ABBA First Mortgage News

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Homeowners are refinancing to put money into their houses to improve them and keep them longer.

Wednesday, April 17th, 2019

People are staying in their homes longer and making repairs or renovations according to a new survey. The sixth annual LightStream Home Improvement Survey conducted by The Harris Poll found that 73% of owners are planning home improvements in 2019, a rise of 26% from last year. They are also planning to spend more – $9,000 on average – a record high for the survey, while the share planning to spend $25,000 or more rose by 83% year-over-year. “The majority of homeowners are planning on staying in their homes for at least 10 years—or never move,” said Todd Nelson, senior vice president of strategic partnerships at LightStream. “Regardless of their age, we found that most consumers are focusing their home improvement projects to reflect their personal lifestyle, comfort and interests.” But the reason for renovations is less about adding value than it is about creating a perfect space. Personalization is the top motivator for 27% of respondents while just 14% are driven by increasing value. Improving their home ahead of sale was the priority for just 7% while 4% were preparing for a major life event such as having a baby. (Source: Mortgage Professional America)

ABBA First has many different refinance programs to meet the needs of many homeowners. We can give you cash out of your home’s equity to help you make the upgrades that you desire. Just give us a call and let’s talk about what you may want to do with your home and take advantage of the low rates that we provide at the same time. Call 910-332-0650.

Rates increased again slightly last week

Tuesday, April 16th, 2019

Rates moved up a bit last week but remained near their yearly lows. For the week ending April 11, Freddie Mac announced that 30-year fixed rates rose to 4.12% from 4.08% the previous week. The average for 15-year loans increased to 3.60% and the average for five-year moved up to 3.80%. A year ago, 30-year fixed rates averaged 4.42%, approximately one third of a percent higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac –“Rates moved up slightly this week while applications for home loans decreased following last week’s jump in rates – indicating borrower sensitivity to changing rates. Despite the recent rise, we expect rates to remain low, in line with the low 10-year treasury yields, boosting homebuyer demand in the next few months.

” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Happy Tax Day-(it’s also my sister Lois’ birthday! Happy birthday Lois. This is my gift to you.)

Monday, April 15th, 2019

Just a reminder from your friends here at ABBA First Mortgage that today is the last day for you to file your taxes. Unless of course you applied for an extension.

After weeks of rate reductions, we see a slight increase in this past weeks rates

Friday, March 29th, 2019

With mortgage rates rising last week, LendingTree’s Mortgage Rate Competition Index revealed that the average borrower could have saved $38,123, while a refinance borrower could have saved $43,712.

The report showed that, for 30-year fixed-rate mortgages, 26% of purchase borrowers got offers under 5%, up from 13% last week. This is an increase from last year’s rate, when 0.3% of purchase offers were 4.375% – its most common interest rate. If these rates seem high compared to what ABBA First offers- THEY ARE! Our average 30 year rate is 3.875% to 4.0% for a 30 year rate purchase mortgage for borrowers with good to excellent credit. Please check our rates page or call one of our loan officers for the best rates advertised at 910-332-0650.

Across all 30-year fixed-rate mortgage purchase applications on LendingTree’s website, the index climbed to 0.81, up 3 basis points from the week prior. Ultimately, this showed that the average borrower could have saved $38,123 on a $3000,000 loan over 30 years.

On the other hand, 31.3% of 30-year fixed-rate mortgage refinance borrowers received offers under 4.25%, rising from 12.1% one week before. This is higher than last year’s rate when 1% of refinance offers were under 4.25%.

And with a wider refinance market index of 0.93, the typical refinance borrowers could have looked for the lowest rate and cut back $43,712.

According to the report, the most common interest rate was 4.25% across all 30-year, fixed-rate mortgage refinance applications. Again, all that ABBA First can do is ask you to compare our rates with the competition and see for your self how much lower our rates are!

A bird in hand is worth two in the bush!

Wednesday, March 27th, 2019

Rates are the lowest in 13 months. People “think” that whis will continue and rates will fall some more. But if the economy begins to pick up this spring, rates will rise once again and we may have seen the last of the low rates this time around.

