What’s Ahead For Mortgage Rates This Week – September 8, 2015

Whats Ahead For Mortgage Rates This Week September 8 2015Last week’s economic news included reports on construction spending, private and public sector employment data and a report from the Fed indicating that any move to raise interest rates may be delayed. The details:

Construction Spending Meets Expectations, Beige Book Indicates Wage Pressures

Analysts said that construction is gaining strength and could soon be the strongest sector of the economy. Construction spending for July met growth expectations of 0.70 percent as compared to June’s reading of 0.10 percent. The Commerce Department reported that this reading translated to a seasonally adjusted annual rate of $1.98 trillion, which was the highest rate of spending in the construction sector since May 2008.

Residential construction spending was up 10.80 percent year-over-year in July, with both single-family and multifamily construction posting double digit gains.

The Federal Reserve issued its Beige Book report last Wednesday, which indicated that wage pressures in many of the 13 Fed districts could cause rising inflation, which the Fed has cited as a component in any decision to raise the federal funds rate. The Fed has set a benchmark of 2.0 percent inflation as an indication for raising rates, but doesn’t expect to see this reading in the short term.

Higher wages increase consumers’ discretionary spending, which would contribute to more hiring and increasing demand for goods and services.

Mortgage Rates, Weekly Jobless Claims Higher

Freddie Mac reported that average mortgage rates rose across the board last week. The rate for a 30-year fixed rate mortgage rose by five basis points to 3.89 percent; the rate for a 15-year fixed rate mortgage wash higher by three basis points and the rate for a 5/1 adjustable rate mortgage also rose by three basis points to 2.93 percent. Average discount points were unchanged at 0.60 for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Weekly jobless claims rose to 282,000 new claims against last week’s reading of 270,000 new claims and expectations of 275,000 new jobless claims. While this was the highest reading for new jobless claims in since late June, the reading for new weekly jobless claims has remained below the 300,000 benchmark for the last six months.

The four-week rolling average of new jobless claims rose by 3250 new claims to an average of 275,500 new claims. Analysts said that layoffs are declining and that workers who lose their jobs are finding new employment quickly.

Continuing jobless claims fell by 9000 to a reading of 2.26 million for the week that ended August 22.

ADP Employment Rises, Non-Farm Payrolls, National Unemployment Rate Fall

Private sector payrolls increased by 190,000 jobs in August as compared to July’s reading of 170,000 jobs according to ADP. This supports the trend of stronger hiring seen by economists in recent weeks. The government reported that Non-farm payrolls, which include public and private sector jobs, fell to 173,000 jobs against July’s reading of 245,000 jobs.

The Commerce Department reported that the national unemployment rate dipped to 5.10 percent in August against expected reading of 5.20 percent and July’s reading of 5.30 percent. The declining unemployment rate further supports economic growth and stronger labor markets.

What’s Ahead

This week’s economic reports include job openings, the usual weekly reports on new jobless claims and mortgage rates and a report on consumer sentiment.

Staging 101: How to Improve Your Landscape and Gardens Before Showing Your Home

Staging 101: How to Improve Your Landscape and Gardens Before Showing Your HomeCurb appeal is often neglected by sellers. So much attention is spent getting the inside of a home cleaned up that the outside is left until last. This is a mistake. Landscaping and gardens are the first things a prospective buyer sees. Following these tips ensures homes look their best and give a positive first impression.

Spruce Up Mulch

A fresh layer of mulch brings out the color in a garden and makes gardens look well-tended. Homes on the market in the spring, summer, or fall benefit from a fresh application of mulch prior to putting a home on the market.

Clean Up

Cluttered yards full of toys and tools are unattractive. Pick up any clutter and place it out of sight of prospective buyers.

Branches, leaves, and other debris are equally unsightly. Rake leaves and eliminate brush to give lawns a clean, manicured appeal. This is important year round.

Renting a power washer to clean driveways and walkways is also advisable. A clean driveway and gleaming walkways invite prospective buyers to picture themselves strolling through the yard.

Trim Grass And Shrubs

Overgrown grass and shrubs look unkempt. Take the time to cut the grass and sweep or blow the clippings off of driveways and walkways. Trim shrubs and trees to desired shape and height, and clean up all trimmings.

Don’t worry about trimming out of season. Well-manicured landscapes suggest that the rest of the house is equally well maintained.

Fresh Plantings

Add a little color in the garden to increase its appeal with some fresh flowers. A new planting ensures blooms look their best, especially against that new application of mulch.

