07 Feb 2018
By Kevin Gahagan

Case-Shiller Home Price Growth Ticks Upward in November Reading

Home Values

Home prices increased in November, with national home prices up 0.70 percent month-to-month and 6.20 percent higher year-over year. Case-Shiller’s 20-City Home Price Index rose by 0.70 percent in the three-month period ending in November; nationally, home prices grew 6.20 percent year-over-year. Seattle, Washington held first place in home price growth with a year-over-year increase of 12.70 percent. Las Vegas, Nevada home prices followed with year-over-year home price growth of 10.60 percent. San Francisco, California home prices grew by 9.10 percent year-over-year. Slim supplies of homes for sale drove rising home prices and sidelined would-be borrowers as affordability remained out of reach. Home Prices Get a Pre-Recession Do-Over in Some Cities David M. Blitzer, Chairman of the S&P Dow Jones Indices Committee, said that Los Angeles and San Diego California along with Las Vegas, Nevada and Miami Florida are repeating fast-paced price gains that they had prior to the recession. Mortgage Rates, Building Costs Impact Supply of Homes and Affordability Combined effects of high mortgage rates and rapidly rising home prices could dampen buyer enthusiasm over time, but the time-worn proclamation that what goes up must come down has not applied to home prices in high demand metro areas. Home buyers may rush to close their home loans before rates rise, but more buyers may delay buying a home due to few options, higher home prices and rising rates. Lower taxes and rising wages may encourage renters to buy homes, but home prices continued to outstrip income for many potential buyers. Building more homes is the only relief in sight for low inventories of homes for sale, but builders face rising materials costs, shortages of lots suitable for building and insufficient workers. Other factors impacting home building and buying homes include poor weather in some areas during December, and further shortages of homes caused by natural disasters in 2017. 2018 may see high-priced local areas develop affordable homeownership programs as current prices continue to rise above interested buyers’ financial resourcesHome prices increased in November, with national home prices up 0.70 percent month-to-month and 6.20 percent higher year-over year. Case-Shiller’s 20-City Home Price Index rose by 0.70 percent in the three-month period ending in November; nationally, home prices grew 6.20 percent year-over-year.

Seattle, Washington held first place in home price growth with a year-over-year increase of 12.70 percent. Las Vegas, Nevada home prices followed with year-over-year home price growth of 10.60 percent. San Francisco, California home prices grew by 9.10 percent year-over-year. Slim supplies of homes for sale drove rising home prices and sidelined would-be borrowers as affordability remained out of reach.

Home Prices Get a Pre-Recession Do-Over in Some Cities

David M. Blitzer, Chairman of the S&P Dow Jones Indices Committee, said that Los Angeles and San Diego, California along with Las Vegas, Nevada and Miami, Florida are repeating fast-paced price gains that they had prior to the recession.

Mortgage Rates, Building Costs Impact Supply of Homes and Affordability

Combined effects of high mortgage rates and rapidly rising home prices could dampen buyer enthusiasm over time, but the time-worn proclamation that what goes up must come down has not applied to home prices in high demand metro areas. Home buyers may rush to close their home loans before rates rise, but more buyers may delay buying a home due to few options, higher home prices and rising rates.

Lower taxes and rising wages may encourage renters to buy homes, but home prices continued to outstrip income for many potential buyers.

Building more homes is the only relief in sight for low inventories of homes for sale, but builders face rising materials costs, shortages of lots suitable for building and insufficient workers. Other factors impacting home building and buying homes include poor weather in some areas during December, and further shortages of homes caused by natural disasters in 2017.

2018 may see high-priced local areas develop affordable homeownership programs as current prices continue to rise above interested buyers’ financial resources. 

06 Feb 2018
By Kevin Gahagan

The 4-Step Financial Checkup to Get Ready for a Mortgage in 2018

Home Mortgage Tips

The 4-Step Financial Checkup to Get Ready for a Mortgage in 2018Are you ready to join the ranks of homeowners in our local community? Congratulations – homeownership is a big step towards building your net worth and financial freedom. However, it is also a significant transaction that will affect your finances for the foreseeable future. Let’s take a look at a quick four-step checklist that will help you to get ready to buy a home with a mortgage in 2018.

