Archives for April 2015

Home Builder Confidence Rises in April

Home Builder Confidence Rises in AprilThe National Association of Home Builders (NAHB) reported that April’s Housing Market Index rose from a reading of 52 in March to 56 for April. This is in line with warmer weather and the peak home buying season in spring and summer. Readings over 50 indicate that more builders view market conditions as positive as those who do not. NAHB members cited lower mortgage rates and better labor market conditions as reasons they expect more home buyers to enter the market.

All Components of Builder Confidence Increase

The NAHB Home Builder Index is calculated from three components. The reading for confidence in current housing market conditions rose from 58 in March to 61 in April. Builder confidence for sales condition in the next six months rose from a reading of 59 to 64, which was the highest reading for 2015 so far.

Home builder confidence in buyer foot traffic moved from 37 to a reading of 41 in April. Lingering winter weather likely kept house hunters indoors in many areas. NAHB Chief Economist David Crowe said that the uptick in the NAHB Housing Market Index indicates that housing market conditions can be expected to improve throughout 2015.

Regional Housing Results Mixed, Fed Beige Book Cites Winter Weather

NAHB measures regional changes in housing markets on a three-month rolling average. April’s results were mixed.

Builder confidence in the southern region increased from 55 to 56 in April. The northwestern region was unchanged from March to April at 42. Builder confidence in Midwestern housing markets fell by two points from 56 to 54. The western region saw builder confidence fall three points from the March reading of 61 to April’s reading of 58.

In an unrelated report, the Federal Reserve also released its Beige Book report which is a collection of anecdotes from business contacts throughout the nation. Winter weather conditions were prominently mentioned in the Beige Book report and were seen as detrimental for housing conditions.

The Beige Book report also mentioned layoffs caused by low oil and gas prices. This could negatively influence housing market conditions in regions where oil and gas provide many jobs and contribute to local economies.

You Ask, We Answer: How Often Should I Refinance the Mortgage on My House?

You Ask, We Answer: How Often Should I Refinance the Mortgage on My House? Refinancing a home mortgage can provide you with an incredible range of benefits. These include everything from reducing your mortgage term and lowering your payments to helping you more effectively build equity or pulling equity out to use for beneficial purposes.

One common question that many homeowners ask is how often a mortgage should be refinanced. While there are benefits associated with mortgage refinancing, there are also some points to consider before you rush into the process.

Think About Refinancing Costs

First, remember that each mortgage application will come with refinancing costs. These costs can equate to thousands of dollars in some cases, and they include title fees, lender fees, appraisal fees and more. While these costs can typically be rolled into your home mortgage so that you pay very little money out of pocket, these costs will increase the amount of debt that is tied to your home. When you refinance too often, you are negating the effects of principal reduction from your mortgage payments.

Consider the Impact On Home Equity

Some who refinance will choose a straight rate and term refinance, and they will not pull equity out of their home. Others, however, have the desire to tap into their home equity to pay off other debts, to fix up the house, to take a vacation or for other purposes. When you tap into your home equity, you may be having a negative impact on your financial situation, depending on how you use the funds.

Pay Attention To Your Final Loan Payoff Date

Before you make a decision to refinance your home mortgage, you also should focus on your loan payoff date. Many have the goal in mind of paying off their home mortgage before they retire, and this is especially true if you plan to live in the home after retirement. On the other hand, you may have plans to sell the home and downsize before retiring. Your refinance will adjust your loan payoff date, so this is an important factor to weigh into your decision making process.

You may know people who refinance every year, and you may know others who have owned their home for a decade or longer without ever having refinanced. Each homeowner has a unique financial situation. You can speak with a mortgage professional to learn more about the specific benefits associated with a refinance loan, and you may also keep these points in mind to assist with your final decision.

Suffering from Credit Problems? Understanding Mortgage Lenders and How They Assess Your Credit

Suffering from Credit Problems? Understanding Mortgage Lenders and How They Assess Your CreditOne of the most significant factors a mortgage lender will review when you apply for a new mortgage loan is your credit history and rating. While some people have stellar credit, others have a troubled credit history with lower scores.

