1. Kitchen Remodeling: The heart of any home, the kitchen, is often considered the most critical area to invest in for a high ROI. A well-designed and modern kitchen can significantly boost your home’s value. According to Remodeling Magazine, a minor kitchen remodel has an average ROI of 72.2%, while a major kitchen remodel has a respectable ROI of 54.9%. Upgrading countertops, cabinets, appliances, and fixtures can revitalize your kitchen and attract potential buyers.

2. Bathroom Renovation: A well-appointed bathroom is another renovation that yields a high return on investment. Homebuyers are often attracted to updated bathrooms with modern fixtures and amenities. According to the same Remodeling Magazine report, a midrange bathroom remodel has an average ROI of 57.1%, while an upscale bathroom remodel has an ROI of 49%. Focusing on enhancements to functionality, aesthetics, and energy efficiency of your bathroom will maximize appeal.
3. Outdoor Improvements: Curb appeal plays a crucial role in creating a favorable first impression for potential buyers. Investing in outdoor improvements can greatly enhance the value of your home. Upgrading your landscaping, adding a deck or patio, or installing outdoor lighting can make your property more appealing. The National Association of Realtors (NAR) states that a well-maintained landscape design can offer an ROI of 100% to 200%.

4. Energy-Efficient Upgrades: In today’s environmentally conscious world, energy efficiency is highly sought after. Upgrading your home with energy-efficient features not only reduces utility bills but also increases its marketability. Installing energy-efficient windows, upgrading insulation, and investing in high-efficiency HVAC systems can yield substantial long-term savings. According to the U.S. Department of Energy, energy-efficient upgrades can save homeowners up to 30% on annual energy costs.

5. Basement Renovation: Transforming an unfinished or underutilized basement into a functional living space can be a wise investment. Adding extra living space, such as a bedroom, home office, or entertainment area, expands the usable square footage of your home and increases its value. The ROI for a basement renovation can vary depending on the region and the extent of the project, but it generally offers a good return on investment.  For those without a basement or in areas of the country where basements are uncommon, other space increases can offer a similar ROI.  Think attic conversions, garage conversions, or even a room addition if your home has sufficient space.

When considering home renovations, it’s important to balance personal preferences with potential ROI. While over time styles and preferences will vary, kitchen remodeling, bathroom renovations, outdoor improvements, energy-efficient upgrades, and basement renovations have consistently shown a solid return on investment.  Before undertaking any major renovation, it’s a good idea to consult with a real estate professional (we know some great ones!) to discuss how renovations could effect the marketability of your home.  In addition, you’ll want to speak with a contractor to understand the project details and costs so you can decide on the best ways to invest in your home.

Did you know?  MasonMac offers renovation financing through our Conventional renovation loan and the FHA 203k program.  We also have HELOCs to access home equity to complete your home projects.  Questions?  You can ask an expert here!

The post The Home Renovations With The Highest Return On Investment appeared first on Mason-McDuffie Mortgage Corporation.

HELOCs are revolving lines of credit, much like credit cards. You can borrow against your home equity up to a certain limit, upwards of 90% or more of your home’s appraised value, and only pay interest on the amount you use. HELOCs have variable interest rates and can be used for any purpose.

In contrast, HELOANs are lump-sum loans that you receive upfront and pay back over a fixed term with a fixed interest rate. You can borrow against your home equity, and the amount you can borrow depends on your home’s appraised value and creditworthiness. HELOANs are often used for significant expenses like home renovations or medical bills.

When considering whether to take out a HELOC or HELOAN, there are some crucial differences to keep in mind. Repayment terms for a HELOC allow you to pay back what you use and can last for 10-20 years. HELOCs often have an introductory interest-only repayment period, often 10 years (followed by a repayment period of 20 years).  On the other hand, HELOANs are paid back over a fixed term, typically 10-30 years. Interest rates for HELOCs are usually variable, while HELOANs most often have a fixed interest rate.

In terms of flexibility, HELOCs are the better option. You can borrow and repay as needed, up to the maximum credit limit, and can reuse the line of credit over time, typically for the first 10 years. This makes HELOCs ideal for homeowners with ongoing or unpredictable expenses. HELOANs may be better suited for homeowners with a specific, one-time expense in mind.

