Treasury Yields Hit New Lows

Tuesday, March 3rd, 2020

Federal Reserve Chairman Jerome Powell signaled on Friday that the central bank is prepared to cut interest rates if needed. “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity,” Mr. Powell said in a statement released Friday afternoon. “The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.” The Fed used similar language last June to indicate it was prepared to cut interest rates if needed after the U.S.-China trade war threatened to aggravate a […]

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When & How to Cancel PMI

Tuesday, February 4th, 2020

Cancellation using original value The Homeowners Protection Act of 1998 (HPA) covers single-family primary residences whose sales were closed on or after July 29, 1999. HPA provides for borrower-requested cancellation and lender required cancellation. Borrower-requested cancellation under HPA Borrowers must provide a written request for MI cancellation to the lender, who cancels the MI policy: • The date the mortgage loan balance is first scheduled to reach 80% of the original property value, based solely on the initial amortization schedule , regardless of the outstanding balance of the loan OR • The date the mortgage loan balance actually reaches 80% […]

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Homeowners Opt to Refinance to Get Cash

Thursday, January 2nd, 2020

Many U.S. homeowners who need cash are taking it out of their properties. This recent trend illuminates the crosscurrents in the U.S. economy: After roughly a decade of rising home prices, homeowners are flush with record amounts of home equity they can tap. But many Americans remain short on cash and are increasingly relying on debt to fund their lives. While mortgage rates have crept slightly higher lately, they are still lower than what borrowers would pay if they tapped a credit-card or home-equity line of credit. Cash-out refis made up a significant share of refinancings in the third quarter, […]

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Warranties Aren’t Just for Cars

Tuesday, December 3rd, 2019

Houses are pretty good at keeping secrets. A hairline crack in a pipe or a worn belt on the clothes dryer may go undetected until something goes wrong. To assuage potential buyers fearful of hidden hazards like these, many sellers offer a one-year home warranty that covers certain repairs to appliances, plumbing and electrical systems, as well as heating and air conditioning. The warranties are a common sweetener to close a home sale, especially if the property has been on the market for a long time. But buyers should know that when something goes wrong, home-service contracts have strict limits […]

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Fed Hints They’re Done Lowering Rates…for Now

Friday, November 1st, 2019

Mortgage rates rose Friday after data showed the economy added more jobs than expected last month, a sign of ongoing growth. The yield on the benchmark 10-year Treasury bond rose, snapping a three-session streak of declines, settling at 1.727% compared with 1.672% before the report and 1.691% Thursday, according to The Wall Street Journal (WSJ). On Friday the Labor Department said the U.S. added 128,000 jobs last month, more than the 75,000 expected by economists surveyed by WSJ. The agency also revised data from August and September to reflect gains of 95,000 more jobs than had previously been estimated. Some […]

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Latest Housing Data

Tuesday, October 1st, 2019

The housing market is a bit better lately. But considering the overall economic environment, the improvement still counts as underwhelming. On Thursday, the National Association of Realtors reported that its index of pending home sales—sales of previously owned homes that are under contract but haven’t been finalized—bounced back in August, putting it 2.5% above its year-earlier level. That follows Wednesday’s Commerce Department report showing that new-home sales jumped last month and last week’s report that existing-home sales firmed in August. The biggest factor behind the pickup in housing has probably been the decline in interest rates. Earlier this month, the […]

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Computer Appraisals Cut Costs

Tuesday, September 3rd, 2019

The next time you buy a house or refinance, your lender might deploy a drone and a computer algorithm to size up your property instead of a tape-measure-toting human appraiser. According to a recent Wall Street Journal article, federal regulators are moving to allow a majority of U.S. homes to be bought and sold without the involvement of licensed appraisers, by increasing from $250,000 to $400,000 the value of homes exempt from a human evaluation. In doing so, they are opening the door to more appraisal work being performed from afar and by computer models. Proponents of the change, primarily […]

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Will More Rate Cuts Follow?

Thursday, August 1st, 2019

The Federal Reserve cut interest rates 0.25% yesterday for the first time since 2008. The average 30-year, fixed-rate mortgage has fallen to 3.75% as of last week from 4.94% last November. For home buyers or owners looking to refinance their mortgages, the lower rates could easily save thousands of dollars over the life of a loan or enable them to purchase a bigger house than they could have afforded in December. The decline in mortgage rates since then would shave $175 off the monthly payment on a $250,000, 30-year loan. As for further rate cuts ahead, Fed Chairman Powell commented […]

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Applying for a Condo Mortgage? Don’t Forget the HOA Charges

Tuesday, July 2nd, 2019

Monthly charges, whether condominium or homeowners association (HOA) fees, can make a big impact on a buyer’s ability to qualify for a loan. All HOA charges have the same impact on the debt-to-income ratio. The monthly housing obligation includes principal, interest, taxes, insurance and HOA fees. Condo fees typically cover amenity charges. Real estate taxes are charged separately.  It all gets added up and calculated as debt in the debt-to-income ratio, which helps determine how much a customer can borrow. Lenders have two considerations when a customer wants to borrow for a property with HOA fees. The first is whether […]

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Mortgage Rates Fall Below 4%

Tuesday, June 4th, 2019

Mortgage rates dropped below 4% for the first time since early last year, adding to hopes for a revival in the housing market. The average rate last week on a 30-year fixed rate mortgage was at 3.99%, according to Freddie Mac, and some lenders have been offering rates below that. That marks a fall of nearly a full percentage point from the highs of November 2018. Lower rates stand to make mortgages more affordable for buyers, and the sharp fall so far in 2019 has lifted optimism for a market that has cooled after years of torrid home price growth […]

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