What’s Ahead For Mortgage Rates This Week – August 28, 2017

Last week’s economic news included readings on sales of new and previously-owned homes, Weekly readings on mortgage rates and new jobless claims were also released, along with coverage of Fed Chair Janet Yellen’s remarks at a conference in Jackson Hole, Wyoming.

Home Sales Lower in July

According to the Commerce Department, new home sales fell to a seven-month low in July; 571,000 new homes were sold on a seasonally-adjusted annual basis in July.  This reading fell short of the expected sales rate of 608,000 new home sales and June’s reading of 630,000 sales. This was unwelcome news for home builders, who have been under pressure to build more homes.  pronounced shortage of available homes coupled with high buyer demand has pressured builders to increase their rate of housing starts. A sudden dip in new home sales could impact builders’ production rates if slow sales persist.

Buyer demand may be waning as home prices have continued to climb. July’s national average home price rose to $313700, which was 6.30 percent year over year. The National Association of Realtors® said the current inventory of available homes rose to 5.70 months. This was the highest reading in highest reading in several months. Real estate pros consider a six-month supply of homes for sale an average reading. Regardless of record high demand for homes and low inventories, rapidly rising home prices reduce the pool of potential buyers due to affordability.

Sales of previously owned homes also fell in July. The National Association of Realtors® reported that pre-owned homes sold at a seasonally-adjusted annual rate of 5.44 million sales. Analysts predicted a rate of 5.50 million sales based on June’s reading of 5.51 million sales.

Mortgage Rates, New Jobless Claims

Freddie Mac reported mixed mortgage rates results, but mortgage types surveyed were little changed. The average rate for a 30-year fixed rate mortgage fell three basis points to 3.86 percent; the average rate for a 15-year mortgage was unchanged at 3.16 percent. Rates for 5/1 adjustable rate mortgage averaged 3.17 percent. Discount points averaged 0.50 percent for all three mortgage types.

First-time jobless claims rose to 234,000, which fell short of the expected reading of 238,000 new claims and the prior week’s reading of 232,000 new claims.

Fed Chair Defends DoddFrank Act

Fed Chair Janet Yellen defended Dodd-Frank mortgage legislation passed after the financial crisis. The legislation established credit standards for mortgage lenders to eliminate irresponsible lending practices. Speaking at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming, Chair Yellen’s comments responded to recent indications by the administration and banking officials that the Dodd-Frank Act should be repealed.

Whats Ahead

This week’s economic reports include readings from Case-Shiller on home prices. Pending home sales, construction spending and inflation reports will be released in addition to weekly readings on mortgage rates and new jobless claims. Several labor reports will also be released including ADP Payrolls, Non-Farm Payrolls, and the national unemployment rate will also be released.

What’s Ahead For Mortgage Rates This Week – August 14, 2017

Job Openings, New Jobless Claims Rise

Job openings rose in June to 6.20 million as compared to May’s reading of 5.70 million job openings. Analysts said that increasing job vacancies show that employers are unable to find qualified workers. Business services, construction, health care and professional job sectors had the most job openings. Slow wage growth could be contributing to widespread job openings. Average wage growth has been running at approximately 2.50 percent, which is lower than the average of 3.50 to 4.00 percent typically seen during economic expansion.

First-time jobless claims rose to 244,000 as compared to expectations of 242,000 new claims and the prior week’s reading of 242,000 new jobless claims.

Mortgage Rates Lower

Freddie Mac reported lower mortgage rates last week. The average rate for a 30-year fixed rate mortgage was three basis points lower at 3.90 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.18 percent. The average rate for a 5/1 adjustable rate mortgage was one basis point lower at 3.14 percent.

Inflation rose in July by 0.10 percent against an expected increase of 0.20 percent; June’s reading was unchanged. Core inflation, which excludes volatile food and energy sectors, rose by 0.10 percent against expectations of 0.20 percent and 0.10 percent growth in June.

What’s Ahead

This week’s scheduled economic reports include the NAHB Housing Market Index, Commerce Department readings on housing starts and building permits issued and the University of Michigan’s Consumer Sentiment Index, Weekly reports on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – August 7, 2017

Last week’s economic news included readings on pending home sales, construction spending. Several reports related to employment were also posted along with weekly readings on mortgage rates and new jobless claims.

Pending Home Sales Rise as Construction Spending Lags

Pending home sales rose by 1.50 percent to an index reading of 110.2 in June according to the National Association of Realtors®. Sales of homes under contract that have not yet closed regained positive territory after May’s negative reading of -0.70 percent. Pending sales were in negative territory for the past three months.

