5424 Penway Dr. Orlando, FL
Wednesday, December 12, 2018
Thursday, November 15, 2018
How to Lose a House in 10 Ways
Home buying is one of the most stressful experiences in adult life (second only to getting a divorce). Why is the process so draining? Unfortunately, there are tons of things that can make a deal fall through– especially if you aren’t working with an experienced professional. Here are 10 ways you might to lose out on your dream home (and how to avoid them):
1. You don’t have enough saved up for the down payment
Surprise! Houses are expensive. The down payment for which you’ve spent so much time saving might not be enough. In addition to closing costs, there can also be unexpected fees around every corner. Make sure that you have significant cushion savings in addition to whatever you plan on putting down for your house—you never know how these things will play out.
2. You don’t have your ducks in a row
Staying organized is essential when you’re house hunting. Are you serious about the bid you’re putting down? Make sure that you’re fully aware of all deadlines, contingencies, and paperwork involved in moving forward with your home purchase.
3. You’re shopping out of your budget
Looking for houses way outside of your budget is the first way to “lose a house”—you’ll just be losing a home you never had a chance of having. When you shop above your budget you’re sure to find a dream house that’s nothing more than that: a dream.
Also plan for the strong possibility of putting in an offer above asking price. This may mean looking at homes listed a few thousand below your budget to create padding in your budget to make a higher offer.
4. You lose a bidding war
Quick, decisive, assertive—these are all necessary traits to winning a bidding war. Working with an agent who can negotiate on your behalf is a great way to ensure you play your cards right. Make sure you’re easy for your agent to reach during talks with the seller, otherwise the house may be gone before you can say “Here’s my offer”.
5. You come down with a bad case of buyer’s remorse
Buyer’s remorse plagues homebuyers across the nation. What’s the most obvious symptom of this condition? Cold feet. Sales contracts fall through all the time because buyers back out at the last second, succumbing to the fear of such a life-altering decision. Keep your wits about you and trust your gut.
6. You close too slowly
Sellers are trying to get sales contracts through as swiftly as possible. In this climate of high demand and limited inventory, residential real estate is a hot market. There will almost always be someone behind you, vying for your potential future home—if you really want it, work hard to satisfy the seller and make things official as soon as possible.
7. Your inspections aren’t timely
Speaking of closing quickly—inspections are sure to take some time. If you’re lucky, all you’ll need is one inspection. However, the inspection is just a first step. If an inspector discovers any problems, you’ll have to start making appointments with specialists to look further into the house’s issues. This is a race against the clock, limited by the time frame set out in the sales contract. Don’t waste any time getting the inspections going or you might find yourself without a house to inspect.
8. Your seller isn’t happy with their appraisal
An appraisal that comes in lower than anticipated is always taken by the seller as a personal blow. This proves to be an issue for the buyer, too. Either the seller will become difficult or, even worse, you’ll have to pay the difference between the appraisal and the sales price out of pocket. There’s another one of those pesky additional spends! Make sure to keep communication with the seller open and diplomatic when frustrations are running high.
9. You can’t secure a mortgage
You’re so close to the finish—and then your mortgage application is declined. Nothing will lose you a house faster than the inability to pay for it! Apply for pre-approval so the seller knows that you’ll actually be able to buy their home; don’t wait for something to go wrong. If you are proactive throughout the buying process the odds of you losing the home are significantly slimmed.
10. You don’t have an agent on your side
None of the above issues are simple. Having someone on your side that knows the ropes of the home buying process is the most valuable tool in your box. Your agent is there to take the brunt of the work off your shoulders and hold your hand along the way. Let a professional help you with the most important purchase of your life.
Going agentless leaves you exponentially more susceptible to the nine other ways to lose a house. Contact me today to work with an experienced professional during your next home search.
Shawn Barral, RE/MAX Revealty
1. You don’t have enough saved up for the down payment
Surprise! Houses are expensive. The down payment for which you’ve spent so much time saving might not be enough. In addition to closing costs, there can also be unexpected fees around every corner. Make sure that you have significant cushion savings in addition to whatever you plan on putting down for your house—you never know how these things will play out.
2. You don’t have your ducks in a row
Staying organized is essential when you’re house hunting. Are you serious about the bid you’re putting down? Make sure that you’re fully aware of all deadlines, contingencies, and paperwork involved in moving forward with your home purchase.
