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What’s Driving Mortgage Rates Today?

Mortgage rates today got a major boost (not in a good way) from unexpectedly high Consumer Confidence numbers from the Conference Board. The highest since December 2000, in fact.

Instead of the widely-expected reading of 113.5, we got 125.6! Investors’ minds blown.

Why should this matter? Because consumer spending drives over two-thirds of the US economy. When Americans feel good about their finances and employment, we love to spend money! And demand for stuff to buy creates jobs, increases wages, and, yes, fuels inflation.

Just the sort of thing to push bond prices down and interest rates up.

Today’s Mortgage Rates

** FHA APRs include government-mandated mortgage insurance premiums (MIP).

These rates are averages, and your rate could be lower.

Housing Prices Up

Also released today was the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, and it contained good news for homeowners. The reports includes all nine U.S. census divisions.

It came up with a 5.9 percent annual increase in January prices, up from 5.7 percent last month. More impressively, this represents a 31-month high!

If you’re still on the fence about buying, however, this might be your wakeup call.

This would be considered good news for the overall economy, which would make it less-good for those who have not yet locked in their mortgage rates yet.

Click to see today’s rates (Mar 28th, 2017)

This Morning

So far, however, other economic barometers are flat and mixed, probably overshadowed by continued White house drama and speculation. CNNMoney’s Fear & Greed Index, while floating in the “Fear” rage at 37, has improved from yesterday’s “Extreme Fear” position. This means investors are a little less spooked and more likely to pull out of bonds and back into stocks. Too bad for mortgage rates.

All three major stock indexes are up a little, and so is oil. Ten-year Treasury yields are also up slightly to 2.37 percent, but still below the 240 fence.

All in all, not bad for anyone floating, but not much upside either.

Tomorrow

Wednesday brings just one piece of data, and not a super-important one at that. Pending home sales as reported by the National Associated of Realtors are expected to drop 2.8 percent due to lack of supply in many markets. This can be seen as slightly inflationary in a way because inventory is not likely to come up unless prices do.

• Thursday: Weekly jobless claims, predicted to be 243,000


• Friday: (highly important) February’s Personal income (expected to increase .4 percent), personal spending (expected to rise by .2 percent), and the core inflation rate (expected to be .2 percent).


• Friday: The Consumer Sentiment Index is predicted to rise to 97.6 from 96.3 for March.

When the actual figures vary significantly from those expected by analysts, there is potential for movement in interest rates.

In general, anything pointing to an improving economy or increased inflation leads to rate increases, while reports that indicate financial faltering push rates down.

Request a personalized quote from a licensed, reputable lender here.

Rate Lock Recommendation

This is a good time to take advantage of the drop in pricing. I recommend locking for anyone closing in the next 30 days, and even longer if your lender will do it for no extra charge.

Note that this is what I would do if I had a mortgage in process today. Your own goals and tolerance for risk may differ.

>>Ready to lock? Click here.<<

What Causes Rates To Rise And Fall?

Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates, because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.

For example, suppose that two years ago, you bought a $1,000 bond paying five percent interest ($50) each year. (This is called its “coupon rate.”) That’s a pretty good rate today, so lots of investors want to buy it from you. You sell your $1,000 bond for $1,200.

When Rates Fall

The buyer gets the same $50 a year in interest that you were getting. However, because he paid more for the bond, his interest rate is not five percent.

• Your interest rate: $50 annual interest / $1,000 = 5.0%


• Your buyer’s interest rate: $50 annual interest / $1,200 = 4.2%

Your buyer gets an interest rate, or yield, of only 4.2 percent. And that’s why, when demand for bonds increases and bond prices go up, interest rates go down.

When Rates Rise

However, when the economy heats up, the potential for inflation makes bonds less appealing. With fewer people wanting to buy bonds, their prices decrease, and then interest rates go up.

Imagine that you have your $1,000 bond, but you can’t sell it for $1,000, because unemployment has dropped and stock prices are soaring. You end up getting $700. The buyer gets the same $50 a year in interest, but the yield looks like this:

• $50 annual interest / $700 = 7.1% The buyer’s interest rate is now slightly more than seven percent.

Click to see today’s rates (Mar 28th, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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Mortgage » VA Loans »

Sam Edwards/Getty Images

The VA mortgage is so attractive that it’s no wonder some borrowers want to take advantage of the Department of Veterans Affairs program more than once.

There are three ways a service member, veteran or other qualified borrower can get another helping:

1. Buy a home with a VA loan, sell it and then buy another home with a new VA loan.


2. Refinance from one VA loan into another.


3. Have two or more VA loans for different homes at the same time.

The VA home loan “isn’t a single-use proposition,” says Michael Dill, vice president of mortgage lending at Guaranteed Rate in Tampa, Florida.

Ready to shop for your next VA loan? Hold on — a lot depends on something called your “entitlement.”

How entitlement works

The VA guarantees to reimburse up to 25 percent of the lender’s loss if a borrower defaults. This protection encourages lenders to offer VA loans with lower rates, no down payment and easier guidelines to qualify.

Typically, if you use a VA loan to buy a home for $200,000, the VA will guarantee a quarter of that, or $50,000.

Your entitlement is the total dollar amount that the VA is willing to guarantee and pay out on your behalf. In most parts of the country, entitlements top out at $106,025, but the limit can be higher in expensive areas such as New York, Los Angeles and Washington, D.C.

The $200,000 home in our example would reduce your $106,025 entitlement by $50,000. So, you’d still have plenty left for another VA loan to buy another home.

“A lot of military guys are stationed somewhere, they buy a property with a VA loan, then they get relocated and need to buy another one,” Dill says. “They can still buy and have multiple VA loans at the same time.”

2 homes, 2 VA loans — and renting 1 out

The VA loan is intended to be used to buy your primary residence, not a rental property. However, if you occupy a home and then move into a second home purchased with a second VA loan, the first one often can be rented out.

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After-hours buzz: RHT, DRI, TSRO & more

Check out the companies making headlines after the bell:

Shares of Red Hat jumped 5 percent in extended trading Monday after the software company reported revenue above analysts expectations. Red Hat’s reported revenue came in at $629 million, beating Thomson Reuters consensus analyst estimate of $619 million. The company reported fourth-quarter earnings per share that were in-line with expectations at 61 cents per share, according to Thomson Reuters consensus estimates.

Darden Restaurants shares rose nearly 4 percent after the restaurant operator released its third-quarter earnings and said it is adding a new restaurant to its business. The Olive Garden owner said it will buy Cheddar’s Scratch Kitchen for $780 million in cash. Darden’s third-quarter earnings exceeded expectations. Revenue for the company came in at $1.88 billion, slightly above Wall Street’s expectation of $1.86 billion, according to Thomson Reuters consensus estimates. Darden reported earnings per share at $1.32, versus $1.27 per share expected by the Street, according to Thomson Reuters consensus estimates.

Shares of Tesaro soared 6 percent after the Food and Drug Administration approved one of the pharmaceutical company’s ovarian cancer drugs. Zejula or niraparib is a drug used to treat women with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer, according to the company’s press release. Tesaro also announced it is expanding its development program for the niraparib drug for treating front-line metastatic ovarian and lung cancers and metastatic breast cancer.

