housing: Bias in the Mortgage Approval Process - 06/17/21 09:02 AM
Discrimination and inequalities persist
The mortgage approval process refers to the steps related to securing a home mortgage. Estimates report that nearly two-thirds of a typical American household’s wealth comes from homeownership, making it crucial for prosperity.1
Lending is central to homeownership in the U.S., and the market is projected to grow. Fannie Mae, the government-sponsored entity that guarantees mortgages through a secondary mortgage market, estimates that home sales and purchase mortgage originations will rise by 6.2% and 14.5%, respectively, in 2021.2
Historically, homeownership has been influenced by racial, ethnic, and other prejudices. Even in the areas where it has improved, recent studies have characterized the reduction … (0 comments)

housing: Should You Refinance Your Mortgage if You Have a Low Rate? - 06/16/21 08:28 PM
With mortgage rates at historic lows, now is a great time to save money by refinancing. And it may make sense even if you already have a low rate on your mortgage. 
Mortgage rates have been at historic lows ever since the beginning of the coronavirus pandemic. At the beginning of 2020, 30-year mortgage rates were 3.72%, and 15-year mortgage rates were 3.16%. 
In comparison, 30-year mortgage rates are currently 2.96%, and 15-year mortgage rates are 2.3%. These rates continue to fluctuate, and its unlikely refinance rates will stay this low as the economy continues to recover. 
So, if you want to take advantage of the … (2 comments)

housing: Home Appraisals: What You Need to Know - 06/14/21 09:03 AM
A home appraisal helps sellers extract maximum value and protects buyers and lenders from overpaying.
The goal of an appraisal is to provide an estimation of a property’s market value.
A home appraisal may not be top of mind when you're looking to buy, sell or refinance a home. But maybe it should be: An appraisal determines for the seller, the buyer and the lender how much a home is worth.
The purpose is to protect the buyer and the lender from paying too much.
A home appraisal isn't the most glamorous part of buying or selling a home, but it's a key step. Learn … (2 comments)

housing: What Is Escrow? - 06/13/21 10:14 AM
Escrow accounts are a key feature of real estate transactions and homeownership.
With an escrow account, the buyer's initial deposit is held until the sale moves forward.
Most people never encounter the concept of escrow until they buy a home. Escrow accounts are set up by third parties as a safe place to hold money. They are used for two main purposes when it comes to real estate: during a home purchase and afterward as an easy way for homeowners to save for property tax and insurance costs.
Here's what you need to know about escrow accounts, how they help facilitate a home purchase … (1 comments)

housing: Looking to Pay Less on Home Costs? Here are 3 Tips to Score the Lowest Mortgage Rate to Step You up for Success - 06/12/21 05:37 PM
If you're looking to get a mortgage, your goal should be to lock in the lowest interest rate possible. After all, the lower the rate, the less your loan will cost you each month. And that means you'll have less interest to pay over the life of your loan. Imagine you're taking out a 30-year $200,000 mortgage. If you lock in a mortgage rate of 3.25%, you'll pay $871 a month for principal and interest on that loan. But if you manage to lock in a rate of 3.05%, you'll pay $848 a month instead. You'll also, with that lower rate, pay a total … (2 comments)

housing: Freddie Mac Mortgage Programs: Which One is Right for You? - 06/11/21 12:59 PM
There is no one-size-fits-all solution when it comes to financing your home. Freddie Mac offers different loan programs that make it possible for borrowers in various situations to achieve their dream of homeownership.
Freddie Mac doesn't make loans. Instead, we purchase qualified loans from lenders. This provides crucial funding for the banks, so they can make more loans and keep interest rates low for borrowers like you.
Freddie Mac has a set of guidelines for the mortgages we back. Mortgages that meet these criteria are called conforming conventional loans. Conventional loans can either be fixed- or adjustable-rate and can be used to finance just … (0 comments)

housing: VA Cash-Out Refinance: How it Works and What to Consider - 06/10/21 08:32 PM
A VA cash-out refinance replaces your current mortgage with a new VA loan, ideally with better terms, while allowing you to take out cash against your home for a variety of reasons, such as upgrading the property or paying down debt. If your existing home loan isn’t backed by the VA but you’re eligible for a VA loan, you can do this cash-out refinance to take advantage of VA refinance rates.
Let’s say you took out a $200,000 home loan and you’ve paid back $80,000 of that balance. With a VA cash-out refinance, you can get a loan for $200,000 and use that $80,000 (less closing costs and … (0 comments)

