The Fed Slashers Rates to 0% - What Does This Mean for Mortgage Rates?

The Fed Slashers Rates to 0% - What Does This Mean for Mortgage Rates?

Today, the Federal Reserve made it's biggest single-day move ever!  They slashed their benchmark rate to near 0%.  But, this cut doesn't necessarily mean a drop in mortgage rates. 

Shorter-term debt such as credit cards and home equity lines of credit will be more directly affected by these cuts since they’re tied to a bank's Prime Rate, which is directly affected by the Fed's rates.

However, the Fed also announced a return to “Quantitative Easing,” (QE) which means the Fed will be purchasing government bonds and mortgage-backed securities. This WILL have a positive effect on mortgage rates. The $700 Billion in QE buying is a huge amount so keep an eye on mortgage rates for a refinance opportunity in the near future.

What Should I Do now?
GET READY!!!  Make sure you have all of your information ready to go in case rates fall.  Everybody is going to be trying to refinance so the mortgage industry will be swamped with refinance requests. (It’ll be like trying to find a bottle of hand sanitizer today!)

Call me at 708.473.7688 or e-mail me for a “Refi Readiness” kit so you can get prepared today!

Equifax Data Breach

Equifax, one of the nation’s largest credit repositories, just announced that 143 million consumer credit accounts have been hacked.  When you think about that number, it is likely that almost every adult over the age of 18 who has a credit history has been a victim.

The hack happened between May and July of this year and hackers were able to access names, Social Security numbers, birth dates, addresses and, in some cases, driver’s license numbers.  The risk is not only that can hackers can run up your current credit accounts, but they can also open new accounts and possibly even file fraudulent tax returns.

But, there are ways you can protect yourself.  Here are a few steps to take to ensure your account have not been compromised and to minimize the negative effects if you have been compromised:

• Check Your Credit – Check your credit report with the 3 main credit repositories (Experian, Equifax, and TransUnion) and look for any suspicious activities such as new accounts, credit inquiries, increased balances on current accounts or unknown addresses.  You can obtain a FREE credit report each year from these repositories by visiting www.annualcreditreport.com
• Place a Fraud Alert on Your Credit Report – A fraud alert notifies creditors that you have been or may be a victim of fraud.  It requires the creditor to take reasonable steps to make sure the person requesting new credit is actually you.
• Pay CLOSE Attention to your Statements – Check all transactions on your statements every month.  Contact the creditor if you see any that appear to b suspicious
• Sign Up for FREE Credit Monitoring – Credit Monitoring will send you alerts when activity is detected on your credit report that can impact your credit history.  This is important in detecting errors or sing of identity theft.  There are several companies that offer free credit monitoring -Credit Karma is a popular one.
• Place a Credit Freeze on Your Credit – If you have been hacked, place a credit freeze on your credit accounts.  This restricts access to your credit information to third parties and prevents would-be hackers from obtaining more credit in your name.  Any time someone attempts to check your credit, the credit repository must obtain your permission to release that information.
• File Your Taxes Early – The best way to prevent income tax fraud is to beat the hackers to the punch.  If you file early, they will have less opportunity to file your tax return and steal your refund.

Equifax has set up a dedicated call center to answer any questions you have regarding the security breach at 866-447-7559.  Or you can check to see if you were affected by visiting, www.equifaxsecurity2017.com, and then click the "potential impact" tab.

It is still a great time to purchase a home or refinance your existing mortgage - mortgage rates are at or near the lowest levels of 2017.  If you, or someone you know, is looking to purchase or refinance, I can be reached at 708-473-7688 or BarkerLoans@gmail.com.

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Turn Your Tax Refund Into a New Home

What are you going to do with your Federal Income Tax Refund?  Buy a 60" HD TV? Take a weekend trip to Vegas?  

What if I told you that your Federal Income Tax Refund could be enough to purchase a home of your own?  Well, it just might be!

