7 Home Maintenance Tasks You Should Tackle in June

Picture courtesy of Realtor.com 

Picture courtesy of Realtor.com 

Ah, June. School's out, the days are long, and the weather's getting toasty. We get it—your vacation is beckoning. (So's ours.) But before you slather yourself with SPF 75 and reach for a piña colada, do yourself a favor and tackle a few maintenance projects. A little pain now means a big gain later—you'll ensure your home runs smoothly through the dog days of summer.

Don't worry: We’re here to make it as quick and easy on you as possible. With our handy checklist of home maintenance chores, you can knock 'em out and get back to that piña colada, pronto. (We'll take ours with two tiny parasols, please.)

1. Check your AC

"The last thing you want is a busted air conditioner, so before a heat wave hits, give it a test run for 30 minutes to make sure it’s cooling properly," says Dave Quandt, vice president of field operations at American Home Shield, a home warranty company.

Shortcut: To extend the life of your AC unit, adjust your programmable thermostat by only 2 to 3 degrees at a time.

Call in the pros: If anything seems off, call in a professional HVAC company. You'll spend between $100 and $250 for service, which includes cleaning the condenser and lubricating the fan motor. When the outdoor temps go deep into the red zone, you'll likely consider it money well-spent.

2. Stop mold before it starts

June kicks off a stretch of the hottest months of the year, especially in Southern states where heavy rain is also the norm. All that heat and moisture provide the perfect climate for mold to flourish, says Phil Kuczak, air-conditioning service and installation manager at Best Home Services in Naples, FL.

Shortcut: There's an easy trick you can use to keep mold at bay: Lower your thermostat.

"Some homeowners try to save money by setting the thermostat at an unsafe high temperature, especially in high humidity areas," Kuczak says. "The cost savings on the power bill could quickly be far outdone if you end up with a mold problem."

Also avoid leaving your AC fan in the "on" position (instead of "auto"). This can cause rapid mold growth, especially in high-humidity regions. Here's why: If your fan is running continuously, then any moisture that's condensed on your AC's evaporator coil during cooling doesn't have a chance to drain off—and it can be blown back into your home.

Kuczak also cautions against trying to limit or increase airflow to certain rooms by shutting supply grills. That can cause condensation buildup, leading to mold growth around those grills and in the adjacent ceiling or wall.

Call in the pros: If you have a mold problem, expect to pay a small fortune for a pro to remove it. Homeowners spend up to $3,200 on average for mold remediation.

3. Prime your pool

Test your pool's pH levels often to keep the chemicals balanced and your pool safe for swimming. Run the pump daily (one hour for every 10 degrees of heat in the water is a good rule of thumb) to avoid that swampy green color.

Shortcut: If you forget and come home to a green pool, a jug of liquid bleach will clear it up quickly, according to Quandt.

Call in the pros: Don't want to bother with it? You can hire a pool maintenance company for an average of $243 a month.

4. Eradicate pests

Warm weather draws out all the creepy-crawlies. But you can give summer bugs the boot (or at least keep them at a comfortable distance).

Shortcuts:

  • Trim shrubs or bushes that touch your home's exterior (which can harbor wood-destroying insects such as termites, carpenter ants, and powderpost beetles).
  • Swap mercury vapor outdoor lightbulbs with yellow sodium vapor ones, which are less attractive to insects such as mosquitoes, moths, and beetles.
  • Weed thick vegetation and pick ripe fruits and vegetables as soon as they're ready.
  • Keep bird feeders at least 25 feet from your house—spilled seeds can attract rodents.
  • Stop mosquitoes before they hatch by eliminating all sources of standing water on your property. Call in the pros: Above all, know when to seek professional help.

"Do-it-yourself pest control for a cockroach or occasional spider can be cost-effective, but it's not going to stand up when you have a serious infestation," says Ryan Michel, owner of Defense Pest Control in Mesa, AZ. "Pests can carry bacteria and disease, and some can do serious damage to your home. If you're seeing pests pop up with frequency—especially if you notice them appearing in the same places—it's time to call in a professional to help."

