As of now, the markets are betting that the Fed will hold off rate increases again in October based upon the disappointing jobs data, as well as other reports showing that manufacturing is slowing. Even the strong growth we have seen in the real estate sector seems to be slowing a bit, though this sector still is one of the shining stars in the 2015 economy. For now it looks like real estate will have to carry us through this segment of our economic recovery. Thus, it is great news that recent reports have shown homes as affordable as ever in 2015.
ABBA First Mortgage News
The latest results are in- inventories are increasing, homes are staying on the market longer (latest poll states an average of 80+ days), and home prices are falling ever so slightly after their peak in July of this year. With rates continuing to stay at all time lows, it makes sense to buy now before any of these factors change for the worse. ABBA First Mortgage can quote you with the best rates available for your needs and send you a pre-qualification even before you step into the water to get your feet wet. We want you to know how it feels to be treated by individuals that treat others the way they WANT to be treated- not necessarily the way they have been treated (or mistreated) by others. Call today or email me at email@example.com.
A voting member of the Federal Reserve’s policy committee said Friday that he believes the economy is on a satisfactory track and that an increase in interest rates is likely to be appropriate in either October or December.
Dennis Lockhart, president of the Fed’s Atlanta regional bank, said the economic data has been giving off mixed signals and there is more ambiguity in the data than there was a few weeks ago.
Lockhart said he will be watching consumer activity closely before he makes his decision on whether to raise rates at one of the Fed’s two final meetings of 2015.
“I continue to feel that cumulative progress is consistent with liftoff relatively soon,” Lockhart said his remarks to the annual meeting of the Society of American Business Editors and Writers.
The Fed has kept its key interest rate at a record low near zero since December 2008.
Lockhart’s views on the timing for a rate hike have been closely followed because he is one of five regional bank presidents with a vote this year on the Federal Open Market Committee, the panel of Fed bank presidents and Washington board members that meets eight times a year to set interest rate policy for the central bank.
The next meeting of the committee will be Oct. 27-28 and the final meeting of the year will occur on Dec. 15-16.
Many private economists believe that a weak jobs report for September released last week makes an October move unlikely, but many are still forecasting a rate hike in December.
When the Fed starts raising rates, something it has not done in nine years, it will mean higher rates for consumer and business borrowers. But central bank officials, including Fed Chair Janet Yellen, have stressed that the rate hikes are likely to be very gradual, meaning rates will remain near historic lows for some time.
Many had expected the first rate hike to occur in September, but minutes of that meeting released Thursday revealed concern among Fed officials about a significant slowdown in China, which roiled markets in August. The thought was that China’s problems could have a more severe impact on the U.S. economy than they had forecast. The Fed voted 9-1 at that meeting to keep rates unchanged.
Lockhart said that trying to interpret the recent twists and turns in the economy has been like riding a roller-coaster.
“The ambiguity of the moment reinforces the need to closely watch the vital signs of the economy over the coming weeks to determine if the outlook has changed,” Lockhart said.
Before the December meeting the Fed will have data on the October and November employment numbers, inflation data for September and October and the first two estimates for overall economic growth in the third quarter, Lockhart said.
Data on consumer spending, he said, will be the most important.
Jobless Claims increased last week to 277,000 — up 10,000 from the previous week. Although this is the highest number of new claims in a month, the weekly average for the year is the lowest since the early 1970s. The news got worse Friday morning as the Non-Farm Payrolls rose by 142,000 in September — missing expectations of a gain of 200,000 jobs. In addition, the August numbers were revised sharply lower to an increase of 136,000. It is believed that hiring in the U.S. has slowed due to the weakening global economy. This news sent the stock market lower. This may lead the Fed to delay an increase in interest rates. On the other hand, consumer spending was higher in August. New automobile sales and strong back-to-school sales were driving factors in the increase.
A survey of consumer confidence showed an increase in September to a level or 103.0. That is up from the August level of 101.1. The Present Situation Index, which is a measure of current conditions, climbed to an eight year high. It’s not all positive, however. The Future expectations Index fell from 91.6 to 91.0. This indicates that U.S. consumers do not see growth picking up in the near future. While consumers are feeling pretty good right now, there are still a lot of signs that show that the economy has a long way to go to fully recover.
Somehow, this doesn’t add up. More jobless claims + greater spending = an increased comsumer confidence level. Time will tell.
The loan process as we’ve known it for the last 30 years has changed. Effective October 3, all borrowers with new loan applications will now need to be provided with a Loan Estimate (LE) within 3 days of application. Additionally, a Closing Disclosure (CD) will be issued at least 3 days prior to closing. So the forms that we know as a GFE (Good Faith Estimate) and the TIL (Truth In Lending statement) have been replaced with these new forms. It may take some getting used to by the realtors, lenders, and closing agents/attorneys, therefore we, those in the mortgage industry, ask that borrowers be patient and expect some delays between the time that you apply for a mortgage and the time that it will take to bring your transaction to completion. On behalf of ABBA First Mortgage, thank you in advance as we will do everything that is necessary and possible to make this change a smooth one for all of our clientele- of that you can rest assured!
