The Fed voted to raise its benchmark short-term interest rate by a quarter percentage point. This move will most likely push up rates on mortgages, credit card rates and other types of consumer loans in the short term.
Consumers with credit card debt, adjustable-rate mortgages and home equity lines of credit are the most likely to be affected by a rate hike, says Greg McBride, chief analyst at Bankrate.com. He says it’s the cumulative effect that’s important, especially since the Fed already raised rates in December 2015 and December 2016.
“These interest rate hikes could add up to hundreds of dollars per month in extra fees for credit card, adjustable-rate mortgage and HELOC borrowers,” McBride says.
The Fed’s likely decision to lift the federal funds rate, which is what banks charge each other for overnight loans, will have several effects on consumers. Here's how it may impact mortgage rates, auto loans, credit cards and bank savings rates:
The Fed’s key short-term rate affects mortgages and other long-term rates only indirectly.
Thirty-year fixed mortgage rates hit a 2017 high last week as the average jumped to 4.21% in anticipation of the Fed’s move Wednesday and another similar hike. That is up from a year ago when the average 30-year mortgage rate was 3.68%, according to Freddie Mac.
“For consumers currently shopping for a mortgage to purchase a property or refinance an existing loan,” says NerdWallet mortgage analyst Tim Manni, a Fed rate hike "shouldn’t feel like a real shock to the system since the rate move has already been 'baked' into the market.”
A third hike later this year could boost the rate by as much as another quarter-point or so, increasing the monthly mortgage payment on a $200,000 home by up to $30
Applicant must be a U.S. Citizen or Permanent Legal Resident of the United States.
Application materials must be received by June 15th, 2017 in order to be considered. The following materials should be submitted:
To provide financial assistance to a student with an interest in Business/Marketing/Entrepreneurship
The recipient will receive a one-time $500 scholarship to be applied to qualified expenses including tuition, fees, books, and on-campus room and board for the 2017 Fall Semester. Funds are provided by Net Equity Financial. Payments are issued by Net Equity Financial and made directly payable to the student’s approved college or university and mailed after June 30, 2017 directly to the accredited college or university last designated by the student.
The winner is selected after Net Equity Financial reviews all entries by June 15th,2017. Applicants are judged on creativity, thoughtfulness, and insight. The winner will be announced by June 30th, 2017.
The institution must be accredited and listed on the official website of the U.S. Dept of Education. Applicants attending military academies are ineligible for this scholarship. All school transfers are subject to accreditation approval.
The recipient must be actively enrolled as a full-time freshman, sophomore, junior, senior, or graduate student in spring 2017 —barring illness, emergency, or military service. It is the recipient’s responsibility to verify receipt of funds with their designated institution and notify Net Equity Financial should the award check not arrive on or about 30 days from the issue date. Net Equity Financial reserves the right to alter or discontinue this program at any time without notice.
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On the other hand, for those who don't, or do not wish to escrow, a different situation often plays out. Once you bought your house, you paid the original tax bill and bought a homeowners policy with a check. Hopefully you set out with some type of plan to budget 1/12 of those bills in a special account so that when next years bills come do, you can just withdrawal the money, pay the bill and all is well. What sometimes happens is the "out of sight, out of mind" theory, followed by the "didn't I just pay that". Yes, you did...last year. Unless you have iron discipline, it can be challenging to try and save the money each year. Even if you are successful for a while, things come up. It's there to dip into for car tires, home maintenance, etc all with the good intention of replacing it as soon as you can because taxes arent do for a while yet.
My final word on this one, from my own experiences as both a homeowner who has done both and as a lender is, "When in doubt, go the escrow route." Get your FREE Quote Now!
Before applying for a Pa mortgage loan, Do Not make Major Purchases of any kind or take on any unnecessary debt if you can avoid it. Reason being that bills for appliances, jewelry, ,furniture, vacations, cars orany of these expenses that may show up on a credit report can affect your DTI. (debt ratio) A 0% interest free loan for a year on some appliances from Home Depot still may need to have a monthly figure attached to it on your credit bureau, often 5% of total balance. That seemingly insignificant amount could be the difference on what rate your lender is able to approve you at, or worse yet, whether you get approved for the mortgage loan at all. Better safe then sorry. Get the loan then buy the appliances (or whatever else) later. You'll be glad you did.
