Why Might You Be Rejected From Getting a Mortgage?

Were you recently rejected from getting a mortgage and are unsure why? Today we have four possible reasons why.

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Why would a buyer not be able to secure a mortgage? There are a few issues which may pop up, so today we will be discussing the top four reasons this can happen.

1. Work status changes. If an employee changes from W-2 status to a 1099 contractor status, this can cause issues. Many companies are doing this to reduce their bottom line so that they don’t have to pay benefits. This status change means the borrower is still getting the same amount of money, but now have to pay their own taxes, as they have technically become self-employed. 

2. Bounced checks. A lot of people don’t seem to think that this is an issue, but it is a sign of financial irresponsibility. 

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If you go behind on a small bill, it can really push your credit score down. 

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3. Opening a new credit account. If a buyer does this in the middle of the loan process, it could cause a problem in qualifying for the mortgage.

4. Current credit. Many people have store cards with low balances, and they think this makes payments on those cards unimportant. However, this is not true. Paying off these lines of credit is extremely important. If you go behind on a small bill, it can really push your credit score down. 

These are the top four reasons that you may be unable to get a mortgage. If you have any further questions about this, please feel free to reach out to us. We look forward to speaking with you soon.

Is Airbnb a Good Platform for Real Estate Investors?

What is happening with the interest rates? You can find out today because we have the mid-spring real estate update for the Chicago area.

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As a real estate professional, it’s important for me to always stay on top of the latest news from our industry, and one of the hot topics I keep hearing about lately is a company called Airbnb. 

Airbnb is an online platform that allows those who own property to rent it out to travelers. With all the ongoing discussion surrounding this platform, there are obviously positive and negative points being brought up. Let’s start by looking at a few of the positives. 

First of all, the platform allows you to supplement your income. 

I’ve personally got one client who has used it to pay off his mortgage, and another who also makes a large sum of money each month through the platform. Additionally, local businesses also receive an infusion of cash when people stay at short-term rental properties through Airbnb. Beyond serving as a source of income, Airbnb also allows investors to meet new people from all over the country—even the world. 

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And beyond serving as a source of income, Airbnb also allows investors to meet new people from all over the country—even the world. 

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Of course, there are arguments against Airbnb. One of the negative aspects people point out is the claim that it hurts a pricing housing market. People also claim that short-term rental platforms like Airbnb take business away from long-term rental inventory. 

So if you’re thinking of running an investment property through Airbnb, be sure to keep all of these pros and cons in mind. Also, make sure you consider the tax implications. 

Running an Airbnb could help you supplement your income, but it’s certainly not a decision to take lightly. You must be comfortable sharing your home with strangers, handling the check-in and check-out process, and taking care of other managerial duties. 

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Chicago’s Mid-Spring Real Estate Market Update

What is happening with the interest rates? You can find out today because we have the mid-spring real estate update for the Chicago area.

Looking to buy a Chicago home? Get a Full Home Search

Selling your Chicago home? Get a Free Home Price Evaluation

Our mid-spring real estate market update is out, and today we’d like to tell you all about it.

So, where are we at from a mortgage standpoint? The rates are still the same. At the beginning of May, the Fed met and decided to relieve the federal funds rate in loans. We do expect it to change later in the year. They are predicting it to change twice—in August and September.

Where are the rates at generally right now? Rates are fluctuating depending on the program. But, they are still very good. They are expected to rise a little bit by the end of the year, however.

Now is the best time to get a mortgage. If you want to try to get the best possible rate, you want to do that at the beginning of the year instead of the end of next year.

From a seller’s standpoint, we know that inventory is low. There was a report that said that we are down by 9% in terms of the number of homes that are for sale at this point in 2018 compared to 2017. The good news is that in Chicago, even though we do have low inventory, prices have gone up year after year by about 7% to 8%.

50% of the inventory on the market is on the higher end, so we have the challenge with first-time home buyers of finding their right property.

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Even though we have low inventory in Chicago, prices have gone up year after year by about 7% to 8%.

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Pre-qualified people are having the issue of finding inventory even though they are looking and looking. When they do find it, they end up in a multiple bidding situation where a lot of times they don’t get it.

There was a report that said 25% of the deals that were done in 2017 were multiple offers and the property ended up selling for higher than the list price. Buyers, if you are looking to buy a property, and you see something that you like, you want to jump on it. Otherwise, somebody else will.

Sellers, get your homes on the market. It is a perfect time.

If you have any questions or would like to list your home, please call me. If you would need to get pre-qualified or pre-approved, you can contact David at 708-705-7911. We look forward to speaking with you soon.

How Much Inventory Do We Have?

How are we doing this spring in terms of inventory? Here’s what you need to know.

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Toward the end of April, we were still dealing with the lowest amount of inventory in our market that we’ve had in the last five to seven years. 

I checked the MLS this morning and we have just over 1,800 condo units in our local downtown Chicago market. The exciting part is that over 485 of those are going to sell every 30 days, which, of course, represents a 3.7 month supply of inventory.

This figure is important because it lets us know exactly where we are in the market and whether it will favor buyers or sellers. If there’s more inventory than demand, then we’re in a buyer’s market. If there’s more demand than there is inventory, then we’re in a seller’s market.

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We are definitely in a seller’s market.

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A typical supply of inventory in a balanced market is six months’ worth. Being that we currently have 3.7 months’ worth, we are definitely in a seller’s market. 

If you have been on the fence about selling your home—whether it’s upsizing or downsizing into a townhome, condo, or another property—please feel free to reach out to me. I’d love to discuss your plans with you.

Why Is Housing Inventory an Important Statistic?

As a statistic, housing inventory means the number of homes that are on the market at any given time, and it can determine whether we’re in a buyer’s or seller’s market. 

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Selling your Chicago home? Get a Free Home Price Evaluation

When it comes to selling your home, there are some very important statistics that you should know about. One of  those statistics regards housing inventory. 

Housing inventory means the number of homes that are on the market at any given time. In our downtown Chicago market, we currently have 654 active listings. Over 30% of those listings have gone under contract in the last 30 days, which means we have a 3.7-month supply of inventory. 

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Our current housing inventory puts us in a seller’s market.

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What does a normal housing inventory look like? Typically, a six-month supply is considered normal, and that level is enough to supply homes for any buyer. That means our 3.7-month supply puts us in a seller’s market. Whenever inventory is up and demand is low, we’re in a buyer’s market. 

If you have any more questions about housing inventory or you’re thinking of taking advantage of our seller’s market by listing your own home, give me a call or shoot me an email anytime. I’d love to help you.