Friday, January 29, 2016

Existing Home Sales Bounce Back




Some Highlights:

  • Sales in December were 14.7% higher than those in November, marking the largest month-over-month increase ever recorded.
  • Inventory levels are still below historic norms at 3.9-months supply.
  • Median home price is up 7.6% from last year, marking the 46th consecutive month with year-over-year price gains.

Friday, January 22, 2016

What Do You Actually Need to Get a Mortgage?







What Do You Actually Need to Get a Mortgage?





What Do You Actually Need to Get a Mortgage? | Keeping Current Matters

Fannie Mae recently released their “What do consumers know about the Mortgage Qualification Criteria?” Study. The study revealed that Americans are misinformed about what is required to qualify for a mortgage when purchasing a home. Here are three takeaways:
  • 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary
  • 86% of Americans either don’t know (59%) or are misinformed (25%) about what an appropriate Back End Debt-to-Income (DTI) ratios is
  • 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required
To help correct these misunderstandings, let’s take a look at the latest Ellie Mae Origination Insight Report, which focuses on recently closed (approved) loans.

FICO SCORES

Average FICO Score | Keeping Current Matters

BACK END DTI

Average Back End DTI | Keeping Current Matters

DOWN PAYMENTS

Average Down Payments | Keeping Current Matters

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will definitely make the mortgage process easier. Your dream home may already be within your reach, call me today and we can run the numbers together.

Friday, January 8, 2016

Obstacles to Home-Ownership... Real or Imagined?

 

Obstacles to Home-Ownership... Real or Imagined?

 

The belief Americans have in homeownership and their desire to partake in this piece of the American Dream is well documented. And yet, there may be obstacles that seem to prevent Americans from attaining that goal. However, studies have shown that many of the obstacles mentioned are perceived, not real.

A recent study by Fannie Mae, What Do Consumers Know About The Mortgage Qualification Criteria?, revealed that many consumers are either unsure or misinformed regarding the minimum requirements necessary to obtain a mortgage. Let’s break down three such challenges.




Down Payment

Perceptions

Many renters have mentioned that the lack of an adequate down payment is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:
  • 40% of all renters don’t know what down payment is required
  • 15% think you need at least 20% down
  • An additional 4% think you need at least 10% down

The Reality

There are programs offered by Fannie Mae, Freddie Mac and FHA that require as little as 3-3.5% down. VA and USDA loans offer 0% down programs. According to the National Association of Realtors, the typical down payment for a first time buyer is 6%.


Credit Score

Perceptions

Many renters have mentioned that the lack of an adequate credit score is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:
  • 54% of all renters don’t know what credit score is required
  • 5% think you need at least a 740 credit score

The Reality

Many mortgages are granted to purchasers with a credit score of less than 700. According to Ellie Mae, the average credit score on a closed FHA purchase is 687 and the average credit score on all loans is 722.


Back End Debt-to-Income Ratio (DTI)

Perceptions

Many renters have mentioned that they carry too much debt which is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:
  • 59% of all renters don’t know what DTI is acceptable
  • 25% think you need at under 25%
  • 7% think you need under 39%

The Reality

Lenders like to see a back-end ratio that does not exceed 36%. Fannie Mae’s maximum total DTI ratio is 36% of the borrower’s stable monthly income. The maximum can be exceeded up to 45% based on credit score and other requirements.

 

Bottom Line

Don't let a lack of knowledge or misinformation keep your family from buying a home this year. I'd be happy to meet with you to help to evaluate your ability to buy now!