The RPR App Adds New Estimated Equity and Mortgage Calculators
Thank you to RPR for sponsoring this article on RE Technology: The RPR (Realtors Property Source) mobile app continues to improve and evolve, all in an effort to help REALTORS be more productive, efficient and deliver value when they're away from their desks or offices. We're constantly adding, refining and improving the app's features and capabilities. And now we're doing it by putting two new tools in the hands of REALTORS -- literally! The latest, updated version of the RPR app now includes two pricing tools that agents can use to educate clients, pique interest and spark conversations: the Estimated Equity Calculator and the Mortgage Calculator. It all adds up! RPR app introduces Estimated Equity and Mortgage Calculators REALTORS® can use the RPR app to search properties, do research on properties, run and send property reports, build CMAs, prospect, look up school ratings, access and share hyper-local Market Trends and so much more. And now, REALTORS® have two new crucial pricing tools at their disposal. We'll first look at the Estimated Equity calculator — these can be important tools for agents because they provide valuable insights into an owner's financial real estate situation, and to help them reach their financial goals. How to apply RPR's Estimated Equity Calculator in the field For most property owners, their home is their biggest asset and their equity is part nest egg, piggy bank and safety net. And due to the fairly recent jump in home values, most have more equity than ever before. The majority of homeowners, thanks to online "estimates" and an awareness of what their neighbors are selling for, have a ballpark number when it comes to their equity. However, surprisingly, a lot of homeowners don't have a clear idea about their home's actual equity value. Sure, they may have an inkling, but without crunching the numbers, it's all just a guess. That's where you, the Estimated Equity Calculator and the Estimated Equity Report come in. Picture yourself at the coffee shop and you strike up a conversation with a neighbor, a casual acquaintance or even a stranger, about the housing market. You explain that you can give them a pretty good idea of their home's worth. And better yet, you can tell them how much equity they currently have in their home. (This is where their eyes get big!) And you show them right there, on the spot, using your phone and the RPR app. It could be a lucrative face-to-face lead magnet, and it's super easy to do. Here's how it works: Conduct a property search in the RPR app, and from any selected property, scroll down to find the color-coded Pricing Tools area. Next, tap Estimated Equity to begin. The Estimated Equity Calculator will look like this: This area is pretty intuitive, you simply follow the steps. The property value will already be filled. Hit Add Loan to add the first mortgage balance. If you feel the property value needs to be adjusted or you have a second loan to add, you have the ability to edit those fields. The Estimated Equity amount will show up in the bottom right corner. Tap Save to add this property's Estimated Equity to the Pricing Tools grid. (Also, try to get the person's contact info so you can send them a report or even a screenshot.) To create your Estimated Equity report, tap on the Create Report button. From there, you can create the report and either download it or email directly to your client from the system. It will include all of the equity calculations, as well as all your branded information, including your photo and contact information. Here's what the finished report looks like: Equity Calculator = Convo starter Keep in mind that the Equity Calculator is an estimate only; it should be viewed as an initial step and its purpose is to arouse curiosities and start conversations. Use it as a way to enlighten potential sellers, get their contact info, and set up another meeting. If things progress from there, and serious listing discussions start, you can eventually provide them with an RPR Seller's Net Sheet, another pricing tool offered (just to the left of Estimated Equity in the Pricing Tools section). The Seller's Net Sheet is a more detailed breakdown on the sale of home that factors in sales price, mortgage balance, commissions, taxes, fees, etc. It's basically more number crunching that gives the seller a good idea of what they'll walk away with from the sale of their home, which is, of course, less than what their equity is. RPR's Mortgage Calculator helps buyers tally their buying power While equity conversations and calculators are for sellers, mortgage calculators are more geared for buyers. These tools provide essential financial information that helps both agents and their clients make informed decisions when budgeting, buying or making an offer on a home. The new Mortgage Calculator in the RPR app is located below the Pricing Tools section and will appear on all residential properties regardless of the listing status. Much like the Equity Calculator, REALTORS® can now ballpark a property's mortgage payment with our new Mortgage Calculator and share the cost breakdown via a one-page report. The calculator includes options for Property Taxes, Home Insurance and HOA Fees. Here's where to find the RPR Mortgage Calculator and how to use it: Conduct a property search in the RPR app, and from any selected property, scroll down to find the Mortgage Calculator, located just below the color-coded Pricing Tools area. Tap on the Edit Monthly Cost button to edit or add more details about the estimated monthly costs, including Price, Down Payment, Interest Rate %, Loan Term, Property Taxes, HOA Dues and Homeowner's Insurance. As you can see, some areas, such as the price and down payment (20% is assumed) are already filled in. However, those areas can be changed. For the other areas, you'll need to apply your experience and local market expertise to add in the current interest rate, the annual property tax percentage and any other fees, such as HOA, which you may know or may have to look into. Each area that you fill in helps the calculator crunch the numbers down to deliver an estimated mortgage payment. Once you have your figures locked down and entered, you can Save the Estimated Monthly Cost. Once saved, you can Edit Monthly Cost or Print an Estimated Mortgage report, a one page report that you can either download or email to your clients. Here's an example: With the RPR app's Mortgage Calculator on your phone, you can sit down with buyer clients, virtually anywhere, and have discussions about monthly payment estimates, budget planning, interest rates, loan terms and offer preparation. Perhaps more importantly, mortgage calculators help REALTORS® advise their buyer clients, build trust and raise their clients' financial literacy. You can easily explain to your buyers, using your phone as a visual aid, that certain homes fit or don't fit their budget. This type of grounded, quick decision-making will secure your role as a trusted advisor early on in the process. RPR's new pricing tools help REALTORS® deliver value — from anywhere The RPR app is a digital property data powerhouse that provides agents with access to property data, tools and reports. And it's all housed (see what we did there?) right on their phones. The new Equity and Mortgage Calculators only make the RPR app even more useful and applicable to helping REALTORS® deliver value to their clients and prospects. The ability to go over these big, important numbers, even at a preliminary stage, can help position an agent as a trusted guide and advisor. If you don't have it yet, get your hands on the RPR Mobile™ app now to try out these new, powerful features and tools. Note: The Mortgage Calculator results and Estimated Equity are not included in any other RPR reports. To view the original article, visit the RPR blog.

Keep Your Clients Closer
The consumer-direct momentum in the residential mortgage business continues to accelerate. Lenders are focused on giving both homeowners and homebuyers a platform to manage their real estate finances. It is inevitable that your clients will adopt an application, so why not provide the application to them with your branding front and center? For the first time that I am aware of, individual real estate agents may now provide their clients with a real estate finance platform co-branded between them and their favorite loan officer. Realfinity.io has just introduced new capabilities to its proven platform, HomeDashboard. For the first time, you can deliver a platform to your clients that: 1. Co-brands between the real estate agent and your favorite loan officer.   2. Delivers real-time customized finance options fully transparent.   3. Allows clients to start a loan application and get pre-approved.   4. Updates both you and your loan officer on clients' property-related activities. Sign up for HomeDashboard in Florida, Texas, and soon California with Realfinity Mortgage. For agents in other states, exclusive access is available through a lender invitation. Deliver HomeDashboard to clients before others do. Secure your position and stay ahead. Realfinity Mortgage, an innovative broker, finds the best mortgage rates by comparing lenders on behalf of clients. RFM with HomeDashboard empowers real estate agents and their clients with investment-grade property data, revolutionizing the awareness of available financing options. If you think you're close to your clients, RealFinity.io gets you closer. Mark McLaughlin serves as CEO of McLaughlin Ventures and M&A Advisory at WAV Group. To view the original article, visit the McLaughlin Ventures blog.

How the New FHA-Approved 40-Year Mortgage Can Save Buyers Money in the Short Term
A new type of mortgage has recently been approved by the Federal Housing Administration (FHA) that offers a longer repayment period of up to 40 years. In this post, we explore the benefits of the newly approved FHA 40-year mortgage, and how it can save homebuyers money in the short term. So, what exactly is the FHA 40-year mortgage? The FHA 40-year mortgage is a new type of loan that allows homebuyers to borrow money over a period of 40 years. This is longer than the typical 15- to 30-year mortgage terms. The FHA 40-year mortgage is designed to make monthly mortgage payments more manageable for homebuyers. The monthly payments are decreased by spreading out the repayment period over 40 years, which makes it simpler for those on a tight budget to afford a home. The fact that the FHA 40-year mortgage can help homebuyers save money in the short term is one of its most important advantages. As was already mentioned, the smaller monthly payments result from the longer repayment period, which makes it simpler for homebuyers to afford their mortgage payments. Homeowners that are struggling with their mortgage payments are able to do a loan modification to this new FHA 40-year mortgage. By doing so, a lower monthly payment will allow them to allocate more of their funds to other costs. According to a recent Yahoo article, Bankrate recently compared 30- and 40-year mortgages and found on a $312,000 loan at 6.85% interest, the monthly payments were $2,044 for 30 years and $1,904 for 40 years. In connection with such, below is a breakdown of the amount of potential savings you could get when comparing a 30-year mortgage at 6.85% and 5.85%. Please note that we used 5.85% to depict the amount of savings you'd basically get from a 40-year mortgage (a 40-year mortgage is the equivalent of reducing your 30-year mortgage by a 1% interest rate). The FHA 40-year mortgage can save buyers money in the short term, but it's important to remember that in the long run, buyers will pay more. So even though monthly payments may be lower, buyers will end up paying more in interest over the course of the loan. The FHA 40-year mortgage is still a great choice for homebuyers on a budget even though they will end up paying more in interest. People may find it easier to afford a home and to save money for other expenses as a result of smaller monthly payments. Additionally, homebuyers can be confident that they are receiving a competitive interest rate because the loan is backed by the FHA. In addition to such, history has shown that interest rates fluctuate. With a 40-year mortgage, as interest rates go down, buyers can potentially refinance to a shorter term mortgage to save money, making the 40-year mortgage an introductory type loan, thus further assisting first-time homebuyers. To view the original article, visit the Transactly blog.

