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Now that you’ve decided to look for a new home, you have to decide whether you want a home that’s new to you or new altogether. There are certain advantages to working with a builder when buying a new home, and a few pitfalls to watch out for. 

 

3 Categories of New Home Construction 

Whether you’re looking for a sprawling multi-family dwelling or a cozy condo, there are three basic home-building options: custom, semi-custom, and spec. 

 

  • Custom. This is where your new home starts with nothing more than a dream. In some cases, the buyer will purchase a piece of land and then hire an architect and a builder — though more often the buyer first finds a builder and together they find the land. It goes smoother this way because builders are usually experts at bidding on lots, armed with knowledge of the process buyers don’t have, and most builders have a team of engineers, architects, and real estate agents at the ready. If you go this route, consider a Construction to Permanent loan from City Lending. 

 

  • Semi-Custom. More common than custom homes, semi-custom homes are often found in more upscale neighborhoods. Here, a builder will begin with a basic design and offer a range of different options that the buyer can choose from. This could be anything from the difference between a one- or a two-car garage, varying floor plans, exterior options such as stone veneer siding, or interior upgrades including fireplaces and hardwood floors. 

 

  • Spec. Also known as production homes, spec houses are built and sold as-is. Any customization the buyer can do is highly limited — perhaps choosing paint colors and different lighting fixtures among the few add-ons that spec homes allow. As the term suggests, builders build these homes on the speculation that they’ll find buyers, so they’re often made with traditional aesthetics to appeal to the masses and spec homes are usually move-in ready. 

 

Mortgage Pre-Approval is Key 

It’s often the case that a builder will want to steer buyers to their preferred lender. While there’s nothing inappropriate about this, know that the homebuyer is under no obligation to work with the lender that a builder recommends. And it’s more than likely the case that you can find better and more diverse lending options with City Lending. Whichever lender you choose, mortgage pre-approval will show a builder that you are serious about the deal, and it will almost certainly make the sale go faster and smoother. 

 

Yes, you should still hire a real estate agent. 

Some people may assume that buying directly from a builder is a great way to cut out the middleman, and so they won’t have to pay the commission that a real estate agent receives. That’s possible, but not advisable. Here are a few reasons why: 

 

  • Advocacy. Your real estate agent advocates for your interests; a builder is out for the interests of the builder. And these two interests are usually at odds. This is most often the case when buying spec and semi-custom homes and there’s negotiation on a host of different contractual issues between the buyer’s agent and the builder’s sales representative. 

 

  • Inspection. Don’t think because a home is newly built that it doesn’t need to be inspected. New-home defects are common and the agent for the builder isn’t likely to seek them out. So having an agent in your corner to shepherd the inspection process is a big plus. 

 

  • Choosing the right builder. Real estate agents tend to know a lot about the builders in their markets, so you might want to find a real estate agent first and have that agent help you find a new home from a builder. 

 

  • Resale value. How the home appreciates is also an important factor to consider, and real estate agents are some of the best people to give advice in this area. If you’re buying a semi-custom home, there are bound to be available upgrades that may or may not add resale value to the home. A real estate agent can give you good guidance here. 

 

  • Agent fees. You probably don’t even have to pay your real estate agent; it’s quite common for the builder to pay the fee of the buyer’s agent, which is often around 6% of the home’s sale price. 

 

The Pros of New Construction 
 

  • Smart technology. With smart homes getting ever more common these days, chances are pretty good that most new spec or semi-custom homes come with high-tech features. These can include smart thermostats, lighting, and smart appliances among the many fun new gadgets. 

 

  • Customization. While nothing offers personalization like a full custom home, semi-custom and even some spec homes offer the buyer more of a chance to make it their own on move-in day than existing homes do. 

 

  • Less maintenance. With a brand-new roof, shiny new plumbing, and new everything else, the possibility that the buyer of a new home will be saddled with home maintenance and repairs is low. And if any problems do arise, they’re almost surely covered by a warranty initially. 

 

The Cons of New Construction 

  • Cost. It’s a fact: new homes often cost more than existing ones. How much more? With overall home prices surging, and supply issues cutting into home construction, that answer fluctuates. But, in general, new single-family homes tend to cost more than existing single-family homes. 

