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Archive for April, 2016
Fed Holds Steady on Federal Funds Rate
In its post-meeting statement, the Federal Open Market Committee (FOMC) of the Federal Reserve announced its decision not to raise the current federal funds rate of 0.25 to 0.50 percent. Although FOMC members acknowledged further improvement in the U.S. economy and jobs markets, the committee cited the following as influencing its decision not to raise the current federal funds rate:
- Household income continued to rise, but consumers have “moderated” their spending.
- Inflation is expected to remain below the Fed’s goal of two percent in the near term.
- Temporary influences including low energy and import prices are expected to ease.
FOMC monetary policy decisions made in April’s meeting were guided by the Fed’s dual mandate of achieving maximum employment and its inflation goal of two percent. Labor markets improved since the Committee’s March meeting, but inflation is not expected to reach the Fed’s goal in the near term.
No Fed Rate Increase in April; Moderate Increases Expected
While the FOMC did not raise the federal funds rate, its statement suggested that future rate increases are likely. Potential increases in the federal funds rate would be gradual into the medium term. FOMC’s April statement hinted that incremental rate increases over time would be expected to facilitate further economic growth and help achieve the two percent inflation goal. According to the statement, any potential increases in the federal funds rate would be “accommodative.” This indicates that FOMC members do not want to raise rates too quickly, which could interfere with current economic growth.
Fed Concerns over Global Economy Ease
Notably absent from April’s FOMC statement were concerns over global economic conditions and developments. In March, the Fed characterized global economic and financial conditions as a risk to U.S. economic growth, but April’s statement said that FOMC members would continue monitoring global news and developments with no mention of potential risks.
Analysts said that the Fed could have been “more hawkish” in its position, but also said that a rate increase could occur in June if FOMC members conclude that economic conditions are favorable. FOMC statements typically indicate that monetary policy decisions are pre-determined way, but rely on the committee’s ongoing review of global and domestic financial and economic developments.
Unless economic developments intervene, Fed policy makers opened the door to a rate increase in June. Past FOMC statements indicated plans to raise the federal funds rate up to four times in 2016, but these plans were revised to two potential rate increases for 2016.
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The HARP Refinance Program Has Been Extended into 2016: Here’s How You Can Take Advantage
With the Home Affordable Refinancing Program recently being extended until the last day of December, 2016, many homeowners who have found their assets in a challenging situation have been given a second chance to apply and receive an affordable mortgage.
By taking advantage of the HARP program, eligible borrowers can refinance to the current mortgage rates on their homes while avoiding paying for private mortgage insurance or putting down the principal.
A Quick Primer On The HARP Refinancing Program
With the economy in a strong downturn in 2008, the value of millions of American homes plunged and the owners found themselves owning property with negative equity.
The Home Affordable Refinancing Program was created by the government to assist people whose home values were lower than the outstanding balance on their mortgages. Previously it would have been impossible to refinance for a better interest rate on the current value of the home, so HARP was designed to help any of these borrowers stay above water.
Who Is Eligible For HARP Refinancing?
There is a certain set of criteria that needs to be met in order to qualify for the HARP refinancing program, but two major points stand out: The mortgage must have been granted earlier than May 31, 2009 and it must have been granted by either Fannie Mae or Freddie Mac.
It is important to point out that many banks do not back their own mortgages and work as a servicer, a middle-man to collect the mortgage that is actually backed by Fannie Mae or Freddie Mac. Many borrowers believe they do not qualify without double checking with their lender to see if the mortgage was granted by Fannie Mae or Freddie Mac, so it is imperative to contact the lender or check online to see who granted the mortgage.
There are also several disqualifiers that should be known. With certain exceptions, many borrowers who have previously refinanced their home under the HARP program are ineligible. The other major factor is that homes must have a loan-to-value ratio of 80% or higher.
What Is The Next Step For Eligible Borrowers?
The next step for anybody eligible for the HARP refinancing program is to check the current rates and see if refinancing would be beneficial. Your local mortgage professional will have experience with the HARP application process and will be able to confirm today’s rates to see if applying is the right move.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes
The HARP Refinance Program Has Been Extended into 2016: Here’s How You Can Take Advantage
With the Home Affordable Refinancing Program recently being extended until the last day of December, 2016, many homeowners who have found their assets in a challenging situation have been given a second chance to apply and receive an affordable mortgage.
By taking advantage of the HARP program, eligible borrowers can refinance to the current mortgage rates on their homes while avoiding paying for private mortgage insurance or putting down the principal.
A Quick Primer On The HARP Refinancing Program
With the economy in a strong downturn in 2008, the value of millions of American homes plunged and the owners found themselves owning property with negative equity.
