I’ve never pulled someone’s credit for a mortgage application and heard them say the credit scores I got were higher than what they got online at one of those consumer credit sites like FreeCreditReport or Credit Karma. This is even true for those people who access their scores directly through the credit bureaus Equifax, Experian, and TransUnion. The mortgage credit scoring model yields scores on average 40 points lower than online consumer sites. Other loan and finance applications like car loans and credit cards are also typically lower. This means the scores on the consumer sites are basically worthless and all they do is inspire false confidence. You may ask how does this benefits anyone? It doesn’t but the consumer credit sites don’t claim they are giving out FICO scores which is what financial institutions use. What they give you are scores based upon their calculations. Even on the rare occasion they are using a FICO based scoring model there are over fifty FICO based scoring algorithms so it’s unlikely to be the one you’ll need in the future when applying for a loan. In my opinion the consumer or free credit report sites are the Zillow of the credit world. It’s fun to see what the numbers look like but it’s not to be taken too seriously. What is one to do? The obvious answer is for anyone looking
With as little as 5% down their net mortgage payment would be $183/mo less than what they pay now in rent!
Almost one year ago one headline read “Home Sales Tumble As Mortgage Rates March Upward”. The main culprit last February was affordability which was based on rising interest rates. To begin 2018 30-year fixed mortgage rates climbed to 4.4% and continued to rise throughout the year, even breaking the 5% barrier for the first time since the previous decade. You may have noticed that rates unexpectedly softened a bit to end 2018 and according to Bankrate.com the 30-year fixed mortgage was down to 4.59% by the middle of January 2019. Now in to the fourth week of this new year we see them pretty much holding steady. Could we see rates continue to fall? Anything is possible but it’s unlikely. Tax reform kicks in this year and we’ve seen the stock market stabilize recently. Most economists I’m reading are saying long term rates will rise in 2019 and some even saying we’re due for an economic downturn. If you are on the fence about buying a home here in early 2019 keep this number in mind. If rates increase just half a point your purchase power drops by $40,000. I see three things converging at the moment. First, home prices have leveled off and even dropped in some markets, rates are down, and the buying season hasn’t started yet. Those factors compounded by a motivated seller could mean right now
Are you stashing money under the mattress, in a home safe, or even in a security deposit box? And are you a person who customarily uses cash for expenses? If so, there is great news for you when it comes to buying a home. Through the Fannie Mae HomeReady program cash-on-hand is an acceptable source of funds for a borrower’s down payment, funds for closing costs, and prepaid items like insurance and property taxes. This means you can use that rainy day fund to buy a home without the illuminati knocking on your door. Of course, you won’t have any money left over for the apocalypse but if that happens we’ll be back to trading furs and bullets anyway. This could especially be good for those first-time home buyers with minimal funds available for down payment. Some other great features of this loan program include: Up to 95% financing with non-occupant co-borrower Up to 105% financing w/o non-occupant co-borrower Not required to be a first-time home buyer Gift funds, grants, and down payment assistance programs are all eligible sources of funds. There are even more enhancements to this program that could benefit you so to find out more click here to contact me and reference “Cash-on-hand” in the subject line. By David Hughson Mortgage Planner david@greenmeansgrow.com 858-863-
If a monthly student loan payment ( >$0) is provided on the credit report, you may use that amount for qualifying purposes. If the credit report does not provide a monthly payment for the student loan, or if the credit report shows $0 as the monthly payment, the lender must determine the qualifying monthly payment using one of the options below. If the borrower is on an income-driven payment plan, the lender may obtain student loan documentation to verify the actual monthly payment is $0. The lender may then qualify the borrower with a $0 payment. File must contain documentation that the payment is an Income driven payment plan (also known as IBR or Income Based Repayment) For deferred loans or loans in forbearance, the lender may calculate (a) a payment equal to 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment), or (b) fully amortizing payment using the documented loan repayment terms. This applies to both purchase and refinance loans so call me to discuss more options on qualifying for a home loan when you have student loans! For more great content on how your purchase power is affected by student loans click here. By David Hughson Broker | Mortgage Planner 858-863-
