California Home Loans: Avoid These Five Grave Mistakes To Not Risk Losing Your Approval For The Mortgage You Need

Have you been pre-approved for a home mortgage? Perhaps you’ve even received pre-approval for a super jumbo home loan — even one with loan amounts up to $15 million. Whether you’ve been pre-approved for an FHA home mortgage, a 30-year VA mortgage, or a 30-year jumbo mortgage, don’t risk your home ownership dreams by making one or more of these five mistakes that could change your qualifications:

Don’t make any major purchases

Even if you have a strong cash flow and have qualified for a super jumbo home mortgage of $5 million or more, don’t run out and buy everything you need for your dream home before your mortgage closes. Your mortgage lender has pre-approved you based on your debt-to-income ratio (DTI), cash reserves, and assets.

Don’t get any new credit cards or buy a major purchase on a credit

Could buying a new cell phone on a payment plan influence your home mortgage? Yes: any kind of change to your credit profile and score could change your underwriting criteria. Don’t respond to store offers for discounts along with a credit card.

Don’t pay off collection accounts or other charged-off amounts

Believe it or not, paying off a collection account might actually lower your credit score. Pay off your bills as you normally do, but don’t make any extra payments. If you’re in any doubt, talk to your mortgage loan professional before paying off anything that was on your credit report during the pre-approval process.

Don’t switch banks

The time to move your account from one financial institution to another is not during your home-buying process. You could be required to submit all new documentation if you change banks while you’re in the mortgage approval process.

Don’t deposit or withdraw large sums

Your bank accounts and assets are part of the mortgage approval process. If you do receive a gift toward your down payment, disclose this to your mortgage loan professional. Don’t withdraw large amounts of money during the mortgage process, either. Try to keep your bank accounts on an even, “normal” path during the mortgage approval period.

Buying a home is an exciting time, and you don’t want to risk any problems while your home is in escrow. Follow our California Home Loan tips and have a trouble-free mortgage loan approval after you’ve been pre-approved.

Sources

https://www.amerifirst.com/amerifirst-blog/5-activities-to-avoid-between-mortgage-pre-approval-and-closing-on-your-new-home

 

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According to Fannie Mae’s most recent forecast, the housing market is likely to revert to a normal-ish level of price appreciation for the silent majority despite an abatement from the year’s dramatic price surge.

Case-Shiller Data Suggests that Home-Price Appreciation is Tapering

The S&P Case-Shiller U.S. National Home Price NSA Index reported an annual gain of 19.8% in August, indicating that home price growth is beginning to settle throughout the country. It is nearly the same increase as the previous month, marking the first time since early 2020 that the year-over-year increase in home prices hasn’t seen significant increases from one month to the next. The Case-Shiller 10- and 20-city composite indices, which track price increases in the country’s biggest cities, also mirrored the cooling. The 10-city index increased by 18.6%, while the 20-city index increased by 19.7%, slightly less than their July gain rates.

It’s worth noting that the 20-city composite index continues to climb faster than the 10-city index. Because the latter index only includes prices in the most populous U.S. metro areas, the 20-city’s higher gain indicates price growth in smaller, more inexpensive regions where migration from more expensive cities has aided price rises. Phoenix continued to lead all cities with annual price gains of 33.3%. It was the 27th straight month that the Arizona capital topped this category. San Diego (26.2%) was second, followed by Dallas (24.6%) and Seattle (24.3%).

Fannie Mae Forecasts Housing Market Cool-Off In 2022

According to Fannie Mae’s most recent forecast, median home prices will increase by 7.9% between the fourth quarter of 2021 and the fourth quarter of 2022. While this would be a slowdown from the year’s dramatic price surge, it would still be robust growth by historical standards. (Since 1987, the average yearly increase in property prices in the United States has been 4.1 percent.) At least in the eyes of Fannie Mae, the housing market is likely to revert to a normal-ish level of price appreciation.

“Mortgage rates may rise in response to the tighter environment, but we expect the severe shortage of homes for sale to remain the primary driver of strong house price appreciation through at least 2022, limiting interest rate effects on home sales and home prices,” wrote Doug Duncan, chief economist at Fannie Mae, in its latest 2022 outlook.

