What You Need to Know About the Mortgage Process

Whether you are purchasing your first home or are an experienced Buyer, it's vital to understand the Mortgage Process and to know what steps you need to take to start the process.  One important thing to remember throughout is not to sabotage your loan.  DO NOT make any large purchases (car, boat, furniture), apply for any other credit (new credit cards, car loan, home equity loan), or change your job status until after you have closed on your new home!  Know what you DO need to do and do it promptly, so you will be ready to move forward on the path toward home-ownership.

Infographic courtesy of Keeping Current Matters/The KCM Blog

House-Buying Power at Near-Historic Levels

Article Courtesy of Keeping Current Matters/The KCM Blog

We keep hearing that home affordability is approaching crisis levels. While this may be true in a few metros across the country, housing affordability is not a challenge in the clear majority of the country. In their most recent Real House Price Index, First American reported that consumer “house-buying power” is at “near-historic levels.”
Their index is based on three components:

1. Median Household Income
2. Mortgage Interest Rates
3. Home Prices

The report explains:

“Changing incomes and interest rates either increase or decrease consumer house-buying power or affordability. When incomes rise and/or mortgage rates fall, consumer house-buying power increases.”

Combining these three crucial pieces of the home purchasing process, First American created an index delineating the actual home-buying power that consumers have had dating back to 1991.
Here is a graph comparing First American’s consumer house-buying power (blue area) to the actual median home price that year from the National Association of Realtors (yellow line).

Consumer house-buyer power has been greater than the actual price of a home since 1991. And, the spread is larger over the last decade.

Bottom Line

Even though home prices are increasing rapidly and are now close to the values last seen a decade ago, the actual affordability of a home is much better now. As Chief Economist Mark Fleming explains in the report:

“Though unadjusted house prices have risen to record highs, consumer house-buying power stands at near-historic levels, as well, signaling that real house prices are not even close to their historical peak.”

Cost Across Time

Infographic courtesy of Keeping Current Matters/The KCM Blog

Looking back in time gives us the opportunity to really appreciate the value of today's interest rates.  While rates have started going up, today's rates remain significantly lower than in previous decades and buying power remains strong. 

 

Some Highlights:

• With interest rates still around 4.5%, now is a great time to look back at where rates have been over the last 40 years.
• Rates are projected to climb to 5.1% by this time next year according to Freddie Mac.
• The impact your interest rate makes on your monthly mortgage cost is significant!
• Lock in a low rate now while you can!

VA LOANS: MAKING A HOME FOR THE BRAVE POSSIBLE

VA Loans: Making a Home for the Brave Possible
Article Courtesy of Keeping Current Matters/The KCM Blog

Since the creation of the Veterans Affairs (VA) Home Loans Program, over 22 million veterans have achieved the American Dream of homeownership. Many veterans do not know the details of the program and therefore do not take advantage of the benefits available to them.
If you are a veteran or you know someone who is, here is a breakdown of the VA Home Loan benefits that can be used to achieve the American Dream!

Top 5 Benefits of a VA Home Loan

1. The greatest benefit of a VA Loan is that borrowers can buy a home with a 0% down payment. In 2016, 82% of all VA Loans put down 0%!
2. Primary Mortgage Insurance (PMI) is not required! (Most other loans with down payments under 20% require PMI, which adds additional costs to your monthly housing expense!)
3. Credit Score requirements are also lower for VA Home Loans. The average FICO^® score of a borrower for an approved VA Loan is 620, compared to 676 (FHA) or 753 (Conventional).
4. There is also a limitation on a veteran buyer’s closing costs. Sellers can pay all of a buyer’s loan-related closing costs and up to 4% in concessions in some cases.
5. Even with interest rates rising, VA Loans continue to have the lowest average interest rates of all loan types.

Who Qualifies for a VA Home Loan?

One of the most important first steps when applying for a VA Home Loan is obtaining your Certificate of Eligibility (COE). “The COE verifies to the lender that you are eligible for a VA-backed loan.”

You Can Apply for a VA Loan if You:

• Serve 90 consecutive days during wartime
• Serve 181 consecutive days during peacetime
• Have more than 6 years in the National Guard or Reserves
• Are the spouse of a service member who has died in the line of duty or as the result of a service-related disability

You Can Use a VA Loan To:

• Purchase a Home
• Purchase a Condo
• Build a Home
• Refinance an existing home loan
• Make improvements to a home by installing energy-related features or making energy-efficient improvements

Bottom Line

For more information or to find out if you or a loved one would qualify to use the VA Home Loan Benefit, contact a local real estate professional who can help! Thank you for your service!

SCCL CURRENTLY ACTIVE LISTINGS

THE CHARTS BELOW ARE NOT INTERACTIVE.

TO VIEW ACTUAL LISTINGS,  USE THE FOLLOWING LINKS.

Click HERE for current single family home listings in SCCL.

Click HERE for current condo/townhouse listings in SCCL.

DOM = Days on Market
HLA = Heated Living Area (Square Footage)
Price/SF = Price Per Square Foot

Properties listed and sold by various CMLS participants.

SCCL CURRENTLY UNDER CONTRACT

DOM = Days on Market
HLA = Heated Living Area (Square Footage)
Price/SF = Price Per Square Foot
UC Date = Under Contract Date

Properties listed and sold by various CMLS participants.  

SCCL 2018 CLOSED LISTINGS

JANUARY / FEBRUARY /MARCH

 

APRIL / MAY / JUNE 

DOM = Days on Market
HLA = Heated Living Area (Square Footage)
Price/SF = Price Per Square Foot
UC Date = Under Contract Date

Properties listed and sold by various CMLS participants.