Rates Continue to Slide This Week

Mortgage Rates Slide This Week, Borrowers for years have been 

able to take out mortgages with small down payments.

They can get mortgages with down payments as low as 3.5% through the Federal Housing Administration, and Fannie and Freddie Mac back loans with down payments as low as 3%. 

No Savings? No Problem, Not sure how to afford a down payment to buy a home until this offbeat idea: crowdfund the money from friends and family.

A 28-year-old construction technician, set up an online profile with a program called HomeFundMe to solicit donations. 

Mortgage rates were mostly in a holding pattern this week, but still eked out the first increase since early June.

Overall, mortgage rates this summer have been ping the past few weeks after sharp rises this spring. “A record number of people quit their job last month, most likely for a new opportunity with higher wages and better benefits,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending July 12:

“This positive trend, along with these lower mortgage rates, should increasingly give some previously priced-out prospective home buyers the financial wherewithal to resume their home search.”

When it comes time to Sell or Buy, We have a wealth of information and 18 years of experience to help you get started. Visit us at WWW.PrecisionReal-T.com or if you prefer a more personal touch Call us today at 801 809-9866.

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Home Values Closest to Alignment since 2015

The gap continues to narrow between homeowners’ 

and appraisers’ perceptions over home values. The latest Home Price Perception Index shows that the average home appraisal in June was only 0.25 percent lower than what owners had estimated—this puts the two different value perceptions at their closest since February 2015.

Homeowners provide their home value estimate at the beginning of the refinance process; that is then matched against the actual value appraisers assigned to the property later during the mortgage process.

The two perceptions over value have been inching closer together over the last few months. A year ago, homeowners were saying their homes were worth 1.70 percent more than appraisers’ valuations.

More metro areas,however, are seeing appraisals higher than what homeowners even expect. Nearly three quarters of the metro areas analyzed saw the bulk of appraisals return higher than what the owner expected.

“Getting an accurate market value is an important, albeit often misunderstood, part of the mortgage process,” says Bill Banfield, Executive Vice President of Capital Markets.

“The valuation has historically involved an appraiser coming to personally inspect the home and give their personal opinion of its value.

Now, more technology is becoming available to modernize the appraisal process. However, even with a more data-based approach, there can be some disconnect between the appraised value and homeowners perception of value.” 

Local Market Trends June 2018

When it comes time to Sell or Buy, We have a wealth of information and 18 years of experience to help you get started. Visit us at WWW.PrecisionReal-T.com or if you prefer a more personal touch Call us today at 801 809-9866. 

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Buyers With Down Payments

No Savings? No Problem, Not sure how to afford a 

down payment to buy a home until this offbeat idea: crowdfund the money from friends and family.

A 28-year-old construction technician, set up an online profile with a program calledHomeFundMe to solicit donations. Her parents and a few others responded, and in March they closed on a $320,000 home in Cheyenne, Wyo.

HomeFundMe, a service launched by lender CMG Financial last year, is among a growing suite of services that help borrowers cobble together the funds to buy homes. These companies—startups and established players in the housing market alike—say they’re offering options for borrowers who have good credit and income but are struggling to save.

Rising consumer debt and high prices have made it tough for first-time buyers to save for a home. Nearly 40% of renters ages 25 to 34 said they were saving nothing each month for a down payment, according to a survey last year by rental-listing company Apartment List.

A few organizations, like Unison Agreement Corp. and Landed Inc., offer “shared equity” contracts through which buyers get money for their down payments in exchange for pledging part of the home’s future value to investors like pension funds or foundations. And some banks, have programs through which young adults can get a mortgage with nothing down if their parents pledge investment assets as collateral.

Yet some worry that helping borrowers get down payments could actually exacerbate the housing market’s main problem: 

Economists caution that actions such as loosening credit standards or supplying borrowers with more down payment money worsen the problem by creating more demand in a supply-constrained market, leading to a further overheating of home prices. 

