Dympna Fay-Hart
Serving Chicago Area Sellers & Buyers

(773) 230-3800

Send me a message

Feed aggregator

Amazon’s HQ2 Reportedly Being Divided Into Two Cities

NAR Daily News Magazine - November 6, 2018 - 12:00am

The hunt for Amazon’s second headquarters location could result in a “pick two” situation. See which spots are the likely contenders.

Categories: Real Estate

REALTORS®, Renters May Be Swing Votes in Midterms

NAR Daily News Magazine - November 6, 2018 - 12:00am

NAR says this midterm election has seen a 64 percent increase in REALTOR® turnout during early voting, which is way ahead of overall voters.

Categories: Real Estate

Red vs. Blue: America’s Split in Housing

NAR Daily News Magazine - November 6, 2018 - 12:00am

In midterm elections across the country, how do these political parties divide when it comes to housing?

Categories: Real Estate

NAR Board Supports New Notary Technologies

NAR Daily News Magazine - November 5, 2018 - 12:00am

Approves future-focused initiatives, including remote notarization and a five-year strategic framework.

Categories: Real Estate

Make Everyone Love Your Brand

NAR Daily News Magazine - November 5, 2018 - 12:00am

There are many ways you can set yourself apart from competitors, including becoming a media source for real estate news and using a storytelling approach in your marketing.

Categories: Real Estate

Ideas for Capturing New Business in 2019

NAR Daily News Magazine - November 5, 2018 - 12:00am

What will be some of the best untapped growth markets next year? Learn about the consumers you should be keeping an eye on.

 
Categories: Real Estate

What’s Fact and Fiction About Tech Disruption?

NAR Daily News Magazine - November 5, 2018 - 12:00am

Keeping the issues in check, including driverless cars, bitcoin transactions, and the potential for discrimination in targeted advertising.

Categories: Real Estate

Solutions for Your Toughest Legal Challenges

NAR Daily News Magazine - November 3, 2018 - 11:00pm

From managing emotional client relationships to complying with legal rules in your marketing, these five tips will help your business run smoothly.

Categories: Real Estate

The News You Missed in Boston

NAR Daily News Magazine - November 3, 2018 - 11:00pm

Big events are happening both in the country and your association. All eyes will be on the midterm election Tuesday, and NAR leaders helped members brace for the potential impact.

Categories: Real Estate

Housing Discrimination Via Algorithms: An Alarming Trend

NAR Daily News Magazine - November 1, 2018 - 11:00pm

Companies are collecting thousands of data points about consumers. But how that information is then used to target ads has fair housing advocates concerned.

 
Categories: Real Estate

Mortgage Rates Roll Back This Week

NAR Daily News Magazine - November 1, 2018 - 11:00pm

Mortgage rates took a slight breather this week as borrowing costs moved lower and offset last week’s uptick.

 
Categories: Real Estate

Agent Shot, Killed Outside of Home He Was Showing

NAR Daily News Magazine - November 1, 2018 - 11:00pm

Police continue to investigate the mysterious shooting of a real estate agent, who was killed in front of a home he was trying to sell.

 
Categories: Real Estate

realtor.com® Launches Agent Ad Tool That Follows Prospective Buyers Online

NAR Daily News Magazine - November 1, 2018 - 11:00pm

Local Expert sets out to help raise agents’ visibility online with prospective buyers by being more strategic with ad placement.  

 

Categories: Real Estate

3 Window Options for Aging in Place

NAR Daily News Magazine - November 1, 2018 - 11:00pm

Advise clients on home features that will meet their needs as they grow older.

Categories: Real Estate

NAR: Midterm Results Won’t Change Your Path Forward

NAR Daily News Magazine - October 31, 2018 - 11:00pm

REALTORS® will remain the leading influence on real estate policy no matter which political party gains the edge next Tuesday, association officials say at the REALTORS® Conference & Expo kickoff event.

Categories: Real Estate

In Danger? Your Lapel Pin Can Help

NAR Daily News Magazine - October 31, 2018 - 11:00pm

Your REALTOR® pin lets consumers know you’re a professional who subscribes to a code of ethics. But it can also be transformed into a secret way to let a dispatcher know you’re in trouble.

Categories: Real Estate

How Does Your State Rank in Down Payments?

NAR Daily News Magazine - October 31, 2018 - 11:00pm

See where your buyers can expect to save—or spend—when it comes to their down payment.

Categories: Real Estate

Millennials Boosting U.S. Homeownership Rates

NAR Daily News Magazine - October 31, 2018 - 11:00pm

A greater number of Americans bought a home during the summer months, increasing the percentage of homeowners. 

Categories: Real Estate

Report: Sellers are Getting $61K at Resale

NAR Daily News Magazine - October 31, 2018 - 11:00pm

See where homeowners saw the highest percentage earnings after selling their home.

Categories: Real Estate

Getting a Mortgage Is Now Easier, but It Could Backfire

RisMedia Consumer News - October 31, 2018 - 2:25pm

(TNS)—Clearing the hurdles to qualify for a mortgage used to be much harder. House hunters with too much debt had their home-buying hopes dashed after being denied a mortgage.

