Home Buying • October 19, 2022

What is underwriting? Everything you need to know.

by Rob Hurt

You’ve found the house you want to buy. You’ve secured the money. You’ve even selected a lender to work with and guide you through the entire mortgage process. Now, what’s this about underwriting?

What is underwriting? While many prospective homeowners have likely heard the term before, it’s not common to know what what underwriting means or what an underwriter does. After all, it’s not an everyday term.

In this article we’ll take you through what to expect from a mortgage underwriter, how the underwriting process works and what you can do to optimize your chances for a clean, issue-free approval when applying for a mortgage on your new home or doing a refinance.

WHAT IS UNDERWRITING?

In the world of banking and mortgage, loans aren’t issued based on the cut of your jib, who you know or where you work. Lenders require an extensive process to evaluate your finances and financial behavior to ensure that you’re a good candidate to repay the loan on time. Lenders don’t like to take unnecessary risks. Underwriters assess the risk of lending money to you on behalf of the lender.

An underwriter will examine your credit, income, debts and asset documentation and make a determination to approve or deny the loan based on your overall financial position in context of the size of the loan you are seeking. The decision they render depends on the above factors as well as your credit score. We’ll talk more about these in a moment.

In addition, the mortgage process today has become more digital and streamlined, and many lenders now possess advanced underwriting technology that allows them to perform preapprovals in minutes, while also reducing turn times for the final underwriting process.

What is an underwriter?

While underwriters also exist in both the insurance and securities industries to assess relevant risks therein, this article is only concerned with mortgage underwriters and how their analyses affect your chances for loan approval. Additionally, underwriting is typically broken down at a lender into three specialty groups:

Conventional: Fannie Mae and Freddie Mac conforming loans
Government: FHA, VA and USDA loans
Jumbo: Loans beyond the limit set by Fannie or Freddie and therefore not backed by any GSE or federal program

Applying for a loan is a document-intensive process where loan officers and their associates (for example, mortgage consultants and loan coordinators) are tasked with collecting a wide array of financial data to ensure they have a complete and accurate financial portrait of the borrower in order to properly assess risk.

Due to the complexity and number of tasks involved and the importance of rendering a fair decision based on all the facts, manual underwriting can take some time—anywhere from a few days to a few weeks depending on the borrower’s ability to obtain an appraisal and furnish all applicable documentation in a timely manner.

WHAT DOES AN UNDERWRITER DO?

Verify income & employment
Examine borrower credit history and credit score
Analyze debt-to-income ratio (DTI)
Ensure ample savings and other assets exist
Have an appraisal of the home and property done
Render a decision on whether to approve or deny the loan

Verify income & employment

Many steps in the underwriting process are based on inspecting financial-related documents to ensure that the applicant has sufficient funds to secure the loan and make monthly payments without defaulting. Verifying income is one of these steps in this assessment.

Typically, underwriters will want to see W-2s from the last two years as well as your two most recent paychecks in order to confirm the consistent receipt of income. For self-employment, a more extensive set of documents are required including profit and loss statements, balance sheets, K-1s and recent personal and business tax returns.

Examine borrower credit history and credit score

Once they enter into the homebuying process, borrowers are quickly accustomed to their credit score—that three-digit number that encapsulates their creditworthiness—being used everywhere as a measurement of financial health. Underwriters will pay close attention to your score but they will also examine your credit history in the form of a detailed credit report to determine if there are any red flags such as late payments, bankruptcies, foreclosures or overuse of credit.

Analyze debt-to-income ratio (DTI)

To determine DTI, underwriters will need to be provided with a list of both your monthly income and monthly debts. The lower your DTI, the better it is for your approval prospects. Most large lenders prefer to see a DTI of 43% or less for a conventional loan.

An individual with a $6,500 monthly income and $2,200 in consistent monthly expenses (proposed mortgage payment [$1,600] + other household expenses [$400] + student loan [$200]) will have a DTI of 34%. This is calculated by dividing total monthly expenses by total monthly income.

