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How to Explain a Gap in Employment on a Mortgage Application

A gap in employment can be a tough thing to explain, especially on a mortgage application. How about that period you spent out of work while you were going back to school? According to the experts, that's a big, fat affirmative—mortgage lenders need to have your full financial story, warts and all. How detrimental is a gap in employment on a mortgage application? Employment history on a mortgage application is something lenders look at in order to decide if you're going to be able to make your monthly payments and eventually pay off your home loan. After all, if you default on a mortgage, a lender is left holding the bag. According to Huettner, there are a number of red flags that can be found in an employment history, and they may require a deeper look by a mortgage underwriter—or they may keep you from qualifying for a home mortgage entirely. The biggest employment history concerns for lenders on a mortgage application include the following: Gaps in employment Frequent job changes Having been employed for less than two years Large changes in income (both increases and decreases) What if your employment history has a red flag? If you're self-employed, lenders want to see at least two years of self-employment to verify that you can make it on your own and still pay your bills on time, says Huettner. The law serves to identify who can repay a mortgage.

Why Millennials Are Moving the Needle on the Real Estate Market

While the uptick in homeownership is nowhere near pre-recession levels, it marks a significant shift from a decade ago, when an unstable job market kept most consumers from even contemplating the purchase of a home. Rates have remained reasonably low, so affordability is possible as well.” “If you look at some of the fintech companies using data science to underwrite people, they are finding people who are very good risks to lend to that they’re starting to bring into the market.”–Richard K. Green Buying Becomes More Attractive as Rents Rise As the saying goes in real estate, it’s all about location. Rising rents, especially along the coasts, “is really shifting the trade-off between owning versus renting,” Keys said. After watching your rent go up and up and up, and potentially bouncing around to look for more affordable rental units, at some point you realize it actually makes sense to buy.” But Sussman points out that money is still a barrier to home buying. It’s likely to remain low as we look forward in the next decade or two.” “After watching your rent go up and up and up, and potentially bouncing around to look for more affordable rental units, at some point you realize it actually makes sense to buy.”–Benjamin Keys It All Comes Back to Supply and Demand Supply and demand is driving up the prices for both renting and purchasing homes. That generation has a homeownership rate of 80%, and they are staying in place as they age. These older Americans are renting out their homes or passing them along to the next generations while they move into apartments. “The biggest change, in many ways, has been toward carefully underwriting the ability to repay. “It’s possible we’ll have a whole new platform that will allow less traditional kinds of borrowers to get approved for loans,” he said. “If the marriage rate stays depressed, then I think the homeownership rate will stay depressed.

Buy-to-let landlords face mortgage crunch as tens of thousands will struggle to get a...

At that time, landlords raced to buy in a bid to avoid the 3 per cent surcharge being introduced on all new buy-to-let and second home purchases from April that year. If you borrowed close to the maximum loan-to-value two years ago, then you are going to face much stricter lending criteria, which includes greater affordability tests. He suggested that many of the landlords who bought new properties in March 2016 and rushed to beat the deadline will have taken out popular two-year fixed rate deals. And in the same year, the Bank of England introduced new rules meaning landlords need more rental income to cover their mortgage costs. It equates to almost 80,000 properties being bought in that month, with Mr Boulger suggesting that around 70,000 would have been bought as buy-to-let properties due to the approaching stamp duty changes deadline. He explained that a significant of buy-to-let properties were bought with cash two years ago to meet the stamp duty deadline. Why landlords raced to beat the stamp duty deadline Landlords took such extreme measures as it meant they could save significant amounts of money. He said: 'Although some of the increase in the number of properties purchased was due to cash buyers, the huge increase in mortgage completions was mainly due to buy-to-let and a good proportion - more than 50 per cent - of these purchases were on two year fixed rates.' Many landlords will have no other option than to stick with their existing lender as they fail to meet the stricter lending criteria imposed on potentially better deals elsewhere. Mr Boulger said: 'Many landlords who had a loan-to-value in excess of 60 per cent will struggle to remortgage but they will be able to get another deal with their existing lender.'

