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Mortgage Interest Rates Today, June 8, 2020 | Key rates mixed

Mortgage rates moved in different directions today. The average for a 30-year fixed-rate mortgage was flat, but the average rate on a 15-year fixed ticked up. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages tapered off.

Rates for mortgages are constantly changing, but they remain much lower overall than they were before the Great Recession. If you’re in the market for a mortgage, it may be a great time to lock in a rate. Just don’t do so without shopping around first.

30-year fixed mortgages

The average rate for the benchmark 30-year fixed mortgage is 3.52 percent, unchanged since the same time last week. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 3.51 percent.

At the current average rate, you’ll pay a combined $450.16 per month in principal and interest for every $100,000 you borrow.

You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be and see what the effects of making extra payments would be. It will also help you determinehow much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 2.87 percent, up 3 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $684 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARMs

The average rate on a 5/1 adjustable rate mortgageis 3.19 percent, falling 6 basis points since the same time last week.

These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.19 percent would cost about $432 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.

Where rates are headed

To see where Bankrate’s panel of experts expect rates to go from here, check out our mortgage interest rates forecast.

Want to see where rates are at this moment? Lenders across the nation respond to Bankrate.com’s weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans:

Current average mortgage interest rates
Loan typeInterest rateA week agoChange
30-year fixed rate3.52%3.52%N/C
15-year fixed rate2.87%2.84%-0.03
30-year fixed jumbo rate3.61%3.63%-0.02
30-year fixed refinance rate3.61%3.62%-0.01

Should you lock a mortgage rate?

A rate lock guarantees your interest rate for a specified period of time. It’s common for lenders to offer 30-day rate locks for a fee or to include the price of the rate lock into your loan. Some lenders will lock rates for longer periods, sometimes for more than 60 days, but those locks can be pricey. In today’s volatile market, some lenders will lock an interest rate for only two weeks to avoid unnecessary risk.

The benefit of a rate lock is that if interest rates rise, you’re locked into the guaranteed rate. Some lenders have a floating-rate lock option, which allows you to get a lower rate if interest rates fall before you close your loan. In a falling rate environment, a float-down lock could be worth the cost. Because mortgage rates are not predictable, there’s no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, then you should do so rather than gamble on interest rates falling even lower.

It’s important to keep in mind: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, with refinancing taking at least a month.

Why do mortgage rates move up and down?

Mortgage rates are influenced by a range of economic factors, from inflation to unemployment numbers. Typically, higher inflation means higher interest rates and vice versa. As inflation rises, the dollar loses value, which in turn drives off investors for mortgage-backed securities, causing the prices to fall and yields to climb. When yields climb, rates get more expensive for borrowers.

Generally speaking, when the economy is strong, more people buy homes. That drives demand for mortgages. Increased demand for mortgages can cause rates to increase. The opposite is also true; less demand can lead to lower rates.

Current mortgage rate landscape

The current mortgage rate environment has been unstable because of the coronavirus pandemic, but generally rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. In general, however, rates are consistently below 4 percent and even dipping into the mid to low 3s. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s on-site rate averages.”

Shopping for the right mortgage lender? See reviews of lenders nationwide.

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Determine After Repair Value | ARV

How to do a Financial Analysis of a Home Flip

Comparable Market Sales

Financial analysis of a fix and flip.

Financial analysis of a fix and flip.

  • Pending Sales
  • Active Sales
  • Walk the Neighborhood Local Realtors

Identify Repairs and Improvements Repair

When it comes to renovations you really need to think in terms of the different possibilities.   This is a fun and exciting part of fixing and selling properties.  It’s a chance to use your creativity and you imagination. But then you need to temper all that with the reality of the cost verses the value added to the property.  So consider breaking down your options in to these three categories:

Repairs – “Must”

This are repairs that are causing a safety hazard or that are required by building standards.

Renovations – “Should”

These will be mostly dictated by what is standard and customary.  So if all the other properties in the neighborhood have 3 bedrooms and two bath and your property has 3 bedrooms and 2 baths then you really “should” consider adding a bathroom.

Upgrades – “Could”

This is where your creativity and financial analysis could make or break a deal.  If most of the houses in the area don’t have a pool, and it will cost you a whole lot to put in a pool, but not sure if buyers are going to value it, that’s the “could” that you need to really think on.

Opportunities to Add Value

  • Amenities
  • Openings (Walls)
  • Conversions
  • Additions
  • Layout Changes

Account for Holding Costs

  • Buying costs
  • Holding costs
  • Costs of money
  • Selling costs

Set Minimum Profit

This should be a percentage of your After Repair Value that you set for every flip.

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Seven Essential Elements of Trust Deed Investments

  1. Knowledge, experience, and integrity of the Mortgage Loan Broker through whom the transaction may be made or arranged.

Before placing your trust and money with an MLB, you would be wise to contact:

(1) the Bureau of Real Estate (CalBRE) to determine if the MLB and his or her loan representatives are properly licensed, how long each has been licensed, and whether any of the licenses have been disciplined; and

(2) the local Better Business Bureau to ask if any complaints have been lodged.

