Home Qualified News

Marketwatch -More homeowners now have mortgage rates above 6% than below 3%: 10 real estate pros on how and when to refinance smartly

Mon, 09 Mar 2026 13:33:23 GMT

Here’s how to refinance wisely

Alisa Wolfson

Following years of uber-low pandemic-era mortgage rates, more homeowners now have mortgage rates above 6% than below 3%, according to a new Redfin analysis released in late February, of the Federal Housing Finance Agency National Mortgage Database that uses data through the third quarter of 2025. Indeed, in the third quarter of last year, 21.2% of mortgaged homeowners had an interest rate of 6% or higher, while only 20% had rates below 3%.

If you’re in that 6% range, there may be good news on the horizon. Mortgage rates dipped into the 5s last week, meaning it might make sense for those with mortgages in the high 6s and 7s to refinance. (You can see some of the lowest rates in your area here, from our ad partner Bankrate.) Here’s when it does — and does not — make sense to refinance.

“A general rule of thumb is for rates to drop 75 basis points [1 basis point is equivalent to 0.01%] before it’s considered economical. However, for those sitting at a 6.5% or 7% and above rate, even 50 points could be advantageous,” says Erik Schmitt, consumer direct executive at Chase Home Lending.

Some say you might want to be a bit more conservative: “The rule of thumb is that if you can achieve a full 1% better rate than you currently have, it makes sense to consider it,” says Sarah DeFlorio, vice president of mortgage banking at William Raveis Mortgage. “Make sure you take closing costs into account, for example if you’re going to save $1,000 per month on your payment, but the closing costs are $10,000, you can determine it will take 10 months to start realizing those savings,” says DeFlorio.

For her part, Michelle Parkison, senior vice president of capital markets at AD Mortgage, says identifying the primary financial catalyst is a critical step of refinancing. “The path you take depends entirely on your desired outcome. To successfully reduce your monthly obligation, the formula generally requires a combination of a lower interest rate and a reduced principal balance. This approach frees up immediate cash for other investments or household expenses. If your goal is to pay less over the duration of the loan, utilizing an amortization calculator is essential. Often, the most effective move is transitioning to a shorter loan term. While this may result in a higher monthly payment, the reduction in total interest expense can be substantial,” says Parkison.

Before settling on refinance terms, look at your blended rate [a weighted average of your existing and new loan rate], especially if you have a home equity loan, HELOC or private mortgage insurance. “This helps you understand the true cost of your financing. In some cases, refinancing into a slightly higher primary mortgage rate to eliminate PMI or consolidate debt may not sound appealing, but it can save you money over the long run. Given today’s record levels of home equity, a cash-out refinance may also be worth considering. This can allow you to consolidate higher interest debt or finance large expenses such as renovations, college tuition or medical costs into a single mortgage,” says Jeff DerGurahian, chief investment officer and head economist at loanDepot.

Indeed, before refinancing, you want to be sure you’re going to stay in your home long enough for the math to make sense. “This is called your break-even point. Talking to a mortgage loan professional is a great first step to understanding what your strike rate is for refinancing,” says John Hummel, head of retail home lending at U.S. Bank.

We asked 10 lending and mortgage experts for their top refinancing tips and tricks.

Don’t discredit your current servicer

Before refinancing, you’ll want to check with your current servicer who may have different rates or refinance incentives. “By refinancing with a current servicer, borrowers may not have to pay out of pocket escrows at closing. Additionally, servicers may offer no lender fees to current customers, so borrowers would only pay third party costs like recording the new mortgage, title insurance and credit reports,” says Adam Spigelman, SVP at Planet Home Lending.

Different lenders offer different levels of customer service. “Larger traditional lenders like U.S. Bank have mortgage professionals who maintain longstanding relationships with their clients while also offering digital tools that make managing and understanding your mortgage easy,” says Hummel.

Look into less obvious savings tactics

“Ask about term adjustments, rate buydowns and PMI removal. These can all mean short- and long-term debt savings,” says Ralph DiBugnara, founder and president at Home Qualified, a digital resource for buyers, sellers and realtors.

Look beyond rates

“One strategy that is often overlooked is adjusting your loan term. If your financial situation has improved, refinancing into a shorter-term loan could significantly reduce the total interest paid over time, even if the monthly payment increases slightly,” says Jeffrey Ruben, president of WSFS Home Lending at WSFS Bank.

Don’t lock yourself into a traditional fixed-rate mortgage

“When you refinance, you don’t have to limit yourself to a traditional fixed-rate mortgage. Depending on your goals, such as how long you plan to stay in your home and whether you expect your income to rise, you may want to consider an adjustable-rate mortgage, which can offer lower initial rates,” says DerGurahian. Keep in mind that ARMs can result in higher monthly payments once the fixed period ends.

“Depending on your current loan type and origination date, such as with FHA or VA loans, you may also be eligible for a streamline refinance. This option allows you to refinance without going through the full application process which can reduce paperwork, time and costs,” says DerGurahian. To apply for a streamline refinance, you’ll need to have an existing FHA loan, at least 210 days must have passed from the closing date of your mortgage and you must be current on payments, having made at least six payments.

If you can, make additional payments

“If refinancing lowers your monthly payment, one option is to keep paying what you pay today and apply the difference toward your loan balance. That can help you pay off the loan faster and reduce the total interest you pay over time,” says Karl Benjamin, certified mortgage banker and executive vice president of third-party origination at Cardinal Financial.

Get prepared early

“Preparation matters just as much in refinancing as it does when purchasing. When rates move meaningfully lower, activity increases quickly. Borrowers who evaluate their options early often secure stronger outcomes than those who wait for perfect conditions,” says Benjamin.

“It’s strongly advised that you connect with a mortgage loan professional to understand your strike rate and everything you will need to be prepared to take advantage when the market presents itself. Refinancing volume has increased as rates have dropped, so ensure you’re having the conversation with a mortgage loan professional on the refinancing process, including current turn-times to close so you have transparency around the process and timing,” says Hummel.

Explore netting escrow

“This allows the borrower to lower the cash to close when refinancing if they’re using an escrow account. Not all lenders will allow for this. Another trick is rolling the costs of the refinance into the mortgage. This can be viewed as going the wrong way, but many borrowers are more concerned about saving on a monthly basis versus owing a bit more,” says Kevin Leibowitz at Grayton Mortgage.

Shop around

“Get multiple bids, primarily from reputable online mortgage companies and community banks. These almost always have better rates and more flexibility than the national lenders with retail locations,” says Ryan Meehan at TaxDrop, a property tax savings platform. You can see some of the lowest mortgage rates in your area here, from our ad partner Bankrate.

Consider your timing

“If you have a home that has appreciated quickly, it’s important to keep in mind that you need to own the property for a full year and a day before you can refinance based on a new appraisal, as many lenders require you to use the original purchase price during that window,” says DeFlorio.

Home appreciation plays a pivotal role in refinancing. “A lower loan-to-value (LTV) ratio, bolstered by rising property values can be a powerful tool, potentially allowing you to eliminate costly private mortgage insurance and further increasing your net savings,” says Parkison.

CBS News-What's the mortgage interest rate forecast for March 2026?

Thu, 26 Feb 2026 13:40:43 GMT

What's the mortgage interest rate forecast for March 2026?

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By Matt Richardson

February 25, 2026 / 10:53 AM EST / CBS News

Mortgage rates have changed a lot in recent years. At one of their highest points, in October 2023, 30-year fixed rates climbed to 7.79%, which pushed millions of would-be buyers out of the market. Since then, a combination of six Federal Reserve rate cuts totaling 1.75%, cooling inflation and declining Treasury yields have slowly brought rates down. As of February 25, 2026, it's possible to secure a 30-year rate under 6% for qualified borrowers.

With no Fed meeting in February, borrowers haven't had much to hang their hopes on. While the central bank doe not directly set mortgage interest rates, its policy decisions can have a broad influence on the overall market. The bank meets again on March 17 and 18, and experts generally expect the Federal Open Market Committee (FOMC) to hold interest rates at their current target range of 3.50% to 3.75%.

So, how will these factors influence mortgage interest rates this month? And where could mortgage interest rates be headed as the year progresses? We asked some experts for their predictions.

What's the mortgage interest rate forecast for March 2026?

The experts we spoke to generally anticipate mortgage rates holding steady or dipping modestly in March. They anticipate the same factors that have been gradually pushing rates down continuing to do so. Those factors include a gradual decline in the 10-year Treasury yield and a fall in the Consumer Price Index (CPI) from 2.7% in December to 2.4% in January. Meanwhile, the Federal Reserve has been holding rates steady as they look for clearer economic signals.

"I would expect that mortgage rates would stay pretty steady over March 2026," says Mark Schweitzer, associate professor of economics at Case Western Reserve University. "There is an FOMC meeting, but market expectations favor no change in the Fed funds rate. The most important data will be the upcoming CPI report on March 11."

Andrew Postell, sales manager and VP of mortgage lending at Rate.com, notes that rates may not look like they're moving in the short term, but the cumulative shift over time has been significant.

"Mortgage rates have been decreasing incrementally over the past two years or so. Week-to-week, it may not seem like a lot, but add it up over time, and the savings are substantial. We are nearly two points lower on the average interest rate from October 2023."

The Fed meeting in March will surely draw plenty of attention, but Ralph DiBugnara, founder and president of Home Qualified, says borrowers should focus on what the Fed says, not just its policy decisions.

"What most don't realize is that it's not the actual cut or raise of interest rates by the Fed that's most important, but how they are forecasting the future. If the commentary post meeting is that the economy is showing signs of leveling out and coming down, there's a good chance the feds can look towards the policy of cutting in the future," DiBugnara says.

The conversation around mortgage rates has changed in recent months as the question of whether rates could reach 6% has effectively been answered. As mentioned, average rates nationwide now sit below 6%.

So, where do mortgage interest rates go from here?

The experts we consulted project rates to remain firmly in the neighborhood of 6%, with some room on either side depending on the economic data we see in March.

Schweitzer anticipates an average rate range of "roughly 5.9% to 6.3%, unless the data surprises us." He doesn't anticipate a sub-6% average rates being the norm in March. "30-year fixed rates realistically dropping below 6% in March is not the most likely outcome, but 30-year mortgage rates are only a little bit above 6% now. If inflation came in low or employment growth was weak, that could cause a large enough dip in Treasuries to reach a mortgage rate below 6%," he says.

DiBugnara's projection range is a bit wider, factoring in the possibility of more volatility. "Realistically, I see 5.75% to 6.25% on a 30-year fixed-rate for averages. That range reflects mild improvement potential, but also room for volatility if economic data surprises," he says.

The bottom line

While it's important to understand where mortgage rates are headed, buyers should be cautious if trying to time the market. After all, unexpected economic indicators and geopolitical events could easily disrupt any well-reasoned projection. Ultimately, if you find a home that fits your needs and budget, you may need to act fast. Locking in a rate now allows you to make an offer before rates or home prices rise. Besides, you can always refinance later if rates drop closer to 5%. If you anticipate rates could drop while you're in escrow, ask your lender about getting a floating rate that adjusts down if rates fall before closing.

Edited by Angelica Leicht

I'm in Real Estate: 7 Cities Where Millennial's Should in Invest 2026

Mon, 26 Jan 2026 16:25:32 GMT

I’m in Real Estate: 7 Cities Where Millennials Should Invest in Property in 2026

January 18, 2026 4 min Read

Written by

Vance Cariaga

Edited by

Brendan McGinley

The youngest millennials will turn 30 years old in 2026, which is usually about when people start thinking hard about buying a house. Times have changed, however.

The typical age of first-time home buyers climbed to an all-time high of 40 years as of June 2025, according to a new report from the National Association of Realtors. That kind of stat is “shocking,” said Lynette Arrasmith, Home Loan Specialist at Churchill Mortgage.

“It tells me that millennials don’t know what they don’t know, and they likely assume they can’t afford to buy — a misconception that isn’t true,” Arrasmith told GOBankingRates.

One way to make homeownership more affordable is to finance itself as a rental property. Millennials looking to invest in a home or other types of real estate have plenty of opportunities if they look in the right place. Below are seven cities where millennials should consider investing in property in 2026, according to real estate agents and other experts.

Birmingham, Alabama

Cost-of-living score: 87

Median age: 35.7

Birmingham offers excellent real estate investment opportunities for millennials — as long as they search the right areas.

Dani Beit-Or, founder and CEO of real estate investment platform Simply Do It, recommends the suburbs because that’s where you’ll find “stable jobs” and people who want to raise families.

“I’m looking at areas with good schools, new construction and tenants that want to stay put,” Beit-Or told GBR.

Cedar Rapids, Iowa

Cost-of-living score: 81.8

Median age: 36.5

For millennials interested in investing in rental properties, Cedar Rapids offers a “major under-the-radar opportunity with demand exceeding available listings,” according to Jeff Hurst, CEO of Furnished Finder, a leading platform for monthly and mid-term rentals.

Lower entry prices make investing “more accessible.”

“Consistent” mid-term rental demand driven by hospital systems and corporate relocations.

Less competition from institutional investors, giving millennials “room to scale.”

Nashville, Tennessee

Cost-of-living score: 104.7

Median age: 37

Nashville is a hot housing market with a slightly above average cost of living, mainly because of Music Row and downtown. But that’s not necessarily where millennials should invest in property.

“The suburban markets around the Nashville metro give my clients the most bang for their buck, and they get to enjoy the benefit of a strong economy and growth without the inflated prices,” Beit-Or said.

New York, New York

Cost-of-living score: 172.5

Median age: 38.8

The Big Apple will never qualify as “affordable.” But for millennials interested in investing in rental properties, it offers plenty of potentially lucrative opportunities, Hurst said.

Here are reasons he believes New York City is “ideal” for millennial investors:

High search volume means “quicker match times.”

Three out of four landlords on Furnished Finder get tenant interest within 30 days

Flexible, furnished listings “appeal to the city’s large academic, business and relocation tenant base.”

Omaha, Nebraska

Cost-of-living score: 90.8

Median age: 35.9

Arrasmith points to Omaha’s affordability as one of its main attractions for millennial property investors.

“Our average closed price for new construction is under $500,000, and for an existing home under $370,000, she said. “Owning real estate is a fantastic way to build wealth, and in Omaha, we’ve consistently seen 4%-5% appreciation in our market year-over-year.”

Raleigh, North Carolina

Cost-of-living score: 105.8

Median age: 34.9

Ralph DiBugnara, founder and president of real estate investment platform Home Qualified, gives Raleigh high marks for its robust tech industry and potential to benefit from employer-mandated return-to-office initiatives.

“A great strategy for 2026 would be to look into any cities that are growing population because of workforce,” he told GBR. “This can be a major needle mover in higher prices for real estate.”

St. Louis, Missouri

Cost-of-living score: 84.1

Median age: 37.2

The St. Louis metro area “checks a lot of boxes” for millennials interested in home investments, Beit-Or said. He pointed to “stable jobs” from major healthcare systems and Fortune 500 employees, as well as “landlord-friendly” state laws that protect investments.

First-Time Home Buyer Advice and Preparation for 2026

Thu, 08 Jan 2026 21:28:18 GMT

By Paul Centopani Reviewed By Aleksandra Kadzielawski

January 8, 2026 - 10 min read

Guidance for 2026 home buyers

Are you planning to buy a house in 2026?

With so many potential buyers waiting for improved conditions, you’re likely not alone. But taking all the right steps to get yourself ready and finding the right advice could give you a leg-up on the competition.

To (hopefully) help make matters easier for home buyers, The Mortgage Reports spoke with industry experts to help guide borrowers in 2026.

Answers have been edited for brevity and clarity.

Verify your home buying eligibility. Start here (Jan 8th, 2026)

In this article (Skip to…)

How to prepare to buy a house in 2026

What is unique about Q1’s housing market?

Early 2026 affordability outlook

Top advice for 2026 home buyers

How would you prepare if you wanted to buy a home in the first quarter of 2026?

When buying a home, preparation can be your best friend.

Getting all your paperwork and affairs in order gives you a clearer budget, what interest rate you can qualify for, and a chance to clean up your financial profile. Plus, it can give you the competitive advantage of the ability to act quickly. So make your home buying prep list - and maybe even check it twice.

Ralph DiBugnara, president at Home Qualified:

The first quarter of the year is traditionally less competitive depending on what market you’re in. Competition is low in colder weather markets post-holidays and is an easier time to find the price you’re looking for, especially in places devoid of for-sale inventory. In warmer weather climates, you will find many more buyers considering a larger move from another state. Either way, the first quarter of the year is a great time to start your journey because most markets heat up and become more competitive when spring hits.

Charles Goodwin, head of bridge and DSCR lending at Kiavi:

It’s important to educate yourself on the realities of the current market. Understanding true affordability, being clear on your budget, and having realistic expectations about inventory and timing are essential for making smart investment decisions today and in the future. With mortgage rates likely to remain in the low 6% range early in the year, pay close attention to closing costs and loan terms to make the most of your investment. Keep an eye on market activity in the area where you’re buying and be prepared for both the logical and emotional aspects of buying a property.

Danielle Hale, chief economist at Realtor.com:

A first-quarter home shopper has some advantages. First, home prices generally ramp up as we move closer to spring and summer, so pricing tends to be a bit lower than later in the year. However, competition can be a bit stiffer as home shoppers tend to get a jump-start on the year relative to sellers. To buy a home in the first quarter, I would take the time to evaluate your budget, including testing a few different potential mortgage rate scenarios, even though I expect that mortgage rates will be fairly flat around the 6.25% mark in most of 2026.

I would also review your wish list and sort features into must-have versus nice-to-have categories so you’re prepared to make tradeoffs. Then, I would set up a search to be notified when properties that meet your criteria hit the market. The more specific your search criteria, the more likely the results will be a good fit for your needs. This will help sanity check your budget and figure out how many tradeoffs you may have to make. It would also be wise to enlist the help of a real estate professional who can help you navigate the process and think through the pros and cons of any tradeoffs as you search.

How to use an FHA 203(k) loan to renovate a home

Tue, 16 Dec 2025 15:45:05 GMT

Laura Gariepy

Updated Fri, December 12, 2025 at 5:02 PM EST 8 min read

You’ve found a home in your dream neighborhood, but there's one problem: It needs expensive updates and repairs. Given the property's condition, you’re unsure if you’ll be able to get a mortgage to buy it. Unfortunately, you don’t have enough cash to purchase the home outright, let alone complete all the necessary renovations. An FHA 203(k) loan may be the answer. With this type of FHA loan, you can secure the financing you need to buy (and rehabilitate) your new home.

MORE: See our top picks for FHA loan lenders.

What is an FHA 203(k) loan?

An FHA 203(k) loan is a type of FHA loan, which is insured by the Federal Housing Administration (FHA) and allows you to finance a home purchase and renovation with just one loan. Instead of taking out a mortgage to buy the home and a second loan to cover updates and repairs, you’ll get all the funding you need on one closing day.

If you qualify, part of the loan will immediately pay the seller for the residence. The remaining cash will be put into an escrow account to be disbursed as repairs are made to the property. The loan is FHA-insured before renovations are completed.

Standard vs. limited FHA 203(k) loans

You can choose between two kinds of FHA 203(k) loans: standard and limited. Here’s how they compare at a glance:

How to use an FHA 203(k) loan

Depending on your home’s needs and the type of FHA 203(k) loan you secure, you can use mortgage proceeds to do the following:

Address health and safety issues

Build or repair a garage

Add rooms to the structure, including an attic or basement

Repair the foundation or other structural elements

Install or repair fencing, walkways, driveways, patios, decks, or porches

Fix or install roofing, siding, gutters, or downspouts

Repair, replace, or upgrade electrical or plumbing system components

Repair or remove an in-ground swimming pool

Make the home accessible to those with disabilities

Rebuild a demolished home (if the original foundation is intact and usable)

The above list isn’t exhaustive. Generally, most renovations intended to increase the safety and functionality of the home would be deemed acceptable. However, you can’t use this loan for luxury upgrades like installing a new swimming pool or tennis court.

Learn which home improvements are tax-deductible.

FHA 203(k) loan requirements

Property guidelines

You can use an FHA 203(k) loan to purchase and renovate the following types of properties:

Single-family homes

Two-to-four-unit townhouses

Some condominiums (interior renovations only)

HUD homes

Manufactured homes titled as real estate (no structural repairs)

Mixed-used properties (at least 51% must be residential)

Discover 12 types of homes for buyers and renters.

Borrowing limits

The FHA has loan limits that cap the amount you can borrow. The limit depends on your property type, value, and location. For instance, in 2026, you can borrow up to $541,287 for a one-unit property in a low-cost area or $2,402,625 for a four-unit building in a high-cost area. (You may qualify for even higher limits if you live in Alaska, Hawaii, Guam, or the U.S. Virgin Islands.)

Once repairs are complete, you must get an FHA home appraisal to determine the after-improved value.

Borrower guidelines

The FHA requires a credit score of at least 500 to qualify for a 203(k) loan, but your lender’s criteria may be more strict. In addition, FHA mortgage lenders generally want to see a debt-to-income ratio (DTI) — how much you owe monthly relative to how much you earn — of 43% or lower.

If your credit score is 580 or higher, you can put down as little as 3.5% of the loan amount. However, if your score is 500 to 579, you must increase your down payment to 10%.

How do FHA 203(k) loans work?

An FHA 203(k) mortgage loan can have up to a 30-year term. You can also opt for a fixed or adjustable interest rate.

“Interest rates are slightly higher than regular FHA loans due to the higher propensity for risk,” Tiana Uribe, real estate broker at TRU Financial Services, Inc., said via email.

Your loan can also include extra funds for unexpected costs (known as “contingency reserves”) and mortgage payments. Your contingency reserve can be up to 20% of your projected repair costs. Your mortgage payment reserve can cover up to six months of home loan bills if you can’t live in the house during renovation.

Like any other mortgage, expect to pay closing costs. For instance, you’ll be charged an origination fee of up to $350 or 1.5% of the base loan amount, whichever is greater.

You should also be prepared to pay an up-front mortgage insurance premium (MIP) of 1.75% of your initial loan balance. You’ll also pay an annual mortgage insurance premium (billed monthly) must be paid on an ongoing basis — generally for the life of the loan.

Property rehabilitation must start within 30 days of closing and be completed within six months. However, if you’re current on your mortgage payments or your loan is in forbearance, you may be able to request an extension if the project runs long.

“The money [in escrow] for repairs will be given out in draws — an initial draw at closing and then additional draws throughout the process as the work is completed and signed off on by the HUD consultant,” said Ralph DiBugnara, founder of Home Qualified.

Pros and cons of the FHA 203(k) loan

All financial products have perks and pitfalls. Here’s how the FHA 203(k) loan stacks up:

Pros

You can finance the purchase and renovation of the home with one loan.

The mortgage typically has a lower interest rate than a credit card or unsecured personal loan.

The renovations help you build equity quickly.

The loan is relatively easy to qualify for.

You can put down as little as 3.5%.

Cons

The process can be long and complicated. (It takes longer to close on this type of loan than a regular FHA mortgage.)

You may have to live in a construction zone for an extended period.

Renovations must be HUD-approved, which can limit your options.

You must pay for FHA mortgage insurance.

The loan isn’t designed for real estate investors.

Should you get an FHA 203(k) loan?

“We are in a real estate market that overall has very little inventory,” said DiBugnara. “A large percentage of homes that are on the market are old and in need of at least [some] TLC. Most buyers are compromising because of high prices and bidding wars on homes that aren't ideal for their needs. A 203(k) loan is a great way for a borrower to buy a house that needs repairs and make it into their own.”

On the other hand, if the complexity and length of the process make you nervous, buying a fixer-upper with an FHA 203(k) loan may not be your best bet. You may also want to consider other types of renovation loans if you want to finance a new swimming pool or other luxurious upgrades that aren’t covered by 203(k) loans.

When will the housing market crash again?

Alternatives to the FHA 203(k) loan

If the FHA 203(k) rehab loan isn’t right for you, several other financial products can help you upgrade your home.

Conventional renovation loans

Fannie Mae and Freddie Mac offer the HomeStyle Renovation and CHOICERenovation loan, respectively. The programs are similar in several ways. For example, both permit down payments as low as 3% for single-family residences. However, you should compare these options side by side and talk to your lender to determine which one would work best for you.

Home equity products

If your fixer-upper just needs cosmetic updates and you can live with the popcorn ceilings and wood paneling for a while, you could eventually tap into your home’s equity to pay for modernization. Your home’s equity is a measure of how much your property is worth minus what you owe on your mortgage, expressed as a percentage. For example, if your house is worth $500,000 and you still owe $300,000 on your mortgage, you have 40% equity.

Generally, you need 15% to 20% equity to qualify for a home equity product. It could take years to reach that milestone, depending on how large a down payment you made at loan closing.

Once you do, you could take out a home equity loan (which gives you a lump sum with a fixed interest rate) or a home equity line of credit (which functions like a credit card and typically has a variable interest rate).

You might also opt for cash-out refinancing, which involves obtaining a new mortgage large enough to pay off your first home loan and put money for renovations in your pocket.

FHA 203(k) loan FAQs

Can you refinance a home with an FHA 203(k) loan?

Yes, homeowners can refinance a home with an FHA 203(k) loan. However, while you can change your interest rate or loan term, Uribe said you won’t be able to tap your equity and take cash out.

Can I use an FHA 203(k) loan for a new home?

Although you can use an FHA 203(k) loan to buy an existing home that needs upgrades, you cannot use an FHA 203(k) loan to finance the construction of a new home. The mortgage is designed to help borrowers repair and upgrade homes that are at least one year old.

Can you buy furniture with an FHA 203(k) loan?

You can’t buy furniture with an FHA 203(k) loan. FHA-approved purchases and projects must be directly connected to the house and improve the functionality of that particular dwelling.

Mortgage Reports-Will Interest Rates Go Down in November? | Predictions 2025

Thu, 06 Nov 2025 14:05:57 GMT

By Julie Gerstein

October 22, 2025

Real Estate Is Still a Good Investment: How It Stacks Up Against Gold, Bitcoin

After soaring to new highs just as the U.S. government entered its first shutdown in almost seven years, gold prices slid back down by just over 5% on Tuesday to around $4,130. Some experts still look at the precious metal as a solid investment, while others warn this is why investing in assets like real estate is a smarter move.

Though high mortgage rates are making it more expensive to buy a home right now, many experts still believe that real estate beats out other investment opportunities.

And with President Donald Trump signing an executive order allowing alternative assets such as private equity, cryptocurrencies, and real estate into workplace retirement plans, the market is still a better investment.

In fact, according to Gallup, 37% of Americans still agree that real estate is the best long-term investment, with only 23% saying gold and 16% relying on stocks.

If all of these options leave your head a bit scrambled about where to put your money, you're not alone.

Some areas of investment, like art, require specialized knowledge, while others depend on how much risk you're willing to take.

With real estate in particular, many homeowners are sitting on record-high equity, which can be used through a home equity loan or a home equity line of credit (HELOC) to purchase an investment property, according to Hannah Jones, senior economic research analyst at Realtor.com®.

"However, investing in real estate is not a slam-dunk in all markets as high home prices and elevated mortgage rates squeeze potential earnings," she points out. "Investors, or homeowners looking to branch out into buying an investment property, should fully understand expected cost and expected income from a property, as well as the time horizon to see a profit."

Here's how real estate stacks up against other investments.

Buying real estate

Pros: Real estate values have grown at a slower pace than the S&P 500 on a year-over-year basis, but according to a Realtor.com analysis, real estate saw an average five-year return of +26% since 1975 as of the end of 2024. That's nothing to sneeze at.

Typical homeowners have also accumulated at least $147,000 in housing wealth in the past five years, according to the National Association of Realtors® in its fourth quarter of 2024 report.

"Traditional investments like 401(k)s, IRAs, and ETFs are great for passive growth, but real estate brings in a whole different level of wealth-building," says Dan Reedy, a real estate investor and broker.

Real estate is also a much more hands-on investment.

"With real estate, you can actively influence your returns by making strategic upgrades or managing rental rates," he adds. "Plus, real estate offers deductions—mortgage interest, depreciation—that can make a huge difference come tax season. It's not just about growing wealth; it's about growing wealth you can control."

Sara Levy-Lambert, vice president of growth at real estate management company RedAwning, adds that although real estate is not without risks, its "blend of passive income potential, stability, and the chance to build equity over time make it a solid choice for those looking to diversify beyond paper assets."

Cons: If you value liquidity and being able to access your funds at a moment's notice, it's probably not the right move for you. Buying and selling homes can take months—if not years—and can require a lot of upfront costs.

"The biggest problem I see is that people have record equity in their home right now—more than they've ever had before. But that's just a number on paper," says Ralph DiBugnara, founder of real estate resource site HomeQualified. "You can't really do anything with it unless you're willing to take [money] out of the house, unless you're willing to leverage it."

By that, DiBugnara means being able to leverage a home equity loan or home equity line of credit.

Investing in real estate directly "gives you full control—you decide on tenants, renovations, and how it's managed. But you also take on the costs and responsibilities that come with ownership," says Jace Graham, CEO of Rising Phoenix Capital.

Real estate investment trusts

Pros: When you think of real estate investing, you're likely picturing putting a down payment on a home and negotiating the terms of a mortgage. But if you can't afford to build a personal portfolio of investment properties, that shouldn't discourage you from buying into the market.

Many do so by participating in real estate investment trusts, or REITs.

REITs allow investors to buy shares in a real estate company. Their portfolios typically include a mix of residential and commercial properties.

