Submitting your loan application does not mean the process is done. There is still a lot of reviewing that needs to happen to finally close the loan. If you are in this phase of the home buying process, there are steps you can take to ensure the loan will close and you will be funded for your purchase. Watch the video below for three easy steps you can take. Like always, I’m happy to help with any questions you may have.
Working with a mortgage broker has many benefits over acquiring a mortgage with a big bank. Not only can we find the better rates, but we can help make sure buyers have more purchasing power. This can be essential in the San Diego market because of the competition brought on by the low inventory of homes. Getting pre-approved is always a great first step in your home search.
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Unemployment is very low. This is great. But, low unemployment is a harbinger of recession as you can see in this chart. However, recessions are a time when interest rates also decline. What does this mean for housing prices? I do not perceive a lot of speculative value in the our current home prices. So, if the economy does slow, I believe pricing will remain stable and we can get into a buyers’ market. I do not expect home prices to be adversely impacted if the economy does slow in the next year or so. This will be supported by lower interest rates in a sluggish economy. Lower rates also help affordability.
April is almost over and this what has been going on recently in the real estate market.
- low inventory of homes
- interest rates have remained low
- listing times have been longer for homes
Make sure to watch the video above to know what this can mean for you and for other trends to keep an eye on. Le me know how I can help you!
I recently commented on the decline in home prices we have seen over the last months in San Diego. Many homes in the market have had price reductions, which can be common during winter months, but it’s something we haven’t seen in San Diego homes for some time. While this can be a positive change for buyers, I believe it is still a sellers’ market due to the low inventory. For the full article click here.
Buying a home represents an important milestone for most consumers. But for those who dive in to the deep end of real estate without a financial safety net, the decision could lead to buyer’s remorse in the long run. Mortgage rates are slowly climbing after reaching historic lows in 2013, but still are close to the lowest they’ve been in the past 3 decades. This makes 2018 a tempting time to buy a home. But some industry experts believe 2018 is friendlier toward sellers than buyers because there’s much more demand than supply.
As with any major financial decision, it’s wise to improve one’s credit score before applying for a mortgage in order to qualify for the best possible rates. Using a Mortgage Calculator can also help to determine an affordable monthly payment and realistic payoff timeline, whether borrowing for the first time or refinancing an existing loan. Without a good grasp of how to pay off mortgage debt, consumers might find that debt unsustainable.
In this report, WalletHub determined which cities are home to the most overleveraged mortgage debtors by comparing the median mortgage balances against the median income and median home value in more than 2,500 cities. Read on for our findings, expert homebuying advice and a full description of our methodology.
Ask the Experts – Mark H. Goldman
As one of the biggest financial transactions of our lives, the purchase of a home requires careful assessment of our finances as well as the potential impact of a mortgage. For advice on both buying and owning a home, we asked a panel of experts to weigh in with their thoughts on the following key questions:
- Is now a good time to buy a home?
- What are the most common financial mistakes people make when buying a home, and which are most costly in the long-term?
- If someone is currently overleveraged and has trouble affording their mortgage payments, what steps should they take?
- Is there any way for an individual to tell if his or her local housing market is overpriced?
- Are there certain housing markets or circumstances in which it is acceptable to be overleveraged in mortgage debt? If so, how much is too much?
Is this a good time to buy a home?
It depends on how long someone plans to live in the home. As a rule of thumb, if someone plans to stay in their home more than five years and their anticipated income is stable, this is a good time to buy. Interest rates are heading up. In most markets, home prices are outpacing inflation. The longer people wait, the more expensive a home will likely become. In addition to the probable appreciation, homeowners enjoy a place to live with very predictable costs. Also, a landlord is no longer a major influence on housing decisions from rental increases or the term of occupancy.
I suggest planned ownership for a few years to recover the acquisition and disposition costs. Speak to people who have and have not owned their homes. I find many people get priced out of their neighborhoods over time as home prices increase beyond their means. Many people regret ever selling a property, since equity usually increases over time. Many people buy a home and live in it for a few years. They move out, rent it and buy another home. It can be a great way to accumulate wealth.
