US long-term mortgage rates little changed; 30-year at 2.93%

WASHINGTON (AP) — U.S. average rates on long-term mortgages changed little this week, remaining at historically low levels that has sparked demand for homes.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year home loan ticked up to 2.93% from 2.91% last week. By contrast, the rate averaged 3.49% a year ago.

The average rate on the 15-year fixed-rate mortgage declined, however, to 2.42% from 2.46% last week.

Housing demand continues as one of few bright spots in the pandemic-hobbled economy. Sales of new homes soared in July, rising nearly 14% as the market continued to gain traction following the spring downturn caused by pandemic-forced lockdowns.

In the wider economy, the government reported Thursday that the number of laid-off Americans applying for unemployment benefits fell to a still-elevated 881,000 last week — evidence that the pandemic keeps forcing many businesses to slash jobs.

Associated Press

How Much Rent Can I Afford? How to Calculate a Rent You Can Afford

The question “how much rent can I afford”  is inevitable for those who plan to spend wisely. Your income is expected to be 40 times your rent. Before deciding on what apartment to rent, it’s advisable you deduct the tax payable on the income you earn. The money left after the deduction of the tax is what the planning should be based on.

The most important thing is that other expenses such as clothing, feeding etc. are put into consideration while determining how much rent one can afford. It’s also necessary to consider the bills that would accrue from the use of the apartment. Such bills include: electricity bills, gas bills, water bills, satellite TV subscription bills etc. It is also important to consider all other relevant bills

Finding It Difficult To Calculate Your Monthly Rent? Here’s How.

Are you having issues calculating your rent?

Do you wanna know the best rent calculation technique?

Don’t worry! This discourse proffers the necessary solutions to your housing problems.

Calculating your rent might seem difficult while looking at it superficially. But it’s one of the simplest tasks that you can ever attempt. In this write-up, you’ll be taken through the most convenient rent calculating method available.

Calculating your monthly rent from your weekly rent.

Most Tenants make the mistake of calculating their monthly rent by multiplying their weekly rent by 4 and their annual rent by 12. This approach is absolutely wrong.

Maybe this is the reason your calculations have always been different from your landlord’s. In calculating your monthly rent, the right approach is to multiply the weekly rent by 52. The result is then divided by 12. You’ve successfully calculated your monthly rent. Some examples shall be made to illustrate the points above.

Incorrect: 
Weekly rent = $200
Monthly rent = $200 X 4
Monthly rent = $800

Correct:
Weekly rent = $200
Annual rent = $200 X 52
Annual rent = $10,400
Monthly rent = Annual rent / 12
Monthly rent = $10,400 / 12
Monthly rent = $866.67

You can see there’s a great disparity between the results of the first and second approach. There’s a difference of $66.67 in the two approaches.

In some cases, the year has 53 weeks. It then follows that the weekly rent would be multiplied by 53.

Monthly Rent Calculator

Determining your monthly rent, as already established above, depends on how much you can reasonably spend per month. You need to factor things like utilities, renter’s insurance and transportation cost while using a monthly rent calculator. Apply the rule of thumb, which states that no one should spend more than 1/3 of your after-tax salary on rent.

For example, if your annual salary is $50,000, that leaves you with $4,166/month. After taxes, you should have around $3,270. One third of 3270 is about $980, and that is what your monthly rent should be on $50,000 a year.

Going by this logic, the $980 should include extra-costs you’d incur for amenities your apartment does not possess.

Rent-to-Income-Ratio Calculator

How much of my income should I spend for rent? To answer this, you’ve got to figure out the rest of your monthly budgeting. Since the largest percent of your monthly income goes to rent, it’s easiest to figure out the rest of your budgeting once you determine how much rent you can afford by using our Rent-to-income-ratio calculator.

A common budgeting strategy follows the 50-30-20 rule. Applying this strategy to your finances is a great way to maintain a focus on controlling your monthly spending while also planning out your future’s finances.

The 50: The 50 of the 50-30-20 rule means that you should aim to pay no more than 50% of your income towards your monthly necessities. These necessities include expenses such as:

The cost of your groceries per month
Your utility bills like your phone bill, water, and electricity
The cost of renter’s insurance
Driver’s insurance
Health & dental insurance
And of course, how much you should spend on rent
As given above, figuring out the amount of money you should to pay for rent gets you off to a good start on budgeting for the rest of your monthly expenses and helps you lay the foundation for figuring out the rest of your finances. If you’re looking at two different apartments and one is 40% of your income and the other is 25%, you might want to calculate how that slight difference will affect the rest of your monthly budgeting for your necessary costs.