Mortgage Rate Trends We Can Expect in 2023
Man, talk about them mortgage rates! Mortgage rates have been on the rise in recent years, but there are signs that they may level off in 2023. The average 30-year, fixed-rate mortgage was 6.42% for the week ending December 29, up from 6.27% in the previous week. While that rate increase broke five consecutive weeks of declines, it's still down from last year's high of 7.08% November 10 and October 27—the highest rate in more than 20 years. Numerous experts are predicting a drop in mortgage rates this year, and in this blog post, we'll explore some of the reasons why mortgage rates could drop, and what it could mean for potential homebuyers. Read on to see the factors and mortgage rate trends that we can expect coming for us this year! The state of the economy is one of the main factors that might result in lower mortgage rates in 2023. The U.S. economy is currently experiencing rapid growth, low unemployment, and rising wages. However, a lot of experts believe that this growth will slow down in the upcoming year, which might cause inflation to fall. When inflation is low, interest rates are pushed lower, which could result in lower mortgage rates. Mortgage rates may be lower in 2023 as a result of the Federal Reserve's monetary policy, which is another factor. Mortgage rates are directly impacted by the interest rates that are set by the Fed for the nation. In order to boost the economy, the Fed has kept interest rates low recently, and they have said that they intend to do so for the foreseeable future. This policy is likely to continue this year which could lead to lower mortgage rates. Mortgage rates may decline in 2023 for a third reason: increased competition among lenders. Due to the increased competition in the mortgage market, lenders will compete for customers by presenting more enticing terms and lower interest rates. Because of the increased competition, mortgage rates may be reduced for borrowers. Finally, the recent modifications to the tax code may also affect mortgage rates in 2023. The amount of interest that homeowners can write off on their taxes has been restricted by the new law. This might result in fewer people applying for mortgages, which would reduce demand and lower rates. Now, don't get on your high horse — it should be noted that these are only predictions and that there is no assurance that mortgage rates will decrease in 2023. But if they do, it might be fantastic news for prospective homebuyers. Less expensive mortgage rates would make it simpler for people to purchase a home, which might encourage more people to do so and strengthen the housing market as a whole. It's important to keep in mind that even if mortgage rates do drop, it's not necessarily the best time for everyone to buy a home. It depends on one's personal financial situation and long-term goals. Before making any decisions about buying a home, it's important for real estate consumers to consult with a financial advisor and consider all of their options. In conclusion, while no one can predict the future with certainty, the signs point to the possibility of mortgage rates dropping in 2023. The state of the economy, the Federal Reserve's monetary policy, increased competition among lenders, and changes to the tax law are all factors that could contribute to this trend. If mortgage rates do drop, it could be a great opportunity for potential homebuyers to take advantage of lower rates and purchase a home. To view the original article, visit the Transactly blog.

5 Reasons Why the Sky Is Not Falling: By the Numbers
The spike in home sales during the middle of the pandemic took nearly everyone by surprise. Previous housing predictions had been dire. The March 19, 2020, headline from CNBC recapped the initial universal sentiment among industry experts: "Home sales could fall 35%, as coronavirus stalls spring housing market, new analysis says." Money magazine reported on April 30, 2020, "Four out of five agents surveyed in early April by the National Association of Realtors said they saw fewer houses on the market. Only half of Americans said they think that now is a good time to buy a home, according to a recent Gallup survey — the lowest share since Gallup began tracking people's sentiments on real estate in 1978." With hindsight, we know the exact opposite happened: We saw record home sales and homes flying off the shelves at an unprecedented speed. It shouldn't be surprising for anyone who has been in real estate for more than a decade that we're hearing the same doom and gloom forecasts today. This time, the catalyst is not a virus, but an unprecedented rise in mortgage rates. Current headlines forecast more bad news for housing: CBS News reports, "U.S. home prices could fall as much as 20% next year," with the New York Times adding, "The Housing Market Is Worse Than You Think." One of the most recent negative headlines buries the news for doom and gloom, leading with: "More than $1 trillion in equity shed during third quarter." The same story notes that "tappable equity at the end of September was at $10.5 trillion," and that "home prices remain up 45% from the start of the COVID-19 crisis. Median home prices are still at least 19% above their February 2020 levels in every major market in the country." It is the headlines that are causing an overreaction among many real estate agents, resulting frequently in panic. The good news is that 2023 is not 2008. The numbers prove the difference. So, let's stop talking about single-source predictions and economic forecasts and instead focus on what the data tells us about today's real estate market compared to 2008. 1. Massive versus little equity: In 2008, "homes were underwater." That was the dominant buzz phrase to describe the chaos that followed when the financial markets collapsed. But the rapid rise in home values during the pandemic has created a completely different real estate market in 2023. Homeowner equity keeps growing, even today despite recent market turndown, reports real estate data guru ATTOM. Only one in 35 homes are seriously underwater. In 2008, nearly one in five homeowners were underwater, CNN Money said on October 31, 2008. 2. Highest FICO scores ever: Between 2004 and 2013, which included the mortgage crisis, average credit scores were at their lowest recorded level at 686. From 2018 to 2020, the average rose to 710, a record high according to a report from credit firm Experian. Others find the average score is even higher, hitting a record high of 788 in the first quarter of 2022, the Federal Reserve Bank of New York reported. Between 2001 and 2009, nearly a third of all home loans were made with a FICO score below 660. Today, few new mortgage loans are made for borrowers with credit scores below 670. What drove the last housing crisis to the brink was the wide availability of no-doc and subprime mortgage loans (below 600 FICO scores). We know that lower FICO scores resulted in more loans that were seriously delinquent in 2005 through 2007. Subprime loans today are but a small fraction of mortgages originated: just 3 percent, according to the N.Y. Fed, versus about 1 in 8 loans from 2003 to 2007. 3. Lower foreclosure rates: In January 2009, the MarketWatch headline said, "2009 foreclosures hit a record high: No relief in sight as delinquent loans continue to pile up." That month, foreclosure filings jumped 21%, comprising 2.21% of all U.S. housing units. A stunning 2.82 million housing units, or one in 45, were in foreclosure. In September, 31,836 properties had foreclosure filings, according to ATTOM, saying they are still lagging at pre-pandemic levels. 4. Inventory shortage of homes needed for population growth: Between 2007 and 2020, homebuilders started at nearly 400,000 homes fewer than their historical average. As the No. 1 ranked real estate agent Ben Caballero expertly detailed for Inman News in May 2020, even if homebuilders can increase production to 1.5 million new homes a year, it will take at least six years to catch up. We have a major housing shortage. Supply and demand drive U.S. markets, including real estate. Keep in mind that the U.S. population in 1980 was 226.5 million people. Today, we have 100 million more people: the population is 331.9 million. While we will see many markets have more home inventory coming online, we have a systemic national shortage and will continue to need more homes. 5. 4 million to 5 million homes are sold each year, regardless of interest rates: From 1998 until 2022, over 4 million homes have been sold annually. When interest rates were below 3%, more than 6 million existing homes were sold. But when interest rates were close to 6% in 2005, 7.1 million existing home sales were made. Interest rates are not the only driver in a home-selling decision. If they were, home sales would completely collapse when interest rates are higher. But they don't — because life happens. People marry, have children, kids move out, divorces happen, families relocate to retire, careerists move for a new job, family members die, Americans want a bigger or smaller home, to move closer to family — those are just some of the reasons driving home selling decisions. Also, remember the adage that you "marry the home but date the rate." This is as true today as in October of 1981, when mortgage rates exceeded 18%. Rates go up, and they also come down. People refinance. How many people do you know have had the same home mortgage for 30 years? No one can predict interest rates — but historically, we know they do not remain high forever. 2023 is not 2008 As you can see, the sky is not falling. But will the housing market experience a correction? Yes. Prices cannot go up forever without wages keeping pace: History shows us that. But will we have a collapse in pricing? The data says, "no." 2023 is a year with homeowners having more home equity because of the run-up in home values. FICO scores will remain high, and the activity in subprime loans and foreclosures remain far below anything like we saw in 2008. While we will likely see more inventory in many markets, it won't be enough to fix our housing shortage problem. Life happens regardless of the news. People will still move whatever interest rates are doing. Of course, some may pause — just like people paused when the pandemic first struck — but history shows buyers adjust and come back into the market. Jessica Morrow, a founding team member at Revive, is the Chief of Staff and oversees company-wide operations. A real estate industry leader, Jessica's background includes real estate brokerage management and ground-up construction. Learn more about Jessica and Revive at revive.realestate.com.

