divider

Archive


No Cash for a Down Payment? New Mortgage Programs Might Offer Options

/ 0 Comments

Would be home buyers who have been held back from purchasing a home due to a lack of cash for the down payment may be able to see their dreams become a reality, even without a hefty down payment. Both Freddie Mae and Freddie Mac have introduced home mortgage programs that require as little as 3% down payment.

According to an article published by Fox Business, written by Brittany De Lea, “These new products are designed to compete with the low-down-payment options offered by the Federal Housing Administration (FHA), which offers loans for as little as 3.5 percent down for those with a credit score of at least 580.”
Freddie Mae’s program is named Home Ready and applicants can get approved with credit scores as low as 620 . The program allows parents to co-sign, even if they will not reside at the home. The product is geared toward prospective home buyers in with low to moderate income; both first time and repeat home buyers can qualify for a Home Ready Mortgage.
Similarly, Freddie Mac’s program, Home Possible, serves to offer affordable, low down payment loans specifically to “homebuyers in high-cost and underserved communities”. Either first time or repeat home buyers can qualify, even with credit scores as low as 640.
Read the entire article.

 

 

 

 

Photo Credit: frankieleon

Learn More
separator

Why Are More Americans Choosing to Rent instead of Buy Homes?

/ 0 Comments

The debate over why households choose renting over purchasing a home in the United States has been a hot topic lately.  Analysts have indicated the young generation of millennials are not interested in being tied down to home ownership and prefer renting over buying. However, an article published by CNN by Daniel B. Kline, points out that it is not just millennials who are opting to rent instead of making a home purchase.  Kline also notes that the decision to rent may not be a lifestyle choice, but a financially driven decision.

It is true that the number of households renting a home has increased over the past decade; almost by 10 million.  It is also true that 65 percent of household headed by those 35 years old and younger rent their homes.  However, it’s the heads of households aged 35-44 that made the biggest increase over the past decade.  In this age group, “the percentage of renters jumped from 31% in 2006 to 41% in 2016”.   Heads of households between 45-65 renting homes also increased over the past decade.

However, these households may not all be renting based on lifestyle choices.  In fact, research indicates that many who rent homes would actually like to purchase a home someday.  Further, surveys show that 65% of renters indicated that they are renting homes due to circumstances, not purely by choice.  Circumstances such as increased home prices and tougher mortgage standards may be partially to blame.

Read the entire article.

 

 

 

Photo Credit:  Mark Moz

Learn More
separator

How Is Student Debt Affecting Real Estate Trends?

/ 0 Comments

Student debt is a thorn in the side of many college students years after they receive their diploma.  The rising cost of tuition and debates as to whether students should be responsible for paying for their college education have been hot topics for several years.   According to an article published by Bloomberg, written by Chris Bryant, “In the U.S., where aggregate student debt has surged 170 percent in a decade, recent graduates owe $34,000 on average. About 5 percent owe more than $100,000. “

This may not seem like an issue that older generations would be worried about.  Their student loans have long been paid off, they may have even helped finance their children’s college education, leaving them debt free from college loans.  However, as the article points out, this mounting debt is a factor in some negative economic trends that affect many, even older generations.

Because the generation of millennials will be dedicating funds to pay their student loans off, with salaries that have not rebounded from the 2008 recession, their focus will not be on purchasing a home.  They are struggling to set money aside for a down payment.  Missed loan payments for student loans can affect credit scores, making mortgages harder to come by.    As baby boomers look to downsize homes in retirement, it might be difficult to find buyer from the next generation who can afford to purchase it.

Read the entire article.

Learn More
separator

Good News About Credit Reporting and Credit Scores

/ 0 Comments

Come this July, you may see a boost in your credit score.  The three major U.S. personal credit monitoring firms, Experian, TransUnion and Equifax, will be removing some borrowers’ civil judgement and tax lien information from their credit reports.

According to an article published by Fortune.com, written by Kevin Lui, since 2015, these credit reporting firms have been working to correct credit reporting mistakes and removing information unrelated to the borrower’s loan application by omitting information deemed unnecessary to lending.  In fact, according the article, “…in 2011 alone, 8 million complaints about wrong information in credit reports were received by the three major credit-reporting firms, according to the CFPB”.

This latest announcement could result in some borrower’s credit scores increasing by up to 20 points.  An increase in a credit score can increase the likelihood of securing a loan and is also helpful when applying to rent a home and even can affect future employment opportunities.

Read the entire article.

 

 

 

Photo Credit:  cafecredit.com

 

Learn More
separator

Expect A Surge of Young, First-Time Home Buyers Into 2020

/ 0 Comments

Over the past fifteen years, the percentage of first-time home buyers that fell between the ages of 20 and 29 has increased from 17 percent to 28 percent of all buyers, according to TransUnion.  Following the same trend, first-time home buyers between the ages of 20 and 39 increased 16 percent in that same 15 year span; ultimately, the age group made up 60 percent of all first-time home buyers by the end of 2015.

An article published by The M Report by Brian Honea indicated that TransUnion anticipates up to 17 million first-time home buyers will enter the real estate market over the next five years.   With this influx of new homeowners comes positive economic news for both local economies as well as the mortgage lending industry.

FotoFlexer_Photo Joe Mellman, VP and Mortgage Business leader for TransUnion, explained  that first-time home buyers help to
improve the local economic activity as a result of increased construction and home improvement demand.  Mellman also describes, from the perspective of mortgage lenders, “First-time home buyers are valuable prospects in the eyes of many mortgage lenders, as that time in a borrower’s life often corresponds to additional financial needs,”.

Read the entire article.

 

Photo Credit:  Renaude Hatsedakis

 

Learn More
separator

Home Purchase and Closing Rates are Showing Improvement

/ 0 Comments

For the first time in the past nine months, mortgages for home purchases have accounted for more than 60 percent of all closed loans.  According to a report released by Ellie Mae, the rate of actually reached 62 percent in May.

Additionally, the rate of loans that closed improved to 70 percent.  Specifically, the rate of home purchase loans that closed was 75 percent, with the rate of refinancing closes lagging slightly at 67 percent.

The report also notes that home buyers who are financing their home purchase have seen an average of 45 days Keys and lock the door on the background of solar gardento close their loan, which is an increase of one day from last month.

The article published by REALTORMag on June 16, 2016 provides data from the Ellie Mae Report, and also discusses the percentage of home borrowers with “high” credit scores, which exceeded 80 percent for conventional loans.

Read the entire article for these details.

Learn More
separator

Refinancing a Home or Getting a Mortgage May Be Easier

/ 0 Comments

approved-160120_1280It’s easier than it has been in several years to qualify for a mortgage, thanks to eased credit score requirements.  According to a recent article in the Spring Real Estate Guide in the Money publication, there has been a 15% increase since 2014 in the number of refinance applications approved.

Impacting the approval rate is the fact that the average FICO credit score required for a 30-year mortgage has dropped 10 points.   In fact, borrowers with an average score of 695 might be able to qualify for a mortgage, which hasn’t been the case for years.

Additionally, those with a higher than average credit score (750-800) might find themselves qualifying for rates in line with borrowers with “excellent” credit (800 or above); the gap in the rate difference might now be close to zero.

More accessible mortgages, coupled with near record low mortgage rates make this an excellent time to secure a mortgage or refinance.

To learn more, read the entire article.

 

Learn More
separator