Rising Mortgage Rates Could possibly Slow down House Price Surge. See what this entails to our first-time homebuyer folks

How Many Home Offers Face Bidding Wars?

According to recent Redfin data, three out of every five property proposals faced bidding wars in December 2021. Their data revealed that 59.6% of home offers filed by Redfin agents in the United States were subject to bidding wars, the lowest proportion in a year and down from a revised rate of 61.3 percent in November, up from 54 percent in December 2020.

Salt Lake City, Utah, has the highest rate of bidding wars among the 37 US metro areas studied by Redfin, with 74 percent of bids written by Redfin agents in December facing competition. Tucson, Ariz., came in second with 73.1 percent, followed by San Diego, Calif., with 71.1 percent, Virginia Beach, Va., with 70.6 percent, and Seattle, Wash., with 70 percent.

Rising Mortgage Rates Could Slow House Price Surge

The rising cost of home loans could halt the growing residential real estate market in the United States. House prices have skyrocketed across the country in the last two years, as the pandemic — combined with the Federal Reserve’s ultra-low loan rates — sparked a home-buying frenzy not seen since the mid-2000s housing bubble. Rates on mortgages have soared to their highest point since early 2020.

Since the Federal Reserve influences mortgage rates, interest rates have climbed in recent weeks following the Fed’s signal to act aggressively to prevent inflation from spiraling out of control. 

In the end, higher mortgage rates will make homes more expensive for certain people, particularly first-time purchasers. If the rate increase moves some buyers out of the market, this should ease upward pressure on home prices. However, so far this year, the rate increase has spurred more people to make bids for purchase because of the perceived fear of missing out on home-buying opportunities.

Supply Chain and Inflation Concerns Ding Builder Confidence Index

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) dropped a little this month, halting a four-month trend that had lifted the NAHB/Wells Fargo Housing Market Index (HMI) 8 points higher. In January, the index, which measures builder confidence in the market for newly constructed homes, fell one point to 83.

According to Robert Dietz, NAHB’s chief economist, the most significant problem for the housing market is a lack of inventory. While single-family starts in 2021 are likely to conclude the year approximately 25% higher than the pre-Covid 2019 level, rising interest rates will negatively impact housing affordability over the next year.

Next week’s potential market-moving reports are:

  • Monday, January 24th – No Report    
  • Tuesday, January 25th – National Home Price Index, Consumer Confidence Index
  • Wednesday, January 26th – New Home Sales Starts, FOMC Statement
  • Thursday, January 27th – Initial Jobless Claims, Continuing Jobless Claims, Pending Home Sales
  • Friday, January 28th – PCE Inflation, Economic Cost Index

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.

Source

https://www.axios.com/2022/01/14/rising-mortgage-rates-house-price-surge

California Platinum Loans

  https://californiaplatinumloans.com

Is It Possible To Qualify for a Good 30-Year Fixed Mortgage Rate In Our Current Market Condition? What Are The Important Factors Being Considered Today?

For most people, buying a home is the single largest purchase they’ll ever make. It’s worth it to get the best 30-year mortgage interest rate you can. Just one more percentage point of interest and you will pay thousands of dollars more for your home over the course of a 30-year mortgage. A 30-year mortgage includes 360 monthly payments. If you can save $200 per month by getting a lower interest rate, this equals $72,000. A quick visit to an investment calendar can show you how much money you’d have if you’d saved $200 a month for 30 years and invested it: at an average 6% rate of return, you’d have an investment fund of over $196,000.

So, what can you do to qualify for a good 30-year fixed mortgage rate?

Improve your FICO credit score

Keep your credit score as high as possible. Pay your bills on time and don’t keep more than 20% to 30% balances on your credit cards. Ideally, you should be able to pay your credit cards off every month. Check your credit report regularly. Make sure you have no derogatory reports like collection accounts or liens. Don’t make major credit purchases like a new car or appliances before you pre-qualify for a mortgage.

Save as much as possible for a down payment

Conventional mortgages often require a 20% down payment. We get it: it’s challenging to save a 20% down payment on a $750,000 home. You can have options for other loan programs like FHA and VA home loans that don’t require such a large down payment.