Keep your funds where they're at. That includes checking, savings, money markets, CD's, retirement funds, 401k savings, mutual funds or stocks. Remember that a loan officer may need a paper trail of each account and transaction you make and it can be very messy. All loans require proper documentation especially these days. Lenders, banks and credit unions triple check every loan file for quality control, accuracy and fraudulent activity so leave your cash parked where it's at until you get solid advice from your lending professional. And by the way, consider not changing banks either.
Tips for First Time Home Buyers
Hire a buyer’s agent to save you time and money
If you are considering buying a home, hire a buyer’s agent. An agent will save you time in finding a home that meets your needs. They can send you listings to view the details and photos before actually setting foot out the door. Also, agents often know of new listings that aren’t on the market yet. Besides, the seller is the one that will end up paying the commission, so take advantage of having some representation on your side, it doesn’t cost you anything.
Set up the financing for your new home purchaseThink about getting the loan before buying a home. It is smarter to go house shopping with a preapproval letter in your hand. When that day comes along that you want to make an offer, it will make your offer a lot stronger when the seller doesn’t have to worry so much as to you having to get financing. Get preapproved now!
Negotiate a successful deal that benefits both parties
Make sure your buyer’s agent gives you a list of comparable sales in the area. This will help you determine how much to bid on the home. The last 3 months sales are a good gauge for you to determine what to bid. Remember there are always more details to the offer than just the price. Examples are: how soon you want to move, having a pre-approval, seller’s assist, the items you want them to leave in the house. There are many details so be sure so sit back and think of the things that are important to you.
Make home inspections part of the plan
You may want to make your offer contingent on the home inspection. If you find out the home has foundation issues, you may decide against buying it. Having a home inspection will let you know exactly what you are getting into. Some people hate to spend another $300-$500 on the inspection, but it does give you the opportunity to address with the seller the problems of the home. Also, it lets you negotiate the items you would like them to address.
Remember buying a home is a step by step journey, there is no easy way there. There are many hurdles to go over to end up living in your dream home, but if you take them one step at a time, you’ll be well on your way to home ownership in no time. Get your FREE Quote Now!
The escrow company will order the payoff from your mortgage company. The interest is prorated to the day of funding/closing. There may be additional fees included in your payoff that the lender will charge, such as:
Often times, the escrow company will request the payoff with a few additional days factored in to act as a cushion. The escrow company may (should) order an updated payoff closer to the signing date in order to provide the most accurate figures possible. The lender being refinanced will refund any difference in your favor. In addition, if you have an escrow reserve account for taxes and insurance, you will receive a refund from the lender in approximately 6-8 weeks after closing.
At your signing appointment, ask to receive a copy of your payoff statement. Check to see how recently it was requested. If it was ordered at the beginning of the transaction and you have since made a mortgage payment, you can ask the closer to order an updated statement prior to closing (with a refinance, there is a three day right of rescission that takes place, so there should be enough time for this to take place with most lenders).
FHA loans are the new most popular mortgage loan. During the housing boom, subprime mortgages were all the rage. But as the housing market fell apart, lending standards tightened and the benefits of FHA mortgages are more prevalent. FHA is a good alternative to for first time buyers to be able to qualify and become a homeowner even though they don't have a large amount of cash to put down.You can borrow 96.5% of the value of the home. You only need to come up with a 3.50% downpayment. Minimum credit scores are typically lower, as well as you won’t be disqualified if you have a bankruptcy or foreclosure. With FHA loans, you can also refinance with them. You need to be current on your payments, but you may not need to get your home appraised. And typically there is a lot less paperwork involved. FHA currently allows sellers to contribute up to 6% towards the buyers closing costs. Lastly, FHA loans come with fixed rates. Many reasons homeowners got into trouble was their mortgages were adjustable rates and their monthly payments became very unstable.
One of the most important factors today in getting a Pennsylvania mortgage is knowing your credit score and history. Your credit is going to determine a lot of things, whether you can get a mortgage, how much you'll have to put down and what your interest rate will be.If you've had a blemish or two on your credit report (and who hasn't these days) here are a few tips toward improving your scores.
Many people consider this option since they don't have money set aside in their savings account. By withdrawing money from your 401k you will have to pay early withdraw fees as well as taxes on the money you take out. On the other hand, it may be worth it if you found the right house.
