August 12, 2022
Using Seller Concessions
Inventory continues to open up in the housing market as we begin to see a shift in leverage toward buyers. Here is one small tip to help you keep money in your pocket if you’re looking to buy a home. When sellers are getting 10 offers on their home, they control the transaction. But when offers slow down, buyers can ask for more incentives. One of the most valuable incentives is called “seller concessions” or essentially a credit from the seller to pay for closing costs. For example, let’s say you are putting down 5% on a $400k home – That’s 20 thousand dollars. Then you factor in closing costs, that’s probably another $5 grand. Your total here is $25k out of pocket. You can haggle with the seller to drop the price a little, but your out of pocket will be a fraction lower. Instead, you can offer $400k with $5k in seller concessions which covers all closing cost and you just owe the down payment at closing which cuts your out of pocket by 20%. This is a great strategy to keep more money in your bank account where it belongs! For more tips, give us a call today.
July 29, 2022
Rate Hike: What Does it Mean?
The FED has officially announced another 75 basis point rate hike which is the 4th hike of the year. But what does that mean for mortgages? Technically, not as much as you may think. The federal funds rate sets the range that banks will lend or borrower to each other overnight. Yes, banks do this all the time and when they pay more you pay more. However, this is most influential on short term interest rates. Loans like credit cards, auto loans, personal loans, and home equity lines are closely tied to the fed funds rate. These loans have already been impacted and credit card rates will hit record highs before the end of the year. Home equity lines are quickly becoming more expensive and rising payments are hitting the pockets of loan holders. With fixed rate mortgages, rates are indirectly tied to the 10 year treasury but also impacted by Fed policy and other economic conditions. It’s safe to say we don’t root for FED hikes but don’t panic, mortgage rates actually went down this week.
July 22, 2022
Market Confusion: Don’t Panic!
The mortgage/housing markets are all kinds of confused. So let us break this down and get to the bottom of this. In housing, home prices have yet again hit an all time high for like the 20th month in a row. Yet, all the talk is about sales slowing down. So is it a good market to buy or a bad market to buy? First, you always want to buy into an appreciating market and all second half predictions have values continuing their ascent. Second, when homes were going under contract in 4 hours and now its at 4 days, that’s not slowing, that’s just throttling down from Ludacris speed to light speed. This could be a better market today than just 3 months ago. In mortgage, the FED is mulling over a 100 basis point rate hike next week, yet we’ve seen rates come down this month. So if this historic hike happens, rates are going to skyrocket, right? Not so fast my friend. The FED doesn’t directly impact mortgage rates and barring a crazy inflation reading in August, we should see rates remain stable over the next few months. The more you know the better you can position yourself.
July 15, 2022
Lowest Rate Not Always Better!
Everyone wants the lowest rate but today more than ever, the lowest rate doesn’t always save you the most money. Rates are the highest they’ve been in like 12 years! The key to saving money today is looking at this as a short term 2-step process and using lender credits to eliminate closing costs. Lenders have access to a whole rate sheet and for this example, let’s say 4.5% is the par or “going” rate. If you want to get a “more attractive” rate like 4.25, you’ll have to pay extra costs or “points” which will be thousands of dollars. But on the flip side, if you take a higher rate like 4.75, the lender will actually pay you money which goes toward closing costs. Lets say buying down the rate saves you $50 a month but costs you $3k extra upfront. This would take you 5 years to recoup that cost. If you refi or sell within that time, you lose money. Now taking the higher rate, you will pay an extra $50 per month but the plan would be to do a zero cost refi within a year or two saving you thousands. It’s not about the percents, it’s about the dollars and cents!
July 8, 2022
Bidding Wars Slow Down
Now that bidding wars are slowing down and more homebuyers are able to get their offers accepted, the big thing that clients are battling with are the rates going up while they look for a home. We now have a solution for that! We just recently got access to a program that allows our clients to lock today’s interest rates upfront and then shop for a home!!! That means that once you lock in today’s rates, you have up to 90 days to find a and close on your new home. This way if it takes you 30-45 days to find a home and the rates went up, you don’t have to lock in the higher rates because you locked them in upfront… but if the rates come down by the time you find a home, we can just switch you to one of our other 10 lenders and you can take advantage of the lower rates at that future time. It’s a win-win. If you’re in the market to buy a home, PrimeLine has you covered. DM us or give us a call and talk to one of our home loan experts!
