Mortgage Mom Radio airs weekly focusing on topics that will educate our listeners around mortgage lending. This week Debbie and Heidi discuss the new Experian Boost feature and explain everything you need to know if you are about to apply or are in the middle of applying for a mortgage.
In This Issue
“It is not in the stars to hold our destiny, but in ourselves.” – William Shakespeare
- Sell in May and Go Away – When stocks go down, so do rates.
- 2021 Housing Market Predictions – After dealing with a year of uncertainty in 2020, the housing market looks to hit it big in 2021.
- Turn an Old Dresser Into a Unique Sink – This simple DIY project can turn an antique into a stunning sink for your bathroom.
- Q&A: Can You Qualify for a Mortgage Without Credit? – Is it possible to obtain a mortgage, even if you don’t have any credit to your name? Knowing what options you have can help you purchase a home.
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What To Watch
Sell in May and Go Away – Explained
Each spring, the same phrase pops up for stock investors: “Sell in May and go away.” It’s important to track, as generally stocks go down, and so do rates.
That question is whether or not stock market investors will see “Sell in May and go away” this season. Yahoo Finance tells us that the full axiom was originally, “Sell in May and go away, and come on back on St. Leger’s Day.” It has its roots in the city of London. Financial professionals would go on holiday in May for approximately four months to escape the summer heat and return for the St. Leger derby in mid-September. Traders and bankers in the U.S. appropriated the aphorism over the years and condensed it to its current form.
The current form is based on the historical tendency for the stock market to produce its best gains between Halloween and May Day (the so-called “winter” months) and to produce well-below-average returns the other six months of the year (the “summer” months).
We did not see “Sell in May” last year, as the stock markets were on a big surge higher after the huge losses seen in March due to the shutdowns. But with stocks at record high levels and high market volatility, there is a possibility of a move lower in stock prices after earnings season winds down at the end of the month. Despite never-ending stimulus, which stocks love, they cannot go straight up, and corrections big and small are always healthy and expected.
If this were to occur, it could shift some investing dollars from stocks into bonds, which would help to further stabilize or cap the recent rise in mortgage rates that was seen from mid-January until the end of March.
If “Sell in May” does not take place this year, do not get too worried. The Federal Reserve continues to try and hold rates at historically low levels and will do so until we see full employment and ideal inflation. Can mortgage rates increase marginally if the economy continues to grow? Yes, that would be normal in an an expanding economy. If the economy is strong, and if the job market continues to rebound, modestly higher rates should not be a deterrent to homeownership.
Bottom line: Rates are still historically low, and now is still a great time to either refinance or consider purchasing a home.
Source: Mortgage Market Guide
2021 Housing Market Predictions
The housing market is tricky to predict, especially since 2020 was a year full of unpredictability. Although no one can forecast what will happen with entire certainty, housing trends can give you an idea about what to expect when it comes to buying or selling a home.
It should come as no surprise that 2020 saw huge fluctuations in the housing market as the country was hit with massive amounts of unemployment and extensive shelter-in-place orders. However, the housing market saw an uptick in pending home sales and rebounded much faster than other sectors of the economy. In fact, 2020 was a record-breaking year for the market with 5.64 million homes sold, the most since the Great Depression.
For 2021, experts predict that the housing market will continue to thrive, thanks to several key features:
- Record-low mortgage rates: Homebuyers are taking advantage of lower mortgage rates and purchasing homes.
- Work-from-home trend continues: With more people working from home, the home’s value increases. Homeowners realize they either invest more money in it or decide to move and maximize their new work arrangement.
- Short listing times: Before the start of 2021, existing homes were usually on the market for just 21 days. That’s two weeks shorter than a year ago. This is great news if you’re a seller.
While 2021 looks to be competitive for buyers, resulting in quick-selling homes and higher prices, sellers should feel pretty good about the housing market. Reach out to your real estate expert if you’re ready to make the jump in 2021.
Sources: Financialsamurai.com, Daveramsey.com, Noradarealestate.com
Turn an Old Dresser Into a Unique Sink
Have you ever gotten the urge to turn an old piece of furniture into something fabulous but were scared about tackling the project? Don’t let your fears get in the way of creating a unique sink out of an old dresser. Not only will the outcome look stunning, but you can save the money you would spend on a brand-new piece.
- Select a dresser that fits the space and make sure it’s sturdy. It’s best to use one that’s made out of solid wood to support the weight of the sink and faucet.
- Purchase a drop-in sink and place it upside down in the center of the dresser’s top. Trace an outline of the sink and draw a line about 1 inch inside the line to mark the cut line.
- Use a jigsaw drill and cut the sink hole out of the dresser.
- Coat the dresser top with water-based polyurethane. You might need to apply four or five coats.
- When the top is dry, apply a bead of clear caulking around the rim of the opening. Set the sink on top and press down lightly.
- Use the jigsaw to cut a square out of the back of the dresser for plumbing.
- Secure the dresser to the wall.
- Attach the faucet and plumbing to the dresser. Make sure to remove the drawers so you can access the area better.
- Cut out indents in the drawers so the plumbing fits.
There’s no better time to get started on a DIY project. Even if you don’t have an old dresser just lying around, a quick stop at an antique store can get you started on this unique project.
Sources: Anoregoncottage.com, HGTV.com, Thisoldhouse.com
Can You Qualify for a Mortgage Without Credit?
QUESTION: How do you qualify for a mortgage with no credit?
ANSWER: It is possible to obtain a mortgage if you have little or no credit, but you might need to look a little harder to find the right mortgage. Also, you might need to provide additional documentation to prove that you have a history of paying bills on time.
It’s important to remember that there’s a difference between having poor credit and having no credit. With poor credit, you’ve had a few bumps and may have a low credit score as a result. Although you might be able to qualify for a mortgage with a low score, you could end up paying a higher interest rate compared to someone with a higher score.
On the other hand, if you have no credit, that means you don’t have a history of dealing with credit accounts. As a result, it’s difficult for creditors to determine your risk since there’s nothing for them to gauge about loaning you money.
There are many options to obtain a mortgage without credit. Some mortgages have more lienint guidelines such as Government backed mortgages (FHA, VA or USDA). Other options include conventional mortgages through Freddie Mac or Fannie Mae. Each lender and loan program has its own requirements, but you usually need to make 12 months of on-time payments to two or three continuing obligations, such as utilities, insurance, and housing.
Just because you don’t have any credit, it doesn’t mean you won’t qualify for a mortgage. If you’re still unsure which way to go when it comes to finding a mortgage, reach out to your loan officer who can guide you.
Sources: Daveramsey.com, Nerdwallet.com
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Debbie Marcoux is licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, NMLS ID 237926, also licensed in AZ-0941504, FL-LO76508, GA-69178, IL-031.0058339, NV-57237, OR, TN-184373, TX, WA-MLO-237926 | Heidi Slagle-Points CA NMLS ID 1666881