What’s Ahead For Mortgage Rates This Week – August 22, 2016

Last week’s economic news included the NAHB Housing Market Index, Commerce Department releases on housing starts and building permits issued. Weekly reports on mortgage rates and new jobless claims were also released.

Shortages of available single-family homes have driven up home prices and increased competition among homebuyers; short inventories of homes for sale are affecting affordability in many areas, although buyers seem motivated by lower mortgage rates and some easing of mortgage requirements. Analysts have repeatedly said that the only solution to the shortage of homes is building more homes.

Fortunately, the National Association of Home Builders reported that builder sentiment concerning U.S. housing markets increased in August. The HMI moved up to a reading of 60 in August as compared to July’s reading of 58. Readings over 50 indicate that a majority of builders surveyed are confident about housing market conditions.

According to NAHB, home builders continued to face obstacles including shortages of buildable lots and skilled labor. Regulatory issues were also cited by some builders, but overall, builders remain optimistic about housing market conditions.

Housing Starts Up, Building Permits Issued Slip in July

Commerce Department reading s on housing starts and building permits issued were mixed; housing starts rose from July’s reading of 1.186 million permits issued to 1.211 million permits issued in August. July’s reading was the second highest since the recession but was driven by multi-family construction. Building permits were lower in August with a reading of 1.152 million permits issued against July’s reading of 1.153 million permits issued.

Analysts said that under present market conditions, there is little reason for homebuilders to increase single-family home production as current pricing has put many would-be buyers on the sidelines.

Mortgage Rates Mixed, New Jobless Claims Lower

Freddie Mac reported that average rates for 30-year and 15-year fixed rate mortgages dropped last week while the average rate for 5/1 adjustable rate mortgages rose. The average rate for a 30 year fixed rate mortgage was 3.43 percent and the average rate for a 15-year fixed rate mortgage was 2.74 percent; both readings were two basis points lower than for the prior week. The average rate for a 5/1 adjustable-rate mortgage was two basis points higher at 2.76 percent. Average discount points held steady for fixed rate mortgages at 0.50 percent; average discount points for 5/1 adjustable rate mortgages were lower at 0.40 percent.

New Jobless claims fell by 4000 claims to 262,000 new claims, which was lower than analyst expectations of 265,000 new claims and the prior week’s reading of 266,000 new claims. Job security is important to home buyers and signs of strong labor markets can help propel would-be buyers into the market,

Whats Ahead

This week’s scheduled economic news includes releases on new and existing home sales and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will be released on schedule.

NAHB: Builder Sentiment Improves in August

Buyer Beware: 4 Common Problems Home Sellers Try to HideAccording to the National Association of Home Builders, August home builder sentiment met analyst expectations and rose by two points to a reading of 60; July’s reading was revised downward to 58. Two out of three components used in calculating the Home Builder Index were higher. Builder sentiment concerning current housing conditions rose two points to 65. Builders were also more confident about housing market conditions within the next six months; August’s reading was one point higher at 56. Builders were less confident about buyer traffic in new housing developments. August’s reading slipped one point to 44.

Any reading above 50 indicates that a majority of builders surveyed were confident in market conditions; readings for buyer traffic have not reached 50 since 2005.

Building More Homes Seen as Solution to Persistent Home Shortage

Shortages of available homes have caused demand for homes to surge in recent months. As demand increases, home prices rise. This thwarts positive conditions including low mortgage rates and recent reports of rebounding job creation. If builder confidence rises, it follows that builders will expand construction, but builders also cited factors including regulatory obstacles, a lack of qualified labor and shortages of land available for development as ongoing concerns.

Regional Confidence Readings Mixed

Regional readings for builder confidence were mixed; builder confidence in the Northeast increased by two points to 41. In the South, builder confidence also rose two points to 63. Builder sentiment in the West was unchanged at 69 while builder sentiment in the Midwest fell two points to 55.

Although growing builder confidence considered positive in light of home shortages, analysts said that single-family housing starts remain well below historical levels.

