The real estate market is showing signs of improvement; as a result, more Americans may be entertaining the idea of purchasing a home for the first time or moving to a new area of the U.S. However, its wise to consider how much money you need to earn in order to afford a home in a specific city. A recent study released by HSH.com provides the details about 27 major U.S. cities and what salary is required in order to purchase a home there.
According to an article published by Realtor.com’s Catey Hill, the study “assumes the buyer has good to excellent credit (and thus would get a mortgage interest rate—depending on location—of around 4%), put down 20% and would be spending no more than 28% of income on principal and interest.” Even with a significant down payment and a low mortgage rate, one would need to earn an average salary of almost $58,000 per year to afford a home in Chicago, according to the study results.
Topping the list with a salary requirement of almost $148,000 a year, is San Fransiciso, CA. More affordable cities such as Cincinnati, Atlanta and Pittsburgh allow home buyers earning closer to $30,000 to purchase a home.
To find out about other U.S. cities and how much you would need to earn to purchase a home there, read the entire article.
Early on in 2016, the average time to close on a home mortgage loan had risen to an average of 50 days. The delay was a direct result of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure rule which changed the type and complexity of loan information industry professionals had to pass on to borrowers. Within the next few months, however, the time to close worked its way back down to a 12 month low of only 44 days.
Yet, the this figure has begun creeping back up again. Ultimately, July 2016 Ellie Mae findings reported an average wait of 46 days. According to an article published in HousingWire.com by Ben Lane, “…is this year’s increase in days to close just the industry fully settling into the post-TRID world and finally finding some semblance of normalcy, or is it more concerning than that? Only time will tell.”
The article goes on to provide additional figures from the Ellie Mae report. For example, July 2016 closing rate for all loan rose to 71.6% and the 30-year mortgage rate reached its lowest since March 2015. For more details, read the entire article.
Over the past few weeks, mortgage rate averages had increased slightly. However, the rates actually dipped lower last week and could continue to drop further this week. This decrease is a direct result of the release of economic data which pushed investors to purchase bonds. Consequently, mortgage rates averages dipped in line with the long-term bond yields.
Specifically, the 30-year mortgage rate average dropped to a low 3.61 percent, hovering near the lowest rates of 2016. Similarly, the 15-year rate average drifted down to 2.86 percent. Freddie Mac chief economist , Sean Becketti, summarized the mortgage rate trends for the year, “…Since the start of February, mortgage rates have varied within a narrow range providing an extended period for house hunters to take advantage of historically low rates.”
An article released by the Washington Post by Kathy Orton, also noted credit availability has loosened as a result of programs from Freddie Mac and Fannie Mae which allow for a low down payment. Read the entire article.
Image Credit: Life’s A Beach Real Estate
It’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.