The end of March not only brings us springtime, it also represents the closing of the first quarter of the year. And it has been a very interesting quarter. For example, stocks have quieted down a bit from a very volatile fourth quarter. Meanwhile, the jobs situation has turned very volatile, with big gains one month and then a dismal showing the following month.

Should we be worried about the small gain in jobs last month? Based upon the large gain in January, there does not seem to be any immediate cause for concern. However, the March jobs report is right around the corner and if we don’t get a major upward revision in February’s numbers and the March report is weak, then we might see speculation regarding our economy slowing down.

One benefit of a perceived slower economy continues to be lower interest rates. At the end of last year, most analysts were predicting rising rates throughout the year. Instead, rates have fallen during the past few months and the meeting of the Federal Reserve Board last week did nothing to change that outlook. A word of caution. If we do have a rebound in job growth, this could be accompanied by a reversal of the rate trend we have been experiencing. If customers are considering borrowing for a purchase, it is always better to go with the bird in hand, instead of chasing the two in the bush.

Lowering the interest rate bar again for mortgages

Monday, March 25th, 2019

Mortgage rates fell quickly after the Fed’s announcement Wednesday that it would be getting back into the bond-buying business, big time – which could take rates even lower.

The average rate on the popular 30-year fixed, which had been sitting for days at 4.40 percent, fell sharply to 4.34 percent, according to Mortgage News Daily. Although that is the lowest in over a year and 19 basis points lower than a year ago nationally, ABBA First leads the charge and offers a 30 year mortgage rate which is BELOW 3.875% for 30 year mortgages. While the rate had surged to over 5 percent at the start of November, which caused home sales to fall sharply in December and January, ABBA First has kept its rates lower than the rest of the country all this time offering its clients the lowest advertised rates daily.

The move in mortgage rates followed Fed Chairman Jerome Powell’s announcement that the central bank would end the so-called runoff of bonds from its balance sheet sooner than most expected. That caused the yield on the 10-year Treasury to tumble. Mortgage rates loosely follow that yield.

“This is about as big of a change as anyone expected. It means the Fed will be buying more bonds more quickly,” wrote Matthew Graham, chief operating officer of Mortgage News Daily. “And bond buying results in lower rates, all other things being equal.”

Even small rate moves can have a big impact on homebuying, especially since so many buyers today are facing overheated home prices and are therefore on the edge of being able to afford a home at all. Looking at the 30-year fixed rate on a $300,000 mortgage, every 25 basis point move down means a savings of $50 on a monthly payment. With the rate now down about 75 basis points from November, that’s a savings of $150 per month.

The drop in rates helps both potential buyers and current homeowners who might be able to benefit from a refinance — but it all comes with a caveat. The Fed isn’t raising rates because the economy is weakening.

“While a plus for homebuyers, if concerns about the economic outlook rattle consumer and homebuyer confidence, it could offset the benefit of lower mortgage rates,” noted Danielle Hale, chief economist at realtor.com.

Impacting your credit scores and its affects

Tuesday, March 19th, 2019

Consumers often have concerns about the score impact hard inquiries have on our credit. Here are three quick tips that will help you distill it down for you as you shop for a mortgage..

1. Inquiry score impact typically ranges between 5-12 points, but there is no specific number assigned, it’s based on the overall report profile, so don’t even try to guess. Just consider that the stronger the profile, the less the impact.

2. Hard inquiries only impact your scores for 12 months, that’s it.

3. Inquiries remain on reports for 2 years, then are removed.

What does this mean for the borrower that is looking for a home and has a credit score that is borderline to being between credit rated categories (ie. good and fair; excellent and very good; etc.)? Often having your credit pulled can drop your score from one category to a lower one and this a fear of many borrowers as they shop for a home. It is good to know that as you shop for a home mortgage that it is taken into consideration from the first credit pull for the next 30 days of shopping, that your credit score is not affected if your credit is repulled for the same reason as was the initial pull of a mortgage inquiry. Hopefully that initial inquiry credit pull did not bring your score below the point of a categorical change and you are still in the position of being able to finance with the same credit grade as originally started with.

