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Author: Jessie Michelson

Is it a good time to buy a home?

Posted on by Jessie Michelson

If you’re staying out of the housing market because you’re afraid home prices will “crash”, take a moment to review the chart below.

It’s from the Federal Reserve Economic Data. They’ve been tracking average sale prices of home in the U.S. since 1965.

Are there dips in home prices? Of course. From the first part of 2007 to 2009, the average home value decreased $49,000. But just three months into 2009, home values were on the rise again. And again in 2017, home values decreased slightly for three years until they took a sharp increase the final months of 2020.

If you’re like the average homeowner, you’ll stay in your home a minimum of 10 years. Will a shift in monthly or even annual home values matter if, after a decade, your home’s value will very likely increase? Probably not.

Home prices increase over time
Can you time when you’ll purchase a home in order to get it at the best price possible? Of course. But generally, the longer you wait the more expensive the home will be. Historically, even over the course of a year, a home price will increase.

Let’s imagine you’re the average homebuyer purchasing a house, then selling it 10 years later. What would be the average price of the home and interest rate for a 30-year loan look like from the time you bought to sold?

In January of 1982 the average American home price was $66,400 and the interest rate was 17.48%

In January of 1992 the average American home price was $119,500 and the interest rate was 8.76%.

In January of 2002 the average American home price was $118,700 and the interest rate was 7%.

In January of 2012 the average American home price was $238,400 and the interest rate was 3.92%.

In January of 2022 the average American home price was $428,700 and the interest rate was 3.45%.

When is the best time to buy a home?
Knowing home values increase over time, the sooner you get a home the lower the price will likely be. There are certainly a lot more things to consider when purchasing a home, but you probably shouldn’t expect to wait it out for a few years and expect a lower sale price.

>> How to get ready to buy a house this year

If you wonder when it’s the best time for you to purchase a house based on your credit, income, savings, and other factors; then it’s time for you to talk to a local mortgage expert. A loan officer will go over your unique financial situation to select a loan that will work best for the type of home you’d like to buy. Talking with a loan officer is free, so we recommend reaching out to a local one now to be ready to buy a house in the future.

Don’t have a loan officer to work with? Find a local mortgage expert near you here.

Lock & Shop mortgage program for home buyers

Posted on by Jessie Michelson

Don’t let changing interest rates dampen the excitement of shopping for a new house.

You’re likely familiar with the traditional way of getting an interest rate: having it set after you’ve found a home to purchase. With Lock & Shop, we do it a little different. Your interest rate is set first, then you take time to find a house that best meets your needs.

How does a Lock & Shop work?

You can either get pre-approved or, better yet, approved through the Buyer Ready Program for a loan. We’ll go through your credit history, finances, employment information, and other data to find the right loan for your needs. Once you’re pre-approved, we’ll lock in your interest rate! You’ll have 60, 75, or 90 days to find the right home for you.

The Lock & Shop advantage

If interest rates increase while you’re shopping, your mortgage won’t be affected. A lot of borrowers find house hunting a lot more enjoyable when they don’t have to worry about rushing to find a home before interest rates increase.

Plus, with a Lock & Shop, a lot of the work our underwriting team would do to approve your home loan will already be completed. That means you can enjoy a faster close on your loan – getting you into your new house sooner!

Who should get a Lock & Shop?

If you’re looking for either a primary or secondary home and are afraid of rising interest rates, a Lock & Shop might be right for you. They’re available for fixed-rate conventional, FHA, VA, and USDA loans. A small upfront fee is all that’s required. And if you need more time, we offer an extension too.

If you’re considering a new home, give us a call and we can help you decide if a Lock & Shop is right for you!

Being pre-approved or pre-qualified: which is better?

Posted on by Jessie Michelson

Getting approved for a loan is the best way to be prepared to purchase your next home. When you work with your lender, almost all of them offer traditional programs to either pre-approve or pre-qualify you for a loan.

Pre-qualify: Traditionally, this means you credit is checked to see whether you have a credit score that would meet the minimum qualifications for a home loan.

Pre-approve: For most lenders, in addition to your credit score being checked, your income and your employment history will also be given a preliminary review by an automated underwriting program. This type of approval is generally considered stronger since it’s a more detailed process.