What are the most common financial mistakes people make when buying a home and which are most costly in the long term?
I find most people should use a competent real estate agent to get informed advice about the price to offer. The financing is a subtle issue. Buyers should evaluate the comparison of loan origination points to the interest rate. Over a long period, it may be beneficial to pay some points to buy down the rate. A competent loan officer can help advise on this issue.
Also, buyers might wish to consider adjustable rate loans if they are fairly sure the will be selling or refinancing in the next 5-10 years. If a buyer expects to refinance in 6 or 7 years, then perhaps a 7-year fixed rate loan would be appropriate. But, remember, we cannot forecast interest rates into the future. So, rates may be higher.
In addition to financing, family issues matter. Young couples should consider space needs if they are starting a family. Of course, schools and proximity to employment, amenities, transportation and shopping are also important. Lifestyle is another important consideration. Do people want an urban or rural environment? “Walk Scores” are increasingly more important to younger and older households.
If someone is currently overleveraged and has trouble affording their mortgage payments, what steps should they take?
Financial difficulty may be temporary or long-term. It is imperative to make an objective assessment of the root cause of the difficulty. Act quickly before the financial burden is compounded. If a sale of the home is indicated, do it before credit is impaired with additional late payments or even foreclosure. In my experience, people who are confronted with financial peril become paralyzed to act. The longer people wait, the fewer options they will have.
I have also seen distressed homeowners use loans from family or friends to fend off immediate financial distress. It may be better to get out from under a home someone cannot afford and use those resources for a new housing solution. For example, borrowing from family for a temporary solution that will not solve the problem may only postpone the inevitable loss of the home. In that case, the family resources may be exhausted and/or unavailable to help with a move. So, make a very realistic evaluation of the financial difficulty and try to form a prudent long-term solution.
Basically, if a home is too expensive to keep, you may need to get a less expensive place to live.
Is there any way for an individual to know if their local housing market is overpriced?
Some indicators of overpriced homes are if marketing times for listings are getting longer. Also, are homes selling above or below list prices? Use several samples to avoid list prices that may have been unrealistic to start with for a particular property. “The signs are everywhere.” If a neighborhood has a lot of “For Sale” signs in the lawns, the market may be slowing down or the market may be losing jobs. It is a healthy indicator if properties are listed and sold in a fairly short time.
Are there certain housing markets or circumstances where it is understandable to be overleveraged in mortgage debt? If so, how much is too much?
If “overleveraged” means someone borrowed more than they can afford to repay, they will likely get into trouble. Time heals many wounds in real estate. If you can hold on long enough, it is probable values will eventually be restored (depending on the reasons for the market decline). If a family purchased a home with a big loan and small down payment without the capacity to support the home, they will likely experience difficulty. This often occurs in markets where there is over optimism for price appreciation. Even though a lender may be willing to make a big loan for the purchase of a home, the most important issue is how much can the buyer afford for their home payment. The month to month value of a home is less important for a family that can afford to live in their home and does not need to sell.
Many homebuyers only consider the home as an investment. I suggest to consider the cost of shelter as a component of their price decision. Shelter costs money whether we rent or own. Consider the utility of the shelter component of owning a home as part of the evaluation of what price and financing to select. It may sound trite, but it is good to live within ones means.
CHULA VISTA, Calif. (KGTV) — Hundreds of thousands of veterans and active duty military call San Diego County home, but a group says they are facing big disadvantages when trying to buy a house here.
The San Diego Veterans Association of Real Estate Professionals says more than 60 percent of listings in the county won’t accept offers with V.A. loans.
The federally backed loans don’t require a down payment or mortgage insurance. Those eligible in San Diego County can borrow up to about $650,000 without any cash down.
“We have served, and the V.A. loan is a guaranteed loan,” said Andre Hobbs, a San Diego realtor and veteran who heads the association.