Tend To All Garden Beds

This is the time to spruce up all garden beds. Remove weeds and trim up perennials to create a well-maintained appearance. Remove or trim back any plants that look dead or otherwise unhealthy.

Address Water Issues

Yards with fountains, faucets, pools, and irrigation systems require additional care. The time to fix issues is before the showing.

Resolve any issues with irrigation systems. Clean fountains and pools of algae and leaves. Fix leaky faucets as they suggest issues elsewhere with plumbing.

Fixing up the outside is just as important as a clean interior. Making gardens, lawns, and landscaping appear attractive and well maintained gives prospective buyers a positive first impression.

Don’t wait until the day of the showing. Start working on landscape staging a month before putting a home on the market. Call your trusted real estate agent today for more staging tips.

3 Reasons Why the Cost of Title Insurance is Worth the Investment

3 Reasons Why the Cost of Title Insurance is Worth the InvestmentTitle insurance is one of the few types of protection policies available to homebuyers and one that is often overlooked because of its optional nature.

Because title insurance is purchased simultaneously with the home, it can be very easy to forego when looked at alongside all the additional fees that are associated with purchasing property.

This is typicaly not advisable, as title insurance is one of the smartest forms of protection a homeowner can buy. Here are just three reasons why every purchaser should get title insurance.

It’s The Best Protection Against Fraud

Title insurance protects the owner of a home from any claim made against their property, whether or not they are responsible. These include unpaid mortgage balances on the home, an improper foreclosure or any form of real estate fraud perpetrated by the seller.

Fraud is more prevalent now than ever before and has started to gain momentum in real estate as well. Forgeries are easier to create in the electronic age and criminals take advantage of today’s ‘do-it-yourself’ attitude to sell property they don’t actually own to unsuspecting victims.

The Insurer Performs An Exhaustive Title Search

Countless records are now made public online for low one-time payments to access them. But does anybody really know what they should be looking for? Title insurers are experts at finding anything suspicious with a home and researching exhaustively to make sure everything about the transaction is legitimate.

And if it’s not, the insurance still covers the buyer for any losses incurred if they are ordered out of their new home should a claim be made against it. Then they will research the claim to make sure it isn’t a fraudulent one.

Title Insurance Is A One-Time Fee

Although it is a large fee, title insurance only needs to be paid for once. Unlike other insurance policies that are either monthly or annually, title insurance is a one-time fee that is acquired at the time of closing. Most mortgage lenders require that their title insurance policy is paid for by the borrower anyway, so it’s not a giant leap to take out your own policy the same time.

Title insurance will also protect against mortgage fraud or any unpaid mortgages the home already has. Although title insurance is strongly recommended, it is a good idea to speak with a professional about it so that any questions you have may be answered.

Selling Your Home? Here’s Why You’ll Want to Invest in Professional Photography

Selling Your Home This Summer? Here's Why You'll Want to Invest in Professional PhotographyWith all of the time and money that can go into moving, spending money on one more thing can seem like a bank account drain. However, when it comes to selling your home, investing in a professional photographer can mean the difference between getting a buyer and making a sale you’ll be proud of. If you want to get the deal your house deserves, you might want to consider the skills of a professional who will make your house look like someone’s dream home.

“Lighting” Up Your House

If you’ve ever noticed how dull a room can look when it’s cloudy outside, you’ll quickly realize how important the right lighting can be in complimenting the appearance of your house. A professional photographer will be able to determine what hours and what types of flash will work to highlight the rooms in your house the best. Not only that, they will go above and beyond what your smart phone can do to correct the issues that can impact a potentially perfect picture.

Capturing The Perfect Panorama

In the right light, it’s possible that you’ll be able to get some great pictures of your house on your own, but a photographer will be able to go beyond that. It’s a proven fact that people are most often lured in by façade photos when searching for homes online, and it’s these the right photographer will be able to perfect. By using a professional who understands what size of lens to use to compliment your home, your photos will easily optimize the way your home looks.

Diving Into The Details With Expertise

Beyond the panorama shots that might convince a potential buyer into considering your house for their next home, a professional photographer may be able to hone in on details that differentiate your house from the rest. With their keen, curious eye, they’ll not only notice intricate details, they’ll be able to highlight them in a way that makes them look interesting, expert and one-of-a-kind. They’ll also be able to beautifully capture the special features that you love about your home!

It can be tempting to be cost effective when it comes to showcasing your home, but just like wedding photographs, you don’t want to skimp on real estate images. If you’re interested in learning more about positive ways you can highlight your home, you should contact your local real estate professional for more information.