The issue with the traditional pre-approval programs is your financial data is checked, but it’s not completely reviewed. There’s still a final step that needs to take place once you apply for your loan: an underwriter needs to do a full personal review of all your data. It’s possible they may find issues that were missed during the automated review. Resolving these issues takes time and lowers your strength of your home purchase offer.

The Buyer Ready Program: the strongest pre-approval you can get
We offer the Buyer Ready Program which is the most detailed approval a lender can offer to you. What makes it unique is we have an underwriter do the complete review of your financials to make sure they address any issues upfront rather than after you put in your home offer. That means your offer is stronger, less likely to run into financing issues, and more likely to be accepted by the seller.

>> What you should never do after you’re pre-approved for a loan

The best pre-approval can help you get a home
We understand how competitive the buyer’s market is, and we want to do everything we can to make sure your purchase offer is strong and appealing to the seller. As a hometown lender, we have years of experience working with our local Realtors. When they see your offer is backed by our Buyer Ready Program, they know it’s stronger than any pre-approval or pre-qualified offer another buyer has. In today’s market, any advantage you have is worth taking! And, best of all, we offer this program at no cost to you.

>> Closing on a home – how to prepare

Contact us today to learn more about the program and, when you’re ready, we’ll qualify your home loan through the Buyer Ready Program.

Does a divorce lower your credit score?

Posted on by Jessie Michelson

While your marital status doesn’t directly impact your score, disentangling your finances while you’re separating from your spouse might. What are the most common issues that can lower your credit score during a divorce?

Missing a payment on joint credit
If you’re like most married couples, you and your spouse have a mortgage, auto loans, and credit cards in both your names. Your creditors extended credit to you based on your joint financial information. When it comes to making payments for your debts, your creditors don’t care whether you’re separating or not. Your payment history is the biggest factor in your credit score (about 35%), so it’s in your best interest to make sure yours helps, not hurts, your score.

What you can do to minimize the negative impact on your credit:
As soon as you can, check your annual credit report (it’s free) to see which accounts are in your name.

Continue to make, at least, minimum payments towards credit debts you’re responsible for. With all the commotion of separating, it’s easy to forget about your bills. But missing a payment now can lower your credit score and make it less likely you’ll be extended credit in the future.

As your divorce progresses, a judge may issue a divorce decree. It’s a contract between the court, you, and your spouse to say who is responsible for each debt. With it, you may be able to exclude some debt or define who is responsible for payments. In most states, you may only be responsible for debt with your name on it or that you’ve made payments towards in the last 12 months. But if you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, your assets and debt will be split 50/50 for anything acquired in the state while you were married – no matter whose name is on the debt.

If you and your spouse have a mortgage together, let your loan officer know if you need to make changes to your loan. They can help you go over your options to refinance in one spouse’s name only.

Transferring credit card balances
Another factor that impacts your credit score that people often forget is the total amount of credit that’s available to you compared to how much of it you’ve used. It’s called your credit utilization ratio, and it represents about 30% of your FICO score.

Imagine you have $2,500 in credit debt split between two credit cards that each have a $5,000 limit. You have $10,000 available credit, you’ve got $2,500 in debt, and your credit ratio is 25%. If you transfer your debt and close one card, you still owe $2,500 but your available credit is now cut in half – just $5,000. Even though you didn’t spend any more money, you’ve now used 50% of your available credit. This change can certainly negatively impact your credit score.

What you can do to minimize the negative impact on your credit:
Transferring your balance to an existing card with a lower interest rate is a great idea to help you pay off your debt faster. To keep from taking any hits to your credit score, consider keeping your old credit card open even if there is no balance.

Closing old credit cards
Your average account age is another factor in your credit score (around 15% of your FICO score). Your oldest credit cards show you can continue to make payments over an extended amount period of time. When you close them, you reduce your average account age and can lower your credit score.

What you can do to minimize the negative impact on your credit:
Consider not cancelling any of your credit cards (even when they’re paid off entirely or you’ve transferred the balance). You will keep the positive benefits of your credit utilization ratio and account age intact, which means you won’t take hits to your credit score.