That’s changing as mortgage lenders ease lending guidelines to expand mortgage credit to more people.

Borrowers with a high debt-to-income ratio now have more leeway than since the subprime mortgage meltdown of a decade ago. Your debt-to-income ratio, or DTI, is the percentage of monthly income you pay toward your monthly debts, including a new mortgage payment. It’s a key factor—along with your credit—that lenders use to determine whether you can repay a loan. The more debt you have, the higher your DTI ratio—and that’s a red flag for lenders evaluating your potential for risk.

Some consumer advocates worry that borrowers who are already struggling to stay afloat might get in over their heads with today’s laxer lending requirements. On the flip side, expanding access to mortgage credit could help creditworthy borrowers in higher-priced housing markets join the homeownership ranks they’ve increasingly been shut out from.

How Getting a Mortgage Has Gotten Easier
Fannie Mae and Freddie Mac, the two government-sponsored enterprises that back most U.S. mortgages, have eased their lending rules in recent years. Fannie Mae increased its maximum DTI ratio to 50 percent, up from 45 percent, in July 2017. Both agencies allow borrowers to finance up to 97 percent of a home’s purchase price, which is considered a high loan-to-value ratio.

Conventional lenders charge higher interest rates on high DTI loans to mitigate their risk. They also require a higher FICO score and more cash reserves.

Raising DTI limits is just one way lenders have made it easier to get a mortgage. LTV ratio increases help borrowers who don’t have a large down payment; however, you’ll pay private mortgage insurance when you put less than 20 percent down—and you might not be able to borrow as much as you need to buy a home.

Some conventional lenders have rolled out their own low down payment programs without private mortgage insurance in exchange for a higher interest rate. Government-insured loans require little to no down payment, and generally have more relaxed credit score requirements than conventional loans.

Mortgage Credit Standards Still Tighter Than Boom Times
Borrowers who don’t fit into a pristine credit box now have more options, says Joel Kan, associate vice president of Industry Surveys and Forecasting with the Mortgage Bankers Association. There’s more balance to the lending equation nowadays after the regulatory pendulum swung too far in the opposite direction—a move that shut out otherwise capable borrowers, Kan says.

Although standards have loosened considerably in recent years, today’s lending practices are still more stringent than they were before the housing crisis. The days of doling out loans without verifying income or employment are long gone.

“We’re still about one-quarter of where we were compared to the pre-housing boom,” says Kan of mortgage credit accessibility. “Standards are looser now than they were from 2010 to 2012 when credit access was the tightest, but it’s not subprime.”

The share of new, conventional conforming home loans with a DTI ratio above 45 percent spiked after Fannie Mae raised its DTI limit, according to research from CoreLogic. From early 2012 up until last summer, the share of these high DTI loans held steady between 5 percent to 7 percent. In the first quarter of 2018, that share nearly tripled, jumping to 20 percent. The average DTI ratio for these home loans rose by two points to nearly 37 percent from Q1 2017 to Q1 2018.

Even as high DTI loans gain popularity, lenders haven’t budged on credit score standards. Borrowers’ average credit score for conventional, conforming purchase loans remained unchanged at 755 in the first quarter of 2018 compared to the same period a year ago, CoreLogic found. That’s significantly higher than homebuyers’ average credit score of 705 in 2001—before the downturn.

Expansion of Mortgage Credit Has Its Drawbacks
High DTI and LTV loans aren’t without risks. A high LTV ratio increases borrowing costs, and you’ll likely have to pay mortgage insurance to offset the lender’s risk.

For starters, lenders calculate your DTI ratio using your gross monthly income (before taxes and payroll deductions) and debts that appear on your credit report. They’re not including monthly expenses like groceries, gas, auto or health insurance, daycare/tuition, utility bills and other recurring bills that can eat up a good chunk of your monthly budget, says Rebecca Steele, CEO and president of the National Foundation for Credit Counseling.

“It puts some borrowers in a more precarious position,” Steele says of high DTI loans. “Today, people have significantly less savings in reserve. To have that you need a stable income, and some consumers struggle with that. Most people have little disposable income, especially because rents are going up.”

A job loss or other major financial hardship could land you in a tighter spot than if you had paid down your debt and shored up your emergency savings fund before buying a home. You’ll also pay more interest with a high DTI loan, Steele says.

Another key issue that some first-time buyers overlook are the hidden costs of homeownership, says Jeff Levine, a certified financial planner with BluePrint Wealth Alliance in Garden City, N.Y. When you’re stretching your income to cover monthly debt payments, you won’t have as much cash on hand for maintenance expenses, homeowners association dues and major repairs that inevitably pop up. Borrowers should factor those expenses into the mix and avoid overextending themselves, Levine says.

“Just because you can get approved for a mortgage doesn’t mean you should get one,” Levine says. “People got into trouble (in the downturn) because they borrowed up to the hilt and didn’t have the capacity to repay.”

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

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

The post Getting a Mortgage Is Now Easier, but It Could Backfire appeared first on RISMedia.

Categories: Real Estate