selling a home

Why You Should Be Paying Attention to The FED Rates

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The Fed Building

Image source: Google

As you know the Federal Reserve just announced that interest rates are holding steady! The goal of the committee is to maintain the target range for the Federal funds rate. This is to support the expansion of economic activity, strong labor market conditions, and favorable inflation.

Why should YOU pay attention to this?

A couple of reasons:

  1. You’ll be informed on the state of the economy
  2. You’ll gain knowledge on the state of the job industry
  3. Paying attention will keep you up to date on the rate of inflation
  4. If you own a home, it lets you know if you can be saving money by refinancing to get a better interest rate
  5. If you are looking to purchase a new home, you want to purchase while rates are low

The next meeting is on March 17th & 18th.

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Ways to Save on Your Monthly Payments

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mortgage savings

Source: Google

The mortgage industry has been experiencing an amazing year so far. The Federal Reserve (FED) has continued to cut rates. Need proof? Last week the FED dropped rates another quarter percent, we are currently hovering at a 2-2.25% rate.

What does that mean for you?

Well if you are looking to purchase you have the ability to buy more home for your money; however, if you are looking to refinance you are looking at saving money over the life of your loan, on top of potentially being able to lower your term.

Refinancing is one of the various ways you can utilize to help save money overall; however, if you find yourself needing alternative options and are looking to be proactive in your home financing needs, here are a few out-of-box ideas.

  1. Buy a Cheaper House – this is self-explanatory, learning to live below your means is a valuable lesson to learn and helps you budget more efficiently.
  2. Choose a Bi-Weekly Payment Option – Most loan servicers provide this option. When you choose to go this route, you end up making 26 payments a year; which adds up to you paying 1 extra payment towards your principle each year.
  3. Choose an ARM – this option is great if you don’t plan on living in your home very long. What’s the point of fixing yourself in a 30-year term if this isn’t your forever home?
  4. Extend Your Repayment Term – Example if you are in a 15-year term you can switch to a 30-year; this doesn’t change the amount of your loan but will overall lower your payments because you are extending the term.
  5. Make a Larger Down Payment – This option would make your parents feel like you are listening to them. You grew up with them harping you to save for a 20% down payment and there is a good reason why: it helps keep your monthly mortgage payment LOW.
  6. Get Rid of Your PMI – this option takes some time if your purchasing and your sellers don’t want to pay this off while negotiating. To be able to get rid of your PMI you must gain at least 20% equity in your home; once you achieve that you can request that your lender drop PMI.
  7. Pay for Points – when you pay for points you are paying for a lower interest rate. There may be more you pay for upfront in closing costs; however, over the term of your loan you aren’t acquiring unnecessary interest.

Mortgage Market Update- 9/12/2019

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Mortgage Market Update (1)

Even though summer is coming to a close and purchase season is slowing down. Freddie Mac reported that the average interest rate for a 30-year fixed rate dropped to another 3-year low at 3.49%. And as the unemployment rate remains historically low, this means that homebuyer demand is improving along with affordability.

August brought some significant good news, so take a deep breath and find solace in our current economy. Why? Fannie Mae is also predicting that the economy should continue to support the current refinance activity. How do we know that? August’s refinance volume was 150% higher than it was last year, which is in correlation to the increase in the demand for homes and affordability.

And if you are still thinking about refinancing know that Black Knight is here to tell us that roughly half of the homeowners across the United States are sitting on a combined total of 6.3 trillion dollars in tappable equity. We haven’t seen eligibility this high since the early 2000s.

Mortgage Rates Hit Another 3-year Low

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Mortgage Market Update (1)

According to Freddie Mac’s Primary Mortgage Market Survey, the average rate for a 30-year fixed mortgage fell to a 3-year low. The 30-year fixed-rate mortgage averaged 3.55% for the week ending August 22, 2019, down from last week’s 3.6%, which is close to 2018’s lowest percentage point. The drop-in mortgage rates benefit not only the housing market but also the economy as a whole. Home purchase demand is up 5% since 2018, and the refinance market has hit a significant surge. Homeowners that have refinanced are seeing close to a $140 of savings per month. The benefits of lower mortgage rates are also helping homeowners gain more equity.

Market Update: The Fed Rate Cut

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Mortgage Market Update (1)

Last week the Federal Reserve made the decision to cut rates for the first time since 2008. With wages on the rise and unemployment rates at a 50-year low, the decision was made to help boost the economy. This means potential savings for homeowners across America looking to refinance or sell their home since home equity is also on the rise.

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*These numbers are based on the weekly average data pulled in from Freddie Mac

With rates being at their lowest point in 3 years, now is an optimal time to purchase and refinance. We want you to take full advantage of the housing market’s favorable conditions!

Give us a call for a free 5-minute mortgage review!

Mortgage Rates Are At A Three-year Low

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low-mortgage-rates
Picture source: Google

This week mortgage interest rates have hit historical marks by reaching three-year lows. This significant marker of low rates comes just two months after The Federal Reserve announced rates have fallen and are not anticipated to rise again for the remainder of 2019. Low rates in conjunction with a surplus of home sales, the housing market is expected to continue to improve and show favorable conditions. Not only are the lower rates good news for potential homebuyers that are looking to enter into the market, but also continues to open opportunities to homeowners that are looking to refinance.

