Inflation and Homebuying

We know this is a tough market with extremely low inventory and to make things more uncertain we are also in a rising mortgage interest rate environment.  The Federal Reserve is changing its fiscal policy to help slow and reduce inflation which in turn causes mortgage rates to climb.

If you’re a Real Estate Agent out showing homes OR if you’re a buyer out looking at homes, please check in with your Loan Officer immediately to confirm you are still qualified and comfortable with the new updated mortgage terms.

Inflation and Homebuying

Someone who was pre-approved last year when the rates were in the 2s or 3s might no longer qualify for the price range they want when rates climb up into the 4s and 5s.  Even buyers who were pre-approved last month may not qualify as rates have risen almost 1% again over the last two weeks!

Likewise if you are listing a home and accepting an offer from a buyer using financing, be sure to verify that the pre-approval has been updated within the last week so you know the potential buyer still qualifies for their mortgage terms.

Thorough Mortgage Consultation  

At Applied Mortgage we complete a thorough Mortgage Consultation for each buyer to review maximum price range, monthly budget, costs to close, and loan programs available.  Every preapproved customer has had their credit check and financials reviewed and information run through our automated underwriting system.  We check in weekly with our preapproved customers who are out searching to address any potential change to their needs while they are home searching.

 Please keep an eye on out for educational market updates by following us on

Does it cost more to buy or build a house?

One way to solve inventory issues – build new homes! But that is proven to be easier said than done.  “New Home Sales” is a key economic indicator which measures signed contracts on new homes. New Home Sales are at 708,000 annualized pace which is down on a year over year basis but up 1% month over month for July. It speaks to the difficulties builders are having with putting up lower priced homes with the cost of material and labors increased this year. Looking at the mix of sales, there are big increases on the number of sales on the high end also dragging up the median home price.  – Information is from MBSHighway 8/24/2021

What does this mean? Unfortunately, there is no clear cut answer and it turns out to be a case by case basis. We’ve provided some important pros and cons as you start to dig deeper into the building a home option if you find it is more cost effective or only relatively more expensive.

Pros to building a home

Pro - Building a home can sound like the right way to achieve the home of your dreams.

Pro - You can create the exact space you and your family desires right down to the layout of the rooms, doorways, fixtures, and outlets.

Pro – Newer means less maintenance!

Pro – you get what you want!

Pro- you can pick any location

Pro – less competition to build a home than there is to buy an existing home

Pro – Lower energy costs since you’re using new materials and state of the art energy efficient items

Cons to building a home

Con – buying raw land may mean lots of work on the land such as clearing trees, bringing in fill to level the land, locating the right spot for a septic and/or well system, bringing in utilities and the site work can be expensive

Con – picking out all the details can be extremely overwhelming

Con – new landscaping can be hard to maintain

Con – Building usually costs more than buying – especially in today’s market

Con- getting a construction loan usually requires a larger down payment than buying an existing house

Con – building a home takes usually around 6-12 months if you don’t have time to wait around

Con – you may have to pay two house expenses at once – you’ll need a place to live while you house is being built

Happy Medium

Happy medium – did you know you can buy and renovate an existing home with a renovation loan? This might be a way to take an existing home that is in the location of your dreams and has many qualities you love, and fix the qualities of the house that don’t meet your standards such as updating the kitchen or bathrooms.

Looking for more support with understanding and navigating the process? Click below to schedule a meeting with us.

Live Budget Workshop

Applied Mortgage presents Facebook LIVE: create your own budget workshop.

FB Live Budget Workshop with Lindsay

Are you struggling to sort out your finances in a shifting time? Are you adjusting to less money coming in every week with the same bills? Do you want to understand how to make a budget and stick to it? That's exactly what we are going to focus on in this workshop

What: Facebook LIVE Create your budget workshop
When: April 9th from 5-5:45pm (30 minute presentation followed by a 15 minute Q&A)
Where: Facebook LIVE
Host: Lindsay Barron LaBonte - Loan Originator, Applied Mortgage from Applied Mortgage

Full Description:
Join Lindsay LaBonte from Applied Mortgage on Thursday 4/9 at 5pm for a 30 minute LIVE Facebook event.

Learn some real life budget hacks including:
💵 Where your money is actually going
💵 Trim expenses you might not even know you were paying
💵 Create a budget worksheet
💰 Maintain a savings goal

This presentation will include an opportunity to ask Lindsay questions LIVE during the presentation!

Here's a great video from our online resources that will help you to be prepared for this LIVE workshop: https://www.appliedmortgageteam.com/planning-phase/gathering-financial-documents

Other online resources that will be helpful:

Budget worksheet (will be used during the presentation) - http://appliedmortgageteam.com/s/BudgetingSpreadsheet.xlsx

Funds to close worksheet - http://appliedmortgageteam.com/s/Know-Your-Budget.docx

Know your Budget fact sheet - http://appliedmortgageteam.com/s/Calculating-Funds-to-Close.docx

If you would like support right away with your budget or homebuying process, click the button below to get started!

Planning Phase Introduction

Planning phase introduction.

Welcome to the Planning Phase of Home Buying

In this section of our educational blog we cover the entire planning phase of buying your home from what documents you need to start gathering to what the credit check process looks like.

Someone you can trust

Someone you can trust.

Someone you can trust

We know that it can be difficult sometimes to share your financial information with a person you are meeting for the first time, so we take this time to set your mind at ease with our professional staff who has over 60 years of mortgage experience.

Gathering Financial Documents

Gathering financial documents.

Gathering Financial Documents

In this section we discuss what financial documents you will need to gather in order to start the application process for your future home loan.

Credit Check

Credit check.

Credit Check

The credit check is an essential part of the home buying process that can feel very intimidating for many. In this video we talk about the credit check process and how to get ready for it.

Credit Scores

Credit scores are reviewed for mortgage qualification.  Best is 740 or above although there are loan programs that go as low as 580 in some cases. If you haven’t reviewed your credit history recently, You can get a free copy of your credit report online, but it costs money to receive the scores: annualcreditreport.com. For mortgage purposes, all 3 scores are reviewed Experian, Transunion, Equifax.

Credit Score Scale (From Framework Homebuyer Course):

• 350 - 599 - You probably won't qualify for a mortgage.

• 600 - 680 - You might qualify but will probably pay a higher interest rate and higher fees.

• 680 - plus - You’re likely to qualify, and with a good interest rate and standard fees.

• 740 - plus - You should get the best interest rates and the lowest fees.

What Impacts Scores?

• 35% payment history

• 30% amounts owed

• 15% length of credit history

• 10% new credit

• 10% credit mix