Navy Fellas Realty Group

Real Estate, Residential sales and purchase

What’s Ahead For Mortgage Rates This Week – August 12th, 2024

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With so little in the way of data releases following the previous week’s FOMC Rate Decision, we’re left with a small release schedule with Consumer Credit and U.S. Trade Deficit rounding up the reports. While relatively light indicators of the current health of the economy, they are still useful for determining more impactful trends in the future. Next week, the inflation data reports with the CPI and PPI are the ones to look out for. This time, these are the ones that will largely determine whether we see rate cuts this year, and lending partners have already been lowering rates in anticipation.

U.S. Trade Deficit

The trade deficit fell by 2.5% in June and receded from a 19-month high, owing to higher exports of aircraft and U.S.-produced oil and gas. The deficit dropped to $73.1 billion in June from $75.0 billion in May, government data showed.

Consumer Credit

Consumers increased the amount of credit they used in June at a slower rate, in a sign of rising financial stress on U.S. households. Consumer credit rose by a modest $8.9 billion in June, Federal Reserve data showed. Economists had expected a $9.7 billion increase, according to a Wall Street Journal forecast.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates are seeing a decrease by -0.36% with the current rate at 5.63%
  • 30-Yr FRM rates are seeing a decrease by -0.26% with the current rate at 6.47%

MND Rate Index

  • 30-Yr FHA rates are seeing a -0.01% decrease for this week. Current rates at 6.09%
  • 30-Yr VA rates are seeing a -0.02% decrease for this week. Current rates at 6.10%

Jobless Claims

Initial Claims were reported to be 233,000 compared to the expected claims of 240,000. The prior week landed at 250,000.

What’s Ahead

As we head towards the last quarter of the year, next week will unveil one of the most important inflation data reports of the year. The Federal Reserve has kept a tight lip on whether it intends to cut rates this year, but they have repeatedly said it was predicted based on inflation data. With the last two releases showing favorable results in achieving their goal, it has fueled speculation that rate cuts are on the horizon.

Buying a Second Home: Should You Rent or Sell Your First Property?

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Buying a second home is an exciting milestone. Whether it’s a vacation retreat, an investment property, or a future retirement haven, the decision involves many considerations. One of the most important questions you’ll face is whether to rent out your first home or sell it. Both options have their pros and cons, and the right choice depends on your financial goals, market conditions, and personal circumstances. Let’s discuss the key factors to help you make an informed decision.

Renting Out Your First Home

Pros:

  1. Steady Income Stream: Renting your first home can provide a consistent income stream, which can help offset the mortgage on your second property.
  2. Appreciation Potential: By holding onto your first home, you may benefit from property appreciation over time, potentially increasing your long-term wealth.
  3. Tax Benefits: Rental properties come with various tax deductions, including mortgage interest, property taxes, and maintenance expenses, which can reduce your overall tax burden.

Cons:

  1. Landlord Responsibilities: Managing a rental property requires time and effort. You’ll need to handle tenant issues, maintenance, and potentially hire a property manager.
  2. Market Risks: Real estate markets can be unpredictable. If property values decrease or rental demand drops, your investment could be less profitable.
  3. Financing Challenges: Qualifying for a mortgage on your second home may be more difficult if you already have an existing mortgage. Lenders may scrutinize your debt-to-income ratio more closely.

Selling Your First Home

Pros:

  1. Immediate Equity: Selling your first home can provide a significant amount of cash, which can be used as a down payment on your second property or to pay off debts.
  2. Simplified Finances: Without the responsibilities of a rental property, you can focus entirely on your new home and its associated costs.
  3. Market Timing: If the real estate market is favorable, selling could maximize your profits, especially if your home has appreciated significantly.

Cons:

  1. Loss of Rental Income: By selling, you forgo the potential rental income and long-term appreciation benefits of keeping the property.
  2. Transaction Costs: Selling a home involves costs such as real estate agent commissions, closing fees, and possible repairs or upgrades to make the home market-ready.
  3. Emotional Attachment: Parting with a home full of memories can be emotionally challenging, especially if it’s your first home.

Making the Right Decision

To determine the best course of action, consider the following steps:

  1. Evaluate Your Financial Situation: Assess your current financial health, including income, expenses, savings, and debt. Determine how a second home purchase and either renting or selling your first property will impact your finances.
  2. Analyze Market Conditions: Research the real estate market in your area to understand trends in property values, rental demand, and economic conditions.
  3. Consult Professionals: Speak with a real estate agent, financial advisor, and mortgage lender to get expert advice tailored to your unique situation.
  4. Consider Your Long-Term Goals: Reflect on your personal and financial goals, such as retirement plans, investment strategies, and lifestyle preferences.

