The kids are headed back to the classroom and it got me thinking that a lot of adults could use some schooling as well. So much has changed in mortgage and real estate in the last few years and recent numbers from Black Knight Financial Services show evidence of housing market recovery:
- Home prices are up 5.3% year-over-year
- Prices as of June rose for the 50th consecutive month
Interest rates are still low, but a lot of young people grew up during a time of great real estate distress and haven’t experienced the strong markets that propelled the worth and wealth building of their parents. They also haven’t experienced the evolution of interest rates and how high they’ve been to know anything other than the “historic lows” we’ve had for years. They won’t last…it’s time to get schooled up on the current market and what’s involved in buying a home to make an educated decision as to whether homeownership is possible and the right decision for the long run. The GCS Title team and I work with many outstanding, experienced real estate and mortgage professionals who can “teach” you what’s involved in the process and “instruct” you on your options. We’re happy to introduce you! ~Charlie
I’m surprised to hear that a member of the public knows what title insurance IS, so imagine my reaction when I heard someone “got in a fight about title insurance.” A friend is on the Board of Directors of her condominium association and apparently got in quite the dustup with others on the board over whether or not they needed to buy title insurance on parking spaces the association was buying downtown Minneapolis. Luckily, she was in the majority and the association purchased policies for all of the spaces, but some common perceptions and misperceptions about title insurance came up in the “argument.” Dissenting board members argued the following things:
- Title insurance is expensive.
Well, it does cost money – but the price is nothing compared to the expense of defending yourself against a lawsuit, mechanic’s lien or another hostile claim to the ownership of and equity in your property.
- We’re buying five parking spaces, but we only need title insurance on one.
Wrong! These parking spaces are newly-constructed and the chance of mechanic’s liens popping up is higher than on a piece of property that has been built for many years. Also, every owner of each piece of property generally gets named in the types of suits that these new spaces are vulnerable to. If something went wrong, the only space protected would be the one with a policy.
- Title companies only insure things when there is no risk.
Wrong again. I could tell you so many stories….
There’s a reason lenders require title insurance policies – they need to make sure their interests are protected. Home buyers should do the same. Title insurance protects you against things you never imagined would come up. The lady that went to the mat to convince her condo board to buy title insurance was pushing to spend some of the association’s money – but the amount they paid is well worth what they’ll save if there’s a problem. Got questions? The GCS Title team and I are here – call anytime! ~Charlie
Home prices are up again according to the latest figures from CoreLogic. In June, U.S. home prices saw a 5.7% year-over-year increase. Anyone looking for a home in the Twin Cities Metro – whether it’s a first home, a move up or a down-size – has probably experienced the fast pace of the market due in part to low housing inventory. Some of that could be attributed to supply and demand, but CoreLogic’s Chief Economist Frank Nothaft says, “Mortgage rates dipped in June to their lowest level in more than three years, supporting home purchases. Local markets with strong economic growth have generally had stronger home-price growth.”
We did a blog recently explaining how home appreciation outpaced a leading investment index in 2015, and this year looks equally strong. If you have questions about whether or not real estate is a sound investment, now is a great time to talk to a real estate professional about the home you have – or the one you want. A conversation with a loan officer is also a great idea – CoreLogic’s chief economist mentioned interest rates and you should find out what they mean to you. At GCS Title, our team helps home buyers and sellers get to the “closing finish line” – but, we’re here for you at other times as well. What does the housing market news mean to you? We can help you get the answers you need – let’s talk! ~Charlie
Pokemon might be coming to your neighborhood. The app claiming to get gamers off the couch has sent them into the streets, roaming parks and other public places in a zombie-like state. Online real estate resource Trulia couldn’t resist getting into the game (and probably tapping the phenomenon for publicity) by creating a “cheat map” for enthusiasts that works like this according to Trulia’s senior public relations manager Andrea McDonald: “Assuming the Pokémon in Go are popping up based on the habitat they thrive in, we have tapped into our map making prowess to showcase the potential hotspots across the U.S. for Electric, Fire, Grass, Psychic and Water Pokémon types.”
