Updated: Monday, February 24, 2020
February Real Estate Roundup
Freddie Macs results of its Primary Mortgage Market Survey shows that "This weeks mortgage rates were the second lowest in three years, supporting homebuyer demand and leading to higher refinancing activity. Borrowers who take advantage of these low rates can improve their cash flow by lowering their monthly mortgage payments, giving them more money to spend or save."
30-year fixed-rate mortgage FRM averaged 3.51 percent with an average 0.7 points for the week ending January 30, 2020, down from last month when it averaged 3.74 percent. A year ago, at this time, the 30-year FRM averaged 4.46 percent.
15-year FRM this week averaged 3.00 percent with an average 0.7 points, down from last month when it also averaged 3.19 percent. A year ago, at this time, the 15-year FRM averaged 3.89 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage ARM averaged 3.24 percent this week with an average 0.3 points, down from last month when it averaged 3.45 percent. A year ago, at this time, the 5-year ARM averaged 3.96 percent.
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â€śMattress Moneyâ€ť and Mortgages
One of the more important things lenders look at when evaluating a home loan application is how much money is available for the transaction. There needs to be funds showing enough money for the required down payment, if any, closing costs and some extra funds left over after closing called cash reserves. Cash reserves are counted as the number of months worth of house payments are left after the loan has closed. If the total mortgage payment, including taxes and insurance, is 2,000 and the cash reserve requirement is three months, there should be an additional 6,000 available. This is on top of the down payment and closing costs. But these funds have to be verified as yours.
Verification is done by reviewing recent copies of bank statements. If your savings account shows 20,000 and the checking account statements show regular deposits on the 1st and 15th, the lender will begin to tally the total amount available and when enough funds are verified, the loan application continues through the approval process.nbsp;
But in this scenario, the funds are short by 5,000. The down payment, closing costs and reserves needed add up to 30,000. Thats okay though, because at home in the vault, there is 7,000 in cash ready for you to use any way you wish. You take out the 7,000 and deposit it in your checking account. Yet theres still a problem. Even though youve saved up those funds over the past year or so, you may not be able to use them. At least, the lender wont count them as yours. This is called mattress money. Loosely meaning the cash is stuffed in your mattress at home. Its frustrating because you know the funds are yours and yours alone, but the lender is ignoring them.
The issue here is there is no way to source where those funds came from. Are the funds a personal loan? If so, at some point the loan will need to be paid back. Will there monthly be monthly payments and if so, how much? In both instances it can affect the ability to repay the mortgage.
If its cash saved up and you know youre going to buy a home in the future, pull the cash out of the vault and into your bank account. This will let the funds season over time and the lender will not question where the funds came from. How long does it take to season funds? Theres no universal guideline but in general funds may be considered yours after two or three months.
If the funds are from the sale of a car, provide a copy of the bill of sale, copy of the check and copy of the deposit into your bank account. If the funds are a gift from a family member or qualified donor, again provide a paper trail. But if its cash at home, mattress money, put it in the bank as soon as able.nbsp;
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How to Save Time, Ease Workload with Online CRE Management Platforms
Kladok is one of the newer online management platforms looking to shift this trend. Having one centralized platform tailor-made specifically for CRE professionals including brokers, property owners, lenders, investors, and insurers -- saves time and makes it easier for real estate professionals to juggle details on assets and deals.
Portfolio and asset management are key parts of CRE companies workload. Organizing financial information along with various property details can be challenging to keep in a simple format. For instance, with various spreadsheets within one Excel document, it can be easy to place a number in the wrong location.nbsp;
Further, various versions of the same Excel spreadsheet are often necessary, which can be confusing. With multiple people typically working on each CRE project, all users must be well-versed on how items are being labeled in order to keep the spreadsheets accurate.
New online management platforms created for CRE professionals make their work more efficient, provide seamless communication across team members and reduce the chances of inaccuracies.
Further, innovative online management systems such as Kladok are easy to operate, while understanding the most advanced versions of Excel might require taking a course on the topic to master the tools.
Kladok is a CRE-specific online management platform that can consolidate several disconnected spreadsheets into one cloud-based location accessible from anywhere. This organized unit gives companies the ability to conduct portfolio-wide analysis or rapidly garner individual property details.
Moving portfolio details onto a technologically advanced management platform can allow a team of CRE executives to view real-time data, eliminating the need to schedule meetings for specific updates on a project which can be frequent. It also can prevent possible project delays due to factors such as a lag in inputting information, incomplete data or details placed in the wrong spreadsheet location.
Along with speeding the workflow, allowing rapid input of data into a central platform can boost transparency, allowing managers to rapidly access all information.
Additionally, some online management platforms offer a task manager. This can ease any uncertainty among team members about when a specific job should be done and who is assigned to handle it.
Accessing financing and commercial insurance products also are available via portfolio and asset data input into CRE management platform Kladok.
Beyond managing data, Kladok is also a platform that offers a network of CRE professionals who can share information, benefiting from each others expertise.
Collaborating with colleagues, organizing data, better managing information and easing workflow are just some of the benefits of an online management platform for CRE executives. Kladok is an easy-to-use platform that creates a centralized workspace. This can save time by consolidating information and removing the need to manually input data in various spreadsheet locations.
Ryan Letzeiser is the Co-Founder and CEO of Obie, a portfolio management platform for commercial and multi-family real estate recently named a Top 100 Finalist for the 2019 Chicago Innovation Awards. Obie also offers tailored and competitive property insurance products.nbsp;nbsp;
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