Regional results for pending sales were mixed. The Northeast posted a gain of 0.70 percent, which was 3.40 percent higher than in June 2016. The Midwest region lost ground with a reading of -0.50 percent in June, but pending sales were 3.40 percent higher year-over-year. Pending home sales increased by 2.10 percent in the Southern region, which was 2.60 percent higher year-over-year. Although the Western region posted a month-to-month pending home sales gain of 2.90 percent for June, pending home sales were 1.10 percent lower year-over-year.

The west has enjoyed a run on rapid home price growth due to slim supplies of homes for sale and high demand for homes in popular metro areas. June’s lower year-over-year reading could signal that home prices have maxed out and low inventory of homes isn’t providing potential buyers with enough choices given higher home prices.

Construction Spending Slows, Mortgage Rates Hold Steady

Real estate pros again cited the shortage of available homes as driving high home prices and creating high competition for homes on the market. These conditions can make homeownership difficult for first-time and moderate- income buyers. Despite pressure on home builders to increase construction, the Commerce Department reported lower construction spending in June. Spending was lower by -1.10 percent against expectations of 0.40 percent growth based on May’s flat reading.

Mortgage rates were little changed last week; the average rate for a 30-year fixed rate mortgage rose one basis point to 3.93 percent. 15-year fixed mortgage rates were two basis points lower at 3.18 percent. Rates for a 5/1 adjustable rate mortgages were three basis points lower at 3.15 percent. Discount points averaged 0.50 percent for all three mortgage types.

Weekly Jobless Claims, Unemployment Rate Fall

New jobless claims fell to 20,000 new claims as compared to expectations of 244,000 new claims and the prior week’s reading of 245,000 initial jobless claims filed. Readings for Non-Farm Payrolls were lower at 209,000 private and public-sector jobs created.in July. Analysts expected 175,0000 new jobs based on June’s reading of 231,000 jobs. ADP Payrolls reported 178,000 private sector jobs created in July as compared to June’s reading of 191,000 new jobs created.

The national unemployment rate dropped to 4.30 percent as expected and was lower than June’s reading of 4.40 percent. Lower unemployment readings suggest that fewer people are seeking full-time work.

Whats Ahead

This week’s scheduled economic reports include readings on job openings, inflation and core inflation. Weekly readings on mortgage rates and new jobless claims will also be released.

5 Things First-time Home Buyers Should Know Before Signing on the Dotted Line

5 Things That First-time Home Buyers Wish They Knew Before They SignedWithout a doubt, it can be both overwhelming and exciting to find your dream home and be able to put the money down for it. However, there are a lot of things to know before signing on the dotted line so you can avoid buyer’s remorse. Instead of going it alone, here are a few tips to keep in mind before you decide to commit to your new home.

A Good Agent Is Important

Many homeowners want to find the right place on their own, but having an agent along to assist you in the process can go a long way towards finding your ideal home at the right price. Instead of risking it, choose an agent that comes highly recommended and has an abundance of experience in the business.

Is The Price Right?

It’s easy to be taken in by a beautiful home, but before putting money down you’ll want to calculate your debt-to-income (DTI) ratio to make sure it’s within reach. You may feel like you can make it work, but paying a high mortgage will become a drain over time and may ruin the happiness of your home investment.

What’s The Potential?

When it comes to first-time buying, many homeowners go into it with unrealistic expectations. However, demanding too much of your investment can mean you miss out on the gems that have a lot of hidden potential. Instead of saying ‘no’ right away, consider what you can improve for little cost.

Researching The Neighborhood

The focus for many homeowners is definitely the house, but ‘location, location, location’ is a cliche for a reason. Instead of focusing only on your home, ensure you’ll be living in a neighborhood where you can feel safe and will have access to all the amenities you need.

Investing In An Inspector

A home inspection may feel like a formality, but it’s important to have the right inspector so they will notice maintenance items that can hugely impact your finances. While little items that need to be fixed-up are not a big deal, issues with the foundation or the roof can cause major grievances if they’re not detected.

There are a lot of things to keep in mind when it comes to buying a home. But by doing your research and being aware of your financial outlook, you’ll be well on your way to a good investment. If you’re currently in the market for a home, please contact us for more information.

5 Things That Can Affect Your Housing Loan

housing loanEvery year, the number of new homeowners dwindles.

There are several reasons why. It could be due to outlying student debt or diminished general appeal. Or maybe it’s simply the daunting task of trying to get a housing loan.

Becoming eligible for a loan can seem difficult, but no home seeker should let that stop them. We’re here to help you learn the things that can affect the approval of your loan.

Let’s get into it.