It'll cost you an average of $178 a month. But hey—you'll sleep better, right?

5. Service your sprinklers

Service your yard's irrigation system to save water, prevent damage to your landscaping, and reduce standing water.

Shortcut: Make sure your sprinklers are programmed to follow any local water rationing regulations, and program your system to optimal summer use settings to keep the landscape looking fresh.

Call in the pros: If you don't know what kind of maintenance your sprinkler system needs, a pro will take it on for $95 to $123.

6. Keep your fridge frosty

It should go without saying that your fridge and freezer are most vulnerable in the summer heat. To keep them running smoothly, clean condenser coils—which help the unit stay cool by releasing heat from the compressor—and be sure to remove dirt, pet hair, and any nasty food that's lodged there.

Shortcuts: Make the job simple by using a vacuum and coil brush, says Chris Granger, vice president of Sears Home Services.

While you're at it, tackle the door.

"A leaky door gasket can result in your refrigerator trying to cool the entire kitchen," Granger says.

Clean the gasket with a mild cleaner, and then check the seal integrity with a solution of soapy water—just like you would do with an inflatable mattress, he says. You can also use the dollar bill approach: Close a dollar bill in the door so it's half in your fridge. If your gasket isn’t tight enough, it won’t hold the bill firmly in place—the dollar bill will fall out or slide down.

Call in the pros: Most appliance repairmen charge by the hour. Depending on the issue, a refrigerator repair could cost anywhere from $100 and $200 an hour.

7. Pimp your ride (riding lawn mower, that is)

Use compressed air or a leaf blower to clear grass, dirt, and debris that have accumulated in your riding lawn mower. Drain old fuel into an approved gasoline can, and follow hazardous waste disposal regulations to get rid of it. Then, change your oil and filter: Granger recommends letting the mower run for a bit before getting started. If you have a foam air filter, clean it with soap and water, and make sure it’s dry before reinstalling.

Finally, change the spark plugs. "This simple but crucial task will help the mower start smoother and run more efficiently," Granger says.

Call in the pros: On average, professional lawn mower maintenance and repair will cost $35 to $90, but could increase depending on the complexity of the job and whether new parts are needed.

 

This article was written by Holly Amaya, June 1st, 2017. Pictures and original article from Realtor.com. To see the original version, click here

2017 Conforming Loan Limits Have Increased!

For the first time since 2006, the conforming loan limits have increased. In 2017, the baseline loan limit for most counties across the U.S. will be $424,100, a slight increase over 2016. More expensive markets, such as New York City and San Francisco, have conforming loan limits as high as $636,150. Anything above these maximum amounts is considered a “jumbo” mortgage.

Download Conforming Loan Limits for 2017 (All Counties)

PDF document

Excel Spreadsheet

The PDF and Excel files above were obtained from FHFA.gov.  You can download them to your computer, in either format, and refer to them as needed.

Update: Conforming Loan Limits Increased for 2017

On November 23, the Federal Housing Finance Agency (FHFA) announced that it would raise the baseline conforming loan limit for 2017. They are also increasing the limits for certain “higher-cost areas” that are above the baseline. This is in response to significant home-price gains that occurred during 2016.

In most counties across the country, the 2017 maximum conforming loan limit for a single-family home will be $424,100. That’s an increase of $7,100 from the 2016 baseline limit of $417,000. This is the first time federal housing officials have raised the baseline since 2006.

But again, this is just the baseline conforming loan limit used for most parts of the country. In higher-cost real estate markets, like San Francisco and New York City, the limit for a single-family home loan can be as high as $636,150.

Anything above these caps is considered a jumbo mortgage.

What Is a Conforming Loan?

A conforming home loan is one that meets, or “conforms” to, certain guidelines set forth by Freddie Mac and Fannie Mae.

