Meeting the Needs of Multi-Generational - Cross-Generational Home Buyers

Meeting the Needs of Multi-Generational - 

Cross-Generational Home Buyers 

Multi-Generational Homes ... Cross-Generational Homes.  No matter what you prefer to call them, they're gaining in popularity all across America ...

Two statistics speak to this growing trend:

1. 64 Million Americans, roughly 20% of the population, now live in a multi-generational home (Pew Research Center statistics, as of 2016, the last statistics available)
2. 41% of Americans considering the purchase of a home are thinking of buying a home that will accommodate adult children or senior-aged parents (John Burns Real Estate Consulting survey)

These stats prove that last century's custom of families' independent living arrangements is slowly morphing and transforming back into the more historical mode of living arrangement ... that of extended family and multiple generations living together under one roof.  

This trend is driven by many factors ...  

Those factors include the stresses of:

• Financial Concerns  
• Challenging economy 
• Rising housing prices 
• High child-care costs 
• Senior-aged parents living longer or experiencing health concerns 
• Student loans 
• Children marrying later in life
• Divorce 
• Down Payment savings concerns
• More

These changes are coming to all our communities. But are American communities prepared for the changes in housing demands?  

Not only existing homes are needing to being altered and modified to fit the changing needs of families.  Housing developers and homebuilders are now having to include multi-generational accommodations within their menu of new construction floor plans.  This is being done in order to accommodate and fulfill the needs of these families as the type of housing being requested for construction is also changing.  

This new trend also affects the needed physical attributes of subdivisions and communities.  Housing developers will be called upon to meet the new demands for multi-generational amenities provided within their developments for as well. 

This can all prove to be a challenge ...  

Often, new housing needs do not currently meet or "fit" with zoning rules and regulations now in place in many municipalities or counties.  Separate in-law or mother-in-law suites are not allowed ... or needed expansions of homes overflow the square footage restrictions in place.  Shifts in zoning and restrictions on denser housing may have to be changed, then implemented if this trend continues.

Another consideration brought into play with this type of housing is the borrowing of money.  When multiple generations consider home buying together, it also means that they will often need to finance that purchase together.  

When borrowing for a mortgage is involved in a multi-generational purchase, I strongly suggest that those involved in the home's financing should have a long, thorough, and honest talk together about finances, both in the short and long term.  

That inclusive talk should include:

• Credit Scores (By ALL Parties)
• Debt held
• How delinquent payments on the newly-acquired loan can impact the credit of ALL borrowers on the mortgage
• Bankruptcies, Judgments, Collections, if applicable
• A formal document/"prenup". (What happens if one of the parties defaults or must "exit" or move out of the housing arrangement)
• Individual contributions
• Future maintenance/repair contributions
• Employment stability
• Financial stability
• Savings available
• A conversation regarding long-term plans
• A conversation concerning how title will be held
• Etc.

Borrowers in this financing scenario must also know and understand how a mortgage lender will view a mortgage application of this type:

• How will credit scores be weighted when multiple applicants are involved?
• How is debt viewed by mortgage underwriters?
• Are Gift Monies included?
• Are any applicants a Veteran or qualifying spouse, widow/widower?  (Please talk to an experienced VA Lender for the particulars on the requirements in play)
• Who is supplying the Down Payment?
• Who will actually OCCUPY at the time of Purchase?
• More ...

While it's true that this type of lending scenario can certainly be more detailed in nature, it can also offer many extra benefits to the home buyers.  All is dependent on the amount of debt held by the applicants as all named borrowers are subject to underwriting scrutiny ... but the scope of the home search may be able to be broadened as a result of the number of borrowers included on the loan.  

Why?  Multiple applicants might be able to qualify for more home, more needed housing features, and a higher mortgage amount.

Are mortgage lenders and banks prepared for this new trend?  Can they fulfill the needs of future buyers?

Mortgage programs do currently exist that recognize this growing trend and need of multi-generational family homes.  Traditional loan options do exist that can be of assistance.  But Fannie Mae's "HomeReady" program (with Income Limitations) and Freddie Mac's HomePossible Program and HomeOne Programs are examples of financing programs that exist that can also be considered.