"You don't own the property directly, so you're hands-off, which is easier for most people," Levy-Lambert says. "They're also traded like stocks, making them more liquid. Just buy or sell whenever you want, without the management headaches."

The IRS requires REITs to pay out at least 90% of their income as dividends to shareholders, so investors have a steady flow of funds coming in. It's also taxed as regular income.

"In a nutshell, direct real estate gives you control and potential tax perks but requires more work and patience, while REITs offer easy, flexible access to real estate returns without the management hassle but are taxed a bit differently," says Levy-Lambert.

A REIT also might be a great place to start if you haven't saved up enough for a down payment but want to make a steady return on the market.

Cons: REIT dividends are generally taxed as ordinary income—not at the lower capital gains rate. The average annual dividend yield for publicly traded REITs currently hovers around 4%, though this can vary by sector and market conditions.

Cryptocurrency

Pros: There's big money to be made—or lost—in the cryptocurrency market at the moment. Bitcoin initially traded at $0.00099 in 2009, but today it's over $88,000, and early investors who have held on have made many millions of dollars. The current presidential administration is also very invested (pun intended) in making crypto more accessible.

Cons: Of course, investing in cryptocurrency comes with many risks. Aside from the many crypto-related scams, including the spectacular collapse of Sam Bankman-Fried's FTX, you might need nerves of steel to play in this market.

"Cryptocurrencies are notoriously volatile, subject to speculation, and witness frequent bubbles and crashes," says Harry Turner, founder of Sovereign Investor. "That's why cryptocurrencies are really only suitable for individuals with a high risk tolerance and an understanding of the underlying technology, which can be complex. Real estate doesn't have this problem."

Gold

Pros: These days, you can purchase gold stocks or ETFs, or buy the physical stuff—coins and gold bullion. If that's what you're into, you can even buy gold at Costco now. For some, nothing beats the security of owning a chunk of precious metal.

Gold is a relatively stable asset. It's less reactive and can be a good hedge against the volatility of the market. In the four years following the 2008 financial crash, the price of gold increased dramatically—in 2011 alone, by 32.8%.

Fast-forward to today, and the price of pot gold is on a bit of a roller coaster. After hitting an all time high price of $4,225.10 per ounce in early October, the prices started to plunge by the following week, falling as much as 6.3% soon after, marking the largest intraday drop for the metal since a 6.3% plunge in June 2013, according to Forbes.

The strength in gold follows the implementation of many of Trump's tariffs on Aug. 8, including surprise levies on 1 kg and 100-ounce imported gold bars. The import charges on gold bars could disrupt shipments from primary refining hubs, including Switzerland, London, and Hong Kong.

Cons: Though you can buy gold at Costco, you can't sell it through the store. In fact, it's fairly difficult to sell gold commercially—and you'll have to do a good bit of research to get a fair price.

Let's be real: Physical gold weighs a ton, and it's not the easiest thing to move around. Plus, you’ll want to insure it, which will cost you additional money, and there are higher taxes on physical gold. So if you sell, you’ll have to pay a capital gains tax of up to 28% on any profit. (The typical capital gains on stocks and bonds is 20%.)

Investing in other types of tangible assets

Pros: Relatively niche markets allow investors to dig into the things they love, be it art, cars, or wine.

Cons: There's a high barrier to entry in some of these particular markets—not just financially, but in terms of knowledge. For example, the classic car collectible market is fairly exclusive and, as an investment category, it might not be very practical either because every time you use one of these collectibles in your portfolio, you run the risk of lowering its value.

Alternative assets can be exciting and sometimes profitable, but they come with extreme volatility. The wine market, for instance, is affected not just by the collector market but also by the agricultural outlook and weather conditions. These markets don't necessarily move quickly, either. As interest ebbs and flows in different types of asset classes, so do potential moneymaking opportunities.

"Look at crypto. Bitcoin, for instance, went from $60,000 to $20,000 in under a year," says Reedy. "The occasional blue-chip wine or NFT might pay off big, but real estate lets you sleep at night while building long-term wealth."

No matter what you choose to invest in, you should talk to your financial adviser about what types of investments are right for you.

Dina Sartore-Bodo contributed to this report.

Realtor.com- Gold Price Plunges After All-Time High: How Does It Now Stack Up Against Real Estate Investments and Other Popular Assets

Thu, 06 Nov 2025 14:01:20 GMT

By: Ralph DiBugnara on October 8, 2025

First-Time Home Buyer Advice: Fourth Quarter 2025

By Paul Centopani Reviewed By Aleksandra Kadzielawski

October 7, 2025 - 9 min read

https://themortgagereports.com/122882/first-time-home-buyer-advice-q4-2025

Expert guidance for first-time home buyers

The housing market can be a tough and sometimes confusing place to navigate — especially for first-time buyers. Home buying conditions are in a constant state of flux, shifting over time and by geography.

Strained affordability pushed many prospective home buyers to the sidelines in recent times. However, conditions are improving in many places around the country.

To gain insights and (hopefully) make matters easier, The Mortgage Reports spoke with industry experts to help guide borrowers in 2025’s fourth quarter. Answers may have been edited for brevity and clarity.

This year’s fourth quarter market is different because of a combination of lower mortgage rates as well as a year of decreased real estate sales. Almost all markets have seen a reduction in homes sold compared to 2023 and 2024. Buyers have gotten priced out because of a lack of homes for sale and unaffordable payments based on elevated interest rates. In September, mortgage rates hit their lowest levels of 2025 and it’s starting to reignite buyers coming to market. That, plus an increase of refinances, means more cash to buy and gives a busy outlook for the quarter.

Create a budget and stick to it. There are still not enough homes for sale to meet demand if mortgage rates drop much lower. The demand will increase and bidding wars will be upon us again. It’s important to not overpay for a house that isn’t yours out of fatigue from multiple rejected offers.

Mortgage Reports - First-Time Home Buyer Advice: Fourth Quarter 2025

Tue, 21 Oct 2025 14:12:06 GMT

By: Ralph DiBugnara on October 8, 2025

First-Time Home Buyer Advice: Fourth Quarter 2025

By Paul Centopani Reviewed By Aleksandra Kadzielawski

October 7, 2025 - 9 min read

https://themortgagereports.com/122882/first-time-home-buyer-advice-q4-2025

Expert guidance for first-time home buyers

Strained affordability pushed many prospective home buyers to the sidelines in recent times. However, conditions are improving in many places around the country.

The October Slope: Tracking the Mortgage Rate Drift in 2025

Thu, 02 Oct 2025 21:48:59 GMT

By: Ralph DiBugnara on October 2, 2025

By:Julie Gerstein on August 8, 2025

https://www.realtor.com/advice/finance/real-estate-investment-gold-bitcoin/

Gold is glittering in the headlines again. With prices hitting record highs in August—$3,534.10 per ounce, to be exact—many investors are wondering: Is now the time to pivot away from real estate and jump on the gold train?

It’s a fair question. After all, gold has long been viewed as a safe haven, especially in times of uncertainty, and with new tariffs shaking up global markets, its value is soaring.

But is it really the best place to put your money right now?

Let’s break down how gold stacks up against other popular investments—including real estate, cryptocurrency, and alternative assets—to help you decide where your dollars belong.

Real Estate: The Long Game Winner?

Despite high mortgage rates and steep home prices, real estate continues to shine as a top long-term investment. In fact, a Gallup poll shows 37% of Americans still consider real estate the best long-term investment—more than gold, stocks, or crypto.

Real estate’s appeal comes down to three things:

Equity Growth: According to the National Association of Realtors®, homeowners gained $147,000 in housing wealth on average over the past five years.

Tangible Control: You can actively influence your investment’s value through renovations, rental income strategies, and market timing.

Tax Benefits: From mortgage interest deductions to depreciation, real estate offers meaningful tax advantages.

"Traditional investments like 401(k)s, IRAs, and ETFs are great for passive growth, but real estate brings in a whole different level of wealth-building," says Dan Reedy, real estate investor and broker.

And in 2025, there's a new twist: President Trump recently signed an executive order allowing alternative assets like real estate and crypto into workplace retirement plans, opening the door for more Americans to diversify their retirement portfolios.

Still, real estate isn’t without its challenges.

"You can't really do anything with [your home equity] unless you're willing to leverage it," explains Ralph DiBugnara, founder of HomeQualified. In other words, that equity is locked unless you’re willing to tap it via a loan or HELOC.

Gold: A Glittering (But Limited) Hedge

Gold has surged thanks to tariffs on imported bars and rising demand as a hedge against inflation and global instability.

Pros:

Stability during market downturns

Hedge against inflation and currency fluctuations

Physical ownership for those seeking tangible assets

Cons:

High taxes on physical gold (up to 28% capital gains)

Low liquidity in physical form—selling takes effort

No cash flow—unlike real estate, it doesn’t pay dividends or rent

And while buying gold at Costco may be trendy, it’s not exactly practical when it comes time to sell or store it.

Cryptocurrency: High Risk, High Reward

Bitcoin is booming—again. At over $88,000, it’s hitting new highs. But the crypto market remains volatile and speculative, better suited to thrill-seekers and tech-savvy investors.

"Cryptocurrencies are notoriously volatile... Real estate doesn't have this problem," notes Harry Turner, founder of Sovereign Investor.

Crypto Pros:

Potential for massive returns

High liquidity

Growing institutional support

Crypto Cons:

Extreme volatility

Security and fraud risks

Regulatory uncertainty

REITs: A Middle Ground for Real Estate Investors

Want to dip into real estate without buying physical property? Real Estate Investment Trusts (REITs) let you invest in real estate portfolios without getting your hands dirty.

Pros:

Traded like stocks—easy to buy and sell

Regular income via dividends (up to 90%)

Diversified across property types

Cons:

Taxed as ordinary income

Less control compared to owning property directly

Yields (around 4%) can vary by sector

REITs are great for those who want exposure to real estate without needing a down payment or dealing with tenants.

Tangible Alternatives: Art, Cars, Wine—and Complexity

Yes, it’s possible to invest in fine wine, classic cars, or digital art (remember NFTs?). But these markets demand deep knowledge, significant capital, and often... luck.

"The occasional blue-chip wine or NFT might pay off big, but real estate lets you sleep at night while building long-term wealth," says Reedy.

Pros:

Passion-driven investments

Potential for high appreciation

Cons:

Illiquid and niche

Highly dependent on market trends

Often not recession-proof

So, Where Should You Put Your Money?

There’s no one-size-fits-all answer. But if you’re looking for steady growth, tangible control, and long-term stability, real estate continues to make a strong case—especially in a world where markets are more unpredictable than ever.

Gold may sparkle, and crypto may excite, but real estate endures.

As Sara Levy-Lambert of RedAwning puts it, real estate offers a rare mix of passive income, stability, and the potential to build equity—something even gold can’t match.

Before You Invest…

Always speak with a trusted financial adviser to assess your personal goals, risk tolerance, and investment timeline.

Because no matter how hot the market is, smart investing starts with a solid plan.

Want help exploring your options in real estate investing? Let me know—I can help you find resources and guides tailored to your situation.

5 Smart Ways To Lower Closing Costs When Buying a Home

Mon, 29 Sep 2025 13:40:02 GMT

By: Ralph DiBugnara on September 29, 2025

By: Nicole Spector on August 18, 2025

https://www.gobankingrates.com/investing/real-estate/ways-to-reduce-closing-costs-when-buying-home/?utm_term=source_link&utm_campaign=1312675&utm_source=nasdaq.com&utm_content=14&utm_medium=rss

If you’re preparing to buy a home, you’ve likely budgeted for the down payment—but closing costs can catch many buyers off guard. These fees cover essential services like appraisals, title searches, and taxes, and they often total thousands of dollars. In some states, they can easily exceed $10,000 when transfer taxes are included.

While some closing costs are unavoidable, there are strategies you can use to reduce the amount you’ll need to bring to the table. Here's a breakdown of five practical ways to cut those costs and make your home purchase a little more affordable.

1. Take Advantage of Community Lending Programs

Many banks offer community lending programs that provide grants or credits toward closing costs. These programs are designed to support eligible buyers—often based on income level or the location of the home—and the financial assistance does not need to be repaid.

For example, Washington Trust Bank offers several programs that can save qualified buyers $1,000 to $2,500 in closing costs. These savings might come in the form of waived underwriting fees or direct credits. It's worth checking with your local bank to see if similar programs are available in your area.

2. Choose the Right Loan Program

Your choice of mortgage loan can have a direct impact on how much you pay at closing. Some loan types—like FHA or VA loans—require lower down payments but tend to come with higher closing costs.

On the other hand, “A larger down payment or a conventional loan program through Fannie Mae or Freddie Mac may offer a larger overall savings,” said Ralph DiBugnara, founder and president at Home Qualified.

It pays to compare loan types and run the numbers with your lender to see what works best for your budget, not just in terms of monthly payments, but upfront costs too.

3. Roll Closing Costs Into Your Mortgage

While this option won’t reduce the total amount you’ll pay in the long term, it can ease the immediate financial burden. Many lenders allow borrowers to roll closing costs into their mortgage, effectively spreading the cost over the life of the loan.

Here’s how it works: if a home is priced at $250,000 and your closing costs are $7,500, you could finance the total at $257,500. You’ll pay a slightly higher monthly mortgage, but you won’t need to come up with as much cash upfront. Just be sure to discuss this option thoroughly with your lender.

4. Offer to Pay the Commissions

This may sound counterintuitive, but paying the real estate commissions yourself can actually result in lower closing costs. That’s because if the seller doesn’t have to factor commission into the sale price, the overall sale price may be lower—which reduces closing costs that are based on the transaction amount.

This approach can also have a lasting benefit. Since property taxes are often calculated based on the recorded sale price, a lower recorded price can mean lower taxes for years to come.

5. Look for First-Time Buyer Grants

If this is your first time buying a home, you could be eligible for generous grants from lenders and local or federal programs. Some banks, like Bank of America, offer closing-cost assistance for first-time buyers that can be worth several thousand dollars—sometimes up to $7,500.

These grants can be game-changers, especially for buyers who are short on cash but otherwise ready to purchase. Be sure to research and compare programs based on your eligibility and location.

Final Thoughts

Buying a home is expensive—but closing costs don’t have to break your budget. Whether it’s exploring the right loan type, tapping into community programs, or being strategic with your offer, there are ways to reduce these costs and make homeownership more affordable.

Don’t be afraid to ask your lender, agent, or bank about options. A few smart moves today can save you thousands tomorrow.

Gold vs. Real Estate: Why Smart Money Still Bets on Property in 2025

Tue, 26 Aug 2025 16:33:11 GMT

By: Ralph DiBugnara on August 21, 2025

By Erik Martin Published on July 28, 2025

https://www.bankrate.com/real-estate/escrow-process/

Understanding Escrow in Homebuying: A Beginner’s Guide

If you’re in the process of buying a home — or even just thinking about it — you’re likely being introduced to a flood of unfamiliar terminology. One of the most important concepts to wrap your head around early on is escrow. It's not just another real estate buzzword; escrow is a critical part of nearly every home purchase, and it protects both buyers and sellers during what’s often the largest financial transaction of their lives.

So what exactly is escrow, and why does it matter so much? Whether you're a first-time buyer or just a little rusty on the process, this guide will walk you through what escrow is, how it works at each stage of the homebuying journey, and how it continues to impact your finances even after you move in.

What Is Escrow, and Why Do We Use It?

At its core, escrow is a legal arrangement in which a neutral third party temporarily holds money or property until a particular condition has been met. In real estate, this is typically an escrow account where funds — usually from the buyer — are kept safe while all the terms of the home sale are completed.

Think of it as a way to make sure that no money changes hands prematurely. The seller knows you’re serious because you’ve placed money into escrow, and you as the buyer are protected because the seller doesn’t receive those funds unless all contract terms are satisfied.

How Escrow Works During a Home Purchase

The escrow process begins as soon as your offer is accepted and the purchase contract is signed. This kicks off a series of steps where funds are held in trust and multiple conditions must be met — including inspections, appraisals, and legal paperwork — before money is released and ownership is transferred.

Let’s break down the phases of escrow in a typical real estate transaction:

Step 1: Opening the Escrow Account

Once the purchase contract is signed, it’s time to deposit your earnest money into an escrow account. This is a good-faith deposit, typically 1% to 2% of the home’s purchase price.

“Once an offer is made and accepted, the contract will stipulate when the escrow deposit is due,” says Ralph DiBugnara, president of Home Qualified. “In most cases, the deposit is split into two parts — first an initial, good-faith deposit followed by the remainder of the deposit.”

This initial deposit is typically due within 7 to 10 days of signing. It's not an extra fee — it will later be applied toward your down payment or closing costs if the deal goes through.

The escrow account itself is usually held by a title company, real estate attorney, or escrow agent — depending on local laws and customs. Their job is to stay neutral and ensure that all money and documents are handled correctly.

Step 2: Appraisal and Inspection

Once your offer is in escrow, your lender will require a home appraisal to confirm that the property's value matches the agreed purchase price. If the appraisal comes in low, you may need to renegotiate the price or cover the difference out of pocket.

At the same time, you’ll have the opportunity to inspect the home. This is your chance to uncover hidden issues with the plumbing, roof, electrical systems, or structural integrity.

If significant problems are discovered, you can either request repairs, negotiate a credit, or — in some cases — walk away from the deal (usually without losing your earnest money, as long as it's within your contractual rights).

Step 3: Title Search and Insurance

Your escrow officer will also coordinate a title search to ensure that the property is legally owned by the seller and free of claims or liens. As a buyer, you’ll be required to purchase lender’s title insurance — and optionally, owner’s title insurance — to protect against future legal issues.

At this stage, your lender will also require you to secure homeowners insurance, which protects the property (and their investment) in the event of fire, theft, or other damage.

Step 4: Final Walkthrough

A day or two before closing, you’ll conduct a final walkthrough of the home to ensure it’s in the agreed-upon condition. This is not a second inspection, but a chance to verify that any negotiated repairs have been completed and nothing has changed since your last visit.

If the seller agreed to leave appliances or fix something, now’s your chance to confirm it was done.

Step 5: Closing the Deal

About three business days before closing, your lender will provide a Closing Disclosure, outlining all final costs including escrow amounts, taxes, fees, and loan terms. Review it carefully to ensure everything matches what you expected.

On closing day, you’ll sign your documents, provide your remaining down payment and closing costs (typically via cashier’s check or wire transfer), and the escrow agent will file the title with the county and release funds to the seller.

Congratulations — you’re now a homeowner!

But Wait — Escrow Doesn’t End There

Even after the deal is done, escrow continues to play a role in your financial life — just in a different form.

Now that you own the home, your lender or loan servicer will typically set up an escrow account to manage future payments for:

Property taxes
Homeowners insurance
Mortgage insurance (if required)

Instead of paying these large bills separately a few times per year, they’re divided into monthly amounts and included in your mortgage payment. Your lender collects these funds and pays the bills on your behalf when due.

This setup can be incredibly convenient, helping you avoid late payments and budget more effectively throughout the year.

Do I Have to Use an Escrow Account?

Whether escrow is optional or required depends on several factors:

If you’re using a government-backed loan (like FHA or USDA), escrow is typically mandatory.

If you’re putting down less than 20% on a conventional loan, your lender will likely require an escrow account.

If you’re putting down 20% or more, you may have the option to waive escrow — but not all lenders allow it.

Even if it’s not required, many buyers choose to keep an escrow account for the ease of budgeting and peace of mind.

Can I Cancel My Escrow Account Later?

In some cases, yes. If you’ve built enough equity or meet specific conditions set by your lender, you might be able to close your escrow account. But there may be fees or restrictions, and not all lenders allow it. Always check with your lender directly before making any decisions.

Final Thoughts: Why Escrow Matters

Escrow isn’t just a technicality — it’s a safeguard that ensures fairness, security, and smoothness in your homebuying process.

From protecting your deposit to managing future expenses, escrow plays a behind-the-scenes role that makes the complex process of buying (and owning) a home much more manageable.

As Ralph DiBugnara explains, “The initial deposit is typically due within seven to 10 days of signing the contract. This earnest money will eventually be applied to your overall down payment on the home.” Knowing how and why that money is handled through escrow helps you stay in control of your purchase.

So next time you hear someone mention “escrow,” you can smile confidently — because now, you get it.

Key Takeaways

Escrow protects both buyer and seller during a home sale by safely holding funds until conditions are met.

Your earnest money deposit is a critical part of the escrow process and shows you're serious about the purchase.

After buying, escrow helps you budget by including taxes and insurance in your monthly mortgage payments.

While escrow accounts are sometimes required, they can also be a helpful tool even when optional.

Looking for more homebuying tips? Let me know if you'd like a guide on inspections, appraisals, or mortgage pre-approval next!

Escrow in Real Estate: Definition, Process, and Tips

Thu, 21 Aug 2025 19:08:10 GMT

By: Ralph DiBugnara on August 12, 2025

By Erik Martin Published on July 22, 2025

https://www.bankrate.com/mortgages/joint-mortgage/

Considering a Joint Mortgage? Here’s What You Need to Know

Buying a home is a big step—and for many, joining forces with a trusted partner, friend, or family member can make it much more achievable. That’s where joint mortgages come into play.

Whether you're looking to increase your purchasing power or simply want to share financial responsibility, a joint mortgage might be the right move. But it also comes with unique considerations you’ll want to understand before signing on the dotted line.

Let’s break down the basics.

What Is a Joint Mortgage?

A joint mortgage is when two or more people apply for a mortgage together, combining their incomes and assets to strengthen their application. This is most common among spouses, partners, friends, or family members.

“It commonly involves two people — usually spouses, joint partners, friends or family members — who pool their income and assets together to buy a home,” says Ralph DiBugnara, President of Home Qualified.

It’s important to note: a joint mortgage doesn’t automatically mean joint ownership of the home. Only the names listed on the property title determine who legally owns the home.

How It Works

In a joint mortgage, all borrowers are equally responsible for repaying the loan. That means if one person misses a payment, the lender will expect the other borrower(s) to cover it.

Credit scores for all applicants are reviewed, and while some lenders may emphasize the highest score, others could raise interest rates if one score is significantly lower.

Requirements for a Joint Mortgage

Each lender has its own criteria, but generally, all applicants must:

Be at least 18 years old

Meet debt-to-income (DTI) and loan-to-value (LTV) ratio requirements

Provide steady proof of income and employment

Meet minimum credit score thresholds

Pros & Cons of Joint Mortgages

✅ Pros:

More Buying Power:

“The main benefit is the ability to purchase more of a home than you would be able to buy on your own,” says DiBugnara. “More income and/or assets equals the ability to borrow more money.”

Shared Costs: Joint mortgages allow you to split monthly payments, making it easier to manage your budget and save for future goals.

�� Cons:

Shared Risk: If one party can’t pay, the others are still liable.

Credit Impact: Your borrowing ability for future loans could be affected.

Complex Exit Strategies: If one person wants out, refinancing or selling may be necessary.

When Joint Mortgages Make Sense

A joint mortgage could be a good fit if:

You’re married or in a long-term, financially committed relationship
You’re buying with someone you trust completely
You’re cohabitating and sharing responsibility for property upkeep

Avoid joint mortgages with people you barely know or don’t fully trust financially—this is a long-term legal commitment.

What Happens If…

One co-borrower wants out? They’ll need permission from the others to sell their share or force a sale through legal means.

A co-borrower passes away? Remaining borrowers still owe the full mortgage. The home may go through probate if ownership isn’t clearly outlined.

Someone stops paying? Everyone’s credit could suffer, and the home could go into foreclosure if payments lapse.

Ready to Apply?

Applying for a joint mortgage requires:

Filling out an application for each borrower

Submitting documentation (income, debt, employment history, etc.)

Signing loan paperwork at closing—all parties must be present

Heads-up: joint mortgage processing can take longer than individual loans, so patience is key.

Final Thought

If you're confident in your financial partnership and want to boost your homebuying power, a joint mortgage can be a smart move.

“With more income and assets combined, you’re in a stronger position to qualify for a mortgage and afford the kind of home you really want,” says DiBugnara.

Still unsure? Let’s talk through your options together. Whether you’re planning to buy solo or with someone else, we’re here to guide you every step of the way.

Can You Really Afford More With a Joint Mortgage?

Tue, 12 Aug 2025 20:41:57 GMT

By: Ralph DiBugnara on August 8, 2025

By Michael Letendre Published: July 14, 2025

https://www.newhomesource.com/learn/how-to-choose-a-home-builder/

Choosing a home builder isn’t just about selecting a company to construct your house—it’s about hiring a trusted partner to guide you through one of the most important financial and emotional journeys of your life. From construction quality to communication styles, the builder you choose will shape everything from your budget to your stress level.

Here are eight essential questions every buyer should ask before signing on the dotted line.

1. What’s Their Track Record and Experience?

Not all builders are created equal. A builder’s history with similar projects can be a strong predictor of how yours will go. You want to see more than a flashy website or a pretty brochure—you need proof of performance.

Ask about completed projects that match your home’s size, style, or level of customization. A well-established builder should have a portfolio of comparable work and be comfortable providing references.

2. Can You Tour an Active Job Site?

Model homes are great—but they’re also staged to perfection. The real insight comes from seeing how a builder manages an actual construction site. Is it clean? Are materials protected? Is work being done efficiently?

How a builder runs a job site can tell you a lot about their priorities, especially when it comes to quality control and organization. Don’t settle for a showroom when you can observe the real process in action.

3. How Is the Payment Schedule Structured?

Not all builders follow the same payment timelines. Some request significant upfront deposits; others tie payments to specific construction milestones.

Ask for a detailed schedule that outlines when each payment is due and what it corresponds to. A milestone-based payment plan ensures that your money is going toward actual progress—not just promises.

4. What Are the Full Financial Terms?

The list price on a new home doesn’t always reflect the full cost of ownership. Financing offers, interest rate buydowns, closing cost assistance, and even inflated rates disguised by "discounted" pricing can all impact your bottom line.

Don’t just focus on the price tag—dig into what you'll actually pay each month and over time.

5. How Much Customization Is Possible?

Some builders stick to rigid packages. Others allow for nearly full customization. Knowing how flexible your builder is upfront can save you time, money, and disappointment.

Before committing, ask what options you’ll have when it comes to layout, finishes, and upgrades. Can you move a wall? Add a window? Change the flooring? Small changes can have a big impact on your satisfaction.

6. What Do Past Clients and Local Agents Say?

Online reviews can be helpful, but they rarely give you the full story. Instead, talk to people who work with builders regularly—especially local real estate agents.

"Public reviews and buyer agent feedback are some of the most valuable tools for evaluating a builder," said Ralph DiBugnara, President of Home Qualified.

Agents often have inside knowledge of how a builder handles problems and whether they deliver consistent quality. If several agents say the same thing—good or bad—pay attention.

7. How Do They Compare to Other Builders?

No single builder is perfect for everyone. Take the time to shop around. Ask the same questions to multiple builders and compare their answers, pricing, flexibility, and included features.

One builder might offer more long-term value—like pre-plumbing a basement for future expansion—while another might have a smoother process or better warranty terms.

8. What’s in the Contract?

Don’t wait until closing day to review the fine print. Request a sample contract early in the process and go through it line by line.

Look for clarity on change orders, warranties, timeline expectations, and penalties for delays. Contracts that are vague or overly one-sided are red flags.

Final Takeaway

Buying a new home is more than picking out floor plans and finishes. It’s a long-term relationship with a builder who will either make the experience smooth—or stressful. Do your due diligence. Ask hard questions. And don’t rush into anything without a full understanding of what’s ahead.

As Ralph DiBugnara put it best: “Public reviews and buyer agent feedback are some of the most valuable tools for evaluating a builder.”

Take your time, ask the right questions, and invest in the builder that’s right for you. The peace of mind is worth it.

How to Choose the Right Home Builder: 8 Essential Questions to Ask Before You Commit

Fri, 08 Aug 2025 17:20:16 GMT

By: Ralph DiBugnara on August 8, 2025

By Michael Letendre Published: July 14, 2025

https://www.newhomesource.com/learn/how-to-choose-a-home-builder/

Here are eight essential questions every buyer should ask before signing on the dotted line.

1. What’s Their Track Record and Experience?

2. Can You Tour an Active Job Site?

3. How Is the Payment Schedule Structured?

Not all builders follow the same payment timelines. Some request significant upfront deposits; others tie payments to specific construction milestones.

4. What Are the Full Financial Terms?

Don’t just focus on the price tag—dig into what you'll actually pay each month and over time.

5. How Much Customization Is Possible?

Some builders stick to rigid packages. Others allow for nearly full customization. Knowing how flexible your builder is upfront can save you time, money, and disappointment.

6. What Do Past Clients and Local Agents Say?

Online reviews can be helpful, but they rarely give you the full story. Instead, talk to people who work with builders regularly—especially local real estate agents.

"Public reviews and buyer agent feedback are some of the most valuable tools for evaluating a builder," said Ralph DiBugnara, President of Home Qualified.

Agents often have inside knowledge of how a builder handles problems and whether they deliver consistent quality. If several agents say the same thing—good or bad—pay attention.

7. How Do They Compare to Other Builders?

No single builder is perfect for everyone. Take the time to shop around. Ask the same questions to multiple builders and compare their answers, pricing, flexibility, and included features.

One builder might offer more long-term value—like pre-plumbing a basement for future expansion—while another might have a smoother process or better warranty terms.

