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Real Estate Agents: How the government shut down will affect your business

With: John Meussner, Loan Officer & Mortgage Coach @ Mason-McDuffie Mortgage

So it’s been a day and the government is still shut down.  What exactly does that mean?  I’ll spare the humor and all the things I’d like to say – basically it means that some services are available, and others aren’t.

     While many vital services are still in action and exempt from shutdown, many others have been frozen, and could inadvertently have a pretty poor effect on the housing market, especially if this shutdown lasts for more than a couple days.

Please note: Not all lenders will have the same processes during a shutdown, just like in 2013. Your experience may vary. For example we are good to proceed on USDA Loans as-is during the shutdown.

USDA loans – the USDA loan program is frozen.  Since files are approved by USDA offices directly, there will be no more guarantees or housing loans issued by the USDA offices until the shutdown is over.  This could have a pretty terrible effect for those who live in rural areas or need 100% financing.

VA loans – VA loans should be in full swing, as the program is run based mostly on fees.  Where there might be an issue is when someone needs a VA certificate.  When the government shut down in the 90’s, there was a delay in obtaining certificates, and this will likely be the case again.  New applications will be taken, and files will be underwritten and funded, though.

FHA loans – FHA loans aren’t expected to feel a real impact from the government shutdown so long as the shutdown doesn’t last for a long period of time.  HUD is running at a significantly reduced staff, though, so getting information and paperwork to & from HUD could take a lot longer than usual.  The good news is, loans will still be insured & they will still have staff delegated to underwriting.

Conventional loans – while many are stating the shutdown is ‘no big deal’ for conventional financing, this is simply not the case.  Yes, conventional loans will be applied for, underwritten, approved, and funded.  BUT, over the past few years, as we all know, lenders have taken extra steps to fight fraud, and 2 of these steps are social security verifications and IRS 4506-t transcripts.  These services will be unavailable, and therefore loan files may be put on hold until the shutdown is over.

     Some borrowers will be in more trouble than others – for self-employed borrowers, they may be at the mercy of the shutdown as a work around for 4506 transcripts isn’t currently available.  Also, for any government employees that are in the midst of the loan process it will be extremely difficult to get any verifications of employment done.

   I’d strongly recommend being proactive in making sure none of your clients are surprised by any potential delays – sellers should understand that the shutdown can cause delays at no fault of buyers.  Anyone buying or refinancing should be aware of what type of loan they are getting, and if the potential is there for delays, they should plan accordingly.

     Hopefully in a day or 2 this blog post won’t matter & things will be running smoothly once again between our elected officials, but as a preemptive stragegy, it would be a good idea to know this information.  And for an added benefit you’ll already know what to be ready for if this happens in the future.

–  John Meussner

Phone
(949) 247-7530
Email
jmeussner@masonmac.com

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How Much Money Do I Need to Buy a Home

If you’re thinking about buying a home, one of the first questions you may have is how much money you’ll need.  While the answer is almost always “it depends”, one thing is for sure – most people are surprised to find out it takes less money than they think to buy a new home.  In fact, there are many mortgage programs that help people buy homes with NO money out of pocket, and other programs that require very little.  We’ll give you some of the basics here, and if you have any questions, we invite you to reach out to your Mason Mac Loan Officer for full details.

The 0% down payment options

Low down payment option mortgages
The cost of buying a new home may be a lot less than you think with our low down payment options

There are several 0% down payment mortgage options that allow a borrower to buy a home with no down payment money.  Some of these programs also allow for a seller to help with closing costs, so if you qualify for these loans it is possible to get a house without putting any money down!

The VA Loan

If you’re an eligible veteran, you can get up to 100% financing to buy a new home, and both a lender and seller can contribute to closing costs, so you’re able to get a new home for very little out of pocket cost.  VA loans offer a huge bonus in that they have very low fixed rates and no monthly mortgage insurance.  This combination of factors gives veterans access to one of the best loan products available.