In related news, NAHB reported that readings for the 55 plus housing market index increased by one point to 57 as compared to the first quarter reading and was unchanged as compared to the second quarter of 2015. As with the general HMI, any reading over 50 indicates that more builders than fewer are confident in market conditions for 55 plus housing markets.

Three Proven Ways You Boost Your Credit to Get a Mortgage Approved

These 10 States Have The Biggest Mortgage DebtCredit problems are unfortunately common, and they can make it difficult for you to obtain a mortgage. Even if you are able to obtain a mortgage with your credit issues, the rate may be rather high in comparison to what you may qualify for if you obtain a mortgage without fixing your credit problems. While some issues may take a while to fix, you may be able to see a decent increase in your credit rating when you follow a few easy steps.

Pay Off Outstanding Derogatory Credit Items

When you review a copy of your credit report, you may notice that some items have an outstanding balance due. If the account is in good standing, the outstanding balance is not a primary issue unless you have an excessive amount of debt. If the account is not in good standing, such as if you have a series of late payments or a collection account being reported on the credit report, you can see a boost in your credit rating when you pay off these debts.

Settle Judgments

Legal matters can also be reported on your credit report, and they may be settled or still outstanding. An example of this would be if an electrician serviced your home, and you did not pay the bill. The electrician could file a lien against you. A settled judgment may still be a ding on your credit rating, but it is far better than having an unsettled judgment. If you notice that you have a judgment reported on your credit report, you may consider taking the necessary steps to settle it and get back in good standing.

Pay Off Small Balances

If you can afford to do so, it can improve your credit rating to pay off small balances. A portion of your credit rating will be determined by the number of open accounts and the number of accounts with balances that you have. By focusing on the small balances, you can often see a quick improvement in your credit score. There may also be a benefit to closing these accounts after they have been paid off.

Before you apply for a mortgage, it is wise to request a copy of your credit report. You want to remove any items that you find on the report that do not belong to you. For those derogatory items that are yours, you can follow these steps to help improve your credit rating with fast results.

Real Estate Investing: How to Find Great Deals on Undeveloped Lots with Big Potential

Real Estate Investing: How to Find Great Deals on Undeveloped Lots with Big PotentialPurchasing a plot of land can be one of the best investments to make. A landowner has great (but not unlimited) freedom in how to develop their plot, and land never expires so its potential is essentially infinite. That said, buying undeveloped or vacant land can be risky business, so read on to find tips on purchasing a plot.

Do Your Homework: Before You Get Onto The Land

Before anything else happens, figure out your priorities. Decide what you want the land for, what amenities and what location you want, what you’re looking for in terms of neighbors or local government, and, of course, know your budget. More specific questions will arise around taxes, fees,and permits for building, available utilities/water access but, first, just start with your ideal land plot and work backwards (and into reality) from there.

Do Your Due Diligence: On The Land Itself

Once you find a plot that fits your needs on paper, get out onto it. Walk the land with an eye on the topography (any unexpected hills or valleys? Is the ground solid/fertile/arable, depending on what you need?), neighboring properties, size and shape of the plot, and any other element that the walk brings to your senses (smell and hearing as well as sight). Ideally, do this walk in the fall, so there is no foliage hiding your view of the property and what’s around it.

Don’t Despair: It’s Costly, But There Are Deals Out There

Remember that developing the land will incur costs too. Budget for as many foreseeable costs as you can, including a land survey, well/utility installation, legal fees, land clearing, landscaping, road construction and others. That said there are places you can look at for deals on the initial land purchase, including property lots for sale (which are cheaper the farther they are from major cities, road access, and already-connected utilities) or bank-owned plots. For those, you can talk to your real estate agent about asking local banks for lists of their foreclosed properties, which tend to be cheaper as banks look to sell them off.

Don’t Be Afraid To Ask: Reaching Out To Experts

Finally, talk to people. Ask locals about the neighborhood, previous uses of the land, potential surprises (like calm paths that turn into snowmobile trails in the winter). Connect with professionals in the local health department, zoning and building departments, accountancy and other areas of development for in-depth answers to your municipal questions. Let your local mortgage agent be your first point of contact.

