Posted by: cameronlewismortgage | May 15, 2017

What’s Ahead For Mortgage Rates This Week – May 15, 2017

Last week’s economic reports included readings on inflation and core inflation, retail sales and consumer sentiment. Weekly reports on new jobless claims and mortgage rates were also released.

Inflation, Retail Sales Higher in April

April inflation grew by 0.20 percent as expected. Core inflation, which excludes volatile food and energy sectors, increased by 0.10 percent. Analysts expected a reading of 0.20 percent. The Federal Reserve monitors inflation readings as part of its research for monetary policy decisions. The Fed set a benchmark of 2.00 percent annual inflation as an indicator of solid economic recovery. Growing inflation could prompt the Fed to raise interest rates in June.

Retail sales grew in April from 0.10 percent in March to 0.40 percent, but fell short of an expected 0.50 percent increase. Retail sales not including the automotive sector rose by 0.30 percent in April, which was the same growth rate posted in March. Analysts expected a reading of 0.50 percent. Growing retail sales indicates that consumers are more confident about economic conditions.

Mortgage Rates Rise, Weekly Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week. The average rate for a 30-year fixed rate mortgage was three basis points higher at 4.05 percent. 15-year fixed rate mortgages had an average rate of 3.29 percent and was two basis points higher than the prior week. The average rate for 5/1 adjustable rate mortgages rose one basis point to 3.14 percent. Discount points averaged 0.50 percent for all three types of mortgages reported.

New jobless claims fell to 236,000 last week as compared to an expected reading of 245,000 new claims and the prior week’s reading of 238,000 new claims. Jobless claims remained below the 300,000 benchmark for the 114th consecutive week; last week’s reading was the lowest in more than 28 months.

Consumer sentiment ended the week on a positive note with a May index reading of 97.7 as compared to an expected reading of 97.20 and April’s reading of 97.0.

Whats Ahead

Economic readings scheduled for this week includes reports on the National Association of Home Builders Housing Market Index, Commerce department readings on housing starts and building permits issued. Weekly readings on mortgage rates and new jobless claims will also be released.

You Ask, We Answer: What Are the Pros and Cons of Private Mortgage Insurance?It’s easy to get Private Mortgage Insurance (PMI) confused with homeowners’ insurance, but PMI is an entirely different thing that may or may not be necessary when it comes to your home purchase. If you’re going to be investing in a home in the near future and are wondering what PMI may mean for you, here are some things to consider regarding this type of insurance.

Your Down Payment Amount

If you’ve been perusing the housing market for a while, you’ve probably heard that 20% is the ideal amount to put down when investing in a home; however, you might not realize why. The truth is that 20% down is the suggested amount because this will enable you to avoid having to pay PMI on the purchase of your home. In this regard, PMI is a protective measure for lenders since they may be taking on more financial risk with those who have less equity built up in their home.

Getting Into The Market

For those who want to get into the real estate market right away and only have 10-15% to put down, PMI can be a means of being able to invest before mortgage rates increase. While buying a home when you want can certainly be a benefit, it’s also worth realizing that PMI is an additional fee and will impact the total cost of your home loan. It may be a risk worth taking if you want to buy now, but if it’s total cost you’re considering, it may better to save more before buying.

Getting Money Back

Whether you’re a homeowner or not, most people don’t look forward to tax time no matter how much money they get back. However, if you have PMI for your home, you’ll not only be able to get a variety of tax deductions, you’ll also be able to get back some of the money that you invested into your private mortgage insurance. It may not be enough of a deduction to compete with saving up, but if you’ve found the perfect home the deductions can serve as an added incentive.

While you’ll only be required to pay PMI if you put down less than 20%, it can be a benefit if you’re looking to purchase a home right away. If you’re currently perusing your options on the real estate market, reach out to one of our mortgage professionals for more information.

3 Classic Credit Mistakes to Avoid If You're Trying to Secure a Mortgage LoanThe mortgage application process can be fraught with a lot of stress on its own, but if you’ve experienced issues with your credit in the past it can be even more taxing. While there may be a lot of things you may not be aware of when it comes to their impact on your credit, here are some things to watch out for if you’re planning on purchasing a home in the short-term future.

Applying For Extra Credit

Whether you’ve just been offered a great new deal by a department store or you’re not even thinking about it, new credit cards can pop up with deals that are quite enticing in the moment. Unfortunately, applying for new credit can actually signal to lenders that you’ve run out of credit on your other cards. Not only that, it will also have an adverse impact on your credit score each time you apply for new credit. If you’re considering a mortgage in the near future, it’s a good idea to hold off on any additions to your wallet.