The USDA Loan

USDA loans are available to low and moderate income buyers looking to buy outside of major metropolitan areas.  A Mason Mac loan officer can quickly tell you if you’ll qualify based on your income and the area you’d like to buy a home.  Like VA loans, USDA loans require no down payment and allow a seller to contribute toward closing costs, so it’s possible for buyers using a USDA loan to get into a home with little to no money out of pocket.

The DPA Programs

DPA stands for Down Payment Assistance, and comes in many forms.  Sometimes it’s a grant from a local county or organization.  Other times it’s a nationwide program that offers a 2nd mortgage to cover a down payment requirement. DPA comes in many forms, but usually has to be through an approved program that’s been given the OK by HUD or Fannie Mae.  DPA programs often assist with down payment but sometimes can help with closing costs as well.  Your Mason Mac loan officers are very familiar with DPA products in the areas we’re licensed.

The 3% Down Options

Do you need 20% down to buy a home?  This is usually a misconception when people are seeking a conventional mortgage loan, but in reality, you can get a conventional loan with as little as 3% down.  20% down avoids the need for mortgage insurance (PMI), but conventional loans are available with far less down, and like the 0% down programs, allows a seller to contribute toward closing costs.

The Just a Little Over 3% Option

FHA mortgage loans require a 3.5% down payment, and can sometimes offer lower rates and cheaper PMI than conventional loans, making them a great loan option for many borrowers.

FHA loans are also able to be accompanied by DPA help to turn a 3.5% down payment requirement into $0 out of pocket for a borrower down payment.  Sellers may contribute up to 6% of a purchase price toward a buyers closing costs, so FHA is another viable solution for buyers without too much of a down payment.  FHA is especially helpful for buyers with a low down payment and less than perfect credit.  Rates are more forgiving on FHA loans than conventional loans for past credit issues and lower FICO scores.

 

Whether it’s through FHA coupled with a DPA product, a conventional loan, or if you qualify for USDA or VA programs, chances are the amount of money you need to buy a new home is less than you think.  Call a Mason Mac loan officer today to get details, and learn which option is the best for you.  Whether you’re short on funds or looking to put 20% or more down, we’ll have loan options for you!

 

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Shopping for a Mortgage – A How To Guide

When it comes to getting a home loan, many people struggle with where to find the best loan for them.  Shopping for a mortgage is different than shopping for a toaster.  With a toaster, you can go on Amazon or walk into a store, pick the toaster, pay for it immediately, and if it doesn’t work the way you like, you can return it.  If the price changes at the register, you can opt to put it back on the shelf.  If it breaks the first time you use it, it should be an easy return.  A mortgage is a bit more complicated.  There is no return policy, and if rates and fees end up higher than advertised, sure, you have the option of “putting it back on the shelf”, but it may mean missing out on a home you love and a ton of wasted money.

Most people know that shopping for a mortgage is the way to go when looking for the best loan, but few people know how to shop for a mortgage loan.

 

Mortgage shopping tips
It’s important to not only know TO shop for a mortgage, but HOW to shop for a mortgage

Get Referrals

The best place to start when shopping for a mortgage is where other people have had success.  Talk with friends and family and find out who they used, and if they were satisfied.  Talk with your Realtor and see why they recommend the lender they do.  Referrals are a great way to put together a short list of potential lenders that you’ll want to work with.

Keep in mind, online reviews are NOT referrals.  Many companies and individual loan officers game the system online, obtaining fake reviews and testimonials to paint themselves in a good light.  While some reviews are accurate, it’s tough to tell what’s real and what’s not online, so personal referrals are a much better option than seeking out highly rated online lenders

 

Get pre-approved

You should only have to complete a full loan application with one lender in order to get started on shopping.  With one pre-approval, you’ll have the information every lender will need to quote you rates and fees – your credit scores, your debt-to-income ratio, and all of the other info required to get you an accurate quote.  Keep in mind though, you’ll want a full pre-approval.  If a lender doesn’t request your financials or tells you they don’t need to pull credit for a pre-approval, there’s no way they can give you an accurate quote – this is a red flag to find a new lender and FAST!

