Today’s Home Price Appreciation Is Great News For Existing Homeowners

Today’s Home Price Appreciation Is Great News For Existing Homeowners

by | May 12, 2022 | News

How Higher Home Prices Is Great News for Existing Homeowners

 

If you’re planning to sell your home this season, rising prices are great news for you. But it’s important to understand why prices are rising to begin with. One major factor is supply and demand.

In any industry, when there are more buyers for an item than there are of that item available, prices naturally rise. In those situations, buyers are willing to pay more to get the product or service they’re looking for when options are scarce. And that’s exactly what’s happening in the current real estate market.

Selma Hepp, Executive, Research & Insights and Deputy Chief Economist at CoreLogic, puts it like this:

“With so few homes, buyers are once again left with fierce competition that’s driving the share of homes that sold over the listing price up to 66% . . . With the continued imbalance between supply and demand, home prices are likely to have another year of strong gains and are expected to average about 10% growth for the year.”

Because it will take some time for housing supply to increase, experts believe prices will continue rising. The latest Home Price Expectations Survey forecasts what will happen with home prices over the next 5 years. As the graph below shows, while the rate of appreciation will moderate over the next few years, prices will continue rising through 2026:

What This Means When You Sell Your House

If you’re a homeowner, the projection for continued price appreciation this year opens up an opportunity to move. That’s because it may give your equity a major boost. Equity is the difference between what you owe on your house and its market value. The amount of equity you have increases as you make your monthly payments and as rising home prices drive up the market value for your home.

Growing equity is a powerful tool for homeowners. When you sell your house, the equity you’ve built comes back to you in the sale. That money could be enough to cover some (if not all) of your down payment on your next home.

Of course, if you want to know how much equity you have in your current house, it’s crucial to work with a real estate professional. They follow current market trends and can help you understand your home’s value when you’re ready to sell.

What This Means for Your Next Purchase

But today’s rising home values aren’t just good news if you’re ready to sell. Because price appreciation is forecast to continue in the years ahead, you can rest assured your next home will be an investment that should grow in value with time. That’s one of several reasons why real estate has been rated the best investment in a recent Gallup poll.

Bottom Line

If you’re weighing whether or not you should sell your house this season, know rising home values may be opening up an opportunity to use equity to fuel your move. Let’s connect so you can find out how much your home is worth and to learn more about all the benefits you have in today’s market.

 

Have a question or want to know what rate you qualify for? Contact us below!

[gravityform id=”4″ title=”false”]

Or call or email us directly at:
1-888-731-4045
info@mysl.com

Why You Should Have a Pre-Approval When Buying a Home

Why You Should Have a Pre-Approval When Buying a Home

by | Apr 26, 2022 | News

Being intentional and competitive are musts when buying a home this season. That’s why pre-approval is so important today. Pre-approval from a lender is the only way to know your true price range and how much money you can borrow for your loan. Peter Warden, Editor of The Mortgage Reports, explains:

“The lender will check out your personal finances and issue you a letter confirming the amount you’re eligible to borrow. This not only gives you a firm budget for house hunting, but also lets sellers know you’re qualified to make an offer.”

Why does that matter so much today? There are many more buyers looking for homes today than there are homes available for sale, and that’s creating some serious competition. According to the National Association of Realtors (NAR), the average home is getting 4.8 offers per sale. As a result, bidding wars are still common.

Your pre-approval gives you a leg up in these situations. That’s because you know exactly what you’re approved to borrow before you write your offer, and it lets the seller know you’re qualified to buy their home. This helps both you and the seller feel confident in what you’re bringing to the table. And that puts you in a better position to potentially win a bidding war.

As Warden puts it:

“There’s another important reason to get pre-approved, too. And that’s because there are way more buyers than homes in today’s market — which means you need to be ultra-prepared if you want to win a bidding war. Most sellers are getting multiple offers right now. And most won’t even entertain an offer without a pre-approval letter included.”

Every advantage you can gain as a buyer is crucial in a market that’s constantly changing. Mortgage rates are rising, home prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals, such as a loan officer and a trusted real estate advisor, on your side. They’ll help make sure you’re ready to put your best foot forward.

Bottom Line

Getting pre-approved for a mortgage helps you better understand what you can afford and signals to sellers you’re serious about purchasing their home. Let’s connect so you have the tools you need to succeed as a homebuyer in today’s market.

 

Have a question or want to know what rate you qualify for? Contact us below!

