Homeowners are bullish on prices, while buyers may find there’s no inventory

Rows of houses in Las Vegas.

Jacob Kepler | Bloomberg | Getty Images
Rows of houses in Las Vegas.

Americans are bracing for houses to get costlier.

In a recent survey, 64 percent said they’re anticipating an increase in property values during the next year, according to findings from Gallup. (Click on graphic to enlarge.)

That’s the highest share since the housing bubble in the mid-2000s, when 70 percent were predicting price levels to soar.

Optimism levels vary depending on which pocket of the country you find yourself. Nearly 80 percent of Americans in the West forecast a pricier real estate market in the next year, compared with 64 percent in the South, 58 percent in the East and 56 percent in the Midwest.

The biggest takeaway? “People are very positive about the housing market,” said Frank Newport, editor-in-chief at Gallup.

How to use your home as a source of cash

How to use your home as a source of cash  

Despite rising prices, Americans want in.

To that point, 45 percent of non-homeowners say they plan to buy a house in the next five years. However, just 22 percent of homeowners in that same time period anticipate selling. Such an imbalance between supply and demand could explain in part why property values are on the rise, Newport said.

Of course, while rising home prices are great if you’re a homeowner looking to sell, that trend isn’t fabulous if you’re in the market. Accumulating enough for a down payment becomes that much more of a stretch.

For example, the growth of student loan debt already poses a major barrier to homeownership for many Americans. More than 80 percent of people ages 22 to 35 with student debt who haven’t bought a house yet blame their educational loans, according to the National Association of Realtors.

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Regardless, two-thirds of Americans still believe right now is a good time to buy a house, Gallup found.

“The more cynical investor swoops in and buys when prices are at the bottom,” Newport said. “But Americans are not cynical investors.”

Gallup conducted telephone interviews between April 2 and 11, with a random sample of 1,015 adults age 18 and older. The results have a margin of error of plus or minus 4 percentage points.

More from Personal Finance:
These are the ways student loans stop people from buying a house
Student loan nightmare: Some borrowers have to start over
People with massive student debt hope Trump will let them declare bankruptcy

WATCH: How to win a bidding war when buying a home

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source: https://www.cnbc.com/2018/05/08/more-americans-expect-home-prices-to-rise-over-the-next-year.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo

US sales of new homes shot up 4 percent in March

Sales of new U.S. homes jumped 4 percent in March, propelled by a surge of buying in the West.

The Commerce Department said Tuesday that sales last month were at a seasonally adjusted annual rate of 694,000. The two prior months had their sales revised upward with the annual rate being 667,000 in February and 644,000 in January. For the first three months of 2018, sales are running 10.3 percent higher than a year ago.

Homebuyers are snapping up newly built houses as the economic outlook has continued to improve in recent months. Nor have the gains been derailed so far by 30-year mortgage rates climbing to their highest averages since early 2014.

Still, the solid sales growth for new homes also shows that many would-be buyers can’t find existing homes that are available to purchase. Listings for existing homes sank to the lowest levels on record for March, the National Association of Realtors reported on Monday.

New homes tend to cost more than older properties. The median sales price of a new home rose 4.8 percent from a year ago to $337,200, a nearly $87,000 premium on the median cost of an existing home.

Prices for a new home are increasingly concentrated at higher price points. In 2016, 53 percent of new homes cost more than $300,000. That figure climbed to 60 percent for new homes sold in March.

The March increase was driven almost entirely by a 28.3 percent leap in sales in the West. New-home purchases rose slightly in the South, fell in the Midwest and plunged in the Northeast. The new home sales report can be volatile on a monthly basis, causing the numbers to be revised later.

source: http://www.foxnews.com/us/2018/04/24/us-sales-new-homes-shot-up-4-percent-in-march.html

Freshen up your home for spring with these 7 steps

Whether it’s obvious by the weather, spring has sprung. As temperatures thaw, it’s also the perfect time to tackle those home improvement projects you’ve been putting off.

Lacking direction or don’t know where to start? These seven steps will help start your spring with a fresher home inside and out.