3 Things You Must Do after Inheriting a Home

3 Things You Must Do after Inheriting a HomeThere can be a lot of excitement when it comes to the realization that you’ve inherited a home, but simply because it’s an inheritance doesn’t mean there aren’t a few strings attached. Whether you’re expecting to be gifted with a home in the future or you’re currently going through this process, here are a few things you may need to watch out for.

The State Of The Mortgage

Once a home has been effectively handed over to you, it’s important to determine the status of the mortgage with the lender and if anything is still owed. While you have the option of taking over the mortgage in a lot of cases, in the event that there’s a reversible mortgage or you’re choosing to rent it out as a second property, you may not be able to transfer the mortgage. While this can often be a rather seamless process, if money is owed there can be other factors to consider.

Determine If You Want It

If you already have a first home and don’t want to take care of your second property as a rental unit, it’s important to realize that keeping the home may not be the best decision for you. While you have the option of organizing a short sale if you’d like to get it off of your hands, you can also contact a real estate agent who will be able to provide you with advice on how to proceed if you’re unwilling (or unable) to take control of the property.

Is It In Good Condition?

Whether you want to keep the home or not, there can be cases where it’s not even a question if it’s a home that you’re going to end up investing money into without much return. In the situation that a lot of money is owed on the house or there are serious issues with its general condition, you may want to release yourself from the inheritance and move on with your financial situation still intact.

There can be an instant feeling of acquired wealth in the event that you’ve inherited a home, but a home in bad condition or that you don’t want to take care of can end up being more of a headache than anything else. If you’re currently considering your options when it comes to a home inheritance, contact your local mortgage professional for more information.

Bi-weekly or Monthly Mortgage Payments – Which is better?

A When you apply for a new mortgage, your lender may ask if you want to set up monthly payments or bi-weekly payments. At one time, monthly payments were common, but bi-weekly payments are increasing in popularity. This is because they break a large expense up into two smaller and seemingly more manageable payments. In addition, you can also make what equates to a full extra payment on the mortgage each year with a bi-weekly payment structure. Before you decide which is best for you, consider a few factors.

Your Personal Budget

Many people may believe that if they get paid every two weeks, a bi-weekly mortgage payment is a better option than a monthly mortgage payment. This is not always the case. You should consider other sources of income and how much your payment is in relation to your paychecks. In addition, consider which part of the month your other regular bills are due. This is critical to establishing the best payment plan for you.

Control Over the Payments

You can still enjoy the benefit of making an extra payment per year with a monthly mortgage payment schedule. For example, you would simply need to pay $100 per month more each payment to realize the same results. When you establish a bi-weekly payment plan, this extra payment is automatic. This may be ideal if you do not think you would stick with paying more per month on your own. However, if you want more control over your monthly payment amount and when you make the extra payment, it may be best to choose a monthly mortgage payment.

The Financial Obligation

The final factor to consider is the financial obligation. When you set up bi-weekly payments, your total amount paid per month will be higher. This means that your total financial obligation will be higher than if you had a monthly payment plan. This financial obligation may impact your ability to qualify for other loans or to achieve other goals.

If you want to pay your mortgage off early, you can choose to make an extra small payment with each monthly payment or set up a bi-weekly payment plan. While each will give you the same overall result over the course of the long term, one option may be preferred for your financial situation. Consider the pros and cons of each option carefully to make a better decision for your financial circumstances.

For more information, contact your trusted mortgage professional today.

What’s Ahead For Mortgage Rates This Week – August 15, 2016

Last week’s economic news included reports on job openings, retail sales and recurring reports on mortgage rates and new jobless claims. Job openings and hiring increased, which provided further evidence of stronger economic conditions. Retail sales were flat in July, new unemployment claims dropped and mortgage rates changed little.