Step 1: Set Up A Monthly Budget

It might sound a little basic, but the best first step is to commit to a monthly budget. After you buy a home using a mortgage, you will be responsible for making monthly payments for a period of time. The faster you get used to working inside of a budget, the better.

Your budget doesn’t have to be extravagant. Simply list your sources of income and your expenses. If you are spending more than you are making, you are going to need to cut back a bit.

Step 2: Start Setting Aside Your Down Payment

If you haven’t already, it is an excellent time to start gathering the funds necessary to make your down payment. This is the amount of cash that you put forward against the price of the home. The remainder of the purchase cost is covered by your mortgage, which you will pay off monthly in the future.

Note that the standard down payment amount is 20 percent of the home’s purchase price. If you have less than this available, you may be required to purchase mortgage insurance. But don’t let this deter you from starting the process now, especially if you have found the house that you want to buy.

Step 3: Check Your Credit Rating

Next, you will want to check your credit rating and FICO score to find out if you have any outstanding issues. You can access a free credit report from any of the major reporting agencies up to once per year, so be sure to take advantage.

Step 4: Meet With Your Mortgage Advisor

Last, but not least, you will want to schedule a meeting with your mortgage advisor. This is your opportunity to have all your mortgage-related questions answered by a professional who has your best interests in mind. If you decide that you are ready to move forward with buying a home, you can begin the pre-approval process at your convenience. We look forward to helping guide you down the path to buying your dream home!

05 Feb 2018
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – February 5th, 2018

Market Outlook

Whats Ahead For Mortgage Rates This Week – January 29, 2018Last week’s economic releases included readings on pending home sales, Case-Shiller Home Price Indices and construction spending. The Federal Open Market Committee of the Federal Reserve released its monthly statement and weekly readings on mortgage rates and new jobless claims were released. Last week’s economic readings wrapped with a report on consumer confidence.

Case-Shiller: Home Prices Rise in November

Home prices rose an average of 0.70 percent monthly and 6.20 percent year-over-year according to Case-Shiller’s national home price index for November. Seattle, Washington posted the highest year-over-year home price growth rate at 12.70 percent. Las Vegas, Nevada posted year-over-year home price growth of 10.60 percent and San Francisco, California posted a home price growth rate of 9.10 percent. Home price gains were attributed to slim supplies of available homes in many areas.

While analysts suggested that strong housing markets (as reflected by high demand for homes) were good for the economy, issues of affordability, slim inventories of homes available and obstacles facing builders continue to impact housing markets.

Recent gains in home prices are fueled by artificially high demand caused by low inventories of homes for sale. Builders cited shortages of labor and buildable lots and said increasing materials costs were impacting rising prices for new homes. Construction spending rose 0.70 percent in December, which exceeded expectations of 0.50 percent and November’s month-to-month reading of 0.60 percent growth in construction spending.

Pending Home Sales Rise, Key Fed Interest Rate Unchanged

The National Association of Realtors® reported 0.50 percent growth in pending home sales in December and the highest month-to-month reading since March 2017. Year-over-year pending home sales gained only 0.50 percent. Pending sales reflect purchase contracts signed with sales not yet closed.

The Federal Reserve’s Federal Open Market Committee announced that it would not raise the target federal funds range of 1.25 to 1.50 percent, but indicated that inflation was nearing the Fed’s goal of 2 percent annually. Analysts said this could foreshadow a rate increase at the Committee’s next meeting in March.

Mortgage Rates, Weekly Jobless Claims

Mortgage rates rose last week according to Freddie Mac’s weekly Primary Mortgage Markets Survey. Rates for a 30-year fixed rate mortgage rose by seven basis points to an average of 4.22 percent; the average rate for a 15-year fixed rate mortgage rose six basis points to 3.68 percent. The average rate for a 5/1 adjustable rate mortgage ticked up one basis point to 3.53 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims dipped by 1000 claims to 230,000claims. Analysts expected 240,000 new claims. The University of Michigan reported a lower reading for consumer sentiment in January with an index reading of 95.7 as compared to an expected reading of 95.0 and December’s reading of 95.90. Consumer sentiment remains near pre-recession highs. Consumers cited tax breaks and large stock market gains as the basis for high confidence.

