We cherish all of our customers, but for certain professions, it makes sense to take an extra step toward giving back, and for that reason, MasonMac created the Affinity-Heroes program.

With the Heroes program, MasonMac branches offer financial incentive to first responders (Firefighters, EMS, Law Enforcement), Teachers, Military, and Healthcare professionals as a way to say ‘thank you’ for also putting in so much effort to make our communities better places to live.

How does the Heroes loan program work?

When buying a home or refinancing, MasonMac will provide .5% of the loan amount (up to $3,500) as a lender credit that can be applied toward closing costs or to discount points to buy down an interest rate.  The credit will always be .5% of the loan amount (so for a $200,000 loan, it would be $1,000, and for a $500,000 loan it would be $2,500) up to the max $3,500 credit.  This can bring significant savings to qualifying borrowers and can help make home ownership more affordable for those buying a home.  For those who already own a home, the Heroes program can help borrowers achieve a reduced interest rate by applying the credit toward discount points, exponentially increasing the long term savings available.

Who Qualifies

Local heroes employed in the following fields qualify for the MasonMac Heroes program:  Firefighters, EMS, Healthcare professionals, Military (active duty, reserve, and veterans), Law Enforcement, and Teachers.  Qualifying applicants must work with a MasonMac branch/LO that participates in the heroes program, and qualifying applicant must be on the loan as a borrower or coborrower.

Are you a hero in your local community?  If so, take advantage of our Heroes loan program to help you achieve the dream of home ownership with substantial savings on your next mortgage loan!  If you have any questions, you can get in touch for a quick answer by clicking here.

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You’ll want to consider the price of home renovations when you start thinking about financing. Home renovation costs vary depending on the size of the house, the location, and the type of renovation. For example, a typical kitchen renovation in a suburban home starts at $20,000 but can go as high as $70,000 for granite countertops and other custom features. A bathroom remodel in an older home averages from $10,000 to $20,000, while a basic exterior paint job is about $5,000 to $6,500 for most houses.The 203K loan has some distinct advantages over other types of loans. One advantage is that it will allow you to borrow more money than other types of loans. Another advantage is that the 203K allows you to borrow money based on the future value of your home, allowing you to amortize the cost of the repairs and upgrades into your investment. 

There are certain eligibility requirements for this type of loan  such as having sufficient funds to pay off the new mortgage and any other debts incurred during the purchase process. With the standard 203k loan, you have the ability to get just one loan for the cost of your mortgage, along with the required repairs. Repair types allowed: Major rehabilitation and/or structural repair.  When doing an FHA 203k streamline, you will have two draws: one where the lender will release 35-50% upfront and 50% when the work is completed. Most of the time, the lender will require a final inspection before the final disbursement.

Qualifying for a 203k loan does come with challenges, but it is possible with a plan. You just need to know what you’re doing and follow the guidelines set by the government. The first step to qualify for a 203k loan is to find out if your property qualifies.

Want to know how to qualify? Reach out to a MasonMac loan officer.

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While the obvious result is “you can borrow more money” for certain loan programs, there are some ways this change could benefit you that you may not have considered.

Increased loan limits give borrowers more access to cash to buy or refinance a home

For Veterans

For 2020, loan limits were removed altogether for the VA Mortgage loan program under the Blue Water Act of 2019.  For Veterans, this means they can now borrow much larger sums of money to purchase higher end homes or to be more competitive in high priced markets while still using their VA benefit and enjoying loan features such as no down payment requirement and no monthly mortgage insurance, even when putting down less than 20%.

Is there a catch?  Nope!  Well, not really anyway.  While loan limits have been removed, it’s important for veterans to know that some lenders may still have overlays and implement their own maximum loan limits (2 caps we’ve seen from investors are a cap at $1.5 million and another at $3 million), but MasonMac has no caps on VA Loans as we underwrite and approve loans directly to VA guidelines.

For FHA borrowers

For borrowers using the FHA mortgage program, they need to pay special attention to the area they’re getting a mortgage in.  Each county has a different FHA loan limit, and the limits can vary substantially even in areas nearby to each other.  With just a 3.5% down payment required, FHA loans are a great option for home buyers (especially those with less than perfect credit and less than 5% Down), and with FHA loan limits increased in many counties, it will allow for access to higher priced homes without a large down payment requirement or perfect credit.

For conventional loan borrowers

For borrowers using conventional financing, higher loan limits mean access to higher priced homes.  In many markets where buyers don’t have a large down payment or have less than perfect credit, this should allow access to higher priced homes without the often restrictive set of guidelines that generally accompany jumbo mortgage financing.  Let’s look at an example for a 10% down mortgage loan in markets using standard conventional loan limits.  In 2019, that limit was $484,350.  With that loan amount and a 10% down payment, the purchase price a borrower would be capped at is about $538,000.  In 2020, that standard limit was increased to $510,400.  That same 10% down would now allow a purchase of up to $567,000.

The same idea applies to “high balance” conventional loans in high price markets.  Access to higher price points using conventional financing can be a huge win for buyers, usually resulting in less restrictive guidelines and better rates than Jumbo loans.