Jonathan Lawless, vice president for product development and affordable housing at mortgage-finance giant Fannie Mae, said the agency is currently focusing not just on making credit available but also on increasing housing supply. For example, Fannie is looking at ways to make it easier to get loans to fix up dilapidated homes and make it simpler to finance the purchase of mobile homes.

Borrowers for years have been able to take out mortgages with small down payments.They can get mortgages with down payments as low as 3.5% through the Federal Housing Administration, and Fannie and Freddie Mac back loans with down payments as low as 3%. But these loans tend to have high monthly costs: They usually require mortgage insurance, and the bulk of the first payments can go to interest, not principal.

About 400 borrowers have used HomeFundMe to help buy homes since the program launched in October. On average, they raise about $2,500, though CMG also can kick in matching grants, and most borrowers have some of their own money saved as well. Friends and family can also make their gifts conditional, meaning borrowers won’t get the money unless they actually purchase the home.

She felt uncomfortable at first asking for help through HomeFundMe. But the budget was tight after paying for their wedding, and a credit union had already denied their mortgage application because they didn’t have enough in savings.

“Whenever I emailed people the link, I would explain, ‘This isn’t fake, this is real,’”  Now, some of her friends are interested in following suit. “It just worked out so well,” she said, “that people were like, ‘No way, I want that!’”

When it comes time to Sell or Buy, We have a wealth of information and 18 years of experience to help you get started. Visit us at WWW.PrecisionReal-T.com or if you prefer a more personal touch Call us today at 801 809-9866. 

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Source: Realtor.com

Move or Improve?

These Scenarios Could Help You Decide 

How to Spend Your Dough, There comes a time when every homeowner will spread their arms, look around, and say,

'This house feels too small.' Perhaps your kids have outgrown their bunk beds, or your partner's startup blew up, and now every inch of your bungalow is occupied.

One way or another, you need more room. But do you break ground on your current home or break your budget on a new house? The decision to move or improve can be complex and emotional.

On one hand, you love your neighborhood and the memories you've made. But on the other hand, you love space. So how do you choose?

The answer depends on your neighborhood, your budget, the housing market, and (sorry) your mom. Here's how to tell whether you should start over in a new place—or transform your existing property. 

First, ask yourself the tough questions

You might be salivating over the houses for sale or dreaming of your double-size, custom-built master bedroom—but don't make a snap decision based on a fantasy.
Instead, start by making a classic list of pros and cons. What is it about buying a new home that tickles your fancy? Or does the process stress you out? Are you pumped for renovation—or would you rather ditch the dust?

'Essentially, these are two different paths to the same destination: a home to love.' 
The mere act of listing your ideas might make the decision. Maybe your 'move' column vastly outweighs your 'stay' list—but you want that new bedroom, dammit! Then you have your answer.

And if you're struggling still? We've done the heavy lifting for you. Take a peek at the following scenarios to determine whether you should move or improve.

Move: If your city gives your plans the thumbs-down

You've drawn up elaborate plans for popping the top of your two-bed bungalow. But your city might not be on board. Before breaking ground, find out if your proposed idea meets zoning requirements.

'The local government is where you'll need to go to find out if you can even expand your current living space.' To figure out if your new expansion will pass muster, you'll need to gather a pile of documents.

Plan to get a property survey and detailed drawings just for the permit alone. And if your city says no—well, it's time to start house hunting.

Improve: If your home is unique

Your first house hunt was hard enough. Now you want to do it again? Oh, but where will you find the perfect home? You need only an indoor-outdoor shower, built-in library (of real mahogany), and double-vanity bathroom for the kids.

If your current home already comes with the special features you require, add on instead of buying new.

Move: If your current home is in a seller's market

The best part of being in a seller's market is taking advantage of the seller's market. If your home has dramatically increased in value during your tenure, it could be 'more beneficial to sell your home and buy a bigger and better home than to expand.' 

But make sure to check with a local real estate agent before finalizing your decision.

Improve: If you love your location

Time for a caveat: Just because your home is in a seller's market doesn't mean you should always sell. If you love your location and home prices are skyrocketing, remodeling may be the only way to stay put in your neighborhood.

