Do You Know How Much Equity You Have In Your Home? You May Be Surprised!
Posted: 10 Feb 2016 04:00 AM PST
“Home price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market. In the last three years, borrowers with at least 20 percent equity have increased by 11 million, a substantial uptick that is driving rapid growth in home equity originations.”
“Homeowner equity is the largest source of wealth for many Americans. The rise in home prices, expected to be at least 5% in 2016, will continue to build wealth and confidence across America. As this process continues, it will provide support for the housing market and the broader economy throughout [the] year.”
“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”
Posted: 03 Feb 2016 04:00 AM PST
“The fourth quarter RESI found that title agents continue to believe that property valuation issues will be the most likely cause of title order cancellation over the coming year.”
Posted: 02 Feb 2016 04:00 AM PST
Where Are Interest Rates Headed This Year?
Posted: 26 Jan 2016 04:00 AM PST
Rents Still Skyrocketing
Posted: 20 Jan 2016 04:00 AM PST
“Apartment rents increased faster last year than at any time since 2007.”
“Another report from Axiometrics Inc., a Dallas-based apartment research company, showed that rents increased 4.7% in the fourth quarter compared with the same quarter a year earlier, the strongest year-end performance since 2005”.
Posted: 18 Jan 2016 04:00 AM PST
“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”
When Is It A Good Time To Rent? NOT Now!
Posted: 12 Jan 2016 04:00 AM PST
“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”
“In general, the higher rents go, the more difficult it will be for young people to save for down payments, making them likely to rent even longer.”
The Most Appealing Aspects of Homeownership
Posted: 14 Jan 2016 04:00 AM PST
Most analysts say that the mortgage industry will need a strong year for home-purchase loan volume in 2016 to make up for an expected large drop in refinances. So how is the housing market doing?
The latest flurry of housing data for October and November brought the usual mixture of good and bad news. The longer view suggests that the market continued to recover solidly in 2015, though some weakness and uncertainty remains, analysts told Scotsman Guide News. The outlook for 2016 is generally positive.
“We still have some vestiges of distress, but for the most part, 2015 was a very strong market,” RealtyTrac’s Vice President Daren Blomquist said. “I don’t know if normal is the right word, but it was a strong market after a soft patch in 2014.”
More economists are starting to refer to “a normal market” for existing homes. In 2015, the home-sales rate topped 5 million for eight consecutive months from March through October, before tumbling steeply in November.
Existing sales, which account for nearly 95 percent of all home sales, fell by 10.4 percent in the month to an annual rate of 4.76 million, according to the National Association of Realtors (NAR).
NAR economists say the big drop in November was likely a temporary blip caused by delays in closings at the end of the month due to the industry adjusting to the new federal consumer-disclosure rules under TRID. NAR is forecasting that sales will end the year 7 percent higher than in 2014. Sales also are projected to increase in 2016, although at a slower pace of around 3 percent.
“The big picture trend for the housing market is up,” NAR analyst Danielle Hale said. "It is moving up a little more sideways in recent months."
NAR’s pending home-sales index, which is based on signed contracts, consistently in 2015 predicted sales in the range of 5 million to 5.5 million, similar to the level in the early 2000s.
“It is right where we should be,” said First American’s Chief Economist Mark Fleming. “The existing-housing market, in terms of number of home sales, shouldn’t be 6 million. It should be right around 5.5 million, so we are pretty close there.”
Mortgage delinquencies and foreclosures are also steadily falling. CoreLogic reported 34,000 completed foreclosures in October, which remains higher than the monthly average of 21,000 before the downturn, but it's still down 27 percent from one year earlier. Seriously delinquent mortgages also have fallen to the lowest level since December 2007, the company said.
On a national basis, home prices rose 6.3 percent in November year over year, CoreLogic reported. Various other price studies have pegged the yearly gain at 5 percent to over 6 percent. Home prices have reached new peaks in a few markets. Black Knight Financial Services reported this week that its home-price index in October was just 5.3 percent below the 2006 peak for the index.
As home values have risen, the number of underwater homeowners — individuals who owe more on a mortgage than the house can fetch on the market — declined steeply. In the past third quarter, an estimated 256,000 homes regained equity.