Freddie and Fannie are the two government-sponsored enterprises (GSEs) that purchase mortgages, bundle and securitize them, and then sell them to investors through Wall Street and other channels.

When a loan meets the purchasing criteria used by the GSEs, it is said to be a conforming loan.

There are various criteria used to define a “conforming” mortgage product. But the size of the loan is one of the most important criteria, from a borrower’s perspective.

Freddie Mac and Fannie Mae will only purchase loans up to a certain amount. These maximum amounts, or limits, vary by county and are updated every year.

‘Jumbo’ Mortgages Are Still Widely Available

Borrowers who wish to obtain a mortgage loan in an amount that exceeds the 2017 conforming limits still have options. When a home loan exceeds the caps set by the Federal Housing Finance Agency, it is referred to as a “jumbo” mortgage product, and it cannot be sold to Fannie Mae or Freddie Mac.

Jumbo loans are still widely available in the U.S., but the qualification criteria are generally stricter for these products due to the higher level of risk involved.

Jumbo mortgage products do not meet the underwriting guidelines set forth by FHFA, so they are not eligible for purchase by Fannie Mae and Freddie Mac. As a result, eligibility requirements are often more stringent with these larger “non-conforming” loans. Lenders often require higher credit scores and larger down payments for jumbo loans, though the specific criteria vary from one lender to the next.

To find the 2017 conforming loan limits for your county, just download the PDF document or Excel spreadsheet above.

If you are in the market for a new home, the first step is to contact one of our highly skilled Mortgage Bankers to see what you qualify for. Our team is standing by, ready to work with you to help you transition into the perfect home for your needs. Contact us today at 215-469-1000.

 

This article was retrieved from Loanlimits.org. 

What Is the Average Price per Square Foot for a Home—and Why Does It Matter?

Picture thanks to Realtor.com

Picture thanks to Realtor.com

If you’re hoping to buy a house, the very first dollar figure you’ll want to know is the home’s price, of course. But a close second is its price per square foot—and the average price per square foot for a home in that neighborhood (or the median price, which is actually a better representative of the middle ground).  Here’s what you should know about these numbers, and how to use them to your advantage as you shop for a home.

How to calculate the price per square foot for a home

Typically, a home’s price per square foot is prominently featured on the listing—both online as well as in those property information sheets you get at an open house.

But a home’s price per square foot doesn’t tell you much on its own. This number is best understood in comparison with similar homes nearby. So your next step should be to type in the city, neighborhood, or ZIP code of interest into a site like realtor.com/local. This will give you the median price per square foot for homes in that area (as well as median asking price, closing price, and number of homes for sale—all useful info during a house hunt).

What’s the average price per square foot for a home?

According to the latest estimates, the median price per square foot for a home in the United States is $123. But that can vary widely based on where you live and other factors. For instance, on the low end, you’ll pay $24 per square foot in Detroit; on the high end, in San Francisco, $810.

Why such a wide range? Well, it’s no secret that certain neighborhoods are considered more desirable than others, and fetch a higher price as a result.

“The hotter the neighborhood, the higher the price per square foot,” says Anthony Stellini, a Realtor® with RSR, a division of the real estate firm Nourmand & Associates. But odds are you knew that already. What you may not know is how this info can help you get a better deal on a house. More on that next!

How price per square foot can help you negotiate

When you run your comparison of a home’s price per square foot with the neighborhood median, you’ll be able to suss out whether a place is a bargain or overpriced.

Let’s say you see a home you love priced at $150 per square foot, but then you find that the median price per square foot for the neighborhood is $135. This suggests the home you’re looking at could be priced too high—which spells an opportunity for you to negotiate for a lower purchase price. Just point out to the sellers that homes of similar size in the area are going for much less. Or, conversely, if the median price per square foot is $135 but this home is only $120, you may have a bargain in your crosshairs that you should snap right up!

Need Help Determining if You are Getting a Good Value?

