American Mortgage Blog

A new survey from Zillow shows that rental markets around the U.S. continue to grow. Citing declining home values, Zillow reported that 70% of markets nationwide saw an increase in rents during January.

One of the most common questions a loan officer is asked is, “How long will my loan take to do?” Of course, when hardly any documentation was required, loans took much less time. But now, with increased underwriting, documentation, and so forth, it is taking longer. And in some instances, much longer. Refinance applications and appraisal complications are holding up home sale closings, according to a recent survey. According to the report, the normal timeline for a closing is about 30 days. However, the survey found the timeline to be between 45 and 60 days.

Lenders often remind their clients that there are several ways to build equity in their homes. We thought it would be a good opportunity to do the same with our readers.

One way is through rising home prices: owners gain equity simply because their homes will be worth more. Another way is through a falling mortgage balance – as you pay off your mortgage each month through amortization, you pay a portion of interest and a portion of principal (assuming it’s not an interest-only home loan). Every time you make your mortgage payment you’ll gain some home equity.

Loan officers see that, and survey show, renters often aspire to be homeowners, but there are about five main issues holding them back. Loan originators hear these often, and can help potential borrowers analyze their particular situation to see if ownership makes sense.

Born between 1979 and 2000, “Millennials” also known as “Echo Boomers” or “Generation Y,” are key to today’s purchase market. Based on 2010 U.S. Census data, there’s approximately six million more Millennials in the prime “First Time Homebuyer” age group (ages 20 – 31) than there were Baby Boomers in the same age group in 1977! Because of the sheer size of this entire group – about 89 million total – Millennials represent an enormous first time homebuyer opportunity both today and into the future. So it’s important for any loan agents, builders, Realtors, and potential borrowers, to know a little more about them. After all, agents will want to lend to them, and other borrowers may be competing with them to buy homes.