8. What’s in the Contract?

Don’t wait until closing day to review the fine print. Request a sample contract early in the process and go through it line by line.

Look for clarity on change orders, warranties, timeline expectations, and penalties for delays. Contracts that are vague or overly one-sided are red flags.

Final Takeaway

As Ralph DiBugnara put it best: “Public reviews and buyer agent feedback are some of the most valuable tools for evaluating a builder.”

Take your time, ask the right questions, and invest in the builder that’s right for you. The peace of mind is worth it.

Can You Get a Home Equity Loan with Bad Credit? Requirements, Risks, and Better Options

Mon, 04 Aug 2025 14:07:37 GMT

By: Ralph DiBugnara on August 1, 2025

By: Paul Centopani July 31, 202

https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional

Mortgage shoppers may have something to smile about heading into August. The average 30-year fixed mortgage rate dropped slightly to 6.72% at the end of July, marking the second straight week of declines and continuing a 28-week streak of staying below 7%.

While that’s a promising sign, most housing experts aren’t predicting a dramatic drop anytime soon. Instead, the outlook for August suggests rates will hold steady or inch downward as inflation data and economic indicators continue to evolve.

Mortgage Rate Recap - Where We Stand According to Freddie Mac:

30-Year Fixed Rate (July 31): 6.72% (down from 6.74% the week prior)

15-Year Fixed Rate: 5.85% (down from 5.87%)

This modest decline comes despite a 3.8% drop in mortgage applications, signaling continued uncertainty and caution from prospective homebuyers.

Will Rates Fall in August?

Most industry experts agree: rates will likely remain stable or trend slightly lower this month. The market is waiting on several critical factors, including:

Inflation data from July (to be released mid-August)

Labor market trends and wage growth

Federal Reserve sentiment about rate cuts

Tariff developments and global supply chain risks

Though some experts are optimistic, most believe any downward movement in rates will be gradual, not dramatic.

Ralph DiBugnara, President, Home Qualified

Prediction: Rates will moderate

"July’s Fed meeting will most likely show us more of the same strategy we have seen this year—which is hold interest rates and no raise or cut. The Fed Chairman seems to want to see a significant drop in inflation before he agrees to cut. But there is a chance he can reverse course slowly to a cutting strategy because of the immense amount of pressure he is receiving. Not only is the President calling for a cut but the world economy has seen multiple countries cut rates over 2025."

"If he does cut, I do not think it will be fast and probably will bleed over into 2026."

Summary of Other Expert Outlooks

Danielle Hale (Realtor.com) believes a cooling inflation print in August could help bring rates closer to 6.4% by year-end.

Selma Hepp (Cotality) expects the Fed to stay on hold this month, citing mixed employment signals and weak homebuyer demand.

Sam Williamson (First American) points to tariff-related price pressures and a cautious Fed stance, predicting rates will hover in the upper 6% range.

Tony Julianelle (Atlas Real Estate) expects rates to stay “range-bound,” with no sharp moves unless inflation or employment data surprises the market.

Marc Halpern (Foundation Mortgage) notes sluggish consumer confidence and low home sales are limiting rate movement for now.

Kelly Zitlow (Cornerstone Capital Bank) points out that the Fed remains cautious, and geopolitical and trade risks continue to cloud the outlook.

Mortgage Rate Trends: Where We're Headed in 2025

Although rates are higher than they were during the pandemic years, they remain below historic averages—and may trend slightly lower in the coming months.

Month Avg 30-Year Rate

July 2024 - 6.85%

August 2024 - 6.50%

September 2024 - 6.18%

October 2024 - 6.43%

November 2024 - 6.81%

December 2024 - 6.72%

January 2025 - 6.96%

February 2025 - 6.84%

March 2025 - 6.65%

April 2025 - 6.73%

May 2025 - 6.82%

June 2025 - 6.82%

July 2025 - 6.72%

The National Association of Realtors predicts the third-quarter average could settle around 6.4%, while the Mortgage Bankers Association forecasts 6.8%. Either way, rates appear to be trending slightly lower heading into the fall. Though higher than the ultra-low rates of 2020 and 2021, today’s rates remain well below the 50-year historical average of 7.8%. That means buyers with good credit can still secure a competitive rate by historical standards.

Strategies for Mortgage Shoppers in August

1. Get Pre-Approved, Not Just Pre-Qualified

This helps you move faster when making an offer and shows sellers you’re a serious buyer.

2. Have Your Financial Documents Ready

With rates still fluctuating, speed is critical. Being prepared can help you lock in a favorable rate when opportunity strikes.

3. Shop Around for Lenders

Rates can vary significantly between lenders, especially during uncertain periods. Getting 3–5 quotes can save you thousands.

4. Choose the Right Loan for Your Situation

VA Loans: Ideal for eligible veterans and service members. No PMI, competitive rates.

FHA Loans: Great for lower credit scores or minimal down payments.

Conforming Loans: Flexible with just 3% down and good credit.

USDA Loans: For rural buyers with low to moderate income.

Jumbo Loans: Best for high-priced homes exceeding conforming loan limits.

5. Monitor Inflation and Economic Data

The mortgage market is data-driven. If inflation readings and job numbers come in cooler than expected, you may see rates ease. But a surprise spike could cause an upward reversal.

Final Thoughts: Be Prepared, Not Reactive

While August may not bring a major drop in rates, the signs are pointing toward eventual relief later this year. The Fed continues to monitor inflation and economic signals, and although immediate cuts aren’t likely, a downward bias is building into fall.

If you're planning to buy or refinance, staying informed, getting pre-approved, and actively comparing lenders will put you in the best position—no matter which way rates move in the short term.

Looking to lock in the best rate today? Start comparing lender offers to find the most competitive deal for your situation.

August 2025 Mortgage Rate Forecast: Are Lower Rates Finally on the Horizon?

ralph@homequalified.com (Ralph DiBugnara) — Fri, 01 Aug 2025 19:50:09 GMT

By: Ralph DiBugnara on July 17, 2025

By Paul Centopani Reviewed By Aleksandra Kadzielawski

July 11, 2025

https://themortgagereports.com/121026/first-time-home-buyer-advice-q3-2025

Mortgage Rate Recap - Where We Stand According to Freddie Mac:

30-Year Fixed Rate (July 31): 6.72% (down from 6.74% the week prior)

15-Year Fixed Rate: 5.85% (down from 5.87%)

This modest decline comes despite a 3.8% drop in mortgage applications, signaling continued uncertainty and caution from prospective homebuyers.

Will Rates Fall in August?

The expert consensus leans toward stability, with some potential for gradual downward movement depending on inflation reports, labor market trends, and the Fed’s next moves.

Ralph DiBugnara, President, Home Qualified

Prediction: Rates will moderate

"If he does cut, I do not think it will be fast and probably will bleed over into 2026."

Other Expert Predictions

Danielle Hale (Realtor.com): Expects mortgage rates to gradually fall as inflation data improves, possibly reaching the 6.4% range by year-end.

Selma Hepp (Cotality): Anticipates no Fed rate cut in August but sees growing pressure for action in September due to mixed employment and housing data.

Tony Julianelle (Atlas Real Estate): Believes rates will stay in a tight range unless there's a significant shift in inflation or labor figures.

Sam Williamson (First American): Projects mortgage rates to remain in the upper 6% range until a clearer disinflation trend emerges.

Kelly Zitlow (Cornerstone Capital Bank): Cites Fed caution and global instability as key reasons for continued rate moderation.

Matt Pettit (Mountain West Financial): Notes that while optimism remains for future rate cuts, the timeline appears delayed.

Mortgage Rate Trends: Where We're Headed in 2025

Although rates are higher than they were during the pandemic years, they remain below historic averages—and may trend slightly lower in the coming months.

Month Avg 30-Year Rate

July 2024 - 6.85%

August 2024 - 6.50%

September 2024 - 6.18%

October 2024 - 6.43%

November 2024 - 6.81%

December 2024 - 6.72%

January 2025 - 6.96%

February 2025 - 6.84%

March 2025 - 6.65%

April 2025 - 6.73%

May 2025 - 6.82%

June 2025 - 6.82%

July 2025 - 6.72%

Strategies for Mortgage Shoppers in August

1. Get Pre-Approved, Not Just Pre-Qualified

This helps you move faster when making an offer and shows sellers you’re a serious buyer.

2. Have Your Financial Documents Ready

With rates still fluctuating, speed is critical. Being prepared can help you lock in a favorable rate when opportunity strikes.

3. Shop Around for Lenders

Rates can vary significantly between lenders, especially during uncertain periods. Getting 3–5 quotes can save you thousands.

4. Choose the Right Loan for Your Situation

5. Monitor Inflation and Economic Data

The mortgage market is data-driven. If inflation readings and job numbers come in cooler than expected, you may see rates ease. But a surprise spike could cause an upward reversal.

VA Loans: Ideal for eligible veterans and service members. No PMI, competitive rates.

FHA Loans: Great for lower credit scores or minimal down payments.

Conforming Loans: Flexible with just 3% down and good credit.

USDA Loans: For rural buyers with low to moderate income.

Jumbo Loans: Best for high-priced homes exceeding conforming loan limits.

Final Thoughts: Be Prepared, Not Reactive

If you're planning to buy or refinance, staying informed, getting pre-approved, and actively comparing lenders will put you in the best position—no matter which way rates move in the short term.

Looking to lock in the best rate today? Start comparing lender offers to find the most competitive deal for your situation.

2025 Real Estate Trends and Market Discussion

ralph@homequalified.com (Ralph DiBugnara) — Tue, 29 Jul 2025 15:50:08 GMT

What You Need to Know About Today’s Housing Market

By: Ralph Dibugnara

July 29, 2025

n this power-packed episode of the Real Estate Talk Podcast, hosts Rob Kyleman and Joshua Britt sit down with Ralph DiBugnara—president of HomeQualified and VP at New American Funding. With over $40 billion in closed loans and decades of real estate and mortgage experience, Ralph dives deep into the evolving housing market, the future of credit scoring, rising costs, Airbnb oversaturation, crypto’s role in real estate, and the generational shifts reshaping buyer behavior. Whether you’re a first-time homebuyer, agent, or investor, this episode is a masterclass in surviving—and thriving—in today’s unpredictable market.

Key Takeaways:

1. The Market Is Local—Really Local

“It’s almost like dealing with different countries. ”Ralph emphasizes that the housing market is no longer just cyclical—it’s fragmented. With wildly different inventory, pricing, and demand across states, agents and buyers must now adopt hyper-local strategies.

2. Rising Costs Are the Real Barrier

“Interest rates are high, taxes are high, insurance is high, cost of goods is high. "Affordability in 2025 is being attacked from all angles. Between a 6-million-unit housing deficit, multiple-offer bidding wars, and inflation across the board, Ralph stresses that buyers need patience—and strategy—to win.

3. Value Lies in the Fixer-Upper

“You either have to buy something older and do the work, or find something that needs to be reconstructed and do the work. "With turnkey homes out of reach for many, Ralph advocates for long-term investment in value-add properties. While rehab costs are also rising, the opportunity lies in sweat equity.

4. Time Is the Great Equalizer in Real Estate

“If you can hold on for five years, you can outrun a bad investment. "Ralph shares a personal story of a condo he held through the 2008 crash and sold 20 years later for a profit—highlighting real estate’s resilience versus volatile investments like stocks or crypto.

5. Social Media Is a Tool—If You Stay Real

“I’m not trying to be a market predictor. I just show what I’m actually going through. "For agents or investors looking to build a brand in 2025, Ralph suggests using platforms like Instagram and YouTube to share real, unfiltered experiences—not just glossy wins.

6. The New Investor Trap: Chasing Shiny Objects

“Social media can speed up a process that shouldn’t be sped up. "The Growth Trap,” as Ralph calls it in his book, describes when people stall without realizing it. In real estate, that often comes from trying to skip steps. His advice? Partner with experienced investors and learn from their pain.

7. Vantage 4.0: A Double-Edged Sword?

“The credit score model may look better for younger generations—but banks will still adjust their risk standards. "Vantage 4.0 may give credit for non-traditional habits like Afterpay or rent payments, but Ralph warns it won’t replace due diligence or underwriting fundamentals.

8. Airbnb: Not What It Used to Be

“The market got flooded, regulations tightened, and now you’re competing with corporations. "Ralph notes that while Airbnb was once a goldmine, it’s become saturated, over-regulated, and competitive—especially in non-tourist towns. Viable short-term rental markets remain, but they’re rare and hyper-regulated.

9. Crypto Is Coming… But Not How You Think

“Most lenders see it like stocks—real, but you’ll need to liquidate it to use it.”While crypto is gaining acceptance, it won’t fully enter mainstream mortgage underwriting until privatization of Fannie/Freddie or non-QM lenders step in.

10. 2025 Forecast: No Major Rate Drops Yet

“We might see a symbolic cut, but it won’t move the needle much.”With global pressure mounting and recession shadows growing, Ralph predicts minor rate cuts in the near term but warns that substantial relief likely won’t come until Jerome Powell exits the Fed in 2026.

Standout Quotes from Ralph DiBugnara :“Real estate, long-term, will outrun all the bad investments you make in it.”“Every loss I take in this business, I treat as an expensive education. ”The only way I see value in buying real estate right now is buying older or distressed and doing the work.”“Social media is reality TV—just show your actual reality and you’ll connect. ”Crypto is a real asset now—but you’ll still need to liquidate to use it in most lending situations.”

Final Thoughts:

Ralph’s blend of street-smart experience and big-picture insight makes this episode a must-watch for anyone navigating today’s housing market. His honesty, resilience, and forward-thinking approach remind us: the rules of the game may change, but fundamentals—patience, knowledge, and community—never go out of style.

Watch the full episode: Disruptors Network YouTube Channel

Get Ralph’s book: The Growth Trap – Available on Amazon

Explore Ralph’s platform: HomeQualified.com.

For a visual overview and additional insights, you can watch the full video here: https://www.youtube.com/watch?v=tkc2Hvmh6F4

Buy Smart, Not Scared: Q3 Game Plan for First-Time Buyers

ralph@homequalified.com (Ralph DiBugnara) — Thu, 17 Jul 2025 15:21:22 GMT

By: Ralph DiBugnara on July 17, 2025

By Paul Centopani Reviewed By Aleksandra Kadzielawski

July 11, 2025

https://themortgagereports.com/121026/first-time-home-buyer-advice-q3-2025

Thinking About Buying a Home? Read This First.

Navigating the housing market can feel overwhelming—especially if you’re buying for the first time. With fluctuating rates, changing inventory levels, and mixed signals in the economy, it’s no surprise that many would-be buyers are unsure whether to jump in or wait it out.

But here’s the good news: Quarter 3 of 2025 is shaping up to be surprisingly favorable for first-time buyers—if you know how to move smart.

________________________________________

What Makes Q3 2025 Different?

Across the country, inventory is increasing, concessions are becoming more common, and prices in overheated markets are starting to cool. Some areas, like parts of Florida and Texas, are seeing oversupply, while others remain highly competitive. That’s why understanding your local market is key.

According to housing expert Ralph DiBugnara, president of Home Qualified, the real advantage for first-time buyers this quarter lies in access to support.

“What new home buyers are getting the benefit of is much more down payment assistance and grant programs than have been available over the last 15 years,” Ralph says. “This has been a major positive in helping new buyers.”

________________________________________

How to Navigate the Chaos

Even with uncertainty around the economy and government policy, Ralph emphasizes the importance of staying grounded and disciplined.

“The best thing a new home buyer can do in today’s market is create a personal budget and stick to it,” he advises. “High rates, high insurance costs, and possible bidding wars can always make it seem like spending more is necessary. I believe having a budget that includes what housing payment is affordable can keep buyers out of making a bad investment.”

In other words, you don’t need to chase perfection—you need to pursue what’s right for you.

________________________________________

Opportunity + Strategy = Advantage

If you’re a first-time buyer in Q3 2025, you’re in a unique position:

• There are more homes on the market than we’ve seen in years.

• Sellers are offering rate buydowns, concessions, and flexibility.

• You may now qualify for programs that can significantly reduce upfront costs.

It’s a window that rewards preparation and patience. And the buyers who win are the ones who know their numbers, understand their needs, and act when the right opportunity appears.

________________________________________

The Bottom Line

It’s not about waiting for the market to be perfect—it’s about being ready when it’s good enough for your goals. Q3 2025 might just be that moment.

If you’re serious about buying your first home, now’s the time to align your finances, lean on trusted professionals, and make your move with confidence.

Need help understanding your options?

Let’s talk down payment programs, current rates, and how to get pre-approved. Shoot me a message, and let’s get you one step closer to the keys

The Smart Buyer's Guide: 5 Hidden Home Upgrades That Pay Off Big

ralph@homequalified.com (Ralph DiBugnara) — Mon, 14 Jul 2025 22:35:44 GMT

By Ralph Dibugnara March 13, 2025

March 8, 2025

By Martin Dasko

According to a recent Realtor.com report, the median asking rent price for the 50 largest metropolitan areas was down 0.2% annually in January, making the cost of living that bit easier to afford. The research found that even though the median rent increased from $1,695 in December to $1,703 in January, it was the 18th consecutive month where rents fell on an annual basis.

The positive for renters is that there are numerous major metro areas where the rent is more affordable now.

These are the top metros where rent is more affordable than last year. The list is organized by percentage price drop year over year. The rent prices are for any unit, from a studio to a two-bedroom condo.

Denver-Aurora-Centennial, Colorado

Year-over-year rental price change: -5.6%

Median monthly rent: $1,796

Income spent on rent: 20.2%

Income spent on buying: 33.4%

Austin-Round Rock-San Marcos, Texas

Year-over-year rental price change: -4.8%

Median monthly rent: $1,467

Income spent on rent: 17.2%

Income spent on buying: 30.3%

San Diego-Chula Vista-Carlsbad, California

Year-over-year rental price change: -4.8%

Median monthly rent: $2,695

Income spent on rent: 31.4%

Income spent on buying: 57.7%

Memphis, Tennessee-Mississippi-Arkansas

Year-over-year rental price change: -4.3%

Median monthly rent: $1,177

Income spent on rent: 21.1%

Income spent on buying: 30.8%

Riverside-San Bernardino-Ontario, California

Year-over-year rental price change: -4.1%

Median monthly rent: $2,065

Income spent on rent: 28.8%

Income spent on buying: 43.6%

Chicago-Naperville-Elgin, Illinois-Indiana

Year-over-year rental price change: -3.6%

Median monthly rent: $1,776

Income spent on rent: 24.6%

Income spent on buying: 24.8%

Dallas-Fort Worth-Arlington, Texas

Year-over-year rental price change: -3.5%

Median monthly rent: $1,445

Income spent on rent: 19.5%

Income spent on buying: 29.3%

Phoenix-Mesa-Chandler, Arizona

Year-over-year rental price change: -3.5%

Median monthly rent: $1,488

Income spent on rent: 20.4%

Income spent on buying: 36.6%

San Francisco-Oakland-Fremont, California

Year-over-year rental price change: -3.3%

Median monthly rent: $2,708

Income spent on rent: 24.3%

Income spent on buying: 41.4%

Atlanta-Sandy Springs-Roswell, Georgia

Year-over-year rental price change: -2.9%

Median monthly rent: $1,565

Income spent on rent: 21.4%

Income spent on buying: 28.4%

Does Buying in These Areas Still Make Financial Sense?

With rental prices dropping, it’s worth exploring if it still makes sense to purchase a home in one of these areas. Here are a few key points to consider before making a decision.

Low Rents Could Be an Opportunity To Enter the Real Estate Market

Lindsey Harn, a real estate agent at Christie’s International Real Estate, said she’s a big believer in buying when the right opportunity comes along.

She added, “If rents are lower, landlords may finally be ready to sell their properties, which means you have more inventory and more options to consider when buying.”

If you’re looking for a place to live, this may be an excellent opportunity to get your foot in the door without competing with as many cash investors. Low rental rates could indicate that the local landlords aren’t making as much in profit and may be looking to liquidate their assets. This could be an ideal time to browse through listings to see if you could purchase a home for a lower listing price.

Buying May Help Stabilize Your Monthly Payments

Ralph DiBugnara, a real estate expert and president of Home Qualified, pointed out that renting has been cheaper than owning in major cities for longer than anyone expected.

He explained, “Even though this has been great news for renters, long-term rental will continue to rise, and the only way to fix your housing payment is to have financing or own real estate.”

DiBugnara believes your mortgage payment will be lower than rent payments in five years, which would help stabilize your monthly housing expenses. He also mentioned that renters will struggle to lower costs without downsizing their space, while homeowners could refinance at a lower rate in the future to bring down how much they’re spending.

DiBugnara said, “I believe owning will always be more advantageous than renting for long-term financial health.”

Consider Your Personal Situation

Even though rent prices are slowly decreasing in many major metros across the country, this doesn’t necessarily reflect your financial situation. As always, you should take into account your own personal situation before deciding on a significant investment like a home.

You’ll want to think about some of these factors before deciding if it makes sense to buy or rent:

Your job stability: If your job isn’t stable or if you’re concerned about potential layoffs, you don’t want to commit to homeownership, because the expenses could quickly pile up.

Your savings and debt: If you have consumer debt or if your savings account isn’t where you want it to be, you’ll want to continue focusing on saving up until you’re ready to commit to homeownership.

Your lifestyle: If you’re looking to start a family or just want some stability in your life, purchasing a home may make sense.

It’s clear that the market is going through some changes. You want to ensure that you review all possible options with your living situation so that you make a decision that aligns with your needs and goals.

Refinancing in 2025: When to Act and What to Consider

ralph@homequalified.com (Ralph DiBugnara) — Thu, 10 Jul 2025 15:54:34 GMT

By: Ralph DiBugnara on July 10, 2025

By Erik J. Martin | Updated July 8, 2025 | Reviewed by Aleksandra Kadzielawski

Published on ��https://themortgagereports.com/54100/how-soon-can-i-refinance-after-i-close-on-my-mortgage

Refinancing your mortgage doesn’t always require a long wait. Depending on the type of loan you have—and sometimes the lender—it may be possible to refinance immediately after closing, or in as little as six months. The article provides a comprehensive breakdown of timelines, eligibility requirements, and strategic reasons to refinance, including lowering monthly payments or accessing home equity.

What the Experts Say

Ralph DiBugnara, President of Home Qualified, encourages homeowners to look beyond just interest rates:

“What’s most important to focus on is, what are the monthly and lifetime savings of the loan? What are the costs? And how long will it take you to recover those costs with the savings you’ll earn?”

This underscores the importance of doing a cost-benefit analysis before jumping into a refinance. It’s not just about qualifying—it’s about making the refinance work for you over time.

Minimum Wait Times by Loan Type

Conventional Loan: Immediately (but often 6 months if using the same lender)

FHA Loan: 6–12 months depending on refinance type

VA Loan: 210 days or 6 on-time payments, whichever is longer

USDA Loan: Usually 12 months of on-time payments

Jumbo Loan: No federal rules—wait depends on lender policies

Top Reasons to Refinance

Lower Interest Rate

Reduce your monthly mortgage payment and save on total interest costs over time.

Shorten Loan Term

Move from a 30-year to a 15- or 20-year loan to pay off your home faster and pay less interest overall.

Switch to Fixed Rate

If you have an adjustable-rate mortgage (ARM), switching to a fixed-rate loan locks in stability and predictability.

Tap into Home Equity

Use a cash-out refinance to fund home improvements, consolidate debt, or cover large expenses like college tuition.

Remove Mortgage Insurance

FHA borrowers can eliminate mortgage insurance premiums (MIP) by refinancing into a conventional loan—often once they’ve built 20% equity.

Manage Divorce Settlements

Refinancing allows one partner to remove the other's name from the mortgage, ensuring clean ownership during a property settlement.

Refinancing Costs & Considerations

Closing Costs: Usually 2%–5% of the loan amount

Credit Score: Impacts approval and interest rate offers

Loan Term Trade-Offs: Longer terms lower your payment but increase interest paid over time

Prepayment Penalties: Check your current mortgage terms

Impact on Equity: Refinancing resets your loan, which may delay equity growth if you’re extending the term

When Should You Refinance?

The right time is a balance between market trends and personal financial readiness:

Have interest rates dropped since your last loan?

Has your credit improved or your home value increased?

Do you have a clear goal—lower payment, faster payoff, access to cash?

If so, a refinance could offer long-term financial benefits. Use online calculators to find your break-even point—the moment your refinance savings outweigh the costs.

How to Refinance – Step-by-Step

Prepare Documents (pay stubs, W-2s, current mortgage statements)

Compare Lenders (get quotes from at least 3)

Apply for a Loan (be ready to explain your refinance goals)

Complete Underwriting (may involve a home appraisal)

Close the New Loan (review final terms, sign documents)

Final Insight

If you bought your home just a few months ago, refinancing might already be on the table. And with the right timing and financial strategy, it can save you thousands over the life of the loan. Just make sure you’re not focusing solely on a shiny interest rate—analyze the full cost and long-term savings, just as Ralph DiBugnara advises.

Will Interest Rates Go Down in July? | Predictions 2025

ralph@homequalified.com (Ralph DiBugnara) — Mon, 30 Jun 2025 18:54:50 GMT

By Paul Centopani

June 26, 2025

By: Ralph Dibugnara June 30, 2025

Mortgage rate forecast for next week (June 30-July 4)

https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional

Mortgage rates decreased for the fourth consecutive week.

The average 30-year fixed rate mortgage (FRM) declined to 6.77% on June 26 from 6.81% on June 18, according to Freddie Mac. It marks 23 straight weeks below 7% for the average 30-year FRM.

Mortgage rates in 2025 have been experiencing a subtle but important shift. After climbing sharply in 2023 due to aggressive Federal Reserve rate hikes aimed at taming inflation, rates have now started to show signs of stabilizing and even easing slightly.

As of late June 2025, the average 30-year fixed mortgage rate stood at about 6.77%, marking four straight weeks of decline and maintaining a level below 7% for over five months. This sustained period below 7% is significant given that mortgage rates had surged well above that in previous years.

Why is this happening?

The Federal Reserve is walking a tightrope:

Inflation has cooled down somewhat, but the Fed is cautious because tariffs and geopolitical events (like tensions in the Middle East) could push inflation back up.

The Fed’s officials, including Chairman Jerome Powell, have been in a “wait and see” mode—hesitant to cut rates until there’s clearer evidence tariffs aren’t causing inflationary pressures.

The labor market has shown mixed signals, with some revisions suggesting it’s not as strong as initially thought, which could eventually pressure the Fed to ease rates to stimulate the economy.

The global economy also faces uncertainty from trade tensions and geopolitical conflicts, which traditionally tend to lower interest rates as investors seek safer assets.

What about July 2025?

Experts overwhelmingly predict mortgage rates will mostly moderate rather than dramatically rise or fall during July. The mix of cautious Fed policy, persistent inflation concerns, and geopolitical risk means rates will likely stay in a narrow band.

Ralph DiBugnara’s Perspective:

Ralph DiBugnara, founder at Home Qualified, describes the market as “a predicament going into July,” highlighting several important points:

Signs Point to Potential Rate Cuts:

Historically, threats of war or geopolitical instability tend to push mortgage rates lower because investors flock to safe assets like Treasury bonds, which pulls down yields and consequently mortgage rates.

Fed’s Pause on Rate Cuts:

However, the Fed remains cautious and has paused rate cuts, largely because it is uncertain about the inflationary impact of tariffs and is monitoring economic data before making moves.

Closer to Lower Rates Compared to Earlier:

DiBugnara believes we are closer to seeing lower mortgage rates now than at the start of the year, suggesting a gradual easing environment ahead, rather than sudden shifts.

Specific Rate Predictions:

He forecasts the average 30-year fixed mortgage rate in July to be around 6.875%, with the 15-year fixed rate at about 6.375%. These levels suggest a slight improvement over the high rates seen previously but still reflect a relatively high-rate environment compared to the ultra-low rates seen in 2020-2021.

Additional Expert Views & Trends

Other economists and mortgage experts echo a similar outlook of rates remaining mostly flat or slightly declining, with the possibility of “rollercoaster” ups and downs due to tariff expirations, Fed meetings, and economic data releases.

Most forecasts from major housing authorities put Q3 2025 rates in the 6.4% to 6.8% range, confirming a mild but steady downward trend.

The “new normal” mortgage rate is considered to be around 7%, according to some experts, with the ultra-low rates of the pandemic era seen as exceptional outliers.

What Should Borrowers Do?

Shop Around: Rates can vary widely between lenders based on credit score, down payment, and financial health.

Be Prepared: Mortgage market volatility means borrowers should get pre-approved and act quickly if they find a good deal.

Manage Expectations: Rates may not drop drastically soon but are expected to gradually improve throughout the year.

Understand Loan Types: Different loan programs (VA, FHA, USDA, jumbo) offer varied rates and benefits depending on the borrower’s profile.

How to shop for interest rates

Rate shopping doesn’t just mean looking at the lowest rates advertised online because those aren’t available to everyone. Typically, those are offered to borrowers with great credit who can put a down payment of 20% or more.

The rate lenders actually offer depends on:

• Your credit score and credit history

• Your personal finances

• Your down payment (if buying a home)

• Your home equity (if refinancing)

• Your loan-to-value ratio (LTV)

• Your debt-to-income ratio (DTI)

To figure out what rate a lender can offer you based on those factors, you have to fill out a loan application. Lenders will check your credit and verify your income and debts, then give you a ‘real’ rate quote based on your financial situation.