3. You’re shopping out of your budget
Looking for houses way outside of your budget is the first way to “lose a house”—you’ll just be losing a home you never had a chance of having. When you shop above your budget you’re sure to find a dream house that’s nothing more than that: a dream.
Also plan for the strong possibility of putting in an offer above asking price. This may mean looking at homes listed a few thousand below your budget to create padding in your budget to make a higher offer.
4. You lose a bidding war
Quick, decisive, assertive—these are all necessary traits to winning a bidding war. Working with an agent who can negotiate on your behalf is a great way to ensure you play your cards right. Make sure you’re easy for your agent to reach during talks with the seller, otherwise the house may be gone before you can say “Here’s my offer”.
5. You come down with a bad case of buyer’s remorse
Buyer’s remorse plagues homebuyers across the nation. What’s the most obvious symptom of this condition? Cold feet. Sales contracts fall through all the time because buyers back out at the last second, succumbing to the fear of such a life-altering decision. Keep your wits about you and trust your gut.
6. You close too slowly
Sellers are trying to get sales contracts through as swiftly as possible. In this climate of high demand and limited inventory, residential real estate is a hot market. There will almost always be someone behind you, vying for your potential future home—if you really want it, work hard to satisfy the seller and make things official as soon as possible.
7. Your inspections aren’t timely
Speaking of closing quickly—inspections are sure to take some time. If you’re lucky, all you’ll need is one inspection. However, the inspection is just a first step. If an inspector discovers any problems, you’ll have to start making appointments with specialists to look further into the house’s issues. This is a race against the clock, limited by the time frame set out in the sales contract. Don’t waste any time getting the inspections going or you might find yourself without a house to inspect.
8. Your seller isn’t happy with their appraisal
An appraisal that comes in lower than anticipated is always taken by the seller as a personal blow. This proves to be an issue for the buyer, too. Either the seller will become difficult or, even worse, you’ll have to pay the difference between the appraisal and the sales price out of pocket. There’s another one of those pesky additional spends! Make sure to keep communication with the seller open and diplomatic when frustrations are running high.
9. You can’t secure a mortgage
You’re so close to the finish—and then your mortgage application is declined. Nothing will lose you a house faster than the inability to pay for it! Apply for pre-approval so the seller knows that you’ll actually be able to buy their home; don’t wait for something to go wrong. If you are proactive throughout the buying process the odds of you losing the home are significantly slimmed.
10. You don’t have an agent on your side
None of the above issues are simple. Having someone on your side that knows the ropes of the home buying process is the most valuable tool in your box. Your agent is there to take the brunt of the work off your shoulders and hold your hand along the way. Let a professional help you with the most important purchase of your life.
Going agentless leaves you exponentially more susceptible to the nine other ways to lose a house. Contact me today to work with an experienced professional during your next home search.
Shawn Barral, RE/MAX Revealty
Thursday, October 18, 2018
Americans’ FICO scores hit record-high average
704! That's the new, record-high average FICO credit score among millions of Americans, and it's positive news for homebuyers, sellers, lenders, and the economy overall.
What it signifies, according to Ethan Dornhelm, FICO's vice president of scores and analytics, is that 10 years out from the housing bust and the global financial crisis, Americans are "making more judicious use of credit." They're using less than the maximum amount of credit available to them, paying their monthly mortgages on time and exhibiting fewer glaring negatives in their credit bureau files.
FICO scores predict the probability that a borrower will default on a loan. They run from 300 – indicating that the individual is extremely high risk – to 850, meaning almost no risk of default. A score of 704 is considered good and, along with other favorable factors in your application, will help get you approved for a mortgage – though not necessarily at the lowest interest rate and fees available.
A score of 750 will get you primo rates and terms but a 450 will probably get your application tossed. In the mortgage arena, FICO scores are used by virtually all lenders and are the only scores that mega-investors Fannie Mae and Freddie Mac accept. They are also used extensively for credit card, auto loan, and other loan applications.
FICO periodically studies a 10-million-persons sample of the 200 million-plus consumers whose credit histories are on file at the three national credit bureaus. In 2009, the average score of consumers nationwide was 686. Since then, average scores have been improving gradually along with the economy, lower unemployment, and rising incomes. The 5-point increase from 699 in 2016 to 704 this year is one of the largest two-year improvements on record.