Bottom line:  The number of home buyers considering a multi-generational or cross-generational home has and is continuing to increase.  So finding the right lender ... an experienced lender ... capable of determining, then providing a mortgage that best fits the needs of multi-generational buyers is growing in importance too. 

When it comes time to buy your Multi-Generational/Cross-Generational family home, work with a lender that offers a full menu of mortgage programs.  That way you'll find the most advantageous financing for all involved.

* Hoping to Buy or Refinance a Home or Investment Property in the New Lenox - Will County - Chicagoland - IL/WI area?

Contact Me! I'll get you the facts, info, and figures you need to make the best home buying and mortgage financing decisions for you and your future.
I'm easily found at:

Gene Mundt

Mortgage Originator  -  NMLS #216987  -  IL Lic. #031.0006220  -  WI License #216987

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell/Text:  708.921.6331

eFax:  815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

          

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Channahon, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

Your Referrals & Testimonials are Greatly Appreciated!

And the Millennial Survey Says ...

And the Millennial Survey Says ...

While Millennials are currently reported to be buying homes at a faster pace than in the past, many of those that wish to buy are presently being stymied ...  

What is it that Millennials feel stand in the way of their home buying dreams?  And what number feel that they are fundamentally incapable of buying?

A survey conducted by LendEDU attempts to shed some light on these questions.  The June 2019 survey indicates that while many Millennials long for homeownership, nearly 90% of non-homeowning Millennials hoping to buy have not done so yet.  

Why not?

Most taking the survey indicated that their student loans were/are the biggest deterrent to taking this big financial step.  

This should come as no big surprise.  The difficulties surrounding student loan debt have been in the spotlight (and hot-seat) for a long time now.  

Now it's true that some mortgage programs exist and can be of assistance to those facing student loan challenge.  Unfortunately, even with this program available, many Millennials still feel that their student loan debt is insurmountable and that sentiment is keeping them from pursuing homeownership.

It must be pointed out here:  The LendEDU survey also indicated that student loan debt isn't the only financial hurdle that Millennials feel they are facing.  

Credit Card debt, building better credit scores, building savings, building an emergency account, and retirement savings ... each was reported in large measure as major concerns.  There were also other "contributors" too.

It's reported within the survey that:

• A lack of knowledge 
• Inadequate financing education 
• Misconceptions regarding financing requirements
• Misconceptions regarding the mortgage process itself 

...  contributed greatly to Millennials sitting on the home buying sideline.

Now there is little an individual Loan Officer can do to address the type or number of loan programs available for borrowers.  That is largely left to government entities and the Private Sector that makes Home Loans.  

However, there IS much Loan Officers can do to address the lack of knowledge, level of financing education, or misconceptions held by Millennials.  And that is why I write this article. 

So what are those financing/credit issues pinpointed and detailed by the LendEDU survey (and other surveys) as troublesome?  

The issues revolve around:

• Credit Score requirements
• How Credit Scores are utilized by Lenders
• Checking Credit Report will hurt Credit Scores
• That married couples have ONE/combined credit scores
• Down Payment requirements and guidelines
• Closing Costs involved in Mortgage financing
• Time/Days of Average Mortgage Process 
• Info pertaining to Debt-to-Income Ratios
• Gift Monies

   And these common misconceptions:

• That Pre-Qualification = Pre-Approval
• That Interest Rates are the only measurement of Mortgage costs
• That all debt is weighted equally
• More ...

I think you get my drift.  There are just way too many facets of the mortgage process and its requirements that current hopeful Millennial buyers do not understand, have wrong, or at minimum ... misunderstand.  

Again, addressing THAT issue is something I and other Loan Officers can do something about by offering educational opportunities and information.  But to a large part, we can only do that if those hoping to buy reach out and ask questions.  

Why is this personal touch ... this in-depth conversation between LO and hopeful home buyer so very important?