Labor Reports Suggest Stronger Economic Trends

The Labor Department reported more job openings in June with 5.60 openings as compared to 5.50 million job openings in May. According to the Job Openings and Labor Turnover Survey, 5.13 million workers were hired in June as compared to May’s reading of 5.15 million hires. June’ JOLTS report also showed that voluntary quits were nearly double the rate of quits during the worst part of the recession. Analysts consider quits an indicator of worker confidence in job markets; in times when jobs aren’t easily found, workers are more likely to stay with current jobs rather than risking uncertainties associated with quitting.

New jobless claims were lower with 266,000 new claims filed against the prior week’s reading of 267,000 new claims filed and expectations of 265,000 new claims filed. Last week’s reading continued a long streak of new jobless claims under 300,000 per week. Labor market trends impact housing markets, as prospective homebuyers typically consider job security as a significant factor in decisions to buy homes.

Mortgage Rates Show Little Change

Freddie Mac said that average mortgage rates held near steady readings last week. The average rate for a 30-year fixed rate mortgage rose by two points to 3.45 percent; the average rate for a 15-year fixed rate mortgage was also two basis points higher at 2.76 percent and rates for a 5/1 adjustable rate mortgage averaged 2.74 percent. Discount points averaged 0.50 percent for all three loan types reported. Consistently low mortgage rates help to ease concerns caused by rapidly rising home prices caused by short supplies of available homes.

Consumer sentiment fell short of the expected index reading of 91.50 with a reading of 90.40 but surpassed July’s index reading of 90.00. Participants in the University of Michigan Survey cited concerns over increasing prices coupled with slow income growth. Analysts said that consumer participants had grown acclimated to low mortgage rates, which may have offset consumer concerns about stagnant wages and higher prices.

What’s Ahead

This week’s scheduled economic releases include the National Association of Home Builders Housing Market Index, Commerce Department Consumer Price Index and Core CPI reports along with weekly readings on mortgage rates and new jobless claims.

What’s Ahead For Mortgage Rates This Week – August 8, 2016

Last week’s economic reports included construction spending, personal income, and multiple reports on employment. Freddie Mac’s mortgage rates survey and new jobless claims were also released.

Construction Spending Dips in June

According to the Commerce Department, construction spending fell in June to -0.60 percent as compared to expectations of an increase of 0.50 percent and May’s reading of -0.10 percent. Spending was even across public and private construction spending. The Commerce Department said that construction spending on June rose to $1.13 trillion was 0.30 percent year-over-year and was 6.20 percent higher for the first six months of 2016 as compared to the same period in 2015; construction spending appears to be trending upward in spite of recent month-to-month declines.

Consumer spending rates in June met expected growth of 0.40 percent and matched May’s reading. Core consumer spending fell to 0.10 percent in June according to expectations, which were based on May’s reading of 0.20 percent.

Labor Reports Indicate Stronger Economy

Inflation remains lower than the Federal Reserve’s annual rate of 2.00 percent, but labor news released last week supports reports of strengthening economic conditions. ADP Payrolls, which covers private-sector job growth, reported 179,000 jobs added in July as compared to June’s reading of 176,000 jobs added.

Non-farm payrolls grew by 255,000 jobs as compared to expected growth of 185,000 jobs. Neither July’s reading nor did expectations of 185,000 jobs added meet June’s reading of 292,000 jobs added, but analysts and media reports touted private and public sector job growth as a strong indicator of economic recovery.

The national unemployment rate held steady at 4.90 percent against expectations of 4.80 percent and June’s reading of 4.90 percent. Analysts said that this reading was better than it appeared due to more people joining the work force in July.

Mortgage Rates Lower:Jobless Claims Rise

Mortgage rates fell across the board last week according to Freddie Mac. 30-year fixed rates averaged 3.43 percent, which was five basis points lower than the previous week. Average rates for a 15-year fixed-rate mortgage fell by four basis points to an average of 2.74 percent. The average rate for a 5/1 adjustable rate mortgage fell five basis points to 2.73 percent.

