Offbeat Ready to buy a home? Lock in your mortgage rate now

18:06  17 may  2018
18:06  17 may  2018 Source:   cbsnews.com

Banks are walking away from low-income homebuyers

  Banks are walking away from low-income homebuyers Banks have been walking away from low- and moderate-income homebuyers seeking loans and that has affordable housing advocates worried.Newly released federal data on mortgage lending from the Consumer Financial Protection Bureau shows people with low and moderate incomes made up only 26.3% of borrowers in 2017, down from 36.6% in 2009.

MoneyWatch - Wednesday Tips for buyers looking to buy a home this spring CBSN Rubio won't primary Trump in 2020 home in the next 30 days," it would make sense to lock in a mortgage rate , said Terrazas.

Ready to lock in a rate ? Check the latest rates on Zillow. 6 Mortgage Myths Debunked. How to Buy a Home Without a Sale Contingency. How to Save Thousands on Your Mortgage .

Buying into the American dream of homeownership is getting pricier. A confluence of factors has made for a seller's market across much of the country, with buyers already sidelined by limited supply and lofty prices. But this week they're confronting another hike in borrowing costs.

"Rising mortgage rates are further squeezing affordability for would-be homebuyers that are already frustrated by limited inventory of available homes and the higher home prices that have resulted," Greg McBride, chief financial analyst at Bankrate.com, said in emailed comments.

The ability to afford a home is becoming a bigger hurdle as increases in property values outrun growth in income and as interest rates climb.

First-time homebuyers learn to move quickly in tight markets

  First-time homebuyers learn to move quickly in tight markets Seasonal demand from buyers is increasing as usual, but shoppers are finding a lack of new listings. Also daunting: coming up with a down payment. Based on the median home price, a down payment of 20 percent — a longtime rule of thumb — would be more than $50,000. Amassing that much cash can be difficult. The average savings of people who do not own homes was $5,200 in 2016, according to the Realtors association, citing Federal Reserve data.In reality, however, many home buyers make much smaller down payments.

Per diem interest is accrued daily between closing and the date your first mortgage payment is due. Interest Rate Lock Period. Closing costs are fees that are associated with buying a home .

Lock your interest rate for up to 90 days while you shop for a new home ! Learn More. Get an approval to buy a home or refinance your mortgage in minutes. Once you’ve adjusted your loan and are ready to move forward, click See if I’m Approved.

The benchmark used in setting rates for loans including home mortgages is the 10-year Treasury note, and on Wednesday it held near seven-year highs, just a tick below 3.1 percent. That's hiking borrowing costs for consumers, businesses and the government.

For those looking to purchase a home, this week's rate increase would tack on about $20 a month to your mortgage payment, which is "not going to make or break anyone" already positioned to make the purchase, Aaron Terrazas, Zillow's senior economist, told CBS MoneyWatch.

The traditional 30-year, fixed-rate home loan currently stands at 4.55 percent, up from 4.05 percent a year ago.

While most Americans buying homes sign up for a 30-year loan, they typically decide to move within seven to 10 years, "making the 10-year Treasury the best and most liquid benchmark for that mortgage rate," Terrazas explained.

Deducting home loans interest is trickier under new tax rules

  Deducting home loans interest is trickier under new tax rules If you are looking to take a mortgage or home equity loan, you need to know how the tax changes may impact youThe new rules generally limit the deductibility of mortgage interest on up to $750,000 of debt for acquiring a home. In some cases, the new rules also disallow deducting the interest on home equity loans used in many common transactions.

With the benchmark 10-year Treasury at a 7-year high, borrowing costs are rising, while home prices also climb.

To simplify the mortgage rate - lock decision, keep these things in mind Most lenders won’t lock you for less than 30 days unless you’re ready to close and often offer the same rate for a 15- and 45-day period. The Rubins were buying a four-bedroom, 2,200-square-foot home in Westchester County

Borrowing costs, which held at about 7 percent from 1985 to 1999, a stable period in the U.S. housing market, are on their way higher, so it's a good time to nail down a loan, said Terrazas.

The increase in borrowing costs is not unexpected, considering that the Federal Reserve is raising its lending rate and selling off its investments in mortgage-backed bonds, he noted.

"We know inventory is tight, but if there's a chance of finding your dream home in the next 30 days," it would make sense to lock in a mortgage rate, said Terrazas. "Given the trend in the past six months has been upward, and moves by the Fed are going to push up short-term interest rates."

A larger hurdle for homebuyers is the short supply and higher prices, the Zillow economist added.

"Nationally, single-family housing completions dropped 4 percent in April, putting the supply of single-family homes for sale near all-time lows, pressuring housing prices." Kathleen Navin and Patrick Newport in said in emailed commentary of government data.

Figures from the Mortgage Bankers Association illustrate the rising borrowing costs and strong demand for mortgages. Fewer consumers are refinancing their home loans compared to a year ago, when interest rates were lower, while applications to buy a home are 10 percent higher, according to the MBA data.

Mortgage rates surge to their highest levels in 7 years

  Mortgage rates surge to their highest levels in 7 years A sharp sell-off in the bond market is sending mortgage rates to the highest level in seven years.The average contract rate on the 30-year fixed will likely end the day as high as 4.875 percent for the highest creditworthy borrowers and 5 percent for the average borrower, according to Mortgage News Daily.

Mortgage rates change by the day, but locking in your rate can ensure you'll still be able to close your loan with the same low rate that's available today. If you're buying a home , you'll need to chose a lender and lock your rate with a few days of your offer being accepted.

A mortgage rate lock is an agreement between a borrower and a lender that guarantees the borrower a specific Fixed or Variable Rate Mortgage : Which Is Better Right Now ? Forecasting Mortgage Rates : Buy , Sell or Refi? Adjustable Rate Mortgage : What Happens When Interest Rates Go Up.

Banks' quarterly profits soar amid lower tax rate .
U.S. banks reported $56 billion in profits in the first quarter, up 27.5 percent from a year earlier, as institutions began to take advantage of a lower effective tax rate, the Federal Deposit Insurance Corporation (FDIC) reported Tuesday.Over 70 percent of U.S. banks reported growth in year-over-year earnings, as the industry enjoyed higher net operating revenue amid a significantly lower corporate tax rate, according to the regulator. Net interest income was up 8.5 percent to $131.3 billion.

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