NewRez brings back non-QM platform

Months after halting its non-qualified mortgage (non-QM) operations in response to COVID-19, home financing company NewRez announced Monday that it is bringing back its non-QM lending platform.

Like many non-QM lenders, NewRez stepped out of the market temporarily due to the turmoil caused by the coronavirus pandemic. But it didn’t take long for non-QM to re-enter the mortgage space and help drive the US housing market’s recovery.

Read more: Non-QM vital to economic recovery

“As we look ahead to a healthy and growing non-agency and non-QM market, we are excited to provide options to highly qualified and strong borrowers that sit outside the traditional agency guidelines,” said NewRez President Baron Silverstein.

The Fort Washington, Penn.-based lender offers a wide range of mortgage products that meet the various needs of creditworthy borrowers who may not otherwise satisfy conventional financing requirements. NewRez said that its SMART Non-QM Loan Series can now be accessed through its relaunched non-QM specific platform.

“As we further grow our footprint in non-QM lending, we are committed to underwriting quality loans that meet our guidelines and pricing models. Our product suite is differentiated with various options to fit specific borrower criteria and needs. Matched with our superior customer service, growing technology capabilities and end-to-end non-QM platform, each lending experience is treated delicately from start to finish. Our non-QM borrowers will also benefit from our experience in servicing these loans with our in-house servicer,” said Jeff Gravelle, chief production officer of NewRez.

“With our leading lending platform, we have the expertise, resources, capabilities and sophisticated products to help complex borrowers find the right lending solutions and pursue the dream of homeownership,” Silverstein said.


Joint home loans for unmarried first-time buyers – Rising Sun Overport

One of the biggest hindrances to a successful home loan application, particularly for younger and first-time home buyers, is a high debt-to-income ratio and low credit score rating. Many do not have a credit rating at all and thus are unable to open an account. Without an account in good standing, there is no means to prove an individual is a good credit risk. This vicious circle can delay many plans and dreams of a home purchase, which is particularly sad in the current climate of being able to avail of the best interest rate in years.

There is however, a possible solution: When you add a co-applicant that does have a good credit rating and has the capacity for a repayment, the odds of a successful approval for a home loan become so much better. Such a co-applicant may be a long-term partner, a friend, business associate or even a family member.

Before rushing into a joint home loan assessment process, there are some legalities to consider, and the first is that contrary to popular belief, South African laws do not recognise so-called ‘common law’ relationships.

I approached Louis Kruger for clarification. He is an Attorney, Notary & Conveyancer, and Managing Director of Kruger Attorneys & Conveyancers, who explains that traditionally the consequences of married persons owning a property are usually governed by their matrimonial property regime, such as being married in community- or out-of-community, customary marriage, religious marriage or civil union.

“The law dictates, dependent on the regime, what the proprietary consequences are for the respective spouses or partners. Persons in a personal or romantic relationship, or same sex partnership however, which is not recognised by law, cannot rely on the same legal protection that the law provides to married persons.”

It is for this reason that Kruger stresses that the future aspirations and relationship between the parties is of great concern. “I always strongly recommend that unmarried persons who wish to purchase a property jointly, must enter into a ‘Co-Ownership or Co-Habitation Agreement’, which helps to regulate their affairs. These agreements generally provide for important aspects such as liability for acquisition costs, maintenance, what happens to the property when the relationship is terminated, or in the event that either party wishes to sell. This agreement will be enforceable between the parties, but will not bind creditors such as the bond holder.

“It is imperative for the parties of such an agreement to understand that should one of them parties no longer wish to remain a co-owner, the remaining owner can only ‘buy-out’ that partner if they are capable of proving affordability to the bank for the full bond amount outstanding,” says Kruger.

From the bank or financial institution’s perspective, if one applicant wishes to exit from the home loan agreement, a substitution of debt is implemented, whereby a new home loan application will need to be processed and a full credit assessment to be conducted to verify affordability. That applicant will then become liable to pay the full bond registration fees for the new home loan.

This drives another of the major legal considerations by joint owners of a property who are utilising mortgage bond finance to purchase a property; that being the effect of both being held jointly and severally liable for any amount due to the financial institution granting such a home loan. Here the law is very clear: Regardless of whether only one individual defaults, both parties’ credit profiles are impacted.

In practice, this means that the bank can claim any amount due from both, or either, of the parties and the bank is not bound by their personal arrangements relative to payment,” says Kruger. “For example, if the parties agree that one of them is responsible for maintaining the regular bond instalments, whilst the other will cover municipal costs and insurance, the bank is not bound by the same agreement, and can insist on payment from either party.

