Blog – Page 12 of 860 – Fred Gruber - First Rate Financial Group

22

Jan

Home Mortgage Tips

How Can You Prepare Your Finances for a Mortgage?

Dreaming of owning a home? Preparing your finances for a mortgage is key to making that dream a reality. Here’s how to get started:

1. Create a Budget

Understanding how much you can afford is the first step. Review your monthly expenses and set a target mortgage payment that aligns with your budget. For example, if you’re comfortable paying $1,200 in rent, aim for a mortgage payment around that amount.

2. Save for a Down Payment

Start building your savings for the down payment. If you’re buying a $300,000 home and plan to put down 5% ($15,000), saving $500 per month can help you reach your goal in 2.5 years. Consider trimming unnecessary expenses to speed up the process.

3. Check and Improve Your Credit Score

Your credit score has a big impact on the interest rate you qualify for. A higher score can save you thousands over the life of the loan. Take steps like:

Paying bills on time.
Reducing credit card balances.
Avoiding new credit inquiries.

Even moving from a 670 to a 720 score can make a big difference.

4. Work with a Mortgage Professional

A trusted mortgage broker can help you navigate the process, find the best rates, and handle the paperwork. They’ll also provide guidance tailored to your financial situation.

5. Get Pre-Approved

Pre-approval shows sellers you’re serious and gives you a clear picture of your borrowing limits. To get pre-approved, you’ll need to gather essential documents like tax returns, pay stubs, and bank statements. A mortgage broker can help you through this step to ensure you’re ready to make offers with confidence.

Preparing your finances for a mortgage takes time, but it’s worth the effort. With a solid budget, a growing savings account, a strong credit score, and expert guidance, you’ll be ready to tackle the home-buying journey.

Ready to take the next step? Give us a call and make your homeownership dreams a reality!

21

Jan

By Fred Gruber

Financial Reports

What’s Ahead For Mortgage Rates This Week – January 21st, 2025

Recent economic data brought significant relief, with both the CPI and PPI indicating that inflation was running cooler than expected. In the context of the current administration, this was welcome news, helping to ease concerns about potential monetary policy changes. The Federal Reserve has very frequently signaled they will follow the data and this time it was a positive result towards reducing rates further this year. The change in administration, however, still remains unknown and there is a lot of unrest across lending partners and markets alike. This was also followed by a better than expected Retail Sales report which has shown 2025 to start off with some economic momentum. Both reports are critical factors in shaping future rate adjustments. Despite this, lending partners have been raising rates in the last few months, driven largely by uncertainty tied to the transition of administrative positions.

Consumer Price Index

The increase in the core rate in the last 12 months dipped to 3.2% from 3.3%. But that still leaves it well above the Fed’s goal of 2% inflation. Meanwhile, overall consumer prices showed a sharper 0.4% increase largely because of higher food and energy prices. Those prices are expected to taper off in January.

Producer Price Index

Producer-price index rises just half as much as forecast. The producer-price index, where the seeds of inflation are planted, rose a mild 0.2% last month, the government said Tuesday. Wall Street had predicted an increase double that size.

Retail Sales

Retail sales grew steadily in December 2024, rounding out a strong holiday shopping season and signaling that the economy entered the new year with solid momentum. According to government data released Thursday, sales at U.S. retailers rose by a seasonally adjusted 0.4%, slightly below Wall Street’s expectations.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.13% with the current rate at 6.27%
• 30-Yr FRM rates saw an increase of 0.11% with the current rate at 7.04%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.08% for this week. Current rates at 6.47%
• 30-Yr VA rates saw a decrease of -0.09% for this week. Current rates at 6.48%

Jobless Claims

Initial Claims were reported to be 217,000 compared to the expected claims of 210,000. The prior week landed at 203,000.

What’s Ahead

We should expect the Manufacturing PMI preliminary this week, as well as the University of Michigan’s Consumer Sentiment report. Given the bank holiday from Martin Luther King, there is a relatively light release schedule otherwise.

17

Jan

By Fred Gruber

Home Buyer Tips

How Mortgage Rates Affect Your Home Buying Power

Mortgage rates play a significant role in determining how much home you can afford. These rates influence the cost of borrowing money for your mortgage, which directly impacts your monthly payment and, ultimately, your home buying power.

The Impact of Mortgage Rates on Affordability

When mortgage rates are low, the cost of borrowing decreases. This means you can afford a larger loan or purchase a more expensive home without substantially increasing your monthly payment. For example, a lower rate might allow you to upgrade to a home with additional square footage, a better neighborhood, or extra features that would otherwise be out of reach.

On the other hand, when mortgage rates rise, your purchasing power decreases. Higher interest rates mean higher monthly payments, which may require you to adjust your budget or consider less expensive properties. Even a small increase in rates can significantly affect affordability. For instance, a 1% rise in rates could reduce the loan amount you qualify for by approximately 10%.

Timing is Key

Mortgage rates fluctuate based on various factors, including the economy, inflation, and Federal Reserve policies. While it’s impossible to predict the exact movements of rates, staying informed about trends can help you make smarter financial decisions.

Locking in a rate when they are favorable can save you thousands over the life of your loan. If rates are expected to rise, acting sooner rather than later could maximize your home buying power. Conversely, if rates are stable or expected to decrease, you might benefit from waiting or negotiating better terms.

The Value of Professional Guidance

Understanding mortgage rates and their implications can be overwhelming, but you don’t have to navigate it alone. A mortgage professional can:

Analyze market trends and provide insight into rate fluctuations.
Explain how different rates impact your monthly payment and loan costs.
Help you develop a strategy to secure the most advantageous terms for your situation.

Partnering with an experienced professional ensures you’re making informed decisions and taking full advantage of the opportunities available to you.

Tips to Maximize Your Buying Power

To make the most of your home buying journey, consider these strategies:

Boost Your Credit Score: Lenders offer the best rates to borrowers with strong credit.
Increase Your Down Payment: A larger down payment reduces the loan amount and can qualify you for better rates.
Compare Lenders: Shopping around can reveal competitive offers and lower rates.
Plan Strategically: Work with your mortgage professional to determine the best time to act based on market conditions.

Mortgage rates significantly influence how much home you can afford, making it essential to understand their impact. By staying informed, timing your purchase wisely, and working with a trusted mortgage professional, you can maximize your home buying power and achieve your homeownership goals.

Have questions about mortgage rates and how they affect your buying power? Contact us today to get personalized guidance and take the next step toward your dream home.