Synnex shares swung 2 percent higher after the company reported first-quarter earnings above expectations. The technology company beat revenue expectations, reporting $3.52 billion versus $3.48 billion expected by analysts, according to Thomson Reuters consensus estimates. The company also reported non-GAAP diluted earnings per share at $1.82, far exceeding expectations of $1.66, according to Thomson Reuters consensus estimates.

After-hours buzz: RHT, DRI, TSRO & more

Mortgage applications fall 2.7%, as borrowers turn to riskier loans - CNBC

The fast-rising cost of housing today is shrinking demand for home loans but also pushing those who are in the market toward cheaper, adjustable-rate mortgages.

Total mortgage application volume fell 2.7 percent last week from the previous week, according to the Mortgage Bankers Association. The seasonally adjusted tally stands nearly 12 percent lower than a year ago.

Mortgage rates didn’t move last week, but they are nearly three-quarters of a percentage point higher than on Election Day. Home prices continue to rise far faster than incomes, and those higher housing costs have borrowers searching for the best deals on home loans. The government-insured FHA program offers low down-payment loans, but rates on FHA mortgages rose last week. Insurance premiums remain higher than before the recession.

Borrowers are now turning to shorter-term, adjustable-rate loans, which offer lower interest rates. Their share of total applications has doubled to 9 percent since the election. That is the highest level since October 2104. The adjustable-rate share of mortgages dropped dramatically following the housing crash, as borrowers fled to the safety of the 30-year fixed rate.

“Homebuyers in a strong housing market are looking for ways to extend their purchasing power, and ARMs are one way to do that,” said Mike Fratantoni, chief economist for the MBA. “While the ARM share got as high as 35 percent precrisis, it is really unlikely it will get nearly as high now given [new] regulations, which effectively prohibit many types of ARMs that were prevalent then.”

Higher interest rates continue to shrink the pool of borrowers who can benefit from a refinance. Those applications fell 3 percent for the week and are down 26 percent from a year ago. Loan applications to purchase a home fell 2 percent for the week but are up 5 percent from a year ago. Demand for housing is strengthening as the spring market kicks into gear, but a tight supply of homes for sale nationwide drags on the selling pace.

Mortgage lending is still conservative. In fact, the average credit score for borrowers in the third quarter of last year rose from the previous quarter, according to CoreLogic, whose quarterly credit-risk index has been falling steadily. That could change as mortgage rates rise further, which is expected.

“Refinance volume will decline with higher mortgage rates, and lenders generally will respond by applying the flexibility in underwriting guidelines to make loans to harder-to-qualify borrowers,” said Frank Nothaft, chief economist at CoreLogic. “As this occurs, we should observe our index signaling a gradual increase in default risk.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less remained unchanged last week at 4.46 percent, with points increasing to 0.41 from 0.37, including the origination fee, for 80 percent loan-to-value ratio loans.

Mortgage applications fall 2.7%, as borrowers turn to riskier loans - CNBC

Mortgage Rates Stumble as Political Uncertainty Weighs

Mortgage rates were slightly higher for the first time in 8 days as markets braced for the impact of political developments. The big issue of the day was (and still is) the healthcare bill set to be debated in the House of Representatives tonight. In general, if the bill is passed, investors will be more keen to believe in the viability of other legislation more germane to financial markets (like tax cuts, other stimulus, and regulatory reform). Those “other” policy points were key reasons for the sharp move higher in rates at the end of 2016. If confidence increases , it could put the same pressure back on rates. But if investors lose confidence in the policy potential, stocks and bonds would have more motivation to move lower (as they’ve both been doing for the past 2 weeks). As of yesterday

Mortgage Rates Stumble as Political Uncertainty Weighs

chemical-activity-barometer-increases-in-march

Note: This appears to be a leading indicator for industrial production.

From the American Chemistry Council: Consumer, Business Confidence Reach Levels Not Seen in Decades; Optimism Reflected in Increased Chemical Industry Activity

The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), posted its strongest year-over-year gain in nearly seven years. The 5.5 percent increase over this time last year reflects elevated consumer and business confidence and an overall rising optimism in the U.S. economy. Speaking last week, Federal Reserve Chairwoman Janet Yellen also referenced a “confidence in the robustness of the economy” as a reason to move forward with an interest rate hike.

The barometer posted a 0.5 percent gain in March, following a 0.5 percent gain in February and 0.4 percent gain in January. All data is measured on a three-month moving average (3MMA). Coupled with consecutive monthly gains in the fourth quarter of 2016, the pattern shows consistent, accelerating activity. On an unadjusted basis the CAB climbed 0.4 percent in March, following a 0.4 percent gain in February and a 0.6 percent increase in January.

…

Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index.

emphasis added

Click on graph for larger image.

This graph shows the year-over-year change in the 3-month moving average for the Chemical Activity Barometer compared to Industrial Production. It does appear that CAB (red) generally leads Industrial Production (blue).

CAB has increased solidly over the last several months, and this suggests an increase in Industrial Production in 2017.

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Rates Drift Lower

Mortgage rates fell after fears of a rate-unfriendly Federal Reserve turned out to be unfounded.

Freddie Mac, in its weekly survey of more than 100 lenders nationwide, reported the average thirty-year rate fell 7 basis points (0.07%) to 4.23% this week.

The March 15 Federal Reserve meeting was actually good for mortgage rates.

While the group did move its benchmark rate up by 0.25%, it did not issue forecasts pointing to aggressive rate hikes or restrictive policy for the remainder of 2017.

The market peeled back increases it had built into mortgage rates “just in case.”

So far this year, mortgage rates have not eclipsed their December 2016 highs. We may have seen the highest rates of 2017 already, and the rest of the year could be tamer than everyone thought.

Click to see today’s rates (Mar 23rd, 2017)

How Freddie Mac Finds Its Weekly Average Rate

Each week, mortgage agency Freddie Mac surveys 125 lenders nationwide for its Primary Mortgage Market Survey (PMMS), a snapshot of current mortgage interest rates.

It asks mortgage companies, banks, and credit unions, and other lenders their current rate for a well-qualified borrower putting 20% down, and paying “discount points,” or extra fees that directly reduce the rate.

The agency polls lenders Monday through Wednesday for its Thursday release.

The delay makes the survey useful for long-term mortgage rate comparisons, but it isn’t a very good way to check up-to-the-minute rates.

Today, the average consumer can see mortgage rate changes that happen in the last hour. That wasn’t the case 45 years ago when Freddie Mac published its first mortgage rate survey.

Back then, the average consumer may have checked rates in newspapers or traveled to their local bank to see recent rate offers.

Today’s mortgage shopper has a distinct advantage. They can check rates online at will, and secure a quote based on minutes-old rates, not days-old ones.

And in today’s rapidly shifting rate environment, that could mean big savings.

Click to see today’s rates (Mar 23rd, 2017)

Stock Market Loses Steam, Mortgage Rates Fall

Wall Street has been talking about rising rates for years.

In 2015, experts predicted much higher rates by year’s end. Rates only rose modestly. The same predictions arose in 2016. Instead, mortgage rates bottomed out near all-time lows.

As one would expect, analysts predicted higher rates in 2017. The rampant post-election rate jump had just happened.

Dire predictions are circulating, but mortgage rates have been remarkably tame in 2017 thus far.

Rates now nearly match levels seen at the height of the post-election jump. They have not crested this level, despite predictions to the contrary.

All markets experience “corrections” from time to time. The good news is it doesn’t always have to be a bad thing.

