Benefit 3 – Avoid contractual problems by getting pre-approved by a reputable lender

Did you know the standard Residential Real Estate Agreement commonly used in Oregon allows the seller to prevent you from switching lenders or loan programs?

In this short video I explain the third benefit of being pre-approved for a home loan prior to starting your search:

Consumers should take the time to compare lenders prior to starting their home search because once they are in an accepted offer they need the sellers written consent to switch lenders.

If you would like to get pre-approved then please contact me today to get the process started!

Benefit 2 – Avoid surprises by getting pre-approved before you start your home search

Are thinking of buying a home and wondering when you should get pre-approved?  Unless you are open to the potential for an unwanted surprise, I recommend you get pre-approved early on.

In this short video I explain the second benefit of being pre-approved for a home loan prior to starting your search:

By taking the time to get a mortgage pre-approval ahead of time a competent lender will be able to properly set your expectations for monthly payments, closing costs, and down payments.  This way, you can direct your home search at a level that is financially sustainable for you.

If you would like to get pre-approved please contact me today to get the process started!

Threat of government shutdown helps mortgage rates remain low

Are you having withdrawals from the ‘round the clock media coverage of the federal government shutdown?  Don’t worry, without a fresh funding bill the government will shut down this Friday at midnight.

Or will it?

Agreement in Principle

According to multiple reports republicans and democrats have reached an agreement to fund the government past this Friday.  Assuming the bill is passed and a shutdown is avoided I would expect the stock market to rally (it is up 200 points this morning) and interest rates to increase modestly.

Mortgage Rates

In the meantime, home loan rates remain at 9-month lows and there is plenty of uncertainty to help keep them low.  The US and China continue seemingly endless trade talks.  If and when there is a trade deal it could spark a stock market rally and hurt mortgage rates.

As I wrote about last week uncertainty about Brexit is also helping US mortgage rates remain low.

On tap this week

Tomorrow the Labor Department will release the latest Consumer Price Index (CPI).  Inflation is the primary driver of mortgage rates because it reduces the purchasing power of dollars repaid to a lender in the future.  Higher inflation results in higher home loan rates and vice versa.

I’ll also be watching the Producer Price Index which is released on Thursday and Consumer Sentiment on Friday.

Outlook

Mortgage rates remain in a long-term downward trend which I highlighted in last week’s update (see HERE).  I will maintain a floating position but am concerned that rates may reverse higher if a government funding deal is reached.

Current Outlook: cautiously floating

Benefit 1 – Getting pre-approved for a mortgage

Are you thinking of buying a home and wondering if you should get pre-approved?  The answer is “YES!” especially in Portland, Oregon where desirable homes are still very competitive.

In this short video I explain one benefit of being pre-approved for a home loan prior to starting your search:

By taking the time to get a mortgage pre-approval, a home seller will take your offer more seriously than without one.

If you would like to get pre-approved then please contact me today to get the process started!

Mortgage rates remain at 9 month lows

Later tonight President Trump will deliver his State of the Union address to a joint session of Congress.  Generally the US president will use the address to communicate the state of the national budget, economy, and layout priorities for the coming year.

In other words, it’s a great night to binge watch “Friends from College” season 2.

Mortgage Rates

Interest rates remain at the best levels since April of last year.  Will they reverse course and move higher?  Or might they go even lower?

Technical Signals

The economic calendar is relatively light this week so I expect interest rates to react to technical trading patterns.

Currently, the yield on the US 10-year treasury note is trading up against its 3-month trailing trend line.  I will be watching to see if the yield can bounce lower off this level.  If so I expect home loan rates to improve.

If not, watch out as rates will likely increase by .125%-.25% in the coming week.

Home Prices

Core Logic released its monthly Home Price Index report earlier today.  It showed that on average home prices across the US increased by +4.6% from last year.  This confirms trends seen in similar housing data.

Home prices continue to increase but at a pace that is declining.  This is much like a car that is slowing.  Home prices continue to move ahead but at a slower speed than they have previously.  Home prices are not reversing and going backwards despite the media’s spin.

Outlook

I expect mortgage rates to react based on the aforementioned technical trading patterns.  What may make it difficult for mortgage rates to improve this week is that the US Treasury is scheduled to auction ~$84 billion in fresh bond supply.  Last year at this time the US government only had to auction ~$66 billion to funds its budget.

Read THIS LINK to learn how this can adversely impact home loan rates.

Current Outlook: cautiously floating

Uncertainty keeps mortgage rates at low levels

Think “fake news” is a new phenomenon?

Back in 1935 an organization called the Clark Foundation based in Cooperstown, NY publicized a false story claiming that US Civil War hero Abner Doubleday invented the game of baseball in that town 100 years earlier.

Despite the story being inaccurate it helped the organization raise money to build the baseball hall of fame which inducted its first members on this day in 1936.

