June 2024 - Mortgage News & Updates

GREAT NEWS !!

New First-Time Homebuyer 0% Down Purchase Program

MSMC's Exclusive 0% Down Purchase Program allows borrowers to combine a 97% First Mortgage with a 3% Down Payment Assistance (DPA) Loan to purchase a home with NO Down Payment.

Purchase First-Time Homebuyer transactions ONLY.
First Mortgage is a Conventional 30 Year Fixed Rate Mortgage with 95 - 97% Financing and loan limit of $766,550.
Second Mortgage/DPA maximum loan amount is the lesser of 3% of the Sales Price or $15,000. The Second DPA Loan is due in full upon refinance or final payment/payoff of the first mortgage.
Second DPA Loan has NO required monthly payment and Does NOT accrue interest.
Homeownership Education Course required.
Standard Conventional Qualification Requirements with NO Income Limit

Example: Sales Price is $500,000

First Mortgage = $485,000

Second DPA Lien = $15,000

This is a Great New Program to help First-Time Buyers.

Call Paul E Smith at (713) 528-1245 to find out more

ECONOMY & RATE COMMENTARY

The Federal Reserve aggressively raised interest rates to slow down the economy and bring down the rate of inflation. Many believed the higher Fed Funds rate would drive the US Economy into a recession. However, continued strength in the Job Market has increased the economy poised for a "soft" landing versus a "hard" landing that includes an economic recession.

In our opinion, the financial markets prematurely positioned for the Federal Reserve to aggressively cut rates. However, with inflation continuing to run above 3%, it is more likely that the Federal Reserve will keep rate cuts on hold which should keep mortgage interest rates at or near current levels.

The good news is that we should not see mortgage rates move higher. However, analysts now believe mortgage rates will not move materially lower until we see lower rates of inflation, weaker employment data or if the Federal Reserve shifts to an "easing" policy.

MARRY THE HOUSE & DATE THE RATE

In light of mortgage rates likely to remain at or near current levels it is worth considering a "Marry the House, Date the Rate" philosophy. This real estate saying encourages home buyers to focus on finding their long term home rather than waiting for interest rates to decline. The basic idea is that buying a home is a long-term commitment but the terms of your mortgage can be changed via a refinance if/when interest rates decline.

In addition, home buyers should also consider the impact of price appreciation. The most recent Greater Houston Partnership Housing Price Report found that home prices INCREASED 3% for the 12 month period ending April 2024. This appreciation rate aligns with the pre-pandemic average of 3-4% per year in the Houston MSA.

Example: A $500,000 current home price with a 3% annual price appreciation rate projects to a $515,000 price after 1 year, a $530,400 price after 2 years and a $548,363 price after 3 years.

2024 PERSONAL FINANCE UPDATES

Annual Gift Exemption increased to $18,000 for a single person per recipient and a married couple can gift up to $36,000 per recipient without taxation implications.

Lifetime Estate & Gift Exemption Increased to $13.61M per person and $26M per married couple.

Conventional underwriting guidelines allow for Gift Funds to be used as an acceptable source of funds for down payment and closing costs when a familial relationship exists between the donor and the borrower and if the borrower is purchasing a Primary Residence.

Example: A married couple can gift up to $36,000 to their single child or up to $72,000 to their child & his/her spouse to help them purchase a home.

Why Customers & Referral Partners Choose Main Street Mortgage Company?

Local, Available, Responsive & Fast
Experienced Mortgage Advisor - Serving Houston Since 1997
Conventional & Jumbo Loan Specialist
Options for Physician, Self-Employed & High Net Worth Borrowers

Call or E-Mail for Mortgage Answers & Information

Paul E. Smith, NMLS 193580 | Main Street Mortgage Company, NMLS 296814

713.528.1245

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GREAT NEWS !!

New First-Time Homebuyer 0% Down Purchase Program

﻿ECONOMY & RATE COMMENTARY

MARRY THE HOUSE & DATE THE RATE

2024 PERSONAL FINANCE UPDATES

ECONOMY & RATE COMMENTARY