What’s Ahead For Mortgage Rates This Week – May 2, 2016

Last week’s economic news included Case-Shiller Home Price Indices, along with new and pending home sales readings. The Federal Open Market Committee of the Federal Reserve met analyst’s expectations and did not raise the target federal funds rate, which remains at 0.25 to 0.50 percent. Freddie Mac’s mortgage rates survey and the Labor Department’s weekly jobless claims report were also released.

Case-Shiller: Home Price Growth Slows in February

Average home prices growth slowed in February according to the S&P Case-Shiller Home Price Index. Home prices fell from January’s year-over-year reading of 5.70 percent to 5.40 percent. 13 of 20 cities included in the index showed slower growth in home prices. Portland, Oregon showed the highest year-over-year price gain at 11.90 percent followed by Seattle, Washington at 11.00 percent and Denver, Colorado at 9.70 percent

Washington, DC had the slowest year-over-year growth rate of 1.40 percent; Chicago, Illinois and New York, New York where home prices grew 1.80 percent and 2.10 percent respectively. S&P Index Chairman David Blitzer said that tight inventories of available homes continued to drive home prices. Analysts are concerned with shrinking affordability, which keeps first-time and moderate income buyers from buying homes. Analysts caution that first-time and moderate-income buyers are the “bread and butter” of housing markets. Without their participation, current homeowners cannot sell and move up to larger homes.

New Home Sales Lower after February Reading Revised

New home sales dipped in March to a seasonally-adjusted annual rate of 511,000 after February’s reading was revised upward to 519,000 sales. Regional results for new home sales were mixed. The Northeast posted flat sales in March; The Midwest posted the highest year-over-year growth in home prices at 18.50 percent followed by the South with a year-over-year gain of 5.00 percent. New home sales fell by 23.60 percent in the West, which was likely due to rapidly escalating home prices in high-cost metro areas.

Pending home sales for March grew by 1.40 percent for a second consecutive monthly increase. Analysts viewed March’s reading as positive for a healthy spring season for home sales. Pending home sales forecast future closings and mortgage lending.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week with the average rate for a 30-year fixed rate mortgage seven basis points higher at 3.66 percent. 15-year fixed mortgage rates were four basis points higher at 2.89 percent; the average rate for a 5/1 adjustable-rate mortgage was five basis points higher at 2.86 percent. Discount points averaged 0.60, 0.50 and 0.50 percent respectively.

New jobless claims also rose last week with 257,000 new claims filed as compared to expectations of 260,000 new claims and the prior week’s reading of 248,000 new claims filed. Analysts said that fewer layoffs suggest strengthening job market. Last week’s four-week average of new jobless claims was 256,000 new claims, which was the lowest reading since December 1973. Improving labor markets can encourage would-be home buyers to become active buyers.

What’s Ahead

This week’s scheduled economic news includes reports on construction spending, private sector employment, non-farm payrolls and the national unemployment rate. Weekly reports on new jobless claims and mortgage rates will be released as usual.

Benchmark Colorado

5 Ways To 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 us today to learn more about credit scores and mortgage finances.

3 Psychological Hacks To Sell Your Home Faster

From real estate agents to home buyers, there are so many tips out there on how to sell your home that it can be overwhelming to determine which tricks will boost your success rate and make the sale. If you’re looking for a few sure-fire hacks for getting your home off the market quickly, the following may do a lot of the hard work for you so that selling won’t remain a worry for long.

Stick To A Neutral Palette

Neutral colors like white and grey may seem like a boring approach to design, but they’re actually a great way to grab a potential buyer’s attention. While an especially bold color like red or dark blue can distract the viewer, neutral tones will not jar the eye and will enable the viewer to see the features that your home truly offers. Instead of a space they can’t see for the color, they’ll be able to pay attention to the details that really matter.

Discard The Oversized Items

Most of us have an old, bulky piece of furniture that we still haven’t bothered to get rid of, but when preparing your home for viewings you may want to finally let go of this ostentatious piece. A bulky furniture item will make an undersized space look even smaller, whereas – in a large, sprawling space – it will swallow the size of the room. Instead of a large-scale item, stick to classy, medium-sized pieces that will effectively complement each other.

Keep Personal Items To A Minimum

It may seem like personalizing your home, from pictures all over the fridge to movie posters, will add to its appeal, but it can actually take away from the impression that potential buyers will get. While a home that has a few personal touches here and there can make it more memorable, too many of these little details may actually make the viewer feel out of place. Since the end goal is an offer on your home, enabling potential buyers to imagine themselves in your space is key.

There are an endless amount of tricks involved in a successful home sale, but there are a few little hacks you can do that may work wonders on the minds of potential buyers.

Benchmark Mortgage

What’s Ahead For Mortgage Rates This Week – April 11, 2016

Last week’s economic news included minutes of the most recent Federal Open Market Committee (FOMC) meeting. Weekly reports on mortgage rates and new jobless claims were also released.