The decision of which financial institution or bank to apply for a home loan, also has to be decided up front. A bond application cannot be split between two different home loan providers, and the monthly debit order has to come from one account. This may put the financial burden on one party who has to ensure that bond repayments funds are always available.

Absa Home Loans confirms what Kruger has already alerted us to, which emphasises that by law, joint applicants have to accept that they are jointly and severally liable for the total monthly home loan repayments, and which includes taxes and other legal and administrative fees that are associated with the ownership of a property.

Another consideration that Absa Home Loans stresses, is the need for each party to have a Last Will and Testament in place, which instructs what should happen to the property in the event of one another’s death. One additional step is also for both parties to have adequate life cover that will settle their share of the outstanding bond.

In the excitement and realisation that together, two parties can afford a property, joint applicants tend to focus mainly on the benefits of pooling their cash resources and affordability, not giving sufficient consideration to the downside impact if things don’t go as planned; death and taxes for example.

Before making a joint home loan application it is highly recommended that both parties explore all eventualities or possibilities no matter how difficult it may be, especially when considering a possible future termination of the relationship. Attorney advice is always recommended because they take an unemotional view of the partnership and are aware of all the legal pitfalls, proffering advice and options.

The consequences of not doing so, and/or not having adequate legal advice, can have serious implications on individual credit ratings and future loan applications, which in turn can set both individuals back for years, regardless of who defaulted or reneged on the co-ownership agreement.

A golden rule is in the word ‘joint’: You are jointly liable, jointly bound to the home loan, and jointly you will thrive or fail.


‘Home Town’: Ben and Erin Napier’s Top Upgrade To Give a Home Happy Vibes

Ben and Erin Napier of “Home Town” usually renovate single-family homes, but in their latest episode, they’ve turned their keen reno eye toward a good cause.

In “Color Psychology,” Napier’s clients Lisa and Mike Cochran have bought a house in Laurel, MS, for $25,000 in order to turn it into a women’s home. They want this nonprofit to be a welcoming place for women who have run into tough times. It should be comfortable and beautiful, but they also know it needs to function for multiple people (and their kids) at once.

Ben and Erin set out to create the ultimate “roommate house” with a modest all-in budget of $100,000. Read on to find out Erin’s favorite beautiful (but inexpensive) upgrades, and find out if you can use them in your own space.

Use bright colors for a welcoming home

Before: This house looked dark and dreary.
Before: This house looked dark and dreary.


Erin knows that the women who will move into this house have been through a lot, so she wants to create a welcoming, happy ambiance.

One way she does this is by using color to make the common spaces and the exterior give off a joyful energy.

“I did a lot of research in college about color psychology, and certain colors make you feel hungry or happy or sad or sleepy,” Erin explains. “In a color palette of sky blue, light-coral colors, lemon-meringue yellow, and then lots of neutrals and creams around those colors together give you a feeling of happiness.”

After: These colors are bright and welcoming.
After: These colors are bright and welcoming.


So Erin paints the exterior a beautiful blue, with a playful coral on the front door. Inside, she brightens up the living room with sunny yellow walls set off by creamy white trim.


Watch: Exclusive: HGTV’s Orlando Soria Gives Us a Tour of His Home


When the paint is dry, the house looks like it’s bursting with joy and life. Sometimes, the right colors can make all the difference.

Erin Napier used bright, uplifting colors in this living room.
Erin Napier used bright, uplifting colors in this living room.


Invest in small updates everyone will appreciate

Everyone will enjoy the new, improved window.
Everyone will enjoy the new, improved window.


Just like a fresh coat of paint, new windows are something everyone in the house will enjoy, and a window upgrade doesn’t have to cost a lot.

That’s why Ben and Erin decide to upgrade this house by replacing a window upstairs. While this only brings extra light to the attic, it also gives the exterior a more elegant look.

“That window is beautiful,” Erin says when she sees the new window installed. “That small change is like changing the world for this house.” This new window proves that sometimes the smallest update can have a huge impact.

Create a designated workspace for everyone

These desks add extra function to this space.
These desks add extra function to this space.


Erin knows that a home should be beautiful as well as functional, which is why she decides to add two custom desks to the living space.

With kids living in the home, she wants to make sure they have space to do their homework—but these convenient desks could also work in a house with roommates.

“We can make it even more multipurpose,” Erin says when looking at the dual kitchen and dining room. “We’re going to have kids. I want to think about how we have a really communal sort of dining space where there’s also maybe desks.”

Ben Napier made these desks in his wood shop.
Ben Napier made these desks in his wood shop.


Ben and Erin find space in the corners of the dining room where one desk could be tucked in on either side of the room, away from the dining table and out of the way of foot traffic.

The desks look lovely and prove that, while there might not be room for a dedicated office in a shared house, there can still be workspaces for everyone.

