But what is really on the radar will be the mid-June Federal Open Market Committee meeting scheduled for the 14th and 15th. What the Fed says about the job market and inflation, its dual mandate, will be key for investors that are looking ahead. In addition, the Fed's balance sheet will be discussed at the meeting as the central bank begins to pare down its massive near $9 trillion balance sheet.

Home borrowing costs may have topped out in the short term and if the economy slows further, we may not see higher rates in the near future.

Bottom line: For those in the market to purchase a home, now is a great time. Rates have improved slightly but any improvement from here may be modest as inflation remains very high.

Source: Mortgage Market Guide

 
 
  Housing News  
     
 

Why Pre-Approval Matters

Congratulations! You've taken a big step and decided to start shopping for a new home. This is an exciting, scary, and competitive process, so it's important you set yourself apart from others in the highly competitive home buying market.

One way you can do that is to get pre-approved for a mortgage. Obtaining pre-approval means you have proof that a lender is willing to provide a specific maximum mortgage amount and a stated interest rate. Getting pre-approved gives you an estimate of how much money you could borrow so you'll know what type of house you can afford. It also shows sellers how creditworthy you are. It can also make you more appealing compared to other potential buyers.

It's best to seek pre-approval from several lenders to make sure you're receiving the best rates. You'll need to supply your Social Security number so the lender can do a credit check. Other pieces of information you'll need to provide include a list of assets and liabilities, documentation of job history, and income tax returns. After reviewing your application, the lender will offer pre-approval, grant pre-approval with certain conditions, or deny the pre-approval.

Once you are pre-approved, you receive a document or letter that states how much money the lender will let you borrow to pay for the home. This letter specifies that as long as the home meets certain criteria and your financial situation doesn't change drastically while you're searching for a home, the lender agrees to give you the loan. These letters are typically valid for 60 to 90 days.

Seeking pre-approval can put you in a stronger position to purchase a home. If you need more information about pre-approvals or want to get started on the process, reach out to a real estate broker.

Sources: Bankrate.com, Investopedia.com, Keepingcurrentmatters.com

 
 
  Home Improvement  
     
 

Make Sure You're Using the Right Sandpaper

If you've ever worked on a project that involves wood, you've probably used sandpaper to get the edges smooth or when applying a finish. But are you sure you used the right sandpaper?

When looking at sandpaper, there are five different types of abrasives:

Aluminum oxide: This is the most common type of sandpaper. It's brittle and crumbles easily, which comes in handy when you're sanding drywall, wood, or painted surfaces.

Ceramic: This sandpaper is harder than aluminum oxide and is ideal for rough or heavy-duty sanding. It's also one of the more expensive options, often used with belt sanders.

Emery: This sandpaper has sharp particles and works well for removing corrosion from metals. You can also use emery to polish metals.

Garnet: This naturally abrasive material wears down more quickly than aluminum oxide, so it doesn't last as long. However, it's great for hand-sanding and smoothing finishes.

Silicon carbide: This type of sandpaper maintains an abrasive action even when it gets wet. It's perfect for polishing between coats of finish, sanding plastic or metal, and performing wet sanding.

Sandpaper is an excellent tool to use in shaping a variety of projects. No matter what type of sanding you need to do, you're bound to find a sandpaper abrasive that works well. Head to your local home improvement store to pick up the best type of sandpaper, and you can get that project finished in no time.

Sources: Familyhandyman.com, Thesprucecrafts.com, Bobvila.com

 
 
  Q&A  
     
  What Is Home Equity, and Why Is It Important?

QUESTION: What Exactly is Home Equity?

ANSWER: Home equity is the current market value of your home, not including the money you still owe. You can increase your home's equity in one of two ways: by paying down the principal of your loan or from the increasing value of your home.

For instance, when you purchase a home for $300,000 and put down $60,000 as a down payment, your lender provides the remaining $240,000. In this instance, you would have $60,000 of equity in the home.

Fast-forward five years down the road and you've been making regular mortgage payments. You now owe $225,000 on your home, but now your home's value has jumped to $350,000. You now have $125,000 of equity in the home ($350,000 minus $225,000).

However, it's important to note that if your home loses value, it can negatively affect your home's equity. For example, if you've paid down the mortgage to that $225,000, but now your home is only worth $275,000, your home's equity is only $50,000 ($275,000 - $225,000). This is less than the $60,000 you used as a down payment.

Home equity is one of the most important financial benefits of owning a home. You can tap into the equity when you sell your home, consolidate debts, or pay for major home improvements.

While you can look at online real estate sales to learn about your home's estimated value, this answer only provides a rough estimation. To learn exactly what your home is worth when it comes to home equity, you need to reach out to a trusted real estate appraiser. This person can provide an official valuation of the current market value of your home.

Sources: Nerdwallet.com, Investopedia.com, Keepingcurrentmatters.com

 
 

Equal Housing Lender