Not Paying Your Bills

It may seem straightforward enough that not paying your bills is going to land you in hot water with your credit score, but many people think paying the minimum at any time will do. The truth is that if you want to keep your credit in line and improve your odds, it’s important to pay your minimum before the due date and always pay your bills. The only thing deferring payments will do is add marks against your credit, and this will be damaging come application time.

Don’t Avoid Your Credit Report

Many people who have a poor credit history are aware of the situation, but they’re also unwilling to address it. While it may be difficult to approach your credit report if you’ve had some hiccups in the past, it’s important to know what point you’re working forward from so you can move beyond it. Instead of ignoring it, get a copy of your credit report and review the numbers. Not only will this enable you to address any errors, it means you’ll be facing your issues head on.

There are a number of factors that can adversely affect your mortgage application, but by avoiding new credit and paying your bills on time you can have a positive impact on the result. If you’re currently in the market for a new home, contact your trusted mortgage professional for more information.

Posted by: cameronlewismortgage | May 10, 2017

What Fees Are Involved With a Reverse Mortgage? Let’s Take a Look

What Fees Are Involved With a Reverse Mortgage? Let's Take a LookInvesting in a home may be one of the most significant purchases you’ll make in your lifetime, but many people forget that there are a number of other costs associated with buying a home. If you’re considering a reverse mortgage and want to be clear on all of the fees involved, here are a few things you can expect to come across.

Initial Home Appraisal Fee

In order to ensure that you qualify for a reverse mortgage, you’ll need to spend a lump sum up front to determine the market cost of your home. While the amount of this fee will depend on the size and age of your home, it generally runs from a couple hundred dollars to less than a thousand and will be paid to the appraisal company that you’re dealing with.

Mortgage Insurance Premiums

At the time that you close on your mortgage, you’ll be required to pay a mortgage insurance premium (MIP) in order to secure your loan. This amount will vary from lender to lender and will be calculated based on the lesser-appraised value of your home. In addition to this, annual mortgage insurance premiums will be charged throughout the entire period of the loan and will be a percentage of the outstanding balance of your mortgage.

Loan Origination Fee

In order to process and underwrite your loan, you will also be required to pay a loan origination fee, which covers the administrative costs. While this amount has come down in recent years, it is a sizeable lump sum that hovers around 2% of your home’s value up to $200,000. If the home’s value exceeds this amount, it will go down to 1% after the initial amount is charged.

Other Third Party Fees

Like any mortgage loan, there are a number of one times fees that you’ll need to pay in order to secure your mortgage. In addition to a monthly servicing fee, there will also be fees like surveying, title fees and credit checks that will be added on to the total cost of your mortgage product. It’s important before choosing this option to ensure that you know what costs you’ll be dealing with.

A reverse mortgage may be the right mortgage product for you, but it’s important to be educated of all of the costs before choosing this option. If you’re currently considering other mortgage products, you may want to contact one of our mortgage professionals for more information.

Yes, It's True! Why Replacing Your Front Door Can Help to Sell Your Home FasterThere are plenty of things that you’ll need to shape up when you embark on selling your home, whether it’s painting the house or the minor fix-ups, but it’s easy to forget about some items that will be readily apparent to homebuyers. If you’re preparing to put your home on the market and are wondering what you shouldn’t miss, here are a few reasons why replacing your front door should be at the top of the list.

It’s The First Thing Buyers Will Notice

While the yard and the exterior of your home may be the most noticeable things to a potential homebuyer when they visit your home, the door will be one of the most imposing things they come across. Because this will be the access point for your home, the quality and stability of your door will create the first impression, good or bad. If you happen to have a flimsy or poorly designed door that is aging, it may be time to invest in something more substantial that will create a positive impression.

A Sense Of Safety

An aesthetically appealing door may be pretty important when it comes to making an instant impression, but a solid door will be key in providing potential buyers with an idea of safety and stability. One of the most important things for homebuyers when it comes to purchasing a home is the sense of security it provides, and a sturdy door will go a long way towards making your community and the potential new dwelling feel like a welcome abode.

Increases Your Home’s Value

There are plenty of small renovations you can take on that will bump up the value of your home, but replacing an unsound door is important because most homeowners won’t to make this upgrade right away. While it may seem like buying a door will be a significant splurge, there are actually many great options for a relatively economical price. It’s just important to find something that won’t break the bank and will fit in with your renovation budget.

When it comes times to sell your home, there are many renovations that can instantly bump up its value. However, many people forget that the door provides one of the first impressions and a sense of security and comfort.