Increasingly, mortgages and mortgage approvals are tethered and tailored to the applicant's personal finances, credit scores, and needs.  Comparisons cannot be made between applicants as their financial and credit backgrounds ... their needs ... are always different.  Mortgage decisions made by client and LO are based on facts and figures intensely personal to the individual mortgage applicant.


So the only way to receive the answers needed to make an informed financing and home buying decision is to talk to a lender.  Then and only then can we provide the facts and the knowledge needed to assist ... whether that be in the infancy of their home buying journey or somewhere along its path.

52% of those Millennials surveyed by LendEDU indicated that they preferred that this type of assistance and initial conversation with a lender be held in-person.  But whether it be conducted one-on-one or via another method, it is the first step and the most reliable step a hopeful home buyer/borrower should and can make.

Millennials should not leave such an important decision regarding their future to chance.  The opportunity to ask questions, educate themselves and gain valuable information personal to their individual finances exists and all is easily attainable.   

Reach out and talk to me or your local lender today ...

* Hoping to Buy or Refinance a Home or Investment Property in the New Lenox - Will County - Chicagoland - IL/WI area?

Contact Me! I'll get you the facts, info, and figures you need to make the best home buying and mortgage financing decisions for you and your future.
I'm easily found at:

Gene Mundt

Mortgage Originator  -  NMLS #216987  -  IL Lic. #031.0006220  -  WI License #216987

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell/Text:  708.921.6331

eFax:  815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

          

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Channahon, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

Your Referrals & Testimonials are Greatly Appreciated!

2019 - Lincoln-Way Community High School Varsity Football Schedules

2019 - Lincoln-Way Community High School

Varsity Football Schedules

Nothing says Fall has arrived like football ...

And Lincoln-Way Community High School, District #210, serving the New Lenox, Frankfort, Mokena, and Manhattan communities, provides plenty of great opportunities to watch top-notch gridiron action.

Consisting of 3 schools and campuses, Lincoln-Way Community High School, District #210 once again is offering a full schedule of exciting football games and superb half-time entertainment for area residents and visitor enjoyment during the 2019 football season.

To help you find and back your favorite Lincoln-Way varsity football team, I've included each school's schedule below ...  

Lincoln-Way Central Knights

Lincoln-Way East Griffins

Lincoln-Way West Phoenix

Remember:  Lincoln-Way Community High School, District #210 football games can be heard on WJOL 1340 AM throughout the entire 2019 football season.

Both my wife and I are proud LWHS alumni.  We hope you take the opportunity to attend LWHS events and support Lincoln-Way High School District #210 students, athletes ... and musicians ... this Fall and throughout the entire year.

Best of luck to all the Lincoln-Way Community High School, District #210 athletes, students, musicians, coaches, directors, teachers, and parents ...

* If you're hoping to buy or refinance a home or investment property in one of the Lincoln-Way Community High School, District 210 communities, Will County, or elsewhere in the greater Chicagoland - IL/WI area, please contact me. I'll put my 40+ years of experience hard to work on your behalf.
I'm easily found at:

     

Gene Mundt

Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed #216987

American Portfolio Mortgage Corp.

nmls #175656

Direct: 815.524.2280

Cell or Text: 708.921.6331

eFax: 815.524.2281

www.genemundt.com

gmundt@goapmc.com

 

              

             

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, 

will offer you exemplary mortgage service and advice when seeking: Conventional, 

FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago 

and the greater Chicagoland region, including: 

The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, 

Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Channahon,

Naperville, etc.), DuPage County, the City of Chicago, 

Cook County, and elsewhere within IL & WI.

Referrals are Appreciated and Welcomed!

What Recent FHA Condo Guideline Changes Can Mean For You

What Recent FHA Condo Guideline 

Changes Can Mean For You 

FHA (Federal Housing Administration) has announced that it is issuing new guidelines for Condominiums and Condominiums projects.  The new guidelines will take effect as of October 15, 2019.

While the new rules extend the time period for FHA Certifications on condominium developments from 2 to 3 years (a long-awaited and very welcomed change) and make more mixed-use approvals possible, for me the most exciting portion of this announcement centers on single Condo units.  

