December 2017 - Realty Solutions Group

6 For-Keeps New Year’s Resolutions for New Homeowners

We all make New Year’s resolutions, but let’s be honest, most are wishful thinking. By February, that “lose 20 pounds” or “learn Spanish” resolution has gone right out the window.

But not for you, new homeowner. This year is different.

Your first 12 months of homeownership set the tone for the entire journey. With just a few smart decisions, you can save money now and get more out of your investment later.

So make room on that list between “run a 5K” and “travel more.” Here are essential New Year’s resolutions for new homeowners.

1. Start an emergency fund

Homeownership has a funny way of costing more than you think. An emergency savings fund provides a financial safety net, and your new home is the perfect reason to start one.

Remember, if the furnace quits on a cold night, there’s no landlord to call. Laid off unexpectedly or surprised by major car repairs? Mortgage payments are still expected on time and in full. Without an emergency fund, these expenses could force you into credit card debt or worse.

Ideally, your emergency fund should cover several months of expenses, but it’s OK to start small. Set aside a portion of every paycheck with the goal of saving $500 as quickly as possible, and then contribute as much as you can moving forward.

2. Take a closer look at your homeowners insurance

Just because a standard homeowners insurance policy satisfied your lender, it doesn’t mean you’re adequately covered.

“Homeowners insurance isn’t one-size-fits-all. There are unique coverage options and, more importantly, ‘exclusions’ that homeowners need to be aware of,” says Ryan Andrew, president of The Andrew Agency, an independent insurance agency in Richmond, Virginia.

Does your policy cover the full cost of your jewelry or other valuables? Are disasters like earthquakes and floods excluded? Will the policy pay if your dog bites the new mailman?

“Your home is usually your biggest asset,” Andrew says. “Spend a few minutes reviewing your coverage and exclusions, and ask questions so you understand your policy.”

» MORE: Choose the right amount of homeowners insurance

3. Get an energy efficiency audit

Heating, cooling and powering a home isn’t cheap. Why be uncomfortable or spend more because your house wastes energy?

After the dust settles, you may notice more about your home, particularly if you bought new construction, says Jessie Ferguson, director of operations at Renewablue, a home energy consulting company. Maybe the air smells funny or one bedroom is colder than the others. She recommends getting an energy-efficiency audit rather than guessing at the problem.

Using blower door tests and infrared cameras, energy audits measure air leaks and detect air infiltration or missing insulation. Audits are performed by utility companies, city governments and some contractors.

“An energy audit is an inexpensive way to get real information about your house. They’ll tell you which fixes will deliver the best bang for your buck,” Ferguson says.

In addition to lowering your utility bills and making you more comfortable, a more efficient home may end up putting free money in your pocket, thanks to local, state and federal rebates.

4. Consider a home warranty

If the appliances in your new home are near the end of their life cycles, a home warranty may help shield you from the cost of replacement.

Also called home service contracts, home warranties are annual agreements that offset the repair or replacement cost of major home components and appliances.

Approach home warranty companies with caution, however. Read customer reviews and avoid gimmicks that seem too good to be true. Like insurance policies, home warranties are full of fine print, and homeowners often fail to realize what’s excluded until they try to make a claim.

“They can be helpful in the first year of homeownership, when you have so many other things to think about and pay for,” Ferguson says of home warranties. “Just make sure you know exactly what you’re getting.”

» MORE: Are home warranties worth the cost?

5. Create a disaster kit with a home inventory

Your new home is your castle, but it’s not indestructible. A disaster kit that includes financial documents and a home inventory will speed up recovery if the unthinkable happens.

A home inventory can be as simple as snapping pictures of big-ticket items in your home, or you could record items, brands, original prices, ages and condition in a spreadsheet.

No matter which method you choose, a home inventory is the best way to make sure you have enough insurance coverage to replace your valuables, Andrew says.

Store the inventory, along with copies of your personal identification, credit card information, vehicle records and other important documents, in a fireproof safe or another place that’s easily accessible if you have to evacuate.

