special sale only this week

How to Get the Lowest Mortgage Rate

Clients always ask me how to get the lowest mortgage rate. Especially given the fact that interest rates have increased since 2022 after having been at record lows for so many years prior to that. Many people think mortgage rates are high currently. However, interest rates today are historically quite average. We were just spoiled with cheap money for a very long time from just after the economic debacle of 2008 through most of 2021. What I see now is an almost carnival like atmosphere of people hawking quick fixes to get “special” mortgage deals. Read More

house and house key

Help Entering The Home Buying Market

Many homebuyers need help entering the home buying market. They cite obstacles and problems that create fear in moving forward with buying a home. This is especially true of first time homebuyers. But with some research and patience, there are answers for a lot of these questions. And there are many ways to overcome fears of home buying.

See the list below of some of the most common fears, and answers to those fears. Read More

income taxes

Grossing Up NonTaxable Income

Fannie Mae, Freddie Mac, FHA, and VA all qualify mortgage borrowers by using their gross income. When getting a mortgage your mortgage lender can gross up nontaxable income to a higher figure to help in qualifying you.

You would think they would use net income, which is after tax income. Especially since a mortgage payment is paid out of after tax income. But they do use gross income. I am sure if they suddenly shifted the guidelines to solely using net income to qualify mortgage borrowers, the allowable debt ratios would go up to compensate for using the lower after tax income. Read More

dollar bill

Maximum Seller Credits

When a buyer is getting a mortgage to buy a home, there may be repairs or issues that the seller needs to remedy. Frequently, the remedy is to offer closing cost credits to the buyer. Clients ask me if there is a maximum amount of seller credits that a seller cannot exceed? In the mortgage industry we have another name for seller credits. We also call them interested party contributions. Whether a credit is given to a buyer from a seller, a realtor, or a lender, they’re all considered interested parties. And regardless of who the credit is coming from, there are limits as to how much it can be. Read More

2024 new years day 8164591 1280

2024 Conforming Loan Limits Announced

2024 conforming loan limits have been announced! New loan size limits are set each year on conventional mortgages that Freddie Mac or Fannie Mae will buy from mortgage lenders. You can see the 2023 loan limits in the chart below. For 2024, the conforming loan limit for a single-family home has increased from $726,200 to $766,550. That is about a 5.5% increase! Loan limits go even higher for 2-4 unit homes.

In most areas, the maximum conforming loan limits for 2024 are as follows: Read More

multifamily home

Multifamily Property Mortgages Got Cheaper

Multifamily mortgage financing just got cheaper.

What Is A Multifamily Home?

Multifamily residential homes are two, three, and four unit homes. These are also called duplex, triplex, and four-plex homes. I have also heard them called two-family, three-family, and four-family homes.

Fannie Mae defines multifamily property as, “A property that consists of a structure that provides living space (dwelling units) for two to four families. Although ownership of the structure is evidenced by a single deed.”

Any home with more than 4 units is considered a commercial property. These don’t qualify for a residential loan. I don’t do commercial loans. I do have some knowledge of commercial loans. They typically require large down payments, like 25% down or more. I doubt that will ever change.

Multifamily residential property has historically also required significant down payments. These down payments ranged from a minimum of 15% down to as much as 25% down.

How Did Things Get Cheaper?

Fannie Mae recently announced a 5% down payment option for multifamily homes. This is a significant policy change. Interestingly, Freddie Mac has not made the same change. Not as of yet, anyway. Read More

House For Sale

Your homeowner’s insurance coverage is too low!

Your homeowner’s insurance coverage is probably too low!

Check your home value annually

You should annually check your house value by having a local realtor pull comparable sales. Or use resources like this home valuation tool from Redfin. Or this one from Zillow. These tools will help you to adjust your home insurance as needed. Or you can ask a local realtor you trust to send you comparable sales. After a certain period you may find your existing insurance coverage is insufficient.

And let’s face it, who checks their house value annually? Who makes increase and adjustments as needed? Not many of us. Read More

interest rates going up

Where Are Mortgage Rates Going?

Everyone is watching mortgage rates these days. And everyone knows they are much higher now than in 2020 and 2021! But are they high? Are they outrageous? And what exactly are they? How are they determined? Will they ever go back to when they were 3%?