A few noteworthy trends jump out of FICO's latest data on Americans' scores:
© Copyright 2018, Richmond Times-Dispatch, Richmond, VA, Kenneth R. Harney.
What it signifies, according to Ethan Dornhelm, FICO's vice president of scores and analytics, is that 10 years out from the housing bust and the global financial crisis, Americans are "making more judicious use of credit." They're using less than the maximum amount of credit available to them, paying their monthly mortgages on time and exhibiting fewer glaring negatives in their credit bureau files.
FICO scores predict the probability that a borrower will default on a loan. They run from 300 – indicating that the individual is extremely high risk – to 850, meaning almost no risk of default. A score of 704 is considered good and, along with other favorable factors in your application, will help get you approved for a mortgage – though not necessarily at the lowest interest rate and fees available.
A score of 750 will get you primo rates and terms but a 450 will probably get your application tossed. In the mortgage arena, FICO scores are used by virtually all lenders and are the only scores that mega-investors Fannie Mae and Freddie Mac accept. They are also used extensively for credit card, auto loan, and other loan applications.
FICO periodically studies a 10-million-persons sample of the 200 million-plus consumers whose credit histories are on file at the three national credit bureaus. In 2009, the average score of consumers nationwide was 686. Since then, average scores have been improving gradually along with the economy, lower unemployment, and rising incomes. The 5-point increase from 699 in 2016 to 704 this year is one of the largest two-year improvements on record.
A few noteworthy trends jump out of FICO's latest data on Americans' scores:
- Age matters. Young people age 18 to 29 tend to have lower scores than other age groups – they score an average 659. Part of the reason might be that many of them have "thin" files with relatively few credit accounts or transactions. When they fail to make payments or pay late on a credit card, the event weighs more heavily on their score than it would if they had longer histories. The average score for people ages 40 to 49 is 690 and, for seniors 60 and older, it's 747.
- Fewer people are hobbled with collection accounts. When you don't pay back what you borrowed, your lender might hire third-party collectors. That gets reported to the credit bureaus and can depress your FICO score for years. Twenty-eight percent of all Americans had collection accounts on their credit files in 2015; today, it's just 23 percent.
- Rock-bottom FICO scores are fewer. In 2009, 7.3 percent of American consumers had terrible scores, ranging between 300 and 499. Now that's down to 4.2 percent. In 2009, 8.7 percent of consumers scored between 500 and 549; today, it's down to 6.8 percent. Overall, fewer Americans now have FICO scores below 650. In 2009, 35 percent scored 649 or less; today, it's 28.7 percent.
- Super scorers are increasing. A record number of Americans – nearly 22 percent – have FICO scores of 800 and higher. Forty-two percent score between 750 and 850.
- Mortgage borrowers' scores are dropping. Though FICO scores for most categories of consumers are up, average scores for people taking out home mortgages are sliding in the opposite direction. In 2009 and 2013, borrowers had average scores of 745; now, they're down to about 733. This might seem odd, but FICO says it shows that lenders are relaxing their approval standards slightly to include a broader range of borrowers. Think millennial first-time buyers and people who hit a rough patch during the Great Recession.
© Copyright 2018, Richmond Times-Dispatch, Richmond, VA, Kenneth R. Harney.
Monday, June 18, 2018
Mortgage interest rates 2018: Rates hit 7-year high
Is the housing market, an engine of economic growth, starting to sputter?
Home sales are slowing, spurring debate about whether the culprit is rising mortgage rates or low housing supplies.
The past week, the average 30-year fixed mortgage rate increased from 4.61% to 4.66%, the highest level since May 2011, mortgage giant Freddie Mac said Thursday. The rate is up from 3.95% at the start of the year and a recent low of 3.78% last September.
Thirty-year mortgage rates have risen in 15 of the first 21 weeks of 2018, the largest share since Freddie Mac began tracking the data in 1972. The healthy economy and prospects of higher inflation are pushing up yields on the 10-year Treasury bond to about 3%, and that rate directly affects mortgage rates.
The nearly three quarters of a percentage point increase in mortgage rates so far this year would boost the monthly payment on a $200,000 mortgage by about $85, according to Greg McBride, chief economist of Bankrate.com.
