Need-To-Qualify-KCM

What Do You Actually Need to Get a Mortgage?

Fannie Mae recently released their “What do consumers know about the Mortgage Qualification Criteria?” Study. The study revealed that Americans are misinformed about what is required to qualify for a mortgage when purchasing a home. Here are three takeaways:

  • 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary
  • 86% of Americans either don’t know (59%) or are misinformed (25%) about what an appropriate Back End Debt-to-Income (DTI) ratios is
  • 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required

To help correct these misunderstandings, let’s take a look at the latest Ellie MaeOrigination Insight Report, which focuses on recently closed (approved) loans.

FICO SCORES

Average FICO Score | Keeping Current Matters

BACK END DTI

Average Back End DTI | Keeping Current Matters

DOWN PAYMENTS

Average Down Payments | Keeping Current Matters

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will definitely make the mortgage process easier. Your dream home may already be within your reach.

 

Article by Keeping Current Matters

 


 

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www.RedRockManagementLV.com
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The Most Appealing Aspects of Homeownership

 

The National Association of Realtors (NAR) just released their first issue of the Housing Opportunities & Market Experience Survey (HOME). In the report, NAR revealed what Americans believe to be the most appealing aspects of homeownership.

Here is a graph showing the results:

The Most Appealing Aspects of Homeownership | Keeping Current Matters

It is interesting to see that the two most appealing aspects had nothing to do with money, but instead, addressed the non-financial benefits of homeownership.

Article by KCM


 

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Red Rock Management & Real Estate Investment
www.RedRockManagementLV.com
Info@RedRockManagementLV.com
FREE Property Management Consultation– CALL 702-622-8668

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Lack of Listings Slowing Down the Housing Market

The housing crisis is finally in the rear view mirror as the real estate market moves down the road to a complete recovery. Home values are up. Home sales are up. Distressed sales (foreclosures and short sales) have fallen dramatically. It seems that 2016 will be the year that the housing market again races forward.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout this winter, supply is not keeping up.

Here are the thoughts of a few industry experts on the subject:

Calculated Risk:

“Low inventory is probably holding down sales in many areas.”

Capital Economics:

“A lack of housing inventory continues to drive developments in the market. As demand has slowly recovered, low inventory levels have weighed on home sales.”

Frank Nothaft, Chief Economist for CoreLogic:

“Many markets have experienced a low inventory of homes for sale along with strong buyer demand… These conditions are likely to persist as we enter 2016.”

Doug Duncan,Chief Economist at Fannie Mae:

“Several factors point to constrained housing affordability in 2016, particularly for first-time home buyers, including slow single-family supply response and limited inventory of starter homes on the market.”

Lawrence Yun, Chief Economist at NAR:

“Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales.”

Bottom Line

If you are thinking of selling, now may be the time. Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price.

 

Article by KCM


 

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www.RedRockManagementLV.com
Info@RedRockManagementLV.com
FREE Property Management Consultation– CALL 702-622-8668

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Real Estate Shines as an Investment in 2015

A survey by The Joint Center of Housing Studies at Harvard University reveals that when a family is buying a home they consider the financial benefits of homeownership along with the social benefits. The survey mentions things like:

  • Paying rent does not make sense
  • Homeownership provides a good financial opportunity
  • Owning a home helps you building family wealth
  • Buying a home is investing in your retirement
  • Home equity gives you something to borrow against

So how did homeownership match up against other investments in 2015? Here is a chart that compares its return on investment against precious metals and the stock market last year:

2015 Return on Investment | Keeping Current Matters

Bottom Line

Not only did homeownership offer all its social benefits. It also was a great investment financially.

Article by Keeping Current Matters

 


 

 

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Red Rock Management & Real Estate Investment
www.RedRockManagementLV.com
Info@RedRockManagementLV.com
FREE Property Management Consultation– CALL 702-622-8668

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Obstacles to Homeownership: Perceived or Real?

A recent study by Fannie Mae, What Do Consumers Know About The Mortgage Qualification Criteria?, revealed that many consumers are either unsure or misinformed regarding the minimum requirements necessary to obtain a mortgage. Let’s break down three such challenges.

Down Payment

Perceptions

Many renters have mentioned that the lack of an adequate down payment is preventing them from moving forward with the purchase of a home. According to the Fannie Maereport:

  • 40% of all renters don’t know what down payment is required
  • 15% think you need at least 20% down
  • An additional 4% think you need at least 10% down

The Reality

There are programs offered by Fannie Mae, Freddie Mac and FHA that require as little as 3-3.5% down. VA and USDA loans offer 0% down programs. According to theNational Association of Realtors, the typical down payment for a first time buyer is 6%.

