What are Mortgage Points and Should I Get Them?

When taking out a mortgage at the Lake of the Ozarks, you'll have to decide if you want to purchase mortgage points. As your Lake of the Ozarks mortgage lender, I'm here to help you understand mortgage points so you can make the right decision for your situation.

What are Mortgage Points? 

A mortgage point is a fee equal to 1% of the loan amount. There are two types of points: discount points and origination points. Discount points are actually prepaid interest on the mortgage loan. The more points you pay, the lower the interest rate on your loan and vice versa. Borrowers can typically purchase up to 3 or 4 points, depending on how much they want to lower their interest rate. Origination points are charged by the lender to cover the costs of making the loan. 

Should I Purchase Mortgage Discount Points? 

Your decision to purchase mortgage discount points should be based on a number of factors, such as how much cash you have available for a downpayment and how long you plan on staying in your new home. Let's take a look at some of the advantages and disadvantages of purchasing these discount points:

Advantages to Buying Mortgage Points

• Lower Interest Rate 
• Smaller Monthly Payments
• Pay Less Interest Over Life of the Loan 
• Build Equity Faster 
• Points are Generally Tax Deductible

Disadvantages to Buying Mortgage Points  

• Larger Upfront Costs 
• Monthly Savings May Be Negligible 
• You'll have Less Cash on Hand for Expenses
• Takes Longer to Break Even 
• You'll Lose Money If You Sell/Buy Before Breaking Even 
• Money May Earn Better Return Elsewhere
• Smaller Mortgage Interest Deduction

 When it comes to purchasing a home at the Lake of the Ozarks or refinancing, I'm here for you every step of the way. I'll discuss financing options, offer competitive interest rates and back it up with the First Class service you deserve. For all of your Lake of the Ozarks home financing needs, give me a call at 573-746-7211.

For Lake area news, resources and tips on financial services, please 

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Michael Lasson

Sr. Residential Mortgage Lender

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(573) 693-9141

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.
 

Federal Funds Rate Rises For First Time In Seven Years

Last Wednesday, the Federal Open Market Committee announced the first increase to the Federal Funds Rate in seven years. This increase in the rate recognizes the considerable progress that has been made toward restoring jobs, raising incomes and easing economic hardships facing our country today. The increase also reflects the Fed's confidence that economic factors still lagging behind desired levels will continue to improve, particularly inflation, manufacturing and new home construction.

What is the Federal Funds Rate? 

The Federal Funds Rate is the interest rate used when depository institutions (banks and credit unions) lend reserve balances, or money, to each other overnight. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions' reserve requirements. Institutions with surplus balances in their account will lend to those institutions in need of a larger balance. The Federal Funds Rate is an important benchmark in financial markets. It was held near zero to support economic recovery following the worst financial crisis and recession since the great depression.

What Does the Increase Mean for Mortgage Rates?

While the increase to the Federal Funds Rate does not have a direct impact on home loan rates at the Lake of the Ozarks, we could see an increase in the near future. It's important to keep an eye on economic news. The economic conditions that made the Fed's finally comfortable with a rate hike, and the further strengthening of the economy, could also amplify investments in stocks, which could negatively impact bonds. Those bonds include mortgage bonds, to which home loan rates are tied.

For now, Lake of the Ozarks mortgage rates remain attractive. Now is the time to buy if you've been thinking about it. Give the best mortgage lender at the Lake of the Ozarks a call at 573-746-7211 today about your financing options. When it comes to your financing needs, I'm committed to working with you every step of the way!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Sr. Residential Mortgage Lender

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(573) 693-9141

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.
 

