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by Keeping Current Matters


Today’s everyday reality is pretty different than it looked just a few weeks ago. We’re learning how to do a lot of things in new ways, from how we work remotely to how we engage with our friends and neighbors. Almost everything right now is shifting to a virtual format. One of the big changes we’re adapting to is the revisions to the common real estate transaction, which all vary by state and locality. Technology, however, is making it possible for many of us to continue on the quest for homeownership, an essential need for all.

Here’s a look at some of the elements of the process that are changing (at least in the near-term), due to stay-at-home orders and social distancing, and what you may need to know about each one if you’re thinking of buying or selling a home sooner rather than later.

1. Virtual Consultations – Instead of heading into an office, you can meet with real estate and lending professionals through video chat. Whether it’s your first initial needs analysis as a buyer or your listing appointment as a seller, you can still get the process started remotely and create a plan together. Your trusted advisor is still on your side.

2. Home Searches & Virtual Showings – According to theNational Association of Realtors (NAR), the Internet is one of the three most popular information sources buyers use when searching for homes. Your real estate agent can send you listing information and help you request a virtual showing when you’re ready to start looking. This means you can virtually walk through the homes on your wish list while keeping your family safe. As a seller, you can still have virtual open houses and virtual tours too, so as not to miss those buyers looking to find a home right now.

3. Document Signing – Although this is another area that varies by state, today more portions of the transaction are being done digitally. In many areas, your agent or loan officer can set up an account where you can upload all of the required documents and sign electronically right from your computer.

4. Sending Money – Whether you need to pay for an appraisal or submit closing costs, there are options available. Depending on the transaction and local regulations, you may be able to pay by credit card, and most banks will also allow you to wire funds from your account. Sometimes you can send a check by mail, and in some states, a mobile escrow agent will pick up a check from your home.

5. Closing Process – Again, depending on your area, a mobile notary may be able to bring the required documents to your home before the closing. If your state requires an attorney to be present, check with your legal counsel to see what options are available. Also, depending on the title company, some are allowing drive-thru closings, which is similar to doing a transaction at a bank window.

Although these virtual processes are starting to become more widely accepted, it does not mean that this is the way things are going to get done from now on. Under the current circumstances, however, technology is making it possible to continue much of the real estate transaction today.

Bottom Line

If you need to move today, technology can help make it happen; there are options available.


EMAIL ME at LisaYoung@elevationsrealestate.com to connect. We can discuss your situation and work through the details..... so you don’t have to put your real estate plans on hold.

  • Lisa Young

Here's a great update I heard from my friend Todd Kooi at Bank of Colorado. Amidst all the negative info we get from media, here's the real scoop on the American economy! Check this out! ---Lisa Y


Todd Kooi NMLS #: 554489 Senior Mortgage Loan Officer Bank of Colorado Phone: (720) 480-0280 todd.kooi@bankofcolorado.com www.bankofcolorado.com/tkooi 1888 W Eisenhower Blvd Loveland, CO 80537


This past week was filled with so much good news. The biggest of which was the signing of Phase One of the U.S. and China trade pact.

This trade deal is a very positive development for the U.S., China, and the world, and paves the way for future business investment and other trade deals around the globe. This also removed what was a big uncertainty for many months.

The economic data was already amazing with the following reports coming in better than expectations:

  • Small Business

  • Retail Sales

  • Philly Fed Index

  • Initial Jobless Claims

And speaking of better than expectations, we also watched the start of corporate earnings season and most of the big banks handily beat expectations.

All of this good news has pushed Stocks to all-time highs, but at the same time Mortgage Bonds and home loan rates remained right at the best levels in three years... remarkable.

Bottom line: the U.S. economy remains quite strong with zero chance of a recession anytime soon, yet at the same time home loan rates have not moved higher, giving many an incredible opportunity to purchase or refinance a home.

If you or someone you know has questions about home loans, give Todd Kooi a call.