Reduce Buyer Frustration with Effective Financing Education and Preparation
Money may or may not buy happiness, but you for sure need it to buy a house. For most people that means getting a mortgage. Thirty-five percent of frustrated homebuyers in the WAV Group Homebuyer Frustration Report pointed to the mortgage process being a source of their frustration. One respondent in the study suggested, "There needs to be more workers in the mortgage field to make it run faster." Buyers just want a seamless experience from home search to the closing table. This is one of the reasons more brokerages have started offering ancillary services such as title and mortgage. Financing complications or delays are a constant struggle in any market, and when the market is moving fast and is super competitive, like it has been recently, it can get even more stressful. Here are some important points your team should add to their initial buyer education consultation. Review Their Credit Report Even if there is nothing incorrect or alarming to find on the report, it is quite likely that there is something on their report they could clarify or update which may get them a better score and possibly a better rate on the mortgage. So it is certainly worth the effort. Suggest they do this BEFORE trying to qualify for a mortgage. Get Organized Buyers will need to track down their tax returns, print out paystubs, and if they are self-employed, they will want their profit and loss statements for at least two years. There will likely be delays with the mortgage company processing documents. Do not add to that delay by not having the documents ready to submit and re-submit when requested. Get Pre-Approved Even before they find a house to make an offer on, buyers need to know how much they can afford. The pre-approval letter is an important step in the process, but it is not the end of the road. Buyers need to understand that there is still more work to be done once they find the house they want to buy. Put the Mortgage Company on Speed Dial Once a house is selected, there is an entirely different approval process before the mortgage will be ready to fund. Buyers should be prepared to stay in touch with the lender throughout the process, and the agent should be tracking the process as well. They should proactively check on the status of the mortgage consistently once the offer is made until it is ready to fund on closing day. Even the most prepared of buyers can sometimes get frustrated. As another respondent in the WAV Group Homebuyer Frustration Report said, they wish there were "Clearer financial requirements to close." As a neutral third-party, your agents can act as part counselor and part advisor for homebuyers trying to figure out the mortgage process. Sometimes they will just not understand what the mortgage company is asking for, or why they are asking for it. If your team can explain a term or help them get a document, that can help relieve some of the stress. Get all the insights and data from the WAV Group 2022 Homebuyer Frustration Report to see how you can set your next buyer up for a smoother home buying experience. Download now! To view the original article, visit the WAV Group blog.

Mortgage Applications Are Plummeting. Is the Housing Market Collapsing?
Agents, buyers, sellers, and investors have had ample reason to question the sustainability of the real estate market. After all, the scorching-hot housing market was fueled in part by COVID-related lockdowns and life disruptions that are becoming more rare. Rising interest rates, intractably high home prices, and continued rumblings about a recession add to skepticism about the housing market's health. Enter another housing market warning sign: A sustained drop in mortgage applications. When people need a home loan, they submit to lenders a mortgage application, which contains information on the borrower's income, employment history, and the property being purchased. Since mortgage applications are the first step of obtaining a home loan, they're often used as a gauge of industry-wide housing demand. With mortgage applications down a full 15% year-over-year, should agents fear a housing market implosion? The data says no. Homesnap's team of data scientists investigated and found that when comparing the first week of June 2022 with the first week of May 2022, active home listings increased by 26.6%, while the number of active open houses skyrocketed by 71.2%. What's going on? If fewer people are applying for mortgages, how can more people be listing and touring properties? In short, the drop in mortgage applications indicates a housing market that's due for cooling, but not yet. For the duration of busy season, at least, fewer mortgage applications will likely coexist with a competitive housing market. How Can the Housing Market Remain Robust, Even as Mortgage Applications Decrease? Mortgage applications are falling because mortgage rates are rising. Basically, as the cost of borrowing for a home loan increases, fewer buyers are qualified to seek one. But even with interest rates set to rise throughout 2022, the housing market isn't collapsing. As our data scientists found, home listings and open houses are actually increasing. There are three reasons: 1. The Market Takes Time to Change A reduction in mortgage applications isn't tanking the housing market because reduced demand takes time to ripple through the market. In fact, months can elapse between submitting a mortgage application and closing on a property. For new home buyers, it could be six months or a full year between submitting a mortgage application and moving into a home. Fewer mortgage applications in the spring and summer may not materially affect the housing market until the fall and winter. Mortgage applications are a measure of housing demand, but not necessarily of today's demand. The housing market is big and complicated, and doesn't adjust to consumer behavior overnight. 2. Housing Inventory Remains Low Other than high prices, the trend agents most frequently identify about today's housing market is record-low housing inventory. That inventory isn't expected to soon replenish, so the housing market is unlikely to topple. Low housing inventory means the number of people who want a home continues to far eclipse the number of available properties. With low listings, having fewer people seeking a mortgage isn't a death knell for the real estate market – even if it results in tapering home prices. 3. It's Busy Season For all the broader market forces at play, an increase in home listings and open houses just after Memorial Day isn't unusual. It's just busy season. If the normal real estate cycle seemed blurred or even erased in 2020 and 2021, it was because the market was turbocharged – hugely affected by the COVID-19 pandemic and the social and financial changes wrought by it. Now, the market may simply be approaching something close to normal. Summer's starting, kids are out of school, people are allowed to slip out of the office early on Fridays, agents have more daylight during which to host home tours – the market is found to pick up. The return of a conventional busy season points to a related reality: Reduced mortgage demand may put the market back to where it was in 2018 or 2019. Agents still had ample buyer demand during that time, even if the market wasn't going gangbusters. Home buying seasonality shifting back to normal doesn't mean the sky is falling, and a reduction in mortgage applications doesn't make for a housing market meltdown. To view the original article, visit the Homesnap blog.

An Old Type of Mortgage Is Back in Style. Is It Right for Your Clients?
It's not an easy time to buy a home. Interest and mortgage rates are rising, the number of listed houses is at an all-time low, and continued demand for homes means that prices continue to go up. Cue the reemergence of the adjustable-rate mortgage. The proportion of mortgages that are adjustable-rate mortgages (ARMs) more than doubled to 10% in January 2022, up from only 4% in January 2021. Increased interest in ARMs is no surprise, as they offer an initial rate that's significantly lower than a standard 30-year mortgage. But what's the catch for buyers? After all, ARMs were last this popular in the lead-up to the collapse of the housing market in the late 2000s. As an agent, when should you recommend an ARM, and when should you advise clients to stick to a traditional mortgage, even if it has a higher rate? How Does an Adjustable-Rate Mortgage Work? As ARMs occupy a larger share of approved mortgages, buyers are more likely to be familiar with them as a strategy to lower their initial rate. What buyers may not understand is that after the initial period – sometimes called a "teaser rate," which typically lasts between three and 10 years – their interest rate and monthly payments fluctuate. ARM rates are tied to a major index, such as the maturity yield on a one-year Treasury bill or the Secured Overnight Financing Rate. After the initial rate expires, mortgage lenders take the index rate and add a pre-agreed number of percentage points, called the margin. The margin stays the same, but the index rate fluctuates, and is out of your and your client's control – though ARMs do come with a cap that insulates buyers from steep increases in monthly payments. The most popular adjustable-rate mortgage is the 5/1 ARM – which means that the introductory rate lasts for five years, and the interest rate changes once every year thereafter. Let's see how one looks in practice. Your buyer needs to take out a $400,000 loan to purchase a home, having put an $80,000 down payment on a $480,000 property. A standard 30-year mortgage, which is known as a "fixed rate," currently comes with about a 5% interest rate. Under this circumstance, your buyer would pay $2,147.29 every month for 30 years – adding up to $773,024.40 total over the course of the mortgage. Under a 5/1 ARM, your buyer may be able to secure an initial, five year rate of about 3.5%. Over the first five years of the loan, they would pay $1,796.18 per month, which adds up to $107,770.80 – $21,067 less than the $128,837 they would pay with a fixed-rate mortgage. After this, things get more complicated. While it's possible that interest rates could be lower in five years, most experts consider it unlikely, as the Federal Reserve has announced and begun to implement an aggressive rate hiking schedule to combat inflation. Even with a relatively low first-time adjustment of 1% and a favorable interest rate cap of 8.5%, monthly payments on this 5/1 ARM rise to a maximum of $2,817.96 per month. Overall, total 30-year payments on the 5/1 ARM would be estimated at $928,320, a full $155,296 more than a traditional, fixed 30-year loan. When Does an Adjustable-Rate Mortgage Make Sense? Clearly, adjustable-rate mortgages combine short-term gain with long-term risk. Your buyers can save money in the early stages of a home loan, but could be stuck with unfavorable, or at least unpredictable, mortgage rates for the brunt of their mortgage. Whether an ARM is a sensible, responsible option depends entirely on the buyer's circumstance. The first type of buyer most advantaged by an ARM is somebody who doesn't plan on living in their home for long. If your buyer indicates that they plan to purchase and then sell their home in five years or less, an ARM will allow them to bank savings without worrying about the fluctuations of mortgage indexes. In this vein, ARMs are a more normal option for people purchasing a "starter" home, because it allows them to build equity and pocket cash in advance of a more expensive home purchase. For buyers who feel squeezed out of the red-hot housing market, ARMs can be an avenue to qualifying for a larger home mortgage. Some of these buyers may anticipate having a higher income in the future, or believe they will be able to refinance their mortgage later on when interest rates drop. These buyers have a higher tolerance for risk, and as long as you explain the potential downsides, opting for an ARM can be a reasonable option. An ARM does not make sense for buyers looking to secure their "forever" home. For example, consider a married couple in their 30s who tell you they are searching for the home in which they will raise their family. They inform you they do not plan to leave this home for decades, and have settled, stable lives and careers in your local area. For such buyers, an ARM would be a resoundingly poor choice. Instead, encourage these clients to pursue a traditional 30-year fixed mortgage, because it will afford them security and clarity. ARMs are a similarly poor fit for buyers who have a low down payment, because a market correction and decreasing home values could leave them with inflated debt on a less valuable investment. Also, buyers who are purchasing a modestly priced home, especially those under $200,000, will only yield $100 or less per month during their initial ARM rate. Those savings likely won't be worth the risk of rising mortgage payments in the future, making an ARM a questionable decision. As with all aspects of being an agent, answering questions about adjustable-rate mortgages depends foremost on your ability to understand and respond to your clients' goals and objectives. To view the original article, visit the Homesnap blog.

