Monthly Archives: September 2011
Tips for Paying Down Your Motgage Fast
| September 30, 2011 | Posted by Tammy under Mortgage Rates |
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Whether you have an FHA loan or a private mortgage from the bank down the street, the idea of paying off your loan is no doubt attractive. If you’re in a good place financially, there are ways to take your 30 year mortgage and pay it off in half, or even a third of the time, without breaking your budget.
1. Increase Your Monthly Payments
The quickest way to chip away at your mortgage is to increase the amount you pay each month. Even if it’s just by a little each month, you’ll be getting ahead of the game. If possible, try to make an extra full payment once in a while, thus reducing the number of payments you’ll owe. While this is often a money management issue, if you’ve been given a bonus at work, or added income to your home, consider devoting more of these funds to your mortgage payment and less to other spending.
2. Renegotiate the Terms of the Loan
Depending on your loan, you may be able to renegotiate certain terms in order to facilitate faster repayment. If you are able to get a lower interest rate, this will lower your monthly payment. The trick is to continue paying the same amount as before. This acts in the same vein as increasing the amount you pay each month. Additionally, speaking to a financial consultant can help you understand bank-specific tricks to pay off your mortgage faster.
Keep in mind, the goal of these tips isn’t to encourage you to live beyond your comfort level. Even if you can only afford to put a little more toward your mortgage each month, that’s okay, you’re still working to pay off your loan sooner rather than later. Working to paying down your mortgage earlier may just allow you to live with limited housing costs during your retirement.
What To Expect When You Take on a Mortgage?
| September 28, 2011 | Posted by Tammy under Home Purchase |
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The mortgage application process can be daunting for first-time home buyers. Knowing what to expect can help them to prepare for it. The mortgage process should begin as soon as you start looking for a home and it does not end until you take possession of your new home.
Step One: Applying and Getting Pre-Approved for a Mortgage
In order to shop for a home, you need to know how much you can afford to spend. The mortgage pre-approval process gives you that estimate, but it also gets a lot of the legwork out of the way. You will need to bring proof of income, and other appropriate documentation when you get pre-approved for a mortgage. This is only needed once, so when you actually need to finalize your mortgage, your lender does not need to go through that part of the process again.
Step Two: Finding and Assessing the Home
Once you find the right home, there is a step in the mortgage process that must take place. Your lender must approve the mortgage and they want to ensure that the value of the home is worth their loan. This means that a property appraisal will be done. Depending on the lender, arranging it may be up to the home buyer or they may take care of it. In either case, the home buyer often has to assume the cost. Provided the home is valued as high as the bank is being asked to lend based on your offer price as a buyer, the loan should be issued.
Step Three: Closing On Your Home
If anything changes between the time you have put an offer on your home and closing, a lender can choose not to honor a loan. Substantial changes in income, major purchases and more can all be problematic if it may impact a buyer’s ability to afford the home according to lender’s requirements. Home buyers should be aware of this so they proceed cautiously with their finances before closing as nothing is final until that pen has been put to paper.
Consumer Confidence and Case-Shiller Index Update
| September 27, 2011 | Posted by Tammy under Mortgage News |
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Consumer Confidence Numbers Released
The Conference Board Consumer Confidence Index, remained essentially unchanged in September after declining sharply in August. The index data came in at 45.4 which is up slightly from 45.2 in August. In other words, the index is showing that consumer confidence is unchanged, which sounds about right.
Case-Shiller Home Price Index
The widely watched Standard & Poor’s Case-Shiller Home Price Index increased for the fourth consecutive month in July as the index rose 0.9 percent in July. The index data shows that 17 of the 20 metropolitan cities in the index posted gains from the previous month. This also indicates that home prices are currently in a sideways pattern, in the short term at least.
Economic Calendar for Week of September 26, 2011
- Monday – New Home Sales
- Tuesday – Consumer Confidence, Dennis Lockhart from the Fed speaks
- Wednesday – Durable Goods Orders
- Thursday – GDP, Jobless Claims, Pending Home Sales Index
- Friday – Consumer Sentiment
Mortgage Rate Update
Mortgage rates have come off their all time record lows of last week. This means that there is still an opportunity to lock in some of the lowest rates in history. There is a much greater chance of rates going up as opposed to going down, so if you are interested in learning about how you can benefit from the current market, we can help.
Yet Another Record Breaking Week for Mortgage Rates
| September 23, 2011 | Posted by Tammy under Mortgage Rates |
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Mortgage rates set record all time lows yet again this week on the back of more global fears about European debt default and general anxiety over the U.S. economy as a whole. While employment is an issue for many and economic data as a whole has been negative as of late, the levels that mortgage rates are currently at present a silver lining for homeowners and to be homeowners in the United States.
Fed Released Report on State of 2010 Mortgage Market
This week also marked the release of a report by the Federal Reserve about the 2010 Mortgage Market. Findings in this report can help shed light on some of the issues that borrowers might facing today.
According to the report, there would have been 2.3 million more refinances if not for stricter underwriting guidelines and borrower home equity issues. As borrowers have borrowed more against their homes and their home values have decreased, they are left with less equity, which may put them outside of newer refinance guidelines for home equity requirements.
From the Federal Reserve Report on the Mortgage Market in 2010:
“We estimate that, in the absence of home equity problems and underwriting changes, roughly 2.3 million first-lien owner-occupant refinance loans would have been made during 2010 on top of the 4.5 million such loans that were actually originated.”
The inability to refinance is especially a problem in states that were hardest hit by foreclosures, where home prices have declined the most, the report shows.
In Arizona, California, Florida, Michigan and Nevada, 6.4 percent of borrowers with credit scores between 680 and 719 were able to refinance in 2010. In other states, 9.7 percent of borrowers within the same score range refinanced.
Mortgage Rates in the Week to Come
The upcoming week has a a few relevant economic reports that may move mortgage rates. These include the August New Home Sales report, Consumer Confidence, Durable Goods Orders, Jobless Claims, GDP and more. We will be reporting with a full economic calendar on Monday.
The Window of Opportunity is Officially Open, Don’t Let it Close On You
This week presented a unique opportunity for homeowners on the sidelines that have not already taken advantage of record low mortgage rates. As with any window of opportunity, there may be a limited time in which you can get rates at their current low levels. We can help you understand which programs fit your needs the best and help you lock in some of the lowest mortgage rates in history.
Federal Open Market Committee Update
| September 21, 2011 | Posted by Tammy under FOMC |
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The Federal Open Market Committee (FOMC) concluded its two day meeting today with a 7-3 vote to leave the Fed Funds Rate (the rate at which lending institutions lend to each other) unchanged within its current target range of 0.00%-0.25%. This Fed press release sheds some light on the FOMC’s current observations of the market and how it will be adjusting its activities moving forward.
From the FOMC Press Release:
Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.
Since the Fed sets monetary policy and participates in other activities such as buying Treasury debt, their activities can significantly impact the mortgage rates and the economy as a whole. As the Fed has implemented various policies to help push the economy out of recession, maintaining these policies for an extended period of time can do more damage than good.
FOMC Meeting Takeaways
- Moving forward with “Operation Twist”: This economic policy may lead to even lower mortgage rates. In short, the Fed is purchasing more long-term securities in an attempt to keep downward pressure on long-term interest rates, which also affects mortgage rates.
- Unemployment “remains elevated”
- Investment in non-residential structures is “weak”
- Business Investment in equipment and software continues to “expand”
- Inflation appears to have “moderated”
- Economic growth “remains slow”
- The housing sector “remains depressed”
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