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SW Florida Borrowers See Slight Fall in Mortgage Interest Rates, Naples, Isles Of Capri, Estero!

 SW Florida Borrowers See Slight Fall in Mortgage Interest Rates, Naples, Isles Of Capri, Estero! It was fairly clear that the table had been set for last week’s Federal Reserve meeting to result in a minimal rise in mortgage interest rates. Their Fed Funds rate directly influences the mortgage interest rates that banks observe. Since SW Florida real estate activity SW Florida Borrowers See Slight Fall in Mortgage Interest Rates, Naples, Isles Of Capri, Estero!can be spurred or dampened by the monthly payment amounts SW Florida mortgage lenders offer applicants, this national story has meaningful local repercussions.

It wound up as a non-event that nonetheless spawned action—albeit in a minor way. In May, Chair Yellen had said that a rate increase would be “appropriate” over the summer months. In the lead-up to last week’s meeting, other Fed governors had strongly implied that it was now time for a slight Fed Funds bump.

Still, most commentators kept their prognostications vague; they had been vociferously anticipating a move for many cycles, only to hear serial postponements from the Fed. In addition to having been burnt before by Fed head fakes, there was also another reason why a no-go might happen this time around. Regardless of what the jawboning had been, economic and employment growth was still stuck in first gear—and a rate hike could retard improvement.

The commentators weren’t wrong to hold fire. Once again, the Fed did nothing (except make even more noise about an SW Florida Borrowers See Slight Fall in Mortgage Interest Rates, Naples, Isles Of Capri, Estero!interest rate hike…later).

Yet, even so, the market forces that nudge mortgage interest rates one way or the other did seem to react. After the non-announcement, rates barely budged at first—but then continued steadily lower (the lowest in weeks, in fact). By week’s end, the Mortgage News Daily announced that the string of moves had brought mortgage interest rates into a “post-Brexit range”—similar to the conditions “that sent rates plunging toward all-time lows.”

SW Florida Borrowers See Slight Fall in Mortgage Interest Rates, Naples, Isles Of Capri, Estero!The reasons last week were less than certain, although frustration with the Fed’s lack of coherence was fairly unanimous. CNBC interviewed big time investment manager Bill Gross, who said that investors were left “very confused” by the meeting’s outcome. He pointed to the likely rate raise that Yellen had emphasized at last month’s Jackson Hole speech, as well as to Fed Vice Chair Stan Fischer’s earlier assurance that there would be two hikes this year.

All this left {Your Town} mortgage interest rate watchers to make their own assessments about what to expect for future conditions—most importantly, whether current favorable low-interest rates could be counted on for long. There had been at least one indicator that optimists could welcome. Almost unnoticed was a footnote to the Fed’s announcement. Back in June, the Fed had predicted the lending rate to end 2016 at .9 percent. It now said the likely number would be .6%. That would result in {Your Town} mortgage interest rates still comfortably in the historically low range—hardly a flashing red light for would-be borrowers.

SW Florida Borrowers See Slight Fall in Mortgage Interest Rates, Naples, Isles Of Capri, Estero! Wherever the Fed heads eventually, it’s indisputable that right now SW Florida mortgage interest rates remain fetching low—creating rare opportunities for buyers and sellers both. Why not give me a call to explore how you can take advantage today?

Wandering SW Florida Mortgage Rates’ Infinitesimal Moves, Naples, Ft. Myers, Cape Coral!

  Wandering SW Florida Mortgage Rates’ Infinitesimal Moves, Naples, Ft. Myers, Cape Coral! The legendary figure of The Wanderer has different connotations in different cultures. English teachers in {Your Area} high school classrooms have always taught some of the most famous parts of Homer’s Odyssey—the heroic story of Ulysses, the most famous Wandering SW Florida Mortgage Rates’ Infinitesimal Moves, Naples, Ft. Myers, Cape Coral!wanderer. Ulysses wandered in and out of a lot of trouble…

Planets are wanderers, too. During ancient night times, ancient shepherds looked up and watched them meandering restlessly among the stars, so they called them planets (“wanderers”). Dion (of Dion and the Belmont) was the most celebrated wanderer of the 60s—at least his hit song claimed that he roamed “around around”).