New jobless claims rose to 269,000 against expectations of 263,000 new claims and the prior week’s reading of 266,000 new claims. There’s good news; new jobless claims remained below the key reading of 300,000 for the 74th consecutive week.

Whats Ahead

This week’s scheduled economic news includes releases on retail sales and consumer sentiment along with weekly reports on new jobless claims and mortgage rates.

3 Tips for Planning Your Monthly Mortgage Payment

3 Tips for Planning Your Monthly Mortgage PaymentOnce you’ve purchased a home and decided on a move in date, it may seem like a lot of the hard stuff is over, but you still have one of the most important things relating to such a large purchase to think about: the payments! If you’re looking for a few tips on ways to approach your monthly payment, the following will steer you in the right direction so you can broach your mortgage schedule successfully.

Set Up A Payment Schedule

Many people have been in the situation of neglecting their phone or credit cards by forgetting about the payment due dates, but this can cause a lot of strife when it comes to an investment as large as your home. Instead of leaving it to chance, choose a day each month and ensure that your bank is transferring the funds over automatically so you never have to worry about missing a payment. This will help you retain a reputation as a responsible borrower and it means you won’t have to deal directly with this important expenditure each month.

Be Aware Of Ways To Pay

Instead of being in the dark about ways to pay your mortgage each month, talk to your bank about your options for making your monthly payments in a timely, hassle-free manner. Before you get into the nitty-gritty of home ownership, look into this as soon as you’ve signed off on the papers so you know the best way to approach each month. This will prepare you for your approximate total mortgage payment.

Is It Really Affordable?

If you’re associated with a lender you trust, you’ve probably already been made aware of the amount of house you can and can’t afford, but ensure you’ve sat down and thought about what all the added interest on your home means. While it can certainly be a huge financial commitment for anyone to commit to a monthly mortgage payment, being able to swing the expense consistently is the difference between financial well-being and a purchase you’ll come to regret.

Making the decision to invest in a home can be one of the most exciting things you’ll commit to in adulthood, but ensure you’re aware of just what your monthly mortgage means so that it’s not something you’ll look back on. If you’re currently on the market for a home, contact your local mortgage professionals for more information.

Evaluating Neighborhoods: 4 Things to Consider Before Purchasing a Home

Evaluating Neighborhoods: 4 Things to Consider Before Purchasing a HomeFrom finding the right agent to discovering the home you can truly feel comfortable in, there are a variety of things involved in the home buying process. However, it’s important not to get caught up in the home and ignore altogether the community you’ll be living in. If you’re planning a move to a new neighborhood, here are some things you should look into before putting in an offer.

Local Amenities

A peaceful, picturesque community is ideal, but if there are not a lot of resources nearby for your family, it’s possible that your new neighborhood may not be the best fit. Instead of having to get in the car and drive everywhere, ensure you research nearby community centers, green spaces and recreational spots so your family has somewhere to spend their weekends.

Research The Crime Rate

You can certainly get a good sense of the well being of a community just by looking at it, but be sure that you’re informed about exactly how safe the surrounding area is so your family will feel at ease in their new locale. While you can easily research the community and find information online, websites like Neighborhood Scout and Crime Report also make it simple to discover the less well-known details.

Transportation And Accessibility

A community you love is ideal, but if you work in the downtown core or an area far away, it will be important to determine the effect this will have on the length of your commute. In addition, you’ll want to be sure there are local transportation options like buses and shuttles that provide access all over the center in the event that it’s needed.

Learn About The Locals

There’s something to be said for the perfect home, but you’ll also need to feel a certain sense of comfort in the place you live so ensure you choose a place with nice neighbors and a community feel. This may seem hard to determine before buying a house, but try visiting the local community center or knocking on a few doors for a quick impression of what the locals are like.

It can be easy to throw everything else out the window as soon as you’ve found the perfect home, but it’s important that your home is situated in a neighborhood you’ll feel comfortable in. Contact your local mortgage professional for more information.