 

[gravityform id=”4″ title=”false”]

Or call or email us directly at:
1-888-731-4045
info@mysl.com

What’s Happening with Mortgage Rates, and Where Will They Go from Here?

by | Mar 30, 2022 | News

Based on the Primary Mortgage Market Survey from Freddie Mac, the average 30-year fixed-rate mortgage has increased by 1.2% (3.22% to 4.42%) since January of this year. The rate jumped by more than a quarter of a point from just a week ago. Here’s a visual to show how mortgage rate movement throughout 2021 was steady compared to the rapid increase in mortgage rates this year:

What’s Happening with Mortgage Rates, and Where Will They Go from Here? | MyKCM

*All rates shown are industry averages and may not reflect actual rates at the moment. Please contact us for your individual rate that you qualify for.

Just a few months ago, Freddie Mac projected mortgage rates would average 3.6% in 2022. Earlier this month, Fannie Mae forecast mortgage rates would average 3.8% in 2022. As the chart above shows, rates have already surpassed those projections.

Sam Khater, Chief Economist at Freddie Mac, explained in a press release last week:

“This week, the 30-year fixed-rate mortgage increased by more than a quarter of a percent as mortgage rates across all loan types continued to move up. Rising inflation, escalating geopolitical uncertainty and the Federal Reserve’s actions are driving rates higher and weakening consumers’ purchasing power.”

Where Are Mortgage Rates Going from Here?

In a recent article by Bankrate, several industry experts weighed in on where rates might be headed going forward. Here are some of their forecasts:

Greg McBride, Chief Financial Analyst, Bankrate:

“With inflation figures continuing to surprise to the upside, mortgage rates will remain above 4.0% on the 30-year fixed.”

Nadia Evangelou, Senior Economist and Director of Forecasting, National Association of Realtors (NAR):

“While higher short-term interest rates will push up mortgage rates, I expect some of this impact to be mitigated eventually through lower inflation. Thus, I expect the 30-year fixed mortgage rate to continue to rise, although we aren’t likely to see the big jumps that occurred over the past few weeks.”

Len Kiefer, Deputy Chief Economist, Freddie Mac:

“Mortgage rates are likely to continue to move higher throughout the balance of 2022, although the pace of rate increases is likely to moderate.”

In a recent realtor.com article, another expert adds to the conversation:

Danielle Hale, Chief Economist, realtor.com:

“. . . As markets digest the Fed’s updated economic projections, I anticipate a continued increase in mortgage rates over the next several months. . . .”

What Does This Mean for You if You’re Looking To Buy a Home?

With both mortgage rates and home values expected to increase throughout the year, it would be better to buy sooner rather than later if you’re able. That’s because it’ll cost you more the longer you wait. But, there is a possible silver lining to buying a home right now. While you’ll be paying a higher price and a higher mortgage rate than you would have last year, rising prices do have a long-term benefit once you buy.

If you purchase a home today valued at $400,000 and put 10% down, you would be taking out a $360,000 mortgage. According to mortgagecalculator.net, at a 4.42% fixed mortgage rate, your mortgage payment would be $1,807 a month (this does not include insurance, taxes, and other fees because those vary by location).

Now, let’s put that mortgage payment into a new perspective based on the substantial growth in equity that comes with the escalation in home prices. Every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts about their expectations for future home prices in the United States. Last week, Pulsenomics released their latest Home Price Expectation Survey. The survey reveals that the average of the experts’ forecasts calls for a 9% increase in home values in 2022.

Based on those projections, a $400,000 house you buy today could be valued at $436,000 by this time next year. If you break that down, that means the equity in your home would increase by $3,000 a month over that period. That’s greater than the estimated monthly payment above. Granted, the increase in your net worth is tied to the home, but it is one way to put the home price appreciation to use in a way that benefits you.

Bottom Line

Paying a higher price for a home and a higher mortgage rate can be a difficult pill to swallow. However, waiting will just cost you more. If you’re ready, willing, and able to buy a home, now will be a better time than a year, or even six months from now. Let’s connect to begin the process today.

 

Have a question or want to know what rate you qualify for? Contact us below!

