ARAMCO Report - The Mother of ALL Mortgage Blogs!

Agentless home buying

Posted by Mehran Aram on Sun, May 12, 2019 @ 07:05 AM

The vast majority of Americans, as many as 9 in 10, use an agent to help them in buying or selling a home. But online real estate brokerage Redfin is looking to shake things up. The company recently introduced Redfin Direct, a way to save on commission by buying a home without a representative.

The idea is to make home buying as simple as buying a product on Amazon. In fact, Redfin CEO Glenn Kelman called it “a buy button for real estate”. But experts warn that this type of real estate transaction might not be for everyone. First-time buyers tend to rely heavily on their agent to help them navigate the process. Eliminating that personal interaction could lead to dissatisfied buyers.

A buyers’ agent also provide the added value of being able to negotiate and be familiar with a market – something Redfin’s new program doesn’t address.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home buying, Redfin, Mortgage rates, Realtors, home buyers, Real Estate Agent, Redfin Direct, Digital Home Buying

Fannie Mae: consumers remain bearish about home buying

Posted by Mehran Aram on Sat, May 11, 2019 @ 06:05 AM

Inventory rates slowly climbing, and mortgage rates hold steady did little to turn consumers on to the idea of buying a home last month. Fannie Mae reported it its Home Purchase Sentiment Index this week that net positive responses to the question about whether now is a good time to buy a home fell 8 points in April. This is a significant 15 percentage points lower than the same month last year.

Despite the negative sentiment about buying a home, consumers seem optimistic that conditions will continue to improve in the coming months. The share of those who believe rates will decline over the next year climbed 12 points over between March and April.

Historically, the net percentage of American’s who feel conditions are ripe to purchase a home increases in the summer months which are traditionally known as “home-buying season”.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home buying, home purchase, Fannie Mae, Mortgage rates, consumer, Home Purchase Sentiment

New report shows spring home-buying season in full swing

Posted by Mehran Aram on Mon, Apr 1, 2019 @ 05:04 AM

The Mortgage Bankers Association’s weekly Market Composite Index showed that the first week of spring brought with it a large gain in mortgage activity. Driven largely by a surge in refinances due to dropping interest rates, mortgage application volume increased 8.9 percent last week on a seasonally adjusted basis. This is the third consecutive weekly increase and the largest in a non-holiday week since July 2015.

Refinances increased 12 percent and accounted for 40.4 percent of total mortage application volume. This is up from 39.2 percent the prior week. The Purchase Index rose by six percent.

Mortgage rates holding steady at their lowest point in a nearly a year will likely continue to drive up activity in the coming weeks and months. Conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home buying, Spring Homebuying Season, Mortgage applications, Mortgage Bankers Association, Refinancing, Mortgage rates, home buyers

Survey: Americans feeling confident about finances

Posted by Mehran Aram on Tue, Feb 12, 2019 @ 05:02 AM

Fannie Mae’s Home Purchase Sentiment Index climbed 1.2 points last month to a reading of 84.7, a reversal of the 2.3 point drop in December but still shy of the all-time high of 89.5 reached a year ago. The Home Purchase Sentiment Index (HPSI) is compiled from a monthly National Housing Survey conducted by Fannie Mae.

The increase was driven by an 8-point increase in the net share of respondents who reported higher income levels and a 4-point increase in the net share of those who say now is a good time to buy a home.

However, the number of Americans who believe home prices will continue to climb has fallen 22-points since last year. This latest installment of the monthly survey is the first since the partial government shutdown that begin in December furloughed over 800,000 federal workers.

As for mortgage rates, today, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home prices, home buying, Fannie Mae, National Housing Survey, Mortgage rates, Home Purchase Sentiment, Housing Sentiment

Closing escrow on the double

Posted by The Aramco Group on Sun, Oct 21, 2018 @ 09:10 AM

It can feel like the hardest part of the home buying process – waiting. You’ve found your dream home, you’ve crunched the numbers, it passed the termite inspection and you’ve already started packing your knick-knacks in bubble wrap. All you have to do now is wait for escrow to close and get your keys.