What‘s Ahead

This week’s economic releases include readings on job openings and consumer credit along with weekly reports on mortgage rates and new jobless claims.

02 Feb 2018
By Kevin Gahagan

What Is Mortgage Insurance and How Does It Benefit Me? Let’s Take a Look

Home Mortgage Tips

What Is Mortgage Insurance and How Does It Benefit Me? Let's Take a LookAre you in the market for a new home? If you are considering a mortgage, you may be curious about mortgage insurance, commonly referred to as PMI or MI. Let’s explore the topic of mortgage insurance, including how it works to reduce risk and how it benefits you as the mortgage borrower.

Mortgage Insurance = Risk Reduction

You might not know this, but the toughest part of the home buying process for many individuals and families is coming up with the required down payment. For example, if you were to buy a $200,000 home, you may want to invest $40,000 or $60,000 or more in the down payment. The remainder would be borrowed in your mortgage, which you would then pay off each month.

Most mortgage lenders require a minimum of 20 percent as a down payment. In the example above, this means having $40,000 cash on hand before you buy the home. If you can’t come up with this much, your lender may require mortgage insurance be purchased to protect them in case you default on the loan.

Mortgage Insurance Can Help You Qualify

Since mortgage insurance reduces the lender’s exposure to risk, it can help you in a number of ways during the qualification process. First, you can put less in your down payment than you had initially intended, which can increase your buying power and the size of home you can afford. Mortgages backed with a private insurance policy tend to be approved a bit faster than those that aren’t. Also, if you decide that you don’t need it later, many mortgage insurance policies can be canceled, which saves you a bit of money.

Look For Supplemental Benefits

Finally, don’t forget to ask your mortgage lender about any supplemental benefits offered with your mortgage insurance policy. Some policies protect you in the event that you lose your job or provide a partial claim advance if you can’t pay your mortgage. Note that not all policies have these benefits, so be sure to ask.

While it is true that mortgage insurance provides benefits to lenders, it also offers significant benefits to you as the borrower. To learn more about mortgage insurance or to get pre-approved for a mortgage so you can buy a home, give us a call today. Our friendly team of mortgage professionals is happy to help.

01 Feb 2018
By Kevin Gahagan

The Mortgage Helper: How to Find the Perfect Tenant for Your Basement Suite

Around The Home

The Mortgage Helper: How to Find the Perfect Tenant for Your Basement SuiteDo you have an empty basement or separated suite in your home? If you have a suite sitting empty, you are missing out on collecting some extra monthly income in the form of rent. Let’s take a look at a quick four-step process that will help you find the perfect tenant to rent out your basement suite.

Step 1: Play By The Rules

Is this your first time renting out a home or suite to a tenant? If so, you will want to do a bit of research first. Read up on Fair Housing Rules and other regulations as these will inform you of your responsibilities as a landlord. Keep in mind that you cannot discriminate in any way when it comes to race, religion, gender, family status or disability. Anyone who applies must be given a fair chance.

Step 2: Be Specific In Your Advertising

When you place a rental listing, be as specific as possible in what you are looking for in a tenant. If you are a single, quiet person, you may want someone similar as you will be compatible. Conversely, if you are a young couple, you may clash with a retired senior or someone older. Be as specific as possible but remember that you cannot be discriminatory.

Step 3: Meet Potential Tenants In Person

Be sure to take the time to meet with every short-listed applicant in person. If you are not comfortable with having so many strangers over to your home, consider meeting at a local coffee shop. An in-person meeting will allow you to visually assess the person and determine if your personalities are a fit for living in the same home.

Step 4: Don’t Skip The Checks

Finally, don’t take any shortcuts when performing background, credit and other checks. Ask your tenant for at least one or two references that you can call to verify their rental history. Investing in a credit check will help to assess their risk of missing monthly rent payments. And if necessary, a criminal records check can let you know if they have been in trouble with the law.

As long as you are well-prepared and diligent, finding a suitable tenant for your basement suite can be a painless process. To learn more about mortgage products are perfect for rentals, contact us today. Our mortgage team will be happy to help you!