How to Become a Homeowner: First Time Home Buyer Guide

Posted on May 11, 2021May 11, 2021 by webmaster

How to Become a Homeowner: First Time Home Buyer Guide Becoming a homeowner for the first time is exciting. However, for many potential buyers, the process can also be confusing. Below is an overview of the steps you need to complete in order to buy your first home.

Work Out The Finances

The first step in buying a home is deciding on a price range. This price range will be determined by your income, as well as your own comfort level with home prices and monthly payments. Consider all of these factors to determine the maximum amount you are willing to spend on your new home.

In most cases, you will be required to pay the downpayment and closing costs upfront, even if you are financing the rest of the home’s purchase price. In general, most lenders will expect a downpayment equal to 20 percent of the home’s purchase price. Otherwise, you may be required to pay mortgage insurance. Before buying a home, set enough money aside to cover these expenses.

For most homeowners, the next step in the home buying process involves looking into different mortgage options. Unless you have enough money to purchase your home for cash, you will need a mortgage. Be sure to compare quotes from different lenders before making a choice to be sure you are getting the best deal. Once you have chosen a lender and a specific type of mortgage, ask for a preapproval letter that you can attach to any offers you make so that you will be a more reliable and attractive buyer.

Hire An Agent

When searching for the perfect first home, hiring a real estate agent to represent you throughout the process is highly recommended. Your real estate agent will act as a buyer’s agent, which means they will have your best interests at heart. When you don’t have a buyer’s agent, you will be dealing only with the seller’s real estate agent instead. Because this individual has been hired to represent the seller, they will always put the seller’s needs above yours.

Find The Right Home

Once you have a qualified agent to represent you and a preapproval letter from your lender, it is time to start looking for your new home! Your real estate agent will help you comb through listings and choose the properties you want to see. Next, you will walk through each home until you find the one that is right for you. After you have chosen a home, your real estate agent will help you prepare and submit an offer to the seller.

The process of buying your first home may seem overwhelming at first. However, by following these steps, you can simplify the process and become a homeowner with ease.

What’s Ahead For Mortgage Rates This Week – January 19, 2021

Posted on January 19, 2021January 19, 2021 by webmaster

What's Ahead For Mortgage Rates This Week - January 19, 2021 Last week’s economic reports included readings on inflation, retail sales, and a speech by Federal Reserve Chair Jerome Powell. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Rises as Retail Sales Fall, Fed Says Current Monetary Policy Won’t Change

The Consumer Price Index rose to 0.40 percent in December as compared to November’s reading of 0.20 percent. The CPI measures inflation and the Core CPI measures inflation without the volatile sectors of food and fuel. December’s Core CPI reading fell to a rate of 0.10 percent growth from November’s reading of 0.20 percent.

Retail sales were dampened by the coronavirus, but December’s negative reading of -0.70 percent sales was lower than the -1.40 percent rate reported in November. December sales excluding the automotive sector were -1.40 percent lower in December as compared to November’s reading of -1.30 percent.

Federal Reserve Chair Jerome Powell dispelled fears of rising inflation and said that the Fed’s Federal Open Market Committee will not raise its current federal interest rate range of 0.00 to 0.25 percent any time soon. Chair Powell also said that the Fed would not decrease its purchase of Treasury Bonds as a further measure to stabilize the economy.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose by 14 basis points to 2.79 percent. Rates for 15-year fixed-rate mortgages averaged 2.23 percent and were seven basis points higher. Rates for 5/1 adjustable rate mortgages rose by 37 basis points to 3.12 percent on average. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims rose to 965,000 claims filed last week as compared to the prior week’s reading of 784,000 initial claims filed. Ongoing jobless claims also rose with 5.27 million claims filed as compared to the prior week’s reading of 5.07 million continuing claims filed.

The University of Michigan’s Consumer Sentiment Index was lower in January with a reading of 79.2. Analysts expected an index reading of 79.2 based on the December reading of 80.7.

What’s Ahead

This week’s scheduled economic reports include the National Association of Home Builder’s Housing Market Index and reports from the Commerce Department on housing starts, building permits issued. Sales of pre-owned homes will also be reported along with weekly readings on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – December 28, 2020

Posted on December 28, 2020December 28, 2020 by webmaster

Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly average mortgage rates were also released, but readings for jobless claims were not released due to the Christmas holiday.