A correction is simply a return to a sustainable level. Often, bubbles form — in the stock market, housing market, and the interest rate market, too.

The recent mortgage rate upheaval could be “overdone” at this point, and poised for a reversal.

What would take us there? There are still plenty of geopolitical concerns, many of which resulted in low 2016 rates. None of those have been resolved yet, by the way.

Ongoing European Union upheaval and middle-east conflict are just two examples.

Plus, the “elephant in the room” is how Donald Trump’s policies will affect the economy, inflation, taxes, and a slew of other rate-influencing factors.

The post-election stock market rally is losing steam. Wall Street is realizing that pro-economic policies proposed by the new president aren’t easy to get through Congress. So, economic growth may not come soon.

Typically, mortgage rates rise in a hot economy. If the hope for a stronger economy wanes, so could the stock market, and mortgage rates could drop.

We’re already seeing this effect. Donald Trump’s health care bill appears stalled. Investors wonder if economic initiatives, too, will run up against a brick wall — or be stripped down — limiting their effect on the economy.

In short, don’t rule out falling rates in 2017. It could be a very good year for mortgage rate shoppers.

Click to see today’s rates (Mar 23rd, 2017)

Mortgage Types Offer Different Rates

Freddie Mac requests conventional/conforming loan rates to arrive at its national average rate.

But it leaves out mortgage rates for government-sponsored programs that could come with even lower costs.

In today’s rising rate environment, a non-conventional loan could be the right decision for some homeowners.

Three loan programs in particular — the USDA home loan, VA mortgage, and FHA loan — are government-backed mortgages with rates in the 3s.

The USDA loan is available in less dense neighborhoods across the U.S. It offers zero down payment and lenient credit score minimums.

Eligibility is based, in part, on location of the home. Ninety-seven percent of U.S. land mass is eligible for a USDA loan, so homebuyers looking for housing outside of major metropolitan areas should check this option.

The zero-down VA home loan program comes with lower-than-conventional rates, according to loan software provider Ellie Mae, undercutting conventional loan rates by an impressive 25 basis points (0.25%).

Veterans with as little as 90 days of service history could be eligible for a VA loan.

With rates falling, the FHA loan rates are dipping into the high-3s. About forty percent of home buyers under the age of 37 buy their first home with FHA.

It’s no surprise.

FHA requires just 3.5% down and is very lenient about credit scores. According to a report released by Ellie Mae this month, 56% of FHA borrowers had a credit score between 600 and 699.

Only 16% of conventional loan applicants had similar scores.

The FHA home loan is the go-to program for home buyers without perfect credit profiles, little cash to put down, and the desire to become a homeowner as soon as possible.

Many lenders are offering these loan types at rates in the 3s, even as conventional rates are solidly above 4%.

What Are Today’s Mortgage Rates?

Today’s interest rates are low, despite the post-election jump. Historically any rate in the 4% range was considered “too good to be true.” But those rates are still available.

Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Click to see today’s rates (Mar 23rd, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

Try the Mortgage Calculator

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mortgage-rates-today-march-23-2017-plus-lock-recommendations

What’s Driving Mortgage Rates Today?

February’s New Home Sales from the Commerce Department tracks a much smaller percentage of home sales than Wednesday’s report covers, so it’s less important for mortgage rates today. Experts believe the report will show a small increase from 555,000 to 571,000.

Click to see today’s rates (Mar 23rd, 2017)

Unemployment Claims Unexpectedly Higher

We also get the weekly Unemployment Claims, but that report only tracks a week’s worth of new claims for benefits. Today’s report was expected to come in with 240,000 new claims, down 1,000 from last week’s 241,000 claims.

However, we did get a sizable jump over last week’s figures and this week’s expectations. In the week ending March 18, the advance figure for seasonally adjusted initial claims was 258,000, an 18,000 more than expected. That’s good for mortgage rates.

Trump Slump Continues?

CNNMoney’s Fear & Greed Index has planted itself solidly into Fear territory. Just a month ago, before the so-called “Trump Slump” took hold, investors’ moods were entirely different — in “Extreme Greed.”

The Fear & Greed Index consists of a series of metrics designed to capture investor sentiment. “Greedier” investors invest more aggressively, and stock prices tend to rise. Consequently, so do mortgage rates. The more fearful investors prefer safe havens like bonds and mortgage-backed securities (MBS), pushing up their prices and interest rates down.

All of these indicators point o continuing drops in long-term interest rates in the near-term.

However, Fed Chair Janet Yellen is expected to give a speech today that is widely anticipated to be positive for the economy and may boost stocks and burst bonds — reversing some of the Trump Slump and causing bond prices to pull back. If locking today, I’d do it fast.

Today’s Mortgage Rates

** FHA APRs include government-mandated mortgage insurance premiums (MIP).

These rates are averages, and your rate could be lower.

Request a personalized quote from a licensed, reputable lender here.

Tomorrow

Tomorrow brings us a fairly important report — Durable Goods orders for February. Experts predict that this indicator of demand for high-ticket orders and items expected to last three or more years will have have fallen by 1.6 percent. That’s a modest setback for the US economy. However, this would be good news for mortgage interest rates. A larger drop would be even better,

Rate Lock Recommendation

This is a good time to take advantage of the drop in pricing. I recommend locking ASAP this morning before Yellen’s speech positively impacts the stocks and negatively affects mortgage rates today.

Note that this is what I would do if I had a mortgage in process today. Your own goals and tolerance for risk may differ.

Ready to lock? Click here.<<

What Causes Rates To Rise And Fall?

Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates, because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.

For example, suppose that two years ago, you bought a $1,000 bond paying five percent interest ($50) each year. (This is called its “coupon rate.”) That’s a pretty good rate today, so lots of investors want to buy it from you. You sell your $1,000 bond for $1,200.

When Rates Fall

The buyer gets the same $50 a year in interest that you were getting. However, because he paid more for the bond, his interest rate is not five percent.

• Your interest rate: $50 annual interest / $1,000 = 5.0%


• Your buyer’s interest rate: $50 annual interest / $1,200 = 4.2%

Your buyer gets an interest rate, or yield, of only 4.2 percent. And that’s why, when demand for bonds increases and bond prices go up, interest rates go down.

When Rates Rise

However, when the economy heats up, the potential for inflation makes bonds less appealing. With fewer people wanting to buy bonds, their prices decrease, and then interest rates go up.

Imagine that you have your $1,000 bond, but you can’t sell it for $1,000, because unemployment has dropped and stock prices are soaring. You end up getting $700. The buyer gets the same $50 a year in interest, but the yield looks like this:

• $50 annual interest / $700 = 7.1% The buyer’s interest rate is now slightly more than seven percent.

Click to see today’s rates (Mar 23rd, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

Try the Mortgage Calculator

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buying-a-house-where-prices-exceed-your-budget

Home prices are on the rise and in some markets, they are mismatched. That means there are fewer homes for sale than buyers and bidding wars are back in hot areas. That’s made buying a house, especially those new to the market, feel waylaid.

Click to see today’s rates (Mar 22nd, 2017)

Buying A House Is A Business Transaction; Treat It Like One

You might feel like you can’t compete, especially in the hottest home buying markets. But, buying a house in your dream market is possible if you know how.

It requires the right strategy and mindset, though. Here are some ways to get that home in your dream market at a price you can afford.

