Blog


Are you one of the many millennials who sees your friends and family diving head first into the real estate market and are wondering if now is the time for you to do the same?

The “cost of waiting to buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.

Let’s take a look at some predications: Freddie Mac forecasts that interest rates will rise to 3.8% by Q4 2020. In addition, CoreLogic predicts that home prices will appreciate by 5.4% over the next4 12 months!

So… perhaps it is time to lose the lease in 2020 to save yourself from rising rents and own your own home? Remember, there are SO many benefits to owning your own home. For instance, buying a home is an investment in your future.

  • Homeownership builds equity every single month
  • Provides stability – rent prices increase 4% annually
  • Your mortgage is like a forced savings plan
  • Possible tax benefits (talk to your CPA to see which benefits apply to you)
  • And so much more!

Take a look at the infographic here – perhaps this will change your mind.

When you're ready to take the next step, Greenway Mortgage is here to help you lose the lease and become a homeowner in 2020!

 

Get in touch with one of our Loan Experts Today! 

 


-Get all the information on Construction Loans here-

In Part 3 of Erin the Expert's 4-part series on Greenway's Construction Loan Platform, program details and benefits are covered! In case you missed last week's blog (Part 2: Four Components of a Construction Loan) you can catch up here. 


A One-Time Construction Loan is an easier way to finance your dream home. Everyone has their own ideas of what a perfect home is like, but let’s face it—they’re not always available on the market. With Greenway’s construction loan, you can build and finance the home of your dreams—all with just one application and one closing. It's that simple!

Let's dive into the program details and benefits a construction has to offer.

Program Details:

  • 1 time close
  • Single Family Residential only
  • Primary & Secondary Residence Only 
  • Only 10% down required, depending on loan size* 
  • 720 min credit score

Benefits:

  • Consolidate construction & purchase price for only 1 set of closing costs & fees
  • Purchase a tear down property 
  • If you already own an empty property & want to build a home, tear down & put up a new one, or do a major renovation on an existing home
  • Pay just interest-only payments during construction
  • Avoid requalification post-construction
  • Simple & flexible draw process with no set schedule
  • Use builder of your choice

How Do Construction Loans Work?

Overall Process:
  • Builder Approval 
  • Project Approval (appraisal, plans & specs, costs from builder)
  • Borrower Credit Approval
  • Initial Draw at Close (up to 50K) to get project started and/or reimburse for any materials already purchased
Construction Period
  • Post close welcome call from construction management company
  • Inspections done as work is put in place, then checks for draws issued to builder and borrower
  • Once work is done, loan is modified into a standard 30 year fixed loan at present market rates (vs. the interest only loan in place during construction). Borrower is able to pay down balance on converted loan in the event other property they owned has been sold in the meantime. *NO CLOSING COSTS*
Specialized Features
  • Stalled projects
  • Modular construction
  • Major renovations (projects beyond scope of renovation programs)

 

Choosing an Experienced Lender is Critical

construction loan is more complex than a standard mortgage, with more moving parts and more specialized expertise required.

Greenway Mortgage has the knowledge, experience, and proven process to guide you through the construction loan process as you build your dream home. To learn more about our construction loan program and find out if you qualify, contact us to discuss your project.


Stay tuned for next week's blog (Part 4) on why choosing an experienced mortgage lender is critical. You can learn more about the One-Time Construction Loan by clicking here.

Don't forget to download Erin The Expert's Mobile Mortgage App where you'll have instant access to Erin, along with helpful tools. Check it out here.

 
 
*Finance up to 90% of project (purchase price + cost to construct)Eligibility requirements, exclusions and other terms and conditions apply.

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

  • Investors are increasingly worried about the spread of the coronavirus outside China. Concerns over the economic impact of the virus are helping rates remain low.
  • Producer prices increased by the most in more than a year in January, but most of the uptick appeared to reflect temporary price swings instead of an underlying increase in inflation.
  • Jobless claims rose modestly last week, suggesting sustained labor market strength that could help support the economy amid risks from the coronavirus.

 

 

  • Builder confidence in the housing market remained strong in February, despite a shortage of workers and a dearth of lots. Rising wages and low rates are fueling demand.
  • New housing starts fell in January, although less than expected. Permits for new construction surged to a 13-year high, pointing to more building to come this year.
  • Mortgage applications were down 6.4% last week, mainly due to a drop in refinance activity. Purchase applications fell 3% but were 10% higher than a year ago.

 


 
FICO Launches New Credit Scoring Model (FICO 10): What does this mean for your mortgage qualification?
The short answer: Nothing. While the FICO 10 scoring model is being rolled out this year, most mortgage lenders will not utilize this version for qualification for some time. Read on for full details.
 
FICO 10 Credit Scoring Model
Just recently announced, FICO is launching a new scoring model coming summer of 2002. This new model is called FICO Score 10. It will take into account a consumer’s account balances and missed payments over the last two years.
 
With these new changes, many Americans will likely see their credit scores change this summer. The new approach now incorporates consumers’ debt levels, taking into account account balances for the previous 24-plus months, while prior FICO scores focused on more recent account balances.
 
