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Understanding Mortgages

Millennials as Home BuyersMillennials belong to the largest generation in the U.S. at 83 million strong, according to the most recent Census Bureau data, and they're also highly diverse. Indeed, almost 45 percent are a part of a minority group. Given this, their attitudes don't always align. After all, they come from a host of different backgrounds and encompass several age groups (18 to 35 years of age).

But one area where millennials are in relative lockstep is homeownership. Many are experiencing the same obstacles to achieving the American dream, new polling data suggests.

The homeownership rate climbed in 2017, reaching 64.2 percent in the fourth quarter, according to the Census Bureau. Up from 63.7 percent in Q4 of 2016, homeownership is currently at its highest point since Q4 2014. It also ticked higher from 63.9 percent in the third quarter. 

And believe it or not, it was none other than millennials who pushed homeownership forward. As reported by The Wall Street Journal, the percentage of buyers 35 years of age and under in 2017's closing quarter reached 36 percent, up 1.3 percent from the fourth quarter of the preceding year.

Supply shortfall causing frustrations

But millennials have been met with a few bumps in the road, influenced largely by supply constraints. According to data from, numerous first-time homebuyers in the previous 12 months had limited options to select from, with inventory down almost 9 percent compared to the previous year. This caused asking prices to reach levels often beyond their financial means.

Joe Kirchner, senior economist, indicated builders can't move fast enough to shore up the number of property listings, but they still need to be mindful of buyers' budgets.

"Builders will need to focus more on homes geared for moderate incomes, partner with the government on initiatives to transform distressed urban neighborhoods and overcome labor shortages through a combination of workforce development training and pressure to ease artificial restrictions on the supply of labor," Kirchner said.

For 70 consecutive months, asking prices have risen on a year-over-year basis. In December, the median for an existing home was $246,800, according to the National Association of Realtors. Inventory levels also fell in December from the same period 12 months ago, down 11.4 percent to just 1.4 million up for sale. That's the lowest amount on record.

If you're new to the homebuying process or are interested in applying for a mortgage, Residential Mortgage Services can help you get started. We originate mortgage loans throughout the Midwest, South and Northeast, and our loan officers are ready to provide you with the options that best fit your needs and budget.

Understanding Mortgages

Why all the personal questionsOn every mortgage loan application there is a section of questions that can feel a bit uncomfortable to ask and answer. Most people expect to answer questions about how much money they make, how much they have tucked away in a bank account and what their credit card debt looks like. It’s a financial transaction, after all. Financial questions ought to be in there. But race? Ethnicity? Which gender I identify with… what does that have to do with a mortgage approval?

And the answer is: Nothing at all.

Questions about race, gender, age, ethnicity, etc. have nothing to do with the mortgage approval process. Even though the questions are asked and answered right there in the same paperwork as your car payment and income, nothing in that section is used as a factor in evaluating whether you are a good candidate for a mortgage loan.

Why are they there at all? To protect you.

You see, in our country’s efforts to protect citizens from unfair biases in the lending world, it became apparent that we couldn’t fix what we couldn’t see. We needed to be able to track the lending opportunities offered within communities in order to catch unfair practices and do something about it. In 1975 the Home Mortgage Disclosure Act (HMDA) was passed, giving the public and financial regulators information to make sure financial institutions were providing access to residential mortgage loans in their communities. This was expanded to include questions that could help identify discriminatory lending patterns. After the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was passed in 2010, new questions were added to help spot troublesome trends. In January 2018 even more additional questions became a requirement.

What should I do when I come across these questions?

It’s up to you how you choose to respond, and your choice won’t make any difference on whether your mortgage loan is approved. Maybe you take the view that the more accurately these questions are answered, the better the statistics will be, and you’re doing your part to help mortgage lending be as fair as possible. Or perhaps you’re uncomfortable identifying yourself in those terms and would rather not give an answer. This is an option that you’re welcome to choose. Either way is fine. If you do choose to answer, though, please answer honestly.

Here’s a fact that not many people know, going into a mortgage application meeting: If you meet with your Loan Officer in person and decline to answer the HMDA questions, your Loan Officer is required to make a best guess and answer the questions for you.

If you have questions or feel uncomfortable about the HMDA questions, talk to your Loan Officer about your concerns. They’ll be able to talk to you and explain your options.


Happy New Year2017 has been a good year. At RMS we continued our growth, opening up operations to service new states and expanding our technology and mortgage loan offerings to create a better than ever home buying and refinancing experience for our clients. And as for 2018, we have even more in store.

We look forward to offering more renovation home loan services, construction loans, more reverse mortgage loans... the key word here is more. We can't wait to share all of the ways we're working on making the home buying and refinancing experience even better than before. Smoother, faster, simpler, with more choices available to our borrowers.

Please be safe in your celebrations as you ring in the New Year!

And as you're setting your sights on resolutions and fresh beginnings, keep an eye on RMS. More is on the way.


Happy Holidays!

Dec 22
Category | General

Happy Holidays

However you choose to celebrate this time of year,

we hope you enjoy warm and happy holidays,

safe travels with no delays,

and a successful New Year!


We’re pleased to announce we’ve LOWERED our minimum

credit score requirements for FHA and VA borrowers!

Credit Score requirements are lowering

Effective immeditately, RMS has lowered the minimum FICO credit score requirement for borrowers looking to finance their homes using the FHA mortgage* or VA mortgage loan programs. The minumum FICO credit score for these applicants has been reduced to 580.
* This does not include 203k or FHA renovation loans.

What is the FHA Mortgage Loan?

FHA stands for the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUD). The FHA loan program is available for FHA-approved lenders to offer a variety of financing options to their clients.

If you’re planning on buying a home, the FHA loan program may be an ideal option for both first time home buyers and repeat buyers alike. With only a minimum 3.5% down payment needed, and lower credit score requirements than other loan programs, these government insured mortgage loans have guidelines designed to help borrowers to afford home ownership.

For current homeowners looking to refinance their FHA home purchase, the program offers a streamline refinance option.

Another great feature of the FHA mortgage program is that it offers a rehab mortgage, also called a ‘203K mortgage,' for both purchase and refinance home loans. 

A FHA rehab mortgage can help when you are:

  • Planning to purchase a home with repair contingencies
  • Looking for a cost effective way to repair or improve your current home
  • Rehabilitating a neglected or damaged foreclosure (within FHA eligible repair guidelines)

If you’re looking for a home mortgage to help restore a property or have limited funds for a down payment, let an experienced mortgage lender help determine if a FHA loan is the right option for you.

What is the VA Mortgage Loan? 

The VA loan program is designed to help eligible Veterans, National Guard, Reservists and Surviving Spouses become homeowners. Home loans guaranteed by the VA do not require a down payment or mortgage insurance, saving eligible borrowers money both monthly and at the closing table.

Eligibility benefits can be used for a home purchase or refinance and may be used more than once! Eligibility requirements for a VA loan are based on:

  • Length of Service or Service Commitment
  • Duty Status
  • Character of Service (determination of discharge conditions)

What does this mean for you?

If you have held back from trying to get a mortgage in the past because you knew your credit history wasn't perfect, this new minimum may open the door for you to make a fresh start in home ownership. Reach out to a loan officer to discover whether an FHA home loan may work for you. If you are active duty military, a veteran or military spouse eligible for a VA home loan, your loan officer can help you to understand your eligibility and look at what mortgage options you have available.

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