07 May 2019
By Kevin Gahagan

Can I Qualify For A Mortgage Without W-2 Income?

Mortgage

Can I Qualify For A Mortgage Without W-2 IncomeIt’s more common these days to have non-traditional income that doesn’t fall into the W-2 category. Many people work in what is referred to as the “gig economy,” where income might come from a variety of freelance sources.

Other times, people don’t have W-2 income because they are retired or have an independent source of wealth that generates interest income. Still other times, an individual may own their own business and take draws instead of a paycheck. In all these cases, it might seem impossible to qualify for a mortgage, since there’s no W-2 income. 

Lenders Are Understanding

Thankfully, many lenders understand when a prospective lender doesn’t have W-2 income. Since it’s becoming more common, lenders have come up with alternative ways to qualify borrowers who want to buy a home. While more paperwork is usually involved, it is still possible to get a mortgage, assuming you work with certain lenders. Your real estate agent can help you in this regard; sourcing lenders that work with non-traditional borrowers.

Rely On Your Tax Returns

Even without W-2 income, you can prove income by relying on your tax returns. If you can show at least two years of qualifying income levels on your tax returns, your lender will have an easier time of finding underwriters for your loan. 

Maintain Your Bank Deposits

Some states offer a Bank Statement Loan Program that looks – not at your W-2s – but at your bank deposits for the last 12 to 24 months. These programs are ideal for people who own their own business and take draws rather than paychecks. 

Try For An Assumable Mortgage

Sometimes you may be able to find a property that has an assumable loan. In these instances, all you need to do to qualify for the mortgage is to have sufficient money for a down payment, have a decent credit history and be able to prove your income one way or another. Assumable loans can be harder to find, but your real estate agent can help you with that part of your home buying process.

Bear in mind that each of these options require a strong credit history in order to qualify. Credit scores and histories are always the cornerstones of acquiring a mortgage, whatever your income source may be.

Be sure to contact your trusted mortgage professional for answers to all of your home financing questions.

06 May 2019
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – May 6th, 2019

Financial Reports

What’s Ahead For Mortgage Rates This Week – May 6th, 2019Last week’s economic news brought good news to U.S. consumers on several fronts. Mortgage rates fell and national unemployment fell to its lowest rate in 50 years. Inflation slowed and the Federal Reserve held its target federal funds rate steady.

Freddie Mac analysts credited strong labor markets, high consumer confidence and falling mortgage rates as factors setting the stage for more home sales.

Pending Home Sales Rise as Construction Spending Falls

The National Association of Realtors® reported higher pending home sales in March; home sales under contract but not completed rose 3.89 percent in March as compared to February’s negative reading of -1.00 percent growth. Pending home sales provide a gauge for completed sales and mortgage loan volume.

Increasing home sales will help balance a lop-sided housing market fueled by an acute shortage of homes for sale and rapidly rising home prices that provided prospective home buyers with few options. High demand for homes drove prices up as buyers competed for available homes in popular metro areas.

Real estate pros repeatedly say building more homes is necessary for bringing housing markets back into balance, but construction spending was -0.90 percent lower in March. Analysts expected spending to dip -0.40 percent; February’s reading showed an increase of 0.70 percent in construction spending; Builders face ongoing headwinds including shortages of buildable lots and higher materials prices.

Mortgage Rates Fall as Fed Holds Key Rate Steady

The Federal Reserve did not raise its current federal funds rate range of 2.25 to 2.50 percent and inflation is growing slower than expected. These factors and low unemployment boosted consumer confidence in April; more home buyers were expected to enter the housing market as mortgage rates fell last week.

Freddie Mac reported that the average rate for 30-year fixed rate mortgages fell six basis points to 4.14 percent; the average rate for 15-year fixed rate mortgage was four basis points lower at 3.60 percent. Rates for 5/1 adjustable rate mortgages averaged nine basis points lower at 3.68 percent.

Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Labor Sector: Lowest Unemployment Rate in 50 Years

National Unemployment fell to 3.60 percent for the first time since 1969; this reading was lower than the expected reading of 3,70 percent the March reading of 3.80 percent. Public and private sector payrolls grew in April.

ADP reported 275,000 new private sector jobs in April; the Bureau of Labor Statistics reported 263,000 more public and private-sector jobs; this exceeded expectations of 213,000 jobs added and the reading of 189,000 public and private sector jobs added in March. First-time jobless claims were unchanged from the prior week’s reading of 230,000 first-time claims filed.

Consumer confidence rose to an index reading of 129.20 in April; analysts expected a reading of 126.90 percent based on the March index reading of 124.20.

What‘s Ahead

This week’s scheduled economic news includes readings on inflation, job openings and weekly readings on first-time jobless claims and mortgage rates.

Last week’s economic news brought good news to U.S. consumers on several fronts. Mortgage rates fell and national unemployment fell to its lowest rate in 50 years. Inflation slowed and the Federal Reserve held its target federal funds rate steady. Freddie Mac analysts credited strong labor markets, high consumer confidence and falling mortgage rates as factors setting the stage for more home sales.