Posted by: cameronlewismortgage | May 8, 2017

What’s Ahead For Mortgage Rates This Week – May 8, 2017

Last week’s economic news included readings on construction spending, the post-meeting statement by the Fed’s Open Market Committee and labor-related reports including ADP payrolls, Non-farm payrolls and the national unemployment rate. Weekly readings on new jobless claims and mortgage rates were also released.

Fed Rate Unchanged, Mortgage Rates Hold Steady

Federal Reserve policymakers did not change the target federal funds rate, which ranges from 0.75 to 1.00 percent. In its usual post-meeting statement, FOMC said that a weak first quarter was “transitory” and expected economic growth to continue going forward. Less consumer spending contributed to a sluggish first quarter, but analysts said that a rate hike was very likely at the FOMC meeting in June. The FOMC included its usual caveat concerning monetary policy in its statement; FOMC policies are not pre-determined, but are based on members’ ongoing review of news and economic developments.

Freddie Mac reported minor changes in its weekly survey of mortgage rates. 30-year fixed rate mortgage rates were one basis point lower at 4.02 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.27 percent; the average rate for a 5/1 adjustable rate mortgage rose one basis point to 3.13 percent. Discount points averaged 0.50 percent for all three mortgage types.

Construction, Labor Reports Reflect Economic Growth

Construction spending fell in March after an unusually high reading in February. The original growth rate for February construction spending was 0.80 percent, but was adjusted to 1.80 percent. A spurt of unseasonably warm weather was cited as pushing construction activity to unusual levels in February. Construction spending fell by -0.20 percent as compared to an expected reading of 0.50 percent, which was based on the original reading for February.

ADP Payrolls reported lower growth for private sector jobs in April with a reading of 177,000 new jobs as compared to 255,000 new jobs gained in March. The Federal Non-farm payrolls report, which covers public and private sector jobs, posted a gain of 211,000 jobs in April after reporting only 79,000 jobs added in March. The disparity in month to month readings indicates ongoing volatility in jobs growth, but the national unemployment rate dropped to 440 percent in April from 4.50 percent in March. Low unemployment rates can indicate economic growth with job seekers gaining employment.

Let's Talk Fencing: How to Put a Fence Around Your Home Without Destroying Its AppealMany homeowners consider a fence around their property for a variety of reasons, whether it’s to keep the dog in the yard or to maintain privacy. However, the wrong fence can entirely change the look of your property and make a beautiful yard a bit of an eyesore. If you’re trying to determine what kind of fence will work for your home, here are some tips before you start to dig in the dirt.

What’s Your Fence For?

Before deciding what kind of material to use, it’s important to know what type of utility you want for your fence. While a stone fence may be elegant and offer a lot of privacy, it can also be quite expensive; on the other hand, a wooden fence may be more affordable but it can deteriorate over time. It’s entirely possible you have a material you’ve already decided upon, but ensure that it’s something that will live up to your expectations and have the functionality you’re looking for.

What’s Your Home’s Style?

An imposing stone fence may be the style that instantly draws you, but if you have a relatively unassuming home or a more whimsical style, it can be a bit much for what your home. Instead of basing your fence purchase around the budget you can afford and the style you like, ensure that it will complement the style of your home and the yards surrounding yours so there is no marked contrast between your fence and the rest of your property.

What’s The Neighborhood Vibe?

Most neighborhoods have a distinct style, so in order to get some ideas for what type of fence will work with your property, take a look around your local area. There will likely be homes that look similar to yours and they may be able to give you a good idea of what options you have when it comes to fencing. You’ll also want to take note of how particular fences look around the gardens and patios of other homes, as these are features you won’t want to obscure.

There are many fences available on the market that serve every purpose, but it’s important to be aware of what will work for your property so you can make a good aesthetic decision.

Refinancing This Spring? How to Choose Between Variable and Fixed Interest RatesFrom choosing a real estate agent to finding the right home, the process of getting a mortgage is rife with many different choices. If you’re investing down the road, it’s likely that you’ve heard about variable and fixed interest rates and are wondering about the differences between the two and how they can benefit you. While what will work best for you depends on your financial flexibility and market knowledge, here are some basics that will help you make a decision.

The Details on Fixed Rates

For many homeowners new to the market, the stability of a fixed rate is comforting because the interest rate will be set for the length of the loan period. This means your monthly mortgage payment will be the same and you will not be required to adjust your budget each month. While knowing your rate can offer financial security in a fluctuating market, it may actually end up costing more money down the road depending on what the rates are like over time.

