Well, the falling rates part is a stretch, as rates fell then moved back up a bit, but appear to be on their way back down... albeit slowly. We are hoping for another drop to the Fed funds rate this year, although the recent better-than-expected employment figures are not helping the cause.
We’ve said this before and will reiterate….as mortgage rates drop, more buyers and move-up or move-down sellers will come
off the sidelines, creating upward pressure on home prices. We should see more inventory available, but
there continues to be pent-up demand, particularly in coastal California.
NEED MORE CASH FOR A DOWN PAYMENT?
Fannie Mae has a non-borrowing Investor program where a
buyer who can qualify for a loan, but needs more cash down, can use cash from
an investor to buy a home. The investor
is not a borrower on the loan, but will be on title for a share of the equity. The investor does not need to be a relative
and the funds are not considered to be a gift.
This could get tricky if the investor decides they want to
sell but the occupant borrower wants to stay put or cannot buy out the investor,
so a legal agreement is likely a good idea to avoid future litigation.
INSURANCE WOES
As I write this Hurricane Milton is on a bullseye path for
Tampa, Florida with yet another hurricane this season. Helene was a doozy, particularly affecting North
Carolina! Insurance has already become a
major headache for homeowners and lenders.
The current fires and hurricanes
are certainly adding to the issue. I fear
that many areas of Florida will not be insurable in the future meaning you can
only buy with all cash. The same will likely
be the result in fire-prone areas of Southern and Northern California. We have had more than a couple escrows cancel in light
of insurance problems with HOA Master insurance, as well as individual policies.
FIRST TIME HOMEBUYERS AND CREDIT
We often hear “I need to pay off all my credit cards and loans before I can buy.” This is absolutely not true. While credit does play into loan qualifying, it is the monthly payments that are considered, and not the actual balance due. Always ask a mortgage professional about the best path to qualifying. It is not always paying off debt first.
SELF-EMPLOYED?
We can help prepare you for a home refinance or purchase. These borrowers take extra care and
assistance. We love to collaborate with
their tax advisors to strategize for the next step.
As always, reach out to us with any questions. And, have a Happy Halloween!
