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.
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.
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