1. Install new house numbers  

Though they’re a small detail, house numbers can increase your home’s charm. A prime first impression for new visitors, your house numbers will be the first thing guests seek out when navigating to your address. So keep them fresh to boost your house’s curb appeal.

2. Paint your front door

Residential Front Door Of A Georgian House In Dublin

The front door can be your home’s most prominent first impression.  (iStock)

For those who glaze right over the house numbers, your front door will be a more prominent first impression. The centerpiece to your home, your front door can set the tone for the entire house. Bold colors are all the rage now. But regardless of the color, adding a layer of paint will make your whole home look freshened up. Learn how to paint your door here.

3. Deep clean

Shot of a handsome mature man and his daughter mopping the floors in their home as part of their spring cleaning

To get the deepest clean, follow steps like dishwashing vent covers, hosing down area rugs and using lots of baking soda.  (iStock)

You never realize how dirty something was until you see it clean. Deep cleaning your home can make your walls, floors and décor look brand new. To get the deepest clean possible, follow these steps from homehacks, like dishwashing vent covers, hosing down area rugs and using baking soda in more places than you ever thought you could.

4. Make the backyard your favorite escape

Quick fixes like oversized plants, DIY seating, an outdoor bar and a cohesive theme will transform your backyard from an extra grassy space to the perfect spot for both solitude and entertaining. These ideas from Lonny might spark your creativity.

5. Build a plant wall

Botanical living room with grey sofa, green pillows and bookcase

Give your home a wall of succulent boxes, framed moss or contemporary plant stands to usher in spring.  (iStock)

A vertical garden not only looks clean and modern, but also ups the air quality in your home. Whether you install succulent boxes, mount some framed moss or hang contemporary plant stands, the extra greenery will make your home instantly look alive and ready to usher in the season.

6. Paint ugly countertops

Can’t stand the look of laminate countertops? Before you shell out thousands of dollars for new ones, try a quick fix that will hold you over for a few years. With these step-by-step instructions, you can transform your laminate to look like woodstone or even granite.

7. Update hardware

Close up image depicting an antique oak cabinet with many drawers and many unique knobs of different colors and patterns. Room for copy space. Image taken on mobile device.

For a creative twist, try installing a statement knob or handle on a select cabinet door.  (iStock)

New kitchen and bathroom knobs are the easiest facelift a home can get. Spring offers the perfect chance to finally fix mismatched kitchen metals or update dated and worn-out handles and doorknobs. For a creative twist, try installing a statement knob or handle on a select cabinet or door.

RD Training Systems Is Coming to Orlando, Florida in April 2018

Rick Kurtz and RD Training Systems are bringing their real estate training to Orlando, Florida this coming April 2018.

ORLANDO FLORIDA,  — Rick Kurtz and RD Training Systems are bringing their real estate training to Orlando, Florida this coming April 2018. This groundbreaking real estate training is to help professional agents stay up-to-date and on the top of many competitors. This training will give the participants a lot of good tools that can help them become a thriving result. There are a lot of things to be expected during the meeting, including high power and minute-to-minute content-rich presentations. Rick Kurtz, the speaker, focuses on proven systems which are made by Realtors for Realtors.

This seminar will teach real agents how to run a real estate business.

If you would like to know how to come to this or any of our other events, please don’t hesitate to reach out and let us know.

Call us today at (844) 454-8787 or visit our website at http://rdtrainingsystems.com.

As real estate agents, we are constantly inundated with offers of training to improve upon our existing business plans from marketing to the service we provide. With all that we have to choose from, it can be a wild west of uncovering what will be of the most value and deliver us the most up to date and effective strategies. All of this while also anticipating what is next going to be at the forefront of the real estate industry.

Downsizing your home: How to determine if a smaller house is the right move

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PM Images | Getty Images

Tim and Tracey Kerin knew it was time to downsize soon after their grandson Maximus was born.

“We started to re-evaluate what’s important to us at this stage in life and decided that our health and family were more important than a larger home with a big backyard and pool,” says Tim, 58, who along with Tracey, 59, operate a commercial cleaning and construction business.

