What’s Ahead For Mortgage Rates This Week – March 18th, 2019

board-of-the-federal-reserveLast week’s economic reports included readings on retail sales, inflation and construction spending. New home sales Consumer sentiment readings were posted along with weekly readings on mortgage rates and first-time jobless claims.

Retail Sales Increase after Lowest Reading in 10 Years

Retail sales rose by 0.20 percent in January; analysts expected an increase of 0.10 percent based on December’s negative revised reading of -1.60 percent. Home centers and internet retailers led in overall sales; retail sales without the automotive sector were higher with an 0.90 percent increase in January, which exceeded expectations of an 0.40 percent increase.

December had a negative reading of –2.10 percent. Auto dealers had fewer sales to car rental firms and other business customers; the reading for retail sales excluding automotive sales rose 0.90 percent as compared to expectations of 0.40 percent more sales and December’s reading.

Inflation rose 0.20 percent in February, which matched expectations after a flat reading in January. Core inflation, which excludes readings for volatile food and fuel sectors, rose 0.10 percent, which fell short of 0.20 percent in January.

Construction Spending Rises as New Home Sales Fall

Commerce Department readings for construction spending rose 1.30 percent in January as compared to December’s negative reading of -0.80 percent. The end of the government shutdown likely helped return construction spending return to positive territory, but real estate and mortgage pros said that building more homes is the only solution to persistent shortages coupled with high demand for homes by would-be buyers.

Slim inventories and home prices rising in excess of wages and inflation are factors contributing to fewer eligible buyers. New home sales fell in January, which is not unusual for winter sales. 607,000 new homes were sold on a seasonally-adjusted annual basis in January; 652,000 new home sales were reported in December, but analysts expected a lower reading of 616,000 sales for January.

Mortgage Rates Fall as New Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week with rates for 30-year fixed rate mortgages averaging ten basis points lower at 4.31 percent. !5-year fixed rate mortgages averaged 3.76 percent after falling seven basis points. 5/1 adjustable-rate mortgages averaged 3.84 percent and were three basis points lower. Discount points averaged 0.40 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims rose to 239,000 new claims last week; 223,000 claims were filed the prior week and analysts expected 225,000 new claims. Last week’s first-time jobless claims were the highest in ten years, but analysts said that layoffs haven’t risen significantly, which signals healthy labor markets.

The University of Michigan reported higher consumer confidence in March with an index reading of 97.80. The expected reading was 95.0 based on February’s index reading of 93.80. Increased consumer confidence in economic conditions suggests that more families will enter the housing market. Analysts said rising consumer confidence resulted from the resolution of the government shutdown.

What’s Ahead

Economic readings scheduled this week include reports on homebuilder confidence in housing market conditions, sales of pre-owned homes and Commerce departments on housing starts and building permits issued. The Federal Reserve’s scheduled announcement will be followed by Fed Chair Jerome Powell’s press conference. Weekly reports on mortgage rates and new jobless claims will also be issued.

Down Payment Money Saving Mistakes

documents-needed-to-apply-for-a-mortgageAre you saving up money for a down payment? Saving money to put down on a home is always a smart idea, but there are right ways and wrong ways to go about it. Understanding how to best save for a down payment will go a long way toward ensuring you’re ready when you finally find the house of your dreams.

Here are four down payment money saving mistakes to avoid.

1. Not Saving Enough

It’s very admirable to have a goal of saving exactly 20% for a down payment. However, this is a common mistake new home buyers make. First of all, consider loan programs that allow for a lower down payment. In addition, there are lots of other costs associated with buying a home that you must also plan and save for, including:

Closing costs
Title fees
Miscellaneous fees
Time off work
2. Not Keeping Track Of The Source Of The Money

Many lenders have strict rules about where the money comes from for a down payment. Pay careful attention to the source of your down payment money, and keep accurate records. You may be asked to present these financial records to prove the source of funds as part of the mortgage review process.

3. Borrowing The Money

In addition, many lenders may allow only a certain percentage of the down payment to come from a family member. They want to know that you have the resources to come up with the down payment yourself without relying on favors from family members. Don’t make the mistake of borrowing excessively for the down payment, even if it’s from a third party lender.

4. Not Keeping Money In Reserve

It’s essential to keep some money in your savings account that isn’t earmarked for the down payment. You’ll need to disclose how much you have in savings and it will factor in where you get approved or not. Lenders want to see a history of consistent saving. This shows that you’re a financially responsible person with cash reserves in the event of an emergency.

The sooner you can start saving money for a down payment, the better. As you save, keep these four down payment money saving mistakes in mind so you have the best possible chances for being financially ready to act when you do find the house you want to purchase.