If you fall into the latter scenario, you may be wondering how lenders will assess your credit situation when you apply for a mortgage in the near future.

Reviewing Your Credit Scores

Initially, lenders will review your credit report to determine your credit scores. Your scores will have a direct impact on the interest rate that you qualify for or if you qualify for a loan at all. There are prime mortgages for good credit borrowers and sub-prime mortgages for those with a blemished credit rating.

If your scores are too low, however, you may not qualify for a mortgage. A mortgage representative can tell you more about their credit rating thresholds and the terms that you may qualify for.

High Debt Balances

Your mortgage lender will dig deeper into your credit report after an initial review of your credit rating. Your debt balances will be reviewed to determine your debt-to-income ratio. Provided your debt-to-income ratio and your credit rating are in line with requirements, high debt balances may not be an issue. Essentially, the lender will determine if you are able to make your payments on time as scheduled or if your debt balances appear to be burdensome. Even if your debt balances are high, you may be approved for a loan if you can afford to make the payments.

Difficulty Making Timely Payments

Your mortgage lender will also review the number of late payments on your credit report as well as the dates for those late payments. When late payments are clustered together, this may indicate a temporary rough patch rather than an on-going issue with making payments on time. However, if you have multiple payments that have been late over the course of the last year or two, this may indicate that you are not creditworthy as a loan applicant.

A credit report can tell a lender many things about you. While it superficially can tell a lender more about your outstanding debts, it also delves into previous financial issues and your overall responsibility with managing debt. If you have suffered from credit problems in the past, you may consider reaching out to a mortgage professional for more insight on how a lender will assess your credit situation.

What’s Ahead For Mortgage Rates This Week – April 13, 2015

Whats Ahead For Mortgage Rates This Week April 13 2015Last week’s economic news included the minutes from the most recent FOMC meeting, which indicated that the Fed’s monetary policymakers are eyeing a potential increase in the target federal funds rate, but don’t expect to do so immediately.

Members of the Federal Open Market Committee expressed concerns about lagging housing markets and noted that inflation has not yet achieved the Fed’s two percent goal. When the Fed decides to raise its target federal funds rate, which now stands at 0.00 to 0.25 percent, Interest rates and mortgage rates can be expected to rise as well.

Mortgage Rates Lower, Jobless Claims Rise

Freddie Mac reported that mortgage fell last week. The average rate for a 30-year fixed rate mortgage fell by four basis points to 3.66 percent; the average rate for a 15-year mortgage dropped by six basis points to 2.93 percent. The average rate for a 5/1 adjustable rate mortgage was nine basis points lower at 2.83 percent. Discount points were unchanged across the board at 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 281,000 against projections of 285,000 new claims and the prior week’s reading of 267,000 new claims. Analysts said that the Easter holiday week affected weekly jobless claims, and that the varied dates of the Easter holiday and spring break weeks for schools can impact weekly readings for new unemployment claims.

The four-week rolling average of jobless claims fell to its lowest reading since June 2000. The four-week rolling average is considered a more dependable source for identifying labor force trends, as it lacks the volatility associated with holidays and one-time events that can cause great variation in weekly readings for new jobless claims.

What’s Ahead

Next week’s scheduled economic reports include retail sales, retail sales not including the automotive sector, the Federal Reserve’s Beige Book report, which includes anecdotal reports of economic conditions reported to the Fed, and Housing Starts. The usual reports for weekly jobless claims and Freddie Mac’s mortgage rates survey will be released Thursday.

On Friday, the University of Michigan will release its Consumer Sentiment report, which provides indications of how American consumers view current economic conditions. While general in scope, consumer sentiment can suggest how consumers view buying homes.

A lack of positive sentiment about the economy in general and jobs in particular suggests that fewer Americans may be ready to buy homes. Increasing positive sentiment indicates less concern about economic conditions and could point to more Americans entering the housing market as the peak home- buying season gets underway.