Are Rising Mortgage Rates Actually Making the Real Estate Market Even Hotter?
Early this year, we provided agents three benchmarks to consider when answering client questions about the explosive rise of housing prices over the past two years. The first housing market factor we encouraged agents to track were mortgage rates. Low mortgage rates in the early days of the COVID-19 pandemic helped supercharge real estate sales in 2020 and 2021. If the 30-year fixed mortgage rate rose as expected and approached its pre-pandemic level of around 4%, it might indicate a taper in home prices. Mortgage rates have risen, but housing prices have not fallen. Why? What is the present state of the housing market and mortgage rates? Is there reason to believe that rising mortgage rates are actually causing even more home buyers to get into the market? We have an update for agents about the state of mortgage rates and the housing market, and believe that this information will help you feel comfortable explaining to buyers and sellers about how rising mortgage rates are likely to affect the real estate market in the short- and long-run. The State of Mortgage Rates and the Housing Market Over the past 14 months, mortgage rates have risen steadily. Just consider that in January 2021, a 30-year fixed mortgage rate was at 2.65%; in early March 2022, the fixed rate is 3.75%, and has topped 4% multiple times. Taken alone, this mortgage rates trend should predict a cooling housing market. Higher mortgage rates mean that people have to pay more over the course of a loan and should, theoretically, dissuade them from paying a hefty sticker price for a home. Still, in spite of rising mortgage rates, the cost of homes has continued to rise in early stages of 2022. Why? To start, remember the two other trends we suggested you monitor at the beginning of the year: Overall inflation has not fallen, and the highest consumer prices in decades are being felt across industries, including the price of homes. New home construction has increased in recent months, but the supply of new homes is still far from reaching pre-pandemic levels. If inflation persists and housing inventory remains low, rising mortgage rates may not be enough to slow the increase in home costs. But so far in 2022, the hot real estate market may not be occurring in spite of rising mortgage rates. Instead, rising mortgage rates are possibly motivating even more consumers to apply for mortgages and buy homes at or above their listing price. How Can Higher Mortgage Rates Heat Up the Real Estate Market? Why might rising mortgage rates be driving buyers into the market? Because rising mortgage rates today may indicate sky-high mortgage rates tomorrow. The Federal Reserve has indicated since the beginning of the year that it plans to raise interest rates this year in response to persistent inflation. Rate hikes may start as soon as the early spring, and if the Fed raises the cost of borrowing, mortgage rates may rise substantially, too. For buyers, then, the prospect of even higher mortgage rates may be a motivator to jump into the market. If mortgage rates are rising now, before rate hikes start, how fast are they going to rise once central banking policy actually changes? It's no wonder that buyers want to buy a home before the Fed raises rates. As an agent, you should remind would-be buyers that now may be the last time in the foreseeable future to capitalize on lower mortgage rates. Also, homeowners may see rising mortgage rates as an indication that selling conditions are likely to be better now than in a year. After all, Fannie Mae is predicting that rapidly rising mortgage rates and a larger inventory of homes will start to cool the price of homes later in 2022 and in 2023. When you talk to potential sellers, remind them that rising mortgage rates could be a sign that the booming market is coming to end, and that now may be the time to sell. Having a handle on the ever-changing housing market requires the ability to identify market shifts and trends as they happen. Clients are going to continue to ask questions about the unprecedented housing market. Make sure you can give compelling, informed, and helpful answers about mortgage rates, home prices, and all other market information by using Homesnap Pro. To view the original article, visit the Homesnap blog.

[Best of 2021] 4 Reasons Why the End of Forbearance Will Not Lead to a Wave of Foreclosures
We're continuing an annual tradition of counting down our top 10 articles of the year. The following article was originally published in August and is #6 in our countdown. See #7 here. With forbearance plans about to come to an end, many are concerned the housing market will experience a wave of foreclosures like what happened after the housing bubble 15 years ago. Here are four reasons why that won't happen. 1. There are fewer homeowners in trouble this time After the last housing crash, about 9.3 million households lost their home to a foreclosure, short sale, or because they simply gave it back to the bank. As stay-at-home orders were issued early last year, the overwhelming fear was the pandemic would decimate the housing industry in a similar way. Many experts projected 30% of all mortgage holders would enter the forbearance program. Only 8.5% actually did, and that number is now down to 3.5%. As of last Friday, the total number of mortgages still in forbearance stood at 1,863,000. That's definitely a large number, but nowhere near 9.3 million. 2. Most of the 1.86M in forbearance have enough equity to sell their home Of the 1.86 million homeowners currently in forbearance, 87% have at least 10% equity in their homes. The 10% equity number is important because it enables homeowners to sell their houses and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create. The remaining 13% might not all have the option to sell, so if the entire 13% of the 1.86M homes went into foreclosure, that would total 241,800 mortgages. To give that number context, here are the annual foreclosure numbers of the three years leading up to the pandemic: 2017: 314,220 2018: 279,040 2019: 277,520 The probable number of foreclosures coming out of the forbearance program is nowhere near the number of foreclosures coming out of the housing crash 15 years ago. The number does, however, draw a similar comparison to the three years prior to the pandemic. 3. The current market can absorb any listings coming to the market When foreclosures hit the market in 2008, there was an excess supply of homes for sale. The situation is exactly the opposite today. In 2008, there was a nine-month supply of listings for sale. Today, that number stands at less than three months of inventory on the market. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains when addressing potential foreclosures emerging from the forbearance program: "Any foreclosure increases will likely be quickly absorbed by the market. It will not lead to any price declines." 4. Those in power will do whatever is necessary to prevent a wave of foreclosures Last month, the White House released a fact sheet explaining how homeowners with government-backed mortgages will be given further options to enable them to keep their homes when exiting forbearance. Here are two examples mentioned in the release: "For homeowners who can resume their pre-pandemic monthly mortgage payment and where agencies have the authority, agencies will continue requiring mortgage servicers to offer options that allow borrowers to move missed payments to the end of the mortgage at no additional cost to the borrower." "The new steps the Department of Housing and Urban Development (HUD), Department of Agriculture (USDA), and Department of Veterans Affairs (VA) are announcing will aim to provide homeowners with a roughly 25% reduction in borrowers' monthly principal and interest (P&I) payments to ensure they can afford to remain in their homes and build equity long-term. This brings options for homeowners with mortgages backed by HUD, USDA, and VA closer in alignment with options for homeowners with mortgages backed by Fannie Mae and Freddie Mac." When evaluating the four reasons above, it's clear there won't be a flood of foreclosures coming to the market as the forbearance program winds down. Bottom Line "The likelihood of us having a foreclosure crisis again is about zero percent." To view the original article, visit the BoomTown blog.

4 Reasons Why the End of Forbearance Will Not Lead to a Wave of Foreclosures
With forbearance plans about to come to an end, many are concerned the housing market will experience a wave of foreclosures like what happened after the housing bubble 15 years ago. Here are four reasons why that won't happen. 1. There are fewer homeowners in trouble this time After the last housing crash, about 9.3 million households lost their home to a foreclosure, short sale, or because they simply gave it back to the bank. As stay-at-home orders were issued early last year, the overwhelming fear was the pandemic would decimate the housing industry in a similar way. Many experts projected 30% of all mortgage holders would enter the forbearance program. Only 8.5% actually did, and that number is now down to 3.5%. As of last Friday, the total number of mortgages still in forbearance stood at 1,863,000. That's definitely a large number, but nowhere near 9.3 million. 2. Most of the 1.86M in forbearance have enough equity to sell their home Of the 1.86 million homeowners currently in forbearance, 87% have at least 10% equity in their homes. The 10% equity number is important because it enables homeowners to sell their houses and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create. The remaining 13% might not all have the option to sell, so if the entire 13% of the 1.86M homes went into foreclosure, that would total 241,800 mortgages. To give that number context, here are the annual foreclosure numbers of the three years leading up to the pandemic: 2017: 314,220 2018: 279,040 2019: 277,520 The probable number of foreclosures coming out of the forbearance program is nowhere near the number of foreclosures coming out of the housing crash 15 years ago. The number does, however, draw a similar comparison to the three years prior to the pandemic. 3. The current market can absorb any listings coming to the market When foreclosures hit the market in 2008, there was an excess supply of homes for sale. The situation is exactly the opposite today. In 2008, there was a nine-month supply of listings for sale. Today, that number stands at less than three months of inventory on the market. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains when addressing potential foreclosures emerging from the forbearance program: "Any foreclosure increases will likely be quickly absorbed by the market. It will not lead to any price declines." 4. Those in power will do whatever is necessary to prevent a wave of foreclosures Last month, the White House released a fact sheet explaining how homeowners with government-backed mortgages will be given further options to enable them to keep their homes when exiting forbearance. Here are two examples mentioned in the release: "For homeowners who can resume their pre-pandemic monthly mortgage payment and where agencies have the authority, agencies will continue requiring mortgage servicers to offer options that allow borrowers to move missed payments to the end of the mortgage at no additional cost to the borrower." "The new steps the Department of Housing and Urban Development (HUD), Department of Agriculture (USDA), and Department of Veterans Affairs (VA) are announcing will aim to provide homeowners with a roughly 25% reduction in borrowers' monthly principal and interest (P&I) payments to ensure they can afford to remain in their homes and build equity long-term. This brings options for homeowners with mortgages backed by HUD, USDA, and VA closer in alignment with options for homeowners with mortgages backed by Fannie Mae and Freddie Mac." When evaluating the four reasons above, it's clear there won't be a flood of foreclosures coming to the market as the forbearance program winds down. Bottom Line "The likelihood of us having a foreclosure crisis again is about zero percent." To view the original article, visit the BoomTown blog.

