For others that are nearing retirement age, going with a shorter term mortgage, like a 15 Year Fixed Rate Mortgage may be the best fit. Typically a shorter term will have a lower interest rate and will help you to pay off your mortgage more quickly. There are several things to consider when buying a home which makes it important to work with an experience mortgage professional such as a mortgage broker. A mortgage broker will help you to review your goals and structure a loan to help you save money.
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They can do calculations such as a break even analysis to advise if you would be better off with a low closing cost mortgage or a low rate mortgage. March was the best month for Michigan Mortgage Rates in a Decade! This is great for anyone that is buying a home or looking to drop their mortgage rate. Many are wondering why rates dropped and will they go up or down. The slow economy in Europe is a factor resulting in lower mortgage rates.
When major global economies are halted, investors demand more predictable investments like bonds and mortgage backed securities which create lower mortgage rates. The Federal Reserve does not directly set mortgage rates however they do have a major effect on them. Banks use this rate to base interest rates on loans. If banks can borrow money cheaper, they can lend it out in the form of mortgages and other loans at lower interest rates. The Federal Reserve released its policy statement showing that they do not expect to hike Federal Reserve Rates for the rest of the year due to the slower growth in the economy.
This caused Treasury Yields to Fall which helps mortgage rates.
Navigating the decision to stay or sell
The Treasury Yields dropped to levels not seen for 10 years which could indicate a future recession. The National Association of Realtors NAR reported that the seasonally adjusted rate for sales of existing homes dropped 4. NAR also confirmed that home inventory increased from 3. Although sales appear to be slowing, this may be due to the 3. While the real estate market shows strength, job grown has dwindled. The headline nonfarm payrolls may have disappointed some with only 20, new jobs. The average since taking the survey from is , new jobs created.
This is the worst number in job growth since September when two major hurricanes hit. Recent reports show that the U. The uncertainty with Chinese trade tariffs have had a negative impact on US manufacturing and exports. There are several factors pushing upward on mortgage rates for the long term. No one can predict the future with certainty. My advice to my friends, family and clients is to review benefits of locking in a mortgage rate or refinancing right now. With upward pressure on mortgage rates, it is a risky gamble to wait to see if they will go lower.
If the numbers make sense and add benefit then take advantage of it immediately! Times have since changed opening up great new programs for low to middle income earners and first time homebuyers. Conventional Loans are now an affordable option for those without the highest credit scores. Mortgage Interest Rates are currently in a tighter spread.
These programs limit the loan level price adjustments LLPAs which increases the par offering rate. In the past, Private Mortgage Insurance PMI rates would also be absurdly high for lower score borrowers seeking Conventional mortgages. With the competition between PMI companies, mortgage insurance rates have dropped significantly in the past few years.
What Is a Cash-Out Refinance?
Related: See our Conventional Mortgage Calculator. Conventional loans may be a better option for homebuyers than FHA Mortgages because of the mortgage insurance savings. FHA has a similar fee plus an up front charge. This fee is currently set at 1. This is an extra expense not found on Conventional Loans. This calculation varies based on loan-to-value and loan term but is as high s.
April , FHA made a major change which started the shift away from this loan type. In many areas of the country, there is a shortage of homes for sale which creates a sellers market. This means that sellers can be more picky when accepting offers from buyers on their homes. Having a Conventional Loan Pre-Approval may make the difference from getting your offer accepted or getting rejected by a seller. If a borrower does not significant funds available or down payment, DPA programs may help the buy a home.
Conventional Loans have minimum credit score requirement of If a borrower has a credit score lower than this, FHA financing may be the only option. Many borrowers with a credit score lower credit scores may have no problems qualifying for FHA financing when Conventional loans are not an option. If a borrower already has an FHA Loan but does not have a significant amount of equity in their home, they may qualify for a rate reduction through an FHA Streamline Refinance. This loan type may allow them to drop their rate and payments without an appraisal or documenting income and with little to no costs.
This is a program unique to FHA financing and can help a borrower that purchased their home when their credit scores were lower but have since improved. Mortgage insurance may be significantly cheaper on Conventional loans versus FHA loans.
Easily Receive More Information
To get more information on what loan type maybe the best fit for your situation, call a licensed loan officer today at or request information below. One of the biggest myths of using a Mortgage Broker is that they do not have control of the underwriting process. Many retail lenders and banks claim this because they have employees that underwrite the file whereas a mortgage broker works directly with the end investor to underwrite the file. If they make a mistake, the end investor may refuse to purchase the loan.
Local Mortgage Brokers have a choice on which bank or end investor they want to send their loans. If one does a poor job by not clearing the loan quickly, the mortgage broker may choose to no longer do business with them. This forces underwriters to remain accountable and nimble on clearing conditions. If a retail loan officer at a bank or direct lender is having difficulties clearing the conditions on their loan, they have no other options because they are held captive to their once underwriter which is the only option they have.
The second myth about using a mortgage broker is that they take longer than a retail lender or a bank. According to the January Ellie Mae Mortgage Origination Survey of many major banks and lenders, the average time to close a mortgage is 45 days! Using a mortgage broker, the average closing time is 21 days which is less than half of the retails and bank lenders. Taking over 30 days to close a loan with a mortgage broker would be uncommon or the result of 3rd party issue.
Mortgage brokers operate more quickly because all they do is mortgage loans. While banks may have other services such as auto loans, credit cards and checking accounts, these are distractions from closing mortgages quickly! The third mortgage broker myth is that mortgage brokers cost more than banks and retail lenders.
This could not be further from the truth! For nearly all loans that mortgage brokers close, there are zero origination fees. This means no underwriting fee, no origination fee and no processing fees. For many banks and lenders these fees could be thousands of dollars that are charged to the clients and add to the cost of buying a home. Mortgage brokers have access to the lowest rates in the mortgage industry. Like Verizon Media, our partners may also show you ads that they think match your interests.
Learn more about how Verizon Media collects and uses data and how our partners collect and use data. Select 'OK' to allow Verizon Media and our partners to use your data, or 'Manage options' to review our partners and your choices. Tip: Sign In to save these choices and avoid repeating this across devices. You can always update your preferences in the Privacy Centre. When reviewing your credit report you should look for common credit problems such as delinquent payments, defaulted loans, unnecessary debt and unnecessary credit.
Be prepared to close out unused credit card accounts, pay off smaller debts and explain late payments or credit discrepancies. You may ask a creditor to review your application and pre-qualify you for a mortgage or other loan. By pre-qualifying you will know how much money you will receive, how much home you can buy or how much equity you can pay to your spouse if you are cashing them out.
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To re-establish or improve your credit rating after a divorce, it is important to remember that even the longest journey starts with one step. Obtain a credit card. Avoid those credit cards that charge exorbitant fees or secure the debt on purchased assets.
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Secured credit cards typically have higher interest rates than unsecured card and annual fees also are common. Often small visa card companies are a good place to start. Even if your credit is poor, you may be able to obtain a credit card with a small credit limit. When you obtain the credit card, use it and, most importantly, pay your bills on time.
This information will be reported to the credit bureaus demonstrating that you are a good financial risk. After several months, apply for another card. Continue using credit cards and paying the associated bills on time. Before you know it, you will have re-established your credit. Information Provided by: Maury D. Beaulier, Esq. Enter Your Zip Code:.
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