Real Estate

Report: Sellers are Getting $61K at Resale

NAR Daily News Magazine - November 1, 2018 - 12:00am

See where homeowners saw the highest percentage earnings after selling their home.

Categories: Real Estate

Getting a Mortgage Is Now Easier, but It Could Backfire

RisMedia Consumer News - October 31, 2018 - 3:25pm

(TNS)—Clearing the hurdles to qualify for a mortgage used to be much harder. House hunters with too much debt had their home-buying hopes dashed after being denied a mortgage.

That’s changing as mortgage lenders ease lending guidelines to expand mortgage credit to more people.

Borrowers with a high debt-to-income ratio now have more leeway than since the subprime mortgage meltdown of a decade ago. Your debt-to-income ratio, or DTI, is the percentage of monthly income you pay toward your monthly debts, including a new mortgage payment. It’s a key factor—along with your credit—that lenders use to determine whether you can repay a loan. The more debt you have, the higher your DTI ratio—and that’s a red flag for lenders evaluating your potential for risk.

Some consumer advocates worry that borrowers who are already struggling to stay afloat might get in over their heads with today’s laxer lending requirements. On the flip side, expanding access to mortgage credit could help creditworthy borrowers in higher-priced housing markets join the homeownership ranks they’ve increasingly been shut out from.

How Getting a Mortgage Has Gotten Easier
Fannie Mae and Freddie Mac, the two government-sponsored enterprises that back most U.S. mortgages, have eased their lending rules in recent years. Fannie Mae increased its maximum DTI ratio to 50 percent, up from 45 percent, in July 2017. Both agencies allow borrowers to finance up to 97 percent of a home’s purchase price, which is considered a high loan-to-value ratio.

Conventional lenders charge higher interest rates on high DTI loans to mitigate their risk. They also require a higher FICO score and more cash reserves.

Raising DTI limits is just one way lenders have made it easier to get a mortgage. LTV ratio increases help borrowers who don’t have a large down payment; however, you’ll pay private mortgage insurance when you put less than 20 percent down—and you might not be able to borrow as much as you need to buy a home.

Some conventional lenders have rolled out their own low down payment programs without private mortgage insurance in exchange for a higher interest rate. Government-insured loans require little to no down payment, and generally have more relaxed credit score requirements than conventional loans.

Mortgage Credit Standards Still Tighter Than Boom Times
Borrowers who don’t fit into a pristine credit box now have more options, says Joel Kan, associate vice president of Industry Surveys and Forecasting with the Mortgage Bankers Association. There’s more balance to the lending equation nowadays after the regulatory pendulum swung too far in the opposite direction—a move that shut out otherwise capable borrowers, Kan says.

Although standards have loosened considerably in recent years, today’s lending practices are still more stringent than they were before the housing crisis. The days of doling out loans without verifying income or employment are long gone.

“We’re still about one-quarter of where we were compared to the pre-housing boom,” says Kan of mortgage credit accessibility. “Standards are looser now than they were from 2010 to 2012 when credit access was the tightest, but it’s not subprime.”

The share of new, conventional conforming home loans with a DTI ratio above 45 percent spiked after Fannie Mae raised its DTI limit, according to research from CoreLogic. From early 2012 up until last summer, the share of these high DTI loans held steady between 5 percent to 7 percent. In the first quarter of 2018, that share nearly tripled, jumping to 20 percent. The average DTI ratio for these home loans rose by two points to nearly 37 percent from Q1 2017 to Q1 2018.

Even as high DTI loans gain popularity, lenders haven’t budged on credit score standards. Borrowers’ average credit score for conventional, conforming purchase loans remained unchanged at 755 in the first quarter of 2018 compared to the same period a year ago, CoreLogic found. That’s significantly higher than homebuyers’ average credit score of 705 in 2001—before the downturn.

Expansion of Mortgage Credit Has Its Drawbacks
High DTI and LTV loans aren’t without risks. A high LTV ratio increases borrowing costs, and you’ll likely have to pay mortgage insurance to offset the lender’s risk.

