Millennials can finally afford homes with new mortgage rules

First-time home buyers, many of them millennials, will receive some long-awaited mortgage assistance this year thanks to recent moves in Washington.

The administration earlier this month cut the premium that borrowers with a Federal Housing Administration loan must pay for mortgage insurance to 0.85% from 1.35%. The half a percentage point reduction will reduce the cost of the average FHA loan by about $1,000 per year. More here.

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5 Ways Spring Home Sellers Can Gain an Edge. Make your home stand out among the competition with some simple improvements.

Along with tulips and daffodils, “For Sale” signs will soon be popping up across neighborhood lawns. An improving labor market in the U.S. is expected to spur increased home sales in 2015, so if you’ve been wanting to sell your home, low interest rates and tight inventory levels should create an attractive environment.

“With the improving economy, we will see more people leaving their parents’ homes. Living in your parents’ basement isn’t part of the American dream,” says Lawrence Yun, chief economist at the National Association of Realtors. “Nearly three million new jobs were created in the last 12 months, and that provides incomes for families and confidence for making long-term decisions.”

NAR forecasts a jump in existing home sales in 2015 to a 5.25 million rate, an increase from 4.93 million sales in 2014. The national median existing-home price was $208,500 in 2014, a 5.8 percent increase from 2013, according to NAR. Yun forecasts the median home price to rise again in 2015 to $218,300. More here.

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Mortgage applications point to more buyers

Despite recent data showing weak home sales for January, a new report shows home buyers may edge back into the market in March.

Mortgage applications to purchase a home rose 5 percent on a seasonally adjusted basis for the week ending February 20th from the previous week, according to the Mortgage Bankers Association (MBA). They are still 2 percent lower than the same week a year ago. The survey includes an adjustment for the President’s Day holiday. More here.

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How to Start Saving for a Home Down Payment

Buying a home is an exciting life milestone, but it can also be intimidating. Your home will probably be the most expensive purchase you’ll ever make, so you want to establish a responsible plan for ownership. If you’re a little daunted about saving up for a down payment, here’s how to get started.

Why Subprime Mortgage Lending Is Ready for a Comeback

The widespread return of the subprime mortgage business will be the big event for the mortgage industry in 2015.

At first glance, this may seem like one of the more wild and outrageous predictions among the wide spread prognosticating that happens this time of the year. But it’s actually not that crazy, given how the market turned out in 2014.

As origination volume has been shrinking, lenders have been moving down the credit scale. In fact, 31% of closed loans in December 2014 had an average FICO score below 700, according to a sample of Ellie Mae loan data. In 2012, that figure was 21%. And the segment of FICO scores that experienced the biggest increase during that time was the pool of borrowers with scores between 621 and 659.

The subprime market has already seen some recent signs of life, with both lenders and aggregators dipping their toes into the market. And don’t forget the lenders out there willing to originate loans that don’t meet the qualified mortgage threshold. More here 

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Getting A Mortgage In Your 30s?

Congratulations, thirty-something. You made it through your 20s without any big financial missteps, you might have established a career and now you are making enough money to consider buying a home.

Maybe you’ve been a proud renter for the past handful of years because of the iffy housing market, student loan payments, changing jobs or cities (or partners) – or because you didn’t want the responsibility of time-suckers like yard work and painting. You could even have invested in a condo or starter home.

Now you feel it’s time to buy for the first time or upgrade. It’s the biggest purchase you’ve ever made. Here are the top five things to consider before you move forward.

1. Become a Mortgage Expert

Unless you saved hundreds of thousands or dollars or have a very generous friend or family member willing to sell you a home for dirt-cheap, you’re going to need a loan. That loan is called a mortgage. You might know that already but do you know how they work—as in, you’re kind of an expert? More here.

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