June 15, 2022 The U.S. Federal Reserve has confirmed a 0.75% increase in the federal funds rate.* This will be the third rate hike initiated by the Federal Reserve so far this year, with possibly another expected to follow as soon as the next meeting on July 27th. It's important to note that while the purchase market is still strong, home listings are showing declining aggressiveness in their asking price.
The government is pushing the economic breaks hard so I hope you are wearing your metaphorical seat belt. Everyone is saying, lock it!
*Source: https://www.federalreserve.gov/newsevents/pressreleases/monetary20220615a.htm
PREPARING
Whether you're anticipating a total solar eclipse or a future home, both require preparation to get what you want out of the moment and save yourself from future headaches.
Here are two scenarios where I typically offer advice when given the time (61-90 days) to make the loan happen.
You're self-employed.; Move the money you are using for the purchase of a home to your personal account. If you have down payment in your business account, you can use it; however, the lender will want to "source" the funds in your business account(s). This means if there is anything private, like account numbers or client names in the bank statements, you may be revealing more than you desire. By having the funds transferred to your personal account more than 60 days before you go to underwriting, lenders can stay out of your business.
You're getting a gift for the down payment. If they love you enough to give you the money, perhaps they trust you enough to give that money 61 days ahead of underwriting. Of course, gifts are allowed on many loan programs if the transfer is documented and you have a gift letter; however, if the funds are already in your account for two months, the money is no longer considered a gift. This actually improves your qualifications in underwriting because a loan using your own funds for the down payment is considered a less risky than a loan with gift funds. If it is yours for 60+ days, it is no longer a gift.
As a last tip, I offer Fully Underwritten Loans WITHOUT a contract. In other words, we can turn your offer into the equivalent of a full cash offer pending the appraisal and title work. This is a powerful option at your disposal for those hard to obtain homes. Please let me know if I can help you purchase a home in Georgia.
*Eclipse photo taken near Dillon, GA on August 21,2017 using Canon Rebel T6, 300mm lens.
From My Dear Client Angela-
I bought a little (1,048 Sq. feet) fixer-upper in Pine Lake, GA. Closed yesterday with the help of my fantastic Agent and Elizabeth Washburn (New Threshold Mortgage Company). These women are not just excellent business professionals, but FRIENDS who I trusted, felt comfortable with and enjoyed throughout the entire process. I knew they were looking out for me and I just never had a worry or an anxious moment. They will both be at the first BIG party at my little house as soon as I am able to get this little jewel of a house up to speed.
My first day working at the house I met my new neighbor who has so many things hanging from his porch (art and things) it is hard to even see the door. I walked over and said, "Hi, I am your new neighbor!" He shook my hand looked me in the eye and said HI--then said, "well I don't know what you think about all this stuff". I promptly said, "I LOVE it!" Then, with a big smile on his face he invited me inside to see more art. He tells me that love and compassion are the only things that really matter and added I know you get that! As he is explaining and describing all of his art, which he mostly found at the thrift store and I am just amazed at his keen eye and just how much he has in this little apartment! He bends down at one point and picks up a native American sand drawing and says he feels compelled to give this to me. I am touched and thank him profusely. As we part and I go back to my little house across the street, he says he is happy that we got to meet at this point in our journeys and then flings his arms open and says, "Welcome to Pine Lake!" I'm feeling right at home!
Since the election, the average mortgage rates have increased. The nine-week rise came to a sudden end today with rates decreasing during the first week of 2017. The average mortgage rate for the 30-year note dropped by 12 basis points to 4.20 percent. Rates for the 15-year notes decreased from 3.55 to 3.44 percent. It is still higher than prior to the election, but a new trend always starts with a first day.
This drop is good news for last minute refinancers or purchasers seeking a mortgage. If restructuring your mortgage is rate sensitive, it is likely time to take action since most experts expect rates to continually climb throughout the year, despite the recent drop.
Compared with rates in previous decades, current rates are low for mortgage borrowers. This is set to change, though, with rates having the potential for a rise to 5%+ during the coming year. It means that homebuyers, especially first-time buyers, should attempt to purchase sooner rather than later, or face decreased home price qualifications in the future.
If you're interested in refinancing or making the dream of homeownership a reality, visit www.NewThresholdMortgage.com for more information and achieve your next step.