Many people think they need a down payment equal to 20% of the purchase price to buy a house.  Well, that is definitely NOT the case! Fannie Mae & Freddie Mac have programs that require as little as a 3% down payment and FHA mortgages only require a 3.5% down payment.  And, there are many Down Payment Assistance Programs that require a down payment as little as 1% of the purchase price!

Let's say you were looking to purchase a home for $125,000.  This means your down payment for a conventional mortgage would be $3,750 -- or $4,375 for an FHA mortgage. There are also closing costs to be paid, but you may be able to negotiate for the sellers to pay a part or all of the closing costs.  

You'll need to document your refund

As any asset used to purchase a home, it has to be properly documented.  A completed, signed Federal Tax Return showing the refund will be required.  If you have opted to have your refund direct deposited, you'll need a copy of the bank statement showing the deposit.  If you have opted to receive a check, make a copy of the check, a copy of the deposit slip, and a copy of the statements showing the deposit.  (TIP: when depositing your refund, do not deposit it with other funds - it makes things a lot easier).

If you're tired of renting, or living at home with Mom and Dad, use your tax refund to buy a place of your own. The 60" HD TV can wait until next year when you have your own place to put it in!

Contact me to learn more at 708.473.7688 or BarkerLoans@gmail.com

Conventional Loan Limits to Increase in 2017

For the first time since 2006, conventional loan limits will be increasing.  The Federal Housing Finance Agency has announced that loan limits for most of the country will be as follows:

     1-Unit $424,100

     2-Unit $543,000

     3-Unit $656,350

     4-Unit $815,650

Certain parts of the country, such as Alaska, Hawaii, Guam and the US Virgin Islands, have conventional loan limits that are 50% higher than the regular loan limits and other parts of the country are designated as "High-Cost" areas and have different loan limits.

Please contact me at barkerloans@gmail.com or 708.473.7688 with any questions.

What's in Your Credit Report?

Most people don't think about their

credit report until it's time to buy a car or a home.  But, if there are errors on your credit report it can make it more difficult, more expensive, or even impossible to obtain financing.

Make sure you are aware of the information contained in your credit report.  You can receive a FREE copy of you credit report from all three credit agencies by visiting www.annualcreditreport.com. And, if there are errors on the report you'll find information on how to correct that information directly with the credit agencies.  And, it's all FREE.

If you have any questions on your credit report or anything pertaining to mortgages, please contact me at BarkerLoans@gmail.com or call 708.473.7688.

Mortgage Forgiveness Debt Relief Act Extended

In mid-December 2015, Congress passed a law extending the Mortgage Forgiveness Debt Relief Act of 2007, retroactively, for all of 2015 through the end of 2016.

This act prevents a borrower from being taxed on any mortgage debt forgiven on a short sale or foreclosure.  Prior to the implementation of this act, any shortfall on the payoff of a mortgage was taxed as income to the borrower.

The limit on forgiveness is $2 Million and the mortgage had to be secured by the borrower's primary residence. If you had any mortgage debt forgiven in 2015, consult a tax professional with any questions.

Please contact me at BarkerLoans@gmail.com or 708.473.7688 with any mortgage-related questions.

Existing Home Sale Fall in November

Existing Home sales declined for the second straight month - down 10.5% on a seasonally-adjusted basis.  The annualized rate falls to 4.76 million units - the slowest pace in over 18 months. On a year-over-year basis existing home sales fell 3.8% - the first decline in 14 months.

In November, the inventory of existing homes for sale was 2.04 million units. Down 1.9% from a year ago.  This represents a 5.1 month supply of homes and indicates inventory levels are still tight.

Some of this decline may be due to the implementation of the new "Know Before You Owe," also known as TRID, disclosures rules which began with new applications on or after October 3, 2015.  These new regulations require new waiting periods after disclosures are sent to the borrowers and require a longer time period between application and consummation of the transaction.  How much an impact TRID made on the existing home sales will be more clear in the coming months.

If you have any mortgage-related questions please contact me at BarkerLoans@gmail.com or 708.473.7688.