Hobbs says the benefit is backfiring for some home seekers in San Diego’s ultra-competitive housing market. It’s because he says sellers are opting for offers instead that include cash down payment because of a misperception about V.A. applicants.
“They assume that this buyer is ready to walk,” Hobbs said. “He’s not motivated.”
Mark Goldman, a real-estate lecturer at San Diego State University, said there are some misconceptions about V.A. loans, such as that they are more complex. He added there are a few extra disclosures, but they aren’t cumbersome.
But V.A. buyers can also have an advantage if the current owner also served in the military.
“Luckily we may meet another veteran seller that understands, ‘hey, I’m willing to do that,'” Hobbs said.
The San Diego County median home price was $529,000 in January, down by $11,000 since December, said real estate tracker CoreLogic on Tuesday.
The big picture: In a year, the median price increased 6.9 percent. San Diego County’s median home price hit an all-time high in June of $545,000. While January’s median is not far from the record, it might take a while to return to that level.
How prices could change: Rising interest rates and other factors could slow the pace of home price increases in the coming year, some experts say.
“The price is already pretty high and now you put higher interests rates on top of that,” said Alan Gin, economist at University of San Diego. “That’s going put home purchases out of reach for some people.”
The rate for a 30-year fixed mortgage was 4.52 percent Tuesday, up from around 4 percent at the end of last year, said Mortgage News Daily.
Mark Goldman, a real estate lecturer at San Diego State University, said he expected median price increases to slow as the market comes down from last year’s highs.
“The market is slowing down, in general,” Goldman said. “Prices are topping out and I don’t see a reversal. (Prices last year) were increasing at a very aggressive rate.”
The housing market reached new price peaks in 2017, shattering records left over from the 2005 housing boom.
Home prices rose as the number of homes for sale continued to drop — even more so than previous years. Meanwhile, the number sales stayed about the same.
Strong job growth, low unemployment and historically low-interest rates all contributed to rising prices, said Mark Goldman, finance and real estate lecturer at San Diego State University.
“If you look back at 2017, it was a robust year,” Goldman said. “Interest rates were quite good, the economy was continuing to barrel ahead, wages were strong, employment was strong and millennials were aging into the homebuying market.”
Balance transfer credit cards have a lot of moving parts, including a balance transfer APR, balance transfer fee, annual fee and, potentially, introductory rates and fees. Plus, offers change regularly. And choosing the best balance transfer credit card for your needs is only half the battle. You also need to get approved for a high enough credit limit and pay off your balance before high-interest rates start costing, rather than saving, your money.
To help you navigate the process successfully, we posed the following questions to a panel of experts on paying down debt.
What’s the best way to find the best balance transfer credit card?
People with good credit often get invitations and offers from their own bank, credit union or credit cards, inviting them to transfer balances. It is always good to check offers on the Internet. Although, be very careful about entering private information (Social Security number, etc.) into forms from advertisements that have been received in your email. If an ad looks good, do not follow a link in the ad. Find the bank’s website to ensure private information goes to a reputable vendor.
Why do you need good or excellent credit to get the best balance transfer credit cards?
High credit scores translate to lower interest rates. Do not take high-interest loans to restore credit scores. That can bring your score down. Credit management will impact scores. If you have limited credit (perhaps only one credit card), consider opening another account and try to pay balances in full each month to establish a good payment history.
What’s the biggest mistake people make with balance transfers?
A major pitfall is to reduce monthly minimum payments on transferred balances and getting stuck at the end of the introductory period with a balance, plus the accrued interest from the beginning of the transfer. Many credit cards allow 0% interest for an introductory period. However, if the balance is not paid in full during that period, they assess interest back to the beginning of the introductory period. The purpose of transferring a balance is to reduce the interest cost to help repay the debt. Avoid using transfers to get additional debt. Take advantage of the low interest to get debt paid off.
Why aren’t there more 0% balance transfer credit cards with $0 transfer fees?
Banks offer transfers to make money. They offer good deals to attract good, creditworthy customers.