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Fixed mortgage rates reverse course for the first time this year

Senator Sherrod Brown, an Ohio Democrat and a member of the Senate Banking Committee, said a bipartisan bill to replace Fannie Mae and Freddie Mac is too complicated and doesn't do enough to address too-big-to-fail concerns or provide assistance for affordable housing. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 4.44 percent with an average 0.5 point. It was 4.46 percent a week ago and 4.3 percent a year ago. The 15-year fixed-rate average fell to 3.9 percent with an average 0.5 point. It was 3.94 percent a week ago and 3.5 percent a year ago. It was 3.63 percent a week ago and 3.28 percent a year ago. “After holding steady for much of the week — even through Friday’s exceptionally strong jobs report — rates fell for the first time this year after inflation data reported Tuesday were weaker than anticipated, and news of the firing of Secretary of State Rex Tillerson prompted some financial market flight to safety,” said Aaron Terrazas, senior economist at Zillow. It would take something even more dramatic and unexpected for the mortgage rates to move by a big margin either way, up or down.” Meanwhile, mortgage applications were flat again last week, according to the latest data from the Mortgage Bankers Association. The market composite index — a measure of total loan application volume — increased 0.9 percent from a week earlier. The refinance index fell 2 percent, while the purchase index rose 3 percent.

How to get equity out of your home

Here are the four most popular ways: Cash-out refinance FHA 203(k) refinance for home improvements Home equity loan Home equity line of credit Any of those could be perfect — or damaging. Equity is simply the amount by which the current market value of your home exceeds your mortgage balance today. How to get equity out of your home: cash-out refinance With a cash-out refinance, you get a whole new first mortgage. How to get equity out of your home: FHA 203(k) refinance This is only going to work if you’re using all the money from your refinance for home improvements. How to get equity out of your home: home equity loan Home equity loans (HELs) are also called second mortgages. Why pay a higher rate on all your borrowing when you can keep your low rate on your first mortgage and pay a higher one just on your new loan? Home equity loan pros Rates are often just a bit higher those of a cash-out refinance LTVs for your combined secured loans are similar to those for a standard refinance: 80 percent for most; 90 percent for the most qualified borrowers Most HELs come with fixed rates and terms so they’re protected against inflation, and are highly predictable for budgeting No wonder HELs are popular. How to get equity out of your home: HELOC A home equity line of credit (HELOC) is the love child of a home equity loan and a credit card. Your lender determines your credit limit (usually somewhere between 80 and 90 percent), and you can borrow up to that. And while you may have started with a 15-year loan and a low interest-only payment, you will now be looking at a 15-year loan with ten years left to repay it, and interest rates that may be going up For instance, if you borrow $20,000 at 4.5 percent with a 15-year HELOC and a five year drawing period, and your balance increased by $4,000 every year and your rate increased every year by 1 percent, here’s your possible payment schedule: Year 1: Balance: $4,000 Rate: 4.5 percent Payment: $15 Year 2: Balance $8,000 Rate 5.5 percent Payment: $37 Year 3: Balance $12,000 Rate: 6.5 percent Payment: $65 Year 4: Balance $16,000 Rate 7.5 percent Payment: $100 Year 5: Balance $20,000 Rate 8.5 percent Payment: $142 YEARS 6 THROUGH 15: PAYMENT (assuming you can fix your rate at 8.5 percent): $248 MONTHLY Of course, some people will get themselves into trouble no matter how they borrow.

Should retirees pay off their mortgages with investments?

Liz has just retired and wonders if she should use her investments to pay off her mortgage, despite her advisor’s advice to the contrary. Q: I retired this year and my mortgage is coming due soon. My advisor said to keep the mortgage as rates are low and keep the money invested to keep making me money. If the investments in question are in a Registered Retirement Savings Plan (RRSP) or a similar tax-deferred account, you need to consider the tax implications of using these investments to pay off your mortgage. If the investments in question are in a non-registered, taxable account, I may be that much more inclined to consider paying off your debt, Liz. The investments in this case would generate taxable investment income, and your required rate of return would need to be higher to account for taxes payable and justify staying invested over paying off your mortgage. I would also consider in this case, if you decided you didn’t want to pay off your mortgage, to at least pay off the mortgage initially with your investments, and then borrow the money back to invest. But if you’re going to do it, at least consider making the interest tax-deductible. Unfortunately, the Canadian financial advice industry is such that you need to take your advisor’s advice with a grain of salt, however disconcerting it is for me to say that. You staying invested ensures the bank gets paid twice – from your investment fees and from your mortgage interest.