Looking for a Fun DIY Project This Spring? How to Plant Your Own Vegetable Garden

Looking for a Fun DIY Project This Spring? How to Plant Your Own Vegetable GardenWhen spring arrives, many people want to spend more time outdoors enjoying the fresh air and warmer temperatures. While you could lounge in a chair with a good book, you may find it more enjoyable to plant your own vegetable garden. This is an on-going project that will require you to spend time outdoors regularly, and it can be quite enjoyable to watch the fruits of your labor spring to life. More than that, you may love to sample and even share the tasty treats that you have grown on your own. If you are ready to get started planning and planting your vegetable garden, follow these preliminary steps.

Choose the Plants That You Want to Grow

As a first step, think about the types of plants that you want to grow in your garden. These should ideally produce vegetables that you and your family will enjoy eating. They also ideally will be suitable for growing in your climate and with the type of soil that is present on your property. Additionally, enough space should be available to accommodate the full grown size of the plants. This up-front effort is critical for the next few steps in the planning and preparation process.

Select a Suitable Space in Your Yard

Each plant species will have special growing requirements. Some plants may prefer to be in full sunlight, and others may prefer partial sunlight or mostly shaded areas. Some may prefer soil that is mostly dry or that is regularly moist and wet. Different areas of your yard may be more accommodating for some plant species than others. For example, plants that prefer more moist soil may thrive in a lower area of your yard that receives more runoff when it rains and that takes longer to dry out after a shower.

Choose the Best Time to Plant

A final point to consider is the best time to plant your crops. Some will thrive when cooler temps in early spring are still common, but others may not tolerate a freeze at all. These may need to be planted after the risk for a late spring freeze is gone. Think about how long it takes plants to grow and what the temperatures in your area may be when the plants are fully grown and ready to produce vegetables for you.

You may be able to complete much of this preliminary planning and research during the last few weeks of winter from the comfort of your own home. Keep in mind that you can get outdoors and begin to prepare your garden area before you are ready to plant your crops. These steps will pave the way for a truly enjoyable do-it-yourself project this spring.

FOMC Minutes: Housing Market Stable But Slow

FOMC Minutes: Housing Market Stable But SlowThe minutes of the March meeting of the Fed’s Federal Open Market Committee (FOMC) were released Tuesday and included a staff review of current economic conditions. The minutes noted that while labor markets continued to grow, inflation to the Fed’s target rate of 2.00 percent was impeded by dropping fuel prices. The Committee noted that expectations for longer-term inflation remained stable.

Non-farm payrolls, which include both private and public sector jobs, grew in January and February and the national unemployment rate reached a new low of 5.50 percent in February. Readings for workers employed part time due to economic reasons edged down and workforce participation was up.

These developments are noteworthy as in recent months analysts have repeatedly cited concerns over the numbers of workers who have stopped looking for work and those who work part time because they cannot find full-time employment. Meeting participants said that underutilization of labor resources “continued to diminish,” but also said that levels for those involuntarily working part-time and still elevated numbers of workers no longer seeking employment.

Personal consumption expenditures slowed in the first quarter due to falling fuel prices and winter weather conditions. Households had more disposable income and household wealth increased due to increasing home values. The Committee said that consumer sentiment was near pre-recession levels according to the University of Michigan’s consumer sentiment survey.

Fed Says Housing Activity “Slow,” No Decision on Raising Fed Funds Rate

The FOMC minutes reflect the committee’s view that housing markets are performing at a slower rate than other economic sectors. The minutes said that building permits and housing starts for single family homes were lower in January and February. Sales of new and existing homes were down in January, but pending home sales rose. This suggests that while markets slowed (as they typically do) during winter, pending sales suggest that completed sales will recover in the late winter and early spring.

The FOMC minutes noted that mortgage credit remained challenging for those in the lower portion of the credit score distribution, but said that the cost of mortgages was historically low for those who qualified for home loans.

The Committee also addressed the likelihood of raising the Federal Funds rate in its usual non-definitive manner. While raising the rate at the next meeting seemed unlikely, committee members wanted the flexibility to raise the target federal funds rate when conditions warrant. The target rate is currently set at 0.00 to 0.25 percent; when the FOMC moves to raise the target federal funds rate, the cost of credit including mortgage loans can be expected to increase.

