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Government Shutdown Brings Mortgage Obstacles

The shutdown effect is obvious if you're a government worker suddenly trying to buy a home with IOU's – but, otherwise, why would your mortgage application be affected? Other loans may require verifying paperwork from the IRS – for example, verification of income – before loan processing can proceed. How To Keep the Home You Already Have Government workers who already own homes have a more fundamental cash flow problem. Your lender may also be able to provide a short-term loan at reduced interest rates. It may be making mortgage payments when you're hit with a financial crisis, making unexpected home repairs, or getting into a bidding war to buy your first home. Start by establishing an emergency fund during better times, so you don't have to rely completely on credit to get through a true financial crisis. If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, join MoneyTips. Make all payments on time and keep other debts as low as possible. You'll have to prioritize debt and possibly make only minimal credit card payments while you devote existing cash toward your mortgage. Did we mention the importance of an emergency fund?

Does affordability matter: Why delinquent mortgages more common in ‘most affordable’ states

Why do the states with housing’s highest “affordability” measurements — much-discussed but perhaps dubious economic yardsticks — have more borrowers who can’t make their mortgage payments? The state’s home listings are priced at 55 percent of normal “affordability,” according to one housing-cost index from the National Association of Realtors. That ranks next to last nationally. I loaded my trusty spreadsheet with various economic and housing markers — plus the recent ranking of state rankings I compiled — to ponder how housing “affordability” translated to other measurements of life. Now to be fair to those “affordable” states, homeownership (tracked by the US Census Bureau) paralleled affordability: averaging 69 percent for states with the highest Realtor grades vs. 63 percent for the least affordable. The same hiring spree that put them in a home-buying mood also makes housing costlier to buy. A broad-based cost-of-living scorecard from the state of Missouri gave most “most affordable” states an average No. 37 for least affordable. 37 for least affordable. And it’s not a small gap: thin 0.2 percent population growth for “most affordable” states in 2018 vs. swifter 1 percent for the pricier locales.

Detroit hits mortgage milestone as housing market gains momentum

For the past decade, it’s been almost impossible for aspiring Detroit homebuyers to get mortgages. But that appears to be changing. The city notched a real estate milestone of sorts last year, recording more than 1,000 new home mortgages in 2018. Its data show that 1,221 homebuyers purchased homes with traditional mortgages last year. The land bank’s Rob Linn says it’s the first time the city has reached more than 1,000 mortgages since the 2008 financial crisis. Subsequent waves of mortgage and tax foreclosures decimated Detroit’s housing market and rendered traditional mortgages almost non-existent, with banks often refusing to lend even to qualified homebuyers. But Linn says there’s been a steady upward trend in new mortgages since 2014, when the city recorded only 490. “In the housing market, success begets more success. “When a resident lives in an area where there are mortgages, it becomes easier for them to get their own.” Linn says another good sign is that mortgage-backed homebuying is spreading to more neighborhoods. Land bank data show that home sales prices are on the rise, too—jumping from around $33,000 in 2014 to more than $74,000 in 2018.

What Is Ownership Interest?

The remainder of this post will go over the ways in which owning property or a business can impact your mortgage transaction. Being on the Title to a Home When it comes to mortgage programs for first-time homebuyers, it does actually matter whether you’ve had ownership in a home before. You have an interest if you own 1% or 100% of the property. Owning Your Own Business Another aspect where ownership interest might come into play is if you own your own business. If you have less than 25% ownership, while the documentation necessary can vary by loan type, there are some things to think about. You may provide a statement regarding the extent of your ownership in the business (e.g. It’s also a good idea to have 2 years of tax returns available with your Schedule E, which indicates other income and losses. For this reason, mortgage lenders are very interested to make sure that the condo association is in good shape. In a condo project, single-entity ownership restrictions are as follows: 2 – 4 units: ownership in not more than one unit 5 – 20 units: ownership in not more than two units 20 units or more: ownership can’t exceed 20% – 25% of the project, depending on the investor in your mortgage Ownership interest can play a big role in many areas of a mortgage transaction. But now that you know how it works, perhaps you’re ready to get started on buying or refinancing a home.

Good news and bad news about the real-estate market in 2019

The problem is that the pent-up demand is still expected to continue to exceed supply, even with more homes for sale. NAR predicts that existing home prices will rise 2.5% in 2019, to a median of $265,200, compared with a 4.7% rise in 2018, to $258,700. Mortgage rates will continue rising From the beginning of 2018 to mid-December, 30-year fixed mortgage rates went up a little less than three-quarters of a percentage point, to around 4.75%. Fannie Mae’s forecast is for an increase of just 0.1 percentage point. For example, in NerdWallet’s daily mortgage rate survey, the 30-year fixed-rate mortgage started the year averaging 4.09%. Affordability still a concern As home prices and mortgage rates rise in tandem, home buyers find it harder to afford homes. New homes get smaller From a home buyer’s perspective, most markets need more houses for sale, and they need to be on the affordable end of the price scale. Lending standards ease a little Mortgage lenders learned an enduring lesson in the housing crisis a decade ago: Make sure borrowers can repay their loans. Borrowers choose ARMs because the initial rates on adjustables are lower than the rates on fixed-rate mortgages. In October, 8.2% of mortgages were ARMs, according to Ellie Mae; 12 months earlier, ARMs had a 5.5% share of mortgages.

Real estate strategy: How to win at real life Monopoly

Here’s how to win at Monopoly in real life by adopting some of its real estate strategy. Considerations for investors with multiple mortgaged properties Mistakes to avoid The leverage you gain with smart mortgaging allows you to control more rentals and acquire wealth. Check mortgage rates for rental property here (Dec 18th, 2018) Monopoly and mortgages The objective of this classic game is to control property and extract rents from your competitors until they run out of money. Some properties are more valuable and desirable than others, and owning a matching group allows you to build homes and hotels and charge much higher rents. Real estate strategy: leverage Monopoly is not just a game. According to Alex Hemani at Forbes.com, leverage in real estate investing works best when property values and rents are increasing. And while most investor property mortgages require at least 20 percent down, getting that 20 percent from your other properties allows you to leverage a lot more. Investment cash-out mortgages in real life There are many ways to extract equity from investment properties. Financing more properties Mortgage lenders require significant cash reserves when financing rental property, and the more properties you have mortgaged, the higher this number may be. Most property investors make their money over time, paying off their mortgages and investing their rental income Many, many wealthy people in the US got there with real estate investing.

Risky Home Loans Are Making a Comeback. Are They Right for You?

One popular loan is the interest-only adjustable rate mortgage, with which a borrower pays only the interest for a period before the rate resets and principal becomes part of the payment. “We all have time on our hands because business is so slow,” he said. “The worst it could be was 8.75 percent, and saving $25,000, I could put that money somewhere else.” The family’s plan, Mr. John said, is to make principal payments in addition to the interest, with the goal of reducing his mortgage faster than he would with a 30-year fixed-rate loan. The price falls will be higher because of the expectation that prices always go up.” And not paying principal during the initial interest-only period just makes the amortization period of the loan shorter, said Richard K. Green, a professor of real estate at the University of Southern California. In other words, instead of paying off a mortgage over 30 years, the borrower is paying it down over 20 or 25 years, increasing the amount of the payments after the interest-only period ends. “It’s not to just get someone into a house,” he said. The risk of a change in a person’s financial circumstances could affect the ability to repay interest-only loans. They were the first to lose their jobs.” Today, though, even qualified borrowers need to be aware of the loans’ risks. After the initial interest-only period resets, the payment can go up as high as 50 percent, and some people cannot afford that, Dr. Green said. “For the first-time home buyer, I say stay away.”

States with highest mortgage delinquency rates have these things in common

Low delinquency rates bode well for homeowners and lenders; however risks still exist that put more people in jeopardy of foreclosure. Top 5 states with most serious delinquencies are on the East Coast In August, the states with the most serious delinquencies, which are defined as 90 or more days past due, were New York (3.1 percent), New Jersey (2.9 percent), Mississippi (2.9 percent), Louisiana (2.7 percent) and Florida (2.5 percent), according to CoreLogic’s latest Loan Performance Insights report. Top 5 states with highest serious mortgage delinquencies State Percentage of delinquencies Foreclosures Source: ATTOM Data Solutions New York 3.1% 12,000 New Jersey 2.9% 15,000 Mississippi 2.9% 773 Louisiana 2.7% 2,073 Florida 2.5% 19,000 “Because of extremely long foreclosure processes in those states, exacerbated by delays because of questionable mortgage documents, there are still a relatively high percentage of delinquent homeowners who have been delinquent for years but not yet foreclosed on — or whom got into a loan modification to avoid foreclosure but have fallen back into foreclosure,” Blomquist says. Louisiana and Mississippi also face a tough housing market, which is more a product of lagging home price growth in the wake of the housing crisis. Almost 21 percent of Louisiana homes and 23 percent of Mississippi homes are underwater, according to ATTOM. That compares with the national average rate of 9 percent. Income inequality topped the national average in Florida, Louisiana and New York. We saw during housing crisis that one spouse wouldn’t tell the other that they were in trouble,” Gerecke says. Some people were victims of frauds and scams – people are somewhat hesitant to ask for help and for good reasons.” For people who are drowning in debt or are facing financial trouble, seeking the help of a financial counselor is a good place to start, Gerecke points out. This is especially true for people who are hesitant to contact their lenders for fear of foreclosure; generally the counselor can act as an intermediary.

