2022 Conforming Loan Limits

Every year the Federal Housing Finance Agency (FHFA) announces their conforming loan limits for the upcoming year immediately following the November release of their House Price Index (HPI). FHFA uses this data on home price appreciation to set the new loan limits for the upcoming year. For areas in the country that are considered high cost, FHFA increases loan limits further and will go up to 150% of the baseline conforming loan limit.

In 2022, the new conforming loan limit for most of the US for one-unit properties will increase to $647,200, an increase of $98,950 from $548,250 in 2021. This means in areas of high-cost or with special statutory provisions, the loan limit can reach as high as $970,800. An example in Washington State would be the counties of King, Snohomish, and Pierce, where the loan limit will increase to $891,250, an increase of $115,000 from $776,250 in 2021.

This significant increase will help home buyers access more credit and remain competitive in the current market where home prices have quickly risen. In fact, this year-over-year increase of 18% in the conforming loan limit is the largest on record dating back to 1970.

If you have any questions or want to find out if you qualify for a conforming loan, please reach out today!

FHFA Eliminates Adverse Market Refinance Fee

The Federal Housing Finance Agency (FHFA) announced today that it will be no longer be collecting a fee on refinance transactions that was known as the “Adverse Market Refinance Fee” effective August 1, 2021 for all qualified mortgages. The lending industry is welcoming the news as this change will help more families take advantage of the low-rate environment and save more money.

If you have considered refinancing this past year but the costs did not justify the savings, now is a perfect time to reconnect to reevaluate your scenario. This is also a great opportunity to leverage your home’s equity to consolidate debt or fund the remodel you have been wanting. It is an extremely inexpensive time in mortgage lending for consumers and you can save even more by acting before rates increase as projected.

Please share this news with your neighbors, families, and friends. I very much appreciate the opportunity to answer any questions and serve your community.

Source: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Eliminates-Adverse-Market-Refinance-Fee.aspx

Cash Committed Closing­™ Program

Homeseed’s goal is to reduce the stress of the mortgage process by helping our clients pre-pare early, and make our clients’ offers stand out in a competitive market. To do so, we’ve developed our Cash Committed Closing Program to help achieve this. We’ll provide you with a fully underwritten pre-approval for financing before you find your home so you can shop with confidence. Additionally, sellers will find your offer that much more attractive knowing that you’ll close on time or our Cash Committed ClosingTM program will issue a $2,000 credit to them. Please see rules for eligibility below.

ELIGIBILITY

  • Transaction must be for a home purchase
  • Borrower(s) must fully complete a loan application before making an offer
  • Borrower(s) must provide a copy of the purchase contract and the closing date must be scheduled no sooner than 28 calendar days from the date of executed purchase and sales contract
  • VA loans will require 30 calendar days
  • Required disclosures must be executed and returned to Homeseed within two business days
  • Initial loan documentation and information requested by Homeseed must be received within five business days
  • Any additional documentation and information requests by Homeseed must be received within two business days
  • Borrower(s) may not request loan term changes within ten business days from the scheduled closing date. Loan changes include, but not limited to, loan program, term of loan, or down payment amount.
  • Borrower(s) must lock the loan rate and complete all loan requirements and conditions at least seven business days prior to the closing date
  • The final appraisal, completion certificate, and/or all revisions must be received five business days prior to the closing date
  • Loans with subordinate financing must have secondary loan approval five business days prior to closing
  • The loan must close and fund with Homeseed in order for the Cash Committed Closing credit to be paid

INELIGIBILITY

  • Any delays attributable to the borrower(s) outlined in terms, a third party, or the seller that cause the missed closing date
  • Information provided by the borrower(s) that could not be verified or was inaccurate
  • The loan amount is $2,000,000 or greater
  • The loan does not meet federal and state regulatory requirements and/or agency guidelines
  • The closing date is missed due to acts outside the control of Homeseed. Acts include, but not limited to, inclement weather, natural disasters, catastrophic events, or other public emergencies.

Housing Market Alert – Seattle Has Over 15% Year Over Year Appreciation

Home appreciation continues to reach historic highs as tight supply and strong demand lead to an extremely competitive housing market. According to the S&P CoreLogic Case-Shiller home price index, prices in February rose 12% year over year across the US. This 12% gain is a 15-year high, and Seattle is one of the top cities with a gain of 15.4% year over year.

