General Loan Limits for 2017

The general loan limits for 2017 have increased and apply to loans delivered to Fannie Mae aka new lender in 2017 (even if originated prior to 1/1/2017). This is the first time the base loan limits have increased since 2006. 

 

What does this mean to you, well many consumers were on the bubble for a long time. By that I mean being in a position where they needed to obtain a high balance loan and along with that a higher rate because the loan amount they were applying for was above the conforming limit. Now with the higher limits, many more borrowers will be in a position to obtain the lower priced conforming loans.

 

Let us help you determine your possibilities.

 

General Loan Limits for 2017

Maximum Original Principal Balance for 2017

Units	Contiguous States, District of Columbia, and Puerto Rico	Alaska, Guam, Hawaii, and the U.S. Virgin Islands
1	$424,100	$636,150
2	$543,000	$814,500
3	$656,350	$984,525
4	$815,650	$1,223,475

Maximum Loan Limits for High-Cost Areas for Mortgages Acquired in Calendar Year 2017
All but 87 counties (or county equivalents) will see a loan limit increase.

Units	Contiguous States, District of Columbia+	Alaska, Guam, Hawaii, and the U.S. Virgin Islands
1	$636,150	$954,225
2	$814,500	$1,221,750
3	$984,525	$1,476,775
4	$1,223,475	$1,835,200

*source Fannie Mae

Mortgages Rates Uncertainty Remain HIGH

Hello again from Rockland Financial...

Rates have been edging higher recently, nothing drastic but they seem to be trending that way.

Interest rates didn't move much today, with most lenders just a bit higher than yesterday.  This actually keeps us in line with the highest levels in over 4 months.  However, for the sake of perspective, rates have almost never been as LOW as they are today.  The average lender is quoting conventional 30yr fixed rates of 3.625% on top tier borrowers, with a few at around 3.5%.

Bond markets that affect rate movement find themselves generally defensive and uncertain. Investors are anxious to see if next week's Fed announcement will hold clues about the Fed's intention to hike rates in early December.  Although the Federal Funds Rate doesn't directly affect mortgage rates, if investors think the Fed will hike in the near future, mortgage rates tend to move higher in the present. A bit of a knee jerk effect so to speak

That's one of the key reasons that rates have been seeing an uptick over the past few months.  The other major concern is that of the Fed's largest counterpart, the European Central Bank (ECB). Investors are anxious to find out if the ECB plans to begin reducing the amount of bonds it's buying each month.  This bond buying is a driving force and contributes largely to low rates around the world.  There are obviously rumors floating around on both sides of this debate, but we won't know anything for sure until early December we should hear ECB's thoughts.

There's a massive amount of uncertainty between the ECB and Fed, and this can't possibly be cleared up for more than a month. As far as strategy is concerned regadring mortgage rates, it makes more sense to be defensive (as in favoring locking vs floating) until at least and unless rates can stage a big enough comeback to call the recent uptrend into question.

And now the broken record part. Rates are still historically low and there are many reasons to take advantage and refinance, below are just a few.

If you are in the market to purchase, getting pre-approved is paramount.

Contact us to help you with any Real Estate need you have. (Rockland Financial is also now representing buyers and sellers with finding the perfect home or listing your property to get the highest price available)

FED decided, it's not quite time to make a move just yet

Federal Reserve still waiting for right moment to raise rates.

Fed leaders decided against increasing the bank's key interest rate on Wednesday September 21st after the conclusion of a 2 day meeting. This was widely expected by economists and investors alike.

"Our decision does not reflect a lack of confidence in the economy," said Janet Yellen, chair of the Fed. "It's better to err on the side of caution."

The Fed also downgraded their forecast of economic growth in 2016 for the third time this year. This could be a positive as rates are likely stay low a bit longer, at least that's what we hope here at Rockland.

Some experts have supported the Fed's decision, arguing that the risks out weigh the pros. It would be much worse to raise rates too soon rather than too late.

"The better decision would be to wait," says William Poole, senior fellow at the Cato Institute. "We can make up ground if we have to in the future but if we raised rates prematurely and then we had to back down, that's going to more disruptive."


For the rest of the year, 10 out of 17 Fed members project only one rate hike this year.

The Fed last raised interest rates in December 2015, its first increase in nearly a decade. Currently, interest rates are in a range of 0.25% to 0.5%.

So as it goes, we are currently still in this market of incredibly low interest rates. Saving money by refinancing is in full swing. With a myriad of reasons such as refinancing to lower your term (15 year fixed), refinancing to get cash for reserves or other investing and obviously getting pre-approved for a purchase money loan, the time is now to inquire about what is possible and what makes the most sense for your financial situation. 

We are always available and will gladly answer any and all questions you might have. Contact us and join the many others who have worked with us and have been totally happy with their results.

