Home Real Estate - Mortgage

Real Estate - Mortgage

Want to buy a new home? Builders want to help

And a supply shortage can make it hard to find homes for sale within your budget. Experts say this news should make home shoppers, who seek positive signs in the real estate market, feel more confident. In January, the number of new construction housing units increased to an annual rate of 1.326 million. But the growth rates will be modest.” Homes are still affordable, despite the ending of historically low-interest rates and increasing prices. The illustration below shows the difference between buying a home today at 4.5 percent (with 20 percent down) and buying a home in 1981 at 18.75 percent with 20 percent down. So the median-priced home today is much more affordable than it was in 1981. Dietz says the NAHB is expecting around a 5 percent increase in single-family home construction in 2018. “And we can expect builders to build as much as possible as soon as possible.” Ailion explains that, for years, builders have focused on constructing higher-priced new homes. Home affordability calculator “Rising demand and low supply resulted in home prices rising 41 percent over the past five years. That’s up from eight percent a year earlier, per Dietz.

Are Subprime Mortgages Still a Part of Mutual Funds?

As such, you would think these types of dodgy loans would be a thing of the past. Although they come with a different name and appearance, the subprime mortgage is back with a vengeance and they are more popular than ever. They’re essentially housing loans given to people who don’t have the credit to qualify for a mortgage. Prior to 2008, they were given out to millions of people with no credit who were clearly unable to ever pay them back. The result was a huge debt bubble that eventually popped, causing the financial crash. Why They’re Back In the wake of the crash, tough legislation was brought in to stop predatory lenders from issuing subprime mortgages. These are proving to be just as popular as the subprime mortgages of the past, meaning there could be potentially devastating repercussions for the economy. What Investors Should Know If you’re an investor, especially one with their toes in mutual funds, this will obviously concern you. Make sure to keep up to date with all of the latest investment trends via money market investments, so you can avoid being burned in the future. One thing that’s certain is that if another major banking collapse does happen, the political will to bail them out like in ’08 will be non-existent.

5 Inconvenient Truths About Real Estate Agents

Buying or selling a home is likely the biggest financial transaction you’ll ever complete. They sometimes work for both sides In some states, the same real estate agent can represent both the buyer and the seller in a transaction. Their commission is negotiable Listing agents may expect you to accept their commission — generally around 6% of the sale price — without question, but you certainly don’t have to. Most sellers never think about the fact that anyone can come through the door of an open house, Gasset said. If you view an open house and decide to make an offer, the listing agent can take credit for your interest. Don’t provide your name, sign any documentation or discuss your opinion of the house with the listing agent unless you have to, Miller says. If you really like an open house, leave and find a buyer’s agent who can help you make an offer. Consumers should interview several potential providers and make their own decision about whom to hire, Harty says. Interview multiple real estate agents. Get a real estate attorney involved.

Non-Traditional Credit Options For Mortgage Applicants

Bruce Marks, CEO of the non-profit NACA that provides loans to low credit score borrowers, says his company relies on non-traditional credit metrics frequently so I spoke with him to get an idea of what lenders are looking for. Rental Income: This is one lenders will look to first so this is the top priority for making sure you have a documented history of on-time payments. But make sure any changes to the monthly payments have a documented explanation (random example: if you and your ex agree that you'll pay for all of summer camp and travel for the kids rather than paying child support directly to your ex, make sure you have the bill from summer camp in your files so you can show a lender you didn't skip out on payments for a few months). Gig Economy income: In the eyes of some lenders, a steady monthly income from a job such as driving for Lyft or delivering packages for Amazon can be almost as good as a job in from a traditional employer. But it needs to be more than just a few recent months of income. "You look at stability of income. Savings/Practice payments: If you are stashing away money for a downpayment it can help to set up transfers out of your checking account as though they were a regular mortgage payment. If you have extra to put away there's no harm in making extra deposits, but a regular withdrawal that you don't dip in to shows a lender you're ready for a mortgage. It's better if the bill is one that is paid monthly as opposed to quarterly (such as water or sewage bills, which typically only bill a few times a year). If you have any other ideas for non-traditional options to add to the list email me at amydobsonRE@gmail.com or tweet me @amydobsonRE.

