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Dodd-Frank Reform Could Make It Easier to Get a Mortgage

RisMedia Consumer News - June 1, 2018 - 11:00pm

(TNS)—It should be easier for you to get a mortgage now that President Donald Trump has signed legislation that will lift lending restrictions on community banks.

Congress on Tuesday voted in favor of rolling back Dodd-Frank banking rules, and Trump signed it Thursday. The reforms will ease some of the mortgage laws from the Dodd-Frank Act of 2010, a massive financial law enacted in response to the financial crisis.

Thanks to the new law, more homebuyers are likely to get approval for a mortgage from their local community bank or credit union.

“Any changes to soften the lending aspects will make it easier for borrowers to get loans,” says Rick Sharga, executive vice president of Ten-X, an online real estate marketplace.

Here’s the Problem
Many lenders say the mortgage laws have become too restrictive for them to make mortgages outside of the so-called Qualified Mortgage rule. The rule is based on your ability to repay the mortgage by requiring that your debt does not exceed 43 percent of your income, but there are very specific requirements when proving your income. The task gets trickier if you’re a business owner, for example, and don’t have consistent income flows.

“Lenders, particularly retail banks, have just stopped taking on any risk at all,” Sharga says. “Getting those smaller lenders back into the game could have a material impact on the housing market.”

What the Bill Fixes
The new changes will allow community banks and credit unions to offer mortgages outside the typical Qualified Mortgage rule so long as they don’t sell that mortgage but keep it in-house. By holding that mortgage on the books, it would be deemed a Qualified Mortgage. The carve-out would apply to institutions with less than $10 billion in assets.

Many lenders think this change will allow more community lenders to offer mortgages. It will also be helpful for homebuyers, when mortgage rates are rising but still low.

It’s unclear how much of an impact the change to the mortgage laws will have on the housing market. A large portion of homebuyers already meet the requirements within the Qualified Mortgage rule. The Urban Institute says the Qualified Mortgage rule has had “little impact” on credit availability, though there are fewer mortgages being offered for under $100,000.

Congress’ move received praise from David Stevens, president and CEO of the Mortgage Bankers Association.

“I want to commend the House of Representatives for joining the Senate and passing this bill, which will protect consumers and provide greater access to mortgage credit,” Stevens said in a statement.

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

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The post Dodd-Frank Reform Could Make It Easier to Get a Mortgage appeared first on RISMedia.

Categories: Real Estate

Facebook Mulls Relocation Over Housing Costs

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

“If we’re going to remain a company in Silicon Valley for the long-term,” the high cost of living in California must be...

Categories: Real Estate

7M Homes at Risk as Hurricane Season Begins

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

About $1.6 trillion in property damage is likely this year, according to CoreLogic.

Categories: Real Estate

Mortgage Rates Retreat From 7-Year High

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

They declined for the first time in four weeks, giving buyers some relief.

Categories: Real Estate

Son Vacates Parents’ Home Under Court Order

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

A judge ordered the eviction of Michael Rotondo, 30, in May. Rotondo says the court battle with his parents was linked to his custody woes.

Categories: Real Estate

20 Markets That Were Hottest in May

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

It’s not all about California; some other cities are climbing up the ranks on realtor.com®’s top-performing list.

Categories: Real Estate

Report: Rents See Slowest Growth in Years

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

Rental prices nationally posted the weakest annual growth in May since 2010. But that doesn’t mean renters are finding relief yet.

Categories: Real Estate

Caution: Email Scam Claims to Be From NAR

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

A scam sender posing as NAR is emailing members with an attachment that asks for updates to a member directory.

Categories: Real Estate

Will Slip in Contract Signings Be Long-Term?

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

Pending home sales decreased in April to their third lowest level over the past year. Is it a temporary slip or a more permanent problem?

Categories: Real Estate

Hawaii Homes Were Built Despite Lava Risk

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

Developers of Lower Puna, one of the most affordable neighborhoods on Hawaii’s Big Island, constructed the properties years ago knowing that...

Categories: Real Estate

Pros Use Adult Coloring Books to Sell Homes

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

Brokerages are finding a way to use real estate- and cityscape-themed coloring books in their business.

Categories: Real Estate

Amazon HQ2 Finalists Ranked on Housing

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

The online retail giant plans to announce its second headquarters location later this summer, and a handful of finalist cities are eagerly...