New Home Sales Post Double-Digit September Gain

The U.S. Census Bureau and the Department of Housing and Urban Development report that newly constructed single-family homes sold at a seasonally adjusted annual pace of 800,000 units this month. This surge was a 14.0% increase over August’s pace of 702,000 units. Earlier reports put the figure at 740,000 units. Sales of 971,000 units were sold at a seasonally adjusted rate of 17.6 percent higher in September 2020 than in September 2019. Analysts polled by both Econoday and Trading Economics had a consensus forecast of 760,000 in sales.

The median price of a home sold in September was $408,800 compared to $344,400 last year. The average prices for the two periods were $451,700 and $405,100, respectively.

There were an estimated 379,000 new homes for sale at the end of September. At the current rate of sales, this amounts to a 5.7-month supply. In August, the inventory was good for 6.5 months, while in September 2020, it was only enough for 3.5 months.

The majority of the sales growth in September came from two regions: the Northeast with 32.3 percent, and the South with a 17.8 percent increase in sales compared to August.

Next weeks potential market moving reports are:

  • Monday, November 1st – Construction Spending
  • Tuesday, November 2nd – Homeownership Rate
  • Wednesday, November 3rd – ADP Employment Report, Federal Reserve Statement
  • Thursday, November 4th – Initial Jobless Claims, Continuing Jobless Claims
  • Friday, November 5th – Consumer Credit, Unemployment Rate, Average Hourly Earnings

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (800) 216-1047

California Platinum Loans

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Need A Faster and Flexible Solution To Your Home Improvement Needs? A Home Equity Line of Credit Can Lower Your Monthly Payments And Help You Achieve Your Upgrade Goals Quickly

Have you been thinking about a HELOC, aka a home equity line of credit? With favorable 30-year refinance rates and California home loans offering many options for refinancing or using the equity in your home, you’ve got a lot of choices to meet your financial goals. Many people choose a HELOC to pay off high-interest credit card debt, or other personal loans. This is just one use of a HELOC that can meet your financial needs.

Why choose a HELOC instead of a refinance or traditional second mortgage?

A home equity line of credit (HELOC) is different from a home equity loan or a home mortgage refinance. With a home equity line of credit, you have credit available for your use as needed. Once you use the credit, whether for home remodeling and improvements or other needs, like college tuition or a down payment on a vacation home, you’ll pay the funds you use back with interest. You can pay the amount back that you use from your HELOC in different amounts: your HELOC will have a variable and adjustable interest rate, similar to an adjustable-rate mortgage (ARM).

If you want a line of credit with interest rates that are usually much lower than unsecured credit cards, a HELOC offers access to funds that you can borrow, use, and repay on a flexible schedule. Most people choose a HELOC because it offers flexibility and availability, along with lower, yet adjustable, interest rates.

Is the interest on a HELOC tax-deductible?

If you use your HELOC to improve your home or make home repairs, yes it may be tax-deductible (you need to check with a licensed CPA or tax attorney for your specific situation). If you use the HELOC for other purposes, it probably won’t be deductible. You should consult a tax advisor before using a HELOC to determine what you can and cannot legally deduct from your taxes.

What financial situations aren’t right for a HELOC and which ones are?

A home equity line of credit is secured by the equity in your home. It’s a form of a second mortgage. If you’re struggling to pay your bills, a HELOC isn’t a smart financial choice.

If you’re financially stable and want financial flexibility and low-interest access to credit, a HELOC can be a wise financial choice. One of the best reasons to work with an experienced independent mortgage broker and a home loan professional is their ability to compare different HELOC lenders and their terms and conditions and advise you on your options. Also typically your monthly payments are a lot lower on HELOC-used funds since the only payments required are typically interest-only payments.  You can use a HELOC to remodel your home, make improvements, or use the money flexibly to meet your other personal financial, business, and family goals.

Sources

https://www.nerdwallet.com/blog/mortgages/heloc-home-equity-line-of-credit/

Using terms from a home mortgage and loan refinance categories

additional source added by FK

https://www.schwab.com/resource-center/insights/content/is-interest-on-heloc-still-tax-deductible

California Platinum Loans

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