Your trusted home mortgage professional is ready to help you identify the right financial options for your specific situation. As soon as you are considering a home purchase or a refinance, be sure to contact this essential real estate partner.

8 Ways To Maintain A Great Credit Score

consumer1Having an excellent credit score is very useful. The following are some tips on how to maintain a superb credit score.

Open Credit Accounts When You Do Not Need Them

If you don’t have any credit accounts, you will have a low score. The best time to open them is when you do not need them. Keep a small balance on them and pay it all off at the end of each month to avoid paying interest.

Charge Up To Half The Credit Limit Then Pay It All Back Within A Few Months

If you must use a credit line, only use half of it and pay it back quickly.

Buy Big Ticket Items With A Credit Card For Cash Back And Points

Even if you can pay cash for a big ticket item, you may find it beneficial to buy it with a card that gives a reward for making a purchase like cash back or rewards points. Then pay off the balance as quickly as you can.

Ask For An Increased Credit Line

For credit accounts that you have been paying on time, call the customer service department and tell them you are thinking about buying something that is slightly above your credit limit. Ask them if they can extend the limit. This usually works even if you do not actually buy something.

You can attempt to raise your credit limit this way about once per year. As you increase your available credit capacity while maintaining all accounts in a “paid as agreed” status, your credit score should go up.

Move Credit Balances To A New Card With Zero Interest

Many credit card companies offer a zero-interest period for transfers of credit card balances from another card. After doing this, transfer this balance, once again, to another card that has a similar offer before the zero-interest period expires.

Close Old Accounts When New Ones Are Open

Having too many credit card accounts can lower your score. Keep about half a dozen cards. Close the ones that you transferred the balance from to zero interest cards.

Use Automatic Payments To Make Sure Bills Are Paid On Time

Never miss a payment or pay late. You may want to use automatic bill payment systems to make sure you never let a bill slip by.

Monitor Credit Card Activity For Unauthorized Use

Monitor all credit card activity in real time. Immediately take action if you notice an unauthorized charge. Monitor your credit history file on the three credit bureau services of Equifax, Experian, and Transunion.

Your trusted home mortgage professional can provide you with additional guidelines to improve and maintain your credit while preparing to purchase or refinance your home. Be sure to contact this valuable resource if you have any questions.

Case-Shiller: December Home Price Growth Slowest in 4 Years

home-prices-slightly-down-trendCase-Shiller Home Price Indices reported the slowest rate of U.S. home price growth since November 2014. According to the 20-City Home Price Index, Home prices grew by 4.20 percent year-over-year and were 0.20 percent higher in December as compared to November. The 20-City Home Price Index fell short of analysts’ expected gain of 4.80 percent year-over-year. Case-Shiller’s National Home Price Index reported home prices increased 4.70 percent in the fourth quarter of 2018.

While home price growth is sluggish, home prices continued to rise faster than wages. This creates obstacles to affordability for many would-be home buyers. Fears about rising mortgage rates and inflation, also concerned would-be home buyers seeking affordable homes.

20-City Home Price Index: Home Price Growth Rose In Only 5 Metro Areas

Las Vegas, Nevada led in home price growth for December with a year-over-year increase of 11.40 percent. Phoenix, Arizona home prices rose 8 percent year-over-year, and Atlanta, Georgia home prices increased by 5.90 percent. Home prices in west coast cities including San Francisco, California and Seattle, Washington grew at a slower pace than in prior years, which could indicate that high-demand metro areas are approaching peak home prices.

December home price growth surpassed November readings in five cities tracked in the 20-City Index. Three cities reported no change in month-to-month home prices growth. David M. Blitzer, Chair of the S&P Dow Jones Index Committee, acknowledged that year-over-year home prices continued to fall despite the prior assertion that housing markets were not approaching “bubble” conditions seen in the Great Recession.

Serious Headwinds Face Prospective Home Buyers

According to data compiled by the National Association of Realtors®, 27 percent of prospective home buyers surveyed at the end of 2017 believed that they would face fewer challenges to finding and buying a home in 2018. Prospective buyers surveyed in late 2018 who planned to buy within the next year decreased from 24 percent to 13 percent. Combined impacts of high home prices, potential increases in mortgage rates and strict mortgage requirements discouraged some would-be buyers, but whether this is a short or long-term trend will depend on factors including inflation, wage growth and inventories of homes for sale.

Market conditions can vary by location. Please be sure to consult with your trusted home mortgage professional to find out about market specifics in your area as well financing options.

Managing Finances Before Applying For A Mortgage

calculatorAre you planning on using a mortgage to help cover the cost of a new home? If so, you will want to prepare your finances and figure out how you will manage all those wallet-draining monthly expenses. Let’s take a look at how to run a quick financial health check to ensure you are ready to apply for a mortgage.

