The Required Steps For A Smooth Mortgage Refinance Process

The Required Steps For a Smooth Mortgage Refinance ProcessThere are lots of people who have heard that one of the top ways to ensure the best mortgage rate possible is to refinance. At the same time, it is critical to make sure that this process is planned out accordingly.

Therefore, there are a few steps that everyone has to follow to make sure they are able to handle the mortgage refinancing process in a smooth manner that leads to the best rate possible.

Ask If A Refinance Is The Right Step

There are a lot of people who assume that a mortgage refinance is a financial win; however, it is important to keep the added costs in mind. For example, the refinancing process is going to lead to another closing. When this happens, there are going to be closing costs that must be considered.

Therefore, the refinancing process could lead to a higher mortgage payment if the money saved on interest payments is not enough to offset these costs.

Check The Credit Score First

Many people get lured into the refinance process by looking at low mortgage interest rates and assuming they are going to qualify for them; however, this is not always the case. Only the people with the top credit scores are able to qualify for these low rates. Therefore, everyone needs to take a look at their credit score and make sure that their credit report has been cleaned up. This is the only way that people are going to be able to qualify for these low rates.

Talk To A Trained Professional

Finally, many people are going to be going through the refinance process for the first time. It is important to work with a trained professional who can walk everyone through this process, ensuring that they know what they are doing as the process unfolds. This can go a long way toward ensuring that everyone has a successful refinancing experience.

Go Through The Right Steps

Following these steps can maximize everyone’s chances of making sure they end up with a refinance that works for them. By planning out the process ahead of time, everyone can go through the steps they need to make sure that the refinancing process proceeds as smoothly as possible.

How To Negotiate A Better Mortgage Rate

How To Negotiate A Better Mortgage RateFor those who are thinking about buying a house in the near future, they want to make sure that they get the best mortgage rate possible. At the same time, if people who want to reduce the interest rate on their mortgage, then they need to do everything you can to make yourself as attractive as possible to lenders. When they are negotiating for a better rate on your mortgage, they need to keep a few important points in mind.

Make A Larger Down Payment

If people want the lender to reduce the interest rate on your mortgage, then borrowers need to think about making a larger down payment. By doing everything they can to reduce the risk they present to the lender, they will be rewarded with a lower interest rate. If borrowers are willing to put more money down, then that is less money that the bank has to lend out. Therefore, the risk the bank takes on is going to be reduced and borrowers will be rewarded with a lower interest rate. Make a larger down payment to reduce the interest rate on the mortgage.

Improve the Credit Score

Another way that people can reduce the risk that they present to the bank is to improve their credit score. What can borrowers do to make this happen? They can check your credit report first and correct any inaccuracies that might be present. After this, they should take a look at any existing debt they have and try to pay down as much of it as possible. By reducing the amount of debt they owe, the credit score will improve, helping them qualify for a lower interest rate on their mortgage.

Take Advantage Of Discount Points

Those want to reduce the interest rate on your mortgage, could use something called discount points. These are points that the borrower will pay directly to the lender in exchange for a lower interest rate. By providing the lender with more money up front, they can secure a reduced payment over the life of the loan.

Reduce the Interest Rate

These are a few of the fastest ways that people can secure a lower interest rate on their loan. This can save them a tremendous amount of money.

The Average Mortgage Payment Is Declining. Here’s Why.

According to a report that was recently published by the United States Census Bureau, the average mortgage payment has been dropping. According to the bureau, the average payment is just over $1,500 per month. This is shockingly close to the average cost of renting, which is just under $1,500 per month.

This data shows that the average mortgage payment is declining, down by around three percent in the past 18 months. This trend is expected to continue. Some people might be surprised that the average mortgage rate is dropping, given that the average real estate value continues to rise across the country. There are a few reasons why mortgage payments are dropping.

Why The Average Mortgage Payment Is In Decline

The Average Mortgage Payment Is Declining. Here's Why.The average mortgage rate is dropping because the average interest rate applied to each home loan is dropping as well. They are hovering around three-year lows.

This means that even though the principal of the loan that someone might take out to purchase a home is staying the same (or going up), the total cost of the mortgage is going down. This is great news for anyone who is looking to buy a home in the near future. Low interest rates may make the cost of buying a home more affordable.

The Importance Of The Average Mortgage Payment

It is important to remember that the average mortgage payment is simply a statistical measure. These statistics are evaluations of the overall trend. In reality, every mortgage is going to be different. Two people who are buying properties that are very similar may end up with mortgages that look very different.