Use inexpensive and easily-cleaned materials

This backsplash is inexpensive and fun.
This backsplash is inexpensive and fun.


Ben and Erin next move onto the kitchen, choosing a backsplash that is beautiful, inexpensive, and easy to clean. They use vinyl wallpaper as a clever substitute for tile, giving the room a pop of color that doesn’t cost a lot. To protect the wallpaper from messes, Erin covers it with plexiglass so it can be quickly cleaned.

“We went with this because it’s affordable but it’s really pretty, because we want this to be a lovely, soft first landing for these women and their kids,” Erin says.

Best of all, Erin’s wallpaper is peel-and-stick, so it’s easy to put up and easy to take down. This makes it an especially great choice for any roommates who want to be able to change up the look of their kitchen without spending too much money.

Don’t go too pricey with kitchen features

Erin learns how laminate counters are made.
Erin learns how laminate counters are made.


With a great roommate-friendly backsplash, Erin wants to continue the theme of inexpensive, sharable space with style. So she uses laminate countertops in the kitchen, knowing that this durable material will look great—and cost just $300. And that frees up funds for the nonprofit to use somewhere else.

“People want to be down on laminate,” Erin says, acknowledging how laminate might not be the popular choice. “But it wouldn’t make sense if we had put $2,000 worth of countertops in this house that was all about the budget.”

And the laminate counters look just like marble, giving the new tenants a beautiful kitchen that isn’t breaking the bank.

When the house is finally finished, Erin and Ben get to present their clients with a happy home that will be enjoyed by many deserving women for years to come.


Mociun’s Shift To Home Decor Helped It Navigate The Unpredictable Year That Was 2020 – The Zoe Report

In the midst of a global pandemic that’s forced so many to stay home (or at least spend more time there), it’s helpful to have a successful jewelry business that also features a robust collection of chic home goods. Just ask Caitlin Mociun. The owner and founder of namesake label Mociun has managed to navigate the storm with her extensive and well-curated home treasures that are as playful and whimsical as they are elevated and well-crafted.

Since its early years, the New York-based company has been no stranger to necessary pivots and evolving. In fact, the label actually began as an apparel company before moving on to jewelry and home decor. “I started [the label] in 2006 as a women’s clothing line, focusing on hand-printed textiles that I designed, printed, and sewed myself,” says the founder, who studied textiles at the Rhode Island School of Design. “I never imagined then that I would have a fine jewelry brand and a store.”

Like its thoughtful and intricate jewelry collections, the label’s home goods are carefully selected and sourced with emerging brands and “styles and designs that [my buyer and I] feel are unique and new,” says Mociun to TZR. “But we also like to mix in and work with brands that have been in business for hundreds of years. I think a big part of what we are looking for is a unique perspective and beautiful craftsmanship.”

Mociun has always pulled inspiration for the label’s items from the 20th-century German art school and movement The Staatliches Bauhaus, or simply the Bauhaus. “The college (RISD) I went to was based on the Bauhaus, so I think my schooling really informed how I approach design,” she says. And more than being inspired by the actual school (which operated from 1919 to 1933) and artists, Mociun says she is inspired by the movement’s principles. Some of those key elements found in the brand’s jewelry and home collections include:

  • Function before form: “I make wearable pieces, so they need to start with being wearable. A piece of jewelry that is uncomfortable, too heavy, unbalanced, etc. is not a successful piece even if it’s pretty or cool-looking.”
  • Working with true materials: “My materials often inform my designs. Part of what I fell in love with in jewelry is the stones, the color of gold, and how the two so simply play off each other. I find them perfect and beautiful in their simplest forms.”
  • “Not seeing a difference in artist and craftsperson.

In home decor, these principles manifest as brightly colored mouth-blown Italian vases, spotted ceramic tea cups with playful dog sculptures in the center, and fanciful woven throw blankets with interesting designs and patterns. In jewelry, geometric and unexpected shapes, brightly colored gemstones and timeless, dainty pieces can be found in the label’s collections. Yes, each item under the Mociun umbrella strikes the perfect balance of sophisticated and playful — and it works.

In addition to Bahaus principles, the designer says her travels have always served as inspiration for the label’s one-of-a-kind pieces. “[Travel] really is about pushing me out of my everyday comfort and routine,” says Mociun. “It would make me look at things in a new way. It’s been really hard for me in 2020 to find a way to do this without leaving my physical spaces.”

Unsurprisingly, 2020 brought with it other challenges to Mociun and her team (and countless other businesses). But the founder says, “working together as a team” has helped keep everyone motivated in these trying times. “No one wanted this ship to sink,” she says. “It has been beautiful and inspiring to see my team work together in new and challenging ways and to find solutions to the problems that come up.”