Last December, the Kerins packed up a two-story colonial replete with a beautifully landscaped garden in Damascus, Maryland, and moved to New Smyrna Beach, Florida, near their sons Justin, 35, and Jason, 33, and their families. And of course, they get to see Maximus, now 2. “We usually see Max a couple of times a week, and he spends one night every weekend, which we look forward to,” Tim says.

The Kerins are not alone in their quest for a simple life centered on happiness. According to a recent TD Ameritrade Survey, 42 percent of preretirees are likely to downsize if they haven’t done so already. Some 25 percent of respondents are moving to a warmer climate, and 17 percent are relocating closer to loved ones.

Another critical consideration is cost. “Retiring with a lower mortgage payment, property tax bill, smaller place to clean and maintain can be attractive,” says Dennis LaVoy, CFP of Telos Financial in Plymouth, Michigan.

Run the numbers

Before downsizing, homeowners should run the numbers to make sure it makes financial sense.

“Look at costs associated with selling the primary home, such as preparing the house for sale, agent’s commission, moving and buying a smaller home to get an idea of the fixed costs to relocate,” says Aaron Galileo, senior loan officer at Investors Home Mortgage in Howell, New Jersey.

Once a person decides to downsize, he or she must keep lifestyle in mind. “You need to save as much as you can for retirement to keep your lifestyle intact,” says Jeff White, a financial analyst at FitSmallBusiness.com. “If you can lower your monthly mortgage payment from $2,500 for the big home to $1,200 per month for a nice condo that fits you and your spouse, why not leap and invest the extra $1,300 into your retirement plan?”

Consider the space you need

The amount of space you have may also influence your decision to scale down. “If the kids have moved out and you’re an empty-nester, do you need all of that space?” asks Brian Graves, co-founder of Everything But the House, an online estate sale marketplace. He says factor in how much space you need based on your family dynamic and the frequency of out-of-town guests.

For some homeowners, maintaining a property, especially an older one, is no longer attractive. That was the case for Sean Dougherty, age 51, and his wife, Juliana V. Atinaja-Dougherty, 56. In February, they moved into a two-bedroom, two-bath apartment in Manhattan after living for more than 20 years in the 2,000-square-foot single-family ranch house in Clifton, New Jersey, where his wife grew up. “The house was run down in small, but noticeable ways, and we kind of lost the emotional energy to fix it up for sale, so we priced it to sell,” says Sean, a senior vice president at a public relations firm, and Juliana, an attorney. “Plus, we always wanted to move back to New York at some point, and having reached a point where we are more financially comfortable, it made sense.”

Factor in cost-of-living changes

Part of their decision was doing the math and figuring out they could afford to do it, especially given that the move to New York would increase their cost-of-living expenses substantially thanks to the rent they now pay. The other part was wanting to enjoy the entertainment and cultural experiences of big-city living.

“In my case, I wanted to do more in New York like seeing friends, taking in a Broadway show or going to a book reading without worrying about the frustrating commute back to New Jersey,” Sean says. Even still, they are happy with the move. “I put a ceiling on what we could afford, and I could still keep my job as my wife plans to retire soon,” Sean says.

His best advice for those thinking about downsizing: “Don’t wait too long. It’s easy to live in the status quo of your life, but then you deny yourself other experiences.”

source: https://www.cnbc.com/2018/04/09/downsizing-your-home-how-to-determine-if-a-smaller-house-is-the-right-move.html

 

Home Prices in 20 U.S. Cities Advance More Than Forecast

A limited number of properties for sale against a backdrop of steady demand helped keep home prices elevated in January, according to S&P CoreLogic Case-Shiller data released Tuesday.

HIGHLIGHTS OF HOME PRICES (JANUARY)

  • 20-city home-price index increased 6.4% y/y (est. 6.2%), after rising 6.3% y/y
  • National gauge of home prices rose 6.2% y/y
  • Seasonally adjusted 20-city index advanced 0.8% m/m (est. 0.6%)

Key Takeaways

Home prices continue to post solid gains across the country, with the largest advances occurring in the West. While demand is being spurred by robust job growth, inventory remains lean and is allowing sellers to raise asking prices. The number of previously owned houses on the market during the month was the lowest for any January in National Association of Realtors’ records back to 1999.