Ready to explore your options for buying a second home? Whether you decide to rent or sell your first property, we are here to help you every step of the way. Contact us today for personalized guidance and expert advice to make your next real estate move a success!

Is Buying a Home with Bad Credit a Smart Choice?

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Have less-than-optimal credit? That doesn’t necessarily mean you have to put your dreams of homeownership on pause. While buying a home with bad credit can be challenging, it’s certainly not impossible. Understanding your options and preparing adequately can turn this daunting task into an achievable goal.

Understand Your Credit Situation

First and foremost, it’s crucial to understand your credit situation. Obtain a copy of your credit report from all three major credit bureaus (Equifax, Experian, and TransUnion) and carefully review it for any errors. Correcting mistakes on your report can potentially boost your credit score, making it easier to secure a mortgage.

Explore Loan Options

Next, explore the various loan options available. While traditional lenders may be hesitant to approve a mortgage for someone with bad credit, there are alternative financing options worth considering:

  1. FHA Loans: These government-backed loans are designed for low-to-moderate income borrowers and require lower credit scores than conventional loans. They also offer lower down payment requirements.
  2. VA Loans: If you’re a veteran or active military personnel, VA loans offer flexible credit requirements and often don’t require a down payment.
  3. USDA Loans: For those looking to buy in rural areas, USDA loans may be a viable option. They cater to low-to-moderate income buyers and offer favorable terms even for those with less-than-perfect credit.

Consider a Larger Down Payment

One way to offset a low credit score is by offering a larger down payment. A substantial down payment reduces the lender’s risk and can improve your chances of securing a mortgage. Additionally, it lowers your loan-to-value ratio, which can result in better loan terms and interest rates.

Improve Your Financial Health

While exploring these options, take steps to improve your overall financial health. Pay down existing debt, avoid taking on new debt, and ensure all bills are paid on time. Even small improvements in your credit score can make a significant difference in your mortgage approval prospects.

Seek Professional Advice

Navigating the home-buying process with bad credit can be complex, so consider seeking advice from a mortgage broker or financial advisor. They can help you understand your options, improve your financial profile, and guide you toward lenders who are more likely to approve your application.

Stay Patient and Persistent

Remember that patience and persistence are key. Buying a home with bad credit may take longer and require more effort, but it’s entirely possible. Stay committed to improving your financial health, exploring your loan options, and preparing for the journey ahead.

Buying a home with bad credit isn’t necessarily a bad choice. With the right preparation and guidance, you can turn your dream of homeownership into reality. Keep your goals in sight, and don’t let a less-than-perfect credit score deter you from achieving them. 

What Does a Home Inspector Look For in a Home You Want to Buy?

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Buying your first home is an exciting milestone, but it can also feel overwhelming. One critical step in the home-buying process is the home inspection. An inspection is a complete examination by a professional home inspector and ensures the property is in good condition and helps you avoid costly surprises. What exactly does a home inspector look for in a home you want to buy? Let’s break it down.

Exterior Structure and Foundation

First and foremost, the home inspector will assess the exterior structure and foundation. They will check for any visible cracks, signs of settling, or water damage that could indicate structural issues. Additionally, they will inspect the condition of the roof, gutters, and downspouts, looking for any signs of wear, leaks, or damage.

Interior Components

Next, the inspection moves inside. The inspector will evaluate the condition of the walls, ceilings, and floors. They will look for any signs of water damage, mold, or structural issues. It’s essential to ensure that the home is safe and habitable.

Plumbing Systems

The inspector will then turn their attention to the plumbing systems. They will check all visible pipes for leaks, corrosion, or damage. Furthermore, they will test the water pressure and ensure that all fixtures, such as faucets, showers, and toilets, are functioning correctly.

Electrical Systems

Equally important, the home inspector will examine the electrical systems. They will inspect the electrical panel, circuit breakers, and outlets to ensure everything is up to code and functioning safely. Any outdated or faulty wiring will be noted, as it can pose a significant safety hazard.

HVAC Systems

The heating, ventilation, and air conditioning (HVAC) systems will also be thoroughly inspected. The inspector will check the age and condition of the furnace and air conditioning units, ensuring they are in good working order. Proper maintenance of these systems is crucial for comfort and energy efficiency.

Attic and Insulation

The attic and insulation will be examined. The inspector will assess the insulation levels to ensure they meet current standards and check for any signs of moisture or pest infestations. Proper insulation is vital for energy efficiency and overall comfort.