Whether you’re looking to “catch ’em all” or for someplace to live, apps can be a great help. They don’t replace the expertise of great real estate agents though. We happen to know a lot of them and we’re happy to connect you. The GCS Title team also works really hard to make sure buyers and sellers don’t feel like they’re walking blindly through the closing process…we love being part of your home buying and selling experience. How can we help you? ~Charlie
A lot of new rules and changes have hit the real estate and mortgage industries in the last few years. Here’s a little background and an update and then we’ll get to what you really need to know.
The intent of a lot of these new regulations – and all the acronyms that go along with them like CFPB and TRID – is to educate and protect consumers. The Dodd Frank Act is responsible for a lot of changes in the way business is done going forward and there are many folks opposed to all or part of the sweeping bill. A congressman from Texas has now introduced what he calls “the Republican plan to replace Dodd-Frank and promote economic growth.” Its name is Financial CHOICE Act— complete with its own acronym that stands for “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.” It’s not clear if it will get anywhere – there’s no companion bill in the Senate yet or official reaction from the rest of Washington.
It’s almost impossible to keep track of everything politicians are up to with regard to real estate and mortgage regulation. For now, know this: You need to surround yourself with great professionals who are up to date on the rules, timelines and how to make the transaction go as smooth as possible for everyone involved. At GCS Title, we have an amazing team dedicated to doing just that. Meet our great people here: https://www.gcstitle.com/meet-the-team/
Whether you’re a Realtor, a loan officer, a homeowner or potential buyer, we want you to know “we get it” and we’re here to help. Call us any time! ~Charlie
A very official-sounding report called “Government Regulation in the Price of a New Home” released by the National Association of Home Builders (NAHB) that has some surprising info. It claims that government regulations and the cost of complying with them make up nearly one-fourth of the price of a new home. Think about that as you walk through the model on a new construction project or a house on the Parade of Homes! You can read about it yourself at https://www.nahb.org/en/news-and-publications/press-releases/2016/05/regulatory-costs-account-for-nearly-a-quarter-of-the-price-of-a-new-home.aspx .
Apparently, the costs associated with regulation have jumped 30% between 2011 and 2015 which coincides with the launch of the main agency and many new rules associated with the Dodd Frank reform bill. NAHB’s CEO Jerry Howard says “The cost of regulation in the price of a new home is rising more than twice as fast as the average American’s ability to pay for it. That is simply not sustainable.” Even though the rules and regulations that have been created for and imposed on real estate and mortgage transactions were mostly created by politicians, our “On the House” blog isn’t about politics. We’re here to share important and interesting news that affects consumers, mortgage loan officers and Realtors.
We at GCS Title think the takeaway is this: The NAHB report highlights how many regulations there are and we’re here to help consumers and our real estate and mortgage partners navigate the rules to successful closing. Our entire team is dedicated to making the process as easy and comfortable for everyone involved. Got questions? We’re here to help!
The summer could be a rollercoaster based on new information from the National Association of Realtors (NAR) and online real estate resource Zillow. Sales of existing homes went up 1.7% between March and April and they’re up six-percent year-over-year. Prices are higher too: NAR reports that the median home price has jumped 6.3% from April 2015, making this the 50th consecutive month of annual home price gains. So there’s the highs – the lows have to do with housing inventory. The April Zillow Real Estate Market Report shows there are 3.4% fewer homes on the market today than there were this time last year. There’s an eight-percent drop in the number of homes for sale in the entry level price range, making it even tougher for first-time home buyers than other property categories. So we’ve got a supply and demand situation that’s driving prices up. I’m not bringing this up to scare people, but rather to make them aware. These market conditions mean it’s more important than ever for consumers to make sure they’re working with experience, full-time, qualified real estate and mortgage professionals. When bidding wars are likely, top-notch representation is critical. GCS is here to help home buyers and sellers have a great experience throughout the closing process and we work with outstanding Realtors and loan officers every day. Let us know if you’d like to meet one! ~Charlie
I guess you could say MN is physically in the middle of the country, but you might find it surprising to find that it’s in the same position with regard to median rents. Check this out: Nationally, the average rent for a one-bedroom apartment is $1140 and $1300 for a two-bedroom. We’re keeping right up here in Minnesota – the average price for a one-bedroom in the metro area is $1036 and $1438 for a two-bedroom. Year over year, rents are up 2.8% nationwide as of April. Isaac Newton’s famous quote “What goes up must come down” never seems to apply to things that require money coming from your pocket, so it’s doubtful rents will be headed in the opposite direction.
