Blog


For the Week Ending November 16, 2018

 

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

 

Consumer prices posted the largest increase in 9 months in October. The Labor Dept said its index rose 0.3% last month after increasing 0.1% in September.
Retail sales rebounded as purchases of cars and building materials surged. Strong sales ahead of the holiday shopping season could help the economy.
Concerns over turmoil in the Brexit deal overseas are pushing investors to the safe haven of bonds. Improving bond prices could help mortgage rates remain low.

 

Home Depot is concerned that higher tariffs could cause price increases on some products. However, sales remain strong for the home improvement retailer.
Modular and other non-site built single-family homes made up 3.3% of homes in 2017. That number is expected to rise in 2018 and the years ahead.
FSBO transactions fell to a record low of 7% of all home sales in 2018 according to NAR. That's dramatically lower than in 1981, when FSBOs were at 15%.

 

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.


Here's Laura with today's video for Mortgage Term Monday - Investment Property. It's important to know that investment properties have specific guidelines that make the mortgage process different than a primary residence. Read more about it in our blog post.

Connect with Laura


When applying for a mortgage loan you will be asked how your property will be used. Let’s take a look at the differences between the 3 occupancy types and how it could affect the final cost of a mortgage.
 
Primary Residence:
If you plan to move all your belongings into a new place you’re getting a primary residence. A primary residence qualifies for the lowest minimum down payment and lowest mortgage rate. Why? Because lenders view a primary residence as a low-risk property since homeowners are likely to stay on top of their mortgage payments.
 
1. Must live in the home for the majority of the year
2. Must be a convenient distance from your job
3. Must live in the home within 60 days of closing
4. If you own the home already and are refinancing, you must be able to prove your residence through documentation such as tax returns  and government identification.
 
Second Home:
Are you considering a vacation home near the beach or a place closer to your job’s second location? In this case, a lender would classify this as a second home. It depends on how you occupy the property (not whether this is the second home you have ever purchased).
 
A second home will meet these conditions:
 
1. Must live in the house for some part of the year
2. Must be a reasonable distance from your primary residence
3. Must be under your control. The home cannot be subject to rental, timeshare or property management agreement.
 
It’s important to understand that if you don’t plan to live in your second home full-time, location can affect if it is going to be considered a second home or not. In addition, if the location of your second home is too close to your primary residence, you could be subject to higher mortgage rates of an investment property.
 
Investment Property:
If you intend to use your property for tenant rental, it must be classified as an investment property. An investment property is a property that is not your primary residence and is purchased or used in order to generate income. The good news is that you can use the expected income from the rental property to qualify for the new mortgage. There are many types of investment properties. For example: residential rental property, commercial property and property purchased to “flip”.
 
What does it take for your property to be considered an investment property?
 
1. The home is within 50 miles of your primary residence and not in a location that makes sense as a second home
2. You plan to collect rent from the property (you may have to submit a lease agreement that confirms the property is occupied by a tenant).
 
Keep in mind, investment properties have the highest interest rates and down payment requirements compared to other property types. and also require a higher credit score.
 
BOTTOM LINE:
The property’s occupancy will be determined during the underwriting process.
 
Wondering how your budget might be affected by either occupancy type? Give one of our loan experts a call today to discuss - 732.626.9827
 


For the Week Ending November 9, 2018

 

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

 

 

The Fed didn't raise policy rates at this month's FOMC meeting but is expected to raise rates in December. Mortgage rates will likely remain unaffected.
The midterm election results are not expected to slow economic growth. As a result, the outcome did not adversely affect stock and bond markets either.
Manufacturing activity slipped for a second month in September yet still pointed to growth. Construction spending was up slightly at 0.1%.

 

Year-over-year purchase applications have held steady despite rising rates, falling 0.2% last week. 
Last month, consumer housing sentiment fell to its lowest level in a year. Fewer consumers expect home prices to rise or mortgage rates to fall.
A recent study shows Gen Z is eager to get an early start on homeownership. They're twice as likely as previous generations to start saving for a home by age 25.

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.


Have a side gig? Just got married? Received a sizeable gift from a relative?

When you're applying for a mortgage these situations are important, can have a significant impact on your qualification and must be documented in a specific way.

Erin the Expert is out with the latest video in her series on mortgage topics.

Reach out to Erin by phone, text or email:


Check out the other videos in the series:

Want to set some time to speak with Erin directly? Click here. If there's anyone that can get a deal done it's Erin the Expert. #ETE

And if you like podcasts, check out Erin's MortgageCast too. She keeps it short and cuts right to the meat of each topic.

(MortgageCast)

 


Showing results 1 - 5 of 288