In today’s SW Florida culture, though, wondering is a lot less glamorous than it’s been through most of history. A modern definition includes the bit about moving around, but most dictionaries include less-than-positive modifiers like “aimless” or “without plan or purpose.”

So when Federal Reserve Chair Janet Yellen gave a recent speech that SW Florida mortgage rate observers hoped would signal the direction where rates are headed, they expected clarity on the Fed’s plan and purpose. Last Thursday, The Wandering SW Florida Mortgage Rates’ Infinitesimal Moves, Naples, Ft. Myers, Cape Coral!Washington Post headlined the following days’ financial reaction:

Mortgage Rates Wander Higher but Remain Near Yearly Lows.”

When financial writers talk about mortgage rates that “wander,” it doesn’t really matter in which direction. It means that they’re going up and down in what amounts to wandering’s “aimless manner.” If it signals anything, it’s mainly that the signals from all corners are mixed. At Jackson Hole, Chair Yellen had signaled that the central bank “is moving closer” to raising their benchmark rate, but it Wandering SW Florida Mortgage Rates’ Infinitesimal Moves, Naples, Ft. Myers, Cape Coral!seemed that the signal was not too convincing: Bankrate.com found that nearly 90% of the experts it talked to think rates will remain unchanged for a while.

As for how the Post could see rates “wandering” higher yet remaining near 2016 lows, it became clear in the paragraphs down below. The average 30-year mortgage rate had changed from 3.43% to 3.46%, remaining stuck in the range that’s lasted all summer (it’s been moving up and down no more than 7 hundredths of a percent). “Wandering” sounds appropriate. Freddie Mac’s Chief Economist said mortgage rates have been “hovering;” but “wandering” sounds at least as apt. What this means for SW Florida real estate is perhaps the only really clear signal to emerge. For the moment, SW Wandering SW Florida Mortgage Rates’ Infinitesimal Moves, Naples, Ft. Myers, Cape Coral! Florida mortgage rates remain appetizing low, keeping the residential market pegged at historical bargain basement levels.

Best of all, that means it’s still a great time to give me a call!

For SW Florida Mortgage Applicants, the Razmatazz is Necessary, Naples, Isles Of Capri!

 For SW Florida Mortgage Applicants, the Razmatazz is Necessary, Naples, Isles Of Capri! Whenever you’re in the planning stages for your next SW Florida real estate venture, the best available SW Florida mortgage rate is a number For SW Florida Mortgage Applicants, the Razmatazz is Necessary, Naples, Isles Of Capri!you look for. Whether you are thinking of a purchase of a new SW Florida home or simply refinancing your existing property, that rate determines how much you will pay each month.

You would think that getting a good idea of what that number is should be pretty easy. Certainly you would be encouraged by what you find on the web. That number—the mortgage rate—is available online almost everywhere you turn. It’s in TV ads. It’s on the radio. It’s almost looking for you.

But as everyone soon learns, those numbers aren’t exactly the ones that you need. What appears in the ads and pop-ups isn’t necessarily that number (if by “that number” you mean the mortgage rate you will wind up paying).

This whole topic was addressed this last weekend by USA Today in an article that did a good job of explaining why the actual mortgage rate that most applicants will be offered is not readily available. The rates in the ads are called theFor SW Florida Mortgage Applicants, the Razmatazz is Necessary, Naples, Isles Of Capri! “published” rates. Unlike many other kinds of consumer advertisements, in mortgage financial parlance, a “published” rate isn’t the same as a “promised” rate. As this month’s survey by Freddie Mac specified, the mortgage rate average of 3.45% was on average only available to customers who chose to pay an additional fee—in this case, .5 point of the loan amount. For a $275,000 loan, that would cost the borrower $1,375 up front to get the “published” mortgage loan rate.

That isn’t the only wrinkle. As USA Today put it, “Lenders also publish rates that have very specific prerequisites.” The rate may only apply to applicants with specific credit scores. The rate might call for a minimum loan-to-value percentage, too—or only be available in specific areas (which may or may not include SW Florida ).