Higher property prices and mortgage rates near a four-year high, however, are putting a dent in affordability. New-home sales have declined for three straight months, according to government data released Friday, while first-time buyers of previously owned houses made up a smaller share of total purchases in February.

Economist Views

“The home price surge continues,” David Blitzer, chairman of the S&P index committee, said in a statement. “Two factors supporting price increases are the low inventory of homes for sale and the low vacancy rate among owner-occupied housing.”

Other Details

  • All 20 cities in the index showed year-over-year gains, led by a 12.9 percent increase in Seattle and an 11.1 percent gain in Las Vegas
  • After seasonal adjustment, Seattle, San Francisco and Atlanta had the biggest month-over-month gains
  • Washington has the smallest month-over-month advance at 0.2 percent

 

source: https://www.bloomberg.com/news/articles/2018-03-27/home-prices-in-20-u-s-cities-advance-more-than-forecast

 

US existing-home sales climbed 3% in February

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WASHINGTON — U.S. sales of existing homes rebounded in February after declining for the previous two months, a sign that many Americans are still looking to buy despite rising prices and a shrinking number of homes available on the market.

The National Association of Realtors said Wednesday that sales rose 3% last month to a seasonally adjusted annual rate of 5.54 million. This increase after declining sales in January and December suggests that competition will be heated during the traditional spring home-buying season.

“The upward trend in home sales remains intact but there are headwinds in the way,” said Jennifer Lee, a senior economist at BMO Capital Markets.

The shortage of properties for sale is creating a challenge for would-be homebuyers. As sales listings have steadily declined, prices have been climbing at the same time as a stronger job market has elevated demand — and, also, competition — for purchasing homes. Higher mortgage rates this year might also cause even fewer people to list their homes for sale, which would make the current supply squeeze worse.

The median home sales price was $241,700 in February, a 5.9% increase over the past year.

Prices are climbing, in part, because the number of sales listings has dropped. The supply of homes for sale declined 8.1% from a year ago to 1.59 million.

In February, sales climbed in the South and West but fell in the Northeast and Midwest.

First-time buyers appear to face the greatest obstacles from the decline in listings, according to an analysis by the real estate company Trulia. Starter homes have seen the steepest price increases as well as sharp drops in inventory — and a greater proportion of them are fixer-uppers that require additional investment from buyers.

Mortgage rates have been rising after President Donald Trump signed tax cuts into law toward the end of last year. The average 30-year mortgage rate was 4.44% last week, up from an average as low as 3.78% in early September, according to mortgage buyer Freddie Mac.

Real estate experts warn that higher rates could prompt more existing homeowners to keep their properties off the market, since selling their homes would require them to then buy a new home and pay more in mortgage interest.

 source: https://www.usatoday.com/story/money/personalfinance/real-estate/2018/03/21/us-existing-home-sales-climbed-3-percent-february/445184002/
for more real estate training, visit http://rdtrainingsystems.com

A booming housing market has realtors in a bind

Making a living as a realtor, which has never been easy, is becoming increasingly difficult. A record numbers of them are scrambling to broker a dwindling number of available properties in a hot market as housing prices continue to rebound from recession-era lows.

Membership in the National Association of Realtors topped 1.3 million in 2017, its highest level since the real estate market bubble burst a decade ago (the association’s members are called realtors). At the same time, however, the supply of homes for sale has contracted for more than two years as millennials, now the largest generation, enter their prime home-buying years. According to real estate brokerage firm Redfin, 607,836 homes were for sale in February, down from 754,160 in September 2017.

Not surprisingly, tight supplies are pushing up prices.

Real median home prices surged 29 percent between 2000 and 2016 and remain on a tear. Data from Redfin shows median home prices were $286,000 in February compared with $263,000 in the year-earlier period. As a result, even veteran realtors like Eric Billetta of Coldwell Banker face increased competition to land every sale when multiple offers are commonplace.

“A lot of realtors jumped out when that bubble burst,” said Billetta, who works in the Philadelphia suburbs. “You’re seeing a lot of younger agents coming in. You’re seeing a lot more part-timers coming into the business and take business from you.”