Contact one of our highly skilled Mortgage Bankers to help you determine if your dream home is priced fairly or if you have room to negotiate. When you need expert advice, let our experts help you in determining if you are getting a good value for your offer. Call us at 215-469-1000 for a no-obligation consultation or request one here!

 

 

This article was written by Margaret Heidenry, October 21, 2016, Pictures and original article from Realtor.com. To see the original version, click here. 

Preparing Your Home for Autumn: Maintenance Tips for the End of Summer

It’s time. Sigh. Summer has drawn to a close, like it or not, and Fall has arrived!

Before the leaves fall and the wind turns chilly, it’s a good idea to do some seasonal maintenance on your home. Here are some things to add to your fall “honey-do” list.

Have your furnace inspected. It’s smart to have your heating system serviced before you actually need to use it. Experts say that as much as 75 percent of the calls they receive about homeowners without heat are a result of not having the furnace serviced and cleaned. It will also keep your heating costs down and help keep the air in your home healthy.

Inspect your roof. You’ll want to check for shingles that are cracked, buckling, or missing. Check for caulking that needs to be replaced, or moss or lichen, which could indicate deterioration underneath. If you don’t trust your own assessment, work with a certified inspector.

Check for mold. The humidity of summer can cause mold to flourish. Check locations such as around leaky pipes, basements, or areas that don’t get good ventilation. You will want to remove the mold as soon as possible. It’s wise to have this done by a professional.

Replace weatherstripping on doors. There could be gaps that you can’t see and that can jack up your energy costs. It’s a simple fix that can be done with items found at your local hardware store.

Check the airflow. Focus on areas like vents, the hood over your stove, dryer vents, baseboard heaters and room fans. Not only is a buildup of dust a fire hazard, but you also want to keep the air flowing and the allergens at bay.

Get control of gutters and downspouts. Clogs in gutters and downspouts can cause the roof to leak, which can lead to a host of other problems. It’s a slippery slope from clogged gutters to water damage in your home!

Look over your siding. You’ll want to look for any areas on vinyl siding that are buckled or warped. If you have wood siding, look for curling, splitting or cracking. Should you find an issue, you’ll definitely want it taken care of before the weather gets cold!

Inspect your insulation. The most important area to check is your attic. You should have the highest concentration of insulation here. See if there are any gaps that need to be filled. You don’t need to check the insulation in your walls unless you notice heating issues.

Make sure your detectors are working. Ensure both smoke and carbon monoxide detectors have fresh batteries. It’s smart to test them, also. Both are especially important once your furnace is in use.

Each season brings its own challenges and wear-and-tear on your home. With summer ending and autumn on the way, you can go into the new season secure that your home is in tip-top shape!

 

Article written by Anita Alvarez, originally published on RISMedia’s blog, Housecall. 

Is Paying Off Your Mortgage Early Something You Should Do?

Even if you can easily afford your mortgage every month, the idea of living debt free after paying off your home loan early can be pretty tempting. If you do decide to pay off your home loan early, you’ll save money from skipping out on the interest tacked on your mortgage payments.   

While saving money on interest rates is great, there are many benefits to steadily paying off your mortgage as well. Consider the following before deciding to pay off your home loan early– you just may save more money in the long run.

Tax breaks.

Many homeowners get a decent tax break based on the interest they’re paying on their home loan. During the years you pay off your mortgage, you get a federal and state tax deduction on mortgage and home equity loan interest for loans that are up to 1 million dollars.  Before deciding to pay off your mortgage, consider your future tax strategy to assess whether or not it’s in your best interest to do so.

Retirement and savings.

If you’re planning to develop a retirement fund or other savings accounts over the upcoming years, perhaps putting so much of your money into paying off your mortgage early isn’t the best idea.  Down the road when you begin to rely more on your 401(K), you’ll be happy you didn’t spend too much of it on a mortgage.  It’s also hard to know of any future expenses that may fall into your lap (like medical bills, natural disasters, school, etc.), and it would be nice to have a little money set aside for you to use when you have nowhere else to turn.

