Listing Courtesy of RE/MAX REALTY GROUP REHOBOTH
Rehoboth Beach home buying activity may be going great guns, but for some would-be buyers, credit score woes are still a stubborn obstacle. That’s why we have been keeping an eye on the new pilot project that was announced late last year. This was the one called the "Wealth Building Home Loan." It’s an experiment aimed at opening up home ownership options, particularly for first time home buyers. Bank of America and Citibank were first to sign up for the program, said to “take a fresh approach to affordable mortgage lending.” It sounds like a pretty good idea!
How It Works
The Wealth Building Home Loan is a mortgage that runs for 15 years at a fixed interest rate. Because the term is so short, equity builds rapidly. The payments are more manageable than any reality-grounded Rehoboth Beach mortgage watcher would think because discount points can be used to buy the interest rate down to…well, “zero”! Since no down payment is generally required, home buyers can apply their available cash to purchasing those points. Since that sounds almost too good to be true, we’ve been keeping an eye open for progress reports.
Extra Help for Buyers with Modest Income
Qualifying for the mortgages would emphasize home buyer income rather than credit score. This would be a real godsend to the many people still rebuilding their credit after the economic downturn. Furthermore, interest would be set at three-fourths of a percent lower than the 30-year FHA rate—which makes sense, since shorter terms mean lower lender risk—with additional points to be offered at special bargain prices.
A Game-Changing Approach
The loan program is piloted through The Neighborhood Assistance Corporation of America, which secured underwriting from BofA and Citibank. It’s intended to be "a game changer,” because equity ownership takes place rapidly. Already in the first three years of a WBHL, 77% of the monthly payments pay off the principal, rather than the 68% that goes to interest under a standard 30-year mortgage. The effect is to accumulate a significant ownership stake almost from the word ‘go’—and more ownership equates to better loan performance.
When last checked, the program was in “pilot project” status (still in the initial shakedown phase) while the innovators who came up with the idea figure out how to make the loans widely available. So far, so good, apparently—we’ll keep an eye on developments to see if the program is greenlighted by the two underwriters.
In the meantime, Rehoboth Beach mortgage-seekers have a wide variety of currently available options for taking advantage of the great buys viewable on this morning’s Rehoboth Beach listings. Give me a call for a no-obligation discussion of how you can take advantage of today’s opportunities! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.
If you use a credit card or Delaware bank checking account’s online system, you may have noticed the appearance of a free service: FICO score tracking. You find it as a clickable area with a link title like “Your FICO® score” or just “FICO®.”
For many years, each of the major credit reporting agencies was mandated by law to honor any consumer’s request for a copy of their credit scores—but it was a once-a-year deal. For access to regular updates, you had to pay for a subscription. Particularly for consumers working to improve their credit scores, the paid services became a prudent monthly expense. The arrival of anytime free FICO score reporting eliminated much of that need.
Of course, tracking your FICO score is only useful if you know how the lending institutions will view it—and the answer to that is anything but clear-cut. Not only does each lender has their own confidential requirements, but since there are three separate reporting agencies, Delaware consumers have three FICO scores (and they’re rarely the same).
Even so, let’s face it: the single piece of information most everybody wants to know is what FICO score is needed to buy a home? or to refinance a home? Even if the answer is imprecise, it’s human nature.
To quell that curiosity, at least one source is willing to report what amounts to an average of approximations: it’s called EllieMae®. Ellie is a company that serves banks, credit unions, and mortgage companies by providing a raft of automated tools—but those are for industry insiders. As a sideline, they also put out a monthly Origination Insight Report with statistics drawn from the home loans processed through their systems—including some that most future Delaware home loan applicants will be interested to learn:
Average FICO score for conventional mortgage refis closed last month: 732
Average score for conventional purchases: 752
Average for FHA purchases: 681
Average FICO score — all loans: 724.
Average time needed to close: 43 days.
The percentage of mortgage refis grew to 39% of all loans, probably because interest rates decreased “for the sixth straight month” to 4.2%. EllieMae reckons that constitutes “a new 2017 low”—something Delaware refi and home loan applicants will be interested to know!
Those bargain basement interest rates continue to create a terrific opportunity for Delaware real estate. Call me for a no-obligation discussion about how you might take advantage of the current real estate environment! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.