Launching a new “and very robust” website at the end of 2019 helped Mociun’s online business put its artful wares, especially those for the home, on full display and allowed the brand to flourish amidst the pandemic, which impacted traffic to its Brooklyn storefront. “This was helped along even further by my amazing website manager who keeps improving our site,” says Mociun. “As well as my photographer and creative content partner, who help our ideas come to life in the photoshoots we work on.”

Indeed, Mociun explains that so much of her namesake labels’ magic lies beyond its stunning product offering. “There is a whole world of people and personalities behind it,” Mociun explains. “I work very hard at figuring out people’s strengths and talents (not always successfully, of course). Just as I have worked towards doing what I like, I want the people on my team to do what they like as well. I have seen all aspects of my brand get better when these things are focused on.”

Better indeed. Mociun’s “organic and unplanned journey” has led it to evolve to the multifaceted — and resilient — label it is today. “I mostly kept moving towards the things that I enjoyed doing, knowing that there are always going to be parts of this that are challenging, that I am not the best at, or that aren’t fun,” says Mociun. “When something really didn’t feel good or didn’t feel like something the world needed, then I would move away from that. [I’m] always checking in and asking myself is this worth spending my time doing and putting out into the world?”

We only include products that have been independently selected by TZR’s editorial team. However, we may receive a portion of sales if you purchase a product through a link in this article.


PCMA sees record number of private client mortgage requests

Non-bank lending firm PCMA said that it is off to a good start in 2021, as the red hot expanded prime jumbo market continues to see increased demand for multimillion-dollar homes.

The Orange County-based company said that it generated over $138 million in private client mortgage applications in the first half of January. Meanwhile, its direct consumer loan volume requests surpassed expectations with an average loan amount of $932,000; an average home value of $1.6 million; an average LTV of 47.6%; and average household reserves of $217,432.00.

“PCMA Private Client Lending has increased by 40% in daily application assignments to our Certified Private Client Mortgage Advisors,” said John Lynch, CEO and founder of PCMA. “The handling of this above-average wave of requests in early January by the team at PCMA shows our dedication to serving the private client community.”

The coronavirus-driven suburban migration has spurred a flurry of purchases of premium homes in 2020 – a trend that is carrying over into 2021. More private clients are looking for loan programs designed to provide borrowers with the jumbo loan amounts they need to buy or refinance a multimillion-dollar home.

Read more: Bigger homes, larger yards: Millennials drive post-COVID trend shifts 

“In my 25 years of experience, the first few weeks of the new year is typically a fistfight to get back into normal life and a very hard time to get client calls and vendors in the supply chain back up and running,” Lynch said. “For the first time in my career, we are kicking off January at a record-breaking pace. This is a great sign for private client lending and PCMA as we enter 2021.”

PCMA said it expects further loan volume growth as it continues to scale in key markets throughout California, Florida, and into other “high concentration communities of high-capacity households” across the US.


Here’s the average purchase price for a house in South Africa right now – BusinessTech

After a year of the Covid-19 pandemic, Ooba has observed changes in both consumer behaviour and lending trends, resulting in a surprising boom in the local residential property market.

Rhys Dyer, chief executive officer of Ooba, predicts that the residential property market in 2021 will continue to show strong levels of activity, mostly driven by first-time homebuyers as a result of the low interest rates.

Evidence of the strong activity, he said, can be seen in the volume of Ooba’s home loan applications for Q4 20, which increased by 36% compared to Q4 19, with a 56% growth in the value of the applications received.

Applications from first-time buyers in Q4 20 were up by 36% compared to Q4 19, with a 59% increase in the value growth. The value of Ooba’s bond instructions to attorneys in Q4 20 was 56% up on Q4 19.

“The current low interest rate environment, as well as competitive home loan deals from the banks, creates an ideal buying environment for first-time homebuyers.

“Banks in Q4 20 were prepared to provide 100% home loans to a large percentage of first time home buyer applicants. 100% bond applications from first-time homebuyers in Q4 20 increased by 39% year-on-year with 80% of these buyers successfully obtaining finance,” said Dyer.

Individuals who currently rent property can in a large percentage of cases purchase their first property at a lower monthly cost than their current rental payment, he added.

According to Dyer, the appetite for banks to lend, especially at high loan-to-value’s (LTV’s), will drive the demand side of the market, especially for first-time homebuyers. However, ongoing Covid-19 interruptions to certain business sectors mean banks will be watching the economic drivers closely.

Ooba’s data show that during the fourth quarter of 2020, the Average Bond Size increased by 13.7% while the Average Deposit as a Percentage of the Purchase Price fell by 15.6%.