The typical time frame to close escrow is generally 30 days but hiccups in the process can stretch out the process to 60 days or even longer sometimes. Buyers may delay escrow to come up with the rest of the cash needed to close. Sellers may ask for additional time as they wait on their new home’s escrow to close. And even if both buyer and seller are on track, delays can be caused by issues with the HOA, lender, appraisals or any number of third-parties.

The important thing to remember is that all these issues can be resolved with a little patience and working with experienced lenders and agents.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.75 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home buying, escrow, Mortgage rates

Millennials showing preference for conventional loans

Posted by The Aramco Group on Tue, Oct 16, 2018 @ 14:10 PM

Younger homebuyers turned more towards conventional home loans in August, so much so that it drove Ellie Mae’s Millennial Tracker to a three-year high. 69 percent of home loans taken out by Millennials in August were conventional loans - up 64 percent from August 2017 and the highest rate since February 2015. FHA loans, another popular option among first-time buyers, accounted for 27 percent of all closed loans during the month, down 32 percent from last year.

Lenders are competing for this growing segment of the home buying population including offering a variety of low-down payment options. Millennials have slowly grown to become a larger share of homebuyers and in part responsible for increases in the overall homeownership rate nationwide.

As with other age groups, millennial males represented most of the loans two-to-one with 61 percent of the total, while 32 percent were women. The remainder did not specify a gender.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.75 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Millennials, home buying, first-time buyers, Mortgage rates, Home Loan, Conventional Loans

Fall and winter listings could bring big bucks for sellers

Posted by The Aramco Group on Tue, Oct 9, 2018 @ 13:10 PM

The days are getting shorter and the weather is getting cooler: fall has arrived. Traditionally, the spring and summer are thought of as ‘home-buying seasons’ but some experts claim that some of the best times to buy and sell a home is when the autumn and winter set in.

Because, in fact, most buyers begin their house-hunting journey in the spring, the market can get overcrowded according to Realtor.com. With so many people listing their home in the warmer months, homeowners must compete with an array of other properties for sale. Putting a home up for sale when the competition is sparse can equate to bigger profits.

Buying a home in the latter part of the year is also the last chance buyers have to add the tax benefits to the following year’s tax return. Rather than dealing with many looky-loos, sellers encounter more serious buyers in the fall and winter.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.75 percent, 15-year rates are near 4.25 percent and the 5-year ARM is averaging 4.15 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home buying, Housing Market, Mortgage rates

5 Steps to Increase Your Buying Power

Posted by The Aramco Group on Wed, Mar 28, 2018 @ 09:03 AM

5 Steps to Increase Your Buying Power

We all have dreams of settling down in the perfect home. Unfortunately, if you're not careful, you  might find your dream of buying that ideal home hindered by obstacles with your local lenders.

If you want to make sure that you'll be able to borrow as much money as you need, take some time to improve your buying power before you start exploring the market. Boosting your buying power means improving your credit, considering the state of the market, and adjusting your saving habits to convince lenders that you're trustworthy.

While there are plenty of things you can do to transform yourself into a more attractive borrower, we're going to look at some of the most important ways that you can prepare yourself to finance a new home.

1.  Start by Finding a Guiding Hand

If you're a first-time homebuyer, you might need a little guidance to help you get through the lending process successfully. Even if you’ve purchased a home before, the rules and processes may have changed since the last time you applied for a mortgage. In either case, it’s best to seek the advice and insight of a professional. Working with a mortgage broker is a good way to ensure that nothing catches you off guard when you start filling out loan applications.

If you’re applying for a reverse mortgage in order to help finance the purchase of a new home, you should get assistance from a Certified Reverse Mortgage Professional (CRMP) who can guide you through the process. Additionally, CRMPs are well versed in the intricacies of dealing with buyers, sellers, and agents, with regards to the reverse mortgage for purchase. They can help you and your realtor ensure a smooth transition. There are stipulations surrounding who is eligible for this type of loan and how the loan is structured, so a professional can assess your specific situation and determine whether a reverse mortgage is the right strategy for you.

Mortgage brokers can help to give you a better idea of what you can reasonably afford based on your income and the current real estate market. By speaking to an expert, you might find that you have more opportunities than you originally thought.

2. Clean Up Your Credit Score

There are a few things that can affect how much interest a lender decides to charge on your mortgage. They'll consider the amount of money you're borrowing, and how long your mortgage term will be; but the factor that you have the most control over is your credit score.

