“Liar Loans” Return

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When it comes to dealing with risk, America’s housing market struggles with balance. How can lenders offer affordable home mortgages for more Americans and still maintain proper safeguards?

The Great Recession was driven in part by overly risky loans that were packaged as securities and sold to investors who were unaware of the underlying risk. The resulting housing market collapse led to the Dodd-Frank regulations that regulated mortgage lending and applied credit-tightening safeguards.

Most of those safeguards are still in place, but loan offers are starting to creep back into risky territory – and investors are happy to buy up those loans looking for returns.

Dodd-Frank instituted qualifying mortgage rules – a set of lending restrictions that must be met before loans can be purchased by the mortgage loan backers Fannie Mae and Freddie Mac. Riskier unqualified loans may still be granted, but lenders don’t receive protections associated with qualified …

Nearly 3 Of 4 Won’t Date People In Significant Debt

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Are you having trouble getting a date? Could be your rap, your looks, or your excessive debt.

According to a recent survey by Finder.com, 72% of respondents say they would re-think a relationship with a partner in significant debt. (That’s similar to the percentage in last year’s Finder.com survey, so don’t expect debt to become a desirable trend.)

“With 72% of Americans saying they’d reconsider a romantic relationship if the other person was in debt, singles with unsettled loans might want to sort out their balance sheets before hitting the dating scene,” says finder’s Consumer Advocate Jennifer McDermott.

According to the survey, “While debt is undoubtedly a turn off, not all debts are viewed as equally unappealing. For example, credit card debt is the number one …

It Takes More Than 7 Years To Save Up A Down Payment

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First-time homebuyers face many obstacles, but perhaps the most frustrating one is accumulating down payment money.

Traditional loans require a 20% down payment. Using Zillow’s $229,800 median home sale price for November 2018, that’s over $45,000 – and in many urban markets, a 20% down payment will easily top $100,000.

How long will it take you to save up a 20% down payment given today’s median homebuyer income of $72,500? According to Zillow Research, you’ll need 7.2 years on average with today’s median home prices. That’s 1.5 more years than it took in 1988, when the median home value was $79,400 and the median homebuyer income was $28,100.

Since 1988, the median home value has increased by a factor of 2.8 while median homebuyer income increased by a factor just below 2.6. However, overall debt obligations have exploded. America’s household…

More Homebuyers Turning To Parents For Down Payment Help

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First-time homebuyers face many challenges, but the biggest task may be coming up with a suitable down payment. Consumers in the early stages of their careers often face a fresh set of bills – and in some cases, mountains of student loan debt. A National Association of Realtors survey found that over half of recent homebuyers age 37 and younger cited student loan debt as the main down payment obstacle.

How can young Americans save up for a conventional 20% down payment, or even the 3.5% minimum down payment for FHA loans? Many have concluded that they can’t – and are asking for help from their parents.

The recent annual report from the Federal Housing Administration (FHA) shows that over one-quarter (26%) of homebuyers with FHA-insured loans received some payment a…

Government Shutdown Brings Mortgage Obstacles

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The Shutdown’s Housing Market Woes

It’s a great time to buy a home, and you’re ready. You’ve saved up a suitable down payment, found a home, and settled on a lender. As an added bonus, interest rates are at their lowest point in the last nine months – despite the Federal Reserve’s interest rate hikes.

There’s only one problem. The government shutdown has created obstacles to your mortgage – maybe in ways you hadn’t considered.

Loan Roadblocks

The shutdown effect is obvious if you’re a government worker suddenly trying to buy a home with IOU’s – but, otherwise, why would your mortgage application be affected? It may depend on the type of loan you’re seeking.

USDA loans, popular in rural areas, are backed by the U.S. Department of Agriculture. With the USDA shut down (at least as of this writing), no new applications are being accepted and scheduled loan closings have been put on hold. Homebuyers caught in the middle are be…

2019 Housing Market Predictions

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Is 2019 the year you finally buy that starter home? Are you upgrading or downsizing to a new home? Are you interested in how your home value is likely to change over the next year? We offer these 2019 housing market predictions to consider as you review your housing plans for the year.

Inventory Will Ease a Bit, but for the Wrong Reason ­– Inventory is expected to increase slightly but that increase will stay below 7%, according to Realtor.com. Unfortunately, that reflects people being priced out of the market as much as it reflects a supply of new homes. Growth in new home construction is expected to stay relatively flat, while overall demand is likely to decrease.

Inventory gains are concentrated in higher-priced homes and markets, implying that there are plenty of homes available for people who can’t afford them.

Talk of a recession starting as early as late 2019 may also scare off potential homebuyers who fear buying at the crest of…

How The Interest Rate Increase Affects You

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Your Christmas gift from the Federal Reserve is here. Surprise! It’s another 0.25% hike in the Federal Funds rate. Sure, you’ve already gotten this same gift three other times in 2018, and nine times since late 2015 – but what else would you expect to receive from the Fed?

Interest rate hikes from the Fed really can be a positive gift to you, but it’s more likely to be a negative – depending on whether you’re a saver or a spender.

The Federal Funds rate is the benchmark rate used to transfer money between banks. This rate is generally passed on to consumers. Borrowers are charged higher interest rates on the money they borrow, while savers are eventually offered better interest rates on checking and savings accounts as well as certificates of deposit (CDs).

In some cases, the changes are passed on directly to consumers. For example, credit cards and adjust…

7 Tips For Selling Your Home During The Holidays

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Are the holidays not hectic enough for you? Put aside your gift list for a moment; how about adding a home sale to your to-do list?

Most people avoid selling their homes during the holidays, but you may not have any choice in the matter. If you need to sell your home around the end of the year, here are seven tips to help your sale go smoothly.

  1. Minimize Holiday Decorations – Not everyone has the same love of holiday decorations, and poorly maintained, tacky, or overly religious displays can be a turnoff for potential buyers. Keep the seasonal decorations simple and easy to maintain.

    That applies to the outside as well as the inside of your home – avoid browning out the neighborhood with your awesome light display.

  2. Keep It Clean – Keeping the home free of tracked-in mud, snow, and other debris is even tougher in the winter months, and arguably even more important. Vacuum well and vacuum often.

7 Tips To Buying A Home During The Holidays

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Moving during the holidays can be a headache with all the seasonal activities and obligations – not to mention unpleasant weather in many locations. However, there are plenty of positives to buying a home during the holidays that may make the headaches of moving worth the effort, including the seven listed below.

1. Less Competition – The same issues that make holiday moving a hassle tend to keep people from shopping for homes at that time. While there may be fewer homes available, there are also fewer homebuyers – and that should equal less competition for any home that fits your needs.

2. Motivated Sellers – Home sellers don’t enjoy moving over the holidays any more than homebuyers do. It’s likely that people who are selling their homes over the holidays are highly motivated to do so. Perhaps they must relocate for a new job, or their home has been on the market for a long time and they need the money from a sale before the yea…