It’s A House, Not Your Soul Mate

Too many buyers, especially first timers, get mushy when they’re buying a home. They expect when it’s the right house, they’ll walk into the property and angels will sing. It will “feel” perfect and no other house will do after seeing “the one.”

But buying a house is probably the biggest financial decision you’ll make. It’s part of your wealth-building strategy. Like you would in the stock market, you want to avoid mistakes. Not only is buyer’s remorse real, home buying mistakes have long-term financial consequences, sometimes big ones.

Right from he start, think like a real estate investor when you’re buying a house because that’s what you are. Keep a clear head and open mind to make the right home choice, especially in your dream market.

Leave Your Ego At Home

Be ready to compromise on some of your wish list, but not on your budget. Know your numbers going in and don’t let your pride get you caught up in the bidding wars. Definitely don’t try competing with those with bigger pockets because you can’t win.

Be extra careful when buying from investors. Many flipped homes aren’t all they appear, and buying the wrong one is a pricey mistake. That also can be true of new and resale homes sold by homeowners.

Keep laser focus on the details of these and other real estate transactions. Also, know the language of real estate and when to walk away from bad deals.

Research Your Dream Market

Invest as much time as necessary in researching your ideal market. Know all you can about the neighborhoods. Understand housing prices, key home features, past home sales history, crime stats, schools, property taxes and other costs, and amenities.

Talk to real estate professionals in those communities and start building relationships. Just don’t sign with a real estate agent before you’re ready. When you’re asking them questions, know what they can’t tell you—like about crime and school statistics. That’s steering and it’s illegal so you’ll do that research online or ask community members.

Don’t just spend time online developing fantasies about a community, though. If it’s nearby enough, spend time in the neighborhoods getting a feel for how people live there. Carry a checklist of things you want in a community and make sure neighborhoods tick the right boxes.

Literally map out which neighborhoods are best for you. In blazing hot markets like Dallas, there are multiple neighborhoods. Picking the right one for the right reasons is crucial to avoid a poor buying decision.

Think About Selling Before You Buy

One of the best ways to buy the right house is thinking ahead about resale value on that home.

Investors will tell you that you make the sales deal at the buyer’s table because the market determines sales value. That means you’ll want to know that market and invest in a home that will sell when it’s time.

Only buy based on what sells well in that market. In other words, if three bedroom homes with two baths sell best, don’t buy a house without those features, even if you love that home. Also avoid homes with funky interior layouts or outside lots you can’t or are too costly to reconfigure.

Remember, home buying is part of your wealth building strategy. What you buy now determines what you can buy later and how much wealth you’ll build long term.

Buy The Worst House In Ihe Best Neighborhood

Sometimes, the only way to get into your dream market is to buy an ugly house there. That may be one right in your perfect neighborhood or another in a transitional community nearby. You’ll know by your research.

But, you’ll need to have vision when you buy these houses. Many home buyers can’t see past hideous paint or carpet colors and outdated cosmetic features. But, if you keep an open mind when you’re seeing these houses, you can find a great one within your budget.

Find a home that fits your resale strategy but is also in the neighborhood where you’ll be happiest.

Be sure you get the right inspections and are ready to put in some work to make it what you want. But pay attention to the next step when you do.

Buy A Fixer But Avoid Money Pits

While many people want new construction, those homes are pricier in hot markets. Established communities in hot markets like Dallas also have older homes that may not appeal to all buyers. They’re outdated or need a ton of work to be livable.

But, those could be a best bet for you if you buy right. Again, go back to your research and consider your resale strategy. If you don’t plan to be in the home long enough to fix it up, don’t buy that house

If you’re staying in a house long term, you still want to avoid a money pit. To do that you have to consider what you can’t see when looking at that property. Unexpected repairs can add 10-20 percent to your rehab budget

To avoid expenses you can’t afford, don’t just opt for a conventional home inspection. Hire a qualified get structural engineer to inspect the home.

Why Hire A Structural Engineer? Because You’re Not Stupid

Because a structural engineer specializes in inspecting major structural aspects of a house like foundations, load bearing walls and beams and major systems like plumbing. They can “see” behind the walls and structure to identify serious problems costing a lot of money to fix.

Conventional home inspectors aren’t trained engineers. They only can find issues they can see, though you might miss many of those things yourself—like serious cracks or water leaks. Sometimes, a home inspector may suggest you hire a structural engineer. If they do, follow that advice because it’s worth the investment.

If there are major issues, it’s time to call in contractors to tell you what they’ll cost to fix. Once you do that, if you can still afford the house, renegotiate price. That will give you more money for renovations.

But don’t over-renovate the house. Adding more features than add value to a house in that neighborhood means at resale means you’ll end up with less money or have a harder time selling.

Nail Down Your Financing. Now.

Whether you’re a first-time home buyer or buying your next home, in this market, you want your financing in place.

Before you start home shopping, know how much mortgage you’ll need and shop around for the right one. Once you find the right lender, get pre-approved to lock in your rate.

If you need down payment help, investigate the programs in your ideal community. Thousands are out there nationwide but you’ll need to plan for them in advance. Some involve buyer education or have other requirements that take extra time to meet.

Though hot markets have low inventory, places like Denver or Santa Clara offer down payment assistance programs to help close deals. For those buying in underserved census tracts, there are special incentives that cut upfront and long-term costs. Check your eligibility for all programs well in advance.

Know if you’ll ask for seller assistance, too. See if existing government or nonprofit programs help you secure that. Or learn if you can get down payment money gifted to you by parents.

If you’re buying a fixer, know how you’ll finance the deal, including the renovation mortgages available to you.

Then, be ready to act because houses sell fastest in hot markets.

What Are Today’s Mortgage Rates?

Part of what makes a property a great investment vs a so-so investment is the cost of your financing. So find the right loan (if you’re planning a fast flip, for instance, why pay for a 30-year fixed mortgage?) is critical.

And so is shopping aggressively for the best deal on that loan. It takes at least four quotes, say researchers, to assure yourself of finding the lowest rate with the best terms. That easy to do here.

Click to see today’s rates (Mar 22nd, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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3-important-facts-about-zero-down-va-home-loans

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Zero down for any borrower

All VA borrowers are eligible for the zero-down option. “It’s not a sliding scale,” says Michael Dill, vice president of mortgage lending at Guaranteed Rate in Tampa, Florida. “The VA is fine with anybody doing zero down.”

But most VA lenders will draw the line if your credit score is too low, and there can be restrictions for more expensive homes.

If you go over what’s known as the county loan limit — which is $424,100 in most U.S. counties but up to $636,150 in most higher-priced areas — you must make a down payment equal to 25 percent of the difference between your purchase price and the limit.

So, if you live in a typical part of the U.S. and buy a home for $524,100, you’ll have to put down $25,000. That’s 25 percent of the $100,000 difference between the sale price and the county loan limit.

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VA refi loans are zero-down, too

Homeowners can refinance into a new zero-down VA loan and cash out some or even all of their equity.

“If your house appreciates in value, there’s nothing wrong with doing a VA cash-out refinance and pulling every dollar of equity from that house,” Dill says.

While a zero-down cash-out refi can be very tempting, there’s a downside if you tap your equity too much, cautions Chris Pollard, a certified financial planner professional at Great Path Planning in Monroe, New York.

“If you keep restarting your loan, you’ll pay a ton of interest and you’ll never make a dent in it because you keep cashing out,” he says.