HOW TO BUY A HOUSE WHEN YOU STILL HAVE A STUDENT LOAN


by ALY J. YALE OCTOBER 1, 2019 in MORTGAGES

(used with permission from BankRate.com)


The majority of millennials don’t own a home — and many have student loans to blame for that. According to a recent survey from Bankrate, a whopping 61% of millennials don’t yet own a home, and nearly a quarter of them say student loan debt is the culprit.


Data from the Federal Reserve shows that 43% of college grads have taken on student loan debt, and as of 2018, the average debtor still owes between $20,000 to $25,000 on their balance.


These debts hold back potential homebuyers two-fold: first, through higher debt-to-income ratios that lenders steer clear of, and second, by making it harder to save for a down payment.

Fortunately, as difficult as it may seem, student loan debt doesn’t preclude you from buying a house. While it does make the process more challenging, there are ways to make it happen. And your financial foundation? That’s the first step.


If you’re looking to buy your first house, but student loan debts are holding you back, this guide can help you navigate the process and come out on top.


Step 1: Improve your debt-to-income ratio


One of the best things you can do to improve your chances of getting a mortgage loan is to lower your debt-to-income ratio. Your debt-to-income ratio (or DTI) is one of the most important factors a lender will look at when evaluating your application. They want to ensure you have the cash flow to handle your new mortgage payment, while also staying current on all your existing debts (student loans included).


For most mortgage loans, you can’t have a DTI higher than 28% on the front-end in order to be considered a good candidate. On the back-end, which includes your estimated mortgage and housing expense, 36% is the max. If you don’t fall under this threshold, then there are a few things you can do to improve it:


  • Pay down your debts where possible. Work on whittling down your student loan debts, credit card debts, and other balances. Use your tax refunds, holiday bonuses, or any extra funds you have to make a dent; even a small reduction in balances can help.

  • Increase your income. If you’ve been at your job a while, you may be able to ask for a raise. If not, a second job, side gig, or freelance work may be able to help supplement your income and improve your DTI.

  • Refinance or consolidate your student loans. By refinancing on consolidating your student loans, you can lower your monthly payment (and the interest you pay), improving your DTI in the process.

  • Enroll in an income-based repayment plan. Income-driven repayment plans allow you to lower your monthly student loan payments so that they’re more aligned with your current income level. These typically allow you to make payments as low as 10-15% of your monthly income. Don’t know what your current DTI is? Use our debt-to-income ratio calculator to get an idea.

Step 2: Increase your credit score


Your credit score also plays a big role in your mortgage application, as it tells lenders how risky you are as a borrower. A higher score will typically mean an easier approval process and, more importantly, a lower interest rate on your loan.


Making consistent, on-time student loan payments is a good way to build credit and increase your score. Additionally, you can also:


Lower your credit utilization rate. Your credit utilization rate is essentially how much of your total available credit you’re utilizing. The less you’re using, the better it is for your score. (Credit utilization accounts for 30% of your total score).

Pay your bills on time. Payment history is another 35% of your score, so make sure to pay every bill (credit cards, loans, even your gym bill) on time, every time. Set up autopay if you need to, as late payments can send your score plummeting.

Keep paid-off accounts open. The length of your credit history matters, too, accounting for 15% of your score. Leaving long-standing accounts open (even once paid off) can help you in this department.

Avoid new credit lines. Don’t apply for any new credit cards or loans as you prepare to buy a home. These require hard credit inquiries, which can have a negative impact on your score.

Finally, make sure to check your credit report often. If you spot an error or miscalculation, report it to the credit bureau immediately to get it remedied.


Step 3: Get pre-approved for a mortgage before you house hunt


Hunting for that dream house is definitely the most exciting part of the process, but before you can start, you first need to get pre-approved for your mortgage loan. For one, a pre-approval lets you know how big a loan you’ll likely qualify for, which can help guide your home search and ensure you stay on budget. Additionally, a pre-approval can show sellers you’re serious about a home purchase and may give you a leg up on other buyers.


When applying for pre-approval, you’ll need to:

  • Provide information regarding your income, debts, past residences, employment, and more. You will also need to agree to a credit check.