Update (Or Start) Your Monthly Budget

First, it is essential to get the basics out of the way. If you haven’t already, it’s time to start a monthly budget to keep track of your income and expenses. Once you have a mortgage, it will be important to prioritize your monthly payments so that you don’t end up falling behind.

Starting a budget is easy and can be done with mobile apps, software, a spreadsheet or a pen and paper. List all sources of income so that you know exactly how much cash you are working with. Then, list out every one of your expenses. It can be tough to remember them all, so consider using debit and credit card statements from the past few months as a reminder.

Get A Copy Of Your Credit Report

Next, you will want to get a copy of your credit report so you can see what potential mortgage lenders will see when assessing your financial history. This is a free service that you can request once per year, so be sure to take advantage. Note that you will want to use government-approved websites for requesting your credit report. Be wary of scams.

Do You Have A Down Payment?

A down payment is not required for every home purchase, but having one saved up can make the buying process easier. The amount you will want to have saved up will depend on the cost of your home, whether you plan on carrying private mortgage insurance and a variety of other factors. If possible, try to save up an amount close to (or more than) twenty percent of the home’s purchase price.

Ready? Chat With A Professional

Now that you have your financial health in check, it is time to meet with a trusted mortgage professional to discuss your financing options.

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

fed-minutes-mortgageLast 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.

What‘s 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.

3 Ways To Help Your Kids Deal With The Move

80-10-10-mortgage-300x130Kids of all ages often have a hard time dealing with moving. They may not be able to understand why the family can’t stay in the same place forever. Even with explanations, children often can’t readily envision how amazing the new place will be.

Here are some ideas for helping your kids deal with the move.

1. Make It Easy To Stay In Touch

For a lot of kids, a big sore spot with moving is having to say goodbye to friends and schoolmates. They may even feel like you’re intentionally wresting them away from their friends. To demonstrate how much you understand the sacrifice, make a gift of a cute set of note cards, stamps included. Even if your child chooses to text or email old friends instead of write, they’ll appreciate your gesture.

2. Visit The New Community

If possible, bring your kids to visit the new neighborhood where you’ll be moving. Encourage positive anticipation by signing them up for things like a library card, pool membership or a community event such as an Easter egg hunt, relay race or something similar. Consider enrolling them in a fun local class such as pottery, horseback riding, or something else they would enjoy. This helps your kids to focus on the upcoming activities instead of leaving their friends behind.

3. Strive To Keep Old Routines

When you’re busy packing and readying for the big move, old routines often fall by the wayside. But children need routines to feel safe. Strive to keep as many old routines as possible in the preliminary days and weeks before the big move. For example, if Wednesday is always family game night, stick to the plan. Your kids will feel more secure knowing that some things will stay the same, even in a new location.

Above all, make the time to listen. Your child might have concerns that you hadn’t thought of, like having to give up their dog or cat in order to move to the new house. Don’t worry, though. Kids tend to adjust very well to new situations. With your support and a few tips like the ones mentioned above, your children will make a happy transition to your new home.

Before you begin your search, be sure to set an appointment with your trusted home mortgage professional to discuss financing options and your home loan pre-approval.

5 Tips To Price Your Home To Sell For Top Dollar

do-it-yourself-kitchen-remodeling-ideasMany home sellers are confused about how to price their home to sell. It’s definitely challenging to try and find that sweet spot between pricing it low enough so it flies off the market without undercutting the home’s value.

Emotions play into the decision, too. If the seller has a lot of sweat equity in the home, or the property is the only place the children have ever called home, owners may tend to place a higher value on the house.

Here’s how to correctly price a home to sell in any market.

Rely On Your Real Estate Agent

Your Realtor is an expert in all matters related to home buying and selling. They have a vested interest in selling your home within a reasonable time frame. As such, they provide a valuable, objective perspective that you should closely pay attention to in order to correctly price your home to sell.

Look At Comps In Your Neighborhood

One thing that your real estate agent does is analyze the comparable properties in your neighborhood. Remember, what a home sells for in a nearby city doesn’t impact how to price your home in a neighborhood far removed. Your prospective buyers will also compare your home’s price to others they could buy in the same neighborhood.

Consider Special Features

Don’t discount special features that your home has, such as built-in shelving units, out buildings, a home movie theater, etc. These give you an advantage in that you can safely set your price a little higher than comparable homes without those features. Be sure your real estate agent mentions them on your MLS listing so buyers understand the higher asking price.

Be Prepared To Make Price Adjustments

Remember that you might have to come down from your asking price, so keep that in mind when you and your real estate agent set that number. Don’t expect that you’ll get exactly what you’re asking for unless you’re in a high demand area. When you give yourself some margin, you gain negotiating power you can use to make a sale happen.