The Importance of Down Payment Assistance Programs in a Pandemic
Economists agree that the real estate business has recovered faster than expected during the pandemic. A continued lack of inventory, low mortgage rates, and pent-up demand are all contributing factors to a robust market. The good news for homebuyers is that down payment assistance is still available, with many program providers offering online and virtual support/education. With an average benefit of $13,000, these programs can help make the difference in achieving homeownership when competition is fierce.

Experienced one too many failed real estate transactions this year? Here is how to dramatically improve your success rate.
There's nothing worse than developing a strong relationship with a buyer and finding them the home of their dreams, only to have the deal fall through at the last minute. While some transactions fail because the appraisal comes in lower than the purchase price or the home inspection reveals a previously undetected flaw, too often they fail because the buyer cannot secure the financing due to overstepping their buying abilities. Is there a way to avoid this painful and sometimes unexpected misstep? According to the National Association of Realtors' 2019 Homebuyers and Sellers Study, 89% of home buyers finance their purchase. However, not all buyers, especially first-time home buyers, understand a mortgage preapproval can make the difference between a successful transaction and one that falls through. Even further, few consumers understand the difference between an informal prequalification and a rigorous preapproval. Due to this, it makes sense to strongly encourage buyers to find out how much home they can afford by securing a preapproval before they fall in love with a property that is beyond their means. However, as RE Technology recently learned, not all preapproval processes are the same. To ensure agents do the best job of encouraging their buyers to focus on homes they can afford, check out Quicken Loans' Verified Approval. Verified Approvals are so thorough they position buyers with the same purchasing power as someone with cash. This makes their offer more attractive to potential sellers, especially in a multi-bid situation. Thanks to how robust the approval process is, Verified Approval is much stronger than a normal preapproval. Verified Approval by Quicken Loans involves an underwriter's comprehensive analysis of a client's credit score, income, employment status, debt, property, insurance and appraisal, paired with a satisfactory title report/search. With a Verified Approval, much of the paperwork is done upfront — Quicken Loans pulls a credit report, provides (at least tentatively) a preapproval amount and helps clients choose a loan type (fixed-rate, ARM, FHA, etc.) and loan term (15 years, 30 years, etc.). This puts clients one step closer to the finishing line when it comes time to making an offer. Buyers with a Verified Approval are more confident and can be treated the same as a cash buyer because they know the size of the mortgage they will be approved for. If a client uses Quicken Loans' RateShield Approval, their rate gets locked in for up to 90 days. The reason for a more confident buyer is that they know the loan will be financed. Quicken Loans even guarantees it, or they pay the prospective buyer $1,000. When speaking to Ari Prostak, a top producing agent for Jason Mitchell Group, RE Technology discovered he strongly prefers to work with Rocket Mortgage by Quicken Loans because of Verified Approvals. "Quicken Loans is more than just a big brand," Prostak says. "It is not only one of the fastest lenders to close but also offers great agents and brokers a chance to become even better. With Quicken Loans, a Verified Approval letter is used to enter a purchasing contract and if it doesn't get to closing because of something that comes up in underwriting, Quicken Loans will give the homebuyer/applicant $1,000 no questions asked." To read the full interview from Ari Prostak, click HERE. There are many things agents can do for their clients to make sure they are ready to buy a home. Making sure they know how much house they can afford will greatly improve their chances of having a successfully completed transaction and more satisfied clients. Using the Verified Approval program regularly will help agents improve their repeat business and referrals. It is a win-win.

Agent Builds Veteran Homebuyer Resources He Wishes He Had
After 10 years of service, three deployments and 500 missions in the U.S. Army, Austin-based REALTOR® Raoul Rowe transitioned to civilian life, earned an IT degree and became a licensed REALTOR®. Today, he's using his personal experience to help more veterans transition back home and succeed in their path to homeownership. "It felt like you finished your military service with a bag of benefits and a simple 'good luck.' There was no one to really fully guide you through critical next steps of transitioning, including buying a home," said Raoul.

How Can You Use Restricted Stock to Buy a Home?
In places like Silicon Valley and Seattle, soaring housing prices have made it increasingly difficult for people to buy a home. Tech workers with publicly traded companies often face an extra hurdle: they get a salary, but a significant portion of their annual compensation typically includes RSUs (restricted stock units) or similar stock assets. An RSU is a type of compensation granted by an employer to an employee in the form of company stock. Once an employee has fulfilled his or her employer's specified vesting period, the RSU can be considered income because the employee has the option of selling it at current market price. According to the IRS, with RSUs, the taxable income is the market value of the shares at vesting. While it has become common among technology companies such as Google, Facebook and Apple to compensate employees with RSUs annually, other well-known publicly traded firms also provide key employees RSUs. This list includes retailer Nordstrom, restaurant firm The Cheesecake Factory, online behemoth Amazon, and many more. Plain vanilla mortgage lending rules do not allow RSUs to be used in qualifying a borrower for a home loan. Opes Advisors, a division of Flagstar Bank, takes a different approach. Opes Advisors looks at borrowers' lives from a holistic standpoint – and RSUs in publicly traded companies are material to an individual's financial life. Opes Advisors recognizes that RSUs are critical to many tech employees' financial prospects, so it offers loan programs that consider how these assets fit into the borrower's ability to purchase a home. Its underwriters have extensive experience with structuring home loans that consider a borrower's RSUs. There are general guidelines that come with the use of publicly traded RSUs and they can vary depending on each borrower's unique situation: Verifiable history of vested RSUs is required. Granted RSUs do not qualify. A minimum of two years of vested shares is required. A vesting schedule must stretch a minimum of two years into the future. Underwriters apply stringent stability of income tests. Qualifying includes other risk thresholds, including minimum FICO scores, debt-to-income limits, and more. Opes Advisors looks at the borrowers' lives from a holistic standpoint. It has developed powerful software that models various purchase scenarios, letting borrowers preview how their purchase decision will affect their entire financial life—before they make a decision. Borrowers can use a mobile app, OpesView, to see the financial outcome before they buy. Today, there are nearly as many different mortgage solutions as individuals are applying for a mortgage. Opes Advisors works with clients to help them find a solution that best fits their lifestyle now and supports their financial goals in the future. Opes Advisors is an advocate for smart mortgage products, including those that take into consideration publicly traded RSUs. If you have RSUs and want to know if they can help you qualify for a home loan, go to opesadvisors.com and find a local mortgage advisor who can show you how RSUs might fit into your plans to buy your next home. Note: Programs available for qualified borrowers. Subject to credit approval, underwriting approval and lender terms and conditions. Some restrictions may apply. Nikki James is a mortgage advisor and personal finance advisor for the Palo Alto, Calif. branch of Opes Advisors, a division of Flagstar Bank. She has more than 25 years of experience in financial services and specializes in residential and new construction financing. Nikki can be reached at [email protected] or 650.322.0303. NMLS 293138      

