Financing Options That Can Help in a Tough Housing Market

 

Financing Options That Can Help 

in a Tough Housing Market

Homebuyers hoping to enter the housing market are currently facing the twofold challenge of low housing inventory and rising interest rates ...

A recent report (Oct 5, 2021) by the U.S. Census Bureau states this statistic:  Homeowner households had a median wealth of $269,100 compared to $3,036 for renters.

A Harvard study showed that:  A person 65 years of age that had been a homeowner was worth 44 times more than someone who had rented. 

Staggering statistics ...  

Both provide a convincing argument for homeownership.  And it's a message that obviously resonates with many, as a Pew Research survey showed that 72% of renters want to own a home one day.   

So, you have a large number of people that want to buy a home.  But you also have a significant portion of those people facing some obstacles that prevent them from doing so.   

How can those obstacles be addressed?

While the rise of housing prices may slow over the coming months, or even recede in some areas, it's seems unlikely that an answer lies within home prices alone.  Historically prices have risen.  Odds are, prices will continue that upward trajectory in the future, just at a slower pace.  

The number of homes for sale on the market will most likely rise in the future too.  That theory is supported by the percentage (82%) of millennial homeowners now reporting that they are currently making home improvements with that goal in mind.  Their updated homes will be listed and available for purchase at some future date.

But fact is, the individual home buyer does not command the housing market.  They're not in the driver's seat when it comes to housing availability nor do they control housing prices either.  However, they can influence the interest rate and loan programs that they personally qualify for at the time they choose to buy/refinance and apply for a loan.   

It's important to share this message:  Those financing a home hold power over the interest rate or mortgage programs available to them.  

To a large degree, they remain in control of their financing destiny.  With time and effort, they can "stage" and position themselves into maximum effectiveness as borrowers applying for loan.  

What's their end goal?  

To create as many options as possible for themselves.  Those options are earned by: 

• Building a good credit history  
• Paying bills on time  
• Saving money  
• Not over-spending  
• Spending wisely  
• Eliminating debt wisely
• Consulting with a lender

The good news is that many options do exist, even in a tougher more challenging market ...  

One such option is Private Mortgage Insurance (PMI).  PMI may be a sound viable solution for those buyers that have saved only a small down payment.

Saving for a downpayment has certainly gotten tougher.  Because of that, Private Mortgage Insurance (PMI) is once again gaining in popularity.  

Why?

When utilized, Private Mortgage Insurance (PMI) enables borrowers to receive Mortgage Approval, even when they have placed less than 20% down payment on a home purchase.  That's a very welcomed advantage.

Costs for PMI are based on the increments of down payment percentages made by a borrower (3%, 5%, 10%, and 15% down payment).  

• The greater the down payment percentage:  The lower the PMI payment is...
• Credit Scores:  Credit scores affect the cost of private mortgage insurance.  The higher the credit scores, the lower the PMI is...

It must be noted that ...

• Two forms of Mortgage Insurance (MI) exist: Conventional Loan PMI and FHA Loan MIP
• There are multiple payment methods available for PMI:  PMI can be paid by a borrower in one lump sum at the time of closing as part of the closing costs.  In some instances, lender-paid mortgage insurance is also an option available to Borrowers.

As you can see from the info provided above, Private Mortgage Insurance ... or any loan program ... is not a "one-size-fits-all".  Every Borrower's borrowing scenario is different with unique features and circumstances.  

It's why I say, anyone considering the purchase or refinancing of a home, should consult with a lender as early in the process as possible.  That way a thorough analysis of of your individual credit/debt, credit report, and goals can be conducted, beneficial comparisons can be made, and specific recommendations and advice can be shared.

 

Are you hoping to Construct, Buy, Refinance or Purchase a home or investment property in Chicagoland or somewhere else in Illinois or Wisconsin?

Looking for mortgage financing answers, options, solutions, and experienced assistance?

Contact me! I'll put my 40 years of Mortgage experience and expertise hard 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/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, Frankfort Square, Joliet, Shorewood, Elwood, Lockport, Wilmington, Crest Hill, Symerton, Braidwood, Channahon, University Park, Beecher, Plainfield, Bolingbrook, Romeoville, Tinley Park, Homer Glen, Crete, Peotone, Naperville, etc.), DuPage County, Kane County, Grundy County, the City of Chicago,

Cook County, and elsewhere within IL & WI.

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