29 Jan 2020
By Kevin Gahagan

Case-Shiller Reports Growth In Home Prices In November

Market Outlook

Case-Shiller Reports Growth In Home Prices In NovemberCase-Shiller Home Price Indices reported that national growth of home prices rose by 0.30 percent in November. Analysts said that slim inventories of available homes boosted home prices. Whether or not home price growth continues gaining speed depends on variables including supplies of homes for sale, affordability and home-buyer confidence in the economy.

Mr. Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices said, “It is, of course, too soon to say whether this marks an end to the deceleration [of home price growth] or is merely a pause in the longer-term trend.”

Phoenix Holds First Place In Home-Price Growth For 6 Consecutive Months

Case-Shiller’s 20-City Home Price Index showed that all cities tracked reported year-over-year growth in home prices after seasonal adjustments. Phoenix, Arizona held the top position with home price growth of 5.90 percent; Charlotte, North Carolina held second place in the 20-City Index with 5.20 percent growth in home prices and Tampa, Florida held third place with year-over-year home price growth of 5.00 percent.

The Case-Shiller 20-City Home Price Index posted a year-over-year gain of 2.60 percent in November and home prices rose by 0.10 percent in November as compared to October. Case-Shiller reported that home price growth increased by 3.50 percent nationally on a seasonally adjusted annual basis.

Buyers Seeking Affordable Homes Inland

Home-buyers sought less expensive homes in inland states as high-priced homes in coastal regions continued to be unaffordable for many. Slim supplies of homes contributed to bidding wars that drove home prices higher. Analysts said that home prices are set to drop in high-cost markets as the home-buyers move to more affordable markets.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, reported a 4.90 percent gain in November home prices for properties associated with mortgages owned by Fannie Mae and Freddie Mac; this reading was compiled on a seasonally-adjusted annual basis.

FHFA data noted that the Mountain Region reported slower month-to-month growth in home prices in November, but all geographic regions reported positive growth in home prices year-over-year. The Mountain region includes the states of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming; these states typically offer a lower cost of living and affordable home prices as compared to high priced coastal areas.

10 Jan 2020
By Kevin Gahagan

10 US Cities With Highest Mortgage Denial Rates

Mortgage

10 US Cities With Highest Mortgage Denial RatesFor many, owning property is seen as a rite of passage. At the same time, for most people, accomplishing this dream is largely dependent on the approval of a mortgage. For this reason, it is important for people to think carefully when deciding who to ask for a mortgage. Some cities have a higher mortgage approval rate than others.

Identifying Problems With A Mortgage Application

Before applying for a mortgage, it is important to think about the most common reasons why someone might be rejected. First, if someone has a debt to income ratio that is too high, they are more likely to be turned down for a mortgage.

It is understandable that if someone already has too much debt, they are unlikely to be able to handle the added burden of a mortgage. Another possible reason for being turned down might be out of someone’s control entirely. This has more to do with geography.

Application Problems In The Sunshine State

For those who might not know, the sunshine state is Florida. Many of the cities with the highest rejection rates are right here. For example, Miami, Jacksonville, Tampa Bay, and Orlando are all among the cities with the highest rejection rates on mortgage applications.

Some of the other cities on the list include New York, San Antonio, San Jose, Detroit, Birmingham, and Houston. Those who live in these cities need to make sure that their mortgage applications are in excellent shape. Otherwise, it could end up in disappointment.

Take, for example, Miami, Florida. More than one in nine mortgage applications are rejected. The most common reason why someone might be denied a mortgage in this major city is debt to income ratio.

Another common reason why those applying for a mortgage in this city might be denied is a lack of collateral. Florida has a reputation for attracting retirees; however, most of the jobs in this state have to do with hospitality. This is an industry that is largely seasonal and has low wages, contributing to a high rejection rate on mortgage applications.

Preparing For The Application Process

Anyone looking to buy property, particularly in these cities, must make sure their application is in order. Getting approved for a mortgage is a critical part of buying a home. For this reason, try to maximize credit scores while minimizing outstanding debt. This can go a long way toward getting approved.

And as always, talk with your trusted mortgage professional for personal guidance through the application process. They are experienced and have the best vantage point to make sure your application is set up for success.

27 Dec 2019
By Kevin Gahagan

The Advantages Of A Dual-Location Lifestyle

Real Estate

The Advantages Of A Dual-Location LifestyleCommuting for hours in traffic on a daily basis is a waste of resources, time, and money. It is stressful and bad for the environment. The infrastructure in many parts of the United States is falling apart. The roads and highways do not have sufficient capacity to handle the demands of the traffic load that continues to increase each year. Many busy professionals and families are turning to a solution of owning two homes for the convenience of enjoying dual-location living.

What Is Dual-Location Living?

The most common form of dual-location living is having a home and also owning a vacation home. Many like this lifestyle of having a vacation home to enjoy, to get away from it all. Retirees may use this strategy to have their residence for spring and summer in the cooler areas and then have another place to spend the time during the bad weather months of fall and winter. 

The trend of dual-location living, which is increasing now, is when the two homes are closer to each other. Professionals and families who want to spend the weekdays in the downtown areas or an area near the best schools may have a downtown residence and also a weekend residence in the suburbs. 

The Best Of City And Suburban Living

During the working week, the time spent downtown can be to enjoy going out to eat and partaking of the various amenities that come along with the big-city life. Then, by waiting until after the commute time, it is easier to go to the home in the suburbs. This allows for a couple of relaxing days before heading back late Sunday night to downtown, once again with less traffic. Waking up on Monday just a few minutes from work is pleasant.

