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.
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!
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!
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.
2022 in Review
Let’s wrap up the year reflecting on the past and looking forward to the future. We saw a blazing hot housing market in the first half of 2022 which propelled home values to all time highs even through the fastest rate increase in modern history. We finally saw some reprieve from bidding wars in the second half and more inventory continues to open up as we head into 2023. The outlook on interest rates appears positive with most experts predicting mortgage rates to decline throughout 2023 and some even hinting at big drops in the spring. There’s a lot of noise about the housing market but a crash seems very unlikely and a slower market will favor buyers next year. Alright this year we finish out the year grateful for all those who have supported us through a wild year in the mortgage world! If you’re looking to buy a home next year, remember – we got you! If you need to refi and pay off Christmas debt, we got you! As a small business, every client matters and we look forward to helping you and your friends in 2023.
Mortgage rates continue to tick down gradually which is positive news for homebuyers looking to accomplish the American dream in 2023! Mortgage rates most closely affect the monthly payment but there are a few other aspects to consider when we see rates drop like this. The biggest is most certainly buying power! Lower rates give you more buying power! Buying power is how much home you can afford based on your budget. Look at it this way – the average 30 year rate was 7% when they peaked in early November and it’s now 6.3%. Let’s say your mortgage payment budget is 3000 per month. In November, you could likely afford a loan amount of $450k. But now just one month later, the same payment would allow a loan of $485k. Now you’re not buying a loan – your buying a home. This rate drop can help you buy a superior home on the same budget. This could be difference between settling for a house and buying the home you’re proud of. Take advantage!
Cash-Out Refinance for Debt Relief
Tis the season for holiday cheer and planning for the new year! If one of your goals in the new year is to get out of debt, we come with great news…If you’re a homeowner, consolidating debt to increase your cash flow is easier than you think. Home equity remains at record highs and just this week, mortgage rates hit the lowest point since September. Credit card balances are now at all time highs and the grey cloud of high interest debt is getting heavier and heavier. A cash out refinance is the perfect way for homeowners to eliminate high interest debt by using your homes equity. Let’s run a few numbers real quick: if you have a $400k mortgage at 3.5% and $50k of other cards and loans, the monthly expense would likely be around $3300/mo. So if you cash out, you’ll now have a mortgage of $450k somewhere around 6%, no other debt and the payment will be under $2700. That’s over $600 in monthly savings or over $7,000 per year. Nobody wants a 6% rate but if a 3.5% has you breaking the bank, maybe it’s time to look at your options.
Loan Limits Increased for 2023
We’ve got positive news on both rates and loan limits today. Combined these two updates can save homebuyers and owners a bunch of time and money on their loans! So first up with rates, the FED has quickly become a little less intense on rate hikes and Jerome Powell himself even appears to be easing his super-hawkish stance on future hikes. With the probability of smaller hikes in the future, mortgage rates have responded favorably and even had the biggest weekly rate drop in 40 years the week before Thanksgiving. Tracking these rate drops often refers to conventional loans and just this week the conventional loan limits officially increased to $726,000. This comes as great news as more home buyers will now qualify for conventional financing and the lower rates and easier qualifications that come with conventional loans. The FHA has also increased their county loan limits to $472,000 which again helps more homeowners and buyers take advantage of the program. A rare glimpse of good news from the mortgage world this week. Let’s keep the positive vibes going
What a week for interest rates with one of the biggest drops we have seen in a long time! So let’s break down what happened and how you can take advantage of this small window of opportunity while it lasts! The Consumer Price Index data came out yesterday which is an indicator of inflation; and the numbers came out better than expected, which is why we’re seeing optimism in the market. This ultimately led to a huge drop in mortgage rates by over 2.5 points since Monday. What this means is that if you locked in a rate in the last few weeks on a purchase or refi, there’s a great chance you can either renegotiate your rate with your current lender or simply switch to a new lender at the lower market rates. Make sure to get a second opinion either way. Now we know that markets tend to overreact which is why there’s no way of knowing how long this window of significantly lower rates will last, so make sure to act fast and give us a call!