Are mortgage rates high?

Looking at the historical numbers, today’s mortgage rates are above average. But today’s rates are not outrageous, as some think. Read More

balance seesaw

Where Are Real Estate Prices Going Next?

Most everyone knows low inventory is keeping real estate prices high. But why is inventory low? Because 90% of US homeowners have a 6% or lower mortgage rate. 62% have a rate below 4%! No one wants to give up their great rate for a much higher rate. They won’t move! But how does this end? When does it end? It can’t stay this way forever. Eventually people must move. People will move due to retirement. Or families will need larger homes. Or sometimes they are ready to downsize.

My theory is inventory will increase over a long period of time, and that may bring prices drops. But when? Interest rates going up has not stopped housing demand nor price increases. Rates going down won’t cause real estate prices to spike. And rates going up even more than they are now won’t cause prices to tumble. Historically low inventory will see to that. Read More

Debts Paid By Others

How Are Debts Paid By Others Handled On A Mortgage Application?

How are debts paid by others handled on a mortgage application? Sometimes when someone applies for a mortgage with me, they mention they have a debt paid by a parent. They may have a school loan that a parent pays. Or people may tell me they co-signed for someone else’s mortgage, but they do not make the payments. Read More

interest rates are up

Current mortgage rates

Everybody is asking about current mortgage rates these days. And everyone knows they are higher! But are they high? And what exactly are they? How are they determined? Let’s take these questions one by one.

Are mortgage rates high?

Looking at the historical numbers, today’s rates are average. You might possibly consider today’s rates a little above average. I wrote this blog with charts that show historical rates. This is a good reference point. You will see that mortgage rates don’t routinely get as low as 3% or 4% over history. Even 5% is rare. If anyone is waiting for rates to go as low as they were in 2020 and 2021, they’ll likely be waiting a long time.

You can click here to watch this video for a short review of my take on historical rates.

What exactly are mortgage rates now?

Mortgage rates can’t be quoted in generic terms. If you want to get a quote that is anywhere near accurate, you need to discuss details with a mortgage lender.

Mortgage rates change due to a few variables. Some of those variables are:

  • Credit score: Obviously a higher credit score is better to get more competitive rates.
  • Down payment: Surprisingly a larger down payment does not necessarily guarantee better terms. A 5% down payment loan typically has mortgage insurance. That mortgage insurance may cover the lender up to 30% of the value of the home. Between 5% down payment and 30% PMI coverage that is 35% of safety for the lender. And that 35% of protection is more valuable than a 20% down payment. This means that a 5% down payment loan may have slightly better terms than 20% down. But there are scenarios where higher down payments may provide better terms. This is why you need to talk to a mortgage lender in detail.
  • Loan Size: Mortgage rates will vary based on loan size. You need to talk to a mortgage lender to see if your loan amount is Conforming, Conforming “High Balance”, or Jumbo. Read more about loan size.
  • Debt ratios: There are times when higher debt ratios may impact your mortgage terms.
  • Property type: Certain property types can come with higher mortgage rates. Condominiums, 2-4 unit multi-family properties, and other property types can come with higher terms.
  • Mortgage type: Rates will vary depending on if you are considering a fixed rate, a buydown mortgage, or adjustable rate mortgage.

A mortgage borrower will pay a much higher rate who wants to buy a condo with 5% down, who has a lower credit score, for a condo. And a mortgage borrower will get lower terms who wants to buy a single family home, with 20% down, and a high credit score.

How are rates determined?

The Federal Reserve determines mortgage rates, correct? No. The Federal Reserve is one lever of many that may have an impact. Mortgage rates are more affected by the free market. Keep an eye on inflation, economic news, and the general economy. This blog I wrote discusses the Federal Reserve and the economy in more detail.

It is also important to note that mortgage rates can change each business day. Rates move up and down daily, just as frequently as you see daily stock market moves.

What are current mortgage rates? As you can see that is a complicated question. You can fill out this form to see terms for your scenario. There is no fee required, no credit pull needed, and no obligation. After seeing numbers you can decide if it is time to get pre-approved.

Conclusion

Contact me to discuss your scenario, your local housing market, or other questions. Click here to schedule a call or you can email me directly.