6. Make a plan to build equity

Unless you bought your home with cash, it will be many years until you own it outright. Make plans now to build equity faster so you can unlock more benefits of homeownership even sooner.

Equity is a fancy word for ‘how much of your house is paid off.’ Home equity is a valuable asset; accrue enough and you can use it to finance major renovations or pay off student loans.

You can build equity slowly just by making your monthly mortgage payments, or you can find ways to speed up the process. For example, take on smart home improvements or switch to biweekly payments to get “equity rich” even faster.

More From NerdWallet

The article 6 For-Keeps New Year’s Resolutions for New Homeowners 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.

6 Ways the Tax Plan Could Change Homeownership

Would a new tax plan save you money or cost you money? The answer depends on a complex array of factors that touch on just about every aspect of your financial life. This article is about a subset of your finances: How tax reform would affect homeownership and mortgages.

The House and Senate have agreed on a compromise tax plan that would change, among other things, whether and how homeowners deduct mortgage interest and property taxes. If Republicans get their way, the bill will be passed and sent to the president before Christmas.

Here are six elements of the tax law that could affect homeownership, home selling and moving.

1. Mortgage interest deduction

The mortgage interest tax deduction is touted as a way to make homeownership more affordable. It cuts the federal income tax that qualifying homeowners pay by reducing their taxable income by the amount of mortgage interest they pay. Under the compromise bill, the deduction is scaled back to interest on debt up to $750,000, instead of $1 million, for people who buy homes after Dec. 15, 2017.

	Current law	Compromise bill
Mortgage interest	You may deduct the interest you pay on mortgage debt up to $1 million ($500,000 if married filing separately) on your primary home and a second home.	For homes bought before Dec. 15, 2017, no change. But for homes bought Dec. 15, 2017, or later, you may deduct the interest you pay on mortgage debt up to $750,000 ($375,000 if married filing separately).

The bill carves out an exception for people who were under contract to buy a home before Dec. 15, 2017 as long as they were scheduled to close by Jan. 1, 2018.

Another exception: When you refinance a mortgage, the compromise bill treats the new loan as if it were originated on the old loan’s date. That means the old limit of $1 million would apply.

2. Property tax deduction

The current tax law eases the pain of paying property taxes by allowing qualifying taxpayers to reduce their taxable income by the total amount of property taxes they pay. In the compromise bill, the deduction would be limited to a total of $10,000 for the cost of property taxes, and state and local income taxes.

	Current law	Compromise bill
Property taxes	You may deduct the property taxes you pay on real estate you own.	You may deduct up to $10,000 ($5,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes.

3. Home equity deduction

On top of the mortgage interest deduction, current tax law adds a deduction for interest paid on home equity debt “for reasons other than to buy, build, or substantially improve your home.” So, for example, if you borrow from a home equity line of credit to pay tuition, the interest you pay is tax-deductible.

The compromise bill eliminates the deduction for interest paid on home equity debt.

	Current law	Compromise bill
Home equity debt	You may deduct interest on up to $100,000 of home equity debt ($50,000 if married filing separately).	Eliminates the deduction for interest on home equity debt.

4. Capital gain exclusion

When you sell a house, the capital gain is the difference between the price you paid for it and the price you sold it for. This capital gain is treated as taxable income. If you owned the house long enough, you’re allowed to exclude up to $500,000 of this capital gain as income so you don’t have to pay federal income tax on it. (The exclusion is capped at $250,000 for married taxpayers filing separately.)

The compromise bill doesn’t alter the capital gain exclusion for homes. The House and Senate had voted to limit the exclusion, but they struck that language from the final bill.

	Current law	Compromise bill
Capital gain	You must have owned the home, and used it as your primary residence, during at least two of the five years before the date of sale. You cannot have used this exclusion in the two years before the sale of the home.	No change to the capital gain exclusion.