Other financial responsibilities.

Borrowing money for a house isn’t as expensive as some other loans like high interest credit card debt, or student loan debt.  Because paying off a mortgage can be easily managed, it may be wise to use any of your extra income on more pressing payments.  If you use more of your money to pay off a home loan early, you’ll end up paying more money in interest rates on more expensive debt in the long run.

Whether or not you decide to pay off your mortgage early, be sure to take the time to go through your current and potential future finances to ensure it’s in your best interest to do so. 

If you’d like an extra opinion on the matter, consult with one of our highly qualified Mortgage Professionals to help you come up with the most beneficial options for you. Call us at 215-469-1000 and schedule your free consultation today!

Adapted from http://dreamcasa.org To see original article, click here.

Survey: 5 in 10 Millennials Still Consider Down Payment a Barrier

91% Millennials Want to Own a Home

Most renters would like to take the next step toward homeownership. They just don’t think they can - yet.

In fact, 91 percent of Millennials stated in a recent survey that they want to own a home.

This group, roughly age 25-34, represent the majority of potential first-time home buyers, according to Ellie Mae, the loan software company that conducted the survey.

The problem -- or perceived problem -- for many potential homebuyers is the down payment.

Inability to raise the necessary down payment was stated as a common barrier to owning a home, cited by 45 percent of respondents.

The other major challenge, according to twenty-nine percent of survey takers, is the inability to qualify for the mortgage.

But in today’s market, buyers can achieve homeownership with little or no down payment, and sometimes without a credit score.

Knowing about these loan products and down payment options will fast-track your homeownership goals, even if perceived barriers have kept you from trying.

Down payment: Will It Take Eleven Years to Save Up?

A common home buying myth is that it takes a 20 percent down payment to buy a home.

For a $300,000 home, that’s sixty thousand dollars.

Fortunately, this myth doesn’t hold water. Most would-be buyers are around 30 years old. Not many of these Millennials have that type of cash stashed in savings. They will someday, but not yet. Not with student loan debt obligations still in play.

Of course, if you want to save that 20 percent down payment you can. Just save $12 every day and you’ll have your down payment banked sometime around 2027.

That’s way too long. Home prices will likely outrun efforts to save up 20 percent of your future home’s purchase price.

Knowing your flexible mortgage loan options is your first move. From there you are just a series of small actionable steps away from making homeownership happen.

What Are My Home Loan Options?

There is no universal mortgage guideline that all applicants must adhere to. Mortgages come in a variety of formats to meet a wider population of home buyers.

From low down payment requirements to credit score leniency, there’s a loan type for most home buyers today.

1. FHA loans

The popular FHA home mortgage program requires just a 3.5% down payment. This financing type is also more flexible for those lacking an extended employment history -- like fresh college grads -- and those who have experienced a credit hiccup.

Speaking of credit, these loans also allow a borrower to have no credit score at all. Many young people have never had so much as a credit card. According to written FHA rules, lenders are not allowed to deny a loan application based on lack of credit history.

Rather, the FHA lender should help the applicant establish a credit score and history via utility payments, cell phone bills, car insurance, and rent history.

2. VA home loans

VA mortgages require no down payment or mortgage insurance. Credit guidelines are lenient, and, like FHA, accept non-traditional credit history.

Active military personnel need only 90 days of service to be eligible for the VA home loan program. If you are a veteran or qualified serviceman you should explore this option first, as it comes with unmatched advantages.

3. Conventional loans

Conventional loans make up around 60 percent of the market. Most assume conventional loans – those backed by Fannie Mae and Freddie Mac – are ultra-conservative and reserved for only the best applicants.

Yet conventional loans now offer three-percent-down (97% LTV) financing through the Conventional 97 program as well as HomeReadyTM, the latter accepting non-borrower household income to qualify.

