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
Seems like you can’t look, watch or listen to anything without hearing something about mortgage interest rates, the impact of Brexit an rates and even “more historic lows” and a possible refi boom. There’s a ton of articles, information, speculation and opinion about what homeowners can do and gain during times of low interest rates and a lot of it is interesting and helpful. Here are a couple highlights:
- Save thousands of dollars on the life of their loans by getting a lower rate or shorter term (15 vs. 30 year)
- Pay of a home equity line of credit
- Consolidating debt
- Get rid of mortgage insurance
These can all be great things…the problem is, you can’t know for sure if any of these things are possible and if they make sense for you personally when it comes to costs/fees/savings without getting specific, professional advice. While it looks so available online, it’s not necessarily personalized…a mortgage calculator just doesn’t tell the whole story. At GCS Title, we work with many, many incredible mortgage loan officers. These people are licensed, experienced – and they’re actual, local people who you can reach without going through an automated system – which is a big deal when you’re making choices and decisions that affect such a big part of your finances. Loan officers are happy to discuss your situation and let you know if you have options you didn’t know you had and their findings will be geared to what’s right for you – no obligation. Let us know if we can introduce you to a loan officer who can answer your questions…a refi boom could be a great thing – as long as it doesn’t blow up in your face. ~Charlie
It can be hard – and actually kind of boring – to keep up with everything lawmakers are passing that affects the real estate and mortgage industries in the interest of “protecting consumers.” The latest development out of Washington D.C. is passage of the SAFE Transitional Licensing Act that basically gives mortgage loan officers a temporary license when making a change. Those changes could be between companies or across state lines. Why should anyone who isn’t a lender in transition care? The government has spent a lot of time examining the real estate process – lending practices, settlement procedures, licensing, disclosures and marketing rules after the “real estate bubble burst” and the “mortgage meltdown.” All the new rules and scrutiny came after the waves of foreclosures and underwater properties that did in fact cause a great deal of suffering for individuals and the economy. Politicians will always be busy making laws – it’s what they do. We at GCS and the Realtors and lenders we work with also understand that consumers must be protected and empowered. Whether you’re a renter or homeowner, there are many times when real estate and mortgage professionals can be helpful – even outside the times when you’re buying, selling or refinancing. The housing and finance crises of years past have made Realtors and loan officers necessary members of your “household finance team” and they can help you stay on top of your home’s value, your credit, your ability to make a move and your options at any given time. Take advantage of their knowledge and commitment to neighborhoods, communities and your ability to build worth and wealth through homeownership! ~Charlie
I’m not asking where you were born and raised, but rather where your Fixed Rate Mortgage (FRM) is. There are three groups of people I’m talking to here: 1) People who have a mortgage – there are questions you need to be asking, 2) Renters – there are questions you too need to be asking and if you don’t – well, you may regret that later and 3) Our Realtor and Loan Officer partners to gather their support in communicating the following important news.
To satisfy the regulators, I will note that there are serious rules about quoting mortgage interest rates in publications and marketing materials, so I won’t do that directly here. But the Primary Mortgage Market Survey from government-sponsored enterprise Freddie Mac as of February 18 shows interest rates for 30-year FRMs at under four-percent and rates for 15-year FRMs at under three-percent. See for yourself: http://www.freddiemac.com/pmms/
GCS isn’t a mortgage company, so you may be wondering why I’m blogging about this. The reason I – and all of my amazing staff – are in this business is because we love helping people make their dreams of homeownership come true, being there to help them through the process and seeing them enjoy all the benefits from making that important investment. Ask anyone at GCS why they do and like their jobs and they will tell you the same.
