Federal Funds Rate Raised for Second Time in Three Months

by | Mar 31, 2017 | Mortgage Information

The Federal Open Market Committee (FOMC) is a committee within the Federal Reserve System and is in charge of making decisions which influence interest rates and growth within the United States. On March 15, the FOMC’s most recent meeting, the federal funds target interest rate was raised for the second time in three months to a new level of 1.0%. Three months prior, In December 2016, the FOMC raised the federal funds target interest rate from .50% to .75%. Since December 2008 the federal funds target interest rate has only been changed four times, and for seven years of those years (12/2008 – 12/2015) the interest rate was at an all-time low of...

Wait, that’s all I need to buy a home???

by | Mar 16, 2017 | Mortgage Information

Our world is evolving, advancing and surging forward at a rapid pace. Are mortgage loans the same as they used to be? Believe it or not, many buyers today still believe they need 20% down to purchase a home, but as our world evolves so do loans. Today, there is an arsenal of loan programs with down payment options less than 20%! For instance, if you’re serving, or served in the military, it’s possible you can get into a home with 0% down (VA Loan). If you’re a first-time home buyer, it’s possible you can get conventional financing with as low as 3% down (conventional loan) and if you’re a repeat buyer you can buy a home with as little as 3.5% down using an FHA loan or 5% down with a conventional mortgage loan! There are two main categories which impact how much cash a buyer needs for closing: down payment and closing costs. How much are closing costs? Generally, a good rule of thumb for estimating closing costs is between 3 – 3.5% of the purchase price. If you’re a repeat buyer and are going with a down payment option of 3.5%, you’ll need to add roughly another 3.5% for closing costs bringing the total to 7% of the purchase price. However, if there is something nice about closing costs, it’s that the buyer doesn’t necessarily have to pay for them. It’s possible for a buyer to negotiate in an offer that the seller will pay for all, or a portion of closing costs. On an FHA loan, the seller can pay for up to 6% of...