The Home Affordable Refinancing Program was created by the government to assist people whose home values were lower than the outstanding balance on their mortgages. Previously it would have been impossible to refinance for a better interest rate on the current value of the home, so HARP was designed to help any of these borrowers stay above water.
Who Is Eligible For HARP Refinancing?
There is a certain set of criteria that needs to be met in order to qualify for the HARP refinancing program, but two major points stand out: The mortgage must have been granted earlier than May 31, 2009 and it must have been granted by either Fannie Mae or Freddie Mac.
It is important to point out that many banks do not back their own mortgages and work as a servicer, a middle-man to collect the mortgage that is actually backed by Fannie Mae or Freddie Mac. Many borrowers believe they do not qualify without double checking with their lender to see if the mortgage was granted by Fannie Mae or Freddie Mac, so it is imperative to contact the lender or check online to see who granted the mortgage.
There are also several disqualifiers that should be known. With certain exceptions, many borrowers who have previously refinanced their home under the HARP program are ineligible. The other major factor is that homes must have a loan-to-value ratio of 80% or higher.
What Is The Next Step For Eligible Borrowers?
The next step for anybody eligible for the HARP refinancing program is to check the current rates and see if refinancing would be beneficial. Your local mortgage professional will have experience with the HARP application process and will be able to confirm today’s rates to see if applying is the right move.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes
You Ask, We Answer: 5 Ways That You Can Proactively Build and Improve Your Credit Score
If you’re planning to buy a house or take out a business loan in the near future, you’ll want to work hard to boost your credit score well ahead of time in order to improve your likelihood of getting the loan you need. A great credit score can also make you more desirable to employers and help you to negotiate lower car insurance rates.
But what can you do in order to build your credit score over time? What are the best strategies for boosting that score as high as possible? Here’s what you need to know.
Dispute Errors On Your Credit Report
According to the FTC, 25% of Americans have significant errors on their credit report. Whether it’s a fully paid debt erroneously reported as still owing or even another consumer’s debt listed on your credit report, these errors can be costly. That’s why you’ll want to regularly review your report for inaccuracies.
If you find any inaccuracies, you can dispute them and have them removed from your credit report – which will increase your score.
Negotiate Your Debts Owing With Creditors
If you owe money to creditors and are past due on the balance, chances are they’ve reported the debt to the credit reporting agencies – and it’s on your credit report. The fastest way to have the debt removed from your credit report is to negotiate with your creditors for its removal. Get your lender to agree in writing that they’ll report the account as “paid as agreed” if you pay the balance.
Keep Your Credit Utilization Ratio Low
Credit utilization refers to the percentage of available credit you use at any given time. So if you have $1,000 in credit available to you and you use $500, that’s a utilization ratio of 50%.
Generally speaking, it’s best to keep your utilization ratio below 30%. If you’re constantly using a high amount of credit, lenders will assume you’re not a responsible borrower.
Pay What You Owe On Time
Paying your bills on time is one of the best ways to build your credit score. Your payment history accounts for 35% of your credit score, so if you pay your bills on time and in full every month, your credit score will increase.
Make More Than One Payment Every Month
Using a large amount of credit at any given time doesn’t look good on a credit report. By making multiple payments every month, you’ll lower the amount owing that gets reported to the credit bureau and increase your score.
Building a credit score is a lifelong skill, which is why you’ll want to learn it early. Contact your local trusted mortgage professional to learn more about credit scores and mortgage finances.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes
What’s Ahead For Mortgage Rates This Week – April 25, 2016
Last week’s economic releases included Existing Home Sales, Commerce Department Releases on Housing Starts and Building Permits and the National Association of Home Builders/Wells Fargo Housing Market Index. Mortgage rates and new jobless claims were released according to their weekly schedule.
Home Builder Confidence Holds Firm in April
According to April’s National Association of Home Builders/Wells Fargo Housing Market Index, home builder confidence held steady with a reading of 58 for the third consecutive month. Analysts viewed April’s reading as a sign of steady expansion for home building, but builders noted concerns over labor shortages. NAHB Chief Economist Robert Dietz said that builders were “cautiously optimistic” concerning housing market conditions.
The National Association of Realtors® reported a jump in sales of previously owned homes in March. The seasonally-adjusted annual rate of sales rose to 5.33 million and surpassed expectations of 5.30 million sales and February’s reading of 5.07 million sales of pre-owned homes.Mr. Lawrence Yun, chief economist for NAR, said that demand is increasing and noted that the national average home price increased more than twice as fast as average wages.
In other housing-related reports, the Commerce department reported slower growth in housing starts, which reached 1.089 million starts in March. Analysts expected 1.170 million starts based on March’s reading of 1.194 housing starts. Building permits were also lower with 1.086 million building permits issued as compared to 1.177 million building permits issued in March.
