What's Ahead For Mortgage Rates This Week – Sept 22, 2014

Last week’s economic news largely concerned the Federal Reserve’s FOMC meeting statement and a post-meeting conference given by Fed Chair Janet Yellen. The FOMC statement indicated that the Fed continued its wind-down of Treasury and mortgage-backed securities and that its purchases are expected to cease after the next FOMC meeting.

What's Ahead For Mortgage Rates This Week Sept 22 2014Last week’s economic news largely concerned the Federal Reserve’s FOMC meeting statement and a post-meeting conference given by Fed Chair Janet Yellen. The FOMC statement indicated that the Fed continued its wind-down of Treasury and mortgage-backed securities and that its purchases are expected to cease after the next FOMC meeting.

The FOMC statement said that committee members find the economy to be improving at a moderate pace and currently strong enough to further reduce the QE3 monthly asset purchases. The Fed seeks to achieve and sustain its dual mandate of maximum employment and an inflation rate of 2.00 percent. While the unemployment rate is lower than the Fed’s benchmark of 6.50 percent, FOMC members cited concerns that the labor force is underutilized and that labor markets, while recovering, could use further improvement. The Fed repeated its customary statement that the Fed’s monetary policies are not on a pre-determined course, and that FOMC members continually review and interpret developing financial and economic news as part of their decision-making process.

Chair Yellen explained during her press conference that it is not possible to provide a specific date when the Fed will change its target federal funds rate. Economists and media analysts expressed concerns that raising the target federal funds rate, which is currently at 0.00 to 0.250 percent, could cause overall interest rates to rise. Chair Yellen said that she expects the current target federal funds rate to remain for a “considerable time” after the QE asset purchases cease. She also said that it is impossible to provide a specific date when the Fed will change its target federal funds rate and cited multiple influences considered by FOMC when changing monetary policy.

Home Builder Confidence Grows, Housing Starts Fall

The National Association of Home Builders Housing Market Index rose by three points in September for a reading of 59. Analysts had predicted an index reading of 56 against August’s reading of 55. September’s reading was the third consecutive reading above 50. Stronger labor markets were cited as supporting the higher reading, but builders were also concerned by tight mortgage credit standards. Any reading above 50 indicates that more builders perceive market conditions for new homes as positive as those that do not.

August’s housing starts were inconsistent with the Home Builders Index; according to the Department of Commerce, construction of new homes fell by 14.4 percent from July’s reading to 956,000. Analysts expected 1.03 million starts against July’s reading of 1.12 million homes started.

Mortgage Rates Rise, Weekly Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week. Average mortgage rates rose across the board with the rate for a 30-year fixed rate mortgage 11 basis points higher at 4.23 percent. The rate for a 15-year mortgage also rose by 11 basis points to 3.37 percent and the rate for a 5/1 adjustable rate mortgage rose from 2.99 to 3.06 percent. Average discount points were unchanged for all mortgage types at 0.50 percent.

New weekly jobless claims dropped to 280,000 against an expected reading of 305,000 and the prior week’s adjusted reading of 316,000 new jobless claims. The original reading for the prior week was 315,000 new jobless claims. The less volatile four-week average of new jobless claim fell by 4,750 new claims to a reading of 299,500 new claims.

What’s Ahead

This week’s scheduled economic news brings multiple housing-related reports. The National Association of REALTORS® will release its Existing Home Sales report for August. Case-Shiller’s monthly Housing Market Index report and the FHFA’s Home Value report will bring new light to national market trends. The Department of Commerce will release its New Home Sales report, and as usual, Freddie Mac’s weekly report on mortgage rates will come out on Thursday. To see houses for sale in the Northern Virginia area please click here.

Getting Past No: What To Do If You're Turned Down For A Mortgage

With most home prices well above what the majority of us have in the bank, getting approved for a mortgage can be the deal maker or breaker when it comes to purchasing a piece of property.

Getting Past No: What to Do If You're Turned Down for a Mortgage or Other Home FinancingGetting Past No: What To Do If You’re Turned Down For A Mortgage

By: Rick Guthrie

Getting pre-approved for a mortgage loan is an integral part of having the ability to purchase a home in today’s society.

With most home prices well above what the majority of us have in the bank, getting approved for a mortgage can be the deal maker or breaker when it comes to purchasing a piece of property. Therefore, getting rejected for a mortgage can feel like a huge loss.

The first thing to realize, however, is that there are action steps you can take to get to “yes.” Here’s what to do if you’re turned down for a mortgage or other home financing.

Shop Around: Don’t Take “No” The First Time

If you get a “no” from your bank the first time around, don’t be fooled into thinking that everyone will give you the same answer.

Instead, be sure to shop around your mortgage with different banks, and opt to speak to a mortgage broker to leverage all of your options.

When looking at several different lenders, you’ll have a much higher chance of getting a yes since every lender adheres to different rules and restrictions. Though you may end up with a mortgage with a slightly higher interest rate, you’re likely to get approved for a mortgage or other home financing.

Ask Friends: Get A Co-Signer

If your “no” was the result of bad credit history or a low credit score, perhaps you should consider asking for the help of friends and family. Sometimes bringing a co-signer in on the deal who has better credit history and a higher credit score will change the response of your bank or lender significantly, and suddenly you’ll find yourself hearing the sought-after “y” word.

Ask Questions: Fix The Problem

If you’ve sought out several different banks and lenders, and still find yourself with rejected mortgage applications, be sure to understand why the “no” came in the first place. If it’s an issue of your credit history, which can’t be appeased with a co-signor, you may need to put in the time in order to correct some of your credit issues.

Other common reasons why people are rejected for a mortgage include unrealistic borrowing expectations, i.e. applying for a mortgage that is too high for you to satisfy, as well as an unreliable employment history or a general lack of credit history. Speak with your mortgage professional to determine the reason, and if shopping around or bringing in a co-signor doesn’t transform the “no” to a “yes,” seek to fix the problem instead.

Though it can be a daunting task to apply for a mortgage after you’ve been rejected, ensuring that you arrive at that ultimate “yes” is something you need to undertake in order to purchase a home and reach that next milestone in your life.

Having trusted professionals on your side is something that will surely ease the tension on all things involved in purchasing a home, including getting approved for a mortgage. For more information on how to get past “no” when searching for a home, call your trusted real estate professional today.