The HomeReadyTM mortgage is perfect for multi-generational households, home buyers with a history of living with roommates, and non-married individuals buying a home together.

4. USDA Rural Development loan

The United States Department of Agriculture (USDA) offers this loan to home buyers in suburban and rural areas to promote economic development in these regions.

USDA loans require no down payment and a credit score minimum of just 640.

They are available from most lenders in the U.S., rather than directly from a government agency. Furthermore, these mortgages come with very low mortgage rates, which lowers the monthly payment, and further increases chances of qualifying for new buyers.

Creative Ways To Raise A Down payment

Sometimes, buyers choose to make a down payment, even if it's a small one.

The cash doesn’t always have to come from a bank account into which you have made years of deposits. The following are ways to come up with a down payment -- ways that new home buyers don't often consider.

1. Your 401(k)

The IRS allows 401(k) home buyers to borrow as much as $50,000 from the vested portion of their accounts.

Many times the payments are deducted from your employment pay check every month. The interest rates are usually favorable too.

2. IRA funds

The IRS allows for a maximum one-time, penalty-free distribution per person of $10,000 for a first-time home purchase or for building a home.

The IRS exemption guidelines for a traditional IRA and a Roth IRA are a bit different though. Consult with an accountant about tax implications.

4. Down payment gifts from family

Your immediate family members and even more distant relatives or godparents can contribute to an FHA loan down payment.

Be prepared to document the gift funds thoroughly, including proof of donor’s ability to give, which generally requires the gift giver to provide a bank statement.

5. Saving automation

Deposit your tax refund directly to a down payment fund or redirect a small portion of your paycheck there. Some banks will even round up to the nearest dollar with every purchase, depositing the difference into your savings account.

Minimize your temptation to tap that fund by refusing checks and debit cards for the account.

6. Bridal registry

Would you prefer a kitchen gadgets or down payment money for your first home? FHA allows for a bridal registry to be used toward your down payment.

Consult your loan officer on how to document it and you could be well on your way to a solid down payment by the time you get home from the honeymoon.

Down payment Assistance Programs

More than 2,300 homebuyer programs are available nationwide and nearly 80 percent of first-time buyers could qualify for a program of some sort.

Who offers these programs?

  • Housing finance agencies in various states
  • Nonprofit agencies
  • City and local development authorities
  • Employers

Homebuyers should investigate these down payment assistance options upfront. They add time to the mortgage loan process so getting started on this path early is strongly advised.

What Are Today’s Rates?

Mortgage rates are low and it’s a perfect time to apply to purchase a home. Traditional challenges to homeownership should not stop today’s home buyer from applying.

Written by:  SHASHANK SHEKHAR, themortgagereports.com

If you have been on the fence wondering whether you can qualify for a mortgage and move into your dream home, contact one of our highly skilled mortgage bankers to set up a no-obligation free consultation so we can review your current situation and get you on the path to home ownership.  

Millennials: Rent Levels and Demographics vs. Credit Scores and Tight Inventory

Doug T. writes, “There's a strange new trend in the office: people are putting names on food in the company fridge to keep them cold. Today I had a sandwich named Kevin.” There are some real estate markets that are anything but cold, but what is a “hot” housing market? The West Coast has seen an ebbing of all-cash Asian buyers, but markets are still good.  Pro Teck Valuation Services (a national provider of residential real estate valuations) came up with its definition, and variety of factors, to determine a "hot" housing market.

Back in April Millennials surpassed Baby Boomers as the nation's largest living generation, according to population estimates by the U.S. Census Bureau. "Millennials, whom we define as those ages 18-34 in 2015, now number 75.4 million, surpassing the 74.9 million Baby Boomers (ages 51-69)." That means that rascally generation is now 19-35. Let's just stick with the Census Bureau's definition.

