Bitcoin to Pay for a Home?!

If you are anything like me, you missed out on the Bitcoin market early on. I mean really, crypto-currency? Can that even be a thing? Well, apparently it is and the value is only going up! Read on for the latest from our newsletter…

In April 2021, Bitcoin hit an all-time high in the price of its coins, virtual trader Coinbase went public with a valuation of $86 billion, and Venmo, owned by PayPal, announced it’s adding support for cryptocurrencies. All of these give access to customers who can now easily buy, sell and pay for items with cryptocurrencies for lower fees, more privacy and more security than they currently get through traditional banking.

Coinbase.com explains that cryptocurrencies are simply decentralized monies to be used over the Internet. No governments, banks, companies or other entities are in charge of it, allowing anyone who wants to participate to be able to. Transactions are safer as they don’t include personal information to merchants, lenders, payment processors, advertisers, or credit reporting agencies.

While the coins are volatile, you can even turn your virtual coins into dollars, as one homebuyer did in Texas in 2017 using Bitpay at the seller’s request. According to CNBC.com, all you need is for the buyer and seller “to agree on exchanging bitcoin for the property.” Or another cryptocurrency if you prefer. All transactions are public and transparent through an open book technology called the blockchain.

If you don’t have enough bitcoin cash to buy a home, no worries. You can start saving for your down payment by using USD Coin, which is tracks 1:1 with the U.S. dollar. Customers who hold USDS coins can earn rewards, an alternative to a traditional savings account, says Coinbase, so start saving for your down payment now.

HOW AN APPRAISAL COULD AFFECT YOUR MORTGAGE REFINANCE RATE AND COSTS

Refinancing your mortgage may help you lower your interest rate and monthly payments, or cash out some of your home equity. Your lender may require an appraisal as part of the refinancing process. The result can affect the new interest rate you will qualify for, along with other costs.

What is an Appraisal?

An appraisal is an inspection conducted by an independent professional to assess the current market value of a house based on its size, amenities and condition. An appraiser compares the home in question to similar properties in the same area that have been sold recently.

Each lender decides whether to require an appraisal to refinance. Some government mortgage programs offer streamlined programs without an appraisal. If your lender requires an appraisal, you will have to pay for it. The fee is typically several hundred dollars.cc

How Can Your Home’s Appraised Value Affect Your Refinancing Options?

The current market value of your home can affect your loan-to-value ratio, which is a percentage calculated by dividing your mortgage balance by your home’s appraised value. A lender will consider the LTV ratio, in addition to your credit score and debt-to-income ratio, to set your interest rate.

If your home’s value has increased since you bought it, you may qualify for a lower interest rate. If your home’s value has fallen, however, you may not be able to qualify for a competitive interest rate because lenders consider borrowers with low amounts of equity riskier than borrowers with more equity. If the appraised value of your house is less than your mortgage balance, you may not be able to refinance the loan at all.

How Can the Appraisal Affect Private Mortgage Insurance?

If the LTV ratio is 80 percent or higher, you may need to pay for private mortgage insurance, which can cost hundreds of dollars per month. If you have been paying for PMI, your home’s value has increased since you bought it and you have more than 20 percent equity, you may be able to eliminate PMI and save money each month.

If you have less than 20 percent equity and don’t want to pay for PMI, you might be able to avoid it by choosing a cash-in refinance. You could pay down your mortgage balance to reduce your loan-to-value ratio, eliminate PMI and get a lower interest rate.

How to Prepare for an Appraisal

Given the importance of your home’s appraised value, you want to present your house in a positive light. You should make sure your home is clean and free of clutter so the appraiser can easily see all the important features. You don’t need to make major improvements before an appraisal, but you might want to apply a fresh coat of paint and make some inexpensive repairs.

Source: RIS Media

Mortgage Market Update, July 2020

This month’s market Primary Mortgage Market Survey® from Freddie Mac showed that the 30-year fixed-rate mortgage (FRM) averaged 3.03 percent, the lowest rate in the survey’s history dating back to 1971.

