Trends Converge Illustrating Home Ownership Is On The Rise

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It’s not uncommon to find conflicting stories about current trends in the U.S. that pertain to the status quo of home ownership. Since the housing market collapse in 2008, it’s as if everyone suddenly acquired their own ‘crystal ball’ – claiming to know when, or how or where to make your next move into real estate.

But now, enough time has passed to allow us to view things in perspective. Actual data replaces “best guesses” and reveals real economic, geographic, and demographic statistics as they affect (and reflect) the state of the U.S. housing market. Plus, studies conducted by industry leaders have been implemented and tracked over time to help us determine how best to serve the homebuyers of the future.

Right now, there are several trends that indicate our industry is on the verge of a new upswing, for several different reasons.

Home Sales in 2015 Expected To Be At Highest Point Since 2006 This growth projection by the National Association of Realtors is driven by the combination of strong job growth, low interest rates and a gradual loosening of lending standards. Early results this year indicate that buyers who have been kept out of the market by those restrictions are beginning to return, and it is anticipated that 2015 will be the first time since 2008 that single-family home starts will exceed apartment starts.

Did you know? In most markets, the cost of renting is roughly twice the cost of owning a home. In reality – people have to live somewhere – whether they own their residence or not. And many are now realizing that it just makes more financial sense to buy than to keep renting.

The Future Plans For Most Millennials Include Home Ownership. Millennials, or “Generation Y” – whatever the popular term you use to describe them (maybe it’s even “son” or “daughter” in your case), they’re big numbers in our society. Approximately 80 million in the U.S. alone meet this demographic description, generally acknowledged to be those between 19-36 years of age today. And according to a recent study by the Urban Land Institute, this group is poised to begin moving into the home buyer’s market in droves – an estimated 70% are planning to do so within the next 5 years. And that’s a whole bunch of first-time homebuyers entering the marketplace.

Department of Commerce data shows that in 2014, more millennials moved from the city to the suburbs, a significant change for a trend that has historically operated in reverse. And this is a generation that faced a host of new challenges: mounting student debt, stricter mortgage qualification standards, and until the past year, weak job and wage growth. It’s becoming clear that these hurdles may delay the step, but ultimately, they want to own homes of their own for reasons that will sound very familiar: marriage, starting families of their own, or even simply this: “I want a yard.”

Financial Regulations Continue To Evolve In Favor of Consumers. As we have reported before, the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act has brought sweeping changes to the home mortgage industry – and additional regulations continue to go into effect as the calendar progresses. In addition to laws that now limit the fees able to be collected from buyers by mortgage brokers (although the same does not apply to banks or mortgage bankers) – this fall is scheduled to see new rules go into in effect with regard to documentation, Good Faith Estimates, and advance disclosures prior to close of escrow regarding your mortgage loan’s terms (translation: No more surprises for consumers.)

Buyers Have More – and More Affordable Options – For Home Mortgages. Gone are the days when banks and mortgage bankers held all the cards for buyers when it came to obtaining a home loan. In the lending industry – as in every other area of consumer spending today – buyers are more in control of their mortgage destiny than ever before. Shopping for the best interest rates and the lowest costs for a new loan can yield tremendous savings for home buyers that still comes as a shock to many (the ones that are used to ‘the old ways’). One example: Premier Mortgage’s clients literally save thousands of dollars in cash-out-of-pocket at close of escrow using our popular “No Fee Loans.” “The ability for consumers to close a home loan and pay absolutely no lender fees is a huge plus for homebuyers,” says Rick Piette, owner of Premier Mortgage Lending.

These are just a few of the recent reports hitting the newsstands these days, and taken collectively, it all points to the fact that for consumers, the “home buying playing field” is finally leveling off. That just might make now the best time in a long time to plan on moving into a home of your own.

Premier Mortgage Lending, NMLS #393282, is located at 701 N. Green Valley Pkwy., Suite 125, Henderson, 89074. The full-service lender is a member of the Las Vegas and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.

Time Is On The Side Of Home Ownership

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If there is only one maxim that is true for virtually every business, it’s that “Time Marches On.” For industry, that means planning ahead – whether it’s for the ‘next big thing’ or the needs of the next generation. For the U.S. home market, the passage of time actually provides a two-fold benefit.

First, it will ultimately bring the 20-somethings of today into the realm of renter, and then potential future homeowner. Second, it is giving previous homeowners the opportunity to rebuild their credit and finances, then re-enter the housing market.

According to 1st quarter 2015 Commerce Department statistics, the growth of total renting households in the U.S. is rising significantly – up by 1.8 million in the past year. And while homeownership has actually dropped in that same period by 386,000 – those figures still represent societal upheavals in residential living arrangements.

In short, the teens of the 2007/2008 housing market crash are now grown up and entering new life phases. With their educations completed, this generation will, in many ways, follow the natural course of events: career, marriage, and family. As their household needs continue to grow, the availability of suitable rental properties will shrink, even as the cost for those rentals will rise. (A trend that’s already occurring.) Ultimately, these facts, combined with low mortgage interest rates and recovering job markets, will make the prospect of home ownership not only emotionally appealing, but a wise financial move, as well. (According to a recent Zillow report, renting is now twice as expensive as buying.)

