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The Fed Raised Rates:
Find Out What This Really Means

The Fed just raised its benchmark Federal Funds Rate for the first time in almost a decade. After holding the rate near zero to support the economic recovery, the Fed upped the target rate range to between 0.25 to 0.5 percent.

While a “rate hike” may sound worrisome, it’s important to understand what this really means.

The Fed Funds Rate is the rate at which banks lend money to each other overnight. It is not directly tied to long-term rates on consumer products like purchase or refinance home loans.

This means that consumers should not expect an increase in home loan rates as a direct result of the Fed’s decision.

Instead, home loan rates are tied to Mortgage Backed Securities, which are a type of Bond. Many factors impact the performance of both Stocks and Bonds, and will play a role in the direction of home loan rates as we move into the new year.

For example, an improving economy, higher wages and higher inflation could all cause home loan rates to rise. However, if our economy falters, or if there is continued uncertainty and turmoil here or overseas, investors could seek out “safer” investments like Bonds, which could help keep home loan rates low.

The good news is that you don’t have to figure this out on your own. If you want to see if you can take advantage of today’s low rates, or if you have any questions about the housing market, current rates or loan products, please don’t hesitate to contact us.

Categories : Interest Rates
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We often talk about the financial reasons why buying a home makes sense. But often, the emotional reasons are the more powerful, or compelling reasons. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.

The top 4 reasons to own a home cited by respondents were not financial.

1. It means having a good place to raise children & provide them with a good education

From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.

2. You have a physical structure where you & your family feel safe

It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.

3. It allows you to have more space for your family

Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.

4. It gives you control over what you do with your living space, like renovations and updates

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:

5. Owning a home is a good way to build up wealth that can be passed along to my family

Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?

Bottom Line

Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.

Categories : Housing Information
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What You Need To Know About the Mortgage Process | Keeping Current Matters

Categories : Housing Information
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Housing in the SpotlightIn June, the Consumer Financial Protection Bureau (CFPB) proposed a delay to the new TILA-RESPA Integrated Disclosure rule, known as “TRID.” A final decision could push TRID’s effective date from August 1 to October 3, 2015.

Citing time needed to correct an internal “administrative error,” the CFPB said that the new timing would better accommodate consumers and providers busy with the start of the new school year, and also allow providers more time to adopt the new rule.

TRID requires the merger of documents provided to a borrower during the loan process. First, the Good Faith Estimate and the initial Truth-in-Lending Statement will now combine to form the “Loan Estimate,” which must be provided within three days of application.

Second, the borrower will now receive a “Closing Disclosure,” which combines the final Truth-in-Lending Statement and the HUD-1 Settlement Statement. This new form must be provided at least three business days before the loan is consummated (i.e., when the borrower becomes contractually obligated per Regulation Z), which in most states is the same as the closing date or when the borrower signs the promissory note.

Upon TRID’s effective date, lenders, escrow and title agents, and closing attorneys will be required to integrate these forms into their processes.