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Episode 2: Everything You Need To Know Before Buying a Home This Year

Listen to Episode 2:

In this episode of ‘On the House,’ we explore the top questions about the process of homeownership and practical steps to help get you there!

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Everything You Need To Know Before Buying a Home This Year | On The House Podcast

 

Host: Jason Haeger – Host of On The House Podcast
Guest: Dianne Glenn – Branch Manager NMLS #295232

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Want to see if homeownership is right for you?

Reach out to your local Benchmark branch to learn more. https://benchmark.us/

Legal Disclaimer:

The information provided in this presentation is for general informational purposes only. The content shared here is not intended to be financial, legal, or professional advice specific to your situation. Mortgage regulations and requirements may vary, and the information discussed may not be applicable to your individual circumstances. Therefore, we recommend consulting with a qualified professional or contacting Ark-La-Tex Financial Services, LLC – NMLS #2143 directly for personalized advice tailored to your needs. Any reliance you place on information from this presentation is at your own risk.

By listening to this presentation, you acknowledge and agree that Ark-La-Tex Financial Services, LLC – NMLS #2143, its hosts, and guests are not responsible for any losses, damages, or liabilities that may arise from your reliance information presented here.

Ark-La-Tex Financial Services, LLC NMLS# 2143 (www.nmlsconsumeraccess.org). All loans subject to borrower qualifying. This is not a commitment to lend. Other restrictions may apply. (https://benchmark.us)

Episode 1: Was It A Mistake Buying a House in 2023?

In this episode of ‘On the House,’ we explore the impact of high-interest rates and challenges faced in 2023, emphasizing the importance of careful consideration before making housing decisions. Additionally, we delve into predictions for 2024, including forecasts for home sales, mortgage rates, and property values from industry experts.

Want to see if homeownership is right for you? Reach out to your local Benchmark branch to learn more. https://benchmark.us/

Legal and Compliance:

The information provided in this presentation is for general informational purposes only. The content shared here is not intended to be financial, legal, or professional advice specific to your situation. Mortgage regulations and requirements may vary, and the information discussed may not be applicable to your individual circumstances. Therefore, we recommend consulting with a qualified professional or contacting Ark-La-Tex Financial Services, LLC – NMLS #2143 directly for personalized advice tailored to your needs. Any reliance you place on information from this presentation is at your own risk.

By listening to this presentation, you acknowledge and agree that Ark-La-Tex Financial Services, LLC – NMLS #2143, its hosts, and guests are not responsible for any losses, damages, or liabilities that may arise from your reliance information presented here.

Ark-La-Tex Financial Services, LLC NMLS# 2143 (www.nmlsconsumeraccess.org). All loans subject to borrower qualifying. This is not a commitment to lend. Other restrictions may apply. (https://benchmark.us)

Benchmark Achieves Accreditation as a Social Impact Lender

Benchmark, a leading mortgage lender since 1999, is proud to announce its accreditation as an Accredited Social Impact Lender (ASIL) by the National Association of Minority Mortgage Bankers of America (NAMMBA).

This accreditation is a testament to Benchmark’s commitment to providing quality mortgage services to all of its clients. Benchmark’s mission is to make homeownership accessible to everyone, and this accreditation is a major milestone in achieving that goal.

“We are thrilled to be recognized by NAMMBA as a Social Impact Lender,” said Benchmark CEO, Brian McKinney. “At Benchmark, we strive to provide our clients with the best possible service and this accreditation is proof of our commitment to our mission.”

NAMMBA is a national organization dedicated to promoting diversity and inclusion in the mortgage industry. The ASIL accreditation is a rigorous process that requires lenders to demonstrate their commitment to social impact lending.

“We are proud to have Benchmark join our ranks of ASIL lenders,” said NAMMBA President, Tony Thompson. “Benchmark’s commitment to providing quality services to all of its clients is a testament to their dedication to their mission.”

Benchmark is committed to providing its clients with the best possible service and this accreditation is a major milestone in achieving that goal. With this accreditation, Benchmark is now better equipped to serve its clients and help them achieve their goals of homeownership.