Credit Score

Banks and other lenders will take a look at your credit score to know whether giving you a loan will be a risky investment on their part or not. The amount of income you make doesn’t have much of a say on this. You could make a lot of money and still have a bad credit score.

Your credit score can have an effect on how much of a loan you can get, as well as the interest rate.

Take some time to find out your own credit score before approaching any lenders. Be certain to check your credit report for errors or flaws. You don’t want any wrong information to affect your rates or chance to secure a loan.

Being Self-Employed Can Deny You a Housing Loan

Regardless of how much you make in a year through your self-employment endeavors, the fact remains that it can look poorly to banks and other lenders. Self-employment can look far too variable in their eyes and can make you seem like a risky investment.

Unfortunately, there isn’t much you can do about this, but it is good to know about so that there aren’t any surprises coming your way.

A good thing would be to bring any pay stubs with you when meeting with your potential lenders. This could help you get a quicker approval.

Never Had a Loan

Strange as it may sound, sometimes being loan-free can be a bad thing. Because you’ve never taken a loan before, banks and other lenders can’t easily decide if you are a trustworthy client or not.

Are you the type of person to pay on time? They have no way of knowing and it’s likely they aren’t willing to take that risk.

One way around this predicament is to take out a small personal loan or credit card a year or two before. If you make the payments on time or are able to pay the loan back, you will build up your credit score and show banks that you can be trusted.

Debt to Income Ratio

A lot of the time, people will try to get a loan for far more than they can actually afford. This will, in turn, plummet their credit score and end up being more trouble than it needs to be.

Knowing your Debt to Income Ratio is a good way to figure out how to make a loan’s payment reliably with your monthly income, all while factoring in all of your other due payments as well.

Take a moment to look at your numbers before deciding how much to ask for your housing loan.

Being Dishonest

It could be tempting to try and hide a particular debt in order to get a housing loan, or maybe make a bad set of debt seem a little better. But honesty is definitely the best policy when it comes to dealing with banks and lenders.

Being dishonest in any of this will risk you being charged with fraud, and it will make it much more difficult to ever find a bank or lender that will want to work with you in the future.

Conclusion

We hope that this has helped you understand more about the process and that you’ll find it easier to expect what will affect your loan. We wish you all the luck in the world for the future.

The feeling of owning that perfect house is way too precious. And we want to help you!

If you have any questions or concerns, please feel free to contact us!

Your First Home: Should You Get a New House?

new house

When you make the decision to buy that first new house, it’s a big deal. Like, “keep you up at night thinking about it” big deal.

If you’ve been paying rent for a while, buying a new home could seem like the cheaper choice. And there are plenty of benefits for first time home buyers.

Here’s one big piece of advice though.

When buying a new house, know what to expect.

Of course, you can never fully know what to expect. With buying a house, there are always going to be unforeseen obstacles.

But there are expected payments and fees that you can be sure will be part of the process. So it’s best to get familiar with them before you take the plunge.

Down Payments

You want a good interest rate. But in order to get that rate, you’ll need to make a down payment on the house. You can expect at least 10%. So, for instance, on a $170,000 home, this will be $17,000.

And if you want to avoid private mortgage insurance (insurance that protects the bank in case you’re unable to pay your loan), it will need to be at least 20%. So now that $170,000 house will need a $34,000 down payment.

Homeowner’s Insurance

Maybe you had renter’s insurance, so this isn’t entirely new to you. But homeowner’s insurance is usually going to run you considerably more than renter’s insurance.

And it’s required before you take possession of your home. So once you’ve gotten mortgage approval and done all the footwork to get your new house, you’ll need to shop around insurance companies to find the best rate.

The good news is, you can lump your car insurance with your homeowner’s insurance and possibly get a discounted rate.

Property Taxes

This one often catches new homeowners by surprise.

If you’re folding your property taxes into your mortgage payment, that’s going to be an extra bundle of money you’ll need to pay each month.

For example, if you’ve been paying $1000 per month in rent and the mortgage payment on your new house will be around that amount, you might think you’re good to go.

But, if your yearly property taxes are $2400, then you’re looking at adding another $200 per month. So when you budget for your monthly payments, don’t forget to figure in your property taxes divided over 12 months.

Payments and Interest

Obviously, you have to pay your mortgage principal.

At the beginning though, much of your mortgage payments will be going toward paying just the interest. So you want to be sure you’re getting the best interest rate possible.

In the long run, a great fixed rate could end up saving you thousands of dollars.

And that’s just the beginning

On top of the above-listed considerations, there are other things like the fees tied up with escrow, tax services, as well as getting credit reports and a home inspection.

