Five Big Financial Reasons to Own Your Home

Andy Davis

There are many reasons why consumers decide to buy their own home instead of renting. Of course many factors such as housing market, whether you have a high or low interest rate, and personal timing go into account, but below are a few financial positives of being a home owner.

  1. Owning your home forces you to save. Paying your mortgage and building equity in your home forces you to save money.
  2. Owning your home allows you to save on taxes.
  3. If you own your home, your monthly housing expenses are locked in through a consistent monthly payment based on your interest rate. If you were to rent, depending on your agreement your payment could be raised by a landlord.
  4. In most parts of the country renting is more costly than owning your own home. Getting a low interest rate allows your mortgage payments to cost less than what some landlords would be charging. Local real estate markets in Lee County and Collier County are part of this trend.
  5. This is the only investment you can make financially that will have increased personal connection. What other investment will you make that you will live inside of other than your primary residence? Building equity in your home while creating life long memories doubles the benefits.

Florida Home Value Rise Beats National Average

Andy Davis

According to Zillow, the rate in price increase among Florida homes will beat the nation’s average over the next year. Home values in Florida are up 4.64% this year with an expected increase of 4.09% next year. Nationally, Zillow expects the value of homes to rise 2.2% over the next 12 months. Low interest rates are causing the local real estate market to heat up substantially. Understanding the affect of  increasing home prices and low mortgage rates will allow informed investors to make sound decisions in this hot housing market.

New FHA Condo Rules Boost Affordability

Andy Davis

According to a recent report by the National Association of Realtors, HUD will be enacting new FHA condo rules. These rules will change a few things, but most importantly they will extend the approval process to individual condo units and extend the FHA certifications of condominium developments from two to three years. This change will ease the compliance obligations put on condo boards likely adding to the total number of FHA approved condos. Providing additional affordable housing options will allow a whole new group of first time home buyers to enter the market. These changes, along with the already low FHA mortgage rates, will make it that much easier for families to buy a property of their own. These changes come as NAR and HUD have been working together to solve a recent decrease in condo lending in recent history and provide affordable options to more families across the United States. The rule changes will take affect in mid October 2019.

Market Concerns Cause Mortgage Rate Drop

Andy Davis

Recent market activity has been cause for a small concern among investors. A shift in investment strategies has caused mortgage rates to drop. As seen in the chart below provided by Freddie Mac, interest rates have decreased almost a full percentage point since the beginning of the year. With rates being at a multi-year low, now might be the right time for new investors to start putting some money into real estate to secure lower rates.

The Wealthy Are Still In On Real Estate

Andy Davis

According to a recent report, Tiger 21, a large group of wealthy investors with combined net worth in excess of $75 billion, has been increasing it’s holdings in real estate. During the last quarter the share of their portfolios dedicated to real estate has grown 2%. Also of note, the cash on hand by this group has increased drastically in order to have liquid assets available. As seen in the graphic below, the groups largest piece of the pie, making up over a quarter, is in real estate.

Ben Carson out at HUD at end of term

Andy Davis

Ben Carson has decided to leave the department of Housing and Urban Development (HUD) after his first term. He has stated that he will finish out the term but wants to pursue private sector interests. Carson’s service for HUD has been a mixed bag. He launched discrimination investigations against some of the larger online advertising firms. He also proposed some policy changes that on the surface seemed to conflict HUD’s mission.

United Wholesale Mortgage Lowers Rates and Pricing

Andy Davis

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PONTIAC, Mich., Jan. 8, 2019 /PRNewswire/ — United Wholesale Mortgage (UWM), the No. 1 wholesale lender in America for four consecutive years, has made a major change to its pricing philosophy, now providing mortgage brokers with the best rates and pricing in America.

UWM has been consistently competitive in terms of rates, regularly ranking near the top of most rate comparisons, but was recognized by mortgage brokers more for its fast and easy processes than offering the best pricing. Now, UWM’s rate sheet is expected to outshine all of its wholesale competitors, in addition to continuing to set the gold standard for service, process, technology and partnership tools.

“Perception has always been that a lender can’t deliver it all – the best service, great technology, a true partnership, and have the best pricing too – but now they can have it all,” said Mat Ishbia, President and CEO of United Wholesale Mortgage. “We’ve shattered expectations. If a mortgage broker has a borrower with a 640+ FICO, it should be a UWM loan.”

UWM has removed all state adjustments and many Loan Level Price Adjustments (LLPA), as well, offering the best pricing on every loan with a 640 FICO and above.

The major pricing improvement follows other recent pricing initiatives that UWM has brought to market, including its Jumbo Bank Buster program (cheapest jumbo rates) and its lower Borrower-Paid M.I. rates.

UWM finished 2018 with $41.5 billion in total loan volume, an all-time high for the company, making up nearly a quarter of the entire wholesale industry’s market share. That production represents a 40% year-over-year growth, making UWM the fastest-growing lender in the nation. Additionally, UWM is the No. 1 non-bank purchase lender in the country and ranks fourth overall among the top-producing mortgage lenders, overall, in America.

Source- PRNewswire and United Wholesale Mortgage

Loan Limits Increase in 2019!

Bob Vaughan

After not increasing the maximum conforming loan limits on mortgages to be acquired by Fannie Mae and Freddie Mac for 10 years, the Federal Housing Finance Agency has now increased the conforming loan limit for the third year in a row. On November 27th, the FHFA announced that it is increasing the conforming loan limit for Fannie and Freddie mortgages in nearly every part of the U.S. According the FHFA, the conforming loan limits will rise from 2018’s level of $453,100 to $484,350 for 2019. That’s an increase of 6.9%! As stated above, this marks the third straight year that the FHFA has increased the conforming loan limits after not increasing them for a period of 10 years (from 2006 to 2016). Back in 2016, the conforming loan limits were increased from $417,000 to $424,100. Then, in 2018, conforming mortgage loan limits were raised from $424,100 to $453,100. And now, the FHFA is doing it again, increasing the loan limit from $453,100 to $484,350 for 2019. The conforming loan limits for Fannie and Freddie are determined by the Housing and Economic Recovery Act of 2008, which established the baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. But, according to the FHFA, home prices are still on the rise. The FHFA’s third quarter 2018 House Price Index report, showed that home prices rose 6.9%, on average, between the third quarters of 2017 and 2018. Therefore, the maximum conforming loan limit in 2019 will increase by the same percentage to $484,350. The conforming mortgage loan limit in Lee County, Collier County and Charlotte county will be $484,350.

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