For SW Florida Mortgage Applicants, the Razmatazz is Necessary, Naples, Isles Of Capri!This might sound like a deliberate bait-and-switch tactic by the lenders, but when you get to the reasons for all the razmatazz, it’s actually necessary. SW Florida’s mortgage lenders are able to keep rates competitively low by only lending to borrowers who have a very good chance of repaying the loan. Those whose histories indicate that they pose a higher risk of not being able to keep up their monthly payments have to expect that they will be quoted a higher interest rate. The last time mortgage lenders stopped doing a good job of those risk calculations, it triggered what we now call “the great recession”—and just about everyone paid a price for that.

For SW Florida Mortgage Applicants, the Razmatazz is Necessary, Naples, Isles Of Capri! So it may be inconvenient, but in order to really find out what your true interest rate will be for a specific real estate transaction, you have to go through the motions of applying for it. In this age of readily available instant information, that can seem like a run-around—but it’s necessary. I’m here to make this and every other aspect of your SW Florida real estate doings as easy as possible. Call me!

For SW Florida Mortgage Shoppers, Bad News Isn’t Always Bad, Naples, Marco Island!

For SW Florida Mortgage Shoppers, Bad News Isn’t Always Bad, Naples, Marco Island! If you keep track of the ebb and flow of U.S. economic news, you might also be aware of how it relates to some things that happen here. Particularly in the For SW Florida Mortgage Shoppers, Bad News Isn’t Always Bad, Naples, Marco Island!way SW Florida’s mortgage rates have been responding to the ups and downs of announcements from Washington, the cause and effect relationship has settled into a fairly predictable tango. Last week was no exception, with a dip from afar leading to some more good news here.

The less-than-buoyant news from Washington came in the form of what CNBC called a “weak” Gross Domestic Product reading for the second quarter. That news caused a drop in mortgage interest rates, which triggered an increase in home purchase applications (now 13% higher than a year ago) and a 10% increase in refinance activity from the previous week. Any time SW Florida’s mortgage interest rates fall, it of course it spells opportunity for both buyers and sellers here: the asking price for a home in SW Florida is one thing, but sooner or later, most prospective buyers get down to what the monthly cost of buying will be—and at current historically low interest rates, that number is often surprisingly affordable.For SW Florida Mortgage Shoppers, Bad News Isn’t Always Bad, Naples, Marco Island!

Why a drop in the U.S. GDP—which is certainly not a welcome news item—should result in good mortgage news in SW Florida is due to a mix of elements. The Wall Street Journal provided a few hints. After noting that recent data releases (retail sales stalled in July; wholesale prices fell) caused Treasury note yields to briefly hit their “second lowest level in history,” they concluded that such news “suggests September and perhaps December rate hikes are less than likely.” Readers were on For SW Florida Mortgage Shoppers, Bad News Isn’t Always Bad, Naples, Marco Island!their own, left to grapple with why that should be. If previous history is a guide, they probably remembered that the Federal Reserve is afraid of weakening the economy by closing the taps on borrowing—which is what results from rate raises. Looked at another way (as economists always do), strong economic news spurs activity and borrowing, so lenders expect that higher rates won’t discourage loan applicants. When the opposite happens, only temptingly lower rates keep the borrowing cycle going.

SW Florida rate-watchers didn’t have to wade through the WSJ financial analyses, though. Local Twitter addicts were invited to follow along as well. It turns out that the Mortgage Bankers Association tweets all the time. By late Friday, they were welcoming the weekend with such TGIF mortgage tidbits as, “average interest rate for 30-year fixed-rate mortgage drops to 3.65%.”

For SW Florida Mortgage Shoppers, Bad News Isn’t Always Bad, Naples, Marco Island! The bad news wasn’t really terrible; in fact, it was moderated by some healthier employment statistics. All in all, though, the effect of the rock-bottom mortgage interest rate news gives SW Florida buyers and sellers a strong reason for optimism—as well as an excellent reason to give me a call!

Mortgage Interest Rates & SW Florida Real Estate: It’s All Connected

One way or another, it’s all connected.

Mortgage Interest Rates & SW Florida Real Estate: It’s All Connected. Last week ended with what some observers justifiably called a “shocking” development—one that could impact SW Florida’s home buyers and sellers measurably—at Mortgage Interest Rates & SW Florida Real Estate: It’s All Connectedleast in the short run. It came with the release of the employment statistics from the Department of Labor. They weren’t good numbers. But the surprisingly weak report might be good news for some home buyers, since it could well affect affordability. As I said, it’s all connected.