For more information about Benchmark and its services, please visit benchmark.us.

Benchmark Delivers A Christmas Homecoming Miracle

Benchmark could just be another mortgage lender, but we’re not. Sure, every company has their ‘core values’, but there is something tangible and special about ours.

Our core values didn’t exist until after they were identified in the soul of the company years after it was established. These values not only inform how we do things, they defined what was already at work. They support an existing culture, rather than being the rules for mandating it. First and foremost, Benchmark is about relationships.

We recognize, and experience, the reality that it is people just like you who make what we do worthwhile. It’s not about money, fame, or pride; in the end, it’s about having the privilege to serve so many people in financing their dreams, while care for their future.

There are many client stories that remind us why we do what we do, and validate our mission. Stories like this one from our branch in Imperial, CA.

Good evening team, I wanted to thank you again for an incredible job getting the Rosales home for Christmas. They were homeless for 6 months, and living in a friend’s room with 2 kids.

We knew we could close for New Year’s but for Christmas we needed a miracle, and today when I give them the news that the house was recorded under their name, the first thing they told me was,

“Please thank everyone on your team because we knew we needed a Miracle and that Miracle is Benchmark. For the last 3 days every time I give Mom an update she will cry and I kept telling her don’t cry because you will make me cry.”

I was lucky to be present when they got the keys, and seeing her kids choosing their rooms and wanting to move all their furniture from storage tomorrow was the greatest gift I could have received as a Loan Officer. 

My client knows I’m the face of Benchmark, but without any of you this will never be possible. 
Valentina Estes, NMLS# 810063
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At Benchmark, we are committed to listening to your goals and setting you up for future success. To learn more, Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service.

 

Benchmark brings you home.

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Is a HELOC a good financial choice?

 A Home Equity Line of Credit (HELOC) is an easy way to borrow money using your home’s value as collateral. Let’s look into how a HELOC works and whether this option is right for you.

  • A home equity line of credit (HELOC) works much like a credit card. With money drawn from a HELOC, you can pay for things like home remodeling/repair fees, credit card debts, or even save it for rainy day funds.
  • A HELOC’s interest rates can be significantly lower than a credit cards

How Much Can You Borrow with a HELOC?

The first step in deciding if a HELOC is right for you is knowing whether you have enough home equity to qualify. This will also determine the amount of the credit line that you’re eligible for. 

Your home equity is the difference between your home’s appraised value and your mortgage balance (assuming you have an existing mortgage). 

Example: HELOC for a home worth $500,000

if your home is worth $500,000 and you have 50% equity, you may be able to borrow as much as $150,000 in a Home Equity Line of Credit (HELOC).

Let’s break that down.

  1. If your home is worth $500,000 and you owe $250,000, your equity is 50%.

    $500,000 – $250,000 = $250,000

    • If your home is worth $500,000 and you don’t have a mortgage, your equity is 100% ($500,000 – 0 = $500,000).

  2. To estimate your possible HELOC credit limit, calculate your combined loan-to-value ratio (CLTV ratio, or your line of credit relative to your home equity). Most HELOC lenders allow a CLTV of at least 80% on your main home, sometimes higher.

    To estimate, multiply your home’s appraisal value by 0.8. This is approximately how much money lenders may let you borrow against your home. With a home value of $500,000, it comes to $400,000.

    $500,000 x 0.80 = $400,000

  3. Then, subtract the amount you still owe on your existing home loan. For our example, let’s estimate that to be $250,000.

    $400,000 – $250,000 = $150,000 credit limit for our example HELOC.

So, How Does a HELOC Work?

A HELOC is a revolving line of credit with a variable interest rate, like a credit card. It also has a fixed term and a defined repayment period, like a mortgage.

A credit card’s credit limit is based on your household income and credit score. You can spend as much, up to the credit limit, or as little as you want in each billing cycle. When you get your statement, you have to make at least the minimum monthly payment, but you can choose to repay the entire statement balance if you don’t want to accrue interest. When your payment is processed, your available credit increases by the amount of your payment that went toward the balance. If a portion of your payment is going to interest, this portion will not contribute to your available credit.

