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For the Week Ending October 11, 2019

 

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

 

Last week's manufacturing data left markets feeling that the Fed will cut rates again this month, more than doubling the likelihood to 80+%.
Producer prices fell unexpectedly in September, leading to the smallest annual increase in nearly 3 years. This is also supportive of better mortgage rates.
High level trade talks with China resume this week. If any kind of deal gets done, it could include suspending next week's planned increase on tariffs.

 

According to a recent survey, consumer sentiment on housing remains strong. Respondents felt it was both a good time to buy and a good time to sell a home.
According to data from the Home Mortgage Disclosure Act, mortgage denials have fallen to the lowest rate since the financial crisis and dating back to 2004.
Three minor upgrades that can spruce up a home quickly? Get the most bang for the buck by updating the front door, the mailbox, and the light fixtures.

  

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

 


We weatherproof our homes when there’s talk of an upcoming storm. Can we recession-proof our homes, too? In the news, there has been negative headlines related to tariffs, a slowdown in the world economy, and a possible recession. Here are some primary concerns we hear from clients:

I was thinking of purchasing a home or property, but I’m worried values will fall. 
 
Historically, home values rise over time, even with some years of declines. If you can invest for the long term, temporary drops should not be a concern. 

I worry that my income will shrink or I’ll even lose my job. 
 
You may be able to prepare now by refinancing to a lower rate on your home loan. You might also secure either a cash-out refi or home equity line of credit (HELOC) to consolidate higher-rate debt. Either way, you can save on both monthly and long-term expenses. 

If I borrow against the equity in my home, I might end up owing more than my home is worth. 
 
This can happen if home values drop. However, given time, values typically rise again and make up for any shortage. If you’re interested in borrowing against your home’s equity, we should spend time discussing your current needs and future plans before moving forward.
 
Rates may drop further. Maybe this isn’t the best time to act. 
 
No one knows for certain what will happen with rates, and markets have already reflected future expectations. One strategy to consider is applying now and floating your rate as you wait for a drop. You might also take preliminary steps, such as gathering documentation, so you’ll be ready to act quickly when you’re confident the time is right. Click the image below for our Rate Report tool, which can help you monitor. (Note: The report displays a national average rate, which may not be applicable to your circumstances. If you would like a rate quote, please reach out to me.)
 
 
When it comes to interest rates and the economy, there are no guarantees. If you want to discuss the possibilities that might make sense for you, please reach out to us today. We are happy to help!  908-489-4658.

 

 


- For all the details about Automation and Big data click here. -

Once you have a signed purchase contract on a home, my big data loan approval system kicks in. My team and I have built a technically advanced loan approval system that uses big data and secure integrations to streamline the loan approval process, eliminate paperwork, and close document requests (aka conditions) to quickly and efficiently approve your loan.

During this process, there are a number of documents that you are required to execute and sign. Instead of visiting our office or emailing, printing, signing, and scanning documents, our client portal has E-sign technology that allows you to execute from anywhere. This speeds up the loan approval process and saves a few trees.

Assuming you've fully and accurately completed the application and provided me with access to your financial and employment information during the pre-application phase, I'll be able to get your loan approved and closing scheduled quickly.

One of the greatest benefits of my big data system is the availability of appraisal waivers. Appraisals are the long pole in getting your loan closed. If my system determines that an appraisal is not required for the property, you can save upwards of $400 and shorten the closing timeframe by five to 10 business days. 

CLOSING

Now you’re ready to close. Here’s the good news – we use E-closings!

Previously, you had to sit and hand-sign a huge stack of documents with your settlement agent. In addition to coordinating an in-person meeting and possibly missing time from work, the process of signing paper documents could take hours! Now, you can E-sign your mortgage documents remotely and securely at your convenience. Again, this saves time and paper and reduces the risk of error.

Stayed tuned for next week's blog (part 3) on "Clients for Life". 

You can learn more about Automation and Big data by clicking here.