Getting a Mortgage When You're Self-Employed

Being your own boss can have its advantages, except when it comes to purchasing a home. While it's not impossible for the self-employed to get a mortgage loan at the Lake of the Ozarks, it can be more difficult. It definitely requires advanced planning. Here are a few tips for the self-employed, to help you through the process:

1. Showing Proof of Income. 

Anyone applying for a mortgage has to show proof of income, showing accurate proof of income though, can be difficult for the self-employed. You also want to make sure your income is relatively consistent; while lenders can ignore seasonal spikes, they don't want to see a decrease in income from the previous year. This leads into the next point about choosing your deductions wisely, as these deductions will affect your income that is reported.  

2. Don't Take Too Many Deductions. 

If you know you're going to apply for a mortgage in the next two years, be careful what deductions you take. The more deductions you take, the lower your income looks on paper. Keep in mind that your Lake of the Ozarks mortgage lender is going to go by what the IRS forms say, not what you say you brought home. While taking deductions for your business has its benefits come tax time, it can pose a huge disadvantage when it comes to getting a home loan.  Random business expenses can come back to haunt you in the form of a lower taxable income, which results in a harder time qualifying for a loan.

3. Maintain a Good Credit Score. 

Whether you're self-employed or not, your credit score plays a big role in determining your loan approval. You don't want to jump through all the hoops of proving your income to find out your credit score isn't going to cut it. Make sure to maintain a good credit score in the months leading up to applying for a mortgage, and even after you've applied. Be sure to pay all your bills on time, use as little debt as possible, and don't open too many new credit accounts, especially in the 6-12 months before you apply for a mortgage.

Other tips for anyone looking to apply for a mortgage will also apply to those who are self-employed. While you may have to jump through a few extra hoops, the process of applying for a mortgage is the same as that of someone working for someone else. If you're self-employed and looking to obtain a home loan at the Lake of the Ozarks, give me a call at 573-746-7211. I will work with you every step of the way, providing the first class service you deserve!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Sr. Residential Mortgage Lender

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(573) 693-9141

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.
 

Enjoy Spectacular Christmas Light Displays at Lake of the Ozarks

Christmas is just 3 weeks away! What is your favorite part of the holiday season? Maybe it's spending time with family, all the delicious food or the awesome decorations and Christmas lights. At the Lake of the Ozarks, we've already started celebrating! If you're looking to get into the Christmas spirit, check out some of these local Christmas light displays:

Lake of the Ozarks Holiday Lights

The Lake of the Ozarks area is home to several annual drive-thru holiday light parks. Each year they open toward the end of November and stay open through the holiday season. While donations are gladly accepted, each of these light parks is absolutely free. You can easily check them out while you're passing through the area or while you're here visiting for the holidays!

1. Enchanted Village of Lights 

 
Location: Laurie Fairgrounds
Date: Now through January 2
Hours: Open Nightly 5-9 PM (10 PM on Weekends)

The Enchanted Village of Lights is one of the largest drive-through holiday light parks in Mid-Missouri.

2. St. Patrick's Festival of Lights

Location: Shrine of St. Patrick in Laurie
Date: Now through January 1
Hours: Open Daily 6-10 PM

The Festival of Lights at the Shrine of St. Patrick, Hwy 5, Laurie, is the oldest light park in the area. It was started in 1981 with hundreds of lights decorating the buildings and grounds and has continued to grow each year. With 4,000 strings of lights, over 60 automatic timers and more than 350 extension cords, the Festival of Lights has turned into one of the major places to see.

3. Versailles Unity Circle of Lights

Location: City Park in Versailles
Date: Now through January 1
Hours: Open from Dark until Midnight

For the 9th straight season, the city of Versailles will light up its city park for the Unity Circle of Lights. The holiday light park is named after the "Unity Circle," a monument erected at the park entrance to show cooperation among various entities in the community. The Unity Circle of Lights is located at the junction of Highways 5 and 52 and will feature as many as 40 lighted displays, including several animated holiday scenes for the family.

4. Osage Beach Holiday Lights

Location: Osage Beach City Park
Date: Now through January 3
Hours: Evenings

Holiday themed lights will be on display at the City Park and at various locations along Osage Beach Parkway every evening. Bring the kids to meet and visit with Santa at the City Park on Saturday, December 19th from 3 PM to 5 PM.

