mortgage – The Real Estate Beat

Understanding Mortgage Rates: A Simple Guide for First-Time Homebuyers – Shared Article

Mortgage rates play a crucial role in determining how much you’ll pay for your home over time. As a first-time homebuyer, understanding these rates can help you make informed financial decisions and secure the best possible loan terms. Here’s what you need to know.

1. What Are Mortgage Rates?

Mortgage rates are the interest rates lenders charge on home loans. These rates fluctuate based on economic conditions, lender policies, and your financial profile. Even a small change in interest rates can significantly impact your monthly payments and the total cost of your loan.

2. Factors That Influence Mortgage Rates

Several factors affect mortgage rates, including:

Credit Score: Higher scores typically secure lower rates.
Loan Term: Shorter loan terms often have lower rates.
Down Payment: A larger down payment may qualify you for better rates.
Market Conditions: Economic trends, inflation, and Federal Reserve policies impact interest rates.

3. Fixed vs. Adjustable Rates

Fixed-Rate Mortgages: The interest rate remains the same throughout the loan term, offering stability.
Adjustable-Rate Mortgages (ARMs): The interest rate may change periodically based on market conditions, potentially lowering initial costs but increasing future payments.

4. How to Secure the Best Mortgage Rate

To get the lowest possible mortgage rate:

Improve your credit score before applying.
Shop around and compare offers from multiple lenders.
Consider a larger down payment.
Lock in your rate when conditions are favorable.

Understanding mortgage rates empowers you to make smart financial choices and secure an affordable home loan.

I read this article HERE.

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FHA Loan Requirements, Limits, and Updates – Shared Article

Thinking about buying a home but worried about saving for a big down payment or qualifying with less-than-perfect credit? An FHA loan could be your solution. These government-backed loans make homeownership more accessible, especially for first-time buyers.

In fact, FHA loans accounted for 29% of mortgage applications for new homes in December 2024, according to an MBA survey of homebuilders. Here’s how they work, who’s eligible, and the latest updates that could make them even more affordable.

How Do FHA Loans Work?

Unlike conventional loans, FHA loans are insured by the government, which means lenders can typically offer more favorable terms. Borrowers can qualify with a down payment as low as 3.5% of the purchase price, and credit score requirements are generally more lenient than conventional loans. Plus, borrowers can use a gift fund for a down payment, closing costs or reserves needed for approval.

What Are FHA Loan Requirements?

To qualify, you typically need:

✔️ A credit score of at least 580 for a 3.5% down payment
✔️ A manageable debt-to-income ratio.
✔️ Steady income and employment history.
✔️ The home must be your primary residence (not a rental or investment property).
✔️ Occupation of the property within 60 days of closing.
✔️ A property inspection which meets HUD’s minimum property standards.

Good News: FHA Mortgage Insurance Costs May Drop in 2025

Right now, FHA borrowers are required to pay mortgage insurance premiums (MIP), which help protect lenders but also add to monthly payments. However, there’s a growing push to reduce these premiums, making FHA loans more affordable.

Industry groups like the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) are urging the government to cut MIP rates, arguing that even a small reduction could make a big difference for home buyers struggling with high costs.

For example, if MIP rates dropped by just 0.25% (25 basis points), it would directly lower monthly mortgage payments. While this might not seem like much, every dollar counts—especially for first-time and lower-income buyers working within tight budgets.

FHA Loan Limits

For 2025, the maximum FHA loan amount in high-cost areas (like major metropolitan cities) is $1,209,750, according to HUD. In lower-cost areas, the limit is generally $524,225 for a single-unit home.

If you’re curious about loan limits in a specific area, you can look them up on the FHA mortgage limits page. This tool also provides median home price estimates used to determine these limits.

Is an FHA Loan Right for You?

FHA loans are great for those who:

✔️ Need a low down payment option.
✔️ Have less-than-perfect credit.
✔️ Want an easier path to homeownership.

However, these loans do come with mortgage insurance, which adds to your monthly payment. Talking to a Home Loan Specialist can help you decide if an FHA loan is the best fit for you.

I read this article HERE.

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How Real Estate Agents Can Help Home Buyers Understand Financing – Shared Article

I read this article HERE.

Nearly one in three renters admit to delaying a home purchase because of misgivings about the mortgage process. Here’s how you can get them on the right page.

Man looking at computer screen with confusion

Americans are confused about mortgages and many other financial aspects of homeownership, according to a new survey of about 1,000 prospective buyers and homeowners conducted by JW Surety Bonds. Read the whole survey HERE.

