In the Market: Getting to know useful acronyms
This weekly feature is a real estate news and information roundup from a millennial’s point of view. When a young professional moves from Indianapolis (median home price $125K) to San Francisco (median price $1 million), you can expect an adventure. Nneka Madus, an analyst in Bank of the West’s Mortgage Division, did just that and has plenty to share in her quest to own a home in San Francisco.One day my mom sent me an email signed “LOL, Mom.” I was so confused … Laugh out loud, Mom??? She replied with the cutest response, “I thought it meant lots of love.” Well, laugh out loud (really loud) is what I did when she explained. Now, imagine if you’re in the middle of the mortgage application process and you mix up your acronyms. ARM, DTI, LTV? Yikes! Confusing your mortgage acronyms could be embarrassing, but, more importantly, it could potentially be costly. Before traversing the mortgage loan process, you may want to become familiar with a few common acronyms, such as the ones that a Trulia contributor has so nicely compiled in this Forbes article. Getting familiar with these acronyms now may be the difference between you doing an “LOL” with joy in your new home versus an “SMH” (shaking my head) at something you may not have understood. Almost 60% of millennials may be leaving up to $700,000 on the table. What?! According to this article by Catey Hill from MarketWatch, millennials who choose to rent instead of buy could be paying up to $700K over the course of their lives without having anything to show for it. If you’re a bit skeptical about this, Catey does the math for you and shows how renting may not pencil out in the long run. If you haven’t gotten the message yet about low mortgage rates, I’m here to reiterate for you. Seriously, rates are near their lowest in 40 years, so you may want to check with a lender to see if you might be able to save some money on your monthly mortgage payment. If you don’t believe me, check out Brena Swanson’s article in Housingwire. She gives homeowners 4 really good reasons they should consider refinancing their mortgage now, while rates remain below 4% on 30-year, fixed-rate mortgages. More money-saving news for homebuyers! The Federal Housing Administration (FHA) announced that mortgage insurance premiums for FHA loans will decrease from 1.35% to 0.85%. With the reduction in mortgage insurance premiums for FHA loans along with the relatively low rates lately, qualified buyers could be saving money in mortgage payments. This Housingwire article outlines four possible advantages, and you can also read Stew Larsen’s take on the FHA’s action.