And, if you’re borrowing against your house to invest the money, that’s “a pretty bad idea in general,” Pollard says.

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You will have to pay a funding fee

Though a zero-down VA home loan won’t stick you with costly private mortgage insurance, you will be required to pay an upfront funding fee. It can be financed in addition to the loan amount.

Borrowers serving or who have served in a regular branch of the military must pay a funding fee of 2.15 percent of the loan amount of their first VA loan with no down payment. Reservists and National Guard members pay slightly more.

The funding fee for subsequent zero-down VA loans is 3.3 percent.

If a borrower makes a down payment of 5 percent, the funding fee drops to as little as 1.5 percent for a first or subsequent VA loan. And, those getting a VA Interest Rate Reduction Refinance Loan (IRRRL) pay just 0.5 percent.

Funding fees are waived for borrowers who have a service-connected disability and for surviving military spouses.

Want to learn more about your eligibility for a VA mortgage? Here are the things you need to know about getting a VA loan.

3-important-facts-about-zero-down-va-home-loans

6 Strategies for Paying Off Mortgage Loans Early | GOBankingRates - Go Banking Rates

Buying a home is a big step that can benefit you in many arenas. But when the mortgage payment comes due each month, it might temper your euphoria of being a homeowner.

Your monthly payment on your house is likely one of the largest line items in your budget — and the sooner you eliminate it, the sooner you can redirect that spending. If you pay off your mortgage early, you might experience true financial freedom. Although there’s no magic way to end the mortgage payoff process overnight, you can use these six tips to pay off your mortgage early.

1. Make Biweekly Payments

If you receive biweekly pay, you can easily make payments on your mortgage every two weeks instead of once a month — just pay half the amount every two weeks. By paying biweekly, you end up making one additional payment each year because there are 52 weeks per year.

Instead of making 12 monthly payments, you make 26 bimonthly payments — the equivalent of 13 monthly payments. The extra payment goes directly to your principal, which helps more than you might think when it comes to paying off a mortgage early.

2. Increase Your Monthly Payment

If you don’t want to change your mortgage payment schedule, consider adding an additional amount to each monthly payment. Whatever additional amount you send will reduce the principal balance, which reduces the amount of interest that accrues.

If you go this route and find that you can’t swing paying an extra amount one month, just make your regular payment. Although this is a great way to pay down your principal, you must have the self-discipline to actually make those bigger payments.

Related: 7 Things to Do Now That Will Pay Off Later

3. Refinance Your Mortgage

Check to see if mortgage interest rates fell since you took out your loan — if they have, you can likely refinance to a lower rate. Even if rates haven’t fallen, you might still qualify for a lower rate if your credit score has improved since you bought your home.

For example, if you had fair credit when you bought your home but you’ve been paying your mortgage and credit cards on time every month since then, you might have improved your credit score. And a higher credit score can likely qualify you for a lower interest rate.

If you’re thinking about a mortgage refinance, consider refinancing to a shorter term if you can afford the higher monthly payments. For example, if you’re five years into a 30-year mortgage, you might want to refinance to a 15-year term. Because 15-year rates are typically lower than 30-year rates, you’ll save a large amount of interest and pay the loan off sooner.

Find Out: When to Choose an FHA Refinance Over a Conventional Mortgage

4. Use Your Tax Refund

The secret of how to pay off your mortgage early could be hidden in your income tax return. The average taxpayer received a refund of $3,120 in 2015, according to the IRS. If you receive a tax refund and use it to pay down your mortgage, you can make a major dent in your principal. And you’ll be using money you weren’t counting on, too.

5. Cut Other Costs

If you want to pay more on your mortgage but can’t afford to, try cutting your spending and putting that money toward your mortgage. Make sure you cut out extra expenses like memberships or subscriptions you don’t use.

To help you stick to your plan, tell your family and friends about your goal. They can check in on you and help you avoid situations in which you’re likely to abandon your spending resolution.

Learn: 6 Ways to Tackle Your Budget

6. Earn Extra Income

If you’re really serious about paying off your mortgage early, pick up a side job and send that money to your loan servicer every month. You can take on extra shifts, pick up a gig on your days off or even start your own side business. Pay off the mortgage early and you’ll have more money to spend on whatever you like.

Up Next: 7 Things to Consider Before Paying Off Your Mortgage Early

6 Strategies for Paying Off Mortgage Loans Early | GOBankingRates - Go Banking Rates

6 Strategies for Paying Off Mortgage Loans - Go Banking Rates

Buying a home is a big step that can benefit you in many arenas. But when the mortgage payment comes due each month, it might temper your euphoria of being a homeowner.

Your monthly payment on your house is likely one of the largest line items in your budget — and the sooner you eliminate it, the sooner you can redirect that spending. If you pay off your mortgage early, you might experience true financial freedom. Although there’s no magic way to end the mortgage payoff process overnight, you can use these six tips to pay off your mortgage early.

1. Make Biweekly Payments

If you receive biweekly pay, you can easily make payments on your mortgage every two weeks instead of once a month — just pay half the amount every two weeks. By paying biweekly, you end up making one additional payment each year because there are 52 weeks per year.

Instead of making 12 monthly payments, you make 26 bimonthly payments — the equivalent of 13 monthly payments. The extra payment goes directly to your principal, which helps more than you might think when it comes to paying off a mortgage early.

2. Increase Your Monthly Payment

If you don’t want to change your mortgage payment schedule, consider adding an additional amount to each monthly payment. Whatever additional amount you send will reduce the principal balance, which reduces the amount of interest that accrues.

If you go this route and find that you can’t swing paying an extra amount one month, just make your regular payment. Although this is a great way to pay down your principal, you must have the self-discipline to actually make those bigger payments.

Related: 7 Things to Do Now That Will Pay Off Later

3. Refinance Your Mortgage

Check to see if mortgage interest rates fell since you took out your loan — if they have, you can likely refinance to a lower rate. Even if rates haven’t fallen, you might still qualify for a lower rate if your credit score has improved since you bought your home.

For example, if you had fair credit when you bought your home but you’ve been paying your mortgage and credit cards on time every month since then, you might have improved your credit score. And a higher credit score can likely qualify you for a lower interest rate.

If you’re thinking about a mortgage refinance, consider refinancing to a shorter term if you can afford the higher monthly payments. For example, if you’re five years into a 30-year mortgage, you might want to refinance to a 15-year term. Because 15-year rates are typically lower than 30-year rates, you’ll save a large amount of interest and pay the loan off sooner.

Find Out: When to Choose an FHA Refinance Over a Conventional Mortgage

4. Use Your Tax Refund

The secret of how to pay off your mortgage early could be hidden in your income tax return. The average taxpayer received a refund of $3,120 in 2015, according to the IRS. If you receive a tax refund and use it to pay down your mortgage, you can make a major dent in your principal. And you’ll be using money you weren’t counting on, too.

5. Cut Other Costs

If you want to pay more on your mortgage but can’t afford to, try cutting your spending and putting that money toward your mortgage. Make sure you cut out extra expenses like memberships or subscriptions you don’t use.

To help you stick to your plan, tell your family and friends about your goal. They can check in on you and help you avoid situations in which you’re likely to abandon your spending resolution.

Learn: 6 Ways to Tackle Your Budget

6. Earn Extra Income

If you’re really serious about paying off your mortgage early, pick up a side job and send that money to your loan servicer every month. You can take on extra shifts, pick up a gig on your days off or even start your own side business. Pay off the mortgage early and you’ll have more money to spend on whatever you like.

Up Next: 7 Things to Consider Before Paying Off Your Mortgage Early

6 Strategies for Paying Off Mortgage Loans - Go Banking Rates

VA mortgage lending turns in a record year - The Seattle Times

If James Pickett had to come up with thousands of dollars for a down payment to buy a house, he’d still be renting.

But at age 50, Pickett was able to purchase his first home in December without any down payment. His family is now enjoying four bedrooms and a nice yard for the same monthly payment he previously paid for rent.

He’s so delighted with his new home, he says he likes taking out the garbage — because he gazes at the house as he heads back inside.

“I look back at the house, and the dog running around in the yard, and I think, this is a beautiful house. This is where I’ll be long-term.”

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Pickett was able to afford his home in Chicago’s West Chesterfield neighborhood because he is a veteran. Between 1985 and 1993 he served in the Marine Corps Reserve so he qualified for a loan backed by the Department of Veterans Affairs, a low-interest mortgage whose popularity continues to grow.

When mortgage-loan money was flowing from banks before the 2008 financial crash, many vets paid little attention to the benefit of getting a VA loan, and lenders often steered vets into private loans that had less government red tape and could be approved faster. But since the crash, they have become a reliable source of homebuying assistance for a segment of the population.

Between 2009 and 2015, the total annual volume of VA mortgage originations more than doubled, from $75 billion to $155 billion, according to the Urban Institute.

Last year was a record year for VA loans, with $179.1 billion provided through 707,107 loans, either for purchases or to refinance old loans — an increase of 12 percent over 2015. The average loan nationally was $253,000, according to Veterans Affairs.

The VA loan program began in 1944, when the government made it possible for veterans returning from World War II to buy homes. About 22 million veterans have received them.

In addition to no down payment, the loans — available to both veterans and active military personnel — don’t require borrowers to buy private mortgage insurance to protect their lender. Typical conventional loans require a 20 percent down payment, or the homebuyer has to buy private mortgage insurance until that threshold is met.

People also don’t need to have immaculate credit to qualify for VA loans. The average FICO credit score for a borrower receiving a VA loan recently has been 710, compared with 760 for a conventional loan, said Karan Kaul, an analyst with the Housing Finance Policy Center of the Urban Institute.

A score of 760 is considered pristine, but Kaul said banks often are even pickier than that, reserving private bank loans for wealthy people “with almost no likelihood of defaulting.”

Interest rates on VA loans are also more favorable than other mortgage products. According to housing data provider Ellie Mae, the average interest rate on a 30-year, fixed-rate conventional loan was 4.42 percent in January. For VA loans, it was 4.01 percent. For loans guaranteed by the Federal Housing Administration, it was 4.23 percent.

Compared with another mortgage product supported by the federal government, FHA-backed loans, the default rate — or percentage of people failing to pay their mortgages — is much lower for VA loans. In 2012, for instance, 2.3 percent of FHA loans defaulted, compared with 1.3 percent of VA loans.

Why? “Vets tend to be financially conscious,” said Randy Hopper, senior vice president of mortgage lending for Navy Federal Credit Union. “They have maturity in life. They are taught to be disciplined from day one.”

But there are also lending practices that are unique to VA loans, and perhaps those practices could serve as a lesson in how to improve the outcome for borrowers in all types of loans, said Chris Birk, director of education for Veterans United Home Loans, a large VA lender.

VA mortgage lenders evaluate the borrower’s debts, expenses and income and make sure there is a specific cushion of leftover money from each paycheck to cover surprises — whether it’s an illness, a home repair or a lost job. That cushion is called “residual income,” and about $1,000 would be required for a family of four.

Non-VA lenders don’t specifically calculate such a cushion or require that borrowers have it.

Federal rules also require VA lenders to work with borrowers if they have trouble making payments, to avoid the home going into foreclosure. There are practices in place, such as relieving payments temporarily.

Because of the unique requirements in evaluating borrowers, some lenders have stayed away from VA loans because they have wanted to avoid a drawn-out process.

Yet updates in government practices and technology changed some of those concerns a few years ago, Birk said.

VA mortgage lending turns in a record year - The Seattle Times

When to Toss Tax Records

QHow long do I need to keep my tax records in case I get audited? Are there some records I should keep longer?

SEE ALSO: 17 Red Flags for IRS Auditors

AIt’s a good idea to keep your returns indefinitely. But you can generally toss supporting tax records three years after the tax-filing deadline, which is the time the IRS generally has to initiate an audit. Several states have four years to initiate an audit (you can find out about the rules from your state department of revenue or taxation; see the IRS’s archive of state tax agencies). The federal audit period extends to six years if you underreport your income by 25%, so Jeffrey Schneider, an enrolled agent in Port St. Lucie, Fla., recommends holding on to your records for at least seven years.

Supporting documents you should hold on to for at least three years include your Form W-2s or Form 1099s reporting income; other 1099s reporting capital gains, dividends or interest; Form 1098, if you deducted mortgage interest; canceled checks and receipts for charitable contributions; and records showing expenses for other deductions and credits. Also keep records showing eligible expenses for withdrawals from health savings accounts or 529 college-savings plans. If you have business expenses, keep records of those costs, such as for equipment purchases, phone bills, business travel and marketing expenses. If you claimed a home-office deduction, keep records of your rent or mortgage interest, homeowners or renters insurance, real estate taxes, utilities, and other eligible expenses. Keep receipts showing any tax-deductible retirement-savings contributions, such as to a deductible IRA, simplified employee pension or solo 401(k). Also keep Form 1095 showing that you had eligible health insurance, or records showing that you met the criteria for an exemption.

SEE ALSO: 17 Tax Breaks You Won’t Believe Are Real

You’ll need to hold on to some tax records longer than the three-year audit period. One of the biggest mistakes people make is not keeping records that establish the basis of property and investments; those are used to determine the taxable gain or loss when you sell. “The most elusive information seems to be the basis information,” says Jerry Gaddis, an enrolled agent in Key Largo, Fla. You should keep purchase records for mutual funds, stocks and other investments held in a taxable account for at least three years after you sell the investment because you’ll need to report the purchase date and price when you file your taxes for the year they are sold. Brokers must report the cost basis of stock purchased in 2011 or later, and of mutual funds and exchange-traded funds purchased in 2012 or later, but it helps to keep your own records in case you switch brokers. If you inherit stocks or funds, keep records of the value on the day the original owner died to help calculate the basis when you finally sell the investment (and for at least the three-year audit period after that). Also keep records of reinvested dividends that you’ve already paid taxes on so you won’t be taxed on them again when you sell the stock.

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Keep records of your home purchase for at least three years after you sell your home, as well as records of any significant home improvements that add to your home’s value, such as the cost of adding an extension or a new kitchen. Up to $250,000 in home-sale profit is excluded from taxes if you’re single (or up to $500,000 if you’re married filing jointly) if you live in the house for at least two of the five years leading up to the sale. But you could end up with a tax bill if you don’t live there that long or if your profits are higher. In that case, you can add the cost of those capital home improvements to the cost basis of your home when you sell and reduce any capital gains. See IRS Publication 523, Selling Your Home, for more information about the expenses that can be added to your basis.