 

Do your shopping on the same day

Once you have a short list of referred lenders, do all of your shopping in as short a time window as possible.  The reason is that mortgage rates change daily, and sometimes several times in a single day, so calling lenders on different dates is going to result in a really poor comparison and cause a lot of confusion.  If you compare lenders on the same day, you’ll get an idea of who has the best rates and prices, and you’ll truly be comparing apples to apples.  Getting quotes spread out over a period of days or weeks could end up costing you a lot of money by not having accurate information.

 

Focus on rate and fees

Some lenders have great rates but astronomical fees.  Others have no fees but the rates are ugly.  Lenders fees and rates are effected by a lot of things – their loan officer’s compensation, operations staff, marketing, and more, so it’s important to remember the cheapest lender may not provide the best mortgage experience or the best loan.  And the lender with the lowest rate may have a poorly paid and inexperienced staff that can either make the loan process a nightmare, or worse, cause you to lose out on a home!

Your best bet when it comes to cost is to find a lender with competitive rates and competitive fees.  Usually the ones that are lowest aren’t the best companies, and the ones on the higher end are unnecessarily expensive.

 

Avoid Big Banks

Think of the companies you constantly see in TV advertisements, on arena floors or stadium walls.  Now think about how they get the money for those big advertising budgets.  Did it sink in yet?  Using big banks with huge advertising budgets usually means you’ll be paying a premium in rate or fees so they can cover that expensive marketing.

Bigger banks are also notorious for a sloppy loan process, due in large part to their size (files are often transferred from one department to another, without each department knowing the loan file inside and out).

For the best service experience and lower costs, you’ll generally have better luck with a mid-sized or smaller lender that doesn’t need to charge people to cover for a multi-million dollar marketing budget.

 

As a lender, you’d think we wouldn’t want you to be shopping around, but in reality, when a borrower shops it’s better for them and us.  When you’ve already been quoted ridiculous rates and fees, you’ll more easily see the value in our well priced products.  And when you’ve spoken with a loan officer from another company that seems to not be able to get you off the phone fast enough, you’ll appreciate our team’s dedication to asking the right questions to ensure you’re getting the right product.  We know that not every lender can match our level of service, and we know that we’re very competitively priced, but you won’t know it unless you shop.  So we hope with these tips, you’ll be able to feel comfortable when seeking out a mortgage loan.  And if after you’re done shopping for a mortgage, you decide Mason Mac is the lender for you, we’ll be here waiting to help!

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How Much Mortgage Can I Qualify For?

Learning How Much Mortgage You Can Qualify For

It’s one of the most frequently asked questions when someone begins their search for a home.  “How Much Mortgage Can I Qualify For?” is one of the most important questions someone can ask, because it will help determine what type of home they will look for, what area(s) they may look in, and will allow a Realtor to really narrow down a home search and focus on what’s within a home buyer’s reach.

how much mortgage can I get
Asking the right questions and working with someone that provides the right answers is paramount to a good home buying experience

 

Believe it or not, though, “How Much Mortgage Can I Qualify For?” is a secondary question compared with “How much Mortgage Should I Qualify For?”.  The real starting point is figuring out a monthly payment that makes sense.  Mortgage loan qualifying is largely based on a term called “Debt to income ratio”, or DTI.  DTI is a percentage of your income that is devoted to debt, and is always calculated as a percentage.

Personal Considerations

For some people, a high DTI is not a big deal, but for others, it could be disastrous.  Many loan programs (not all) don’t factor in a borrower’s disposable income – the actual dollar amount left over at the end of each month after all the bills are paid, utilities are paid to keep the lights on, and groceries are purchased.  So for a borrower with lower income, a high DTI could be disastrous as it could mean very limited disposable income to cover life’s unexpected events.  That same DTI may be no big deal for someone with lots of disposable income on hand.

 

So how much mortgage can you qualify for?  Your loan officer will guide you through different loan options available to you, and your maximum qualifying loan will depend on a few things – your income, credit, and amount of money to put down as a down payment being the big ones. Typically, having better credit will allow a higher DTI, and putting more money down, therefore reducing your loan amount, will also help lower the DTI.

