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How Will the Mortgage Industry Change in the Near Future

Posted on January 27, 2017 by Scott Li

With President Trump taking office, there is some speculation that the mortgage industry is about to see some significant changes. Although mortgage rates are still low when compared to historic rates, they’ve climbed to over 4% for the first time in more than a year. Experts think the increases will continue for a few different reasons.

The First Spikes

Immediately after it was announced that Trump won the election, market rates spiked. This was actually surprising for many experts and analysts, who immediately began to rethink the future of the economy and different markets. On December 14, 2016, the Federal Reserve raised its interest rates by 0.25%. This was expected and even predicted by many finance experts since the rates hadn’t increased at all in nearly a year. In fact, this increase marked only the second Federal Reserve interest rate increase in the past 10 years. read more

How a Mortgage Credit Might Affect You

Posted on January 26, 2017 by Scott Li

Many states across the country are still working to recover from the housing crisis of the late 2000s. To help more families avoid foreclosure, the federal government is considering reforming the MID, or Mortgage Interest Deduction, which would benefit low- and moderate-income taxpayers. This credit will affect everyone in all tax brackets in different ways.

The Proposal

The Tax Policy Center has proposed three different ways to reform the MID and help people keep their homes. One of these proposals involves completely replacing the MID with a 15% non-refundable credit for any mortgage valued at $500,000 or less. Currently, this credit is available for mortgages valued at $1 million or less. Government officials feel that more households would be able to benefit this way, although the average subsidy would be significantly lower than today’s MID. It would also raise taxes by some $240 billion nationwide over the next decade. read more

Why It’s Smart to Refinance Your Mortgage

Posted on January 1, 2017 by Scott Li

While there are tens of thousands of Americans across the country deciding whether it’s smart to buy a home, there are probably twice that many who could benefit from refinancing. Since mid-November, mortgage rates have been on the increase, which means the time to do so may be running out. Here are some of the reasons why you should think about refinancing now.

Why Do Homeowners Refinance?

If there’s one reason why homeowners refinance, it’s because they have an opportunity to get a lower interest rate. No only will their monthly payments go down – and sometimes significantly – but they will also pay less interest over the lifetimes of their mortgages, which may equal tens of thousands of dollars in savings. In fact, it’s estimated that the average homeowners could save themselves about $3000 by refinancing their mortgages right now. Even though interest rates are starting to climb, they’re still lower than most existing mortgages. read more

Is a Trump Presidency Driving Up Mortgage Rates?

Posted on December 29, 2016 by Scott Li

People are up in arms (or celebrating) the fact that Donald Trump is the United States president-elect. However, it hasn’t just affected the people; it’s also had a stunning impact on mortgage rates. They’ve spiked since the election results were announced, and they’re continuing to climb.

MBS Movement Following the Election

In the weeks after Trump was elected, MBS (Mortgage-Backed Securities) lost well over 240 points in very short order. Keep in mind that MBS points and mortgage rates move opposite of one another. Whenever MBS prices climb, overall mortgage rates – and the amount of money consumers ultimately pay – go down. However, with MBS falling significantly, mortgage rates are doing the opposite. A 240-point drop is equal to a .5% increase in rates. They’re still going up, and they’re going up quite a bit. As of mid-November, mortgage rates had climbed to the highest they’d been since January of this year. read more

How Do You Know if You Qualify for Mortgage Preapproval?

Posted on December 22, 2016 by Scott Li

If you want to know whether you’re ready to buy your first home, a mortgage preapproval is the way to go. Preapproval will allow you to start bidding on homes because buyers are far more likely to take you seriously. Here’s everything you need to know about mortgage preapproval and whether you’re likely to qualify in your current financial situation.

Prequalification vs. Preapproval

Many people seem to think that mortgage prequalification and preapproval are the same things, but this is not at all the case. Prequalification is essentially a conversation with a lender in which you provide some basic information and your lender tells you whether you’re likely to qualify for a mortgage based on that information. The preapproval process is much different, and it requires a hard credit check along with several other very important elements. read more

Home Values in the US are Increasing – Why the Time to Buy Is Now

Posted on December 17, 2016 by Scott Li

The decision to buy a home is a hard one to make, especially when the real estate market never seems to stay steady long enough to make the right choice. However, if you’ve been on the fence, now is undeniably the right time to buy a home. You’ll certainly be glad you didn’t wait.

