Many people are very focused on interest rates these days and are wondering where they are headed next and how it may affect their mortgage payment. Interest rates have been historically low for a very long time, and people are starting to fear that they may increase and have an outsized impact on the cost of purchasing a home.
You can see a chart of the long-term history of interest-rates by clicking here. This chart shows that we are definitely near the bottom of where interest-rates have been over a long period of time. On the other hand, if interest-rates start to go up does it have as much of an impact as people think? Read the rest of this entry »
Deciding on how much mortgage you can afford is very complicated with several things to consider. Before you plan to spend the maximum amount you’ve been approved for, consider what you feel comfortable with. And before you treat your home purchase like a zero-sum game consider spending a sufficient amount to buy enough house to keep you happy for a longer period of time, due to the hefty transaction costs of real estate. Read the rest of this entry »
FHA, known as the Federal Housing Administration, offers a mortgage loan requiring borrowers to have mortgage insurance on the loan. The FHA loan originated during the great depression and has contributed to the growth of the housing market ever since. Read the rest of this entry »
I sometimes get asked about waiving one or all contingencies in a real estate contract, to help make for a more aggressive offer in a competitive sellers’ market. The main contingencies in most real estate contracts are the appraisal contingency, the financing contingency, the termite inspection contingency, and the home inspection contingency. I am not a proponent or an opponent of any of these strategies, but simply want to discuss the pros and cons of each, since it is a question I do get. Let me take these one at a time. Read the rest of this entry »
I sometimes have clients ask me how they can reduce the amount of cash they need to pay towards the purchase of a new home. Recently a client who was making an offer on a house that had an asking price of $650,000 wanted to make an offer of only $600,000 figuring that since they were putting 20% down, they’d save $10,000 by paying 20% down on $50,000 less in price. However, the house is worth what it is worth, and Read the rest of this entry »
A lender pulls three credit reports to issue a mortgage? Yes, potentially. One when you get pre-qualified, another at loan application, if loan application and settlement happens 120 days or more after pre-qualification, then the third check is just before settlement! Yes, now Fannie Mae, Freddie Mac, FHA, and all the rule makers require lenders to check for credit activity just a day or two prior to settlement. Read the rest of this entry »
If you’ve looked up your credit score on your own before then you know your credit score, right? Well, you may not know your accurate credit score, and you likely only know one credit score instead of all three. One problem with credit scores is that lenders use three credit scores Read the rest of this entry »
There is a new underwriting rule change that is going to be very painful for mortgage borrowers. It has to do with open 30 day charge accounts. The rule says for open 30 day charge accounts that do not reflect a monthly payment on the credit report, or 30-day accounts that reflect a monthly payment that is identical to the account balance, lenders must verify borrower funds to pay off the account balance. The documented funds must be in addition to any funds required for closing costs and cash reserves. This is very important. It used to be Read the rest of this entry »
One thing that gets a lot of people in trouble with their credit scores is a past due account, also known in the industry as a collection or a collection account. These collection accounts stay on your credit report for 7 years. That is bad enough as it is, but it gets worse. Let’s assume you have an outstanding five year old collection Read the rest of this entry »
Justin: We are on. Hey Brian, how are you?
Brian Martucci: Hey, good, Justin.
Justin: Good. Well, happy Thanksgiving to you. I know this is kind of a holiday weekend, but what you have to say is pretty important, especially with everyone hitting Black Friday today.
Brian Martucci: That’s right. Sure is.
Justin: Okay. So let’s talk a little bit about credit scores. Read the rest of this entry »