One in three renters say their lack of knowledge about homeownership has caused them to delay a home purchase, while homeowners admit to making some costly mistakes in the homebuying process because of a low homeownership IQ.

Real estate professionals must play the role of an educator, helping to clear up their clients’ misunderstanding about a home purchase. “It’s clear that improved education and resources could help foster Americans’ homeownership success,” researchers note in the JW Surety Bonds survey. “As the housing market continues to change, so must our approach to homeownership literacy.”

The Gaps in Homebuying Knowledge

Aside from confusion about mortgages, home buyers also appear to misunderstand the added costs involved when buying a home, such as closing costs and property maintenance. The JW Surety Bonds survey uncovered the following consumer knowledge gaps about homeownership:

Unaware of key real estate terms. One in eight buyers surveyed could not accurately define what a “mortgage” is, and 43% were unsure of the meaning of “mortgage rate,” the survey found. That knowledge gap may be alarming, considering that 74% of buyers financed their home purchase with a mortgage in 2024. You can provide your clients with NAR’s Consumer Guide on mortgages and financing, as well as a customer handout on loan and lending terms to know.
Failing to shop around for a mortgage. Forty-one percent of homeowners say they did not feel confident negotiating mortgage rates or refinancing terms with a lender, the survey found. But the average borrower could save an average of $76,410 over the life of their loan—or $212 a month—just by comparison shopping for a mortgage and negotiating rates, according to a 2024 survey from LendingTree. Also, many buyers say they were unaware of more affordable loan options, such as FHA loans, VA loans (you can share NAR’s Consumer Guide on what veterans need to know about buying a home) and other low down payment programs that could particularly impact first-time home buyers. You can provide your clients with NAR’s Consumer Guide on buying your first home, as well as a customer handout on questions to ask when choosing a lender.
Not budgeting for hidden homeownership expenses. More than a quarter of homeowners—27%—say they were caught off guard about unexpected fees during the homebuying process, according to JW Surety Bonds’ research. Real estate professionals can help their clients prepare for the added costs, such as property taxes, homeowners insurance, homeowners association fees (if applicable) and routine property maintenance. (Most financial advisers recommend saving 1% to 2% of the home’s purchase price annually.) What’s more, 40% of homeowners say they do not use an escrow account to pay their property taxes, which could expose them to large annual tax bills, the survey’s researchers caution. You can provide your clients with NAR’s Consumer Guides on homeowners insurance—including specific guidance on flood and fire coverage—and escrow and earnest money. Also, you can share a comprehensive overview of transactions involving homeowners associations.
Not paying attention to home affordability. Some home buyers may be at risk of overspending on their home purchase. It could lead to buyer’s remorse: One in nine homeowners say they regret buying their home due to unexpected costs they learned about only after closing. Further, one in nine homeowners say they spend more than 50% of their monthly income on housing costs—a percentage that most financial experts would consider severely “cost-burdened.” Another 36% of homeowners say they did not have an emergency fund to cover unexpected home repairs, leaving them vulnerable to further financial strain, the survey notes. You can share NAR’s Consumer Guide on preparing for homeownership and provide a customer handout with a worksheet to track your clients’ budgets.

Where Home Buyers Can Turn for Guidance

Some prospective home buyers are on the lookout for more answers and guidance on the homebuying process. NAR has many Consumer Guides covering various aspects of the process, from written buyer agreements to home inspections and appraisals, at facts.realtor. Here are other top sources consumers cite for gathering homeownership information, according to the JW Surety Bonds survey:

Friends or family: 64%
Articles or blogs: 49%
Real estate agents: 31%
YouTube: 29%
Financial advisers: 17%
Online courses: 14%
TikTok: 13%

How Real Estate Agents Can Improve Homebuying Education

Real estate professionals may be able to help improve their clients’ homeownership literacy while also expanding their outreach. Try this:

Host education seminars. Team with lenders or financial advisers to offer buyers education seminars that highlight the financial aspects of a home purchase, such as the types of loans available and getting pre-approved for a mortgage. Loans and grants for first-time home buyers may help your clients better afford homeownership.
Talk real estate on social media. Glennda Baker, an associate broker with Glennda Baker + Associates, Inc., in Atlanta, has amassed more than 870,000 followers on TikTok with her short-form real estate education videos. Her videos cover a range of topics, including homebuying mistakes, financing a home purchase and living under a homeowners association.
Customize your consumer handouts. Publish content on your blogs and newsletters and provide handouts about the various aspects of home buying. REALTOR® Magazine offers customizable client education and handouts that detail the steps involved in a home purchase, from financing to closing.