 

Pending Home Sales Rise as Construction Spending Falls

The National Association of Realtors® reported higher pending home sales in March; home sales under contract but not completed rose 3.89 percent in March as compared to February’s negative reading of -1.00 percent growth. Pending home sales provide a gauge for completed sales and mortgage loan volume.

 

Increasing home sales will help balance a lop-sided housing market fueled by an acute shortage of homes for sale and rapidly rising home prices that provided prospective home buyers with few options. High demand for homes drove prices up as buyers competed for available homes in popular metro areas.

 

Real estate pros repeatedly say building more homes is necessary for bringing housing markets back into balance, but construction spending was -0.90 percent lower in March. Analysts expected spending to dip -0.40 percent; February’s reading showed an increase of 0.70 percent in construction spending; Builders face ongoing headwinds including shortages of buildable lots and higher materials prices.

 

Mortgage Rates Fall as Fed Holds Key Rate Steady

The Federal Reserve did not raise its current federal funds rate range of 2.25 to 2.50 percent and inflation is growing slower than expected. These factors and low unemployment boosted consumer confidence in April; more home buyers were expected to enter the housing market as mortgage rates fell last week.

 

Freddie Mac reported that the average rate for 30-year fixed rate mortgages fell six basis points to 4.14 percent; the average rate for 15-year fixed rate mortgage was four basis points lower at 3.60 percent. Rates for 5/1 adjustable rate mortgages averaged nine basis points lower at 3.68 percent. Discount points averaged 0.50 percent for 30-year fixed-rate mortgages and 0.40 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

 

Labor Sector: Lowest Unemployment Rate in 50 Years

National Unemployment fell to 3.60 percent for the first time since 1969; this reading was lower than the expected reading of 3,70 percent the March reading of 3.80 percent. Public and private sector payrolls grew in April. ADP reported 275,000 new private sector jobs in April; the Bureau of Labor Statistics reported 263,000 more public and private-sector jobs; this exceeded expectations of 213,000 jobs added and the reading of 189,000 public and private sector jobs added in March. First-time jobless claims were unchanged from the prior week’s reading of 230,000 first-time claims filed.

 

Consumer confidence rose to an index reading of 129.20 in April; analysts expected a reading of 126.90 percent based on the March index reading of 124.20.

 

 

 

 

 

 

 

 

 

 

What’s Ahead

This week’s scheduled economic news includes readings on inflation, job openings and weekly readings on first-time jobless claims and mortgage rates.

03 May 2019
By Kevin Gahagan

States With The Best Opportunities To Acquire Investment Property

Real Estate

States With The Best Opportunities To Acquire Investment PropertyReal estate investors sometimes get stuck in a rut. They repeat the same type of investment that they did before. This is not necessarily a bad thing because a successful experience is worth repeating. However, it is also a good idea to occasionally take a look at the big picture as well, to see what else is out there for investment consideration.

Real estate markets go up and down. This can be a regional phenomenon. In some states, there are lots of properties that are “underwater.” This means the owners borrowed more on their property than it is currently worth.

In other states, there are properties that generate positive cash flow, while increasing in value. This is very desirable. It means that after paying all the expenses of owning the property, there is cash left over for the owner to receive and profits when selling the home.

Invest In Value

The investment strategy of buying low and then selling high is sage advice. To that, we would add the fine-tuning of buying value. Buying value means making investments that produce the greatest positive cash flows, while the investments appreciate in value.

State-By-State Comparisons

GoBankingRates did an analysis of the United States to see what states currently offer the best real estate deals for investors. They took a look at the three top markets in each state. They calculated the average for the home values and noted the increase in property value from 2017 to 2018.

There are 15 states that offer opportunities worth considering, which are:

Utah 

The three largest markets are Salt Lake, Provo, and Ogden. The average home price is $350,000 with a 12.6% year-over-year increase in value.

Idaho

The largest markets are Boise, Idaho Falls, and Coeur d’Alene. The average home price is $304,000 with a 12.6% year-over-year increase in value.

Montana

The largest markets are Billings, Missoula, and Great Falls. The average home price is $343,000 with an 11.1% year-over-year increase in value.

Maine

The largest markets are Augusta, Bangor, and Portland. The average home price is $231,000 with a 10.7% year-over-year increase in value.

Indiana

The largest markets are Indianapolis, Fort Wayne, and Evansville. The average home price is $179,000 with a 9.3% year-over-year increase in value.

Tennessee

The largest markets are Nashville, Memphis, and Knoxville. The average home price is $251,000 with a 9.1% year-over-year increase in value.

Georgia

The largest markets are Atlanta, Augusta, and Columbus. The average home price is $250,000 with an 8.8% year-over-year increase in value.

Michigan

The largest markets are Detroit, Grand Rapids, and Warren. The average home price is $205,000 with an 8.5% year-over-year increase in value.

Missouri

The largest markets are St. Louis, Springfield, and Kansas City. The average home price is $203,000 with an 8.1% year-over-year increase in value.

Mississippi

The largest markets are Jackson, Hattiesburg, and Gulfport. The average home price is $191,000 with a 7.4% year-over-year increase in value.