National Association of Realtors®: Sales of Pre-Owned Homes Exceed Expectations
March sales of previously owned homes reached a seasonally-adjusted annual rate of 5.33 million sales against predictions of 5.30 million sales and February’s reading of 5.07 million sales. While March sales of pre-owned homes coincide with the approaching peak home selling season, high demand for homes and low supplies of homes for sale could slow sales. Inventories of available homes are currently at a 4.5 month supply; a six month supply of available homes indicates a normal reading for available homes.
Mortgage Rates Mixed, Jobless Claims Lowest Since 1973
Freddie Mac reported mixed results for last week’s average mortgage rates. The rate for a 30-year fixed rate mortgage was one basis point higher at 3.59 percent. The rate for a 15-year fixed rate mortgage was one basis point lower at 2.85 percent while the average rate for 5/1 adjustable rate mortgages fell by three basis points to 2.81 percent. Discount points averaged 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.
Weekly jobless claims dropped to their lowest level since 1973 with a reading of 247,000 new claims filed. Analysts expected a reading of 265,000 new claims filed based on the prior week’s reading of 253,000 new claims filed. Strong labor markets can be an incentive to home buyers to move up to larger homes or transition from renting to owning, but short supplies of available homes and rapidly rising home prices present obstacles. First-time buyers account for approximately 30 percent of home sales; their participation could diminish unless available homes increase and demand for homes eases.
What‘s Ahead
This week’s scheduled economic reports include the S&P Case-Shiller Home Price Indices along with new and pending home sales reports. Weekly reports on mortgage rates and new jobless claims will be released on schedule.
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Existing Home Sales Jump, Builder Confidence Holds Steady
Home buyers kicked the spring home shopping season into gear and boosted sales of pre-owned homes in March. Existing home sales rose 5.10 percent in March according to the National Association of Realtors®. 5.33 million pre-owned homes were sold in March against expectations of 5.30 million sales and February’s reading of 5.07 million sales on a seasonally adjusted annual basis.
Demand for homes remains strong in spite of rapidly escalating prices in many areas. Short supplies of available homes continue to drive demand and home prices. Sales rose only 1.50 percent year-over-year, but during the first quarter of 2016, existing home sales rose by 4.80 percent as compared to the first quarter of 2015. Sales were 11.11 percent higher in the Northeast, which was a notable improvement over lagging sales in recent months.
There was a 4.50 month supply of available homes in March and the median price of an existing home rose 5.70 percent to $222,700. NAR Chief Economist Lawrence Yun noted that the annual increase in home prices was more than twice the rate of average wage increases. First-time home buyers represented 30 percent of buyers in March; this was the same percentage as February. First-time and moderate income buyers continue to face challenges due to rapidly rising home prices competition for available homes.
NAHB: Home Builder Confidence Unchanged in March
According to the National Association of Home Builders Housing Market Index for March, home builder confidence remained at 58 for the third consecutive months. Any reading over 50 indicates that more builders are confident about current market conditions than not.
Builder confidence in current market conditions fell two points to 63 while builder confidence rose 1 point to 62 for market conditions in the next six months. Builder confidence in buyer traffic for new home developments also rose one point to 44. Readings for buyer traffic have not exceeded 50 for approximately 10 years. NAHB Chief Economist Robert Dietz characterized home builder sentiment as “cautiously optimistic.”
Challenges facing home builders include a short supply of labor; the number of job vacancies reached a post-recession high in February. All four regional builder confidence readings declined in April; the Northeast lost two points for a reading of 44. The Midwest and South each lost one point for readings of 57 and 58 respectively. The Western region posted a loss of two points for a reading of 67.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes
Understanding the CFPB’s New Mortgage Rules and How They Might Affect You
If you’re getting a mortgage, you’ll want to ensure you’re well versed in all of the government regulations surrounding mortgages and how they affect you. One government agency that dictates a number of the rules surrounding mortgages is the Consumer Financial Protection Bureau. The CFPB has several regulations that lenders need to follow, some of which have only recently come into effect.
So how do the CFPB’s new mortgage rules affect you? Here’s what you need to know.
Know Before You Owe: Mortgages Just Got Easier To Understand
The CFPB’s new Know Before You Owe mortgage disclosure rule has rolled four previous forms into two. You’ll now receive your Loan Estimate and Closing Disclosure documents when you are about to close on a mortgage, making it easier to understand what exactly is in your mortgage. The new law also requires lenders to give you three business days to review your Closing Disclosure and pose questions before you sign the closing paperwork.
These forms are also standardized across the country – they are now shorter and written in simpler language, and all lenders are required to use the same forms. The forms must clearly state what your closing costs will be and what your monthly payment will be throughout the term of the loan.
