In the ever-changing landscape of the real estate market, one factor that consistently influences decisions is the interest rate. 

For well over a year now, realtors, mortgage brokers, homeowners, and potential home buyers alike have been nervously watching the rates as they leapt ever higher from their all-time low back in 2020.  

But recently, there have finally been some significant developments in this area that potential home buyers and realtors should be aware of and may find hopeful.

Current State of Interest Rates

The average top-tier 30-year fixed mortgage rate has seen a drop from over 8% in October to under 7.5%. 

As of December 8, 2023, the rate stands at 7.09%. This is a significant decrease and represents a 4-month low in mortgage rates. 

While other elements of the economy, such as job stats and inflation rates, continue to cause the mortgage rates to fluctuate, it appears that they are fairly stable. 

A Downward Trend?

What’s even more interesting is that these rates may finally be legitimately trending downward. This is a crucial development, as it could potentially lead to an increase in home buying activity. 

However, it’s important to note that Mortgage Backed Securities (MBS) prices are moderately weaker, which may result in higher mortgage rates. Additionally, when certain aspects of the economy, such as the labor market, are strong like they are now, can also keep interest rates high. 

Overall, however, we can say we have legitimately observed a downward trend over the last 4 months, and it seems to be holding steady. 

Practical Implications for Home Buyers and Realtors

This downward trend in mortgage rates has several practical implications for potential home buyers and realtors.

Lower Monthly Payments: With lower interest rates, the monthly mortgage payments will be lower for the same loan amount. This could affect the budgeting for potential home buyers and provide realtors with more options to present to their clients.

Increased Affordability: Lower interest rates could make some homes more affordable for potential buyers, especially those with tight budgets or those looking at higher-priced homes. Realtors can use this information to guide their clients toward homes previously considered out of their price range.

Market Dynamics: However, the decrease in rates could potentially stimulate the housing market, as more buyers might be able to afford homes. This could potentially lead to an increase in home prices over time, providing realtors with the opportunity to close more deals. But it also means the new sense of affordability may be under threat as housing prices go up. 

What’s It All Mean? 

The current interest rate presents both opportunities and challenges for potential home buyers and realtors. 

Many have been waiting for interest rates to come down to feel like they can better afford to purchase a home. So lower rates may encourage those potential home buyers back out into the market and coax them into making a purchase. 

However, because this will increase demand, housing prices will likely begin to climb again, perhaps simultaneously with the decrease in rates. This will, ironically, make housing less affordable.

Perhaps what homebuyers and realtors alike should focus on is this – houses will likely not fall in price. They will continue to increase, possibly rapidly if demand suddenly increases. 

So, if you are needing to get into your own home, or to purchase a bigger home, now is more affordable than a year from now. 

The silver lining is that, by all appearances, the interest rates are finally beginning to cool off, so it is hopeful that within a year, you may find a good opportunity to refinance for a lower rate which will make your mortgage even more affordable. 

But if you wait for the interest rates to cool off to a number you like, you may discover that the home you need is no longer in your price range. 

Stay Up To Date

It’s important to stay informed about these developments and understand their implications. But the housing market, interest rates, and economic impacts are complex, to say the least.

Consulting with a financial advisor or mortgage professional could provide more personalized advice based on individual circumstances. 

At Gulfside Mortgage Services, we have a passion for helping our clients get into the home of their dreams and helping them thrive. We have survived two decades of economic ups and downs and housing market ups and downs (including the crash of 2008). 

We have the expertise and experience required to help you or your client find the lending options they need. Give us a call today to learn more about current interest rates and what they mean for you.

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For many folks, delving into the weeds of their credit is probably the least favorite step in preparing to buy a home – it’s certainly not an exciting one.

And there’s really no question as to why.

Understanding your credit score and all the activities that can hurt it or improve it can be complicated and confusing. It’s stressful, too, because there’s the possibility that you discover your score isn’t as good as you thought, or you find out there are items on your credit report that don’t belong.

But like it or not, credit plays an enormous role in the process of securing a mortgage loan and buying a home.

Since questions about credit come up a lot, we here at Gulfside Mortgage Services decided to write this article to help with the top five credit questions we get.

• How do I Check My Credit Report?
  This is an easy step but unfortunately many do not realize they can do it for free. You should never have to pay to see your credit report.
  
  One of the best resources you can use to check your credit report is annualcreditreport.com. You can check your report weekly for free. Furthermore, they allow you to check all three reports available from Equifax, Experian and TransUnion.
  
  Additionally, some credit card providers will allow you to check on your credit score for free as well.


• How do I Dispute Errors on My Cre-dit Report?
  It is important to review your credit re-ports carefully, as this is a major way to catch identity theft and erroneous charges, both of which can hurt your credit score and negatively impact your eligibility for a good mortgage.
  
  If you find what you believe to be an error in your credit report, you can dispute it and have it corrected. Both the business that reported the infor-mation and the credit bureau it was reported to must correct wrong infor-mation, and they have to do it for free.
  
  You will need to dispute the error with each credit bureau that has the wrong information separately. Take the following steps to officially dispute an error:

  1) In writing, explain what you believe is wrong, include the bureau’s dispute form (if they have one), and copies (not originals) of documents that support your claim. Make sure you include your full name and address, as well as a copy of your report with the mistakes circled. Keep record of everything you send.
  
  2) So that you know the credit bureau receives the letter, send it by certified mail and pay for a “return receipt.”
  
  3) You can also submit disputes online or by phone, but be sure to have all of the previously mentioned documentation ready to include in the email or at hand while on the phone.Once received, the credit bureau has 30 days to investigate and must get back to you with their decision. To learn more about submitting disputes and other steps you can take, visit consumer.ftc.gov

• Does Shopping for Loans Hurt My Credit Score?
  The answer is technically ‘yes,’ but only slightly if you’re doing it right.
  