Underwater homes accounted for 8.1 percent of all homes with a mortgage in the third quarter, down from 22 percent in third-quarter 2012. The diminishing number of underwater properties bodes well for future sales as many of these homeowners have been unable to sell since the downturn, analysts say.
Blomquist said overall home sales were on pace through November for the best year since late 2007. He also noted that applications for Federal Housing Administration (FHA) loans have risen dramatically, an indicator that credit has become more available and first-time homebuyers have been out buying houses.
Blomquist said that rising prices in some markets are a cause for concern, however.
“The red flag out there is affordability,” Blomquist said. “If interest rates go up too quickly, like to 5 percent, then that could really have a chilling effect because we are already at affordability ceilings in many markets.”
One weak link in the housing market has been a dearth of new-home construction, and thus lower sales of new homes. Sales have generally picked up through the year, but are running at half the rate of 2000 and 2001, when nearly 1 million newly built homes were sold. New-home sales rose in November to an annual rate of 490,000, which is far below the peak of around 1.2 million sales in 2005.
Rising interest rates also concern analysts. Forecasters are expecting long-term rates to rise anywhere from 30 to 70 basis points and end 2016 at 4.3 percent to 4.7 percent. Market analysts universally say that even a small jump in rates will hurt the market for refinances, but opinions differ on the impact on home-purchase sales.
In its latest forecast in December, the Mortgage Bankers Association (MBA) predicted that refinance volume will drop by nearly 36 percent in 2016, to $415 billion, whereas home-purchase volume will increase by 10 percent over the 2015 total to $905 billion this year.
Rising mortgage rates could put homes out of reach for some first-time homebuyers, Hale said, but the improved economy that has added roughly 200,000 jobs a month should cancel most of the ill effects of rising rates on sales.
“What we expect is that the recovering economy with the new jobs that are added, and income growth that we are finally starting to see, should be enough to help keep demand steady, but we won’t see the big pickup in existing home sales that we saw this year,” Hale said.
Saving up to buy a house can seem overwhelming but with a few simple steps you’ll be on your way to the closing table in no time! Very few people have the means to immediately pay off their home in full and therefore must apply for a mortgage. A down payment is the percentage you can afford to pay upfront for your home at the time of the purchase.
There are several options to mortgage financing. Conventional no MI (mortgage insurance) requires 80% LTV (loan to value) and a down payment of 20%. For borrowers with less cash on hand other great programs are available to fulfill your home buying goals. The Conventional loan offers up to 97% loan to value. FHA (Federal Housing Authority) offers homebuyers a 3.5% down payment requirement and more flexible lending requirements. The VA loan offers Active duty, Veterans and National Guard with up to 100% financing. VHDA (Virginia Housing Development Authority) offers homebuyers a down payment of up to 101.5%. All programs differ in eligibly and guidelines.
For example, if you’re buying a home for $300,000 and your mortgage requires you to pay 20% of that your down payment would be $60,000. All programs differ in eligibly and guidelines. To find out more about your mortgage and down payment options contact Advance Financial Group today. For ways to save check out the steps below.
Determine What You Can Afford
Know before you go! Before you fall in love with a home it’s important to determine what loan program is right for you, and what monthly payment you’re comfortable budgeting. Getting pre-approved upfront will help make sure you start your search in the right direction. To get pre-approved today click here.
Establish a Monthly Budget
To ensure you have money saved establish a monthly budget. Start by creating a spreadsheet that shows your monthly gross income and your expenses for each month. Set time aside each month to review your budget and spending habits and determine where you can cut costs.
Here is a free budget spread sheet for you to use.
Cut Out Unnecessary Costs
After establishing your monthly budget you should have a good idea of what expenses can be cut. You will find a vast improvement in your monthly savings by simply cutting out unnecessary costs. According to the Washington Post cutting down on daily coffee runs, packing your own lunch and cooking more meals at home could help you save over $3,000 dollars annually.
Create Your House Fund
Create a separate savings account specifically for your down payment. Set an amount to automatically transfer from your paycheck into your house fund. You will be surprised at how fast your money adds up!