[gravityform id=”4″ title=”false”]

Or call or email us directly at:
1-888-731-4045
info@mysl.com

When It Comes to Jumbo Loans, One Size Doesn’t Fit All

by | Feb 23, 2022 | News

When it comes to Jumbo Loans, one size doesn’t necessarily fit all. At Sharp Loan, we offer multiple Prime Jumbo products designed to accommodate a broad range of borrowers. Each is tailored to borrowers with different circumstances. In choosing a jumbo product, we take your unique priorities into account and work to find the pricing and loan experience that meets your exact needs. Here are five Jumbo loan programs that we offer.

PRIME JUMBO (15- OR 30-YEAR FIXED)

  • Loan amounts up to $3M
  • 680+ FICO and up to 45% DTI
  • Up to 89.99% LTV and no MI required
  • UWM services these loans exclusively
  • Borrower solicitation protection
  • Eligible on primary, second and investment properties for purchases, rate/term and cash-out refinances
  • One appraisal required for purchases up to $3M and refinances up to $2M*
  • Two appraisals, from two different appraisers, required for refinances over $2M*
  • Loan amounts greater than $2M require 18 months of reserves in addition to any reserves required by AUS

PRIME JUMBO RELEASED (30-YEAR FIXED)

  • Loan amounts up to $3M
  • 680+ FICO and up to 45% DTI
  • Up to 89.99% LTV
  • Eligible on primary, second and investment properties for purchases, rate/term and cash-out refinances
  • One appraisal required for loans up to $2M*
  • Two appraisals, from two different appraisers, required for loans over $2M*
  • Loan amounts greater than $2M require 18 months of reserves in addition to any reserves required by AUS

PRIME JUMBO ARMS (5-, 7- AND 10-YEAR)

  • Loan amounts up to $3M
  • 680+ FICO and up to 45% DTI
  • Up to 80% LTV
  • Eligible on primary, second and investment properties for purchases, rate/term and cash-out refinances
  • One appraisal required for purchase up to $3M and refinances up to $2M*
  • Two appraisals, from two different appraisers, required for refinances over $2M*
  • Loan amounts greater than $2M require 18 months of reserves in addition to any reserves required by AUS

PRIME JUMBO INTEREST ONLY (30-YEAR FIXED)

  • Loan amounts up to $3M
  • 700+ FICO and up to 43% DTI
  • Up to 80% LTV
  • 10-year interest only, 20-year amortization period
  • Eligible for primary and second homes for purchases and rate/term refinances
  • One appraisal required for purchases up to $3M and refinances up to $2M*
  • Two appraisals, from two different appraisers, required for refinances over $2M*
  • Loan amounts up to $1M require 12 months of reserves in addition to any reserves required by AUS
  • Loan amounts over $1M require 24 months of reserves in addition to any reserves required by AUS

PRIME JUMBO MAX (30-YEAR FIXED)

  • Loans up to 80% LTV
    • Loan amounts up to $2.5M
    • 700+ FICO and up to 43% DTI
    • Eligible for primary and second homes for purchases and rate/term and cash-out refinances
    • One appraisal required for loans up to $2M*
    • Two appraisals, from two different appraisal companies, required for loans over $2M*
    • For primary purchase loans up to $2M – 12 months reserves required
    • For second home loans over $2M – 18 months reserves required
    • For primary cash out loans up to $1M – 12 months reserves required (up to $300,000 cash back)
    • For primary and second home loans over $1M – 18 months reserves required (up to $300,000 cash back)
    • For primary cash out loans between $1.501-$2M – 12 months reserves required (up to $500,000 cash back)
    • For second home cash out loans between $1.501-$2M – 18 months reserves required (up to $500,000 cash back)
  • Loans with an LTV between 80.01-96.5%
    • Loan amounts up to $1.5M
    • 720+ FICO and up to 40% DTI
    • Eligible for primary purchases and rate/term refinances
    • One appraisal required for loans up to $1M*
    • Two appraisals, from two different appraisers, required for loans over $1M*
    • For primary purchase loans up to $1.5M – 24 months reserves required

*Appraisal waivers are not applicable on Prime Jumbo, Prime Jumbo Released, Prime Jumbo ARMs, Prime Jumbo Interest Only and Prime Jumbo Max.

 

Have a question? Contact us below!

[gravityform id=”4″ title=”false”]

Or call or email us directly at:
1-888-731-4045
info@mysl.com

New Loan Limits Reflect The Hot As Fire 2021 Real Estate Market

by | Dec 1, 2021 | News

Since home values increased to levels that have never been seen before, it is fitting that the Federal Housing Finance Agency (FHFA) has decided to increase new loan limits by the largest percentage ever. The FHFA’s increase was determined by the House Price Index for the third quarter of 2021 compared to the third quarter of 2020, where the national average price increase was 18.05%.