First-time Real Estate Investor? Here Are 3 Helpful Tips That Will Get You Started

First-time Real Estate Investor? Here Are 3 Helpful Tips That Will Get You Started Real estate investing comes with many benefits that you may be eager to start taking advantage of. For example, the right rental property can provide you with monthly cash flow coupled with equity appreciation, tax deductions and more, and these can have incredible effects on your overall financial situation. As a first time real estate investor, you may be excited to start searching for a property to invest in, but you may consider following a few helpful tips to make your search more successful.

Determine Your Budget

There are investment properties that range in price considerably, and you will need to know up-front what your budget is before you can begin your search.

The right real estate investment will generate revenue to pay your monthly mortgage payment and expenses, but there may be months when your property is vacant. Therefore, in addition to thinking about the amount of down payment that you can afford, also think about how affordable it will be to manage property expenses when the space is vacant.

Consider Different Communities

You may consider being flexible regarding the communities that you invest in. Each community may have a different economic base and primary demographic. For example, some towns or even suburban communities may be largely comprised of college students or military professionals. Think about the benefits between the ease of finding new tenants versus the benefit of having long-term tenants.

Analyze Cash Flow

After you have found a few properties to consider, it is important to analyze cash flow. Each property will be unique with regards to the required mortgage payment, income generated, property taxes and even repair and maintenance needs. While you can estimate these expenses initially, you should request historical operating statements from the sellers early in the process. You will find that some properties can be considerably more profitable than others, so it is important to complete a thorough analysis.

When you are preparing to make your investment, consider following these tips, and seek the advice of a helpful mortgage advisor who can guide you in the right direction.

How Does Making Lump Sum Payments Affect Your Mortgage? Let’s Take a Look

How Does Making Lump Sum Payments Affect Your Mortgage? Let's Take a Look Periodically, many homeowners will receive a rather sizable amount of extra cash. This may be from a bonus from your employer, a refund on your tax return, a financial gift from a relative or something else altogether.

While there are many things that you could do with your windfall, you may be wondering if paying down your mortgage balance is a wise idea. Before you make your decision about how to spend your money, consider what impact your lump sum payment will have on your mortgage.

Reduction in Principal Balance

The most obvious impact a lump sum payment will have on your mortgage is an immediate reduction in your outstanding principal balance. Your regular monthly payments will be applied to both interest and principal, but your lump sum payment will be entirely applied to principal. Therefore, you can expect to see a rather sizable reduction in the outstanding balance, and this will have a direct and positive impact on your home equity.

More Effective Loan Payments

Your required monthly mortgage payments will not be lowered when you make a lump sum payment on your mortgage, and you will still be required to pay the same amount to your lender going forward. However, your interest charges for each month will be adjusted. Your interest will be calculated based on the current loan balance each month. A reduction in outstanding balance lowers the interest charges. This essentially makes your future payments more effective at debt reduction and reduces the amount of interest you will pay over the life of your loan.

A Change to the Final Loan Payment Date

Because each of your loan payments going forward will be more heavily weighted on principal reduction than on interest charges, the fact is that your final loan payment date can be accelerated. Depending on the amount of the lump sum payment that you make toward your mortgage, this may be an acceleration of a single month, several months or even several years in some cases.

Making a lump sum payment on your mortgage can have many positive effects for you. However, this is not the only option available when deciding how to spend or invest your windfall. Compare these benefits against the benefits of other options available to determine your best course of action. You may also speak with a mortgage professional for personal guidance and assistance.

What’s Ahead For Mortgage Rates This Week – April 6, 2015

Whats Ahead For Mortgage Rates This Week April 6 2015Mortgage rates ticked upward for fixed rate loans and were unchanged for 5/1 adjustable rate mortgages according to Freddie Mac. Weekly jobless claims were lower in spite of slower job growth reports.

Last week’s economic events included several reports on jobs and unemployment including the ADP report on private-sector payrolls, the Department of Labor’s reports on non-farm payrolls and the national unemployment rate. The details:

Mortgage Rates, Pending Home Sales Weekly Jobless Claims

Fixed mortgage rates rose by one basis point for both 30 and -15-year mortgages. The average rate for a 30 year mortgage rate was 3.80 percent and the average rate for a 15-year mortgage was 2.98 percent.

The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.92 percent. Average discount points for fixed rate mortgages were unchanged at 0.60 percent and rose from an average of 0.40 percent to 0.50 percent for 5/1 adjustable rate mortgages.

The National Association of Realtors® reported that pending home sales for February increased by 3.10 percent against an expected reading of -0.20 percent and January’s reading of 1.20 percent. This was a welcome surprise in light of severe winter weather conditions throughout much of the U.S.

Weekly jobless claims were lower at 268,000 new jobless claims as compared to the prior week’s reading of 288,000 new claims and expectations of 285,000 new jobless claims. Analysts note that week-to-week reports of jobless claims are volatile, and the four-week-rolling average is a better source for identifying jobless trends.

Non-Farm Payrolls, ADP Payrolls Lower

Labor markets received unwelcome readings as the Labor Department’s Non-Farm Payrolls report fell far shy of expectations and the ADP report, which measures private sector jobs, fell below February’s reading. Non-Farm Payrolls for March reflected only 126,000 jobs added against estimates of 243,000 jobs added and February’s reading of 264,000 jobs added.

This was the lowest reading for Non-Farm Payrolls in 15 months. The March reading raised questions concerning the potential for another economic slowdown and whether or not lower readings for labor reports signaled a temporary slowdown or indicated broader challenges to the economy.

ADP reported 189,000 private-sector jobs added in March as compared to February’s reading of 214,000 jobs added. This was the lowest reading since January, 2014. The ADP report is seen by analysts as a precursor of the Non-Farm Payrolls report.

The National Unemployment Rate was unchanged at 5.50 percent in February; this report lags a month behind Non-Farm Payrolls and ADP reports, so does not reflect the drop in job growth for March.

Labor markets are a priority for prospective and active home buyers as mortgage approval and the ability to afford a home hinges on steady employment. Housing markets could be in for more challenges unless dropping job growth proves to be a temporary situation.

What’s Ahead 

This week’s scheduled economic releases include reports on job openings and minutes of the last FOMC meeting along with Thursday’s reports on mortgage rates and weekly jobless claims.

Get Rid of Wi-Fi and Cellular Dead Zones in Your Home with These Easy Tips

Get Rid of Wi-Fi and Cellular Dead Zones in Your Home with These Easy TipsIt can be frustrating to deal with dead zones with your wireless and cellular coverage while you are out and about. However, overcoming dead zones in public areas may be as simple as relocating to a different area in a building or walking to a new location. Dead zones may also be present in residential homes and apartment buildings. If you have a dead zone in your home, this issue can easily cause you considerable frustration on a daily basis, and you may be wondering what steps you can take to overcome the problem.

Invest in a Better Router

If your router is not hard-wired and receives a wireless signal, it can be difficult to connect to the Internet or to use your mobile devices in your home. Your router may not be strong enough to pick up a wireless signal, and you may benefit from investing in a better router. You may also consider repositioning your router or placing it in another location of your home. For example, you may get a better signal when you place it near a window on one side of the home rather than in the middle of the home.

Purchase a Wireless Repeater

Another idea is to invest in a wireless repeater. This is a special product that is designed to pick up weak signals and to magnify, strengthen and expand them. A repeater can give you far superior coverage inside your home, but keep in mind that there does need to be at least a small signal available for it to pick up. If your carrier or service provider does not offer coverage over your home area, this will not be a suitable option for you.

Think About a Wired Connection

Another idea is to consider a wired connection. Your goal is to bring the wireless signal into the home, and you may be able to do this through cable. Then, your router can give you wireless coverage inside the home through the hard-wired connection.

Nobody wants to deal with dead zones inside their home. After all, most people will use a wireless connection numerous times a day from morning until bedtime, and you want to enjoy this convenience inside your home. When you are dealing with a dead zone, you can consider following some of these tips to see an improvement in your coverage or signal strength. If these ideas do not work, you can always reach out to your service provider for additional assistance and support.