  • You’ll need to know what down payment you can offer. If you’re going to use gift money from a loved one, you’ll need a gift letter (from the donor) saying it doesn’t need to be paid back.

  • You’ll have to provide some documentation. Your lender will need recent pay stubs, bank statements, W-2s, tax returns, and other financial paperwork in order to evaluate your application.


If you want your pre-approval application to go smoothly, go ahead and gather up your financial documentation early, and have it ready to go once your lender requests it.


Step 4: Consider down payment assistance

If your student loans are making it hard to save up that down payment (and you don’t have gift money coming from a family member or other donor), then you’re not completely out of luck. In fact, there are actually a number of assistance programs that can help you cover both your down payment and closing costs on your loan.


The assistance usually takes one of four forms:

  • A down payment grant. These are interest-free and do not need to be repaid 

  • Forgivable second mortgages. These are technically second mortgage loans (on top of the one used to finance your house) but are forgiven if you live in the home for  a certain number of years. 

  • Traditional second mortgage. There are also programs that give you assistance via a low-interest loan. These need to be paid off monthly, just as your initial loan does. 

  • Matched savings programs. These programs encourage you to save up funds in a dedicated down payment savings account. Then, the institution or agency offering the program matches those funds (usually up to a certain point).


To qualify for these programs, you might need to:

  • Be a first-time homebuyer

  • Have an income below a certain threshold

  • Complete a homebuyer education course

  • Be a military member, veteran, or public servant (teacher, firefighter, EMT, etc.)

  • Commit to a certain level of savings each month

Agencies may also consider your credit score, debt-to-income ratio, and other financial factors when evaluating your application for assistance. The location you’re buying in (and its median income) could also play a role.


Step 5: Look into first-time homebuyer loans and programs


In addition to down payment assistance programs, you can also leverage one of the many first-time homebuyer mortgage programs that are out there — both through the federal government and state-based agencies. All of these programs offer low interest rates, and several require no down payment at all. This can be hugely beneficial if you’re dealing with a heavy student loan burden.


Federal Options


Talk to your lender about these special programs and how you might qualify:

  • FHA Loans

  • VA Loans

  • USDA Loans

  • Conventional Loans

  • 203k Home Renovation Loans

  • Good Neighbor Next Door Loans



Another option: State first-time home buyer programs


Individual states also have their own first-time home buyer programs and assistance offerings. Many of these help with closing costs, down payments, and more. There are also state-backed loan programs that can reduce your interest rate, lower your monthly payment, and help you save significantly over the course of your loan if you qualify.

You’ll find a full list of state-specific resources at HUD.gov.


Step 6: Find a co-borrower


If you have a fellow grad or a friend or family member who also wants to get out of the rent race, teaming up to buy a house could benefit you both. In this scenario, they become your “co-borrower,” applying for the mortgage loan jointly with you.

The advantage here is that it would allow both of your incomes and credit profiles to impact the application. That could mean a higher loan balance, an easier approval process, or a lower interest rate if they have a solid financial foundation. You can also pool your savings for a bigger down payment — another step that will lower your monthly housing costs and save you big on long-term interest.

If you don’t want to outright purchase a house with someone else, you could also ask a friend or relative to become a co-signer or guarantor on your loan. This would allow lenders to consider their income and credit on your loan application, but it wouldn’t actually give them ownership of the property.


The bottom line


Student loan debt can be a drag, especially if you’re trying to buy a house. Fortunately, there are options. By taking advantage of the right loan programs, working on your credit and DTI, and teaming up with the right partners, you can improve your chances significantly (not to mention, lower the cost of buying a home — both up front and for the long haul).


SEE THE FULL ARTICLE at

https://www.bankrate.com/finance/mortgages/student-loan-debt-and-afford-mortgage.aspx

(970) 219-1955 -cell  |   LisaYoung@ElevationsRealEstate.com

Lisa Young is a licensed Real Estate Broker and Realtor with Elevations Real Estate, Fort Collins Colorado

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