July 1, 2022
Home Inventory Increasing
Alright it is Friday and some promising news just dropped today as Realtor.com announced that active listings for homes jumped almost 20% in June nationwide. When more homeowners are looking to sell, opportunities present themselves! Also, Important note: mortgage rates dipped this week so strike while the iron is hot. But regardless of what happens to rates, more inventory should minimize bidding wars and shift us away from a seller’s market to more of an even playing field as sellers fear missing out on the peak of the real estate market and try to cash in to then upgrade their homes. Remember that rates will continue to fluctuate, so if you buy when inventory rises, you can negotiate a better deal and when rates drop, you can refi to lower your rate and payment. And you guessed it, you can then apply that savings towards extra principal every month to pay the house off faster. Use your 4th of July weekend wisely and give us a call to talk through your options so if you see an opportunity, you’re ready to claim it!
June 24, 2022
Real Estate as an Investment
We’re going to bring it back to basics today and talk real estate as an investment. Many people seek to buy real estate as a home but it’s important to understand the investment value as well. It’s a volatile market with many blue chip stocks down 20-30% on the year, crypto tanking, and most investments struggling to break even. The same cannot be said for real estate where almost every market in America continues to see above average gains. Think about it this way, real estate enables you to use leverage to multiply your gains. If you put 25k into a stock and that stock goes up by 10%, you’ve earned yourself a dandy $2500 bucks. But in real estate, let’s say you put 5% down on a 500,000 house, that’s a $25k investment. Then let’s say that home appreciates by 10%, well you just earned a cool 50 G’s with a 200% return on your investment. Yes, there is a monthly payment but you’re going to pay to live regardless, may as well pay your own mortgage, not someone else’s. Give us a call to get the best return on your home purchase.
June 17, 2022
What the Rate Hike Means For You
We are coming in hot today with a reaction to the FED’s unprecedented 75 basis point rate hike and what that means for you! First up is housing and as you can imagine, the surge in interest rates to nearly 6% will reduce the number of buyers in the market and free up more inventory. More inventory is less competition and less competition means prices stabilizing. If you’ve been looking to buy a home, this may be your opportunity. You may pay a higher rate now but chances are you can refi down in a year or two. The second piece is debt, specifically bad debt. Rates on credit cards and revolving lines are jacking up just as fast and these interest payments are on the brink of 20% in many cases. With consumer debt rising to keep up with inflation, now is the time to pay off high interest credit cards and personal loans. Home equity remains at all time highs, take the opportunity to pay down bad debts with a cash out refinance. Again, you may pay a higher rate now but chances are you can refi down in a year or two.
June 10, 2022
Using Lender Credits
We have a quick money saving tip today that could save you thousands on your mortgage in this rate environment. Rates are at their highest since 2009, However, the key to winning right now is using lender credits to save on closing costs. Why is that? You buy a house to buy a home. You refinance to get cash out to pay off debts. You are getting a loan to achieve something else, you’re not buying a loan and you probably wouldn’t buy it when it’s the most expensive in 10 years. So the trick is this, lenders have access to a whole rate sheet. You can choose a lower rate but you have to pay additional upfront costs, or “points” for it. Or, this is key, you can take a higher rate and the lender will actually give you credits that pay for your closing costs. You may pay an extra $30-$40 per month but the intention is to refinance when rates come back down. Given the economic uncertainty right now, you can bet that will happen in the next 12-18 months. So $30 over 12 months is $360 but if you save 2, 3, 4 thousand dollars on costs, that’s ROI!
June 3, 2022
Pre-Approval Letters to Stand-Out
Realtors and Home buyers, if you’re looking for ways to give yourself more leverage when submitting an offer on a home, this one’s for you!!! Submitting an offer with a pre-approval letter is standard procedure these days. Most sellers won’t even consider an offer without one but what does that letter actually mean? In most cases, it means you applied for a loan, the loan officer pulled your credit, and they asked for a paystub or two. This gives the seller some indication that you’re a qualified buyer but what if you could give the seller full certainty! That’s where a Verified Approval Letter comes in. This means your practically approved for the financing prior to even making the offer pending just appraisals and inspections. It’s like approaching the table with a cash offer! To get a Verified Approval, we collect all documents and underwrite the loan upfront to give all parties the certainty they need to make and accept an offer. Preparation is key in this market, give us a call to get started today.