 

  • Less landscaping. One of the big advantages existing homes have over new ones is the landscaping, as existing homes offer the possibility for tall shade trees and other mature greenery that are harder to find with new construction. 

 

  • Off-gassing. Love that new-home smell? Is that the feeling of hope and promise you’re breathing in? No, it’s more likely formaldehyde. From carpets and curtains to wood that’s just about everywhere, new homes tend to give off significantly more volatile organic compounds (VOCs) than existing homes do. 

 

Whether you go custom, semi-custom, or spec, City Lending is here with a wide range of lending options for your new home. Contact us today. 

The majority of today’s homebuyers are staring down one undeniable fact: interest rates are rising. The heyday of historically low rates is over, and we’re faced with the new reality of mortgage rates that are closer to historical norms. How high will they go? Will they ever come down again? Let’s look at the current state of mortgage rates and at where experts see them going. 

 

The Fed is Having its Say 

In a widely expected move, Federal Reserve Chairman Jerome Powell recently announced that the central bank is looking at a rapid increase in interest rates this May, a move that’s meant to help curb inflation and cool off the economy. In March, Fed officials forecasted they would make seven rate increases of a quarter-point each — and now that number looks likely to be nine. Market watchers are predicting that rates will be close to 3% by the end of this year.  
 

While moves by the Federal Reserve and mortgage interest rates aren’t directly linked, there is an indirect connection that both borrowers and lenders watch closely, as mortgage rates and the federal funds rate often go in the same direction. But policy set by the Fed is only one factor in determining mortgage rates; the rate of inflation, the number of jobs created, and the expansion or contraction of the overall economy are contributing factors. The Fed may serve as a reliable bellwether, but it’s not a crystal ball. 

 

Homebuying Has Been Impacted 

The busy spring home-buying season has had a gathering cloud hanging over it: seven consecutive weeks of increases in mortgage rates. According to Freddie Mac, by the third week of April 2022, the average 30-year fixed-mortgage rate was 5.11%, the highest we’ve seen in over a decade; it hit 5.21% in April 2010. Mortgage News Daily reports an even higher number: 5.35% in the third week of April 2022. A year ago, in April 2021, the average was just 3.2%.  
 

This rise in mortgage rates has outpaced the forecasts of several industry insiders. Just before 2022, the Mortgage Bankers Association predicted that the average 30-year fixed rate would be 4% by the year’s end, and Fannie Mae predicted that the rise over the course of 2022 would peak at 3.3%. We’re already beyond those forecasts and all signs say the increases aren’t over. 

 

What do rising mortgage rates mean for the housing market? 

It’s helpful to take a snapshot of current market conditions to give context as to where the housing market is likely headed. According to the National Association of Realtors, in March 2022, the median price for a single-family home was $375,300, a record number that’s about 15% higher than the median price one year prior. Experts say that the rise in mortgage rates and shrinking home inventory, due in part to supply chain issues, contributed to the jump in prices. 

 

A Glimpse into Next Year 

What will the cost of homes look like in 2023? While the market may just go from white-hot to toasty, housing experts are predicting something of a cool down. Zillow recently predicted that we’ll see 14.9% growth in home value over the next year. While that may not sound like a cool down, a month prior, Zillow’s estimate was 17.8%. This downgrade seems a direct result of rising interest rates that have made home buying less affordable for many. Others are predicting a more significant cooling: CoreLogic thinks home prices will decrease to a growth rate of 5% over the next year; Fannie Mae forecasts a rise of 11.2% by the end of 2022, and a 4.2% rise in 2023. 

 

Looking Beyond 2023 

If you think that the current rise in mortgage rates is just an anomaly that will soon self-correct, with a return to historically low interest rates on the near horizon, you may be at odds with most folks. A survey by the New York Federal Reserve found that a majority of households think that the average interest rate for a 30-year fixed-rate mortgage will rise to 6.7% in 2023 and to 8.2% in 2025. Do experts agree with these consumers? The National Association of Realtors predicts a more moderate rise, with the average 30-year rate falling between 5% and 5.5% in 2023. Fannie Mae agrees, predicting that we’ll be at 5% in 2023. The Mortgage Bankers Association forecasts a decrease in rates beyond that, with the average falling to 4.6% in 2024. 
 

