from Rita M. regarding 740 Primos Ave. Primos, PA 19018.  (06/09/2017)

“Anthony is a true professional. He understood that we were selling our Mother’s house because she recently passed away. He was very knowledgeable and compassionate and made our sale go smoothly. I would recommend him to anyone looking to sell or buy a home.“

Fannie to Loosen Mortgage Requirements

Fannie to Loosen Mortgage Requirements

Government-sponsored financing giant Fannie Mae will ease its requirements next month, raising its debt-to-income ceiling from 45 percent to 50 percent on July 29. The move could pave the way for a larger number of new buyers to qualify for a mortgage, particularly millennials who may be saddled with student loan debt.

The debt-to-income ratio compares a person’s gross monthly income with his or her monthly payment on all debt accounts, including auto loans, credit cards, and student loans. It also factors in the projected payments on the new mortgage. Lenders see applicants with lower debt-to-income ratios as less at risk of defaulting.

Fannie Mae, Freddie Mac, and the Federal Housing Administration have exemptions that allow them to buy or insure loans with higher ratios than the federal rules, which are set at a maximum of 43 percent. The FHA allows debt-to-income ratios of more than 50 percent in some cases.

In a recent study, Fannie Mae researchers looked at more than a decade and a half of data from borrowers with debt-to-income ratios in the 45 percent to 50 percent range. They found that a significant number of these borrowers had good credit and were not prone to default.

“We feel very comfortable” with the increased debt-to-income ratio ceiling, says Steve Holden, Fannie Mae’s vice president of single-family analytic. “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 debt-to-income ratios. For example, these borrowers may make higher down payments or have cash reserves of 12 months or more.

Many lenders say they’re happy to see Fannie loosen up their debt-to-income guidelines a bit. Joe Petrowsky, owner of Right Trac Financial Group in Hartford, Conn, calls the move “a big deal” for potential buyers who are currently being rejected for mortgages: “There are so many clients that end up above the 45 percent debt ratio threshold.”

But that doesn’t mean that anyone with a debt-to-income ratio of below 50 percent will be approved. Borrowers will still be closely vetted by Fannie’s underwriting system to examine their complete application, including income, down payment, credit scores, and more.

Source: “Fannie Mae Will Ease Financial Standards for Mortgage Applicants Next Month,” The Washington Post (June 6, 2017)

President Trump Vows to Strengthen Middle-Class Housing

National Home ownership Month kicks off this month, and President Donald Trump is pledging to strengthen the middle class by reducing rules and regulations and cutting taxes that he believes will help them become homeowners.

This year’s theme for National Home ownership Month is “Find Your Place in a New Era of Home ownership.”

“For generations of Americans, owning a home has been an essential element in achieving the American dream,” Trump wrote in a proclamation. “Home ownership is often the foundation of security and prosperity for families and communities and an enduring symbol of American freedom. These policies will unshackle our economy and create and sustain high-paying jobs so that more Americans have the resources and freedom they deserve to fulfill their American dream.”

Trump acknowledged many of the roadblocks young families and minorities are facing in saving up for a down payment and their struggle to access to credit. HUD Secretary Ben Carson at a recent forum on U.S. home ownership also addressed the challenges millennials are facing when trying to attain home ownership.

“We recognize the abiding value of owning a home, and rededicate ourselves toward ensuring that every hardworking and creditworthy American enjoys a fair chance at becoming a homeowner,” Carson said in a statement.

The nation’s home ownership rate fell to 63.6 percent in the first quarter of 2017, down from 69.1 percent at the market’s peak in 2005, according to U.S. Census data.

Some housing experts are skeptical that Trump’s policies will lead to more Americans being able to purchase homes. For example, Ken Johnson, a real estate economist at Florida Atlantic University in Boca Raton, Fla., pointed to Trump’s proposal to double the standard deduction that taxpayers can use to lower the tax burden. He believes this could diminish the value of the mortgage interest deduction that homeowners use to lower their costs.

“The larger standard deduction should noticeably minimize the demand for home ownership,” Johnson says.

Source: “President Trump to Americans: Happy National Homeownership Month,” realtor.com® (June 1, 2017)

Stellar Yelp Reviews Buoy Home Prices?

Stellar Yelp Reviews Buoy Home Prices?

A good Yelp review of a restaurant can certainly be a boon to that eatery’s business, but a new study shows that it can also be a boon to nearby home values too.

Researchers used Washington, D.C., to test their theory into restaurant quality and impact on property values. They found the number of highly rated restaurants, measured by Yelp reviews, within a one-mile radius of a home was associated with an 11.5 percent increase in the home’s value, according to the study appearing in the Journal of Urban Economics.

Restaurants that provide good value by being less expensive and highly rated were the only type of restaurant associated with higher home values, according to the study. Further, researchers discovered the link between restaurant quality and home values has only appeared since Yelp became popular in the Washington, D.C., area in 2008. Before that, researchers found no significant relationship to restaurant reviews and home values.

“Prior to Yelp, people had imperfect information about a restaurant’s quality, making it difficult for sellers and buyers of homes to incorporate the value of proximity to high quality restaurants into home prices,” Forbes.com columnist Adam Millsap reports on the study’s findings. “After Yelp made this information accessible, it was capitalized into the value of the home.”

Source: “Housing Prices Are Rising and Technology Is Contributing,” Forbes.com (May 25, 2017)