June 2017 - Realty Solutions Group

Mortgage Rates Friday, June 30: Leveling Off

Current mortgage rates leveled off today after climbing for three straight days, as the rate for the 30-year fixed loan was unchanged, and both the 15-year fixed and the 5/1 ARM fell by a single basis point, according to a NerdWallet survey of mortgage rates published by national lenders Friday morning.

As reported by Bloomberg, some experts feel the markets “overreacted” this week to recent comments made by European Central Bank President Mario Draghi. While Draghi stated that he believed the European Central Bank would soon begin to remove the stimulus it is currently providing to markets through its bond-buying program, the bond market here in the U.S. remains quite attractive to investors the world over.

“Yes, interest rates crept up but now have, we hope, stalled,” wrote Rob Chrisman, mortgage expert and senior advisor at the Stratmor Group, in his daily newsletter. “But hope is not a strategy. They crept up based on some news from Europe revolving around the prospects of the European Central Bank’s eventually tapering off its asset purchases — something we can look forward to. Nothing really has changed here in the U.S. — thus the potential stall.”

MORTGAGE RATES TODAY, Friday, JUNE 30:

(Change from 6/29)
30-year fixed: 4.08% APR (NC)
15-year fixed: 3.48% APR (-0.01)
5/1 ARM: 3.89% APR (-0.01)

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NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

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The article Mortgage Rates Friday, June 30: Leveling Off originally appeared on NerdWallet.

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In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.

We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.

Mortgage Rates Thursday, June 29: Upward Trend Continues

Mortgage rates for 30-year and 15-year fixed loans, as well as 5/1 ARMs, increased for the third day in a row, according to a NerdWallet survey of mortgage rates published by national lenders Thursday morning.

The news that mortgage rates have risen for the third straight day doesn’t quite match up with Freddie Mac’s Thursday morning headline that 30-year fixed-rate mortgages fell to a new 2017 low, but even they acknowledge that their news is already behind the curve of current market conditions.

“The 30-year mortgage rate fell 2 basis points to 3.88% this week,” said Sean Becketti, chief economist of Freddie Mac, in a Thursday morning press release. “However, the majority of our survey was conducted prior to Tuesday’s sell-off in the bond market, which drove Treasury yields higher. Mortgage rates may increase in next week’s survey if Treasury yields continue to rise.”

Ten-year Treasury yields, which tend to mirror the movement of long-term mortgage rates, were up again Thursday morning. According to the NerdWallet survey, the 30-year fixed rate has not been this high since May 30, the 15-year hasn’t seen a level higher than 3.49% since May 17, and the 5/1 ARM rate hasn’t reached 3.90% since March 21.

MORTGAGE RATES TODAY, THURSDAY, JUNE 29:

(Change from 6/28)
30-year fixed: 4.08% APR (+0.03)
15-year fixed: 3.49% APR (+0.03)
5/1 ARM: 3.90% APR (+0.01)

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The article Mortgage Rates Thursday, June 29: Upward Trend Continues originally appeared on NerdWallet.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

Premium Home Market Sales Soar

We previously reported that a shortage of homes for sale in the starter and trade-up home markets is driving prices up and causing bidding wars, creating a true seller’s market. At the same time, in the premium home market, an over-stock of inventory has started to see prices lower and put buyers in the driver’s seat, starting a beginning of a buyer’s market.

Last week, the National Association of Realtors put out their Existing Home Sales Report which shed some light on the impact of inventory levels on sales in each price range.

The chart below shows you the year-over-year difference in sales at each price range.

The under $100K range shows declines in the last couple of years due to the small amount of distressed homes available for sale (just 5% of sales this past month, compared to 35% in January 2012). Sales in the next two price ranges are being slowed down by low inventory as buyers compete for the same home.

NAR’s Chief Economist, Lawrence Yun, said:

“Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”

The biggest surprise? This is the first time in many years where the $1M and higher price range had the biggest jump in sales when compared to last year and to all other price ranges (29.1%)! The two price ranges below the $1M range came in a close second and third. As the price went higher, so did the sales! This showing the premium home market sales is on the rise.

Yun commented, with additional inventory available in the higher price ranges, and with the economy improving, a lot of luxury buyers are finding their dream homes easier.