One of those new faces is Daniel Goldstein, who transitioned to real estate from the media several years ago. He understands the lengths realtors go through to land a sale because he has experienced it himself: His mother regularly receives unsolicited pitches from realtors interested in selling her house in California.

“She’s very happy where she is,” said Goldstein of Re/Max Town Center in Potomac, Maryland, outside of Washington, D.C. “She’s using equity from her house to convert some of the space into a rental unit. … It’s my first real estate development deal.”

Nationally, the inventory of homes on the market is at about a three-month supply, less than half the seven months worth in a typical healthy market, according to Boomer Foster, president of Long & Foster, the nation’s fourth-largest real estate brokerage. In many hot local markets, houses are on and off the market rapidly. The median number of days nationally is now 29, according to Redfin. In Seattle, that number is nine.

One reason for the boon in realtors is the profession’s low barrier to entry, requiring the passage of a state license to become a real estate agent at the minimum age of 18.

Demand for real estate license exams at the for-profit Hondros School of Business more than doubled between 2012 and 2017, forcing the school to add more locations, additional instructors and an online program, according to Marketplace.

The Bureau of Labor Statistics says the median salary for real estate brokers in 2016 was $56,970, and for agents it was $44,090. The top 10 percent earned more than $112,570.

Like everything else, however, the real estate profession isn’t as easy as it looks, especially in the current market, and many newcomers wind up quitting, according to Foster of Long and Foster. He figures 80 percent “wash out” in their first 18 months.

“It’s pretty much how it’s always been,” Foster said. “People look at our industry, and say ‘I like looking at houses, and I see how much my real estate agent made,’ and they think it’s easy. For the true real estate professional, it’s not easy — and they earn every penny they make.”

source: https://www.cbsnews.com/news/so-many-realtors-so-few-homes-for-sale/

Mortgage Rates Focus Shifts from Fed News to Geopolitical Risk

After dipping by about 10 basis points in the middle of last week, mortgage rates recovered all of that drop and are now in line with where they stood a week ago, just shy of four-year highs. The average prime 30-year fixed mortgage rate quoted on Zillow stood at 4.29 percent on Wednesday.

Incoming economic news and Federal Reserve expectations have dominated market headlines in recent news cycles, but political/geopolitical developments once again seized markets’ attention this week. Growing uncertainty about the direction of U.S. trade policy has pushed up the near-term risks to the American economy. Abroad, the results of elections in Italy raise risks to the European economic outlook.

To be clear, Fed news was still in the background: In testimony to the Senate Banking Committee on Thursday, Fed Chair Jerome Powell moderated comments made earlier in the week implying a faster pace of interest rate hikes than had been expected, but Fed Gov. Lael Brainard gave a speech echoing Powell’s initial comments. In addition, reports of the likely candidates to fill the Fed’s currently open Vice Chair role point to a more hawkish tilt to the Federal Open Market Committee.

The main economic news due this week is Friday’s monthly jobs report. Absent a major disappointment, geopolitical news is likely to continue dominating the headlines.

The post Mortgage Rates Focus Shifts from Fed News to Geopolitical Risk appeared first on Zillow Research.

Many lenders are loosening requirements for prospective home buyers

Alex Fine for The Washington Post

Will I or won’t I? An essential concern shared by prospective home buyers who need to finance their purchase is whether they will qualify for a mortgage for the amount and terms they require.

Pushback against overly tight credit after the housing crisis, a shrunken proportion of first-time buyers and worry about affordability as home values rose led to some tweaks to guidelines that could ease financing pressures for home buyers this year. Unlike the too-loose standards during the housing bubble, today’s borrowers still need to prove they can handle the loan.

“We are seeing thoughtful underwriting of loans and a greater understanding that younger first-time buyers are in a growth phase of their careers,” said John Pataky, executive vice president of the consumer division of EverBank in Jacksonville, Fla. “The approach is measured and guided, so we know that people becoming homeowners have the wherewithal to repay the loan as their income and career grow.”

Among the main changes to mortgage loans in the past year or two are the availability of low down-payment loans, a loosening of the debt-to-income ratio requirements and easing of rules about how student loan payments are calculated.