And while homeownership has yet to return to pre-recession rates, “time” is also on the side of those homeowners who struggled with foreclosures during that period. Because time, along with financial planning, are what it takes to rebuild credit and accumulate down payment funds. Many former homeowners have used that time wisely to rebuild and recoup, and are now beginning to venture back into the home buying market.

Fortunately for both groups – first-time and returning home buyers – the playing field for mortgage lending has been leveled in the interim by the reform provided through the Dodd-Frank Wall Street Reform and Consumer Protection Act. Which means that the increased availability of mortgage financing is now offering one more helping hand to the U.S. real estate market.

However, it’s important for buyers to remember that no two mortgage loans will cost the same. In fact, if you sought financing through a traditional banking institution or a mortgage banker and were denied, it’s possible that the very costs of obtaining that mortgage may have played a role in having your loan turned down.

As a mortgage broker, Premier Mortgage Lending offers several loan opportunities for home buyers – including “Second Chance” and “No-Fee” mortgages. The first helps those who have been turned down previously with private money lending; while our “No-Fee” mortgage loans literally cost buyers $0. No origination fees, no junk fees – and that translates to less cash out-of-pocket, lower APRs, and more home for your money.

If you’re not sure about your ability to qualify for a mortgage loan, isn’t it better to find out what your options are? For additional information or to schedule an appointment for mortgage prequalification or refinancing, call Premier Mortgage Lending at 702-485-6600 or visit premiermortgagelending.com.

Premier Mortgage Lending, NMLS #393282, is located at 701 N. Green Valley Pkwy., Suite 125, Henderson, 89074. The full-service lender is a member of the Las Vegas and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.

How New Mortgage Rules Directly Affect You

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Questions You Should Be Asking Your Lender

“Boom!”

You may recall that was the sound of the Las Vegas economy for decades – and it was especially true for real estate. When Rick Piette, founder of Premier Mortgage Lending, first arrived in Southern Nevada some 30+ years ago, he was among those who rode the wave along with everyone in the valley. Of course, it couldn’t last forever (we now know) – and it all changed in 2007 when the entire U.S. housing market came to a screeching halt.

We’re now eight years past when the crisis began, and the Las Vegas community has survived – and changed. A great deal of that change came from new laws and regulations created to keep the same domino effect from ever happening again. And Rick Piette is among those who believe that is a very, very good thing.

“Making certain that the vast majority of those who live on “Main Street U.S.A.” get a fair shake with their new mortgage loan was, to me, the most important part of the Dodd-Frank Consumer Protection Act,” states Piette. “A large portion of that Act dealt specifically with mortgage loans, but much of the public isn’t aware of how these new regulations directly affect them. That’s one of the things that we want to help homebuyers understand – because knowing what to look for and what to ask – can literally save them thousands of dollars.”

What Rick Piette is referring to are the new mortgage rules that came into effect in 2014. One of these rules puts a ‘cap’ on how much a Mortgage Broker can make on a loan, and allows that fee to be paid by the lender to whom the loan is brokered – not the consumer.

“That might sound a bit confusing for some buyers,” concedes Piette. “But here’s the thing: It doesn’t matter if you’re looking for your first mortgage loan, or you’ve had many in the past. These rules have now put the control over the cost of a loan right into the buyer’s hands. As far as I’m concerned, that’s exactly where it belongs.”

As a Mortgage Broker, Premier Mortgage Lending not only adheres to the new regulations, they embrace them. While banking institutions and mortgage bankers are not restricted in the same way when it comes to loan origination, document processing, or other ‘junk’ fees – Piette has chosen to follow the path that delivers that fair shake to homebuyers.

According to Piette, “There’s no ‘smoke and mirrors’ here; no false claims designed to lure customers with promises that can’t be kept. Our company operates on a very simple principle: Our traditional mortgage loan products pass on literally zero costs to the buyer. Our fees are capped by law and paid directly by the lender – and that is how buyers save thousands of dollars on our mortgage loans.”

“Our Fee Worksheet states it clearly,” he continues. “There is literally no charge for Loan Origination, Processing, Underwriting, or Document Fees – that’s $0. But for the exact same loan from another lender – with the same loan amount, interest rate, loan type and duration – buyers will typically find fees totaling from $3,000 – $7,000 or more. Many of our customers are simply stunned at the difference.”

In truth, Rick Piette encourages his clients to shop around for the best loan. And if they find one, “I’ll tell them to take it,” he confirms. “Why would you buy a banana for $5, when you can get the same one for 50-cents? It’s the same logic.”

That’s a philosophy that everyone at Premier Mortgage Lending adheres to: The customer deserves the best loan available, and the one that will keep as much of their own money as possible in their own pocket. Even if that means they go elsewhere. “Because the most important thing to us is that buyers know their options, what rights they have, and the right questions to ask every lender,” he continues.

Some might question why Premier Mortgage Landing would choose this course – when so many other lenders could have, but didn’t. “Premier Mortgage has always worked hard to provide great service and products to our customers. Being able to provide a tangible, easy route to potentially save large sums of money is simply a perfect fit for our company. It really matters to us that we can help homebuyers achieve their dream more affordably. We believe that a large part of Las Vegas’ economic recovery lies in getting people back into homeownership, and our No-Fee loan program can help make that happen.”

It does raise the question: How much IS that banana worth?