Appliances

Furthermore, if the home includes appliances such as a stove, refrigerator, or dishwasher, these will also be inspected. The inspector will ensure they are in working condition and identify any potential issues.

Safety Features

Lastly, the home inspector will evaluate safety features, including smoke detectors, carbon monoxide detectors, and fire extinguishers. These essential items must be in place and functioning correctly to ensure the safety of the home’s occupants.

A home inspection is a vital step in the home-buying process. It provides a comprehensive overview of the property’s condition, helping you make an informed decision. By understanding what a home inspector looks for, you can better prepare for this crucial step and move forward with confidence. Have more questions? Give us a call, we would be happy to help.

Tips for a Quick and Profitable Home Sale

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Selling your home can be both exciting and overwhelming. The goal is often to sell quickly and for the best possible price. Here are some important tips to help you achieve a quick and profitable sale.

1. Boost Curb Appeal

First impressions matter. Therefore, enhancing your home’s curb appeal is crucial. Start by tidying up your yard, trimming bushes, and planting flowers. Additionally, a fresh coat of paint on the front door can make a significant difference.

2. Declutter and Depersonalize

When potential buyers walk through your home, they should be able to envision themselves living there. Consequently, declutter and remove personal items like family photos and collectibles. This creates a clean and neutral space that appeals to a wider audience.

3. Make Necessary Repairs

Minor repairs can significantly impact a buyer’s perception of your home. Fix leaky faucets, patch holes in walls, and ensure all lights are working. A well-maintained home suggests to buyers that the property has been well cared for.

4. Stage Your Home

Staging involves arranging furniture and decor to showcase your home’s best features. This not only makes the space look inviting but also helps buyers see the potential in each room. Furthermore, staged homes often sell faster and for higher prices.

5. Price It Right

Setting the right price is critical. Therefore, work with your real estate agent to determine a competitive and realistic listing price. Overpricing can deter potential buyers, while underpricing may leave money on the table.

6. Market Effectively

Effective marketing can significantly impact the speed and profitability of your sale. High-quality photos, virtual tours, and compelling descriptions are essential. Additionally, leverage social media and online listings to reach a broader audience.

7. Be Flexible with Showings

The more accessible your home is for showings, the more potential buyers will see it. Consequently, be flexible with viewing times and keep your home show-ready. This increases the chances of receiving multiple offers.

8. Consider Professional Help

If you’re unsure about any aspect of selling your home, consider hiring professionals. Real estate agents, stagers, and photographers can provide valuable expertise and ensure your home is presented in the best possible light.

Selling your home quickly and profitably requires preparation and strategy. By boosting curb appeal, decluttering, making repairs, staging, pricing correctly, marketing effectively, and being flexible with showings, you can maximize your chances of a successful sale.

What’s Ahead For Mortgage Rates This Week – August 5th, 2024

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The Federal Reserve’s decision to maintain the current interest rates has paved the way for a potential rate cut in September. While this news has been met enthusiastically by lending partners, the broader markets have indicated a slightly less warm reception despite both the data and Federal Reserve’s intentions being a match. Until September, we can expect a lull in significant data releases, with more substantial decisions anticipated then.

FOMC Rate Decision

Powell stated that the Federal Reserve seeks “a little more confidence” that inflation is consistently trending downward before taking action. The Federal Reserve’s benchmark short-term interest rate now stands at 5.25% to 5.5%. Although consumer prices spiked briefly in the first few months of the year, causing the Federal Reserve to hesitate, inflation has since calmed.

Consumer Confidence 

The index of consumer confidence rose to 100.3 in July from a revised 97.8 in the prior month, the Conference Board said Tuesday. Economists polled by the Wall Street Journal had forecast the index would slip to 99.5 in July.

U.S. Hourly Wages

Wages rose a mild 0.2% last month. The increase in pay over the past year slowed to 3.6% from 3.8% in the prior month and is returning close to pre-pandemic levels.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates are seeing a decrease by -0.08% with the current rate at 5.99%
  • 30-Yr FRM rates are seeing a decrease by -0.05% with the current rate at 6.73%

MND Rate Index

  • 30-Yr FHA rates saw a -0.22% decrease for this week. Current rates at 6.10%
  • 30-Yr VA rates saw a -0.22% decrease for this week. Current rates at 6.12%

Jobless Claims

Initial Claims were reported to be 249,000 compared to the expected claims of 235,000. The prior week landed at 235,000.

What’s Ahead

Last week was tense as everyone anticipated the Federal Reserve’s decision to maintain interest rates. This week, apart from the usual unemployment data, there are only minor releases like the US Services PMI and Consumer Credit Reports, which aren’t expected to have a significant impact.