Minutes of the Federal Open Market Committee (FOMC) meeting held October 28 and 29 were released Wednesday. The report suggests that the U.S. economy continues to improve, although the annual inflation rate remains near 1.50 percent and short of the committee’s goal of 2.00 percent. Falling crude oil prices were cited as a cause of faltering inflation rates. The minutes indicated that FOMC members expect inflation to remain below the 2.00 percent benchmark for the next year or so.
The minutes did not reveal an exact date for raising the target federal funds rate, which is currently 0.00 to 0.250 percent, but analysts expect a rate change in mid-to-late 2015. One committee member said that the Fed should commit to keeping the target federal funds rate at its present level until inflation reaches the Fed’s goal of 2.00 percent.
Job Markets Improve, Mortgage Rates Fall
FOMC members said that labor markets had improved “somewhat further.” The minutes noted that the national unemployment rate had declined to 5.90 percent in September, which was lower than the FOMC goal of 6.50 percent for national unemployment. While this was good news, FOMC discussed the fact that a significant number of part-time workers suggested under-utilization of the labor force. A combination of stronger labor markets and a 0.25 percent reduction of mortgage rates during the intermeeting period between September 17 and October 28 were seen as positive for housing markets, but the committee noted that mortgage lending standards for single-family homes had not changed much. Lending requirements were more accommodative for commercial real estate.
QE Ends, FOMC Seeks to Maintain “Accommodative” Financial Conditions
FOMC members voted to end asset purchases made under the Fed’s quantitative easing program, but said that ongoing reinvestment of principal payments on bonds and MBS with the goal of maintaining “sizeable” holdings of long-term securities. The minutes indicated that this would help maintain “accommodative” financial conditions.
The committee agreed to re-assert its position that although national unemployment and inflation may achieve or surpass FOMC goals, the committee could maintain the target federal funds rate at current levels for “some time” after the benchmarks are achieved. Ultimately, the FOMC’s decision to change the target federal funds rate will include thorough and ongoing review of global and domestic economic developments.
Committee members concluded this meeting with a decision to set the next FOMC meeting for December 16 and 17.
Once you’ve found the perfect new home and delivered your first offer to the seller, you may find that they return with a counteroffer or a flat out refusal. Negotiation is part of the home buying process, but at times you may feel like the seller is the one holding up the deal due to their approach or attitude.
In this blog post we’ll share a few ways to manage an unreasonable or stubborn home seller so you can get the deal closed.
Ask Yourself: Are Your Demands Reasonable?
Before trying to figure out how to work the seller from a different angle in order to win the home, you’ll need to assess whether or not there’s a problem with your offer or your purchasing terms which is causing friction with the seller.
Ask the seller or their agent to identify the exact issue so that you can decide whether or not you are willing to sacrifice that particular term in order to secure the home.
What is Motivating the Seller?
If you’re finding that seller is simply being stubborn or is unwilling to budge on their price or the terms of the sale, you’ll need to approach them differently. During the home buying process it should be your goal to try to figure out why the seller has placed their home on the market and what their motivation for selling might be.
Are they moving to a new city for work? If so, there is likely some sort of time limit on their sale and you may be able to wait them out. Or, perhaps you’ve discovered that they are simply downgrading to a smaller home and that they’ll only sell their current home for the right price.
Sweeten the Deal and Be Ready to Walk
If the price is what is holding the deal up, you can submit a final offer with your maximum price but be sure to let the seller know that you’re walking away from the deal if they aren’t ready to sign. At this point you can consider the home a lost cause if they refuse, so table the best offer that you’re willing to make and encourage the seller to accept it.
Dealing with a stubborn home seller might seem like a bit of an impossible situation, but try to keep in mind that they are selling their property for a reason. If you have your heart set on the home just keep faith that eventually they’ll crack and the home will be yours. If you’re just getting started with the home buying process or if you need more information about buying a local property, contact a real estate agent today.
Are you getting ready to sell your home? As soon as your listing goes live you’ll begin entertaining potential buyers who will be inspecting your home from top to bottom to ensure it meets their needs perfectly. Your bathrooms will be a key area of focus and you might be surprised to learn that the look and feel of these small rooms can make or break a sale.
In today’s blog post we’ll share three quick tips for renovating or upgrading your bathrooms to freshen up their look before potential buyers start viewing your home.
Clean Your Bathroom Out and Start Fresh
Before you begin, take a close look at your bathroom. Is there wallpaper on the walls? Are the sinks and faucets a bit dated and stained? Does the bathtub have a crack in it or is there some discoloration in the tiles or grout?