“The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level.”

Bottom Line

If you are one of the many homeowners who is looking to sell your starter or trade up home and move up to a luxury home, now is the time!

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

Make Pre-Approval Your First Step

Throughout the country, buyers who are searching for their dream homes greatly outnumber the amount of homes for sale. Because of this there is now a competitive marketplace where buyers need to really stand out. Getting pre-qualified or pre-approved for a mortgage can show how serious you are when putting in an offer on your dream home.

Even if you are in a area that is not as competitive, knowing your budget can give you the dream home you want is comforting.

Freddie Mac lays out the advantages of pre-approval in the My Home section on their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

Working with a local real estate professional has many advantages. For one, they have relationships with lenders who can help you thru the lending process. Once a lender is selected you will fill out a loan application so that they have the important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac gives the 4 Cs that help determine the amount you will be qualified to borrow:

Capacity: Your current and future ability to make your payments
Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
Collateral: The home, or type of home, that you would like to purchase
Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, this helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

Mortgage Rates Wednesday, June 28: Higher Again Today

Mortgage rates for 30-year and 15-year fixed loans, along with 5/1 ARMs, all moved higher again today, according to a NerdWallet survey of mortgage rates published by national lenders Wednesday morning.

Despite incredibly stable interest rates over the past seven days, mortgage applications fell by 6.2% from the previous week, according to the latest report from the Mortgage Bankers Association. This is the largest weekly decline in applications in more than six months, when fixed rates were over 50 basis points higher than they are today.

Applications for refinance mortgage loans were down by 9%, while purchase applications declined by 4%. Refinances continue to dwindle, and now make up only 45.6% of all applications, according to the MBA.

MORTGAGE RATES TODAY, Wednesday, JUNE 28:

(Change from 6/27)
30-year fixed: 4.05% APR (+0.03)
15-year fixed: 3.46% APR (+0.04)
5/1 ARM: 3.89% APR (+0.01)

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The article Mortgage Rates Wednesday, June 28: Higher Again Today originally appeared on NerdWallet.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

What Are 2 Myths That Hold Back Home Buyers?

In a recent article from Realtor.com, “Home Buyers’ Top Mortgage Fears: Which One Scares You?” it is mentioned that “46% of potential home buyers fear they won’t qualify for a mortgage to the point that they don’t even try.”

Myth #1: “I Need a 20% Down Payment”

The down payment amount needed to get a home loan is overestimated by buyers. According to the First Quarter 2017 Homeownership Program Index (HPI) from Down Payment Resource, saving for a down payment helped hold back home buyers, 70% of renters, from buying.

Rob Chrane, CEO of Down Payment Resource said this,

“There are many mortgage-ready renters today, but they don’t know it. Often, homebuyers remain sidelined for years due to the down payment.”

Too many buyers believe that they need a minimum of 20% down to buy their dream home, but programs are available now that allow buyers to put down as little as 3%. Renters are able to enter the housing market sooner than they thought with the new programs that have emerged needing less cash out of pocket. These great programs will not hold back home buyers to get into their dream home.

Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO® score is necessary to qualify. This can hold back home buyers from making a purchase.

A lot of buyers believe a ‘good’ credit score is 780 or higher.

To help get rid of this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.

As you can see in the chart above, 53.2% of approved mortgages had a credit score of 600-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

Mortgage Rates Tuesday, June 27: Higher as Bond Yields Rise

Mortgage rates for 30-year fixed loans, 15-year fixed and 5/1 ARMs bumped higher today, according to a NerdWallet survey of mortgage rates published by national lenders Tuesday morning.

U.S. bond yields, which guide mortgage interest rates, were higher on Tuesday after European Central Bank President Mario Draghi gave a speech in which he said recent signs that inflation pressures were easing were temporary, MarketWatch reported. The comments were interpreted by traders as indicating that official interest rates would continue to rise this year, the financial news organization said.

Draghi’s comments were similar to those made earlier this month by Federal Reserve Chair Janet Yellen in which she made the case that recent weakness in inflation data was a short-term phenomenon, MarketWatch reported.