  There are two key factors to understand about how searching for loans impacts your score.
  
  First, all inquiries occurring within 30 days of scoring have no impact on the score at that time. Once more than 30 days have passed, all inquiries within that time frame only count as a single inquiry.
  
  Second, multiple inquiries for loans of the same type (mortgage loans, for example) will also count as a single inquiry if they occur within the same 45-day period. The assumption here, again, is that you are ultimately seeking one line of credit, so looking at multiple loans only counts once.
  
  But all of that also depends on you making your multiple inquiries within the same 30-45 days.  If you make multiple inquiries in one month, put your search on pause, and then make more inquiries in the next month, and spread it out, the inquiries will hit your credit more than once, which may start to add up.

  So, the best advice is to do your loan shopping in a fairly short time. Make sure you are ready to move forward when you begin searching for specific mortgages, so when you find a good rate, you are jumping on it.

  Additionally, note that even when inquiries do hit your credit score, they only have a minimal impact. A single inquiry typically only lowers a FICO score by less than five points, depending on a person’s credit history. Consumers who have a shorter credit history or few accounts may see a greater impact. But among the five categories used to make up a FICO score,journey and discovered that your cre-dit is less than ideal, there are steps you can take to improve it.

• First, pay your bills on time. Payment history, including de-linquent payments, hits your credit score.
• Lower your debt. Try to keep your credit utilization below 30%. Focus on paying down some of those credit cards.
• Don’t close old accounts! Length of credit history matters. While it is tempting to close a credit card account you have fi-nally paid off, DON’T! It can hurt your score. If you don’t want to be tempted to use it, just cut the card up and get its info off any digital payment apps.
• Do limit your new credit inqui-ries. Try to keep new inquiries within a short period so that they only count once on your score.

It may take a little time, but taking one or all of these steps will improve your score and you may even see some immediate improvement.

Have More Questions?

We hope the above guide will help answer some of your more pressing questions regarding credit concerns within the mortgage process.

If you have more questions about how credit factors into mortgage qualification, you can visit our website or give us a call at (941) 485-4222 to learn more!

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If you are looking to buy a home in 2023, you may have noticed that the housing market is very competitive.

There are more buyers than sellers, which means that many homes receive multiple offers and sell for more than the asking price. In fact, according to the National Association of Realtors (NAR), the median existing-home sales price in July 2023 was $410,200, up 15.8% from a year ago.

So how can you stand out from the crowd and increase your chances of getting your offer accepted?

One strategy is to offer over the asking price from the start.

Here are five good reasons why this may be a smart move in today’s market.

5 Reasons to Bid Over Asking Price 

1. Low inventory: As briefly stated above, competition for houses right now is fierce, despite the higher interest rates and inflation.
   
   The most recent report from Existing Home Sales shows that the existing inventory of available homes is very low – less than 1 million homes – and some of these are already under contract!
   
   

   And this inventory issue is not going to improve for two main reasons:

   First, as inflation trends slow and interest rates start to come back down, there will be more people able to buy.

   Second, in general, the U.S. population is increasing by leaps and bounds. And if you are thinking about buying a home in Florida, then you know our population is on a constant growth trajectory.

   There are more buyers every day with fewer available homes. Competition is only going to get tougher. You have to bid over asking price out of the gate to set yourself apart from the competition.

2. Avoid a bidding war. A bidding war is when two or more buyers compete for the same property by raising their offers until one of them wins. Bidding wars can drive up the price of a home and cause a lot of stress and uncertainty for buyers.

   By offering over the asking price from the start, you show the seller that you are serious and motivated, and that you are willing to pay a premium for their home.

   This may convince them to accept your offer right away, or at least give you priority over other buyers.

3. Show your love for the home. Sometimes, sellers are motivated by emotion and not just money. They may have a sentimental attachment to their home and want to sell it to someone who will appreciate it and take good care of it.

   By offering over the asking price, you demonstrate that you love and highly value their home. This may appeal to the seller’s emotions and make them favor you over other buyers.

4. Compensate for a lower appraisal. An appraisal is an estimate of the home’s value by a professional appraiser. It is usually required by lenders to ensure that they are not lending more money than the home is worth.

   However, in a hot market, appraisals may not keep up with the rising prices and may come in lower than the agreed-upon sale price. This can create a problem for buyers who need a mortgage, as they may have to come up with extra cash to cover the difference or renegotiate with the seller.

   By bidding over the asking price, you can anticipate this scenario and show the seller that you are prepared to pay more than the appraised value if necessary.

5. Potentially beat cash offers. Cash offers are offers that do not depend on financing from a lender.

   Cash offers are attractive to sellers because they eliminate the risk of financing falling through and speed up the closing process. However, cash offers are not always the highest, and they may not reflect the true market value of the home.

   By offering over the asking price, you can compete with cash offers and show the seller that you are willing to pay more than what cash buyers are offering.

Of course, offering over the asking price is not always the best strategy for every buyer and every situation. You should always consult with your real estate agent and your lender before making an offer, and stick to your budget and your goals.

At Gulfside Mortgage Services in Venice, FL, we are available to help you navigate this process and develop a strategy that will work for you or your clients.

Why You Should Not Wait to Buy

Despite higher interest rates and inflation, if you are teetering on the fence – STOP. Now is the time to buy in Venice, Florida and not wait for a few very good reasons:

• Historical data shows that housing prices will not go back down but will continue to increase. Stop hoping that you can get a house you love for less than current prices.
• As explained above, inventory will not get better, so stop waiting for that.
• Interest rates, however, will get better, at which time you can refinance. Go after your dream house now before it goes up in price and out of your range. You can refinance later for a better interest rate.

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