Author Archives: joeglez

What’s Ahead For Mortgage Rates This Week – July 8, 2013

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What's Ahead For Mortgage Rates This Week July 8 2013Last week saw a relatively quiet week due to the 4th of July holiday, but there were some housing-related developments:

Monday: The Department of Commerce reported that overall construction spending increased by 0.50 percent in May to a seasonally adjusted annual rate of $874.9 billion. Residential construction grew by 1.20 percent, and May 2012 construction spending was 5.40 percent higher than in May 2012.

More spending in residential construction can indicate builder confidence in housing markets; added construction could help ease low inventories of available homes.

Tuesday: CoreLogic reported that May national home prices increased by 12.20 percent over May 2012, and grew by 2.60 percent in May including sales of distressed properties. Excluding distressed properties, home sales rose by 2.30 percent in May for a year-over-year increase of 11.60 percent.

States hardest hit in the economic downturn are showing good recovery; Nevada home prices rose by 26 percent year-over-year. While double-digit increases in home prices are good news, economists note that home prices remain approximately 20 percent below their peak in 2006.

Employment Data: More Jobs, Less Unemployment

Employment data are important for housing markets; employment is closely tied to home buyers’ ability to qualify for mortgage loans. Last week ended with several important jobs related reports:

Wednesday: ADP reported that 188,000 private-sector jobs were added in June for the highest increase in four months. This number surpassed expectations of 160,000 new jobs and May’s revised figure of 134,000 jobs added.

Freddie Mac’s mortgage rates survey had some good news as average rates for a 30-year fixed rate mortgage fell from 4.46 percent to 4.29 percent with discount points also falling from 0.80 to 0.70 percent. Average rates for a 15-year mortgage fell from 3.50 percent to 3.39 percent, with discount points moving from 0.80 percent to 0.70percent.

Friday: The Labor Department released Non-farm Payrolls and the national Unemployment Rate for June. Non-farm matched May’s level of 195,000 jobs added, which surpassed expectations of 155,000 jobs added. The unemployment rate remains at 7.60 percent, just over expectations of 7.50 percent.

The Federal Reserve has cited a benchmark unemployment rate of 6.50 percent as a criterion for raising the federal funds rate and reducing its current quantitative easing policy; this news may help slow mortgage rates as the Fed isn’t likely to modify its programs based on the current unemployment rate.

Looking Ahead

This week’s economic news includes today’s report on consumer credit. Tuesday brings Job Openings for May, and Wednesday brings the minutes from the recent FOMC meeting. The minutes should clarify exactly what the committee discussed concerning quantitative easing and their plans for modifying it.

Thursday, Freddie Mac will release weekly mortgage rates. The federal government will release weekly jobless claims and will update the federal budget. The week’s economic news will conclude with release of the Producer Price Index (PPI) and Core PPI for June, along with Consumer Sentiment for July.

Go Green By Faking It With Artificial Grass

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Go Green By Faking It With Artificial TurfThe summer heat is starting to take its toll on you and your thirsty lawn. Homeowners spend hundreds of dollars every summer striving to grow healthy grass and keep it green.

If you’re sick of trying to maintain a manicured lawn, then you can go green another way. Install artificial turf.

The Grass is Always Greener

Today’s artificial grass is made out of polypropylene, nylon, or polyethylene threads that are sewn into a mesh backing that allows for water drainage. This is then usually laid on top of compacted gravel and tied down at the perimeter.

Modern artificial lawns can mimic many varietals of grass and some even have a thatch layer to give it a more realistic look.

Sick Of Maintenance

Homeowners have many reasons for wanting to be free of their demanding lawns, such as high summer water bills and the constant use of pesticides. With a fake lawn, you won’t have to water, which is especially good for high-heat areas, you won’t have to mow and you can quit worrying about how the weather will affect it.

Considering The Costs

While installing artificial grass can cost a bit up front, it’ll be maintenance free for the next 15 to 20 years. You won’t have to worry about water bills, purchasing grass seed, buying fertilizer or getting gas for the lawnmower, which can add up to a couple hundred dollars every year.

Potential Drawbacks

While a maintenance-free yard does have some appeal, there are a few drawbacks to take into consideration. Fake lawns don’t absorb pet waste, so you have to hose them off regularly.

They can also heat up in direct sunlight. Planting shade trees will help with this issue. And, artificial lawns cannot be recycled, which is an issue that the industry is looking to remedy.

Saving water and reducing the use of pesticides is great for the environment. However, you have to like the look of artificial grass and make sure you’re ready for the investment.