The Top 5 Home Features That Buyers Are Hunting For This Fall

The Top 5 Home Features That Buyers Are Hunting for this AutumnWhether you’re getting prepared to buy a new home or just curious about upcoming trends in housing, there are a bevy of features gaining momentum on the real estate market. From top to bottom and room to room, here are five popular features that homebuyers will be sure to notice this fall.

Bigger Is Not Necessarily Better

There was a time when a bigger home meant a better home, but with the cost of maintenance and heating, bigger homes are experiencing a decline in popularity. Instead of sizeable mansions that look the part, buyers are becoming more interested in houses that are more economical to maintain and possess a warmer, cozier vibe.

A Modern, Up-To-Date Kitchen

Where a living room and a bedroom can often be fixed up with a layer of paint, the costs that can go into updating an old kitchen can be quite prohibitive for a new buyer. Instead of a space they’ll just have to renovate, buyers are interested in a sleek, modern looking kitchen with stainless steel appliances that offer modern conveniences.

Energy Efficient And Environmentally Friendly

While older homes can offer character and the history that goes along with them, new homes are winning when it comes to energy efficiency. With people becoming more conscientious of the environment and their impact, energy efficiency in a home is not only popular right now, but will come to be a necessity in the next few years.

Options For A Smart Home

Technology has become so ubiquitous these days that it makes more sense for buyers to invest in homes with smart features. From thermostats that can be adjusted with mobile devices to doors opened via Bluetooth, smart features are a huge part of what makes a modern home.

A Burst Of Bright Color

Muted tones can often be the best for allowing a potential buyer to envision a home as their own, but color here and there can definitely draw in the younger crowd. With bright color making a design comeback, a brilliantly bold sink or appliance can be the type of risk that pays off and has the potential to sway the right kind of home seeker.

The features that grab a potential buyer can change all the time, but certain popular trends will not be going out of style anytime soon. If you’re curious about trends that will be hitting the market in your area, contact your trusted real estate professional for some inside tips.

What’s Ahead For Mortgage Rates This Week – August 31, 2015

Whats Ahead For Mortgage Rates This Week August 31 2015Last week’s economic news included several reports related to housing. The Case-Shiller 20-City Home Price Index for June rose to 4.50 percent as compared to May’s reading of 4.40 percent. Denver, Colorado was the only city to post double-digit year-over-year growth. FHFA also released its House Price Index for June. Home prices for properties associated with mortgages owned or backed by Fannie Mae and Freddie Mac rose at a year-over-year rate of 5.60 percent in June as compared to May’s reading of 5.70 percent.

New Home Sales, Pending Home Sales Rise in July

Commerce Department data revealed that new home sales increased in July to a year-over-year reading of 507,000 against expectations of 510,000 new home sales and June’s revised reading of 481,000 new homes sold. The original reading for June was 482,000 new homes sold. New home sales provided a strong indicator of recovering housing markets as July’s reading was 25 percent higher than it was one year ago.

Pending home sales moved into positive territory in July after June’s reading of -1.80 percent. Pending home sales for July grew by 0.50 percent. Pending home sales are an indicator of future closings, so this is good news as the peak buying and selling season wanes.

The national median home price rose to $285,900 in July, which was two percent higher year-over-year.

Mortgage Rates, New Unemployment Claims Fall

Mortgage rates fell across the board last week. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage fell by none basis points to 3.8r percent; the rate for a 15-year fixed rate mortgage also fell by nine basis points to 3.06 percent. The average rate for a 5/1 adjustable rate mortgage was four basis points lower at 2.90 percent. Discount points for fixed rate mortgages were unchanged at an average of 0.60 percent and fell from an average of 0.50 percent to 0.40 percent for 5/1 adjustable rate mortgages.

Weekly jobless claims were also lower last week with 271,000 new claims filed as compared to expectations of 271,000 new claims filed and the previous week’s reading of 277,000 new claims filed. Last week’s reading was the 25th consecutive week of new jobless claims readings under the benchmark of 300,000 new claims filed; this is the longest stretch for new jobless claims under the 300,000 new claims benchmark in more than fifteen years.

New jobless claims rose by 1000 new claims to a seasonally adjusted average of 272,500 according to the four-week average. Analysts note that the four week average smooths out volatility that can occur with week-to-week readings.