Lenders review your credit report to determine whether you seem reliable enough for a loan, and what kind of interest rate to offer you. They essentially use your credit score to evaluate your risk as a borrower, and determine how likely you are to make timely payments on your loan. The higher your credit score is, the better your mortgage rate will be, because you will be judged as a reliable and low-risk borrower.

Many finance professionals advise not to check your credit score too often — however, if you notice a dip, make sure you investigate what caused your score to drop and work on raising the number as soon as possible. Pay off your debts and fix any credit report mistakes in a timely fashion in order to maintain a good credit score.

3. Reduce Your Debt-to-Income Ratio

Your debt-to-income ratio is essentially an insight into the amount of debt you have compared to your incoming cash. Lenders calculate this number by dividing your monthly debt payments by your monthly income. The result is expressed as a percentage, and your lender will address this percentage when determining how well you'll be able to manage payments.

If you have a low debt-to-income ratio, this will indicate that you have a good balance between your debt and income (you owe very little in debts compared to the cash you have coming in). In most circumstances, 43% will be the highest debt-to-income ratio you can have while still qualifying for a mortgage. If your ratio is higher than this, you may need to work on paying down debts before you buy a house, or risk having to pay a higher interest rate. The good news is that many lenders allow debt-to-income ratios to be lowered based on the cash you may receive during your refinance; provided you use those funds to pay off some outstanding debt.

4. Ramp Up Your Down Payment

Nothing shows your lender that you’re reliable more than a sizable down payment. A large deposit not only outlines your ability to save but also reduces your overall loan-to-value ratio, which improves the chance that you'll be able to get the mortgage you want. Your loan-to-value ratio is calculated when you divide the price of the mortgage by the purchase price for the property.

The bigger your down payment, the lower your loan-to-value ratio — which can result in better terms on your mortgage, smaller monthly payments and that less interest over the life of your loan.

5. Know the Facts on Mortgage Rates

Although your credit score, debt-to-income ratio, and down payment can all impact how likely it is that you'll be able to purchase your ideal home, there's one important element that many would-be homeowners overlook. The current mortgage interest rate can frequently determine how much cash a lender is willing to let their clients borrow.

If you wait around too long, and the mortgage rates creep up by a percentage point or two, you could find that you can no longer afford the same home you would have been able to buy only a year ago. That's why experts often recommend that you lock in a good fixed interest rate when you can.

For more information about qualifying for a refinance or purchase loan, or to get assistance from one of our Certified Reverse Mortgage Professionals, contact ARAMCO.

Topics: home buying

Home Buying for Seniors: Do You Know the Trends? [QUIZ]

Posted by The Aramco Group on Wed, Oct 25, 2017 @ 09:10 AM

Are you a part of the 'Silent Generation' (age 71 or up)? And are you considering purchasing a home? Before you do, test your knowledge with our quiz on the data and trends from the 2017 Home Buyer and Seller Generational Trends Report. 

 

Topics: home buying, Seniors

ARAMCO Report - Thursday June 4, 2015

Posted by The Aramco Group on Thu, Jun 4, 2015 @ 16:06 PM

The Catch 22 of Renting before Buying

San Diego rents increased 5.5 percent between April 2014 and April 2015. That is equivalent to an increase of $123 per month as of April of this year, when the median monthly rent was $2,347 according to Zillow.

Renting is traditionally the stepping-stone to homeownership in the American dream, but while higher rents motivate people to buy a home and get out of the rental market they can also hinder homeownership by siphoning potential savings away from being used for a down payment.

Renters in high-income areas like San Diego can often pay higher than average percentages of their monthly income—sometimes up to 50 percent vs. an average of 30 percent nationally—on rents. This is because San Diegans’ median incomes have been 18.8 percent higher than the national average (approx. $63,000 vs. $50,000, via US Census), but their median monthly rental costs have been 72 percent higher than the national average ($2,347 vs. $1,364), as they were April 2015.

Mortgage programs from FHA, Freddie Mac and Fannie Mae—that have low down payments and that historically have lower interest rates—are meant to help qualified first-time homebuyers break this problematic cycle.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Topics: San Diego County, home buying, San Diego, Down Payment, 30 year fixed rates, renting, Rent