Consider Your Own Finances

Pricing your home to sell is only one factor to consider. The larger equation takes your entire financial picture into account. Figure out how much you owe, how much commission you’ll pay and any sales concessions, if any, you’d be willing to offer a prospective buyer. This due diligence ensures you’ll be satisfied with the outcome after all the money has changed hands.

Pricing your home to sell correctly is a critical part of making the transaction happen. Remember that your real estate agent is the best judge of the best price point, but you can always point out the reasons why you’d like it higher or lower.

It’s important to plan out where you will live once your current property has sold. A great place to start is by obtaining a current evaluation of how much you can afford for your new property and getting your new home loan pre-approved with assistance from your trusted home mortgage professional.

Garage Organization Ideas For Your New Home

garage organizationNow that you have a beautiful new home with a garage, the fun of organizing can begin. When your garage is well organized, everything is much easier. You can get home projects finished faster, get out the door quicker and better enjoy all your sporting activities.

Here are some tips to organize your new garage.

Make Use Of The Walls

A lot of homeowners overlook the wall space when organizing the garage. If your garage has exposed studs, this is actually a benefit in terms of storage space. You can easily create shallow shelves in between the studs using 2 x 4 and shelf brackets. Use these shelves to store smaller items that tend to get lost on larger shelves. You can also create an effective space for hanging garden tools. Screw extra large hooks onto the outside edge of one of the 2 x 4s. Hang brooms, rakes and shovels from the hooks.

Utilize The Ceiling

You can also utilize the back area of the ceiling, beyond the area where the garage door stops when it’s raised. Install hanging systems that you can source from a local hardware store. You’ll be able to hang things like bicycles, skis, kayaks and more. Some homeowners even hang small lawnmowers and spreaders during off-season.

Invest In A Workbench

Even if you don’t do carpentry, a garage workbench is a useful part of an organized garage. This is the place where you can do small repairs on household items or add to your garage organizational systems. You’re more likely to repair an item when it’s sitting on your workbench and you have all the needed parts within reach. Install some smaller clear storage drawer units above the workbench to hold screws, nails and nuts and bolts in various sizes.

Hang A Pegboard

A pegboard provides a central place for your garage tools. Hang the pegboard on the wall within reach of your workbench. Outline the spaces on the pegboard for hammers and screwdrivers so they always get put back where they belong.

It’s never fun to have to endlessly search every time you need something from the garage. These garage organization ideas will make your new home and garage even more enjoyable.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional to find out about current financing options.

5 Ways Bridge Loans Help Real Estate Investors Increase Profits

Lower-Payment-SaveBridge loans, which are also commonly referred to as interim financing, gap financing or swing loans, help a motivated home buyer to secure financing before their home or investment property sells. Lenders can usually modify these flexible loans to accommodate a person’s unique needs.

Current real estate market conditions allow savvy investors to make big profits as long as they can move quickly on good opportunities. Low inventories of existing homes and slower than normal construction developments have combined to drive the median home price across the US to $223,900. This represents a 7.6% national average increase through 2018. Market experts expect prices to rise by another 6.3% over the next 12 months which may present very good opportunities for home buyers.

Bridge loans are a short-term funding solution with some unique features.

They usually include payback terms between 2 months to 1 year.
Most bridge loan options gain approval in about 15 days.
May receive up to 70% of the property’s value in the loan.
Bridge loans are a tool real estate investors can use to increase their holdings in this hot market. How can these funds be used to help you make more money from your properties?

When prime properties come up for sale, investors need to be ready to take advantage. If most of your cash is already tied up in other properties, a bridge loan is a perfect way to get the quick cash you need to win the bid.
While a property is up for sale, investors can use bridge loans to continue financing new projects. When the sale is complete, the funds can be used to pay off the bridge loan.

Hard money loans are a popular option for real estate investors who can’t wait for the normal bank loan process. However, these funds usually come with higher interest rates. Bridge loans are a lower cost alternative, as lenders generally charge less interest for these accounts.

Not sure what you’re going to do with your new property? If you wait too long to make your decision, chances are good that the property will be gone. Use a flexible bridge loan to secure your property. If your plans change, it’s simple to convert the funds into a more conventional loan structure.

For flippers who buy properties, perform renovations, and put the properties back up for sale for a profit can use bridge loans to quickly increase their holdings without sacrificing the liquid assets they need for material, labors, and other renovation costs.

In order to qualify for these funds, investors need to prove that they can afford double mortgage payments, present a clear plan on how they intend to pay for the loan (either through resale or refinance), and have a property that can be used as collateral with at least 20% existing equity.

When used as part of an overall investment plan, bridge loans help real estate investors buy more properties, which can mean more money in their pockets. Call your trusted home mortgage professional to discuss bridge loan and other financing options that best suit your personal situation.