The mortgage payment is based on numerous factors that can vary widely from person to person. In addition to the interest rate applied to the loan, other factors include the size of the down payment, the buyer’s credit score, how much debt someone might have, their average income, and the possible requirement of private mortgage insurance (PMI).

Lowering A Monthly Mortgage Payment

Anyone looking to lower their monthly mortgage payment has a few tools at his or her disposal. Consider making a larger down payment, improving the credit score, or reducing any current debts. This can help someone negotiate for more favorable mortgage terms.

Consult with your trusted home mortgage professional to discuss your best financing options.

What’s Ahead For Mortgage Rates This Week – September 9th, 2019

What’s Ahead For Mortgage Rates This Week – September 9th, 2019Last week’s economic reports included readings on construction spending, public and private-sector jobs and the national unemployment rate. Weekly reports on mortgage rates and first-time jobless claims were also released.

Construction Spending Rises in August

Construction spending rose 0.10 percent higher than in July according to the Commerce Department. Analysts expected construction spending to increase by 0.60 percent based on June’s reading of -0.70 percent. Construction spending was -2.70 percent lower year-over-year based on revisions to data going back to 2008.

Construction spending was impacted by multiple factors including costs of labor and building materials and inclement weather in some areas of the United States. As peak home buying season winds down to fall and winter, builders are expected to reduce spending. Builder concerns over the impact of tariffs on imported building materials continued to affect builders’ budgets.

Mortgage Rates Fall, Weekly Jobless Claims Rise

Freddie Mac reported lower mortgage rates last week; the average rate for 30-year fixed rate mortgages was nine basis points lower at 3.49 percent. Rates for 15-year mortgages were six basis points lower and averaged  3.00 percent.

Rates for 5/1 adjustable rate mortgages averaged 3.30 percent and were one basis point lower. Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.60 percent for 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims rose by 1000 claims to 217,000 new claims filed. Analysts expected 214,000 initial jobless claims based on the prior week’s reading of 216,000 first-time claims filed. No signs of layoffs were indicated in relation to the higher reading for new jobless claims.

The monthly reading for new jobless claims showed 216,250 new claims filed and was higher by 1500 new claims filed. The monthly reading is considered more stable than week-to-week readings for initial jobless claims.

Public and Private-Sector Jobs Reports Mixed, Unemployment Rate Holds Steady

ADP reported 195,000 private-sector jobs added in August. The Commerce Department reported 130,000 public and private sector jobs added; analysts expected 170,000 jobs added in August. The national unemployment rate was unchanged at 3.70 percent.

What’s Ahead

This week’s scheduled economic news includes readings on inflation, retail sales and consumer sentiment. Weekly readings on mortgage rates and initial jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – March 25th, 2019

What’s Ahead For Mortgage Rates This Week – March 25th, 2019Last week’s economic news included readings from the National Association of Home Builders, Federal Reserve Federal Open Market Committee and a press conference by Fed Chair Jerome Powell.

Sales of pre-owned homes in February were reported along with weekly readings on mortgage rates and new jobless claims.

NAHB: Builder Confidence Unchanged Despite Headwinds

Home builders remained confident about housing market conditions in March. The NAHB Housing Market Index posted a reading of 62, which matched February’s reading and fell one point short of expectations. NAHB Index readings above 50 represent a positive outlook on housing market conditions.

Home builders continued to face obstacles including high materials costs and lack of buildable lots and labor. Analysts said builders focused on building larger homes, which were not affordable for many prospective buyers.

FOMC: Fed Puts Brakes on Interest Rate Hikes

Monetary policymakers reversed course on raising the target range for federal funds and voted not to raise the current rate range of 2.25 to 2.50 percent. FOMC members cited global economic concerns including Brexit and wavering economic conditions in China.

While the U.S. Labor sector was strong with ongoing jobs and wage growth and low national unemployment, FOMC members said that the Fed could be “patient” about raising rates and did not expect to raise rates in 2019. Slowing economic growth and inflation were reasons for holding interest rates steady.

Fed Chair Jerome Powell described the current economy as “good” and said that the Fed would gradually roll back its accommodative purchase of treasury bonds. This news was likely to cause yields on 10-year Treasury notes to fall; this would cause mortgage rates to fall due to their connection with 10-year Treasury notes.

Pre-Owned Home Sales Hit 11 Month High in February

The National Association of Realtors® reported 5.50 million sales of pre-owned homes on a seasonally-adjusted annual basis. February sales reading fell short of 5.12 million sales expected but were higher than the rate of 4.93 million sales in January.

February’s reading was 11.80 percent higher than January’s sales. The sales pace was 1.80 percent lower year-over-year, but the median sale price of preowned homes was $249,500., which was 3.60 percent higher year-over-year.