For starters, lenders calculate your DTI ratio using your gross monthly income (before taxes and payroll deductions) and debts that appear on your credit report. They’re not including monthly expenses like groceries, gas, auto or health insurance, daycare/tuition, utility bills and other recurring bills that can eat up a good chunk of your monthly budget, says Rebecca Steele, CEO and president of the National Foundation for Credit Counseling.

“It puts some borrowers in a more precarious position,” Steele says of high DTI loans. “Today, people have significantly less savings in reserve. To have that you need a stable income, and some consumers struggle with that. Most people have little disposable income, especially because rents are going up.”

A job loss or other major financial hardship could land you in a tighter spot than if you had paid down your debt and shored up your emergency savings fund before buying a home. You’ll also pay more interest with a high DTI loan, Steele says.

Another key issue that some first-time buyers overlook are the hidden costs of homeownership, says Jeff Levine, a certified financial planner with BluePrint Wealth Alliance in Garden City, N.Y. When you’re stretching your income to cover monthly debt payments, you won’t have as much cash on hand for maintenance expenses, homeowners association dues and major repairs that inevitably pop up. Borrowers should factor those expenses into the mix and avoid overextending themselves, Levine says.

“Just because you can get approved for a mortgage doesn’t mean you should get one,” Levine says. “People got into trouble (in the downturn) because they borrowed up to the hilt and didn’t have the capacity to repay.”

©2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

For the latest real estate news and trends, bookmark RISMedia.com.

The post Getting a Mortgage Is Now Easier, but It Could Backfire appeared first on RISMedia.

Categories: Real Estate

A Home Where Someone Died: Does That Need to Be Disclosed?

NAR Daily News Magazine - October 31, 2018 - 12:00am

You’re trying to sell a home that the former owner passed away in. Do you have to reveal that to home buyers, and will it give some buyers the creeps?

Categories: Real Estate

How to Sell a Spooky House Without Scaring Off Buyers

NAR Daily News Magazine - October 31, 2018 - 12:00am

Homeowners want you to sell their house. There's one problem: The house carries a reputation of being haunted. Is this sale doomed?

Categories: Real Estate

Haunted House For Sale? Sure, I’ll Buy It, But …

NAR Daily News Magazine - October 31, 2018 - 12:00am

Home buyers may be so anxious to find a home that they aren’t even spooked if it’s rumored to be haunted.

Categories: Real Estate

REALTORS® in Costume: What Would You Dress Up As for a Listing?

NAR Daily News Magazine - October 31, 2018 - 12:00am

Unicorns, T. rexes, the Incredible Hulk, and more—real estate professionals across the country are donning costumes for some unique photo shoots of homes they're trying to sell.

Categories: Real Estate

5 Spooky Things Clients Do to Real Estate Agents

RisMedia Buying 101 - October 30, 2018 - 2:54pm

It’s the season of scary and as a real estate agent, the spookiness often lasts all year long. Since it’s Halloween, we thought we’d get in the menacing mood. That’s right—we’re going to list five really spooky things clients (or people in general) do that surely give agents goosebumps. 

  1. The open house sign-in shut down
    A simple task, and, yet, many can’t take 10 seconds to do it: writing down an email when you arrive at the open house. Tip for agents: Put a freshly baked plate of cookies out with a little sign saying “one per email.” They won’t be able to resist.
  1. Refusing to sign electronically
    Your real estate agent—who works seven days a week, around the clock to find you your perfect home or get you more than the listing price—asks you to sign electronically. There’s a reason why they do this, and it’s not because it makes them feel warm and fuzzy inside. It’s fast and efficient, and as a plus, it’s eco-friendly. In the name of everything that’s good in this world, why would you demand to sign on paper? WHY?
  1. Buy a giant boat in the middle of escrow
    As a buyer, you have one job, and that job is to sit tight and let your agent find you the perfect home. When you find that home and you’re in escrow, it most certainly is not time to celebrate by buying a car, yacht, helicopter, or, even worse yet, another house. That would be what’s known as a fail—do not pass Go, do not collect $200 dollars.
  1. Request to look at homes outside their price point
    There’s a fine line between asking your agent to go above and beyond and downright taking advantage of them. If someone has been approved for $500,000-dollar homes, then that is the realm of homes they’ll be showing you. So, the answer is no, Barbara, you can’t look at the $10 million-dollar home.
  1. Work with multiple agents at once
    This one almost hurts to write. If you’re at the beginning of the process and just trying to figure out which agent you’d like to work with most, then this is totally acceptable. Shop around. If you’re anywhere further down the home-buying or -selling path, please refrain. It’s not fair to either party. Remember: Agents don’t get paid unless they transact.