Market Update: The Federal Reserve Holds Rates

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The Fed BuildingImage Source: Investopedia

No news is good news for the mortgage industry right now. The Federal Reserve announced; rates are holding steady! This recent announcement comes just 2 months after the initial Fed meeting that resulted in the decision to drop rates and is anticipated to keep them low for the remainder of 2019. Weaker inflation and labor economic data has also aided in keeping rates low. With the excitement of rates remaining steady and purchase season in full swing, now would be an optimal time to purchase a new home. The Federal Reserve holding mortgage rates provides optimism surrounding refinancing to lower mortgage payments, removing or lowering mortgage insurance and pulling cash out for Spring home projects.

Baby Boomers: Looking For Dream Retirement Homes

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A lot of baby Boomers are retiring and looking to buy their retirement homes. According to the National Association of Home Builders, builder confidence has reached 76 for the 55 and older market. With the recent decline in mortgage rates, this has been particularly favorable for the demand on 55 and older housing. There could be slight challenges with the new demand of retirement homes being built for Baby Boomers. Rising construction costs and a lack of skilled labor, will present problems for builders, which could rev up cost.

For the last several weeks Mortgage Applications have been on the decline but that’s all changing. Within this past week, applications are on the rise and purchase season is picking back up. According to the Mortgage Bankers Associations, there has been a 2.7% increase compared with the previous week. Majority of new applications were from purchases. The average loan size for purchases has elevated slightly from $332,000 to $335.600.

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Don’t forget before purchasing a home to take all cost into consideration, especially property tax. While property taxes range in price, they are calculated on the area you live in. According to ATTOM data solutions, property taxes have gone up on average. One of many reasons why property taxes are rising, is due to changes in the cost of government and the level funded by State taxes. Another factor in the rise of property taxes is that State and local governments are receiving less from the federal government and need to pay for all services provided by residents.

Down payments can feel like a looming cost and be the greatest financial barrier to home ownership according to research. However, there is a common misconception about the amount of money new homeowners need to put down. According to The Mortgage Report, new homeowners do not have to put much down at all. Most buyers put down only 10% in comparison to the 20% that many people think they need.

Going Digital: Zillow offers 3D home tours

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New technology is on the horizon that will make it easier to attend home tours. Zillow has created a new 3D virtual tour, that is available for consumers. Potential buyers will never have to leave their home to attend open houses again. It’s a free resource that real estate professionals can use to help them serve more clients at a lower cost.

Home prices seemed to be higher toward the beginning of the year, which has increased the Housing Price Index according to the Federal Housing Finance Agency. The FHFA monthly HPI is based off the home sale prices from Fannie Mae and Freddie Mac. The HPI excludes cash sales and jumbo loans. Across the nine census divisions, the East South-Central Division saw a 1.4% rise in February. However, the Middle Atlantic Division didn’t experience any growth at all, as there was an appreciation decline of 1.2%.

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Homeowners could be tapping into a nice amount of pent-up wealth in their homes. In the last quarter of 2018, US homeowners had a collective amount of attainable equity, close to 5.7 trillion dollars. According to Corelogic, at the end of 2018, homeowners only collected nearly 10,000 in equity. Many Americans are hesitant to do cash-out refinances as rates are said to play a major role. With rates taking a nudge upwards, this has a negative effect on home-owners.

New home sales are on the rise. According to Housing Wire, home sales rise 3% above 2018 levels. The momentum of home sales growth is credited to mortgage rates staying relatively low. The Census Bureau and The Department of Housing and Urban Development analysis shows, new home sales have increased 4.5% in March from February’s revised rate of 662,000.

According to the Urban Institute, the government had made mortgage credits available in the last several months in comparison to the last 10 years. The HCAI rose at the end of 2018, which means lenders are willing to tolerate defaults and take more risks. All of which makes a good environment for loan approval.

 

The American Dream and the looming recession

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Refinances are finally making a comeback after last year’s drought. Black Knight revealed that an estimated 3.27 million homeowners could benefit from refinancing. This is an increase year-over-year by 16% from 2018. This means a jump of candidates around 75%, with rates at a current 10-month low.

Various areas throughout the country give low-income families a chance at the American Dream. Being a homeowner gives people a chance to benefit from their communities, as well as gain wealth from their home equity. With metros becoming more expensive and having a lack of affordable starter homes, low-income residents aren’t typically able to share in the prosperity of home ownership

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. To escape the high costs of homes, buyers are looking to relocate to inland markets.

With perks such as no down payment, it’s no surprise that VA loans have become increasingly more popular for first-time home-buyers. Benefits such as no mortgage insurance and strong loan servicing protections accompany this loan as well. Both prime and non-prime home-buyers using VA loans are reporting less early delinquency rates.

With a confident forecast of 2% economic growth for the next year, JP Morgan Chase chief economist Anthony Chan is dismissing concerns over a looming recession. During the Chicago Agent Magazine’s Accelerate Summit at the Chicago Merchandise Mart last Tuesday, he predicted that while it won’t be as exponential as last year, the economy will still see growth.