Common Mistakes to Avoid When It Comes to Getting a Mortgage

The Weekly Recap

Mortgage rates fell for the second week in a row following a better CPI report showing inflation decreasing month over month which led to a softening in the 10 Year Treasury. Even with the good news Powell is still being cautious about committing to when rates will be cut. While the CPI numbers were positive, inflation in NYC climbed to its highest in a year thanks to energy and housing costs. The Dow Jones poked its head above 40,000 for the first time ever. Meme stocks made a comeback and Apple apologized for a soul crushing commercial. Netflix will stream some NFL games this year and the first presidential debate is schedule for 6/27.

Common Mistakes to Avoid When It Comes to Getting a Mortgage

There are so many moving parts when it comes to buying a home. It’s incredibly challenging to keep all of the information straight and to make sure you have as seamless a transaction as possible. One portion of the transaction that people may inadvertently create a problem with is when it comes to financing and getting fully approved for a mortgage. Here are a few ways to make sure you are able to get your home fully financed and with the best rate without any issues or hiccups.

Talk to More than One Mortgage Lender: the rate market is hyper competitive even in higher rate environments. Talking to several mortgage lenders allows you to rate shop and see who is willing to compete for your business. Through this process you should not just look for the lowest rate, but which lender you feel will be the best partner for you in getting a deal done even if they are slightly higher than the cheapest rate. A great rate doesn’t matter if the bank doesn’t work hard for you to get the deal done.

Understand the Difference Between Pre-Qualification and Pre-Approval: There is a big difference between the two. A Pre-Qualification is a marketing tactic used by institutions to get you to call them to discuss potentially working with them and are not worth the paper they are printed on. The Pre-Approval though is gold. It specifically outlines your purchase power and is needed for any offer you submit where you will be financing. It lets sellers know that your offer is meaningful and that you’ve gone through preliminary financial vetting.

Moving Money Around: Do not continually move money from account to another. Banks want to see continuity in accounts and will ask for explanations on where money is going and will make this very tedious process even more tedious. Keep your finances as steady as possible and in their respective accounts.

Leaving Your Job: You might currently hate your job, but deciding to leave to re-discover yourself without another position lined up is a death knell for any hopes of financing. Even if you have enough cash reserves, banks look at your Debt to Income ratio to determine their ability to lend to you. Even if you are co-purchasing with someone else, ride the wave of completing the purchase before seeking other employment.

Big Expenses: Do not, under any circumstances, buy a new car or purchase a vacation home or a buy a boat while you are under review for a mortgage. This will impact your debt to income and will give any bank the reason to revisit a decision to lend to you and can create major issues.

I am not by any means a mortgage banker or lender, but as someone who has been in the real estate space for a long time these behaviors from buyers can raise red flags for institutions and can impact your ability to purchase the home you’ve spent such a long time searching for. I would love to connect you with one of my mortgage partners that I work with on a daily basis for them to help you identify your purchase power or answer any questions that you might have about the process!

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan.

Mortgage Rate Update

Mortgage rates decreased for the second consecutive week. With news of inflation easing up, to 10-year treasury yield dipped which led to lower rates. Even though the rate dip was small, it seems that we are trending in the right direction especially with a much weaker jobs number coupled with the positive inflation news.

News You Can Use

• US Inflation Ebbs for First Time in Six Months in Relief for Fed Bloomberg

• CPI Report Shows Inflation Easing in April CNBC

• Powell Reiterates Fed Likely to Keep Rates Higher for Longer Bloomberg

• Major Brokerages Retain US Rate-Cut View Reuters

• Inflation Pressures Ease in April as Consumer Prices Rise at Slowest Pace in Three Months Yahoo Finance

• Fed’s Goolsbee Praises Disinflation, Says More Progress Needed Bloomberg

• NYC and San Francisco Inflation Jump to Year High as US Cools Bloomberg

• US Stock Market Hits Another Record High As Inflation Cools Axios

• US Consumer Sentiment at Six-Month Low Reuters

• GameStop, AMC Soar More than 70% CNBC

• NY Fed Report Warns Discount Window Stigma May Never Go Away Reuters

• Apple Apologizes for iPad Pro Ad CNBC

• Map Reveals Best NYC Neighborhood for Singles NY Post

The Deep Insight

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