First-time buyers accounted for 34 percent of sales; this falls short of the typical 40 percent participation rate for first-time buyers. Affordability and strict mortgage qualification requirements continued to challenge first-time and moderate-income buyers.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average rates for fixed rate mortgages. 30-year fixed mortgage rates were three basis points lower and averaged 4.28 percent; Mortgage rates for 15-year fixed rate mortgages averaged 3.71 percent and were five basis points lower on average. The average rate for a 5/1 adjustable-rate mortgage was unchanged at 3.84 percent. Discount points averaged 0.40 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week with 221,000 new claims filed. Analysts expected 225,000 new claims based on the prior week’s reading of 230,000 new claims filed.

Whats Ahead

This week’s scheduled economic news includes readings on housing starts and building permits issued, new and pending home sales and inflation. Weekly readings on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – March 4th, 2019

What’s Ahead For Mortgage Rates This Week – March 4th, 2019Last week’s economic reports included readings from Case-Shiller Housing Price Indices and Commerce Department reports on housing starts and building permits issued.

Readings on pending home sales and consumer confidence were released along with weekly reports on mortgage rates and initial jobless claims.

Case-Shiller Home Price Growth Slows to Lowest Rate in Four Years

Home prices continued to grow in December but reached their slowest pace since November2014. Seasonally-adjusted annual home price growth reached 4.70 percent in December as compared to growth of 5.10percent year-over-year in November.

Analysts cited high home prices, and slim inventories of available homes, although demand for homes eased in some metro areas. Affordability and accessibility to mortgages sidelined low and moderate-income buyers; some buyers allegedly gave up on buying homes.

Building more homes is necessary for relieving the housing shortage; real estate pros, mortgage lenders and home buyers rely on home builders to provide enough housing for first-time buyers and existing homeowners to transition from renting to owning and for existing homeowners to move up to aspirational homes. 

Housing starts fell short of expectations in December with a seasonally-adjusted annual rate of 1.078 million starts. Analysts expected 1.28 million starts based on November’s reading of 1.214 million housing starts. Construction was affected by winter weather and higher costs for building materials.

Pending Home Sales Rise in January

Pending home sales increased in January; sales with signed purchase contracts rose 4.6- percent as compared to December’s negative year-over-year reading of -2.30 percent. The National Association of Realtors® said that all four U.S. regions reported higher readings for pending home sales. The Northeast reported 1.60 percent more pending sales, Midwest and Southern regions reported increases of 2.80 percent and 8.90 percent, and the Western region reported 0.30 percent more pending home sales.

Mortgage Rates, Hold Steady New Jobless Claims Rise

Freddie Mac reported no change in 30-year fixed mortgage rates, which averaged 4.35 percent. The average rate for 15-year fixed rate mortgages dropped one basis point to 3.77 percent; mortgage rates for 5/1 adjustable rate mortgages were unchanged at 3.84 percent. Discount points averaged 0.50 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims matched expectations of 225,000 claims filed as compared to 217,000 first-time claims filed the prior week. The University of Michigan Consumer Confidence Index rose to an index reading of 131.4 and exceeded the expected reading of 124.7.

January’s reading was 121.7. Rising consumer confidence may compel would-be home buyers to enter the housing market during peak buying season in spring and summer.

Whats Ahead

This week’s scheduled economic reports include readings on January housing starts, construction spending, and new home sales. Weekly readings on mortgage rates and new jobless claims will be released along with labor-sector reports on public and private sector jobs and the national unemployment rate.

 

What’s Ahead For Mortgage Rates This Week – February 4th, 2019

What’s Ahead For Mortgage Rates This Week – February 4th, 2019Last week’s economic reports included readings new and pending home sales, Case-Shiller housing market indices and consumer sentiment. Weekly reports on mortgage rates and first-time jobless claims were also released.

New Home Sales Rise as Pending Home Sales Fall

Sales of new homes rose 17 percent in November for an eight-month high. Year-to-date sales of new homes were only 2.70 percent higher than for the same period in 2018.New home sales rose to 657,000 sales as compared to expectations of 563,000 sales and November’s reading of 562,000 sales. Analysts cautioned that Commerce Department readings for new home sales are prepared from a slim sampling of sales and are subject to volatility.

Pending home sales slumped in December to a negative reading of -2.20 percent as compared to November’s seasonally-adjusted annual reading of -0.90 percent. Analysts said the dip was likely caused by consumer concerns over the government shutdown and potential future shutdowns.

December’s reading was the twelfth consecutive negative month-to-month reading. Real estate pros and analysts cited ongoing challenges including high home prices and mortgage rates as contributing to fewer contract signings.