Property Considerations

The type of home you buy will also determine how much mortgage you can qualify for.  For example, a condominium property may seem affordable, but could come along with high HOA dues or property assessments that may make the property unaffordable, even though the purchase price could be lower than a single family home.  Likewise, a single family home could have additional taxes attached to is, such as Mello Roos taxes in California or 3rd party tax assessments and additions that could make the cost of ownership much higher than indicated by a price tag.  This is where having a team helping you along the way makes a huge difference in the home buying process.  A good loan officer can help you price out different purchasing scenarios, and knowing the max you can qualify for AND the max monthly payment you want to qualify for, a good Realtor will guide you to properties that you’ll like AND be able to afford, all things considered.

 

Another consideration that comes along with property types lies in unique properties such as condotels, non-warrantable condos, or agricultural and mixed use properties.  The price tags on such properties may make them appealing, but additional down payment or asset reserve requirements could put this type of property out of reach.  This, again, is where working with a great home buying team can make a ton of difference in your experience.

 

Planning for the future

Nobody has a crystal ball, but thinking about the future can help you determine how much mortgage you qualify for, too.  Are you working in a field with steady income raises?  Are you relocating on a job offer in a situation where a co-borrower will be moving too and finding a job once settled in?

Perhaps you’re interested in buying a multi-unit home where you’ll have both job income and rental income to help cover mortgage payments and add additional cash flow?  Perhaps you have an auto loan with a high monthly payment that’s about to go away, or your student loans are about to be paid off?

All of these scenarios and more could affect the amount of mortgage you qualify for.  Sometimes, it makes sense to temporarily carry a high DTI because you’ll soon see your cash flow and disposable income increase.  It’s important to not overanalyze, but to consider the future, and ultimately, make a decision that leaves you comfortable and able to cover your mortgage, your other debts, and still live the lifestyle you desire.

 

Buying a home is a huge decision, and answering the questions “How much mortgage can I qualify for?” and “How much mortgage should I qualify for?” is the first step toward successfully navigating the home buying process toward your path to homeownership.  Better yet, having a team to help guide you along the way and answer the many questions you’ll have is the best way to assure yourself of a pleasant home buying experience, and a loan that will keep you happy in your home for years to come!

Have questions about the home buying process?  Ask the professional that shared this post with you or give us a call at 877-ASK-MMMC (275-6662)

 

 

 

 

 

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Think a Mortgage Involves Tons of Paperwork? Think Again.

Post-housing market collapse, getting a mortgage got tough.  Rather than a joyous experience and a simple process, the journey from application to closing on a mortgage loan sat in the same realm as root canals, DMV visits, insurance claims, and getting faulty credit fixed.

Esignatures and improved tech have made the mortgage process easy
Paperwork and mortgages are no longer synonymous. The paperless mortgage is the new normal

Since that time (nearly a decade ago!), much has changed, but there’s still a stigma attached to the loan process.  Much of this has to do with 3 things:  poorly trained Loan Officers, companies slow to adapt to new technology & processes, and the overlays some lenders stack on top of traditional guidelines.

Overlays are when a lender requires documentation beyond what is traditionally required for a specific program.  For example, while Fannie Mae may require only a verification of employment to document income, some lenders may require 2 years W2 forms on top of that – the request for W2s would be an overlay.  Overlays can result in additional layers of paperwork, and additional rounds of documentation requests along the way as overlays present themselves.

As technology progresses, lenders have access to all sorts of data verification systems behind the scenes.  Further, for many loans, automated underwriting systems have come to advance to a point where not a lot of documentation is required.  If lenders are set up to verify income through a 3rd party, verify assets through a secure online platform (of course, with borrower consent), and do a check for data accuracy on clients without the client providing anything, then the amount of paperwork needed from start to finish can be quite minimal.  In some cases, a copy of a photo ID, a signed authorization to obtain a verification of employment, and a copy of an insurance declarations page is all that’s needed from a borrower to get from application to closing.  However, not all lenders and mortgage outfits are equipped or willing to use the tech available, making the process more burdensome for their clients.

