The Accunet Mortgage Show (2/16/20 Episode)

Brian and David discuss the factors behind low mortgage rates, what NOT to do when your loan is being processed, how to write a winning offer in 2020, and more on this week’s episode.

This week’s highlights:

  • The coronavirus has caused a true black swan event; something unseen and unpredicted that stresses and changes the financial markets. In this case, keeping rates low.
  • Buying or refinancing a home is complex. Keep your loan on-track with our list of 5 things NOT to do while your loan is being processed.
  • We’re still experiencing a highly competitive market. Raise your chances of purchasing with our tips on writing a winning offer in 2020.

How low are mortgage rates, and why?

According to Brian, rates are so low than an inchworm bumped his head on the 30-year fixed-rate! (So, pretty low.)
Freddie Mac released its weekly survey on Thursday, and unsurprisingly, reported stunningly low rates. It’s important to note that Freddie Mac’s weekly survey usually references data available on Tuesday — and this week, rates were a little higher on Thursday. That being said, we’re still seeing great deals on mortgages in 2020.
At the end of the day on Friday, Accunet could offer…

Rate Loan Type Costs APR
3.375% 30-year fixed-rate $2,100 3.44%
3.5% 30-year fixed-rate $1,209 3.52%
3.625% 30-year fixed-rate $209 3.65%

Why are mortgage rates so low? 

Unfortunately, rates are low because of the coronavirus outbreak. This is what we in the industry call a black swan event — something unseen and unpredicted that changes the financial market.
People aren’t going to work; no one is going to restaurants; people can’t get to work; All this, compounded with China having one of the world’s largest economies, is keeping the market stressed, and rates low.

5 things NOT to do when your home loan is being processed

Buying a home is exciting! But all too often, we see buyers make critical errors during loan processing which results in their loan being canceled. Reduce stress on your purchase or home refinance, and avoid these 5 things during loan processing:
1. DON’T stop paying your bills, even if you’re refinancing them.
When you’re buying or refinancing a home, you need to prove you can be relied on to make timely payments. And guess what? Lenders keep track of payments throughout the entire purchase or refinance process.
2. DON’T allow anyone else to check your credit.
Right before closing, we run another full credit check. This allows us to see if you’ve let anyone else check your credit, if you’ve taken out any new loans, leases or credit cards — if you’ve done ANY of these things, we have to requalify you, which can take serious time!
3. DON’T buy or lease any new, expensive items.
Once, we saw a client decide to co-sign for a significant others loan while they were trying to buy a home. Co-signing isn’t just a signature; it leaves you 100% responsible for the loan — this completely changes your financial profile, and can disqualify you from a mortgage!
4. DON’T charge any new items to your credit card.
If it makes you feel better, even David is guilty of this one. But that doesn’t mean you should do it; changes to your credit could add serious time to the loan approval process.
5. DON’T change jobs.
Buying or refinancing a home is dependent on your income. If that income changes, or if your income source changes, your mortgage might need to change, too.

How to write a winning home offer in 2020

The Wisconsin housing market is competitive. To write a winning offer, you need to stand out — and these tips can help you:

  • Don’t make your offer contingent on the sale of another home. This adds a huge “maybe” to your offer that could result in the sale defaulting. Which, guess what? Sellers don’t like when they have competing offers!
  • Offer the sales price.  Even if you think it’s too high, you can make your offer contingent on the appraisal coming in at the listed value. This ensures you’re paying what the house is worth, and makes your offer more appealing to sellers. 
  • Write the biggest down payment possible. 0-3% down is flimsy. While low-down-payment offers can win (especially with an Accunet Rock-Solid Pre-Approval), it’s so much harder. 
  • Write a sincere, nice letter to the sellers. Sellers want to identify with their home’s new owners. But DON’T include a photo – it could leave someone liable to a discrimination suit.

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