If your bathroom hasn’t been renovated in the past few years, there’s a good chance that the entire room needs a top-to-bottom overhaul. Clean all of the fixtures, materials, cabinets and even that dated flooring out and start from scratch.
Choose Your Color Palette Wisely
Before you begin you’ll want to have some sort of color palette in mind. Does the bathroom receive some sort of direct sunlight? Is there a skylight or a window in the room? Is there a color theme in other rooms in the house that you’ll need to match up with? Having some color ideas in mind will greatly assist with painting and adding shower curtains, mats, towels and more.
Don’t Skimp on Fixtures and Accessories
Remember that you’re selling the home and that you’re likely to recoup some or all of the costs of your bathroom renovations in the form of a bump in your selling price. Don’t buy cheap faucets or fixtures as buyers will be looking closely and they’ll want to ensure they’re buying a home that has quality building materials used throughout. If you’re going to upgrade your bathrooms, use materials that are high-quality but avoid anything too luxurious unless it fits with the rest of the decor.
Breathing some new life in to your bathrooms won’t break the bank, but it might just help secure your home sale. For more tips and strategies on how to ensure a quick and successful sale, contact your local real estate agent today.
Last week’s housing related news was lean, with no scheduled reports released other than Freddie Mac’s primary mortgage market survey.
We’ll start with some good news. The University of Michigan / Thompson-Reuters Consumer Sentiment Index reported its highest reading in more than seven years. November’s reading of 89.4 surpassed the expected reading of 88.0 and was higher than October’s reading of 86.9
Mortgage Rates Near 4.00 Percent, Weekly Jobless Claims Up
Freddie Mac reported a one-basis point drop in the average rate for 30-year fixed rate mortgage from 4.02 percent to 4.01 percent; the average rate for a 15-year fixed rate mortgage also fell by one basis point to 3.20 percent.
The average rate for a 5/1 adjustable rate mortgage rose by 5 basis points to 3.02 percent. Discount points for all three loan types held steady at an average of 0.50 percent.
Weekly jobless claims rose by 12,000 to 290,000 against expectations of 280,000 new jobless claims filed and the prior week’s reading of 278,000.
Last week’s report was the ninth straight week that new jobless claims came in under 300,000. The reading for the four-week rolling average was 285,000 new jobless claims, which represented an increase of 6,000 new claims.
This week’s number of scheduled economic reports will be more robust. The NAHB Housing Market Index, Housing Starts and the National Association of REALTORS® Existing Home Sales reports will be released.
The minutes of the most recent Federal Open Market Committee (FOMC) meeting of the Federal Reserve will also be released along with weekly mortgage rates and jobless claims data.
Are you thinking about using a mortgage to buy a new home? Buying your own piece of local real estate is a major financial investment and one that can require some pretty complex math to fully understand.
In this blog post we’ll discuss mortgage calculators and how to use one of these tools to determine your monthly mortgage payments, interest charges, amortization periods and more.
Determining Your Principal and Down Payment Amounts
To get started with a mortgage calculator you’ll need to know how the price of the home and how much you intend to contribute as a down payment. Generally speaking you’ll want to place a down payment of at least 20 percent in order to avoid having to pay for private mortgage insurance and to give you access to better interest rates.
Choosing Your Interest Rate and Amortization Period
Now that you have an idea of the amount of mortgage financing you’ll need, the next step is to choose your interest rate and amortization period. Different lenders will offer different interest rates for every one of their mortgage products, so again you’ll want to play around with these numbers and run the calculation to see which combination of mortgage financing, interest rate and amortization period gives you a monthly payment that suits your budget.
Using a Mortgage Calculator for Refinancing
If you’re thinking about refinancing your current mortgage you can also use a mortgage calculator to help make the math a bit easier. Simply use your outstanding mortgage balance as the principal amount and then choose an amortization schedule that fits your financial goals. Be sure to keep an eye on your interest payments, as you may find that by refinancing to a longer amortization period your monthly payments go down but your total interest paid is quite a bit higher.
Don’t Forget the Closing Costs
Finally, don’t forget that there are numerous “closing costs” – fees, taxes and more – which you’ll need to factor in to your overall calculation. Closing costs will include everything from home appraisal fees to government filing fees and property taxes, and will vary depending on the home and the city or community you’re buying in.
While online mortgage calculators can handle the tricky math to determine monthly payments and interest costs you may still find that you have questions about your mortgage or some aspect of the process. For more information, contact your local mortgage professional and they’ll be happy to share their advice and expertise.