Every time I mention Millennials to my cat Myrtle she gives me a look as if to ask, "How long will everyone take to realize that Millennials are in no hurry to marry, have kids, or save up enough money and then finance a house? It will happen eventually - why are lenders and real estate agents pushing them? Still it doesn't stop the fascination with their every move but the ones that I talk to aren't too excited about constantly being under the microscope." Yes, that was all conveyed by Myrtle's look.

The CPI report indicates apartment rents climbed 0.4% in May to a record high, marking the 67th consecutive month of increases. As of the end of 2015 about 37% of households were renters, the highest level since the 1960s.

Sure enough, the latest analysis by Pew finds that the most common living arrangements for Millennials are: living with parents (32%), married or cohabitating (32%), living alone or with roommates (14%) and other living arrangement (22%). The percentage of those living at home is the highest on record.

More millennials are living with their parents than they are with a partner or significant other, for the first time in the modern era. This is probably a reflection of a lot of things - from the weak economy to people getting married later in life. However, it does represent pent-up demand for housing. And eventually Pampers, right? CNBC echoed that more young adults aged 18-34 live at home with Mom and Dad than in any other arrangement. 

Zillow's Chief Economist writes, "With home prices and rents rising as fast as they are, it's a common assumption that young adults in many cases cannot afford to live alone. Though that may be true in some markets, there's still a large number of amazing places across the U.S. that are prime for millennials to thrive independently." Those in Richmond and Pittsburgh are bucking the trend according to data from Zillow. Its data found that 8.9 per cent of millennials live alone but in Richmond it's 15 per cent and in Pittsburgh 14.3 per cent.  Millennials are also more likely than average to live alone in Buffalo, NY; Columbus, OH; Virginia Beach, VA; Cleveland; New Orleans; Austin, TX; Kansas City, MO; and Oklahoma City.

Let's track them every month through "Big Data!" The recent Ellie Mae Millennial Tracker, which shows that among primary millennial borrowers that are women, more than 60 percent are single while only 38 percent are married. This is a striking difference from male primary borrowers, where just 41 percent are single. Women were listed as the primary borrower on nearly one-third (32 percent) of closed loans. What are the top MSAs by percentage of millennial loans closed? Columbia, Mo., Jonesboro, Ark. and Sioux Falls, S.D. Ellie Mae perused its database and found that FHA loans continued to be popular among millennials, making up 37 percent of their closed loans (which is significantly higher than the 23% FHA loans for the general population). But check this out: in its database Ellie Mae found that the average FICO score (how about credit score?) was 722 for all closed Millennial loans in May.

Speaking of Millennials, the high student loan debt is causing lower credit scores. The average credit score for the 18-34 age cohort is 625, compared to the national average of 667. Almost a third of that age cohort have sub-600 scores. Good luck getting a loan with that. Finally, all of the new post-2008 regulations have added anywhere form 50k-100k to the cost of building a starter home, making it difficult for builders to make homes that are affordable for the first-time homebuyer. 

If they can purchase, what kind of houses are they buying? A tight supply of starter homes is pushing prices up 9% per year in that segment, more than double the price appreciation at the high end. This is a combination of lower foreign demand for luxury homes and increasing demand by Millennials who want to buy. 

Mark Fowler with The Futures Company, writes, "2016 is the year that Millennials said goodbye to their teenaged years-the cohort is now 20-37 years old and runs the gamut of graduating college to buying a home to starting a family. In short, it's no longer acceptable to think of Millennials as kids or youth. That title goes to the Centennials, the generation made up 78 million consumers aged 0-19.

"It's no secret that Millennials are a demographically-diverse group, but their diversity among life stages makes them an even more complex cohort. At The Futures Company, we often divide Millennials into two segments; Emerging Millennials (20-28) and Adult Millennials (29-37). Younger Emerging Millennials are just beginning to form their worldviews, while Adult Millennials have a much more concrete vision of their future.

"Adult Millennials are right in the midst of life stage transitions that make them an incredibly attractive marketing target: they're buying homes (in many instances, their first); they're getting married; they're having children; they're settling into career paths and building wealth.