“The summer is heating up as record low mortgage rates continue to spur homebuyer demand,” said Sam Khater, Freddie Mac’s Chief Economist. “However, it remains to be seen whether the demand will continue if COVID cases rise to the point that it hinders economic growth.” In addition:

• 30-year fixed-rate mortgage averaged 3.03 percent with an average 0.8 point for the week ending July 9, 2020, down from 3.07 percent. A year ago at this time, the 30-year FRM averaged 3.75 percent.
• 15-year fixed-rate mortgage averaged 2.51 percent with an average 0.8 point, down from last week when it averaged 2.56 percent. A year ago at this time, the 15-year FRM averaged 3.22 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.02 percent with an average 0.3 point, up slightly from last week when it averaged 3.00 percent. A year ago at this time, the 5-year ARM averaged 3.46 percent.

Freddie Mac. ©2020. All rights reserved.

How to get the best mortgage rate

A house is a major purchase. In fact, it’s typically one of the biggest purchases people make in their whole lives. If you’re like one of the millions of buyers who get a mortgage for their dream home, securing the lowest interest rate possible could go a long way toward saving you money over the lifetime of the loan.

According to national nonprofit American Consumer Credit Counseling, here are five factors homebuyers need to consider to get the best mortgage rate:

Questions? Call Maxine for answers! 703-836-1464

Good credit score. The higher the credit score, the better the mortgage rate. People with lower scores are considered more at risk of defaulting on the loan. To improve your score, make sure you pay all your bills on time and try to eliminate or significantly lessen credit card balances.

Down payment. Building savings and being able to put forward a larger down payment will help you receive a lower mortgage rate. Ideally, you should try to save up enough to make a 20 percent down payment.

Steady employment. Working for the same employer for at least two years shows mortgage lenders you have steady earnings, which makes you a more attractive borrower.

Fixed rate vs. adjustable rate. Fixed-rate mortgages keep the same interest rate the entire life of the loan. Adjustable-rate mortgage (ARM) rates change over time, beginning with an introductory period that lasts three, five, seven or 10 years of a steady rate. Following this introductory period, the ARM rate may change periodically

15 year vs. 30 year. If you have a consistent income and feel you’ll live in your home for an extended period, it may be worth considering a 15-year loan rather than the average 30-year loan. Although a 15-year loan means higher monthly payments, it’ll save you thousands of dollars in interest.

Make sure you shop around for lenders and do research, even when refinancing, to make sure you’re getting the best rate for your situation.

This article is intended for informational purposes only and should not be construed as professional advice.

Source: Reprinted with permission from RISMedia ©2020. All rights reserved.

Identity Theft 101: Tips from PenFed on How to Protect Your Identity

Our parent company, PenFed Credit Union, put out a great post a while back on identity theft and, with the recent hacking attempts, it seemed relevant to re-blog it now.

Did you know that an estimated 17.6 million Americans—that’s 7% of U.S. residents age 16 and older—were victims of identity theft in 2014. That’s 17 million people whose credit cards were used fraudulently or had their personal information used to open new accounts. Having your credit card or identity stolen can make for a big financial headache—and make a mess of your credit until you fix it.

To sort things out, you must contact your financial institution to notify them about the fraud so they can review your account for possible fraudulent transactions and close the account. Also, they will initiate sending you a new card or debit card with a new account. This can be done usually by telephone. However, if your identity has been used to open new fraudulent accounts, the process can be more involved, requiring you to file a police report and dispute inaccurate data on your credit report. While you are not typically on the hook for fraudulent transactions, it can take time to sort out. You should keep a record (date, time, name of financial representative, summary of conversation) of each call to the financial institution.

Avoid stranger danger

But taking some common sense precautions can help you avoid identity theft in the first place. Here’s what you need to know to keep yourself safe from fraud:

