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What Can You Expect?

by Morris Pyle Team

Businesses must treat customers fairly if they expect to do business with them again or get recommendations to their friends. Customers of stores like Nordstrom’s understand that a salesperson is an employee and represents the company.

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The line becomes less clear in some industries, especially ones that involve real estate. Agency is a legal relationship authorizing a person to act for or in the place of another. It involves responsibilities that exceed treating a person fairly.

The duties a buyer or seller can expect to receive from a real estate salesperson or broker include but are not limited to honesty, accountability, full disclosure, representation and reasonable skill and care. Buyers and sellers might additionally expect representation, obedience, loyalty and confidentiality.  State laws can differ on specific duties.

Mortgage and title officers are limited in their duties to the buyer to honesty and accountability and specific requirements under the federal Real Estate Settlement and Procedures Act.

A special relationship with a real estate agent makes it advantageous to have them coordinate efforts with the other professionals in the home buying process. Since most buyers’ and sellers’ transactions are infrequent, the agent can bring valuable experience to the transaction.

Every buyer and seller should discuss the level of service they expect from the real estate professional they work with. Another good question is what happens if the purchase and sale are within the same company.

Fannie Mae will ease financial standards

by Morris Pyle Team

Fannie Mae will ease financial standards for mortgage applicants next month


The top reason mortgage applicants nationwide get rejected is because they’re carrying too much debt relative to their monthly incomes. Fannie Mae will be raising its DTI ceiling from the current 45 percent to 50 percent as of July 29. (iStock)

By Kenneth R. Harney June 6 

It’s the No. 1 reason that mortgage applicants nationwide get rejected: They’re carrying too much debt relative to their monthly incomes. It’s especially a deal-killer for millennials early in their careers who have to stretch every month to pay the rent and other bills.

But here’s some good news: The country’s largest source of mortgage money, Fannie Mae, soon plans to ease its debt-to-income (DTI) requirements, potentially opening the door to home-purchase mortgages for large numbers of new buyers. Fannie will be raising its DTI ceiling from the current 45 percent to 50 percent as of July 29.

DTI is essentially a ratio that compares your gross monthly income with your monthly payment on all debt accounts — credit cards, auto loans, student loans, etc., plus the projected payments on the new mortgage you are seeking. If you’ve got $7,000 in household monthly income and $3,000 in monthly debt payments, your DTI is 43 percent. If you’ve got the same income but $4,000 in debt payments, your DTI is 57 percent.

[For every eight applicants who seek a mortgage, one is rejected]

In the mortgage arena, the lower your DTI ratio, the better. The federal “qualified mortgage” rule sets the safe maximum at 43 percent, though Fannie Mae, Freddie Mac and the Federal Housing Administration all have exemptions allowing them to buy or insure loans with higher ratios.

Studies by the Federal Reserve and FICO, the credit-scoring company, have documented that high DTIs doom more mortgage applications — and are viewed more critically by lenders — than any other factor. And for good reason: If you are loaded down with monthly debts, you’re at a higher statistical risk of falling behind on your mortgage payments.

Using data spanning nearly a decade and a half, Fannie’s researchers analyzed borrowers with DTIs in the 45 percent to 50 percent range and found that a significant number of them actually have good credit and are not prone to default.

“We feel very comfortable” with the increased DTI ceiling, Steve Holden, Fannie’s vice president of single family analytics, told me in an interview. “What we’re seeing is that a lot of borrowers have other factors” in their credit profiles that reduce the risks associated with slightly higher DTIs. They make significant down payments, for example, or they’ve got reserves of 12 months or more set aside to handle a financial emergency without missing a mortgage payment. As a result, analysts concluded that there’s some room to treat these applicants differently than before.

Lenders are welcoming the change. “It’s a big deal,” says Joe Petrowsky, owner of Right Trac Financial Group in the Hartford, Conn., area. “There are so many clients that end up above the 45 percent debt ratio threshold” who get rejected, he said. Now they’ve got a shot.

That doesn’t mean everybody with a DTI higher than 45 percent is going to get approved under the new policy. As an applicant, you’ll still need to be vetted by Fannie’s automated underwriting system, which examines the totality of your application, including the down payment, your income, credit scores, loan-to-value ratio and a slew of other indexes. The system weighs the good and the not-so-good in your application, and then decides whether you meet the company’s standards.

Fannie’s change may be most important to home buyers whose DTIs now limit them to just one option in the marketplace: an FHA loan.

The big downside with both Fannie and Freddie: Their credit-score requirements tend to be more restrictive than FHA’s. So if you have a FICO score in the mid-600s and high debt burdens, FHA may still be your main mortgage option, even with Fannie’s new, friendlier approach on DTI.

3 Steps to Home Buying!

by Morris Pyle Team

A professional Realtor can go a long way in helping you get through the home buying process with the least amount of drama.

Step 1 to buying a home should be Find a Real Estate Agent you trust to help you. This person may become your lifeline during what can be a somewhat stressful transaction. You may end up making many calls and/or emails to seek guidance, information; and sometimes, quite honestly, just to vent about the loan process or financial hoops you have to jump through.

Step 2 is Get Pre-Approved For a Loan before you start shopping. This will help you have a realistic expectation of what you can afford for a house. This also gives you the ability to move forward quickly when you find a house you want to buy.  I am happy to recommend a Loan Officer and lender who will work hard to approve a loan for you!