FOMC Minutes Indicate Fed Not Pressing Rate Increases

Minutes of the FOMC meeting held March 15 and 16 suggest that FOMC members are easing their enthusiasm for raising the target federal funds rate. In recent months, the committee has indicated that it was leaning toward raising rates on a slow but steady pace. Ongoing concerns over changing global economic and financial conditions contributed to FOMC’s decision not to raise the key federal funds rate. Low energy prices continue to cause U.S. inflation to stay below the Fed’s goal of two percent, which suggests that the economy is not recovering as fast as originally expected.

Labor markets continued to improve as the national unemployment rate held steady at 4.90 percent in February. FOMC noted that the labor force participation rate and employment to population ratio increased. The four-week moving average of new jobless claims fell in March after increasing in February. These readings support continued expansion of labor markets.

Housing markets and household spending improved. Committee members characterized developments in labor and housing markets as “broadly consistent” with earlier expectations. Some housing markets connected with energy production weakened. FOMC members elected to maintain the target federal funds rate at a range of 0.25 to 0.50 percent. Global financial and economic developments were cited as contributing to the Committee’s decision not to raise its target rate.

Mortgage Rates, Weekly Jobless Claims Lower

Mortgage rates fell across the board last week. According to Freddie Mac’s weekly survey of mortgage rates, the average rate for a 30-year fixed rate mortgage dropped to 3.59 percent from the previous week’s reading of 3.71 percent. The average rate for a 15-year fixed rate mortgage dropped 10 basis points to 2.88 percent; the average rate for a 5/1 adjustable rate mortgage dropped to 2.82 percent from 2.90 percent. Average discount points held steady at 0.50, 0.40 and 0.50 percent respectively. Last week’s mortgage rates were the lowest in 14 months.

Analysts said this news was positive in the sense that lower rates make mortgages more affordable, but more home buyers entering the market would further increase demand for homes. Low inventories of homes and high demand have fueled higher home prices in many areas.

Weekly jobless claims fell to 267,000 new claims against expectations of 268,000 new claims and the prior week’s reading of 276,000 new jobless claims. New jobless claims remained below the benchmark of 300,000 new claims for the 57^th consecutive week.

What’s Ahead This Week

This week’s scheduled economic news releases include retail sales, the Fed’s Beige Book report, the consumer price index and core consumer price index. Weekly jobless claims and Freddie Mac’s mortgage rates report will be released as usual on Thursday.

3 Questions To Ask Before Refinancing Your Mortgage

If you’re looking to reduce your interest payments or get more favorable loan terms, there are lots of ways you can change your mortgage. But one of the most effective ways to take advantage of low-interest rates is with a mortgage refinance. That said, refinancing typically comes with a variety of costs and may not be a good solution for all homeowners.

So how can you tell whether it’s a good idea to refinance your home? Here are three questions you need to ask yourself if you want to find out.

How Much Equity Do I Have?

If you have less than 20 percent equity in your home, your lender can require you to get private mortgage insurance. While refinancing could get you a lower interest rate and better terms, extra PMI costs will usually devour any savings you may have had. Before you decide to refinance your mortgage, determine how much equity you have in your home and how close you are to the 20 percent mark – if you can pay down enough of the balance to drop your PMI, refinancing may be a viable option.

How Long Do I Plan To Live Here?

When you refinance your home, you’ll pay administrative costs ranging from 3 to 6 percent of the loan’s value. You’ll need to do some calculations to determine your break-even point – the point in time when the money you save from a lower interest rate is equal to the amount of money you paid in administrative costs. If you’re close to paying off your entire mortgage or if you plan to move before you hit the break-even point, a refinance will only cost you money.

Is It A Good Time To Refinance?

Refinancing creates a new loan based on your home’s current value – and if your home has increased in value since you bought it, you can cash out your equity. However, refinancing may also lose you money. For example, if you have $300,000 worth of equity in a $750,000 home, refinancing allows you to cash out your $300,000.

But if your property value has decreased in recent years – for instance, if it’s dropped to $500,000 – then a refinance can change your equity status. Equity is your home’s current value minus your remaining loan balance. If you owe $450,000 and your property value drops to $500,000, then your equity is only $50,000 instead of the $300,000 you had before.

The key lesson? Always check market conditions before refinancing a home.

Refinancing is a complex issue with a variety of nuances. That’s why it pays to consult your local mortgage professional to learn whether a refinance is right for you. Call us today!

What’s Ahead For Mortgage Rates This Week – April 4, 2016

Last week’s economic calendar was full of new releases including pending home sales, Case-Shiller Home Price Indices and construction spending. Labor related reports including ADP payrolls, federal Non-farm payrolls, and the national unemployment rate were also released along with reports on consumer confidence and weekly reports on mortgage rates and new unemployment claims.

Case-Shiller: January Home Prices Up 5.7% Year-Over-Year

According to the S&P Case-Shiller 20-City Home Price Index for January, home prices increased by 5.70 percent year-over-year. The West led price increases with double-digit price gains posted for San Francisco, California, Portland, Oregon and Seattle, Washington. Denver, Colorado also posted a double-digit gain, but dropped its recent lead for metro areas tracked by the 20-City Index.

