Most of us want something cheap, fast, and easy. Unfortunately, getting all 3 is kind of a Unicorn. However, pick whatever 2 out of the 3 you’d like. Cheap and easy? Well, it may not be fast. Fast and Cheap? Well, may not be easy….you get the point. Out of fast, easy, and cheap…what are the 2 most important to you? There may be some lenders who can close in 10 days, which is really fast. However the caveat may be that it’s more expensive. Or perhaps a lender who offers a really slick app for an easy experience….well, the cost for that technology is generally passed on to the consumer and therefore more expensive whether that be in rate or fees. In our day and age of immediate gratification, most consumers are willing to pay a little more for convenience, but everyone’s situation is different. This is another reason why you need to be speaking with a trusted local mortgage professional.
BIG Changes to FHA Loans
So on March 18th FHA made some big changes, specifically related to transactions with credit scores below 620. With these changes, borrowers with scores below 620, are far more likely to have their files Underwritten with more scrutiny not allowing the same leniency as before this change was implemented. The main result of this change…is the amount someone will be approved for, and is directly tied to the Debt to Income calculations. There are some instances where even a file with below a 620 score MAY go higher, but compensating factors such as reserves are required to do so. Having the knowledge to navigate the loan programs and being up to date on the latest changes are another reason why you need to be making sure you’re working with a trusted local mortgage professional, so call me today.
How will your credit score impact you buying a home?
Most people think you have to have top notch credit in order to obtain a mortgage, and this just isn’t the case. Every loan program has a different credit score requirement. For example, a Conventional loan requires at least a 620, but FHA only requires a 580! When pulling credit, we pull all three bureaus…Equifax, Transunion, and Experian. Whatever your middle score is, is used as your qualifying score….meaning, if you have a 585, 623, and a 670…well, then the 623 would be your qualifying score. Nowadays there are a ton of options to obtains a free score, whether that be through your credit card or perhaps an app like Credit Karma. However, these scores may have some variance from a Mortgage Inquiry. There are a vast number of scoring models, and a mortgage inquiry is a specific one.
What are Closing Costs?
Closing costs are the portion of your investment in addition to the down payment. Some of these items may include an appraisal, attorney charges, property taxes, and homeowner’s insurance to name a few. You may even hear some of my competitors advertising ZERO closing costs, or that they will pay your closing costs for you. So, they are going to give you thousands of dollars out of the kindness of their heart….right? Sounds too good to be true? Because it is….Disclaimer, they are not reinventing the wheel. It is common practice that higher rates are available in exchange for a lender credit to absorb closing costs. This is one of the reasons I show my clients options when it comes to rates. In some instances it may make sense to take a slightly higher rate in exchange for a credit, or it may make more sense to buy points for a lower rate…it all depends on your particular scenario. That is why you need to make sure you are working with a trusted local mortgage expert.
What does a mortgage application consist of?
Your very first step before you even begin to look at homes is a loan application. A loan application can take a matter of minutes! The application helps determine your budget, loan program, as well as other important information crucial to your home buying process. Click the “Apply Now” button at the top of the screen to get started!!
2018 Recap/2019 outlook
2018 was quite the year! We’ve seen interest rates volatile and home prices increase, causing affordability to be one of the biggest hurdles in home buying. There have also been fantastic changes to student loan calculations, as well as increased loan limits for different programs. Interest rate forecaster’s predict may hold around where they currently are, but job growth and inflation will be key factors in potential rate hikes in 2019.
MAJOR change to Student Loan calculations!!
Student Loan debt is hands down the #1 reason first time home buyers are holding off. Fortunately, there have been MAJOR changes by Freddie Mac in regards to this pain point. Check out this month’s video for additional helpful information!
What are Escrows??
An Escrow account is an interest free account that collects your homeowner’s insurance and property taxes through you monthly payment. When the time comes that these particular bills come due, your Escrow account pays them on your behalf. In some instances you may elect to waive escrows, but can depend on the loan program as well as amount of down payment.
What is your first step in buying a home?
Most people assume you need to find a Real Estate agent before anything else in the home buying experience. Actually, you need to speak with a trusted local lender. If you haven’t spoken to a lender, how do you know how much home you can afford? How do you know which loan program is best for you? These are just a few examples of this month’s mortgage minute.
How Millennial’s are impacting the housing market
Why is the rate of Millennial home ownership so low? A few variables are delayed child bearing, delayed marriage, and student loan debt. Check out my video for additional information on this topic, with information provided by housingwire.com