With mortgage rates low and home prices dropping, is this a good time to buy now?

Tuesday, March 12th, 2019

Well why don’t you tell me. Can a great situation get much better? Possibly. But home price appreciation went down for the 10th consecutive month in December, according to a recent report from Black Knight.

Ben Graboske, Black Knight’s data and analytics president, said home prices at the national level fell 0.3% from November for their fourth consecutive monthly decline. As a result, the average home has dropped over $2,400 in value since last summer.

“And while home prices are still up on an annual basis, the slowdown continues nationwide and, importantly, is not being driven by seasonal effects,” said Graboske. “December marked the 10th straight month of slowing annual home price appreciation, falling from a high of 6.8% annual growth in February to 4.6% at the end of the year.”

This slowdown could result in an increase in home sales, said Graboske.

“There is good news in these numbers for prospective homebuyers, though. Combined with the average 30-year fixed rate declining by more than half a point over the last three months, housing is now the most affordable it’s been since early in the 2018 home-buying season,” said Graboske. “It currently requires 22.2% of median income to purchase the average home with a 20% down payment on a 30-year fixed-rate loan. The recent decline in rates has translated into a more than 6% increase in a homebuyer’s purchase power – while keeping monthly payments the same – or a decrease of $62 a month in principal and interest on the average home bought with 20% down.” Obtaining your mortgage through ABBA First may save you a much greater monthly savings and therefore make it more than worth your while to shop now and save later.

Condos are making a comeback!

Friday, March 8th, 2019

The Department of Housing and Urban Development (HUD) has been dragging its feet on finalizing its rules for condominiums that can receive financing from the Federal Housing Administration, and industry groups have had enough. The National Association of Realtors® recently issued a letter to HUD Secretary Ben Carson urging him to issue the long-awaited final rule. “For far too long, worthy borrowers have been unable to purchase the home of their choosing because of FHA’s unfairly restrictive rules on condominiums,” NAR stated. “Ten years is far too long for this problem to have endured, stifling the U.S. housing market and our overall economy.” NAR said there are approximately 145,000 to 155,000 condominium developments in the U.S., and that homeowners in many of these buildings are shut out of FHA financing under the current rule. Only 9,427 of the 52,410 applications submitted for FHA approval were accepted, NAR said.

In 2009, FHA restricted its condo approval process, limiting the number of properties that could receive FHA loans. But in 2016, FHA caved to pressure from trade groups and members of Congress who insisted that too many first-time homebuyers, seniors and urban residents were being negatively impacted by the current rule. It issued a proposal that would lift a number of restrictions, streamline the recertification process and bring back spot approval for condos in non-certified developments. But apparently, that’s where the progress stopped.

Bring on the warmer weather!

Thursday, February 28th, 2019

Is it March 1st yet? With lower interest rates and more inventory on the markets, many are predicting a rebound for home sales this spring. This was not a leap year, so February was a very short month. It seemed like it just started, but now February is getting ready to end. For many who dealt with snow and cold, they’re pretty happy to be saying goodbye to February. Government workers are especially happy as they spent part of February with the threat of another government shutdown hanging over their heads. They’re happy to say that this did not happen.

The cleanup from the snow and the government shutdown continues, and we will finally see a report on economic growth for the fourth quarter this week. This comes as the first quarter is two-thirds of the way through. The jobs report for February will be delayed until March 8th — not because of the shutdown, but because February is such a short month and the first Friday of March falls on March 1st. Check out ABBA First Mortgage rates this weekend as we start a new month with a bang of lower rates to bring on new business!

One thing is for sure, spring is around the corner. This means not only will the snow be melting, but warmer temperatures will bring people out of their houses. A key barometer of the health of the real estate market is coming. Will those wandering outside be going to open houses and writing sales contracts? Once again we cry, bring on the warmer weather!