All About Variable Rates

A fixed rate can provide security, but a variable rate is much like it sounds and will fluctuate with the market interest rate. This means that your monthly mortgage payment will not be fixed and in the event of market increases or decreases, your mortgage payment may change markedly. While the benefit of variable rates is that they can actually end up costing less down the road, they can be a burden for those who do not have market knowledge and are going to feel the stress of changing rates.

Choosing Between The Two

While it’s expected that interest rates will rise in the coming years, there are still no guarantees that variable rates will end up costing more than a fixed rate. This means that if you are comfortable with the fluctuations, a variable rate may be better, but if it’s consistency you’re looking for, you may want to choose a fixed rate. If you are struggling with financial stability month-to-month, a variable rate may be more economical over time, but a fixed rate will offer the security of knowing your costs.

There are benefits associated with fixed and variable rates, but it’s important to determine how comfortable you are with the real estate market and your finances before making a decision. If you’re currently in the market for a new home, contact your trusted mortgage professionals for more information.

5 Tips for Crafting a Counter-offer That Doesn't Scare Away a Potential Home BuyerIf you’ve recently put your home up for sale, one of the most exciting parts of the selling process is getting an offer. However, all is not said and done once you’ve received an offer, as you’ll probably want to negotiate a better price. If you’re wondering how you can counter without losing a potential buyer, here are some tips when the time comes to negotiate.

Lower Your Price (A Little)

As a seller, it’s important to believe in the price you’ve put your home on the market for, but lowering your asking price after getting an offer will tell the potential buyer that you’re flexible. While you may not want to compromise too much, you’ll have to move a bit to keep them interested.

Pay For Closing Costs

There are so many costs involved in home ownership that many people are tired of all the associated fees of buying a home by the time it comes to closing. Instead of budging on your price, offering to pay for the closing costs can serve as a significant financial benefit for many buyers.

Hold Off On Offers

It can be a risky strategy, but choosing a specific day to consider offers can create a healthy competition for your home, and may stimulate interest without losing potential buyers. While you’ll want to be careful how you navigate this, it can work out well when it comes to bumping up the offers.

Provide An Expiration Date

Most counter-offers come with a timeframe that will allow those interested to accept the deal; however, consider adjusting this period to a timeframe that will work better for you. While you shouldn’t wait too long, a period of more than one day will tell the potential buyer that you want your home to be the right choice for them.

Be Reliable And Responsive

For an interested homebuyer, there’s nothing worse than having a home-seller that is not responsive to their offer. Instead of sitting on an offer too long, ensure you’re letting interested parties know that you’re considering their offer and will get back to them as soon as you’ve made a decision.

The art of negotiating can be complicated when it comes to selling your home, but by being responsive and showing flexibility, you may be able to get the offer you’re looking for.

Honesty Is the Best Policy: Why You Need to Be Truthful on Your Mortgage ApplicationThere are few things better than finding your dream home and being able to afford it, but simply because you’ve found the perfect place doesn’t mean you should stretch the truth. It might seem tempting to polish your mortgage application a little in the hopes of making a better impression, but here are a few reasons why you should stick to the truth when signing off on your home.

Your Credit History Tells All

It can be tempting to bump up your salary or make some hefty deposits into your savings account. However, lenders will be taking a look at your financial history by way of your bank statements, credit report and paystubs so they’re likely to discover any erroneous details. If you’re not honest about your financial situation, the lender may suspect that you’re not a reliable buyer. Not only that, making false statements about your finances may give you more home than you can really afford, which can cause setbacks down the road.

Mortgage Fraud Is Still Fraud

A little white lie on your mortgage application might not seem like such a big deal, but because you are painting a picture of yourself that is not true, this can actually be considered mortgage fraud. While there are mistakes that can be made on any mortgage application given all the details required, it’s very important not to mislead the lender or home seller on purpose. It may not be common, but mortgage fraud can be punished with hefty fines or even prison time.

A Bad Way To Begin

There’s nothing like the feeling of moving into your newly-purchased home and feeling enthusiasm for all the things it entails, but being dishonest about your financial situation can sully that. A lie may just be a small detail, but mortgage lenders look at a variety of factors to ensure you’re a good fit for a loan that will stay manageable month after month. While a minor mistruth may seem insignificant, it disables lenders from being able to assess if your financial situation is right for the home you want to purchase.

It may be enticing to fudge a few details on your mortgage application, but there can be serious implications involved in not being honest about the information on your application. If you’re currently in the market for a home, contact one of our mortgage professionals for more information.

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