The New “What did you do with your Z today” (with off topic replies)

vtec to vvel

https://www.cnn.com/2023/07/14/busin...ome/index.html

"Homebuyers must ‘learn to live’ with near-7% mortgage rates, says RE/MAX chairman"

Umm....

1. If you are waiting for rates to drop back down near to 2%, you will be waiting for a very long/indefinite period of time.
2. Rates in the 70's/80's/90's were close to 20%, and this when wages were lower even with inflation factored in, so 7% range is very low compared to past times.
3. People are okay with signing off and accepting credit cards and personal loans with rates upwards of 30%, but are afraid of 7% range mortgage rates?

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Rusty

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"The Difficult Anytime, The Impossible By Appointment Only"
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MZ DAIZY

Just an excuse not to mow the lawn…

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MZ DAIZY

I think everyone is leery of another housing market bubble.

I do get your point about the CC interest, though. But! I know a lot of people that are living day to day on their Credit Cards to supplement their paychecks.

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vtec to vvel

I used to get this one A LOT. Good News: There is no housing bubble, at least not to the likes of the late 2000's. What imaginary bubble is there to burst? It was a completely different market and environment then compared to now.

Then: too much supply (from excess foreclosures) and not enough buyers.
Now: too little supply and too many buyers, even with rate increases. Being on the tail-end of COVID, there may be foreclosures coming up, but, will only feed into the supply shortage.

Also, mortgage lending was not regulated then and heavily regulated now. You so much as sneeze the wrong way and the Underwriter is already re-auditing the file.



EDIT:
I had a client that barely qualified for a mortgage and really wanted to be a home owner. He was the type to live off of credit cards/loans and barely had anything left after all expenses paid. 2 years later, he called and said he may need to sell because he's barely staying afloat. He made all his mortgage payments on time and was able to build equity fast (he also put more than the min. down payment when initially buying), so instead of him selling, we did a cash-out refi. Yes, his rate went from 2.25% to 7.75%, and yes, his mortgage went up about $500/month, but, he was able to decrease his net monthly total outgoing by nearly $4K by using the cash-out refi funds to pay off toxic debt.

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MZ DAIZY

We put 40% down with mid 700 hundred FICA scores and still got put through the wringer...

We've built up some equity now and would like to refinance to do improvements. Was told not to bother!

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vtec to vvel

Each loan application is unique. All requirements have to be met, otherwise, can be a bumpy road. Even if you have a sh!tload of money and good credit score, if you are financing and other elements of the requirements are missing, this can lead to other questions.

What was their reasoning on not to refinance?

And how many loan originators did you speak with?

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MZ DAIZY

They went back and found some CC payments that were late.

As far as refi, was told house overvalued and debt to equity was questionable. This is why being self employed most of my life comes back to haunt me.

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vtec to vvel

Late payments in itself won't prevent anyone with moving forward with a mortgage. The effects of the late payment, such as dropping in score and how much, and the status (i.e. charged off, collections, etc.) may play a factor. The type of loan also plays a factor.

The only way to know whether a house is "overvalued" compared to what you owe is getting an appraisal done. Without this, a loan originator cannot determine a value of a home.

Being self-employed can be tricky, but as long as the taxes are done correctly and matches the bank deposits, it shouldn't be an issue. I've closed plenty of SE borrowers during my time and the biggest key is not writing off anything and everything you can and to show that you make the income to which you claim you have made. I had a client that made over $800K gross, but wrote off so much at the advice of their tax accountant and we could only use about $120K.

One thing I will always tell people is to shop around and get multiple opinions. You could get better service and attention, as well as possible better rates, by going to a brokerage rather than a bank (most brokerages should have the ability to shop around to see what the best rates you could qualify for, whereas banks will typically give you what THEY have to offer).

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