5. Mortgage interest deduction for second homes

Under current law, you may deduct interest on mortgage debt on your primary home and a second home. The compromise bill kept this part of the tax law in place, although it reduced the amount of eligible mortgage debt, as seen in item No. 1 above.

	Current law	Compromise bill
Mortgage interest deduction for second homes	Deduct the interest you pay on mortgage debt up to $1 million ($500,000 if married filing separately) on your primary home and a second home.	Deduct the interest you pay on mortgage debt up to $750,000 ($375,000 if married filing separately) on your primary home and a second home.

6. Moving expenses

Under current tax law, you may deduct some moving expenses when you move for a new job. You have to meet complex criteria involving distance and timing of the move.

Under the compromise bill, only members of the armed forces on active duty would be allowed to deduct moving expenses.

	Current law	Compromise bill
Moving expenses	Deduct some moving expenses if you meet distance and time requirements.	Only active duty members of the armed forces may deduct moving expenses.

Fewer taxpayers would itemize

The nonpartisan Tax Policy Center estimates that the number of itemizers would fall from about 49 million to 10 million.

The upshot: Under current law, if you’re married filing jointly, and you paid $15,000 in mortgage interest and property taxes in 2017, you would itemize those deductions because they exceed the standard deduction of $12,700.

But if tax reform raises the standard deduction for married filing jointly to around $24,000 in 2018, then that $15,000 in mortgage interest and property taxes is less than the standard deduction. So you wouldn’t itemize. You would use the standard deduction.

Whether you end up paying less tax or more tax depends on a wide range of factors beyond the homeownership-related deductions and exclusions discussed here. Every taxpayer is different.

Realtors raise a ruckus

The National Association of Realtors opposes increasing the standard deduction on the grounds that it “would destroy or at least cripple the incentive value of the mortgage interest deduction (MID) for the great majority of current and prospective homebuyers, and sap the incentive value of the property tax deduction for millions more.”

NAR argues that the de-emphasis on itemized deductions would result in “a plunge in home values across America in excess of 10%, and likely more in higher cost areas.”

Skeptics challenge the Realtors’ assertion that giving taxpayers a bigger standard deduction would cause home prices to nosedive. Logan Mohtashami, senior loan officer for AMC Lending Group in Irvine, California, says in an interview that there are always “spreadsheet people” who decide whether to rent or buy a home based on tax advantages. “But, in general, people buy homes because they want to raise their family, they want to own something, forced savings” — and not have to deal with a landlord, he says.

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The article 6 Ways the Tax Plan Could Change Homeownership originally appeared on NerdWallet.

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

13 Mortgage Questions to Ask — and the Answers You Want

Having a list of mortgage questions to ask potential lenders is just the start. Knowing the answers you’re looking for puts you ahead of the game.

1. Which type of mortgage is best for me?

This question will help you know if you’re talking to just a producer — a salesperson — or a quality advisor. When you ask, “What are my options?” for each type of loan discussed, the mortgage lender should tell you the pros and the cons in light of your particular situation. Use this mortgage guide to get up to speed.

2. How much down payment will I need?

A 20% down payment is every lender’s ideal, but you have choices here, too. Qualified buyers can find mortgages with as little as 3.5% down, or even no down payment. Again, there are considerations for every down payment option. The best lenders will take the time to walk you through the choices.

3. Do I — or the property I’m buying — qualify for any down payment assistance programs?

If you really want to size up your mortgage lender’s value, this is the question that will do it. If you get a chuckle or a groan in response, move on. Lenders with knowledge of local, state and national down payment assistance programs — and the wherewithal to help you navigate the process — are well worth the hunt.

4. What is my interest rate?

Sure, you’re going to ask this one. It’s the one benchmark we all understand. Or do we? Lenders can move the needle on your interest rate a number of ways, most of them involving additional fees.

But after talking to at least a couple of lenders, you’ll get an idea of a ballpark interest rate you’ll qualify for. Let’s say it’s 5%. We’ll call that your payment interest rate because that’s what your monthly mortgage payment will be based on. Knowing that, you’ll move on to the next — and very important — question, about the annual percentage rate, or APR.