Move: If renovating will be an ordeal 

Say you're snug in a three-bedroom ranch, but you'd like at least five bedrooms and a new playroom. That's a lot of work. Figure out how big the gap is between what you have and what you want. If it's enormous, undergoing a massive renovation might not be worth it.

Start by considering remodeling costs, the length of time your home will be under construction, and whether you plan to live in the home during construction, recommends. 'A significant remodel project is an extremely big deal—far more involved than would be packing up your things and moving them.' 

Improve: If your parents want a say

'But my folks don't get a say in my house!' you might be thinking.

Except when you need additional space to accommodate aging parents. You'll likely be looking for an in-law unit—which can be tricky to find on the market, much less one that said mother-in-law actually likes.

'We deal with many people struggling with this decision,'  'The ones that decided to expand usually have parents that need to move in with them, so there are more people involved in the home-buying process. Not everyone can decide on a house.'

Expanding makes it much easier to take your parents' taste into account by designing an add-on specifically for them.

Move: If you'd be building the biggest house in the neighborhood

Take a look around. Have a lot of your neighbors expanded? Or are they mostly chilling in the original square footage?

'Before expanding, families should make sure they're not adding on in a neighborhood with smaller homes.' 

When it comes time to Sell or Buy, We have a wealth of information and 18 years of experience to help you get started. Visit us at WWW.PrecisionReal-T.com or if you prefer a more personal touch Call us today at 801 809-9866. 

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2018’s Best-Run City in America…

Utah Ranks 2nd, Running a city is a tall order. The larger the city, 

the more complex it becomes to manage.

In addition to representing the residents, local leaders must balance the public’s diverse interests with the city’s limited resources.That often means not everyone’s needs can or will be met.

Leaders must carefully considerwhich services are most essential, which agencies’ budgets to cut or boost and whether and how much to raise taxes, among other decisions.

But how do we measure the effectiveness of local leadership? One way is by determining a city’s operating efficiency. In other words, we can learn how well city officials manage and spend public funds by comparing the quality of services residents receive against the city’s total budget.

Methodology

In order to determine the best- and worst-run cities in America, WalletHub compared 150 of the most populated cities across six key categories:

• Financial Stability – Total Points: 16.67
• Education – Total Points: 16.67
• Health – Total Points: 16.67
• Safety – Total Points: 16.67
• Economy – Total Points: 16.67
• Infrastructure & Pollution – Total Points: 16.67

Using that approach, WalletHub compared the operating efficiency of 150 of the largest U.S. cities to reveal which among them are managed best. We constructed a “Quality of Services” score made up of 35 metrics grouped into six service categories, which we then measured against the city’s per-capita budget.

Ready to Sell or Buy now is the Time, We have a wealth of information and 18 years of experience to help you get started. Visit us at WWW.PrecisionReal-T.com or if you prefer a more personal touch Call us today at 801 809-9866. 

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Source: WalletHub

Challenges to Obtaining Manufactured Home

While most manufactured housing customers obtain a chattel 

loan—a personal property loan—there are significant potential cost savings for them in the mortgage loan market, according to a report from the Urban Institute.

In fact, in the report, the researchers at Urban Institute suggested costly chattel loans could be partially responsible for the decline in this affordable housing sector in recent years.

Abstract

Manufactured housing is one of the most affordable types of housing in the US, but the high cost of manufactured home financing may be contributing to its surprisingly low production. Our close look at Home Mortgage Disclosure Act (HMDA) data reveals that the loan most manufactured homebuyers obtain – the chattel loan – costs 4.4 percentage points more per year than a standard mortgage loan.
Despite this greater expense, more than half the manufactured housing borrowers who might qualify for a mortgage opt for a chattel loan instead. We conclude that policymakers should explore measures that make accessing mortgages easier for buyers of manufactured homes.

Addressing the high cost of financing for this affordable housing sector could help ease the current affordable housing supply shortage, the researchers said in a report.

Manufactured housing was significantly more popular in the past. From 1977 to 1995; records show 240,000 manufactured home shipments per year. In 2017, there were only 93,000 manufactured homes shipped.