How will the housing market react to these and other changes in the coming years? Zillow recently posed that question to over 100 housing market experts and economists. On average, survey respondents predict the growth of home value to rise at a rate of 4.9% per year, culminating at 26.8% by the close of 2026. The majority of these experts believe that housing inventory, which has recently seen a significant drop, will be back at pre-pandemic levels by the close of 2024. 

 

Some Historical Perspective 

According to the Washington Post, the United States is currently experiencing the highest inflation we’ve seen in the past four decades; the Federal Reserve is betting that higher interest rates will tamp that down. But this increase in rates is not unprecedented, or even exorbitant in historical terms. The National Association of Realtors estimates that 8% is the historical average for a 30-year fixed mortgage. In 1981, the United States saw one of the worst economic downturns since the Great Depression. Both inflation and unemployment soared, and the Fed raised interest rates in response — the average 30-year fixed mortgage rate then topped 18%. Even the most bearish predictions for rates in the near future don’t come close to that. 

 

All parties meet their ends, and so nobody expected the abnormally low interest rates of the past few years to go on forever. The post-party days mean normalization, and affordable rates that aren’t historically low or high. And when you’re ready to secure one of these affordable rates, loan originators at City Lending are ready to help you finance your dream home. 

It’s a question many potential homebuyers have never even thought of: Can you buy a home that’s not listed for sale? The answer is a simple “yes,” though finding unlisted homes for sale can be complicated. 

 

So, what exactly are unlisted homes? 
 

There’s one thing that all unlisted homes are not: unavailable for sale. When a home isn’t on the market, that generally means that it hasn’t been listed on the major multiple listing services (or MLS) that most brokerages and real estate agencies use. Or, perhaps, the home was listed before but didn’t sell. A home could be unlisted because the owner is on the fence over whether to sell, or the house could be a pocket listing: a property that a real estate broker doesn’t list. The latter is often the case with exclusive homes targeted at an elite clientele, and a pocket listing could be owned by a high-profile person who doesn’t want the sale of their home to be public knowledge.  

 

In general, you’re more likely to have unlisted homes for sale in a sellers’ market with low inventory and more buyers than there are sellers. Which accurately describes today’s housing market. 

 

Ask Some Agents 

 

Not all real estate agents have pocket listings, but some surely do. You can compile a list of local agents using a variety of online tools, including directories from the National Association of Realtors. Facebook is another great place to find agents. When you’ve got your list, start sending them texts and emails, or give them phone calls. You could very well find a pocket listing or a home that’s just about to go on the market. 

 

Networking and More Networking 
 

Even in the digital age, word-of-mouth is still a thing. A good way to start a search for an unlisted home is to tell everyone you know you’re in the market. From family, friends, neighbors, and even casual acquaintances, there’s a chance somebody knows somebody who could have a home for sale. Find out if Facebook groups or your local Real Estate Investors Association have in-person events where you could chat up anyone from brokers to builders and investors to find out about unlisted properties. Then take it online; posts all across the top social media platforms, from Facebook and Twitter to TikTok, Instagram, and more, can tell the world you’re looking for an unlisted home. 

 

Target Rental Homes 

 

If a house is for rent, there’s a chance that it could be for sale. There’s no harm in contacting the owner to see if they’d like to sell — that’s how some real estate agents find homes to sell. As landlords may not wish to let their tenants know that a home is up for sale, the likelihood that a rental property might be unlisted but still available for sale is good enough reason to merit why you’re asking the question. One of the best ways to do this is through rental property managers, who are apt to know better than anyone else which rental properties might be ripe for a new owner. 

 

Find a Fixer-Upper 

 

Referred to in real estate circles as “driving for dollars,” cruising around in search of homes that are in need of serious work is one way to find one that might be available for sale. This could mean finding a place that’s undergoing improvements, or one that’s dilapidated or even abandoned. While the current owner may see the property as a problem, you may be able to see its potential. All the better if you’re handy or know a thing or two about home renovations. 