SEE ALSO: 16 Nice-Try Tax Breaks Rejected by the IRS

Keep Form 8606 showing any nondeductible IRA contributions until all of your IRA money is withdrawn (plus at least the three-year audit period) so you can prove you’ve already paid taxes on the contributions and won’t be taxed on them again.

If you have a business, you should keep records for any assets that are still used in the business or are being depreciated, says Gil Charney, director at the Tax Institute at H&R Block.

Most online tax programs let you access your returns for five or six years (the returns may be available for only six months with some free tax-filing versions). TaxAct Online customers can access their returns for seven years after filing, and people who use the free edition starting this year can also access their returns for seven years. Any documents entered as part of the tax return will be stored digitally with the return, and you can also attach digital images and documents to the return, such as scanned images of W-2 forms, 1099 forms and receipts, says Tony Reding, tax analyst with TaxAct. TurboTax’s MyDocs and H&R Block’s MyBlock program also let you upload and store tax-related documents. For more information about online tax-filing programs, see our Guide to 7 Top Tax Software Programs.

For more information about the rules for keeping tax documents, see IRS Tax Topic 305 – Recordkeeping.

SEE ALSO: 9 Surprising Things That Are Taxable

Got a question? Ask Kim at askkim@kiplinger.com.

When to Toss Tax Records

Equifax to Meet with Investors in Minneapolis and Toronto

ATLANTA, March 15, 2017 /PRNewswire/ — Equifax Inc. (NYSE: EFX) today announced that
Jeff Dodge and
Doug Brandberg of Investor Relations will meet with investors in Minneapolis on Wednesday, March 22nd and in Toronto, Canada on Thursday, March 23rd.

Dodge and Brandberg will discuss the company’s fourth quarter 2016 performance, as well as the strategic outlook for 2017.

An archive of the presentation will be available at investor.equifax.com.

About Equifax

Equifax is a global information solutions company that uses trusted unique data, innovative analytics, technology and industry expertise to power organizations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its database includes employee data contributed from more than 7,100 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,500 employees worldwide.

Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015). For more information, visit www.equifax.com.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/equifax-to-meet-with-investors-in-minneapolis-and-toronto-300424101.html

SOURCE Equifax Inc.

Equifax to Meet with Investors in Minneapolis and Toronto

How Fed hike will affect mortgages, car loans, credit cards - Boston.com

WASHINGTON (AP) — Are mortgage rates going up? How about car loans? Credit cards?

How about those nearly invisible rates on bank CDs — any chance of getting a few dollars more?

With the Federal Reserve having raised its benchmark interest rate Wednesday and signaled the likelihood of additional rate hikes later this year, consumers and businesses will feel it — if not immediately, then over time.

The Fed’s thinking is that the economy is a lot stronger now than it was in the first few years after the Great Recession ended in 2009, when ultra-low rates were needed to sustain growth. With the job market in particular looking robust, the economy is seen as sturdy enough to handle modestly higher loan rates in the coming months and perhaps years.

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“We are in a rising interest rate environment,” noted Nariman Behravesh, chief economist at IHS Markit.

Here are some question and answers on what this could mean for consumers, businesses, investors and the economy:

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Q. I’m thinking about buying a house. Are mortgage rates going to march steadily higher?

A. Hard to say. Mortgage rates don’t usually rise in tandem with the Fed’s increases. Sometimes they even move in the opposite direction. Long-term mortgages tend to track the rate on the 10-year Treasury, which, in turn, is influenced by a variety of factors. These include investors’ expectations for future inflation and global demand for U.S. Treasurys.

When inflation is expected to stay low, investors are drawn to Treasurys even if the interest they pay is low, because high returns aren’t needed to offset high inflation. When global markets are in turmoil, nervous investors from around the world often pour money into Treasurys because they’re regarded as ultra-safe. All that buying pressure keeps a lid on Treasury rates.

Last year, for example, when investors worried about weakness in China and about the U.K.’s exit from the European Union, they piled into Treasurys, lowering their yields and reducing mortgage rates.

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Since the presidential election, though, the 10-year yield has risen in anticipation that tax cuts, deregulation and increased spending on infrastructure will accelerate the economy and fan inflation. The average rate on a 30-year fixed-rate mortgage has surged to 4.2 percent from last year’s 3.65 percent average.

After the Fed’s announcement Wednesday of its rate hike, the yield on the 10-year Treasury actually tumbled — from 2.60 percent to 2.49 percent. That decline suggested that investors were pleased that the Fed said it planned to act only gradually and not to accelerate its previous forecast of three rate hikes for 2017.

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Q. So does that mean home-loan rates won’t rise much anytime soon?

A. Not necessarily. Inflation is nearing the Fed’s 2 percent target. The global economy is improving, which means that fewer international investors are buying Treasurys as a safe haven. And with two more Fed rate hikes expected later this year, the rate on the 10-year note could rise over time — and so, by extension, would mortgage rates.

It’s just hard to say when.

Behravesh forecasts that the average 30-year mortgage rate will reach 4.5 percent to 4.75 percent by year’s end, up sharply from last year. But for perspective, keep in mind: Before the 2008 financial crisis, mortgage rates never fell below 5 percent.

“Rates are still incredibly low,” Behravesh said.

Even if the Fed raises its benchmark short-term rate twice more this year, as it forecast on Wednesday that it would, its key rate would remain below 1.5 percent.

“That’s still in the basement,” Behravesh said.

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Q. What about other kinds of loans?

A. For users of credit cards, home equity lines of credit and other variable-interest debt, rates will rise by roughly the same amount as the Fed hike within 60 days, said Greg McBride, Bankrate.com’s chief financial analyst. That’s because those rates are based in part on banks’ prime rate, which moves in tandem with the Fed.

“It’s a great time to be shopping around if you have good credit and (can) lock in zero-percent introductory and balance-transfer offers,” McBride said.

Those who don’t qualify for such low-rate credit card offers may be stuck paying higher interest on their balances because the rates on their cards will rise as the prime rate does.

The Fed’s rate hikes won’t necessarily raise auto loan rates. Car loans tend to be more sensitive to competition, which can slow the rate of increases, McBride noted.

___

Q. At long last, will I now earn a better-than-measly return on my CDs and money market accounts?

A. Probably, though it will take time.

Savings, certificates of deposit and money market accounts don’t typically track the Fed’s changes. Instead, banks tend to capitalize on a higher-rate environment to try to thicken their profits. They do so by imposing higher rates on borrowers, without necessarily offering any juicer rates to savers.

The exception: Banks with high-yield savings accounts. These accounts are known for aggressively competing for depositors, McBride said. The only catch is that they typically require significant deposits.

“You’ll see rates for both savings and auto loans trending higher, but it’s not going to be a one-for-one correlation with the Fed,” McBride said. “Don’t expect your savings to improve by a quarter point or that all car loans will immediately be a quarter-point higher.”

Ryan Sweet, director of Real Time Economics at Moody’s Analytics, noted:

“Interest rates on savings accounts are still extremely low, but they’re no longer essentially zero, so that may help boost confidence among retirees living on savings accounts.”

___

Q. What’s in store for stock investors?

A. Wall Street hasn’t been spooked by the prospect of Fed rate hikes. Stock indexes rose sharply Wednesday after the Fed’s announcement.

“The market has really come to view the rate hikes as actually a positive, not a negative,” said Jeff Kravetz, regional investment strategist at U.S. Bank.