For the Week Ending October 4, 2019

 

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

A recent string of disappointing economic data has caused stocks to plummet and bond yields to drop. When yields drop, mortgage rates generally improve.
The labor market, on track to add about 1.9 million jobs this year, could be faltering. It's the smallest jobs gain since 2010 and down 2.7 million from 2018.
Markets are now pricing in an October Fed policy rate cut, the 3rd in as many months. This speculation is helping mortgage rates improve.
The housing market may be a bright spot in a worrisome economy. The forecast for home sales is good due to rising demand and a projected uptick in inventory.
Single-level homes are making a comeback. One-story homes comprised 47% of new home construction in 2018, up from 45% in 2017.
Fannie Mae and Freddie Mac will be allowed to keep more earnings, a total of $45 billion moving forward, as an initial step toward exiting government control.

 

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

 


Whether you’ve owned a home before or you’re ready to take the leap into homeownership for the first time there are usually a handful of questions around what is required for a down payment and how-to best source down payment assistance. In today’s blog we’ll go over how much you really need for a down payment and how you can get help with down payment and closing costs.

Interesting Statistics About Your Credit Score and Down Payment

  • According to a study done from Fannie Mae’s ESR team, fewer than 1-in-4 consumers are aware that low down payment programs exist. With that said, many still don’t know mortgage lenders’ credit score, down payment, or debt-to-income ratio requirements.
  • Most people think that you need a minimum credit sore of 650 when actually a 580 is sufficient.
  • In regards to down payment, many think that they needed 10%. Some mortgage lenders offer small down payment mortgages — as little as 3down payment — to borrowers who qualify. Get in touch with your loan office to discuss your options.

How Much Do You Really need for a down payment?

First let’s clear up a common myth. You DO NOT need 20% down for a down payment. A survey from Fannie Mae shows only 17% of consumers know the minimum options are actually between 1 – 5% of the purchase price and 40% don’t know how much they need at all.

There are many mortgage loans available that require as little as 3% down for first-time buyers, and some ask for only 3.5% down from repeat buyers. There are even loans available for Veterans that provide 0% down payment options too.

Saving for a Down Payment

Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary.  However, if you’re planning to put down just 3%, the research shows it may be possible in most states to have enough saved for a down payment in less than a year. That puts homeownership in a much closer reach for many potential buyers, maybe even you!

How can I get help with my down payment?

Regardless of the loans available, many buyers still need assistance with a down payment. The great news is, there are a lot of ways to tap into down payment assistance options:

  1. Assistance from Family Members:

The (NAR) said, “a third of recent first-time buyers received down payment assistance from family members.” They also mentioned, “the average net worth of those aged 75 and over stands at $264,800…They just might offer the boost the next generation needs to become homeowners.

That means one of the ways to find help with a down payment is to accept a gift from a family member. If this is an option for you, make sure you talk to your loan officer before you accept the money, to ensure you document the process the way it is required by your loan. This way, it will be received properly and you can still potentially qualify.

  1. Down Payment Assistance Programs:

With Greenway’s FHA Down Payment Assistance program you only need 3.5% and you can cover some of that with the Down Payment Assistance grant.  

What is the FHA Down Payment Assistance Program?

With this program, first-time home buyers can get money for down payment and closing costs. Through NJ’s Housing and Mortgage Finance Agency, Greenway is able to offer first-time buyers in NJ an FHA Mortgage with a $10,000 grant for down payment and closing costs.

Program Details:

  • $10,000 towards down payment and closing costs
  • All New Jersey properties eligible (no zone restrictions)
  • First-time buyer is anyone that has never owned a home or hasn't owned in the last 3 years

Fine Print:

  • Approved counseling required
  • 3yrs tax returns, NJ and Fed
  • 3mo bank statements
  • Borrowers with funds to cover 20% down payment ineligible
  • Forgivable 2nd lien expires after 5 years as primary residence
  • First lien has 9-year recapture tax

For more information, questions, or to see if you’re eligible visit our website here. You can also visit our First-Time Home Buyer Resource page to see what other programs are available.

Keep in mind, there are more than 2,500 down payment assistance programs available (by local areas like city, county, or neighborhood), and some of them are even specifically for first-time buyers.

It is so important to get familiar with these options by doing your homework before you plan to buy a home. Determine what is available in the area where you ultimately want to live, so you have all the details you need to take advantage of the down payment assistance option that is best for your family.

Are you ready to take the next step? Contact us today.


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