If you’ve been considering going green by switching to year-round green grass, talk with a local installer for grass options and cost comparisons.

7 Smart Tips To Painting Your Own Home This Summer

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7 Smart Tips To Painting Your Own Home This SummerWinter may have taken a toll on your home’s exterior this year. You’ve been noticing the cracking paint for months, but you don’t want to shell out the big bucks to hire a professional painter.

Don’t fret! With the weather warming and the nice summer weekends, it’s the perfect time to tackle that project of painting your home.

While this might seem like an insurmountable task, especially if you have a multi-story home, it’s not. It just takes the right tools and a bit of hard work. Below are step-by-step instructions to having the outside of your house looking shiny and new.

Test For Lead

Homes built before 1978 could have used lead paint, so be careful if you have an older home. They make kits that test for lead paint. If your home tests positive, then ensure you take the necessary precautions to keep yourself and your neighbors safe.

Scrub It Up

You need to wash the exterior of your home before painting. Mildew thrives under new paint, so kill it with a solution of water and phosphate-free cleaner.

Scrape And Sand

Take a scraper to your home’s exterior to remove any peeling paint. Spraying water under the paint as you scrape helps speed up the process. Then sand down any rough spots, so that you have a smooth canvas.

Apply The Primer

Paint on the primer immediately after you’ve prepped the wood. This will provide and even base for your topcoat of paint.

Buy Some Caulk

You’ll need to caulk all the joints to prevent water penetration and air leakage. Plus, caulk does a great job of filling in blemishes in your siding.

Pick Out Your Paint

Choose a water-based latex paint. It’s easier than applying oil-based paints. However, if your home already has an oil-based paint, you’ll have to stay with it. Once you’ve selected your favorite paint color, just grab a brush or rent a sprayer to start painting your home.

Maintain your exterior.

Be sure to check your home annually for any potential problems. Replace cracked caulk, remove mildew and patch any peeling paint before it spreads.

Utilize the beautiful summer weekends to get started on painting your home. Understand that this process normally takes two weekends, so be patient. Plus, by not hiring a professional, you’ll save a significant sum of money and have bragging rights when you receive compliments on the condition of your home.

 

Liberate Yourself From Your Mortgage With This Simple Plan

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Liberate Yourself From Your Mortgage With This Simple PlanWhat if you could accelerate the mortgage payment on your home so that you own your property several years earlier than your 15 or 30 year term?

Making your final mortgage payment and owning your house is an incredibly good feeling and there is a simple way that you can bring about that rewarding day much sooner.

By making one extra mortgage payment every year, you will be able to pay off your mortgage years earlier without putting a lot of stress on your present day finances. Although it might not seem like a lot, just one extra payment per year can help you to significantly reduce the length of your mortgage.

For example, if you have a 30 year mortgage with a fixed rate, it could be possible to pay off your loan in 25 years instead of 30 when you make an extra payment per year. You will also very likely be able to save thousands of dollars over the years in interest charges.

How to Fit the Extra Payment Into Your Budget

If you think that your budget is too tight to squeeze in the extra yearly payment, it’s time to start thinking about what adjustments you can make. With a bit of clever budgeting, you can find the extra cash needed.

First of all, break the extra payment down by dividing it by 12. For example, if your monthly mortgage payment is $1600, you will need to save an extra $133 per month to be able to make a full extra payment every year. Or, you could think of it as $33 per week or $4.75 per day.

Surely you can survive on $4.75 per day less than you are spending right now, right?

There are many ways that you could find this extra money. It’s the difference between eating at a restaurant or cooking at home once or twice per week, bringing home-brewed coffee to work in a thermos rather than going to the expensive coffee shop, or cancelling a cable TV package that you never watch. Take a look at your budget so that you can determine where you can cut your expenses.

Once you make your goal of an extra payment every year, not only will you see that the savings program was easier than you thought it would be, but you might decide to accelerate even more so that it will be even sooner when you have the satisfaction of owning your home.

For more information about the optimal plan for the mortgage on your Phoenixville home, feel free to contact me by phone or email.

What’s Ahead For Mortgage Rates This Week – July 1, 2013

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What’s Ahead For Mortgage Rates This Week – July 1, 2013The past week was active for economic news and mortgage rates. The aftermath of the Fed’s indication that it may start dialing back its multi-billion dollar monthly purchases of Treasury and mortgage backed securities has sent mortgage rates to record highs.

If you’re thinking of buying a home, this may be one last chance for finding the best deal on mortgage rates; meanwhile, home prices continue trending up as well.

