Home Finance

If you're wondering if home prices are going to come down due to the cooldown in the housing market or a potential recession, here's what you need to know. Not only are experts forecasting home prices will continue to appreciate nationwide this year, but most of them also actually increased their projections for home price appreciation from their original 2022 forecasts (shown in green in the chart below):

As the chart shows, most sources adjusted up, and now call for more appreciation in 2022 than they originally projected this January. But why are experts so confident the housing market will see ongoing appreciation? It's because of supply and demand in most markets. As Bankrate says:

After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.

Knowing that experts forecast home prices will continue to appreciate in most markets and that they've actually increased their original projections for this year should help you answer the question: will home prices fall? According to the latest forecasts, experts are confident prices will continue to appreciate this year, although...

There's never been a truer statement regarding forecasting mortgage rates than the one offered last year by Mark Fleming, Chief Economist at First American:

You know, the fallacy of economic forecasting is: Don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.

Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. It's only April, and rates have already blown past those numbers. Freddie Mac announced last week that the 30-year fixed-rate mortgage is already at 4.72%.

Danielle Hale, Chief Economist at ...

Once you've found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It's exciting to start thinking about moving in and decorating your new place, but before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who's qualified to explain how your financial decisions may impact your home loan.

Here's a list of things you shouldn't do after applying for a mortgage. They're all important to know – or simply just good reminders – for the process.

1. Don't Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or Lender.

Lenders need to source your money, and cash isn't easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

2. Don't Make Any Large Purchases Like a New Car or Furniture for Your Home.

New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Since higher ratios make for riskier loans, qualified borrowers may end up no longer qualifying for their mortgage.

3. Don't Co-Sign Other Loans for Anyone.

When you co-sign, you're obligated. With that obligation comes higher debt-to-income ratios as well. Even if you promise...

Mortgage rates are hovering near record lows, and that's good news for today's homebuyers. The graph below shows mortgage rates dating back to 2016 and where today falls by comparison.Generally speaking, when rates are low, you can afford more home for your money. That's why experts across the industry agree – today's low rates present buyers with an incredible opportunity. Here's what they have to say:

Sam Khater, Chief Economist at Freddie Mac, points out the historic nature of today's rates:

As the economy works to get back to its pre-pandemic self, and the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all-time.

Mark Fleming, Chief Economist at First American, ...

This year, mortgage rates have started to slowly climb above recent record-breaking lows. Many homeowners planning to move may feel like they've missed the chance to score a great rate on their next mortgage. In reality, there's still time to secure a rate far below the historic norm. Here's why.

After creeping up for seven consecutive weeks, average mortgage rates have dropped more recently (See graph below). With rates taking a slight dip over the past two weeks at the same time the inventory of houses for sale is so low, homeowners today are sitting in the optimal seat to sell. What's the advantage of selling your house now? Securing a low mortgage rate on your next home.To take advantage of today's...

Freddie Mac recently released their Quarterly Refinance Statistics report which covers refinances through 2020. The report explains that the dollar amount of cash-out refinances was greater in 2020 than in recent years. A cash-out refinance, as defined by Investopia, is:

a mortgage refinancing option in which an old mortgage is replaced for a new one with a larger amount than owed on the previously existing loan, helping borrowers use their home mortgage to get some cash.

The Freddie Mac report led to articles like the one published by The Real Deal titled, House or ATM? Cash-Out Refinances Spiked in 2020, which reports:

Americans treated their homes like ATMs last year, withdrawing $152.7 billion amid a cash-out refinancing spree not seen since before the 2008 financial crisis.

Whenever you combine the terms spiked, homes like ATMs, and financial crisis, it conjures up memories of the housing crash we experienced in 2008.

However, that comparison is invalid for three reasons:

1. Americans...

When it comes to making a home more environmentally friendly, solar panels are one of the first things homeowners think about. Solar panels can be an excellent way to save energy and money over time, and there are multiple ways to get them. The first way is to use cash or a solar loan in order to purchase the panes, and the second is to lease the solar panels from a company. However, these options are not equal. Here are some of the reasons why homeowners should purchase solar panels instead of leasing them.

Cost

Solar panels are not an addition that can be made on a whim. Depending on the quality of the panels and size of the roof, it can cost anywhere from $15,000-30,000 to purchase solar panels. It’s these steep up front costs that often make homeowners look into leasing panels instead of purchasing them outright. Loans typically last 20-25 years, which is roughly the lifespan of the solar panels themselves, and make it easier to obtain the panels. However, homeowners who lease their solar panels will miss out on possible tax benefits and rebates that may save up to 50 percent of the cost of the panels.

Lease contracts will also take energy cost inflation into account when they’re created and will usually increase about 2-3 percent per year. If energy costs don’t rise as predicted in the contract,...

One of the benefits offered to members of the US Armed Forces is the ability to take out a Veteran’s Affair’s (VA) loan when it comes time to buy a home. However, there isn’t just one VA loan that fits all needs, and many veterans don’t realize they have may have options for the loan they want to take out. Here are the different types of VA loans and the different advantages they each have.

VA Purchase Loans

The Purchase Loan is the loan most people think of whenever someone talks about VA loans. With a Purchase Loan, applicants won’t have to pay any closing fees when purchasing a home. However, hey will have to pay a VA Funding Fee that helps the program keep running in the future. The Funding Fee is a one-time payment, and its cost will vary based on the cost of the home that is being purchased. Purchase Loans also typically feature lower interest rates than normal loans as well as 100% financing. 