Those trying to enter the housing market are feeling the frustrations and disappointments of a competitive low inventory market. In many cases, buyers are having to make over five offers on homes before getting one accepted. However, the risk and rewards can quickly make sense when you consider the yearly equity gains with appreciation being higher than most full-time annual salaries. With a 15.4% gain in home prices year over year in Seattle, a person purchasing a $750,000 home last year would have gained $115,500 in appreciation on average. Historically low interest rates are also helping give a small boost to your purchasing power, so long as they remain low.

In the end, the most important thing prospective homebuyers need to consider is if are you in a position to responsibly take on a mortgage payment. Make sure you are evaluating a range of factors including your finances, personal life, and future. Connect with us today if you have any questions. If you have anyone looking to get pre-approved to purchase a home or refinance, we’d love the opportunity to serve them!

Homeseed Launches Wealth and Asset Management Tool

Homeseed is constantly looking for ways to provide value for our clients and industry partners that extends past the transaction. Our goal is to be your trusted advisor for life and provide ample opportunities to engage and communicate with us regarding your home. To help support this goal, we will soon be launching a tool that provides dynamic financial reports to clients about their home or any other potential real estate endeavors.

For most individuals, 83% of wealth comes from real estate at the average age of retirement. Therefore, it is important to provide homeowners with the appropriate tools and the guidance of a Homeseed Loan Advisor to manage wealth through the largest asset they will likely ever own, their home. Our monthly reports will provide you with information regarding your home’s value, financial strategies in connection with your equity position, and plenty of engagement opportunities with your Loan Advisor to help you grow your real estate portfolio and continue to build wealth.

Homeseed is excited to be providing this service to all our clients and partners, even those who have already financed a home through us in the past. We want to empower you to take ownership of managing your wealth in a simple, engaging, and meaningful way. Communicating with our Loan Advisors will also always be a simple click away as well.

Please reach out if you’d like to learn more about this new tool we will be offering. If you also have anyone looking to get pre-approved to purchase a home or refinance, we’d love the opportunity to serve them!

Dealing With Appraisal Gaps

In our competitive housing market, most homes are receiving numerous offers and sell for over the listing price. But what happens when the home appraises for less than its selling price? In a seller’s market, it’s often left to the buyer to cover the difference between the purchase price and the appraisal. And what happens if an appraisal comes in short by $50,000? Or even $100,000? If the borrower does not have extra funds to cover the appraisal gap, Homeseed has a back up plan to help your borrower save the deal.

A scenario we’ll use to go over our appraisal gap strategy is a purchase price of $700,000 with a 20% down payment. If the appraised value comes in $50,000 or $100,000 below the $700,000 purchase price, our loan to value ratio will increase above 80% and the borrower will be required to purchase a mortgage insurance policy. What we can then do is finance a single-premium mortgage insurance policy into the loan amount that helps us cover the appraisal gap. This also allows us to keep the required cash to close similar across all three scenarios. Financing the mortgage insurance premium will increase the loan amount and thus the monthly payment, but not by much. On a $50,000 short appraisal value, monthly payment only increases by about $28. On a $100,000 short appraisal value, monthly payment increases by about $41. This is a relatively inexpensive way to cover up a large appraisal gap in this market. 

Please reach out if you’d like to learn more about this financing strategy and other ways to help you clients remain competitive in this market. If you also have anyone looking to get pre-approved to purchase a home or refinance, we’d love the opportunity to serve them!

Have you thought about building your dream home?

Finding and getting an offer accepted on any home is tough in today’s housing market, but what if you could build your own dream home? You could design it how you want and potentially build your own equity in the process. Either buy land and finance it into the costs of the loan or build on land you already own while using its equity as a down-payment. With a construction loan from Homeseed, there are plenty of options and adjustments available throughout the process as you build your dream home.

“Nothing worth having comes easy” is the mantra to remember when going through the building process. The whole process can be daunting but having a can-do attitude will be your ticket to success. 

Here’s a simplified checklist for the construction process:

  1. Research land: location, available utilities, cost for development
  2. Research type of home:  layout, cost to build, finishes
  3. Research builders: reputation, easy to work with, attention to detail, cost per square foot
  4. Research loan options:  which loan option fits your project and financial goals.

Doing your own research will help you prepare for the challenges ahead. Depending on how you like to organize a project, you will want to keep a digital or paper record of all the details and information you discover. Tip: check out the local jurisdiction in the location you are wanting to build for building requirements and costs. Some building departments have super helpful websites as well. 

Getting the financial piece nailed down is one of the early important steps.  Here at Homeseed, we offer Conventional (conforming and Jumbo loan amounts), FHA, VA, and USDA construction loans. Speaking with a loan advisor about your financial goals will help you decide which loan option is best. 

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