You should get three to five of these quotes at a minimum, then compare them to find the best offer. Look for the lowest rate, but also pay attention to your annual percentage rate (APR), estimated closing costs, and ‘discount points’ — extra fees charged upfront to lower your rate.

Summary Takeaway

Mortgage rates in July 2025 are expected to moderate, possibly edge down slightly, but will remain historically elevated compared to pandemic lows. The Federal Reserve’s cautious stance, ongoing inflation concerns, and geopolitical risks are keeping rates relatively stable, with the potential for modest declines if economic conditions allow.

Ralph's insight encapsulates the uncertainty and cautious optimism: rates might soften soon, but for now, it’s a “wait and see” environment with moderate levels around 6.875% for 30-year fixed mortgages.

Decrease in Buying Vacation Homes: A Unique Buying Opportunity in 2025

ralph@homequalified.com (Ralph DiBugnara) — Thu, 05 Jun 2025 17:03:56 GMT

A Rare Dip in Vacation Home Demand

By: Ralph Dibugnara

June 5, 2025

As the real estate market continues to shift in 2025, one trend stands out: the sharp decline in the purchase of vacation homes. According to a recent analysis shared in a YouTube video, the number of mortgages taken out on second homes has reached its lowest point in 20 years. This downturn in activity presents a potential goldmine for buyers who know where to look.

Why the Drop in Vacation Home Purchases Matters

Over the past year, fewer people have been investing in second homes—often used as vacation or short-term rental properties. Rising interest rates, economic caution, and declining returns from platforms like Airbnb have made many prospective buyers hesitant. As a result, inventory in these areas is building up.

This slowdown could lead to a surplus of properties on the market, especially in popular tourist destinations that previously saw high demand from investors. In turn, this increased inventory may drive prices down and create unique opportunities for strategic buyers.

The Airbnb Effect: Inventory on the Horizon

Short-term rental markets, especially those reliant on Airbnb income, are now seeing a pullback. As fewer buyers take on new mortgages and many owners reconsider the profitability of managing vacation rentals, more homes are likely to be listed for sale in the next 12 to 24 months.

This means we could soon see a wave of former short-term rentals hit the market. For buyers, this anticipated supply boost represents a rare opportunity—especially if prices remain suppressed due to low competition.

A Buyer’s Market for the Right Type of Property

Even though some investors may be cautious about re-entering the Airbnb business, the speaker in the video notes that these properties still hold value—particularly for owner-occupants. If you're looking to purchase a home in a desirable area and live in it, now could be the perfect time to get in before demand rebounds.

In other words, this isn’t just a play for rental investors. People looking for a second home, a relocation opportunity, or even a primary residence in a scenic area can benefit from today's soft market conditions.

Looking Ahead

The decline in vacation home buying isn't just a statistic—it's a signal. With fewer buyers, growing inventory, and reduced competition, 2025 may offer some of the best buying conditions in years for certain segments of the real estate market.

Whether you're an investor waiting for the right moment or a future homeowner eyeing a dream location, keeping an eye on the short-term rental market could lead you to your next big opportunity.

For a visual overview and additional insights, you can watch the full video here: https://youtube.com/shorts/riNsRqLCkVQ?si=En3MKSlTJgqLfB1b

Why Warren Buffett Prefers Stocks — But Real Estate Is Still a Great Investment

ralph@homequalified.com (Ralph DiBugnara) — Mon, 02 Jun 2025 18:01:01 GMT

Understanding Warren Buffett’s Stock Preference While Real Estate Remains a Solid Investment for Everyday Investors

By: Ralph Dibugnara

June 2, 2025

You’ve probably heard the advice everywhere: “Buy real estate!” But Warren Buffett, one of the world’s greatest investors, famously says he prefers stocks over real estate. So, why the difference? Let’s break down the perspectives.

Real Estate’s Strong Historical Track Record

The video points out that over the last 83 years, real estate has appreciated in value for 77 years — an impressive record. The only years it declined were during major market crashes, making it a relatively safe investment for the average person.

Real estate’s consistent growth comes from fundamental factors like:

Limited housing supply

Increasing demand due to population growth

Its status as a tangible asset

For most people looking for a solid, understandable way to grow wealth, real estate ticks many boxes.

Warren Buffett’s Unique Position and Preference

Warren Buffett’s investing journey is unique. He built his fortune in a time when stock investing had less competition and inefficiency that he could exploit. Today, he has access to sophisticated financial tools and inside knowledge, enabling him to make complex, high-level stock investments.

For Buffett:

Stocks offer greater liquidity

They provide ease of diversification

He can make more sophisticated investment choices

These advantages make stocks a better fit for his style and resources.

What This Means for Most Investors

If you’re an everyday investor:

Real estate is still one of the best “simple” investments for building wealth.

It provides steady growth, tangible value, and potential rental income.

The housing shortage and demand trends support continued appreciation.

Buffett’s advice is shaped by his unique skills and resources, but for most people, real estate remains a solid, long-term investment choice.

Conclusion

Warren Buffett’s preference for stocks doesn’t mean real estate is a bad investment. Rather, it highlights that different investments work better for different investors depending on their knowledge, capital, and goals.

For many people seeking a straightforward, historically reliable investment, real estate remains a powerful way to grow and protect wealth.

Acceleration Clause: The Silent Killer in Your Loan Agreement

ralph@homequalified.com (Ralph DiBugnara) — Fri, 30 May 2025 18:28:11 GMT

By: Ralph Dibugnara

By Yaёl Bizouati-Kennedy May 8, 2025

https://www.realtor.com/advice/finance/what-is-an-acceleration-clause/

t’s no secret that the double whammy of inflation and high interest rates continues to hurt Americans’ finances. Further compounding the issue, an Insurify survey found that “homeowners will again face rising insurance costs in 2025 as insurance companies try to recoup massive losses from recent years.”

The insurance comparison shopping website projects the annual cost of home insurance will increase 8% by the end of the year, to a national average of $3,520.”

In turn, these combined high costs can result in missed mortgage payments.

In fact, as of Feb. 28, 2025, the total U.S. loan delinquency rate stood at 3.53%, representing a 5.69% year-over-year change, according to Intercontinental Exchange data.

While missing one mortgage payment might not seem catastrophic, homeowners should be cautious about one specific clause in their contract: the mortgage acceleration clause.

What is a mortgage acceleration clause?

A mortgage acceleration clause is a provision in the mortgage contract that stipulates the lender may “accelerate” payments under certain circumstances. It's part of the standard mortgage agreement used by Fannie Mae. But even if your mortgage is not backed by Fannie Mae, most lenders have some form of an acceleration clause in place.

“If a homeowner fails to fulfill the terms of their mortgage agreement, they’ll receive an acceleration letter notifying them that the lender has triggered the acceleration clause,” according to Rocket Mortgage.

"If any terms of the loan agreement are not met, the mortgage note holder has the right to call the note," adds Ralph DiBugnara, a vice president at Residential Home Funding.

What can trigger an acceleration clause in real estate?

Various situations can initiate the implementation of this clause, and understanding your contract and its terms is crucial.

Missing payments

When homeowners miss a mortgage payment, lenders can use this clause.

“The number of payments that can be missed before a lender demands repayment can vary based on several factors, such as the loan documents, laws and regulations, investor guidelines, and lender policies,” according to Chase Bank.

Lack of insurance

Another instance that can trigger this clause to be implemented is if you cancel your homeowners insurance for whatever reason.

As Rocket Mortgage explains, “your lender will require you to maintain homeowners insurance so that the property can be repaired if it’s damaged to restore its market value.”

Unpaid property taxes

The clause can be implemented if you fail to pay your property taxes, and this could result in a lien against your home, according to Quicken Loans.

To put this in context, a recent survey from real estate resources website Ownwell found that 74% of respondents worry about significant increases in their annual property tax bills.

Bankruptcy and unauthorized property transfer

An acceleration clause can also be enacted by your lender in the instance of a bankruptcy, as well as in the case of an unauthorized and unapproved property transfer.

What can you do if your mortgage is accelerated?

If you receive a mortgage acceleration clause letter, there are a few steps you can take.

"It's important to note that even if your mortgage is accelerated, you can still avoid foreclosure," explains Adam Sherwin of the Sherwin Law Firm, in Somerville, MA. "It doesn't mean that there's no other option left."

Case in point: The legal foreclosure process "can’t start until you are at least 120 days behind on your mortgage,” according to the Consumer Financial Protection Bureau.

A lender doesn't have to accelerate your loan to foreclose on your home, explains Sherwin, but often it will.

"It's kind of a formality," Sherwin explains. "It's one last chance to pay before the foreclosure process begins."

Mortgage acceleration repayment plan

One option is mortgage acceleration repayment plans. Quicken Loans explains that this enables owners to pay missed payments, and once they’re caught up, regular mortgage payments will be reinstated.

“Some lenders are flexible and may even make a repayment plan available so you can catch up on defaulted payments without a large lump sum payment,” according to Quicken Loans.

Refinancing

Refinancing loans might also be an option, but this is not available to everyone, especially if the acceleration clause is implemented due to missed payments, as these “have a significant impact on your ability to qualify,” according to Rocket Mortgage.

Short sale

This means that the home will be sold for “less than the balance remaining on the mortgage,” and the proceeds of the sale will go toward the loan, according to Chase Bank.

Finally, there are also some preemptive steps you can take if you believe you will miss a mortgage payment. For instance, homeowners can ask for mortgage assistance. Some lenders will help you if you experience a hardship due to an unexpected life event such as job loss, illness, or a natural disaster.

"Each servicer has their own specific guidelines for modification," says Sherwin, but they may extend your loan's terms, reduce your interest rate, or come up with a delayed repayment schedule that works for both parties.

Updated from an earlier version by Audrey Ference.

The Reality Behind the Housing Market Headlines

ralph@homequalified.com (Ralph DiBugnara) — Tue, 27 May 2025 19:33:07 GMT

The Truth Homebuyers and Investors Need to Know About Today’s Housing Market

By: Ralph Dibugnara

May 19, 2025

In the face of ongoing discussions about a housing crisis and fluctuating market conditions, a recent YouTube Short titled “The TRUTH You NEED to Know!” offers clear, no-nonsense insights about the realities of the current real estate landscape... especially in New Jersey and the broader Northeast.

The Reality Behind the Housing Market Headlines

Contrary to popular belief fueled by national headlines suggesting widespread housing market declines, this video stresses that not all real estate markets are created equal. In particular, the Northeast, including New Jersey, continues to experience strong home prices and sustained demand, defying trends seen in other parts of the country.

The video highlights how New Jersey’s market remains competitive and stable due to:

Limited housing supply

Consistently high demand fueled by proximity to major cities

Reluctance of sellers to lower prices despite economic pressures

One Size Doesn’t Fit All: Understanding Regional Market Differences

Across the U.S., headlines often point to declining home prices and softening demand. However, these generalizations can be misleading—particularly in the Northeast. Markets like New Jersey remain resilient, with prices staying firm or even climbing in certain areas due to sustained demand, limited inventory, and proximity to major metropolitan hubs like New York City and Philadelphia.

It’s essential to understand that:

Real estate is local: National trends don’t always apply.

The Northeast behaves differently: Unlike the Sunbelt or parts of the Midwest, the Northeast has a scarcity of developable land, strong job markets, and institutional demand that support home values.

Prices aren’t dropping everywhere: In fact, many towns across New Jersey are experiencing stable or rising prices despite higher interest rates.

Strategies Highlighted in the Video

The video emphasizes several actionable strategies tailored to navigating tough conditions in a high-cost, competitive market like New Jersey:
Partner with Local Agents: Agents with deep knowledge of specific neighborhoods can give buyers an edge with early listings, hyper-local insight, and access to off-market deals.
Consider Foreclosures and Auctions: In some municipalities, distressed properties still exist. These can offer value if buyers are prepared to handle renovations and legal complexity.
Direct Outreach Works: Contacting owners directly—especially absentee landlords or those in pre-foreclosure—can reveal buying opportunities before the public sees them.
Track Micro-Trends: Instead of relying on broad market averages, buyers should study individual towns, school districts, and even street-by-street trends to spot undervalued properties.

Guidance for First-Time Homebuyers: Don’t Rely Solely on Zillow

First-time buyers often begin (and sometimes end) their home search on platforms like Zillow or Redfin. While these tools can be helpful for browsing, they don’t capture the full picture.

Why this is risky in markets like New Jersey:

Zillow data often lags behind the market by days or weeks.
“Zestimates” can be inaccurate in older neighborhoods or areas with diverse housing stock.
Off-market opportunities never make it to online platforms.
Listings may appear active when they’re already under contract.

Better approaches include:

Working closely with a buyer’s agent.
Attending local open houses and town planning meetings.
Studying township websites and property tax records.
Joining local Facebook groups or neighborhood forums for early leads.

Conclusion

New Jersey isn’t a “declining” market—and it shouldn't be approached as such. Whether you’re a seasoned investor or a first-time homebuyer, success in this region requires hyper-local knowledge, strategic partnerships, and a willingness to go beyond surface-level advice. Don’t rely solely on national headlines or generic Zillow articles. Learn the local terrain, think long-term, and approach each deal with diligence and creativity.

For a visual overview and additional insights, you can watch the full video here: https://youtube.com/shorts/n75P1fDUVTQ?si=mXGoFScchLKdz8i-

10 First-Time Homebuyer Tips: How To Get That House

ralph@homequalified.com (Ralph DiBugnara) — Thu, 22 May 2025 18:20:52 GMT

By: Ralph Dibugnara May 22, 2025

By: David McMillin

11/24/25

https://www.bankrate.com/mortgages/tips-for-first-time-home-buyers/?mf_ct_campaign=tribune-synd-feed&utm_content=syndication

Key takeaways

Before you start looking for homes, take time to evaluate your finances and improve your credit score. There’s a big difference between meeting the minimum credit score requirement and showing your lender a credit score well above 750.

Remember to account for the variable expenses of owning a home, which include insurance, property taxes, maintenance and repairs.

While sellers still have the edge in most parts of the country due to limited inventory, buyers are gaining more bargaining power. Work with an expert real estate agent to develop a negotiation strategy and score a better deal on your first home.

If you’re still renting your place, the thought of buying a home can feel pretty overwhelming. A recent TD Bank survey of first-time homebuyers found that 64 percent of people who have never owned a home are concerned about affordability due to high mortgage rates. Despite those worries, nearly half are working to save up for a down payment. If you’re one of them, read on for some money-smart moves that can put you on the path to successfully buying a home.

House hunting tips for first-time homebuyers

1. Check your credit (and work on it)

The higher your credit score, the better the interest rate on your mortgage.

Pull your reports

Thoroughly understand where your credit stands by pulling a free copy of your report at AnnualCreditReport.com. It’s not a one-and-done free ticket, either; the site lets you pull your report every week without paying anything.

It’s important to note that your credit report may look different depending on the credit bureau. There are three main credit reporting bureaus in the U.S.:

Experian

Equifax

TransUnion

It’s wise to look at all of your reports because you never know which report a lender will analyze. “Look for any errors or past-due accounts that might have gone to collections,” says Ralph DiBugnara, president of New York City-based Home Qualified, an online resource for homebuyers. “These liabilities can create roadblocks when you apply for a home loan. If anything is amiss, contact the creditor to see if you can sort it out.”

Fix and then monitor your credit

In addition to contacting a bureau if you spot any mistakes, follow these steps to keep your credit in the best shape possible:

Pay down your credit card balances: Most lenders like to see a credit utilization ratio of 30 percent or less, according to Lindsey Shores, business development manager with SchoolsFirst Federal Credit Union. “For many people, this number is something they have to plan for and work to pay down to achieve,” she says. If you’re over that number, try to pay down your balances.

Pay your bills on time: Follow this step whether you’re trying to buy a house or not — you can make or break your credit by making your payments on time every month.

Take advantage of free credit monitoring tools: Many banks have free credit monitoring tools built into their mobile apps, giving you the ability to check your credit score easily and more frequently. “You’ll get notified if your credit score changes, or if there’s suspicious activity on your report,” says DiBugnara.

2. Nail down your budget

When you’re building a budget to narrow your search for properties, don’t just think about how much house you can afford, but how much in recurring costs you can handle once you’ve purchased your home. Consider these key items:

Principal and interest: This will be the bulk of your monthly payment, and if you take out a fixed-rate mortgage, this chunk will never change over the course of the loan.

Homeowners insurance: How much you’ll pay to protect the property can vary widely. If you’re buying in an area with higher risks for flood, wildfire or other severe weather, you’ll need to be prepared for higher, ever-increasing premiums.

Property taxes: Your property taxes will look different depending on the location, and, in most cases, will increase as your home’s value increases and/or your local government needs to raise them for their budget.

HOA fees: If you’re looking at condos or homes in a homeowners association, ask how much you’ll pay each month in HOA fees. If you’re looking at buildings with a gym, pool and other amenities, these can get very steep.

In addition to these expected expenses, it’s a good idea to put aside some money regularly for maintenance and unexpected repairs.

“As a rule of thumb, I tell clients to prepare to spend 1 percent to 3 percent of the value of their homes each year on house [expenses],” says Steve Sivak, a certified financial planner and managing partner of Innovate Wealth. You might need to set aside more if the home you end up buying is older, bigger or has maintenance-heavy amenities, such as a pool.

3. Consider your needs and wants

Finding the ideal location and address can take more time than you expect, so begin scouting neighborhoods early in the process.

“Drive and walk around that area at different times of the day and night,” says Bill Golden, a Realtor and associate broker with Keller Williams Realty Intown. “This will help you get a feel for what you like and don’t like.”

Along with pinpointing the neighborhood, now is a good time to narrow down your preferences for the home itself by considering these essential questions:

What type of house are you looking for?

What can you compromise on?

What are the dealbreakers?

Are you willing to look at older properties that may require some updates, or do you want a move-in-ready property?

Think about what you like and dislike about where you currently live — that can help inform your list of needs and wants.

4. Get finances in place

Regardless of income level, you should be able to document to potential lenders that you have a stable source of earnings.

“Your income and how much you earn monthly will be scrutinized by lenders, who will look for a two-year employment history and want to see consistent income — whether you’re receiving a salary, hourly pay or are self-employed,” says Tom Hecker, a loan officer with Cherry Creek Mortgage.

If you’re self-employed, be ready for closer scrutiny than someone getting a salary or hourly wage.

In terms of your liquid funds and overall financial health, in addition to reviewing your credit report, mortgage lenders typically look at your bank statements from the last two months when assessing your application. If you plan to make any deposits into your checking or savings accounts from other assets — such as a down payment gift — do it before that 60-day window. This gives the funds time to “season.”

And it’s best to avoid opening new credit accounts or loans, or racking up more debt, at this stage, DiBugnara adds. All those activities could possibly ding your credit report.

Learn more: How to save for a down payment

Tips for finding the right mortgage

5. Comparison shop mortgage lenders

At this point, you should know what monthly payment you’re comfortable with, what areas you can afford and how much you can put down. Now it’s time to shop for a mortgage. Consider these factors:

Comparison shop: Compare mortgage rates from at least three different types of lenders, as well as different types of mortgages.

What others have to say: Read customer reviews for lenders online to get a sense of what the experience is like with individual lenders.

Interactions with the lender: Even “in this market, you can find competitive rates and service, but you want to pay close attention to lenders’ responsiveness and communication,” says DiBugnara.

The mortgage terms: It’s also a good idea to focus on not just the rates lenders quote you but also all the mortgage terms. What are the late fees? What are the estimated closing costs? Is there a prepayment penalty? If you’re able to get a mortgage with the bank where you already have accounts, will you get a better deal? Sometimes, it makes sense to choose a loan with a slightly higher rate if the other terms are more favorable overall.

Learn more: Different types of mortgage lenders

6. Get preapproved

Once you settle on a lender, get preapproved for a mortgage. This will require documentation of your income and finances, and organizing your paperwork in advance can help the process run smoothly. It will also prepare you for mortgage underwriting, which will require similar documentation.

Unlike prequalification, which is a projected loan size you’ll be able to get, a preapproval is an official letter from a lender stating exactly how much it will loan to you. A preapproval will put you in a much stronger position when you’re making an offer on a house, and it will ease the process once your offer has been accepted and you’re actually applying for your loan.

Preapprovals usually expire after 90 days, says DiBugnara, so ask your lender how long yours will be good for. If you’re a first-time homebuyer with significant debt or so-so credit, you might want to apply for a preapproval as soon as possible to identify issues to fix.

“Once you have a preapproval in place, keep sticking to your budget and savings plan and continue to pay all debts on time,” says Hecker. “Try not to make any extraordinary purchases or take on extra debt, either.”

7. Look for down payment assistance

There are many first-time homebuyer and down payment assistance programs, including at the local, regional and national level, that can help cover your down payment or closing costs. These aren’t for everyone, though. To score some down payment assistance, be prepared for these eligibility requirements:

Earn less than a specific amount per year, which typically varies by location and household size

Purchase a home that does not exceed a maximum amount, which can vary based on targeted and non-targeted areas

Take out a loan offered in conjunction with the state housing authority

These programs are typically limited to borrowers with an income below a certain level (based on location), and can impose a cap on the home’s price, too. Keep in mind that many of these programs have terms that stipulate you must live in the home for a certain period of time to qualify for forgiving the loan and/or avoiding a recapture tax penalty that can come into play if you sell the property earlier than expected and earn a profit.

Often, your loan officer can provide info on the available programs and what you might be able to pair with your mortgage.

Tips for buying your first home

8. Work with a real estate agent

After you have your financing squared away and a preapproval letter in hand, your next step as a first-time homebuyer is to hire a real estate agent or Realtor.

An experienced real estate agent who knows the area you’re looking to buy in especially well can advise you on market conditions and whether homes you want to make offers on are priced properly. Your agent can also identify potential issues with a home or neighborhood you’re unaware of, and go to bat for you to negotiate pricing and terms.

You can start by asking friends, relatives or co-workers for referrals. Interview several prospective agents to get a feel for who may be a solid match in terms of personality and expertise.

“Don’t just pick [an agent] blindly — make sure it’s someone who works in the general area you’re looking in and whom you feel comfortable with,” says Golden. Offerings “come up every day, and a good Realtor will be on top of that and get you to see new listings as soon as they become available.”

9. Negotiate with the seller

Even when you see the home of your dreams, don’t be afraid to negotiate the price with sellers. While it’s difficult in red-hot real estate markets, some areas of the country are beginning to see more homes sell for less than the asking price. As you work to get a good deal, consider these bargaining tactics:

Use comps to justify a lower offer. A low offer can offend a seller, so work with your agent to look at comps that justify why a seller should consider your terms. Did a nearby property with an additional parking spot recently sell for the same amount? Are there other similar homes with nicer amenities listed for less? Back up your bargaining with evidence from the rest of the market.

Ask for concessions based on the home inspection report. Is some of the electrical wiring incorrect? Does the furnace seem like it’s nearing the end of its lifespan? Are the windows going to need to be replaced soon? If your home inspector uncovers some minor issues with the home, don’t be afraid to ask for concessions that will require the seller to cover a chunk of your closing costs. And if the inspector uncovers some major issues, be aggressive in your negotiations — and don’t be afraid to walk away from the deal altogether.

Request a different closing timeline. Negotiating your home purchase isn’t just about money; it’s also about time. Depending on your needs, you can ask the seller for a closing date that gives you more or less time to get the deal done. For example, if you really want to avoid paying another month of rent, don’t be afraid to request that the seller be prepared to move out earlier.

10. Draw up a contract

When you find a home and prepare to make an offer, work with a real estate attorney to spell out any conditions or situations that will allow you to walk away from the deal. These are known as contingencies, and they often include:

Major issues with a home inspection

Mortgage application denial

A lower appraisal than the offer price

If these terms are spelled out in writing with deadlines, you’ll have an out if the transaction doesn’t go as planned — and get your earnest money deposit back, too.

Bottom line

For a first-timer, buying a home can feel overwhelming and endless. But breaking down the process into steps and tackling them one at a time can help you stay focused and get the job done. Doing your research in advance and working with a trusted real estate agent can help you stay on track throughout the process. Keeping your finances steady and limiting other big-ticket purchases can also help you qualify for a loan and get into your first home.

Why Now Is Always the Right Time: Stop Waiting and Start Doing

ralph@homequalified.com (Ralph DiBugnara) — Mon, 19 May 2025 17:13:09 GMT

By: Ralph Dibugnara May 15, 2025

In the dynamic landscape of New Jersey's real estate market, investors are continually seeking effective strategies to identify and secure profitable deals. A recent YouTube Short titled "NJ Real Estate Investing: Finding Deals in a Tough Market" offers insights into this very challenge.

Understanding the Market Challenges

New Jersey's real estate market presents unique challenges, including high property prices, competitive bidding, and limited inventory. These factors necessitate a strategic approach to identify undervalued properties and capitalize on investment opportunities.

Strategies Highlighted in the Video

While the video is brief, it emphasizes key tactics for navigating the tough market:

Networking with Local Agents: Building relationships with real estate agents who have in-depth knowledge of local neighborhoods can provide early access to listings and off-market deals.

Exploring Foreclosures and Auctions: Properties in foreclosure or available through auctions often present opportunities to purchase below market value.

Direct Marketing to Property Owners: Reaching out directly to homeowners, especially those in distress or considering selling, can uncover potential deals before they hit the market.

Analyzing Market Trends: Staying informed about local market trends, including price fluctuations and neighborhood developments, aids in making informed investment decisions.

The Importance of Due Diligence

Investors are reminded of the critical role due diligence plays in real estate investing. This includes thoroughly researching properties, understanding zoning laws, and assessing potential renovation costs to ensure profitability.

Conclusion

Navigating New Jersey's real estate market requires a combination of strategic networking, market analysis, and proactive outreach. By employing these tactics, investors can uncover valuable opportunities even in a competitive environment.

For a visual overview and additional insights, you can watch the full video here: https://youtube.com/shorts/5q3Y0NO3piE?si=bE1xYNreP08Y2rlA

Navigating New Jersey's Real Estate Market: Strategies for Success

ralph@homequalified.com (Ralph DiBugnara) — Thu, 15 May 2025 15:21:48 GMT

By: Ralph Dibugnara May 8, 2025

Youtube link: https://youtube.com/shorts/yFRkety94Sw?si=JDU4CgX64Wb2IF1-

In today’s fast-paced and often unpredictable financial markets, knowing how to navigate investment decisions is more critical than ever. Whether you're just beginning your investment journey or have years of experience behind you, there are a few timeless principles that can help you stay grounded, avoid common pitfalls, and achieve long-term success. The viral YouTube Shorts video “What Investors Should Know” captures these principles in a short but powerful format. Here's a deeper dive into the key takeaways.

1. Embrace Market Volatility

Market volatility is not something to fear—it's something to expect. The video reminds investors that price fluctuations are a natural part of the market cycle. While dips and spikes may cause emotional reactions, it’s important to avoid knee-jerk decisions. Successful investors understand that volatility often presents opportunities rather than threats.

2. Think Long-Term

One of the most valuable pieces of advice in the video is the emphasis on long-term thinking. Trying to time the market or chase short-term gains often leads to disappointment and unnecessary risk. Instead, building wealth steadily over time—through patience, consistency, and discipline—is a more effective and sustainable strategy. Compounding returns reward those who stay invested.

3. Diversify Your Portfolio

Risk management is a foundational element of smart investing, and diversification is a key strategy to achieve it. By spreading investments across different asset classes (stocks, bonds, real estate, etc.), you reduce your exposure to any single point of failure. As the video states, a well-diversified portfolio offers protection against volatility while still allowing for meaningful growth.

4. Keep Learning and Adapting

Markets change. Economies shift. New technologies emerge. The best investors are students of the game—they stay curious, informed, and open to change. The video encourages a mindset of continuous learning: reading market trends, understanding global events, and being willing to adapt when necessary. Staying informed keeps you resilient and ready for what’s ahead.

Final Thoughts

The path to financial success doesn’t require perfect timing or advanced degrees—it requires clarity, discipline, and a commitment to the basics. As “What Investors Should Know” so effectively illustrates, embracing market cycles, focusing on the long haul, managing risk through diversification, and continuously educating yourself are the cornerstones of smart investing.

For a quick dose of inspiration and insight, you can watch the original video here: Watch the Short.

What Every Investor Should Know: Four Timeless Principles for Financial Success

ralph@homequalified.com (Ralph DiBugnara) — Mon, 12 May 2025 13:31:48 GMT

By: Ralph Dibugnara May 8, 2025

By Julie Gerstein

https://www.realtor.com/advice/finance/real-estate-investment-gold-bitcoin/

High mortgage rates are making it more expensive to buy a home right now—but many experts still believe that real estate beats out other investment opportunities.

Despite that, many investors have been swept into the thrill of playing the markets or trying out new asset classes like art, cryptocurrency, classic cars, and even wine.

If all of these options leave your head a bit scrambled about where to put your money, you’re not alone.

Choosing an investment strategy requires considering your budget, time horizon, and risk appetite. It also depends on how much effort you’re willing to put into learning about the particular market.

Some areas of investment, like art, require specialized knowledge while others depend on how much risk you’re willing to take.

With real estate in particular, many homeowners are sitting on record-high equity, which can be used through a home equity loan or a HELOC to purchase an investment property, according to Hannah Jones, senior economic research analyst at Realtor.com®.

“However, investing in real estate is not a slam-dunk in all markets as high home prices and elevated mortgage rates squeeze potential earnings. Investors, or homeowners looking to branch out into buying an investment property, should fully understand expected cost and expected income from a property, as well as the time horizon to see a profit,” she says.