In related news, the Federal Reserve’s Federal Open Market Committee elected not to raise the Fed’s target federal funds interest rate range, which is currently 2.25 to 2.50 percent. Domestic and global economic concerns led committee members to pause interest rate hikes.

Case-Shiller reported lower home price growth in November with a year-over-year annual reading of 5.20 percent growth. Las Vegas, Nevada, Seattle Washington and Denver Colorado held the top three spots on the Case-Shiller 20-City Home Price Index.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported slightly higher average mortgage rates last week; 30-year fixed mortgage rates averaged 4.46 percent and were one basis point higher than for the prior week. 15-year fixed mortgage rates averaged 3.89 percent and were also one basis point higher.

The average rate for 5/1 adjustable rate mortgages was six basis points higher at 3.96 percent. Discount points averaged 0;50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

First-time jobless claims surged last week to 253,000 new claims filed. Analysts attributed the spike in new jobless claims to seasonal quirks that were not expected to last. The four-week rolling average of new jobless claims is considered less volatile and rose by 5,000 new claims to 222,250 initial claims filed.

The University of Michigan released its Consumer Sentiment Index last week; the January index reading of 91.20 was higher than the expected reading of 90.70 but was the lowest since President Trump’s election. December’s index reading was 98.30; analysts blamed the government shutdown on the sudden dip in consumer confidence.

Whats Ahead

This week’s economic news includes the President’s State of the Union speech and speeches by Fed Chairman Jerome Powell. Weekly reports on mortgage rates and new jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – January 28th, 2019

What’s Ahead For Mortgage Rates This Week – January 28th, 2019Last week’s economic news included readings on sales of previously owned homes and weekly readings on average mortgage rates and new jobless claims. A scheduled report on sales of new homes was not available due to the government shutdown.

National Association of Realtors®: Sales of Pre-Owned Homes Lowest in 3 Years

Sales of previously owned homes fell in December and failed to meet expectations. 4.99 million pre-owned homes were sold on a seasonally-adjusted annual basis; analysts predicted 5.10 million sales based on 5.33 million sales in November 2018. December’s reading showed the lowest number of sales since November of 2015.

Sales of previously-owned homes fell 6.40 percent month-to-month and were 10.30 percent lower year-over-year. Inventories of previously-owned homes also slipped in December with a 3.70 months supply of homes as compared to 3.90 months supply of available homes in November. Real estate pros consider six months supply of homes for sale as an average inventor.

Real estate pros said that lower buyer traffic in all regions of the U.S. could indicate less interest from buyers, but on a positive note, fewer buyers also remove the high rates of competition seen in the recent past.

Lower mortgage rates are well-timed for the upcoming spring sales season. Real estate pros were hopeful that lower mortgage rates will hold and entice more buyers into the market.

Mortgage Rates Mixed, New Jobless Claims

Freddie Mac reported no change in average interest rates for fixed rate mortgages. The average rate for 30-year fixed rate mortgages held at 4.45 percent; the average rate for a 15-year fixed rate mortgage was also unchanged at 3.88 percent. Rates for 5/1 adjustable rate mortgages averaged three basis points higher at 3.90 percent. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 199,000 new claims filed. Analysts expected 218,000 new claims to be filed based on the prior week’s reading of 212,000 new claims filed. Last week’s reading represented the first time since 1969 that new jobless claims fell below 200,000, but analysts were wary of potential impact of the government shutdown on new jobless claims. The shutdown ended on Friday until February 15, but politicians seemed unenthusiastic about future shutdowns.

Whats Ahead

This week’s scheduled economic reports include Case-Shiller Home Price Indices and readings on pending home sales, construction spending and the post-meeting statement from the Federal Reserve’s Federal Open Market Committee.

Labor sector readings on private and public employment and the national unemployment rate will also be released. Weekly readings on mortgage rates and new jobless claims will be released on schedule.

What’s Ahead For Mortgage Rates This Week – December 10th, 2018

What's Ahead For Mortgage Rates This Week - December 10th, 2018Last week’s economic reports included readings on construction spending and Labor Department readings on private and public jobs growth. The Consumer Sentiment Index was released along with weekly readings on mortgage rates and new jobless claims.

Construction Spending Slows in October

Residential construction slowed in last month as public works projects increased. Private sector construction spending fell by -0.10 percent as compared to expected growth of 0.30 percent and last month’s negative reading of -0.10 percent.

Construction spending for October was $1.309 billion on a seasonally adjusted annual basis as compared to September’s revised reading of $1.311 billion. Overall construction spending was 4.90 percent year-over-year.