That’s because investors now regard the central bank’s rate increases as evidence that the economy is strong enough to handle them.

Ultra-low rates helped underpin the bull market in stocks, which just marked its eighth year. But even if the Fed hikes three times this year, rates would still be low by historical standards.

Kravetz is telling his clients that the market for U.S. stocks remains favorable, though he cautions that the a pullback is possible, given how much the market has risen since President Donald Trump’s November election.

___

Q. Why is the Fed raising rates? Is it trying to slam the brakes on economic growth?

A. No. The rate hikes are intended to withdraw the stimulus provided by ultra-low borrowing costs, which remained in place for seven years beginning in December 2008, when the Fed cut its short-term rate to near zero. The Fed acted in the midst of the Great Recession to spur borrowing, spending and investing.

The Fed’s first two hikes — in December 2015 and a year later — appear to have had no negative effect on the economy. But that could change as rates march higher.

Still, Fed Chair Janet Yellen has said policymakers intend to prevent the economy from growing so fast as to boost inflation. If successful, the Fed’s hikes could actually sustain growth by preventing inflation from rising out of control and forcing the central bank to have to raise rates too fast. Doing so would risk triggering a recession.

___

Q. Isn’t Trump trying to speed up growth?

A. Yes. And that goal could pit the White House against the Fed in coming years. Trump has promised to lift growth to as high as 4 percent annually, more than twice the current pace. He also pledges to create 25 million jobs over a decade. Yet the Fed already considers the current unemployment rate — at 4.7 percent — to be at a healthy level. Any significant declines from there could spur inflation, according to the Fed’s thinking, and require faster rate increases.

More rate hikes, in turn, could thwart Trump’s plans — something he is unlikely to accept passively.

Under one scenario, the economy could grow faster without forcing accelerated rate hikes. If the economy became more productive, the Fed wouldn’t have to raise rates more quickly. Greater productivity — more output for each hour worked — would mean that the economy had become more efficient and could expand without igniting price increases.

___

Veiga reported from Los Angeles.

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Animated explainer: http://bit.ly/2nlGO0K

How Fed hike will affect mortgages, car loans, credit cards - Boston.com

fed-meeting-how-mortgage-rates-will-change-by-weeks-end

The Market Has Already Built In A Fed Rate Hike

The Fed could hike rates this week.

The stock market is rallying to new records almost daily. And February Non-Farm Payrolls data show continued strength in the job market.

Plus, inflation is on the rise.

These factors and more point to an increase to the Federal Funds Rate, one of the Fed’s levers with which it helps heat or cool the U.S. economy.

The good news is that mortgage rates don’t track the Fed Funds rate — not perfectly, anyway.

As a mortgage shopper, you need not fear a hike. Markets may have already priced that into today’s mortgage rates.

But markets always seek to be six months or even years ahead of reality. That’s why it could pay to lock in your rate before the Fed adjourns. The group is set to deliver its own projections for 2017-2018 rate increases.

If they veer from past predictions, mortgage rates could move wildly.

Click to see today’s rates (Mar 15th, 2017)

Watching Mortgage Rates Ahead Of The Fed

According to Freddie Mac, the average 30-year conventional fixed-rate mortgage increased 11 basis points (0.11%) last week, and now averages 4.21% nationwide.

Mortgage rates are up nearly 70 basis points (0.70%) since late October. The U.S. presidential election catapulted rates to multi-year highs.

But that doesn’t mean rates will stay this high.

The mortgage rate market might be rising too far, too fast. A correction, therefore, is possible as 2017 marches on.

Mortgage rates are driven by free markets. Like the stock market, the market for rate-affecting bonds can lose value within a short period.

This causes rates to rise.

Mortgage rate shoppers have certainly witnessed this scenario play out over the past few months, but it wouldn’t take very much for rates to come “back to earth.”

But how realistic is that scenario? It’s looking less and less likely.

Mortgage rates may have hit a new baseline — a new normal. The Fed is on the defensive, protecting the economy from too much growth.

That’s a marked shift from the group’s policies over the past decade. Since the late 2000s, it has rolled out program after program to goose the economy and stave off recession.

At one point, Great Depression 2.0 was a real possibility.

Thankfully, the tide has changed. Now the Fed has a new problem: keep growth (and therefore inflation) in check.

The Fed’s dual charter is to foster maximum employment and stabilize prices in the economy. In other words, the unemployment rate should be low, and inflation should be near 2% annually.

It can’t raise the Fed Funds Rate too quickly: rising rates could eliminate jobs and put companies on the defensive.

But it can’t be too slow to lift rates either. That could lead to uncontrolled inflation.

The Fed, then, is the “Goldilocks” of the U.S. economy. It seeks balance. Economic activity should be, well, just right.

The group has not increased its benchmark rate since its December 2016 meeting, just the second hike in a decade.

Now, a March hike is on the table, when just weeks ago, analysts expected no move until June.

A faster Federal Reserve could mean higher rates. It may be wise to secure a low rate soon.

Click to see today’s rates (Mar 15th, 2017)

Mortgage Rates: What Will Happen This Week?

The Federal Open Market Committee (FOMC), or simply “the Fed”, adjourns its 2-day meeting on Wednesday at 2:00 PM ET.

A rate hike would be a big deal, and would dominate headlines.

But a less obvious report could move markets more than the hike or no-hike decision.

Four times per year, the Fed releases its own economic projections covering the unemployment rate, inflation, and yes, even predicting its own rate hike schedule.

The group last released its projections in December 2016. It called for three rate hikes in 2017, with a final Federal Funds rate between 1.25-1.5% by the end of the year, up from a range of 0.50-0.75% currently.

The market is already building in the future increases.

But what if the Fed starts predicting four hikes this year? That could send consumer mortgage rates skyward.

It would signal a hotter economy and greater risk of inflation than the group originally thought. The market would quickly anticipate the same, and price mortgage rates accordingly.

A strong economy is typically bad for mortgage rates. Inflation is higher, and investors would rather grab a greater return from stocks than bonds.

Mortgage rates are based on a type of bond — mortgage-backed securities or MBS. So, if you were an investor, would you rather make 10% annually in the stock market, or be holding a mortgage bond that pays 4% per year?

So, mortgage interest rates need to rise to attract investors.

The good news is that rates are still very low, especially in historical perspective.

Conventional mortgage rates are in the low 4s — which is about half of their average over the past 45 years.

Government-backed loan rates are even better. VA home loans can be had at rates about 0.25% lower than those for conventional loans. FHA and USDA home loans beat “standard” loan rates, too.

This week, we could see rates change, though. The meeting of the Federal Reserve is just one consideration. Fortunately, markets should be quiet until Wednesday, when massive movement is possible.

The following reports are most likely to move rates this week.

• Wednesday, March 15: Consumer Price Index released (a key gauge of inflation)


• Wednesday, March 15: Federal Reserve meeting adjourns, statement released


• Wednesday, March 15: FOMC Forecasts released


• Thursday, March 16: Housing Starts


• Friday, March 16: Industrial Production

Need to buy a home or refinance soon? Early in the week could be your best bet.

What Are Today’s Mortgage Rates?

Mortgage rates are still low — for now. If you’ve been waiting to purchase a home or refinance one, consider moving up your timeline. Rates can change suddenly and without notice.

Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Click to see today’s rates (Mar 15th, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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