Looking to buying a home after a difficult divorce?
Your credit score is just one factor your lender uses when deciding whether you’re eligible for a loan. If you’re unable to minimize the impact on your credit score after a divorce, there are still ways to move forward with a home loan. We’re experts in finding the right federal, state, and even local programs to help you afford a home. Talking to us about your home finances is free whether you have a loan with us or not. When you’re ready, give us a call and we’ll go over your home options no matter what your credit score is.

Mann Mortgage loan officers ranked among top-producing residential mortgage originators in US

Posted on by Jessie Michelson

Scotsman Guide awarded 17 Mann Mortgage loan officers with their prestigious Top Originator award for 2022.

Scotsman Guide’s produces the mortgage industry’s most comprehensive verified rankings of the nation’s top producing residential mortgage brokers, originators, loan officers, and bankers. Only loan officers who have secured $40 million or more in production or closed 100 or more loans in 2021 were able to make the list.

“Mann Mortgage loan officers are incredible and it’s great so many have earned this recognition from Scotsman Guide,” says Jason Mann, CEO of Mann Mortgage. “We measure success not only in the amount of loans we close but in the number of people we work with to fulfill the dream of homeownership. We are incredibly grateful to all the people who trusted us with their home financing and helped 18 of our loan officers win this award from Scotsman Guide.”

Congratulations to the following Mann Mortgage loan officers who were named a 2022 Scotsman Guide Top Originator:

Julie Lapham – Missoula, Montana
Ryan Howard – Las Vegas, Nevada
Angelina Rice – Life Mortgage, Washington
Deborah Criddle – Idaho Falls, Idaho
Robert Martinson – Monument Home Loans, Virginia
Rob Fleming – Missoula, Montana
Corey Hill – Helena, Montana
Salvatore Viti – Las Vegas, Nevada
Matthew Fleming – Las Vegas, Nevada
Juan Baltazar – Homeseed, Washington
Carolyn Cole – Polson, Montana
Matthew Brown – Eugene, Oregon
Mike Hogan – Chimney Rock, Washington
Valerie Mills-Smith – Allied Mortgage Resources, Oregon
Vickie Tuskan – Roseville, Minnesota
Jonathan Hughes – Lewiston, Idaho
Isaac Morris – Safford, New Mexico

In addition, these four women were also ranked as a Top Women Originator by Scotsman Guide:

Julie Lapham – Missoula, Montana
Angelina Rice – Life Mortgage, Washington
Deborah Criddle – Idaho Falls, Idaho
Carolyn Cole – Polson, Montana

And, for the second year in a row, Mann Mortgage was ranked by Scotsman Guide as being one of the 100 Top Overall Lenders in 2022. Mann Mortgage was the only Montana-based lender to make the list.

Get a new home without paying a mortgage? It’s possible!

Posted on by Jessie Michelson

If you’re 62 or older, you may be eligible for a reverse mortgage purchase loan (also called an HECM for purchase loan). They’re designed for older people who want to get a smaller home, move closer to family, or find a home that will better fit their physical needs as they age – all without paying a mortgage.

Reverse mortgages are a little tricky to understand, so let’s go over what makes them different from a traditional mortgage.

Traditional mortgage vs a reverse mortgage
In a traditional mortgage, when you’re ready to buy a home, you ask your mortgage company to lend you money to pay the seller. You promise to pay the lender back in monthly installments over a set number of years. Each month, your loan balance decreases until it is paid in full.

A reverse mortgage is a secondary loan available if you’re a homeowner who is 62 or older and owns a considerable amount of your home. The equity in your house is your collateral and you promise to pay back the loan with the sale of your house. The funds come to you as a lump sum of cash, monthly installments, or a line of credit. Your loan accrues interest, so the balance increases over time (especially if you choose not to make payments).

Why get a reverse mortgage purchase loan?
Imagine you’re in your mid-60’s and you’ve paid off the home you bought when your kids were young. Now that you’re retired and living off your savings, you wish you could move closer to your grandchildren. Now that your income is limited, how can you afford to pay a mortgage each month?

This is where reverse mortgage purchase loans are designed to help. With a considerable down payment (usually 45 –70% of the sale price, which is often made possible by the buyer selling their current home), your lender will give you a loan to purchase your home without requiring you to make monthly payments towards it.

