Category Archives: Rates

Yellen Raises Rates on her way out as Fed Chair

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Yellen-rate-hikeThe Fed increased rates at their most recent meeting. They also indicated they will likely raise rates three additional times in 2018. Please read on for more:

First, who is the Fed and what do they do?

The Federal Reserve Board (the Fed), controls the Fed Fund Rate and the Discount Rate. These are charges for overnight loans from bank to bank or from the Fed to member banks.

What does an increase mean for regular people?
• It could cause banks to increase their “prime rates,” which are often used to calculate interest on consumer products like credit cards and home equity lines of credit (HELOCs).
• Mortgage rates are long-term rates and not directly controlled by Fed rate changes. However, mortgage rates are influenced by Fed policy, and rates can rise in anticipation of future Fed action. There are exceptions, yet home loan rates will typically follow overall interest rate trends over time.

Upcoming change in leadership at the Fed:
In January 2018, the current Fed chair, Janet Yellen, will step aside for a new chair, Jerome Powell. Time will tell whether this transition will impact overall policy.

Here’s what we know:
With the uncertainty, I’m tracking the changes carefully and am happy to keep you informed whenever you like.

Thank you for allowing me to provide you updates on industry news. Please reach out if I can answer any questions for you or help with financing (or refinancing) your home.

Dean Henderson, CRMS
661-726-9000

USDA Lowering Fees

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USDA-mortgage-lower-fees2Upfront Guarantee Fee and Monthly/Annual Fee Decrease

USDA has announced a reduction in the upfront guarantee fee and monthly/annual fee for fiscal year (FY) 2017 effective with Conditional Commitments issued on or after October 1, 2016 through September 30, 2017. The current and new reduced fees are as follows:

USDA Rural Development Reducing Guarantee and Annual Fees in October:
Effective October 1, 2016 (the start of fiscal year 2017) program fees for USDA Rural Development’s guaranteed home loan program will be significantly reduced.
The upfront guarantee fee will change from 2.75% to 1.0% of the loan amount.
The annual fee will change from 0.50% to 0.35% of the average scheduled unpaid principal balance for the life of the loan.

USDA FEES 10-1-16

 

 

 

 

 

The new fee structure will save homebuyers thousands of dollars up front and reduce monthly payments significantly.

For More Information about the USDA program call:

Dean Henderson, CRMS
President
Financial Independence Mortgage
(661) 726-9000

The 2012 Election’s Impact on Our Real Estate Market

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How can we expect the results of the recent 2012 election to effect our local real estate market?  Real Estate is the engine that drives not only our local economy but the global economy as well.  How our elected officials handle the Real Estate industry will determine the direction of our economic prosperity.  Check out this analysis from the RE Source guys:

For more information on the Antelope Valley Real Estate Market call:
Dean Henderson, CRMS
661-726-9000

Rates at ALL-TIME Lows!

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Mortgage rates slammed into a new, record-setting low Thursday, with mortgage giant Freddie Mac reporting that figures for the benchmark 30-year fixed-rate mortgage fell below 4 percent for the first time in history. Finance Web site Bankrate.com noted similar albeit less history-making lows.

Freddie and Bankrate.com released weekly surveys to yield the results for this week.

Making the biggest waves, the GSE found the 30-year loan dropping on average to 3.94 percent nationally, down from 4.01 percent last week and 4.27 percent over the same time last year.

This marks the first time that Freddie saw the benchmark mortgage hitting lows below 4 percent.

Bankrate.com reported no new records, seeing the 30-year loan fall only to 4.21 percent, down from 4.30 percent last week.

The Finance Web site meanwhile saw a slide in 15-year fixed-rate mortgages from 3.47 percent last week to 3.46 percent this week, with 5-year and 1-year adjustable-rate mortgages (ARMs) hitting a 3.11-percent stride, inching below 3.13 over the same period.

Freddie departed from the findings by again seeing record lows for the 15-year loan, with interest rates falling to 3.26 percent this week from 3.28 percent last week.

The GSE recorded a 2.96-percent average for the 5-year ARM, a few percentage points down from 3.02 percent last week, and a 2.95-percent average for the 1-year ARM this week, down from 2.83 percent last week.

The chief economist with Freddie, cites action from the Federal Reserve and investors fleeing euro zone markets as dual forces contributing to “incredibly low” mortgage rates.

He specifically highlights the $400-billion buy-up in short-term Treasury debt by the Federal Reserve and doubts about whether bigger euro zone economies will bail out their faltering neighbors.

Asked whether record lows for the benchmark 30-year will help stimulate demand, he says that it helps but that low consumer confidence, fears about a double-dip recession, and a wait-and-see approach to still-falling home prices keep first-time homebuyers on the sidelines.

“There’s not strong demand for credit in the housing market and that’s tending to keep a lid on borrowing costs,” Sal Guatieri, a senior economist with BMO Capital Markets, tells us.