For home owners

For those already fortunate enough to own a home, it’s wise to consider these new loan limits offer access to more equity in a home.  With home values at all time highs, household debt has also reached historic levels.  With increased loan limits, borrowers have more options with cash out refinance loans for things like cash to pay debts or cash for home renovations.

Bottom line is that loan limit increases will give both buyers and home owners options through the new year to access more equity in their homes or to achieve home ownership despite rising values.

Want to know what your options are for the new year?  Give your MasonMac loan officer a call to get started!

The post What Increased Loan Limits Mean For You In 2020 appeared first on Mason-McDuffie Mortgage Corporation.

Buying a home during the holidays is easier and more stress-free than most people realize

The Timeline

Anyone buying a home during the holidays should factor those holidays into their timeline, especially once they find a home and it’s time to structure a contract.  Holidays mean banks (and lenders) are generally closed, staffs run a bit thinner as people take vacation and travel to be with family), and many one day holidays lead to more than single-day delays.  For example, with Veteran’s Day on a Monday, many banks and lending operations will close early on the preceding Friday.  With Thanksgiving being on a Thursday, many businesses will be closed or will be working with short staffs Friday.  This doesn’t mean a long process, but it does mean a few extra days should be anticipated.

The Deals

When buying a home during the holidays, many people think they’ll get a steal on their new home, or a Black Friday-esque price tag on their new home.  While there is less competition and prices often see a small lag during the winter months, the market is still the market.  In a hot area with limited inventory, buyers shouldn’t expect firesale prices on their new home.  With less competition out, though, they may have less stress from competing offers.  It’s important to make a strong offer to ensure if you love a house, you’ll be able to get your offer accepted and turn it into your home.

Your Schedule

While the mortgage process is easy for most buyers (we’d argue, easiest when you work with MasonMac), it’s important to take into consideration that you will have to do some legwork – providing documents, returning disclosures, and actually going out to see homes during the holiday season will need to fit into your schedule.  If you’ll be traveling or MIA for any period of time, it’s important to communicate that to your real estate agent and lender in advance so that your time away won’t shake up the process.

Know your Deadlines

If you want to be in your new home before Christmas, you should have found your new home by Thanksgiving.  The purchase process generally takes anywhere from 3-4 weeks, so it’s important to keep that timeline in mind when planning to make a move.  Everyone involved in the process will likely have some type of travel or time away from the office planned – that includes appraisers, title/escrow companies, and yes, even sellers – so keep this in mind as scheduling showings may even take a bit longer if you need a seller or seller’s agent to let you access a home.

The Big Picture

Overall, winter is a great time to buy or sell real estate, and buying a home during the holidays typically means less competition, more motivated buyers and sellers, and a process that doesn’t vary much from buying a home at any other time of year.  Timing, expectations on people, and communication about time in or away from the office (or for buyers, time that will be spent out of time or unavailable) is important to maintaining timelines and ensuring all contractual dates are met. With this post coming at the end of October, there’s still plenty of time to find and settle on a new home in time for the holidays, and certainly time to find a new home before the new year.

The post 5 Things To Keep In Mind When Buying A Home During the Holidays appeared first on Mason-McDuffie Mortgage Corporation.

Before we go too deep, it’s important to answer the question “What is PMI?”.  Mortgage insurance (PMI) is an insurance policy that insures a lender against a default – that is to say, if you get a mortgage and fail to repay it, and the bank has to foreclose on the home, the bank receives an insurance payout to mitigate some of those losses.  So “why do I need mortgage insurance” is a question many borrowers ask.  After all, a borrower pays for it, but receives none of the benefit, right?

Mortgage Insurance (PMI) opens the door to home ownership for borrowers with less than 20% down

Well, in the past, lenders required 20% down to purchase a home.  This was because in the event of foreclosure, the losses would stack up, and lending more than 80% of a home value was too much risk to handle for lenders.  Enter PMI – PMI is actually the reason people can buy homes with less than 20% down, and just about any loan program that allows for a lower down payment has mortgage insurance associated with it in some form.  VA loans?  They include an up front mortgage insurance premium (UFMIP – we know, there weren’t already enough acronyms in the mortgage business!).  FHA loans include this fee as well, along with monthly mortgage insurance.  Conventional loans have PMI in various forms, and even loans that don’t show the PMI as a portion of the monthly payment or loan amount absorb the cost into a higher interest rate.

Mortgage insurance is responsible for nearly all of the low- to no-down payment options that exist.  So while it’s a cost to consumers, the benefits of PMI far outweigh the negatives.  PMI companies also reward borrowers in many cases for things like great credit – especially on conventional loans, PMI rates can be very affordable.

So you may not WANT mortgage insurance, but you may NEED it.  And in many cases, it may make more sense to take a loan with PMI than without it.  Let’s take the example of the 15% down conventional loan.  For a borrower with 15% down, PMI is extremely affordable for those with great credit.  If 20% down would be stretch and destroy savings, that 15% down option with PMI may be better and leave a borrower in a more comfortable financial position than if they stretched to put 20% down (the difference between 15 and 20% down on a $500,000 purchase is $25,000!).