As a first time homebuyer you can often avoid the penalties, but you will have to pay taxes on the money. However, you can usually take the money out of your 401k without a penalty if you basically take out a loan on the money,( if your employer permits loans.)Get your FREE Quote Now!
Also, unless you are putting at least 20% down on the home purchase, you will more than likely have pmi insurance. Since there isn’t going to be a huge difference in the monthly payment on the insurance itself, it may be in your better interest to consider not borrowing from the 401k unless you have enough to put the entire 20% down to avoid the insurance all together.
If you have an accountant I would suggest you sit down with them and see what this impact would have on each situation in relation to your taxes. It is unique to every individual.
With a fixed-rate loan, your payment stays the same for the entire duration of the mortgage. The amount of the payment that goes to principal (the loan amount) increases, but your interest payment will decrease accordingly. Your property taxes increase, or rarely, decrease, and your insurance rates might vary as well. But generally monthly payments for a fixed-rate loan will increase very little.
Your first few years of payments on a fixed-rate loan are applied mostly to pay interest. The amount applied to principal increases up slowly each month.
You might choose a fixed-rate loan in order to lock in a low interest rate. People select fixed-rate loans when interest rates are low and they want to lock in at this lower rate. For homeowners who have an ARM now, refinancing into a fixed-rate loan can provide greater monthly payment stability. If you have an Adjustable Rate Mortgage (ARM) now, we can help you lock in a fixed-rate at the best rate currently available. Call Net Equity Financial Mortgage at (215)741-3131 to discuss how we can help.
Adjustable Rate Mortgages — ARMs, come in a great number of varieties. ARMs are normally adjusted every six months, based on various indexes.
Most ARM programs have a "cap" that protects you from sudden monthly payment increases. Some ARMs can't increase more than 2% per year, regardless of the underlying interest rate. Sometimes an ARM features a "payment cap" which ensures your payment can't go above a fixed amount over the course of a given year. Additionally, the great majority of ARM programs have a "lifetime cap" — this means that your rate will never go over the cap amount.
ARMs most often feature the lowest, most attractive rates toward the start. They guarantee that interest rate for an initial period that varies greatly. You've likely heard of 5/1 or 3/1 ARMs. For these loans, the initial rate is fixed for three or five years. It then adjusts every year. These loans are fixed for a certain number of years (3 or 5), then adjust after the initial period. Loans like this are best for people who expect to move within three or five years. These types of ARMs most benefit borrowers who plan to move before the initial lock expires.
Most borrowers who choose ARMs choose them because they want to get lower introductory rates and do not plan to stay in the home longer than the initial low-rate period. ARMs can be risky when housing prices go down because homeowners can get stuck with increasing rates when they can't sell or refinance at the lower property value.
Getting a mortgage loan, whether FHA, refinancing, or conventional can take a little doing, but here are a few tips to prepare for the process. Get your FREE Quote Now!
1) Gather all your financial information in one place. Current W-2's (or 1099's), at least last years tax returns, preferably the last 2 years, current mortgage statements, 1 month of current pay stubs for all borrowers,
2) Have an idea of what your credit score is. A lender will pull a trimerge report from 3 major credit bureau's and have some questions about these issues. The lender may also guide you in the right direction if your credit is less than perfect on what steps to take to improve it.
3) Be honest and provide accurate information on your application. Credit reports, bank accounts, and jobs are all verified. It's a lot easier to deal with an issue upfront than find out later in the loan process after you've paid for an appraisal and things are moving along.
4) Respond promptly to any requests for additional information so that you get your approval sooner.
MortgageNewsWireAfter the downturn in the housing market several years ago, a lot of homeowners struggled to make their mortgage payments. Many eventually lost their home to foreclosure, walked away or were forced short sell their house for a loss. None of these occurrences left their finances or credit in a position to purchase another home so they became renters. Fast forward 4 or 5 years later to today. The economy is in a better place. The real estate market is in a rebound and many of those people have become gainfully employed again. Despite those past setbacks, the majority of them are hoping to again one day buy another home of their own. Is this just wishful thinking? Perhaps not….