When it comes to closing costs, HELOCs usually have lower costs, as you only pay for what you borrow. HELOANs may have slightly higher closing costs as you borrow a lump sum upfront. Both options come with some risk, such as the risk of increasing interest rates with HELOCs or larger fixed monthly payments with HELOANs.

Deciding between HELOC vs HELOAN always depends on your unique financial situation and goals. If you need ongoing access to cash or have unpredictable expenses, a HELOC may be the better choice. For a specific, one-time expense, a HELOAN may be more suitable. Understanding the differences between the two can help you make an informed decision.

MasonMac loan officers have the experience to help you navigate the two options and determine which may be right for you.  Give us a call to learn more, or you can always reach out for a quick response by asking a question here.

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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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The Fed funds rate is the rate at which the Fed lends money to banks, and banks lend money to each other, NOT the rate that consumers borrow at.

When the Fed raises the Fed funds rate, it is generally to fight inflation.  Beginning in early 2022, inflation began to skyrocket, and throughout 2022 and so far into 2023, the Fed has consistently raised their rates to curb inflation.  While inflation has slowed, recent data points to inflation being higher than the Fed’s target rate, and for this reason, rate hikes have continued into Q2 2023.  Future rate hikes will depend on the direction of inflation from here.

It’s important to note that mortgage rates are not directly tied to the Fed’s actions.  Since high inflation results in high mortgage rates, the Fed rate hikes often help bring mortgage rates down, since reductions in inflation lead to reductions in mortgage rates.  Some other financial products are, however, tied directly to the Fed funds rate.  The “Prime rate” for example, moves in direct correlation with the Fed funds rate, so credit card rates will move up in line with the Fed funds rate.

Since early 2022, the Fed has raised their Fed funds rate by a total of 5%.  That means credit card debt has become 5% more expensive for consumers to carry, and other types of debts have become more expensive as well.  Mortgage rates, though, have come down substantially since their highs seen in October 2022, despite additional Fed rate hikes.

The Fed has signaled that they’ll rely on data and economic figures to determine the future direction of the Fed funds rate, but most forecasts predict the cycle of rate increases is either at or near it’s end, as inflation numbers and economic conditions seem to be shifting.

Mortgage rates improved on the day, and have come down substantially from October highs and another recent spike in February.

For questions about the Fed rate hike, mortgage rates, or anything else housing or mortgage related, you can ask an expert here and get answers instantly!

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Benefits of Non-QM Mortgages

Non-QM mortgages can provide many benefits to borrowers who don’t qualify for traditional mortgages due to various reasons such as self-employment, foreign nationality, or other unique financial situations. Some of the key benefits of Non-QM mortgages include:

1. Flexibility in Documentation: Unlike conventional mortgages that require very specific documentation of income and employment, Non-QM mortgages offer flexibility in documenting income. This is beneficial for self-employed borrowers who may not have traditional pay stubs or W-2 forms to verify their income. Non-QM mortgages allow self-employed borrowers to provide alternative forms of documentation such as bank statements, business financials, or even CPA letters to verify their income.
2. Expanded Credit Criteria: Non-QM mortgages may have more lenient credit requirements compared to traditional mortgages. This can be beneficial for borrowers with less-than-perfect credit histories or unique credit profiles. Non-QM mortgages may consider factors such as payment history, reserves, and other compensating factors to assess the borrower’s creditworthiness, rather than relying solely on credit scores.
3. Customized Loan Terms: Non-QM mortgages offer flexibility in loan terms, allowing borrowers to customize their loans to suit their unique needs. Borrowers can choose from options such as interest-only payments, adjustable rates, or longer loan terms, which may not be available with traditional mortgages. This flexibility can help borrowers tailor their mortgage to their financial situation and achieve their homeownership goals.