5. What is the annual percentage rate?

When you have zero-discount-point APRs from competing lenders, you can see who has the lowest fees for the same payment rate. In our example of receiving a 5% payment rate, you’re looking for the lowest APR based on that payment rate. Maybe one lender offers you a 5.25% APR, and another a 5.5% APR. The 5.25% APR lender is charging you fewer fees.

A higher APR is not always a bad thing. Say you’re buying your “forever home.” If you buy some discount points to lower your payment rate, you’ll have a higher APR. But after some years, you’ll make up for the additional fees by paying less in interest thanks to that lower payment rate.

6. Are you doing a hard credit check on me today?

It’s always good to know when the lender is going to perform a “hard” credit check, called a “hard pull.” That type of payment history inquiry shows up on your credit report. Lenders need to do this to give you a firm interest rate quote.

When you’re shopping more than one lender, you’ll want these hard credit pulls to occur within a short period of time — say within just a week or so — to minimize the impact on your credit score.

7. Do you charge for an interest rate lock?

Once you’ve decided on a lender, you may want to lock in your interest rate at some point. This ensures that it doesn’t go up — though it won’t go down, either. The answer you’re looking for on a typical home loan (not a construction loan) is: There’s no charge for an interest rate lock.

8. Will I have to pay mortgage insurance?

If you put down less than 20%, the answer will probably be “Yes.” Even if the mortgage insurance is “lender paid,” it’s likely passed on as a cost built into your mortgage payment, which increases your rate and monthly payment. You’ll want to know just how much mortgage insurance will cost and if it’s an upfront or ongoing charge, or both.

Then ask the lender what your options are. The answer may be just, “Make a bigger down payment.” Or, you may find there are other loan programs that you might qualify for that don’t require mortgage insurance.

9. What will my monthly payment be?

You’ve probably asked this question already. But knowing what your monthly mortgage payment will be is kind of key to the whole deal, right? You’ll also want to ask if there is any prepayment penalty if you pay off the mortgage early — for instance, if you move or refinance. The answer should be “No.”

10. Do you have an origination fee?

An origination fee provides additional profit for the lender beyond what’s built into the interest rate. A good follow-up question: What are all of your lender fees? Be sure to specify “lender fees.” They’ll know what you mean, because there are also additional costs … which you’ll ask about next.

11. What other costs will I pay at closing?

Fees that are charged by third parties, such as for an appraisal, a title search, property taxes and other closing costs, will be paid at the loan signing. These costs will be detailed in your official Loan Estimate document and your almost-time-to-sign Closing Disclosure. But the sooner you know what they are, the better you can shop, compare — and prepare — for them.

12. How — and how often — will I be updated on the loan’s progress?

Will you have a single point of contact throughout the mortgage loan process? And how will you be updated on the progress: by email, phone or an online portal? Establishing your service expectations upfront, and seeing just how eager the lender is to meet them, will give a clear point of comparison among lenders.

13. How long until my loan closes?

Of course, you want to know what your target closing and move-in dates are so you can make preparations. And just as important: Ask what you should avoid doing in the meantime — like buying new furniture on credit and other loan-busting behavior.

The article 13 Mortgage Questions to Ask — and the Answers You Want originally appeared on NerdWallet.

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

FHA Title 1 Loans: What You Need to Know

FHA Title 1 loans are a little-known financing tool for home improvements and repairs. The FHA is well-known for helping first-timers buy a home, and Title 1 loans are a way for homeowners to finance permanent property improvements and renovations.

Home buyers can also piggyback a Title 1 loan onto their purchase mortgage to fix up a property they’re buying.

What is an FHA Title 1 loan?

An FHA Title 1 loan is a fixed-rate loan used for home improvements, repairs and rehab. (Adjustable-rate loans aren’t offered.) Loans under $7,500 are usually unsecured; your signature will suffice. Larger loan amounts will require using your home as collateral. You get the loan from an FHA-approved lender.

The definition of FHA Title 1 loan “improvements” is fairly broad: The Department of Housing and Urban Development says the money can be used for anything that makes your home “basically more livable and useful.”

That includes buying appliances, such as dishwashers, built-in ovens, refrigerators and freezers. Home improvements that aim to expand accessibility for disabled people are also allowed, as are energy-efficient upgrades such as solar energy systems.

FHA Title 1 loan details:

The maximum loan term — the length of time you have to pay it back — is 20 years on a single-family or multifamily structure; 15 years on a manufactured home on a foundation; and 12 years for a manufactured house without a foundation
The maximum loan amount is $25,000 on a single-family home; $12,000 per unit on a multifamily structure, up to a total of $60,000; $25,090 for a manufactured home on a foundation; and $7,500 for a manufactured home without a foundation
An FHA-insured product known as the 203(k) loan is often used to fund major repairs and renovations

Requirements for an FHA Title 1 Loan

There are few HUD-specific hurdles to clear to get an FHA Title 1 loan. Specific requirements include:

The house must have been built and occupied for at least 90 days
You need to own the home or have a long-term lease
Loan proceeds must be verified as used for specifically intended property improvements
An annual FHA mortgage insurance premium of $1 per $100 of the amount of the loan will be charged or built into your interest rate
You must have a debt-to-income ratio of 45% or less

There are no minimum credit score or income requirements set by HUD. You don’t even have to have equity in the home.

The interest rate and additional terms are determined by the lender you use. That’s one reason it’s always a good idea to shop more than one lender, just to be sure you’re getting the best deal possible.

Don’t let the details drag you down

As with any government program, there are a few acronyms and a bit of bureaucracy built into FHA Title 1 Loans. Here are some quick facts to help clear up any confusion:

The Federal Housing Administration, or FHA, is a part of the U.S. Department of Housing and Urban Development, or HUD.
Neither HUD nor the FHA offers loans; instead, they insure private lenders against losses from loan defaults. That encourages lenders to make FHA loans.
FHA loans are intended to help people of modest financial means to buy and improve their homes. They are not for luxury homes or fancy upgrades like pools and outdoor fireplaces.

How to find an FHA Title 1 loan lender

You’ll apply with a mortgage lender for any FHA loan, but not all lenders deal with them. To find an FHA-approved lender in your state, go the HUD website.

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The article FHA Title 1 Loans: What You Need to Know originally appeared on NerdWallet.

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

10 Housing and Mortgage Trends to Watch for in 2018

The housing picture is likely to improve in 2018:

Home prices are expected to climb, but not as fast
More houses could be for sale toward the end of the year, giving home buyers a greater selection to choose from
Homeowners will have more equity to borrow from

Yet in other ways, 2018 might continue to be challenging, especially for home buyers. Mortgage rates are likely to rise, reducing affordability.

Here are 10 housing and mortgage trends to expect in 2018.

1. Home prices decelerate

Good news for first-time home buyers: Home-price appreciation is expected to cool down in 2018 after a torrid couple of years.

Home prices rose 6.3% in 2016, according to the Federal Housing Finance Agency. They’re on track to exceed 6% in 2017, too. But for next year, the median forecast among six industry and lender groups is for a 4.1% increase in existing home prices nationwide.

Why the slowdown? One factor is home construction. Economists expect the construction of single-family houses to rise sharply in 2018, based on building permit applications. The median estimate has single-family housing starts rising about 8% in 2018, to roughly 912,500 new houses.

2. More homes for sale

Home buyers are struggling to find houses for sale. The shortages are especially acute for the kinds of homes that first-time buyers tend to get. Among the reasons for the tight supply:

Many baby boomers are content to age in their homes instead of downsizing
Investors bought millions of homes after the housing bubble burst, and they’re making too much money as landlords to sell
Home builders make more profit from expensive houses than entry-level houses, so that’s what they’re constructing

But there’s some hope for 2018: Realtor.com predicts that the housing supply pinch will begin to ease late in the year.