1. Never give passwords or personal information to strangers. Scammers calling your home or even emailing you can be very convincing. They may tell you they’re from the government or your financial institution, and warn of dire consequences if you don’t hand over your social security number, account numbers, or passwords. But no valid institution will ask for this information over the phone or by email—if someone contacts you asking for it, they’re trying to scam you. If you’re contacted by someone and are not sure if it’s legitimate, contact the institution directly to confirm.
2. Keep your passwords secure. You want to use a strong password—at least 12 characters, including numbers, capital letters, and special characters—to make it hard for thieves to crack. On top of that, you should change your password regularly and never use the same password on multiple websites, which can mean that all of your accounts are compromised if a thief gets just one password. A password manager app on your computer or smartphone can help you keep track of your passwords without resorting to writing them down (which is certainly not secure). If it’s available, you should also use two factor authentication. Two factor authentication requires you to log on with both a password and a code that’s usually texted or emailed to you when you try to log on—and it will stop thieves in their tracks.
3. Make sure your computer is secure. You should apply security updates to your computer and web browser when they’re available. Most apps can be set up to do this automatically, making it a no-hassle process. If you’re using a shared computer, be sure to log out of any accounts before you walk away, and never use a public computer to access banking or other sensitive information.
4. Watch your wallet. It doesn’t matter how careful you are with your information if a thief steals your wallet. Always keep an eye on your wallet or purse. In case your wallet does go missing, don’t carry more personal information than you need to. Your social security card, rarely used credit cards, and written down passwords or Personal Identification Numbers (PINs) should never be kept in your wallet. Not carrying unnecessary personal information will help protect you even in case of theft.
5. Keep your financial documents safe. If other people are in your home, like workmen or even roommates, keep your financial paperwork safely stored and locked up. And when you’re getting rid of bank statements—or even credit card offers you’ve received in the mail—shred them to be sure no one can use them to get your information.
6. Monitor your financial statements. Even if you’re following all of these steps to stay safe, you may still find yourself the victim of fraud. The best way to catch it early is to check your financial accounts regularly: monitor statements from your financial institution and keep an eye on your credit report. If you see any transactions you didn’t make, report them immediately.
7. Review your credit report, annually. Your credit report is essentially your financial report card. It’s important to know how to review it and make corrections, if needed—and know what you need to do if you should ever detect fraudulent activity. Federal law requires each credit reporting company to give you a free copy of your credit report once a year. You can request free copies of each of your credit reports from AnnualCreditReport.com.

BEWARE: Wire Fraud is on the Rise

In June 2017, cybercriminals stole more than $14 million from unsuspecting people. Real estate transactions are especially vulnerable to these wily larcenists.

Real estate purchases routinely involve sending large sums of money by wire. This method is convenient, fast, and generally secure. Still, sophisticated criminals have been able to exploit people’s lack of familiarity with the real estate and escrow process.

One of the most common scams has been to convince an unwary buyer that the instructions for wiring funds have changed at the last minute “for security reasons.” The email, which appears to come from the title company or other settlement service provider, asks the buyer to wire their funds to a different link than previously agreed. The unsuspecting buyer who falls for this deception will discover, too late, that their money has been diverted to the scammer’s offshore account and is gone forever, along with the scammer.

The obvious advice is to avoid getting taken in by this kind of chicanery. Never wire funds without personally verifying with the title company or real estate closing lawyer that any change is genuine. For those unfortunates who may fall prey to the scam, there are some immediate actions that may offer a slim chance to recover the misdirected funds.

• Contact the bank or other financial institution the funds were sent from. They may be able to stop the transfer.
• Contact all parties involved in the real estate transaction, including the title and escrow people, the seller and the agents.
• Inform the FBI immediately. You can file a complaint at www.ic3.gov. This should be done as quickly as possible. Even waiting just 72 hours could be too late for any recovery.

There are few experiences in life that are more stressful, emotional and confusing as buying a home. Criminals are well aware of this and will do their utmost to leverage those aspects to separate unsuspecting people from their money.

Knowledge is key.

Source: Everyone’s favorite mortgage guy, Jason Banks and TBWS

Top 5 Reasons the Mortgage Process Gets Bogged Down

Questions? Call Maxine for answers! 703-836-1464

Things are moving along at a nice pace and then BAM! out of no where come mortgage issues… how could this happen?!  Believe it or not, there are a few very common things that frequently are the sources of those bumpy roads. Read on for some tips from Jason Banks, with Presidential Mortgage.