Written by Melissa Dittmann Tracey

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DRE # | Sabrina 01413526 | Susan 01238225 | Team 70000218 | Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

What You Need to Know before Shopping for a Mortgage

Buying a home doesn’t start with the house – it starts with the home loan. I cannot tell you how important it is for Buyers to LOAN SHOP BEFORE they house shop! It is a task only the Buyer can do. Your Realtor cannot apply for home loans for you. It is a LOT OF WORK! Ask anyone who recently brought a home, you will be scanning and rescanning documents till you’re blue in the face. I find many people shy from the responsibility which will only make their journey into homeownership much more difficult. In our Silicon Valley Market – Time is of the Essence. I say this because it is also a term in our legally binding contract – not just a sediment of our breakneck speed.

So when I read this article, I knew I had to share it. So here you go…

What You Need to Know before Shopping for a Mortgage

Buying a home is probably the largest purchase you will ever make. The best ways to ensure that you do not make a mistake that could cost you thousands or tens of thousands of dollars over the term of the loan is to shop around for the best possible mortgage for your circumstances. What should you know before hopping for your loan?

How is your credit?

Whether you get a loan or not is dependent on your personal credit situation. You must have a credit score that will assure you of meeting the lender’s requirements for approval. Also, the rates you are offered for the loan will be a direct result of your credit scores. Therefore, before going mortgage shopping, access your credit reports and scores. Just because your credit is not perfect does not mean you would not qualify for a mortgage. If there are negative entries on your credit reports, make sure that they are accurate. Errors are commonly made and they result in depressed scores. There are laws that govern what and how information is reported on your credit reports. These laws were passed toprotect you. If you do not know how to exercise your consumer rights, there are legitimate Credit Restoration companies who could do this for you (like New You Credit Repair). Look for the NACSO logo on their website to assure yourself that these companies are legitimate.

Want to know more about getting a mortgage or bettering your credit profile and scores, give us a call! 650.568.5522 / Info@TheCatonTeam.com

Comparison Shop

Before choosing a mortgage, do a little comparison shopping and get information from several lenders. You should ask for quotes from commercial banks, mortgage companies, and credit unions and compare the rates you receive for the types of mortgages offered. Most people are surprised to find significant differences in the offers they are given.

Clarify Costs

Make sure you know upfront all of the costs associated with a mortgage. You should ask for specific information concerning:

•Rates

•Points

•Fees

•Down Payments

•Mortgage Insurance

•Closing Costs

The goal is to avoid any surprises concerning hidden fees, so never feel as if you are asking too many questions. The more you know the less risk there is you will end up with a mortgage you cannot afford.

Negotiate

It is possible to negotiate a better offer than what you are initially given. If you like things about one mortgage offer and other things about another mortgage offer, let the lenders know what you have been offered and see if they will work with you to get you the exact mortgage you want.

Communication is key in this process. Speak freely with your lender, your Reatlor and yourself. Ask questions. Do the ‘Homework’. The Caton Team has over 25 years combined Silicon Valley Real Estate Experience. We know what it takes! Curious if you can buy – give us a call or email to set up a complimentary evaluation. 650.568.5522 / Info@TheCatonTeam.com

I read this article at: https://www.linkedin.com/pulse/what-you-need-know-before-shopping-mortgage-stephen-leifer

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4 Tips to Determine How Much Mortgage You Can Afford

I had to share this article – with our Fall Real Estate Market starting now – it’s a good time to think about your budget if you are planning on becoming a home owner! I find so many buyers thinking about the house they want before they consider the impact of home ownership on their day to day finances. Taking time now, before you house shop, to put your financial house in order – will help your chances in this competitive market today! Enjoy – Sabrina

4 Tips to Determine How Much Mortgage You Can Afford

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

1. The general rule of mortgage affordability

As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.  To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt

Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.  Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide

The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.  Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.   However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.  Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

By: G. M. Filisko

I read this article at: http://members.houselogic.com/articles/4-tips-determine-how-much-mortgage-you-can-afford/preview/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

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Thanks for reading – Sabrina

1. What Are Mortgage Rates?

2. Factors That Influence Mortgage Rates

3. Fixed vs. Adjustable Rates

4. How to Secure the Best Mortgage Rate

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties, Redwood City Ca.

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How Do FHA Loans Work?

What Are FHA Loan Requirements?

Good News: FHA Mortgage Insurance Costs May Drop in 2025

FHA Loan Limits

Is an FHA Loan Right for You?

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties, Redwood City Ca.

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The Gaps in Homebuying Knowledge

Where Home Buyers Can Turn for Guidance

How Real Estate Agents Can Improve Homebuying Education

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties, Redwood City Ca.

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