Blockchain expert: “It’s not going away”

In a conversation with HousingWire's Sarah Wheeler, Hoffman discussed blockchain technology in relation to the mortgage industry. "We’re still in early stages of this, so I equate it to an automobile on a dirt road behind a horse and buggy. Our infrastructure is not there yet, but it is being developed.” Hoffman said. It will not take away jobs but it will change how we do things.” Hoffman explained to conference attendees the originations of blockchain and stressed the differences between it and bitcoin, which is commonly confused with blockchain. "They’re not the same thing," Hoffman explained. "Blockchain is the technology behind digital currencies, such as bitcoin or others," Hoffman said. "Whatever comes of bitcoin or others, the technology still remains." In an interview with HousingWire, Hoffman explained her goal in the mortgage space is to help people understand the importance and the uses of blockchain technology. "Without any discussions, your executive leaders are not going to push the technology forward," she said. "Yes, it’s technology, but so was the Internet and you don’t need to understand all the inner-workings of the Internet, but you need to understand how you can power it to help your business move forward.”

Peer-to-peer real estate marketplace Homie wants to replace your realtor with a bot

At one family gathering, a cousin began talking about how he bought a brand new home and sold his own home all without a real estate agent on a site called Homie. Johnny Hanna, who had previously developed the successful real estate lead-gen software Entrata, started the agent-less real estate site with a few friends in hopes of taking some of the frustration out of the process of buying and selling a home. He tells TechCrunch Homie has taken over the millennial market along the Wasatch Front, the area linking a mountainous region from Provo to Ogden, Utah, since launching 18 months ago, and it now plans to do the same in Phoenix, Arizona. Hanna also mentioned he could possibly expand Homie to Vegas, Dallas, Denver and about five to 10 metro areas in the next year. But so far, the startup has only sold about 1,700 homes on the platform — all in the aforementioned Wasatch Front region. “We looked at a lot of different markets in the U.S. and identified the ones that make the most sense,” Hanna said. You don’t need a human to show you the same house over and over when one is like the next and it’s more about negotiating price. So far, the startup has raised about $9 million in seed funding and is currently seeking another $10 to $15 million in Series A financing to help it scale in the next year. Hanna, a realtor himself, is okay with that bit. Even if that means one more human job will be taken over by a bot.

Seattle Is Now the Number Three US City for Foreign Real Estate Investors

A tweet by Mike Rosenberg, a business reporter at the Seattle Times, offers a link to an interesting document released by the Association of Foreign Investors in Real Estate (AFIRE). The document the organization dropped is called "London Edges Out NY as Top City Among Foreign RE Investors." It mainly concerns the global investor class's renewed interest in London's real estate market after a period of uncertainly caused by the 2016 passing of Brexit. As a consequence, London's real estate market is once again the top target for what I call global surplus capital. Interesting enough, AFIRE rates Seattle as the third-best city in the US. The former condition has meant slow growth and few investment opportunities for the latter; yet it is the owners of the latter who place great political pressure on advanced capitalist states to keep wages low or stagnant. It appears to investors around the world like a Mount Rainier on a prairie. They soon send their capital in that direction, and this capital almost immediately inflates already inflated values in that sector or that region. Seattle is not like Dubai, a global city that has no illusions about the investor class and what it can do to a city's economy. This is yet another contradiction of capitalism.

Are we about to see an online mortgage revolution?

Finding and applying for a mortgage has always been a fairly long-winded and often tedious process, but it seems the mortgage industry is finally catching up with the digital revolution. Most major lenders can now at least begin the mortgage application process online; although having to drop offline to complete the application over the phone and via the post is still commonplace. Fortunately, with the rise in the number of mortgage brokers conducting their business online, Habito, Trussle and Dwell for example, finding a mortgage is getting easier. This year, mortgage broker Nuvo is going a step further with the launch of its Facebook Messenger service utilising smart technology and artificial intelligence. Accessed via Facebook Messenger, the Nuvo chatbot, when provided with some basic customer information, can suggest the best mortgage options in under one minute. The Nuvo platform has been designed to fill the gap between price comparison websites and fee charging traditional brokers, and fulfil the growing demand for online services. Nuvo developer Richard Hayes says the company’s artificial intelligence powered chatbot sets it apart in the sector: “It allows customers to provide details via chat which not only is more natural than form filling, but it also means the process is two-way so the customer can ask a question at any point if there is something they don’t understand. Speaking at an event last year, Bank of England governor Mark Carney said: “To its advocates, this wave of innovation promises a FinTech (financial technology) revolution that will democratise financial services. Consumers will get more choice, better-targeted services and keener pricing. As customers become more willing to delegate decision-making to machines, their funds and loans are being better matched with the best rates from around the system.”