Affordable housing set for spotlight of next presidential campaign

Affordable housing is poised to become a more prominent issue in the 2020 presidential race, with several potential Democratic candidates releasing proposals on the topic in recent months. — have all introduced bills aimed at reducing housing burdens. Harris’s bill, introduced in July, would create a refundable tax credit for renters who pay more than 30 percent of their income on rent and utilities. Besides Harris, Gillibrand, Booker and Warren, other possible Democratic presidential candidates may also be poised to make housing a key plank in their campaigns. He added that he thinks the bills show that every Democratic presidential candidate will have to include addressing housing issues as part of their platform. Democratic strategists said that housing could be an issue that can help politicians in the party show they are attentive to voters’ needs. Experts on Democratic politics also said that housing is an issue of importance to parts of the party’s base, including millennials and minority voters. Booker’s office said that the senator’s bill includes safeguards against rent increases. Harris's office said that there are a number of things that need to be done to address the housing crisis, including addressing limited supply, but that the senator's bill is one thing that could be done to help. Democrats have been critical of some of the Trump administration’s housing proposals, such as proposals in the president’s budget to cut funding for Department of Housing and Urban Development (HUD) programs.

Home buyers beware: Most expensive housing markets in some states average $750,000-plus

The U.S. economic recovery and continued growth have had many positive effects on the nation and the population. For at least one group, however, the improving economy has had a negative impact — for potential homebuyers. Along with incomes and low unemployment, the housing market continues to grow. Of course, housing markets are different from one another. To determine the county with the most expensive housing market in every state, 24/7 Wall Street reviewed median home values of 3,119 counties and county equivalents as of the second quarter of 2017 from the National Association of Realtors. In California, the most expensive market has a median value in excess of $1 million. In other states, the most expensive market barely tops $200,000. homes valued $1,000,000+: 6.4% More: American cities with the most property crime in every state Most expensive housing market: Carver County Median home price: $329,383 Median mortgage payment: $1,331 Median household income: $88,638 (State: $65,599) Pct. homes valued $1,000,000+: 3.9% More: Cities where crime is soaring in every state Most expensive housing market: New York County Median home price: $932,366 Median mortgage payment: $3,768 Median household income: $75,513 (State: $62,909) Pct. 24/7 Wall Street is a USA TODAY content partner offering financial news and commentary.

How to Invest in Real Estate: Buying vs. Not Buying Property

Investing in real estate isn't for everyone. 7 Ways to Invest in Real Estate by Buying Property For many of the methods of investing in real estate, you'll need to have money saved. Here are seven ways to invest in real estate that involve a purchase of actual property. Maintain a good house in the right area, and you may be able to make the same money off a few vacation tenants that you might make from a year-round tenant elsewhere. It is high-risk, high-reward real-estate investing. 10 Ways to Invest in Real Estate Without Buying Property If buying property is too expensive of an investment for you, it's not only way you can add real estate to your investment portfolio. Here are 10 ways you can invest in real estate without actually having to buy any property. Look beyond REITs for your real estate companies. For example, RE/MAX is a company that sells homes via real estate agents. Real estate agents require some education and training before they can actually get out there and flip houses, but successful real estate agents can take home nice commissions on the properties they sell.

Millennial buyers face tough housing market

It’s a big change.” Like the couple from San Francisco, who are 28 and 30, other millennials are starting to follow in the footsteps of earlier generations and buy suburban houses after fueling a boom in city apartments. Last year 32.3 percent of young people were homeowners, a slight increase from 2016 when it was 32.2 percent. Between 2011 and 2017, home prices grew 48 percent while income for all age groups rose only 15 percent, according to National Association of Realtors statistics. Student debt is a big obstacle to buying a home for many millennials, said Jessica Lautz, director of demographics at the National Association of Realtors. The median student debt for millennials is $41,000, and they typically put off buying their first home for seven years after they wanted to buy, Lautz said. Ownership is still “considerably lower than 10 years ago,” Porter said. Today’s first-time buyers are increasingly living in ad hoc situations while they save up, Lautz said, citing a survey from the Realtors Association. A shortage of housing for sale is also driving prices up in some booming areas such as the San Francisco metro area, where Jimenez Smith and her husband work and live. The San Francisco couple felt the pressure to buy because their rent was rising and they were afraid that the price of a house would soon outstrip their income, even though they already could afford a $4,000 monthly mortgage and had saved about $150,000 for a down payment. “We were going through disclosures and praying it would appraise right,” Jimenez Smith said.

Buy-to-let landlords face mortgage crunch as tens of thousands will struggle to get a...

At that time, landlords raced to buy in a bid to avoid the 3 per cent surcharge being introduced on all new buy-to-let and second home purchases from April that year. If you borrowed close to the maximum loan-to-value two years ago, then you are going to face much stricter lending criteria, which includes greater affordability tests. He suggested that many of the landlords who bought new properties in March 2016 and rushed to beat the deadline will have taken out popular two-year fixed rate deals. And in the same year, the Bank of England introduced new rules meaning landlords need more rental income to cover their mortgage costs. It equates to almost 80,000 properties being bought in that month, with Mr Boulger suggesting that around 70,000 would have been bought as buy-to-let properties due to the approaching stamp duty changes deadline. He explained that a significant of buy-to-let properties were bought with cash two years ago to meet the stamp duty deadline. Why landlords raced to beat the stamp duty deadline Landlords took such extreme measures as it meant they could save significant amounts of money. He said: 'Although some of the increase in the number of properties purchased was due to cash buyers, the huge increase in mortgage completions was mainly due to buy-to-let and a good proportion - more than 50 per cent - of these purchases were on two year fixed rates.' Many landlords will have no other option than to stick with their existing lender as they fail to meet the stricter lending criteria imposed on potentially better deals elsewhere. Mr Boulger said: 'Many landlords who had a loan-to-value in excess of 60 per cent will struggle to remortgage but they will be able to get another deal with their existing lender.'