Likewise, the Average Bond for first-time homebuyers grew by 15.5% while the Average Deposit was down by 16.3%. On-going support from banks to continue to lend with no or very low deposit requirements continue to sustain robust property market activity.

“The bulk of residential property activity will be at price points that first-time homebuyers can afford. We expect strong interest in properties priced between R500,000 and R2 million,” said Dyer.

“However, this growth in demand will likely result in some stock shortages during the year, which will drive up the prices of second-hand properties in this segment. We anticipate an increase in new property developments to augment the inventory, making additional affordable homes available to buy.”

He said that activity in the luxury and high-end property market is expected to remain subdued. “Slow economic growth coupled with low confidence in the economy, is encouraging wealthier South Africans to limit their exposure to the local property market.”

With no immediate end in sight to the pandemic, buyers are prioritising their quality of life and new ways of working when purchasing a home. More space, a bigger garden and a home office are in demand. This may mean larger properties slightly further from the CBD may gain more appeal, said Ooba.

The fourth quarter statistics from Ooba show that the Average Purchase Price increased by 11.7% year-on-year reaching R1,349,337. The Average Purchase Price for first-time buyers fared even better, with a 13.7% increase, breaching the million-rand mark at R1,089,443.

Annual price growth has been driven by improved affordability due to the lower borrowing costs, coupled with the demand for larger, more expensive freehold properties.

The current constrained supply of properties for sale resulting from the heightened property market activity in the latter half of 2020 is also placing upward pressure on property prices in the lower price segment of the market.

“Our statistics show that the successful bond approval rate if you only apply for finance to a single bank is 59.7%, down 9.3% year-on-year.

“During Q4 2020, just over 80% of Ooba’s home loan applicants successfully secured bond approvals at an average interest rate of 0.02% below prime, underscoring the value of our home loan comparison services,” said Dyer.

Read: Here’s why a home loan pre-qualification is so important


Keep Rodents and Pests Out of Your Home This Winter: A Room-by-Room Guide

Don’t you just love escaping the icy cold of winter and getting cozy in your house? Surprise! So do rodents and other pests. While you might think summer would be peak pest season, it turns out that creepy, crawly creatures seek shelter from the elements in winter, just like us.

According to the National Pest Management Association, mice and rats invade about 21 million homes each winter, and they can squeeze in an opening the size of—get this—a dime. And that’s not even considering numerous other skittering friends such as termites, ants, and spiders.

But there are measures you can take to prevent your home from becoming the pests’ party pad. We’ve rounded up some helpful room-by-room advice to help you keep rodents and other pests out this winter.


As you might imagine, the kitchen is typically the room singled out by pest control professionals as having the highest risk of a pest problem, says Nancy Troyano, entomologist for the family of pest control brands that include Ehrlich, Western Exterminator, and Presto-X.

Here are some common-sense steps to take to hinder insects or rodents from invading:

  • Store food in airtight containers.
  • Check the expiration dates of cereal and other dried food items, and discard expired items to prevent infestations.
  • Keep your counters and floors clean and crumb-free.
  • Regularly empty garbage cans.
  • Deep-clean underneath appliances to remove dust and crumbs that may have fallen.
  • Check for leaky sinks to deter pests seeking moisture.
  • Inspect boxes, bags, and other grocery carriers thoroughly for signs of pests before bringing them in.

Finally, Cynthia Mannes, vice president of public affairs for the National Pest Management Association, reminds you not to overlook pet bowls. Rather than leave pet food sitting out all day, remove and clean bowls after mealtime and wipe up any spilled food or water around them.


Attics are a favorite room of rodents, and it’s easy to see why: They are dark, secluded, and dry, with plenty of places to nest. To help keep them out, check the condition of your roof tiles and attic vents and replace any that are damaged or missing, recommends Troyano.

Don’t forget to check again once or twice in the winter, especially if your area has experienced strong winds.

To make the attic environment as unwelcoming to rodents as possible, ditch the cardboard boxes and store your keepsakes in sealed plastic bins—they’re more difficult for rodents to chew through, Mannes says.


Rodents love the garage almost as much as the attic. In fact, Mannes says, one of their preferred hideouts is under a car hood, where it’s nice and warm. As you might imagine, vehicles can also serve as a source of food that’s left behind: french fries, crackers, etc. They’re not picky!

What’s even more disconcerting is the abundance of wiring available for their gnawing pleasure. Mannes says rodents spend nearly 3% of their time each day just gnawing on objects like wires.

Frequently check under the hood of your car(s) for gnawed materials, frayed wires, nests, and droppings, which will alert you to an unwanted visitor. (Yes, they can live in there even when you are driving.)

