Experts Say that the Housing Market is on the Rise

It's been a buyer's market for quite awhile now in the housing market. Prices have been low and sometimes, for home owners, way too low. While it’s great for young, first-time buyers, for anyone trying to get out or a company trying to sell property, it definitely hasn't been a seller's market.

In the Red but Headed to Black

In fact, in most places around the country, selling property now would be like willingly handing the house over due to declining values and so many people in the red with their mortgages. The past five years have made it very tough for homeowners.

It has been this way for a few years now, but the National Association of Realtors (NAR) now says that the market is on the rise though creeping rather slowly.

In the past year, the housing market prices have been going up, reports members of NAR and sales themselves have gone up from the previous year. Due to the lower prices in housing, investors and families seeking a place of their own to live and own have been buying houses again.

This has led to greater sales this past April, which amounted to 9.9% higher than that of April 2011. The same went for this past March in which sales were 3% higher than the previous year.

Greater Home Sales

Other good news is that the month of April brought 400,000 home sales, which was an 11.1% increase over March and its 360,000 home sales. This is the first time since 2010 that we have had a month-to-month increase in sales from that of the previous year.

According to the NAR, if this trend in housing purchases continues, there will be an eventual return to a seller’s market. 

Prices Increasing

Along with greater housing sales, prices are increasing. The national average for housing prices has risen from last year's average, which was approximately $161,000 to about $171,000 this past April, rising just over 10% in a year.

If the sales continue to rise along with the prices, the housing market will eventually migrate from a buyer's market to a seller's market sometime in the near future.

As if mirroring the country's median price, the local market in New Mexico is statistically on the rise as well. These past couple month's home sales have been noticeably higher than last year's spring season, and these months sales have risen consecutively.

While in smaller numbers, if every other state begins to follow these numbers, the housing market may finally recover and the dream of homeownership will become a reality for many more.  

Posted by Indigo Mortgage at 11:22 AM No comments:

Things to Know Before Locking in Your Mortgage Loan Interest Rate

You, like many others, may have read about locking your mortgage loan's interest rate because there are certain companies that play the bait and switch routine where you find out the interest rate promised upfront has now been increased once the mortgage loan process is underway. 

So, it might seem that the obvious move here is to lock your interest rate, right?  Before you assume what may seem to be the obvious answer, let’s consider some of the pros and cons of doing so.

The Pros and Cons of Locking your Loan Rate

Let’s start with some good news. When you lock your interest rate on a mortgage loan, it guarantees you that rate for a fixed amount of time, which is usually no more than 90 days. However, for a small fee, you can usually extend the lock-in if there is some issue that has prolonged the mortgage process.

The locked rate guarantees you the offered rate that you chose to have locked and, in most cases, the cheapest rate will be one of the early offered rates.

This seems like a good way to go because, often, the interest rate might only increase as your loan documents pass through more hands in the company.

There are also some cons to consider. For instance, what happens when you lock your mortgage loan interest rate only to find out that the rates actually slipped even lower? 

While a tiny percentage drop isn’t a terrible loss, there are times where interest rates have taken quite a dip. These larger changes can make a significant change in your overall payment and savings over time, so this is when you need to think carefully about your next steps.

Don’t Panic! Have a Plan

Your first reaction should not be to panic. It’s understandable because so many people already feel so nervous about the mortgage loan and home buying processes. However, you can chose to opt out of the mortgage loan process with that lender if it will mean a considerable change.

Yet, today’s lenders are often on top of following interest rate fluctuations and can guide you before you lock in a rate. A smart lender who wants your business is often willing to renegotiate the loan to keep your mortgage loan in the pipeline, especially those companies that you’re your best interests at heart.

The bottom line is simple: locking your loan rate is recommended by many as a smart decision to make during your mortgage loan process, especially if you have a faithful and highly ethical mortgage lending partner who is guiding the process every step of the way.

Posted by Indigo Mortgage at 11:27 AM No comments:

Understanding the Fine Print of Underwriting

When taking out a loan and borrowing money from a mortgage loan company, there are many things to consider and often many obstacles to overcome. It isn't as simple as just signing a piece of paper and promising that you will pay back the lender in the documented time frame or in the documented installment payments.

As the recent years have illustrated, mortgage lenders are concerned about borrowers who will default on their mortgage loans while even some lenders themselves have focused on their best interest rather than that of their customers. When taking out a mortgage loan, it is very important that you know who you are dealing with, so it is best that you do your research, learn about the mortgage company, what others have experienced, and what type of mortgage programs are best for you to ensure they recommend those to you.

The Underwriting Process

The underwriting process is where a lender assesses the risk of issuing a borrower funds and then decides if it is worth the risk to issue the money to the borrower. Typically, a document is presented to the borrower, showing in detail all of the risks being taken and the consequences for not paying the money back. By signing the document, you are agreeing to the risks and terms and have officially become the owner of a mortgage loan – and a house or commercial property, of course!

Changes to the Underwriting Process

Many people already don't like the procedures and complications that are associated with underwriting. And, chances are, if you have not taken out a loan in recent years, you don't know yet but things are changing. While you may not agree with the changes, these are the facts.

What's new? What's been altered or added? While mortgage lenders already wanted to see your bank statements now, they are now looking into a lot more. For instance, they want an explanation for every amount of unexplained funds in your bank account.

They need to know where that 20 spot came from – Did Grandma gift it on your birthday? Or, is it a loan? The point to this is they need to know if you are borrowing money from another source. This is because they want to make sure you are in the position to pay back what you are promising.

Credit inquiries must be explained as well as any new lines of credit taken out. The primary reasons for these extra checks are to ensure that you are not hiding properties or trying to flip them. Lastly, there is now an IRS document that needs to be completed known as the 4506-T.

Simply put, it allows the lender to contact the IRS and get a copy of your tax returns and verify your income. Being that the document also falls under the Patriot Act, if you happen to be self-employed, then you still must use the document.

We’re Here to Help

We do hope that we have shed some light on some of the changes in the process of underwriting. If you have more questions, remember that no one cares more about your loan as we do -- Albuquerque's best choice lender!

Posted by Indigo Mortgage at 11:04 AM No comments: