March 31, 2023
2:1 Buydown for Spring Buying Season
Alright, it is Friday and we’ve officially made it to Spring and buyer interest is accelerating. Given rates are still putting pressure on affordablility, here is a way to make your monthly payments a little more reasonable. We’ve talked about seller concessions where the seller gives you money as an incentive and you can use those funds toward closing costs. You’ve also hear us talk about another option for seller concessions called a 2-1 buy down. With a 2-1 buydown, a buyer can receive seller concessions to essentially buy down the interest rate by 2% in the first year of the mortgage and 1% in the second. For example, let’s say you close your loan at a 6% interest rate. The first year, your payments will reflect that of a 4% rate and the second year is a 5% rate. On a $400,000 loan, the 2-1 buydown would save you almost $6000 in the first year of your new home! The best part is, if you refinance or sell your home within the first two years, you get to keep the left over seller credits! Buying a home can be more affordable than you think! Check out your options!
March 17, 2023
Silicon Valley Bank Closure: Mortgage Impact
It’s been all over the news but last week silicon valley bank and signature collapsed and its generating all kinds of ripple effects across markets. Since we know how to stay in our lane, let’s look at what this means for mortgages and the housing market. The easy answer is that mortgage rates dropped quickly but it has nothing to do with the bank. Mortgage rates are tied to bonds and the bond market is heavily influenced by FED decisions. The idea here is that the collapse of the banks may lead the FED to reduce or pause rate hikes in the near term. Most experts don’t look at this event as the catalyst for mortgage rates to begin a sustained decline but it may kick off the spring buying season to a different tune. Inflation remains the adversary of low rates. Higher rates led to a slower purchase market and most believe the purchase market will rebound quickly if interest rates dip. Buyer demand is still high, those are just on the sidelines waiting for affordability.
March 10, 2023
Investing in Real Estate
Investing in real estate continues to be a popular vehicle to build wealth. Accumulating properties is often difficult due to the capital required but here’s strategy that can help you build your cash flowing portfolio. Buying an investment property has different conditions than a primary home. For instance, the down payment requirement is often 20% down and the rates are over a percent higher. When you buy a primary, you only have to put 3-5% down, rates are much lower, and you are essentially stating that you plan to live in the home for one year. Then at the one year mark, you can now look for a new primary residence and convert your current home to a rental. With the same capital required to buy 1 investment property, you can acquire 4 properties in 4 years with this strategy. In addition, you’ve locked in much lower rates on all properties during that span to increase your cash flow! If you want to invest in real estate, give us a call to see how you can build your portfolio!
March 3, 2023
Loan Level Pricing Adjustments
With all the good news last week about FHA loans becoming cheaper, it’s also important to understand what’s happening with Conventional Loans this year. So Fannie Mae and Freddie Mac announced earlier this year that they are making some significant changes to what’s called Loan Level Pricing Adjustments which determines how much the interest rates are impacted by your credit score and down payment on Conventional mortgages. But now your debt to income will also play a big factor in your rates. This applies to Conventional mortgages and does not impact FHA and VA loans and a lot of lenders have already implemented these changes causing rates to go up for many home buyers, and so what that means is that it is super important to speak with a loan officer that is well versed on these impacts so they can best advise you on how to structure your loan if you’re looking at buying or refinancing your home. For example, 1st time buyers will now have better pricing adjustments than before, but if you put too much money down, you may miss out! Before you do anything, give us a call!
February 24, 2023
Basis Points for FHA Loans Reduced
The FHA has just announced a significant reduction in the mortgage insurance premiums on FHA loans! FHA loans are federally insured loans which are great option for first time homebuyers and are more lenient on down payments, credit, and income requirements. These programs were created to increase homeownership. Because FHA loans are insured by the government, they are less risky for lenders and have lower rates. However, they still require Mortgage Insurance to help protect the government in the form of monthly MIP or Mortgage insurance premium. Here’s the great news: This week, it was announced that the mortgage insurance on FHA loans will be reduced by 30 basis points effective immediately. The MIP was previously set at 85 basis points meaning for ever $100k financed, loan holders would pay $70/mo. Now that number is reduced to $45/mo. That may not sound like a big difference but consider a real example. On a $400,000 loan, homeowners will now save $1200 per year! If you have an FHA loan currently and want to lower your payment or buy a house and take advantage of these savings, give us a call today!
