The Mortgage Brothers Show

The Scenario

Our newly-retired client came to us hoping to get approved for a mortgage, but had been told that now that he was retired, he didn’t make enough money to qualify for a loan. Technically, this was true. He’d had plenty of income before he retired, but his income from Social Security and his pension were not enough to qualify him for a mortgage on the home he was interested in.

When it comes to life’s important questions, “What’s the difference between a mortgage broker and a mortgage banker?” really can’t compete with “What do you want to be when you grow up?” and “Will you marry me?” Compared to these classics, the question sounds like the set up for a joke, but it’s not–at least, not when you’re trying to figure out the best way to finance a new home. If you are in the market for a new home, understanding the advantages of using a mortgage broker instead of a mortgage banker can make a world of difference.

The Federal Housing Finance Agency (FHFA) has announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. See below for the new limits that will be available in January 2019.

Last week, the Phoenix Business Journal ran an article about Scottsdale-based luxury home builder Meritage Homes’ intention to shift its focus from the luxury market toward building more entry-level homes. With home prices and interest rates on the rise, prospective homeowners, especially Millennials burdened with enormous student loan debt, want affordable housing, so Meritage’s shift makes good sense.

Good news for seniors living in Sun City who want to use a Reverse Mortgage. FHA has lifted its two-year old ban against doing forward mortgages and reverse mortgage (referred to as Home Equity Conversion Mortgages or ‘HECMs’) in their West Valley retirement community.

Everyone knows that houses can be inherited, but can homeownership? It would seem that the answer to that question is “yes.”

In a competitive real estate market like metro Phoenix, home buyers–especially first time home buyers–need to use any edge they can to make them more appealing to sellers. Apart from having wheelbarrows full of cash on hand, probably the best thing they can do to increase their chances of making a successful offer on their dream home is to get pre-approved for a home loan. Doing so gives a buyer an advantage over other potential buyers who have not taken this step or who have only been pre-qualified for a loan.

Here in Phoenix, home values have been steadily increasing and the long term trend has favored sellers over buyers. This means, if you’re worried you won’t get your money out of the house you’re thinking of buying when you sell, don’t be. It’s still a good time to buy.

According to real estate website Trulia’s most recent Rent vs. Buy report, the cost of buying a home in the Phoenix Metro area is 25.9% cheaper than renting. This number is slightly less than the national average of 26.3%. The study is based on buyers making a 20% down payment on a 30-year fixed mortgage and staying in the home for seven years.

Trulia has been tracking whether it is cheaper to rent or buy a home in 100 of the largest U.S. housing markets for the past six years. In all markets–with the exceptions of San Jose, CA and San Francisco, CA this year–it has cost less to own than to rent since 2013.

One way to show you're serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Contact the Mortgage Brothers Team.