The Don'ts of Credit

The loan process can be agonizing. It seems like you are always asked a million questions and have to file so much paperwork. Unfortunately, I can't change that for you, but what I can do is help you avoid a damaging situation with your credit.

If you are in the closing period of your home but have not officially closed, DO NOT open new credit. The new rules of our industry require us to do a soft pull of your credit. That means we will need to check to see if you have acquired any new debt prior to closing. If you do, it could ultimately make you ineligible for the loan.

So please do not lease a new car, buy furniture on credit, etc. Wait until after your home has officially closed.

If you have any questions, please give me a call. Even if I'm not your official lender, call me with any questions you may have.

Happy Thanksgiving!

Happy Thanksgiving! It’s the season of giving and thankfulness and I couldn’t help but reflect on this past year. Our team has had such an incredible year and it’s all because of you and I just wanted to take this time to thank you. Have a wonderful and safe Thanksgiving! Please let me know if there is anyway I can help you!

Federal Reserve Scaling Back on Bond Purchasing

Welcome back to my video blog. Interest rates have been phenomenal for the past year. You may have heard that they are beginning to creep up, though. Why is that?

Right now the Federal Reserve is purchasing bonds, giving investors more confidence. This in turns creates steady and low interest rates. However, as the market begins to improve, the Federal Reserve will eventually scale back on its bond purchasing. This will cause interest rates to rise.

Although, we don’t know exactly when this will happen, we know it will happen. The Federal Reserve meets Dec.17th and we should find out more information about whether they will scale back on their bond purchasing.

If you are considering making a real estate move, it’s important to keep an eye on this topic. If you have any questions, please give me a call! Thanks for watching!

How Does Federal Bond Purchasing Affect the Market?

Welcome back to my video blog. Today I wanted to take the time to answer a couple of questions I’ve been getting asked about a lot lately.

What are interest rates doing?

As many of you know interest rates have been fluctuating lately. Why is that? There will always be fluctuation when there is uncertainty in the market. The good news, though, is because the Federal Reserve is not pulling back on its bond purchasing, investors feel more comfortable. This in turn causes interest rates to remain low.

Is it a good time to refinance?

With low interest rates, now is a good time to see if you qualify. Take advantage of the market and see what programs are out there that can benefit you.

If you have any questions, please give me a call. Thank you for watching!

The Pre-Approval Process

Thanks for joining me today! We have a competitive market. Homes are getting multiple bids; so how do you make your offer stand out?

The most important factor when you place your bid is to be preapproved. Keep in mind this is different from a prequalification. Preapproval means a lender has verified your employment history, income, credit and assets. Your preapproval will determine how much you can spend on a home and will speed-up your application process when you have found the home of your dreams.

There are three main elements a lender will look at during the loan process. They will first check your confirm your employment to verify a stable history and likelihood of continuance. They also want to know what kind of down payment you can make and where the funds will be coming from. Thirdly, they’ll check your credit. Do you pay your bills on time?

It today’s market, it is essential to stand out from other potential buyers. The best way to stand out is with a strong offer backed by a mortgage preapproval. Before you make an offer on any property, get preapproved. Sellers will not take you seriously otherwise and you may lose the home.
If you have any questions, please give me a call!

How are the interest rates in the current real estate market?

Hey, everyone! Thanks for joining me today!

I’m sure you’ve all heard about the increasing interest rates and there is a lot of confusion as to what drives the rates. A lot of people have been asking me why the recent spike.

Our market is full of uncertainty: is recovery really happening, is unemployment as good as it seems, etc. Numbers can be skewed.

Take for instance how the uncertainty of these numbers can affect the market. The reports of lower unemployment rates each month have been driving interest rates higher. However, when considering the unemployment rate, 70 percent of that statistic is part time. The more uncertain those factors are, the more volatility you will see in interest rates.

Thanks for watching! If you have any questions, please give me a call. I’d love to help!

What's Going on in the FHA Market?

Hi everyone. Thanks for joining me again. I wanted to better explain some of the recent changes to the FHA mortgage program and how the changes to the mortgage insurance factor will affect you monthly and moving forward.

As of June 3, the Federal Housing Administration changed its cancellation policy for the annual mortgage insurance premiums. Any new FHA loan has an increase in the monthly mortgage insurance by about 10 basis points. This means for every $100,000, it’s going to cost you $8 more a month.

The biggest difference now is that if you put 5% down or less, you now have mortgage insurance for the entire life of the loan. It used to be that it was gone after 78% was paid and payment has been made for five years.

So, if you have a $200,000 loan, you’re going to be paying about $13,500 of mortgage insurance over five years. Now, with having it for the full life of the loan you pay $81,000 over those 30 years. If you put 10% or more down, you will have 11 years of monthly insurance which is about $28,600.

While these changes are certainly significant, FHA is still a competitive financing option for homebuyers today. Low down payment options, low credit score requirements and higher limits for gift funds and seller concessions are a few of the main benefits that a FHA loan offers.

A FHA loan is one of many financing options available today – including those with no mortgage insurance at all. If you or any of your clients are in the market to buy or purchase a home – don’t rule out FHA right away. Call me and I would be more than happy to compare program options,  rates, and payments to determine what would best meet your needs.

What's Happening with the Rising Interest Rates?

Welcome back to my video blog!

Everyone is up in arms about the rising interest rates! People want to know how it will affect them and their monthly payment.

Let me just put everyone at ease and explain the effect of rising interest rates.

About 6-7 months ago, interest rates were at an all-time low at about 3.5%. Today, they have spiked to around 4.5%. Now, if you have a $200,000 loan for thirty years your payment went up from $895 a month to $1,009 a month; that’s a $114 difference.

The median household income is $51,400. The increase in rates is a 3% difference to your debt-to-income ratio. Will this affect you? It’s not a huge impact, but it can alter your loan amount and down payment.

The market is still great! As home prices begin to increase, now is the time to buy and sell so give me a call at 215.591.0222 x 1630

Don’t Miss Out on Record-Low Rates

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I've gotten a lot of questions lately about what interest rates will do in 2013.  People want to know if the government will keep rates low.  It really depends.  What happening with the economy, the unemployment rate, how bonds are being sold and purchased on the market, home sales prices, how long homes are on the market, and consumer confidence all go into the equation.  As you can see, there are a lot of moving pieces.

Another factor we look at is jobless claims.  Although jobless claims were down, we should wait until March to analyze this number because it could be skewed due to companies hiring for the holidays.  We really can’t get a feel for where the unemployment rate is until spring.

The real estate market; however, is ticking back up.  From 2011 to 2012, the average home sale price is up 11.5%.  This is a big number.  Of course, different pieces factored into this increase with investors coming in to buy foreclosures, distressed properties and short sales. Since there was more demand for rentals, the cost of rent went up. An investor can buy a rental for $150,000 and rent it for $1,800 a month. Beyond investors, first- and second-time home buyers also came into play to increase home sales, so the bottom line is consumer confidence in the market is up.
 
We had this type of confidence in the market in 2009 due to the homebuyer tax credit but we no longer have this incentive.  Now we have a different incentive—record-low interest rates.  It’s definitely time to take advantage of the low interest rates whether it’s to refinance or purchase a new home because we don’t know how long they’ll be as low as they are.
 
Don’t miss my next blog when I’ll introduce you to a product you can take advantage of to get you into your first or next property.
  
If you have any questions, please contact me at jmoderski@gatewayfunding.com or 215.591.0222 x1630.  I’d be happy to assist.