'Aging in Place' Helps To Fuel Housing Shortage

As the baby boomer generation has aged, it has also stayed put. And for all the innovations builders and product manufacturers have come up with to help seniors “age in place.” they may have also made it difficult for would-be home-buyers, causing a lack of housing inventory.

According to a new report from Freddie Mac, 2019 will see a significant shortage of available homes here in the U.S., failing to meet needs by 2.5 million units. It doesn’t help that at the same time millennials are buying fewer homes at this point in their lives compared with previous generations at similar periods.

As seniors continue to prefer to stay where they are as the optimal way to live out their remaining years, housing inventory has tightened nationally. According to the report, for people between the ages of 67 and 87, home-ownership rates dropped by 11.6 percent for previous generations but only 3.6 percent for the current (leading edge) generation of seniors, identified as having been born between 1931 and 1941.

New advances in information technology may be the culprit, as well as accessibility to better healthcare and education, with the report crediting those advancements as “boosting and extending” housing demand among seniors. The result? The current senior generation has become much slower in transitioning out of home-ownership than prior generations.

The U.S. Census Bureau says lost units will need to be replenished at a rate of 350,000 homes per year in order to bring the market to a “well-functioning” status. “Vacant homes increase liquidity in the market, enable prospective buyers to find a match, and give prospective sellers confidence to list their home for sale,” the Freddie Mac report states. “Vacancy rates are an important indicator of housing market vitality. Too high a vacancy rate reflects a moribund market, while too low of a rate reduces the efficiency of the marketplace.”

While this does not bode well for home shoppers, it will boost spending on renovations, according to Chief Economist Sam Kater. “We believe the additional demand for home-ownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations.” If that is true, however, those in a position to purchase the limited number of homes available may well see their property values increase more quickly than anticipated. 

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source: Realtor, Reversemortgagedaily, FreddieMacTBWS

Mortgage Giants Freddie Mac and Fannie Mae Offer More Relief To Worried Homeowners

In a move sure to bring a sigh of relief to millions of distressed homeowners, loans backed by Fannie Mae and Freddie Mac will now defer all missed mortgage payments, tacking them on to the end of their loans already in forbearance.

Borrowers who took forbearance due to COVID-related issues will not have to repay their missed payments until they sell their homes, refinance their current mortgage or their mortgage matures. Under the program, the borrower begins making their mortgage payments again when they’re able.

For homeowners in forbearance due to COVID-19, payment deferral allows them to make up missed forbearance payments when they sell their home or refinance. This new forbearance repayment solution responsibly simplifies options for homeowners while providing an additional tool for mortgage servicers. Borrowers who can pay their mortgage should, because missed payments remain an obligation that will ultimately have to be repaid.” The extension can continue up to 180 days beyond the 180 days granted by forbearance. 

The issue is that forbearance is not forgiveness; therefore, borrowers in forbearance have to repay their missed mortgage payments one way or another. The GSEs’ (government-sponsored loans’) new payment deferral allows borrowers who took forbearance to shift as many as 12 months of mortgage payments to the end of their loan and is available to homeowners who have completed a COVID-19 related forbearance plan and are able to continue making their full monthly contractual payment but cannot afford full reinstatement or a repayment plan to bring their mortgage loan current.

According to Freddie Mac, the maturity date, remaining term, interest rate and payment schedule of the borrower’s mortgage remains the same as it was before. In addition, Freddie Mac said that utilizing the payment deferral option does not prevent a homeowner from someday being eligible for a Freddie Mac modification if payment relief is needed in the future. This option will begin being offered to borrowers on July 1, 2020.

For more information on how this all works, I am available to answer your questions. 

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

A Fun Look Back At The Homes Of The 1920s

It has now been 100 years since the start of the Roaring '20s when flappers danced in Great Gatsby. Prohibition was still a decade away. As for housing styles, it's fun to compare today's homes to those a century ago, dresses above their knees, jazz began permeating the night club scene with insane rhythms, and men dressed like the Great Gatsby. Prohibition was still a decade away. As for housing styles, it's fun to compare today's homes to those a century ago.

Back East, in places like Quincy, MA, "streetcar suburbs" were growing quickly, containing American Foursquares, Dutch Colonials, and "Quincy Capes" that were built alongside multi-family homes. House and Hammer's Jon Gorey, who lives in that area, says 1920s floor plans seemed to be made for entertaining and boasted 12-ft ceilings throughout. "The downstairs rooms are almost always connected all the way around in a circular flow pattern — which, any child can tell you, is perfect for racing around in circles. Instead of doors between rooms, there are often wide, cased openings. And when every room opens into another, and another, it helps to relieve any claustrophobic inklings you might otherwise get in a small house."

Homes in the wild west were built with different building materials than those used in colder climates. As historians note, the Los Angeles of the 1920s was roaring like it never had before. Hollywood was in its infancy and the "Go West, young man" mentality had people from all over the country dreaming of a different life. Realtor David Lubell, who specializes in selling historic Los Angeles homes, says that Mediterranean architecture began dominating southern California, derived from styles of the Iberian and Italian peninsulas. "Of course, the climate in southern California makes this a sensible outcome, but the story is more complex than just the weather," says Lubell. "More than two centuries of Spanish-Mexican settlement also had a tremendous influence on the stylistic choices in Los Angeles. The indigenous peoples use of adobe mixed with the Spanish Colonial forms set the foundation for a different kind of architecture than in the rest of the United States." This is, of course, even more prevalent in parts of the American Southwest.