Are you at Risk?
The newer model can put borrowers with late payments on their records at a disadvantage. In addition, consumers with a history of high utilization ratios (the amount of credit you use vs. what you have available) will also see their scores drop. However, for borrowers with already good credit, the new model will likely provide a boost. On loans and mortgages, it could even mean additional saved on interest and fees (again, when lenders start to use it)!
 
Overall, this scoring model is deemed to be more accurate. It is better for consumers because there’s many who aren’t getting the credit score, they deserve. For example, if someone has a 690 but really should have a 700, they’re missing out on lower fees and rates that they higher credit score would get them.
 
What Can You Do To Improve Your Credit Score?
  • Try to pay off your credit card balances early, even before their monthly due date.
  • If you are already a homeowner, stay on top of your monthly mortgage payments.
  • Reduce your spending where possible
Will Lenders Use This Model?
Lenders will most likely not see these scores in practice in the mortgage industry for several years to come. Currently Freddie Mac and Fannie Mae only approve one FICO score model and it is the one which was created in 2004.
 
New score models were created over the years including FICO® 8, FICO® 9 and FICO® 10. Until Fannie Mae and Freddie Mac approve the use of different models, lenders must use the model they deem appropriate/approve. Per FICO® - “Updates incorporated in new releases (FICO® Score 8, 9, etc.) do not impact the older models”.
 
Credit Basics Are Still Important
 
Payment History
The factors that FICO looks at to calculate your score overall aren’t changing with the new model. Payment history will still make up about 35% of FICO scores. So, paying your bills on time (and in full) remains crucial to getting a good score.
 
Total Amount You Owe
Around 30% of your FICO credit score is based on the total amount you currently owe, and that’s still true under FICO 10. Keep your balances as low as possible! Do not use more than 30% of your available limit with products like credit cards.
 

 

After the two factors mentioned above, the length of your credit history, your mix of loans and the new accounts you’ve applied for recently, remain important to calculating your credit score.

Checking Your Credit Score Online

When consumers go online and receive their scores’ they must review which scoring model they are receiving. Consumers could get a Vantage Score, a whole different scoring model. They most likely will get a FICO® model score but must verify the version. The difference in score versions provided can have a consumer find a variance of 30-90+ points from lender accessed scores. Keep in mind, Credit Karma uses Vantage, which can render significantly difference scores than used for mortgage qualification.

Online scores are good to gauge where your scores sit, but only a lender can provide the true FICO® lending score used for decision making. Scores are obtained when the credit bureau information from Experian, Equifax and Transunion is evaluated by the FICO® model score. This is a snapshot at the time the credit report is pulled. It is a lender guideline to use the middle score. For example, a 650 – 690 and 675 score would result in the middle score being a 675.

Bottom Line

Instead of getting hung up on which model a lender may use, it’s important to practice fundamental good habits such as paying bills on time and keeping your debt low. If you’re thinking about buying a home, get to know your credit score better and how to improve it! Learn more here

Give Greenway Mortgage a call to discuss your credit score in detail. There are many different ways we can help. 908.489.4658. 


Important Resources

 


-Get all the information on Construction Loans here-

In Part 2 of Erin the Expert's 4-part series on Greenway's Construction Loan Platform, the 4 Components of a Construction Loan are discussed. In case you missed last week's blog you can catch up here. 


What are the 4 Basic Components of a Construction Loan?

There are four basic components of the Greenway Mortgage construction loan program – builder approval, project approval, credit approval, and construction.

  1. Builder Approval. Aside from getting you pre-approved for your construction loan, the first and most important step is to approve your builder. You have the freedom to choose your general contractor, but we need to verify that the general contractor is established and reputable. As part of this process, we’ll verify the builder’s license and insurance and make sure they have a recent track record of completing similar projects.

  2. Project Approval. The second step is to approve your specific project. This involves reviewing project plans and specs from your architect, cost estimates from the builder, and an appraisal of the home’s value on the property once construction is complete.

  3. Credit Approval. During these first two steps, we’ll work on your credit approval, following the same process as securing a traditional mortgage. Depending on the loan size, a down payment of only 10 percent is required. You can finance up to 90 percent of the home, including the purchase price and the cost to construct. A minimum credit score of 720 is required to secure a construction loan.

  4. Construction. Once your loan closes, the construction phase begins. You’ll receive an initial draw of up to $50,000 to start the project or reimburse you for materials already purchased. You and your builder will coordinate with the construction manager, who will release funds according to the agreed upon draw schedule as work is completed and inspected.

Choosing an Experienced Lender is Critical

construction loan is more complex than a standard mortgage, with more moving parts and more specialized expertise required.

Greenway Mortgage has the knowledge, experience, and proven process to guide you through the construction loan process as you build your dream home. To learn more about our construction loan program and find out if you qualify, contact us to discuss your project.


Stay tuned for next week's blog (Part 3) on Construction Loan Program Details & Benefits. You can learn more about the One-Time Construction Loan by clicking here.

Don't forget to download Erin The Expert's Mobile Mortgage App where you'll have instant access to Erin, along with helpful tools. Check it out here.


Showing results 1 - 5 of 451