Keep all items on shelves, rather than directly on the ground. Transfer food items like pet kibble or warehouse club vats of snacks to plastic containers. Check around doors for gaps and seal any opening that is larger than a quarter of an inch, Troyano says.


To keep birds, bats, and squirrels from making homes in your chimney flue, install a suitably sized chimney cap that sits right on top of your chimney, says Troyano. Expect to pay about $350, including installation. And store your firewood at least 20 feet from the foundation of the home.

“Rodents often make their nests in wood piles and easily gain inside access if the stack is too close to the house,” cautions Mannes.

Foundation and walls

Crack repair is key: Identify and repair any openings in the foundation, as well as around utility pipe entryways. Keep an eye out for a damaged dryer vent hose as well as other vents.

When sealing up cracks and holes in the home’s foundation, it’s vital to choose the right materials to fill these entry points.

“We suggest homeowners use a silicone-based caulk for smaller openings and fine-grade steel wool for larger gaps, as the rough fiber found in steel wool is a deterrent for rodents,” Mannes says.

The great outdoors

Bird feeders don’t just ensure a steady food supply to birds in the cold weather. Mice are also attracted to bird food, including seeds and discarded hulls, Troyano says. Make sure you regularly clean up seeds and debris surrounding bird feeders.

Also secure trash cans with tight-fitting lids, and stop leaks around pipes and drains to help deter cockroaches, ants, and other insects that are attracted to moisture.

Yes, your winter to-do list just got longer, but ensuring rodents and critters will keep their creepy paws off your precious house is well worth it.


27 Cheap Things That’ll Help Your Entire Home Look Fancier Than It Really Is – BuzzFeed

The top piece can either come off of the drawers to sit next to them, or they easily stack.

Promising review: “This organizer was literally everything I could have wanted it to be. It holds exactly what I wanted: my foundations, primers, lippies, eyeliners, tools, eyeshadows, highlighters, and bronzers. Everything looks super glam and I’m obsessed. It’s sturdy, easy to clean, and looks cohesive with my vanity. I love that this is so affordable compared to these instagram and YouTube organizer companies that charge almost a hundred dollars for organizers like these.” —MiamiGirl

Get it on Amazon for $16.35+ (available in five colors).

BTW, Anamaria, an editor here, owns this organizer and LOVES it because she can fit so much into it — and then see it all! Read her full makeup organizer review for more.


Existing-home sales hit new record high in December

The National Association of Realtors’ latest report on existing-home sales revealed another monthly increase in December, with sales in 2020 performing at their highest levels since 2006, despite the pandemic.

Existing-home sales (completed transactions that include single-family homes, townhomes, condominiums and co-ops) inched up 0.7% from November to a seasonally-adjusted annual pace of 6.76 million units in December. Sales in total jumped 22.2% year over year from the 5.53million-unit rate in December 2019.

Sales activity surprisingly remained this strong in December, says NerdWallet Home and Mortgage Expert Holden Lewis, “considering that buyers have few homes to choose from.”

Data from the Mortgage Bankers Association revealed that housing inventory fell 16% month over month to 1.07 million units in December, representing a 1.9-month supply.

“It’s hard to emphasize how bonkers a 1.9-month supply of homes for sale is. That’s a record low, and there’s no doubt that even more people would be buying homes if more owners listed their properties for sale,” Lewis said. “With demand exceeding supply, home prices were 12.9% higher in December compared to a year earlier. When the pandemic subsides, the rapid price appreciation should induce more owners to sell.”

The median existing-home price for all housing types in December was $309,800, 12.9% higher than it was a year ago. The median existing single-family home price was $314,300, while the median existing condo price was $272,200.

Properties typically stayed on the market for 21 days, down from 41 days a year ago. NAR said that 70% of the homes sold in December were on the market for less than a month.

More affordability issues will arise if inventory stays this tight and home-price appreciation continues to accelerate, according to Joel Kan, associate vice president of economic and industry forecasting at MBA.

“This, in turn, would be especially challenging for first-time homebuyers, who make up a third of all home sales,” he said.   

First-time buyers accounted for 31% of home sales last month, unchanged from the same time in 2019 but down slightly from 32% in November. Meanwhile, individual investors or second-home buyers (who accounted for many cash sales) purchased 14% of homes in December. All-cash sales made up 19% of transactions while distressed sales (foreclosures and short sales) represented less than 1% of sales.

Regional stats

All four major regions posted double-digit annual gains. The majority of existing-home sales activity happened in the Northeast, where sales climbed by 27.4% year over year to a rate of 930,000 units. Sales down South also increased, up 20.7% annually to rate of 2,860,000 in December.