housing: Saving for a Down Payment When You Live Paycheck-to-Paycheck - 06/08/21 08:36 AM
A down payment is an important component of taking a step toward homeownership. Saving for a down payment is also the biggest obstacle that you probably face when you want to buy a home.
A down payment is the cash you pay upfront when you are going to make a large purchase. If you were going to buy a $350,000 home with a 10% down payment, you would need to have $35,000 in cash.
Then, your mortgage lender provides the rest of the money to buy the home, and you pay your lender back over time. There are a few exceptions to lenders … (1 comments)

housing: A Hand Up with a Down Payment - 06/06/21 09:33 AM
James Truslow Adams, who coined the term “American dream” in 1931, defined the concept as a “better, richer, and happier life for all our citizens of every rank.” Today, the notion is now intricately tied to homeownership as a means of building wealth. Yet, as we celebrate American Housing Month this June, we must recognize that for many Americans, attaining homeownership—and by extension, the American dream—seems all but impossible. 
Purchasing a home usually requires a down payment. Prospective buyers must usually provide an initial upfront payment of 20 percent of their home’s purchase price if they want to avoid paying for private mortgage insurance. … (1 comments)

housing: The Pros and Cons of Paying Off Your Mortgage Early - 06/05/21 11:39 AM
Paying off your mortgage early helps you save money in the long run, but it isn't for everyone
Paying off your mortgage early is a good way to free up monthly cashflow and pay less in interest. But you'll lose your mortgage interest tax deduction, and you'd probably earn more by investing instead. Before making your decision, consider how you would use the extra money each month. Paying off your mortgage early can be a wise financial move. You'll have more cash to play with each month once you're no longer making payments, and you'll save money in interest.
Making extra mortgage … (2 comments)

housing: How Much House You Can Afford - 06/04/21 03:19 PM
Income and savings matter—but so does your lifestyle
Good news: Answering the question, “How much house can I afford?” does not require calculus-level math skills. You just have to start with Trulia’s housing affordability calculator, and then factor in a set of facts about your life.
The life stuff is just as important as the calculator. Things like student loans, local cost of living, childcare, and your hobbies will affect how much house you can afford. And a mortgage lender can lend you as much as you can “reasonably afford,” which could be more than you want to pay. Here’s how to set the right budget … (0 comments)

housing: What to Expect During a Home Inspection? - 06/03/21 10:31 AM
From finding an inspector to dealing with surprises — this is your guide to getting a house checked out.
The first thing you need to know about home inspection: You’ll feel all the feels.
There’s the excitement — the inspection could be the longest time you’re in the house, after the showing.
Right behind that comes … anxiety. What if the inspector finds something wrong? So wrong you can’t buy the house?
Then there’s impatience. Seriously, is this whole home-buying process over yet?
Not yet. But you’re close. So, take a deep breath. Because the most important thing to know about home inspection: It’s just too … (0 comments)

housing: When Should You Lock a Mortgage Rate? - 06/02/21 11:37 AM
When it comes to interest rates, mortgage applicants should pay close attention because every little bit of interest counts. A quarter of a percentage point doesn’t sound like much, but it can mean thousands of extra dollars in interest paid, or not paid, over the life of a typical 30-year loan.
For buyers worried that rates will rise between the time they apply and their closing date, a feature called rate lock could be the solution.
What is a mortgage rate lock?
A rate lock freezes the interest rate, usually for a fee paid when you agree to the terms of the loan. The lender guarantees (with a … (0 comments)

housing: New Refi Program Aims to Help Lower-income Owners Save - 06/01/21 09:27 PM
Fannie Mae will launch RefiNow this week, which could help lower-income homeowners save hundreds of dollars a month on their mortgage payments.
The program, which begins June 5, aims to help about 2 million homeowners lower the interest rates on their mortgages. Eligible homeowners could save an estimated $100 to $250 a month, according to the Federal Housing Finance Agency, Fannie Mae’s regulator.
Among the eligibility requirements, homeowners must earn 80% or less of their area’s median income to apply. Borrowers also must have a Fannie Mae–backed mortgage (use the loan lookup tool to find out). Borrowers must be current on their mortgage and … (0 comments)

