How Will the Mortgage Industry Change in the Near Future

Posted on January 27, 2017 by Scott Li

With President Trump taking office, there is some speculation that the mortgage industry is about to see some significant changes. Although mortgage rates are still low when compared to historic rates, they’ve climbed to over 4% for the first time in more than a year. Experts think the increases will continue for a few different reasons.

The First Spikes

Immediately after it was announced that Trump won the election, market rates spiked. This was actually surprising for many experts and analysts, who immediately began to rethink the future of the economy and different markets. On December 14, 2016, the Federal Reserve raised its interest rates by 0.25%. This was expected and even predicted by many finance experts since the rates hadn’t increased at all in nearly a year. In fact, this increase marked only the second Federal Reserve interest rate increase in the past 10 years. read more

How a Mortgage Credit Might Affect You

Posted on January 26, 2017 by Scott Li

Many states across the country are still working to recover from the housing crisis of the late 2000s. To help more families avoid foreclosure, the federal government is considering reforming the MID, or Mortgage Interest Deduction, which would benefit low- and moderate-income taxpayers. This credit will affect everyone in all tax brackets in different ways.

The Proposal

The Tax Policy Center has proposed three different ways to reform the MID and help people keep their homes. One of these proposals involves completely replacing the MID with a 15% non-refundable credit for any mortgage valued at $500,000 or less. Currently, this credit is available for mortgages valued at $1 million or less. Government officials feel that more households would be able to benefit this way, although the average subsidy would be significantly lower than today’s MID. It would also raise taxes by some $240 billion nationwide over the next decade. read more

Why It’s Smart to Refinance Your Mortgage

Posted on January 1, 2017 by Scott Li

While there are tens of thousands of Americans across the country deciding whether it’s smart to buy a home, there are probably twice that many who could benefit from refinancing. Since mid-November, mortgage rates have been on the increase, which means the time to do so may be running out. Here are some of the reasons why you should think about refinancing now.

Why Do Homeowners Refinance?

If there’s one reason why homeowners refinance, it’s because they have an opportunity to get a lower interest rate. No only will their monthly payments go down – and sometimes significantly – but they will also pay less interest over the lifetimes of their mortgages, which may equal tens of thousands of dollars in savings. In fact, it’s estimated that the average homeowners could save themselves about $3000 by refinancing their mortgages right now. Even though interest rates are starting to climb, they’re still lower than most existing mortgages. read more

Is a Trump Presidency Driving Up Mortgage Rates?

Posted on December 29, 2016 by Scott Li

People are up in arms (or celebrating) the fact that Donald Trump is the United States president-elect. However, it hasn’t just affected the people; it’s also had a stunning impact on mortgage rates. They’ve spiked since the election results were announced, and they’re continuing to climb.

MBS Movement Following the Election

In the weeks after Trump was elected, MBS (Mortgage-Backed Securities) lost well over 240 points in very short order. Keep in mind that MBS points and mortgage rates move opposite of one another. Whenever MBS prices climb, overall mortgage rates – and the amount of money consumers ultimately pay – go down. However, with MBS falling significantly, mortgage rates are doing the opposite. A 240-point drop is equal to a .5% increase in rates. They’re still going up, and they’re going up quite a bit. As of mid-November, mortgage rates had climbed to the highest they’d been since January of this year. read more

How Do You Know if You Qualify for Mortgage Preapproval?

Posted on December 22, 2016 by Scott Li

If you want to know whether you’re ready to buy your first home, a mortgage preapproval is the way to go. Preapproval will allow you to start bidding on homes because buyers are far more likely to take you seriously. Here’s everything you need to know about mortgage preapproval and whether you’re likely to qualify in your current financial situation.

Prequalification vs. Preapproval

Many people seem to think that mortgage prequalification and preapproval are the same things, but this is not at all the case. Prequalification is essentially a conversation with a lender in which you provide some basic information and your lender tells you whether you’re likely to qualify for a mortgage based on that information. The preapproval process is much different, and it requires a hard credit check along with several other very important elements. read more

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