Hard to believe but homeowners with poor credit pay exactly twice as much for homeowner’s insurance as people with excellent credit, according to a new insuranceQuotes.com study. Homeowners with median credit pay 32% more than those with excellent credit. People with poor credit pay at least twice as much as people with excellent credit in 38 states and Washington, D.C. Three states prohibit insurers from using credit to calculate homeowner’s insurance premiums: California, Massachusetts and Maryland. “In most states, insurers are putting more emphasis on credit scores this year,” said Laura Adams, insuranceQuotes.com’s senior analyst. “The impact of a poor credit score is higher now than it was last year in 29 states and Washington, D.C., while it is lower in just 17 states. It’s more important than ever for people to maintain a solid credit rating by paying their bills on time, keeping their balances low and correcting errors on their credit reports.” (Source: HousingWire) The overall expense to a client with fair credit compare unfavorably to what a client with excellent credit may pay. ABBA First wants to ensure ALL borrowers that we seek to find the best rate and lowest closing costs/fees when they apply for a mortgage through us. Please note that we are an equal housing lender and determine to treat others the way we ourselves would like to be treated. Call today for your quote. Open Monday 8-6, Tuesday 8:30-6, and Friday 8:30-5 and on Saturday from 9-12 for rate inquiries only.
Understanding your credit can feel like doing calculus—confusing and over your head. Because of this, many people simply neglect it altogether, pretending it doesn’t exist. Unfortunately, this can have a major and lasting impact on your finances for the rest of your life.
Did you know more than a quarter of Americans say they’ve never checked their credit report? This is troubling, because your credit report might contain a black mark against you that’s actually an error. Here are three sneaky things that could be hurting your credit, that you can fix in a matter of minutes.
- Incorrect Information
Everything from your name to your address plays a role in ensuring your credit report is accurate. If you have a common name, for example, the wrong address could signify a case of mistaken identity, or worse—stolen identity.
Ensure that everything on your credit report is accurate, including your social security number, past jobs and places of employment.
- Unpaid bills
But wait! I pay all my bills! Not so fast. We’re talking about unpaid bills you might not know about, or accounts that have been marked delinquent in error. Gyms, cable companies and the like are notorious for leaving accounts open when they should have been closed, sometimes for years! Those seemingly unpaid balances could be hurting your credit score.
If you find an open or delinquent account that should not be on your report, be sure to contact both the creditor and the credit bureau to let them know about it. Often this just takes a phone call or two and a few minutes of your time to resolve.
- High credit card balances.
Even if you pay your credit card bill on time every month, its high balance could still be hurting you if it’s too close to the limit. As a rule, you should shoot for the balance on all of your cards to be no more than 20 to 25% of the credit limit. If you’re a responsible spender and don’t live beyond your means, you could call the credit card company and ask for a higher limit. This will reduce your debt-to-credit ratio, provided you don’t use it as an excuse to spend more.
Don’t let these unnecessary factors harm your credit score. The only surefire way to make sure they don’t is to check your credit report regularly! Please allow ABBA First to assist you with your next steps and assure that you are moving in the right direction with your credit reporting.
Starting with applications received on October 3rd of this year, the final closing costs on a home loan must be made available to a consumer purchasing or refinancing a home three business days before closing. This means that all parties must do a much more judicious job of planning a purchase or refinance transaction. The time frame between beginning of the transaction and closing will take longer due to these disclosure delays.
Want to go to closing quickly after signing a contract? The best avenue would be to make sure your application is fully pre-approved by your lender’s underwriters before you make an offer. This strategy also has the potential to make your offer more enticing to sellers because they know you are a serious buyer. It will also be important to make sure all issues are resolved early in the process. Last minute changes to the contract are much more likely to cause a delay in the settlement date. It is all-important for everyone who is part of the process to work as a team to insure that the transaction flows smoothly without delays. ABBA First is ready and willing to work with you to obtain a full approval based upon an undetermined, still yet to be found, house that you will eventually call your home. We want your business and will work with you and for you to make these changes a seamless transition.
Mortgage rates went up slightly following last week’s Federal Reserve meeting. The worsening was due in part to the comments made from Fed Chairperson, Janet Yellen. Both global and national economic data was mixed and had little impact on this slight deterioration. Mortgage rates ended the week a little higher and are expected to continually go up, except for the possible slight dips due to the factors mentioned above that directly affect the MBS (Mortgage Backed Securities). To see up to the minute changes in the MBS, please follow the Rate-O-Meter found at: http://www.abbafirst.com/about-us.php There you can follow the MBS during that exact block of time.
Where are rates going? The Federal Reserve is undecided as to whether or not to raise the short term interest rate which affects the prime rate that has remained unchanged for the last 5 years or so.
- Rates on home loans were stable again in the past week as the Fed meeting approached.
- Freddie Mac announced that for the week ending September 17, 30-year fixed rates rose one tick to 3.91% from 3.90% the week before.
- The average for 15-year loans also increased one tick to 3.11%.
- Adjustables were mixed, with the average for one-year adjustables falling to 2.56% and five-year adjustables rising one tick to 2.92%.
- A year ago, 30-year fixed rates were at 4.23%, close, but still higher than today’s levels.
- Attributed to Sean Becketti, chief economist, Freddie Mac — “The Treasury market was relatively quiet this week, and as a result rates on home loans barely budged. Inflation fell shy of expectations in August, up 0.2 percent over the past year, but core consumer prices increased 1.8 percent year-over-year. Low rates help to support housing markets, which continue to bring good news. The National Association of Home Builders’ HMI came in above expectations at 62, which is a ten year high. Even if the Fed decides to raise short-term interest rates, we don’t expect a significant impact on the housing market. We’re still on track for the best year of home sales since 2007. And in contrast to two years ago, when rates spiked in response to the Taper Talk, the economy is in much better shape and markets have been expecting the Fed to act for months. While our outlook incorporates a moderate increase in rates over the next 18 months, rates are likely to remain low by historical standards and should not be a determining factor for most Americans looking to purchase a home.”
Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.