The National Association of Realtors (NAR) reported better than expected growth in February pending home sales. Low mortgage rates pushed pending home sales to their highest rate in seven months. Pending home sales rose 3.50 percent in February, which exceeded the expected reading of 1.80 percent and January’s reading of 03.00 percent. NAR Chief Economist Lawrence Yun said that February’s reading indicated that housing markets may be recovering after choppy winter sales. Mr. Yun also noted a “slight uptick in inventory,” which is good news for housing markets currently experiencing low inventories of homes for several months or more.

S&P Index Committee Chair David M Blitzer echoed Mr. Yun’s remarks about the impact of low inventories of homes for sale. While higher home prices driven by low inventories benefit home sellers, there comes a point where potential buyers cannot find and / or afford available homes. Constructing new homes is the only immediate solution to increasingly limited supplies of homes for sale.

Construction spending slipped in February from January’s upwardly revised $1.150 trillion on a seasonally-adjusted annual basis. February’s reading was $1.144 trillion. Construction spending fell 0.50 percent as compared to analysts’ expectations of 0.20 percent. Year-over-year, construction spending was 10.30 percent higher in February.

Mortgage Rates Mixed, New Jobless Claims Rise

Freddie Mac’s weekly mortgage rates survey reported mixed results last week. The average rate for a 30-yar fixed rate mortgage held steady at 3.71 percent; the average rate for 15-year fixed rate mortgages rose by two basis points to 2.98 percent and the rate for 5/1 adjustable rate rose by one basis point to 2.90 percent. Average discount points were unchanged across the board at 0.50, 0.40 percent and 0.50 percent respectively.

New unemployment claims rose to 276,000 against an expected reading of 270,000 new claims and 265,000 new claims the prior week.

The Bureau of Labor Statistics reported fewer jobs created in March than for February. 215,000 jobs were added in March as compared to the expected reading of 203,000 new jobs and February’s reading 245,000 new jobs. ADP reported a lower reading of 200,000 private sector jobs added as compared to expectations of 205,000 jobs added and February’s reading of 205,000 private sector jobs added. The national unemployment rate ticked up to 5.0 percent over February’s reading of 4.90 percent.

Consumer confidence rose over two percent in March with a reading of 96.20 percent. Analysts expected a reading of 94.20 based on February’s reading of 94.00.

What’s Ahead This Week

Economic reports scheduled this week include job openings and weekly reports on mortgage rates and new jobless claims.

Benchmark Colorado

Pros and Cons: The Top 5 Mortgage Calculators on the Web

If you’re shopping for a great mortgage, you’ll want to use a mortgage calculator. Mortgage calculators keep getting more accurate and more complex, allowing you to explore the various details involved in a mortgage. Try one of these mortgage calculators to learn what you can expect.

ML Calc: A Simple, Straightforward Calculator With Current Rates

ML Calc (mlcalc.com) is a simple mortgage calculator powered by mortgage software company Arsidian. And just one click, you can open up a new window that shows you the current mortgage and refinancing rates in your city. However, the user interface is outdated and simplistic, making it difficult to assess data if you’re a visual learner.

The Zillow Calculator: Beautiful Graphics For Visual Learners

Zillow’s intuitive mortgage calculator is fantastic for those who learn best through graphics. Upon inputting your details, Zillow will generate a graphical breakdown of your mortgage payment. You can also view a payment schedule graph that shows you when your loan will be paid off.

The only problem? It doesn’t allow you to compare different mortgages.

Mortgage Professor: A Full-Service Suite of Powerful Calculators

Mortgage Professor is a full suite of 53 unique calculators that investigate everything from refinancing to APR to down payments to mortgage insurance to consolidation. The site can give you data like when your mortgage point payments will break even, whether it’s less expensive to piggyback a second mortgage, and what your best option for a reverse mortgage is.

Mortgage Professor offers a lot of flexibility and options, but the struggle many users face is not knowing where to start – the calculator doesn’t indicate which calculation is the best one to begin with.

BankRate: Get Real-Time Estimates From Actual Lenders

BankRate’s mortgage calculator offers much of the same standard features you’d expect to find, but the one unique feature is its listing of lenders. By inputting details like your mortgage term and amount, your down payment size, and your credit score, you can see real-time quotes from lenders – and immediately contact them.

Bankrate doesn’t include taxes, though, and understanding its specialized symbols can be a challenge given the poor user interface.

Realtor.com: Location Options And VA Mortgage Options For Military Families

Realtor.com’s mortgage calculator is a great tool for those who want a variety of unique options like location-specific home prices and VA benefits. It also uses easy-to-understand visuals and even shows nearby homes in your price range – plus a variety of articles about mortgages. However, the calculator only allows users to view payment estimates one year at a time.

Finding a mortgage that suits your needs can be a struggle, but a qualified mortgage professional can help. Contact us today to get the most accurate information for your unique situation.