Homeowners’ typical mortgage payments are rising much faster than home prices

The Many Ways to Be Relieved of Your Timeshare Obligations While it is true that a timeshare contract is a binding legal document, it is often mistakenly thought that such a contract cannot only be cancelled. In fact, most timeshare companies maintain that their contracts are non – cancellable. This misconception is perpetuated by timeshare companies and user groups that are funded, maintained and controlled by the timeshare industry. Straight Up with Jocelyn Predovich: The Truth about FHA 203k Loans The FHA 203k loan program provides home buyers the opportunity to buy and fix up a property, without exhausting their personal savings. Homeowners’ typical mortgage payment is rising much faster than home prices, according to new data from CoreLogic. The US median sale price has risen by just under 6% over the past year, according to CoreLogic. However, the principal-and-interest mortgage payment on a median-priced home has spiked by nearly 15 percent. And the trend looks set to continue – CoreLogic’s Home Price Index Forecast predicts that home prices will rise 4.7% year over year in August 2019. One way to measure the impact of inflation, mortgage rates and home prices on affordability is to use the so-called “typical mortgage rate,” CoreLogic said. While the US median sale price in August was up about 5.7% year over year, the typical mortgage payment was up 14.5% because of a neatly 0.7-percentage-point hike in mortgage rates over the time period, LePage said.

Affordable Housing Bond Measures Pass in Three States

While most of the national attention in last night’s election coverage focused on prominent personalities in key states, a number of local referendums addressed issues related to housing affordability. Portland voters approved a $652.8 million bond measure to build more affordable housing. Two North Carolina cities also passed bond measures to finance affordable housing. The measure will finance the creation of new low-income housing and the rehabilitation of foreclosed, blighted or dilapidated single-family houses and apartments. Separately, voters in Chapel Hill approved a $10 million bond to build and preserve more than 700 affordable homes and apartments. Paying off the bond could add a penny to the town’s tax rate of 52.80 cents per $100 in property value. In Texas, Austin voters approved a $250 million proposal for affordable housing. “We’re excited for this historic bond to have passed with such an overwhelming margin,” said John Lawler, the Head of the Keep Austin Affordable coalition organized in support of the bond, in an interview with the Austin Statesman. “We see it as a mandate for the city of Austin to invest heavily in affordable housing.” However, one proposition that went down in defeat. Sponsored


Household incomes failing to catch up to rising home prices, NAR...

Rising home prices are outpacing household incomes nationwide, making it even tougher on first-time buyers, a new report from the National Association of Realtors and Realtor.com found. First-time buyers in Hawaii, California, Oregon, Montana, Rhode Island and the District of Columbia struggled the most, according to the Realtors Affordability Distribution Curve and Score, which measures affordability through a combination of data on mortgages, income and Realtor.com listings. Residents in those states can only afford between 19-23 percent of the active housing inventory, according to the NAR report, released on Wednesday. “The survey confirms that the lack of entry-level supply is putting affordability pressures on too many buyers — especially those at the lower end of the market, where demand is the strongest,” said Lawrence Yun, chief economist at NAR, in a prepared statement. “This is why first-time buyers continue to struggle finding affordable properties to buy and are making up less than a third of home sales so far this year.” Nationally, the affordability score dipped slightly from 0.86 to 0.84 from March 2017 to March 2018, due to rising home prices and a spike in mortgage rates. In Ohio, Indiana, Kansas, Iowa, and West Virginia, where housing prices are lower, a typical household can afford 54 to 62 percent of the active housing inventory currently on the market, according to the report. “Wages are growing, which is welcome news for prospective buyers, but prices are increasing at a faster rate, up almost 6 percent in the first two months of 2018,” Yun said. “Solutions to improve these conditions include more homeowners selling, investors releasing their portfolio of single-family homes back onto the market and more single-family housing construction.” Despite the overall decline, 14 states saw an increase in affordability scores — led by Vermont, Hawaii and North Dakota — and 35 metro areas also saw an increase. “We’ve seen affordability improve as inventory declines have begun to lessen these areas,” Realtor.com Chief Economist Danielle Hale said. “More balanced supply and demand dynamics have kept listing price growth below the national average, providing some much needed relief for stretched home buyers in these areas.”