Credit Score

Perceptions

Many renters have mentioned that the lack of an adequate credit score is preventing them from moving forward with the purchase of a home. According to the Fannie Maereport:

  • 54% of all renters don’t know what credit score is required
  • 5% think you need at least a 740 credit score

The Reality

Many mortgages are granted to purchasers with a credit score of less than 700. According to Ellie Mae, the average credit score on a closed FHA purchase is 687 and the average credit score on all loans is 722.

Back End Debt-to-Income Ratio (DTI)

Perceptions

Many renters have mentioned that they carry too much debt which is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

  • 59% of all renters don’t know what DTI is acceptable
  • 25% think you need at under 25%
  • 7% think you need under 39%

The Reality

Lenders like to see a back-end ratio that does not exceed 36%. Fannie Mae’s maximum total DTI ratio is 36% of the borrower’s stable monthly income. The maximum can be exceeded up to 45% based on credit score and other requirements.

Bottom Line

Don’t let a lack of knowledge or misinformation keep your family from buying a home this year. Meet with a local real estate professional who can evaluate your ability to buy now!

 

Article by Keeping Current Matters

 


 

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Red Rock Management & Real Estate Investment
www.RedRockManagementLV.com
Info@RedRockManagementLV.com
FREE Property Management Consultation– CALL 702-622-8668

American-Dream-Alive

American Dream of Homeownership Still Very Much Alive

In a recent post, Trulia examined whether homeownership was again being seen by adults in the US as a “part of their personal American Dream.” Over the last five years:

  • The percentage of U.S. adults who believe homeownership is part of their American Dream increased from 70% to 75%
  • The percentage of 18-34 Year-olds who believe homeownership is part of their American Dream increased from 65% to 80%

Here is a graph of the survey over the last five years:

American Dream of Homeownership | Keeping Current Matters

Bottom Line

As the housing industry recovers from the crisis of 2008-2010, Americans belief in homeownership as part of their own personal American Dream has also made a strong comeback.

 

 

Article by Keeping Current Matters

 


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Red Rock Management & Real Estate Investment
www.RedRockManagementLV.com
Info@RedRockManagementLV.com
FREE Property Management Consultation– CALL 702-622-8668

Negotiate

Thinking of Selling Your Home? Get Ready to Negotiate!

Now that the market has showed signs of recovery, some sellers may be tempted to try and sell their home on their own (FSBO) without using the services of a real estate professional.

Real estate agents are trained and experienced in negotiation. In most cases, the seller is not. The seller must realize their ability to negotiate will determine whether they can get the best deal for themselves and their family.

Here is a list of some of the people with whom the seller must be prepared to negotiate if they decide to FSBO:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house.
  • The termite company if there are challenges
  • The buyer’s lender if the structure of the mortgage requires the sellers’ participation
  • The appraiser if there is a question of value
  • The title company if there are challenges with certificates of occupancy (CO) or other permits
  • The town or municipality if you need to get the COs permits mentioned above
  • The buyer’s buyer in case there are challenges on the house your buyer is selling
  • Your bank in the case of a short sale

Bottom Line

The percentage of sellers who have hired a real estate agent to sell their home has increased steadily over the last 20 years. Meet with a professional in your local market to see the difference they can make in easing the process.

 

Article by Keeping Current Matters

 


 

 

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Red Rock Management & Real Estate Investment
www.RedRockManagementLV.com
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FREE Property Management Consultation– CALL 702-622-8668

Nov-Sales

Why Did Home Sales Drop So Dramatically Last Month?

Yesterday, the National Association of Realtors (NAR) released their latest Existing Home Sales Report which covered sales in November. The report revealed that sales:

“…fell 10.5 percent to a seasonally adjusted annual rate of 4.76 million in November (lowest since April 2014 at 4.75 million)…”

That revelation gave birth to a series of industry articles, some of which quoted pundits questioning whether the housing market was slowing. In actuality, there is one rather simple explanation to much of the falloff in sales last month. It is likely the implementation of the “Know Before You Owe” mortgage rule, commonly known as the TILA-RESPA Integrated Disclosure (TRID) rule, which went into effect on October 3. These regulations caused house closings to be delayed by an extra three days in November as shown in the graph below.

Average Days To Close | Keeping Current Matters

Three days might sound like a minimal difference. However, since there are only approximately 20 days in a month that a closing would normally take place (Mondays through Fridays), losing three days constitutes well over 10% of all closings. These sales are not lost. They are just moved into the next month’s numbers. In a DS Newsarticle on the subject yesterday, Auction.com EVP Rick Sharga explained:

“The most likely cause for the weak sales numbers is a delay in processing loans due to the new TRID mortgage requirements imposed by the CFPB. This is the biggest change in mortgage document processing in many years, and there have been numerous reports within the industry of problems implementing the process and the new documentation that comes with it.”

So how is the housing market actually doing?

A better way to look at how well the housing market is doing is to look at the Foot Traffic Report from NAR which quantifies the number of prospective buyers that are actively looking for a home at the current time:

Foot Traffic Growing | Keeping Current Matters

We can see immediately that demand to buy single family homes is increasing over the last few months – not decreasing.