MORTGAGE RATES TODAY, Tuesday, JUNE 27:

(Change from 6/26)
30-year fixed: 4.02% APR (+0.01)
15-year fixed: 3.42% APR (+0.01)
5/1 ARM: 3.88% APR (+0.02)

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The article Mortgage Rates Tuesday, June 27: Higher as Bond Yields Rise originally appeared on NerdWallet.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

Buying Your First House: Starter Home or Forever Home?

If you’re a first-time home buyer, you may be wondering: Should you purchase a small starter home to get into the market now, knowing you may grow out of it in a few years? Or, should you stretch your budget — or spend more time saving — to get a “forever home” that will take care of your long-term needs?

Here are some factors to consider as you weigh whether to get a home best suited for the short term or the long haul.

• Market conditions: Mortgage rates are historically low, but there’s no telling how long that will last. Also, many real estate markets nationwide are booming; consider whether to jump in before home prices get even higher, or whether they may weaken.
• Where you want to live: Consider if you’d be OK living for a few years in the suburbs, where you might be able to find something more affordable, or if you’d rather try to snag a home in a different area where you want to live long-term
• How much house you can afford: It ultimately comes down to how much money you have saved and how much you can afford to spend on a monthly mortgage payment. Use a home affordability calculator to see what’s within your price range.
• What kind of house you want: For a starter home, you might go for an apartment, condo or townhouse in an up-and-coming area. If you’re thinking forever home, a single-family detached or a house with land to build an addition later could be a better fit — but it’ll be more expensive.
• The costs of getting out early: If you do spring for a starter house now, and you end up getting married or having kids or needing to move quickly, you may face penalties, such as capital gains tax

Those are some of the big-picture considerations. Let’s dive into the details on what else you need to think about.

Starter home considerations

Your lifestyle: Do you want to be in the middle of a big city, or are you fine with the ’burbs if that means you can own a home? If you want to live centrally, where real estate is most expensive, you’ll probably have to start small. Dana Bull, a real estate agent in Boston with Harborside Sotheby’s International Realty, remembers when she bought her first condo at 22, she could afford only one well outside of Boston, and she had some regret as she missed being in the city near her friends. Consider what you’re willing to sacrifice, both in terms of location and size.

Your future needs: Bull says many first-time home buyers assume they’ll be in a home much longer than they actually are. She says young, single people sometimes don’t realize how quickly life can change. A job switch, new relationship or new baby can alter what you need in a home.

Zachary Conway, a financial advisor with Conway Wealth Group LLC in Parsippany, New Jersey, adds that selling a house can be stressful — especially if you’re in the midst of major life changes such as having a baby.

So, if your life is full of flux and you think you would stay in your starter home for only 1 1/2 to three years, it may be less stressful to keep renting until you’re ready for something large enough to meet longer-term needs.

Capital gains taxes: If you set out to buy a starter home for the short term, be careful, Bull says. If you sell soon after moving in, you may owe capital gains tax on your profit from selling the home.

According to the IRS, individuals are excluded from paying taxes on $250,000 ($500,000 if married) of gain on a home sale as long as the house was used as your main residence during at least two of the five years before selling it. That means you may want to think carefully about buying a home you’ll grow out of in less than two years. Consult a tax professional to see how this could affect you.

Consider an exit strategy: If you’re considering going the starter home route, you should think through from the start how you’ll offload it when the time comes to move, Bull says. For instance you might buy a property that you could rent out to cover your mortgage, especially during times of economic uncertainty, she says. This helps ensure you can cover your mortgage payment if you need to move ASAP, or if the market is weak when you hope to sell but you don’t want to take a loss.

You should also carefully research the area in which you’re looking to buy, Conway says, and confirm “there’s enough resale potential to make sure that even in a market that’s heading downward, you still have a likelihood of being able to get out of where you are.”

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Forever home considerations

Interest rates: Conway says that if you decide to wait so you can afford a forever home, there’s a chance interest rates could increase from their current historic lows. “You might be able to scrape together some additional funds in the next few years, but maybe at that point, we may be closer back to historical norms of interest rates, and your mortgage is more expensive,” Conway says. Nobody can predict what will happen, but it’s important to keep a pulse check on mortgage rates.