Categories: Real Estate

May Prices Reached Record Highs

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

U.S. prices surged to an all-time high and homes sold faster than they ever have in May, according to the latest housing report from realtor.com...

Categories: Real Estate

The Top Landscaping Trends for 2018

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

Landscape architects reveal the hottest trends for sprucing up outdoor spaces.

Categories: Real Estate

Drop in Rates Still Doesn’t Budge Loan Demand

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

Mortgage rates eased last week following recent increases, but would-be home buyers or refinancers didn’t bite.

Categories: Real Estate

Single-Family Rental Giant Hit With Class-Action Suit

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

Invitation Homes is facing a class-action lawsuit from tenants who are accusing the company of stacking late fees against those who pay their rent...

Categories: Real Estate

How to Get More Shares of Your Real Estate Content

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

The more you can get of your content shared online, the more you get your name in front of potential prospects. But getting shares is harder to do...

Categories: Real Estate

Texas Weighs Stronger Building Codes Post-Harvey

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

Texas cities are weighing a program called “Fortified” to build sturdier homes and businesses to withstand powerful storms.

Categories: Real Estate

To Succeed, Set Rejection as a Goal

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

One writer shows how, by anticipating rejection in her sales, she set herself up for success.

Categories: Real Estate

$1 Million: What It Buys in the U.S. Housing Market

RisMedia Consumer News - May 29, 2018 - 3:17pm

One-million dollars is a lot of money to most of the world’s population, but it’s a drop in the bucket to a billionaire. The housing market in the U.S. seems to have a similar relationship with homes valued between $900,000 and $1.1 million: Some of them are sprawling estates, while others are considered middle-of-the-road homes.

HouseCanary examined homes valued around $1 million in different metropolitan statistical areas (MSAs) across the country to determine what an “average” million-dollar home looks like, from San Francisco to Tuscaloosa, Ala. We found that what a million dollars will buy can vary widely from place to place—so if you’ve got $1 million to spend on a home, here’s what you can expect to get in return.

Where $1 Million Is Big Money
In most markets, $1 million will get you a lot of house, but they might not be considered mansion material. We found that in the preponderance of markets (110 out of 375 metro areas), a million-dollar home is somewhere between 3,000 and 4,000 square feet. But there are also some markets where you can buy a true mansion or estate if you’re willing to spend between $900,000 and $1.1 million.

Those markets tend to be at least somewhat off the beaten path, so you may be sacrificing some shopping convenience, access to airports, or proximity to cultural, sports, or other local assets. And those markets may not also have relatively high household income, meaning you’ve got to save for a lot longer to make that million-dollar down payment. But the amount of room you’ll get to spread out and do your thing might make that kind of sacrifice well worth it!

Ohio is one state with several big cities, but it’s in unassuming Lima, about 90 minutes northwest of Columbus, where you’ll find the best deals for $1 million. The average million-dollar home in Lima, Ohio, is 9,435 square feet and sits on a four-acre lot. It has five-plus bedrooms, four bathrooms, and 4-5 parking spots. For that million-dollar home, buyers pay about $105.99 per square foot.

In Lima, most homes are very affordable. To pay a mortgage on a median-priced home in Lima, the median-income household would spend 17.30 percent of its income. The median household income in Lima is $45,575, and you can still buy a home there for much less than $100,000. So it’s not surprising that the two million-dollar homes in Lima are much larger than average!

You’ll find similar bang for your million-dollar buck in Anniston-Oxford-Jacksonville, Ala., about an hour and 20 minutes northeast of Birmingham, where the average million-dollar home is 8,354 square feet and sits on a five-acre lot. It has three bedrooms, 2.5 bathrooms, and 4-5 parking spaces. The price-per-square foot in this corner of Alabama for a million-dollar home is about $119.70.

Homes are also very affordable in Anniston-Oxford-Jacksonville, with the median household spending just shy of 17 percent of total household income ($41,954 annually) on a median-priced house.

Texas is another state with several big cities—Houston and Dallas are two of the biggest cities in the country. In Wichita Falls, Texas, about two hours and change northeast of Dallas, your average million-dollar home comes on a whopping 60-acre lot and is 7,852 square feet. The price-per-square foot is about $127.36—still very reasonable. It has five bedrooms, 4.5 bathrooms and four parking spots, and the median household in Wichita Falls spends just 13.94 percent of its annual $46,043 income on a median-priced home.