“It looks like we could get to a point where we’re seeing growth in inventory sometime in the fall of 2018,” says Danielle Hale, chief economist for Realtor.com.

3. Home sales could rise

Resales of existing homes are expected to rise modestly in 2018. The median estimate is that existing home sales will rise 2.5%, to 5.6 million units.

Meanwhile, sales of new homes are expected to rise a median of 7%, to 653,500 newly built single-family houses.

According to Realtor.com, cities in the South will show the most sales growth in 2018. Hale says she expects 6% existing home sales growth, particularly in markets such as Dallas; Tulsa, Oklahoma; Little Rock, Arkansas; and Charlotte, North Carolina. She says those places are not as “regulation constrained,” they have strong regional economies and developers have plenty of vacant land to build on.

4. Mortgage rates head up

Mortgage rates are expected to rise in 2018. CoreLogic, a data provider for the real estate industry, averaged six forecasts of mortgage rates, arriving at a consensus view that the 30-year fixed will average 4.7% in December 2018. In November 2017, the 30-year, fixed-rate mortgage averaged 4.07%.

“Not only are mortgage rates higher, but mortgage rates will be at the highest level since 2011,” Nothaft said at the Urban Institute symposium. “So we’re looking at an environment, going forward, where this era of cheap mortgage rates will largely be behind us.”

Interest rates are notoriously resistant to prediction, though. At the beginning of 2017, most people expected mortgage rates to rise steadily throughout the year. And they did rise — for a few weeks. The average 30-year fixed peaked in mid-March 2017 at 4.58%, according to NerdWallet’s daily survey. Then it declined, dipping slightly below 4% a few times in the summer, before moving upward slightly in the fall.

5. Affordability declines

If, as expected, home prices and mortgage rates go up in 2018, homes will be less affordable.

For example, if mortgage rates rise to 4.7% toward the end of 2018, and the median price of existing homes rises by 4.1%, then monthly mortgage payments for a typical house would rise substantially.

But according to an Urban Institute analysis, middle-class families in much of the country still have some financial wiggle room if rates and prices rise in 2018. Most home buyers don’t appear to stretch to the limits of affordability, the Urban Institute wrote.

6. More equity, more HELOCs

As home values rise, homeowners gain equity. And banks expect millions of homeowners to borrow against that equity.

About 1.6 million homeowners are predicted to get new home equity lines of credit in 2018, a 16% increase over 2017, according to a recent TransUnion study. The credit bureau says 67% of homeowners have enough equity to get HELOCs, and 80% of those borrowers have high credit scores.

TransUnion forecasts that 10 million homeowners will get HELOCs from 2018 through 2022, double the number of new lines of credit in the five years before that.

7. Security headaches continue

Thieves are stealing down payments from home buyers by combining email hacking with wire fraud. And there’s no sign of it slowing.

Complaints of this type of wire fraud skyrocketed by 480% in 2016, according to the 2016 annual report (the latest available) from the FBI’s Internet Crime Complaint Center. Lenders and title companies say the problem worsened in 2017, and that they fend off this form of fraud constantly.

The best way to avoid becoming a victim: When you receive emailed instructions for wiring money, call your agent to verify. The email may be a fake, designed to trick you into wiring money into a thief’s account.

8. More options for people with credit issues

A few specialty lenders are focusing on nontraditional mortgages. For example, Angel Oak Mortgage Solutions in Atlanta targets the borrower “who has had a life event, so they lost their house or had to file bankruptcy or things got really bad, but they’ve now got their feet back on the ground and they’re ready to buy their next house,” says Tom Hutchens, the lender’s senior vice president of sales and marketing.

Several lenders offer interest-only mortgages, and even loans with limited income documentation. These mortgages are dubbed “non-QM” because they don’t meet Fannie Mae’s and Freddie Mac’s plain-vanilla “qualified mortgage” rules. One prominent non-QM lender, Impac Mortgage Holdings, plans to begin securitizing these loans early in 2018.