The higher costs may already be damping sales. Existing home sales fell 2.5% last month to a seasonally adjusted annual rate of 5.46 million and were 1.4% below the year ago level, the National Association of Realtors (NAR) said Thursday. From January through April, home sales are down 1% from the same period a year ago, according to NAR Chief Economist Lawrence Yun.
Some economists largely blame low housing supplies, not rates. There was a four-month inventory of existing homes on the market in April – the time it would take to exhaust the supply at the current sales pace -- compared with a balanced six-month stockpile. When units go up for sale, buyers are snapping them up. Homes typically stayed on the market 26 days in April, the shortest time frame since NAR began tracking the data in 2011.
“I think the reason home sales are not rising is just that there’s no inventory,” says Freddie Mac Chief Economist Sam Khater.
Also, the skimpy supplies are pushing up prices, another factor that could be discouraging some buyers. The median price of an existing house was $257,900 last month, up 5.3% the past year.
But amid solid job and income growth and a stronger economy, higher rates and prices won’t stop the vast majority of Millennials from buying their first homes, Khater says. Most will simply buy smaller units, he says. Alternatively, they’ll buy homes further from the urban areas where they work, says Zilllow Senior Economist Aaron Terrazas.
Yet both economists say higher rates are likely discouraging some existing homeowners who might otherwise sell their houses and buy larger ones. They may balk at forgoing their current low rates for a bigger monthly payment.
“If they don’t really need the extra space, they’re not going to move, Terrazas says. He believes home sales have been tempered by a combination of the low supplies, higher prices and mortgage rates, and wages that have risen only modestly.
But Ian Shepherdson, chief economist of Pantheon Macroeconomics, mostly attributes the tepid sales to higher mortgage rates. An index of mortgage applications for home purchases is up 3.5% from a year ago. But it’s down 6% on a seasonally adjusted basis since it peaked in December, Shepherdson says. Mortgage applications reflect home buyer demand and current rates, he says, rather than obstacles that may ultimately prevent shoppers from buying a house, such as low supplies and competition from other buyers.
“It’s wishful thinking to argue that this isn’t about rates,” he says. In recent years, he says, every half percentage point increase in rates has cut mortgage applications by about 8%.
Applications to refinance mortgages are more sensitive to rates and fell last week to the lowest level since December 2000, according to the Mortgage Bankers Association.
The effects of higher rates are likely to intensify, economists say. Khater predicts the average 30-year fixed rate will climb to about 5% by the end of the year.
Source: USA Today
Home sales are slowing, spurring debate about whether the culprit is rising mortgage rates or low housing supplies.
The past week, the average 30-year fixed mortgage rate increased from 4.61% to 4.66%, the highest level since May 2011, mortgage giant Freddie Mac said Thursday. The rate is up from 3.95% at the start of the year and a recent low of 3.78% last September.
Thirty-year mortgage rates have risen in 15 of the first 21 weeks of 2018, the largest share since Freddie Mac began tracking the data in 1972. The healthy economy and prospects of higher inflation are pushing up yields on the 10-year Treasury bond to about 3%, and that rate directly affects mortgage rates.
The nearly three quarters of a percentage point increase in mortgage rates so far this year would boost the monthly payment on a $200,000 mortgage by about $85, according to Greg McBride, chief economist of Bankrate.com.
The higher costs may already be damping sales. Existing home sales fell 2.5% last month to a seasonally adjusted annual rate of 5.46 million and were 1.4% below the year ago level, the National Association of Realtors (NAR) said Thursday. From January through April, home sales are down 1% from the same period a year ago, according to NAR Chief Economist Lawrence Yun.
Some economists largely blame low housing supplies, not rates. There was a four-month inventory of existing homes on the market in April – the time it would take to exhaust the supply at the current sales pace -- compared with a balanced six-month stockpile. When units go up for sale, buyers are snapping them up. Homes typically stayed on the market 26 days in April, the shortest time frame since NAR began tracking the data in 2011.
“I think the reason home sales are not rising is just that there’s no inventory,” says Freddie Mac Chief Economist Sam Khater.
Also, the skimpy supplies are pushing up prices, another factor that could be discouraging some buyers. The median price of an existing house was $257,900 last month, up 5.3% the past year.
But amid solid job and income growth and a stronger economy, higher rates and prices won’t stop the vast majority of Millennials from buying their first homes, Khater says. Most will simply buy smaller units, he says. Alternatively, they’ll buy homes further from the urban areas where they work, says Zilllow Senior Economist Aaron Terrazas.