Price, market, interest rate fluctuations and compliance issues make it really hard to publish comparisons between monthly rent and payments on a home. But that shouldn’t stop those of us in the industry from having comparisons on hand between rent and mortgage payments that can be rattled off in conversation with our leads, prospects, strangers and anyone else we come in contact with. The fact that a home can be purchased for the same amount or less than rent often sparks “water cooler conversations” and a lot of questions that we and our Realtor and loan officer partners are happy to answer. Let’s get the buzz going!
The Spring-Summer market is underway and everywhere you read and watch, you’ll find comments about the real estate market, interest rate movement, shortages of homes for sale in certain areas and price ranges. People outside the real estate and mortgage industries may wonder what it all means – and if they don’t, they should. It’s so easy to draw a conclusion about how the market’s doing, whether or not it’s a good time to buy or sell, if mortgage interest rates are good and so on. The problem with that is, it’s virtually impossible to know whether or not that conclusion is true without information from a real estate and mortgage professional that was researched and prepared specifically for an individual or family. Here are some questions consumers should NEVER try to answer by reading the news or surfing the net alone:
- Can I afford and qualify for a home?
- Can I get enough money for my home to buy a different one?
- Are interest rates good or should I wait to see if they’ll go lower?
- Is it a good time to buy a home or are prices going to hold steady or go down?
These are just a few typical questions that should be verified with a review of your personal situation. Drawing the wrong conclusion based on general information or statistics can cause you to miss an opportunity. Don’t worry – you don’t have to “sign your life away” to get a professional, specific opinion. We at GCS Title work with many experienced professionals and can connect you with people who can answer your questions with no obligation or pressure. Let us know what questions are on your mind – we’re happy to help you get them answered. ~ Charlie
You’ve probably heard of Seasonal Affective Disorder (SAD) that affects people’s moods and happiness levels in the winter months when there’s less sunshine. That in mind, some researchers wanted to know if sunshine or clouds affected mortgage loan approvals (not making this up). Folks at the University of Washington compared loan approvals on unexpectedly sunny days to those on unexpectedly cloudy days and found some interesting things: 1) The number of approvals on the sunny days was higher and 2) The “sunny day approvals” also proved more likely to go into default. Anyone who has ever gone through the process of getting a mortgage might (and probably should) freak out to hear this and wonder, “After all the paperwork, scrutiny, explanations and proof of everything, it comes down to SUNSHINE?” It’s not quite that simple, but UW felt their data was strong enough to publicize. UW Associate Finance Professor Ran Duchin says, “The cool thing about this data is that for all the applications that are approved, we could actually trace the performance of those loans being originated, after they’re approved.” Duchin says this data should motivate lenders to investigate “to what extent should we automate some of the decision-making processes … to avoid this sort of human factor, these mistakes.”
I know from years of doing business and working with the finest loan officers and lending institutions that this research makes for an interesting news item, but it’s not even close to the whole story. Things like the weather shouldn’t affect your loan approval or experience as a borrower. One way to make sure you’re not harmed by a “fair weather lender” is to deal with experienced professionals. Get recommendations and research loan officers and companies before making a decision and don’t make an “impulse application” online without due diligence. Anyone who’s ever gotten a mortgage understands how helpful “live humans” are when the process gets stressful and complicated (and that’s practically the definition of “mortgage process”). Ask us! We can connect you with the best of the best.