How can you decide if a loan with PMI is right for you?  We recommend talking with you loan officer about different loan options, including various down payment and program options.  If you have less than 20% down, you’ll likely see mortgage insurance in some form, so it’s a good idea to understand how it works.  If you’re stretching to save 20% down, you may want to talk to your MasonMac loan officer to see if another program option could be a better choice.  A good loan officer will guide you through the options, provide the positives and negatives with each program option, and help you make the right choice for you and your family.

Questions about PMI?  Down payment assistance?  Low- or no- down payment options?  Give your MasonMac loan officer a call, or reach out for help at home@masonmac.com or by asking an expert here.

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The mortgage industry is currently in the middle of a business boom due to a rare alignment of drastically lowering rates and a large amount of available home equity for borrowers everywhere.  Due to the lowering rates, home owners are choosing to refinance in droves (Housing Wire recently posted that nearly 10 MILLION home owners can reduce their rate by .75 or more!), and the increased applications have lender’s operations staffs working overtime.  With an influx of applications comes longer turn times for things like reviewing conditions, sending and reviewing disclosures, underwriting, and moving a loan through the closing process.

A 45 day contract period will assure a stress free transaction and allow some breathing room for market-driven delays

As lenders get busier, the 3rd party vendors they rely on also see an increase in business.  Appraisers have more homes to appraise and reports to write.  Title companies have more title searches to run, closing to attend to, and issues to resolve.  This ripple effect doesn’t cause an extreme delay on any front, but an additional day here, day there, and before long, the entire process is a week longer.

For now, loans can still close faster than 40 days.  In many cases, they’re closing faster than 30 days and in as little as 2 weeks, but as applications continue to come in, hiring can’t happen fast enough (remember, with hiring comes training, which means a new hire moves slower AND a more experienced team member training them gets less done as well!), so turn times WILL increase, and if you’re operating under a 30 day contract, there is 0 room for error.

Listing agents need to communicate this with their sellers, and buyers agents need to be aware so they don’t create an unnecessary hurdle that could add stress to their client’s home buying process.  Verbiage that’s often included in purchase contracts includes language such as “45 days or sooner if all parties agree…” to allow a transaction a full 45 days to consummate – but leaves room to close early if the pieces fall into place.

Can a transaction still take place in under 30 days if it’s needed?  It can.  But agents should work to exceed client expectations and limit stress for their clientele throughout the home buying transaction, and setting an escrow period of 45 days is an easy way to make life easier for everyone, and avoid unnecessary (and extremely stressful) delays.

The post The Shift to a 45 Day Home Buying Process appeared first on Mason-McDuffie Mortgage Corporation.

Have you heard this before?  A lot of people have heard this phrase, or some rendition of it, and it usually comes from a lender or real estate agent.  What usually isn’t communicated as well is HOW home ownership builds wealth.  HOW, through buying and holding real estate, does one go from rags to riches, or at least a more secure financial future?

It generally boils down to the 2 A-words –  appreciation and amortization.

Appreciation

Over time, homes have a tendency to increase in value.  This increase is influenced by various economic factors, but historically, home prices have fared well and have gone up more years than not.  If you look at the Case Shiller Home Price index, a measure of home values, historically you’ll see how well home values have done.  Anyone buying and holding real estate increases their wealth simply by holding an asset that’s appreciating in value.  And since home prices are so high, the percentage values increase can become a very large dollar amount.  For example, in a year when a $1 million home appreciates 5%, the home owner technically has a $50,000 increase in their wealth.

The Case Shiller home price index shows homes historically have increased in value

While values aren’t guaranteed to increase, historical data and basic economics in most markets (supply VS demand) suggest real estate will be an appreciating asset in the future as it has been in the past.  This will vary depending on economic conditions and locations (real estate is local!).  But as you can see, if home prices continue to climb, whoever owns the homes will increase their wealth.

Amortization

A lesser discussed but also very important part of home ownership and financial planning lies in amortization.  That is, the paying down (and eventually, paying off) of debt.  If you look at this chart, a mortgage loan is broken up into 2 parts – principal and interest.  It is amortized over a loan term (in this example, 30 years) at a rate of 4%.  Each month, a portion of a borrowers payment goes toward the principal on their loan, or the amount of the loan that is paid off.  This becomes equity for a home owner.  In this example, if you add the principal amounts paid over 10 years, the mortgage holder will have built up more than $60,000 in additional home equity just by paying their mortgage.  This is where the phrase and idea that “renters are paying someone else’s mortgage” comes from.  If the home owner is renting their property and the renter is paying most or all of the mortgage payment, the home owner is benefiting from the amortization schedule on their mortgage AND enjoying the home appreciation while they own the property.  The renter gets neither of these benefits, even if their rent payment is somewhat lower than a mortgage payment would be.

Amortization is an example of how mortgage debt can benefit home owners and provide a financial benefit that renting cannot

The powers of appreciation and amortization are 2 of the biggest factors in how home ownership builds wealth and working together, they can play a huge role in retirement planning, and the amount of net worth someone has after a period of 10, 20, or 30 years.

Want some help in growing your own wealth through home ownership?  Have questions?  Reach out to one of our loan experts to get started on your path to financial security!

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