08
Jul
By Mike Pfefferman
Financial Reports

What’s Ahead For Mortgage Rates This Week – July 8th, 2024

With the FOMC Minutes coming precisely within expectations, there is once again a lot of optimism that the Federal Reserve may cut rates this year. Much of the Q2 data reports show favorable amounts of reduction in inflation as well as a more stable economic outlook for the rest of the year. With the larger reports in PMI Manufacturing numbers and Non-farm Payroll figures, the overall outlook seems to align with the rest of the data points, justifying the more recent optimism about potential rate cuts. This week should give the final results on Q2 inflation results with the new releases of CPI and PPI data reports.

Global US Manufacturing PMI

A key barometer of U.S. factories fell in June for the third month in a row, signaling that an ongoing slump in the industrial side of the economy shows no sign of ending. The Institute for Supply Management’s manufacturing index slipped to 48.5% in June from 48.7% in the prior month. Numbers below 50% signal that the manufacturing sector is shrinking.

U.S. Hourly Wages

Wage growth for the last 12 months ending in June slowed to 3.9% from 4.1%, marking the smallest increase seen since August 2021. At one point, yearly wages were rising as fast as 5.9%. A shortage of labor prompted millions to change jobs in pursuit of better pay, particularly to cope with significant inflation.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates are seeing an increase by 0.09% with the current rate at 6.25%
  • 30-Yr FRM rates are seeing an increase by 0.09% with the current rate at 6.95%

MND Rate Index

  • 30-Yr FHA rates are seeing a decrease by -0.01% for this week. Current rates at 6.50%
  • 30-Yr VA rates are seeing no change for this week. Current rates at 6.52%

Jobless Claims

Initial Claims were reported to be 238,000 compared to the expected claims of 233,000. The prior week landed at 234,000.

What’s Ahead

CPI and PPI are the most relevant reports coming up, with the rest of the week having an extremely light release schedule. 

05
Jul
By Mike Pfefferman
Mortgage

The Pros and Cons of Mortgage Life Insurance

Mortgage life insurance is a type of policy designed to pay off your mortgage in the event of your death. As with any financial product, it has its pros and cons. Understanding these can help you determine whether it makes sense for your situation.

What is Mortgage Life Insurance?

Mortgage life insurance, sometimes called mortgage protection insurance, is a policy that pays the remaining balance of your mortgage if you pass away before it is fully paid off. The benefit is directly linked to the amount you owe on your home loan and decreases as your mortgage balance decreases.

Advantages of Mortgage Life Insurance

  1. Peace of Mind: Knowing that your mortgage will be paid off if you pass away can provide significant peace of mind for you and your loved ones.
  2. Financial Security for Loved Ones: This type of insurance ensures that your family can stay in the home without the burden of mortgage payments.
  3. Simplified Underwriting: Unlike some other types of life insurance, mortgage life insurance often has simplified underwriting processes, which means fewer medical exams and quicker approval times.

Drawbacks of Mortgage Life Insurance

  1. Decreasing Benefit: The payout decreases as your mortgage balance decreases, meaning the value of the policy diminishes over time.
  2. Lack of Flexibility: The benefit goes directly to the mortgage lender, not to your beneficiaries, limiting how the funds can be used.
  3. Potentially Higher Costs: Mortgage life insurance can be more expensive compared to term life insurance for the same amount of coverage.
  4. No Coverage for Other Expenses: It only covers the mortgage, so other financial needs of your family, such as living expenses, education, or other debts.

When Does Mortgage Life Insurance Make Sense?

  1. Health Issues: If you have health conditions that make it difficult or expensive to qualify for traditional life insurance, mortgage life insurance might be a more accessible option.
  2. Simplified Needs: If your primary concern is ensuring that your mortgage is paid off and you are not as worried about leaving additional financial support for your family, this type of policy could be suitable.
  3. Elderly Homeowners: Older homeowners who may face higher premiums for traditional life insurance might find mortgage life insurance a more affordable way to protect their mortgage.

When Should You Avoid Mortgage Life Insurance?

  1. Better Alternatives: If you can qualify for a term life insurance policy, it often provides more flexibility and can be more cost-effective. Term life insurance can cover more than just your mortgage, providing your beneficiaries with funds to use as they see fit.
  2. Stable Financial Situation: If you have significant savings or other forms of life insurance that can cover your mortgage, additional mortgage life insurance may be unnecessary.
  3. High Premiums: If the premiums for mortgage life insurance are significantly higher than other options available to you, it may not be worth the cost.

Mortgage life insurance can be a valuable tool for some homeowners, providing peace of mind and ensuring that their family can remain in the home. However, it is not the best choice for everyone. Evaluating your overall financial situation, the costs, and the benefits compared to other insurance options will help you make an informed decision.

By considering your unique circumstances, you can determine whether mortgage life insurance makes sense for you and your family.

04
Jul
By Mike Pfefferman
Holidays

Celebrating Independence Day: More Than Just Fireworks and BBQs

While fireworks, barbecues, and parades are fundamental to our 4th of July celebrations, the spirit of Independence Day runs much deeper. It’s a time to honor our history, recognize our freedoms, and celebrate the unity that defines us as a nation.

A History Worth Remembering

On July 4, 1776, the Continental Congress adopted the Declaration of Independence, marking the birth of the United States of America. This historic document, crafted by Thomas Jefferson and signed by representatives of the thirteen colonies, asserted our nation’s right to self-governance and freedom from British rule. It was a bold declaration of the values we hold dear—liberty, equality, and the pursuit of happiness.

Honoring Our Freedoms

Independence Day is a celebration of the freedoms that are foundational to our nation. The freedoms of speech, religion, and assembly, among others, are enshrined in our Constitution and Bill of Rights. These freedoms have shaped our society and continue to be the cornerstone of American democracy. By celebrating the 4th of July, we pay tribute to the vision of our Founding Fathers and the sacrifices of countless individuals who have fought to preserve these rights.

A Time for Gratitude

It is important to express gratitude for the privileges we enjoy as Americans. The freedoms and opportunities we often take for granted are the result of the hard-fought battles and unwavering determination of those who came before us. Taking a moment to appreciate this legacy fosters a sense of responsibility to protect and nurture these values for future generations.

As we light up the sky with fireworks and gather with loved ones this 4th of July, let’s remember that Independence Day is more than just a summer holiday. It’s a celebration of our history, our freedoms, and our unity. By reflecting on the significance of this day, we can truly appreciate the privileges we enjoy and commit ourselves to upholding the values that define our great nation.

Happy Independence Day! Let’s celebrate with pride and purpose. What are your favorite 4th of July traditions? Share them with us in the comments below!

 Stay safe and enjoy your 4th of July!