 

Search for Foreclosures 

 

At the risk of taking advantage of someone else’s misfortune, homeowners who are in danger of losing their homes to foreclosure might be open to purchase offers. You can find these homes a variety of ways, including checking the public notice listings in your local newspaper to see what homes are going to be auctioned (banks are legally required to post public notices prior to the auction). You can also go to county courthouses to look at the public records of current foreclosure proceedings, usually searchable by zip code. Some websites, such as Fannie Mae HomePath and Zillow, show homes that are in the foreclosure process. 

 

Non-Traditional Online Real Estate Resources 

 

Just because a home isn’t MLS listed, that doesn’t mean it’s not listed anywhere online. Websites such as OffMarket, HomeQT, and Mashvisor specialize in the buying and selling of off-market properties. You might be able to find an off-market home for sale on Facebook Marketplace, or through classifieds websites such as Craigslist, eBay Classifieds, and Oodle. As Zillow allows owners to list their homes 30 days before they are officially listed for sale, you may be able to find semi-listed “Coming Soon” homes there. 

 

Send a Love Letter 

 

Do you have a talent for prose? Or perhaps just the ability to express your thoughts with simple words? No matter your level of wordsmithing, you can send an old-fashioned letter to the owner of a home you love. Express that love and you just might be able to convince an owner that you are the perfect person to next care for the home. Sure, it’s a longshot, but if it doesn’t work, you’re only out the cost of a stamp. 

 

Yup, There’s Even an App for That… 

Dating apps have shown us we can find love with our smartphones, so why should seeking your dream home be any different? Even if that home’s availability isn’t public knowledge. With the DropOffer app, buyers can get information on unlisted properties through real estate agents, who pay a monthly fee to DropOffer. Buyers need to be invited by agents to view listings and can send offers directly to the homeowners. DropOffer gets a referral fee after the deal is done. 
 

But before you begin your search for an unlisted home, it would be wise to consider getting pre-approved for a mortgage. City Lending is here for that and all your other home financing needs. 

Whether you're looking to escape to the beach, the mountains, a lakefront retreat, or a vibrant cosmopolitan scene, having a vacation home is one of the best ways to go. Let's delve into some things to think about if you're thinking of buying one. 

 

What exactly is a vacation home?
 

While they may seem identical, vacation homes and second homes are not always the same thing, and they may be classified differently for tax purposes, such as when the time comes to sell the property down the road. While one can rent out a vacation home, vacation homes are different from investment rental properties, in that vacation homes are defined as secondary dwellings that are not the owner's primary residence and are partially for recreational use by the owner. If it's to be considered a vacation home, the owner must use the home for personal purposes more than 14 days a year and stay there at least 10% of the number of days that the home is rented.
 

Platforms such as Airbnb and Vrbo have made it easy to generate income with vacation homes. If that's your plan, you'll want to do some homework and look into the vacation rental market before you buy. While there are several online tools to do this, the independent analytics firm Airdna is a top choice because they specialize in Airbnb vacation-rental data. There you'll find metrics on factors such as invest ability, revenue growth, rental demand, and much more. 

 

It's a Hyper Competitive Market 

 

As is the case with the market for primary residences, the vacation home market is red hot and on a steady rise that's seen a jump since the onset of COVID-19. Data from the National Association of Realtors shows that vacation home sales rose by 16.4% in 2020, well outpacing the overall growth of existing-home sales, and the increases continued through the first few months of 2021. According to Redfin, in March 2022, the demand for vacation homes was up about 35% above pre-pandemic levels. And that's a drop-off; Redfin reported a whopping 87% increase in vacation-home demand the month prior. 

 

Starting Your Search
 

As vacation rental markets are most often specialized and local, you'll want to find a local real estate agent at the onset of your search. This local expertise can be especially important if you plan to rent your vacation home, as short-term rentals are illegal in some locations and a range of other local zoning and rental rules may apply.  

 

Choosing the Location 

 

While most people know the old real-estate adage of "location, location, location," many don't know exactly why that's number 1, 2, and 3 on the list of important things to look for in a home. It's rarely the physical structure of a home that appreciates, as nearly all structures depreciate with time, but the land the home sits on that gains the most value. It's not a distinction without a difference; land is a finite resource that's in ever-increasing demand with population growth. And so, land has a significant influence on a home's resale value, often well above any other factor. You'll want to carefully evaluate where that land is and consider these things: 

 

  • Neighborhood. One gauge to see if you're buying in a good neighborhood is to look at how long homes for sale there stay on the market. If they don't last long, that's a good sign that others deem this to be a good place to own a home. Another is schools. Whether you plan to take advantage of local schools or not, you should check if the area is served by good public schools, which often adds value to homes in that location. And even if you're searching for a secluded getaway, you'll still want it to be close enough to some restaurants, shopping, and grocery stores. 

 

  • Lot considerations. If the home has a nice view, that home's lot should have solid appreciation in value. Views of water, or even just being near bodies of water, can add significant value when you decide to sell the home. On the contrary, homes that face anything unsightly, such as major roads, congested commercial areas, or homes that look directly at a neighbor's home, tend to have less resale value. 

 

  • Development. Is the home you're looking to buy in an established neighborhood, or do you see lots of spaces around the home where change could happen? If it's the latter, you'll want to investigate if there are any plans such as housing starts or large construction projects in the works. These changes could have positive impacts on your home's value — such as hospitals or transportation infrastructure — but they could negatively affect both your home's resale value and the time you want to spend enjoying your vacation home. 

 

Green Features are the Future 

 

While location may be the biggest factor in determining a home's value, it's not the only one. According to the National Association of Realtors, almost two out of three homebuyers called green features "somewhat valuable" and about the same number of real estate agents and brokers find value in listings that promote energy efficiency. So energy-efficient windows, insulation, solar panels, and Energy Star-rated appliances are all things to look for in listings. 

 

Financing Your Vacation Home 

 

When heading into a competitive sellers' market, whether it's for a primary or a second home, there may be no more valuable a tool for a homebuyer to have than a mortgage pre-approval. As for financing options, you have lots to choose from. Here are just a few:  

 

  • Self-employed homebuyers may look to Bank Statement Loans for their second homes. Loans for up to $3 million consider bank statements rather than more traditional requirements, such as tax returns.
      
  • People with considerable equity in their primary residence might consider Cash-Out Refinancing to buy a vacation home.
      
  • Conventional mortgage loans that conform to guidelines established by Freddie Mac or Fannie Mae can be great ways for some to buy vacation homes. 

 

No matter where you buy your vacation home or how you'd like to finance it, the loan originators at City Lending are here to help you get your perfect home away from home. 

Whether you're looking to escape to the beach, the mountains, a lakefront retreat, or a vibrant cosmopolitan scene, having a vacation home is one of the best ways to go. Let's delve into some things to think about if you're thinking of buying one. 

 

What exactly is a vacation home?
 

While they may seem identical, vacation homes and second homes are not always the same thing, and they may be classified differently for tax purposes, such as when the time comes to sell the property down the road. While one can rent out a vacation home, vacation homes are different from investment rental properties, in that vacation homes are defined as secondary dwellings that are not the owner's primary residence and are partially for recreational use by the owner. If it's to be considered a vacation home, the owner must use the home for personal purposes more than 14 days a year and stay there at least 10% of the number of days that the home is rented.
 

Platforms such as Airbnb and Vrbo have made it easy to generate income with vacation homes. If that's your plan, you'll want to do some homework and look into the vacation rental market before you buy. While there are several online tools to do this, the independent analytics firm Airdna is a top choice because they specialize in Airbnb vacation-rental data. There you'll find metrics on factors such as invest ability, revenue growth, rental demand, and much more. 

 

It's a Hyper Competitive Market 

 

As is the case with the market for primary residences, the vacation home market is red hot and on a steady rise that's seen a jump since the onset of COVID-19. Data from the National Association of Realtors shows that vacation home sales rose by 16.4% in 2020, well outpacing the overall growth of existing-home sales, and the increases continued through the first few months of 2021. According to Redfin, in March 2022, the demand for vacation homes was up about 35% above pre-pandemic levels. And that's a drop-off; Redfin reported a whopping 87% increase in vacation-home demand the month prior. 

 

Starting Your Search
 

As vacation rental markets are most often specialized and local, you'll want to find a local real estate agent at the onset of your search. This local expertise can be especially important if you plan to rent your vacation home, as short-term rentals are illegal in some locations and a range of other local zoning and rental rules may apply.  

 

Choosing the Location 

 

While most people know the old real-estate adage of "location, location, location," many don't know exactly why that's number 1, 2, and 3 on the list of important things to look for in a home. It's rarely the physical structure of a home that appreciates, as nearly all structures depreciate with time, but the land the home sits on that gains the most value. It's not a distinction without a difference; land is a finite resource that's in ever-increasing demand with population growth. And so, land has a significant influence on a home's resale value, often well above any other factor. You'll want to carefully evaluate where that land is and consider these things: 

 

  • Neighborhood. One gauge to see if you're buying in a good neighborhood is to look at how long homes for sale there stay on the market. If they don't last long, that's a good sign that others deem this to be a good place to own a home. Another is schools. Whether you plan to take advantage of local schools or not, you should check if the area is served by good public schools, which often adds value to homes in that location. And even if you're searching for a secluded getaway, you'll still want it to be close enough to some restaurants, shopping, and grocery stores. 

 

  • Lot considerations. If the home has a nice view, that home's lot should have solid appreciation in value. Views of water, or even just being near bodies of water, can add significant value when you decide to sell the home. On the contrary, homes that face anything unsightly, such as major roads, congested commercial areas, or homes that look directly at a neighbor's home, tend to have less resale value. 

 

  • Development. Is the home you're looking to buy in an established neighborhood, or do you see lots of spaces around the home where change could happen? If it's the latter, you'll want to investigate if there are any plans such as housing starts or large construction projects in the works. These changes could have positive impacts on your home's value — such as hospitals or transportation infrastructure — but they could negatively affect both your home's resale value and the time you want to spend enjoying your vacation home. 

 

Green Features are the Future 

 

While location may be the biggest factor in determining a home's value, it's not the only one. According to the National Association of Realtors, almost two out of three homebuyers called green features "somewhat valuable" and about the same number of real estate agents and brokers find value in listings that promote energy efficiency. So energy-efficient windows, insulation, solar panels, and Energy Star-rated appliances are all things to look for in listings. 

 

Financing Your Vacation Home 

 

When heading into a competitive sellers' market, whether it's for a primary or a second home, there may be no more valuable a tool for a homebuyer to have than a mortgage pre-approval. As for financing options, you have lots to choose from. Here are just a few:  

 

  • Self-employed homebuyers may look to Bank Statement Loans for their second homes. Loans for up to $3 million consider bank statements rather than more traditional requirements, such as tax returns.
      
  • People with considerable equity in their primary residence might consider Cash-Out Refinancing to buy a vacation home.
      
  • Conventional mortgage loans that conform to guidelines established by Freddie Mac or Fannie Mae can be great ways for some to buy vacation homes. 

 

No matter where you buy your vacation home or how you'd like to finance it, the loan originators at City Lending are here to help you get your perfect home away from home. 

The goal of homeownership isn’t always an easy one to achieve. But when you do become a homeowner with a mortgage, you can then use that achievement to realize other objectives. Let’s look at a few ways that refinancing can help you to utilize the equity you have in your home as a tool to reach a variety of financial goals. 

Investing as a Goal 

For a huge number of Americans — almost one in five based on a recent survey — investing is their top financial goal. And this objective is nearly equal across different age demographics, with Generation X, millennials, and Generation Z all showing similar desires to invest more. Baby boomers lag just behind them with about 15% of people in that age group looking to make more investments.  
 

Cash-out refinancing may be one of the best ways you can use the equity you have in your home to help you invest. With this strategy, you would replace the mortgage you currently have with a larger one, and, as the product’s name suggests, take out the difference in cash. You can then use that money to fund a host of different investments. The key here is to invest in something stable that has a rate of return that’s higher than the rate you are paying on the funds you took out through refinancing.  

Stocks can be one way to do this. While subject to market forces and not 100% guaranteed to be profitable, historically, the stock market offers an average return of 10%. As a hypothetical, if one is paying 5% interest on the cash they use to invest, and that investment is returning at 10%, they’re making a steady profit. Granted, the rate of inflation will reduce those profits, and stock values fluctuate, so the stock market is a long-term strategy best managed with the help of financial professionals who know what they are doing.  