Getting to Yes: Why More Agents Are Turning to Opes Advisors
Nikki James feels uniquely empowered as a loan officer. In the lending world today, where loan originators commonly lament the struggle to obtain approval on anything but a "plain vanilla" loan, Nikki is blunt: "I feel there's rarely a loan that comes my way that I can't do," she says. Nikki is a top-producing mortgage advisor with Opes Advisors, a division of Flagstar Bank. She will be the first to credit of her feeling of empowerment to the distinctive hybrid mortgage model that emerged after Opes Advisors joined Flagstar Bank. "Becoming a part of Flagstar just added to what I can offer," she said. It's all about "getting to yes," Nikki said, a philosophy that permeates the culture at Opes Advisors. She notes that when everyone from processing to underwriting to the corporate offices is aligned, getting to yes is a lot easier. This is the reason that more real estate agents are bringing their clients to Opes Advisors, because they are often able to offer options that most lenders do not. One example she gives is the work she does with many elderly couples who are house rich, but do not have a lot of income—just Social Security, dividends and interest—but are ready to "step down." "One older couple owned a $6 million home free and clear and they wanted to buy a $2.5 million home to be closer to town and have less to care for," Nikki said. "They had some money, but really the $6 million home was their net worth. To Opes Advisors, there wasn't much risk to put a $2.5 million loan on a $6 million home. They paid cash for their new condo, which gave their real estate agent time to move their belongings out of the home, get it painted, fix it up a bit, and put it on the market for top dollar," she added. That made Nikki and Opes Advisors a hero with her client and her agent. For Nikki, being part of Opes Advisors allows her to deliver exceptional customer service—and results—to her clients and her agents. That's something she knows is probably an uncommon feeling among loan officers elsewhere. "So many people who want to sell feel paralyzed, absolutely paralyzed. I wish they would talk to someone at Opes Advisors so we can show them that in many cases, there are ways to buy before you sell. Not everyone will be able to, but so many people would move if we could show them how." Here are some more real-world examples of how other mortgage advisors at Opes Advisors have helped customers get to yes: Grant Tisdel who serves the San Diego area, including Carlsbad, Calif., had well-qualified borrowers looking to maximize their new purchasing power prior to selling their current home. The borrowers wanted to do some work on their existing residence and then sell the home in the future. Fortunately, Opes Advisors' Jumbo Community Program allows 95 percent financing on the new property and their income was sufficient to support the DTI (debt-to-income) ratio for both properties. The best part was that Grant was able to secure the loan with an aggressive rate and terms that could not be matched. (Jumbo Community Loan Program by Opes Advisors is available in California cities that include Campbell, Carlsbad, Irvine, Los Altos, Menlo Park, Mountain View, Palo Alto, San Anselmo, San Diego, San Francisco, San Jose, San Mateo, San Rafael, Santa Clara, Sherman Oaks, and Sunnyvale, as well as in Bellevue and Seattle, Wash.) Marney Solle is based in California's Marin County and had clients who needed to use all of their income to qualify for a refinance, but some of that income had recently changed. Because the borrower had recently switched to a base salary plus commission position, there was no history of prior commission income. Moreover, the co-borrower's non-traditional income source did not meet the minimum requirement that it continues three years into the future. The result was a DTI ratio of over 50 percent. The solution: the borrower's parents were willing to sign on the loan, and that lowered the DTI to below 43 percent. However, for a jumbo loan refinance, most investors still require occupant ratios. Marney was able to structure the transaction with a broker jumbo product she had access to, which allowed occupant ratios up to 60 percent, provided the blended ratio was less than 43 percent. The borrowers were able to complete their refinance and lower their monthly expense as a result of Marney's creative strategy – and the access to additional product sources Opes Advisors provide. Scott Hellar of the Larkspur, Calif., branch had borrowers with A+ credit; however they had no homeownership experience and were looking at a $1.75 million purchase price. The Flagstar jumbo products were coming up as the best price, but required two exceptions: one for minimum trade lines and one for first-time homebuyers limit of under $1 million. Scott submitted an exception request on the Flagstar product and the exceptions were approved in less than 24 hours. Scott was able to secure the transaction at a good rate and the purchase was funded on time! To discover how Opes Advisors can help your clients, visit opesadvisors.com to locate an office near you and talk with a local mortgage advisor in your area. Ron Penir is regional director for Opes Advisors, a division of Flagstar Bank and oversees the Central Coast region, including the Pasadena, Santa Barbara and San Luis Obispo communities. Penir has devoted over two decades of his career to advancing the mortgage industry by recruiting, retaining, and managing the trade's top-producing loan originators. For more information he can be reached at 805.250.2409 or [email protected].      

Busting Millennial Home Buying Myths
Millennials have been often called the "renter generation," but new research is showing that millennials are fast becoming the greatest "home buying generation" ever. Already more than one-third of millennials are homeowners, according to the National Association of Realtors. More importantly, says Fannie Mae, as millennials are getting older, they are starting to buy homes at a faster pace than any previous generation. Researchers are proving that much of the talk about millennials and their inability or lack of interest in becoming a homeowner is simply not true. Here's a closer look at how the experts are busting the five biggest millennial home buying myths: Myth #1: Millennials don't want to buy, they want to rent It turns out that millennials are renting, but not by choice. One study shows that 84 percent of 18-34 year olds who are currently renting say that they intend to buy a home even if they currently are unable to afford one. Research by the National Association of Homebuilders (NAHB) puts the number even higher, finding that more than 90 percent of millennials say that they eventually want to buy a house. In fact, for the fourth consecutive year, millennials are the largest group of home buyers among all generations (34 percent), according to the NAR 2017 Home Buyer and Seller Generational Trends Study. Moreover, 48 percent of millennials surveyed by Harris Poll for NerdWallet said they plan to buy a home in the next five years, and they are much more likely to do so than other generations. Myth #2: Millennials can't afford a down payment While many millennials have not saved enough for a 20 percent down payment, the fact is there are many low-down payment mortgage options for millennials. One big problem is a lack of awareness of this fact: 21 percent of all millennials think you must have exactly 20 percent for a down payment to buy a home, a Harris Poll study found. Twenty-four percent of millennials think 6 percent to 10 percent for a down payment and another 23 percent of millennials think you need more than a 20 percent down payment. Yet one of the oldest home loan programs around, FHA, allows a buyer to put down less than 5 percent as a down payment. Fannie Mae and Freddie Mac also have low-down payment programs for first-time home buyers, with down payments slightly lower than FHA. For veterans, people buying homes in rural areas, and in certain states, there are other special loan programs for qualified millennials that require no down payment. There are other ways to tackle the down payment challenge as well, as many millennials have discovered: help from mom and dad. There are ways parents can help with the down payment and there are loan programs that allow the parent to be a co-borrower on the loan without occupying the property. The key is for a millennial to meet with a mortgage advisor to learn about all of their options and to figure out a game plan that works best for their particular life plan. Myth #3: Millennials won't want to use a real estate agent The theory is since millennials are digital natives, they will want to do everything online, including buy homes, right? Wrong. Three-quarters of all millennials (75 percent) say they prefer working with a local real estate agent over an online agent, according to a survey by financial wellness website CentSai for more than 2,000 Americans, ages 18-24. Why? The respondents cited a desire for face-to-face collaboration, associating it with greater 'handholding,' 'local knowledge,' 'longstanding relationships,' and 'personal touch,' RISMedia reported. The NAR Generational Report shows millennials already are the heaviest users of real estate agents: 89 percent of millennials, 87 percent of Gen X buyers, and 85 percent of younger boomers purchased their home through an agent last year. Myth #4: Millennials can't buy a home because of student debt While we know that some millennials are unable to buy homes because of their student debt, this is not a universal truth for all millennials. NAR researchers note that 46 percent of buyers age 36 and younger with debt reported a median student loan balance of just $25,000. The fact is 44 percent of all millennials last year who bought homes had student loan debt at the time they purchased a home. Again, one of the challenges, the experts say, is that millennials may be delaying buying a home because they believe they will not qualify until they pay off their student loans. They do not realize the difference on how debt is calculated when qualifying for a home mortgage and that's another good reason why they need to sit down and talk with a mortgage advisor. Fannie Mae is trying to help as well. Back in April, the mortgage giant announced new rules that included a change to the formula that lenders use to calculate a borrower's debt-to-income ratio. This is one of the ways lenders gauge one's ability to afford a monthly mortgage payment. Previously, lenders had to calculate one's monthly student-loan payments as 1 percent of the total student loan balance. Now, lenders can use the actual student-loan payment amount, which may be lower than 1 percent, and that means many more millennials are expected to qualify for a mortgage. Myth #5: Millennials only want to live in the city Almost 50 percent of millennial homeowners actually live in the suburbs and about 20 percent of millennials live in a rural area. Only a little over 30 percent live in urban neighborhoods, says a new study by Zillow. According to Jeremy Wacksman of the Zillow Group, "We're finding that they are more similar to older generations than many thought." Millennials need to live in the suburbs, as they want bigger homes: nearly 2,400 square feet, on average, according to a March 2016 NAHB tracking survey. By comparison, for baby boomers, the average desired new home size is less than 1,900 square feet, and for all homes, about 2,200 square feet. The NAHB says that nearly half (48 percent) of the millennials they surveyed want four or more bedroom homes. Jim DeMarco is Branch Manager of the Seattle, WA office for Opes Advisors, A Division of Flagstar Bank. With over 13 years in the financial services industry, he is responsible for leading, managing and coaching a team of sales and service professionals to ensure the operational excellence of the branch and create an excellent customer experience.    