Here’s how real estate stacks up against other investments.

Buying real estate

Pros: Real estate values have grown at a slower pace than the S&P 500 on a year-over-year basis, but according to a Realtor.com analysis, real estate has seen an average five-year return of +26% since 1975. That’s nothing to sneeze at.

Typical homeowners have also accumulated at least $147,000 in housing wealth in the past five years, according to the National Association of Realtors® in its latest quarterly report.

“Traditional investments like 401(k)s, IRAs, and ETFs are great for passive growth, but real estate brings in a whole different level of wealth-building,” says Dan Reedy, a real estate investor and broker.

Real estate is also a much more hands-on investment.

“With real estate, you can actively influence your returns by making strategic upgrades or managing rental rates. Plus, real estate offers deductions—mortgage interest, depreciation—that can make a huge difference come tax season. It’s not just about growing wealth; it’s about growing wealth you can control,” he adds.

Sara Levy-Lambert, vice president of growth at real estate management company RedAwning, adds that although real estate is not without risks, its “blend of passive income potential, stability, and the chance to build equity over time make it a solid choice for those looking to diversify beyond paper assets.”

Cons: If you value liquidity and being able to access your funds at a moment’s notice, it’s probably not the right move for you. Buying and selling homes can take months—if not years—and can require a lot of upfront costs.

“The biggest problem I see is that people have record equity in their home right now, more than they’ve ever had before. But that’s just a number on paper,” says Ralph DiBugnara, founder of real estate resource site HomeQualified. “You can’t really do anything with it unless you’re willing to take [money] out of the house, unless you’re willing to leverage it.”

By that, DiBugnara means being able to leverage a home equity loan or home equity line of credit.

Investing in real estate directly “gives you full control—you decide on tenants, renovations, and how it’s managed. But you also take on the costs and responsibilities that come with ownership,” says Jace Graham, CEO of Rising Phoenix Capital.

Real estate investment trusts

Pros: When you think of real estate investing, you’re likely picturing putting a down payment on a home and negotiating the terms of a mortgage. But if you can’t afford to build a personal portfolio of investment properties, that shouldn’t discourage you from buying into the market.

Many do so by participating in real estate investment trusts, or REITs.

REITs allow investors to buy shares in a real estate company. Their portfolios typically include a mix of residential and commercial properties.

“You don’t own the property directly, so you’re hands-off, which is easier for most people,” Levy-Lambert says. “They’re also traded like stocks, making them more liquid. Just buy or sell whenever you want, without the management headaches.”

The IRS requires REITs to pay out at least 90% of their income as dividends to shareholders, so investors have a steady flow of funds coming in. It’s also taxed as regular income.

“In a nutshell, direct real estate gives you control and potential tax perks but requires more work and patience, while REITs offer easy, flexible access to real estate returns without the management hassle but are taxed a bit differently,” says Levy-Lambert.

A REIT also might be a great place to start if you haven’t saved up enough for a down payment but want to make a steady return on the market.

Cryptocurrency

Pros: There’s big money to be made—or lost—in the cryptocurrency market at the moment. Bitcoin initially traded at $0.00099 in 2009, but today it’s over $88,000, and early investors who have held on have made many millions of dollars.

Cons: Of course, investing in cryptocurrency comes with many risks. Aside from the many crypto-related scams, including the spectacular collapse of Sam Bankman-Fried‘s FTX, you might need nerves of steel to play in this market.

“Cryptocurrencies are notoriously volatile, subject to speculation, and witness frequent bubbles and crashes,” says Harry Turner, founder of Sovereign Investor. “That’s why cryptocurrencies are really only suitable for individuals with a high-risk tolerance and an understanding of the underlying technology, which can be complex. Real estate doesn’t have this problem.”

Gold

Pros: These days, you can purchase gold stocks or ETFs, or buy the physical stuff—coins and gold bullion. If that’s what you’re into, you can even buy gold at Costco now. For some, nothing beats the security of owning a chunk of precious metal.

Gold is a relatively stable asset. It’s less reactive and can be a good hedge against the volatility of the market. In the four years following the 2008 financial crash, the price of gold increased dramatically—in 2011 alone, by 32.8%.

Cons: Though you can buy gold at Costco, you can’t sell it through the store. In fact, it’s fairly difficult to sell gold commercially—and you’ll have to do a fair bit of research to get a fair price.

Let’s be real: Physical gold weighs a ton, and it’s not the easiest thing to move around. Plus, you’ll want to insure it, which will cost you additional money, and there are higher taxes on physical gold. So if you sell, you’ll have to pay a capital gains tax of up to 28% on any profit. (The typical capital gains on stocks and bonds is 20%.)

Investing in other types of tangible assets

Pros: Relatively niche markets allow investors to dig into the things they love, be it art, cars, or wine.

Cons: There’s a high barrier to entry in some of these particular markets—not just financially, but in terms of knowledge. For example, the classic car collectible market is fairly exclusive, and as an investment category, it might not be very practical either, because every time you use one of these collectibles in your portfolio, you run the risk of lowering its value.

Alternative assets can be exciting and sometimes profitable, but they come with extreme volatility. The wine market, for instance, is affected not just by the collector market but also by the agricultural outlook and weather conditions. These markets don’t necessarily move quickly, either. As interest ebbs and flows in different types of asset classes, so do potential moneymaking opportunities.

“Look at crypto—bitcoin, for instance, went from $60,000 to $20,000 in under a year,” says Reedy. “The occasional blue-chip wine or NFT might pay off big, but real estate lets you sleep at night while building long-term wealth.”

No matter what you choose to invest in, you should talk to your financial adviser about what types of investments are right for you.

Real Estate Is Still a Good Investment: See How It Stacks Up Against Other Assets, From Gold to Bitcoin

ralph@homequalified.com (Ralph DiBugnara) — Thu, 08 May 2025 13:18:18 GMT

By: Ralph Dibugnara May 5, 2025

Youtube link: https://youtube.com/shorts/UvTeKZkJWdc?si=FFRHsl5MNkxpaXrO

In today’s gig economy, owning an Airbnb or short-term rental property has become a popular side hustle—and in some cases, a full-time business. Social media often showcases the glamorous side of hosting: beautiful properties, flexible income, and glowing guest reviews. But behind the scenes, the financial realities tell a more complex story.

A recent YouTube Shorts video titled “How much does it COST to run an Airbnb/Rental Property” offers a quick yet valuable breakdown of the expenses every host should consider before diving into the short-term rental market. Let’s take a closer look at what it really takes to keep a rental property running smoothly—and profitably.

The Core Expenses of Running a Short-Term Rental

1. Mortgage Payments

For most property owners, the mortgage is the largest monthly expense. These payments include both the principal balance of the loan and the interest charged by the lender. Even if a property is fully paid off, owners still face property taxes and insurance costs.

2. Utilities

Unlike traditional long-term rentals—where tenants typically cover utilities—Airbnb hosts are responsible for all essential services. Electricity, water, gas, trash removal, and high-speed internet are non-negotiables for today’s guests. During peak seasons or in properties with features like pools or hot tubs, utility bills can skyrocket.

3. Maintenance and Repairs

Every property requires upkeep, but short-term rentals often experience more wear and tear due to frequent guest turnover. Routine maintenance includes lawn care, HVAC servicing, and pest control, while occasional repairs (a broken appliance, plumbing issues) can lead to unexpected costs.

4. Cleaning Services

Cleanliness is paramount in the hospitality industry. After each guest checks out, the property must be thoroughly cleaned and reset. While some hosts manage this themselves, many hire professional cleaning services. Depending on the property size and location, cleaning fees can range from $50 to $200 or more per booking.

5. Property Management

For hosts who prefer a hands-off approach, hiring a property management company is an option. These firms handle guest communications, check-ins, cleanings, and maintenance. However, convenience comes at a price: management fees typically range from 10% to 25% of the monthly rental income.

6. Insurance and Taxes

Standard homeowners insurance often doesn’t cover short-term rentals. Specialized insurance policies designed for Airbnb hosts provide broader protection but come with higher premiums. Additionally, property taxes and, in some areas, occupancy taxes or licensing fees must be factored into the budget.

7. Guest Amenities and Supplies

Modern travelers expect more than just a roof over their heads. Hosts must provide toiletries, fresh linens, coffee, and other amenities to enhance the guest experience. These supplies need regular restocking, adding to monthly operating costs.

Beyond the Numbers: Profitability and Planning

The video effectively highlights a crucial point: generating income from an Airbnb isn’t as simple as pocketing the nightly rate. Successful hosts carefully calculate both fixed and variable costs to determine their true profit margins.

Moreover, profitability isn’t guaranteed year-round. Seasonal demand, local competition, economic fluctuations, and changes in platform policies can all impact occupancy rates and pricing power.

Is Hosting Worth It?

For many, the answer is yes—but only with realistic expectations and careful financial planning. Those who treat their short-term rental like a business, accounting for every expense and prioritizing guest satisfaction, are best positioned to turn a profit.

As the YouTube Shorts video succinctly shows, understanding the full scope of operating costs is essential. Whether you’re a seasoned real estate investor or a first-time host, knowing what to expect can mean the difference between a rewarding venture and an expensive lesson.

What Does It Really Cost to Run an Airbnb or Rental Property?

ralph@homequalified.com (Ralph DiBugnara) — Mon, 05 May 2025 18:53:39 GMT

By: Ralph Dibugnara May 1, 2025

By: Paul Centopani

April 30, 2025

Mortgage rate forecast for next week (May 5-9)

After last week's huge jump, mortgage rates drifted slightly downwards.

The average 30-year fixed rate mortgage (FRM) dipped to 6.81% on Apr. 24 from 6.83% on Apr. 17, according to Freddie Mac. It marks 14 straight weeks below 7% for the average 30-year FRM.

“Headlines rather than economic data have been the dominant drivers of day-to-day volatility in the stock, bond, and mortgage markets. Despite the noise, average mortgage rates ended up little changed compared to the previous week. The economic situation is rapidly evolving, making it hard to predict the direction of mortgage rates with any conviction," said Kara Ng, senior economist at Zillow Home Loans.

Will mortgage rates go down in May?

"The market awaits some clarity on economic policies — particularly tariff-induced trade wars — before rates can move strongly in either direction."

-Rick Sharga, CEO at CJ Patrick Company

Mortgage rates fluctuated significantly in 2023, with the average 30-year fixed rate going as low as 6.09% and as high as 7.79%, according to Freddie Mac. That range narrowed in 2024, with a spread of 6.08% to 7.22%.

With the economy probably heading into a recession, we may have already seen the peak of this rate cycle. But if inflation rises, mortgage rates could uptrend. Of course, interest rates are driven by many factors and notoriously volatile, so they could change direction any given week.

Experts from Realtor.com, First American, and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in May.

Expert mortgage rate predictions for May

Ralph DiBugnara, founder at Home Qualified

Prediction: Rates will decrease

There has been much anticipation of lower mortgage rates, but we have yet to see any consistency of that happening. The stock market has been down, along with inflation and consumer spending. In most markets, these factors would signal downward mortgage rates. But currently there is lack of confidence in the Fed lowering and or changing their current stance. The results have been a higher 10-Year Treasury which, in turn, influenced higher mortgage rates. In May I believe we will see some slow movement lower, as some positive economic data this month could push the average 30-year fixed mortgage rates down to 6.75% and 6.375% for the 15-year fixed. Also, ARM loans have emerged again as options with lower rates that should be considered. The 7/1 Arm should land about 5.875%.

Hannah Jones, senior economic research analyst at Realtor.com

Prediction: Rates will decrease

"Mortgage rates surged in April following the announcement of widespread tariffs early in the month. While rates remained elevated for much of the month, they began to decline toward the end, hinting at a potential return to pre-announcement levels. Looking ahead to May, rates are expected to ease further as markets find more stability. However, upcoming economic data—particularly the jobs report and inflation data—could spark renewed volatility if results deviate from expectations. The recent movement in mortgage rates reflect broader economic uncertainty, which has left many households concerned about job security and financial stability. A sustained, downward trend in rates could help rebuild consumer confidence and encourage more buyers to re-enter the housing market."

Sam Williamson, senior economist at First American

Prediction: Rates will moderate

“Mortgage rates are expected to remain in the mid-to-upper 6% range in May, amid ongoing worries over tariff-induced inflation and a softening in both business and consumer sentiment. Most market watchers anticipate that the Federal Reserve will hold rates steady at May’s Federal Open Market Committee meeting. Although the Fed does not set mortgage rates directly, its policy decisions affect borrowing costs indirectly through their impact on bond yields.

"Significant attention will be focused on Fed Chairman Jerome Powell’s remarks during the FOMC press conference. Any comments made by the Chairman signaling a potential shift from the Fed’s current “wait-and-see” approach could sway bond yields: a more hawkish tone regarding inflation risks is likely to push rates higher, while dovish comments emphasizing employment concerns might ease them. Moreover, despite a seemingly resilient labor market amid ongoing federal restructuring efforts and slowed hiring amid policy uncertainty, any hint of weakness in the upcoming jobs report could increase recession fears—likely leading to lower bond yields and, in turn, reduced mortgage rates.”

Diane Yu, CEO and co-founder at TidalWave

Prediction: Rates will moderate

"Mortgage rates, whether they linger between 6.4% and 6.6% or shift in May 2025, are merely one factor in a complex equation. Inflation, Federal Reserve actions, and global uncertainties undeniably influence rates, but true opportunity for homebuyers hinges on market dynamics, personal financial stability, and timing. Affordability isn’t dictated solely by rate fluctuations-it’s shaped by income growth, escalating home prices, and individual debt capacity. For households planning their next move, this means looking beyond rate forecasts and building resilience to market volatility."

Mortgage interest rates forecast next 90 days

As inflation ran rampant in 2022, the Federal Reserve took action to bring it down and that led to the average 30-year fixed-rate mortgage spiking in 2023.

With inflation gradually cooling, the Fed made three rate cuts in 2024 (September, November, and December). Heading into 2025, many experts believed mortgage interest rates would gradually descend.

Of course, rates could rise on any given week or if another global event causes widespread uncertainty in the economy.

Mortgage rate predictions for 2025

The 30-year fixed-rate mortgage averaged 6.81% as of Apr. 24, according to Freddie Mac. Four of the five major housing authorities we looked at predict 2025's second quarter average to below that.

Wells Fargo sits at the low end of the group, projecting the average 30-year fixed interest rate to settle at 6.35% for Q2. Meanwhile, the Mortgage Bankers Association had the highest forecast of 7%.

Housing Authority

30-Year Mortgage Rate Forecast (Q2 2025)

Wells Fargo

6.35%

National Association of Realtors

6.40%

Fannie Mae

6.50%

National Association of Home Builders

6.66%

Mortgage Bankers Association

7.00%

Average Prediction

6.58%

Current mortgage interest rate trends

Mortgage rates decreased from the previous week.

The average 30-year fixed rate declined to 6.81% on April 24 from 6.83% on Apr. 17. Meanwhile, the average 15-year fixed mortgage rate went to 5.94% from 6.03%.

Stay on top of mortgage rate trends

Get updates on mortgage rate news, low and no-down payment mortgage options, and more!

Top of Form

Bottom of Form

Month

Average 30-Year Fixed Rate

April 2024

6.99%

May 2024

7.06%

June 2024

6.92%

July 2024

6.85%

August 2024

6.50%

September 2024

6.18%

October 2024

6.43%

November 2024

6.81%

December 2024

6.72%

January 2025

6.96%

February 2025

6.84%

March 2025

6.65%

April 2025

6.73%

Source: Freddie Mac

After hitting record-low territory in 2020 and 2021, mortgage rates climbed to a 23-year high in 2023 before descending somewhat in 2024. Many experts and industry authorities believe they will follow a downward trajectory into 2025. Whatever happens, interest rates are still below historical averages.

Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac. So if you haven’t locked a rate yet, don’t lose too much sleep over it. You can still get a good deal, historically speaking — especially if you’re a borrower with strong credit.

Just make sure you shop around to find the best lender and lowest rate for your unique situation.

Which mortgage loan is best?

The best mortgage for you depends on your financial situation and your goals.

For instance, if you want to buy a high-priced home and you have great credit, a jumbo loan is your best bet. Jumbo mortgages allow loan amounts above conforming loan limits, which max out at $806,500 in most parts of the U.S.

On the other hand, if you’re a veteran or service member, a VA loan is almost always the right choice. VA loans are backed by the U.S. Department of Veterans Affairs. They provide ultra-low rates and never charge private mortgage insurance (PMI). But you need an eligible service history to qualify.

Conforming loans and FHA loans (those backed by the Federal Housing Administration) are great low-down-payment options.

Conforming loans allow as little as 3% down with FICO scores starting at 620. FHA loans are even more lenient about credit; home buyers can often qualify with a score of 580 or higher, and a less-than-perfect credit history might not disqualify you.

Finally, consider a USDA loan if you want to buy or refinance real estate in a rural area. USDA loans have below-market rates — similar to VA — and reduced mortgage insurance costs. The catch? You need to live in a ‘rural’ area and have moderate or low income to be USDA-eligible.

Mortgage rate strategies for May 2025

Mortgage rates displayed their famous volatility throughout 2024. Fed cuts in September, November, and December, with the potential for more in 2025 provide optimism for descending rates.

Previously, the central bank held off on a rate hike at eight consecutive meetings, preferring to see if the economy would keep cooling organically. They finally deemed inflation's downtrend as organic and made its first cuts since 2020.

Find your lowest mortgage rate. Start here (May 1st, 2025)

However, ongoing inflation battles forced the Fed to hold in January and March. As always, the committee said it would adjust its policies as necessary — which could mean additional cuts or possibly none at all.

Here are just a few strategies to keep in mind if you’re mortgage shopping in the coming months.

Be ready to move quickly

Indecision can lead to failure or missed opportunities. That holds true in home buying as well.

Although the housing market is becoming more balanced than the recent past, it still favors sellers. Prospective borrowers should take the lessons learned from the last few years and apply them now even though conditions are less extreme.

"Taking too long to decide to make an offer can lead to paying more for the home at best and at worst to losing out on it entirely. Buyers should get pre-approved (not pre-qualified) for their mortgage, so that the seller has some certainty about the deal closing. And be ready to close quickly — a long escrow period will put you at a disadvantage.

And it's definitely not a bad idea to work with a real estate agent who has access to "coming soon" properties, which can give a buyer a little bit of a head start competing for the limited number of homes available," said Rick Sharga.

If mortgage rates continue on a downward trajectory, more and more buyers will likely enter the market after being priced out on the sidelines. Being decisive (and prepared) should only play to your advantage.

Shopping around isn't only for the holidays

Since interest rates can vary drastically from day to day and from lender to lender, failing to shop around likely leads to money lost.

Lenders charge different rates for different levels of credit scores. And while there are ways to negotiate a lower mortgage rate, the easiest is to get multiple quotes from multiple lenders and leverage them against each other.

“For potential home buyers, it’s important to get quotes from multiple lenders for a mortgage, as rates can vary dramatically, especially during such a volatile period," said Odeta Kushi.

As the mortgage market slows due to lessened demand, lenders will be more eager for business. While missing out on the rock-bottom rates of 2020 and 2021 may sting, there’s always a way to use the market to your advantage.

How to shop for interest rates

The rate lenders actually offer depends on:

Your credit score and credit history

Your personal finances

Your down payment (if buying a home)

Your home equity (if refinancing)

Your loan-to-value ratio (LTV)

Your debt-to-income ratio (DTI)

This might sound like a lot of work. But you can shop for mortgage rates in under a day if you put your mind to it. And shaving just a few basis points off your rate can save you thousands.

Compare mortgage and refinance rates. Start here (May 1st, 2025)

Mortgage interest rate FAQ

What are current mortgage rates?

Current mortgage rates are averaging 6.81% for a 30-year fixed-rate loan and 5.94% for a 15-year fixed-rate loan, according to Freddie Mac’s latest weekly rate survey. Your individual rate could be higher or lower than the average depending on your credit score, down payment, and the lender you choose to work with, among other factors.

Will mortgage rates go down next week?

Mortgage rates could decrease next week (May 5-9, 2025) if the mortgage market takes a cautious approach to a possible recession. However, rates could rise if lenders account for the Federal Reserve taking measures to counteract inflation or if a global event brings economic uncertainty.

Will mortgage interest rates go down in 2025?

If inflation continues to dissipate and the economy cools or goes into a recession, it's likely mortgage rates will decrease in 2025. Although, it's important to remember that interest rates are notoriously volatile and are driven by many factors, so they can rise during any given week.

Will mortgage interest rates go up in 2025?

Mortgage rates may rise in 2025. High inflation, strong demand in the housing market, and policy changes by the Federal Reserve in 2022 and 2023 all pushed rates higher. However, if the U.S. does indeed enter a recession, mortgage rates could come down.

What is the lowest mortgage rate right now?

Freddie Mac is now citing average 30-year rates in the 7% range. If you can find a rate in the 5s or 6s, you’re in a very good position. Remember that rates vary a lot by borrower. Those with perfect credit and large down payments may get below-average interest rates, while poor-credit borrowers and those with non-QM loans could see much higher rates. You’ll need to get pre-approved for a mortgage to know your exact rate.

Will there be a housing crash?

For the most part, industry experts do not expect the housing market to crash in 2025. Yes, home prices are over-inflated. But many of the risk factors that led to the 2008 crash are not present in today’s market. Low inventory and massive buyer demand should keep the market propped up. Plus, mortgage lending practices are much safer than they used to be. That means there’s not a subprime mortgage crisis waiting in the wings.

What is the lowest mortgage rate ever?

At the time of this writing, the lowest 30-year mortgage rate ever was 2.65%. That’s according to Freddie Mac’s Primary Mortgage Market Survey, the most widely used benchmark for current mortgage interest rates.

Should I lock my rate now or wait?

Locking your rate is a personal decision. You should do what’s right for your situation rather than trying to time the market. If you’re buying a home, the right time to lock a rate is after you’ve secured a purchase agreement and shopped for your best mortgage deal. If you’re refinancing, you should make sure you compare offers from at least three to five lenders before locking a rate. That said, rates are rising. So the sooner you can lock in today’s market, the better.

Is now a good time to refinance?

That depends on your situation. It’s a good time to refinance if your current mortgage rate is above market rates and you could lower your monthly mortgage payment. It might also be good to refinance if you can switch from an adjustable-rate mortgage to a low fixed-rate mortgage; refinance to get rid of FHA mortgage insurance; or switch to a short-term 10- or 15-year mortgage to pay off your loan early.

Is it worth refinancing for 1 percent?

It’s often worth refinancing for 1 percentage point, as this can yield significant savings on your mortgage payments and total interest payments. Just make sure your refinance savings justify your closing costs. You can use a mortgage calculator or speak with a loan officer to crunch the numbers.

How do I shop for mortgage rates?

Start by choosing a list of three to five mortgage lenders that you’re interested in. Look for lenders with low advertised rates, great customer service scores, and recommendations from friends, family, or a real estate agent. Then get pre-approved by those lenders to see what rates and fees they can offer you. Compare your offers (Loan Estimates) to find the best overall deal for the loan type you want.

What are today’s mortgage rates?

Mortgage rates are rising, but borrowers can almost always find a better deal by shopping around. Connect with a mortgage lender to find out exactly what rate you qualify for.

Will Interest Rates Go Down in May? | Predictions 2025

ralph@homequalified.com (Ralph DiBugnara) — Thu, 01 May 2025 14:20:32 GMT

By: Ralph Dibugnara April 28, 2025

Youtube link: https://youtube.com/shorts/oudfX2KCZuo?si=wQdJ1R6fR-Wpb4ll

The U.S. real estate market is facing major challenges — and it's not what most people expect. According to industry insights shared recently, the number one thing the housing market desperately needs is inventory.

Despite fluctuating mortgage rates and ongoing economic uncertainty, buyer demand remains strong. People still want to purchase homes, but there simply aren’t enough properties available to meet the demand. This shortage continues to push prices higher, making affordability an even bigger issue.

The current lack of inventory stems from multiple factors: many homeowners are "rate locked," meaning they’re reluctant to sell because they don't want to lose their historically low mortgage rates. On top of that, new home construction hasn’t kept pace with the growing population, further tightening supply.

If the market hopes to balance itself, more inventory must come online — whether through new builds, incentivizing homeowners to sell, or creative solutions from policymakers. Without an increase in available homes, the mismatch between supply and demand will persist, keeping housing prices elevated and competition fierce.

What the U.S. Real Estate Market Needs Right Now

ralph@homequalified.com (Ralph DiBugnara) — Mon, 28 Apr 2025 16:43:29 GMT

A home equity line of credit (HELOC) can give you a way to turn your home's equity into a line of credit you can use when needed. HELOCs have several key benefits that make them a solid borrowing choice in today's market. They operate like a revolving line of credit, giving homeowners flexibility they wouldn't have with a lump sum of equity borrowed. And the average interest rate is 8.02%, making them one of the most affordable ways to borrow money right now.

Like any financial decision, though, opening a HELOC takes some planning. What will you use it for? How much equity do you have? How long do you want your draw period to be? These questions are instrumental in finding the right HELOC for what you need.

Additionally, it helps to understand how a HELOC works so you know what to expect once you open it. A HELOC uses a variable rate, which means your HELOC interest rate — and HELOC payment — can change monthly. Additionally, any withdrawals from your HELOC during your draw period trigger interest-only monthly payments until you pay off what you borrowed or your repayment period kicks in.

Another thing to consider is that a HELOC is considered a secured funding source. This means your home will serve as collateral. But does that result in a lien being putting on your house? That's what we'll explore below.

Does a HELOC put a lien on your house?

Yes, a HELOC puts a lien on your home. A lien is a legal term referring to a creditor having a right to ownership of what you're borrowing against, says Ralph DiBugnara, president of mortgage broker Home Qualified.

"A lien, basically, is a legally binding placeholder on the title of your home," DiBugnara says. "It's a record [that says] if you ever sell the house or refinance the house that the lienholder that you hold a debt to has to be paid off."

A lien typically gives your HELOC lender the right to start the foreclosure process if you're at least 120 days late on your payment, DiBugnara says. However, banks usually won't go straight to foreclosure because it's a tedious process, so they typically take you through three steps before foreclosure begins, he says:

A payment agreement in which you agree to pay your back payments through a lump-sum payment at the end of your repayment period.

A HELOC modification in which your lender adjusts the terms of your HELOC to make monthly payments more affordable.

A forbearance agreement in which you promise to make your late payments or foreclosure will start.

If your home goes into foreclosure, your credit score will likely be impacted and the foreclosure will stay on your credit report for seven years, according to the Consumer Financial Protection Bureau (CFPB). A lower credit score may result in higher borrowing costs for you in the future, which means the foreclosure process can be a financial burden long after it's over.

But if you make your payments on time, you generally don't have to worry about any lender liens on your home.

How to use a HELOC responsibly

To avoid your lien being enforced and, potentially, losing your home to the lender, it helps to know some simple guidelines for HELOC borrowing.

First, make sure you have a purpose for opening a HELOC. Using it for the right reasons, like home repairs and renovations that can result in a tax deduction, is key. After you identify the purpose for your line of credit, decide on a HELOC amount that fits the purpose. Borrowing significantly more money than you need could lead to overspending and increase the chances you fall behind on your payments. And, avoid taking out a HELOC to cover everyday costs like groceries and gas, DiBugnara says.

"If you're taking out a HELOC to pay your daily expenses, you may put yourself in a position to have a problem," he says.

Using a HELOC to cover everyday costs is a sign that you might be in financial trouble, which means you could be in jeopardy of missing HELOC payments and, possibly, going into foreclosure. If you find yourself in that position, an unsecured lending option like a personal loan or credit card may be a better option since you don't have to offer collateral to get funding.

The bottom line

HELOC lenders typically place a lien on your home's title if you open a line of credit with them. The lien gives your lender the right to foreclose on your home if you default on your HELOC payments. However, most lenders want to avoid the foreclosure process and will offer you alternative options before it gets to that point. Borrowing a HELOC responsibly, both in the decisions you make before you open one and how you handle your spending after it's open, can help you avoid ever having your HELOC lender's lien become an issue.

Does a HELOC put a lien on your house?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 24 Apr 2025 14:16:40 GMT

From Pandemic Lows to Today’s Highs: How Interest Rates Are Reshaping the Housing Market

Video: https://youtube.com/shorts/S9k0tmj1rjA?si=vYLCe2kaZLAbRwxo

In the midst of the COVID-19 pandemic, one silver lining for prospective homeowners was the record-low interest rates. Mortgage rates dipped to historic lows—some even under 3%—making homeownership more accessible and monthly payments more affordable than ever. Fast forward to today, and the story has drastically changed.

A New Reality for Borrowers

Today’s homebuyers are facing interest rates that have more than doubled since the pandemic era. With rates hovering between 6% and 7% in many cases, the dream of buying a home has become significantly more expensive. This shift impacts more than just the total cost of a home—it directly affects monthly mortgage payments, borrowing power, and long-term affordability.

To put it into perspective:

A $400,000 home at a 3% interest rate equals a monthly payment of approximately $1,686 (excluding taxes and insurance).

That same home at a 7% interest rate jumps to about $2,661—a difference of nearly $1,000 per month.

Fewer Buyers, More Hesitation

As rates rise, so does buyer hesitation. Many potential homeowners who secured ultra-low rates during the pandemic are now reluctant to sell and buy again at higher rates. This has led to a decrease in housing inventory, further driving up home prices in many regions and putting added pressure on first-time buyers.