9. Lenders embracing automation

Mortgage lenders continue to pour money into automating the loan-application process. The best-known example is Rocket Mortgage by Quicken Loans. But Quicken isn’t the only lender that embraces automation. Some lenders, such as loanDepot, cook up their own automation in-house, while software providers such as Blend and Roostify help large and small banks to automate applications. Now a few lenders want to use automation to guide borrowers to loan products that best suit them.

10. Tax reform could affect buyers and owners

Lawmakers were still working on tax reform as this article was being written. Preliminary House and Senate versions limited the number of home sellers who would benefit from the home capital gains exclusion, and they treated the mortgage interest tax deduction differently. It’s too early to know how a final tax reform bill would affect home buyers and homeowners, but we will keep you posted.

More from NerdWallet

The article 10 Housing and Mortgage Trends to Watch for in 2018 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 Tuesday: Higher, but With Fewer Foreclosures

The average rate on a 30-year fixed-rate mortgage rose two basis points, the average 15-year fixed-rate climbed three basis points and the average rate on the 5/1 ARM went up one basis point, according to a NerdWallet survey of daily mortgage rates published by national lenders Tuesday.

The 30-year fixed-rate mortgage is two basis points lower than one week ago, and 30 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

Fewer people face foreclosure than a year ago, according to CoreLogic, a data provider for the real estate industry. About 0.6% of mortgaged houses were in foreclosure at the end of September, compared with 0.8% a year earlier, CoreLogic said. To put it in more concrete terms, the foreclosure rate went from about 4 in 500 houses last year to about 3 in 500 houses this year.

The percentage of homeowners who are 30 or more days past due on their mortgage payments has gone down, too. It was 5% at the end of September, compared with 5.2% a year earlier. CoreLogic attributed the improvement to strong job growth and prudent mortgage underwriting.

MORTGAGE RATES TODAY, TUESDAY, DEC. 12:

(Change from 12/11)
30-year fixed: 4.08% APR (+0.02)
15-year fixed: 3.63% APR (+0.03)
5/1 ARM: 4.20% APR (+0.01)

Get personalized mortgage rates

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 Tuesday: Higher, but With Fewer Foreclosures 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: Barely Moving, Like Your Rush Hour

The average rate on a 30-year fixed-rate mortgage was unchanged, as was the 15-year fixed. The 5/1 ARM rose one basis point, according to a NerdWallet survey of daily mortgage rates published by national lenders Monday.

The 30-year, fixed-rate mortgage is four basis points lower than one week ago, and 25 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

As rates remain stable, here’s something housing-related that’s moving up: Commute times. From 2012 to 2016, the average commute time increased roughly 42 seconds each way, according to the Census Bureau. Nationally, one-way travel time between home and work averaged 26.1 minutes in 2016, up from 25.4 minutes in 2012.

The longest one-way commute times were in East Stroudsburg, Pennsylvania (38.6 minutes), the New York City metro area (35.9 minutes) and the District of Columbia metro area (34.4 minutes).

Places with some of the shortest average commute times were Walla Walla, Washington (15.4 minutes), Grand Forks, North Dakota (15.5 minutes), and Great Falls, Montana (15.6 minutes).

MORTGAGE RATES TODAY, MONDAY, DEC. 11:

(Change from 12/8)
30-year fixed: 4.06% APR (NC)
15-year fixed: 3.60% APR (NC)
5/1 ARM: 4.19% APR (+0.01)

Get personalized mortgage rates

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The article Mortgage Rates Monday: Barely Moving, Like Your Rush Hour 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: Mixed, While Flipping Sees Slipping

The average rate on a 30-year fixed-rate mortgage went up three basis points, the 15-year fixed rate fell one basis point and the 5/1 ARM was unchanged, according to a NerdWallet survey of daily mortgage rates published by national lenders Friday.