Have a strong record of earnings and employment

These days, more people are working independently or combine self-employment with traditional salaried jobs. Be sure you can document at least two years or more of steady earnings at the level you need to qualify for the mortgage you want.

Shop multiple lenders

You’ll get different answers from different lenders on interest rates and loan terms. That’s one reason working with an experienced independent mortgage broker who is a loan professional can help you get the best deal on your 30 year fixed mortgage.  That SINGLE INDEPENDENT MORTGAGE BROKER can SHOP dozens or hundreds of with a  LENDERS on your behalf with a SINGLE LOAN APPLICATION.  And with a SINGLE CREDIT PULL.  This is a huge benefit of working with an independent mortgage broker, they only have to run your credit ONCE and can instantly compare rates and shop your loan with dozens if not more lenders finding you the best rates and lowest costs.  Whereas, a consumer went to dozens of lenders to shop the rates, each lender would need a complete application and would have to run the consumers credit in order to accurately quote a rate.  Since rates are a factor of much more than just a FICO Score, and the LTV, Loan to Value of a property.  Pricing models take into account DTI debt to income, and debt to available credit ratios along with many other factors that can only be accurately priced with a complete application and a tri-merge mortgage credit report.

So that’s why an independent mortgage broker who has your complete loan application and has run your credit can accurately compare and shop rates on your behalf with multiple lenders simultaneously.  Without having each of them re-running your credit.  Since through the wholesale channel a broker can just re-issue the same credit report to as many lenders in their channel without any additional hard hit inquiries on the consumers credit.

Now once you have the best mortgage rate and know your loan terms, consider locking in your loan rate while you’re in the closing process. This is a service many lenders offer for free, as well as for a modest one-time cost for those wishing to buy down to an even lower rate.

Source

https://www.forbes.com/advisor/credit-score/how-to-raise-your-fico-score/

California Platinum Loans

  https://californiaplatinumloans.com

Are You a Veteran? Well, Today Is Your Lucky Day! You Can Now Afford Any Home You Are Qualified For In The Golden State

Veterans have some amazing financial news as a New Year’s gift: the long-standing county VA loan limits will be completely lifted. A qualified veteran can now borrow as large a VA home mortgage as they can afford and need without worrying about loan limits. The current VA mortgage cap of $726,525 for high housing price counties will no longer be in effect.

Can I buy a multi-million dollar home with a VA mortgage?

After January 1, 2020, yes! You can apply for and receive a VA mortgage of more than $726,525 up to $2 million, $3 million, $5 million or more.

Will I need to pay a down payment?

The VA is not requiring lenders to cap the amount of mortgages they issue with zero money down. You may not need to pay a down payment for the new VA home mortgages that will be issued without the VA county loan limits. However, in some areas and with some lenders, you may need to pay a down payment that will be calculated by a formula using the difference between the mortgage amount and the county FHA loan limit. In general, this type of down payment is limited to no more than 25 percent of the difference between your home’s purchase price and the FHA loan limit.

Is the VA funding fee going up?

Yes — for a short period — and the amount will vary depending on your entitlement status and how many times you’ve used your VA home loan benefit. If you’re a first-time VA home buyer, your funding fee will be 2.35 percent. The current first-time funding fee is 2.15 percent for regular military.

The funding fee for a subsequent use of the VA loan benefit will be 3.6 percent of your loan amount. This is an increase from the current 3.3 percent rate.

Can I roll the funding fee into my VA loan?

This depends on your situation.  Check with an independent mortgage broker such as California Platinum Loans on how you can qualify to roll your VA funding fee into your VA home mortgage.

Overall, the new change in guidelines or some like to call it change in VA Law,  for VA loans is fantastic news for veterans. You can now buy the home you want and can qualify for using your VA mortgage benefit. It’s worthwhile to check your options for your new, larger VA home loan with a qualified VA home mortgage expert.

Sources

https://www.nerdwallet.com/blog/mortgages/va-home-loan-limit-and-funding-fee-changes-2020/

plus the VA mortgage Powerpoint presentation

California Platinum Loans

  https://californiaplatinumloans.com