Ensure ample savings and other assets exist

In determining whether or not you’re a suitable candidate for a new loan, the underwriter will need to take a look at your savings as well as any liquid assets that are available to cover down payment and closing costs.

Pertinent assets are anything that can be turned into liquid cash–real estate holdings, stocks, bonds and other securities and even things like cars, boats and works of art.

Savings are important because they are the borrower’s safety net should they face unexpected financial hardship at some point during the life of the loan. This asset type is known as reserves Both savings and checking accounts will count toward reserve requirements.

Have an appraisal of the home and property done

A lender never wants to approve a loan amount that is in excess of the value of the home being purchased; this is the chief reason that an underwriter will order an appraisal to be conducted. The lender wants to be absolutely certain that the loan being offered is commensurate to the value of the home.

Render a decision on whether to approve or deny the loan

It all boils down to this: Can you afford the costs of the home given your income and assets? Does your financial history indicate that you are a low-risk candidate for the lender to extend funds to?

A good underwriter works diligently to compile a complete portrait of your financial history, including all streams of income, assets, debts and credit behavior over an extended period of time. It’s an evaluation that demands patience, knowledge, thoroughness and full access to all relevant documents.

What is underwriting?

The end of the underwriting process: common decisions

At the end of the process, the underwriter must make a decision on the loan for which you’ve applied. In the best of all possible worlds, that decision is an approval that enables you to proceed to closing.

The least favorable outcome, of course, is denial. This means the lender will not approve the loan you’ve applied for. This can be crushing news to prospective homebuyers.

Another common judgement is for the underwriter to say “approved with conditions.” This is a type of loan status that is almost always a precursor to final approval by the underwriter. It typically comes after initial review where it’s understood approval will be granted pending the furnishing of additional borrower documentation, appraisal, title insurance, etc. Once these administrative issues are resolved (and subsequently reviewed by the underwriter), borrowers will receive the “clear to close” signal and move to the final process in procuring a mortgage.

Technology and underwriting

We can’t possibly describe the role of the modern underwriter without also talking about technological advances that have enabled many underwriting processes to go digital, or be entirely automated.

While the role of AI and machine learning within underwriting is not widely appreciated by most prospective homeowners and those seeking to refinance, it is a substantial component to the modern underwriting process. Automating certain underwriting tasks can reduce turn times from hours or even days to mere minutes. And digital advancement is not only rendering unprecedented efficiencies, but also enables underwriting to reduce errors and even track behavioral patterns that help determine creditworthiness of borrowers.

Preapprovals, prequalifications and underwriting

Preapprovals are becoming almost indispensable within the retail mortgage sector, as more and more lenders are leveraging the many inherent efficiencies of digital technology (in concert with seasoned professionals) to rapidly determine basic loan eligibility and approval. These automated underwriter systems (AUS), employ rapid, automated processes that use advanced algorithms as part of a sophisticated software system to make preliminary underwriting decisions. Hence, the preapproval.

Borrowers like preapprovals because they provide validation of their financial power and perceived creditworthiness by the lender. Sellers like them because they provide the necessary proof that the borrower has the financial might to make the purchase, allowing them to compete with cash buyers. Without a preapproval, many borrowers experience unforeseen last-minute obstacles when trying to get approved for their mortgage.

Lenders like preapprovals for the same reasons, as well as the added bonus of having an opportunity to establish a methodical step-by-step process for reviewing and verifying the many files that accompany the underwriting process without the last-minute crunch. Ultimately, this makes it easier to spot issues and submit conditions ahead of time, issues that could otherwise cause delays during the final phase of underwriting.

Prequalifications are different from preapprovals and are not typically verified by a lending institution. They merely give you an indication of affordability—not a thorough vetting thereof.

Optimizing the underwriting process

While much of your credit history and financial behavior will have been set in advance of your home search and mortgage application, there are a few things you can do as the process kicks off to optimize your chances of a clean underwriting experience.

Avoid any significant life changes including new lines of credit

You don’t want to create any surprises for the underwriters assessing your creditworthiness as your big day approaches. With this in mind, it’s unwise to make any large purchases or open any new lines of credit that may impact your credit score and jeopardize your application.