Yet both economists say higher rates are likely discouraging some existing homeowners who might otherwise sell their houses and buy larger ones. They may balk at forgoing their current low rates for a bigger monthly payment.
“If they don’t really need the extra space, they’re not going to move, Terrazas says. He believes home sales have been tempered by a combination of the low supplies, higher prices and mortgage rates, and wages that have risen only modestly.
But Ian Shepherdson, chief economist of Pantheon Macroeconomics, mostly attributes the tepid sales to higher mortgage rates. An index of mortgage applications for home purchases is up 3.5% from a year ago. But it’s down 6% on a seasonally adjusted basis since it peaked in December, Shepherdson says. Mortgage applications reflect home buyer demand and current rates, he says, rather than obstacles that may ultimately prevent shoppers from buying a house, such as low supplies and competition from other buyers.
“It’s wishful thinking to argue that this isn’t about rates,” he says. In recent years, he says, every half percentage point increase in rates has cut mortgage applications by about 8%.
Applications to refinance mortgages are more sensitive to rates and fell last week to the lowest level since December 2000, according to the Mortgage Bankers Association.
The effects of higher rates are likely to intensify, economists say. Khater predicts the average 30-year fixed rate will climb to about 5% by the end of the year.
Source: USA Today
Monday, April 16, 2018
It’s the Best Time to Sell in a Decade
Prices are rising and homeowners are staying put longer, and that means more homeowners can cash in when they go to sell. Home seller profits surged to a 10-year high in the fourth quarter of 2017. Sellers saw an average home price gain since purchase of $54,000, up from $47,133 a year ago.
That $54,000 average seller profit represents an average 29.7 percent return on investment compared to the original purchase price. That is the highest average home seller return on investment since the third quarter of 2007, according to ATTOM Data Solutions’ Q4 2017 Home Sales Report, released this week.
“It’s the most profitable time to sell a home in more than 10 years, yet homeowners are staying put longer than we’ve ever seen,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well.”
Among the 155 metro areas that ATTOM Data Solutions’ tracked, the locales with the highest average home seller ROI were: San Jose, Calif. (90.9%); San Francisco (73.3%); Merced, Calif. (64.6%); Seattle (64.4%); and Santa Cruz, Calif. (59.8%).
Meanwhile, homeownership tenure set a new record high in the fourth quarter of 2017. Homeowners who sold in the quarter had owned their homes on average 8.18 years, up from 7.78 years in the fourth quarter of 2016. It is the longest average home seller tenure since ATTOM Data Solutions has tracked it starting in the first quarter of 2000.
National Association of Realtors
That $54,000 average seller profit represents an average 29.7 percent return on investment compared to the original purchase price. That is the highest average home seller return on investment since the third quarter of 2007, according to ATTOM Data Solutions’ Q4 2017 Home Sales Report, released this week.
“It’s the most profitable time to sell a home in more than 10 years, yet homeowners are staying put longer than we’ve ever seen,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well.”
Among the 155 metro areas that ATTOM Data Solutions’ tracked, the locales with the highest average home seller ROI were: San Jose, Calif. (90.9%); San Francisco (73.3%); Merced, Calif. (64.6%); Seattle (64.4%); and Santa Cruz, Calif. (59.8%).
Meanwhile, homeownership tenure set a new record high in the fourth quarter of 2017. Homeowners who sold in the quarter had owned their homes on average 8.18 years, up from 7.78 years in the fourth quarter of 2016. It is the longest average home seller tenure since ATTOM Data Solutions has tracked it starting in the first quarter of 2000.
Tuesday, February 20, 2018
2018's Housing Market Looks Good Unless You're A First-Time Buyer
The nation’s housing market for 2018 continues to look good, according to two recently released reports. But first-time millennial buyers will continue to struggle with affordability, especially in high-priced areas like Los Angeles, San Francisco, Boston, New York and Washington DC.
Listen to Ralph G. DeFranco, Ph.D, global chief economist, Mortgage Services, Arch Capital Services Inc.: “With interest rates and home prices both on the rise, first-time homebuyers – largely millennials – may want to consider making the jump from renting to owning sooner rather than late.”
Median price for homes currently listed in Boston is $735,000, according to Zillow.com.