Use Cases and Examples of Non-QM scenarios

Non-QM mortgages are used by a wide range of borrowers who may not qualify for traditional mortgages due to their financial situation. Some common examples of borrowers who can benefit from Non-QM mortgages include:

1. Self-Employed Borrowers: Self-employed borrowers often face challenges in obtaining traditional mortgages due to the nature of their income. They may have irregular income streams or may write off a significant portion of their income on their tax returns, which can affect their ability to qualify for a conventional mortgage. Non-QM mortgages can provide self-employed borrowers with flexible income documentation options, making it easier for them to qualify for a mortgage.
2. Foreign National Borrowers: Foreign national borrowers, who do not have U.S. citizenship or permanent residency, may face hurdles in obtaining a traditional mortgage. Non-QM mortgages can offer financing options for foreign national borrowers, allowing them to purchase a home in the U.S. without the need for a Social Security number or credit history.
3. Investors:  Investors who have large property portfolios or are in need of financing based on potential rental income can benefit from a DSCR (Debt Service Coverage Ratio) loan, which uses current or potential rental income on a property to qualify, rather than traditional income and employment documentation.
4. Borrowers with Unique Financial Situations: Non-QM mortgages can also benefit borrowers with unique financial situations such as those with significant assets but limited income, retirees with unconventional income sources, or borrowers with previous credit events such as bankruptcies or foreclosures. Non-QM mortgages provide these borrowers with alternative financing options that may not be available with traditional mortgages.

Cons of Non-QM Mortgages

While Non-QM mortgages offer many benefits, they also come with some potential downsides that borrowers should be aware of. Some of the negative aspects of Non-QM mortgages include:

1. Higher Interest Rates and Fees: Non-QM mortgages may have higher interest rates and fees due to the perceived increase in risk to these non-traditional products.
2. Complex underwriting:  Since Non-QM loans offer more flexibility in guidelines and documentation, the underwriting process can also be more tedious        with borrowers being asked to provide more documents and explanations throughout the loan process.  For this reason, it’s a good idea if using Non-QM financing to give a few extra days for the underwriting process.  MasonMac underwriters Non-QM products in-house with MasonMac underwriters, so the process is more streamlined than working with wholesale/mortgage broker options.
3. Non-QM mortgage funds come from a smaller pool of investors with a smaller pool of overall funds than conventional loans which have oversight from FHFA.  For this reason, the Non-QM mortgage market can be more volatile and subject to frequent changes to product availability.  This is a pro and a con, because this also leads to a more nimble market, with new products frequently coming to market.

Non-QM mortgage loans aren’t a solution for everyone, but there is no doubt they have a place in today’s market for borrowers who cannot qualify for traditional mortgage products.  Understanding Non-QM loans and working with a lender that specializes in them not only presents more loan options but can make the process of getting financing easy even for those who don’t qualify for conventional or government-backed mortgage loans.

Curious about Non-QM loans, or have any questions about specific products?  Feel free to ask an expert by clicking here for a quick response!

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This is huge news to help address the affordability challenges that are prevalent in much of California.  For those looking to buy their first home that haven’t been able to save enough for a down payment, Dream for All can help assist with covering down payment requirements and closing costs.

As with most CalHFA loan programs, there are restrictions and unique qualifying considerations to meet the Dream for All program:

• Buyers must be first time home buyers, defined by CalHFA as those buyers who have not owned a primary residence within the most recent 3 year period
• Buyers must meet county area median income requirements (income limits vary by county)
• The Dream for All program is a 2nd mortgage that ‘piggybacks’ on to a conventional first mortgage loan, which must be a CalHFA first mortgage
• Funds are limited and program is set to end when allotted funds are exhausted
• California home buyers only, property must be a primary residence

With MasonMac’s Dream for All offering, a 2nd mortgage is set up that covers down payment and closing cost requirements, and the borrower does not have to make payments on this second mortgage.  Since it is a shared appreciation program, the loan is due to be repaid when the home buyer sellers their home, refinances, or pays their first mortgage in full.  When the loan is repaid, the original amount borrowed is repaid, and depending on the borrower’s income in relation to their area median income, a percentage of the earned home appreciation is also paid back to CalHFA.

Due to the shared appreciation, the program may not be financially beneficial to everyone, however it’s a tremendous option for those with low to moderate income living in high cost areas since it eliminates the burden of saving a large amount of money for down payment or closing costs.