Bottom Line

No matter what last month’s sales numbers show, the housing market is still doing well as demand remains strong.

 

Article by Keeping Current Matters

 

 


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How to Tackle To-Dos Like a President

How often do you find yourself failing to get through your to-do list?

And no, including “Write to-do list” just to give yourself something to cross off immediately doesn’t count as a win.

Of course, it’s not always your fault—every fire drill that pops up just keeps making your list longer and longer.

“We’re just too busy going through our lives, trying to keep the balls in the air and our heads above water, (so we don’t think)

Is there a better way to do this?” says Maura Thomas, founder of RegainYourTime.com and author of “Personal Productivity Secrets.”

Turns out, there is—if you take a tip from Dwight D. Eisenhower.

Popularized by Stephen Covey but based on the productivity principles of the former president, the Eisenhower Matrix helps you categorize your to-dos by their level of importance and urgency so you can decide where to focus your energy.

Why It’s Worthy of Being Called a Power Hack By sorting your tasks into one of four clearly defined categories, the Eisenhower Matrix forces you to evaluate what is really worthy of your time—and what can be delegated or even nixed altogether.

How to Get Hacking Below, we offer examples of the kinds of activities that fall into each category. See how you would divvy up your to-do list; then follow Thomas’ advice on how to tackle each type so you can accomplish more in less time.

Category #1: Important and Urgent

Your assistant gives her notice—and her last day is tomorrow. A rush client request throws a wrench in a project that was going smoothly. These tasks are considered a crisis or have critical deadlines that you have to meet.

How to Tackle Them Since you can’t predict when crises will pop up, assume they’ll happen and leave room for them in your schedule.

“Most people overschedule themselves, but if something goes wrong, all your plans fall like dominoes,” Thomas says. The solution? Don’t fill up more than 60% of your productive time.

For example, if you work from 8 a.m. to 6 p.m., leave about four hours on your calendar blank to allow for emergencies. If there are no emergencies that day, you’re in luck and can get ahead on the next day’s tasks.

Category #2: Important but Not Urgent

Scheduling a networking lunch with a hiring manager. Getting a leg up on planning your family vacation. Brainstorming long-term objectives for your team. These tasks influence your big-picture goals, but don’t necessarily have a burning deadline.

How to Tackle Them: Most of these items will be large projects rather than daily to-dos, so break down each into bite-size deadlines to help you get started, says Thomas.

For any items you can’t break down, determine a set amount of time you can work on them that feels short to you, so the task itself feels less overwhelming.

Thomas also suggests including only three important-but-not-urgent tasks on your daily to-do list so you leave time for e-mails, meetings and crises—and whenever possible, work on them during the times of the day you feel most energized.

Category #3: Not Important but Urgent

Emails, phone calls, questions from coworkers—these are the things you have to address immediately, even if they don’t help you with your larger goals.

How to Tackle Them “The easiest way to control your distractions is to control your technology,” Thomas says.

First, check your e-mail in batches only a few times a day—say, every three hours, or after you complete a more important task. To ensure you stick with it, quit out of your e-mail completely so you’re not tempted to check alerts.

The same goes for your phone: Silence it completely—then put it away in a drawer or face down on your desk so you don’t see the alerts.

And if you’re receiving too many calls or queries from coworkers outside of the period of time you’ve set aside for them, simply close your office door, put on headphones, or place a “do not disturb” sign on your chair or cubicle wall.

Category #4: Not Important and Not Urgent

Whether it’s logging expense reports, creating contracts or filing papers, ”these are the tasks that won’t have a big impact on our work once we do them, yet they don’t go away,” Thomas says.

How to Tackle Them Outsource as many of these tasks as possible by delegating them to a junior employee or, for personal chores, a virtual assistant, Thomas suggests.

Even if you have to pay for outside help, the hours you gain back to accomplish a more important goal—like finally making headway on that next big career move—could help you come out ahead financially in the long run.

Author Bio: Jane Bianchi, contributing writer at LearnVest


 

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House-Trap

Don’t Let Rising Rents Trap You!

There are many benefits to homeownership. One of the top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

Don’t Become Trapped

Jonathan Smoke, Chief Economist at realtor.com recently reported on what he calls a “Rental Affordability Crisis”. He warns that,

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

The Joint Center for Housing Studies at Harvard University recently released their 2015 Report on Rental Housing, in which they reported that 49% of rental households are cost-burdened, meaning they spend more than 30% of their income on housing. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

It’s Cheaper to Buy Than Rent

In Smoke’s article, he went on to say,

“Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”

 “While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

Know Your Options

Perhaps, you have already saved enough to buy your first home. HousingWire reportedthat analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream home. As we reported last week, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

 

Article by Keeping Current Matters

 

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