And you might consider that the money you may gain isn’t limited to what the investment earns; given today’s attractive interest rates, you could very well get a better rate on your current mortgage through refinancing and lower your monthly payments. 

Refinancing and Real Estate Investing 

One of the most direct ways to employ cash-out refinancing to invest in real estate is to use the money you get to put a down payment on an investment property. This could be a considerable amount, as cash-out refinancing allows for borrowers to get up to 80% of the equity they have in their homes — with low credit score requirements, as low as 640. Some borrowers could very well have enough equity in their homes to buy an investment property outright with cash.  

Also, keep in mind that refinancing works for the second property as well if, like many, you use a mortgage loan to buy an investment property. Just as you can with your primary residence, you can use refinancing to change the mortgage terms on an investment property. One might wish to refinance from a mortgage with an adjustable rate to a fixed one. Or shorten the term of a loan to own a property sooner, paying higher monthly payments but accruing less overall interest. You might also use cash-out refinancing with the mortgage you have for an investment property to pay for maintenance and repairs on that property. 

Paying Down Debt 

Recent data shows that paying down debt is the number-one financial goal of people in the United States, as about 20% of Americans are looking to reduce what they owe. You may be able to simply achieve this goal by using the money you save in monthly payments by refinancing at a lower rate and putting that difference toward debt each month. Though one can also use cash-out refinancing to pay off debt by consolidating high-interest debt with a lower-interest loan. Credit card debt, for example, tends to have a higher interest rate than mortgage rates. 

Home Improvement as a Financial Strategy 

Repairing or upgrading your home isn’t just a goal that could improve your living situation in the short term — it’s also a long-term financial goal. Several home improvements offer significant returns on investments by increasing property values. While not all home upgrades pay off, many do. These often include kitchen updates, replacement entry doors, energy-efficient windows, wood decks, and new garage doors. In terms of cost versus value, Remodeling magazine found that adding stone veneer to a home’s exterior recoups 95.6% of its cost when a property sells. These improvements, paid for through refinancing, could earn you money in the long run. 
 

To utilize refinancing to pay for some or all of these upgrades, you can look to an FHA 203k Rehabilitation Loan. Backed by the Federal Housing Authority, these versatile loans can be used for basic upgrades such as a revamped kitchen or a bathroom makeover, or extensive projects such as additions or even tearing structures down to their foundations to rebuild. It’s a simple deal: you just roll the renovation costs into your current monthly mortgage payment. All with credit-score requirements as low as 580, no tax returns are needed, and you don’t have to currently hold an FHA mortgage to take advantage of FHA refinancing. 

More Money for Retirement 
 

One way to use refinancing with retirement goals in mind is to shorten the term of your mortgage so that you pay off a home sooner and retire with less debt. Entering retirement with a home paid off offers peace of mind that goes beyond pure financial stability. But others use a different strategy: using cash-out refinancing to invest in their retirement savings by contributing to a 401(k) or an IRA. This might make sense if the return on the investment is higher than the interest rate on the home loan.  

Are you ready to take proactive steps to secure your financial future? If so, City Lending is waiting with a range of loan products designed to help you achieve your financial goals. Contact us today. 

While others are out searching for Easter eggs, will you be on the hunt for a new home? The two hunts aren’t all that unalike, taking you into unfamiliar terrain where what you seek feels hidden from sight. So, let’s look at a few ways to make your Easter time home search easier. 

Things You Should Do While House Hunting 

Things You Shouldn’t Do While House Hunting 

 And no matter where your hunt takes you, from loan pre-approval to closing, City Lending is ready with a big basketful of mortgage options guaranteed to meet your lending needs. 

If you are a real estate agent who is helping homebuyers navigate today’s fast-moving housing market, you could probably use a trusted and reliable lender on your side. And City Lending could be the right preferred lender for you, for a whole host of reasons. Let’s delve into a few of these reasons and look at how they can help you sell more homes. 