A HELOC is similar, but your credit limit is also based on how much equity you have in your home. Additionally, a HELOC has two periods:

  1. First, there is a draw period, typically several years, during which you can borrow up to your credit limit and make interest-only payments.

  2. Then, there is a repayment period, generally several more years, when you can no longer borrow money but must repay your outstanding balance with interest.

What are the steps to get a HELOC?

  1. Apply with a Benchmark online, in person, or over the phone.

  2. You will be asked to submit supporting documents including photo ID, paystubs, tax returns, proof of assets, bank statements, current mortgage details, and other financial information

  3. If approved, Benchmark will issue an initial, conditional approval

  4. Benchmark will order and schedule an appraisal of your home.

  5. Our underwriters will check your application and make sure everything’s in order

  6. Your final approval will be sent by your underwriter

  7. Close the loan and receive funding. Since a HELOC is not a lump sum loan, you’ll receive a special account or card allowing you to access your HELOC as needed

What else should you know to decide if a HELOC might be a good choice for you?

We recognize that not every loan product is right for everyone. There are a few more things you should know about HELOCs.

  • Like most credit, the better your credit score and credit history, the higher the chances are that you will be approved. 

  • A HELOC is a very low cost way to borrow money, and can be an attractive option if you do not have a substantial amount in savings, and are in need due to a crisis or economic downturn. 

  • You can use a HELOC to pay for almost anything, and funds are easily accessible once open. 

  • If you feel burdened with credit card debt, and you’re looking for a way to save on interest, a HELOC could be a great tool. 

Curious to learn more?

At Benchmark, we are committed to listening to your goals and setting you up for future success. To learn more, Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service.

 

Benchmark brings you home.

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VA Loan: National Guard VA Loan qualifications 2022 update

Featured photo credit: https://www.nationalguard.com/careers/ground-forces

Photo credit: https://www.nationalguard.com/careers/ground-forces

The VA loan is one of the most powerful home buying tools available to those who qualify. A few benefits of the VA home loan are an option for ZERO down payment, no Private Mortgage Insurance, and lenient credit qualifications.

There are specific criteria to qualify for the VA home loan, one of which is the Minimum Service Requirement. This is essentially a baseline for service qualifications.

The Minimum Service Requirements for The Army, Navy, Air Force, & The Marine Corps:

  • Served 90 consecutive days of active service during wartime.
  • Served 181 days of active service during peacetime.

Recently, the VA has revised their qualifications for those who serve and have served in the National Guard, which has opened the VA loan to thousands of National Guard members.

National Guard updated VA Loan qualifications are as follows:

  • If you’ve served for at least 90 days (minimum 30 consecutive days) of active duty under Title 32 orders, you meet the minimum service requirement.

Over recent years, thousands of National Guard members were activated under Title 32 Orders, meaning many of them are eligible for a VA Home Loan.

Have you served or are currently serving in the National Guard? Reach out to one of our branches today to learn about the VA home loan and find out if you are eligible today!

Get Your COE!


    At Benchmark, we are dedicated to serving veteran clients and providing them with a world class home buying experience. We have changed the way VA lending is done. That is why Benchmark never quits.

    Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service for your new loan.

     

    Benchmark brings you home.

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    Prepare Your Home for Fall

    The resurgence of everything pumpkin spice means that fall is upon us once again. You are probably as excited to pull out that box of fall décor as we are. If you live in a building (a house, duplex, apartment, condo, etc..) then there are some other important tasks that should be added to your to-do list to make sure your home is well prepared for the change of season.

    • Have your furnace inspected

    Don’t get left in the cold. Fall brings cooler temperatures, shorter days, and earlier sunsets. Ensure that your home stays nice and cozy by having your furnace inspected. Contact your preferred local HVAC company to get your furnace checked out and maintenance, if needed.