1)         Internet banking – With the invent of internet banking, we find clients are very active with money transfer.  Each transfer has to be paper trailed and followed.  We once had a client with 23 different accounts that they would push money to every month.
2)         One day sale! – I get called a few times a month by the client that is at LOWES, HOME DEPOT, SEARS, etc. stating they have a fantastic sale on Washer Dryer.  Keep in mind, the mortgage process is like a recipe…change one ingredient and you may not end up with a house.
3)         Availability of Funds – any time a borrower is withdrawing funds from a 401k, IRA, TSP, or some other “non-cash” account, we recommend that the client withdraw the funds at least 2 weeks prior to settlement.  We have had clients try to wait to the last minute only to find out it is a 10 day process…
4)         Lack of Urgency – The mortgage process is many times a very tight time line.  I find that for some clients, they are not aware that every day counts.  I have sent loan papers out on a Monday to be told they can get them back to me within a week OR SO….  The quicker we get the loan package the quicker we can get everything ready to submit.  On every file we hope to have the loan ready to submit the minute we get the appraisal in hand.
5)         Appraisals – The timing of appraisals continues to be an issue.  We are now requesting the reports be turned into us with 15 days.  This is up from 10.  So please write your contracts accordingly as we cannot push appraisers for expedited service based on HVCC guidelines.

Everyone wants a smooth deal… taking these observations to heart will be a huge help in keeping the mortgage process moving smoothly along.

Homebuying Tips: Advice For First-time Home Buyers

Best Advice For First-time Home Buyers

If you are a first-time homebuyer, you’ll have a much easier time finding and financing your next home if you follow these tried and true tips:

1. Hire an experienced real estate professional:  Buying a first home is a complex process. Your Berkshire Hathaway HomeServices professional will assist you through the hurdles of neighborhood searches, comparing homes, making an offer, inspections and appraisals, as well as help you identify the best values.
2. Check and repair your credit: Banks use your credit scores to make lending decisions, so make sure your credit is accurate and deficiency-free. Order your credit reports and scores by visiting http://www.annualcreditreport.com so you can make repairs, if needed.
3. Get pre-approved: To get pre-approval, you have to apply for a loan and share your income, work history, debts and other information. Your lender will confirm your down payment source, interest rate, type of loan and loan term. Only then will you know exactly how much home you can buy.
4. Check out federal, state and local government incentives: To learn about first-time home buyer programs, see: http://www.grants.gov or http://www.hud.gov. Click on Housing Authorities to find out what’s being offered in your community.
5. Prepare to compromise: There’s no perfect home, so you’ll have to prioritize your wish list. Older homes often need cosmetic work so expect to pay more for a home in pristine move-in condition.
6. Make a long-term investment: Equity is built over time, so plan to occupy your home for several years or more. Your home is also an investment in happiness and that can be the best deal you ever make.

FINANCIAL TIPS: Four Ways to Build Equity

Four Ways to Build Home Equity

Equity is the percentage amount of your home that you actually own. You have three ways to build your ownership stake: through the purchase, through the reducing principal and through the passage of time.

1. Down payment: You gain instant equity when you put down a down payment. If you put 20 percent down, your equity ownership is 20 percent.
2. Purchase price: You can also gain instant equity by buying your home below the market. That’s difficult to do because homes don’t typically sell below market unless there is some sort of problem, such as poor condition, lack of updates or foreclosure. To build equity, invest in updates and repairs to bring your home up to neighborhood standards.
3. Paying down principal: As you pay your mortgage, little goes toward reducing the principal while a lot goes to paying interest. The longer the term of your loan, the less quickly you’ll build equity. Work with your lender to choose an adjustable rate or fixed rate for the length of time you think you’ll be in your home.
4. Time: Historically, home values tend to beat inflation by one or two percentage points, which means you can estimate a rise in your home’s value to average about three to five percent annually in a normal market.

It takes time to build equity this way, but when you combine principal reduction with buying wisely and caring for your home so that it retains its desirability, you’ll find that you build equity quickly and steadily.

DC Metro housing supply growth continues

Hot off the presses from RBIntel…

Sales down [MRIS-wide] from July 2013; Listing Activity up

OVERVIEW

The Washington, DC Metro Area continues to have lower levels of buyer activity than in 2013.  Closed sales have now decreased from their prior year during every month in 2014, and decreased 8.4 percent from last July.  New pending contracts have had year-over-year decreases for eight consecutive months.  In July, new pending contracts fell 4.8 percent, with decreases in each property segment.   Despite the lower buyer activity relative to 2013, closed sales and new pending contracts continue to be higher than in 2010, 2011 and 2012.  The median sales price increased modestly from last year, rising 0.7 percent.  This increase was driven by townhomes and condo properties, with condos reaching their highest July-level since 2007, and townhomes reaching their highest level on record, with data starting in 1997.