This is also when modernism began to find its footing, beginning with the opening of Bauhaus, the German art school that combined crafts and the fine arts and began to spread its design love everywhere. Art deco touches meant homes were flashy, sophisticated, and fun all at the same time. Geometric shapes, shiny fabrics, stylized images of skyscrapers and airplanes, and exotic touches from Africa, Egypt, and the Far East were brought together to form an eclectic and exciting home interior. 

As for the nuts and bolts of homes of the 1920s, lath-and-plaster was still the ticket. Galvanized pipes were employed both within the house and for sewer lines as well. No one back then knew they corroded over time. And the now-infamous knob-and-tube wiring was everywhere. So if you were to buy a 1920s home that had never been updated, you'd be looking at replacing all plumbing and electrical conduits as well as the electrical panels. Toilets of the 1920s had long cords attached to tanks placed high on the wall, and tubs were surrounded by 360-degree curtains. Interestingly enough, you can still find manufacturers who make those strange looking toilets and, of course, clawfoot tubs are still the rage. How about those craftsman homes, such a beautiful home that still provides many homeowners with continued enjoyment to this day. 

Kitchens were large, usually with a large informal dining table in the center. And for those who could afford it, iceboxes were traded in for modern electric refrigerators, introduced in 1920. No longer did homeowners need to wait for the ice to be delivered by a guy in a truck. It was now contained in trays in a freezer compartment, ready to break out for cold drinks at a moment's notice.

So as you look to consider doing some updating to your home in the coming decade, remember that it was the 1920s that began a tradition of distinctive style in home interiors. It was a prosperous (and sometimes irreverent) time in U.S. history. The elements of it that have been preserved to this day are living proof good architecture and design can stand the test of time.

I hope this has been fun come back soon. 

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source: TBWS

How To Select A Loan Officer

Someone once asked me: If you were shopping for a Mortgage broker. How would you select one? Do I need a mortgage broker to get a mortgage?

You might believe, the interest rate is one of the last reasons to choose a lender. I say this because almost all loans get ultimately sold to the same pool of investors-Fannie Mae, Freddie Mac or Ginnie Mae. Lenders earn their money by originating and funding loans which they then sell to investors for a small profit. The investors pay a set price for these mortgages, depending on what the market is doing on any given day.

It's important to know this as a consumer so that you realize that there isn't a huge spread in rates between one lender and the next. You should be looking for different criteria for choosing a lender to purchase or refinance a home.

You asked about mortgage brokers, but it might be a good idea at this point to talk about some terminology. A mortgage broker is a licensed person who acts as a go-between for lenders and consumers. The broker will typically receive a fee from the lender for those services. It does not usually cost more to use the services of a mortgage broker.

There are also mortgage bankers. Although you might think a "banker" is someone sitting behind a fancy desk in your local Too Big To Fail bank, the term is actually broader than that. A mortgage banker is someone who originates and funds mortgages in the name of his or her company. They will then sell the funded loan to the investor for a small profit. It does not cost more to use the services of a mortgage banker or a commercial bank when you are seeking a mortgage. 

You might ask what the difference is between a "banker" and a "broker." Both do essentially the same job, but under today's regulations, there are minor differences between the two types of loan originators. A broker is considered the "originator" under the new regulations. A banker is seen as a "creditor." The disclosure documentation is very slightly different between the two, but in most cases, there are functionally the same. A banker, however, may have a bit more flexibility when it comes to getting your loan funded. 

Let's consider that "broker" and "banker" are essentially interchangeable terms. Many people who used to be brokers are now bankers. Some don't even change the name of their company or their location. 

I'd suggest that a better way to ask your question might be to ask, "Am I better off going to my neighborhood Too Big To Fail bank or finding an independent lender (broker or banker)?" Here is what you should look for when you look for a mortgage.

First, you should be aware that getting a mortgage today involves more moving parts than previously. This means that having a loan officer to guide your application through the process is very important. It doesn't matter whether your loan officer is a banker or broker; what matters is that you have a point of contact to answer questions and let you know how the process is going.

A good loan officer will also help you as a trusted advisor; they should be able to let you know if there are ways where you might tweak your credit score so as to get better pricing on your loan. For example, raising a credit score from 735 to 740 could save $1,000 on a $400,000 loan. Accomplishing that could be as simple as reducing the balance on a single credit card.

Your loan officer should also have a good feel for the performance of the market. Mortgage rates change every day, based on the price of a type of bond called a Mortgage Backed Security (MBS). The price of the MBS changes during the day according to market activity. It directly affects the rates for mortgages. To give you an idea, if the price of the MBS goes up from one day to the next by .25% (that would be $.025 per $100 of bond value), the cost of a mortgage will improve by .25%. That means that a $400,000 mortgage would be $1,000 less expensive. 


This doesn't mean that the cost of your loan is constantly fluctuating. There will come a time in the mortgage process when you have to "lock" the rate. This means that the lender is now committed to fund the loan at an agreed price and terms, regardless of what happens in the market. If your loan officer believes, from being aware of the market activity that rates might improve over the near term, he or she may advise you not to lock right away. Conversely, your loan officer may believe that rates may increase soon based on market activity and would encourage you to lock early, thus protecting from rising rates. No one is right all the time, but you're far better off dealing with a lender who understands the mortgage markets.

To answer your question—FINALLY—the answer to your question is no…but regardless of whether you go to a Too Big To Fail bank or an independent lender (broker or banker), your interests are best served by finding someone whom you can trust as a resource and trusted advisor. 

I hope this is helpful. Good luck!

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219