Mortgage Q&A With the Mortgage Whip Drew Whipple

Today I’m joined by my good friend Drew Whipple, aka the ‘Mortgage Whip,’ to answer a few common questions about mortgages in today’s market. 

What does the mortgage market look like for today’s homebuyers and those looking to refinance?

Obviously, the real estate market is booming right now, despite the fact that home values are increasing. Interest rates have ticked up a little bit over the last month or so, but historically, they’re still very low. Around a year and a half ago, the average mortgage rate was around 4%; now, it’s in the low 3s. That means if you had a $500,000 loan, you’d have paid $250 more for it a year and a half ago than you would today.

It’s also a great environment for refinancing. Right now, many are refinancing out of paying off credit card debt, which lowers their monthly payments. They’re also doing cash-outs to buy secondary homes; the secondary market is really hot at the moment.. Further, other people are looking to recast back to a 30-year mortgage, lower their payments, and get more money to play in the market.

What trends should people keep their eyes on?

Towards the end of the year, experts anticipate that rates will go up to around 3.255% to 3.75% and continue to creep up in 2022. If you’re looking to buy or refinance, now is the time to do it.

What can homebuyers afford?

On his initial consultation call with clients, Drew helps them figure out what they make each month. Then he goes to their credit report to figure out what the clients are paying with credit cards, student loan debts, and any other kind of loans that would show on the report. He also includes what their proposed mortgage payment would be on their home loan, which encompasses principle, interest, taxes, mortgage insurance, and any other relevant fees.

Essentially, if you’re going with a conventional loan, look at what your monthly income is, multiply it by 45%, and that number is what you can afford each month, including your proposed mortgage payment and all your other debts. The FHA loan allows for a higher debt-to-income ratio of almost 56%.

How much money do buyers need to put down?

Right now, you could do as little as 3% down on an unconventional loan, 3.5% on an FHA or USDA loan, or you could get 100% financing with a VA loan. There are tons of loan products out there, so be sure to speak with a mortgage specialist to figure out what the best option for you is.

If you have any other questions about mortgages for Drew the Mortgage Whip, reach out to him at 856-924-1682, or Dwhipple@Evesham.Mortgage.com. And if you’re looking to buy or sell a home, don’t hesitate to contact me, your Ironman Realtor, anytime. I’d love to hear from you.