And of course there are horror stories about poorly trained Loan Officers requesting round after round of documentation because they don’t know any better.  “Ok Mr/s Borrower, I need a paystub today” then the next day, “actually, I need a months worth of paystubs and 2 years W2 forms”, and the following day, “actually, all of the above and 2 years tax returns”, etc, etc, etc.  A poorly trained or inexperienced loan officer can make the process much more tedious than it has to be.

 

How Simple and Fast Can it Be?

Let’s look at a recent, real life, MasonMac example.  13 days from application to clear to close (with a holiday weekend in the middle of that). Borrower’s income was salary and steady, so their employer documented their income – they sent in 0 income documents.  It was a refinance without the need for asset documents.  There was no additional income, no credit issues nor explanation needed.  Borrower was required to send ID, insurance, and a quick note about a previous address.  They e-signed their disclosures, appraisal and title were ordered and received within a week, and the entire loan process was wrapped up in just 7 business days.

 

Not every loan is that fast.  If we have variable income, or income derived outside of salary, there will always be additional documentation.  If assets are needed, we need statements.  If a loan is extremely complicated, the paperwork will need to go along with it.  The loan process overall, however, is not the monster we had to deal with in 2013.  Today, the process at MasonMac is quick, streamlined, and easy to navigate thanks to agency-direct underwriting, the newest and best in technology, and the incredible team working behind the scenes.

 

Have questions about the loan process, our loan products, or anything else from the MasonMac world of mortgages?  Ask an expert for an instant response or give us a call today!

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What’s Ahead For Mortgage Rates This Week – July 10, 2017

Last week’s economic reports suggested that demand for homes is rising despite a jump in mortgage rates and rising home prices fueled by low inventories of homes for sale. Demand for homes rose by 1.40 percent as interest rates jumped after the 10-year Treasury rate rose by 10 basis points.

Construction spending was unchanged in May as compared to a -0.70 percent reading in April. Although builders express high confidence in housing market conditions, construction spending continued to lag behind spending levels based on builder confidence readings.

Home buyers received good news as major credit bureaus removed two key components from consumer credit reports. Fannie Mae and Freddie Mac raised the debt/to income ratio for home loans from 45 percent to 50 percent of gross income. This move was made to help would-be home buyers swamped with education debt. Doug Duncan, Fannie Mae’s chief economist, said that raising the debt to income ratio would not increase lender risk significantly.

Mortgage Rates, New Jobless Claims Rise

Mortgage rates rose last week. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose eight basis points to 3.96 percent; the average rate for a 15-year fixed rate mortgage rose five basis points to 3.22 percent. The average rate for a 5/1 adjustable rate mortgage rose four basis points to 3.21 percent. Discount points averaged 0.60 percent for a 30-year fixed rate mortgage and held steady at 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Jobless claims rose last week to 248,000 new claims from the prior week’s reading of 244,000 new claims, but this increase does not appear to be related to layoffs. Non-Farm Payrolls for June increased to 222,000 jobs added as compared to 180,000 jobs expected and May’s reading of 152,000 jobs added. Non-Farm Payrolls include public and private-sector jobs.

ADP Payrolls, which reports private-sector job growth, dipped in June to 158,000 jobs added as compared to 230,000 private-sector jobs added in June. Employers have repeatedly cited difficulty in finding skilled candidates for job openings, which makes it less likely that they’ll lay off employees who have needed skills. The national unemployment rate edged up in June with a reading of 4.40 percent against expectations of 4.30 percent and May’s reading of 4.30 percent.

Whats Ahead

This week’s scheduled economic reports include testimony by Fed Chair Janet Yellen, readings on inflation and core inflation and retail sales. Mortgage rates and new jobless claims will be released along with a reading on consumer sentiment. If you’re currently preparing to buy, please reach out to one of our Mason-McDuffie Mortgage professionals.