Here’s the scoop on last week’s activity affecting real estate markets:

Tuesday’s Case-Shiller Composite Indices for April demonstrate the momentum of recovery in many housing markets. As of April, national home prices had increased by 12.10 percent as compared to April 2012. April’s reading also exceeded March’s reading of 10.10 percent year-over-year.

FHFA released its home prices report for April and noted that the average price for homes with mortgages owned by Fannie Mae or Freddie Mac increased by 7.40 percent, which slightly surpassed the March reading of 7.20 percent.

The Department of Commerce released New Home Sales for May and reported 476,000 new homes sold on a seasonally-adjusted annual basis. This exceeded expectations of 453,000 new home sales and also surpassed April’s reading of 454,000 new homes sold.

Wednesday brought the Gross Domestic Product (GDP) report for the first quarter of 2013. The GDP grew by 1.80 percent against expectations of 2.40 percent and the previous quarter’s growth, also 2.40 percent.

Freddie Mac’s Primary Mortgage Market Survey (PMMS) brought the days of bargain basement mortgage rates to a halt as average mortgage rates for a 30-year fixed rate mortgage moved from last week’s 3.93 percent to 4.46 percent. Average rates for a 15-year fixed rate mortgage rose from 3.04 percent 3.50 percent. This was the largest weekly jump in mortgage rates in 26 years.

Home buyers may also consider a 5/1 adjustable rate mortgage, which provides an average 5 year fixed rate of 2.74 percent.  The fixed mortgage rate converts to an adjustable rate after five years.

The National Association of REALTORS ® reported that Pending Home Sales in May rose by +6.70 percent to their highest level in 6 years.

Last week ended on a positive note with the Consumer Sentiment Index for June beating expectations of 83.0 and coming in at 84.1. May’s reading was 82.1; higher consumer confidence is likely driving demand for available homes.

What‘s Ahead This Week

Next week’s scheduled economic news includes Construction Spending due on Monday and the ADP private sector jobs report is set for Wednesday.

Thursday the financial markets are closed as we celebrate the July 4th holiday.

Friday brings the Department of Labor’s Non-farm Payrolls Report and the National Unemployment Rate. If the unemployment rate stays steady at 7.60 percent, this may reduce fears that the Fed will start reducing its monetary easing program any time soon, which should help to slow the recent increases in mortgage rates.

How To Improve Your Credit Score For Better Financing Terms

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How To Improve Your Credit Score For Better Financing TermsImagine that you’ve found the perfect home and are ready to apply for financing. Your home loan approval amount comes back lower than you would have expected and at an interest rate significantly above what you have heard is available on the market.

This could be because you have an average to poor credit score.

Mortgage lenders base interest rates on many things, but your credit score plays a large part. Anything between 720 and 850 will typically qualify for better interest rates. A mediocre score is usually between 660 and 719, and a low score is 659 and under.

If you have a lower score than you’d like, below are a few traits for you to follow of people who possess higher credit scores and secure the best home financing.

They don’t max out their cards.

It’s better to keep a low revolving balance on a few cards than to spend every dime allotted on one. The ratio of credit card balance to your credit limit is called credit utilization. The higher your credit utilization, the larger affect it can have one your credit score.

They make payments on time.

This is very likely the most important tip for your credit health. If you miss a payment on a term loan, credit card account or monthly home bill, then you could be turned over to collections, which will affect your score negatively.  You will almost surely be reported as late to the credit bureaus, which will in turn drop your credit score precipitously. Absolutely make all of your payments before their due date.

They stay with one card.

Don’t close and open credit card accounts frequently. Each time you make a change to your line of credit, it affects your score. Even if you don’t want to be tempted to use a credit card, keep the account open and leave the card at home. According to the Fair Isaac Corporation (FICO), high credit achievers have accounts that are usually at least 11 years old.

Excellent credit could qualify you for a better interest rate, which might save you thousands of dollars over the life of the loan. So stay on top of your monthly credit bills and keep a low balance on just a few cards to watch your score steadily increase.

If you’re ready to learn more about your ability to purchase a Phoenixville home, call your trusted home financing professional today.

5 Important Tips To Help Smooth Your Move When You Have Teens In The Home

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5 Important Tips To Help Smooth Your Move With TeensYou’ve got a new job offer across the country and you are planning to pack your things, buy a home and make the big move.

However, when you tell your 17 year old daughter your plans, she lets out a mournful wail and cries that it is not fair. How can you possibly take her away from all of her friends, her favorite hangout spots and the cute boy she just started seeing?