How does a lender make money then?
Like most loans, your reverse mortgage purchase loan accrues interest and the loan balance increases over time – especially if you don’t make payments towards it. For many borrowers, that’s not a problem. The loan is still a good financial option for them because homes historically grow in value in the US. In the past few years, appreciation has been crazy – 19% in 2021. But it’s generally closer to 4% annually. So, for most people, over time their home’s value outpace the loan balance so they know they can pay the loan off when they sell their house.

Can you make payments if you want?
Of course, but it’s not required.

Paying off your loan
The balance is due in full when you move away or die. Usually, it’s paid off with the proceeds from the sale of the home. If you’re lucky, you may have money left over for your estate or heirs – but you’ll never owe more money than the home is worth.

You and your heirs are protected from owing more than the home’s fair market value – a huge advantage to this type of loan.

Want to learn more?
Reverse mortgage purchase loans are insured by the Federal Housing Administration. We’re authorized lenders and are happy to meet with you and your children to help you decide whether this loan is right for you. Call us today to set up a free consultation.

“Good” credit vs “bad” credit

Posted on by Jessie Michelson

To get a mortgage to purchase a home, you’ll need to show your lender you can repay debt. The best way to do it is by having a high credit score and a robust credit history. In the journey towards good credit, you may find some of your actions inadvertently have negative impact on your credit score. Let’s go over the difference between actions that give you good and bad credit.

GOOD CREDIT

Getting a home loan
If you have a mortgage and have made payments on time, you’ve given yourself an excellent credit boost. Mortgage debt is the single biggest contributor to overall American household debt, and handling it well will increase your credit score. Mortgage debt is considered good debt.

Having student loans
The average public university student borrows $30,030 to pay for their bachelor’s degree. College costs remain a significant financial challenge for many people. If you haven’t had to research tuition for a while, you may be surprised to hear how much it costs. Today, the average price for just one-year (tuition, room and board, books, transportation, and other expenses) is $25,290 at a public in-state college and $40,940 out-of-state. Thankfully, when calculating your credit, it’s considered a positive move to take on college debt. Regular on-time payments will improve your credit.

When considering your college cost and future career, aim to keep your student loans in line with your projected income. Some debt is unavoidable, but it should never be so great that it ruins your financial future. Generally speaking, try to keep your debt under $30,000 so you can afford to pay it off and get a mortgage at the same time. U.S. News has an easily understandable article on how much debt is too much.

>> Buying a home when you have student loan debt

Having an Auto loan
The average new car costs more than $36,000. Most of can’t pay that in cash, so we need a loan. It’s considered good credit since the interest rates are generally low and there is a set number of payments you’ll make until it’s paid off. As long as you make your payments on time, auto loans aren’t considered bad credit.

NOT SO GOOD CREDIT

Using credit cards
Credit cards typically have higher interest rates than car loans, student loans, or mortgages – often above 20%. If you only pay minimum payments, it will take you a surprisingly long time to pay back your debt. And the types of things we buy with a credit card are depreciating assets like clothes, furniture, food, events, and gas. There’s nothing wrong with these types of purchases or having a credit card, but after you calculate your interest payments, the true cost of the item is much higher after it was added to your credit card. Having credit card debt doesn’t indicate you’re taking debt towards a more financially stable future (like with a home or student debt), so it’s generally considered harmful to your credit.

Making late payments
If any payment is more than a month late, it may be reported to a credit bureau. This includes payments to credit cards, lenders, even utility providers like your electric or water company. Negative information can be reported for seven years.

Maxing out a credit card
Credit utilization is the amount of money you have used compared to the credit limit on the card. Generally, try and keep your credit card balance low. A maxed-out card can lower your credit score by quite a few points.

Requesting too many loans
When you apply for a credit card or a loan, the lender will do a hard inquiry into your credit to see your history and score. For most people, a hard inquiry will cost about 5 points and remain on your credit report for two years. If you’re shopping for a good rate, each similar inquiry will not continue to negatively impact your credit if they’re done in the same time period.

A lot of factors play into your credit history and score. To see yours, visit annualcreditreport.com. If you have any questions on how your credit will impact your ability to secure a home loan, reach out to your mortgage lender. We offer many types of home loans – some work for people with great credit scores while others are designed to give those with a troubled credit history the help they need to get a home. Don’t lose hope. Work with an expert to help you find the right path towards your home loan goals.