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Buying a Home? Make Sure Your Finances Are in Order First

Below is a guest blog post by Janet Elliot of RE/MAX

Purchasing a new home is part of the American Dream, just as much as graduating high school and college, getting married, and having children. It’s also the hardest part of the dream to achieve; you need patience, resilience, thick skin, and great financial planning.

The latter is the most important aspect of buying a home. With that said, you don’t need loads of money in order to purchase – just decent credit and a solid financial plan. So, before you head out to the local open houses, be sure you’ve first tackled your finances in order to know which homes you can actually afford.

Make Sure You Have the Credit

According to Keith Gumbinger, Vice President of HSH, a mortgage information company, the best mortgage rates are given to potential buyers who have a credit score of 740 or above. However, you can still get a home loan with a credit score of 620; in some cases even a 580 credit score can qualify you for an FHA loan.

Just because you may qualify for a loan at 580, it doesn’t mean that you should apply for one. Lenders use your score to determine whether or not they will lend to you, but also at what rate. Lower credit scores mean higher rates.

The best thing you can do to get your credit score on track before purchasing a home is to get a free credit report from annualcreditreport.com six to twelve months before you go house hunting. This report looks at the three main credit bureaus, giving you insight into your number, and what needs to be taken care of to improve the score.

Doing this up to a year before you start looking allows you plenty of time to increase your score. Mortgage companies aren’t the only ones that look at this number; sellers and real estate agents also look as this number, and it can determine if they will sell to you or take you on as a client. Don’t overlook this step, it’s essential to your success.

Do You Have Too Much Debt?

Your debt is another huge factor when attempting to secure a lender. In fact, it can at times be even more important than your credit score; it’s the first thing they look at when determining your eligibility. The debts they look at include student loans, car loans, credit card payments, and so forth. Ideally, lenders are looking to see if your overall debt plus your potential new mortgage payment is 45% or less than your income.

For example, if your monthly pretax income is $5,000, they want to see that $2,250 or less of it is going toward your mortgage payment and debt. Obviously, the less debt you have, the better. If you can reduce your overall debt by paying off that pesky car loan or student loan, your payment-to-income ratio will decrease and make you a more attractive buyer. In addition, leave older credit lines open, avoid opening new credit lines, stop buying on existing credit, and don’t shuffle your money around; this will leave you in the best position to buy a home.

Set a Budget and Prepare for Your Down Payment

Now that you have your debt and credit score goals where you want them, it’s time to look at your budget and prepare for your down payment. The best way to determine your budget is by using the standard rule when it comes to purchasing a new home. The rule of thumb is to only look at homes that are no more than 2.5 times your gross annual salary. In layman’s terms, if your annual salary is $50,000, look for homes priced no more than $125,000 dollars.

Once you have your max amount, it’s time to speak to lenders to see what your financing options are. You typically will have the choice between two types of mortgages: fixed-rate and adjustable-rate. Fixed-rate mortgages are where your monthly payment and interest rate stay the same the entire time you have the loan, for between 15 to 30 years.

Adjustable-rate mortgages have an introductory interest rate that will change after a specific period of time. Simply put, it could start off at a particular rate for the first two years, but can begin being adjusted annually after that. In general, most real estate agents would suggest that a fixed-rate mortgage payment is the safer financial choice, but every homeowner is different.

Aside from determining your budget and settling on a loan option, you will also need to plan for a down payment. In the best case scenario, you want to have a down payment of 20 percent of the total price of the home, but a minimum of 10 percent down can work for a conventional mortgage loan. Since everyone’s situation is different, some buyers simply cannot come up with that type of down payment.

If you are among those who cannot afford a higher down payment, you can apply for an FHA loan, which can make your down payment as little as 3.5 percent of the cost of the home.

In some cases, if you meet the income limitations of your state, you can even get a five percent down payment loan from traditional loans. Work with your real estate agent and speak with a few lenders to find which style of mortgage and down payment method will be best for your situation.