You’ve likely been preapproved already by the lender; now as closing moves into sight, they’ll review your employment, assets, debts, credit history and credit score one more time. You don’t want to derail an approval by making any material changes that will force the underwriter to issue new conditions, etc.

Be accessible to the underwriter and respond in a timely manner

It’s important to remain accessible during the underwriting process. There are times when the underwriter or other loan professionals have questions, require clarifications or need additional documentation to finish their job. For example, joint bank accounts or income from alimony or child support payments may necessitate additional, verifiable documentation. Make sure to respond to any queries immediately so your application remains at the top of the underwriting queue.

Always prioritize honesty in your interactions with underwriting

Communicating effectively, timely and honestly with your lender is of critical importance throughout the mortgage process. Regular, transparent communication with the underwriter is always going to put you in a better position than “going dark” or providing ambiguous or errant documentation in an attempt to fudge the facts.

Sometimes it’s as simple as taking a moment to explain a period of unemployment or providing a legitimate reason why a single credit card payment was missed. Only by accurately explaining your perspective in full detail can the lender make an informed decision based on the facts. Issues are part and parcel of the underwriting process; how you deal with them can make a huge difference as to when and if you are approved.

In conclusion

Given the inherent complexity of the homebuying process, prospective homeowners and those looking to refinance need to do all they can to avoid unexpected issues that may contribute to potential delays. Delays are almost never advantageous to the borrower; they invite seller anxieties and may put your loan approval at risk. This is precisely why you always want to do everything you can in advance to ensure a smooth underwriting process with as few conditions as possible.

Remember, the underwriter is there to measure the risk to the lender and to make sure you— the borrower—have been fully vetted, and if approved, will be a strong candidate to pay back the loan as agreed. Underwriters perform a vital behind-the-scenes function for lenders and are a critical component to any mortgage process. Make sure you assist them by providing all the necessary financial documentation in a helpful, timely manner.

Uncategorized • Uncategorized • Uncategorized • October 19, 2022

Getting to the Bottom of these Rollercoaster Rates

by Rob Hurt

Why are mortgage rates going up and down? | Guaranteed Rate Affinity

Let’s start with a graph:

Chart, line chart Description automatically generated

Source: https://www.rate.com/mortgage-rates

This graph is almost exclusively peaks and valleys, no plateaus to be seen. Apologies if you strained your neck following along with all of the ups and downs.

So what are you looking at? This charts the average weekly mortgage rates for a 30-year fixed-rate mortgage from the first week of June to the second week of September of 2022. Rates were averaging 5.09% at the beginning of the graph and were 5.98% on the far right side. And in the middle, we see a lot of volatility.

Introducing rollercoaster rates

Rates are also going up and down on a daily basis, too. According to Mortgage News Daily, in the first week of September, rates went up 0.24% one day, down 0.21% the next, then back up 0.23% before two days of drops.

You see why we’ve been calling them roller coaster rates, right? Let’s look at what’s causing them to bounce around so much.

There are many different economic factors that will ultimately affect the mortgage rate you’ll get quoted from a loan officer. A lot of them are specific to you and your personal finances, like credit score and debt-to-income ratio. But the factors that most affect mortgage rates nationally reflect the greater economy. And as you may have heard, the economy is going through a weird phase right now.

Here are the five main factors that are affecting the mortgage rates you’re seeing.

Federal Reserve’s monetary policy

One of the most important factors in our economy is the monetary policy set by the Federal Reserve Bank, commonly referred to as the Fed. Their federal funds rate is a tool that they have to move the economy in the direction they want it to go. The federal funds rate is what commercial banks use to lend and borrow from each other.

That rate is not the same as the mortgage rate, but they are often mentioned together because mortgage rates often mimic the changes in the Fed’s rates. The rate impacts the long-term outlook of the bond market, which is a driver of mortgage rates (and we’ll talk about that later).