Let’s take a look at the new loan limits and what they mean for homebuyers.

The New Loan Limits

Homebuyers should be happy to see that conforming loan limits have increased significantly. The new loan limits are as follows:

  • $647,200 for regular one-unit loans (increased from $548,250 in 2021)
  • $970,800 for one-unit high-balance loans (increased from $822,375 in 2021)
  • $1,243,050 for two-unit high-balance loans (increased from $1,053,000 in 2021)

Something else that is interesting is that by law, once the FHFA sets the loan limits, they cannot be reduced. That means these limits are here to stay even if the housing market were to experience a dip in prices.

How Do Loan Limits Work?

The Housing and Economic Recovery Act of 2008 created the FHFA who sets conforming loan limits by county. Most counties will fall in line with the FHFA’s national restrictions, which are based on the House Price Index report. There are only four counties where the baseline loan limit did not increase this year, which shows that the dramatic increase in home values is not limited to a particular area. Instead, the entire country is experiencing this unprecedented real estate market.

Historically, the FHFA has increased the loan limit each time home values have increased. Doing this keeps the real estate market moving forward, and ultimately this increase combined with the low inventory most of the country is struggling with could lead to home values increasing even more.

What Does This Mean For Homebuyers?

Many homebuyers around the country discovered that the existing loan limits were simply not enough to allow them to purchase a home. This led to frustration, and homebuyers felt like they were missing out. Interest rates are low, and all signs point to home values continuing to rise, which means getting into a house sooner than later is essential.

Now, thanks to this increase, a larger group of homebuyers will be able to take out a loan without attempting to access a jumbo loan. Jumbo loans do not have limits, but they are much more challenging to qualify for.

Ready To Get Moving?

Give us a call if you’d like to get the home buying process started and take advantage of the new loan limit increase while interest rates are still low.

We are here to help you from loan application to final approval. Our team will be happy to answer any questions you may have along the way and help you make the biggest purchase of your life.

*Even if you’ve locked in your rate, it can still be adjusted to the new loan limit and still close this year. But you need to act quickly. 

 

Submit the form below to get started!

 

[gravityform id=”4″ title=”false”]

Or call or email us directly at:
1-888-731-4045
info@mysl.com

Are 3D Printed Neighborhoods the Future of Housing?

Are 3D Printed Neighborhoods the Future of Housing?

by | Nov 19, 2021 | News

The housing market is very hot right now, and home prices are at an all-time high. Why is that? There are a number of factors, but the simplest explanation is based on supply and demand. People are eager to buy homes, but there are labor and material shortages keeping new housing from being built at a fast enough pace. In fact, there is currently an estimated national shortage of 5.5 million homes! Thanks to breakthroughs in 3D printing technology, however, that might be about to change.

 

A 3D-Printed Partnership

Texas-based ICON is one of very few companies that specializes in large-scale 3D printing. Working in tandem with a home construction company called Lennar, they will be creating the largest 3D-printed neighborhood in the world. Construction will begin on 100 single-family homes in Austin, Texas in 2022.

 

Environmental Impact

With this partnership, the two companies hope to circumvent the labor and supply issues currently plaguing home construction, and create new options for quality, affordable housing. The technology should allow for more efficient construction with less impact on the environment. The construction process would eliminate the need for formwork (the concrete molds that cement is poured into), saving money and materials while cutting back on waste and carbon dioxide emissions.

 

Logistics of Large-scale 3D Printing

ICON’s 3D printers are over 15 feet tall and use a concrete-based building material that is layered onto a predefined blueprint. They are capable of building the framework (both the exterior and interior wall system) of a single-family, one-story house in approximately a week. The remaining construction (doors, windows, roof, etc.) would be completed by Lennar.

 

Potential Benefits

ICON believes that their tech can be used to combat homelessness, and could also be a life-saving tool for disaster relief. They have not yet given estimates for the prices of these new homes, but they are being pushed as a more affordable housing option.

 

Conclusion

It may sound like science fiction, but make no mistake: the future is here. At Sharp Loan, we strongly believe in leveraging technology to innovate the lending process and make life easier for our borrowers. Contact us to learn more!

 

Have a question? Contact us below!

[gravityform id=”4″ title=”false”]

Or call or email us directly at:
1-888-731-4045
info@mysl.com