Every year around this time baseball fans eagerly await the election results to see which former players will be inducted in that year’s class.

Brexit uncertainty

The financial markets are eagerly awaiting a vote in the British Parliament today which will set the stage for Brexit which is currently scheduled to take place on March 29th.

Britain still does not have an approved trade agreement with the European Union and if Brexit takes place in the absence of one it is likely Britain will fall into recession.

Many analysts are predicting Brexit will get delayed so an agreement can be reached but there is still much uncertainty.

…more uncertainty

Political uncertainty is not contained to Britain.  Here in the US we recently reopened the Federal government after the longest shutdown in history.  The threat of another shutdown looms three weeks away and it is not a clear that a longer funding bill will get passed in time.

Furthermore, US and Chinese trade negotiators continue to meet periodically but by all accounts are still far from a comprehensive trade deal.

Political and economic uncertainty helps US mortgage rates remain low.  Should these issues get resolved I would expect mortgage rates to move higher by .25%-.50%.

Home prices still rising

The Case-Shiller Home Price index report was issued earlier today and showed that home prices nationwide increased by 5.2% from a year earlier.  Here in Portland home prices only increased by 4.4% from last year.  Many in the media are painting a doomsday scenario.

However, for a customer who puts 5% down on a $400,000 home ($20,000) and sees their home value increase by 4% in the first year (+$16,000) that is better than they could expect from the stock market.

Outlook

Still to come this week is the Fed monetary policy decision (no rate hike expected) and the all-important jobs report due out on Friday.  For now we can continue to float but I am concerned rates may have hit a bottom at current levels.

 Current Outlook: floating

Credit Myth #7- Qualifying for a home loan without a credit score

After spending over 16 years in the mortgage lending industry I have identified seven myths that consumers commonly hold regarding their credit.  In this series of videos I am going to breakdown each myth and help you better understand how your credit scores are determined so that you can achieve a better outcome for your next loan application.

The seventh myth is that an applicant without a credit score cannot qualify for a mortgage.  Please watch this short video to learn the truth:

It is possible for people without a credit score to obtain a home loan.  They have to be able to demonstrate that they have made on-time payments for other recurring payments such as rent, utilities, insurance or other similar bills.  This is known as a “non-traditional credit reference”.  This approach may not be used for an application with a credit score that is too low to qualify.

If you would like to learn if this loan program would work for you please contact me today!

A short outlook for housing in 2019

Have you made it a goal to buy a home in 2019?  If so then knowing when to buy can offer real savings.  In this short video I explain why I think home buyers that take action at the beginning of the year will likely be better off than those who wait.

As explained in the video, many experts are predicting that home prices and interest rates will rise throughout the year.  Given that mortgage rates are currently at multi-month lows, I am encouraging those who want to buy a home to look sooner rather than later.

If you would like a no obligation review of your options please contact me today to get started.  Thanks!

 

The shutdown’s impact on mortgage rates

The government shutdown is now the longest running shutdown in our history.  Over 800,000 federal workers remain without a paycheck.  Meanwhile, the government is accruing back wages to the tune of $2,000 per second.

How is the shutdown impacting home loans?

Mortgage Rates

The government shutdown has helped contribute to lower mortgage rates.  How?

First off, political uncertainty encourages investors to be less risky with their capital.  When investors seek safety mortgage-backed securities attract greater demand which drives yields lower.

Second, lower government spending has a slowing effect on the economy which is bad for the stock market.  As we know the US stock market has traded lower for the past two months which also helps interest rates improve.

Mortgage Processing

Most borrowers will not experience any delays as a result of the shutdown.  However, some applications require that the tax returns provided with the application be verified through the IRS.  They are not currently providing this service so those applications are likely to be delayed.

Furthermore, the VA and FHA are currently understaffed.  For applications which require specific underwriting guideline questions lenders are left to either proceed with the application without clarity from the VA/ FHA, deny the loan, or delay it.

Economic Data

The federal government issues most of the economic reports that analysts rely on to make forecasts.  Some reports are being issued on schedule but others are not (see a list of reports HERE).

The all-important jobs report is scheduled for release on February 1st (for now) but the financial markets may not react to the report because the reliability of the results will be called into question.

Given that there does not appear to be a compromise in sight we will maintain a floating bias BUT borrowers should be warned that we expect home loan rates to rise once the shutdown is over.

 Current Outlook: floating

Credit Myth #6: It takes a great credit score to qualify for a home loan (not true)

After spending over 16 years in the mortgage lending industry I have identified seven myths that consumers commonly hold regarding their credit.  In this series of videos I am going to breakdown each myth and help you better understand how your credit scores are determined so that you can achieve a better outcome for your next loan application.

The sixth myth is that an applicant must have a good credit score to qualify for a home loan.  Please watch this short video to learn the truth:

If you would like to learn about your options for buying a home with a below average credit score please contact us today to get the process started!