Rates are Approaching Another All Time Low... and, just married :)

Rates have steadily been decreasing in 2016, quite the opposite of what everyone thought might happen.  

To put in perspective, in terms of conventional 30 year fixed quotes on top tier borrowers, the best ever seen was a range from 3.125% - 3.25% during a few days in late 2012.  Rates did manage to spend a few days back down at 3.25% in early July 2016, however since then, the new range has settled between 3.375% and 3.5%.  In other words, rates have held for over a month at levels that are a mere quarter point higher than the all-time lows we saw back in 2016 and that only held for a few days.  So unless you happen to be one of the lucky few that got an application in during those brief moments, today's rates might as well be all-time lows.  Congrats to you and me (see pic below)! 

So to make quite the direct to point... REFINANCE NOW! This isn't likely to stick at least not for long, don't be one of those who ends up saying "I should've pulled the trigger on that refi"

BUY NOW... your buying power is at its peak. Once rates start to inch up you will no longer qualify for the same purchase price that you qualify for now with these incredibly low interest rates.

Contact us now to find out how your potential savings are or to get pre-approved for your purchase.

The time is now, do not miss out.

 (this is pretty random but I just got married on 8/13/2016 and this was our wedding selfie)

How the BREXIT could affect us...

This is huge news and is a trending topic in a big way and this can have a big trickle down effect. Here are some things that could get effected

*Your mortgage

Mortgage rates are reaching their lowest levels in three years in recent weeks as the Federal Reserve has begun to fear that Brexit might become a reality. The latest data shows the average interest rate on a 30-year fixed conventional loan at 3.54 percent approximately, compared with more than 4 percent a year ago.

This isn't what most economists expected to happen this year. In December, the Fed raised its interest rate for the first time since the recession and said it planned to make four more rate hikes this year in 2016. The anticipation of higher rates from the Fed pushed up 10-year Treasury yields, and mortgage rates followed.

The Fed has not hiked rates again, yet. It was forced to reevaluate its plans amid this weakness in the global economy. Last week, Fed officials voted to remain on hold, and they cited the risks surrounding Brexit as an important factor. Consequently, yields on 10-year Treasury notes fell to levels not seen since 2012.

Brexit has spawned a recent bout of volatility in global markets. This has anxious investors scurrying for safety -- and few assets are safer than U.S. Treasuries. High demand for government debt pulls down interest rates.

This all translates into ultra-low mortgage rates for American households. And with Britain voting for Brexit, they could go even lower.


*A Volatile market slows down the engine of U.S. growth
 
American consumers make up the majority of U.S. economic activity. If they don't spend, the economy doesn't grow.  How much money is spent often depends on how they feel good about where the country is heading. Americans don't go out and buy homes and cars if things aren't looking good and a stock market downturn can really whittle down confidence.

Brexit is already causing severe volatility in global markets. If that volatility continues for weeks and months, it could cause American business owners and consumers to reconsider their spending plans.

A cutback by consumers would be particularly bad news at the moment.


*Brexit forces the Fed to rewrite its playbook 
 
As mentioned above, in December, the Federal Reserve signaled that it would raise rates four times this year -- this would be a strong sign that the U.S. economy has recovered from the recession. Higher interest rates benefit savers, who can make more money on deposits.

By June, some Fed committee members were calling for just one rate hike in the wake of weak growth and slowing job gains.

If volatility in the markets from Brexit continues, and if U.S. consumers ease back on spending, and employers slow down hiring even more, the Fed could be looking at zero rate hikes in 2016. In fact, markets are already starting to increase their expectations for a rate cut this year.

This isn't not how the Fed planned for the year to unfold. U.S. central bank officials had started the year with high expectations after raising rates in December for the first time in nearly a decade.

The Fed is now coming back down to earth. Other central banks around the world have lowered interest rates into negative territory and the conversation has shifted to whether the Fed should consider that move too.


Long story short, there is quite a bit going on and quite a bit on the horizon after that decision was made today. I won't bore you with this any longer today but keep an eye for more news to come.

For now rates are low, crazy low... If you are thinking about purchasing a property or are thinking about refinancing, contact me to see what we can do to help.

*source - Washington Post,  CNN money

7 Mortgage Misunderstandings That Could Cost You

There are many mortgage misunderstandings that could cost you a lot in the long run. Spending a little time learning more about mortgages might help you save hundreds, maybe thousands, of dollars.

Don't assume you know everything you need to know


1. Ignoring your credit score
Your credit score has a major impact on the interest rate that lenders may offer you. If you don't have a good score, consider spending some time improving it before getting into to buying a home. You may be able to improve your score by fixing errors on your credit record, by paying bills on time, and/or by reducing your total overall debt.