    • Clean your gutters

    Gutters safely carry water from your roof away from your home’s foundation. Blocked gutters can prevent this water from flowing, causing damage to your home, so it is important to clear out any debris that has built up. You can hire someone to do this, or you can do it yourself. Consider getting gutter guards so that water will flow smoothly without your gutters getting clogged with leaves or other debris.

    • Properly insulate your home

    Combat the drop in temperature by making sure your home is properly insulated. The most effective way to keep your home warm is to invest in extra insulation, and there are many different options that vary based on your type of home and specific layout. This can be pricey, but will save money on energy bills in the long run. You can also reduce heat loss by covering windows with blinds and curtains.

    • Check outdoor faucets

    Make sure all outdoor faucets are turned off. It might be worth doing now, before winter, to avoid water freezing and bursting pipes. Don’t forget to use insulated covers for exterior water spigots.

    • Bring in outdoor items

    Depending on the weather, it may be best to pack up outdoor furniture and other patio items that could get damaged. If you have a pool, it might be time to cover it so that it stays clean until next summer.

    Following these tips can help you avoid common problems in the fall and winter. By making sure that your home is well prepared, you can relax and enjoy all that this season has to offer.

    Is waiting for lower interest rates a mistake?

    With mortgage interest rates at a level not seen for over a decade (see chart below), the question of whether to wait for interest rates to fall is creeping in. This is not unreasonable, however, it does beg the question.

    Are rates actually high?

    If you take a look at the chart below, you can get a pretty good idea. At first glance, you may be tempted to think, “With rates THIS high, they’re bound to come back down before too long.” You may think this looks like an economic blip; that things will calm down back to normal soon.

    10 Year chart of mortgage interest rates

    But a longer view may give you a different perspective.

    Looking over the past ten years means we are looking back on a housing market recovering from the 2008 crash (the conditions of which do not exist today). This is a short-term view; A view that includes a lot of market manipulation intended to encourage buying through various means, including keeping interest rates low.

    To see more clearly, we need to take a look at a much longer time frame.

    25 year chart of interest rates

    The longer view gives a sobering realization. Current rates do not appear to be high at all, in the long term. The reality is that the lower rates we’ve been experiencing are a strange occurrence, fueled by quantitative easing. The rising rates we see now are the result of a slight reversal of this practice. To better understand what this really means, take a look at the chart of the Federal Reserve’s Balance Sheet over the last 10 years below.

    10 year chart of Federal Reserve balance sheet

    The Federal Reserve was buying investment securities (including mortgage debt securities) to help prop up the economy, and to bring mortgage interest rates down. The fact that the strategy worked is a clear sign that its reversal means that rates have, and will probably continue to drift back up to natural market levels. As we have discussed before, a rising interest rate means a rising cost of homeownership.

    However, it’s clear that interest rates are not the only thing going up.

    Inflation is a value killer

    Inflation is on everyone’s minds as of writing. The Consumer Price Index shows a fairly sharp climb since the COVID-19 pandemic began, and the Federal Reserve’s increase in interest rates (not the same as mortgage interest rates) was intended to alleviate inflation. Oh, you want a chart to show inflation? See below.

    5 Year chart of Consumer Price Index

    The rising prices means that your money is worth less. Everything costs more than it did, which can eat into what you can afford for a monthly mortgage payment. It may seem like a good idea to wait: for your money to be worth more, for the economy to stabilize, and for mortgage interest rates to return to their senses.

    As discussed previously, however, there is no solid basis for anticipating mortgage rates to come down any time soon, if at all. If this is true, though, does it even make sense to buy a home? Is real estate really the right place to put your money if the cost of living goes up?

    Rising prices mean cash held in hand is losing value, while investments that rise with it are, at the very least, holding value.

    “Real estate is one of the time-honored inflation hedges. It’s a tangible asset, and those tend to hold their value when inflation reigns, unlike paper assets. More specifically, as prices rise, so do property values.”

    Mark Cussen, Financial writer at Investopedia

    Higher cost (rates) means less competition

    We have seen a cooling of demand in the housing market since rates have started rising. The sellers’ market has become more equitable, favoring buyers in many locations. There have been fewer multiple-offer scenarios, and even when there are multiple-offers, there have been fewer offers to compete with.