$1 Million in the Middle
Even though there are more homes between 3,000 and 4,000 square feet than between 4,000 and 5,000, the average square footage for a million-dollar home across all metros studied is 4,305 square feet—which is quite a bit of room to stretch out, but still only about half the size of the biggest million-dollar homes in the country.

In the Nashville MSA (which also includes Davidson, Murfreesboro and Franklin, all in Tennessee), an average million-dollar home is 4,302 square feet, with 3-4 bedrooms, four bathrooms, and three parking spots nestled on a 0.96-acre lot. The price-per-square foot is $232.45—more than double the price per square foot in Lima, Ohio.

Affordability in Nashville is also middle-of-the-road: Most economists suggest that households spend no more than 30 percent of their total income on housing, and in Nashville, a median-priced house costs 30.5 percent of the median household income, which is $56,152 annually.

Richmond, Va., and St. Louis (spanning both Missouri and Illinois) are also relatively average markets. In Richmond, an average million-dollar house is 4,312 square feet on an 0.85-acre lot, with four bedrooms, four bathrooms, and two parking spots. The price-per-square foot is $231.91, slightly lower than in Nashville. A median home for a median household in Richmond uses 29.17 percent of its $61,124 annual household income.

And in St. Louis, the average million-dollar home is 4,330 square feet on a 0.93-acre lot. It also has four bedrooms, four bathrooms, and two parking spots. The price-per-square foot is very close to both Richmond and Nashville at $230.95. In St. Louis, the median household (which makes $56,726 per year) spends 21.83 percent of its income on a median-priced home.

Million-Dollar Babies
It makes sense that in areas where housing is more affordable, million-dollar homes are larger. But what happens when affordability starts to creep up (and up…and up)?

As you might guess, when affording a home captures more and more of a median household’s income, the million-dollar homes get smaller. The smallest average million-dollar home in the country is in San Jose-Sunnyvale-Santa Clara, Calif., at 1,576 square feet, on a 0.13-acre lot. It has three bedrooms, two bathrooms, and two parking spots, and in this MSA, the median household spends 76.33 percent of its income ($100,469 annually) on a median-priced home. The price-per-square foot is an eye-popping $634.52, almost six times what you’d pay in Lima, Ohio, for a home.

In San Francisco-Oakland-Hayward, Calif., you’ll find a slightly bigger average million-dollar home at 1,600 square feet, on a 0.13-acre lot, with three bedrooms, two bathrooms, and two parking spots. The price-per-square foot is $625, just $9.52 lower than in San Jose-Sunnyvale-Santa Clara. A median household in the Bay Area makes $85,947 per year and typically spends 80.20 percent of its total income on a median-priced home.

Honolulu is another market with small average million-dollar properties. In Honolulu, the average million-dollar home is 1,846 square feet on a 0.15-acre lot, with four bedrooms, two bathrooms, and two parking spots. The price-per-square foot for a Honolulu million-dollar home is $541.71—definitely more reasonable than its San Francisco counterparts, but still almost double what you’d pay in Nashville, Richmond or St. Louis. The median household in Honolulu (which makes $77,161 per year) spends 61.62 percent of its income on a median home—still more than double the recommended amount, but much more reasonable than San Jose or San Francisco.

In Boulder, Colo., you can get slightly more square footage for a million dollars than in San Francisco. The average Boulder million-dollar home is 2,270 square feet on a 0.24-acre lot, costing $440.53 per square foot. It has four bedrooms and 2.5 bathrooms, with two parking spots, and the median household spends just over half (51.39 percent) of its $72,282 annual income on a median home.

If I Had a Million Dollars…
Would you rather have a vast estate in Lima, Ohio, or Wichita Falls, Texas, or a cozy family home in San Francisco or Honolulu? Maybe opting for something middle-of-the-road in St. Louis or Nashville makes more sense…and it’s less square footage to clean!

This was originally published on HouseCanary. For more information, please visit www.housecanary.com.

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

The post $1 Million: What It Buys in the U.S. Housing Market appeared first on RISMedia.

Categories: Real Estate