What’s Ahead

This week’s scheduled economic reports include the Federal Reserve’s Beige Book report, ADP and the federal Non-farm Payrolls reports. The national unemployment rate will be released along with regularly scheduled reports on mortgage rates and new jobless claims.

From Big to Small: How to Downsize from a Large House to a Smaller, More Efficient Home

From Big to Small: How to Downsize from a Large House to a Smaller, More Efficient HomeIf you’re moving from a large home into a smaller house or condo, you’re probably looking forward to enjoying a lower utility bill and not having to do as much cleaning. But before you move, you’ll want to take certain precautions to ensure that you’re not overwhelmed.

A smaller home won’t have as much room for your belongings, which means you may need to get creative. Here’s how you can downsize without losing your mind.

Decide What You’re Going To Keep

Before you do anything else, choose which of your belongings are coming with you. Unless you’ve habitually been getting rid of things you no longer need over the years, chances are you have a large stash of things you’ll never use again. That’s the kind of clutter you’ll need to eliminate before moving into a smaller home.

The obvious exceptions would be anything of significant sentimental or monetary value, but you’ll want to get rid of lots of your everyday objects – for instance, there’s no reason why you need three soup ladles. Having trouble deciding what to throw out? Here’s a simple rule of thumb: If you can’t remember the last time you used it, you probably don’t need it.

Have Anything In Storage? Find A Storage Solution Now

Most homeowners nowadays have the luxury of large storage spaces like basements or attics – but if you’re moving into a condo or a small starter home, storage will be at a premium. And that means anything stored in your basement, garage, or attic will probably need to find a new home. You’ll want to look for a storage solution earlier rather than later.

Perhaps you could rent a storage locker in your neighborhood, or let children or relatives hold onto your belongings until you decide what to do with them.

On Your Moving Day: Move Large Items First, And Put Away Stored Items Before Anything Else

When the day comes for you to move into your new home, you’ll want to try to find the best configuration for the space right away – before your new home is filled with boxes stacked six feet high. Before you do anything else, move your furniture and other large items into the space first, and get them set up so they’re out of the way.

Once all of your boxes are in your new home, put storage items away before anything else – it’ll help you avoid unnecessary stress and sorting later.

Downsizing can be stressful, but with a solid plan and a great real estate agent, you can find a smaller home and move in without issues. Call your trusted real estate professional for more great tips on streamlining the moving process.

How to Submit an Offer Below the Asking Price Without Spooking the Seller

Going Low: How to Submit an Offer Below the Asking Price Without Spooking the SellerYou’ve found it: A large new home for your family. It’s in the area of the city that you love, with the perfect architectural style and lots of room for entertaining guests. It would have been perfect for you, but there’s only one problem – you’re not quite ready to pay the price the seller is asking for. You’ll have to put in an offer below the seller’s asking price – a risky move.

Although you will be rolling the dice with an offer below asking price, there are ways that you can increase the likelihood that your offer will be successful. Before you submit your offer, use these three strategies to make it more appealing.

Work Out Other Terms In The Seller’s Favor

If you’re going to ask for a lower selling price, it helps to show that you’re willing to compromise on other terms – that way, you come across as a reasonable human being and not a bargain hunter. By offering to give the seller the better deal on other terms, you’re showing that you want to close a sale – and the seller will see you making an effort to come to an agreement and respond in kind.

There are several ways to do this. When you submit your offer, see if you can negotiate an arrangement that has you paying the closing costs or a closing date that works better for the seller. Or, offer to make the down payment in cash or give the seller a larger deposit.

Arm Yourself With Facts To Make Your Case

If the home you want to buy is priced well above fair market value, you can easily use that to your advantage and turn it into a benefit for the seller. First, you’ll want to look up property values for similar homes in the area. You should also investigate how long it takes homes in that area to sell and the difference between the average asking and average selling price in the area.

If you can show the seller that their asking price is above their neighborhood’s average sale price or that their home has been on the market longer than the average home (or both), then you can make a strong case for a lower offer.

Submitting an offer below asking price can work, but it’s not something that should simply be done on a whim. It takes careful planning and a great strategy to actually win a bid if you’re coming in below asking price. Contact you trusted real estate professional to learn more about how to submit a below-asking-price offer.

Case-Shiller: Home Prices Continue to Outpace Inflation

You Ask, We Answer: How the New FICO Score System Might Impact a Typical Mortgage BorrowerDenver, Colorado continues to woo homebuyers as home prices rose by 10.20 percent as of June according to the Case-Shiller 20-City Home Price Index. The Mile-High City was the only city included in the index that posted double-digit year-over-year growth in June. San Francisco, California posted a 9.50 percent year-over-year gain in home prices and Dallas, Texas rounds out the top three cities posting highest year-over-year home price growth with a reading of 8.20 percent.

