Tune in as Brian and David Wickert talk about selling and buying a home in the COVID-19 economy, and give you financing advice you can count on.
This week’s highlights:
- Buying a lake home is exciting—but finding one that’s available can be tricky.
- Money Magazine released an article listing its top recommendations for mortgage financing…and they couldn’t be more wrong.
- Maternity and paternity leave doesn’t preclude you from buying a home, but it comes with a few extra steps.
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Buying a lake home in Wisconsin
The COVID-19 economy has become the new normal, and with it, homebuyers are changing up their usual patterns. With travel off the table, homebuyers are looking for somewhere to vacation responsibly. Enter: Lake houses.
More and more Wisconsinites are in the market for a lake house, but it’s not always easy to find one. Brian and David took a look at the most popular counties for lake house purchases in SE Wisconsin, and here’s what we found:
- Waukesha County: 57% of listed lake homes already have offers
- Washington County: 25% of listed lake homes already have offers
- Jefferson County: 25% of listed lake homes already have offers
- Walworth County: 37% of listed lake homes already have offers
We recently had a client ask for help on buying a lake home. Luckily, she’s in a position to make a cash offer. This really helps her chances of getting an accepted offer. Now, our client is money-savvy, so even though she could pay in cash, she’s opting for a mortgage — after all, mortgage payments are great for credit scores (if you pay them on time), and leave you with cash-on-hand to save, spend or invest.
Despite this, we recommended she write a cash offer. Why? Well, when you write an Offer to Purchase in Wisconsin, there’s language in the contract that allows a homebuyer to still obtain a mortgage, should they choose to do so. This means her offer will have the strength of a cash offer while giving her the freedom to get a mortgage if she wants to.
Why Money Magazine is dead wrong about refinancing
Back in May, Money Magazine released an article called, “3 Best Mortgage Refinance Companies of 2020.” In it, they rank their favorite mortgage companies in terms of refinancing capabilities — but they completely missed the mark. Not only did they fail to report rates or closing costs associated with each option, but their categories are incredibly misleading:
#1: Quicken Loans: Best for Online Mortgage Refinancing
Money Magazine’s review of Quickenloans’ services seems to be unduly influenced by Quickenloans’ technological capabilities. Instead of focusing on rates, follow-through or closing costs, Money Magazine lauds Quickenloans’ website and approval process as being easy-to-use. But “too good to be true” is just the tip of the iceberg. Quicken Loans has repeatedly left clients without financing after their “awesome tech” gave them a digital pre-approval. Their technology is impressive, but it’s not foolproof. In the mortgage industry, that’s not okay.
#2: Guild Mortgage: Best Mortgage Refinance Company for Airbnb Owners
Money Magazine lauds Guild Mortgage because they let customers use Airbnb income to qualify for a mortgage. Usually, that’d be great. But right now, it’s just completely untrue. You used to be able to use Airbnb income to qualify for a mortgage, but the rules have changed a lot. Fannie Mae and Freddie Mac realized that home rentals are taking a sharp downward turn during the pandemic, making them a high-risk investment. You’d have to prove very recent Airbnb income, which is practically impossible right now.
#3: Bank of America: Best Mortgage Refinance Company For Member Discounts
As the article points out, “members can qualify for up to a $600 reduction of their purchase or refinance origination fees in closing costs.” And, true as that might be, the authors neglect to mention how much the closing costs are to begin with, making the savings nebulous at best.
Buying a home while on paternity/maternity leave
You can absolutely get a mortgage preapproval while on parental leave — but the process is a bit different than usual, even if your leave is fully-paid.
Before writing a pre-approval, mortgage lenders need a couple extra pieces of information:
- An official document listing the borrower’s intended date of return to work
- A written statement of the borrower’s intent to return to work
When in doubt, get in touch with your lender. Depending on your circumstances (i.e. your income while on-leave), they’ll be able to offer tailored homebuying advice.