Down payment amounts are up—here’s what you need to know

New data show that most buyers actually put down only about one-third that amount. $20,000 is a 7.6 percent down payment. Complete guide to down payment assistance in the USA “First, the most qualified buyers with the largest down payments end up buying most of the homes for sale. Or, they’re forced to get creative to cobble together a bigger down payment,” says Blomquist.” Put in pigskin terms, “buying a house is a full-contact sport in today’s market,” he adds. “The report shows that 23.4 percent of all purchase loan originations on homes bought in the third quarter involved co-borrowers,” says Blomquist. These cities include San Jose (51.1 percent co-borrowers); Miami (42.7 percent); and Seattle (36.7 percent co-borrowers). “This indicates more buyers are getting creative to get to 20 percent down and avoid PMI,” he says. What you can do now Don’t have 20 percent saved? Check out low down payment mortgage options, like the FHA’s 3.5 percent home loan. It's a fact that those who put more money down get the best mortgage rates.

Lending gets easier for Millennial home buyers

According to the latest Millennial Tracker from Ellie Mae, the average FICO score for a Millennial buyer has dropped two full points over the last year. Increasing accessibility According to the tracker, the average Millennial FICO score on all mortgage loans decreased from 725 in November 2016 to 723 in November of this year. Millennials aren't just buying homes; They're refinancing, too Still, Millennials have higher average FICO scores than most buyers. “With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market,” Tyrell said. More than two-thirds of Millennial buyers used conventional products, while 30 percent used FHA loans. Just 2 percent took out VA loans. Men made up the largest majority of Millennial home buyers, accounting for 68 percent of all closed loans. The Millennial home buyer gender gap: male vs. female mortgage characteristics Female buyers, who accounted for just 32 percent of Millennial buyers, were much more likely to buy a home while single. In fact, 59 percent of female Millennial buyers in November were single, 40 percent were married, and 1 percent were separated. Get today’s mortgage rates Want to take advantage of today’s loosening credit standards?

When your medication costs more than your mortgage

Since this is the road they’ve chosen to go down, let’s lay out some facts about the root causes of outrageous drug prices. It is a fact that pharmaceutical companies develop life-saving medications and breakthrough cures. It is also a fact that pharmaceutical companies control the price of drugs. Consumers rightly ask, “Why is the cost of my health insurance going up?” Rising drug prices are a big reason why. Here’s another fact: Nobody aside from pharmaceutical companies benefit from out-of-control drug prices, and that is why hospitals and insurance companies work hard on behalf of patients and consumers to negotiate lower prices. Patients see the result of those outrageous drug prices reflected in the price they pay at the pharmacy, the bill they get from a hospital visit, and the premium they pay for health insurance. As a result, too many families are forced to make an impossible choice between paying for their child’s prescription and paying their mortgages. Big Pharma would have us to believe that there is a binary choice between affordability and innovation. The fact is, nine of the 10 leading pharmaceutical companies spend more on sales, advertising, marketing, and lobbying than they do on research and innovation. But instead of talk that passes the buck on drug pricing, screams about the supply chain, and blames anyone but themselves, let’s talk about how we can work together on real solutions that truly balance affordable access with world-class innovation.


How to Get a Building Permit: Don’t Renovate Without It!

That's right—even though you own your house, you still need to get permits for structural changes, to ensure that your changes will be "up to code," as they say. Here’s everything you need to know about how to get a building permit. Do you need a building permit? How to apply for a building permit The great news is that getting a building permit is easier than you think—mostly because you probably don’t have to do it yourself. Unless you’re a pretty slick DIY-er, chances are good that your project is going to require a contractor, and that’s the person to rely on for the building permit process. First of all, contractors will know the ins and outs of the process for obtaining building permits in your local area, and they’ll also know exactly which permits you need, from structural to electrical to plumbing. Asking how much a building permit costs is a little like asking how much a house renovation will cost—prices vary wildly. The good news is that the upfront permit price will cover all additional inspections that the city will make as the work progresses, including the final sign-off. “Any work with a permit attached usually requires one or more inspections to be performed by licensed inspectors, to verify the work was done according to code, the plans on file, and any other requirements,” says McHugh. Building permit paperwork to keep Once the dust has settled—literally—on your renovation project, a final inspection will occur.