When the Fed raises rates, mortgage rates usually follow that upward trajectory. The Fed has been setting the federal funds rate higher and higher lately, which is why the more general trend of mortgage rates over the last year has been going higher and higher as well, despite frequent dips.

Wondering why the Fed has been moving their rate up? For one purpose—to fight inflation, which is one of the Fed’s main missions and the next rate-affecting factor that we’ll discuss.

Inflation

Inflation measures the declining value of currency throughout a period of time. It shows how the prices of the things we buy tend to go up over time due to lowering supply and increasing demand. When inflation gets higher, the purchasing power of the dollar goes down, meaning it costs more to buy something today than it did yesterday.

If you’ve heard any economic news over the last year or so, you know that inflation has been a concern for some time. As of this writing, the inflation rate was 8.3% higher than a year ago, which is down 0.1% from the previous month and half a percentage point from June. The Fed’s goal is to keep the rate of inflation around 2%. This higher rate of inflation is reflected in higher prices at the gas pump, for groceries and many other areas of the economy.

Inflation affects mortgage rates because lenders want to make sure that the money they earn on the interest of the loan is enough to overcome inflation. As inflation has gone up, lenders have responded with higher mortgage rates.

Bond market

When explaining the federal funds rate, we mentioned that that rate affects the bond market, but we didn’t mention how much of a role the bond market plays on mortgage rates. The performance of the bond market has been said to be the closest corollary to what’s going on with mortgage rates, with the 10-year Treasury Bond yield, also known as the 10-year T-note, known to follow the closest.

That’s because banks and investment firms package groups of mortgages into investment products that are called mortgage-backed securities. You may have heard that term as a contributing factor to the housing crash of 2008-2009, but don’t worry, these products have much more stringent guidelines, removing some of the risk that caused that great downturn.

Institutions purchase these mortgage-backed securities because they are a fairly consistent source of income, which are known as yields. When the bond market in general is performing well, mortgage-backed securities must keep up with their yields, so that could drive mortgage rates higher.

The bond markets have not been performing well over the first half of 2022. This has spooked investors and helped pull mortgage rates back down, even though rates have trended upward throughout 2022.

How fast the economy is growing

The health of the overall economy obviously plays a huge factor in mortgage rates. It is measured in many ways, and some of the most reliable are gross domestic product (GDP) and the employment rate. When the economy is performing well, more and more people are finding jobs and getting paid more. This in turn leads to more spending money on things, including on new homes. When more people have money to spend on a mortgage, lenders can set their interest rates higher.

However, the economy is confusing experts right now. Employment has been positive for a few months now, with numbers surging past where they were at the start of the pandemic. But there are also worries about a recession coming, fueled in part by the high inflation we’ve been seeing. Mortgage rates usually come down during recessions.

Just as the economy has been confusing experts, it also seems to be confusing mortgage rates right now. These contradictory economic datapoints seem to play a large part in today’s rollercoaster nature of rates.

Conditions in the housing market

Chalk up this last major factor to that tried-and-true economic principle of supply and demand. When demand is low, mortgage rates come down to try to entice more people to buy a home.

However, unusual and unique factors have rippled across the housing market since before the pandemic, and they continue to shake out now. It all started with a lack of inventory of homes for sale, which was actually an issue from at least 2019. When there aren’t enough homes for sale, housing prices go up as buyers compete against each other by raising what they’re willing to offer.

When the pandemic started, there was concern that the economy would suffer, so the Fed responded by lowering their rates to zero. This brought mortgage rates down to historic lows, reaching an average of 2.65% in January of 2021. These low rates, coupled with the greater focus on living spaces forced upon everyone by new WFH policies, brought buyers into the market with a force hardly ever seen before.

Consequences of keeping rates low

Despite the increase in demand, the Fed decided to leave interest rates low in order to prop up the economy. This led to lower and lower supply, as buyers took advantage of low rates to keep snapping up whatever homes they could find. Home prices kept going up as well.

Then the Fed decided it needed to start putting upward pressure on rates by bringing interest back into their federal funds rate, which pushed mortgage rates up. But home prices stayed at the same level they were at when mortgage rates were low, in fact prices kept going up even as mortgage rates were going up.