The housing recovery isn’t over, it just feels like it is

Sales of new and existing homes are falling, construction of single-family homes is basically flat for the year, mortgage rates are rising and affordability is weakening. We know that because the price gains are finally starting to shrink, according to a report this week from the National Association of Realtors. The reason the housing recovery isn't over is because demand is very solid, and the price gains are starting to ease. Sales of existing homes have been lower for five straight months, according to the Realtors, and mortgage applications to purchase a home have also been falling, although they are still slightly higher than a year ago. "I think the market still has legs, but if rates continue to rise it will price out entry-level buyers and they have been carrying the market the last few years," said Khater. "While monthly home sales slipped, yearly growth pushed the three-month average to 8.1 percent, back above what is forecasted for 2018 (7 percent)," said Danielle Hale, chief economist at realtor.com. A historically normal level of single-family housing starts, going back 40 years or so, is about 1.1 million per year. "Builders need to manage rising construction costs to keep their homes competitively priced for the newcomers to the housing market," said Danushka Nanayakkara-Skillington, senior economist at the National Association of Home Builders. Mortgage rates are higher now than they were one year ago, but not by a lot, and they are still, by historical measures, pretty low. As more supply hits the market, sales will grow again.

Four Creative Financing Options For Real Estate Buyers

Financing a home is one of the most critical factors for buyers looking to purchase real estate. However, bad credit does not have to prevent you from purchasing real estate. Seller financing is a loan that is provided from the current homeowner who is selling their property to the buyer. Homeowners who have a difficult time selling their home are most likely to provide seller financing. However, if the buyer does not purchase the property by the end of the specified time, then the seller is able to sell the property and the buyer has no obligation to purchase. #3 – Short Sales If a homeowner is experiencing financial difficulties or if the home is owned by a lending institution, then the bank that owns the home may allow the home to be sold for less than what the actually worth. It’s not possible to purchase a home through short sale without bank approval. This proceeding is initiated by the bank, rather than by the buyer (in a short sale). Foreclosures take less time to complete than a short sale. Evidenced by the statistics, foreclosure are much more common when the housing market collapses and real estate prices drop.

How much down payment do you need for a house?

Applicants who make smaller down payments may have to buy mortgage insurance to get approved for a home loan. Click to see your low-downpayment loan eligibility (May 11th, 2018) Down payment plus borrowed funds equal purchase price “A down payment is money you pay that isn’t financed through a mortgage,” says attorney William Walzer. The down payment amount you must pay depends on the loan you get. Because of this risk, buyers must usually pay private mortgage insurance (PMI) if the down payment is below 20 percent.” There’s good news: three types of loans require little-to-no down payment: Federal Housing Administration (FHA) loan (minimum 3.5 percent) Veterans Administration (VA) loan (minimum zero percent) United States Department of Agriculture (USDA) loan (minimum zero percent) Complete guide to VA home loans These government programs do require some form of insurance as well. In addition, mortgage insurance costs less if you make a larger down payment, also reducing your monthly costs. And it may require a larger loan amount at a higher interest rate,” says Miramontez. And find out how quickly you’ll need to save to meet your goals,” Miramontez says. “Include a certain amount you need to save for the down payment fund every month,” Feldman says. “Any amount you save can help. Many states and cities have programs to help their citizens buy a home,” says Feldman.

Here’s how a 5% mortgage rate would roil the US housing market

Mortgage rates are now at their highest level in four years and poised to move even higher. The timing couldn't be worse, as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale. Mortgage rates have not been at 5 percent since 2011. Just 6 percent said they would drop their plans to buy altogether. About one-fifth of consumers said 5 percent rates would cause them to move with more urgency to purchase a home, fearing rates would rise even further. Another fifth said they would consider more affordable areas or just buy a smaller home. Specifically, the deduction on property taxes is now limited to $10,000. Some have claimed that higher rates and the new tax law will put downward pressure on home prices, alleviating some of the current sticker shock, but other factors are fighting that assertion. "There are still many more buyers than the current housing supply can support, with no major relief in sight." Higher mortgage rates may mean some borrowers on the margins will not qualify for the size of the loan they need or want.