Want to know if MasonMac’s CalHFA Dream for All program is right for you?  Give us a call and we’ll be happy to answer any questions you may have about this or any of our other down payment assistance options.

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Residents in the Hoosier State now have access to MasonMac’s full suite of products, including conventional mortgage loans, FHA loans, first time buyer products, nonQM loans, VA mortgage loans, and Jumbo mortgage loans.

MasonMac has several Indiana loan officers ready to serve the state’s borrowers, and is focused on customers financing residential real estate.  With products for every demographic from first time home buyers to seasoned investors, MasonMac offers Indiana residents purchase money, refinance, renovation, and equity loan products to meet all of their mortgage needs.
Indiana will now have access to an industry leading customer experience, and as a platform for experienced loan officers, can service consumers and the real estate industry with competitive rates, a wide variety of loan products, and lightning fast closings with the QuickMortgage digital loan process.
With so many loan options, the team at MasonMac is excited for the opportunity to serve Indiana home owners, home buyers, and real estate agents in the state!

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Have you ever had your credit report pulled when applying for a loan, only to be swarmed with calls from creditors trying to sell services or offer loans?  This isn’t a coincidence, and is one of the most annoying aspects of applying for credit for today’s consumers.  If you’ve ever wondered why you get bombarded with calls when applying for credit, it comes down to one thing:  Trigger leads.  Trigger leads are data sold to lenders by the credit bureaus.  When you have your credit pulled, the credit bureaus let other creditors (that you may not have any relationship with) know that you’re seeking a loan, and they provide your contact info so those creditors can reach you.

While consumers sometimes think the lender they applied with has done something wrong or their information has been leaked, the reality is it’s the credit bureaus selling this data.  Consumers do have some recourse in opting out by calling 1-888-5-OPT-OUT (1-888-567-8688), but the reality is some unscrupulous lenders may still call, disregarding the do not call list and betting on the fact that consumers won’t follow through with complaints.  The only other recourse aside from opting out is in fact pursuing complaints and lawsuits against companies violating the do not call list.

Is there anything lenders can do to stop ‘trigger lead’ calls?

Yes, and no.  Lenders can remove some personal information when pulling a credit report, but some information is required to get the report.   With the massive increase in data gathering over the past decade, it’s very likely that even if a lender removes some of your personal info, the credit bureaus will likely have it stored away.

So your lender may do their best to protect you, but thanks to big data, there’s little to stop the credit bureaus from selling your data.

Who are the lenders that are calling?

Any lender that is willing to pay the credit bureaus for your data may end up with your information.  They may be reputable, they may not be.  The credit bureaus sell your info to just about any bidder, and it’s not uncommon for dozens of creditors to end up with your personal contact information along with information that you’re applying for a loan.

What can consumers do?

We recommend opting out to drastically reduce the numer of inbound calls: 1-888-5-OPT-OUT (1-888-567-8688).  Aside from that, if you find it offensive that you’re required to have credit run to obtain a loan, with 0 protection from the credit bureaus regarding the sale of your data, it may be worthwhile to drop your local congressperson a note or file consumer complaints against the credit bureaus themselves.

Otherwise, it’s best to ignore the calls as best as you can – they should stop after a few days or, at worst, weeks, and they’re usually worst within a few days of having your credit run, so if you know you’ll be having your credit pulled or are applying for a loan, it may be best to just ignore unrecognized callers for a few days.

Do credit bureaus sell your information – they do, but hopefully we’ve provided some ways to help, or at least offer an understanding of what’s happening when your credit is pulled.  It’s not your lender causing the influx of calls, and there’s little anyone other than you can do to mitigate or eliminate the calls altogether.  The good news is that the huge influx of calls is usually short lived, and you can rest assured ignoring the calls results in unscrupulous lenders having wasted money purchasing your data.

The post Trigger Leads – What Are They & What You Can Do appeared first on Mason-McDuffie Mortgage Corporation.

This question is one of the most common questions we see from consumers, investors, real estate agents, and many others with interest in the real estate market.  The answer is ‘yes’.  But it also depends on your specific situation, what’s important to you, and where you are financially.