This led to a huge affordability problem.

The effect of affordability

The average price of a home has gone up almost $60,000 in a year, from $382,600 for the second quarter of 2021 to $440,300 in the second quarter of this year. In that time, the average mortgage rate in the last week of June went from 3.02% in 2021 to 5.7% in 2022.

These numbers are intended just as an example, but let’s say you could put down 20% on that average priced home in 2021 and have the same dollar amount for a down payment this year. Just take a look at the difference in monthly costs for the same home, purchased at different times one year apart:

Year	Home Price	Mortgage Rate	Down Payment	PMI	Monthly Payment (including taxes, insurance, and PMI)
June 2021	$382,600	3.02%	$76,520 (20%)	$0	$1,843
June 2022	$440,300	5.7%	$76,520 (17.4%)	$198	$2,829

This affordability issue, along with buyers frustrated by bidding wars and not finding a home they like due to the lack of options, has pushed potential buyers to the sidelines. Many are waiting for more favorable conditions before reentering the market. So, all of a sudden, demand is dropping, and that’s pushing lenders to tentatively lower rates to entice more buyers to get back into the market.

How these factors work together

To summarize, here are how those five economic factors are affecting the mortgage rates you’re seeing today:

Bringing rates up	Pulling rates down	Confusing rates
Fed monetary policy	Bond market	Economic growth
Inflation	Housing market conditions

This push and pull effect likely accounts for much of the rollercoaster nature of mortgage rates. That’s why it’s best to keep an eye on rates, and be prepared to lock in a low rate the moment you see it.

October 19, 2022

Should You Still Buy a Home with the Latest News About Inflation?

by Rob Hurt

While the Federal Reserve is working hard to bring down inflation, the latest data shows the inflation rate is still high, remaining around 8%. This news impacted the stock market and added fuel to the fire for conversations about a recession.

You’re likely feeling the impact in your day-to-day life as you watch the cost of goods and services climb. The pinch it’s creating on your wallet and the looming economic uncertainty may leave you wondering: “should I still buy a home right now?” If that question is top of mind for you, here’s what you need to know.

Homeownership Is Historically a Great Hedge Against Inflation

In an inflationary economy, prices rise across the board. Historically, homeownership is a great hedge against those rising costs because you can lock in what’s likely your largest monthly payment (your mortgage) for the duration of your loan. That helps stabilize some of your monthly expenses. James Royal, Senior Wealth Management Reporter at Bankrate, explains:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

And with rents being as high as they are, the ability to stabilize your monthly payments and protect yourself from future rent hikes may be even more important. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains what happened to rents in the latest inflation report:

“Inflation refuses to budge. In September, consumer prices rose by 8.2%. Rents rose by 7.2%, the highest pace in 40 years.”

When you rent, your monthly payment is determined by your lease, which typically renews on an annual basis. With inflation high, your landlord may be more likely to increase your payments to offset the impact of inflation. That may be part of the reason why a survey from realtor.com shows 72% of landlords said they plan to raise the rent on one or more of their properties in the next year.

Becoming a homeowner, if you’re ready and able to do so, can provide lasting stability and a reliable shelter in times of economic uncertainty.

Bottom Line

The best hedge against inflation is a fixed housing cost. If you’re ready to learn more and start your journey to homeownership, connect with a real estate professional today.

October 11, 2022

Saving for a Down Payment? Here’s What You Should Know

by Rob Hurt

As you set out to buy a home, saving for a down payment is likely top of mind. But you may still have questions about the process, including how much to save and where to start.

If that sounds like you, your down payment could be more in reach than you originally thought. Here’s why.

The 20% Down Payment Myth

If you believe you have to put 20% down on a home, you may have based your goal on a common misconception. Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

Unless it’s specified by your loan type or lender, it’s typically not required to put 20% down. According to the latest Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. There are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

This is good news for you because it means you could be closer to your homebuying dream than you realize. For more information, turn to a trusted lender.