Hot markets: In many major cities such as Boston, property values are rising rapidly, Bull says. There’s also a lot of uncertainty as to whether home values will plateau or keep going up, leaving first-time home buyers wondering if they should give in to the “feeding frenzy,” she says. If you wait in hopes of saving for a larger home, it’s possible prices will rise faster than you can save, she says.

Your cash flow: Considering your lifestyle and life events is certainly important, “but really at the end of the day, it comes down to the math of do we have the cash flow,” Conway says.

If you want a forever home, you have to ask yourself whether you can afford the larger down payment, and whether your salary supports a higher monthly mortgage payment. Conway says it’s key to create a budget and to carefully track what you save and spend, and to be sure you can afford a more expensive home. Don’t assume your salary will be higher in a few years and go for a bigger mortgage, he says. And don’t forget to factor in higher ongoing expenses like property taxes and homeowners insurance.

» MORE: How Much Down Payment Do You Need to Buy a Home?

Don’t stress too much

While making the decision between a starter home and forever home is a major move, Bull says don’t fret too much about making the wrong decision. Remember, she says, “there are always options — you can sell, you can rent, you can put yourself in a position where you can go out and buy another house.”

Conway adds that if you decide you’re not ready to buy for a while, that’s OK too, and you shouldn’t look at rent as throwing away money. “I wouldn’t jump into buying something for the sake of the fact that’s what we were told we should do,” he says. “It really comes down to what you’re comfortable with from a cash flow standpoint and what you want in your life. There’s nothing inherently wrong with paying rent.”

Emily Starbuck Crone is a staff writer at NerdWallet, a personal finance website. Email: emily.crone@nerdwallet.com.

The article Buying Your First House: Starter Home or Forever Home? originally appeared on NerdWallet.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

Mortgage Rates Monday, June 26: Lower as Markets Await Direction

Mortgage rates today for 30- and 15-year fixed loans moved lower, while 5/1 ARMs were unchanged, according to a NerdWallet survey of mortgage rates published by national lenders Monday morning.

In a housing market where prices are rising and inventory is falling, low mortgage rates are the one thing making it easier on buyers. Since the middle of May, mortgage rates have been floating within a 10-basis-point range. When rates are this stable, it helps remove buyers’ concern that rates could fluctuate just before they’re set to close and disrupt the sale they worked so hard to get.

Federal Reserve Board Chair Janet Yellen is due to speak later this week in London. Market observers are expecting Ms. Yellen to offer some insight into the central bank’s view of the economy, which should help paint a better picture of whether the Fed plans to move interest rates again this year. But until the markets get a clear sign of where the economy is headed, or at least where the Fed believes the economy is headed, mortgage rates should continue to bounce around within their tight window of just a few basis points.

MORTGAGE RATES TODAY, Monday, JUNE 26:

(Change from 6/23)
30-year fixed: 4.01% APR (-0.02)
15-year fixed: 3.41% APR (-0.01)
5/1 ARM: 3.86% APR (NC)

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Tim Manni is an assigning editor at NerdWallet, a personal finance website. Email: tmanni@nerdwallet.com.

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The article Mortgage Rates Monday, June 26: Lower as Markets Await Direction originally appeared on NerdWallet.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.

Mortgage Rates Friday, June 23: Only a Notch Higher

Mortgage rates for 30- and 15-year fixed loans ticked higher, while 5/1 ARMs were unchanged, according to a NerdWallet survey of current mortgage rates published by national lenders Friday morning.

New home sales were up 2.9% month-over-month in May, according to a just-released report by the Department of Commerce. Continued low mortgage rates are fueling a brisk real estate market so far in 2017, but there’s a downside for buyers.

“The bottom line is that there are fewer homes on the market, and they are selling faster,” Joseph Kirchner, senior economist for Realtor.com, said in a release. “This is a strong market for sellers, which is good news for people who are downsizing or settling an estate. It’s bad news for millennials, first-time buyers or second-time buyers looking to upsize for that baby on the way.”

MORTGAGE RATES TODAY, FRIDAY, JUNE 23:

(Change from 6/22)
30-year fixed: 4.03% APR (+0.01)
15-year fixed: 3.42% APR (+0.01)
5/1 ARM: 3.86% APR (NC)

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Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick.

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The article Mortgage Rates Friday, June 23: Only a Notch Higher originally appeared on NerdWallet.

In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.