In the Midwest, existing-home sales spiked 27.4% from a year ago to an annual rate of 930,000. The West recorded a 17.9% year-over-year gain, up to a 1,380,000 pace.

2021 forecast

NAR Chief Economist Lawrence Yun expects the flurry of activity in the housing market and the overall economy to continue this year.

Read more: Strong fundamentals set bullish tone for US housing market in 2021 

“Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%,” he said. “Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell from 2.77% in November to 2.68% in December. The average commitment rate across all of 2020 was 3.11%.

“To their credit, homebuilders and construction companies have increased efforts to build, with housing starts hitting an annual rate of near 1.7 million in December, with more focus on single-family homes,” Yun said. “However, it will take vigorous new home construction in 2021 and 2022 to adequately furnish the market to properly meet the demand.”


What Is A Mortgage? – Forbes Advisor – Forbes

A mortgage is a type of loan that is secured by real estate. When you get a mortgage, your lender takes a lien against your property, meaning that they can take the property if you default on your loan. Mortgages are the most common type of loan used to buy real estate—especially residential property.

Mortgages are considered relatively safe loans for lenders to make because the lender can take the property if you don’t pay. As long as the loan amount is less than the value of your property, your lender’s risk is low. Even if you default, they can foreclose and get their money back.

How A Mortgage Works

A mortgage is a lot like other loans: a lender gives a borrower a certain amount of money for a set amount of time, and it’s repaid with interest.

However, mortgages are also a little bit different than other types of loans because mortgages are loans made against real property. This means that the loan is secured by the property, so the lender gets a lien against it and can foreclose if you fail to make your payments.

Every mortgage comes with certain terms that you should know:

  • Loan amount. This is the amount of money you borrow from your lender. Typically, the loan amount is about 75% to 95% of the purchase price of your property, depending on the type of loan you use.
  • Loan term. The term represents the amount of time you have to repay the loan. The most common mortgage loan terms are 15 or 30 years.
  • Amortization. This is the process by which you pay off your mortgage over time and includes both principal and interest payments. In most cases, loans are fully amortized, meaning the loan will be fully paid off by the end of the term. However, if your mortgage isn’t fully amortized (for example, if it has a balloon payment at the end), the amortization may be longer than the term.
  • Interest rate. The interest rate is the cost you pay to borrow money. For mortgages, rates are typically between 3% and 8%, with the best rates available for home loans to borrowers with a credit score of at least 740.
  • Points. Mortgage points are the fees you pay upfront in exchange for lowering the interest rate on your  loan. These fees allow you to save money on interest over the life of the loan. Not all mortgages charge points, so it’s important to check your loan terms.
  • Payment frequency. The number of payments that you make per year (12 is typical) impacts the size of your monthly mortgage payment.

When a lender approves you for a home loan, the mortgage is scheduled to be paid off over a set period of time. However, loans can always be paid back early. In some cases, lenders may charge prepayment penalties for paying back a loan early, but such fees are unusual for most home loans.

Breaking Down A Mortgage Payment

When you make your monthly mortgage payment, each one looks like a single payment made to a single recipient. But mortgage payments actually are broken into several different parts.

The two primary parts of every mortgage payment are principal and interest. How much of each payment is for principal or interest is based on a loan’s amortization. This is a calculation that is based on the amount you borrow, the term of your loan, the balance at the end of the loan and your interest rate.

What Does Mortgage Principal Mean?

Mortgage principal is another term for the amount of money you borrowed. In addition to the amount you borrowed, your mortgage principal may also include fees you were charged to secure your loan. In many cases, these fees are added to your loan amount and paid off over time.

When referring to your mortgage payment, the principal amount of your mortgage payment is the portion that goes against your outstanding balance.

If you borrow $200,000 on a 30-year term to buy a house, your monthly principal and interest payments may be about $950. Part of that $950 will go toward the $200,000 you owe your lender, and the rest will go to interest. Your total monthly payment will likely be higher, as you’ll also have to pay taxes and insurance.

What Does Mortgage Interest Mean?

The interest rate on a mortgage is the amount you’re charged for the money you borrowed. Part of every payment that you make goes toward interest that accrues between payments.

While interest expense is part of the cost built into a mortgage, this part of your payment is usually tax-deductible, unlike the principal portion.

The Rest of Your Monthly Mortgage Payment

In addition to principal and interest, there are often other items included in your monthly mortgage payments. These may include:

  • Extra payments. If you elect to make more than your scheduled payment each month, this amount will be charged at the same time as your normal payment and go directly toward your loan balance.
  • Real estate taxes. Depending on your lender and the type of loan you use, your lender may require you to pay a portion of your real estate taxes every month. These payments will be put into an escrow account and released to local tax collectors when real estate taxes are due.
  • Homeowners insurance. Like real estate taxes, this will depend on the lender you use. Any amount collected to cover homeowners insurance will be escrowed until premiums are due.
  • Mortgage insurance. If your loan amount exceeds 80% of your property’s value on most conventional loans, you may have to pay PMI, orprivate mortgage insurance, each month. However, this usually stops when you have at least 20% equity in your property.