Bonus spookiness: When clients insist on sticking around during the open house. Eek!

The good news, we have a way to really knock your client’s socks off, and it’s called MoxiPresent: interactive, stunning presentations for open houses, buyers, sellers, you name it. Find out more here.

For the latest real estate news and trends, bookmark RISMedia.com.

The post 5 Spooky Things Clients Do to Real Estate Agents appeared first on RISMedia.

Categories: Real Estate

REALTORS® to Make Waves in Midterm Election

NAR Daily News Magazine - October 30, 2018 - 12:00am

With strong voter registration numbers and turnout for early voting so far, the nation’s 1.3 million REALTORS® are poised to have a significant impact.

Categories: Real Estate

The Top 8 Mortgage Lenders from 2017

NAR Daily News Magazine - October 30, 2018 - 12:00am

Find out which lenders are dominating in loan originations. 

Categories: Real Estate

Cat-astrophe? Feisty Feline Traps Agent at Showing

NAR Daily News Magazine - October 30, 2018 - 12:00am

A REALTOR® in Wisconsin had heard the phrase “guard dog,” but she had never come across a “guard cat.”

Categories: Real Estate

Gearing Up for Boston

NAR Daily News Magazine - October 30, 2018 - 12:00am

Whether you’re traveling to Boston for the industry’s premier annual event or you’re following along at home, REALTOR® Magazine is here to help you make the most of the 2018 REALTORS® Conference & Expo.

Categories: Real Estate

Where Home Prices Are Falling the Most

NAR Daily News Magazine - October 30, 2018 - 12:00am

Housing affordability is worsening due to higher mortgage rates, which is prompting a slowdown for what home sellers are getting for their home.

Categories: Real Estate

Homes With Patios Gaining More Popularity

NAR Daily News Magazine - October 30, 2018 - 12:00am

Homeowners are craving more outdoor space in newly built houses.

Categories: Real Estate

Inside Good Neighbor’s Heart-Wrenching Enterprise

NAR Daily News Magazine - October 29, 2018 - 12:00am

Necia Freeman, a 2018 Good Neighbor honorable mention, opens up to realtor.com® about helping hungry children and drug-addicted women.

Categories: Real Estate

Single Women Prop Up First-Time Buyer Segment

NAR Daily News Magazine - October 29, 2018 - 12:00am

While the pool of first-time buyers is shrinking, single female buyers continue to claim a big presence in the housing market, NAR reports.

Categories: Real Estate

Owner vs. AVM: Who’s Better at Figuring Home Value?

NAR Daily News Magazine - October 29, 2018 - 12:00am

Both have their strengths and weaknesses, according to a Federal Reserve study. Does one have the edge over the other?

Categories: Real Estate

3 Reasons HOAs Are Getting Sued

NAR Daily News Magazine - October 29, 2018 - 12:00am

These liability issues are putting homeowner associations at increased risk of litigation.

Categories: Real Estate

Study: Rookie Pros Double Their Income After First Year

NAR Daily News Magazine - October 29, 2018 - 12:00am

New agents who have been in the business for less than a year earn an average annual income of $19,375. But there’s a good reason not to quit.

Categories: Real Estate

How to Apply Tax Changes to Your 2018 Returns

NAR Daily News Magazine - October 29, 2018 - 12:00am

Watch this NAR video series to learn what deductions you can and can’t take as a real estate professional, homeowner or renter, and individual or joint tax filer.

Categories: Real Estate

Fall Yard Care Checklist: What to Do When

NAR Daily News Magazine - October 26, 2018 - 12:00am

As temperatures cool, here’s what homeowners should do to keep their lawns in tip-top shape. Share this infographic that breaks it down.

Categories: Real Estate

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