“Affordability” is the index that seeks to summarize in a single number whether or not a typical family would qualify for a mortgage under current economic conditions. When a homeowner in SW Florida is looking at the state of the market, it’s not a bad indicator for explaining why sales might be rising or falling. Even though the nation’s residential prices have been rising steadily, the Affordability Index has remained better than the historical average. You’d think that when something is more expensive, it would be less affordable—but the contradiction is explainable when mortgage interest rates are taken into account.

All across the U.S., very low mortgage interest rates have been more than compensating for higher home price tags. Interest rates near or below the 4% mark tend to make monthly home loan payments eminently affordable. That happy situation can’t last forever, of course; so it’s why anyone with stake in SW Florida real estate has reason to watch for changes in mortgage interest rates. If you are thinking of buying a home in SW Florida, low mortgage interest rates are a Mortgage Interest Rates & SW Florida Real Estate: It’s All Connectedstrong motivator to get going. If you are thinking of selling, legions of motivated buyers are what you’d hope for.

Adding more fuel to the fire had been the growing likelihood that those mortgage interest rates will soon begin to rise—this month, as a matter of fact. Until last Friday, the Federal Reserve governors had been unusually forthright in statements that they were likely raise lending rates at next week’s meeting. The experts didn’t disagree.

Then came Friday’s jobs report, which blew those expectations, if not into the weeds, at least onto the sidewalk. MarketWatch was typical. “Weak job numbers…have essentially taken a June rate Mortgage Interest Rates & SW Florida Real Estate: It’s All Connectedincrease off the table.” They called the chances for such a move in July “also significantly reduced.” Only hours earlier, the same site had headlined, “Investors are now ready to accept the Fed’s interest-rate hike.”

Fortune was equally firm, headlining, “Don’t expect the Fed to Raise Interest Rates This Month.” An earlier article had described financial markets that were raising bets on a June increase following release of Fed deliberations.

Does this new twist make SW Florida real estate market more or less attractive? The poor labor report might give some pause about the U.S. economy as a whole, but SW Florida’s continuing low mortgage interest rates certainly counterbalance those concerns. Then there is always the outside chance that the experts are, again, wrong—and the Fed will raise the Funds rate, anyway.

Mortgage Interest Rates & SW Florida Real Estate: It’s All Connected. This is a realm in which few things are certain. One is that, as previously mentioned, it’s all connected. Second, there’s at least one sure way to take advantage of the best SW Florida’s real estate market has to offer—calling me!

SW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springs

SW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springs. This will be a heads-up for SW Florida residents who may be applying for a home loan in the future: there are some major adjustments underway that could affect their eligibility. It hasn’t been talked about much—possibly because most peoples’ eyes tend to glaze over when the topic of loan analysis is raised. But the more SW Florida mortgage applicants know about how lenders decide SW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springswhich loans to grant and on what terms, the better the odds of getting a green light. Briefly, here’s what is coming:

Starting on the 25th of this month, the way Fannie Mae (FNMA) goes about assessing creditworthiness will change. FNMA is the government-backed outfit that buys up private lenders’ home loans once they have been made. That insures that the lenders continue to have a steady supply of cash with which to fund new loans. In short, Fannie’s mission is to keep the home loan industry liquid. Together with similar corporation Freddie Mac, they are behind 60% of home loans in the U.S.—so many SW Florida mortgages are directly involved.

In order to qualify for government backing, lenders have to prove that a given home loan carries an acceptable level of risk. Lenders work with software programs issued by Fannie to help put numbers to the amount of risk—and that’s where the change is about to take place. Beginning next weekend, their latest release of the software (“Desk Underwriter 10.0”) will start to be used. For the first time, it will add a new element in theSW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springs way a local applicant’s credit history is analyzed—one that is intended to better predict their ability to repay. It’s called “trended data.”

Credit reports will continue to use the familiar scoring benchmarks: outstanding balance, percentage of credit used, and timeliness of payments. In fact, the traditional credit scores aren’t slated to be impacted at all. What will change is the importance those scores are given, because the trended credit data will go deeper into what a borrower’s history shows. The software will take the previous 24 months’ revolving credit card payment history to rate whether the trend has been SW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springsone of using more credit; maintaining the same level of borrowing; or paying down balances. In brief, if the “trended data” shows that balances owed have been rising, it indicates a Near Prime borrower. If the amount owed remains relatively stable, it shows a Prime borrower. If the balances have been dropping, it indicates a Super Prime candidate who is most likely to repay without a hitch.

