Credit Mistakes Potential Home Buyers In Lapeer Make

“Maintaining a strong credit score is one of the most important things potential buyers can do if they want to qualify for a mortgage” …

Maintaining a strong credit score is one of the most important things potential buyers can do if they want to qualify for a mortgage, since credit scores are used by lenders to measure financial health. A recent study showed that 34 percent of potential buyers believe their current score will hurt their future ability to purchase a home.

1. Don’t be late. Paying bills on time is essential, since a person’s payment history makes up 35 percent of the total credit score. A late bill payment of 30 to 60 days also gets reported to credit bureaus and stays on the credit report for a whopping seven years.

2. Applying for new credit. According the National Association of REALTORS®, applying and being approved for a new line of credit can cause concern with lenders who might take it as a sign that there’s a higher risk of default due to increased spending. Bottom line, if your potential buyers are planning to apply for a home loan in the near future, make sure they don’t apply for anything else around the same time, Yahoo! Finance warns. 

3. Having high balances. Just making minimum credit card payments isn’t good enough for most mortgage companies. People who hold high credit balances are not looked as favorable loan candidates since high balances and maxed out cards raises the debt-to-income ratio, according to lenders.

4. Too much disputing. While it’s a good idea to keep tabs on the credit report and dispute false charges, doing so too-often will be a red flag to lenders who may chalk it up to gaming the score instead.

5. Not having a credit history at all. Credit can’t be established if there’s none to begin with, so if your clients have a thin credit file, let them know they need to start building their history before applying for a home loan.
References: RealtorMag, Yahoo! Finance

Donald Horne, Team Success Listing
Associate Broker-Coldwell Banker Shooltz Realty
Oxford Office   248-969-8065
Lapeer Office   810-338-0628
donaldhorne.realtor@gmail.com
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In Lake Orion, Mortgage Applications Rose 2.3%

The Buyers Are Coming … Mortgage rates may have inched up slightly but that didn’t seem to deter home buyers from shopping for a loan last week.

Mortgage application volume rose 2.3 percent week-over-week on a seasonally adjusted basis, driven by an uptick in home purchase applications, the Mortgage Bankers Association reports. Mortgage applications are nearly 24 percent higher than they were a year ago.

lake orion mortgages After a short dip, mortgage applications for home purchases reversed course last week and rose 5 percent. Purchase applications are 17 percent higher than a year ago.

Purchase applications got back on track last week, resuming the level of activity observed throughout most of April and May,” says Lynn Fisher, MBA vice president of research and economics. MBA also reported that the average loan size for purchase applications rose to a survey high last week, reaching $307,700.

Meanwhile, applications for refinancings mostly held flat last week, budging just 0.4 percent during the week. MBA reports the average on a 30-year fixed-rate mortgage rose to 3.85 percent last week, up from 3.82 percent the prior week.
References: RealtorMag, CNBC

Donald Horne, Team Success Listing
Associate Broker-Coldwell Banker Shooltz Realty
Oxford Office   248-969-8065
Lapeer Office   810-338-0628
donaldhorne.realtor@gmail.com
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Find Out Your Home’s Value

Mortgage Rates Drop To 3 Year Lows

The 30-year fixed-rate mortgage averaged 3.57 percent in the most recent week, the lowest average in three years, Freddie Mac reports in its weekly mortgage market survey.

“Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8 percent since late March,” says Sean Becketti, Freddie Mac’s chief economist. “As a result, the 30-year mortgage rate fell 4 basis points to 3.57 percent, a new low for 2016 and the lowest

mark in 3 years. Prospective home buyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks.”

Freddie Mac reports the following national averages with mortgage rates for the week ending May 12:

  • 30-year fixed-rate mortgages: averaged 3.57 percent, with an average 0.5 point, dropping from last week’s 3.61 percent average. Last year at this time, 30-year rates averaged 3.85 percent.
  • 15-year fixed-rate mortgages: averaged 2.81 percent, with an average 0.5 point, falling from last week’s 2.86 percent average. A year ago, 15-year rates averaged 3.07 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.78 percent, with an average 0.5 point, a decrease from last week’s 2.80 percent average. Last year at this time, 5-year ARMs averaged 2.89 percent.
    References: RealtorMag, Freddie Mac

Donald Horne, Team Success Listing
Associate Broker-Coldwell Banker Shooltz Realty
Oxford Office   248-969-8065
Lapeer Office   810-338-0628
donaldhorne.realtor@gmail.com
Team Success Listing’s
Find Out Your Home’s Value

Closing Times Are Speeding Up

Closing Times Are Speeding Up

The average time to close on all mortgage loans dropped to 44 days in March, the shortest amount of time in a year, according to Ellie Mae’s latest Origination Insight Report.

New mortgage rules went into effect last October, pushing closing timelines from 46 days in October to 48 days in November and December, and then to 50 days in January. But lenders and real estate professionals have had time to adjust to the new rules, and closing times are speeding up again.

timeThe average time to close on a loan for a home purchase fell to 45 days in March, while closing times for refinancings dropped to 41 days. Times to close on FHA loans also fell to 44 days in March, while VA loans averaged 48 days to close.

What’s more, Ellie Mae’s report shows that the average closing rates for all loans continued to rise to the highest level since tracking began in 2011. Closing rates for all loans rose to 70.6 percent in March (closing rates on purchase loans was slightly over 75 percent). Ellie Mae calculates the closing rate on a 90-day cycle, since most loan applications require one-and-a-half to two months from application to close.

Sixty-seven percent of all closed loans had FICO scores above 700. The average credit score was 722. Only 12 percent of the closed loans had scores below 650, according to Ellie Mae’s report. The average loan-to-value ratio was 80 percent, and the average debt-to-income ratio remained constant at 25/38.
References: Mortgage News Daily, RealtorMag 

Donald Horne, Team Success Listing
Associate Broker-Coldwell Banker Shooltz Realty
Oxford Office   248-969-8065
Lapeer Office   810-338-0628
donaldhorne.realtor@gmail.com
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Mortgage Closing Times Lengthen Again

The time to close on a mortgage loan is once again increasing. The average time in January climbed to 50 total days, up four days since the “Know Before You Owe” mortgage disclosure rules took effect in October, shows a new report released by Ellie Mae.

Over the past year, the average time to close on a loan has grown 10 days longer. In January 2015, the average time to close was 40 days, according to Ellie Mae’s report.

mortgage closing times lengthen againThe report also broke down average close times by type of loan:

  • Purchase loans: 51 days (up from 50 days)
  • Refinance loans: 48 days (up from 47 days)
  • Federal Housing Administration loans: 51 days (up from 49 days)
  • Conventional loans: 49 days (same)
  • Department of Veteran Affairs loans: 53 days (up from 52 days)

Ellie Mae’s report also showed that despite closing times climbing, conventional purchase closing rates reached a new high in January. Conventional purchase closing rates increased above 73 percent for the first time since Ellie Mae began its tracking in August 2011.

Also, Ellie Mae’s report showed the average FICO score was down last month, averaging 719 on closed loans (down from 722 in December). That is also the largest month-to-month drop in FICO scores since mid-2015, Ellie Mae notes.
References: HousingWire, RealtorMag, Daily Real Estate News

Donald Horne, Team Success Listing
Associate Broker-Coldwell Banker Shooltz Realty
Oxford Office   248-969-8065
Lapeer Office   810-338-0628
donaldhorne.realtor@gmail.com
Search All Properties
Find Out Your Home’s Value Here

First Time Home Buyers, Tip #2, Finding A Home.

This series, Finding A Home, is about looking at open houses, how to make an offer, concessions and appraisals. Tips from real estate brokers and mortgage lenders.

1)  What to look for at an open house

2)  How to make an offer on a house

3)  Buyer and seller concessions

4)  The role of a home inspector

5)  Home appraisal vs home inspection

What is the value of your home in today’s market?
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Many Renters Can Afford To Buy A Home, They Just Don’t Realize It Yet …

Many Renters Can Afford To Buy A Home, They Just Don’t Realize It Yet …

Do I need a lot of cash to buy a home?  No, there are low cash required options available.

Won’t my monthly payment be more than I can afford?  There are loan choices that offer lower payments and qualifying for a mortgage is easier than ever.

Isn’t today’s housing market the wrong time to buy?  No, today’s housing market has made available many opportunities for first time buyers and interest rates are still low giving you more buying power.

What’s Your Average Rent?

Did you know that if you spend $825.00 a month in rent, after 3 years you have spent $29,700.00 in someone else’s property? After 10 years you have spent $99,000.00 paying off someone else’s mortgage!

Stop making your landlord rich, learn how easy it is to become a homeowner. Let us help you locate the financing, obtain the down payment and find you a new place to call home!

Donald Horne, Broker / Owner
Team Success Listing LLC
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First Time Home Buyers, Tip #1, Getting Started.

This series, Getting Started, is about should you buy or rent at this time, what can you afford, how do you secure a mortgage and home buyer tips from real estate brokers and mortgage lenders.

1)  Advantages of buying vs renting

2)  How much home can you afford

3)  Getting a mortgage in today’s market

4)  First time home buyer tips

first time home buyer tips

Let us help you locate the financing, obtain the down payment and find you a new home!

Donald Horne, Team Success Listing
Associate Broker-Coldwell Banker Shooltz Realty
Search All Properties
Oxford Office   248-969-8065
Lapeer Office   810-338-0628
donaldhorne.realtor@gmail.com
Down Payment Resource Center

Buying vs Renting, Build Your Own Equity Not Your Landlords

Buying vs renting, build your own equity not your landlords … If you are renting, buying a home could very well be a financial move that benefits you in the long run, as you pay your own mortgage and build equity instead of paying your landlords mortgage.