"Financially, Emerging Millennials are still struggling to find a foothold, build their savings and contribute to the economy, with a Median Household Income of $47.7K.  Adult Millennials with a Median Household Income of $72.6K are fueling the economic engine while juggling expenses for houses, spouses, kids and careers.  Specific to Mortgage, 17% of Emerging Millennials have a mortgage where 37% of Adult Millennials have a mortgage.

"However, both groups of Millennials they still face rather grim economic realities. 58% of the Millennials feel they are living paycheck to paycheck. Nearly 1/3 of Millennials are experience severe or high levels of economic anxiety. 40% of Emerging Millennials are worried about paying their monthly bills and 60% are worried about paying off their student loans."

Some companies are certainly paying attention to the trends. A recent press release noted that millennials currently account for one in three home purchases, and this rate is expected to increase in the coming years. By some estimates, Millennials will spend up to $2 trillion in real estate purchases over the next five years.

 

Article written by Rob Chrisman, adapted from Mortgage News Daily. To read the full article, click here.

Mortgage Terminology 101

Mortgage Terminology 101

Navigating the home-buying process can be a challenge, for first-timers and seasoned buyers alike. In addition to looking for the perfect home, prospective buyers need to be knowledgeable about the ins and outs associated with choosing a mortgage, beginning with having a general understanding of the terminology involved in mortgage papers.
 
While many borrowers simply seek rates and terms that appear reasonable, it’s important that they understand the type of lender they’re dealing with. 
 
Following are some of the most common terms you’ll come across when going through the process of choosing a lender. 
 
Mortgage Lenders. Lenders are the ones who make the loan and provide the money you’ll use to buy your home. When meeting with lenders, you’ll have to provide a lot of financial background information. The lender will then set the mortgage interest rates and other loan terms accordingly.
 
Mortgage Brokers. Brokers work with multiple lenders to find the loan that’ll offer you the best rate and terms, so when you take out the loan, you’re really borrowing from a lender, not a broker. This is often one of the most confusing parts of the mortgage process for prospective buyers.
 
Mortgage Bankers. Most mortgage lenders are mortgage bankers, which means they don’t lend their own money, but borrow funds at short-term rates from warehouse lenders. Larger mortgage bankers will originate their own loans, which they’ll then sell directly to Fannie Mae, Freddie Mac, or investors.
 
Portfolio Mortgage Lenders. These lenders originate and fund their own loans, offering more flexibility in loan products because they don’t need to adhere to the guidelines of secondary market buyers. Once these loans are serviced and paid for on time for at least a year, they’re considered “seasoned” and can be sold on the secondary market more easily. 
 
Hard Money Lenders. If you’re having trouble getting a mortgage and working with a portfolio mortgage lender, a hard money lender may be your last resort. These lenders are private individuals with money to lend, though interest rates are often much higher.
 
Wholesale Lenders. Wholesale lenders cater to mortgage brokers for loan origination but offer loans to brokers at a lower cost than their retail branches offer them to the general public. The result for the borrower? The loan costs about the same as if it were obtained directly from a retail branch of the wholesale lender.
 
Correspondent Mortgage Lenders. These lenders have agreements in place with one or more wholesale lenders to act as their retail representative so they lend directly to buyers and use wholesaler guidelines to approve and close loans with their own money. They also agree to buy back any loans they close that deviate from wholesaler guidelines. 
 
Direct Mortgage Lenders. A direct mortgage lender is simply a bank or lender that works directly with a homeowner, with no need for a middleman or broker.

By Keith Loria, RISMedia, 2016

Now that you know the different types of Lenders, you want to find one that will fit your individual needs. Centennial Lending Group is a Mortgage Lender. We work directly with you and your personal needs to find the best mortgage and rates for you. If you have any questions or would like a free consultation to see what options are available to you when purchasing or refinancing your home, contact us today by calling 215-469-1000 or go here to send us an email!