Foreign Buyers Increasingly Interested in U.S.-Based Real Estate

“It’s just that at any given point, who the front runners are changes,” he continued, noting that when he got his start in real estate in the 1980s, Japanese buyers were purchasing a bulk of real estate, whereas in 2017, they only made up 2% of foreign property purchases, according to the NAR report. Like Mr. Genton, Mr. Umansky said he’s seen an increase in money coming from Taiwan and Hong Kong as money from mainland China has decreased, but that the real buyer group that’s emerged of-late in the luxury L.A. market are Brits. In New York, the trend toward Asian buyers is also continuing Like in Los Angeles, broker Rick Pretsfelder of Leslie J. Garfield said that Asian buyers are the most prevalent foreign buyer group that he’s seen this year in Manhattan, representing about 30% to 35% of attendees at high-end showings, and 10% to 15% of purchasers. Buyers from Taiwan and South Korea are also prevalent, he said, while buyers from Eastern Europe and Russia—common purchasers of townhouses seven or eight years ago—are nowhere to be seen. In Miami, Latin American buyers still rule However, in Miami, Asian buyers—including those from mainland China—have never made up a huge part of the foreign buyer mix, said Vanessa Grout, the president of CMC Real Estate, the sales and marketing arm of the CMC Group, which is currently involved with the Brickell Flatiron project. Instead, Latin American buyers—many of whom also must contend with outbound currency restrictions from their country of origin, Ms. Grout noted—have always had the strongest presence in Miami. Instead, buyers today are largely from Colombia, Peru, Mexico and Chile, Ms. Grout said, noting that South and Central American buyers will purchase about 60% of the properties in the 549-unit Brickell Flatiron project. In fact, he expects 90% of the downtown units to go to foreign buyers, with almost all of them coming from Latin America. As the prevalent foreign buyer group changes, just as it always has, Mr. Karmely emphasized that the bigger story here is how foreign buyers’ desire to purchase U.S.-based real estate has continued to expand and accelerate. And that in Miami, they’ve expanded their interest away from the beach and into the downtown core, where four or five years ago, no foreign buyer would have looked, he said.

Don’t be afraid to shop around for a better mortgage deal

WASHINGTON -- It's one of the weirder documented facts about homebuying in America: Surprising numbers of people don't bother to shop for mortgage money, even though they could save tens of thousands of dollars through lower interest payments by doing so. But for some reason, many go limp when it's time to make a really high dollar purchase -- getting a mortgage to purchase a house, often the biggest expenditure of their lives. CFPB researchers also found that rate quote variations among competing lenders for the same prime borrower -- with a high credit score, 20 percent down payment, seeking the same mortgage amount -- frequently vary by one-half of one percentage point. Even on a $200,000, 30-year fixed-rate loan, choosing a lender quoting a 4.5 percent rate, compared with a lender who'll do the loan at 4 percent, can cost you $3,500 in the first 60 months alone. Compare that with saving a few bucks filling up on gas. Lending Tree, an online network with 342 mortgage companies competing for homebuyers' business, found that the median spread between annual percentage rate (APR) quotes to individual borrowers for each loan request on its platform was six-tenths of a percentage point during the week ending March 11. (The annual percentage rate measures the cost of the loan when fees are added into the quoted interest rate, thereby giving a more accurate picture of the true cost per year.) Another online platform that allows lenders to make competing offers, Zillow Mortgage, conducted a data analysis exclusively for this column that showed the median high-low APR spread in offers on its network of hundreds of lenders and brokers to be even wider -- just under seven-tenths of one percent on a 30-year fixed loan with 20 percent down. Lending Tree promises you up to five firm offers from competitors but requires you to submit personal identifying information so lenders can evaluate your application. Get active, shop for your mortgage money, and save a bunch when it really counts.


5 Inconvenient Truths About Real Estate Agents

Buying or selling a home is likely the biggest financial transaction you’ll ever complete. They sometimes work for both sides In some states, the same real estate agent can represent both the buyer and the seller in a transaction. Their commission is negotiable Listing agents may expect you to accept their commission — generally around 6% of the sale price — without question, but you certainly don’t have to. Most sellers never think about the fact that anyone can come through the door of an open house, Gasset said. If you view an open house and decide to make an offer, the listing agent can take credit for your interest. Don’t provide your name, sign any documentation or discuss your opinion of the house with the listing agent unless you have to, Miller says. If you really like an open house, leave and find a buyer’s agent who can help you make an offer. Consumers should interview several potential providers and make their own decision about whom to hire, Harty says. Interview multiple real estate agents. Get a real estate attorney involved.