In addition to holiday lights, the Lake of the Ozarks community has many great Christmas events you can participate in. If you're considering purchasing a second home at the Lake of the Ozarks, you could become a part of our great community and participate in events like these all year round. For all your Lake of the Ozarks home financing needs, give me a call at  573-746-7211.

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Sr. Residential Mortgage Lender

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(573) 693-9141

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.
 

What Causes Interest Rates to Move Up or Down?

You've heard everyone saying that interest rates are near historic lows. How did they get there? Why are they going to go back up eventually? Your Lake of the Ozarks mortgage lender is here to explain what causes interest rates to move up  or down. The interest rate you're offered is an important piece of the Lake of the Ozarks home loan process.

How Mortgage Rates Work

Mortgage rates move up or down in eighths of a percentage. For example, if you don't have an even 4%,  you will be offered something like 4.125%, 4.25%, 4.375%, 4.5%, 4.625%, 4.75%, or 4.875%. A change of a mere .125% may not seem very big, but it could mean thousands of dollars in savings or costs annually. When you see rates advertised with a different percentage, something like 4.86%, that is actually the APR which factors in the cost of obtaining the loan. Another thing to think about with advertised rates, is that they are an average of rates and will not be the exact rate that you'll receive.

How Mortgage Rates are Determined

While many different factors can affect interest rates, the best indicator of whether mortgage rates will rise or fall is said to be the movement of the 10-yr Treasury Bond yield. While most mortgages are originally financed as 30-yr mortgages, most homeowners either pay them off or refinance them in around 10 years. This is why the 10-yr Treasury Bond is a great measure of the interest rate change. In addition, Treasuries are backed by the "full faith and credit" of the US, and therefore are the benchmark for many other bonds as well. To get an idea of where mortgage rates will be based on the 10-yr Treasury bond, use a spread of about 1.70% above the current 10-yr bond yield. The spread accounts for the increased risk associated with a mortgage vs. a bond. This spread can change and should only be used as a way to ballpark where interest rates currently are. For specific details on current interest rates, please contact your mortgage lender at Lake of the Ozarks.

Factors that Cause Mortgage Rates to Move

Typically, when bond rates (or bond yield) go up, the interest rate also goes up. However, you don't want to confuse the bond rate with bond prices, as they have an inverse relationship with interest rates. Let's take a look at a few other factors contributing to the rise and fall of interest rates:

1. Economic Outlook - When the economic outlook is poor, investors turn to bonds as a safe investment. When purchases of bonds increase, the associated yield falls and so do mortgage rates. However, when the economy is expected to do well, investors will place their money in stocks, causing bond prices to decrease and interest rates to rise.

2. Economic Activity - Economic activity including jobs reports, Consumer Price Index, Gross Domestic Product, Home Sales, Consumer Confidence, and other data on the economic calendar can move mortgage rates significantly.

3. Federal Funds Rate - If the Federal Funds Rate changes, mortgage rates can swing up or down depending on what their report indicates about the economy. 

4. Inflation - If inflation fears are strong, interest rates will rise to curb the money supply, but when there is little risk of inflation, mortgage rates will most likely fall.

While the 10-yr Treasury bond is the best indicator of where interest rates are going, they don't always match up. There have been times and will be more times, where mortgage rates rise faster than the bond yield. Just because the bond yield rises 20 basis points, doesn't mean that mortgage rates will do the same. In addition, these rates are only averages and your unique situation will be the biggest factor in what rates are offered to you. The best thing to do is talk to your mortgage lender to see what options you have for a mortgage at the Lake of the Ozarks. Lakelender Michael Lasson will discuss your options and offer competitive interest rates, backing it up with the first class service you deserve - call 573-746-7211 today! 

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Sr. Residential Mortgage Lender

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(573) 693-9141

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.