  1. Market value and equity of the property and the security for your loan.

  2. Borrower’s financial standing and credit worthiness.

  3. Escrow process involving the funding of the loan or the purchase of the promissory note.

  4. Documents and instruments describing, evidencing, and securing the loan or purchase of the promissory note.

  5. Loan servicing provisions, authority and compensation.

  6. Recovering your investment when the borrower fails to pay.

Reviewing, analyzing, and understanding the seven essential elements of trust deed investments should assist you in
evaluating the risk involved. Trust deed investments can provide an excellent return but remember, the risk of a trust deed investment is yours. Therefore, you may wish to discuss the investment with an Mortgage Loan Broker and/or other qualified professional before committing your funds.

Reference: Guy Puccio, James Nordell and George Pfeiffer, Esq. (2014).  Brochure,  Trust Deed Investments. What you should know.  California Bureau of Real Estate.  Prepared by Parklway Land, Inc.

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Information about FHA Loans and Relevant Facts to consider

FHA loans

What do you need to know?

FHA loans have less rigorous standards than conventional loans

  • A borrower’s credit score for an FHA loans must be at or above around 580, which is considerably lower than a conventional loan.
  • One pays a lower down payment on an FHA loan, where conventional loans are at a 5% to 20% down payment. FHA loans are 3.5% to 10%. Specific percents for  down payments are determined by borrowers credit.
  • The FHA does not necessarily require credit history.
FHA loans have less rigorous standards than conventional loans The borrower's credit score for an FHA loans must be at or above 580, which is considerably lower than a conventional loan. There is a lower down payment on an FHA loan, where conventional loans can be at a 5% to 20% down payment, FHA loans are 3.5% to 10%. The specific percent will be determined by the borrowers credit.

Credit scores needed for down payments

Requirements

  • Fixed rate of interest.
  • FHA requires mortgage insurance when borrowers pay down less than 20% on the loan. FHA loans require the borrower to pay an upfront premium and an annual premium mortgage insurance. The borrower pays the upfront as the borrower gets the loan, and they pay an annual payment every month. The upfront is typically 1.75% of the loan amount, and the annual payment is typically .85% of the loan amount.

Cash repair FHA loans

  • The FHA has a special loan for borrowers to make cash repairs to their homes.

About the lenders

  • Borrowers recieve their home loans from FHA approved lenders, so some lenders differ on their rates and costs for the same loan.
  • If there was a default or a loss on the loan, the FHA would cover it, so that the lender would be safe.

 

 

 

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3 Easy ways to improve your credit score.

Credit Score Tiers

Credit Score Tiers to Improve your Credit Score

Want to know how to improve your credit score? Most credit scores, including FICO scores, operate within the range of 300 to 850. The credit tiers generally look like this:

Flawless : 800 +
Excellent : 750 – 799
Good : 700-749
Fair: 650 – 699
Poor : 550 – 599
Terrible : 500 – 549
Wow : 499 and below

 

If you wish to improve your credit score and you are ready to refinance or purchase a property now then there are Non-Prime Loan Programs that can help you with that.  But regardless, here are three ways you can work towards building your credit score.

1. Pay your bills on time

Maybe this should go without saying.  But delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO Scores.   If you have missed payments, get current and stay current. The longer you pay your bills on time after being late, the more your FICO Scores should increase. Older credit problems count for less, so poor credit performance won’t haunt you forever.

Setting up an on-line bill paying system that can pay your minimum balance due, or ideally the whole balance if you can manage that.  Otherwise have a system of where you open your mail, where you put your bills, and when you pay them.

Late Payments and Collection Accounts

Be aware that late payments and paying off a collection account will not remove it from your credit report.  It will stay on your report for seven years. If you can’t make your payments on time contact your creditors or see a legitimate credit counselor.  This won’t rebuild your credit score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time.

2.  Manage your Credit Balances

Keep balances low on credit cards and other “revolving credit”. High outstanding debt can affect a credit score.

Pay off debt rather than moving it around.

The most effective way to improve your credit scores in this area is by paying down your revolving (credit cards) debt. In fact, owing the same amount but having fewer open accounts may lower your scores.

  • Don’t close unused credit cards as a short-term strategy to raise your scores.
  • Don’t open a number of new credit cards that you don’t need, just to increase your available credit.  This approach could backfire and actually lower your credit scores.

3.  Make Sure Your Credit Report is Accurate to improve your credit score

Everyone has three credit reports, one from each of the 3 major credit bureaus: Experian, Equifax and TransUnion.  Since your credit scores are based on the data in your credit reports if you have a mistake on your credit report, your credit score will reflect that mistake.

You’re entitled to a free copy, once a year, of all three of your credit reports under the Fair Credit Reporting Act. These reports can be accessed via AnnualCreditReport.com, the government-mandated site run by the major bureaus.

Once you have your credit reports in hand, here’s a quick checklist of questions to ask yourself to help you spot potential errors:

  • Is all of your personal information accurate?
  • Are your credit accounts being reported?
  • Late or missed payments listed that you remember making on time?
  • Accounts or applications for credit you don’t recognize?
  • Items from decades ago still appearing on your report?

If you are considering Refinancing or Purchasing a home, then let’s start off with a quick inquiry that does not require you to share any sensitive information.

[zohoForms src=https://forms.zohopublic.com/noelle19/form/MasterInquiry/formperma/51bG251711G01112Gf5mA6Dgh width=100% height=600px/]

 

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