Home Prices are Leveling Out

Although home prices have been on the rise throughout 2016, experts believe that things will shift in 2017. Interest rates are starting to climb in the last quarter of 2016, and as they continue to climb, home prices should start to level out, if not fall somewhat. If you’ve been waiting for the rising prices to slow down, now is the perfect time to bid on your dream home and make things happen. The flood of buyers can’t make up for the numbers of unsold homes, and because so many have been on the market for so long, sellers are ready to start making deals. read more

What Goes into Mortgage Preapproval?

Posted on December 1, 2016 by Scott Li

Mortgage Preapproval

In today’s competitive real estate market, mortgage preapproval is very important. The mortgage preapproval process can (and usually does) take some time, but once you have it, sellers will take you more seriously. Here, you’ll learn about the process and what you’ll need to get preapproved for your new home.

Prequalification vs. Preapproval

Although these two things may seem the same, they aren’t. A prequalification doesn’t require a credit check. In fact, a loan officer will simply ask you about your credit score, your income, your debt, your assets, and the amount of down payment you’ll have, then tells you whether you qualify for a mortgage – and for how much. Because there’s no credit check involved, sellers don’t often take prequalification seriously. Preapproval, on the other hand, is far more involved. When you receive a preapproval amount from a lender, you can feel confident that you will qualify for that mortgage once you’ve chosen a home. read more

Need a Loan for a Tougher to Approve Property?

Posted on November 30, 2016 by Scott Li

Mortgage Approval

If you want to buy a traditional single-family home, getting a loan isn’t too difficult if you have good credit. However, if you want to buy a condo or townhome, things are a little different. These properties present challenges for those who want to buy them, but there are some tips and tricks for getting your mortgage approved.

Why Lenders Don’t Approve

Before you can set out to win over a lender and get the mortgage you need to buy a condo or townhome, it’s important to fully understand why so many banks simply won’t provide the funds. In some cases, the building may be under construction. In others, the bank might feel that one person owns too many of the units, or that too many of the units are being rented. What’s more, if there is inadequate insurance, or even if too many people are behind on their monthly dues, banks typically avoid these properties. Fortunately, there are some things you can do. read more

How to Get Out of Mortgage Debt Faster

Posted on November 29, 2016 by Scott Li

Your mortgage is very likely the largest debt you’ll ever have. Getting out from under that debt quickly can save you tens of thousands of dollars in interest charges, too. Here are a few tips and tricks for paying off your mortgage more quickly so you can reap the benefits of owning your home outright.

#1 – Make Extra Payments

The best way to get out from under your mortgage debt quickly is to make extra payments on your loan. Although one extra mortgage payment per year can knock down the principal significantly, it’s even better if you can make one extra payment each quarter. By making four extra payments a year, you can drastically reduce the length of your loan term and save thousands on interest. What’s more, you’ll own your home far more quickly. read more

Are Credit Guidelines Starting to Loosen Up?

Posted on November 18, 2016 by Scott Li

are-credit-guidelines-starting-to-loosen-up

According to senior loan officers across the country who were surveyed by the Federal Reserve, the standards used to help lenders determine who qualifies for mortgages are loosening. This is especially true when it comes to residential loans, but just about everyone who is interested in buying a home can benefit in some way.

Slow but Steady Changes

When it comes to standard GSE-eligible residential mortgages – which are the most common credit mortgages – 88.9% of lenders reported that there were no real changes in credit requirements over the last three months. However, 11.1% of lenders said that credit requirements have eased somewhat, allowing them to provide loans to people who may not have qualified only a couple of months previously. Government residential mortgage credit standards remained relatively the same, as did QM jumbo loans. In fact, some providers of jumbo loans (1.6% of banks) reported some tightening of credit guidelines. read more

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