One Last Thing Before You Make an Offer

Closing costs are another thing to think about before you put in an offer. It used to be you could get some credits for your closing costs and still have your offer accepted, but not so much anymore. To be prepared in the current market, be sure you have at minimum 2.5 percent of the purchase price for closing costs (not including your down payment). This will give you the best chance of putting in a successful offer.

The real estate market is competitive right now, with many sellers taking multiple offers of the asking price and choosing the most solid one. Rise above the competition with closing costs already accounted for. By following these steps, you will be in the perfect position to put in an offer on your dream home. Now it’s time for the fun stuff – heading out to open houses!

janetelliotJanet Elliott has served as a Realtor with REMAX for 28 years in the metro Atlanta area. Janet is also a Certified Residential Specialist or CRS. This is a designation achieved by less than 1% of real estate agents. When not practicing real estate, Janet can be found spending time with family and friends out on the water!

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What’s Ahead For Mortgage Rates This Week – October 3, 2016

Last week’s economic releases included reports on new and pending home sales, S&P Case-Shiller Home Price Indices and regularly scheduled weekly reporting on mortgage rates and weekly jobless claims. Readings on consumer sentiment and confidence were also released.

New and Pending Home Sales Lower as Peak Sales Season Winds Down

August readings for new and pending home sales were lower than for July; analysts said that slim supplies of available homes and rising home prices contributed to slower home sales. Peak home sales typically occur during spring and summer. Homebuyers with school-aged children prefer to be settled into a new home when school starts in August and September.

According to the Commerce Department, new home sales achieved their second highest reading since the Great Recession. Although lower than July’s reading, August sales of new homes reached 609,000 on a seasonally-adjusted annual basis. Analysts expected a reading of 600,000 new home sales based on July’s reading of 659.000 new homes sold. August’s reading was 20.60 percent higher year-over-year. High demand for homes appears to be kicking home builders into higher gear as they strive to ease slim inventories of available homes.

The impact of short inventories of available homes was reflected in August’s reading for pending home sales. Home sales awaiting closing fell in August from July’s reading of +1.20 percent in July to 2.40 percent in August. The National Association of Realtors® said that home sales are declining due to very limited inventories of available homes. Rapidly rising home prices and strict mortgage qualification requirements also contributed to slipping sales. After home buyers sign a purchase contract, they are at the mercy of changing mortgage rates their ability to qualify for a mortgage. Pending home sales supply an indication of future closings and mortgage loans.

According to the S&P Case-Shiller 20-City Home Price Index for July, home price growth dipped from June’s seasonally adjusted annual rate of 5.10 percent to 5.00 percent. Slim inventories of homes for sale and high demand were again cited as primary reasons for slower home price growth. While demand is high, slim supplies of available homes can cause would-be buyers to postpone their home search until more homes are on the market.

Mortgage Rates Fall, New Jobless Claims Rise

Mortgage rates fell across the board last week according to Freddie Mac’s weekly survey of rates. The average rate for a 30-year fixed rate mortgage fell six basis points to 3.42 percent; the average rate for a 15-year fixed rate mortgage was four basis points lower at 2.72 percent. 5/1 adjustable rate mortgages had an average rate of 1.81 percent, which was one basis point lower than the previous week’s reading Discount points were also lower and averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims rose last week to 254,000 claims, but new claims were lower than the expected reading of 259,000 new claims which was based on the prior week’s reading of 251,000 new jobless claims. New jobless claims have stayed below 270,000 new claims for three months for the first time since 1973.

In prepared testimony before the Financial Services Committee, Federal Reserve Chair Janet Yellen discussed problems facing two major banks and said the Fed’s goal was managing its regulatory stance to support financial stability.

September’s Consumer Confidence Index reading rose to 104.1, which exceeded analysts’ estimated reading of 99.3 and August’s reading of 101.1.

What’s Next

Next week’s scheduled economic reports include readings on construction spending and several labor-related releases including ADP Payrolls, Non-Farm Payrolls and the National Unemployment Rates. Weekly reports on mortgage rates and new jobless claims are set for release as usual.