Mike and Jill Kohler, owners of Net Equity Financial, a mortgage and real estate services company in Middletown think it’s not only possible, but likely for many. “There is a good segment of the population that are a lot closer than they think to owning a home again. The first step is overcoming the financing challenge” says Mike Kohler. “If you have been renting and are able to document your rent terms with your landlord for the last 12 months, that will go a long way toward your goal. There is always a supply of nice homes on the market, but the overall goal is to help you find a home that you like, can comfortably afford, and get the financing you need to own instead of rent.” One of the biggest benefits that Net Equity offers their clients is the ability to shop mortgage loans at a lot of wholesale lenders with only one application. “We deal with 40 to 50 different banks, FHA, Freddie Mac, credit unions, and wholesale lenders at any given time. Although a lot of lending today is computerized and straightforward, the value is in knowing where to go with what type of loan. I may be working with a marginally qualified client that I know can afford the house who will get turned down by 35 of those lenders, but it’s having the right funding source to match the type of borrower that matters.” says Jill, And when that happens, It results in a great deal of happiness for our clients as they become homeowners again.Get your FREE Quote Now!
Many first time home buyers also fall into a similar challenging category that Net Equity Financial also service. It’s the classic which came first, the chicken or the egg. “Ok, I’ve graduated from college, finally found a decent job with some long term prospects at a company I’ve been at a little while. and I’ve been able to bank a few bucks. I know I want to buy a house rather than keep paying rent but am I really going to qualify for a mortgage?? Net Equity’s answer. “You just might. But more importantly, the goal is to make sure you can truly afford the home so you don’t become part of a future statistic.” The Kohlers mention they’ve had clients who from their initial contact have been approved, found a house they love and settled within 30-40 days.
Net Equity Financial is a mortgage company located 2267 Langhorne-Yardley Rd in Middletown, Pa. They are also affiliated with Century 21 Chapman Agency Real Estate also of Middletown. Their websites are www.NetEquityLoans.com and www.PaRealEstateForSale.com. Office number is 215-741-3131. They are licensed by the Pa Dept of Banking NMLS #144477 and licensed Realtors by the Pa Real Estate Commission. Get your FREE Quote Now!
1. Easier to get a purchase mortgage in 2014
FHA mortgages with low money down will be a key driver for the first time home buyer. They will be easier to obtain to offset a decline in refinancing.
Higher mortgage rates and higher prices in 2014
Buying will remain cheaper than renting. (til rates hit above 5.25%)
2. Real Estate Market less frenzy
More listings equals inventory in 2014 which is great for buyers. Also fewer investors since prices have risen higher.
A fed cut on bond buying will make rates rise. (when economy strengthens)3. Repeat buyers take center stage
Three types of buyers
To prequalify for a mortgage loan, Get your FREE Quote Now!source: Trulia
Today January 1st, 2014 we usher in a brand new year along with some new predictions for the 2014 housing market.
1) Higher mortgage rates when the fed curtails bond buying and slightly higher real estate prices in 2014 means that Affordability may get worse.
2) Market less frenzy. More inventory in 2014 will mean more listings for buyers to choose from. Fewer investors since prices higher. It may become slightly easier to get a purchase mortgage due to the anticipated decline in refi’s at higher rates. "Qualified" mortgages are good news for buyers, add’l inventory, easier mortgage, but affordability issues.
3) Repeat buyers will begin to drive the market. With prices now higher. That makes a great time for older homeowners to sell and cash out of their current home, and either upsize to the bigger one for their now expanded family, OR downsize to a smaller, more manageable home to retire in.
4) Single family rental homes will stay affordable until 30 year interest rates reach the mid 5's, which may still be a ways off yet.
5) Price growth will slow from the pace of the last couple of years. Get your FREE Quote Now!
There may be some green this Christmas, after all.
Retail sales in November got a surprise lift, rising 0.7%, the biggest gain in five months, the Commerce Department said on Thursday, raising hopes for a solid holiday shopping season and an improving economy.
November’s 0.7% jump follows a 0.6% gain in retail sales in October. Economists had been expecting a 0.6% increase in November.
The gains were across the board.
Sales at automobile dealers climbed 1.8%, the most since June, after gaining 1.1% in October. Revenue also grew at furniture stores, electronics shops and non-store retailers, including online retailers.
A rising stock market, improving home values and declining unemployment have helped lift consumer sentiment, boding well for the economy. Consumer spending accounts for nearly 70% of U.S. economic activity.
Signs of a strengthening economy could prompt the Fed to pull back sooner rather than later on its economic stimulus program.
But it wasn’t all good news on the economic front.
