Among all the other things that Fannie Mae does, it also maintains a Home Purchase Sentiment Index. Here’s what their latest figures show: Since March, the number of people who think home prices are going to up over the next 12 months has increased. Additionally, more people also seem to think that mortgage rates will go up over the next year. 11% of people state that their household income is significantly higher than it was a year ago. 15% of people say that right now is a great time to seller a home. This is the highest ever. Interestingly, 30% of buyers say now is a good time to buy. While that seems high compared to the sellers in number 4 above, it’s actually the lowest it’s ever been. 74% of people state they are not concerned with losing their job.
Back when the real estate market was hot, in the mid-2000s, people were borrowing against the equity in their homes for pretty much anything and everything. In 2005, in fact, American homeowners borrowed more than $350 billion. After the economy crashed, whether out of fear or because their homes no longer had equity, people stopped borrowing against their homes. In 2011, home equity borrowing was down to about $73 billion, just about a fifth of what it was during the real estate hey-days. But since then, it’s been gradually increasing. In 2014, Americans borrowed about $121 billion against their homes. In 2015, that amount went up by 20%, to about $146 billion. As the values of their homes increase, borrowers are taking advantage of their newfound (or returned) equity to update their homes, among other things. Of course, it’s still not always easy to get a loan, what with tight… read more →
If you’re one-half of a married couple buying a house, chances are that you’re applying for your loan together. Stop. Think about it. Is that the right move? If it’s not necessary – that is, if you don’t need both of your incomes to qualify – should you do it? Maybe, maybe not. It depends on your situation, and a lot depends on something that most people don’t know – usually, lenders will price out your loan application based on the lower credit score in a couple, not the higher one. If your credit score is 750 and your spouse’s or partner’s is 670, your interest rate will probably be higher based on your spouse’s or partner’s lower credit score. On the other hand, if you both score around the same, it won’t make much of a difference. This interesting and fairly unknown rule is known as the Minimum FICO… read more →
What makes VA loans different? First of all, the VA does not actually lend money. Rather, it guarantees loans made by other banks. These types of loans are only available to veterans, currently active military, National Guard members, and the spouses of people in the military who died or were disabled on duty. If you qualify for a VA loan, you do not have to make any downpayment at all, so long as you are purchasing a primary residence. Moreover, you can use a VA loan not only as a first-time homebuyer, but for subsequent purchases as well. On the flip side, the VA charges an upfront fee of 1.25% – 3.3% of the loan amount. The upfront fee is usually included in the loan amount, although the seller may agree to pay it on behalf of the buyer as well. Also, the VA limits how much it will lend… read more →