Still, there’s nothing quite too exciting as getting that new house for the first time. It doesn’t have to be scary. If you approach the experience armed with some knowledge, you’ll end up with a place you can truly call home.

Do you have any other helpful tips for those looking to buy a new home? We’d love your input!

What’s Ahead For Mortgage Rates This Week – July 10, 2017

Last week’s economic reports suggested that demand for homes is rising despite a jump in mortgage rates and rising home prices fueled by low inventories of homes for sale. Demand for homes rose by 1.40 percent as interest rates jumped after the 10-year Treasury rate rose by 10 basis points.

Construction spending was unchanged in May as compared to a -0.70 percent reading in April. Although builders express high confidence in housing market conditions, construction spending continued to lag behind spending levels based on builder confidence readings.

Home buyers received good news as major credit bureaus removed two key components from consumer credit reports. Fannie Mae and Freddie Mac raised the debt/to income ratio for home loans from 45 percent to 50 percent of gross income. This move was made to help would-be home buyers swamped with education debt. Doug Duncan, Fannie Mae’s chief economist, said that raising the debt to income ratio would not increase lender risk significantly.

Mortgage Rates, New Jobless Claims Rise

Mortgage rates rose last week. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose eight basis points to 3.96 percent; the average rate for a 15-year fixed rate mortgage rose five basis points to 3.22 percent. The average rate for a 5/1 adjustable rate mortgage rose four basis points to 3.21 percent. Discount points averaged 0.60 percent for a 30-year fixed rate mortgage and held steady at 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.

Jobless claims rose last week to 248,000 new claims from the prior week’s reading of 244,000 new claims, but this increase does not appear to be related to layoffs. Non-Farm Payrolls for June increased to 222,000 jobs added as compared to 180,000 jobs expected and May’s reading of 152,000 jobs added. Non-Farm Payrolls include public and private-sector jobs.

ADP Payrolls, which reports private-sector job growth, dipped in June to 158,000 jobs added as compared to 230,000 private-sector jobs added in June. Employers have repeatedly cited difficulty in finding skilled candidates for job openings, which makes it less likely that they’ll lay off employees who have needed skills. The national unemployment rate edged up in June with a reading of 4.40 percent against expectations of 4.30 percent and May’s reading of 4.30 percent.

Whats Ahead

This week’s scheduled economic reports include testimony by Fed Chair Janet Yellen, readings on inflation and core inflation and retail sales. Mortgage rates and new jobless claims will be released along with a reading on consumer sentiment.

5 Essential Facts About USDA Home Loans

usda home loans

Buying a home or getting a mortgage loan may feel like it’s becoming increasingly harder as the years pass. Because of this, if you’re branching out, you may want to consider USDA home loans.

USDA loans come with their own sets of qualifications and are usually geared for rural or low-income buyers. However, there are a number of benefits to taking out this type of loan. Let’s take a deeper dive and explore 5 of those benefits!

Purpose

The purpose of USDA home loans is literally to assist low-to-moderate income buyers in rural areas in purchasing a home.

When you don’t have a lot of money, sometimes it can seem like actually owning a home is a pipe dream. USDA home loans help give people who aren’t wealthy a chance at affording a home.

This can help promote prosperity, according to the US Department of Agriculture. USDA loans exist to promote happiness, harmony, and improve the quality of life.

Types

There are two types of USDA loans: direct and guaranteed. Direct loans have more requirements to use. Your property has to qualify as “modest in size” for your area, and it cannot have a market value that exceeds your loan limit. There are also limitations put on your home itself.

Direct loans are aimed at low-income families, so the requirements can be strict.

Guaranteed loans are similar, but they open a few more doors and aren’t quite as strict.

Qualifications

Direct and guaranteed loans have different sets of qualifications. To qualify for a direct loan, you must not own a home. You also must not be able to obtain a loan elsewhere, and you have to legally be able to handle a loan.

If you’ve been suspended from participating in federal programs, you will not be able to apply.

Guaranteed home loans have income-eligibility requirements. To get a guaranteed loan, you must also be a US citizen or otherwise qualified, and you need to be able to pay your credit obligations in a decent amount of time.

Down-payments

The great thing about USDA home loans is that they don’t require a down payment.

If you’re a qualified borrower and have been approved for the loan, there’s no down-payment required. This can wind up saving you thousands in home-buying costs and upfront expenses.

Insurance

USDA loans do not have private mortgage insurance, also known as PMI. Instead, your USDA loan will have a premium for your mortgage insurance wrapped up in the cost.

Typically, this is about 2% of your entire loan cost. However, it’s also not a separate payment, and it’s included in the cost of your loan.