The Urban Institute estimated an average rate spread of 5.61 percent for loans from manufactured housing lenders, well over four times the rate at general lenders, which the institute estimated at 1.20 percent.

“At a minimum, we conclude the difference between chattel and non-chattel lending is 4.41 percentage points,” the researchers stated.

On an $80,000 20-year chattel loan, this would translate to a savings of $2,600 per year, according to the researchers.

However, the researchers noted, “this does not mean everyone who takes out a chattel loan could save 4.41 percent in interest by switching to a mortgage.”

Borrower credit scores, incomes, closing costs, and land ownership can also impact the equation.

The report pointed out that borrowers who obtained chattel loans may have lower credit scores and lower incomes on average. 

The median income for a manufactured housing lender customer was $45,000. The median income for a general lender customer is $51,000.

Also, closing costs were likely to be more expensive on a mortgage loan than a chattel loan. “Even so, the cost differential between chattel and mortgage financing is significant,” the researchers maintained.

Another factor to consider is that not all chattel borrowers have the option of a mortgage loan. Chattel loans function as personal property loans where the home itself is considered personal property. This allows borrowers who own their home but not the land on which it sits to obtain financing. For a mortgage loan, the borrower must own both the house and the land.

However, “Data show that most manufactured homeowners taking out chattel loans might have been eligible for a mortgage,” according to the report.
This could be the result of a couple major convenience factors that can lead borrowers to choose a chattel loan, perhaps even without considering a mortgage loan. 

The first is that manufactured homes are titled as personal property, regardless of whether the owner owns the land on which the property sits. To obtain a mortgage loan, the borrower would have to go through a potentially complicated process of transferring the property to “real property.”

The second is that there are often chattel lenders offering loans at the same site where the homes are sold. Customers can purchase their home and obtain their loan at a one-stop shop all in one day.

While conceding that not every chattel loan borrower would qualify or opt for a mortgage loan, the researchers maintained there were significant savings for some customers.

They suggested policymakers encourage borrowers at least to consider a mortgage and to look into simplifying the process of switching over a title for a manufactured home.

“The reduced costs and greater protections could stimulate demand for manufactured housing and hence the production of these homes, adding units to the scarce supply of affordable housing,” the report stated.

Ready to Sell or Buy now is the Time, We have a wealth of information and 18 years of experience to help you get started. Visit us at WWW.PrecisionReal-T.com or if you prefer a more personal touch Call us today at 801 809-9866. 

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Construction May Ease Inventory Shortage

There are more than 15 percent fewer entry-level homes 

under $200,000 on the market this year than last year,” said Hale. “In contrast, there are slightly more $350,000 plus homes on the market than last year.

If raises help buyers reach beyond entry-level homes, it could lead to a better match up of home shoppers and available homes.”

Friday’s numbers also indicated some hope for relief in housing supply. The data found that construction employment continued to trend up in June and had increased by 282,000 year over year.

“Specifically for the housing market, residential construction employment increased, which is critically important to increase the pace of housing starts and add more housing supply to the market.”  “Based on the increase of residential construction employment this year, it is not surprising that housing starts have been rising.”

“Over the past year, 282,000 total construction jobs have been added as builders work to add supply given the tight inventory and rising home prices.”

Money spent on construction of new structures in May rose 4.5 percent in May, compared with the same period a year ago. Revised April data indicated that month over month, total construction rose 0.4 percent above the revised April estimates. Residential construction also saw a slight uptick on a month over month basis, rising 0.8 percent in May.

On a year over year basis, total residential construction spends rose 6.6 percent, led by an increase in construction of new single-family homes that rose to more than growing 8.2 percent over the same period last year. While new home sales have been rising along with housing starts.

“We had previously expected improve builder margins by 10-15 percent, which we anticipated may have led builders to consider increasing activity at the lower-end of the market where inventory challenges are particularly acute. 

Are You Ready to Sell or Buy, now is the Time, We have a wealth of information and 18 years of experience to help you get started. Visit us at WWW.PrecisionReal-T.com or if you prefer a more personal touch Call us today at 801 809-9866. 

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