New Found Optimism In The Housing Market Among Americans

After months and months of declined confidence in the housing market, Americans are shifting their opinions. Data collected by Fannie Mae’s Home Purchase Sentiment Index shows an improved assurance after a 5 month decline.

“Three months after the presidential election, measures of consumer optimism regarding personal financial prospects and the economy are at or near the highest levels we’ve seen in the nearly seven-year history of the National Housing Survey,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

It seems the new presidential administration has sparked consumer optimism in the economy, and their personal financial visions. This increase in housing optimism could spark an acceleration in housing action. However, it’s important to mention that even though consumers believe it’s an optimal time to sell their homes, they aren’t too thrilled about their prospects in purchasing a new home.

The American people’s belief that home prices would increase over the next year rose by seven percentage points while the percentage of those who believe it’s a good time to purchase a home decreased by three percentage points. The number of individuals who believe mortgages will stay the same remained unchanged.

Housing In 2017 Under New Administration

Over a month into the Trump presidency, we are already seeing the impact the new administration is having on the housing industry. In fact, in a matter of hours after being inaugurated, President Trump issued an executive order that immediately suspended a fee reduction that was set to go into effect on FHA loans. This reduction would have cut the fees by .25 percentage points of the total amount borrowed.

Reactions to this new order have been mixed across the board with some advisors believing the suspension will take money away from low income homeowners while others believe the action will protect taxpayers if we were to experience another housing crash.

Regardless of who takes office, rate volatility has always been present at the start of a new administration, and the expectation is no different for Trump’s presidency. Uncertainty about the president’s plans for tax reform and financial regulations is the main cause of rate volatility at the beginning of a presidential term. As President Trump begins to make his financial regulatory plans clear, we will begin to see which way the ball rolls as far as mortgage rates go.

Barring a recession, home prices are expected to steadily rise, but as building and construction increases to keep up with demand from new homebuyers, prices will eventually plateau. We are already beginning to see price increases due to housing demand in response to the Trump administration’s push to reform the Dodd-Frank Act which would make it easier for homebuyers to borrow.

It’s important to keep in mind that although the president and his administration do have a major impact on the housing market, there are many other factors that have influence as well.

The New Year Brings A Drop In The 30-Year Fixed Mortgage Rate!

For the first time since the presidential election, we are finally beginning to see a drop in mortgage rates. The 30- year fixed mortgage rate increased by 40 basis points in the two weeks following the election, raising the rate to 3.94%, as stated by Freddie Mac Chief Economist, Sean Becketti.

According to a report done by Freddie Mac, the 30- year fixed rate mortgage ends the week of January 5, 2017 at 4.20%; this is down from the previous week’s 4.32%. The 15- year fixed rate mortgage rate sits at 4.44%, down from last week’s 5.55%.

After a gradual increase over the past nine weeks, the decrease is a welcome break from the rising rates. With that being said, rates are still looking good for those in the market to refinance or purchase a new home, and now may be an optimal time to act!

Check out AmeriSave’s rates today, and let us serve all of your mortgage needs!

Don’t Let The Fear Of Rising Rates Take You Out Of The Race!

With a new government administration set to take office, the mortgage industry is in for some changes, which is to be expected with any new elected president. Since the election, Americans have seen an aggressive increase in mortgage rates, which are currently siting at their highest level since May 2014; that, along with the news that the federal reserve voted to raise interest rates, has borrowers wondering how the new changes will affect their lending options. However, fear of rising rates shouldn’t be a deterrent considering they are still reasonably low.

According to a survey done by Freddie Mac, last week the average rate for a 30-year fixed-rate mortgage was 4.13%, this week the rate rose to 4.16%. This time last year, the average rate was 3.97%. This means, if a borrower were to put a 20% down payment on a $241,000 home today, they’d only be paying about $21 more each month compared to what they would have paid a year ago.

Right now the fear of rising rates has painted a doom and gloom picture on the mortgage industry that is far from the truth. Rates under 5% have been the norm for the last decade, and we have quite a way to go before that changes. Perspective is key when examining rates, and by historical standards, rates are still looking great for 2017. Consider this, if interest rates were to increase another 25 basis points, the change in mortgage payments would be insignificant.

If you’re in the market for a new home or considering refinancing your mortgage, now may be the time to act! Let AmeriSave serve your mortgage needs. Check out our rates today!