February 10, 2023
Qualifications for Homebuying 2023
The housing market is picking up speed in 2023 with mortgage applications up significantly in the first 6 weeks of the year. If you want to buy a home in 2023, now is the time to get organized and prepare! The first step is to talk with a mortgage pro to understand what you qualify for and what hurdles to address early on. The biggest hurdles to buying a home are often credit and the down payment. Credit is so important in lending because it determines the type and terms of loans you qualify for. The minimum scores required for most loans is 620 but certain programs allow for less. Make sure all payments are made on time to credit cards, loans, and medical bills. Avoid opening new accounts and keep credit card balances under 50% of the credit limit. On the down payment, unless you have a rich uncle, you’ll want to save up! Good news!: it’s tax refund season! This can go a long way in building your down payment since most loans require 5% or less. You can also borrow against your 401k, get a gift from family, or we even offer down payment assistance for those who qualify.
February 6, 2023
Lowest Rates Since September!
The FED keeps hiking but mortgage rates have fallen to the lowest levels since September! With mixed signals, we don’t know how long this will last but rates droping opens up money saving opportunities for tons of homeowners who purchased in the second half of 2022. Through refinancing, you can reduce your monthly payment by hundreds, reduce or eliminate PMI, and even come out with thousands in cash through deferred payments, escrow refunds, and cash back at closing! The best part – its less documentation and most close in 3 weeks or less. We specialize in no-cost refinances to save you more by using the banks money to cover all closing costs. In the old days, the “rule of thumb” said you have to drop at least 1% on the rate to make sense but they also charged exorbitant fees. But if it costs you nothing, even just a half a percent drop can save you thousands per year! Most people don’t know you can refinance this quickly! If you bought late last year, give us a call today to see how much you can save!
Buyer’s Market Back
New data shows just how much the housing market has shifted toward buyers. According to Redfin, 42% of home sellers gave seller concessions or a credit to buyers in Q4 of 22 – that’s the most since pre-pandemic levels. Seller concessions are more valuable than price reductions for a few reasons. First, seller concessions are most often used to cover closing costs that would otherwise be paid out of pocket. If your total out of pocket for the down payment and closing costs is $25k, Reducing the price by $5k will save you $250 out of pocket and $25 per month. But a $5k seller concession saves you $5 grand immediately. Additionally, seller concessions can be used for the popular buy down programs lenders are offering now. This means the seller pays you money as the buyer and the funds go toward reducing the interest rate on your loan by as much as 2% in the first year! On a $400,000 loan – that is just under $500 per month. These incentives can save you big time and make homeownership more affordable! Take advantage of the buyers market while it lasts!
January 13, 2023
Charlotte Named Hottest Real Estate Market in 2023
Big news coming out this week, Zillow just ranked Charlotte as hottest real estate market for 2023, reinforcing what local experts have been saying about the economics driving our home prices. When it comes to home values and appreciation, every market will be different, but it’s important to understand what drives home values. It’s basic supply and demand. Demand comes in the form of people needing homes or population growth. Supply comes in the form of population moving out, seller sentiment, and new builds. The other important factor that plays a role in home values is income and employment. With the amount new jobs, companies, and money moving to Charlotte, it’s no wonder why real estate is still rolling. The bidding wars have cooled down but we’re still seeing strong momentum in home values. If you’re wondering if you should buy a home or wait, give us a call, run the numbers and compare it to your alternatives. If it doesn’t make sense, at least you know!
January 6, 2023
Big Banks Investing
As you’re making plans for 2023, if you’re wondering whether buying a home should be on your list of goals, here’s a tip… Follow the money!!! One of the largest banks recently partnered up with a build-to-rent developer and they plan to buy up to one billion dollars in residential investment properties throughout the US with the first batch of 250 single family homes near Atlanta, estimated to close in the next 30-60 days! That’s right, JP Morgan Chase is about to scoop up a ton of single family rental properties, but it’s important to understand the economics behind it. When rates are up and fears of recession are all over the news, consumers are typically the first to get scared and back out of the housing market. That’s less competition for investors who enter the market while others are waiting for rates to drop. Then when rates drop, everyone else jumps back in the market causing more competition and appreciation. While everyone that already bought while rates were high, can simply refinance and lower their payments at that time. If you need some guidance and want to just run some numbers, give us a call.