The economy continued to show strong business activity and growth in employment which drove the 30-year fixed mortgage rate to a seven year high of 4.94 percent on national average– WE are still at 4.75%
Higher mortgage rates have led to a slowdown in national home price growth, and the price deceleration has been primarily concentrated in affluent coastal markets in California.If you are in an adjustable rate mortgage Lock in a fixed rate now.!
Sales of new homes are slowing and unsold inventory is rising for the first time in three years. With mortgage rates increasing affordability is becoming an issue and we may see a drop in the market valuations in spite of a growing economy!
After leveling off recent weeks, mortgage rates move up to reach a
new high last seen seven years ago.The 30-year fixed mortgage rate edged
up to 4.61 percent, which matches the highest level since May 19,
2011.Consumer spending and higher commodity prices caused bond markets
to increase and led to higher mortgage rates over the past week.While
this year’s higher mortgage rates have not caused much of an effect in the
strong demand for buying a home seen in most markets, inflationary pressures and
the prospect of rates approaching 5 percent could begin to hit the valuation of
home prices.Many people are refinancing to convert their
adjustable rate mortgage to a fixed wile rates are still low, get cash out for
hone improvements to there existing homes or paying off debt to free up cash
flow for other investments I would be happy to discuss any and all
options or concerns you may have.
OR Price your own
loan http://www.firstcaliforniafinancial.com/CaliforniaMortgageRateSheet and give me a call for a custom
government bond yields topped 3% for the first time in more than four years The
10-year yield is a barometer that influences borrowing costs for consumers,
corporations and state and local governments. Mortgage rates are tied to this
and have reached almost 4.5% see this article from Government backed funding
source. http://www.freddiemac.com/pmms/ great
My concern is that the Home affordability index will
lesson with higher rates = higher payments and the housing values will slow if
not even drop in value. This could trigger another financial situation as so
much of the economy is tied to housing.
Many people are refinancing to get cash out for
improvements to there existing homes rather than buying new ones or paying off
debt to free up cash flow for other investments or simply converting there
adjustable rate mortgage to a fixed wile rates are still low.
I would be happy to discuss any and all options or
concerns you may have.
OR Price your own
loan http://www.firstcaliforniafinancial.com/CaliforniaMortgageRateSheet and give me a call for a custom quote..
"I’VE FOUND A HOUSE THAT I REALLY WANT TO BUY, BUT THE AMOUNT I’M PRE-APPROVED FOR IS SLIGHTLY LESS THAN WHAT THE SELLER IS ASKING. DO I HAVE ANY OPTIONS? OR SHOULD I KEEP LOOKING?"
The answer to that depends on how much less you’re pre-approved for. If the home is truly out of your price range, you really should move on and look for a home that you can afford. However, if the difference between the seller’s asking price and what you’re approved for is a small amount, there are several possible ways to close that gap, including:
• Working with your lender to increase the amount you’re approved for.
• Putting down a larger down payment.
• Negotiating with the seller to lower the price.
Before you do anything else, though, you should talk to your broker. Although it may not always be feasible, some borrowers are able to get approved for a larger amount, especially if the difference between the pre-approval and the asking price is minimal. A pre-approval is not necessarily set in stone, so definitely touch base with your broker. Also, make sure you bring your real estate agent into the loop so that they’re aware of the situation.
In simple terms, your debt-to-income ratio is the percentage of your monthly gross income that goes toward paying all of your debts and liabilities, which includes your mortgage, credit card debt, student loans and other housing expenses. Your DTI ratio is broken down into two parts: front-end ratio and back-end ratio. With a few calculations, you can calculate your own DTI ratio and take steps to improve it.
Your front-end ratio is the percentage of your gross monthly income that goes toward your monthly housing payment. To calculate your front-end DTI ratio, divide your monthly housing payment (principal, interest, insurance, taxes, etc.) by your pre-tax monthly income. As a general guideline, you’ll want your monthly housing payment to be less than 28 percent of your gross monthly income. If it’s higher, that may be a red flag if you’re applying for a mortgage, although there is some flexibility in some cases.
The second part—your back-end ratio—measures your gross monthly income against all of your recurring monthly debts and liabilities and is generally considered the more important component of your overall DTI ratio. To calculate your back-end ratio, divide your total monthly credit card debt, student or personal loans, housing expenses, etc. by your pre-tax monthly income. Under the new Qualified Mortgage rules passed by the Consumer Finance Protection Bureau in 2014, most mortgages require a back-end ratio of 43 percent or less, although some Fannie Mae and Freddie Mac loans do allow for a higher debt-to-income ratio if the applicant has strong credit. Generally, a back-end ratio of 36 percent or less is considered a good goal if you’re looking to get a new mortgage.
If your back-end ratio exceeds the targeted percentage, there are ways to fix it. The most direct way to improve your ratio is to start paying down your recurring debt, such as the monthly balances on your credit cards. Paying down debt is usually much easier and more feasible than taking the reverse route of increasing your monthly income.
If you’re considering buying a home or refinancing in the near future, you’ll need to start working on your DTI ratio as soon as possible.
Even though you may be between jobs (at least technically), these situations are fairly common. If you can understand the situation from the point of view of your lender and know what your options are, you should be able to get the mortgage—and the home—that you want.
Lenders will look at three aspects of your income: history, amount and stability. That may seem like two strikes against you—with only income history going for you—but just because you’re getting a new job doesn’t mean that you’ve suddenly become a lending risk. If your new job is in the same industry and the pay is equal to or greater than that of your prior job, many lenders will consider that as a sort of continuation of your old job. Also, keep in mind that there are other factors—such as your credit score and debt-to-income ratio—that a lender will consider besides income.
In most cases, you’ll have several different options in terms of getting a mortgage when you relocate. A lender may want proof of at least 30 days of employment at your new job, so closing on a new home immediately may be tricky, but there may be ways to get around this. For example, if you have an offer letter—or, better yet, an employment contract—a lender may approve your loan as long as your start date is before the date you close on your new home. If that’s not feasible, most lenders offer loan products that are specifically geared to these situations.
The bottom line is this: Lenders deal with people relocating for a new job on a regular basis and they will certainly do their very best to get you into your new home.