There are nuances, too (they really would make everyone’s eyes glaze over)—but that’s the big picture. For SW Florida mortgage applicants who will be applying this summer, the fact that their history will now be analyzed in this manner is at least good to know—even if it’s not possible to alter. For everyone else who may not be applying for a while yet, it should be useful to plan credit card usage in light of how it’s likely to affect lending decisions.

SW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springs. I make it a point to keep my clients abreast of all current developments affecting the buying, selling, and financing of SW Florida properties. Whenever you have a question about anything to do with our local real estate scene, I hope you won’t hesitate to call!

Future of SW Florida Mortgage Interest Rates—the Brexit Effect

Future of SW Florida Mortgage Interest Rates—the Brexit Effect. By the end of last week, homeowners who keep an eye on SW Florida mortgage rates had a remarkably clear view of what the future is likely to bring. “Brexit” had all but sealed the deal.

Future of SW Florida Mortgage Interest Rates—the Brexit EffectPart of the reason for the resurgence in the local real estate market has been the phenomenon of SW Florida’s historically low mortgage interest rates. Following 2015’s first rate hike in nine years (and the promise that two or three more were in store for 2016), across the nation, financial commentators foresaw the expected gradual rise in mortgage interest rates to act as a moderating influence on home sales activity. In other words, a market that would slowly grow a bit tighter.

As recently as April, that had been the common wisdom. That changed. Those who factor mortgage interest rates into their own decision about buying and selling SW Florida property were doubtless pleased when, last month, some bad news about employment rates triggered good news about the all-but-certain Federal Reserve interest rate hike: it was going to be delayed.

The delay was expected to last for months, but probably not much longer. Then came last week—and Brexit.

For anyone whose vacations allowed them to remain blissfully unaware of world affairs, “Brexit” was the name given to an election Great Britain held to determine whether or not to remain in the European Union. When the votes came in,Future of SW Florida Mortgage Interest Rates—the Brexit Effect the decision was to leave. Exit. This was so completely unexpected that the bottom dropped out of world stock exchanges. Convinced that Brexit would fail, traders had bolstered markets in the days leading up to the vote. Japan’s stock market tumbled 7.9%. Theirs was the most dramatic, but here in the U.S., the Dow fell 3.4%. The British pound dropped; the dollar rose.

The reason SW Florida mortgage interest rates could be affected by a distant overseas political event is due to the currency ramifications. When the dollar is seen as more stable than others, it rises in value. That causes U.S. products sold overseas to become more expensive, producing a drag on the economy. Since growth might falter if the Fed were to add the additional burden of higher interest rates, it seems all but certain that Future of SW Florida Mortgage Interest Rates—the Brexit Effectmortgage interest rates will remain where they are for longer than had been assumed. Possibly, for far longer.

The Wall Street Journal pointed out that “central banks will bolster growth by easing policies and, in the case of the Federal Reserve, delaying potential rate increases.” Forbes headlined “Brexit Makes That Federal Reserve Rate Rise Recede into The Future;” they predicted a future of “near zero interest rates…far longer than expected.” London’s Financial Times went even further, suggesting “the possibility of the Fed reversing last December’s quarter-point rise.” On Friday, The Washington Post noted that U.S. mortgage interest rates “already hit rock bottom this year…nearly a three-year low.” They quoted one analyst’s post-Brexit observation: “If you’re a borrower, don’t wait to lock your rate as this opportunity may not last long.”

Future of SW Florida Mortgage Interest Rates—the Brexit Effect. The Brexit phenomenon is certainly not reason enough for anyone to buy or sell a home—but when the decision is already in the works, current SW Florida mortgage interest rates can’t help but make the prospects more attractive. Call me if you are interested in further investigating just how rewarding today’s market can be!

Events Will Determine SW Florida Home Loan Interest Rate Outlook

Events Will Determine SW Florida Home Loan Interest Rate Outlook. Those of us who keep abreast of where SW Florida’s home loan interest rates are likely to head haven’t had much to keep track of lately. By the end of last week, that was beginning to change.