Down Payment Assistance Programs Can Be a Game Changer

A professional will be able to show you other options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from downpaymentresource.com, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

A recent article explains why programs like these are helpful:

“These resources can immediately build your home buying power and help you take action sooner than you thought possible.”

And if you’re wondering if you have to be a first-time buyer to qualify for these programs, that’s not always the case. According to an article from downpaymentresource.com:

“It is a common misconception that homebuyer assistance is only available to first-time homebuyers, however, 38% of homebuyer assistance programs in Q1 2022 did not have a first-time homebuyer requirement.”

There are also location and profession-based programs you could qualify for as well.

Bottom Line

Saving for your down payment is an important first step on your homebuying journey. Connect with a local real estate advisor (like Rob Hurt!) and trusted lender today to begin exploring your options.

Original Blog Post Link here

Home Ownership • October 5, 2022

The Long Term Benefit of Home Ownership

by Rob Hurt

Today’s cooling housing market, the rise in mortgage rates, and mounting economic concerns have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to factor the long-term benefits of homeownership into your decision.

Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how you gain equity and wealth as home values grow with time.

The National Association of Realtors (NAR) explains:

“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.”

Here’s a look at how just the home price appreciation piece can really add up over the years.

Home Price Growth Over Time

Even though home price appreciation has moderated this year, home values have still increased significantly in recent years. The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy those gains have been over the last five years.

If you look at the percent change in home prices, you can see home prices grew on average by almost 64% nationwide over that period.

That means a home’s value can increase substantially in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains you stand to make become even clearer (see map below):

The second map shows, nationwide, home prices appreciated by an average of over 290% over roughly a thirty-year span.

While home price growth varies by state and local area, the nationwide average tells you the typical homeowner who bought a house thirty years ago saw their home almost triple in value over that time. This is why homeowners who bought their homes years ago are still happy with their decision.

Even if home price appreciation eases as the market cools this year, experts say home prices are still expected to appreciate nationally in 2023. That means, in most markets, your home should grow in value over the next year even if the pace is slower than it was during the peak market frenzy when prices skyrocketed.

The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and fight annual lease hikes for no long-term financial benefit? Instead, consider buying a home. It’s an investment in your future that could set you up for long-term gains.

Bottom Line

Don’t let the shifting market delay your dreams. Data shows home values typically appreciate over time, and that gives your net worth a nice boost. If you’re ready to start your journey to homeownership, reach out to a real estate professional today.

Link to original post:
https://www.keepingcurrentmatters.com/2022/10/05/the-long-term-benefit-of-homeownership/

Community • October 4, 2022

Fall Festivals Across Dallas/Ft. Worth

by Rob Hurt

There’s no shortage of fall-inspired activities to do this season, so we’ve compiled a list of our favorite fall festivals across DFW.

September 22 was the official first day of fall, so everyone across Dallas-Fort Worth is in an autumn state of mind. There’s no shortage of fall-inspired activities to do this season, so we’ve compiled a list of our favorite fall festivals and events across Dallas-Fort Worth.

Whether you’re looking for something kid-friendly or spine-tingling, there’s a festival for everyone on our list:

AUTUMN AT THE ARBORETUM

This annual celebration at the Dallas Arboretum is a must-see on many people’s lists. Running now through October 31, find yourself transported into a fantasy world with this year’s theme: A Fall Fairy Tale. Prepare to exclaim “oh my gourd” as you walk through the elaborate displays that feature more than 100,000 pumpkins, gourds and squash as well as autumn flowers.

STOCKYARDS CHAMPIONSHIP RODEO

What would Fall in Texas be without a good old fashioned rodeo? Head over to the world-famous Stockyards in Fort Worth for one of their exciting Friday or Saturday night rodeo competitions. Events include tie-down, break away and team roping, as well as barrel racing and bull riding.

PUMPKIN NIGHTS

Needing your pumpkin fix this autumn? Open now through October 30, Pumpkin Nights at Howell Farms in Arlington has it all. Travel along a half-mile walking path featuring fantastical lands built using over 5,000 hand-carved real and artificial pumpkins. After the path, the seasonal celebration continues with entertainment and games in The Village.