The Importance of Pre-Approval 

As you surely know, we’re in a seller’s market — and a red-hot one at that. Most homes for sale get multiple offers these days and bidding wars are all too common. You’ve been in a few yourself and faced off against a selling agent who has ignited a bidding war. So, you understand the importance of a buyer having a pre-approved mortgage in getting a home deal done. We do too. That’s why we’re dedicated to providing a swift and smooth pre-approval process to make home-buying easier for both you and your clients. 

Loan Products for Every Homebuyer 

As homebuyers are as unique as the homes they seek, we have a wide-ranging selection of loan products to meet a variety of needs. Here are a few you can suggest to your clients. 

FHA Loans. These can be perfect for first-time buyers or for those borrowers who might not qualify for conventional loans. Less money down is a big plus with an FHA loan, often requiring as little as a 3.5% down payment for borrowers with credit scores of 640 and higher. All your client needs to do is to show two years of W-2s and pay stubs going back 20 days. And City Lending doesn’t add overlays; we underwrite using FHA guidelines. 
 

ITIN Loans. Chances are you’ve come across a potential client with worries that their immigration status will prevent them from getting a mortgage. But that’s not necessarily the case. Not if they choose an Individual Tax Identification Number (ITIN) Loan Product. Foreign-born people who lack social security numbers may still quality for home financing if they are legally allowed to work in the U.S. Two years of tax returns and two months of bank statements is all it takes to get the approval process started. 

 
Bank Statement Loans. Your roster of clients almost surely includes some people who work for themselves, from small business owners to workers who are a part of the ever-growing gig economy. So, you know the difficulty they can face trying to meet the financial documentation requirements of conventional mortgages. Enter Bank Statement Loans, which use a potential borrower’s bank deposits in determining their eligibility for a loan. With lenient requirements — people with credit scores as low as 620 and debt-to-income ratios as high as 50% can qualify. 

VA Loans. If you’re showing listings to veterans or active members of the armed services, they’re likely to be interested in VA loans. These government-backed products have some serious selling points: the possibility of putting no money down, no need for mortgage insurance, eligibility for those with credit scores as low as 600, and more. All with a reasonable interest rate and possible for amounts up to 1 million dollars. 

FHA 203k. Whether you have a client who is looking for a fixer-upper or one who just wants to make their new dream home a little dreamier, the FHA 203k Rehabilitation Loan Product might be right. This loan, insured by the Federal Housing Administration, allows homebuyers to finance their renovations — perfect for first-time homebuyers who may go the more economical route of buying a home that needs some work. 

Rely on the Support of City Lending 

You might not have heard of City Lending in 2014 when we were getting started with a small, but dedicated team. We’ve since grown to have over 200 employees, a success story that’s founded on our dedication to our clients, our investor relationships, and the ever-growing City Lending in-house team. Should you choose to work with us, you’ll be able to take advantage of our considerable resources.  
 

With a dedicated staff of loan processors and assistants, our loan originators are never bogged down with paperwork, leaving those important but often cumbersome details to a team of pros. Who do it quickly. Our compliance team reviews content for turnarounds in 48 hours or less. For you, that means you can count on some of the fastest loan processing times in the lending business. We move so swiftly because we don’t outsource our work, handling everything from processing and underwriting to managing an appraisal roster in-house.  

There may be no real estate agent on earth who hasn’t fielded calls from impatient homebuyers, fretting while they wait for the underwriting process to complete. While we can’t make underwriting time go away, we do have the high-tech tools to make it as expedient as possible. These include Optimal Blue, LoanBeam software, the ability to track the mortgage process with SimpleNexus, and access to fast financial verification through Birchwood services.  

Fast Closings and Communication 

What does all this tech and support staff mean for you? Fast closings, for one. We don’t want financing to linger in limbo any more than you or your clients do. So, we’ve assembled a team of highly skilled professionals and created an unrivaled system to streamline the process. As you probably know, there are lots of things that can spoil a real estate deal. We strive to make sure that financing isn’t one of them.  

As with most relationships, communication is fundamental to maintaining a good lender-agent relationship. It’s why we put considerable attention and resources toward promptly answering every call, email, and text from agents. We know that in today’s market, homes sell fast. You need answers fast, to sell that current home and to move on to selling the next one. 

Are you ready to consider selecting City Lending as your lender of choice? If so, we’d love to have a chat. Contact us today.