Step 3 is Start House Shopping! Be sure you are buying a house that you can see yourself living in for a while. Typically you do not want to be back in the market in just a few years. The same is true for financing - make sure the loan you get is something you can handle for the long term. Be aware of the terms. If you decide on a variable mortgage, make sure you understand when rates are going to go up, and, if there are balloon payments, when balloon payments are due & how much.

Buying a home now, in the F-M Area, should be a great investment! Interest rates are very low, & our economy is one of the best! The Best time to buy is NOW! Prices are increasing!

Morris Pyle, Realtor Emeritus, RE/MAX Legacy Realty

Just call or email me to get my 40+ years of experience to help you purchase your dream home!  701-238-1652 or morrispyle@gmail.com 

Better Homeowners

by Morris Pyle Team

Indecision May Cost More

“More has been lost due to indecision than was ever lost to making the wrong decision.”

Interest rates have as much effect on housing costs as price and when they are both

trending upward, it can be very expensive to wait.

There can be some legitimate reasons for postponing a purchase such as needing to

save the down payment, improve your credit or waiting to find out about a possible transfer.

The problem is that prices and interest rates could, and very likely will, go up in the future.

 

If the price of $250,000 home went up 5% and the interest rate went from 4.5% to 5.25%,

the payments would increase by $176.42. The additional cost over a seven-year period

would be close to $15,000.

 

The questions that indecisive buyers need to ask themselves is “how am I going to feel

knowing that if I had not waited, I could have been living in the home for less money?” and

“What would I have spent the money on if I didn’t have to make the larger payment?”

 

Use the Cost of Waiting to Buy calculator to find out how much indecision may be costing

you.

Lower the Rate - Deduct the Interest - 4/9/2017

by Morris Pyle Team

Lower the Rate - Deduct the Interest - 4/9/2017 
 

Credit card debt in America is back to levels prior to the recession. The average credit card APR is just under 16% according to CreditCards.com Weekly Credit Card Report.  33967393-250.jpgHomeowners have an advantage over renters when it comes to getting their arms around debt issues.

Basic money management suggests that higher rate debt be replaced with lower rate debt. Credit cards, personal cars, boats, motor vehicles and other personal property, typically have interest rates higher than that of real estate loans.

Borrowing against a person’s home usually provides the lowest rate of financing. Refinancing a home mortgage to take cash out to retire personal debt is one option. Another would be to secure a home equity or HELOC, home equity line of credit.

An alternative advantage of borrowing against one’s home is that the interest may be tax deductible unlike the interest on most personal debt. Qualified mortgage interest includes acquisition debt which can only be used to buy, build or improve a principal residence and up to $100,000 of home equity debt which can be used for any purpose.

Managing money is a critical life skill that people need to master. While the goal may be to become debt-free, paying the least amount of interest possible can be a good first step. Owning a home provides an asset that allows for options not available to tenants. Seek professional advice to determine your best course of action.

Good techniques to make a DIY project much easier

by Morris Pyle Team

Good techniques to make a DIY project much easier

 

 

Homes are already selling two weeks faster than a year ago but timing could make them faster still.

Have the Smartest Home on the Block?

by Morris Pyle Team

From security systems to thermostats, light bulbs to sprinklers, your home can easily become smarter with internet-enabled devices.

Best Smart Home Devices of 2017

From indoor and outdoor cameras, to security systems and locks, to lighting and light bulbs, more and more devices are internet-enabled. This gives you more control - from anywhere in the world - over what's going on in your home at any time. Want to see what's new?

 
 
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SEE BEST OF 2017

It's going to be March before we know it! I hope 2017 is off to a great start for you.

I'm always looking for ways to help my clients improve the value of their homes. One of the things I'm seeing more often is people adding more smart technology to their homes - things like internet-connected cameras, appliances, lights, and even locks.

 

Is this something you're doing in your home? Reply and let me know! I'm always looking for great ideas to share and I'd love to hear from you.

 

Hope you're doing well. If I can be a resource to you in any way, please call or text any time. 

 

And, as always, if you know someone who's thinking about buying or selling, I'd love to help them out. Share my phone number or my email address

Spring is ??????

by Morris Pyle Team

I hope everybody is enjoying the great weather we are having here in the Northland the last few days.   We have noticed a significant uptick in the number of people looking at homes over the last two week.  I think we are in our spring surge.   

This is a good time to be looking for a new home, but you have to remember that you also need all of your finance in place, since a lot of people are also looking so that dream home you are looking for might be gone in just a few days on the market.  If you have not completed your pre-check list, you should get on that now.   I have seen several items that can help people with getting things like Mortgage applications in order and approved.

https://www.fool.com/mortgages/2017/02/11/4-mortgage-fears-and-how-to-fix-them.aspx

I hope you all will enjoy the nice weather and give us a call to help you find the home you are looking for.

excellent article in the Fargo Forum today

by Morris Pyle Team

This is an excellent article in the Fargo Forum today.

Counter intelligence: What to know when looking for new countertops

It covers all different kinds of countertops that you could have in your home both new and old.  If you are looking to remodel or build, you should take a look.

Displaying blog entries 1-10 of 68

Contact Information

Photo of Morris Pyle Team Real Estate
Morris Pyle Team
RE/MAX Legacy Realty
4342 15th Ave. S., Suite 105
Fargo ND 58103
701-238-1652
701-281-0449