Single-Family Home Sales Fall in November

Sales of new and previously owned homes were lower in November. Fear of rising covid-19 cases and the usual slump in home sales during the winter holidays contributed to fewer home sales. Rapidly rising home prices cooled buyer interest; short supplies of pre-owned homes for sale drove prices of new homes higher as demand increased.

Inventory of new homes increased by 14 percent as the median price of a new single-family home rose to $335,000, which was five percent higher year-over-year. George Ratiu, a senior economist with Realtor.com, said that would-be homebuyers were dealing with an increased divide between their home-buying preferences and affordability.

Rising materials costs continued to drive new home prices up; builders faced challenges in constructing affordable homes due to higher materials costs and lower profit margins.

November sales of previously-owned homes were lower with 6.69 million sales reported on a seasonally-adjusted annual basis as compared to October’s reading of 6.86 million sales. Short inventories of available pre-owned homes caused a dip in sales as buyers competed for fewer available homes. Shortages of available homes are expected to persist into 2021 and to drive home prices higher. Affordability will challenge many buyers even as mortgage rates remain at or near record lows.

Mortgage Rates Lower

Rates for fixed-rate mortgages dipped last week according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage was one basis point lower at 2.66 percent; rates for 15-year fixed-rate mortgages averaged 2.19 percent and were two basis points lower. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.79 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.50 percent for 15-year fixed-rate mortgages, and 0.20 percent for 5/1 adjustable rate mortgages.

The University of Michigan reported a lower index reading of 80.7 for December as compared to an expected reading of 81.0 and November’s reading of 76.9. A post-Thanksgiving surge in Covid-19 cases caused consumer sentiment to fall.

What’s Next

This week’s scheduled economic readings include Case-Shiller’s Housing Market Indices, pending home sales, and weekly readings on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – September 21, 2020

Posted on September 21, 2020September 22, 2020 by webmaster

What's Ahead For Mortgage Rates This Week - September 21, 2020 Last week’s economic news included readings on housing market conditions, housing starts, building permits issued, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

National Association of Home Builders Reports Record High Builder Confidence

The NAHB reported record high builder confidence in housing market conditions. The Housing Market Index had an index reading of 83 in September as compared to August’s reading of 78. Analysts said that this builder confidence reading was notable due to rising costs for building materials.

Component readings of the NAHB Housing Market Index also rose in September. Builder confidence in current single-family housing market conditions rose four points to an index reading of 88; builder confidence in housing market conditions in the next six months rose by six points to 84. Builder confidence in buyer traffic in single-family housing developments rose by nine points to a record index reading of 73.

Builder confidence readings over 50 reflect growing builder confidence in housing market conditions. March and April fell below 50 but rebounded as demand for larger suburban homes took hold as working from home increased. Record low mortgage rates are allowing home buyers to buy larger homes with more amenities. Robert Dietz, the chief economist for the NAHB, said that “Builders in other areas of the country have reported receiving calls from customers in high-density markets asking about relocating.”

Housing Starts and Building Permits Drop in August

The Commerce Department reported 1.42 million housing starts on a seasonally-adjusted basis in August as compared to July’s reading of 1.49 million housing starts. 1.47 million building permits were issued on a seasonally-adjusted annual basis;

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported mixed changes in mortgage rates; rates for 30-year fixed-rate mortgages averaged 2.87 percent and rose by one basis point. Rates for 15-year fixed-rate mortgages were two basis points lower on average at 2.35 percent. Rates for 5/1 adjustable rate mortgages averaged 2.96 percent and were 15 basis points lower. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 860,000 from the prior week’s reading of 893,000 new claims filed. Ongoing jobless claims also fell; 12.63 million were filed as compared to the prior week’s reading of 29.67 continuing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index also indicated economic growth with an index reading of 78.9 as compared to August’s reading of 74.1. Analysts expected am index reading of 75.9 for September.

What’s Ahead

This week’s scheduled economic readings include reports on new and existing home sales along with weekly reports on mortgage rates and jobless claims.