Blog — James Whitener - Whitener Team

What Is A Loan Contingency: An Overview

What Is A Loan Contingency: An Overview If you are in the process of looking for a new home, you need to find the right one to meet your needs. Sometimes, you want to learn more about specific properties before you decide if it is right for you. As a result, a lot of prospective buyers will include contingencies in their home offers that may allow them to back out without losing their earnest money. What are a few examples of loan contingencies, and how can you use them to protect yourself during the process?

Examples Of Common Loan Contingencies

Even if you have agreed on a purchase price for the house, the closing date is probably not going to be for one or two months. This will provide you with time to complete your due diligence and make sure no issues come up. For example, there may be a contingency that allows the closing date to be extended if there are any issues with the financing process through the lender.

You might also decide to include a contingency clause in case something develops with the home inspection. If something is wrong with the home inspection, you may provide yourself with an opportunity to pull out of the deal without losing your earnest money.

How A Loan Contingency Clause Protects The Buyer

It is important for buyers to work with real estate agents who understand how loan contingencies work because this is an important protective measure. A contingency clause can protect the buyer because it provides the buyer with a way to back out of the contract without losing his or her earnest money.

Typically, if the buyer backs out of the contract, he or she will lose his or her earnest money; however, if the buyer backs out for a reason that is protected by the contingency clause, then his or her earnest money might be protected.

Some Buyers Waive Their Loan Contingency

If the housing market is particularly competitive, and you know you are going to purchase the house no matter what, then you might want to waive your loan contingency as a way to strengthen your offer. On the other hand, keep in mind that waving your loan contingency means sacrificing this important layer of protection.

January 24, 2023/by whitenerteam_admin

What’s Ahead For Mortgage Rates This Week – January 23, 2023

Financial Reports

What's Ahead For Mortgage Rates This Week - January 23, 2023

Last week’s economic reporting included readings from the National Association of Home Builders on U.S. housing markets, and Commerce Department data on housing starts and building permits issued. The National Association of Realtors® reported sales of previously owned homes, and weekly readings on mortgage rates and jobless claims were also released.

NAHB: Homebuilder Sentiment Rises in December

The National Association of Home Builders reported increased homebuilder confidence in U.S. housing market conditions in December; this was the first time in 12 months that homebuilder confidence rose. Builder confidence in current housing market conditions rose by four points; builder confidence in home sales conditions over the next six months increased by two points. Builder confidence in prospective buyer traffic in new housing developments rose by three points.

Jerry Konter, a Georgia home builder and chairman of NAHB, said: “It appears that the low point for building sent in this cycle was registered in December, even as many builders continue to use a variety of incentives including price reductions to bolster sales. The rise in builder sentiment also means that cycle lows for permits and starts are likely near, and a rebound for homebuilding could be underway later in 2023.”

Robert Dietz, the NAHB’s chief economist, predicted that single-family home building will increase as mortgage rates are expected to trend lower and boost housing affordability. Mr. Dietz said, “Improved housing affordability will increase housing demand as the nation grapples with a structural housing deficit of 1.5 million units.”

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by 18 basis points to 6.15 percent. Rates for 15-year fixed-rate mortgages averaged 5.28 percent and were 24 basis points lower on average.

First-time jobless claims fell to 190,000 claims filed as compared to expectations of 215,000 initial claims filed and the previous week’s reading of 205,000 new jobless claims filed. Ongoing jobless claims increased to 1.65 million claims filed compared to the previous week’s reading of 1.63 million continuing jobless claims.

What’s Ahead

This week’s scheduled economic reporting includes readings on new and pending home sales, consumer sentiment, and predictions on inflation. Weekly readings on mortgage rates and jobless claims will also be published.

January 23, 2023/by whitenerteam_admin

An Often-Overlooked Trick Can Help You Afford A Second House

Mortgage

An Often-Overlooked Trick Can Help You Afford A Second House The whole idea of investing is to use a portion of your money now to get more down the road. It is important for everyone to diversify their investments, and you might be thinking about buying a second house to do so. Investing in real estate is a goal that a lot of people have, but how can you get started? It was challenging enough to buy your first house, so how can you afford a second one?

Use A Cash-Out Refinance To Buy Your Second House

One trick that many people overlook is that they can actually conduct a cash-out refinance to purchase a second house. In general, your lender will allow you to cash out up to 80 percent of the value of your home during a cash-out refinance. This can give you a tremendous amount of flexibility that you can use to purchase a second house. For example, if your house is worth $300,000, you may be able to withdraw tens of thousands of dollars in equity.

What To Consider When Using A Cash-Out Refinance

When you apply for a cash-out refinance, there is a chance that the interest rate on your new loan might change. This might mean that you end up with a higher interest rate than before. You must make sure you can afford this new interest rate. Furthermore, you will be required to pay closing expenses. You need to have enough money set aside to cover those closing expenses. Keep in mind that the term of the loan might change as well. If you were close to paying off your house, this type of refinance might reset that clock. It might take you longer to pay off your mortgage than it did before. Consider these factors carefully before conducting a cash-out refinance.

