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.
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.
3 Ways and 1 Big Reason to Refinance a HELOC
If you or anyone you know had a Home Equity Line Of Credit or HELOC in the last 10 years then change is imminent. Most borrowers are unaware of how much their payments will go up. In some cases, payments have gone up as much as 4.5 times from what they were currently paying.
HELOC’s have two stages. First is the draw period, which usually is about 10 years. The payments during this period are interest only.
After the draw period ends, the HELOC goes into the amortization period, and you will have to pay principal and interest. With the Fed raising interest rates, these monthly payments are going up. Don’t get caught off guard. Between 6 months to 12 months before the end of the draw period, reach out to me for solutions.
There are 3 ways to refinance a HELOC. 1. Refinance the HELOC, and start over with a new HELOC, with it’s own interest-only draw. 2. Pay off the HELOC with a home equity loan, witch has a fixed amount and a fixed rate. Payments remain the same through the life of the loan. 3. Refinance the HELOC and first mortgage into a new primary mortgage. Consider refinancing into a 15- or 20-year mortgage to reduce total interest payments.
Don’t get caught off guard with high payments. Be proactive and call me today!
I’m constantly on the lookout for new lending trends to better serve my clients. Recently available are two new loan programs designed to help more buyers, including those who have been turned down by other lenders. If you or someone you know is recovering from a recent foreclosure, bankruptcy, or a history of late mortgage payments, it is easier than ever to get financing. Homeowner’s Access is a loan product that may qualify borrowers with a history of 30- or 60-day late loan payments. Other features include a minimum 610 FICO score, only 2 years seasoning for bankruptcies, foreclosures and short sales. The other loan program is Fresh Start. This allows a minimum 580 FICO scoring and eliminates seasoning requirements for bankruptcies, foreclosures, and short sales. Best of all, both Homeowner’s Access and Fresh Start allow my clients to receive 100% gift funds from family members. Now, more than ever, I am able qualify more challenged borrowers for home ownership.