Time to tie all this together: A time will come when mortgage interest rates will rise and it will become more expensive to purchase or refinance a home. This will limit options for people across the board – whether they’re buying their first home, moving up, moving on, downsizing, buying a vacation home or even wanting to reorganize their assets for other purposes. I think it’s so important for renters and homeowners to talk to experienced real estate and lending professionals and ask questions about their current situation and what they would like to do in the next 1, 5 and 10 years. It’s highly likely that rates will change (not in a good way!) and there will be fewer choices. Professional Realtors and Loan Officers are not in business to make a sale no matter what…they believe their job is to help you be successful over the long term and be your advisors whether or not you’re buying, selling or refinancing at a specific time. Choosing and checking in with trusted real estate and lending professionals should be part of your routine. We at GCS happen to know quite a few of them and can help you connect.
Most people in California’s Bay Area don’t have the income necessary to afford homes there. The “U.S. Sustainable Home Price Report—Fourth Quarter-2015” from Fitch Ratings says that home prices in San Francisco are “unsupportable by area incomes.” The report mentions parts of Florida and Texas that have the same issue, though not as severely. While we certainly don’t have that problem here in Minnesota, there does seem to be a constant challenge with regard to what people know and *think* they know about qualifying for a mortgage and how owning versus renting benefits one’s overall financial picture.
It’s easy to see why the public may be suspicious of Realtors’ and Loan Officers’ motives when they tout the benefits of homeownership when following up on a lead – it’s human nature to conclude someone is just trying to sell you something and discount what they’re saying. That’s why we as industry professionals have to be talking about this every day to everyone. Questions that can start conversations and really reinforce the benefit of owning over renting are things like:
“Do you think it’s better to put money in the bank or spend and never see it again?”
“What if your biggest monthly cost also doubled as savings?”
We certainly hope homeownership doesn’t exceed people’s reach here in our neck of the woods or anywhere for that matter. Starting these dialogues with the public is never a bad idea – whether or not they have decided they are “in the market for a home.” Naturally, we’re always trying to build and increase business, but part of our job is sharing the understanding of how important the product we deal with (homes) is to the benefit of the clients – past, current or “eventual” – we serve.
The medical capitol of Rochester, Minnesota just got a little more distinguished: Rochester, MN has made it into livability.com’s “Top 10 Best Affordable Places to Live” list. I like this list because it mentions affordable places that people would actually want to live. But there’s plenty of good news to go around….
Turns out, Rochester, MN and the rest of the top ten aren’t the only affordable places to live. A report by a huge entity that has its own think tank (Black Knight Financial Services) that monitors, analyzes and studies all things mortgage and real estate-related released a report that says mortgage payment-to-income ratio is still favorable by historical standards, so it’s easier for many people to buy a home. Black Knight’s Senior Vice President of the Data & Analytics Division Ben Graboske explains it this way: “… it currently takes 21 percent of the median monthly household income to purchase the national median-priced home using a 30-year fixed rate mortgage. That’s down significantly from 33 percent back at the top of the market in 2006, and is still below the average of 26 percent we saw in the more stable years before the housing bubble.” For those of us who aren’t statistical geniuses, this report is saying that homeownership is affordable AND a sound choice. So many people (understandably) got scared by the real estate market crash and we in the real estate and lending industries need to be constant ambassadors (and cheerleaders according to this info!) for homeownership and its benefits. We can do this together! Let’s get this information out to all the people it can help!
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.
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!
What would have to happen for you to say “I feel the best I have in 10 years!”? That’s basically what the nation’s builders said heading into the third quarter this year. According to the October National Association of Home Builders/Wells Fargo Housing Market Index (HMI), builder confidence is the highest it’s been in a decade. The number of buyers visiting models and projects hasn’t increased, but all four regions in the U.S. where this gets measured saw an uptick in builder confidence regarding current sales conditions and expectations for the next six months. Oddly, builders are struggling with availability of lots and labor.
So, what does this mean to MN consumers, lenders and Realtors? It’s a good idea for us to find out how our local MN builders are doing – and how they’re feeling now and about the immediate future. C
Coffee meetings? Some tours? Let’s get together and talk about what they have and how we can work together to find the best value and options for our clients with MN builders!
Owner & President