What it takes to get (and keep) a mortgage

Make a pre-qualification checklist The first step toward purchasing a home is getting pre-qualified for a mortgage loan. Following are items your lender will ask for during this process: • Most recent two years of W-2s for anyone whose name will be on the loan • Two years of tax returns • Statement of assets, such as 401k accounts, mutual funds, investments and, most importantly, the accounts the funds your down payment is coming from • The lender’s application filled out as completely as possible • Homeowners insurance information After gathering these items and reviewing your financial history, your lender will tell you the loan amount. Loan Application Dos and Don’ts Once you find the home of your dreams, it’s time to apply for the actual loan. During the application process, your lender will verify all information, including the steps leading up to closing. • Making Large Purchases: Don’t make any large purchases until you close on your loan. This includes furniture for your house, a new car or anything else that will significantly change the debt you have. This means you should avoid applying for a new credit card or any activity where your credit will be pulled. Your credit score is an important part of your loan process; therefore, you should avoid activities that could change it. You don’t want this process to delay closing on your new home. They can help you avoid making decisions that could negatively affect the outcome of your mortgage loan.

Is the highest offer when selling a home always better?

Do you need a higher price to pay off your mortgage and other costs? Buyers can write any contingencies they want into their offers. Common ones include: Mortgage finance — If the buyers don’t get their mortgage approval, they are off the hook Home appraisal — If the home falls short according to the valuation of an independent appraiser, the deal’s dead Home inspection — If the property has significant defects, you’re done Clear title — Any issues with your title (your ownership of the property and your right to sell it) and it’s all over Home sale — If the buyer can’t sell her own place, she can walk away Of course, buyers don’t have to withdraw if a contingency is triggered. Cash vs. mortgage Clearly, your buyer won’t be able to trigger a mortgage finance contingency if she’s paying cash. Pre-approved buyers can close on a deal as long as the property meets their lender’s guidelines. As long as your property appraises for at least the selling price and has no inspection or zoning issues, your sale should close. Cost of keeping your existing home vacant If you face the possibility of moving on and leaving your existing home empty, you’re probably worried about the prospect of paying two mortgages. For unoccupied homes, the cost of maintaining coverage isn’t typically too great. But most sellers want only to accept offers that are likely to survive all the way to closing. They can’t afford to deal with buyers whose contingencies and mortgage applications pose high risks.

TRENDING

6 Reasons Housing Construction Is Ripe For Disruption In The Fall...

They say economic and housing recoveries don’t die of natural causes. They’re murdered. Can American home building--a laggard at adopting available construction technologies and digital power--pivot soon and nimbly enough toward building processes already in wide use in other global markets, to find profitable inroads against direct construction costs and make entry-level homes more affordable to a wider universe of buyers? Here, we’ll look at six reasons housing construction is ripe—and ready—for disruptive innovation if the current housing recovery cycle has any chance of lasting to 2020 and beyond. The fact that roughly $250 billion in 2018 revenues tie back to those legacy on-site building practices—an 88% market share of U.S. vertical construction expenditures according to market research consultancy Freedonia Group—shows just how hesitant U.S. builders are to embracing more automated, more predictable, and more financially and operationally disciplined building processes. Building materials, labor, land, and capital—all essential resources for new residential development and construction--are now altogether straining builders’ ability to develop homes affordably. Labor Capacity Constraint. The CNC wave is on: Off-site home builders such as Walpole, N.H.-based Bensonwood Homes and its Unity Homes entry-level division, and Ripon, Calif.-based start-up Fully-Integrated Offsite Solutions builder Entekra use digitally programmed cutting machines called CNC to cut structural members of each panelized section of a home. As integrated models, 3D visualization, building information modeling, and digital construction processes create templates that tie what home buyers want directly to a procurement and production package, a windfall of profitability awaits. The first, most likely opportunity area for disruptive innovation to happen would involve taking what does not produce value out of the architecture, capital, construction, engineering, and real estate chain of processes that generate new or improved housing.