The 30: The 30 represents how much of your income should go to discretionary spending. Basically, you should allocate 30% of your monthly income to cover entertainment, dining, the gas needed for out of town trips, the costs of your hobbies, and anything else that you can live without if you had to.

The 20: The last, and often what feels like the most distant, is the 20. The last 20, according to the 50/30/20 rule, is the percentage of income that should to go towards your financial goals. Whether that is putting down money for your retirement, paying off a car loan or student loan, or saving money for a down payment for your home.

Final thoughts

With this knowledge, I hope you’ll be able to independently determine your rent and make proper housing decisions.

Thanks for reading.

source: usa.inquirer.net

Great News for Homebuyers in 2019: Loan Limits Increase

Thinking about buying a home in the next year? You’re in luck.

The Federal Housing Finance Agency (FHFA) announced yesterday that for the third straight year they will increase the limits for mortgages backed by agencies that cover the vast majority of the home loans issued in the U.S. In 2019 they will increase the limit 6.9 percent, taking the limit from $453,100 to $484,350.

What does this mean for you as a homebuyer? It may allow you up to $30,000 more on an affordable loan option, particularly if you are looking to buy in a market with rising home prices.

This increase in loan limits is designed to help homebuyers keep pace with a more expensive market. Even as home prices rise, you can afford to buy a more expensive home with an agency conforming loan.

“These higher loan limits create more borrowing opportunities – whether you’re a potential homebuyer or a homeowner seeking to refinance,” says A. Wade Douroux, President and CEO of Resource Financial Services. “This gives homebuyers access to higher amounts through conventional lending – which is also good news for sellers this year.”

The knowledgeable mortgage bankers at Resource Financial Services can help you figure out if the new conforming loan limits apply to you. They can answer all your questions and have a wide range of programs that may benefit you.

“Get in touch with us soon to discuss how these loan limits can help you with a home purchase or refinance,” says Douroux.

Resource Financial Services exists to make people’s dreams of home ownership a reality. The mortgage lender offers experienced mortgage specialists who work hard to educate homebuyers about the wide variety of loan programs that can be tailored to meet individual financial needs. Homebuyers can expect quicker closings, same-day pre-approval, 5-Day Processing and guaranteed lower rates.

Call toll-free at 877.797.4545to speak with a mortgage banker or visit Resource Financial Services online at rfsmortgage.com to learn more.

source: resourcefinancialservices.com

More Millennials Are Buying Homes

In the second quarter of 2018, Millennials began buying homes in a big way. Despite the commonly-cited hurdles that include student debt, irregular and gig income and the high cost of living, today’s Millennials are finding their way to home ownership.

A report from the US Census Bureau shows that home ownership rates among people aged 35 and under jumped 3.4% between April and June of this year. The Ellie Mae Millennial Tracker shows the average age of millennial borrowers is 29.

What’s driving Millennials into the market? A larger percentage of them are reaching the point in their lives where it’s appropriate to buy a home. They are settling down, getting married and having families.

“Most Millennials are buying a house because there are major changes happening in their lives such as starting a family, getting a new job, or because they’ve decided that they want to build equity and stop renting,” said Ellie Mae Executive Vice President of Corporate Strategy Joe Tyrrell.

Resource Financial Services is here to help Millennials on the road to home ownership. We understand that buying your first home can be a little intimidating. And no matter how many times you ask for advice from parents, family members and friends who are experienced homebuyers, there will still be questions.

That’s why we believe meeting with one of our reputable and experienced mortgage bankers should be your first step. With our guidance and knowledge, you can find a home you can truly afford with a mortgage that works for your budget.

Five Simple Steps to Home Ownership:

One: Make the call. Pick up the phone and call a mortgage banker at Resource Financial Services for step-by-step guidance on the home-buying process. There is no charge for a phone call that can make all the difference in helping you understand your options and what you may be able to afford.

Two: Get pre-approved. Before looking at the first house, your mortgage banker can pre-approve you for a loan and explain the customary closing costs and financing fees. This will give you an accurate picture of how much home you can truly afford and help you narrow down homes based on that amount.

Three: Begin the house hunt. Your pre-approval will help you sort by price, identify neighborhoods and find your dream home faster. It will also give you an edge when you make an offer in a competitive seller’s market.