More Power For Borrowers Who Are Behind On Payments
For decades, the mortgage system worked like this: If you run into trouble with your mortgage and find yourself behind on payments, your lender can foreclose on your home. But now, new rules state that lenders must take certain steps before they start the foreclosure process. Lenders must reach out to borrowers who are struggling and provide them with the opportunity to make a payment or work out an alternative arrangement.
The lender doesn’t have to give the borrower options that aren’t available, but if there is a non-foreclosure option on the table, the lender is now legally obligated to pursue it.
Mortgage Providers Will Need To Be More Transparent
The new rules also make the mortgage system much more transparent.
Under the new law, your lender is legally obligated to give you a mortgage statement with all of the information about your monthly payment in one place. If you run into trouble with payments, your lender is obligated to assign an employee to track your documents, answer your questions, and guide you through your options. There will be no more surprise foreclosures, no more administrative red tape, and no more debt traps.
Getting a mortgage is a complicated endeavor, and the new rules that have come into effect are designed to simplify the process. Contact a mortgage professional near you today to learn more about how mortgages work.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes
What’s Ahead For Mortgage Rates This Week – April 18, 2016
Last week’s scheduled economic releases included reports on retail sales, inflation and the Federal Reserve’s Beige Book report. Weekly reports on mortgage rates and new jobless claims were also released. The Consumer Financial Protection Bureau announced a limited program for reducing principal on eligible mortgages held by Fannie Mae and Freddie Mac. This program is intended to resolve remaining “underwater” mortgages on homes worth less than their current mortgage amounts.
Retail Sales Fall, Inflation Rises
Retail sales fell in March to close out a weaker than expected first quarter 2016. Retail sales fell 0.30 percent in March as compared to expectations of a 0.10 percent increase and February’s flat reading. Analysts said consumers were reluctant to spend in spite of improving job markets and household finances. Retail sales rose by 1.70 percent year-over-year, a reading categorized as “weak” by analysts.
Hiring for lower wages and fewer hours worked was seen as contributing to consumers’ reluctance to spend, especially on big-ticket items including vehicles. Retail sales excluding auto sales were 0.20 percent higher than in February, but did not meet the expected reading of 0.50 percent and incrementally exceeded February’s reading, which was unchanged from January.
Inflation rose by 0.10 percent in March against expectations of 0.20 percent and February’s negative reading of -0.70 percent. Core inflation readings that exclude volatile food and energy sectors mirrored the Consumer Price Index with 0.10 percent growth against an expected reading of 0.20 percent and February’s Core Consumer Price Index reading of 0.30 percent. Lagging inflation is largely attributed to lower fuel prices, but this doesn’t impact the Core CPI reading.
Fed Beige Book: Economy Recovering at Modest to Moderate Rate
According to the Federal Beige Book report for March, business contacts surveyed by the Federal Reserve suggested that increases in wages and oil prices should bump up the economy, but the Fed expects economic expansion to increase at a “modest to moderate” rate for the long term. Employers noted difficulties in hiring for low and high skilled jobs in some areas, and retailers were optimistic about sales for the rest of 2016.
In general, the Fed has adopted a cautious approach to raising its target federal funds rate. Fed Chair Janet Yellen repeatedly cited concerns over global risks for scaling back Fed rate increases from four to two in 2016.
Mortgage Rates, Jobless Claims Fall
Freddie Mac reported the lowest mortgage rates for 2016; rates were also their lowest since May 2013. The average rate for a 30-year fixed rate mortgage fell one basis point to 3.58 percent; the average rate for a 15-year fixed rate mortgage fell two basis points to 2.86 percent. The average rates for a 5/1 adjustable rate mortgage also slipped two basis points to 2.84 percent. Discount points were 0.50, 0.40 and 0.50 percent respectively.
In unrelated mortgage news, the Consumer Financial Protection Bureau announced a limited program for reducing mortgage balances for eligible mortgages owned by Fannie Mae and Freddie Mac that exceed home values. Mortgage lenders will notify eligible homeowners by December 31.While limited in scope, this program is expected to prevent foreclosure of eligible properties that cannot be sold or refinanced.
Jobless claims fell to 253,000 new claims last week, which was lower than the expected reading of 270,000 new jobless claims and the prior week’s reading of 266,000 new claims. Coupled with the Beige Book findings that employers are facing shortages of qualified workers, this low reading appears to further support improving economic conditions.
What‘s Ahead
Next week’s scheduled economic releases include the National Association’s Home Builders Housing Market Index along with Commerce Department reports on housing starts and building permits. The National Association of Realtors® will also release its Existing Home Sales Report.
Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes