2017 was certainly an interesting year! We had more buyers, and looser mortgage guidelines, qualifying more people for a home loan. We still maintained incredibly low interest rates with noisy politics and uncertainty contributing a great deal to that. As supply and demand would have it, we saw an increase in demand for home ownership but a shortage of supply as low inventory was the only thing holding the housing market back from a sure explosion. That led to home values increasing and a shift from a buyers- market; to a sellers- market.
So here we are its 2018 and we are seeing incredible economic growth. The Dow Jones Industrial average is soaring to record levels, unemployment rates are at a 17-year low and job growth predictions are all leading to signs of a very healthy America in 2018; from an economic perspective.
So what does all of this mean to you? Well it’s always important to know what is going on in the real estate market because if you are a home owner, you should always know the current market value of your home. If you are considering selling, you of course want to know how much cash you can get out of your sale. And if you’re looking to own a home, you want to know what the interest rates are, what they are projecting to be and what the inventory situation looks like to make better, more informed decision.
It’s expected that historically low interest rates, still baffling to even the most seasoned analysts, will gradually rise to an average of 4.5% percent over the next 12 months. Inventory is expected to increase, but moderately; making 2018 thus far, a sellers- market.
“This will be the first of many years to come in which it’s all about the millennial first-time homebuyer,” said Mark Flemming, chief economist at First American Financial Corp, a title insurance company. “ Find ways to appeal to those buyers, and it’s likely to be a successful year.”
Millennials, first time home buyers and self-employed individuals finally have access to options they really didn’t have after the mortgage meltdown. Let’s face it, most rentals today aren’t as desirable and they are more expensive as sellers of nicer properties have opted to “cash out” and sell once the market recovered. What I have recommended to interested buyers in our community is define where you are at financially and what your credit score is; then learn what products exist today that will get you qualified. For my sellers or potential sellers, get a free market analysis and know the market value of your home; you might be pleasantly surprised.
VA loans are home mortgages backed by the Department of Veterans Affairs (VA). With a VA loan, eligible service members and veterans can buy a home with little or no down payment, or refinance an existing home to get cash out or a lower monthly payment.
As an approved lender for the VA Home Loan Guarantee Program, I can offer service members, veterans, and eligible surviving spouses favorable terms on all types of home mortgage products. In many cases, I can get vets 100% financing with no mortgage insurance. I recently helped a client a acquire a loan of over $1,000,000.00 with just 10% equity in his home. He will now be able to do some needed home improvements, and take his family on a dream vacation. He is one happy vet!
I would like to discuss homeowners insurance and how it can impact future buyers. Usually insurance is last on the list to be finalized. Well….It’s not quite as easy to obtain as it used to be. With California having its annual fire season, accompanied with copious amounts of rains from last winter I am seeing premiums skyrocket. In some cases, some insurance carriers won’t even write the polices. If you are a borrower with a high debt to income ratio, adding a higher premium could be detrimental.
Also, worth mentioning is FEMA is in the process of updating their flood maps. This is important because with the record rains, individuals that weren’t previously in a flood zone could find themselves paying more. The lesson is clear. Please take a careful look at your homeowners insurance before buying or selling a house. Make sure you have adequate coverage from a reputable broker. Call or email me for recommendations.
The future is here with Remote E-Closing. The days of being bombarded with reams of paper at the closing table are over. Previous e-closings required either some in-person contact or a notary to e-sign closing documents via a shared tablet.
Borrowers will FaceTime with a notary in order to complete the closing live. The process allows for all documents to be signed, including the promissory note and mortgage. Buyers will never have to leave their home or wet sign a single document for purchase or refinance loans.
This gives borrowers the ability to close a loan whenever they want, whether it’s at 11 a.m. or 9 p.m., this will have an incredible impact on the entire experience,”
The e-closing technology is currently available to brokers in four states: Illinois, Montana, Virginia and Washington. The expansion will continue into more states throughout this year. Fannie Mae, Freddie Mac and the CFPB are all supporting these changes. So this is big news.
New market update. Changes are coming. Freddie Mac will be implementing appraisal waivers for purchases. This already exists for refinances. This will be great way for borrowers to save time and money for the transaction. And how nice would it be to not grovel with appraisers over value. Seriously… I’m ready for that.
Also following is Fannie Mae. They are looking to do the same.
Here’s the best part, if you don’t get an appraisal waiver with Freddie’s LP system you can switch it over to Fannie Mae’s DU and see if you can get the waiver there. These are big changes for sellers as well as buyers. It’s now easier then ever to get the financing you need.