These interior design trends are now cheugy

Posted on by Jessie Michelson

Do you have chevron-printed toss pillows? Is your favorite food lasagna? Are you rocking baby Yoda merch? Do you wear golf polos when you’re not golfing? These are tell-tale signs you, my friend, are a major cheug.

What’s “cheugy”?
According to the Urban Dictionary, cheugy (pronounced chew-gee) is the opposite of trendy. It was something that was popular but cookie-cutter and unoriginal a few years ago. A cheug is a person who follows these slightly out-of-date trends.

There’s no shame in being a cheug. Most of us indulge in some cheugy things, and that’s a little of what makes talking about it fun. Cheugy people wear their likes and dislikes openly – if they like The Office, they’ll wear Dunder Mifflin shirts and drink from a “That’s what she said” mug. If a cheug likes baby Yoda, Harry Potter, Friends, Minions, Disney, owls, rose gold, sparkles… they decorate their lives with it.

Is your home décor cheugy?
The way you dress, the way you text, how you act on social media, and even how you decorate your home can be considered cheugy. Do you have motivational quotes as art? Have you painted your walls gray? Below is a list of home design items considered cheugy. How many of them do you still have in your home?

  • Quotes as art. Like, “live, laugh, love”, “bless this mess”, “good vibes only”
  • Chevron print on bed sets, toss pillows, rugs, walls
  • Shiplap (unless it’s historic and not a remodel)
  • Simple geometric Moroccan rugs (unless they’re authentic)
  • Chalkboard walls
  • Subway tiles with dark grout (again, unless they’re in a historic home)
  • Farmhouse-vibe without being an actual farmhouse
  • Kitchen pottery with words like “butter” on a butter keeper and “tea” on a mug
  • Rolling barn doors instead of regular doors
  • Kitchen islands that are a different color and style than the other cabinetry
  • Cheeseboards as kitchen decorations
  • Mason jars as plant holders or drinkware
  • All-white kitchens
  • Wood crate tables, shelves, and furniture
  • Gray painted walls
  • Marble-topped accent tables
  • Macramé plant hangers and wall hangings
  • Brass and rose gold
  • Hanging Edison lightbulbs or lighting fixtures with exposed bulbs
  • Keep calm and ____ on prints

What do you do if you or your home are cheugy?
Nothing. If you like your home’s style or your clothes, keep them. In a few years, they’ll be back in style anyway.

Going forward, avoid trends – especially very hot ones you see everywhere. Instead, buy well-made items you like and find unique decor as you travel, at an antique store, or at a garage sale. Don’t feel pressured to keep up with what’s hot. If you like baby Yoda, sparkly water bottles, and gray walls, that’s totally ok. Your home should be a place that makes you happy.

Conforming loan limits for 2022

Posted on by Jessie Michelson

When applying for a mortgage, one of the most popular options is a conforming loan. These loans are called “conforming” because they conform to the guidelines set by Fannie Mae and Freddie Mac, federally-backed home mortgage companies created by the U.S. Congress to boost homeownership.

What do Fannie Mae and Freddie Mac have to do with your home loan?
These entities exist only to support the U.S. mortgage system. They don’t originate loans. Instead, after a loan has been issued, one of the entities will buy the loan from the lender if it meets their criteria. This is an important part of the mortgage market because it allows lenders to sell loans to Fannie Mae and Freddie Mac and use the cash raised to engage in further lending.

For a loan to be purchased by Fannie Mae or Freddie Mac, the borrower generally needs:

  • A good credit score
  • A debt-to-income ratio of 50% or less
  • At least 3% down payment
  • A loan amount that’s equal to or less than the conforming loan limit

2022 conforming loan limits
Each year, the Federal Housing Agency decides what the conforming loan limit is. As houses become more expensive, the limits increase. In 2022, the amount increased substantially for all units.

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Conforming-Loan-Limits-for-2022.aspx

­­Base limit: This is the maximum loan amount for homes in most areas of the United States.

High-cost limit: This is the maximum loan amount for homes in high-cost markets such as parts of Alaska, Hawaii, California, and Washington, D.C.

Units: The number of housing units per building.