The reason the question “is it a good time to buy a house” comes up frequently today is because interest rates have risen substantially year over year, making the monthly payment rise for many people considering a home purchase.  With these higher payments, many are wondering if it’s a bad time to buy a home, but it’s important to remember that with increasing rates has come a softening market – meaning buyer’s today are seeing both lower median home prices and reduced competition, allowing for seller concessions that weren’t widely available during the market craze of 2020-2021.  So while payments might be higher today, total price tags may also be lower, allowing buyers to keep more money in the bank at closing time.

Median home prices in the US have come down from their 2021 highs

The other consideration many people have when asking ‘is it a good time to buy a house’ is what will happen with home values in the future.  The real estate crash of 2010 is still fresh in a lot of minds, but it’s important to look at the economics of today’s market and compare them to the crash to see what’s likely to happen in the coming months.

One of the important considerations is one of the foundational aspects of economics and pricing – supply & demand.  If you consider the US population has continued to increase and believe that means more people will require housing, the next place to look for a clue on where home values will go is to housing supply.

Housing inventory is far below the 2007 market peak

In the image below you can see that housing supply is far below the supply of homes that was on the market in 2007 preceding the crash in home values.  While low inventory isn’t a guarantee of home price growth, in terms of supply and demand, the lack of inventory for a growing population should provide some support for home values and continued appreciation, even if that appreciation is slower than the abnormally high appreciation rates home owners saw in 2020 and 2021.  It’s also important to note that real estate is very local, and some markets have more inventory than others, along with varying populations, so examining these numbers in your local market is important!

So interest rates are up, but it appears home values have some support.  Interest rates also ebb and flow, so while you should never buy a home based on the hope that your payment will eventually get cheaper, that possibility does exist!  If rates dip, refinance possibilities may exist for home owners to reduce their monthly mortgage payment, but this is no guarantee – it would just be a cherry on top for today’s would be home buyers.  As you can see below, home prices have historically climbed on a consistent basis outside of the great recession over a decade ago, and for that reason home ownership has been a key metric in helping Americans establish wealth and grow their net worth.  For many, the alternative (renting) doesn’t offer that same level of financial security.

Home values have climbed since 1975

So while we’re a mortgage company and home ownership is in our interest (pun intended), a look at the data supports home ownership being a great idea for those who can afford their monthly payment, and those who have the financial stability to consistently make a mortgage payment.  The lack of inventory nationwide is good support for home values, and rising rates have diminished some demand, giving buyers more power and control in the purchase process than they’ve had in recent years.

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Here is the chart showing the loan limit updates for the year 2023:

FHFA announced increases to conventional loan limits for 2023

What does this mean for borrowers?

Borrowers can benefit from the increases in loan limits mostly due to the fact that conventional lending guidelines are more forgiving than jumbo loan guidelines.  Any loan above the conventional loan limit falls into jumbo loan territory, and may be more difficult to qualify for.  For example, many jumbo loan products require at least 10% down payment and good to great credit scores.  Conventional loans require 3-5% down payment, and are far more forgiving in terms of FICO score.

These increases also mean that more cash is available to home owners who want to use conventional cash out refinance mortgages, and investors who want to purchase more expensive investment properties using conventional guidelines.

With home prices rising drastically year over year since 2020, these loan limits should help more borrowers access competitive financing terms , and help those in higher priced markets buy a home without an immense down payment.

1st Time Over $1 Million

2023 marks the first year FHFA will allow Fannie Mae & Freddie Mac backed conventional mortgage loans exceeding $1 million dollars in high cost markets for single family homes.  This will help buyers obtain loans to help buy homes in expensive metro areas or areas where median home values have exceeded the million dollar mark, without the need for an intimidating down payment.  To fully understand the benefit, take a competitive jumbo loan product and compare the down payment requirement on a $1.1M home.  With a competitive jumbo product requiring a 20% down payment, that’s a $220,000 investment (before closing costs!) to get into a home.  With a conventional loan product requiring just 5% down, the initial investment shrinks to $55,000, helping to make it easier to achieve the dream of home ownership in higher cost communities.

For more information, or to see what the loan limits are in your community, reach out to your MasonMac loan officer today!

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