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Mortgage Broker Phoenix AZ | Home Loans | Desert Springs Mortgage, LLC

If you are looking to buy a home or refinance in Phoenix, or throughout the state of Arizona, give us a call at (623) 432-1309 to schedule your consultation.

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When Is the Right Time to Buy a House? – What to Know

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First Time Homebuyer In Phoenix Az

Homeownership is among the biggest commitments and responsibilities an individual will undertake. As a homeowner, you’re not only obliged to pay for monthly amortization, but you also must settle costs for maintenance and repairs, utilities, decoration, and sanitation. Understandably so, it’s still a dream for almost every individual to be able to afford homeownership.

Since buying a house is not a simple venture, there will be things you need to consider before you sign those papers. Here are some signs that tell you it’s time to buy your house:

Buy a Home Tips in Phoenix, AZ

  1. You pay rent on time. If you have no trouble when it comes to paying rent, you’re probably ready for homeownership. Since paying rent doesn’t just mean settling the monthly expense for renting the place, being able to do so means you’re equipped to upgrade to a place of your own. Paying monthly rent must be added on top of utilities and other expenses. By still managing to pay rent on time, that means you have the discipline required not to delay monthly amortization payments for your house.
  1. Your credit score looks good. Another criterion that dealers will look for is if you have a good credit score. While this is closely related to paying rent on time, having a good credit score means you’re also responsible for using credit only when absolutely needed. That means you don’t rely as much on credit, and you understand that it is only meant for emergency purposes. Having a good credit score will also show dealers and sellers that you know credit is not free money, but another responsibility which should only be used for special circumstances. If your credit score looks good, chances are high that you’re ready for homeownership.
  1. You have a good job that pays well. Sometimes, it can be easy to believe that your monthly income is enough for such responsibilities when the truth is it’s not. Having a good job that pays well doesn’t just mean you have a high salary, but you also have more than enough to afford your lifestyle, including paying for a house. Having a good job also means you’re not likely to lose it in the coming years, which is called job security. At the very least, you’re enjoying your job, and you don’t have plans to leave soon. Sometimes, people have high salaries, yet they don’t find meaning in their jobs. As a result, they spend more to please themselves, but that doesn’t really eliminate their frustration toward their jobs. If you plan on staying for a long while, and you’re earning more than enough to pay for your daily expenses, it’s probably time to invest in a house of your own.
  1. You’ve already decided. One of the hardest parts of homeownership is choosing the house itself. If you feel like you already know what type of home you want and have already decided in terms of design and location, you’re ready to undertake this commitment.

Buy Your First Home with Desert Springs Mortgage

Homeownership is a milestone in everyone’s life. If you’re a first-time home buyer and you believe you have what it takes to fulfill your responsibilities as a homeowner, it’s best to consider investing in your own property already. Not only will it give you a sense of accomplishment, but it will also give you security in the future. Are you a first-time home buyer from Phoenix, Arizona? Desert Springs Mortgage provides fast and reliable mortgage brokerage services. Contact us today to learn how you can buy your own house!

Homebuyers are Stretching the Most in these Cities

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Home prices continue to reach new highs, with the most recent data showing prices for existing homes at a median of $276,900 in June; new homes are even more expensive at a median of $302,100. The annual increase in home prices has been outpacing income growth since 2012. As a result, homebuyers have been stretching more and more to purchase their dream homes. Low interest rates have masked this to some extent, as they have subdued the monthly payment, but the recent increase in interest has reduced this mitigating factor.

A well-known rule of thumb says that the home price should not exceed three times the buyer’s annual income. When a mortgage is used to buy a house, the ratio of amount borrowed to income is the extent to which a borrower is leveraged. In this study, we compared leverage ratios across cities to see where borrowers are stretching the most to purchase a home.

They used Home Mortgage Disclosure Act (HMDA) data that includes over 7 million mortgages originated in 2017 to calculate the leverage rate of borrowers in the 50 largest cities in America. The median amount borrowed was divided by the median borrower income for all purchases in the HMDA database for 2017.

Key findings

California is known for its high home prices and high incomes. Unfortunately, the tech boom is not enriching everyone with cash, and 6 of the top 10 cities are in the Golden State, including the top four (Los Angeles, San Diego, San Francisco, and San Jose).

Los Angeles leads the way for stretched buyers, with the median homebuyer with a mortgage borrowing 3.75 times their annual income.
San Diego has similar income to Los Angeles, but cheaper homes give it the second highest leverage ratio of 3.62.
Home prices are much higher in the Bay Area cities which rank 3 and 4 for stretched borrowers, but higher incomes provide some relief and leverage ratios are 3.52 and 3.50 for San Francisco and San Jose.

The more affordable cities are clustered in the Rust Belt and southern U.S. states. Pittsburgh and Cleveland have the lowest leverage ratios at just 2.00 times annual income.

Houston is the largest city in the bottom 10 and has the highest loan amounts of the affordable cities. High incomes driven by the energy and health care sectors helps it to a benign leverage ratio of 2.17.

This means that the time spent commuting is a major consideration on where to relocate and purchase the next home, the longer the commuting time – potentially, the less desirable a city or neighborhood becomes.Source: LendingTree Study

What Happened to Rates Last Week?

Homebuyers Week Chart

Mortgage backed securities (FNMA 4.50 MBS) lost -23 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move higher for the week. It was the second straight week of higher rates with MBS selling off a total of -39 basis points over the past two weeks.

Overview: We had very strong economic data all week with big readings in Manufacturing (1/3 of our economy 0 and Services (2/3 of our economy) and then ended the week with higher wage growth with the Year-over-year Average Hourly Earnings hitting 2.9%.

Jobs, Jobs, Jobs:
Non Farm Payrolls:
August was better than expected, 201K vs est of 191K.
July was revised lower from 157K down to 147K
June was revised lower from 248K down to 208K
The three month rolling average is now 185K

Wages:
The Average Hourly Earnings YOY rose by 2.9% vs est of 2.7%
Earnings on a MOM basis rose by 0.4% vs est of 0.2%.
Average Hourly Wages are now $27.16

Unemployment:
The Unemployment Rate was unchanged at 3.9%
The Participation Rate dropped from 62.9% down to 62.7%

Services: The ISM Non-Manufacturing (2/3 of our economy) was very strong and beat out forecasts with a 58.5 vs 56.8 estimate.

Manufacturing: The August ISM Manufacturing Index jumped to 61.3 vs est of 57.7. Its the best reading since January. Any reading above 60 is rare for this report and very robust. ISM Prices Paid hit 72.1 vs est of 70.2…a very lofty level and yet another report that shows pricing pressures (inflation).

The Talking Fed: NY Fed Pres John Williams (voting member) said that steady inflation and low unemployment have created an economy that is “as good as it gets” for the U.S. but that “we can continue to be relatively patient and allow this economy to continue to grow.”

What to Watch Out For This Week:

Homebuyers Week Schedule

The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. Contact us today at (623) 432-1309 to learn more.