More >> Check what the conforming loan limit is where you live.

Because conforming loans can be re-sold, they’re not as risky for lenders and often have favorable terms for borrowers. Savvy home buyers will keep their loan amount within the conforming loan limits so they have an easier time securing their loan, they’ll have more relaxed requirements, and their rates will probably be better.

If you’re looking for a conventional 15 or 30-year loan (as most people are), you may want to consider keeping the loan amount under the loan limit in order for it to be a conforming loan.

When you need a bigger loan – consider a jumbo loan
If the limits won’t get you a home you’re interested in buying, you could look into a jumbo loan. Jumbo loans won’t be purchased by Fannie Mae or Freddie Mac, so they don’t need to conform to their loan limits – meaning you can get more money. If you have a strong credit score and low debt-to-income ratio, you may find a lender willing to extend one to you.

However, jumbo loans come with some disadvantages. They have stricter qualification rules, require a sizable down payment (sometimes 20% or more), and normally have a higher interest rate. For those reasons, a lot of homebuyers try to avoid them by finding a home that will keep them within the conforming loan limits.

To see whether you’ll be eligible for a conforming home loan, contact your local Mann Mortgage home lender. Together, they’ll help you crunch the numbers to see what type of loan would be best for you.

How to get ready to buy a house this year

Posted on by Jessie Michelson

Buying a house is a big life event. To make sure you start your journey on the right foot, we’ve put together a few things you’ll want to do before you step into your first open house. If you follow our tips, you’ll set yourself up to get the right type of home and home loan.

Check and improve your credit score
Your credit score (sometimes called a FICO score) will be used by your mortgage company to decide if you’re eligible to receive a loan and, if you are, the interest rate you’ll get. Scores range between 300 and 850 – the higher the score, the better. If your score is under 500, you have what’s called “challenged credit”. It’s not impossible to buy a home, but you’re going to struggle. Learn about buying a home with challenged credit. In general, the lower your score, the higher down payment your mortgage company may require.

Check your score for free once a year at annualcreditreport.com. If it’s low, you’ll need time to raise it. You can start by doing the following:

  • If you don’t have a credit history, get one. Take out a credit card and make your payments on time to show you’re credit-worthy. Not having a credit history can give you a very low credit score.
  • If your credit cards are maxed (or almost maxed) you’ll need to start paying them off. Using too much of your available credit can lower your credit score.
  • Pay bills on time. If your payments become 30-days past due they will likely be reported to the credit bureau and lower your credit score.

Decide where you want to live
Do you want to stay in the city, county, or state you’re in? Take a little time to research your options and make sure you know where you want to be for the next few years.

Contact a local mortgage lender
Working with a home expert who has connections in your community is always a great idea. They’ll know the local and state first-time homeowner and down payment assistance programs that can save you a lot of money – and that’s in addition to all the national loan and assistance programs. Together, you will go over your credit, income, and financial goals to find the best home loan.

Save for your down payment
The amount you need to save for a down payment depends on the type of loan you select and your financial situation. It can range from 0% of the total purchase price for a VA loan to as much as 20% or more for conventional or jumbo loans. Many people mistakenly assume you always need 20% down to purchase a home, and that’s just not the case.

Some people may chose to put as much down as possible while others will put the minimum down. Which is right for you? You and your loan officer can go through the pros/cons of each scenario to help you decide.

>> Get the scoop on how much you’ll need for a down payment.

Get pre-approved
Being pre-approved means your lender has already looked at your income, assets, debt, and credit report to decide how much they might be willing to lend you. It’s never a guarantee of a loan, but it’s much better indication (for both you and the person you’re buying from) that you’ll be extended a loan if you make an offer on a house.

>> Don’t make these first-time home buyer mistakes

Find a real estate agent to represent you
Once you’re a client, agents have a fiduciary responsibility to you. That means they are legally obligated to put your best interests first. They will know what to look for with a property and neighborhood, they will help you negotiate the price, and they will help you navigate the paperwork and legal issues with making an offer and purchasing a home.

After those steps are done, you’re ready to be a serious buyer with competitive offers on your next home.

Wherever you are on your journey to purchase a home, reach out to us. We are happy to go over your finances and goals and help you navigate the home loan process.

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