DeFranco further said: “Our research shows few signs of a housing bubble because the typical warning signs aren’t present. Overall, the shortage of housing paired with a robust job market should keep the housing market strong and growing, short of an unexpected event and despite the contrary pressures that may be created by the tax bill.”
Arch Mortgage Insurance Co. (Arch MI) recently released its winter 2018 edition of The Housing and Mortgage Market Review® (HaMMRSM), authored by DeFranco. [The data shows] a 6.2% increase in home prices in 2017 compared with the year before.
The HaMMRSM also makes market predictions to 2020. Among them: Home prices will continue to increase around the country in most markets. Look to annual increases of 2-6%, with most housing markets currently at low risk for a downturn.
Mortgage rates will rise, causing people to move less often. According to the report, “rising rates give existing borrowers with fixed-rate mortgages a financial incentive to stay put.” In addition, “homeowners will have more incentive to seek second liens or home improvement loans rather than move to a new home or refinance.” Makes sense since a new mortgage would likely be a higher rate cutting into the key affordability factor.
Realtor.com also released its “State of the Housing Union," "which shows the strong U.S. economy and unprecedented housing shortage pressuring potential home buyers striving to attain the American Dream.” Realtor.com’s analysis pointed to the fundamentals. “Strong buyer demand, constrained inventory, and ready-to-buy first timers are the key underlying dynamics driving today’s housing market. The macro-factors that have defined real estate in recent years – strong demand and weak supply – continue to set the tone for the industry,” said Joe Kirchner, senior economist for realtor.com.
Boston, a city millennials love continues to have inventory and affordability issues. According to Zillow, the median price for homes currently listed in Boston is $735,000.
“I pay attention to numbers and we don’t have enough good property on the market. There is big demand in Boston with companies moving to here either from outside of the city or from other states,” observes David Bates, broker associate at William Ravis Real Estate.
“I would be surprised to see a slowdown. I see increasing demand and very good appreciation,” adds Bates who is also known for writing about the Greater Boston real estate market for Banker and Tradesman, Boston Magazine, The Boston Globe, Boston Herald and Boston.Curbed.com.
Clearly, getting your foot in the proverbial front door of your first house remains the key to achieving the American dream.
Ellen Paris - Contributor, Forbes
Listen to Ralph G. DeFranco, Ph.D, global chief economist, Mortgage Services, Arch Capital Services Inc.: “With interest rates and home prices both on the rise, first-time homebuyers – largely millennials – may want to consider making the jump from renting to owning sooner rather than late.”
Median price for homes currently listed in Boston is $735,000, according to Zillow.com.
DeFranco further said: “Our research shows few signs of a housing bubble because the typical warning signs aren’t present. Overall, the shortage of housing paired with a robust job market should keep the housing market strong and growing, short of an unexpected event and despite the contrary pressures that may be created by the tax bill.”
Arch Mortgage Insurance Co. (Arch MI) recently released its winter 2018 edition of The Housing and Mortgage Market Review® (HaMMRSM), authored by DeFranco. [The data shows] a 6.2% increase in home prices in 2017 compared with the year before.
The HaMMRSM also makes market predictions to 2020. Among them: Home prices will continue to increase around the country in most markets. Look to annual increases of 2-6%, with most housing markets currently at low risk for a downturn.
Mortgage rates will rise, causing people to move less often. According to the report, “rising rates give existing borrowers with fixed-rate mortgages a financial incentive to stay put.” In addition, “homeowners will have more incentive to seek second liens or home improvement loans rather than move to a new home or refinance.” Makes sense since a new mortgage would likely be a higher rate cutting into the key affordability factor.
Realtor.com also released its “State of the Housing Union," "which shows the strong U.S. economy and unprecedented housing shortage pressuring potential home buyers striving to attain the American Dream.” Realtor.com’s analysis pointed to the fundamentals. “Strong buyer demand, constrained inventory, and ready-to-buy first timers are the key underlying dynamics driving today’s housing market. The macro-factors that have defined real estate in recent years – strong demand and weak supply – continue to set the tone for the industry,” said Joe Kirchner, senior economist for realtor.com.
Boston, a city millennials love continues to have inventory and affordability issues. According to Zillow, the median price for homes currently listed in Boston is $735,000.