Homebuilders continued to be wary of tariffs on building materials and cited high labor costs and a shortage of buildable lots. Winter weather also slows construction in many areas of the U.S.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average mortgage rates last week. Mortgage rates for a 30-year fixed rate mortgage fell by six basis points to 4.75 percent; rates for 15-year fixed rate mortgages were four basis points lower at 4.21 percent on average.

Rates for 5/1 adjustable rate mortgages averaged five basis points lower at 4.07 percent. Discount points averaged 0.50 percent for 30-year fixed rate mortgages and 0.40 percent for 15-year fixed rate mortgages. 5/1 adjustable rates had average discount points of 0/30 percent.

First-tome jobless claims were lower last week with 231,000 new claims filed as compared to an expected reading of 224,000 new claims filed and the prior week’s reading of 236,000 new jobless claims filed.

Labor Department: Slower Jobs Growth in Public, Private Sectors

The Bureau of Labor Statistics reported fewer jobs added to Non-Farm Payrolls in November. 155,0000 public and private sector jobs were added as compared to expectations of 190,000 jobs added and October’s reading of 237,000 new jobs added. ADP reported 179,000 private sector jobs added in November as compared to 225,000 jobs added in October. The national unemployment held steady at 3.70 percent.

Consumer sentiment was unchanged in November with an index reading of 97.50 according to the University of Michigan’s Consumer Sentiment Index.

Whats Ahead

This week’s scheduled economic releases include readings on inflation, retail sales and weekly reports on mortgage rates and first-time jobless claims.

 

What’s Ahead For Mortgage Rates This Week – December 3rd, 2018

What’s Ahead For Mortgage Rates This Week – December 3rd, 2018Last week’s economic news included readings from Case-Shiller Home Price Indices, sales of new homes and pending home sales. FHFA increased maximum loan limits permitted for mortgages held or guaranteed by Fannie Mae and Freddie Mac. Weekly readings for mortgage rates and first-time jobless claims were also released.

Case-Shiller Indicates Slow-Down in Home Price Growth

Home prices slowed their growth in September according to Case-Shiller. David Blitzer, CEO and Chairman of S & P Dow Jones Indices, said “Home prices plus data on house sales and construction confirm the slowdown in housing.

Rapidly rising home prices have sidelined new and moderate-income home buyers; slim inventories of homes for sale and recently rising mortgage rates also squeezed options for home buyers.

Home prices grew at a seasonally-adjusted annual rate of 5.70 percent in September as compared to 5.70 percent during August. September’s reading was the lowest in nearly two years, but remains close to twice the growth rate for wages.

Las Vegas, Nevada held first place for home price growth with a seasonally-adjusted annual growth rate of 13.50 percent. San Francisco, California followed with a year-over-year growth reading of 9.90 percent. Seattle, Washington held third place for home price growth with a year-over-year reading of 8.40 percent.

New and Pending Home Sales Dip in October

The Commerce Department reported fewer sales of newly-built home in October to 544,000 sales as compared to September’s reading of 597,000 sales of new homes. Analysts predicted a reading of 589,000 sales for October. Home sales slow as winter weather and holidays approach, but higher mortgage rates also caused the dip in sales.

Pending home sales are sales where a purchase offer is made, but the sale of a home has not closed. Pending home sales were -2.60 percent lower in October as compared to 0.70 percent growth in September. The National Association of Realtors® reported an October index reading of 102.1 as compared to September’s reading of 104.8 in September, which represented a 2.60 percent decline in contract signings. This was the lowest reading for contract signings since June 2014.

Mortgage Rates, Higher Loan Limits and New Jobless Claims

Freddie Mac reported mixed results for average mortgage rates; Rates for 30-year fixed rate mortgages were unchanged at an average of 4.81 percent; rates for a 15-year fixed rate mortgage averaged one basis point higher at 4.25 percent and the average rate for 5/1 adjustable rate mortgages was three basis points lower at 4.12 percent. Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.40 percent for 15-year fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

The Federal Housing Finance Agency announced higher loan limits for home loans owned or guaranteed by Fannie Mae and Freddie Mac. The maximum loan amount for conforming mortgages was raised 6.90 percent to $484,350. The maximum loan amount for mortgages in high priced counties will be based on 150 percent of the $484,300, which is $726,525.00.

New jobless claims were higher last week with 234,000 new claims filed. Analysts expected 220,000 new claims based on the prior week’s reading of 224,000 first-time claims filed.

Whats Ahead

This week’s economic news releases include readings on construction spending and labor sector reports on public and private sector job growth. The national unemployment rate will be released along with weekly readings on mortgage rates and first-time jobless claims.