Denver’s home prices were impacted by the city’s rapidly expanding economy and demand for homes coupled with a slim supply of homes for sale. According to the National Association of Realtors®, there is approximately one month’s inventory of homes available in Denver as compared to the national average of five months. 

Cities experiencing the least year-over-year growth in home prices according to the 20-City Home Price Index were Chicago, Illinois with a year-over-year growth rate of 1.40 percent, Washington D.C. with a year-over-year reading of 1.60 percent in home price growth and New York, New York with a reading of 2.80 percent growth in home prices year-over-year.

The 20-City Index indicated national home prices grew by five percent year-over-year in June, with a month-to-month increase of one percent from May to June.

Detroit Leads Gains in Month-to-Month Home Prices 

Detroit, Michigan led month-over-month home price growth with a May to June reading of 1.80 percent. Cleveland, Ohio and Portland Oregon posted month-to-month gains of 1.50 percent followed by Atlanta, Georgia and Denver Colorado; each city posted month-to-month home price gains of 1.30 percent. 

As economic conditions continue to improve, prospective homebuyers face obstacles including tight mortgage approval standards and home prices growing at approximately twice the rate of inflation.

FHFA: Home Prices Dip in June

The Federal Housing Finance Agency reported that home prices associated with mortgages owned or backed by Fannie Mae and Freddie Mac slipped to a year-over year growth rate of 5.60 percent in June as compared to May’s reading of 5.70 percent. The agency also reported that home prices rose by 1.20 percent during the second quarter of 2015; this was the sixteenth consecutive quarterly increase in home prices.

FHFA Principal Economist Andrew Leventis noted that home prices continued to exceed inflation and were rising in spite of higher mortgage rates.

In general, analysts regard longer term readings as more reliable than month-to-month readings that reflect more volatility based on day-to-day influences.

Will Missing Mortgage Payments Impact My FICO Score? Yes – and Here’s How

Will Missing Mortgage Payments Impact My FICO Score Yes and Heres HowIf you’re like most homeowners, you probably believe that one missed mortgage payment won’t have a noticeable impact on your FICO score. People get behind now and then, and besides, you’ve been faithfully making payments on time for years. How bad could it be?

In truth, even one missed mortgage payment could seriously damage your FICO score. Lenders can report missed monthly payments whenever they choose – they don’t need to wait until a certain date to do it. That means even if your mortgage payment is a few days late, your lender may report it as unpaid.

So what exactly happens to a FICO score when you miss a mortgage payment? Here’s what you need to know.

Payment History: The Single Largest Factor In Determining Your Credit Score

FICO scores are calculated based on several different criteria, the largest of them being your payment history. A full 35% of your credit score is determined by how often you pay your bills on time and in full. And although FICO says that one or two late payments aren’t going to decimate your credit score, they will shave off some points that could have made the difference between a low-risk and high-risk interest rate.

Consumers With Higher Scores Have More To Lose

A 2011 FICO study analyzed the impact of late mortgage payments on consumer credit scores. The study grouped consumers into three groups based on their starting FICO score, with Consumer A having a score of 680, Consumer B a score of 720, and Consumer C a score of 780. The findings?

Even if you have a credit score of 780, being just 30 days late on a mortgage payment can result in a 100-point drop. And it can take up to three years to earn that credit back. In contrast, a consumer with a score of 680 who is 30 days late will see only a 70 point drop and can recover their original score within 9 months.

The takeaway? Contrary to popular belief, people with high credit scores stand to lose more from a missed payment than people with low credit scores.

There Are Varying Degrees Of “Late”

One common misconception is that if you miss a mortgage payment, it doesn’t matter if it’s 30, 60, or 90 days overdue. The mainstream thinking is that late is late is late. But that’s not how FICO sees it.

Although borrowers with credit scores under 700 won’t see much of a decline after 30 days late, borrowers with a higher credit score will. If you have a credit score of 720 and you’re 30 days late on your mortgage, your score will fall to about 640. If you’re 90 days late, that score will fall again this time, to about 620.

That means if you miss a mortgage payment, you need to get in touch with your lender as soon as possible in order make repayment arrangements and hope they haven’t yet reported the overdue payment. It’s your best shot at protecting your FICO score.