FHA Increases Conforming Loan Limit

For the first time in 10 years, the Federal Housing Finance Agency (FHFA) has raised conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac. Separate loan limit announcements are expected shortly from FHA and the Veterans Administration.

The current loan limit, $417,000, has been in place since 2006. When the housing crisis hit, the Housing and Economic Recovery Act of 2008 (HERA) set the baseline loan limit at that existing level for one to four family houses in most of the U.S. and required it be adjusted each year to reflect any changes in the national average home price. When prices continued to decline HERA also made clear that the baseline could not be adjusted upward until the average U.S. home price returned to its pre-decline level.

Why Getting A Home Mortgage May Be The Right Move Even If You Can Pay In Cash

Since we were old enough to care, we’ve probably had it instilled in our minds that debt is a bad thing and to avoid it at all costs. Many would say this was sage advice, and few would argue with that notion; I wouldn’t argue with that notion.

I will, however, contend that mortgage loans may actually be favorable over paying for a home in cash. Now, before you disregard everything I’m about to say, hear me out.

Related: How to Apply For a Mortgage

Not everyone has disposable income they can throw at a house to pay for it in full, but if you do, you’re probably a money savvy individual who makes smart financial choices. With that, obtaining a mortgage allows you to invest the money you would use to purchase a home into stocks, bonds and other types of investments.

Why is this good?  Well think about it like this, say you take $300,000 (price of your potential home) and sock it away in a mattress for future use, such as retirement. That may seem like a sizable nest egg, but with the average cost of living sitting at $40,938 per year (without taking into account possible social security or pension payments) you’re going to run through that $300k in less than 10 years.

Now, say you take that $300,000 and invest it in a diversified, balanced portfolio of stocks and bonds. Over time your assets may grow, and once you’re ready to use that money (let’s say for retirement), you could have grown your investment considerably by letting your money work for you. Investments allow the money you have saved to generate more income through interest.

Of course, you can counter this logic by pointing out that a mortgage includes paying a sizable amount of interest over the course of the loan. While it is true that you’ll be paying interest that you otherwise would not have paid by buying your home with cash, with current interest rates as low as they are, there is the possibility that the gains you make in the market more than offset the interest you’ll pay on the loan. A good compromise may be to make a sizable down payment and invest the rest, that way you are diversified among real estate and the stock market.

Growing your liquid money through investments isn’t the only high point in getting a mortgage. Thanks to the IRS, you can deduct interest payments from your taxes and put that money towards your savings, and who doesn’t love tax deductions!

Remember, even if you purchase a home in cash, there are still regular payments that need to be made on property taxes, home insurance, and HOA fees.

At the end of the day, the decision to get a mortgage loan or pay in cash is up to you and depends on what’s best for your needs. If getting the most bang for your buck is a priority, then a mortgage may be a very good option. Growing your liquid funds and having money stored up for an emergency is a great reason to opt out of paying cash for a home, even if you can afford it.

Interested in applying for a mortgage? Head over to AmeriSave.com and check out our rates today!

The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this forum is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The information is general in nature and is not specific to you the reader or anyone else. YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS FORUM WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. You understand that you are using any and all information available on or through this forum AT YOUR OWN RISK.

RISK STATEMENT – The trading of stocks, futures, commodities, index futures or any other securities has potential rewards, and it also has potential risks involved. Anyone wishing to invest should seek his or her own independent financial or professional advice.

6 Things That Can Drive Up Your Mortgage Rate

When applying for a mortgage loan, every borrower hopes to receive the best rate possible. However, many may not be certain what factors actually determine the rate they receive.

Check out our list below of the top 5 things that could be driving your mortgage rates through the roof!

1) Credit Score

This is a given and many are aware that in order to receive the best rate possible, your credit score must meet your lender’s credit threshold.

If your score is under that threshold, you could end up paying more interest as opposed to someone whose credit score is higher.

Check out our blog post on the 5 steps you should take to get your credit, mortgage ready!

2) Occupancy

If you are mortgaging a property that isn’t your primary residence, you could pay significantly more in interest.

Because second homes are riskier investments, interest rates reflect those risks lenders must take into account for negative possibilities.

3) Loan Amount

If your loan amount is really high or really low, you could pay more in interest. Loans over or under the conforming loan limit could possibly see raised interest rates due to lenders having to make up costs.