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Credit Score Got You Concerned? Here’s 3 Ways to Get It Together

Credit Rating ScoreIf you’re worried about your bad credit, you’ll want to do everything in your power to improve your rating as quickly as possible – especially if you are looking to purchase a home in the near future. Improving your credit rating can give you access to better interest rates on mortgages or even help you to get that job you’re after.

IMPORTANT! If you are currently involved in a home loan transaction, speak with your trusted mortgage lender before taking any action regarding your credit!

So how can you boost your FICO score quickly and easily? Here’s what you need to know.

Get Your Credit Report And Dispute Any Errors

Credit reporting agencies don’t always keep 100% perfect records, and there’s a good chance that your credit report contains at least one error. One recent FTC study found that 25% of consumers have an error on their credit report and that in 5% of cases, the errors were actually severe enough to impact the loan terms that borrowers were able to negotiate.

You can get your annual credit report from all three credit reporting agencies for free. Carefully read over it. If you see any errors – if your name is misspelled, if they have the wrong address on file, or if there are late or unpaid charges that you didn’t make you can dispute the items in question.

Try Maintaining A Lower Utilization Ratio

Your debt-to-credit ratio (also known as your utilization ratio) is one of the more important factors that determine your credit score. It measures the outstanding balance on your accounts in relation to the total credit available to you, which helps lenders assess your capacity to take on new debt.

If this number goes beyond 30 percent, you’ll start to see your credit score drop. Ideally, you should aim for a utilization ratio below 10 percent this will prove to your lender that you can responsibly pay for the credit you use.

Have Recurring Bills? Automate Your Payments

Automating your monthly payments can be a great way to boost your credit score. Whether it’s your mortgage, your credit card, or your student loan, a pre-authorized monthly payment will ensure that everything gets paid on time and give you a great credit history.

Your FICO score is a number that will determine your eligibility for mortgages and other loans. These are general tips to help with your credit score and improve the overall reporting of your credit.

Reach out to one of our mortgage professionals at Mason-McDuffie Mortgage to learn about what kind of a mortgage your credit score can afford you.

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3 Things That Determine Your Mortgage Interest Rate

Minimum FHA Mortgage Credit Scores Are Falling: Here's What You Need to KnowWhen you initially start shopping for a home mortgage, you may be drawn to advertisements for ultra-low interest rates. These may be rates that seem too good to be true, and you may gladly contact the lender or mortgage company to complete your loan application. However, in many cases, mortgage applicants are unpleasantly surprised and even disheartened to learn that they do not qualify for the advertised interest rate. By learning more about the factors that influence your interest rate, you may be able to structure your loan in a more advantageous way.

Your Credit Rating

One of the most important factors that influence an interest rate is your credit score. Lenders have different credit score requirements, but most have a tiered rating system. Those with excellent credit scores qualify for the best interest rate, and good credit scores may qualify for a slightly higher interest rate. Because of this, you may consider learning more about your credit score and taking the time to correct any errors that may be resulting in a lower score.

The Amount Of Your Down Payment

In addition, the amount of your down payment will also play a role in your interest rate. The desired down payment may vary from lender to lender, but as a rule of thumb, the best home mortgage interest rates are given to those who have at least 20 to 30 percent of funds available to put down on the property, and this does not include subordinate or secondary financing. If you are applying for a higher loan-to-value loan, you may expect a higher interest rate.

The Total Loan Amount Requested

In addition, the total loan amount will also influence the rate. There are different loan programs available, but one of the biggest differences in residential loans is for very large loan amounts. The qualification for a jumbo loan will vary for different markets, but these loans qualify for different rates than conventional loans with a smaller loan amount.

While you may be able to use advertised interest rates to get a fair idea about the rate you may qualify for, the only real way to determine your mortgage rate will be to apply for a loan and to get pre-qualified. Contact us at Mason-McDuffie Mortgage by visiting our Facebook page at facebook.com/masonmcduffiemortgage to request more information about today’s rates and to begin your pre-qualification process.