USDA home loans: the right choice

USDA loans are a great choice for people looking to purchase in rural areas. Additionally, if you’re a low-to-moderate income homebuyer, it’s very likely that you qualify for one of these loans.

A USDA loan can help you save thousands of dollars in homebuying expenses because they don’t require down payments. However, you do need to make sure that you qualify.

If you have questions regarding home loans and the home buying process, please don’t hesitate to contact us!

5 Key Items for a Quick Mortgage Approval

Want a Quick Mortgage Approval? Come Prepared With These 5 Key ItemsAre you finally getting into the real estate market? There are a few key items you’ll need to prove your reliability to a mortgage lender.

Previous Tax Returns

To ensure the earnings information you’ve provided to the lender, you’ll need tax returns for the two years prior to your mortgage application. In addition, you may also be required to provide your W-2s as backup documentation.

Bank Statements

For your down payment, you’ll need to present bank statements to show you have a cushion in case interest rates increase. If you do get money gifted to you for your down payment, you’ll need a letter to prove you’re not indebted to the provider.

Recent Pay-stubs

It can be much more difficult to get approved for a mortgage if you have a patchy work history or happen to be self-employed. You’ll need 2 months of recent pay stubs to prove consistent employment. The pay-stubs provided should also be an accurate reflection of the salary you’ve provided on your application to ensure no discrepancies.

Investment Statements

It’s certainly a good sign to the lender if you have a healthy balance in your checking and savings accounts. But you’ll also need to provide any statements for mutual funds and other investments. While they may not be necessary to prove financial soundness, they will help with approval if you have a lot of money squirreled away.

A Listing Of Debts

A lender will also want to know about any outstanding debts like auto loans, credit card payments or student loans. This will give the lender a good sense of your honesty and your ability to manage your mortgage.

Mortgage approval may seem like a time-consuming process with no certain end. By having the appropriate documentation and being upfront about your debts, you may be able to speed up the timeframe. If you’re currently perusing your mortgage options, contact us for the inside scoop.

How to Determine Your Home Loan Eligibility

home loan eligibility

Are you looking to take that next step in your life? Have you finished browsing the net looking for that perfect place to call home?

Are you ready to become a homeowner?

Before you can actively start looking to purchase a property, the first sensible thing to do would be to check out your home loan eligibility.

Why?

Because knowing how much you can borrow not only helps you understand your own financial situation but also it stops you from getting your heart set on a place, only to find it out of your budget.

Let’s take a look at the best ways to check on your maximum home loan potential.

Calculate your Home Loan Eligibility Early To Set Your Search In the Right Area

When it comes to a home loan, the math is actually quite simple. You look at what you have coming in – your income – and you deduct your outgoings each month – your expenditure. The rest is just a matter of seeing how much you can realistically afford to pay back each month.

There are plenty of home loan calculators out there that can help you get a ballpark figure.

The main criteria that get looked at when applying for a home loan are:

Age – As harsh as it sounds, age plays a role in your home loan calculations.

Employment Status – if you are in a stable full-time job, then that is a big check in the plus column because a regular income shows the bank that you are in good standing to make your payments every month. The amount you are earning will also directly influence the amount you can borrow.

Credit Rating / Credit Card History –  If you have been living a debt free life, or at least maintaining your credit card by paying off your purchases in a simple large lump sum each month, then you score maximum points. The better managed your credit card history, the better image you produce for the banks looking to lend you money.

Choosing the Right Home Loan for You

There is more to finding a home loan than just understanding your home loan eligibility. Loan types and duration are also deciding factors.

The core loan types you should be looking at:

Fixed Interest –  The simplest loan. All you need to do is set your interest rate for 15-30 years and simply let your payments run. A great loan for those that are buying with the intention of staying put, and want to know exactly how much they will be paying for the foreseeable future.

Adjustable Rate Mortgages – If your credit rating is working against you, then you can counter balance this to some degree by taking a flexible interest rate loan. Here, the rate is set for a shorter period of time and will then be adjusted.

Federal Housing Administration Loan – For many people, being able to save the average 20% needed for a downpayment on a home, can be tough. With FHA home loans, you can put down as little as 3.5% on a down payment and move on with a fixed interest rate.

The only caveat with this is that you need to take out mortgage insurance, which you can spread over the life of the loan. This totals to approximately 1% of the full loan value.

Buying a Home is the Biggest Decision You Will Make

Making the decision to buy a home is one of the biggest things you will do in your life. To do so without due care and attention can be problematic.

By first understanding your home loan eligibility you can get yourself started on the next phase of your life with a clean conscience, knowing that you are not getting yourself into financial trouble.

If you need help with arranging your home loan or are looking for a quote, get in touch with us today. We are here to help.