2. Getting a bigger mortgage than you can really afford
While house hunting, it might be tempting to look a bit beyond your price range. Big mistake, don't buy a home that will be expensive enough to have you stretched thin financially. It is said that you should spend no more than 25% - 30% of your gross monthly income on housing (including property taxes & insurance) - but try not to relying on a broad guideline like this, take the time to figure out what you can afford. Try and take as much as possible into consideration, for example your regular household expenses, such as food, utilities, transportation, travel, entertainment, maintenance, credit card payments, and contributions to savings. Other expenses to consider could be medical or automotive emergencies and the cost of setting up your old home for sale and setting up your new one. Buying less home than you can afford will give you a margin of safety, and help you be able to save.

3. Getting pre-approved (I've mentioned this quite a bit before)Once you know what loan you want and from which lender, don't wait until you find that perfect home to start the loan process. Get pre-approved for the loan before you go shopping. This has several advantages. First, through the process of working with your loan officer, you will find out just how much home you can afford to buy. Second and equally important, it will make you a more credible buyer, should you end up getting into a multiple bidding scenario which is very common these days.
 
4. Getting the wrong kind of mortgageDon't assume that a standard cookie cutter 30-year fixed-rate mortgage is always best. It just might be, but also consider your alternatives. You have many options on the table, you may need to decide between a 15-year or 30-year loan (other time frames also available), between a fixed-rate mortgage or adjustable (ARM). Longer terms will afford you lower payments, but you'll pay more in interest over the life of the loan.

If you're not comfortable with a 15-year's higher payments, consider getting a 30-year loan that allows prepayments, and then set out to pay more than you need to each month, in order to pay additional principal and shorten the life of the loan.

If you're not planning to be in the home very long, an ARM might be best in today's low interest rate environment, as it can lock in lower rates for a few years. If you think you'll be in the home for the long haul, it can be better to lock in a low rate for the expected life of the loan.

5. Making a small down paymentWhile it isn't always possible to put a larger down payment consider the following. Putting less than 20% down on a new home means you to take on an extra loan in the form of private mortgage insurance (PMI) or (MIP on an FHA loan), which will increase your monthly payment. A smaller down may also result in a higher rate. 20% just isn't possible sometimes and if that's the case you have many options there too. Contact us to help you determine what is your best scenario

6. Paying off your mortgage earlyIt can sometimes be good idea to pay off your mortgage early, and avoid having a big loan on your shoulders, especially if you may be entering retirement. However paying off your mortgage early isn't always the best thing to do. If you don't have an emergency fund or good retirment, for example, you might be better off establishing and/or funding one with the extra money you are using to pay down the mortgage. Keep in mind you will also be giving up mortgage interest deductions by paying off the loan early. If you have any high interest debt, such as credit card debt, paying that debt off early should be the priority.

7. Thinking it's not worth it to refinancingFinally, once you have a mortgage, don't just assume it isn't worth refinancing. If the rate you might get on a new loan is about a percentage point lower than your current rate, it could be well worth it to refinance. Also when you purchased your home, you may have got a 30 year fixed and lowering your term to say a 15 year fixed could make a lot of sense now.

Crunch all numbers though and consider your big picture. If you don't plan to stay in the home long, refinancing will make a little less sense.

Spending a little time learning more about mortgages could help save you a bunch money =)

*source The Motley Fool

Does Applying for a Mortgage Tank Your Credit Score?

A lot of folks think that if they apply for a mortgage that their credit score will drop dramatically each time an application gets filled out, think again. What really happens when you apply for a mortgage and your credit is pulled is...

Getting your credit pulled is a requirement when you apply for a mortgage. It's really the only way a mortgage company can determine whether you can qualify for financing and what your rates and fees are going to be.

Now if you are going to apply for multiple forms of credit at the same time, such as a credit card, a mortgage and/or an auto loan, these actions can and most likely will negatively impact your credit score. Each of these applications will generate a hard inquiry on your credit report, which could send a signal to other lending institutions that you are having difficulty managing credit.

This extra damage to your credit score can be side stepped by applying for one form of credit at a time, and limiting the time between each credit inquiry. This is because most credit scoring models group inquiries for the same type of financing (ie., mortgage, auto or student loans). If made within a specific time frame this allows people to comparison-shop without necessarily dinging their credit scores. This timing can vary, but, in most cases, inquiries of one of those types will be counted as one, provided they occur within a 14- to 45-day period, give or take.

When Credit Shopping, remember, there are many different types of credit scores. Different lenders and industries use different models and there can be variations from score to score. As an example, the credit score your auto dealer may look at might be 740 while the score Rockland Financial looks at could be 720.

Also each creditor you do business with reports to the bureaus at different times of the month. So it's normal for your credit score to be different from one month to another and during different times of the month.

So long story short, don't get rate quotes from a mortgage company without having an idea of where your credit stands, it's just setting yourself up for disappointment - Even more so if your actual scores end up being different than your guesstimates. 

*source (credit.com)