    If you live in a competitive market, Benchmark can give you an edge. If you don’t live in a competitive market, this could be your opportunity to get your offer accepted on the best possible terms. Again, this is what we do best. Contact us get more information about how you can win with Benchmark.

    Housing prices tend to climb

    The financial world is full of commonly repeated advice. Invest early and invest often. The best time to plant a tree is 20 years ago; the second best time is today. Add this one to the list: Buy now to buy more.

    Even if we find ourselves in a recession, as some predict, this does not guarantee falling home prices. The exception being the notorious 2008 recession due to the collapse of real estate debt-based investment schemes, the conditions of which do not exist, and have not existed since.

    Buying a home is not just about building family wealth. Owning your own home comes with other benefits. Owners Enjoy More Privacy and Security, for example.

    Will interest rates come down?

    There is no indication that they will come down any time soon. Even if you do suspect that rates will be reduced in the future, you should weigh the cost of waiting. Of course, you may be able to refinance at a lower rate in the future, while taking advantage of current home prices now.

    Either way, your rent payment will become at least a partial investment into a physical asset you own. The principal portion of a mortgage payment directly reduces the amount you owe on your home. When you pay rent, the only equity you are building is your landlord’s.

    Not to mention, rent also rises.

    10 Year Rent Inflation Chart

    The chart above is not plotting rent prices. The chart is plotting rent price inflation. See the dip caused by the COVID-19 pandemic starting early 2020? This isn’t really a dip; it’s just a reduction in the annual inflation rate of rent prices. Inflation never reversed within the last decade.

    How do you escape the squeeze?

    It would do no good to lie to you and tell you that there is an easy way out of the rising cost of housing. We have published a short list on How to Get Ahead When You Can’t Get the House You Want, but the wisest words I’ve ever read on housing were these: “Welcome to California. Buy a house immediately.” This is less about California, and more about how to live with rising housing prices. This was advice given to someone who moved there for a job in the tech industry. The advice holds true now: the sooner you buy, the better your chances of being able to buy.

    Related: Top 5 Myths About Home Buying in 2020

    If you think you might want to become a homeowner, I encourage you to contact us. Even if you think you cannot afford a home yet, or if you don’t know what you need to do to get started, we specialize in helping people just like you achieve the American dream of homeownership. Benchmark has been helping people get into their own home since 1999, and we’ve learned a few things along the way.

    Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service for your new loan.

     

    Benchmark brings you home.

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    How To Make Your Interest Rate Hold For Longer

    Searching for a home? That’s great! It’s a good time to buy! We know that it can be stressful, as interest rates could go up during your search. What if it didn’t have to be that way? What if you could be certain that your interest rate wouldn’t change while you searched for your next home? With Benchmark’s Lock and Shop program, you don’t have to worry about rising interest rates. Lock and Shop by Benchmark allows you to lock in your interest rate while shopping for your home!

    Get More Time To Shop

    75 days. The Lock and Shop program will lock your rate for 75 days, giving you more time to search for your home. Enter the market with a pre-approval and a locked rate from Benchmark to give you the confidence to succeed in a competitive market.

    In a highly competitive market, making several attempts to land a deal is the challenging reality. The more prepared you are, the higher chance you have of your offer winning acceptance. Our branches provide many helpful tools to our clients, so you can be prepared when it’s time to make an offer.

    Three steps for how Lock and Shop can help you succeed

    Step 1: Get Pre-approved.

    Step 2: Lock your rate with our Lock & Shop program.

    Step 3: Identify a few different properties you are interested in, and make an offer. If your offer doesn’t win, move to the next. Do this for 75 days from date your rate was locked.

    Just imagine how it could help you.

    Tom’s family is moving to a new state due to his job. They are unfamiliar with the area, and have a lot to consider. Buying a home is a big decision, and they don’t want to rush the process and end up regretting their choice. Wisely, they contacted Benchmark and spoke about their concerns of rising interest rates. Understanding their challenges, their loan officer recommended the Lock and Shop program to them. Relieved to be able to lock in their interest rate, Tom and his family searched for their perfect home with confidence.

