22
Jul
By Mike Pfefferman
Financial Reports

What’s Ahead For Mortgage Rates This Week – July 22nd, 2024

The week after the inflation data reports was expected to be relatively quiet, with the most significant event being a meeting with Federal Reserve Chairman Jerome Powell. He remained tight-lipped about when rate cuts would happen, but given his demeanor, he did not deny that rate cuts were on the way — simply that he would not indicate when they would arrive. This has only confirmed to lending partners and the broader market that they were right to feel optimistic that rate cuts are possible before the end of the year.

There were a few cyclical reports released, with the Economic Indicators report taking the lead and the Federal Reserve’s Beige Book being among the highlights.

Economic Indicators

The leading index for the economy fell again in June for the fourth month in a row, reflecting a slowdown in U.S. growth since the beginning of the year. The privately run Conference Board said the index slid 0.2% last month. The index had fallen for two straight years before briefly turning positive in February.

Federal Reserve’s Beige Book

U.S. economic activity seemed to soften in the past two months, with five of the Federal Reserve’s 12 regions reporting flat or declining activity, a Fed survey released Wednesday found. That is three more weak districts than were reported in the last survey, in May.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates are seeing a decrease by -0.12% with the current rate at 6.05%
  • 30-Yr FRM rates are seeing a decrease by -0.12% with the current rate at 6.77%

MND Rate Index

  • 30-Yr FHA rates are seeing an increase by 0.07% for this week. Current rates at 6.32%
  • 30-Yr VA rates are seeing an increase by 0.08% for this week. Current rates at 6.34%

Jobless Claims

Initial Claims were reported to be 243,000 compared to the expected claims of 229,000. The prior week landed at 223,000.

What’s Ahead

Next week, the government will release the Consumer Confidence Report and the total U.S. employment data. Both of these reports should provide insights into the state of the economy and consumer sentiment.

19
Jul
By Mike Pfefferman
Mortagage Tips

How to Manage a Mortgage After a Career Change

A career change is usually an exciting journey, it offers new opportunities and growth. It can also bring challenges when you have a mortgage to manage. Balancing a new job and financial commitments can be stressful, but with the right strategies, you can stay on top of your mortgage payments and maintain your financial stability.

1. Assess Your New Financial Situation
The first step is to thoroughly assess your new financial situation. Understand your new income, any changes in benefits, and how these impact your overall budget. You should be considering the following:

  • New Salary: Calculate your take-home pay after taxes and deductions.
  • Benefits: Account for any new benefits like health insurance, retirement contributions, or bonuses.
  • Expenses: Review your monthly expenses and see if any adjustments are needed to align with your new income.

2. Create a Realistic Budget
Creating a budget is crucial to managing your mortgage effectively. Outline all your monthly expenses, including your mortgage payment, utilities, groceries, and other essentials. Make sure to:

  • Prioritize Payments: Ensure your mortgage payment is a top priority in your budget.
  • Emergency Fund: Maintain or build an emergency fund to cover unexpected expenses.
  • Discretionary Spending: Limit non-essential spending until you are comfortable with your new financial situation.

3. Communicate with Your Lender
If your career change comes with a temporary reduction in income, it’s essential to communicate with your mortgage lender. They may offer solutions such as:

  • Payment Plans: Temporary payment plans can help you manage during a transitional period.
  • Refinancing: If you have a good credit score, refinancing your mortgage for a lower interest rate can reduce your monthly payments.
  • Forbearance: Some lenders offer forbearance, allowing you to temporarily reduce or suspend payments without penalties.

4. Automate Your Payments
Automating your mortgage payments ensures that you never miss a due date. Set up automatic payments through your bank to avoid late fees and maintain your credit score. This step can give you peace of mind, knowing your mortgage is being handled consistently.

5. Increase Your Income
Consider ways to supplement your income during this transition. This could include:

  • Part-Time Work: Taking on a part-time job or freelance work can provide additional income.
  • Side Hustles: Explore side hustles or gigs that fit your skills and schedule.
  • Selling Unused Items: Selling items you no longer need can generate quick cash.

6. Review Your Insurance Policies
Ensure your homeowner’s insurance and other policies are up-to-date and adequately cover your needs. If your career change impacts your insurance through work, adjust your policies to fill any gaps.

7. Seek Professional Advice
A financial advisor can provide personalized advice tailored to your new circumstances. They can help you optimize your budget, explore refinancing options, and plan for long-term financial health.

8. Stay Positive and Adaptable
Career changes are a part of life, and while they can be challenging, they also offer growth opportunities. Keep a proactive mindset, stay organized, and adapt as needed to ensure your mortgage and financial health remain on track.

Managing a mortgage after a career change requires careful planning and proactive steps. By assessing your financial situation, creating a realistic budget, communicating with your lender, and exploring additional income sources, you can confidently navigate this transition and maintain your financial stability.

18
Jul
By Mike Pfefferman
Mortgage

Can You Refinance a Reverse Mortgage Loan?

When you first opted for a reverse mortgage, it might have felt like the perfect solution to tap into your home equity and enjoy your retirement without monthly mortgage payments. As time passes, your financial situation, goals, or the market itself can change, making you wonder: “Can I refinance my reverse mortgage?” The answer is yes, but it’s essential to understand what is involved before making a move.

Why Consider Refinancing Your Reverse Mortgage?

  1. Lower Interest Rates: Just like traditional mortgages, reverse mortgage rates can fluctuate. If current rates are significantly lower than when you first took out your loan, refinancing could save you money over time.
  2. Increased Home Value: If your home’s value has risen since you took out your reverse mortgage, refinancing might allow you to access more equity.
  3. Switching Loan Types: You might find a different type of reverse mortgage that better suits your needs, such as one with a lower margin or different payment options.
  4. Adding or Removing Borrowers: Life circumstances change, and you might want to add a new borrower, like a spouse, to the loan, or remove one due to divorce or death.

Steps to Refinance Your Reverse Mortgage

  1. Evaluate Your Situation: Consider why you want to refinance and if the benefits outweigh the costs. This might include lower interest rates, access to more funds, or better loan terms.
  2. Research Lenders: Not all lenders offer reverse mortgage refinancing, so it’s crucial to find those who do. Compare offers from multiple lenders to find the best deal.
  3. Get a New Appraisal: Your home will need to be appraised again to determine its current market value. This can affect the amount of equity you can access.
  4. Undergo Financial Assessment: Lenders will assess your financial situation to ensure you can meet the new loan terms and property charges.
  5. Close the New Loan: If approved, you’ll close on the new reverse mortgage. The new loan will pay off the old one, and any remaining funds will be available to you.

Potential Drawbacks

  • Closing Costs: Refinancing comes with fees that can add up, so it’s important to ensure the benefits outweigh these costs.
  • Extended Loan Term: Refinancing could extend the term of your loan, potentially impacting your heirs.
  • Impact on Public Benefits: Increased funds from a reverse mortgage refinance might affect your eligibility for public benefits.

Is Refinancing Right for You?

Deciding whether to refinance your reverse mortgage depends on your specific circumstances and financial goals. It’s wise to consult with a financial advisor or reverse mortgage counselor to ensure it’s the best move for your situation.

Remember, refinancing isn’t the only option. Sometimes, other financial strategies might better suit your needs without the costs associated with refinancing.

Ready to Take the Next Step?

If you’re considering refinancing your reverse mortgage, do your homework, seek professional advice, and weigh all the pros and cons. Your home is one of your most valuable assets, so making informed decisions is crucial. We are always here to help. Give us a call.