While your payment may include any or all of these things, your payment will not typically include any fees for a homeowners association, condo association or other association that your property is part of. You’ll be required to make a separate payment if you belong to any property association.

How Can I Determine How Much Mortgage I Can Afford?

How much mortgage you can afford is typically based on your debt-to-income (DTI) ratio. For most lenders, the maximum DTI to get a conventional mortgage should be no more than 43%.

To calculate your maximum mortgage payment, take your net income each month (don’t deduct expenses for things like groceries). Next, subtract monthly debt payments, including auto and student loan payments. Then, divide the result by 3. That amount is approximately how much you can afford in monthly mortgage payments.

Types of Mortgages

There are several different types of mortgages you can use based on the type of property you’re buying, how much you’re borrowing, your credit score and how much you can afford for a down payment. Your circumstances and the goals for your loan will dictate which option is best for you.

Some of the most common types of mortgages include:

Fixed-Rate Mortgage

With a fixed-rate mortgage, the interest rate is the same for the entire term of the mortgage. The mortgage rate you can qualify for will be based on your credit, your down payment, your loan term and your lender.

Adjustable-Rate Mortgage

An adjustable-rate mortgage (ARM) is a loan that has an interest rate that changes after the first several years of the loan—usually five, seven or 10 years. After the first adjustment, the rate typically will change about every year thereafter. Rates can either increase or decrease based on a variety of factors.

With an ARM, rates are based on an underlying variable, like the prime rate. While borrowers can theoretically see their payments go down when rates adjust, this is very unusual. More often, ARMs are used by people who don’t plan to hold a property long term or plan to refinance at a fixed rate before their rates adjust.

Government-Backed Loans

There are two types of government-backed mortgages: direct-issue and insured. The government offers direct-issue loans through government agencies like the Federal Housing Administration, United States Department of Agriculture or the Department of Veterans Affairs. These loans are usually designed for low-income householders or those who can’t afford large down payments.

Insured loans are another type of government-backed mortgage. These include not just programs administered by agencies like the FHA and USDA, but also those that are issued by banks and other lenders and then sold to Fannie Mae or Freddie Mac. However, these loans must all conform to certain lending standards set by the FHA in order to qualify.

Jumbo Loans

Jumbo loans are just like the conforming loans that are sold to Fannie and Freddie, but with one key difference: They exceed the maximum loan amount for conforming loans. For most areas in the U.S., any home loan that exceeds $510,400 is a jumbo loan and may come with certain restrictions or higher interest rates ($765,600 is the threshold in high-cost areas).

Balloon Loans

Balloon loans are mortgages that won’t be fully repaid when the term ends if the borrower just makes their normally scheduled payments. These loans are said not to be fully amortized—the payments on the loan are structured for a schedule that lasts longer than the loan term.

When the loan term on this type of mortgage ends, you’ll be required to make a balloon payment. These balloon payments are often refinanced so you don’t have to pay it off all at once, but that isn’t always an option—if your credit score declines, for example.

How To Find The Best Mortgages

With so many loans available, you may find it difficult to find the best mortgage. Often, the first step is to identify the right lender. Different types of lenders are better for certain types of loans. Each can help you find the right loan based on your goals and circumstances.

Types of Mortgage Lenders

How to Qualify For A Mortgage

All borrowers must go through a formal application process to qualify for a mortgage. This process will involve checking your personal credit and finances. However, because your loan will be secured by real estate, there are additional steps to qualify, such as having the property appraised and inspected so the lender knows their loan is secured by a high-quality property.

The basic steps to qualify for a mortgage are:

  1. Complete an application
  2. Provide a personal financial statement
  3. Supply income documentation
  4. Have the property appraised
  5. Have your property inspected
  6. Review loan options and terms
  7. Close on your loan

To get a jump-start on your mortgage application, there are several items that you can gather. These include your driver’s license or passport, recent pay stubs—if you’re employed full-time, two years of tax returns and documentation showing where your down payment is coming from, including recent bank and investment account statements.

Reasons You May Not Qualify

When you apply for a loan, your application can be rejected for any number of reasons. Your debt-to-income ratio may be too high, or the property you’re buying may not be worth more than you want to borrow. Or, your credit may not be good enough to qualify. Any mortgage application will require a credit check, so you review your credit report beforehand to make sure your credit is in good shape.