Another report, from the Labor Department, showed applications for unemployment insurance payments jumped by 68,000 last week to 368,000. It was the biggest increase in a year.
with News Wire Services
President Barack Obama on Tuesday proposed and outlined a broad overhaul of the nation's mortgage finance system, including winding down government-backed Fannie Mae and Freddie Mac. He declared that taxpayers should never again be left "holding the bag" for the mortgage giants' bad bets. The president said sweeping housing reforms are still needed to ensure that a rejuvenated market doesn't simply "re-inflate the housing bubble." The cornerstone of that effort is winding down Fannie Mae and Freddie Mac, a proposal with bipartisan support in the Senate.Get your FREE Quote Now!
While the president has previously endorsed overhauling Fannie and Freddie, his remarks Tuesday marked the first time he outlined his specific proposals for doing so.
The president wants to replace Fannie and Freddie with a system that would put the private sector, not the government, primarily at risk for loans. The government would still be involved, both in oversight and as a last-resort loan guarantor.
Obama is also seeking guarantees that a private sector-led mortgage finance system would still ensure wide homeowner access to popular 30-year mortgages at fixed rates.
Funds for closing when you’re buying a home
Whenever you are buying a home utilizing a mortgage, your lender is going to need to know where your funds that will be used for the down payment and closing costs are coming from. And in most cases, they will want the funds to be “seasoned” (statements showing the funds have been in your account for a two month minimum).
A lender wants assurance that the borrower has enough funds for closing and ideally, enough savings when all is said and done after closing, to have a cushion (2-6 months of your proposed mortgage payment aka “reserves”). Typically a lender is looking for 2 months of asset account statements. If large deposits are shown on the statements, the lender (or underwriter) may require to have the large deposits explained and possibly documented. Many people have their paychecks go into their bank account and, like the tide, out goes the money. Whatever is shown as ending balance is what the lender will use for your loan application and approval purposes.Get your FREE Quote Now!
Depending on the mortgage program you’re utilizing for your financing, different types of funds for closing may or may not be acceptable. Here is an example of some traditional funds allowable for closing:
Cash on hand (also referred to as “mattress money”) is a no-no. If you’re planning on buying a home in the next 3-6 months, you’ll want to get your dough into a bank account where a “paper trail” can be established of your funds.
With today’s automated underwriting and all of the available mortgage programs, more or less documentation may be required from the lender. The above list is only a sample. The requirements for your personal financing may be different. It’s important that regardless of what funds you’re planning on using for your down payment and closing costs, that you discuss it with your Mortgage Professional.
If you are considering buying a home located anywhere in the State of Washington, I’m happy to help you with your mortgage needs, including reviewing your down payment options.
I am often asked this question during a refinance from homeowners. Your mortgage payment is paid in arrears. For example, your February payment is paying January’s interest. Remember when you bought or refinanced your home and the loan originator stated “you’re going to skip one month’s payment” or “you won’t have another payment due until the following month after closing”? Well this is where that payment essentially catches up with you. (Technically, it’s not “that” payment, you’re just always paying the previous month’s interest).
A major cause of the housing crash in 2006 and 2007 were poorly documented mortgages and very loose lending standards that contributed to the 4.9 million defaults that ended up in foreclosure, costing families their homes.
Mortgage lenders who made bad loans paid dearly with massive losses that drove some, like Countrywide and Washington Mutual, out of business. The survivors changed their lending practices dramatically, raising standards on credit worthiness and ability to repay, and requiring better documentation. The result is that many homeowners who qualified for a mortgage to buy or refinance a home in 2005 could not qualify today.
With the housing recovery underway, pressure is growing to loosen credit, debt and income requirements. Currently, for example, the percentage is in the 50 percent range. Economists at the National Association of Realtors estimate that an additional 500,000 to 700,000 home sales could be made if credit conditions returned to normal.
Some policy makers, led by Fed Chairman Ben Bernanke, have repeatedly urged lenders to lay down the law on the tight lending standards that have made it difficult for home buyers with moderate credit and income to qualify for mortgages.
“Certainly, some tightening of credit standards was an appropriate response to the lax lending conditions that prevailed in the years leading up to the peak in house prices. Mortgage loans that were poorly underwritten or inappropriate for the borrower’s circumstances ultimately had devastating consequences for many families and communities, as well as for the financial institutions themselves and the broader economy,” Bernanke said in December.
“However, it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.”