“I pay attention to numbers and we don’t have enough good property on the market. There is big demand in Boston with companies moving to here either from outside of the city or from other states,” observes David Bates, broker associate at William Ravis Real Estate.
“I would be surprised to see a slowdown. I see increasing demand and very good appreciation,” adds Bates who is also known for writing about the Greater Boston real estate market for Banker and Tradesman, Boston Magazine, The Boston Globe, Boston Herald and Boston.Curbed.com.
Clearly, getting your foot in the proverbial front door of your first house remains the key to achieving the American dream.
Ellen Paris - Contributor, Forbes
Tuesday, January 23, 2018
Loan-To-Value (LTV) Ratio: What it means for you!
Many terms and acronyms may be thrown around during the loan approval process, especially when refinancing. Unless you’re well-versed in personal finance and banking, you may not fully understand the information you receive. In order to be a more informed and conscious consumer, it’s important to know what some of those terms mean. One of the most commonly question acronyms is “LTV”, or loan-to-value ratio.
LTV is a number that compares the value of the asset to the loan that it secures. Put another way, when you purchase a car, your lender issues a loan plus interest to help you make the deal. Technically, because your lender issued the funds to purchase the car, that car is collateral in the event that you default on your payments. So, LTV is the ratio that determines the level to which the asset will pay off the loan.
A more common phrase associated with LTV is being “upside down.” When a borrower is “upside down,” it means that they owe more than what the car is worth. People who are “upside down” have a high LTV.
So, why is LTV important?
LTV is an assessment of risk. Lenders are notorious for favoring less “risky” applicants for loans. They assess a number of criteria (credit score, LTV, DTI, and others) to determine the likelihood that each person will make their payments, on time, for the duration of the loan. After all, lenders want to get not just their money back, but also the interest rate on top of that.
LTV determines risk because in the event that the borrower defaults, it determines the return on the loan that the collateral’s value would provide. A higher LTV means that the asset is less likely to pay off the loan, and that’s why higher LTVs are less likely to be approved for refinancing.
I might have a high LTV. Am I doomed?
You’re not doomed. A high LTV will make your loan application less appealing for lenders, but isn’t guaranteed that you’ll be denied. Instead, your lender may give you a higher interest rate or add certain stipulations onto your loan in order to mitigate risk.
There’s more to the story...
Though LTV ratios are an important component in lender decisioning, it’s not the only piece to the puzzle. Offers are typically based on the combination of several factors, so even if you have a high LTV you could still be eligible for refinancing.
We always advise customers that the earlier you refinance your current loan, the better. Because cars lose value relatively quickly, the sooner you refinance, the less likely you are to have a higher LTV ratio.
By Julia Guardione @ RateGenius.com
LTV is a number that compares the value of the asset to the loan that it secures. Put another way, when you purchase a car, your lender issues a loan plus interest to help you make the deal. Technically, because your lender issued the funds to purchase the car, that car is collateral in the event that you default on your payments. So, LTV is the ratio that determines the level to which the asset will pay off the loan.
A more common phrase associated with LTV is being “upside down.” When a borrower is “upside down,” it means that they owe more than what the car is worth. People who are “upside down” have a high LTV.
So, why is LTV important?
LTV is an assessment of risk. Lenders are notorious for favoring less “risky” applicants for loans. They assess a number of criteria (credit score, LTV, DTI, and others) to determine the likelihood that each person will make their payments, on time, for the duration of the loan. After all, lenders want to get not just their money back, but also the interest rate on top of that.
LTV determines risk because in the event that the borrower defaults, it determines the return on the loan that the collateral’s value would provide. A higher LTV means that the asset is less likely to pay off the loan, and that’s why higher LTVs are less likely to be approved for refinancing.
I might have a high LTV. Am I doomed?
You’re not doomed. A high LTV will make your loan application less appealing for lenders, but isn’t guaranteed that you’ll be denied. Instead, your lender may give you a higher interest rate or add certain stipulations onto your loan in order to mitigate risk.
There’s more to the story...
Though LTV ratios are an important component in lender decisioning, it’s not the only piece to the puzzle. Offers are typically based on the combination of several factors, so even if you have a high LTV you could still be eligible for refinancing.
We always advise customers that the earlier you refinance your current loan, the better. Because cars lose value relatively quickly, the sooner you refinance, the less likely you are to have a higher LTV ratio.
By Julia Guardione @ RateGenius.com
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