A Cash-Out Refinance Might Be Right For You

In the end, a cash-out refinance could be a great way for you to withdraw equity from your home, using it to purchase an investment property. On the other hand, you need to ensure you can still afford the new loan after you take that equity out of your home. Work with an expert who can help you find the right option to meet your needs.

January 20, 2023/by whitenerteam_admin

How’s your vision?

Uncategorized

A Story of how Short Sighted viewpoints can skew the world you see

I won’t go into full detail of how narrowing my vision of a certain situation caused a major headache as I do prefer to have some semblance of privacy. I will do my best to paint you a picture of how trying to see all angles and being open to other options can be time consuming but it can help you get to your goals without unnecessary strife and pain.

My wife and I are looking to make some major changes in our life to simplify things and get to doing the things we most enjoy. In this process we have made some decisions to really shake things up to start pushing towards those goals. Most of these decisions are based in finances and I had a very narrow vision of how this should work. I’m beyond thankful that my wife is patient and understanding as she let’s me kind of work through these things.

As I’m working to reconfigure our finances and push to accomplish some items we decided to take on I had an epiphany that showed how short sighted I was being. Once I allowed myself to look beyond my initial idea and be open to other ideas that maybe weren’t the first or even my idea at all… I found a way to save us almost a thousand dollars a month and replenish our savings almost overnight. This is a lesson in humility and patience. The first I have in spades but the second I have none. I want to go go go go! This can be great in some instances but in others it can narrow your vision so far that you don’t do the research and the thinking necessary to feel good and confident in what you’re doing.

Be self aware and humble enough to slow down a bit, ask for help and consider opposing views. It will save you time, it will save you money and it may even save your relationships. Keep pushing forward but don’t forget to re-evaluate!

January 19, 2023/0 Comments/by James Whitener

VA Loans: Are They Assumable?

Mortgage

VA Loans: Are They Assumable? Members of the military, their family members, and veterans have access to a unique mortgage option called a VA loan. This can be a strong option because it provides borrowers with an opportunity to purchase a house for less than 20 percent down. While not everyone is eligible for a VA loan, there are a lot of people who are wondering, are VA loans assumable? There are a few key points to keep in mind.

What Is An Assumable Loan?

An assumable loan means that the buyer is essentially going to take over the mortgage held by the seller. Essentially, this means that the buyer is going to take over the remaining balance of the loan as well as the interest rate attached to that loan. The buyer will have to compensate the seller for any equity the seller has already accumulated. This means either providing the seller with cash for his or her equity or taking out a second mortgage to cover the difference. The biggest advantage of assuming a loan is that you may be able to secure a lower interest rate than you would in the current market.

Who Can Assume A VA Loan?

The great news is that a VA mortgage loan is assumable. Even though a VA loan is only available to retired service members, active service members, and members of their immediate families, anyone the lender qualifies to take over the loan can assume it. In general, this means that the buyer needs to have a credit score of at least 580 and a debt-to-income ratio of 45 percent. The buyer and seller must also have at least 12 months without any missed payments. Finally, the person assuming the loan must also occupy the property and the buyer must be willing to take over the terms of the original loan.

Should I Assume A VA Loan?

Assuming a VA loan could be right for you because you can access a lower interest rate and potentially save thousands of dollars on closing costs and expenses if you do not have to take out a second mortgage. On the other hand, this also means that you might need to put more money down to compensate the seller for his or her equity.

January 19, 2023/by whitenerteam_admin

Should you buy right now?

Uncategorized

What’s your financial THEORY?

The most common question I get asked no matter what the market is doing is “Should I buy right now?” The answer isn’t simple. Most of my responses to this are either questions or lawyer speak. What are you trying to accomplish. What are your short term and long term goals. How do your reserves look? Do you think we are headed into a recession? What is your threshold for risk? What is your financial theory?

The list can go on and on and on. Am I able to provide you with some insight to what the markets are doing and what are some possible short term outcomes with rates and financial industries? Absolutely. But as you’ve heard 100 times, I don’t have a crystal ball and the best I can do is give you some insight to what has historically happened in the past. The fact of the matter is it is going to come down to your financial theory. How do you manage your budget? Are you willing to make some sacrifices? Do you think that we are headed towards a recession and do you believe that recession will slow inflation which will in turn slow and/or reduce interest rates.

The simplest answer is do your homework, ask a ton of questions and don’t rely on one source for your information to make this kind of decision. You should be talking to financial people, you should be reading the news on all sides of the table. You should try to get your hands on historical data to show you trends of what happens in this economic scene. There isn’t a simple answer and rarely is there an answer that is perfectly clear. Go in with your eyes wide open, recognize the possible pitfalls and make sure you have a safety net. There’s always areas in the market for opportunity but you have to find them and do the work.

This is my favorite part of what I do, call me and let’s discuss!

January 18, 2023/0 Comments/by James Whitener

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