    Get in touch today to learn more about the Lock and Shop program from Benchmark!

    Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service for your new loan.

     

    Benchmark brings you home.

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    Sellers: How To Incentivize Home Buyers Inexpensively

    Has your home been on the market long? Do you feel like selling your home is an insurmountable task? Selling your home can feel hopeless the longer your property sits awaiting a buyer. As sellers struggle to attract buyers, they are confronted with ideas like price slashes or full remodels to sell to their homes. These ideas would inevitably cost thousands, reducing the gain from the listing price, and leave a seller wondering if there is a better way. Perhaps what you’ve been waiting for is a 2-1 Buydown.

    It’s Hard to Sell in the Current Market

    Since the beginning of 2022, sellers may have noticed a decline in property purchases.

    In fact, the National Association of Realtors says that

     “existing-home sales declined for the fifth straight month to a seasonally adjusted annual rate of 5.12 million. Sales were down 5.4% from May and 14.2% from one year ago.”

    https://www.nar.realtor/newsroom/existing-home-sales-slid-5-4-in-june

    The national inventory of unsold homes is on the rise, almost parallel to the rise in interest rates from 2021 to 2022. The housing market interest rates have seen a steady increase from the average 2.96% in 2021 to 4.61% at the end of Q3 in 2022. Current buyers have now watched interest rates cross 5%, with no projections for drastic decreases any time soon.1

    1https://themortgagereports.com/61853/30-year-mortgage-rates-chart

    With increasing buyer fearfulness, how can you, a seller, stand out and encourage buyers to choose your home as their first option? Offer a 2-1 Buydown agreement.

    What is a 2-1 Buydown?

    The 2-1 Buydown: The seller contributes an upfront fee, which lowers the buyers effective interest rate by up to two percentage points for the first two years of their loan.

    This lowers initial monthly payments, giving the buyer more funds to turn their new house into a dream home, or to use in any other financial goals, and gives them time to plan for the higher interest payment after the first, and then second year.

    You, the seller, will have provided a unique experience by enabling the buyer to build equity as they ease into their new home.

    2-1 Buydown Inspiration Story

    The following story is fictional, loosely based on a real sale, and is used to explain how a 2-1 Buydown could help a seller incentivize a buyer.

    A seller named Benjamin Smith, like you, dreaded each passing day as his property listing had no potential buyers.

    After weeks of constant turmoil, he turned to his friend, a loan officer at Benchmark. After a lengthy conversation about market prices and interest rates and the awful feeling from not being able to sell his home, they discussed the idea of a 2-1 Buydown. The following week, Ben’s Realtor mentioned that a buyer had interest in the home, but wasn’t fully convinced yet.

    Ben asked his agent to express that he would be willing to do a 2-1 Buydown. The buyer was very happy with the idea of two years of lower payments, and planned to use the resulting savings to remodel the garage into a home gym.

    He had a $250,000 loan with a note rate of 5%. The monthly payments would be $1,342. After Ben’s temporary 2-1 Buydown of $5,232, here’s what the reduction in monthly payments would look like for the first two years. (APR 5.558% at 5.375%)

    YearRateMonthly Payment
    13%$1,054
    24%$1,194
    35% (original rate)$1,342

    That left our homeowner Ben with an extra $288/mo for the first year, and an extra $148/mo the second year before the original interest rate begins in the 3rd year. That’s a total of $3,456 saved in the first year, and $1,776 saved in the second year, for a combined savings of $5,232 (the 2-1 Buydown amount) for the first two years of homeownership. This also gave Ben the opportunity to buy now, and time prepare for higher payments later, rather than waiting to buy (which has its own costs).

    Sell faster with a 2-1 Buydown from Benchmark

    Ready to learn more? Get the sellers’ edge, and help your buyers start building family wealth with a 2-1 Buydown agreement with Benchmark.

    Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service for your new loan.

     

    Benchmark brings you home.

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