The 30-year, fixed-rate mortgage is three basis points lower than one week ago, and 24 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

While mortgage rates have held relatively steady in the last few months, home flipping appears to have become a little less profitable. Flippers of single-family homes and condos yielded a gross average profit of $66,448 per home in the third quarter, for an average 47.7% return on investment, according to ATTOM Data Solutions, a real estate information vendor. That’s down from 48.7% average return on investment the previous quarter, and the lowest since the second quarter of 2015.

ATTOM defines gross profit as the difference between the purchase price and the selling price, so it doesn’t include the money spent to fix up and sell a home. A flip is defined as a purchase and sale within 12 months.

MORTGAGE RATES TODAY, FRIDAY, DEC. 8:

(Change from 12/7)
30-year fixed: 4.06% APR (+0.03)
15-year fixed: 3.60% APR (-0.01)
5/1 ARM: 4.18% APR (NC)

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The article Mortgage Rates Friday: Mixed, While Flipping Sees Slipping 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 Thursday: Unchanged, as Home Equity Grows

The average rate on a 30-year fixed-rate mortgage was unchanged, the 15-year fixed rate fell one basis point and the 5/1 ARM was unchanged, according to a NerdWallet survey of daily mortgage rates published by national lenders Thursday.

The 30-year, fixed-rate mortgage is six basis points lower than one week ago, and 27 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

Mortgage rates have improved compared to a year ago, and so has the story on home equity. When you owe more on your house than the house is worth, bankers say you have negative equity. (Normal people, like us, tend to say you’re “upside-down” or “underwater” on your home.) Having negative equity carries a risk of foreclosure. Here’s why: If you fall behind on the mortgage payments, you can’t simply sell the house to pay off the loan.

From the third quarter of 2016 to the third quarter of this year, 712,000 homeowners went from having negative equity to having positive equity, according to a quarterly study from CoreLogic. The real estate data company says 4.9% of mortgaged homes have negative equity — down from a 26% negative-equity rate in the depths of the Great Recession, in the fourth quarter of 2009.

The major metro area with the greatest concentration of homes with negative equity is Miami, describing almost 14% of homes. Fewer than 1% of homes in San Francisco have negative equity.

MORTGAGE RATES TODAY, THURSDAY, DEC. 7:

(Change from 12/6)
30-year fixed: 4.03% APR (NC)
15-year fixed: 3.61% APR (-0.01)
5/1 ARM: 4.18% APR (NC)

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The article Mortgage Rates Thursday: Unchanged, as Home Equity Grows 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 Wednesday: Down, Along With Inflation Pressure

The average rate on a 30-year fixed-rate mortgage plunged seven basis points, the 15-year fixed rate fell six basis points and the 5/1 ARM fell one basis point, according to a NerdWallet survey of daily mortgage rates published by national lenders Wednesday.

The 30-year, fixed-rate mortgage is six basis points lower than one week ago, and 31 basis points lower than one year ago. A basis point is one one-hundredth of one percent.

The drop in mortgage rates happened on the same day as a report showing anemic wage growth, which implies lower inflation and therefore little upward pressure on interest rates. The Bureau of Labor Statistics compiles a quarterly stat called “unit labor costs” that measures the bang for the buck that employers get when they pay workers. When employees become more productive, but their wages don’t keep up, their employers take a bigger slice of the economic pie than the workers. In the language of the BLS, unit labor costs go down.

In the third quarter of this year, American workers’ productivity went up faster than wages. Unit labor costs fell at an annual rate of 0.2% in the third quarter, according to the BLS. And unit labor costs fell 0.7% in the last four quarters.

With workers unable to demand full compensation for their productivity increases, there is little to lift the inflation rate higher. That’s reflected in lower mortgage rates.

MORTGAGE RATES TODAY, WEDNESDAY, DEC. 6:

(Change from 12/5)
30-year fixed: 4.03% APR (-0.07)
15-year fixed: 3.62% APR (-0.06)
5/1 ARM: 4.18% APR (-0.01)

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The article Mortgage Rates Wednesday: Down, Along With Inflation Pressure originally appeared on NerdWallet.

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