Is It Still a Good Time to Buy?

The answer depends on individual circumstances. While higher rates might deter some, others see opportunity—especially if home prices stabilize or decrease. Experts suggest focusing on long-term goals: buy when it makes financial sense, and consider refinancing down the road if and when rates drop.

Bottom Line

The contrast between today’s interest rates and those during the pandemic highlights a significant shift in the real estate landscape. Buyers must now be more strategic, budget-conscious, and informed than ever before. While the path to homeownership may look different, it remains possible—with the right planning and timing.

From Pandemic Lows to Today’s Highs: How Interest Rates Are Reshaping the Housing Market

ralph@homequalified.com (Ralph DiBugnara) — Mon, 21 Apr 2025 15:02:34 GMT

Stock Market vs. Real Estate - Choosing the Right Investment Path

Video: https://youtube.com/shorts/A4aQtTK6tMw?si=tDhsd8zBcNYgwdJB

Video Transcript:

"Which is better: investing in the stock market or real estate?

The stock market offers liquidity and the potential for high returns, but it can be volatile.

Real estate provides tangible assets and steady income, yet requires more capital and management.

Ultimately, the best choice depends on your financial goals, risk tolerance, and investment horizon."

Article

In the realm of wealth-building, two prominent avenues often come to the forefront: the stock market and real estate. Each offers unique opportunities and challenges, and understanding their nuances is crucial for making informed investment decisions. Stock Market: Liquidity and Accessibility Investing in the stock market provides a high degree of liquidity, allowing investors to buy and sell shares with relative ease. This flexibility is advantageous for those seeking short-term gains or needing quick access to funds. Additionally, the stock market offers a diverse range of investment options, from individual stocks to mutual funds and ETFs, catering to various risk appetites and investment strategies. Real Estate: Tangible Assets and Steady Income Real estate investment involves acquiring physical properties, which can generate consistent rental income and potential appreciation over time. This tangible asset class often appeals to investors looking for long-term stability and passive income streams. However, real estate requires significant upfront capital, ongoing maintenance, and can be less liquid compared to stocks. Making the Right Choice The decision between stock market and real estate investments hinges on individual financial goals, risk tolerance, and investment horizons. For those seeking liquidity and lower entry barriers, the stock market may be more suitable. Conversely, investors aiming for long-term growth and passive income might find real estate more aligned with their objectives.

Stock Market vs. Real Estate - Choosing the Right Investment Path

ralph@homequalified.com (Ralph DiBugnara) — Thu, 17 Apr 2025 14:18:16 GMT

Stock Market vs. Real Estate - Choosing the Right Investment Path

Video: https://youtube.com/shorts/A4aQtTK6tMw?si=tDhsd8zBcNYgwdJB

Video Transcript:

"Which is better: investing in the stock market or real estate?

The stock market offers liquidity and the potential for high returns, but it can be volatile.

Real estate provides tangible assets and steady income, yet requires more capital and management.

Ultimately, the best choice depends on your financial goals, risk tolerance, and investment horizon."

Article

10 first-time homebuyer tips: How to get that house

ralph@homequalified.com (Ralph DiBugnara) — Thu, 03 Apr 2025 14:49:57 GMT

By Ralph Dibugnara

By David McMillin

March 24, 2025

Key takeaways

Remember to account for the variable expenses of owning a home, which include insurance, property taxes, maintenance and repairs.

House hunting tips for first-time homebuyers

1. Check your credit (and work on it)

The higher your credit score, the better the interest rate on your mortgage.

Pull your reports

It’s important to note that your credit report may look different depending on the credit bureau. There are three main credit reporting bureaus in the U.S.:

Experian

Equifax

TransUnion

Fix and then monitor your credit

In addition to contacting a bureau if you spot any mistakes, follow these steps to keep your credit in the best shape possible:

Pay your bills on time: Follow this step whether you’re trying to buy a house or not — you can make or break your credit by making your payments on time every month.

2. Nail down your budget

Principal and interest: This will be the bulk of your monthly payment, and if you take out a fixed-rate mortgage, this chunk will never change over the course of the loan.

In addition to these expected expenses, it’s a good idea to put aside some money regularly for maintenance and unexpected repairs.

3. Consider your needs and wants

Finding the ideal location and address can take more time than you expect, so begin scouting neighborhoods early in the process.

Along with pinpointing the neighborhood, now is a good time to narrow down your preferences for the home itself by considering these essential questions:

What type of house are you looking for?

What can you compromise on?

What are the dealbreakers?

Are you willing to look at older properties that may require some updates, or do you want a move-in-ready property?

Think about what you like and dislike about where you currently live — that can help inform your list of needs and wants.

4. Get finances in place

Regardless of income level, you should be able to document to potential lenders that you have a stable source of earnings.

If you’re self-employed, be ready for closer scrutiny than someone getting a salary or hourly wage.

And it’s best to avoid opening new credit accounts or loans, or racking up more debt, at this stage, DiBugnara adds. All those activities could possibly ding your credit report.

Learn more: How to save for a down payment

Tips for finding the right mortgage

5. Comparison shop mortgage lenders

At this point, you should know what monthly payment you’re comfortable with, what areas you can afford and how much you can put down. Now it’s time to shop for a mortgage. Consider these factors:

Comparison shop: Compare mortgage rates from at least three different types of lenders, as well as different types of mortgages.

What others have to say: Read customer reviews for lenders online to get a sense of what the experience is like with individual lenders.

Learn more: Different types of mortgage lenders

6. Get preapproved

7. Look for down payment assistance

Earn less than a specific amount per year, which typically varies by location and household size

Purchase a home that does not exceed a maximum amount, which can vary based on targeted and non-targeted areas

Take out a loan offered in conjunction with the state housing authority

Often, your loan officer can provide info on the available programs and what you might be able to pair with your mortgage.

Tips for buying your first home

8. Work with a real estate agent

After you have your financing squared away and a preapproval letter in hand, your next step as a first-time homebuyer is to hire a real estate agent or Realtor.

You can start by asking friends, relatives or co-workers for referrals. Interview several prospective agents to get a feel for who may be a solid match in terms of personality and expertise.

9. Negotiate with the seller

10. Draw up a contract

Major issues with a home inspection

Mortgage application denial

A lower appraisal than the offer price

If these terms are spelled out in writing with deadlines, you’ll have an out if the transaction doesn’t go as planned — and get your earnest money deposit back, too.

Bottom line

Is a $250,000 home equity loan risky? Experts weigh in

ralph@homequalified.com (Ralph DiBugnara) — Thu, 27 Mar 2025 14:16:49 GMT

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16 first-time homebuyer mistakes to avoid

ralph@homequalified.com (Ralph DiBugnara) — Thu, 20 Mar 2025 16:06:05 GMT

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10 Major Metros Where Rent Is More Affordable — Is Buying Still Worth It?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 13 Mar 2025 14:58:25 GMT

By Ralph Dibugnara March 6, 2025

By: Paul Centopani

February 26, 2025

https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional

Mortgage rate forecast for next week (Feb. 24-28)

Mortgage rates came down for the fifth straight week.

The average 30-year fixed rate mortgage (FRM) declined to 6.85% on Feb. 20 from 6.87% on Feb. 13, according to Freddie Mac.

“The 30-year fixed-rate mortgage has stayed just under 7% for five consecutive weeks and in that time has fluctuated less than 20 basis points. This stability continues to bode well for potential buyers and sellers as we approach the spring homebuying season,” said Sam Khater, chief economist at Freddie Mac.

Will mortgage rates go down in March?

-Rick Sharga, CEO at CJ Patrick Company

Find your lowest mortgage rate. Start here (Feb 27th, 2025)

With the economy possibly heading into a recession, we may have already seen the peak of this rate cycle. But if inflation rises, mortgage rates could uptrend. Of course, interest rates are driven by many factors and notoriously volatile, so they could change direction any given week.

Experts from Realtor.com, First American, Home Qualified and CJ Patrick weigh in on whether 30-year mortgage rates will climb, fall, or level off in March.

Expert mortgage rate predictions for March

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Ralph DiBugnara, president at Home Qualified

Prediction: Rates will moderate

“The market is starting to slowly but steadily see some small movement of mortgage rates coming down. I believe March will be around the same averages we have seen through February. Historically, we would see the greatest drop in mortgage rates come during the spring buying season. If inflation ticks down and consumer spending slows along with increased seasonal home buying, we should see a significant reduction in interest rates.”

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Hannah Jones, senior economic research analyst at Realtor.com

Prediction: Rates will moderate

“Mortgage rates are likely to remain high through March. We may see some volatility as markets weigh the implications of the Trump administration’s various economic proposals and policy actions. PCE inflation data could influence rates, especially if it comes in higher-than-expected. Overall, we expect both inflation and mortgage rates to be higher for longer than initially expected, but the path is not yet clear due to considerable policy uncertainty.”

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Rick Sharga, CEO at CJ Patrick Company

Prediction: Rates will moderate

“With consumer confidence plummeting and a great deal of uncertainty and volatility in the market as the Trump Administration continues to promise high tariffs and mass deportations, there’s been a flight to safety in the bonds market, driving down bond yields. Because of those lower yields, we’re seeing what is probably a temporary dip in mortgage rates, which could reverse course suddenly if the next inflation report comes in higher than expected. But for now, it looks like rates for a 30-year fixed-rate loan will rest somewhere between 6.75-7.0% for at least the next few weeks, while the market settles into its new reality.”

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Sam Williamson, senior economist at First American

Prediction: Rates will moderate

“With a strong U.S. labor market and inflation running hotter than anticipated, the Federal Reserve is likely to hold off on cutting interest rates at its upcoming March meeting. This limits downward pressure on 10-year Treasury notes, which mortgage rates tend to follow. Consequently, we expect mortgage rates to remain stable in March, fluctuating in the upper 6% range.”

Will Interest Rates Go Down in March?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 06 Mar 2025 16:03:36 GMT

By Ralph Dibugnara February 27, 2025

By Erik Martin

February 4, 2025

Best Ways to Tap Home Equity for Home Improvements | Mortgages | U.S. News

Using your home equity financing products may allow you to borrow more at a lower interest rate compared to credit cards or personal loans.

Key Takeaways

Tapping into home equity can provide substantial funds for home improvements at lower interest rates than personal loans or credit cards.

Home equity loans, HELOCs, cash-out refinances and FHA 203(k) rehab loans have distinct advantages and drawbacks.

While using home equity for renovations can enhance property value, it's crucial to consider closing costs, foreclosure risk and the impact of fluctuating property values.

Thanks to strong home appreciation, Americans have accumulated $35 trillion in home equity, which can fund renovations and improvements that boost their home's appeal and resale value.

There are several popular ways to liquidate home equity, including a home equity loan, home equity line of credit, cash-out refinance and FHA 203(k) rehab loan. Homeowners should consider each home improvement loan's pros and cons and determine which option will best meet their needs.

You don't necessarily have to pull from your home equity to fund a major remodel or other home improvement goal. Other options include taking out a personal loan, using credit cards, or applying for a personal line of credit from a bank or lender. However, a home equity loan or line of credit is often a smarter move. Loans backed by home equity are less risky for lenders, so their interest rates are lower and terms are more favorable.

Take a closer look at the advantages and disadvantages of using home equity to improve your property.

SEE:

Best Home Equity Loans

Pros of Using Home Equity for Remodel

You Can Borrow More

If you have a lot of unused home equity, you may qualify to borrow a lot more than the limits imposed by non-home-equity financing options, like personal loans or credit cards. Consider that the average home renovation project budget in 2025 is more than $52,000, with typical expenses ranging from around $19,000 to more than $88,000 for most homeowners, according to digital marketplace HomeAdvisor.

"You are borrowing against your home when you tap home equity, and right now people are sitting on a ton of equity," says John Horton, senior vice president of mortgage lending with A and N Mortgage Services Inc. "Over the last seven to eight years, the average increase in home equity has been between 9% and 10% per year."

Interest Rates Are Lower

Home equity financing products typically offer lower interest rates than credit cards or loans not backed by real estate. Paying a lower rate means potentially saving thousands over the life of your loan.

A Flourish chart

Enjoy Longer Repayment Terms

Home equity repayment terms generally run between five and 30 years. Extending repayment reduces your payment and can make the loan more affordable. Most personal loan providers set their maximum term at five to seven years.

Reap Tax Savings

"You could be eligible for a tax deduction on the interest you pay for a home equity loan or HELOC if you use it for a home improvement project, although you'll need to consult with your tax advisor to see if you qualify," says Aaron Craig, vice president of mortgage and indirect sales for Georgia's Own Credit Union.

Cons of Using Home Equity for Remodel

You'll Pay Closing Costs

Expect to pay 2% to 5% of the loan amount or credit limit at closing. Fees and interest rates can vary widely among lenders and products, so it's important to compare.

Your Home Is at Risk

Home equity financing is secured by your home. Missing home equity loan payments could lead to default and foreclosure, even if your first mortgage is in good standing.

You May Pay More Interest Than You Think

The longer repayment terms available with home equity financing are a double-edged sword. That's because extending the repayment period to lower what you pay each month increases your interest cost over the life of the loan. You can calculate the total interest expense by multiplying the monthly payment by the number of scheduled payments and then subtracting the loan amount.

Interest Rates and Payments Can Increase

Many HELOCs come with variable interest rates that can change your payment and costs significantly over the life of the loan. In addition, HELOC terms are divided into a drawing phase, typically five to 10 years, during which the borrower can make a minimum or interest-only payment. Once the drawing period ends, the entire balance must be repaid over the remaining loan term, and payments can rise sharply. Many borrowers are unprepared for this.

Getting Approved Could Take Longer

The lender must appraise the property in addition to evaluating your credit history, income and debts. "Since it is a loan secured on your home, home equity financing usually takes a little longer to fund than a consumer loan alternative, like an unsecured personal loan. But this isn't a big deal unless you are under a tight deadline and need the money quickly," Craig says.

It Could Lead to Negative Equity

Tapping a substantial portion of your home's equity can be risky if property values decline, leading to negative equity. This occurs when your outstanding loan balance surpasses your home's current market value, thereby limiting your ability to refinance or sell the property.

Calculate:

Use Our Free Mortgage Calculator to Estimate Your Monthly Payments.

Best Home Improvement Loans

Now that you have a better idea of the pluses and minuses of going the home equity financing route, which borrowing vehicle is best for you?

HELOC

A HELOC is a flexible line of credit that works similarly to a credit card.

You can borrow as needed up to a preset limit and only pay interest on the amount you use.

HELOC lenders generally allow total borrowing against 80% to 90% of the home's value. If your home is worth $100,000 and you owe $70,000 on your existing mortgage, you may be able to borrow an additional $10,000 to $20,000 with a HELOC.

The interest rate on a HELOC is typically variable, meaning it can fluctuate depending on market conditions. Some lenders offer fixed-rate HELOCs or convertible HELOCs, which give the borrower more control over their interest rate and payment.

A HELOC operates in two main stages: the draw period and the repayment period. During the draw period, you can borrow against the line of credit and are only required to make minimum or interest-only payments on your balance. The draw period typically lasts five to 10 years. Once the loan moves into the repayment phase, you can no longer access the credit line. The required payment will be adjusted to cover your interest and pay off your balance during the remaining loan term.

"HELOCs are a great way to access home equity, acting almost like a credit card on your home," says Ralph DiBugnara, president of Home Qualified. "This is a line of credit that traditionally follows the prime borrowing rate, which historically is somewhere between 0.35% and 0.5% above the average 30-year mortgage interest rate. Right now, however, that is a disadvantage because it's providing a rate in the mid- to high-7% range."

Even a HELOC with a variable interest rate won't necessarily cost you more than a fixed-rate home equity loan.

"Your payments could actually decrease if interest rates fall. Interest rates are usually lower on a HELOC than on a home equity loan," Craig says.

Home Equity Loan

As with a HELOC, you can likely borrow against 80% to 90% of your property value with a home equity loan. You receive a lump sum when you close your loan, and you repay it with fixed monthly payments. Home equity loan terms typically run between usually five and 20 years, with some lenders offering up to 30 years.

"It's a solid choice if you have a well-planned project and can comfortably manage the repayments," says Carl Holman, director of communication and content for A&D Mortgage.

However, you could underestimate the project and end up needing more money than you agreed to borrow, "or you could overspend by borrowing more money up front than what the project ends up costing," cautions Craig. "You also have limited flexibility to borrow any more funds using your home equity if additional dollars are needed for the project. That means you'd have to secure an additional loan."

Cash-Out Refinance

A cash-out refinance involves replacing your existing mortgage with a new, larger loan, allowing you to take the difference in cash. Lenders typically approve cash-out refinances up to 80% of your home's appraised value.

"A cash-out refi provides a large lump sum at closing and may come with a lower rate than a home equity loan or HELOC. Plus, the interest could be tax deductible," Holman says. "However, it reset your primary mortgage loan term, which could mean paying more interest over time."

Also, closing costs – usually 2% to 5% of your loan amount – could be significant. Cash-out refinancing can be a good option if you're looking to tap into your equity and can secure a better rate for your primary mortgage.

Craig adds that a cash-out refinance can be more budget-friendly because you only have one payment to make instead of a monthly bill for your mortgage and a separate bill for your HELOC or home equity loan. However, a cash-out refi can be quite costly if your refinance amount is large and the equity cash-out portion is relatively small. That's because the closing costs apply to the entire mortgage, not just the cashed-out equity.

Read:

Best Home Improvement Loans.

FHA 203(k) Rehab Refi

The FHA's 203(k) Rehabilitation Mortgage Insurance program enables homebuyers to finance both the purchase and renovation costs of a property with one loan. If you already own a home, you can also refinance your existing mortgage while incorporating the costs of necessary repairs or improvements into the refinance. This approach is particularly advantageous if you have little equity, as the refinance loan-to-value is based on the improved value of the property, not its current value.

The limited 203(k) loan allows financing up to $75,000 for non-structural repairs and improvements, such as kitchen remodels or new carpeting. There is no minimum borrowing amount, and it's suitable for minor renovations. The rehabilitation period for this loan is nine months.

The standard 203(k) loan covers more extensive renovations, including structural repairs, and has a minimum borrowing amount of $5,000. It mandates the involvement of a 203(k) consultant to oversee the project and has a rehabilitation period of 12 months.

"These loans are accessible to borrowers with lower credit scores and smaller down payments and offer a streamlined option for smaller projects," Holman says. "However, it requires more paperwork, FHA inspections, and mortgage insurance premiums, and it's limited to primary residences. But it's a solid choice for buyers tackling major renovations."

Which Is the Best Option for You?

The right home equity financing choice for you depends on your needs, budget, timeline and other factors.

A home equity loan is best for a borrower who currently has a very low interest rate on their first mortgage, can afford additional loan payments, has a pretty good idea of how much the home improvements are going to cost, and likes the stability of a fixed rate and fixed term.

A HELOC is better for someone who isn't quite sure how much home improvements are going to cost and wants some flexibility but is OK with a variable interest rate.

If you have a high interest rate on your first mortgage and can benefit from refinancing to a lower rate, a cash-out refinance could be a good option.

A homeowner with low equity and limited funds available should consider an FHA 203(k) loan.

Best Ways to Tap Home Equity for Home Improvements

ralph@homequalified.com (Ralph DiBugnara) — Thu, 27 Feb 2025 15:27:07 GMT

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Net proceeds from the sale of a house: How much do you really make?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 20 Feb 2025 16:12:50 GMT

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Best time to buy a house: Why spring is ‘homebuying season’

ralph@homequalified.com (Ralph DiBugnara) — Thu, 06 Feb 2025 14:29:26 GMT

By: Ralph DiBugnara February 6, 2025

Mia Taylor Michele Petry

January 27, 2025

Key takeaways

Late spring and early summer are typically considered peak homebuying season.

However, the increased competition among buyers can lead to higher prices.

Buyers hoping to score a deal may want to wait until fall or winter, when competition — and prices — typically ease.

Historically, spring and summer have been the busiest times in the real estate market. But the traditional seasonality of homebuying and selling was upended by the pandemic: Home sales slowed significantly amid stay-at-home orders, then dramatically spiked, and the market remained volatile for quite some time.

The good news is, things have since returned to something closer to normal. One positive sign: After years of a distinct lack of available homes for sale, which kept homebuyers at a disadvantage, Realtor.com is forecasting an 11.7 percent increase in existing housing inventory for 2025. This increase would bring more balance to the supply-and-demand metric — and also more leverage for buyers.

In other words, seasonality may once again become the most important factor in determining the best time of year to buy a house. Here’s what to know about buying in high season versus buying in a more traditionally slow period.

Buying a house in spring or summer

Spring and early summer are the busiest and most competitive time of year for the real estate market. There’s usually more inventory listed for sale than other times of year, and home prices tend to be steeper to reflect the increased demand. Since 2011, the months of February through June have been the most lucrative time to sell, according to a 2024 study by ATTOM Data Solutions, with May in particular earning sellers an average premium of 13.1 percent above market value. The other months in the range all yielded premiums ranging from 12.2 percent to 12.8 percent.

“Typically, sellers choose spring and summer as the time to list as the majority of buyers are out in the market,” says Ryan Jancula, principal and lead broker with Jancula Group at Compass in Los Angeles. “This is a double-edged sword for a buyer, as you will be met with more opportunities but [also] much more competition, which may lead to further increase in prices or less desirable sale terms.”

If you’re hoping to save some money and your timeline is flexible, consider waiting until the rush is over and not starting your home search until mid- or late-summer.

Keep in mind: The most expensive month of the year to purchase a home is May, when seller premiums are as high as 13.1 percent above market value, according to ATTOM data.

Pros

More listings: The increase in springtime and summertime listings means buyers have more options. “Spring is when the most inventory comes to market and there is likely more choice,” says Victoria Vinokur, a broker with Brown Harris Stevens in New York City.

Better weather: During warmer months, buyers are more easily able to get out and about to see homes. Home exteriors are easier to see with no snow, and interiors look more inviting when there’s plenty of sunshine coming in.

More convenient timing: “If buyers have school-age kids, this is the best time to purchase so it doesn’t break up the school year,” says Jane Katz, a New York City real estate agent with Coldwell Banker Warburg. “The transaction should close by [the end of] summer, so kids can start in their new school in September.”

Cons

Increased competition: This is often the peak time for the real estate industry, which means more buyers are on the hunt — so expect plenty of competition.

Higher prices: With increased competition comes multiple bids and, likely, higher home prices. Sellers have the upper hand when demand is strong.

Moving costs: Moving is expensive, and moving companies’ prices are also impacted by supply and demand. Come summer, when demand increases, so will the prices you’ll pay to hire pro movers. The same move will cost you less during winter.

Buying a house in fall or winter

Buying off-season has its benefits, though. The ATTOM study, which analyzed 59 million single-family home and condo sales between 2011 and 2023, showed that October is the month with the lowest seller premium by far at 8.8 percent, compared to May’s 13.1 percent. The next lowest were September and November, both at 9.5 percent. That means October is when homebuyers are likely to get the best deal. In fact, a recent Zillow report declared early fall to be “the next housing sweet spot.”

Keep in mind: The least expensive month of the year to purchase a home is October, when seller premiums are at their lowest, according to ATTOM.

“Late summer and winter tend to be quieter, with a better chance for a buyer to find less competition and a deal,” says Ralph DiBugnara, a vice president at New American Funding and founder of Home Qualified.

Pros

Less competition: Fewer buyers are looking for homes during the winter, which means there’s less competition to face for available listings. Less-intense competition also typically means more time to spend making a decision.

More leverage: With fewer buyers, there’s more opportunity to negotiate the best deal possible. “In winter and especially around national holidays, sellers will see less buyer traffic and be more willing to negotiate,” says DiBugnara.

Motivated sellers: During the quieter fall and winter months, when fewer prospective buyers are shopping, home sellers may be more willing to lower their prices, or offer concessions, to attract those prospective buyers who are still looking.

Cons

Less inventory: Fewer homes are typically listed on the market during winter, which means fewer choices for buyers.

Weather issues: Depending on where in the country you live, winter weather can make viewing homes far more challenging. Closings may even be postponed due to adverse weather conditions.

Home inspection difficulties: It can also be more difficult to inspect homes in cold weather. If there’s snow coating a roof, for example, it can be challenging for an inspector to assess its condition.

Best time to buy a house: Prices and seasonality

Just because spring is the industry’s prime time doesn’t automatically mean it’s the right time for you. You have to consider your personal circumstances as well as seasonality — for example, if you are getting married or having a baby in August, you may not be able to wait nearly a year for a larger home.

“While spring is typically referred to as the homebuying season, that doesn’t necessarily guarantee that it is an optimal time to buy,” says Mark Hamrick, Bankrate’s senior economic analyst.

In addition, if price is of concern to you, you may in fact be better off waiting out the rush. This chart illustrates median home prices since the start of the COVID-19 pandemic, using data from the National Association of Realtors. Once the chaos of the early pandemic died down, the highest price spikes were uniformly in June or July, and the lowest prices occurred in the dead of winter.

Other factors to consider

A number of other factors can impact when might be the best time to buy a house. Here are a few more things to consider.

Mortgage rates: Mortgage interest rates are not seasonal, but they certainly fluctuate. Throughout 2023, rates spiked sharply. They then dropped, then rose again. And despite high hopes, the Fed cuts in 2024 did not provide much relief for mortgage rates, which remain elevated. “While mortgage rates have edged down from their highs, they are likely to remain above their pre- and early-pandemic levels, when 3 percent to 4 percent rates were common,” says Hamrick.

Lack of inventory: The shortage of available homes that plagued the country for the past few years has begun to ease, but home prices remain stubbornly high. Realtor.com predicts prices will continue to inch upward throughout 2025, albeit somewhat more slowly than previous years.

Recession fears: When consumers feel nervous about the economy, especially amid talk of a possible recession, they tend to back off of spending. This holds particularly true for big purchases like a home. If you worry about your income or job security should a recession happen, waiting to buy might be wise, regardless of season.

How Soon Can You Refinance a Mortgage?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 30 Jan 2025 16:19:07 GMT

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First-Time Home Buyer Advice: First Quarter 2025

ralph@homequalified.com (Ralph DiBugnara) — Thu, 23 Jan 2025 15:35:09 GMT

By Ralph Dibugnara January 16, 2025

How to get a home equity loan with bad credit

Linda Bell, Troy Segal

January 8, 2025

Key takeaways

A lower credit score doesn’t necessarily mean a lender will deny you a home equity loan. It does mean the loan will be more expensive, as you won’t get the lowest interest rate.

It’s possible to get a home equity loan with a fair credit score — as low as 620 — as long as other requirements around debt, equity and income are met.

Strategies for getting a loan despite your bad credit include taking on a co-signer, applying to a place where you currently bank, and writing a letter of explanation to the lender.

Alternatives to a home equity loan include personal loans, cash-out refinances, reverse mortgages and shared equity agreements.

Can you get a home equity loan with bad credit?

Yes, you can. A lower credit score doesn’t necessarily mean a lender will deny you a home equity loan. Some home equity lenders allow for FICO scores in the “fair” range (the lower 600s) as long as you meet other requirements around debt, equity and income.

That’s not to say it’ll be easy: Lenders tend to be stringent with these loans even more so than they are with mortgages. Still, it’s not impossible. Here’s how to get a home equity loan (even) with bad credit.

Requirements for home equity loans

Not all home equity lenders have the exact same borrowing criteria, of course. Still, general guidelines do exist. Typical requirements for home equity loan applicants include:

A minimum credit score of 640

At least 15 percent to 20 percent equity in your home

A maximum debt-to-income (DTI) ratio of 43 percent, or up to 50 percent in some cases

On-time mortgage payment history

Stable employment and income

To learn a specific lender’s requirements for a home equity loan, you’ll need to do some research online or contact a loan officer directly. If you aren’t ready to apply for the loan just yet, ask for a no-credit check prequalification to avoid having the loan inquiry affect your credit score.

What are “good” and “bad” scores for home equity loans?

First, let’s define our terms. Here’s how FICO — the most popular credit scoring model — categorizes different scores:

Score

Classification

300-579

Poor

580-669

Fair

670-739

Good

740-799

Very Good

800-850

Excellent

Source: MyFico.com

When it comes to home equity loans, lenders set a high bar for creditworthiness — higher, even, than mortgages. That’s because they are considered riskier than mortgages: You, the applicant, are already carrying a big debt load. Should you default and your home get seized, the home equity loan — as a “second lien” — only gets paid after the primary (the original) mortgage.

Furthermore, home equity loans don’t have a robust secondary market they can be sold on, like most mortgages do. So the lender usually bears all the risk of originating and then keeping them.

Bankrate insight

In June 2024, government-sponsored enterprise Freddie Mac began a pilot program that involved purchasing certain single-family, closed-end second mortgages (aka home equity loans), creating a trial secondary market for them.

As a result, home equity lenders set stricter criteria, demanding scores squarely in the “fair” range. A score in the 500s – good enough for an FHA mortgage — will have a tough time qualifying for a home equity loan. Some lenders have loosened their standards of late and are approving applicants with scores as low as 620. But a “good” score, preferably above 700, remains the threshold for many institutions. It can vary even within one lender, depending on factors like the loan amount or other loan terms.

And of course — as with any loan — the lower your credit score, the less likely you will qualify for the best interest rates.