4) Location

Depending on the state you live in, your interest rate could end up being higher or lower.

5) Down Payment

Generally speaking, putting down a higher down payment could make your interest rate lower. This is because the more stake you put into your future property, the less of a risk you become.

6) Type of Interest Rate

There are two types of interest rates: fixed and adjustable. A fixed interest rate stays the same whereas an adjustable rate changes based on the market.

You typically can get a lower adjustable rate; however, over time that rate could go up or down.

Check Out These 5 Steps To Get Your Credit Mortgage Ready!

If you’re considering buying a new home, then you’re probably aware of the criteria that factors into obtaining a mortgage loan. However, one of the many standards that concern most individuals is the shape of their credit.

Your credit does affect your loan eligibility and rate, that’s why it’s important to take steps in order to improve your report/score before submitting an application.

Check out these 5 steps so that you can have confidence when applying for your next home loan!

1.  Check your credit report

Okay, first things first, check your credit report. You’ve probably heard this advice many time, but there is a reason it is the first step you should take. Credit reports may have mistakes; in fact, according to a report by the Federal Trade Commission, 1 in 5 Americans have an error on their credit report. Those aren’t the best odds. Spending time once a year reviewing your report to confirm there are no errors can increase your score and ultimately save you money; better scores typically equal better rates.

2.  Pay down your debt

You’ve probably heard of this little thing called debt-to-income ratio, and if you haven’t, get acquainted with this term. Basically, your debt-to-income ratio is the total of your monthly debt payments divided by your monthly gross income. The higher your ratio, the bigger risk you are to a mortgage lender because you’re less likely to be able to pay your monthly mortgage bill. Paying down debt and paying off collections will also be good for you in the long run because it’s less monthly payments you have to make on top of your mortgage.

3.  Don’t over utilize your credit

No matter how high the limit is on your credit cards, utilizing a high percentage can have a negative impact on your credit. A good rule of thumb is to keep your utilization under 30%, so if you had a credit card with $1500 limit, you wouldn’t want to spend more than $450 at any given time. Also, if you can afford to pay off your credit cards in whole every month, that can help boost your score.

4.  Diversify your credit lines

This may seem counterintuitive, but with responsible managing, having several forms of credit lines can improve your credit. A good mix of credit cards and loans that you make regular, on-time payments with low utilization shows lenders that you are responsible with your debt.

5.  Get some credit

For many, the world of credit cards and personal loans seems daunting and scary, so they opt out of dealing with any form of credit at all. However, building a credit history is important if you plan on purchasing a home with a mortgage. The older your credit history the better, so start building soon. Secured cards and small loans are good starting places. If you’re still unsure, ask a financial professional for help.

If you already follow these steps, then you’re on the right track and may be ready to venture into home ownership. Check out our rate calculators and get your no obligation quote today!

What Is A Reverse Mortgage?

You’ve finally reached the golden age of 62 and now qualify for a reverse mortgage, so how does this impact you? Well, quite frankly all this means is you have more options, and who doesn’t like having options!

With a reverse mortgage, or a home equity conversion mortgage, eligible homeowners can pull equity out of their homes. Basically, you receive a loan based on your age and the amount of equity you have built up. After your existing mortgage is paid, the remainder of the loan amount is yours to spend; however, you are still responsible for tax and insurance payments.

As the borrower, you are not required to pay back the loan for as long as you live in the home and the loan is non-recourse, meaning neither you nor your heirs are required to pay back more than the sale price of the home.

For more information and details about what a reverse mortgages is, visit https://www.reversemortgage.org/About

Still wondering if a reverse mortgage is right for you? Check out this information from the CFPB to help you make your decision.

Historically Low Rates Continue To Increase

Mortgage rates slowly continue to creep up but that’s not discouraging borrowers from purchasing homes. In fact, due to historically low mortgage rates, home sales are increasing at a pace we haven’t seen since 2008.

According to data, the 30-year fixed- rate mortgage increased to 3.48% from last week’s 3.45%, and the 15-year fixed- rate mortgage increased to 2.78% from last week’s 2.75%. The adjustable rate mortgage remained the same at 2.78%.

Even with the slight increase, mortgage rates remain low and now is still an optimal time to purchase or refinance a home. Speak with a professional adviser and check out our page at www.amerisave.com to view today’s rates and get your mortgage quote in minutes.

Check out our post: Refinance applications drop as purchase applications rise