What is your monthly rental payment? $450, $500, $600? A $100,000 home would have a payment of about $537 or less, depending on your credit rating. No money for a down payment? This program might just be the answer … Down Payment Resource Center.

Let us help you locate the financing, obtain the down payment and find you a new home!

Donald Horne, Team Success Listing
Associate Broker-Coldwell Banker Shooltz Realty
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Oxford Office   248-969-8065
Lapeer Office   810-338-0628
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If You Buy a House Now, You Will Save About $217,000.00!

Buying a home costs money. Lots of money. There’s the down payment and the monthly mortgage payment and the maintenance and taxes and the insurance and… Are you overwhelmed yet?

It might seem like so much that you just want to put off the house hunt and sign that yearlong lease with your landlord (even though he upped your rent 25% and will likely do the same next year).

But this is going to blow your mind: Even with all of those costs, you still stand to save more than $200,000 over the next 30 years if you buy right now.

“But that’s over the course of 30 years!” you say. “I’m thinking about my money right now!” you say.

Well, get this: Wait just one year, and you throw nearly $19,000 in savings down the drain. The penalties are so high because mortgage rates are forecast to increase and because home prices are rising quickly, according to our chief economist, Jonathan Smoke.

Yep, that’s right. There’s a financial benefit—and, similarly, a financial penalty—for every single day you pay your landlord instead of your mortgage company. At a national level, the 30-year financial benefit of owning today is $217,726, according to our economic data analysts, who crunched the numbers to determine the relative merits of buying vs. renting. (Their work doesn’t capture qualitative advantages such as more control over your living situation, flexibility with pets, and, generally, more options—all things many potential home buyers would argue are equally, if not more, important when deciding whether to take the plunge.)

Postpone for one year, and you’re losing out on an estimated $18,672 in savings. Delay for three years, and that figure jumps to $54,879.

“We’re at a critical juncture: Rents, home prices, and mortgage rates are all expected to rise significantly over the next several years,” Smoke says. “That means the cost of delaying homeownership will go up even more sharply, if you wait three years or even one. It’s much like the decision to start contributing to a 401(k). Delay contributing, and you lose out on the compounding returns.”

‘Financial calculus’ confirms it’s wise to buy ASAP

its wise to buy nowSmoke and his team used a lot of factors to come up with these estimates, and they made quite a few assumptions as well.* For instance, they assumed that any money saved by renters would be invested, and that the investment would enjoy a compound annual growth rate of 5% (that’s consistent with conservative long-term expected market returns).

We know—these are some pretty big assumptions. How many renters are actually saving and investing? But we’re telling you about these assumptions, because the bottom line is this: Our data team stacked the deck against owning and still came out with eye-popping figures in favor of buying.

“The financial calculus confirms it’s wise to buy—and buy as soon as possible,” Smoke says.

That’s because no matter how you slice it, you can’t deny a few key facts that make the case for buying: Nationally, it’s cheaper right now to buy than to rent, home prices are expected to appreciate, and, while renting is subject to inflation, homeownership costs are locked.

In some markets, financial ‘penalty’ is over $1M

But, as always, it depends on where you go.

For example, in Bismarck, ND, the financial benefit of buying is actually negative. That means you’d spend $12,350 more over the next 30 years to buy instead of rent. That’s because in places such as Bismarck, rents are low, and while home prices have risen dramatically over the past few years, they aren’t expected to rise much in the future. That seems like an incentive to buy, right? Not necessarily. Think about this in terms of home appreciation. Because home prices may have peaked for the foreseeable future, you don’t stand to gain much from owning a house here.

travel west to californiaBut travel west to California and you’ll see an entirely different picture. In Santa Cruz, for instance, you stand to save more than $1 million over the next 30 years if you buy today. That’s because both rent and home prices are skyrocketing, thanks to strong economic drivers such as job growth, population growth, and household growth.

But it’s still hard to get a foot in the door: A median-income household in Santa Cruz could afford less than 10% of the homes available for sale there.

In order to realize a positive financial benefit from buying a house, owners have to wait for “break-even time periods”—when the transaction costs of buying and selling cancel out. Nationally, that wait time is just over three years. In markets that have higher home price to rent ratios, such as San Jose, CA, and New York City, owners normally need to wait longer—as long as six to seven years.

“From a pure financial perspective, you have to be committed to staying longer term,” Smoke says about those high-cost markets. “That’s one of the reasons why rents are also high and getting higher.”

So, in some places you win, in other places you lose. That kind of means it all balances out, right?

Nope, Smoke says: Nearly 90% of the markets (335 of ‘em) produce a financial benefit of at least $100,000 from owning over 30 years. In addition, almost a quarter of the nation’s markets reap a financial return greater than the national average.

We’re not exactly math majors, but we’re picking up what Smoke is putting down. It might feel challenging to come up with a down payment, but we never saw the savings spelled out in such plain language.
rachel stults oversees buying, selling and finance news at realtor.com. a nashville native and former newspaper reporter, rachel loves cooking, stand-up comedy, beaches and karaoke.

 

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