Four: Make the offer. Your real estate agent (and we highly recommend working with one) has extensive knowledge and experience on comparable home transactions and can offer the best strategy for the home you’re interested in. Your purchase agreement will note how much you’re willing to put down as a down payment. By the way it’s a myth that you need 20% as a down payment; the average down payment is only 10% and for first time homebuyers it’s even lower at 6%. Arrange to have the deposit held in escrow (not with the seller) so your money can be returned to you if the offer falls through.

Five: Close. Once an offer is accepted by both parties and signed, it becomes a binding contract. Your Resource Financial Services mortgage banker will help you understand the process and go over any documents you need to provide as well as any closing costs you owe so there are no surprises at closing.

Working closely with a reputable lender that offers competitive rates, a variety of products and the education is the best way to eliminate surprises and help you create a clear path to homeownership.

Resource Financial Services is here to make people’s dreams of home ownership a reality. That’s why our experienced mortgage specialists work hard to educate homebuyers about the wide variety of loan programs that can be tailored to meet individual financial needs. We offer quicker closings, same-day pre-approval and guaranteed lower rates.

source: resourcefinancialservices.com

Mortgage delinquencies rose in second quarter, trade group says

The Mortgage Bankers Assn. says home loans with at least one missed payment but not yet in foreclosure rose to 7.58% in the second quarter from 7.4% in the first quarter.

The nation's slowly improving housing market hit another bump last quarter, with more borrowers missing payments amid continued high unemployment, a report from a trade group shows.

The Mortgage Bankers Assn., in a quarterly delinquency survey issued Thursday, said home loans with at least one missed payment but not yet in foreclosure increased in the second quarter to 7.58% of all mortgages. That's up slightly from 7.4% in the first quarter.

A separate survey from foreclosure listing firm RealtyTrac Inc. said the number of homes going into foreclosure rose 6% in July compared with a year earlier, the third straight month of year-over-year increases.

That trend reflected the fact that last year many foreclosures were on hold as banks focused on cleaning up flawed processes for seizing homes after the "robo-signing" scandals.

The Mortgage Bankers Assn. survey said the quarter-to-quarter increase in delinquencies appeared to result instead from a fundamental change: The slowing of the economy's recovery during the first half of the year.

Although in no way reversing the longer-term trend of declining delinquencies — the missed-payment rate was 8.44% a year earlier — the increase raised eyebrows at the lender group.

"It's not the direction you would want to see," Mortgage Bankers Assn. economist Michael Fratantoni said in an interview. The key determinant, he said, will be the job market, which has shown signs of improvement lately.

In a brighter sign, the percentage of loans in all stages of the foreclosure process, or at least 90 days past due, dropped to 7.31% in the second quarter from 7.44% in the first quarter and 7.85% a year earlier.

The slow decline in this "seriously delinquent" category shows that lenders are gradually working through the huge backlog of soured loans made during the housing boom, Fratantoni said.

Federal Housing Administration loans entering foreclosure were a notable exception. The percentage of loans in foreclosure soared to 4.23% in the second quarter to a record high. Foreclosure starts for FHA loans also increased to 1.53%, also a record high.

The increase was due to major lenders, particularly Bank of America Corp., starting up foreclosures on loans that had been delinquent but held up because of to the federal government's investigations into faulty foreclosure practices, said Shaun Donovan, secretary of Housing and Urban Development, which oversees the FHA.

"We had a significant period of time where Bank of America was not starting foreclosures or completing foreclosures for FHA loans," Donovan said in an interview with The Times. "What you are seeing is basically many, many months-long backlog of particularly Bank of America claims that are being submitted, and have caused artificially that rate to rise."

"It doesn't reflect an underlying trend overall for the broader portfolio," he added.

The report confirmed signs that California, once the poster child for collapsing housing markets, is generally in recovery mode.

Across the nation, 4.27% of all home loans were in the foreclosure process at the end of the second quarter, the home lenders group said. In California, 3.1% of residential mortgages were in foreclosure.

That compared with 13.7% in Florida, 7.7% in New Jersey and 6.5% in New York, all states in which foreclosures are processed through the courts, resulting in huge legal entanglements. Most foreclosures in California are processed more quickly without judicial reviews.

Fratantoni said that with home prices rising again in many California markets, more struggling homeowners are finding it possible to sell their homes rather than see them taken away in foreclosures.

source: latimes.com