STATE FAIR OF TEXAS

Running September 30 through October 23, everything is bigger at the State Fair of Texas! Ride the iconic ferris wheel, win an oversized stuffed animal, listen to live music and last but not least, eat delicious fried food. Try the award-winning Fried Charcuterie Board and Peanut Butter Paradise, or enjoy a classic Fletcher’s corn dog.

FRIGHT FEST – SIX FLAGS OVER TEXAS

If you’d rather partake in blood-curdling thrills, Six Flags Over Texas’s Fright Fest is right up your (dark) alley. Find yourself screaming both on and off the rides as you walk through themed scare zones and tackle the New Texas Giant or Titan at night. Continue the frights of Halloween at one of the many haunted houses across the metroplex like Fort Worth’s Cutting Edge, Plano’s Dark Hour or Waxahachie’s Screams.

DENTON ARTS AND JAZZ FESTIVAL

As one of the largest tourist attractions in North Texas, the Denton Arts and Jazz Festival on October 1-3 provides the finest in entertainment and art across the Dallas/Fort Worth Metroplex.Enjoy jazz, blues, and cross-cultural music from six stages, a delicious variety of food, breathtaking art and kids activities – making this event perfect for the whole family.

MIDLOTHIAN VILLAGE DAY FESTIVAL

Head to Midlothian on October 15 for the 40th Annual Midlothian Village Day Festival. This community-centered event is filled with fun activities including crafts, games, inflatables, entertainment, food vendors and a raffle. There is no cost for admission, and this year features a parade so don’t forget to bring a chair.

MCKINNEY WINE AND MUSIC FESTIVAL

Nothing beats an afternoon of wine tasting and live music! On Saturday, October 15, the 6th Annual McKinney Wine and Music Festival features 30 award-winning wineries, live music all day and a huge variety of local vendors.

WATER LANTERN FESTIVAL

If you’re looking for a unique fall experience this October, head over to Fort Worth’s Panther Island Pavilion on Saturday, October 22 for the Water Lantern Festival. Enjoy food trucks, kids activities and live music as you create your unique lantern. At sunset, watch as thousands of lanterns are released onto the lake carrying messages of hope, happiness and healing.

ENNIS AUTUMN DAZE

Looking for some fall fun for the whole family? Head down to the 20th annual Ennis Autumn Daze in historic downtown Ennis on October 28-30. Featuring live music from Pat Green and Gary P. Nunn, carnival rides, haymaze, pumpkin patch, cornhole tournament, professional pumpkin carvers, food, shopping vendors and more, you won’t want to miss out on this annual event.

PUMPKIN PATCHES

Whether you want to pick out pumpkins to carve or take family pictures, here’s our list of favorite pumpkin patches:

Aubrey – Team Family Farms
Cleburne – Mainstay Farm Park Pumpkin Days
Decatur – Black Creek Farm & Pumpkin Patch
Flower Mound – Flower Mound Pumpkin Patch
Frisco – Pumpkins on the Prairie
Grapevine – Hall’s Pumpkin Farm
McKinney – Storybook Ranch
Midlothian – Shadow Creek Pumpkin Farm
Rockwall – Blase Family Farm

Uncategorized • October 4, 2022

The Cost of Waiting for Mortgage Rates To Go Down

by Rob Hurt

Mortgage rates have increased significantly in recent weeks. And that may mean you have questions about what this means for you if you’re planning to buy a home. Here’s some information that can help you make an informed decision when you set your homebuying plans.

The Impact of Rising Mortgage Rates

As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.

Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is $389,500). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.

As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a real estate advisor to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.

Are Mortgage Rates Going To Go Down?

The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. Realtor.com says this about where rates could go from here:

“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.”

So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get inflation under control.

And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”

Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining equity over time which will help grow your net worth. The question now becomes: what makes more sense for you?

Bottom Line

Each person’s situation is unique. To make the best decision for you, partner with a real estate advisor to explore your options.