In a nutshell, these changes should make it easier for individual Condo units to qualify for FHA-backed mortgage financing.  That's an important and exciting change.

Starting on October 15, 2019, the FHA guidelines will read: 

• An individual Condo unit located in a building of 10 units or more ... may be eligible for spot approval if no more than 10% of the units are FHA-insured 
• For Condo units in buildings with fewer than 10 units ... no more than two units can have FHA insurance

Why is this important?  And to whom will it make a difference?

For Buyers:  

• These revisions will enable FHA insurance of individual Condo units, even if the condominium project as a whole does not have FHA approval   
• These revisions provide additional flexibility in ratios ... specifically the ratio of Investors to Owner-Occupants ... allowing for FHA financing in a Condo building  

For Sellers:

• This revision could be huge.  It could be the "shot in the arm" that Condo owners/sellers in Chicago and the Chicagoland area have needed to facilitate sales.  

For the Chicago - Chicagoland Housing Market:

• Condos represent a sizeable portion of the housing market in the City and surrounding area.  These changes will remove some barriers presently found in the housing market and make the transacting of Condos easier for buyers and sellers alike.  

For homebuyers interested in entering the housing market for the first time ... and for those seeking to downsize ... Condos are an affordable stepping-stone.  FHA has contributed to this portion of the market immensely. 

Again, why?

FHA has helped make housing more affordable and "financeable".  

It allows for lower down payments to be made by borrowers when home buying.  (Note:  Many borrowers choose to utilize the flexibility of an FHA loan even when they could place a larger down payment on a property.)

Here are some examples as to how the utilization of FHA financing can prove beneficial to Borrowers:

• Down Payment:  The minimum down payment for an FHA Loan is 3.5%
• Credit Scores:  FHA allows for Credit Scores well below Conventional Loan requirements, and at affordable rates
• Type of Down Payment:  FHA allows Borrowers to receive Gift Funds from family members (and others, in some cases) 
• Co-Signing Borrowers:  With an FHA Loan, Non-occupying Borrowers (typically relatives) can be introduced as Borrowers to assist in Income or Credit support for the Primary Borrower
• Employment History:  FHA is the most forgiving loan product regarding job tenure, job stability, length of employment, how income is received, and more
• Credit Histories:  FHA allows minimal, fair, and sometimes "no-credit" Borrowers to qualify (pending other factors) 
• Interest Rates:  FHA Loans typically run about 1/4 to 1/2 lower than Conventional Loan rates, when Credit Scores are equal
• Major Credit Events: FHA allows Borrowers to rebound more quickly (shorter waiting periods) after Bankruptcies, Short Sales, or Foreclosures than most all other types of financing

While it is true that Mortgage Insurance is generally required with FHA Loans, the monthly payment associated with these loans can be considered a small price to pay when use of an FHA Loan (previously unattainable) paves the way to homeownership.  Plus it must be mentioned that Mortgage Insurance Costs can be reduced with larger down payments and shorter loan terms ... or dropped/addressed in the future.  (Contact me for clarification or further info)   

For anyone hoping to enter the housing market for the first time (or downsizing), it's important to get the facts regarding their personal financing options.  That is especially true if home buying plans possibly include the purchase of a Condominium or Townhome.  

Quite simply, these new FHA guidelines may have enhanced and broadened the housing to be considered during your home search ...  

Knowledge and level of experience of real estate and lending professional become even more important during these types of transactions and after rules or regulations changes.  Bottom line, make sure to do your homework prior to making your choice.  The likelihood of your financing and home buying process ending successfully rests upon it.

Are you dreaming of buying or refinancing a home or Investment Property in New Lenox - Will County - Chicago - Chicagoland - IL/WI?

Contact me today! I'll put my 40 years of mortgage experience and expertise to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI License #216987

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell:  708.921.6331
eFax:  815.524.2281

gmundt@goapmc.com

www.genemundt.com

          

       

Gene Mundt, Mortgage Originator, an Originator with 40 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in
Chicago and the greater Chicagoland region, including:
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Lockport, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

Your Referrals & Testimonials are Greatly Appreciated!