Article originally posted on www.mpamag.com Fannie Mae has recently announced the changes related to Mortgages Paid by Others. When a person is obligated on a mortgage debt – but is not the party who is actually repaying the debt – the full monthly housing expense may be excluded from that person’s recurring monthly obligations when they go to buy their next home if: The party making the payments is obligated on the mortgage debt, There are no delinquencies in the most recent 12 months, and The borrower is not using rental income from the applicable property to qualify. In order to exclude the mortgage debt from the borrower’s debt-to-income ratio, the most recent 12 months’ cancelled checks (or bank statements) from the other party making the payments that document a 12 month payment history with no delinquent payments must be obtained. David Hughson Mortgage Broker 858-863-
Worried that housing prices are too high? Worried that if the market drops you’ll lose any $ you put into your down payment? You may want to take a look at Down Payment Protection. Down Payment Protection: When speaking with new buyers I often hear that they are concerned that they might be buying in a high priced market. What if the prices fall like they did before? Well, there is a new product that protects buyers from this. It’s called Down Payment Protection. We have a few lenders that are offering this now. At least one of them offers it for free on certain loan products. Here’s and example of how it works. You buy a home and put 60k down down, 5 years later the market is down and you need to sell for less than you bought it for. What would have been a loss of some of your down payment is now potentially covered and reimbursed to you! It’s important to note that a there are many different types of this insurance and the details of how they work and how much it costs you can vary quite a bit. So it’s best to discuss your particular scenario to determine what’s right for you. If you’d like to learn more about these options feel free to contact me for more info. You can email by clicking
Hey Tribe, [I haven’t been doing this long enough to do an entire expose on the industry of real estate, but I have been doing this long enough to see several iterations already arrive & come to pass. I believe this one is going to be different. I believe this one is going to leave its indelible mark, But, I also believe that when most people are thinking and talking and using this current iteration in its nascency, they’re getting it wrong, again. Here’s a quick note to make sure that my tribe, that’s you, is among the minority who gets it right.] It seems the older I get, the more I’m amused by the fact that: while very little ever seems to change on the marco-level, a ton of things are constantly changing on the micro. Add to that, we always seem to repeat these cycles of history and yet allow ourselves to be completely taken away by them, when they do. Its like watching the movie Momento from 2000, except then, Momento’ing ourselves to the storyline every morning when we wake up and feel compelled to go watch the movie, again ;). Here’s where history seems to be repeating itself in the current RE game, and why you need to recognize this pattern to protect your own booties .. But also why this one is going to be
Do you have a family member in need and want to help them buy a house? If you have a disabled adult child or an elderly parent who can’t qualify for a mortgage on their own you have options! With the Family Opportunity Mortgage, your can purchase another home without the conventional investment property requirements! Here are some program highlights: Purchase a home for your family member as if you were purchasing an owner occupied home. This allows you to take advantage of the much more lenient owner occupied guidelines and avoid the much more strict investment property guidelines. 620 minimum credit score Can be used for a purchase or refinance To find out if you qualify click here and type FOM in the subject line. By David Hughson Mortgage Broker 858-863-
David & Alexis “You Were Super Helpful & Taught Us A Lot!” | Testimonial of The GreenHouse Group The GreenHouse Group Celebration & Testimonial Of Buying Their First San Diego Home with The GreenHouse Group. And THATS what we love to do: meet great people, and help co-create great things, and leave them better than how we found them. If you are wondering whether now is the right time to own a home of your own, and want to make sure that you get the right team to help you get there, perhaps this sounds like something you might want to talk to us about. If so, feel comfortable contacting us at 858-863-0261. This was done with the help of Jesse Ibanez as REALTOR, Greg Kuchan as Partner Agent, both from The GreenHouse Group in San Diego,
