Category: Mortgage Rates
Record Low Mortgage Rates Moving Up For Good?
| October 6, 2011 | Posted by Tammy under Mortgage Rates |
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Mortgage rates have continued to slowly trend upwards this week from the record lows of last week. This means that there is still a great opportunity to lock in these near record low rates before they make their final move up. If you lock in your rate, that is. That is a big if, because there is market data coming out tomorrow which may move the market in a way that pushes up mortgage rates significantly.
Non-Farm Payrolls Report Data on Friday May Push Mortgage Rates Up
Tomorrow at 8:30 AM Eastern, the market will be waiting and watching as the Non-Farm Payrolls report otherwise known as the “jobs report” or “employment report” is released for September. This report can have a significant impact on mortgage rates and includes data about the U.S. unemployment rate, number of new jobs added or lost during the month in addition to average hourly earnings. This data helps market participants such as investors, banks and traders understand the health of the employment sector and can have a huge impact on mortgage rates.
Weaker than expected data could be positive for mortgage rates, while stronger than expected data could mean much higher rates depending on how strong the data is.
Keep in mind that since we are at a bottom, mortgage rates have a lot more room to move upward and are expected to move upward fast when they do move. This means that if you do not have a rate lock in, now may be the time.
The Low Rate Window May Be Closing
Have questions about a rate locks or the right loan for your scenario and goals? We can help you answer any questions you have in addition to locking in a low rate so that you are not at the mercy of the market! Holding off on your rate lock may mean the reality of much higher rates later.
Qualifying for a Better Mortgage Interest Rate
| October 5, 2011 | Posted by Tammy under Mortgage Rates |
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You may not know it, but the interest rate you’ll pay for your home loan depends on a number of different factors. Changing any one of these factors can help not only make you a better candidate for a loan, but also ease the financial burden that comes from a major purchase like buying a home. We’ve outlined some of these things below:
1. Your Credit Score
Your credit score plays a major role in the type of interest rate you’ll qualify to receive. While different programs have different credit requirements, the rate you pay may increase or you may be disqualified altogether if you do not meet a specific program’s minimum or preferred credit score standards. If you find that you are having trouble qualifying for a mortgage, you might qualify for federally supported loans from Fannie Mae or similar institutions.
2. Available Liquid Assets / Reserve Cash on Hand
The amount cash reserves you can show to the lender are also important. Cash reserves help show that in case there is a disruption in your income, you will be able to maintain your monthly payments.
3. Your Down Payment Options
Another aspect to consider when applying for home loans is your down payment. Different lenders will require certain amounts in order to agree to giving you a loan.The higher a down payment you can afford to make will not only help you in the long run, but give you an edge when applying for financing. Most financial institutions would prefer a down payment of anywhere from 10 to 20 percent in order to assure a good interest rate although this can vary by program. In difficult economic times, more and more banks are asking for the buyer to put more money down. Government-backed loans allow you to put less money down initially, but also carry higher monthly rates.
It’s important not to be discouraged if your credit score is lower than you anticipated, or if you can’t afford a large down payment. You can investigate other loan options, or even try to find ways to improve your credit. Improvement won’t happen overnight, but it can happen if you have patience. In fact, we can help you improve your credit score and help educate you on how to improve and maintain high credit scores in the future.
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.
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.
Economic Worries Translate Into Low Consumer Confidence and Low Mortgage Rates
| July 15, 2011 | Posted by Tammy under Mortgage Rates |
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The University of Michigan’s / Thomson Reuters widely-watched consumer confidence index shows consumer confidence moving lower driven by lack of confidence in government economic policies and increasing pessimism over unemployment, home prices and falling income. The index fell 7.7 points to 63.8, its biggest decline since March with the index falling to 76.3 from 82.0, the lowest reading since November of 2009.
One issue at the forefront of eroding consumer confidence is the impending budget deal debacle which will decide the fate of whether or not the US debt ceiling can be increased, allowing the United States to continue funding its monthly obligations.
Adding to consumer anxiety is credit rating agency Standard & Poor’s statements this week that there is a 50 per cent chance it will downgrade the U.S. government’s credit rating within three months because of the congressional infighting over approving an increase in the debt ceiling. The rating agency has placed the United States on a credit watch, not good news for the economy or consumers.
FED Chairman Ben S. Bernanke in Semiannual Monetary Policy Report to the Congress:
Much of the slowdown in aggregate demand this year has been centered in the household sector, and the ability and willingness of consumers to spend will be an important determinant of the pace of the recovery in coming quarters. Real disposable personal income over the first five months of 2011 was boosted by the reduction in payroll taxes, but those gains were largely offset by higher prices for gasoline and other commodities. Households report that they have little confidence in the durability of the recovery and about their own income prospects. Moreover, the ongoing weakness in home values is holding down household wealth and weighing on consumer sentiment. On the positive side, household debt burdens are declining, delinquency rates on credit card and auto loans are down significantly, and the number of homeowners missing a mortgage payment for the first time is decreasing. The anticipated pickups in economic activity and job creation, together with the expected easing of price pressures, should bolster real household income, confidence, and spending in the medium run.
The silver lining for mortgage rates is that bad economic news results in lower or depressed mortgage rates. We can help you decide if you in the best mortgage for your needs or if a lower rate is available. Please contact us today for your free existing or future mortgage consultation.
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