11 Months
Eleven months may sound like a long – or short – period of time to you, but when it comes to buying a MN home, it’s a pretty good number. The Chief Economist for mortgage guarantor Fannie Mae has some interesting news that should get renters’ attention: Doug Duncan believes “…mortgage rates will edge up only gradually, ending the year around 4.2%.” If this prediction proves true, that gives people almost an entire year to get in position to buy a MN home and still take advantage of interest rates that will most likely not be this low again in their adult lifetimes.
This is an important message that can have huge, long-term positive impact on the financial future of people who take advantage of this low interest rate opportunity. Most industry professionals and experts agree that it’s unlikely interest rates or home prices will go down, so the old phrase “buy low, sell high” applies to today’s market climate.
Let’s make sure the public knows the benefits of homeownership and how it’s key to how most Americans build worth and wealth. I think it’s also important to educate consumers about the fact that the home buying process isn’t confined to just a month or two. We know that people should talk with a lending professional to make a plan to get ready to buy, but the public doesn’t realize that getting qualified can be a process involving different steps over a few months rather than a yes or no answer at a single point in time. We’ve got eleven whole months to get people in position to become homeowners – let’s do this!
~Charlie
- Published in On the House
Extra Credit?
Credit scores are going to be making news. Without a lot of boring details, this is because of a new bill on Capitol Hill that will allow other scoring methods besides the dominant, industry-standard Fair Isaac Corporation (FICO). Depending on how excited the media gets about this, the public will likely start hearing things like, “New credit scoring methods will make it easier for low and middle-income people and those without traditional credit histories to now be considered for mortgage loans.”
The bill – known as the Credit Score Competition Act of 2015 – is well-received within the industry. National Association of Mortgage Professionals past President John Councilman says, “The need to rethink credit scoring is long overdue – the current system shuts out some creditworthy borrowers.” Sounds good, right? It basically is…but it’s still important for consumers to get educated by lending and real estate professionals about what their specific options and challenges are.
The internet has been good and evil for the home buying process. News like the potential for people to use things like their rent payment history and other things to build a credit profile will open the door to all kinds of offers and promotions by online entities just looking to make a quick buck than build clients for life. “Too good to be true” offers that waste peoples’ time could sour bona fide potential clients on the idea and process of buying a home. That’s just wrong!
If you’re a consumer wondering if the changes in the works could help you, we can connect you with responsible, experienced professionals that can give you the real scoop for your specific situation. To our mortgage and real estate partners, let’s work together to make sure this piece of good news doesn’t backfire for the people it’s intended to benefit.
~Charlie
- Published in On the House
Unpredictable Predictions
Regular news can be slow this time of year, but making predictions for what will happen in the new year provides a ton of material. I find that pretty much the only thing that’s predictable about predictions is that we shouldn’t put too much stock in them. A lot of us in the real estate, mortgage and related industries shake our heads when we hear or read news stories that are misleading or just plain wrong because the reporter doesn’t understand the material and incorrect information can prevent the public from exploring homeownership or making another move that could personally benefit them.
Here’s a great nugget for all of us to have on hand to combat misinformation: A study of 6,500 predictions made by financial, real estate and other experts in various media forms from the internet to print to TV between 1998 and 2012 found that the “forecasts” had an accuracy rate of just 47-percent! The takeaway from this study by Virginia-based CXO Advisory Group is a good one: The pundits have worse odds with their predictions than you would in flipping a coin. So just because you saw, heard or read it on air or online doesn’t make it accurate.
Real estate and mortgage have become staples in the news due to bursting bubbles and that big meltdown. It would be truly unfortunate for anyone to miss an opportunity to buy, sell, move up, downsize or move on because they didn’t have the real scoop of what their actual, specific options are. As industry professionals, we need to make sure we reach out and keep the public informed of what the real story is in our area. Let’s work on that together!
Happy New Year!
~ Charlie
- Published in On the House
Bubbles = Good, Fizzles = Bad
Are you getting ready to ring in the New Year? How are you feeling about the end of 2015 and the beginning of 2016? Here’s some good stuff from the U.S. Federal Reserve about how Americans are doing now compared to the peak of that thing called the “Great Recession” in 2009:
• Household net worth is currently $85,700, up from a recession low of $57,000
• Consumer debt has fallen to 9.8% from 13.2%
• Average credit score has risen from 687 to 695
People might not necessarily realize that from what they’re hearing in the news. On the real estate and mortgage side of things, we know that home appreciation is moving but not out of control, rates are still historically favorable and we had a lot of lending changes this year that can make it easier for some folks to qualify such as the return of 3% conventional financing and lower FHA MIP premiums. SO…however you feel like you did in 2015, know there is reason for optimism. Let’s spread the word together and help educate consumers so they can take advantage of this amazing time in history to buy in and really reap the benefits of homeownership. The takeaway?
Americans far from fizzled economically, so break out the bubbly and celebrate the gains of this year and possibilities for next!
Happy 2016! Be safe!
~Charlie
- Published in On the House
Hellooooo….
Anyone out there? This is an interesting time of year. Some people have shut down, others are scrambling to get closings done by year-end. Whether you’re on hiatus or in high gear, this particular stretch on the calendar can leave a lot of us feeling a bit out of sorts, wondering what’s next after the holiday season is finally finished and we’re staring down the barrel the 31 very cold days of January and the clean slate of a new calendar year.
If you’re not one of those amazing, uber-organized people who has your business plan and tasks laid out in detail for the first quarter and knows exactly where you’re going and how you’ll get there, don’t worry. There’s still time to start and initiate the momentum you need. You don’t have to do it all by yourself! If you’re one of our industry colleagues, there’s strength in numbers and accountability relationships. In this peculiar “holiday stall zone,” it’s easy to feel isolated. Let’s talk about what you want to do in 2016!
If you’re a renter or homeowner, your next step is easy. We can put you in touch with real estate and lending professionals who specialize in your area and/or phase of life: First-time buyer, move-up, downsize – whatever!
Bottom line: Phones and email still work this time of year. What’s on your mind?
~Charlie
Charlie Lawson, President & Owner
612-207-2300
clawson@gcstitle.com
- Published in On the House
How’s Your Shopping Going?
Are you done yet? If you think your holiday shopping is taking a while and costing a lot, check out what MN first time home buyers are up against according to research from Zillow and Allianz:
- MN First time buyers typically rent for six years. Consumers rented an average of 2.6 years before buying in the 1970s
- MN First time home buyers are spending 2.6 times their annual incomes on homes. Consumers spent approximately 1.7 times their annual incomes on homes in the 1970s
While people might not be home shopping for six years, the idea of homeownership is out there and on their brains while they’re writing those rent checks. This means MN Realtors and MN lenders will likely be in touch with people for longer periods of time before they buy their first MN home. And, if they’re NOT in touch, they should be. With everything that’s happened in the last few years and the new regulatory climate, it’s more important than ever to be very intentional with our marketing and make sure we’re educating the public and building solid, long-term relationships. There are simple ways to do this which are effective and compliant. Let’s talk about communicating to consumers in this new world – while prices and financing are still so favorable.
~Charlie
- Published in MN First Time Home Buyers, On the House