Posts Tagged: ‘Buying your first home’

Buyers Market Coming Soon

August 20, 2018 Posted by Andre Hemmersbach

Are we on the cusp of a change in the Real Estate market? The last 4 years have seen incredible increases in real estate values mainly due to an imbalance between supply and demand. Buyers (demand) have outstripped listing inventory (supply) month after month and year after year. In the last few weeks, I have had a number of conversations with Realtors who have told me that things seem to be slowing down. Multiple offers scenarios, while still happening, are being joined by less buyers and some properties that are not priced correctly are not getting any action. The truth will be revealed at the end of August and September (see chart below).

Price vs Listing Chart

Price vs Listing

 

The end of summer traditionally has a pretty sharp drop off in the number of properties for sale. If at the end of August and September that seasonal adjustment does not happen with its normal veracity, we could be seeing a future with buyers having a bit more room for negotiations.

I have been helping clients finance their real estate for the last 30 years. Call me for a free consultation.

Hot Up-and-Coming Real Estate Markets

March 21, 2017 Posted by Andre Hemmersbach

A great way to find hot up and coming real estate markets is to see where people are moving and it’s as simple as supply and demand…remember Econ 101?

According to United Van Lines, which has been tracking moving statistics for 40 years, retirees left sand and sunny beaches for western mountains. See the “Annual National Movers Study” below.

US map of hot up and coming real estate markets

United Van Lines Movers Study

Moving In Real Estate Markets

The top inbound states of 2016 were:
1. South Dakota
2. Vermont
3. Oregon
4. Idaho
5. South Carolina
6. Washington
7. District of Columbia
8. North Carolina
9. Nevada
10. Arizona

 

South Dakota is the most popular moving destination of 2016 with nearly 68 percent of moves to and from the state being inbound, furthermore, the state has continued to climb the ranks, increasing inbound migration by 23 percent over the past five years. New to the 2016 top inbound list are South Dakota at No. 1 and Arizona at No. 10 with 68 and 57 percent inbound moves, respectively.

 

Moving Out Real Estate Markets

The top outbound states for 2016 were:
1. New Jersey
2. Illinois
3. New York
4. Connecticut
5. Kansas
6. Kentucky
7. West Virginia
8. Ohio
9. Utah
10. Pennsylvania

In addition to the Northeast, Illinois (63 percent) moved up one spot on the outbound list, to no. 2, ranking in the top five for the last eight years. New additions to the 2016 top outbound list include Kentucky (58 percent), Utah (56 percent) and Pennsylvania (56 percent).

Purchasing a rental property or a second home in a hot and up coming real estate markets is a good bet if you are looking for capital  appreciation. If you follow some basic real estate investment guidelines, do a little homework and work with professionals, it could pay off in a big way! Call me to discuss winning strategies for purchasing investment properties.

Home Loans For The Self-Employed

April 9, 2016 Posted by Andre Hemmersbach

1040-Tax-Form

Home Loans for the Self-Employed

Getting home loans for the self-employed borrower may be easier than you think. Tax season normally represents a time of financial pain, but for some self-employed individuals it could represent an opportunity!

Everyone knows that one of the factors a lender will review before approving a borrower for a home loan in their income. What most people do not know, is that there is flexibility in the documentation requirements for self-employed borrowers.

A little known policy loophole in some lender’s underwriting guidelines is the ability to only use a 12 month average of net income from self-employed borrowers. Not all lenders follow the policy and some loan officers just default to asking for the industry standard 2 years returns because they do not know any better. The problem with that is once the underwriter reviews 2 years tax returns, they cannot just “lose” the documentation per their agreements with their investors; they have to use the 2 year average. On the other hand if your loan officer is aware enough to review and catch it upfront, a self-employed borrower who had a terrible 2014 but a record breaking income year in 2015 could be off and running with an approval to purchase the home they deserve!

I know the above to be true as our office usually turns around one to two deals every month that have been declined elsewhere for this very reason.

Please call me to set up a free consultation to create a plan so that you can qualify for a home loan to purchase your house.

Move Up Buyers Get A Break

July 9, 2015 Posted by Andre Hemmersbach

Your next home

Home Sweet Home

Move up buyers got a big break from Fannie Mae (FNMA) this week as a change in their underwriting guidelines will make it easier for move-up buyers to qualify. During the mortgage meltdown FNMA had added additional requirements and hurdles for the move-up buyers as a way to mitigate the extra risk. In the case of a borrower looking to convert his current residence to a rental, a lender had to prove a minimum equity position of 30% in the borrower’s current residence to use any rent to offset a mortgage payment. Needless to say most borrowers do not qualify for two mortgages without the benefit of rental income and a 30% equity position in the market of 2008-2014 was just as unlikely.

As of July 8th the equity test for move up borrowers who wish to keep and rent their old residence will no longer apply. This will allow the borrowers to qualify using fair market rent on their current residence to help offset their current mortgage and make it easier and quicker to process and close the new purchase transaction.

Lenders Only Look At Four Things Before Approving Your Home Loan.

April 20, 2015 Posted by Andre Hemmersbach

Getting a home loan is not as tough as rumor has it! The mortgage approval process simply boils down to the four basic items explained in the following few paragraphs. First time home buyers and even repeat purchasers need not be bewildered by the formulas and methods used by lenders, you just need someone to hold your hand and an expert that knows the home loan rules!

Lenders are looking for what I call the four “C”s and once you understand the concept of these basic requirements everything else starts to make sense.

  • Cash – Lenders look for “skin-in-the-game” as a way to make sure that you have a financial incentive to continue to make the mortgage payment when things get tough. The larger your down payment or equity the less they have to worry about the borrower walking away from the home loan. Minimum down payment requirements range from as little as 0% to as much as 35%

    You will need a home loan to enjoy this light filled room

    Get a home loan and then sit back and enjoy

  • Capacity – Another way of saying income. The lender wants to make sure that the borrowers have sufficient stable income to handle the mortgage, property taxes, insurance and other debts. Key words in the previous statement are SUFFICIENT and STABLE. Lenders will use a combination of pay stubs, W-2 and other documents and compare those to the only reliable source available in our financial system to prove their legitimacy….the IRS and your tax returns. The minimum requirements for income vary widely by program; lender and other factors so make sure you are working with someone that understands the rules.
  • Credit – Simply put – how have you handled other financial promises of repayment in the past? Nowadays it is easy for a lender to figure this out with a copy of your credit report and a number called a credit score. A credit score is numerical representation of your credit risk. Over 700 is good below 620 not so good. By the way there are easy ways to increase your credit score. (Call me to discuss)
  • Collateral – The property you wish to purchase. Lenders are looking for collateral (their security) to be in good shape and free of any health and safety issues. Why not a complete “fixer upper” see the cash bullet above. The lender wishes to protect a borrower from any unforeseen repairs that the borrower cannot afford. Besides the last thing a lender wants to do is to have to fix up a property after having to foreclose on a home loan.

I have been helping people finance their real estate for over 25 years. Whether you are a seasoned real estate investor or first time home buyer my experience and knowledge will insure that your home loan goes smoothly! I would be happy to meet with you for a free consultation to discuss your plans to purchase a home.