More than a 'Doctor Loan,' Opes Advisors Intros New Home Financing for Professionals
The United States is packed with professionals. We have more than 200,000 physicians practicing primary care, and we have more than 114,000 veterinarians to tend to our pets and livestock. There are more than 110,000 licensed architects currently practicing in the U.S., and if you need a lawyer, you won't have to look far, because the population of attorneys in the United States is north of 1.3 million. The market opportunities provided by these professionals to the real estate industry is enormous because their income capabilities and asset potential makes them prime candidates for homeownership. All of these industries also are growing: there are 17,000 new medical school graduates each year and 3,000 new veterinarians. More than 6,000 new architects graduate each year, and more than 55,000 new lawyers passed the bar in the U.S. last year alone. This gives both real estate agents and mortgage lenders a terrific opportunity to find ways to better serve professionals, because they do have unique needs. Doctors, for example, often have significant student loan debt that often will take them at least a decade to pay off. Doctors also go through gradual income acceleration and it is often challenging for them, when factoring in their monthly student debt, to be able to qualify for a home mortgage based on standard underwriting debt-to-income ratios. Doctors also don't always have enough savings for a 20 percent down payment, and there's the conundrum. How does a doctor, who should be a very low long-term risk, and who earns a reliable income that is destined to grow significantly, buy the home he or she truly wants? Specialized Home Loan for Professionals Opes Advisors, a Division of Flagstar Bank and innovative mortgage lending and wealth management firm with offices throughout California, offers its own specialized home loan program for all kinds of professionals, not just doctors. Yes, it's available for physicians and dentists. What's special is that our program is also available for other types of professionals who work hard and make a difference in their communities - licensed accountants, attorneys, architects and veterinarians. Plus, our Professional Home Loan has consideration for a wide range of specialties in the medical profession, including Medical Residents (with educational license), Medical Doctors (MD), Doctors of Dental Science (DS), Doctors of Dental Medicine or Surgeon (DMD), Doctors of Optometry (OD), Doctors of Ophthalmology (MD), Doctors of Osteopathy (DO), and Doctors of Pediatric Medicine (DPM). And what makes this loan something real estate agents and brokers will really want to make their clients aware of is the enormous flexibility of these loans. For example, the Physician Home Loan offers: Available for Purchase and Rate & Term Refinance on a Primary Residence Both 5/1 and 7/1 ARMs options No or low down payment (depending on loan amount) Loan amounts up to $1,500,000 Additional Down payment funds can be gifted Deferred Medical Student Debt may be excluded from DTI ratios Our web page has full details and conditions: https://www.opesadvisors.com/professional-loan-overview_r/ For budding future doctors, that last loan feature is huge. Too often student debt prevents a professional client from buying a home. Not having to include the monthly student debt payment in one's ratios for loan qualification can often mean the difference between a yes and a no, or buying a dream home versus settling on a home. Now granted, only medically licensed borrowers are eligible for the student debt exclusion, and the deferment must be 12 months beyond the closing date of the transaction. Plus, the down payment gift funds are allowed only after the borrower makes the minimum down payment from their own funds. Clearly, not every professional will qualify for these loans, as there are good credit qualification thresholds that must be met on all home financing. However, this is an incredibly exciting mortgage product for real estate agents and brokers to tell their professional clients about. With these professional loan options from Opes Advisors, a professional client may be able to purchase a bigger home for their money, and for many that could make them a much happier client. To learn more or to find a nearby Opes Advisor office, go to www.opesadvisors.com. Laura Roedel is Vice President of Marketing for Opes Advisors, a Division of Flagstar Bank. With over 18 years in the financial services industry, she is responsible for innovating, leading, and fulfilling marketing strategies focused on residential home lending and effectively communicating the unique value proposition of Opes Advisors to multiple market segments, including real estate agents and clients.    

What NOT to Do When Buying a Home
Buying a home can be one of the most exhilarating, even thrilling - yet sometimes admittedly stressful - experiences of one's life. It's also something that the average person only does about once every decade, according to the National Association of Realtors®. So whether your client is a first-time buyer or buying a third home, there are some things to keep in mind that will help the experience be more thrilling and less stressful. These are the most important "What NOT to do" tips from experienced mortgage advisors to consider when buying a home: Don't pack papers too early. Once your clients have turned in all the documentation requested by the lender upfront, they can pack up the rest of their paperwork, right? Don't. Underwriters may ask for extra documents, so until the loan actually closes, the safest approach is to keep personal financial documents readily available. Saving 10 percent could be dangerous to the closing. Clients need to purchase new appliances for their new home and some stores offer an extra 10 percent off when opening a new credit card. What's the harm, right? Don't. Your client's credit can be pulled again just before closing and with a new credit line, their score could drop. Believe it or not, this could prevent a closing from happening. Safest approach: Make major purchases AFTER the home loan closes. Cash deposits can complicate things. Your client's parents just gave $1,000 cash as a birthday gift and they decided to deposit the money before the home purchase closed. No problem, right? Don't, as this could be a problem. All "gifts" have to be verified with a detailed paper trail. Clients should ask for advice from their mortgage advisor before making any large deposits, by cash or check, during a home purchase. Taking a new job could stall the loan process. Your client is in the middle of buying a new home and was offered a great new job that starts right away. With her new commissions, she is going to make at least 30 percent more income. However, the base salary is 30 percent less than her current salary. That won't affect the home purchase, right? When someone is qualified for a mortgage with income that is based on commissions, bonuses or self-employed income, a two-year history is required. That means a job change like this could affect your client's ability to qualify for the loan. Reaching out to their experienced mortgage advisor will help clients navigate any major decisions that could affect their home financing. Never wait to sell stock when using it for a down payment. Clients who are planning to sell their stock to use as a down payment sometimes wait as long as they can to see if it will go up. Don't. Not only can the value of the stock drop – leaving your client short of funds to close on the purchase of their home – but they need to provide the documentation of having enough funds to close for loan approval. Selling the stock when they know the value can help them close on time. Renters need to be extra careful with their security deposits. When clients are buying a home and moving from a rental where the landlord holds a security deposit, they may think that it's okay to use that deposit towards the last month's rent. Don't. That's because rental history is verified and skipping a payment, or a reported late payment, could negatively impact loan approval. Clients shouldn't ignore a request for something they've already provided. Sometimes clients might be asked for a document they think was provided, yet a page could be missing or digitally corrupted. The request may also seem a little crazy, but when an underwriter makes a request, they really do need the document. Clients should call their mortgage advisor and ask for help to understand the reasoning behind the request and then send in the requested information as quickly as possible. Never be too busy to stay on top of bills. Things can get hectic when buying a home: packing, closing down and setting up utilities, arranging for movers, ordering cable or satellite installation, visiting schools – there's a million things to do. But the one thing clients can't neglect is paying their bills. Even if a credit report has been run once, it can be run again before closing, so it's important that clients keep their payments current by paying everything on time. Don't toss blank pages. Clients often toss the last page of the bank statement because it's usually blank or has an ad on it. That's okay, right? It's not, if the page has a number on it. Underwriting rules require all numbered pages of a bank statement, including blank ones. Fortunately, most banks provide easy access to download full copies of recent online bank statements so clients have another option for missing pages. Hold on to paystubs. Clients with auto-deposit of paychecks through work may receive a paper copy of the paystub at home and have a habit of throwing these away. Don't. They'll need the most recent paystubs for their loan application. Keep in mind that documents for a mortgage have a short "shelf life," so clients need to hang on to the most current copies of paystubs, bank statements and other key financial documents until their loan closes – just so they're not scrambling at the last minute for this information. Finally, the best advice for clients buying a home is to stay the course – try not to make any big changes during the home financing process: don't open new bank accounts, take out new credit lines, make any major purchases, or start any home improvement projects. If they heed these don'ts, they'll take a lot of the stress out of the home buying process and truly enjoy the thrill of stepping in the doorway of their new place, looking around and knowing that there really is no place like home. Robert Lipston is Regional Manager of Opes Advisors, A Division of Flagstar Bank. Learn more about Opes Advisors at www.opesadvisors.com.     

CFPB Fines Real Estate Company: Do Agents Need to Worry?
Is Zillow RESPA compliant? Are MSAs illegal? These are a few of the questions posed in a new video that examines the impact of a recent order from the Consumer Finance Protection Bureau (CFPB), the government agency formed in 2011 in the wake of the 2007-08 mortgage crisis. Late last month, the CFPB "issued a warning shot to Realtors and brokers nationwide" when they fined a real estate company for an improper MSA (marketing services agreement) and referrals. According to the consent order, the lender was violating RESPA by offering the brokerage what was, essentially, a disguised payment for a referral. So what does this mean for agents who use, for example, Zillow's co-marketing program that lets them share advertising costs with a lender--or even other lead generation services? Does this arrangement violate RESPA, and do agents need to worry about the CFPB coming after them? Check out the video above to learn more, and then share your thoughts with us in the comments below!