Moving is a difficult transition and it is often even more traumatic for teenagers. The teenage years are an important stage where young adults establish their individuality and independence and during this time their social circle is extremely important to them.

Being removed from that against their will can make any teen feel sad, confused, angry and resentful. Also, fitting into a new social scene in a different location can be a challenge for a teen that might be singled out as the “new kid”.

How can you help your teen during this transition so that the experience will be easier on them?

5 Tips To Help Your Teen Move More Smoothly

Here are some tips that will make the experience of moving a little bit easier on your teenager:

  • Give them as much notice as possible so that they have time to adjust to the idea of moving. They will feel like they have enough time to say goodbye to their friends and close a chapter of their lives.
  • Try to schedule the move around the school calendar, as moving in the summer is much less disruptive to your teen’s life than relocating in the middle of the school year.
  • Make sure that they have ample time to spend with their close friends before they leave and once you arrive, understand that they might go through a grieving process of missing their old pals.
  • When you get to your new home, make sure that your teen has plenty of ways to keep in touch with their old friends, such as an internet connection and a cell phone plan.
  • Encourage your teen to get involved in the community of your new hometown, like joining sports clubs or attending events. This can help them to make new friends.

Moving to a new city is always exciting but offers challenges like this one for families. For more advice on moving to a new Collegeville home, contact your trusted mortgage professional today.

Home Prices Record Highest Monthly Gains Since Case Shiller Index Inception

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Home Prices Record Record Month To Month GainsThe S&P Case-Shiller Home Price Indices for April indicate that the housing recovery gained ground.

In April 2013 average home prices tracked in the Case-Shiller 10 and 20-city Composites increased by 11.60 and 12.10 percent year-over-year. On a month-to-month basis, the Composites increased by 2.60 and 2.50 percent respectively.

According to David M. Blitzer, Chairman of the S&P Dow Jones Indices’ Index Committee, the 10-and 20- City Composites experienced their largest month- to- month gains since their inception: “Thirteen cities posted month- to-month gains of two percent or more, with San Francisco leading with a month-to-month gain of 4.90 percent.”

The 10-and-20 City Indices reported the highest year-over-year gains in home prices since 2006.  Cities where home prices gained more than 20 percent year-over-year included Atlanta, Las Vegas, Phoenix and San Francisco. Phoenix posted its 12th consecutive month of double-digit increases in home prices while San Francisco home prices increased year-over-year by an average of 23.90 percent. Home prices increased year-over-year in 19 the 20 cities included in the 10-and 20 City Composites, with home prices in Detroit remaining flat.

Mortgage Loan Requirements Showing Signs Of Loosening

Mr. Blitzer also noted that according to the most recent Fed Senior Loan Officer Opinion Survey, some lenders are beginning to relax credit requirements for mortgage loans. This good news, along with the availability of adjustable-rate mortgage loans is expected to help with maintaining affordability and providing access to homes for more buyers.

According to the S&P Case-Shiller 10-and-20 City Composites, home prices fell approximately 26 to 27percent from their highest in June 2006 to their lowest in March 2012. As of April 2013, average home prices had recovered by 13.10 percent for the 10-City Composite and 13.60 percent for the 20-City Composite.

More Reports Show Ongoing Housing Recovery

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, reported that home prices increased an average of 7.40 percent year-over-year as of April 2013, and rose by 0.70 percent between March and April 2013. While this data fell short of an expected month-to-month increase of 1.10 percent, Average FHFA home prices were 11.70 percent below their peak in April 2007.

FHFA bases its report on sales of homes financed with mortgages owned or securitized by Fannie Mae and Freddie Mac.

The U.S. Commerce Department reported that sales of new homes reached a five-year high in May, the highest level since July 2008. May sales increased 2.10 percent between April and May 2013 to a seasonally-adjusted annual rate of 476,000 homes. This represents a year-over-year increase of 29 percent from May 2012.

While rising mortgage rates and home prices may slow demand for homes, economists don’t believe that either factor will halt the housing recovery. A good next step is asking your trusted mortgage professional about current home values and loan options in and around Collegeville.

3 Clever But Simple Ways To Get Your Home Mortgage Paid Faster

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3 Clever But Simple Ways to Get Your Home Mortgage Paid FasterPaying off the mortgage on your home faster means that you will not only have the satisfaction of owning your own home sooner, you will also have the benefit of paying much less in interest over the years.

The faster you pay off your mortgage, the more money you can save, so here are some tips to accelerate your payment schedule.