Native American Direct Loan

As the name might imply, these loans are exclusive to Native American veterans. However, they can only be used if the applicant in question intends to either purchase or build a home on Native American Trust land and has a valid Certificate of Eligibility (COE) to apply for the loan. Native American Direct Loans don’t require a down payment, and the maximum loan limit for most areas can be more than $424,000....

Shopping for the right home loan can be nearly as important as shopping for the right home. Failing to compare the benefits and limitations of each type of loan option can mean paying unnecessary costs and fees associated with obtaining the home loan as well as higher interest rates over the life of the loan. Since the Federal Housing Administration was created as part of the National Housing Act of 1934, it has provided home loan options for millions of buyers and continues to offer benefits to thousands more each year.  

What is an FHA Home Loan?

FHA home loans are not actually issued by the Federal Housing Administration. Instead, these loans are issued by approved banks and lending institutions and insured by the FHA. If a home owner defaults on their FHA home loan, the Federal Housing Administration pays a claim to the issuing lender. This practice allows lenders to make loans to more borrowers while incurring less risk.

Benefits of Using an FHA Loan

FHA home loan programs can benefit home buyers in a number of ways. Some of the most popular benefits include: 

• Low or no down payment options, usually no more than 3.5% of the purchase price of the home
• An ability for buyers with lower credit scores to obtain an FHA loan
• A stringent appraisal process to ensure the home is in good condition and buyers will not incur large repair...

Some Highlights:

• Many buyers are purchasing a home with a down payment as little as 3%.
• You may already qualify for a loan, even if you don't have perfect credit.
• Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.

Contact Marin Modern Real Estate, experienced Marin County Realtors, for help purchasing or selling a home in Marin County.

As home owners approach retirement, they may be concerned about not having enough money to cover their living expenses on a fixed income. You may have heard of a reverse mortgage as a way to supplement your income, without having to sell your home and downsize.

This guide shows you the details surrounding a reverse mortgage, and how to determine if it is the right choice for you.

What is a Reverse Mortgage?

When you get a traditional mortgage, you borrow a certain amount of money from a bank to finance or refinance a home, and then make monthly mortgage payments with interest. With a reverse mortgage, also known as a Home Equity Conversion Mortgage, you use the home’s equity to get a loan from the lender.

The lender makes payments to you at a specified interval, which can range from a lump sum at closing to fixed monthly payments for the rest of your life, depending on the loan terms. As long as you fulfill the requirements of the loan, you are not required to leave the home. Some people consider a reverse mortgage to be an effective way to supplement their income in retirement.

Who Can Qualify for a Reverse Mortgage?

There are a few simple qualifications you have to meet in order to be able to get a reverse mortgage. Applicants must:

• Be at least 62 years old
• Maintain the home (or a unit in a 2-4-unit dwelling) as a primary residence
• Own most or all of the home outright...

As you search for a mortgage, you may think that your lender will be your loan provider and mortgage servicer for the life of the loan. The truth is more complicated, with many entities having some control over the process at various stages.

With this guide, you will gain a better understanding of every step of your mortgage, from the beginning of the loan process, to the final payment. To better understand how different mortgages will work within your personal situation, speak with a lender or financial advisor.

1. Researching Lenders

Before applying for a mortgage loan, home buyers often decide on a couple of lenders they would like to consider. Shopping around is more likely to give you better rates and terms, and to help you understand what is available with your income and credit. Unfortunately, about half of home buyers only seriously research one lender, and 77 percent of home buyers apply to only one lender.

2. The Difference between a Mortgage Pre-Qualification and a Mortgage Pre-Approval

Home buyers shopping for a mortgage should know the difference between a mortgage pre-qualification and a pre-approval. In most cases, a mortgage pre-qualification is simply taking the information you provide and placing it into a mortgage calculator to determine if you have enough income to buy a home and your approximate top budget. A mortgage pre-qualification...

There has been some buzz going on around about a recent legislation that has passed in California that is now rolling out in Marin County. Have you heard of PACE?  What is it? Is it good or bad? How can this help homeowners?  The talk around town has been very mixed!

PACE stands for Property Assessed Clean Energy.  It is a way for homeowners to finance energy efficiency, renewable energy and water conservation upgrades in their home. These upgrades can include solar panels, new windows, tank less hot water heaters, new heating and cooling systems, insulation, lighting improvements, and water pumps…just to name a few.

There are several companies that partner with PACE to provide this kind of financing.  HERO or SCEIP are a couple common names in our area.  Rates on these loans can be anywhere from 5-10% and the terms can be from 5-20 years. Unlike other loan products, the loan is rolled into the homeowner’s property taxes as an assessment.  The payment is fixed and it stays with the property when transferred in a sale.  Many people can qualify for these loans with little equity in their homes while a home equity line of credit may require more equity in the home and a lot more paperwork for loan approval.

So there are pros and cons for sure.   You may pay higher to carry the PACE loan and it is a fixed payment at a higher interest rate than a HELOC in most cases.  However, the homeowner may be able to get the loan when they cannot pull money out of the house for home improvements because there is not enough e         quity.  In addition,...