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What’s Ahead For Mortgage Rates This Week – May 2, 2016

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Whats Ahead For Mortgage Rates

Last week’s economic news included Case-Shiller Home Price Indices, along with new and pending home sales readings. The Federal Open Market Committee of the Federal Reserve met analyst’s expectations and did not raise the target federal funds rate, which remains at 0.25 to 0.50 percent. Freddie Mac’s mortgage rates survey and the Labor Department’s weekly jobless claims report were also released.

Case-Shiller: Home Price Growth Slows in February

Average home prices growth slowed in February according to the S&P Case-Shiller Home Price Index. Home prices fell from January’s year-over-year reading of 5.70 percent to 5.40 percent. 13 of 20 cities included in the index showed slower growth in home prices. Portland, Oregon showed the highest year-over-year price gain at 11.90 percent followed by Seattle, Washington at 11.00 percent and Denver, Colorado at 9.70 percent

Washington, DC had the slowest year-over-year growth rate of 1.40 percent; Chicago, Illinois and New York, New York where home prices grew 1.80 percent and 2.10 percent respectively. S&P Index Chairman David Blitzer said that tight inventories of available homes continued to drive home prices. Analysts are concerned with shrinking affordability, which keeps first-time and moderate income buyers from buying homes. Analysts caution that first-time and moderate-income buyers are the “bread and butter” of housing markets. Without their participation, current homeowners cannot sell and move up to larger homes.

New Home Sales Lower after February Reading Revised

New home sales dipped in March to a seasonally-adjusted annual rate of 511,000 after February’s reading was revised upward to 519,000 sales. Regional results for new home sales were mixed. The Northeast posted flat sales in March; The Midwest posted the highest year-over-year growth in home prices at 18.50 percent followed by the South with a year-over-year gain of 5.00 percent. New home sales fell by 23.60 percent in the West, which was likely due to rapidly escalating home prices in high-cost metro areas.

Pending home sales for March grew by 1.40 percent for a second consecutive monthly increase. Analysts viewed March’s reading as positive for a healthy spring season for home sales. Pending home sales forecast future closings and mortgage lending.

Mortgage Rates, New Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week with the average rate for a 30-year fixed rate mortgage seven basis points higher at 3.66 percent. 15-year fixed mortgage rates were four basis points higher at 2.89 percent; the average rate for a 5/1 adjustable rate mortgage was five basis points higher at 2.86 percent. Discount points averaged 0.60, 0.50 and 0.50 percent respectively.

New jobless claims also rose last week with 257,000 new claims filed as compared to expectations of 260,000 new claims and the prior week’s reading of 248,000 new claims filed. Analysts said that fewer layoffs suggest strengthening job market. Last week’s four-week average of new jobless claims was 256,000 new claims, which was the lowest reading since December 1973. Improving labor markets can encourage would-be home buyers to become active buyers.

What’s Ahead

This week’s scheduled economic news includes reports on construction spending, private sector employment, non-farm payrolls and the national unemployment rate. Weekly reports on new jobless claims and mortgage rates will be released as usual.

5 Documents First-time Home-buyers Need for a Smoother Purchasing Process

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5 Documents First-time Home-buyers Need for a Smoother Purchasing ProcessWith all the work that goes into finding the kind of home you’ll want to put an offer on, it can be easy to forget about all the little things that happen after the deal has been made. While the paperwork involved in purchasing may seem like a long way off, here’s a quick review of some of the documents you’ll need when the time comes to seal the deal.

Your Credit Report

It’s important to review your credit before putting an offer in, so ensure that you request your credit report in advance and review it for any errors that may be present. If there are any discrepancies negatively impacting your credit score, you’ll be able to have them corrected before they can cause an issue with your real estate purchase.

Pay Stub Proof

In order to ascertain your ability to pay your monthly mortgage, you will need to provide pay stubs from your current place of employment. You won’t want to give away your originals, but a photocopy of your paychecks usually serves as adequate verification.

Recent Bank Statements

The number of bank statements required to prove your credit history may change depending on the lender you’re dealing with, but you’ll probably need photocopies from the last two to three months. This will be a means of proving your financial health as well as your ability to pay your monthly mortgage.

Tax Return Copies

Your federal tax returns will provide further proof of your employment and financial standing, so the last two years of these – complete with your signature – will need to be submitted. Keep in mind that any schedules you’ve filled out to complete your yearly returns should also be included.

Additional Asset Statements

In addition to recent bank statements, if you have any stocks and bonds, mutual funds, RRSPs or other investments, you should also provide statements of proof for these. While these accounts will only require your most recent statements, they will be beneficial in providing a more comprehensive picture of your finances.

There are many aspects of purchasing a home that can be time consuming, but having the documents you need beforehand can save a lot of stress when crunch time comes. If you’re planning on purchasing a home soon, contact your trusted local mortgage professional for more information.

You Ask, We Answer: 5 Ways That You Can Proactively Build and Improve Your Credit Score

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You Ask, We Answer: 5 Ways That You Can Proactively Build and Improve Your Credit ScoreIf you’re planning to buy a house or take out a business loan in the near future, you’ll want to work hard to boost your credit score well ahead of time in order to improve your likelihood of getting the loan you need. A great credit score can also make you more desirable to employers and help you to negotiate lower car insurance rates.

But what can you do in order to build your credit score over time? What are the best strategies for boosting that score as high as possible? Here’s what you need to know.

Dispute Errors On Your Credit Report

According to the FTC, 25% of Americans have significant errors on their credit report. Whether it’s a fully paid debt erroneously reported as still owing or even another consumer’s debt listed on your credit report, these errors can be costly. That’s why you’ll want to regularly review your report for inaccuracies.

If you find any inaccuracies, you can dispute them and have them removed from your credit report – which will increase your score.

Negotiate Your Debts Owing With Creditors

If you owe money to creditors and are past due on the balance, chances are they’ve reported the debt to the credit reporting agencies – and it’s on your credit report. The fastest way to have the debt removed from your credit report is to negotiate with your creditors for its removal. Get your lender to agree in writing that they’ll report the account as “paid as agreed” if you pay the balance.

Keep Your Credit Utilization Ratio Low

Credit utilization refers to the percentage of available credit you use at any given time. So if you have $1,000 in credit available to you and you use $500, that’s a utilization ratio of 50%.

Generally speaking, it’s best to keep your utilization ratio below 30%. If you’re constantly using a high amount of credit, lenders will assume you’re not a responsible borrower.

Pay What You Owe On Time

Paying your bills on time is one of the best ways to build your credit score. Your payment history accounts for 35% of your credit score, so if you pay your bills on time and in full every month, your credit score will increase.

Make More Than One Payment Every Month

Using a large amount of credit at any given time doesn’t look good on a credit report. By making multiple payments every month, you’ll lower the amount owing that gets reported to the credit bureau and increase your score.

Building a credit score is a lifelong skill, which is why you’ll want to learn it early. Contact your local trusted mortgage professional to learn more about credit scores and mortgage finances.

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