How to apply for a bad credit home equity loan

Before applying for a home equity loan, remember that it’s not just a question of getting the financing, but also how you can overcome a lower credit score to get the best possible rate. Here are some steps to take:

1. Check your credit report

Check your credit reports at AnnualCreditReport.com to get a sense of where you stand. If there are any errors, like incorrect contact information, contact the credit bureau — Equifax, Experian or TransUnion — to get it updated as soon as possible.

2. Determine your equity level

To qualify for a home equity loan, lenders typically require that you own at least 15 percent or 20 percent of the home outright. The amount of equity you have, your home’s appraised value and your combined loan-to-value (CLTV) ratio help determine how much you can borrow.

Home equity loan calculator

Bankrate’s home equity loan calculator can estimate your potential home equity loan amount.

Visit the calculator

Here’s a quick way to calculate your equity: Take the value of your home and subtract the balance left on your mortgage. While lenders will only consider the official appraised value of your home when determining how much you can borrow, you can get an idea of your home’s value through Bankrate or a real estate listing portal or brokerage.

Let’s say your home is worth $420,000 and you have $250,000 to pay on your mortgage:

$420,000 – $250,000 = $170,000

In this example, you’d have $170,000 in home equity.

That doesn’t mean you can borrow $170,000, however. If the lender requires you to maintain at least 20 percent equity, you’d need to preserve $84,000 ($420,000 * 0.20). That leaves you with the potential to take out a home equity loan of up to $86,000 ($170,000 – $84,000).

Remember: When taking out the loan, make sure your combined loan-to-value (CLTV) ratio — the total of all your home-based debt — is within the lender’s limit, typically 80 percent or lower.

3. Find out your DTI ratio

The DTI ratio is a measure lenders use to determine whether you can reasonably afford to take on more debt. To calculate your DTI ratio, simply divide your monthly debt payments by your gross monthly income. For example, say you bring in $6,000 a month in income and have a $2,200 monthly mortgage payment and a $110 monthly student loan payment:

$2,310 / $6,000 x 100 = 38.5%

To make things even easier, you can use Bankrate’s DTI calculator.

For a home equity loan, most lenders look for a DTI ratio of no more than 43 percent.

4. Consider a co-signer

If your credit score is making it tough for you to get a home equity loan, taking on a co-signer with better credit might score you an approval.

A co-signer is just as responsible for repaying the loan as the primary borrower, even if they don’t actually intend to make payments. If you fall behind on loan payments, their credit suffers along with yours.

The extra guarantee they provide might get you over the hump if your credit is iffy. But you still have to basically qualify on your own. “A co-signer can help with credit and income issues for an applicant who has a lower credit score, but ultimately the main applicant or primary borrower will have to have at least the bare minimum credit score that is required based on the bank’s underwriting guidelines,” says Ralph DiBugnara, president of Home Qualified, a real estate platform for buyers, sellers and investors.

5. Try a lender you already work with

If your bank, credit union or mortgage lender offers home equity products, it might be able to extend some flexibility, or at least help with your application, since you’re an existing customer.

“A loan officer familiar with the details of an applicant’s situation can help them present it to an underwriter in the best possible way,” says DiBugnara.

6. Write a letter to the lender

Write a letter of explanation describing why your credit score is low, especially if it has taken a recent hit. This letter should matter-of-factly explain credit issues — avoid catastrophizing — and include any relevant paperwork, like bankruptcy documentation. If your credit score was impacted by late payments due to job loss, for example, but you’re employed now, your lender can take this context into consideration.

Lenders that offer home equity loans with bad credit

There are home equity lenders that offer loans to borrowers with lower credit scores. (See FAQ, below). Here are some to consider, along with their requirements:

Lender

Bankrate Score (scale of 1-5)

Loan types

Credit score minimum

Maximum CLTV

Maximum DTI

Figure

4.2

HELOC

640

75%-90%

Undisclosed

Rate

4.1

HELOC

620

90%-95%

50%

Spring EQ

4.1

Home equity loan, HELOC

640 for home equity loans, 660 for HELOCs

90%

43%

TD Bank

3.8

Home equity loan, HELOC

660

90%

Undisclosed

Connexus Credit Union

4.2

Home equity loan, HELOC

640

90%

Undisclosed

Discover

4.0

Home equity loan

660

90%

43%

Learn more: Home equity lender reviews and ratings

Pros and cons of getting a home equity loan with bad credit

Getting a home equity loan with bad credit has its benefits and drawbacks. You can tap your equity to help with expenses, but it’s also risky.

Pros

Access to funds: A home equity loan gives you a significant amount of cash at your fingertips, which can help you pay for home improvement projects, consolidate high-interest debt and tackle big-ticket expenses.

You’ll pay a fixed rate: Home equity loans are for a fixed sum at a fixed interest rate, so you’ll know exactly how much your payment is each month. This can help you budget for and reliably pay down debt, which can help boost your credit score.

You could get out of costlier debt: If you have high-interest debt — like credit card debt — you could pay it off with a lower-rate home equity loan, then repay that loan, with one payment, for less.

Cons

You’re taking on more debt: If you’ve had trouble managing money in the past, it might not be wise to take on more debt with a home equity loan, even if you qualify.

It’ll be more expensive: A lower credit score won’t qualify you for the best home equity loan rates, meaning you’ll pay more in interest.

You could lose your home: If you fall behind on loan payments, you’ll further damage your credit. Even worse: If you’re eventually unable to pay back the loan, your home could go into foreclosure.

Learn more: Pros and cons of home equity loans

What to do if your home equity loan application is denied

If your application for a home equity loan is rejected, don’t despair. First, ask the lender for specific reasons why your application was denied. The answer can help you address any issues before applying in the future.

If your credit was one of the deciding factors, you can improve your score by making on-time payments and paying down any outstanding debt. If you don’t have enough equity in your home, wait until you’ve built a bigger stake (mainly by making your monthly mortgage payments) before submitting a new application.

Both these approaches may take a half-year to a year to make a significant difference in your credit profile. If you’re in more of a hurry, consider applying to other lenders, as their criteria may differ. Just bear in mind that more lenient terms often mean higher interest rates or fees.

And of course, you can consider other forms of financing.

Home equity loan alternatives if you have bad credit

If you need cash but have bad credit, a home equity loan is just one option. Here are some alternatives:

Personal loans

Personal loans can be easier to qualify for than a home equity product, and they aren’t tied to your home. Personal loans have higher interest rates, however, and shorter repayment terms. This translates to a more expensive monthly payment compared to what you might get with a home equity loan.

Cash-out refinance

In a cash-out refinance, you take out a brand-new mortgage for more than what you owe on your existing mortgage, pay off the existing loan and take the difference in cash. Most lenders require you to maintain at least 20 percent equity in your home in order to cash out.

A caveat, however: A cash-out refi makes the most sense when you can qualify for a lower rate than your current mortgage’s, and if you can afford the closing costs. With bad credit, getting that lower rate might not be possible.

Reverse mortgage

Reverse mortgages allow homeowners over the age of 62 to tap their home’s equity as a source of tax-free income. These types of loans need to be repaid upon your death or when you move out or sell the home. You can use reverse mortgages for anything from medical expenses to home renovations, but you must meet some requirements to qualify.

Shared equity agreement

Home equity investment companies might work with you even if you have a lower credit score, often lower than what traditional lenders would accept. These companies offer shared equity agreements in which you receive a lump sum in exchange for an ownership percentage in your home and/or its appreciation.

Unlike with home equity lines of credit (HELOCs) or home equity loans, you don’t make monthly repayments in a shared equity arrangement. Some companies wait until you sell your home, then collect what they’re owed; others have multi-year agreements in which you’ll pay the balance in full at the end of a stated period.

Make sure you understand all the terms of this complex arrangement. Technically, you’re not borrowing money, you’re selling a stake in your home — to a financial professional who naturally wants to see a return on their investment.

How to get a HELOC with bad credit

Applying for a HELOC is pretty much the same as applying for a home equity loan, but if you have bad credit, a loan might have a slight edge over the line of credit. That’s because home equity loans have fixed interest rates and fixed payments, so you’ll know exactly what you need to repay each month. This predictability could help you better manage your budget and keep up with payments.

A HELOC, on the other hand, has a variable rate, which can cause unexpected increases in your monthly payments. For this reason, lenders often have higher credit score criteria for HELOCs than home equity loans.

Learn more: What is a HELOC (home equity line of credit)?

Tips for improving your credit before getting a home equity loan

To increase your chances of getting approved for a home equity loan, work on improving your credit score well before applying — at least several months. Here are three tips to help you rebuild your credit:

Pay bills on time every month. At the very least, make the minimum payment, but try to pay the balance off completely, if possible — and don’t miss that due date.

Don’t close credit cards after you pay them off. Either leave them open or charge just enough to have a small, recurring payment every month. Closing a card reduces your credit utilization ratio (CUR), which can decrease your score. The recommended CUR: no more than 30 percent.

Be cautious with new credit. Getting a higher credit limit on a card or getting a new card can lower your credit utilization ratio — but not if you immediately max things out or blow through the bigger balance. Treat the newly available funds as sacred savings.

FAQ on getting a home equity loan with bad credit

Is it better to get a home equity loan or a HELOC if you have bad credit?

In general, it’s better to get a home equity loan with bad credit. A home equity loan often has a lower credit score requirement compared to a HELOC, and it comes with a fixed interest rate, so your payment will be the same every month, making it easier to plan for.

Can you get a better interest rate on a home equity loan with a higher credit score?

Yes — in fact, this is the rule for any type of loan, including a home equity product. The higher your credit score, the lower your interest rate.

Which banks give home equity loans with bad credit?

When searching for a home equity loan with bad credit, check whether a lender indicates what its minimum credit score requirements are for applicants on its website – for any home equity loan, not just for the “as low as” rate (which will be reserved for high-scoring applicants). Often lenders require a minimum score of at least 620, but scores above 700 remain the standard for many institutions. It can also be a good idea to look for borrowing opportunities from non-qualified loan lenders. These types of loans come with more flexible income and credit requirements, but they also tend to have higher interest rates and fees.

Many mortgage brokers work with non-QM wholesale lenders, or know of lenders specializing in applicants with iffy credit histories or scores. So a broker can be a good place to look, too.

How to get a home equity loan with bad credit

ralph@homequalified.com (Ralph DiBugnara) — Thu, 16 Jan 2025 14:40:15 GMT

By Ralph Dibugnara December 12, 2024

Boomers Have a New Retirement Problem

Published Dec 09, 2024

By Aliss Higham

Baby boomers have benefited from skyrocketing house prices over recent decades, with millions of homeowners born before 1964 watching their equity rise over recent decades. But now, thanks to a glut of unfavorable conditions in the U.S. housing market, boomers face a new retirement problem: affordable and accessible homes in which to age.

As a result, boomers are now "aging in place" in their current homes—a trend likely to induce a knock-on effect for younger generations.

According to a recent study conducted by Redfin, 78 percent of all boomers plan to stay in their current home for retirement. Another 2022 report from Redfin found that empty-nest boomers take up 28.2 percent of all "large homes"—three bedrooms or more—compared to 14.2 percent of millennials, who are much more likely to have their children still living at home.

While data isn't available indicating how much this has changed over recent years, the tradition of downsizing into smaller homes designed with retirement in mind is becoming a distant, if not completely unlikely, prospect for America's aging boomer population. While some may not want to move on from a house they've lived in for years on end, retrofitting existing homes for the sake of accessibility is a costly endeavor, particularly for older Americans living on fixed incomes.

"Baby Boomers are increasingly choosing to 'age in place,' meaning they remain in their homes longer instead of selling to downsize or relocate," New York City real estate broker Alexandra Gupta told Newsweek. "This trend is contributing directly to the housing shortage, as millions of homes that would otherwise be available to younger buyers remain occupied."

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A composite image created by "Newsweek" is shown. Boomers are aging in place, triggering a knock-on effect for other generations. Photo-illustration by Newsweek

Shortage of Accessible Homes

A lack of accessible homes required for some as they age are scarce—and a slowdown in new homes being built is a major factor. According to a report by CNBC in 2023, less than 5 percent of the U.S. housing supply is accessible.

But the problem is not just restricted to accessible homes. U.S. housing inventory and the speed at which new homes are being built have still not recovered to the levels seen before the 2008 financial crash. In January 2006, some 2.2 million new units were started. That dropped to just 490,000 in January 2009. In October 2024, 1.3 million units have been started—still nearly 1 million shy of the 2006 level.

The lack of homes for sale is a significant factor in today's high housing prices, which Ralph DiBugnara, founder and president of Home Qualified, told Newsweek is a key reason why boomers want to stay put, despite their homes likely being worth considerably more than when they bought them.

"The biggest problem I see facing homeowners today is they are equity rich, cash poor and without as many options to fix it because of high interest rates and high home prices," he told Newsweek.

"Baby Boomers are at a stage where they want to move or downsize but cannot because of the lack of homes for sale which has driven up prices. That combined with the high cost of a new home due to increased interest rates and insurance costs are keeping them locked in homes with equity. This is also a major factor in the inventory shortage problem the market is facing."

Making Homes Accessible

Fewer stairs, lifts, wider hallways, ramps and other modifications may come to be a necessity for many Americans as they grow older. And with them comes significant cost. While the size and scope of each refitting project is different, according to Thrive Homes, installing a stair lift can cost from $3,500 to $6,000. Concrete ramps can cost up to $500 per foot, and door widening could set you back as much as $2,500.

As expensive as they are, home modifications can also be considered unattractive to prospective buyers if the time comes when a move is absolutely necessary, thus potentially pushing down the price of the property. In a 2021 National Association of Home Builders survey of homebuyer attitudes, 56 percent of respondents said they would not buy a home if it had an elevator installed—a necessity for wheelchair users living in multiple-floor properties.

But other modifications such as wide hallways and step-free entries were considered desirable by the majority of those surveyed.

Knock-on Impacts

With boomers choosing to stay in place instead of buying new homes at high prices, younger generations are feeling the effects in an already squeezed housing market.

Boomers own the lion's share of U.S. housing, a trend that has broadened since the 2008 financial crash and the ebbing away of their parents in the Silent Generation. It again expanded during the coronavirus pandemic and its aftermath, with Gen X and millennials also widening their share of America's real estate market.

"Boomers' control over a large share of the housing market also has a broader economic effect," Gupta said. "Many Boomers hold substantial home equity, which has allowed them to leverage their property for wealth or to secure retirement. Younger generations, however, may struggle to build similar wealth through homeownership. As real estate remains increasingly out of reach for younger buyers, the wealth divide between Boomers and subsequent generations may widen, with homeownership becoming an even more significant driver of financial inequality."

The result, Gupta explained, is likely to keep their children—millennials and Gen Z—in the rental market for longer, and could also put some boomers back in rentals if they cannot find an affordable property to buy with the right home modifications. This could have even further ramifications in the cost of renting.

"As more Boomers age in place or choose to downsize into more accessible housing options, the rental market may see an uptick in demand for senior-friendly housing," she said. "Millennials and Gen Z, who are already delaying homeownership due to rising prices, may increasingly turn to rentals for longer periods. This could lead to rising rents, especially in desirable metropolitan areas, as younger people delay purchasing homes, further challenging their ability to save for down payments."

Solutions in Sight

While the federal government has some options on the table to ease housing woes, such as the U.S. Department of Agriculture's Rural Housing Service and special home-buying programs offered by the Department of Housing and Urban Development, Jesse Saginor, associate professor of real estate development in the University of Maryland School of Architecture, Planning and Preservation, said more needs to be done.

"One solution is to significantly increase funding, subsidies, tax credits, and/or zoning flexibility to allow for the construction of affordable senior housing so that seniors have somewhere affordable to move, given that many may only live on Social Security and little else," he told Newsweek. "So, that solution focuses on building housing for seniors that is affordable, and, assuming they are willing to move, also attainable. It removes the cost-prohibitive nature of moving to housing given their fixed incomes."

But Saginor added that "until we build for all segments of population in terms of income and age, there are bound to be shortages irrespective of mortgage rates and inflation, because the demand for housing tends to be dynamic while the supply of housing is largely static."

Boomers Have a New Retirement Problem

ralph@homequalified.com (Ralph DiBugnara) — Thu, 12 Dec 2024 17:03:18 GMT

By Ralph Dibugnara December , 2024

By Mia Taylor and Michele Petry

November 19, 2024

Key takeaways

iBuyers are online companies that buy homes directly from the owner, typically in a quick all-cash transaction.

Selling to an iBuyer speeds up the home-sale process considerably, making it a good choice if you’re in a rush or need the cash fast.

However, they usually offer a much lower price for your home than you might make in a traditional home sale.

Homeowners who want to sell quickly and skip the hassle of showings, repairs and wading through a lengthy closing can speed up the process by using an iBuyer. These speedy sale platforms — the “i” stands for instant — are online tech companies that purchase homes from sellers directly, without any third-party involvement (like a lender or a real estate agent).

An iBuyer company can make an all-cash offer on your home within 24 hours, or sometimes even faster, and can typically close within two or three weeks. They can often schedule closing dates at your convenience as well. But, if this all sounds too good to be true, be aware that iBuying transactions do come with financial drawbacks. Read on to learn more.

What is iBuying?

The iBuying approach to selling a house has roots that predate the internet. Years before real estate websites came along, local companies would put up signs around town offering to pay cash for homes — they’d then flip the properties for a higher price, making a tidy profit. Today these companies can be easily found online, following the same general approach: making quick cash offers for homes and reselling them.

“The iBuyer is typically a company whose business model is to buy properties from homeowners, do minor, usually cosmetic repairs, and then sell at a profit,” says Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence firm. “For the home seller, the benefits are speed — the transaction typically happens very quickly once the offer has been accepted — and certainty, as the deal closes immediately, as opposed to putting a property on the local multiple listing service and waiting for offers.”

This approach can be very attractive to sellers who need to close a sale quickly, whether for lifestyle or financial reasons. If you need to relocate ASAP for work, inherited an elderly relative’s home and don’t want to keep it, or simply need the cash from the sale as quickly as possible, for example, an iBuyer can be a good choice.

Popular iBuyer companies

While iBuying grew amid the highly competitive post-pandemic housing market, it has receded since and represents a very small share of the overall real estate market. According to data from CoreLogic, iBuyers accounted for less than 0.5 percent of all home purchases in 2023, buying approximately 1,000 homes per month over the course of the year. In 2021 and 2022, that number ranged as high as 9,000 homes per month.

“iBuying represents a pretty minuscule percentage of overall home sales,” says Sharga.

Historically, just four companies have accounted for the lion’s share of iBuying business: Opendoor, Offerpad, Redfin and Zillow. Combined, they made up more than 95 percent of iBuyer purchases from 2017 to 2021, according to another CoreLogic study.

However, while Opendoor and Offerpad remain two of the biggest players in the industry, Redfin and Zillow have since bowed out of this sector of real estate. Other popular companies offering iBuyer-like services include Clever, HomeLight, Orchard and Knock.

How iBuyer companies work

The iBuying process itself is very straightforward. In most cases, a seller provides some basic information about their home, or sometimes even just a street address, and within a short period of time, the iBuyer makes an offer — sight unseen.

These companies use algorithms to base their valuations on a property. “Then, an iBuyer makes a cash offer, sometimes as quickly as within 24 to 48 hours,” says Jade Lee-Duffy, a San Diego–based Realtor. “This process is meant to streamline buying and selling property, essentially cutting out the middlemen of banks and real estate agents.”

The process is indeed streamlined — iBuying transactions close much more quickly than traditional ones do. However, the convenience of this process comes at a price for sellers. Because iBuyers need to make a profit, they typically purchase homes for much less than their estimated market value.

“Keep in mind iBuyers are not going to pay premium prices for homes, so the offer will most likely be low,” says Ralph DiBugnara, president of Home Qualified and vice president at mortgage company New American Funding.

In addition, while an iBuyer’s offer is made sight unseen, if the seller accepts, the next step is typically an in-person home evaluation. If any unexpected or costly issues are discovered during the in-person visit, that will likely impact the initial offer. “It could cause them to lower the offer, or cancel it,” says DiBugnara.

These types of companies can often be picky about what types of homes they’re willing to buy, as well. Since they need to make a profit on each transaction, they are not likely to be interested in homes that need major amounts of work or that don’t meet other specific criteria.

iBuyers vs. other homebuying companies

If you want to sell your home fast but are unsure whether iBuyers are the best approach, there’s another option: companies that proclaim, “we buy houses.”

Similar to iBuyers, these operations will make a quick, all-cash offer for your home and can close the deal very quickly. And also similarly, the offer you’re likely to get could be far less than fair market value.

Unlike most iBuyers, though, cash-homebuying companies will typically purchase homes as-is, meaning you won’t need to do any sprucing up or make any repairs at all, even if it’s in very poor condition. This can make them a good option for sellers whose property needs more work than they are willing, or able, to put into it.

iBuying pros and cons

The iBuying process is different from a traditional home sale in many ways. Here are the main benefits and downsides:

Pros

More certainty: In addition to closing more quickly than a typical transaction, which involves real estate agents and lenders and scheduling hassles, there are fewer uncertainties associated with iBuying. “There are [less] little headaches from a seller’s standpoint: no showings, no open houses and fewer potential contingencies to deal with,” says Bill Gassett, a RE/MAX Realtor and owner of Massachusetts-based Maximum Real Estate Exposure.

No financing: Selling to an iBuying company means an all-cash deal that is not contingent on a buyer successfully securing financing. This eliminates the waiting time of the underwriting process, as well as the possibility that the loan won’t be approved.

Greater efficiency: In these transactions, sellers deal directly with just the one company throughout, rather than a succession of mortgage lenders, real estate agents and others. Most importantly, the speed with which the deal goes through means the seller gets their money that much faster.

Cons

Lower profit: The flipside, however, is that a seller will net less money when working with an iBuyer than they likely would if selling the traditional way. In addition to the lower offer price, you could get hit with fees that can add up to the same amount you would have paid in real estate commissions, or even more: iBuyers can charge fees that amount to 6 to 8 percent of the home’s purchase price, says Gassett. You may still have to pay closing costs as well.

More selectiveness: iBuyers don’t operate everywhere, so depending on your location, selling to one may not be an option. And even if an iBuying company does buy homes in your area, your home may not qualify — they tend to have very specific, and sometimes narrow, criteria for what types of properties they are looking for.

Less personal attention: In iBuying, much of the process is done online with very little human contact. Sellers typically get less personal service or one-on-one attention than they would with a traditional sale, in which a real estate agent spends time consulting with and advising the homeowner over the entire course of the sale process.

Is selling my house to an iBuyer worth it?

Selling your home this way may be worth it if you have to relocate quickly, need the money fast, or don’t want to deal with the hassle of showings and a lengthy closing process. Selling to iBuyers also does away with any uncertainties about when your home will sell, and because they pay in cash, you don’t need to worry about a buyer’s financing potentially falling through.

However, if your main goal is to earn top dollar for your property, iBuyers are not the best choice. If getting the best possible price for your home sale is more important to you than speed or convenience, the best option is selling the traditional way, with the help of a real estate agent who knows your local market well.

What is iBuying, and how do iBuyer companies work?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 05 Dec 2024 15:13:07 GMT

By Ralph Dibugnara November 14, 2024

By Homes.com

Buying down your interest rate involves paying an upfront fee to your lender to reduce the interest rate on your loan. The key advantages of a buydown are that it increases your purchase power and reduces your total cost over the life of the loan. However, you must consider your long-term goals and if the expense is worth the cost.

How Does Buying Down Your Rate Work?

When you apply for a mortgage, you’ll be offered an interest rate that’s influenced by factors like market conditions, your credit score and the mortgage type.

If you want to lower your rate, you can buy it down by paying a one-time fee at closing in exchange for a rate cut.

“Buying an interest rate down is also known as paying discount points,” says Ralph DiBugnara, a mortgage banker and president of Home Qualified in New York City. “This is a way to get a lower interest rate upfront and it will give the applicant a lower rate than market rate or that they qualify for.”

Understanding Points: The Cost of Buying Down

When you buy down the interest rate on a mortgage, you’re buying mortgage points, which are also referred to as discount points. Points are essentially prepaid interest that can be purchased at closing to lower your mortgage interest rate for the life of the loan.

One point, or 1% of the loan amount, typically reduces the interest rate by about 0.25%.

How Much Will I Save If I Buy One Mortgage Point?

“On a $500,000 loan amount, a 1% point discount buydown will cost $5,000,” explains DiBugnara. “And as an example, if this reduced the interest rate from 6.75% to 6.5%, the principal and interest mortgage payment would be reduced from $3,242.99 to $3,160.34.”

That represents a savings of roughly $83 per month, which is about $992 per year and $29,754 over the course of a 30-year mortgage. If you buy down a mortgage with these terms, you will recoup the upfront cost of purchasing a discount point in a little more than five years.

Lender Credits vs. Mortgage Points

Some mortgage lenders may offer lender credits, which represent cash paid by the lender to cover some of your out-of-pocket closing expenses. However, lender credits will increase your monthly payments while buydowns will reduce them. You’ll typically be locked into a higher interest rate with a lender credit.

Does Buying Down Make Sense with Current Mortgage Rates?

Mortgage rates have made buying a home more challenging in recent years. Amid the current market, rates are ticking upward once again.

The average interest rate for a 30-year conventional mortgage is currently 6.9%, while 10-year fixed-rate mortgages are offered at around 6.17%. There’s a similar trend with adjustable-rate mortgages (ARMs), where the average rate is currently 6.18%.

For context, the average rate for a 30-year conventional loan in January 2021 was 2.65%.

When combined with record-high home prices, some prospective homebuyers find that these interest rates have potentially priced them out of the market. Moreover, many homebuyers seek ways to make their monthly mortgage payments more affordable. The advantage of buying down your mortgage rate is that you can potentially reduce the total cost of your home over the life of the loan.

What Is a 3-2-1 Buydown Mortgage?

A 3-2-1 buydown mortgage is a home loan where the borrower receives a lower interest rate over the first three years. The interest rate is cut by 3% in the first year, 2% in the second year and 1% in the third year. After the buydown period ends, the borrower pays the full interest rate for the remainder of the loan.

This type of mortgage is different from the process of buying down your rate. A lender, homebuilder, or seller typically covers the cost of a 3-2-1 buydown to make a home more affordable to potential buyers.

How Much Should I Buy Down My Interest Rate?

The decision to buy down your rate will depend on several factors, including your down payment and closing costs, the purchase price of the home, the interest rate you qualify for, and how long you plan to keep the home.

Long and Short-Term Benefits

There are two benefits to buying down your interest rate. The short-term benefit is an increase in buying power, and the long-term benefit is paying less interest over the life of the loan.

Short-Term Benefits

A reduced rate lowers the cost of monthly mortgage payments, which can make it easier to qualify for a home loan. A buydown can also help you qualify for a larger mortgage, allowing you to buy a more expensive home.

Long-Term Benefits

Over the long term, a mortgage buydown means you’ll spend far less on interest.

“The long-term savings from a lower interest rate can be substantial,” says Carl Holman of A&D Mortgage. “Even a small reduction, like 0.25%, can result in thousands of dollars in interest savings over the life of the loan. For example, on a $300,000 loan with a 30-year term, lowering the interest rate from 6% to 5.75% could save you over $15,000 in interest payments.”

A lower interest rate also has another benefit: It allows you to build equity in your home more rapidly than you would with higher interest payments.

“Lowering your interest rate means that more of your monthly payment will go toward the principal balance you owe. This will build your equity more quickly,” says Rose Krieger, a home loan specialist for Churchill Mortgage, a national mortgage lender.

Determining the Break-Even Point

Another important factor to consider when buying down your mortgage rate is the “break-even” point for the money you’re spending to secure a lower rate. In other words, how long will it take for you to recoup the expense associated with the buydown?

“The break-even point is when the amount you save on your monthly mortgage payments equals the upfront cost of buying down the rate,” explains Holman.

For example, if it costs you $4,000 to buy down the rate and you save $50 a month on your mortgage, your break-even point would be 80 months into the mortgage, or just over six and a half years.

If you stay in the home longer than the break-even point, the money saved will outweigh the upfront cost you paid to buy down your mortgage rate.

The Opportunity Cost of Buying Down

Buying down a mortgage interest rate can be costly. Before spending a large sum of money, it’s important to consider the expense in light of your overall financial plans and goals. You should determine if a reduced interest rate is the best use of your free cash.

“The funds used to buy points could instead be invested elsewhere, like in retirement savings or paying down higher-interest debt,” says Holman. “It’s important to weigh the potential returns from those other uses against the long-term savings from buying down your mortgage rate. Sometimes, those other goals might offer a better return on your investment.”

Additionally, it’s wise to speak with a lender to determine if there is a better way to use the money as part of your home purchase. For example, using the funds to provide a more substantial down payment could have a bigger financial benefit.

“Putting a larger down payment on the home may reduce the mortgage interest rate anyway and depending on the amount, it may eliminate the requirement for mortgage insurance, which would in turn, lower your overall monthly payment,” says Krieger.

When to Buy Down Points

There are indeed times when buying down mortgage points can be beneficial. A mortgage buydown is generally worth it if you plan to stay in the home for a long time since a lower interest rate means you’ll recoup the upfront cost.

If you plan to sell in a few years or refinance to obtain a lower interest rate, a mortgage buydown is much less likely to pay off.

It’s also important to ensure that you have sufficient cash reserves to handle emergencies as a homeowner before depleting savings in pursuit of a lower interest rate.

Review your financial picture and establish a firm understanding of your cash flow, savings and homeownership goals. If you have questions about the best approach, consult a mortgage professional for personalized advice.