Events Will Determine SW Florida Home Loan Interest Rate OutlookEver since the Federal Reserve’s single boost in their Fed Funds rate by a quarter of a percent last December, the interest rate scene had been quiet. At that time, a gradual increase in the Funds rate had been predicted by nearly every observer. It’s the benchmark rate by which banks determine their prime interest rates, which are generally about 3% higher; SW Florida’s home loan interest rates are closely related to those.

 But the widely hailed gradual rise in rates failed to appear in January; then again in February—the result of the Fed’s Governors getting cold feet. The economy, battered by some nasty weather and further rained upon by disappointing employment numbers, was judged to be simply too uncertain to have more cold water poured upon it (interest rate hikes do that). The consensus view gradually turned to an expectation that home loan interest rates were stuck in neutral.

This month began with most observers sticking to their guns. The 24/7 Wall Street web site ended April with the headline “Little Chance (or None) Seen for Fed Rate Hike.” They elaborated that “Some economists feel that the rate hike risks Events Will Determine SW Florida Home Loan Interest Rate Outlookhave all but dried up for 2016…it does imply that rates will rise far slower than what had been expected…

SW Florida businesses (SW Florida real estate among them) generally stand to benefit by the continuation of the stimulative effect of low-interest rates, so having rates frozen at historically low levels is treated as good news. Sooner or later there will have to be a return to normal interest rate levels, but in the meantime, few voices argue very strenuously against the status quo.

That quiet was broken last Wednesday with the release of minutes from the Fed’s last meeting—the gist of which seemed to be that a June hike in rates was now being seriously considered. Most press reports made it sound as if a rate hike was imminent; but closer scrutiny made that considerably less than a sure thing. What had really been enunciated was subtle.

Events Will Determine SW Florida Home Loan Interest Rate OutlookCNBC’s Kate Rooney had the clearest take in an article about Wall Street trying to make sense of the Fed’s announcements. Since Fed Chair Janet Yellen’s statements in March had led all to believe no rate hike was anticipated, the new strong statement may have been intended to undo too much reliance on that. What was really being said was that a hike would be likely if current positive trends continued, rather than that newly strengthening trends were required. Most importantly, NO prediction was being made: everything would depend on the data (and events like the British vote to leave the European Union).

Events Will Determine SW Florida Home Loan Interest Rate Outlook. The bottom line for where home loan interest rates were likely to head? The best call is that unfolding events will determine that—and even the Fed itself awaits what’s to come. The one absolute in all of this was that right now, SW Florida’s home loan interest rates remain extremely attractive. It’s nice to have at least one certainty—which continues to be that it’s a very good time to call me!   

SW Florida Homeowners Have the Option: Loan or Line of Credit

SW Florida Homeowners Have the Option: Loan or Line of Credit. There’s a reason the English language’s greatest playwright was called “The Bard of Avon” and not “The Bard of SW Florida.” In Hamlet, for instance, despite the fact that Shakespeare’s Polonius character is supposed to be a wise counselor, he gets at least one piece of advice wrong when he SW Florida Homeowners Have the Option: Loan or Line of Credittells his son, “Neither a borrower nor a lender be.

This is flat-out terrible advice—at least for many SW Florida homeowners. 

The thing about borrowing is that if done prudently, borrowing can free some of the value a given SW Florida residence represents. There are two different ways that happens:

First off, there is the property’s stored value (the equity). As each monthly mortgage payment whittles down the amount owed to the lender, that equity builds—more so if the value of SW Florida real estate happens to be growing in general, which has been true lately. Unlike the other daily living expenses a family incurs, the dollars paid for your SW Florida shelter aren’t entirely “spent”—that is, lost. Like a savings account, the portion of the money that isn’t apportioned to interest will be recapturable when the home is sold.

Better yet, you don’t have to sell the place in order to free some of the value of that equity. After all, if you had to move outSW Florida Homeowners Have the Option: Loan or Line of Credit of your house to make use of it, it would be highly inconvenient. But you can make use of the property’s value in the meantime by naming it as collateral for a loan—either a line of credit (HELOC) or a home loan (a second mortgage). Because both types are smiled upon by lenders since they are secured, the interest rate will be less than for other kinds of personal loans.