“Our challenge is always to increase access to sustainable credit,” said Jonathan Lawless, vice president of customer solutions for the Federal National Mortgage Association (Fannie Mae) in Washington.

Since mid-2016, there has been marginal easing in every aspect of mortgage loans, said Jonathan Corr, chief executive of Ellie Mae in Pleasanton, Calif.

“We’ve seen a very slight drop in the credit scores of approved loans, a slight increase in the debt-to-income ratios and an increase in loan-to-value, which means people are taking advantage of low down-payment loan programs,” Corr said.

Still, borrowers with shaky finances should not expect a loan approval like the old days. People who are weak in some areas would need to compensate with stronger finances in other areas.

Borrower confusion over loan rules

In spite of the existence of low down-payment loans and down-payment assistance programs, a NeighborWorks America survey in 2017 found that, on average, consumers think that 17 percent is the minimum required down payment to own a home. Yet loans with zero, 3 or 3.5 percent minimum down payments are readily available now.

In some cases, unsubstantiated concern might be stopping people from even applying for a loan. According to the recent Ellie Mae Borrower Insights Survey, 29 percent of renters think a 700 to 749 credit score is needed to qualify for a loan. But lender guidelines say a minimum credit score of just 620 is required for many loan programs. Some lenders will approve loans with a lower credit score if the borrower has substantial resources or other compensating factors.


Low down payments and assistance programs make getting mortgage loan approvals easier. (Illustration Dwuan D. June and istockphoto/TWP)

The average credit score of a closed loan was 722 in the Ellie Mae Originations Insight Report in December. Although 82 percent of conventional loans had credit scores of 700 or higher, 13.6 percent had credit scores between 650 and 699, and 4.7 percent had scores below 650. Federal Housing Administration (FHA) loans were almost evenly split among borrowers with a credit score of 700 or above (34 percent), between 650 and 700 (35 percent) and under 650 (31 percent).

“There are lots of programs available to serve different needs, but, typically, if a loan requires a higher credit score, it’s because the lender is taking a chance on you in some other way, such as allowing a lower down payment or a higher debt-to-income ratio,” Pataky said.

Prospective home buyers might be concerned about a predicted increase in mortgage rates; the Mortgage Bankers Association predicts they could rise to 4.8 percent by the end of the year. Anticipated higher mortgage rates could actually benefit some borrowers, said Jeff Taylor, co-founder and managing director of Digital Risk, a provider of mortgage processing services and risk analytics in Maitland, Fla.

“The credit box is likely to expand a little bit because lenders will want to approve more loans when they can get a better yield from higher rates,” Taylor said. “We expect more purchase loans and fewer refinances this year, so lenders will be competing for borrowers.”

Loan applications are increasingly handled digitally, which can make the loan process itself less painful, Taylor said.

“Lenders can use digital tools to upload materials and provide loan approvals more quickly,” Taylor said.

A secondary benefit, according to Lawless, is that lenders can have more certainty over the validity of information, and therefore less concern about the consequences of potential errors.

“Making the loan application process simpler and more efficient makes it less costly, so consumers should anticipate a better and cheaper experience,” Lawless said.

Corr said greater clarity over regulations about the potential punishment for lender errors could lead to additional changes in loan programs.

Lower down-payment loans

FHA loans are popular with first-time buyers because they require a down payment of just 3.5 percent of the purchase price of a home. Now, conventional loans are also available with as little as 3 percent required for the down payment.

“Awareness of the availability of low down-payment loans and first-time buyer programs is essential, because many people don’t know about the opportunities for homeownership,” Pataky said. “Many of these borrowers have good jobs and can afford the mortgage payments, but they are not cash rich.”

Borrowers can search for down payment assistance programs at downpaymentresource.com.

Fannie Mae’s Home Ready mortgage program, which allows for a 3 percent down payment, is available to both repeat buyers and first-time buyers.

“We’ve found that some homeowners who bought their first home and then lost equity during the housing crisis haven’t recovered enough to rebuild their wealth, so they need low down payment loans, too,” Lawless said.