Is it Worth it to Buy Down Your Rate?

Buying down the interest rate on a mortgage can reduce monthly mortgage payments and allow you to qualify for a larger mortgage. However, you should weigh the expense against your long-term goals before spending the money to bring your rate down a quarter-point or more.

Should You Buy Down Your Interest Rate on a Home Loan?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 14 Nov 2024 14:57:12 GMT

By Ralph Dibugnara November 7, 2024

By Brian OConnell

Home insurance seems to be a low priority for new homeowners, but adopting that mindset could be a serious mistake. Why? Because of costs related to home insurance and the reasons homeowners need insurance in the first place. You're going to want to protect yourself and your assets.

Do you think you need home insurance? If so, you're going to want to evaluate your personal finances and determine how to budget for home insurance payments. Before you get out your wallet, here's what you need to know.

How much does home insurance cost?

Price-wise, new home buyers can expect to tack on $1,200 to the cost of a new home, in the form of proper home insurance.

That cost, however, depends on several key factors including:

Age and price of the home

Amount of cash put down via a down payment

State or municipality where the home is located

Since real estate is primarily about location, where you buy your new home largely dictates how deeply you’ll have to dig in your pocket for home insurance payments.

For example, homeowners in Louisiana face the highest home insurance rates in the U.S., at $1,958 (on average) per year. Compare that to $677 in Oregon or $692 in Utah.

RECORD-LOW MORTGAGE RATES WON'T LAST — REFINANCE BEFORE IT'S TOO LATE

What does a typical homeowners policy cover?

No matter where you live home insurance shares some basic commonalities.

"Good home insurance policies will mainly cover two types of liabilities - loss of personal property as well as liability for any other damages," said Ralph DiBugnara, president at Home Qualified, a digital platform for home buyers, sellers, and investors. "Yet every carrier has some common standards as well as items and scenarios that they deem to be high risk or low risk."

That’s why it’s important a shopper should get at least three quotes because costs and coverages will vary from carrier to carrier. The idea is for shoppers to compare different rates from different companies, and the best way to accomplish that is by going online.

To get the best home insurance policy at the best price, DiBugnara advised asking – and answering – three key questions before signing on the dotted line:

How much insurance coverage do you actually need?

What exactly does that coverage protect me from happening?

How much of a deductible should I take and still be safe?

"Answering these questions correctly can help you avoid major issues in case of disaster or damage to your home," he said.

HOW TO FIND THE BEST MORTGAGE RATES AND FASTEST CLOSINGS

What type of home insurance coverage do you need?

Some home insurance experts say homeowners put too much emphasis on monthly payments and not enough on getting the right coverage. In that scenario, costs escalate in the form of high out-of-pocket expenses when a disaster strikes and the house incurs major damage.

"Just like auto insurance, there can be great variance in the cost from one home insurance company to another," said Jeff Zander, founder of Zander Insurance, in Nashville, Tenn. "In many cases, people have paid less attention to their home insurance cost since it is often included in the escrow payment portion of the mortgage."

"For most people, a home is their greatest asset, but the bank is only concerned about getting them their money and not about any of their contents, personal property, or liability risks that arise from owning a home," Zander said.

Homeowners looking for quality home insurance at a decent price also need to make a distinction between covering select risks or covering all risks. Fortunately, home insurance policies have you covered.

"There are really two types of home insurance policies," Zander noted.

A "named perils" policy: This lists the perils that are covered. "If the peril is not listed, then it is not covered," he said.

An all-risk policy: "This is the most preferred homeowner insurance policy since it lists the exclusions," Zander added. "Basically, if it is not excluded then it is covered. An all-risk policy is a much broader policy form and includes better protection."

The takeaway on getting good home insurance for the best price? Think value and not cost.

"Don’t cut corners when purchasing home insurance," said Orlando Frasca, an insurance specialist at Rogers Insurance Services in Danville, Cal. "Consumers often look at the lowest price as opposed to what they are getting for that price, only to find out certain coverages they thought they have were not included on the policy."

How much does home insurance cost?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 07 Nov 2024 18:39:04 GMT

By Ralph Dibugnara November 7, 2024

By Brian OConnell

How much does home insurance cost?

Price-wise, new home buyers can expect to tack on $1,200 to the cost of a new home, in the form of proper home insurance.

That cost, however, depends on several key factors including:

Age and price of the home

Amount of cash put down via a down payment

State or municipality where the home is located

Since real estate is primarily about location, where you buy your new home largely dictates how deeply you’ll have to dig in your pocket for home insurance payments.

For example, homeowners in Louisiana face the highest home insurance rates in the U.S., at $1,958 (on average) per year. Compare that to $677 in Oregon or $692 in Utah.

RECORD-LOW MORTGAGE RATES WON'T LAST — REFINANCE BEFORE IT'S TOO LATE

What does a typical homeowners policy cover?

No matter where you live home insurance shares some basic commonalities.

To get the best home insurance policy at the best price, DiBugnara advised asking – and answering – three key questions before signing on the dotted line:

How much insurance coverage do you actually need?

What exactly does that coverage protect me from happening?

How much of a deductible should I take and still be safe?

"Answering these questions correctly can help you avoid major issues in case of disaster or damage to your home," he said.

HOW TO FIND THE BEST MORTGAGE RATES AND FASTEST CLOSINGS

What type of home insurance coverage do you need?

"There are really two types of home insurance policies," Zander noted.

A "named perils" policy: This lists the perils that are covered. "If the peril is not listed, then it is not covered," he said.

The takeaway on getting good home insurance for the best price? Think value and not cost.

First-Time Home Buyer Advice: Fourth Quarter 2024

ralph@homequalified.com (Ralph DiBugnara) — Thu, 24 Oct 2024 17:14:53 GMT

By Ralph Dibugnara October 17, 2024

By Tribune News Service | Tribune News Service

UPDATED: September 27, 2024

By Erik J. Martin, Bankrate.com

Leaves aren’t the only things falling this autumn: Mortgage rates are finally heading down, too. And that, combined with a seasonal dip in home prices, is causing some end-of-year excitement among homebuyers and sellers.

The median existing-home price was $416,700 in August, per the National Association of Realtors — a record high for August, but still down from $422,600 a month earlier. And average rates for the benchmark 30-year fixed-rate mortgage loan have dropped from a high this year of 7.39% in May to 6.24% in late September.

With rates already down more than a full percentage point and more Fed interest-rate cuts on deck, many market-watchers are asking, what do the final three months of 2024 have in store for sellers and buyers? We reached out to a panel of pros for their real estate trends and forecasts.

Q4 2024 housing market trends: What to expect

The last quarter of the year is usually a slowdown period for real estate markets across the country. Typically, home sales tend to decrease in the fourth quarter and stay subdued until spring. During this period, there are usually fewer buyers, the number of homes for sale declines and properties are more likely to see price cuts compared to other times of the year.

Molly Boesel, principal economist for CoreLogic, seconds those sentiments. “Many buyers have been waiting on the sidelines to purchase, and many will now purchase quickly,” she says. “Therefore, we most likely won’t see the typical slowdown in the last three months of the year.”

Ralph DiBugnara, president of Home Qualified, says these factors, combined with the presidential election, should ensure sharp movement in favor of buyers between October and December. “It should make the fourth quarter of 2024 probably the busiest of the year,” he predicts.

Q4 mortgage rate projections

As of September 25, the rate for a 30-year fixed mortgage averaged 6.24% versus 5.43% for a 15-year fixed home loan, per Bankrate’s latest survey of large lenders. And housing experts envision rates dipping even lower over the rest of the year.

“During the next three months, we’re probably going to see average 30-year fixed mortgage rates in the low 6% or perhaps the high 5% range,” says Ted Rossman, senior industry analyst for Bankrate. “The path forward for mortgage rates will depend on the state of the economy, the job market, what the Fed does and more. Consider that last fall, the average 30-year fixed mortgage rate briefly hit 8% for the first time since 2000. Now, we’re moving in the right direction — although today’s rates are still much higher than they were for most of the past 15 years.”

Bugnara anticipates 6.25% and 5.625% average rates, respectively, for 30-year and 15-year mortgage loans this quarter. But Boesel expects the 30-year mortgage rate to average 6.0% this quarter. Sharga mirrors that prediction, with a caveat: “There’s an outside chance it could dip below 6% and settle in the high 5% range,” he says.

Where home prices are heading

Housing prices have been on the rise for quite some time, and that doesn’t look to change in Q4: Buyers should not expect to see a significant drop in prices before the end of the year.

“Home prices should increase this quarter by 3.9% year-over-year,” says Boesel. “Continued homebuyer demand bumping up a still-limited supply will push prices up.”

Bugnara concurs, predicting that we’ll see home prices jump 3% to 5% over the quarter.

Dennis Shirshikov, an adjunct professor of economics at City University of New York, also foresees prices remaining high — “however, you might see slight cooling in certain overvalued markets,” he says.

Housing inventory predictions for Q4

“We’re unlikely to see a huge wave of homeowners listing their properties for sale until mortgage rates come down significantly — probably below 5.5%,” says Sharga. However, he notes that inventory levels are up about 40% from last year. “The inventory of new homes for sale is actually back to pre-pandemic levels, so overall there’s more to buy,” he says.

But Shirshikov does not think inventory will grow much more this year, particularly for entry-level homes. “Many homeowners locked into low mortgage rates will continue holding off on selling, restricting supply,” he says.

Boesel anticipates the inventory that does arrive on the market to sell fast. “As new supply enters the market, it should quickly exit as homebuyers waiting on the sidelines act quickly,” she says. For-sale inventory should trend around 15% to 20% above 2023 levels, she forecasts.

Strategies for homebuyers and sellers

Now that the tea leaves have been read on real estate trends for Q4, how should consumers proceed? If you’re hoping to buy, be sure your finances are in order.

“Don’t buy a home before you’re ready,” says Rossman. “Make sure you have a cushion for transaction costs, repairs and maintenance. It’s better to rent for longer than to buy before you are ready.”

Still, be prepared to pounce if a great opportunity arises. “Competition for properties should remain brisk in quarter number four, so buyers should be ready to act when they find the home they want to purchase,” Boesel says.

“I’d recommend considering less competitive markets where your purchasing power can go further,” says Shirshikov. And if fewer buyers than expected enter the market this season, “you might find some good deals, especially from sellers who are more motivated to close before the end of the year.”

Sellers, meanwhile, should consider the following factors:

Local market conditions: “Know what’s happening in your local market,” says Sharga. “If homes are selling quickly and prices are rising, it’s probably a good time to list. On the other hand, if you see inventory levels increasing, homes remaining on the market longer and prices weakening, it might make sense to wait until spring to list your home for sale.”

Competitive pricing: “Even in a seller’s market, buyers are sensitive to high mortgage rates,” Shirshikov says. “Overpricing your property could lead to it sitting longer on the market. Consider offering incentives, such as covering closing costs, to make your listing more attractive, if necessary.”

Where you will live next: “You can probably get a good price for what you’re listing, but you may have to pay more than you want for what’s next,” says Rossman. “And your mortgage rate could be a lot higher than you are used to, even as rates have begun to come down. Sweet spots are empty-nesters downsizing and people leaving higher-cost markets for lower-cost markets. On the flip side, trading up in a similar market is pricey.”

Housing market: Pros predict end-of-year trends as rate relief arrives What do the final three months of 2024 have in store for sellers and buyers?

ralph@homequalified.com (Ralph DiBugnara) — Thu, 17 Oct 2024 13:28:27 GMT

By Ralph Dibugnara October 10, 2024

By Christy Biebe

October 1, 2024

Home equity loans have long been one of the more affordable ways for property owners to borrow and, unlike alternatives such as a home equity line of credit (HELOC), home equity loans typically offer borrowers a fixed interest rate and predictable payments.

Unfortunately, home equity loan rates have soared in the post-pandemic era as the Federal Reserve raised the benchmark interest rate to fight inflation. While home equity loans and HELOCs remained cheaper than credit cards, borrowing costs hit the highest levels in years.

The good news is, the tide may be turning. Driven by anticipation of a Fed rate cut, expert predictions of falling rates in the summer of 2024 proved accurate. With the latest inflation report showing just a 2.5% year-over-year increase in the all-goods index, the Fed rate cut announced in September and the Fed strongly signaling more cuts are coming, predictions of additional rate drops this fall have many owners hoping cheaper loan options will soon be on the table.

But, will rates drop in October or should homeowners hold on for further rate declines? We asked some experts where they think rates are trending.

Here's the home equity loan interest rate forecast for October

Looking to access your home equity this month? Here's what could happen to interest rates:

A rate reduction could be on the table

Homeowners eager to tap into their equity as soon as possible may have some new opportunities to borrow at a lower rate this October.

"Home equity loan rates will be reduced by .50% in October," predicts Melisa Cohn, Regional Vice President at William Raveis Mortgage. Cohn indicates that rates will drop because of the Federal Reserve's recent rate cut at the September meeting.

Borrowers who currently have home equity loans won't see their costs decline, unlike those with variable-rate HELOCS that often move directly with the prime rate which is heavily influenced by the Fed. Although HELOC rates fluctuate over time, home equity loan rates are fixed. Anyone who already borrowed is locked in at the rate they were initially offered unless they refinance.

New home equity loan borrowers, however, could benefit from more affordable loan options coming on the market. The Fed's benchmark rate is just one factor affecting how much banks charge homeowners looking to tap equity, but when it costs banks less to borrow, they often respond by lowering rates on home equity and other consumer loans.

Bigger rate cuts are coming

While loans should become more affordable in October, those who can hold on for a little longer may be rewarded for their patience.

"I don't think we'll see much change in home equity rates in October; however, pretty sizable drops are coming," predicts Aaron Gordon, Branch Manager and Senior Mortgage Loan officer at Guild Mortgage. "The Fed dropped rates 50 basis points in September so that was great news for home equity loans but the next Fed meeting isn't until early November. With inflation getting closer to the Fed's 2% stated target, I believe we'll see steady drops over the next year."

Ralph DiBugnara, President of Home Qualified, also believes rate drops are imminent but not necessarily immediate, although he predicts the rate decline will start in October. "With overall mortgage rates coming down because the Fed has started lowering the borrowing rate, home equity loan rates will come down as well," he says. "This reduction should happen over the fourth quarter of 2024 and into 2025."

DiBugnara explained that reduced consumer spending, higher unemployment rates and high levels of consumer debt will prompt the Fed to continue rate cuts, which will lead to further reductions in home equity loan costs for property owners.

The bottom line

Of course, not everyone can delay their borrowing date indefinitely if they have pressing financial needs now and those looking for home equity loans in October should still see some good opportunities out there. The key will be finding them.

"It's important to shop home equity rates as there may be a pretty big difference between your favorite bank or credit union and other lenders," Gordon says. By exploring multiple loan offers and comparing rates and fees, borrowers who need to tap their equity can find the best deals in the current market -- while homeowners who aren't on the clock can sit back and wait for even better offers in November and beyond.

Here's the home equity loan interest rate forecast for October

ralph@homequalified.com (Ralph DiBugnara) — Thu, 10 Oct 2024 13:28:47 GMT

By Ralph Dibugnara October 4, 2024

By Christy Bieber

Edited By Angelica Leicht

September 24, 2024

On September 18, 2024, the Federal Reserve announced a 50 basis point cut to the federal funds rate. For homebuyers faced with record-high mortgage rates in the post-pandemic era, this was welcome news. Many had been prepping for a rate cut in hopes mortgage rates would fall after the September Fed meeting. Those readying themselves for cheaper home loans were given reason for optimism about September's mortgage rate forecast when the Fed delivered a larger-than-anticipated rate cut.

Still, the big question for most buyers is whether the Fed's moves will push current mortgage rates low enough so they can finally buy a home with affordable monthly payments. Mortgage costs had already begun dropping in anticipation of the Fed's actions and are down over a point from the post-pandemic highs — but are still higher than during the pandemic and in the years leading up to it.

Buyers looking at loan offers in the 6% range are likely wondering if there's a chance rates could decline further in October, even though the Fed doesn't meet again until November. If you're considering staying on the sidelines in hopes that will occur, here's what experts say about your chances.

Will mortgage rates drop in October without a Fed meeting?

For would-be homeowners focused on the Fed, it's important to realize the central bank doesn't play as big a role in driving borrowing costs as some buyers might think.

"The Fed funds rate is not directly tied to mortgage rates, so we don't need the Fed to announce another rate cut in October to see rates continue to decline," says Sarah Alvarez, vice president of mortgage banking at William Raveis Mortgage.

The Fed sets the overnight rate at which banks borrow from each other. It doesn't impact mortgage rates directly.

"Mortgage rates can and do move without a big decision by policymakers," says Ali Wolf, the chief economist for Zonda. "Mortgage rates move on a day-to-day basis based on economic data and investor sentiment."

Wolf believes that since economic data is likely to come in muted, rates are likely to continue trending downward in October.

Both inflation and employment numbers are key factors to watch.

"If inflation continues to show signs of cooling we will likely see rates continue to decline," Alvarez says.

While Alvarez warns election uncertainty and an escalation of global wars could potentially have a negative impact, there's also plenty of evidence suggesting economic trends will favor further cuts.

"Prices have reached a point where Americans have stopped buying. Unemployment has also continued to increase," says Ralph DiBugnara, founder of Home Qualified. "The combination is bringing inflation down, and with that mortgage rates will continue to fall next month."

October's rate cuts still may not be as substantial as borrowers hope, though, unless conditions worsen.

"Right now, the economy is running pretty strong but if labor market conditions weaken considerably, that could lead to a more sizable drop in interest rates," says Lisa Sturtevant, PhD and chief economist at Bright MLS.

Anticipation of future Fed action could cause rates to fall

While some would-be homebuyers saw the long-awaited September rate cut as crucial to declining mortgage rates, the reality is that borrowing costs had already started to fall in anticipation of the Fed's actions — and this is a pattern likely to repeat.

"The expected Fed rate cut this week has already been largely baked into mortgage rates, which have been falling since July," Sturtevant says. "An expectation of a rate cut by the Fed in November could actually cause mortgage rates to fall in October in anticipation."

Alvarez agrees that when the Fed is hawkish about future rate cuts, this positively impacts the mortgage market. That's good news as the central bank signaled another half-point rate decrease is likely this year. With the Fed's intentions made clear, lenders can act sooner rather than later.

"The Fed has changed their sentiment to one of reducing the borrowing rate," DiBugnara says. "The markets now understand that the Fed has no choice but to lower rates." Investors and banks will react accordingly.

Buyers shouldn't wait for a rate cut to act

While all available evidence suggests rate cuts are likely outcome in October, there are no guarantees — and there are some risks worth considering.

"Many homebuyers have been waiting on the sidelines for rates to fall. If there is a surge in mortgage demand in October, mortgage rates could actually be pushed up a bit as lenders respond to that increased demand," Sturtevant warned.

An increase in buyer demand could also put upward pressure on home prices, leaving would-be borrowers in the unfortunate position of facing a more competitive market and higher purchasing costs just as mortgage loans become more affordable.

Since buyers can refinance a home loan if rates decline, but can't buy at today's prices if home costs surge, those who have been sitting on the sidelines may want to take advantage of opportunities available now.

Today's rates aren't the most competitive in history, but they're down considerably from recent highs. Borrowers who are financially ready can get in at a reasonable cost before home prices rise and consider refinancing later if rates continue to decline.

The bottom line

While a Fed meeting won't happen in October, potential home-buyers could still see important changes in the mortgage and housing market — including a reduction in loan rates.

Still, the downside risks of delaying a home purchase in anticipation of future rate cuts may outweigh the upside. Would-be borrowers should seriously consider taking action before a potential home price surge — especially with the Fed signaling rate cuts could continue into 2025. Future opportunities to refinance are likely to become more plentiful over time, but the home prices of today may be gone for good tomorrow.

Will mortgage rates drop in October without a Fed meeting?

ralph@homequalified.com (Ralph DiBugnara) — Fri, 04 Oct 2024 17:29:28 GMT

By Ralph Dibugnara October 4, 2024

By Christy Bieber

Edited By Angelica Leicht

September 24, 2024

Will mortgage rates drop in October without a Fed meeting?

For would-be homeowners focused on the Fed, it's important to realize the central bank doesn't play as big a role in driving borrowing costs as some buyers might think.

The Fed sets the overnight rate at which banks borrow from each other. It doesn't impact mortgage rates directly.

Wolf believes that since economic data is likely to come in muted, rates are likely to continue trending downward in October.

Both inflation and employment numbers are key factors to watch.

"If inflation continues to show signs of cooling we will likely see rates continue to decline," Alvarez says.

While Alvarez warns election uncertainty and an escalation of global wars could potentially have a negative impact, there's also plenty of evidence suggesting economic trends will favor further cuts.

October's rate cuts still may not be as substantial as borrowers hope, though, unless conditions worsen.

Anticipation of future Fed action could cause rates to fall

Buyers shouldn't wait for a rate cut to act

While all available evidence suggests rate cuts are likely outcome in October, there are no guarantees — and there are some risks worth considering.

The bottom line

While a Fed meeting won't happen in October, potential home-buyers could still see important changes in the mortgage and housing market — including a reduction in loan rates.

What's the mortgage interest rate forecast for September 2024

ralph@homequalified.com (Ralph DiBugnara) — Thu, 19 Sep 2024 18:36:01 GMT

By Ralph Dibugnara September 12, 2024

By Sandy John, Andrew Pentis, Katie Lowery, CNN Underscored Money

If you have a 30-year home loan, refinancing to a 10-year mortgage allows you to pay

off your loan decades earlier and score a lower interest rate. But these savings come at

the expense of a considerably higher monthly payment, making it easy to outrun your

budget. Here’s a look at today’s 10-year refinance rates:

Current 10-year refinance rates

You may not see 10-year refinance rates advertised widely, but many mortgage

lenders offer conventional, decade-long terms, said Ralph DiBugnara, a veteran

mortgage industry executive based in New York.

“Ninety-five percent of the time, it’s the same rate as the 15-year fixed-rate

mortgage,” which are “usually the most advantageous rates in the market,”

DiBugnara said.

Like other mortgage rates, 10-year refinance rates fluctuate based on factors such as

the state of the economy and the overall credit market. The Federal Reserve has

maintained the federal funds rate after an unprecedented rate-hike cycle with 11

increases between March 2022 and November 2023 to fight post-pandemic inflation.

How 10-year refinance rates are trending

After reaching their highest point in more than 20 years in late 2023, mortgage refinance

rates have generally been trending downward.

“If the economy starts to cool and the Fed signals a shift toward lowering rates, we

might see a bit of a dip in refinance rates,” said Mike Roberts, a Utah-based mortgage

broker. “That would be great news for homeowners looking to lock in a lower rate.”

In mid-2024, Fannie Mae’s Economic and Strategic Research Group forecasted that 30-

year mortgage rates will average 6.4% in 2025. Following that estimate, we may see

(10- and) 15-year rates around 5.75% next year. (That’s because the 15-year rate has

been 66 basis points lower on average than the 30-year rate over the past five years,

according to our analysis.).

6 tips for scoring competitive 10-year refinance rates

1. Check your budget. The payments on a 10-year term will be much higher than

you’re currently paying if you have a 30-year loan, and you’ll need to have

documentation to verify that your income will cover the payments. Calculating

your monthly dues — and double-checking affordability via your budget — is a

wise first step.

2. Check your credit scores. You’ll likely need a 620 score to get a conventional

loan, but a higher score can result in a lower interest rate. Pay all of your bills on

time, make sure all your accounts are up to date and try to pay down debts

before applying for a refinance.

3. Figure your loan-to-value ratio. For a refinance, you may need to have at least

20% equity in your home to get the best mortgage rates. So, if your home is

worth $400,000, you’d need to have $80,000 in equity (.20 x $400,000 =

$80,000).

4. Shop around. Compare interest rates, closing costs and other expenses, which

the lender will list on a loan estimate document. By comparing the annual

percentage rate, or APR, via preapprovals, you can compare all the refinance

costs, not just the interest rate.

5. Consider discount points. Some lenders allow you to purchase mortgage

discount points in exchange for a lower interest rate. One point typically costs 1%

of the loan amount and may lower the interest rate by, say, 0.25 percentage

points — but the actual discount amount varies by lender.

6. Choose a loan. Select the lender you want to work with and lock in your interest

rate.

Here are examples of reputable mortgage refinance lenders that offer some of the best

10-year refinance rates:

How do refinance rates work?

While the overall economy and the rates set by the Federal Reserve influence mortgage

refinance rates, lenders also set rates based on the strength of your application.

“It’s a combination of factors — the overall economic climate, the Fed’s policies, your

credit score, your loan-to-value ratio and the demand for loans in the market,” said

Roberts. “Typically, refinance rates are a bit lower than purchase rates, but the gap has

been narrowing lately.”

For example, if you have high credit scores, you’ll be offered a lower rate than someone

with fair credit scores. You can also lower your interest rate by having more home equity

before refinancing. The state where the property is located can also affect the rate you

pay, as can the loan program you choose.

Related >> How mortgage rates are determined

Like new home loans, shopping around for the right refinance lender and choosing a

shorter term loan can also result in a lower mortgage rate.

Factors affecting individual 10-year refinance rates

 Credit scores and history

 Loan program

 Rate type (fixed or adjustable)

 Borrowing amount

 Equity amount

 Loan term length

 Location

Getting a lower mortgage rate will help to lower your monthly payment. Even a slightly

lower mortgage rate can result in substantial savings over the 10- to 30-year loan

period.

Example: Say you refinance $300,000 on your mortgage. Here’s how changing the

term of your home loan could affect your monthly payment and total costs. (The

mortgage payments here cover principal and interest only.)

Term Fixed interest rate Monthly payment Total repayment

10 years 6.500% $3,406 $408,794

15 years 6.500% $2,877 $470,438

20 years 6.875% $2,303 $552,946

30 years 7.125% $2,021 $727,755

Pros and cons of a 10-year fixed-rate refinance

Pros Cons



Lower rates and higher overall savings (if

you’re refinancing from a longer term)



Accrue equity at a faster clip



Increase your odds of a mortgage-free

retirement

 Less commonly available

among lenders

 Stricter eligibility

requirements

 Closing costs (2% to 6% of

the loan amount)

 Higher monthly cost (than

longer loan terms)

 Can get in a financial bind if

income drops

 Less payment flexibility

Should you refinance your home loan to a 10-year term?

Refinancing to a 10-year term can save you many thousands of dollars compared to a

longer term loan. In exchange, you must commit a lot of money every month to paying

off your mortgage.

“If you can swing the higher monthly payment and you really want to be mortgage-free

faster, it’s definitely worth considering,” said Roberts. “The interest savings can really

add up over time.”

Some homeowners prioritize a mortgage-free future, but before committing to a 10-year

term, be sure your budget can handle the higher payment without being stretched too

far.

“The danger I see is, people take a 10-year fixed and then struggle with the higher

payment — it’s about 70% [more expensive on average] than a 30-year fixed,” said

Steve Hill, a California-based mortgage broker. “If you think your mortgage payment is

expensive now, try almost doubling it. It’s not for everyone.”

When it might be wise to refinance to

a 10-year term

When it might be unwise



You have a high, steady

income 

You’re preparing for retirement

and will have a fixed income

within 10 years 

You want to be mortgage-free

faster to focus on other

financial priorities

 Your income could change or is

unpredictable

 You need more room in your budget for

other obligations, such as high-interest

debt or investing goals

 You have an ultra-low mortgage rate

 You want flexibility to pay off your

mortgage on time or ahead of schedule,

as possible

 Your current mortgage has a

prepayment penalty

How to apply for a 10-year mortgage refinance

Applying for a 10-year mortgage refinance is a lot like applying for a mortgage with

other terms, but some specific considerations are involved. Here are six steps to help

you through the mortgage refinance process.

1. Do the math. Use a mortgage calculator to estimate your monthly payments with a

10-year mortgage refinance. If you’re not confident that you can afford 120 straight

months of that payment, consider keeping a longer loan term and instead paying extra

toward the principal each month. “That way, if an emergency strikes, you're not stuck

[with] the higher payment,” said Hill.

2. Check your eligibility. Make sure your credit scores are the best they can be. You’ll

also want to check your home equity. The more equity you have, the less risky you are

to the lender, which could mean a better interest rate. Although it can be possible

to refinance a mortgage with bad credit, you’ll pay higher rates, potentially negating any

savings you’d see from refinancing.

3. Research lenders. Ten-year refinance loans aren’t as common as 15- and 30-year

terms, so narrowing your list of prospects should be easy. Get preapproved with at least

one bank, credit union and online lender each to compare rates — and choose the right

mortgage lender.

4. Gather your documentation and apply. Each lender has unique requirements, but

they’ll also require documentation to show proof of income, assets and debts. You’ll

likely be asked to hand over recent pay stubs and bank statements, for example.

5. Get a home appraisal. Before the mortgage underwriting process can begin, your

lender will need a new appraisal of your home to determine its current value.

6. Close on the loan. Your refinance loan will have a closing process and closing

costs just like your original mortgage. Like with your original home loan, you’ll have a

right of rescission, or a special grace period — until midnight of the third business day

after the transaction — to cancel the loan contract. If you have doubts about your ability

to afford the high payments of a 10-year term, this is your last chance to back out.

10-year refinance rates: What to know about the current market

ralph@homequalified.com (Ralph DiBugnara) — Thu, 12 Sep 2024 14:30:23 GMT