Pay Your Mortgage Every Other Week (Bi-Weekly)

Did you know that if you take your monthly mortgage payment and divide it in half and then pay it every two weeks that you will end up making a full extra month of payments every year? This is called a bi-weekly payment program which has been around for a long time, and it’s still a good idea today!

You likely won’t notice the difference since the extra half payments occur in long months with bigger paychecks, but over the years this will end up saving you thousands of dollars in interest payments.

Make a Bigger Monthly Payment

Similar to the bi-weekly payment plan above, you can accomplish the goal by dividing your principal and interest portion of your payment by 12 and then adding that amount to your regular monthly payment.  You will be paying that extra payment every year, but spacing it out over each monthly payment.  

Most homeowners using this tactic can shorten their term by up to seven years.

Put Any Windfall Toward the Mortgage

Was your tax rebate larger than you expected? Have you received an inheritance from your great aunt Thelma? Have you won a cash prize in a contest?

Put any unexpected chunks of cash straight toward your mortgage instead of spending them. This won’t affect your budget at all, because you were never expecting or counting on that money in the first place. But once again, it can make a huge difference in the overall amount of interest that you pay on your mortgage loan.

However, keep in mind your particular situation. Spending every last penny paying off your mortgage as quickly as possible might not be the best option for you if you have no emergency savings fund or if you have a credit card languishing with high interest debt.

It is usually more important to deal with these pressing financial issues before attempting to save money on your mortgage.

One great way to start your research on how to pay your Phoenixville home off faster is to talk with your trusted mortgage professional.  They can answer your questions and point you in the best direction for your situation.

What’s Ahead For Mortgage Rates This Week – June 24, 2013

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What's Ahead For Mortgage Rates This Week - June 24, 2013Comments by Fed chairman Ben Bernanke after Wednesday’s FOMC meeting caused havoc in financial markets as investors anticipated the potential effects of any rollback of the Fed’s policy of quantitative easing (QE). Chairman Bernanke said that the Fed may begin reducing its $85 billion monthly purchase of Treasury securities and MBS toward the end of this year.

The chairman made it clear that any decision concerning QE would be based on careful review of current and developing economic conditions. QE is intended to keep long-term interest rates low; any reduction of the QE securities purchases could cause mortgage rates to rise.

Economic News Bodes Well For Housing

The week’s other economic news included more good news for housing. The NAHB/WF Housing Market Index for June came in ahead of expectations at 52, which surpassed the expected reading of 45 and May’s reading of 44. Any reading over 50 indicates that more builders surveyed believe that housing market conditions are positive.

Tuesday was busy for economic news. The Consumer Price Index for May rose from April’s reading of –0.40 percent to +0.10 percent in May, which was below expectations of +0.20 percent.

The Department of Commerce released its Housing Starts Report for May; the reading for May missed expectations of 953,000 housing starts and came in at 914,000 which exceeded April’s 856,000 housing starts. Increasing the number of available homes could help steady recently increasing home prices, but existing homes remain in short supply in many areas.

Fed Expects Moderate Improvement Continuing For Economy

Wednesday’s news involved the Fed’s FOMC meeting and press conference. The Fed stated after the meeting that it expects moderate improvement in economic condition and noted that housing, which was a primary cause of the economic downturn, is now leading the economy’s recovery.

Freddie Mac reported that the average rate for a 30-year fixed rate mortgage fell from 3.98 percent with 0.7 percent discount points to 3.93 percent with borrowers paying 0.8 percent in discount points.  The average rate for a 15-year fixed rate mortgage fell from 3.10 percent to 3.04 percent with 0.7 percent in discount points for both weeks. Investor response to the Fed’s mention of possibly reducing its QE program is likely to send mortgage rates up next week.

The National Association of REALTORS® released its Existing Home Sales report for May. Existing home sales came in at 5.18 million and beat projections of 5.00 million and April’s sales of 4.97 million existing homes.

Increasing sales of existing homes is good news as demand has exceeded supplies of existing homes in recent months. High demand drives up home prices and impacts affordability along with rising mortgage rates.

What’s Ahead For This Week

Next week’s scheduled news includes a number of housing related reports, FHFA Home Prices, the Case-Shiller Home Prices Report and New Home Sales are set for release Tuesday.

The Gross Domestic Product Report comes out on Wednesday. On Thursday, data for weekly jobless claims, consumer spending and pending home sales will be released.

Friday brings the Chicago Purchasing Managers Index and the Consumer Sentiment Index.

The data released in these reports will continue to inform the Fed’s decision-making with regard to bond purchasing and interest rate policy. It’s possible though, following the aggressive market sell-off activity from last week, that we may see a softening in long-term rates over the course of this week.