Guidelines from Fannie Mae and the Federal Home Loan Mortgage Corp. (Freddie Mac) previously required borrowers to have a maximum debt-to-income ratio of 45 percent, but last year, that ratio was increased to 50 percent. Your debt-to-income ratio compares the minimum monthly payment on all recurring debt, including your housing payment, with your gross monthly income.

“Debt-to-income ratios are important to understand a borrower’s ability to repay the loan,” Lawless said. “But not everyone reports all of their income. For instance, people may be getting help from other family members for some expenses, or they are applying for the loan without their spouse’s income. As long as we see another good compensating factor that shows us they will be able to sustain the payment, we think the higher ratio is justified.”

The lower debt-to-income ratio required in the past used to disqualify a lot of borrowers, especially if they had student loan debt, said Carolyn Sullivan, a senior mortgage consultant with American Financing in Aurora, Colo.

“A 50 percent debt-to-income ratio is the new high-water mark,” Pataky said. “But with each loan request, we look at factors and eligibility requirements on an individual basis. Not everyone can qualify at that 50 percent level, in which case a maximum of 45 percent or less is necessary. We just have to make sure all the components of the loan fit.”

FHA loans allow for debt-to-income ratios as high as 55 percent, provided the rest of your loan application demonstrates your ability to repay the loan.

“The looser debt-to-income ratio is a big deal, because it’s easy for a couple with two cars, a couple of credit cards and student loans to have a lot of debt,” Sullivan said. “But what’s important is that we still verify all income and assets, and look closely at all factors to make sure the borrowers can repay the loan.”

Student loan debt

Changes to the way lenders regard student loan debt is simply a common-sense revision, Lawless said.

In the past, lenders had to qualify borrowers based on a monthly payment of 1 percent of the balance, even if a different amount appeared on their credit report.

“Now we allow lenders to use the actual amount being paid on an income-based student loan repayment plan,” Lawless said. “And if a parent or an employer is making the student loan payments, we can even exclude that debt from the loan application, as long as we can see 12 months of documentation of those payments.”

Rising home values across the nation led to an increase in maximum loan amounts for conforming loans, which could make it easier for some borrowers to qualify for a loan this year.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, and the Federal Housing Administration both raised conforming loan limits for 2018 to a maximum of $453,100 in most counties, and up to $679,650 in high-cost housing markets. Borrowers who need to finance more than the conforming loan limit need a jumbo loan, which has different guidelines.

An estimated 2.8 million homes in the United States will now be eligible for a conforming loan instead of a jumbo loan, according to analysis by Zillow.

“A conforming loan can save borrowers money compared to a jumbo loan, because jumbo loans typically require a down payment of at least 10 percent and as much as 25 percent in some cases,” Taylor said.

Jumbo loans also can be harder to qualify for, requiring a higher credit score, a lower debt-to-income ratio and more cash reserves, Taylor said.

While tweaks to loan guidelines by the FHA, Fannie Mae and Freddie Mac offer opportunities to more borrowers, consumers with more complex financial circumstances or simply a lack of credit history can turn to “nonprime” lenders. “Subprime” loans, considered to be significant contributor to the foreclosure crisis, are now referred to as “nonprime” or “alternative” loans by some lenders to remove the stigma.

“Unlike the subprime loans of the past, we offer loan products not typically offered by banks but with reasonable mortgage rates and fees,” said Raymond Eshaghian, president and founder of GreenBox Loans in Los Angeles. “We offer special programs for people with lots of equity and high credit scores who can’t qualify for a traditional loan because they are self-employed and their accountants have used creative accounting that doesn’t show enough income.”

Tips for increasing your chances of getting mortgage approval

●Check your credit. Check for errors on your credit report long before you apply for a loan to give yourself time to fix mistakes and improve your credit profile.

●Do research online and then visit a lender for individualized information.

●Shop around for a lender and a loan.

●Pay down debt to 30 percent or less of your credit limit.

●Establish savings for a down payment.

●Be aware of available loans with low down payment requirements.

●Check for down payment assistance programs.

●Don’t overload yourself with too much debt. Balance your income, your housing payment and other expenses for a more comfortable budget.