Today I had a 30-minute informational call with a woman in the
early stages of a marital separation. We went over the basics, equity
buyouts, mortgage payments, and the qualifying process. At the end of the
call she told me that she felt so much better knowing not only what her future
mortgage payments could look like, but also that she could afford to keep the
house if that is what they decide. Then she asked me how much she owed me for
the call. Of course the answer was nothing at all.
As a mortgage originator, I am not permitted to collect an hourly
fee. I only get paid if and when someone does their mortgage with
me. A simple fact, but the conversation reminded me that not everyone
knows that! So, I am reminding you today that I am here to help your
clients with mortgage solutions for FREE, and without any obligation.
Considering the fact that getting a divorce is very often an
expensive process, I find that my clients appreciate that I can offer them
advice based on my years of experience without charge, and that I am always
happy to help.
Margie Hofberg, President
Residential Mortgage Center
Happy New Year! We said goodbye to 2019 and now welcome 2020 and
a new decade. Predicting the housing economy is difficult anytime, but even
more so given the trade and geopolitical uncertainties that will continue in
2020 as well as the national election coming up in November.
However, there is some consensus on a few key measures among
both industry players (such as financial institutions) as well as the
governmental mortgage giants Fannie Mae and Freddie Mac including:
Mortgage rates, which
dropped from 4.50% to 3.75% during 2019, will continue to decrease, but only
modestly. They are expected to reach approximately 3.60% in 2020.
Housing activity will
show an uptick, with existing home sales up 5% year over year, to approximately
5.5 million sales per quarter in 2020.
are expected to remain steady in 2020, with purchase loans becoming a larger
percentage of total originations.
Tight inventories of
homes for sale will continue to push home prices up, especially in urban areas
like the DMV. Expect the median home price to rise about 5% in 2020.
For those contemplating changes to their housing or mortgage
situation, the most important factor is your personal financial (and
non-financial) goals. How your goals relate to the market is where we can help.
Contact Margie to discuss how you can benefit from what looks
to be a stable market in 2020 (at least for now.)
Wishing everyone a happy and healthy 2020!
Steven H Hofberg, Operations Manager
Over the past five years, condominiums have surged in both
popularity and value. There are a number of reasons for this, but certainly
millennial lifestyle choices and affordability (when compared to single family
homes) are major factors. This affordability means that condos are popular for
first-time homebuyers. But after the financial crisis, FHA stopped accepting
“spot” condo approvals, meaning that the entire project, not just the unit
being financed, had to have FHA approval. Since very few condo projects took
the time and considerable expense of getting full approval, the use of FHA
financing for condo purchases has been severely limited for the past decade.
However, that has recently changed. Effective October 15, FHA is
again accepting individual condo unit approvals. Although not every condo unit
will be approved, this change will substantially increase the number of units
that can be financed through FHA. Not all lenders are yet participating with
FHA in the spot approval program, but RMC is fortunate to be working with one
lender that is participating.
We feel that this is a game changer for condo purchases,
especially for first-time homebuyers and those with limited down payment
resources. Like any mortgage program, there are lots of details. Contact Margie for further information on this exciting
Steven H Hofberg
In the real estate market, there is a perception that spring is
THE time to buy. But consider the facts. In hot markets like the DC metro area,
spring and summer can be (and was again this year) a very frenzied time to look
for a house. In addition, you may face issues like bidding wars, escalation
clauses, and no contingency or minimal contingency contracts.
Now consider fall. It can be a great time for prospective
buyers. Good deals can often be found for houses that didn’t sell in the spring
or summer, as owners may be more willing to negotiate. Or they want to sell
before the holidays. In any case, you will almost certainly have fewer buyers
competing against you.
So, if you were trying to buy this year but have come up short
so far, contact Margie to
see how much of a mortgage loan you can qualify for and to get a Qualification
Letter. Then go looking for your house!
Bond Market Weakness Pushes Mortgage Rates Lower
From the RMC Newsletter dated June 4, 2019
Domestic financial headwinds and trade disputes, particularly the
huge one between the US and China, have investors moving into “safe havens”
like US Treasury bonds. The yield on the benchmark 10-year Treasury bond
settled on Tuesday of last week at 2.268%, its lowest close since September
2017. Investors, analysts, and the Fed itself look to Treasury yields as a
barometer of economic sentiment. Bond yields also factor heavily in the cost of
debt for all types of borrowers, including home buyers. Few analysts see a risk
of imminent recession, but many are predicting slower growth primarily due to
disruptions of global trade caused by higher tariffs.
This economic stew does have its positives, one of which is its
effect on mortgage rates. They generally track the 10-year bond yield, which
has been falling substantially over the past few months. The impact on rates
has likewise been substantial, falling a full percentage point in the last six
months. This has made home ownership more affordable and it has opened the door
to more borrowers who wish to refinance to lower their rate, take cash out, or
recast an ARM that has or will soon adjust upward.