The second way that Polonius’ advice would have been wiser in Hamlet’s Denmark or Shakespeare’s England than it is here today involves a more contemporary character: Uncle Sam. Some or all of the interest paid on either a HELOC or a second mortgage may be taken as a personal income tax deduction, depending SW Florida Homeowners Have the Option: Loan or Line of Creditupon various factors. Polonius might foolishly offer some blanket advice about that—but wiser counsel would be to consult your tax advisor.

When it comes to deciding which makes more sense for tapping into your home’s equity— opening a line of credit or second mortgage—the choice depends on the uses planned for the cash. If you know exactly how much you need (as when a major home repair is needed), the key advantage of an equity loan is that the interest rate and repayment schedule are fixed. With a HELOC, you have more flexibility: it works like a credit card. You can repay a borrowed amount and later tap into the line of credit again without reapplying. On the other hand, the interest rate and repayment requirements can change over time. And like a credit card, there is a built-in temptation to overuse it. Polonius wouldn’t approve…

SW Florida Homeowners Have the Option: Loan or Line of Credit. The financial wisdom of owning your home was around long before Shakespeare’s time— it’s one thing that doesn’t change. Whenever you have a question about your own plans and SW Florida real estate, I hope you’ll give me a call. As usual, the Bard had something wise to say about that, too: “Better three hours too soon than a minute too late!

 

Mortgage Rate Blahs are the Good Kind for SW Florida Home Buyers

This is sort of fun:

Mortgage Rate Blahs are the Good Kind for SW Florida Home Buyers. Mortgage rates, SW Florida home loan applicants and soon-to-be-applicants should be delighted to hear, went down again last week. The national average quoted in the Mortgage Rate Blahs are the Good Kind for SW Florida Home BuyersWashington Post notched down to 3.61% on a 30-year fixed loan, down from blah blah blah

You will probably not be surprised by the presence of the multiple blahs. By now, everyone in SW Florida has simply heard this so often and for so long that it has practically lost all meaning. But it’s sort of fun to realize that we were already celebrating the decline in mortgage rates to 3.8% a year ago, although it was pointed out even back then that we’d been hearing it for so often and so long…

Despite the repetition, in the real world of SW Florida —where low mortgage rates translate into very real payment dollars saved every month—this is the kind of news that impacts a family’s future disposable income more than any other. The difference between last year’s average mortgage interest rate and that average last week means savings of more than $13,000 over the span of a $350K loan. And that was just the improvement since last year. The savings over historical average mortgage rates (7.49%) amounts Mortgage Rate Blahs are the Good Kind for SW Florida Home Buyersto a gasp-inducing $306,000 for the same loan…a difference that surely deserves banner headlines.

That didn’t happen. Even the most financially sophisticated journals seemed to have all but succumbed to the numbness-producing sameness of the news, partly because the Fed’s announced plan to raise their Fed Funds rate seems to be fizzling out. The Economist described the moves by the Federal Reserve variously as “lackluster” and “dovish.” “If any other lift-off were so sluggish,” they yawned in the print edition, “you would not want to be aboard the rocket.”

There was little more excitement evident at The Wall Street Journal, who focused Mortgage Rate Blahs are the Good Kind for SW Florida Home Buyerson guessing what mortgage rate changes might be in store. They found that the mix of good and bad economic numbers meant that the Federal Reserve “may opt to simply wait”—rather than rocking the boat and raising in June, as had been expected.

“Mortgage Rates: Trending Down Going Into Homebuying Season” was the most excitement Forbes’ headline writers could muster; possibly because the news that followed was anything but new. Forbes quoted Freddie Mac’s chief economist with his less than stirring pronouncement: “Since the start of February, mortgage rates have varied within a narrow range.” Forbes’ deduction? “For now, home loans are really cheap.” 

Mortgage Rate Blahs are the Good Kind for SW Florida Home Buyers. Does this mean that SW Florida home buyers can relax for a while longer, content to rely on an extended period of this kind of bargain-basement financing? Perhaps. But although those historical averages are reassuring when compared to current mortgage rates, they also stand as a sobering reminder of what the new normal could become. In other words, if striking while the iron is hot is still common sense, giving me a call sooner rather than later could be a prudent move!