housing: Looking for a New Mortgage Rate? 4 Things to Keep in Mind - 05/30/21 07:57 PM
Whether you’re buying a home or looking to refinance, getting the best mortgage rate should be one of your top goals. Not only does a low rate equate to a lower monthly payment, but it also reduces the long-term costs of taking out your loan.
Unfortunately, securing low mortgage and refinance rates is easier said than done — and if you want the best one possible, you’ll need to prepare long before you dive into the mortgage process.
Are you considering a home purchase or refinance this year? Follow these guidelines and compare rates across mortgage lenders without impacting your credit score on ChangeMyRate.com.
For more information read … (0 comments)

housing: Why Are Payments Higher When You Shorten the Term? - 05/29/21 06:39 PM
Many financial advisors recommend taking out a shorter-term loan. Why? Because over the life of the loan, less interest is paid to the mortgage company. That makes sense. Less interest is always good, right? But with a shorter-term loan, there’s a tradeoff. The shorter the term, the higher the monthly payments. Why is that, exactly?
Monthly mortgage payments have three basic components. The first is the actual loan amount. The second is the interest rate on the loan. The third is how long the loan is actually amortized over. Amortization simply means how the loan is paid down and when. Most mortgage … (2 comments)

housing: Time to Refinance: Mortgage Rates Dip Back Below 3% - 05/28/21 07:18 PM
Ultra-low mortgage rates returned this week, with lenders offering home buyers and refinancers a chance once again to lock in a rate below 3%. But the National Association of REALTORS® warns that these low rates in the 2% range won’t last much longer, and mortgage rates likely will edge up soon. The 30-year fixed-rate mortgage averaged 2.95% this week, Freddie Mac reports.
“Mortgage rates are continuing to offer many homeowners the potential to refinance and increase their monthly cash flow,” says Sam Khater, Freddie Mac’s chief economist. Homeowners who refinanced their 30-year fixed-rate mortgage in 2020 saved more than $2,800 annually, Khater … (0 comments)

housing: What Are the Pros and Cons of an Online Mortgage? - 05/26/21 09:45 PM
There are online mortgage lenders that are becoming an increasingly popular way to get funding to buy a home. You can go through these online lenders and do your entire mortgage application from your computer or tablet. This is different from the traditional way of doing things, where you have to go to a bank and complete your paperwork in person.
There was a recent survey from the financial website NerdWallet that found 64% of millennials would prefer to do the entire mortgage application process digitally.
Online mortgages are incredibly convenient, but as with anything, there are potential downsides to think about too.
Pro: … (0 comments)

housing: Making the Best Choice - Buy vs. Rent - 05/25/21 08:39 PM
“May your choices reflect your hopes, and not your fears.” Nelson Mandela
Our cities are waking up after being cooped up for a year. Mortgage rates are still low, and the real estate market is still hot.  It is decision time.  Do you buy a home, or do you continue renting?  What are some profitable exit strategies you can use later if you decide to move to another geographic area? 
Rent hikes are predicted to rise as the demand for housing continues.  How much has your rent gone up over the last three to five years?   If you bought a home that … (1 comments)

housing: Is the Mortgage Refinance Boom Ending? What to Consider Now - 05/24/21 10:41 AM
The COVID-19 pandemic unleashed a financial tidal wave that left many Americans struggling in the wake of job losses and reduced earnings. For some homeowners, however, the pandemic did have one positive side effect: record low interest rates for mortgage refinancing. 
As refinancing rates reached historic lows, mortgage refinancing activity reached its highest annual peak since 2003, according to Freddie Mac. In January 2020, the average 30-year mortgage rate was 3.62%, reaching a low of 2.65% by January 2021. As of May 2021, 30-year mortgage rates had leveled out at 3.00%.
Freddie Mac's latest quarterly forecast suggests that refinance originations will hold steady for the remainder of … (1 comments)