Reducing Expenses

For those who need to manage their budget carefully, maintaining two places can be quite expensive. It may be better to share expenses with others by renting out a portion of each home. The proportional sharing does not have to be equally-divided in both homes.

Instead, the city-based home may have a private room and bath with the rest of the house rented out and the reverse in the suburbs, where only a guest room rents out. Doing this well means the rental income will offset significant portions of the expenses.

Another possibility that comes from dual-location living is using the time saved, which comes from less time wasted on commuting, to generate additional income.

Summary

The trend of owning two homes, near each other, yet on the other side of a long commute, makes sense. Besides all the conveniences of dual-location living, it is the start of building up a real estate investment portfolio by buying a second home and generating some rental income to help pay for it.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted mortgage professional to assess financing options.

24 Dec 2019
By Kevin Gahagan

Tips On How To Get The Home You Want In A ‘Seller’s Market’

Real Estate

Tips On How To Get The Home You Want In A 'Seller's Market'A “seller’s market” happens when there are more potential buyers than homes for sale. In a seller’s market, people looking for a home may feel frustration and not easily find the home that they want. When they find a home for sale that they like, the seller of the home may receive multiple competitive offers at the same moment.

The seller is in an excellent position when this happens. Sellers can pick from the purchase offers to choose the one they like the most. Even if an offer is the same as another one, sometimes it is not the offer chosen by a seller.

Causes Of A Seller’s Market

Seller’s markets arise because a particular area is very desirable. There can also be limitations that do not allow any further development of residential properties in an area. Well-established neighborhoods in up-scale market areas are typically likely candidates for becoming a seller’s market. Easy credit financing is another contributing factor.

Check the median sales price as a percentage of the listing price for an area. If it is greater than 100%, this is a seller’s market.

Buying A Home In A Seller’s Market

If you must live in a certain area, and there are extremely compelling reasons for buying a home in a seller’s market, then expect to pay more and work harder to get the type of home that you want. Here are some tips about how to buy a home in a seller’s market:

1. Work With A Top Real Estate Professional: You want to go into this challenge along with the best professional help that you can find. You want to choose a top real estate agent that specializes in the market area that you desire. They should know the neighborhood intimately and represented both buyers and sellers in that market.

2. Pre-Approved Credit Commitment: Apply for mortgage approval before looking for a home to buy. Request more than the amounted needed and pay for a written loan commitment that guarantees the financing is both approved and legally-committed for the time, plus a little more, that you need to find a home to buy.

3. Move Fast: Make a purchase offer as quickly as possible when a new home listing comes up that meets your criteria.

4. Cash Earn Money Deposit: Offer the seller earnest money in cash that is a significant amount to accept the purchase price you offer. By cash, we mean physical dollar bills of around $5,000 or more. Cash makes people sign a deal.

5. Offer More Money: If you want a specific home, make your purchase offer 1% or more than the asking price. Also, offer in writing to match any other competing offers plus a bit more. You may get into a bidding war and have to pay much more to get the home.

6. Off-Market Properties: Seek to buy a property that is not yet for sale. Ask your agent to call people who they sold a home to before. Ask everyone in the local area if they know of one that is like the one you want. Knock on doors of homes that are one you might like to buy and ask the owner if they will sell the home.

Summary

To get the home you want, try to be flexible with the basic criteria of what type of home it is. Work with a great real estate agent. Move fast and use our tips to be competitive with other potential homebuyers.

If you are interested in purchasing a new home or in refinancing your current property, be sure to consult with your trusted home mortgage professional.

03 Dec 2019
By Kevin Gahagan

How Are Mortgage Rates Determined?

Mortgage

How Are Mortgage Rates DeterminedWhen someone is interested in buying a home, there are a number of factors that people need to consider. Some of these include the budget, the size of the home, and the mortgage interest rates. 

The mortgage rate is going to play a tremendous role in whether or not someone is going to be able to afford their dream home. For this reason, it is critical for everyone to know how a mortgage rate is determined. There are a number of factors in someone’s financial history that are going to impact the mortgage rate the lender offers.

The Credit Score

One of the most important factors that a lender is going to consider is someone’s credit score. A credit score is a reflection of someone’s risk to the lender. The higher the credit score, the more likely the loan is going to be repaid, in the eyes of the lender.

If someone’s credit score is too low, the lender might not make an offer at all. In order to reduce the interest on someone’s mortgage, it is important to correct any inaccuracies on the credit report ahead of time. This will make someone more competitive when applying for a mortgage.

The Employment History

The lender’s biggest concern is making sure their loan is repaid. In order to make mortgage payments on time, the borrower needs to have a steady stream of money coming in. This means maintaining a steady job.

In order to predict this, the lender is going to look at someone’s employment history. The longer someone has been employed, and the fewer gaps someone has in their employment history, the lower the interest rate on the mortgage is going to be. 

The Current Financial Market

Some of the factors involved in a mortgage rate are outside of the borrower’s control. Mortgage rates are also impacted by the current financial market. Like the stock market itself, the mortgage rates are going to rise and fall with the real estate market. It is important for everyone to think about the current financial market when applying for a mortgage.

Thinking About Mortgage Rates

These factors will play a role in the mortgage rate someone is going to be offered. Everyone should think about the interest rate on a mortgage when looking for a home. 

Talk about your personal financial situation with your trusted home finance professional. They are a valuable and experienced resource that can answer all of your questions regarding the best fit for your mortgage.