Mortgage + Tech + Advice: A better path for homeowners
Today, some mortgage lenders approach home lending as a one-size-fits-all, numbers game. Their objective is to automate the origination of home loans on a large scale, making it easier for homeowners to apply online, which also speeds up the process of selling to investors in loan packages. The problem this creates is a mortgage-lending process focused on the commodity—the mortgage product—and not focused where it should be: real estate decisions with real consequences for home buyers and homeowners. At Opes Advisors, we are committed to transforming the mortgage lending process by helping people make the most important financial decisions of their lives. Our fundamental belief is that the effective path for homeowners in the mortgage lending process, along with advanced technology, is missing a vital component: financial advice. Uniquely, we have formed our company as a Financial Advisory firm licensed by the SEC as well as state and federal licenses for mortgage banking. Our focus is on each client's total financial picture in the context of this important real estate decision. Our proprietary, Silicon Valley-born real estate decision technology, Opes Advantage, alongside our financial advisors has been helping home buyers and homeowners for the last ten years to make smarter purchasing decisions by modeling how life's major decisions can impact one's financial future. The old way is not always the best way We've all been told that if you shop for rates and lenders and then click a few buttons on your device – you should magically get a mortgage. If it really is that simple, then why do so many people live with uncertainty about how real estate financing will affect their financial future? In our view, the role of a mortgage firm should be to help clients fully understand how the decision to buy or sell a home can completely alter their financial situation and have long-term consequences well into their future. Other lenders can tell people how much they will loan them, but at Opes Advisors, we not only provide that service, but we show how each lending scenario affects them personally against their goals and ambitions for the future. Factoring in the mortgage Before Opes Advisors, no financial services firm was equipped to offer financial advice at the point of sale on the real estate buying and mortgage lending process. There simply were no firms advising people about how this real estate buying decision fits into their entire financial life. Opes Advisors is more than just one of the Top 25 largest mortgage banks in the U.S. We are an innovative financial advisory firm, one based on trust and on the surprisingly groundbreaking notion that you need to consider your total financial picture whenever you make a major financial decision, especially when buying your home and financing that purchase. Technology to understand the "What ifs" By using Opes Advantage, our clients can easily visualize how this real estate purchase changes their entire financial picture for any period of time in their lives. Opes Advantage creates a personal model of their financial life so a client sees their future through a variety of "what if" scenarios. What happens when they want children? Or later have two kids going to college at the same time? What if both spouses are working and then one chooses to stay home? How do variable bonuses change their personal financial picture? Any ambition or concern can be modeled specifically to their situation. The missing piece of the buying decision and mortgage puzzle is Opes Advantage; and we take into account all of these variables – and more – from the cost of raising children and income projections to inflation and taxes. So many factors impact one's financial future. We want home buyers and homeowners who get a mortgage to actually see how these decisions impact their financial future. That's what Opes Advantage can do: it gives people a complete view into their financial future by taking into account all the complexities across a wide range of life events. Expertise is crucial Because buying a home is one of the largest financial decisions most people will ever make, more than technology is needed to factor in each family's unique concerns and explain the resulting impact on their financial future. That's why combining advanced technology with deep subject matter expertise is so crucial. Opes Advisors is the only mortgage lender that adds the financial advice component. This approach is more effective because it helps people envision their decisions and removes uncertainty from the process so they can move forward with confidence. The mortgage lending process will continue to undergo disruption as the industry focuses on mortgage as a commodity, yet this path provides home buyers and home owners with no new help on important real estate decisions. Mortgage lending can be more than just the mortgage product. Mortgage lenders will need to offer all three things to adapt to the future: the right mortgage product, advanced technology and sound financial advice. This is the approach that will offer clients a more secure future than just pressing a button. To learn more about Opes Advisors, visit opesadvisors.com.

[Infographic] 5 Down Payment Myths Debunked
The latest data from the Down Payment Resource Homeownership Program Index debunks 5 common myths about down payments and programs. Find all the data and state-by-state breakouts in the infographic below.

Why You Should Call Your Credit-Challenged Prospects Now
This post comes to us from the Market Leader blog: Agents! Brokers! Have you been working with someone who wants to buy a home, but has some credit issues? Anyone who was a borderline case and got denied for the credit terms they needed to make the deal work? Have any clients who backed out of buying when they saw their FICO score? The good news is that the rules are changing to the benefit of consumers. This gives you the all-important opportunity to call them back – this time as someone who is clearly in their court and has information that can help them! Shifts in the FICO Score System Last week, Fair Isaac Corp., the company that administers FICO, the most important measure of consumer creditworthiness in commerce today, announced that it is cutting people who have experienced past hardships a little slack when it comes to calculating credit scores. The new algorithm, called FICO Score 9, includes some key updates: If a consumer has had a debt that went to collection – and later paid it off or settled it – then that former debt will no longer count against them in their FICO score calculation. Debts related to medical bills will not be weighted so heavily against the consumer. The company is also rolling out some new methodologies to better assess the credit worthiness of people who don't have an extensive credit history.

Is Your Website Serving the Needs of Tomorrow’s First-Time Buyer?
Members of the Millennial generation are reaching an age where they're considering buying a home for the first time. As the largest generation since the Baby Boomers, this means that an influx of first-time homebuyers is on the horizon. Are you and your business ready? Every generation faces their own set of home buying challenges. For Millennials, these challenges are often financial, thanks to a sluggish job market and a massive increase in student loan debt. These factors mean that this generation of first-time homebuyers often can't overcome the biggest obstacle to homeownership--saving enough for the down payment. But did you know that there's a tool you can add to your IDX website that can remove this common homeownership hurdle? It's called Down Payment Resource (DPR), and it's available as a free member benefit to an increasing number of agents whose MLS subscribes to the service. DPR integrates with your MLS to provide you with information about down payment assistance programs in your area. It's the first step to removing the down payment hurdle for qualifying consumers. Adding Value to Your Website While an average of 70% of listings in any given market are eligible for down payment assistance, these programs are often underutilized. Information can be difficult to find--if homeowners even know about them at all, that is.

4 Ways to Help Buyers Prepare for Higher Mortgage Rates
After years of historically low mortgage rates, home buyers are seeing the tide turn and wondering how much higher rates will inch up. What advice should agents give them? 1. Plan ahead. In many markets, higher rates have arrived in tandem with inventory shortages, forcing buyers to think harder about ways to improve their negotiating position. The best first step? Encourage buyers to shop for a lender and secure pre-approval on a mortgage before shopping for homes. Of course, this will be more difficult if a buyer has any blemishes on their credit history. Even though higher interest rates could dampen refinance activity and free up more money for new mortgages, lending standards are expected to remain tight. Help buyers resolve any credit issues early to avoid future disappointments. 2. Submit a winning offer. In a rising rate environment, time means dollars. Encourage buyers to consider the potential cost of having their offer rejected and needing more time to find and submit a winning bid on another property. Viewed this way, a buyer may prefer to adjust their negotiating position and make their offer more attractive. For example, consider telling a seller that you'll accept a higher mortgage rate if rates change before you're able to lock. Sending a signal that you won't back out of a contract could tip the scales in your favor—and may ultimately cost much less than playing hardball while rates creep even higher.

Product Review: Down Payment Resource
As a real estate agent, you're probably always on the lookout for ways to better serve your clients. Did you know that there's a tool that can remove your clients' and potential clients' biggest obstacle to homeownership? It's called Down Payment Resource (DPR), and it's available as a free member benefit to an increasing number of agents whose MLS subscribes to the service. DPR integrates with your MLS to provide you with information about down payment assistance programs in your area. It's the first step to removing the down payment hurdle for qualifying consumers. The Basics Down Payment Resource takes active residential listings and processes them against their database of all the programs--state, county, city, neighborhood, non-profit--that exist in a market. It then matches the properties that are eligible, based on location and list price, to all of the programs for which it would qualify. Currently, there are over 1,500 actively funded programs tracked in Down Payment Resource. A full 60-80% of listings in any market qualify for assistance. Down Payment Resource will flag these eligible homes in the MLS. Agents simply need to click the DPR icon next to these listings to get a list of programs for which a property is eligible. All property eligibility processing and flagging is updated by DPR nightly, and each specific program is updated monthly, so the information users see is current and accurate. Clicking "Next Steps" on the search results page will display the details of a particular program, including participating lenders, education providers (many programs require a consumer education course), a program flyer and contact information for questions. The details page also links directly to the program administrator or funder so action can be taken by the buyer or their agent. Agents can even email clients about eligible properties right from the Down Payment Resource interface.

Mortgage Calculators: Qualify Leads and Save Time
This post comes to us from WebsiteBox: What makes a great agent website? An integrated IDX, buyer/seller specific content, great images and gadgets. All of these features need to be presented in a well designed layout to create a real estate agent website that stands out from the competition. One of the most important gadgets to have on an agent website is a mortgage calculator. This handy gadget can help you qualify leads by ensuring that buyers who inquire regarding specific listings can actually afford them. It also helps you save time by providing buyers with a quick, easy to use tool that lets them know about their financing options for the properties they are interested in. The gadget also helps protect maintain the client's privacy, since they can enter their personal financial information into the gadget right away without having to reveal the details to you. There are 10 types of mortgage calculators that you want to add on your website: 1) Do You Qualify? - This allows potential buyers to find out if they would be able to qualify for a mortgage based on the price of the property, their income and monthly expenses. This is a great tool to help real estate agents qualify leads right away and ensure that potential buyers can actually afford the listing that they are looking at.

How to Make Loan Pre-approvals Work in Your Favor
Agents, have you ever had this happen to you? An enthusiastic would-be buyer calls you up, eager for you to show them a certain property. "I'd love to help you out," you might reply. "Go ahead and send me a copy of your pre-approval letter and I'll get in contact with the listing agent." Did the mere mention of the word "pre-approval" stop the conversation dead in its tracks? Perhaps the caller was just an inexperienced buyer, or they were a lookie-loo. Regardless, no agent should waste their time on prospects who are not pre-approved for a mortgage. Consumers with pre-approvals in hand are serious about purchasing a home. As an agent, your time is precious. You should be spending your time with the prospects most likely to result in a completed transaction. However, don't think of unapproved buyers as a hassle--think of them as an opportunity. By tying the pre-approval process to the signing of a buyer representation agreement, you come out ahead--and with a qualified new client! Here's how.