Inventory continues to rise and active listings reached their highest level of any month since November 2011.  However, the number of homes for sale remains low, at just 43.2 percent of its peak-level.  New listings continue to rise, and have now increased from the prior year for five consecutive months.

Click here to view PDF version of this report

CLOSED SALES

Seventh consecutive month of year-over-year declines; decreases in all property segments.  In July, there were 4,539 closed sales in the Washington DC Metro Area.  This is 8.4 percent, or 414, fewer sales than this time last year and marks the seventh consecutive month of year-over-year declines.  But closed sales remained higher than the July-levels in 2010 through 2012.  All property segments had fewer closed sales than July 2013.  Sales for single-family detached homes decreased 13.2 percent, or by 330 sales, from last year and had the sharpest decline of all property segments.  Sales for townhomes decreased 5.3 percent, or by 66 sales, while those for condo properties decreased 1.6 percent, or by 19 sales.  As compared to last month, the number of sales decreased 9.3 percent, which is a milder decrease the 10-year average June to July change of -10.5 percent.

PRICES

Modest increase in prices led by townhomes and condo properties.  At $428,000, the median sales price for the region increased 0.7 percent, or by $3,000, from last July.  This is the highest July-level for the region since 2007.  The median sales price for single-family detached homes fell 1.2 percent, or by $6,750, to $535,000 and was the only property segment to have a lower median sales price than last year.  At $418,000, the median sales price for townhomes increased by $19,000, or 4.8 percent, from last July.  The median sales price for condo properties increased 3.4 percent, or by $10,000, from July 2013 to $300,000.

Of the jurisdictions, the city of Alexandria had the highest growth in in median sale price, rising 9.3 percent.  The median sales price in Prince George’s County rose by nearly as much and increased 8.8 percent.  Three jurisdictions in the area had declines in median sales price from this time last year: the city of Fairfax (-9.2 percent), Montgomery County (-1.5 percent) and Fairfax County (-1.1 percent).

NEW CONTRACTS

Decreases in all property segments; eighth consecutive year-over-year decline.  The number of new contracts declined from last July, falling by 4.8 percent, or by 240 contracts, to 4,773 contracts.  This is the eighth consecutive month of year-over-year decreases.  But the number of contracts is above its July-levels in 2006 through 2012.  All property segments had fewer contracts than last July.  New contracts for townhomes fell the most, and decreased 7.6 percent, or by 100 contracts.  New contracts for condos declined 7.3 percent, or by 99 contracts, from last July, while those for single-family detached homes decreased 1.9 percent, or by 44 contracts.  New contracts decreased 7.4 percent from last month, which is a milder decline than the ten-year average June to July change of -8.5 percent.

INVENTORY

Highest number of active listings since November 2011; increases in new listings in all property segments. Active listings in the Washington, DC Metro Area increased 33.5 percent, or by 2,808 listings, from last July to 11,119 listings.  Active listings have now increased from the prior year for ten months in a row and have reached their highest level of any month in nearly three years.  Despite these gains, active listings are 56.8 percent lower than their 2007 peak.  Of the property segments, active listings for townhomes had the largest increase from last year, rising 45.3 percent.  Active listings for condo properties rose 37.7 percent.  There were 6,431 active listings for single-family detached homes, 28.3 percent more than this time last year.

For the fifth consecutive month, new listings were above their year-ago level.  There were 6,282 new listings in July, an increase of 8.1 percent, or 470 listings, from July 2013.  New listings for townhomes had the highest growth of the property segments and rose 9.3 percent, or by 137 listings from last year.  New listings of single-family detached homes rose 8.9 percent, or by 253 listings, from this time last year, and those for condo properties increased 5.2 percent or by 77 listings. Homes continue to sell quickly and the median days-on-market is 17.  While this is five days higher than last year, it is lower than the 10-year July-level average of 29 days.