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The Latest Real Estate and Mortgage Industry News From The Gamache Team

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Photo credit to David McBee

2020 has been an incredible year for the real estate market. If you have been following our blogs, you already know that 2020 has been a record year for both the Real Estate and Mortgage Industry.

Real Estate Sales have been strong, with 2020 sales beating 2019 sales without having finished Q4. Sellers are choosing to move out of state or to more suburban areas closer to restaurants, shops, and recreation.

Homes with larger backyards for outdoor living, larger kitchens for immediate family gatherings, rooms for offices and classrooms, and space for working out top the list of what buyers are looking for.

Record low interest rates are allowing buyers to afford more home and in areas that were previously out of their budget.

Proposition 19, the measure on the November 3, 2020 ballot, was approved. The Proposition grants tax breaks for adults 55 or older, those who are disabled, and those who lost their homes due to a natural disaster but imposes limits on the transfer of real property to family members among other stipulations. (source).

While the details of the tax transfers that are set to begin on April 1 are still a bit unclear, experts predict Proposition 19 to be a driving force for many to move.

For more information on how Proposition 19 may affect your taxes, it’s best to seek advice from a certified tax expert in your area.

New Mortgage Limits Mean Good News for Homebuyers

The Federal Housing Finance Agency has announced an increase in the amount of conforming loans for 2021. Up from $510,400 in 2020, the new conforming loan amount for loans by Fannie Mae and Freddie Mac will be $548,250.  

The limit for high balance loans will be $822,375 and anything over that amount will be considered a jumbo loan.

The higher balance is especially beneficial for the Tri-Valley real estate market which typically features higher priced homes than other areas of the state and country.

If you are looking to purchase a home in the Tri-Valley area, The Gamache Team can help you find the perfect neighborhood.

Questions about the Latest Real Estate and Mortgage News? The Gamache Team is Happy to Help

The Gamache Team understands the complexities in the real estate market and loan industry. We know it can be confusing to keep up-to-date with what is going on and how this may affect you.

If you would like to learn more about how the newest changes in the real estate and loan industry may affect your home sale, home value, option to purchase, or more, please do not hesitate to reach out to us. Email Dan@gamacheteam.com or Call (925) 918-0332.

 

 

FICO Updates Its Scoring System-How This Could Affect Your Ability to Get a Loan

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Technology isn’t the only industry that regularly updates its systems; FICO (Fair Isaac Corp) does as well. This summer, FICO expects to roll out its newest versions of credit scoring, FICO Score 10 and FT.

The newest FICO scores don’t necessarily mean borrowers will have a more difficult time getting a loan, but the new scoring system create a larger gap between those with good credit and those with fair to poor credit.

FICO Score 10 will likely reward those who have good credit with a higher score. Those who have more difficulty paying off lenders and who currently have lower credit scores will likely see even lower credit scores.

Borrowers, Do Not Fret, There are Reasons to Remain Calm Despite the Release of FICO Score 10 and FT

Borrowers who are shopping for a loan in the near future have at least two advantages. First, there are numerous FICO releases. According to Ted Rossman, industry analyst at CreditCards.com and Bankrate, lenders tend to use a more forgiving version, FICO 8, released in 2009.

With underwriters preferring this version, it is unlikely that any lender is going to jump at the chance of using a new system, which may, or may not work to their advantage. Without testing how the new FICO version will impact the number of approved loans, institutions will most likely wait awhile before adjusting to the new system.

Ways to Achieve a High FICO Score

No matter what FICO version is being used, three principles remain consistent to earn a high FICO score.

  1. Pay bills on time every month
  2. Avoid applying for too much credit too often
  3. Keep balances low

It’s also a smart idea to check your credit report often. All too often, errors can occur that you may not be aware. The result is a lower credit score and higher finance rates when you do get a loan.

Sign Up for Experian Boost

Experian Boost was launched in 2019 in an effort to build credit history and improve credit scores. Consumers connect their bank records to provide a history of utility payments, telephone bills, and rent.

This free service has helped almost a million people improve their credit scores, according to Experian’s blog, Does Experian Boost Work? Borrowers whose lender uses a more recent FICO score see the most improvement.

Let The Gamache Team Help You Find a Lender

The Gamache Team can help you find a lender that works with you and your situation. We have come across almost every situation that might require a more detailed and creative approach to lending. Our relationships with our lenders provide a valuable asset to help our buyers get into the home of their dreams or prepare them to buy that dream home.

Contact us to learn more about how the lending process works and what you need to prepare to get a home loan.

 

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