Ohio

The largest markets are Cincinnati, Columbus, and Cleveland. The average home price is $207,000 with a 7.2% year-over-year increase in value.

Nebraska

The largest markets are Omaha, Lincoln, and Bellevue. The average home price is $221,000 with a 7.0% year-over-year increase in value.

Alabama

The largest markets are Birmingham, Montgomery, and Huntsville. The average home price is $210,000 with a 7.0% year-over-year increase in value.

Kentucky

The largest markets are Louisville, Lexington, and Bowling Green. The average home price is $226,000 with a 6.0% year-over-year increase in value.

Arkansas

The largest markets are Little Rock, Fort Smith, and Fayetteville. The average home price is $195,000 with a 5.7% year-over-year increase in value.

Summary

There are interesting opportunities uncovered by this analysis. Utah and Idaho are very attractive for investing right now. Real estate investors considering any of these states can also compare population growth rates, unemployment rates, cost-of-living, and other livability factors when making an investment decision.

If you’re interested in looking at properties in another state, be sure contact your trusted home mortgage professional to discuss investment financing options.

02 May 2019
By Kevin Gahagan

FOMC Statement: No Changes to Key Fed Rate

Market Outlook

FOMC Statement No Changes to Key Fed RateThe meeting of the Federal Reserve’s Federal Open Market Committee ended Wednesday with the Committee’s customary post-meeting statement recapping monetary policy matters considered by the Committee. Members voted not to change the current target rate range of the federal funds rate. The current rate range of 2.25 percent to 2.50 percent.

Federal Funds Target Rate Range: Monetary Policymakers Remain “Patient“

FOMC members cited low inflation pressures, global and domestic economic and financial developments as supporting the Committee’s decision to leave the Federal funds rate unchanged despite recent political pressures to lower the rate and increase the Fed’s accommodative stance toward boosting the economy.

FOMC members evaluated actual and expected economic conditions, labor markets and readings on global and domestic current events and economic news. Based on their assessments, FOMC members again asserted their willingness to be patient concerning Committee decisions to change the federal funds rate range.

The Fed’s dual mandate of supporting maximum employment and stable pricing as indicated by low national unemployment rates and the benchmark inflation rate of two percent are foundational influences on any decision about changing the Fed’s key interest rate range; the national unemployment rate has hovered near a historically low rate of 3.80 percent in recent months and inflation is also below the Fed’s benchmark of two percent.

Fed Chair: No Strong Case for Moving Federal Funds Rate in Either Direction

Federal Reserve chair Jerome Powell said during his post-meeting press conference that FOMC members did not see a strong case for moving the federal funds rate in either direction. Mr. Powell cited improvements in global economic conditions within Europe and China and said that trade negotiations with China and Japan were also improved.

When asked about lowering the Federal funds rate based on lower inflation rates, Chairman Powell said that maintaining inflation near two percent was important, but viewed lower inflation during the first quarter of 2019 as a result of transitory influences. He reassured his audience that short-term fluctuations in the inflation were not considered a problem.

Chairman Powell said that the Fed is not influenced by political pressure and that the Fed’s monetary policy is not based in any way on political commentary or pressures. Mr. Powell said the outlook for domestic economic growth was good based on consumer spending and business investments. He said that resolution of trade issues would likely improve consumer sentiment.

 

01 May 2019
By Kevin Gahagan

What To Look For In A Real Estate Agent

Real Estate

What To Look For In A Real Estate AgentYou have lots of choices when it comes to choosing a real estate agent. Aside from deciding if you’d prefer to work with a man or woman, and what age range you’d like them to be, here are some tips to help ensure that you pick one that is best suited for your needs.

Signs In Their Bio

The first thing to do is read the bios of any real estate agents you’re considering. Bios tell a lot about an agent, including what certifications they hold and how long they’ve been an agent. Some bios even have some personal information such as charitable interests or a little about their family life. Look for signs that the agent’s interests and certifications align with your needs.

Relevant Experience

A lot of real estate agents specialize in a certain area such as short sales or helping first-time homebuyers. If your situation falls into a particular category, you could look for a real estate agent who caters to your particular needs. This can simplify the experience, since the real estate agent will have some expertise in navigating the details of the transaction. Look for relevant experience in their bio, or ask them personally.

Good Rapport

You’ll likely be working with your real estate agent for a long time. The relationship between you and your agent should be pleasant. Not only should you have a good rapport with your agent, but you should be able to feel like they understand the human aspect of what you’re trying to achieve with your home buying or selling. You can gauge the rapport with a prospective agent with a simple phone call or brief in-person interview before you hire them.

Presentation

Make sure that your real estate agent makes a good personal presentation. They should comport themselves in a professional manner and dress accordingly. Remember that your agent will be representing your home and your interests to others. You’ll get the best results when your agent professionally reflects your goals in the transaction.

Your partnership with a trusted real estate agent is an important part of a successful real estate experience and transaction. A number of real estate agents will be vying for your business. Use these tips to make sure that you choose the one who best matches up with your needs, personality and style.

Remember, your trusted home mortgage professional will likely have excellent real estate referrals. Be sure to ask when you schedule your consultation to inquire about financing options and pre-approval.