July's Look Into The Markets: What To Watch
July 19, 2023

In This Issue

"Perfection is not attainable. But if we chase perfection we can catch excellence." - Vince Lombardi


When purchasing a home, you may have several options for getting a loan to pay for it. In this issue, we'll discuss these options, along with the following topics:


What to Watch - Will the Fed signal that due to persistent inflation, rates must continue to increase? Will the Fed hold rates higher for longer?


Choosing the best mortgage for your goals - Knowing the different types of mortgages available can ensure you get the right one for your budget and goals.


How to use wallpaper to upgrade your décor - Wallpaper can add visual interest to a room, whether it's on the wall or in a frame.


Q&A - Do you need a credit score for a mortgage? If you've never borrowed money before, learn how you can get a mortgage with no credit score.


Please feel free to forward this newsletter to friends, family or co-workers who may find it helpful.


What To Watch


Higher for Longer


Mortgage rates and what the Federal Reserve has in store for the markets are on the radar of mortgage consultants, realtors, and potential home buyers in the coming months.


Home borrowing costs continue to hover in the high 6% range for the 30-year fixed, up from the low 3% level in early 2022, and have added a heavy layer of costs associated with monthly mortgage payments. The jump in rates has caused refinance applications to cool given that 82% percent of homeowners have an interest rate below 5% while 92% of homeowners had an interest rate below 6%.


If the Federal Reserve continues in its quest to slow the economy, bad news is good news for bonds and rates. Borrowing costs could push lower if slow economic growth sets in. But if the higher rates don't bring inflation down, rates will stay elevated. At the June meeting, the Federal Reserve paused its rate hiking policy but has vowed to raise rates twice more in 2023 to fight high inflation. Next up is the Fed meeting on July 27th and is the one to watch. It is expected that the short-term Fed Funds Rate will rise by 25bp. The language in the statement will be key.


Will the Fed signal that due to persistent inflation, rates must continue to increase? Will the Fed hold rates higher for longer?


Bottom line: The "higher for longer" narrative from the Fed and some uncertainty is limiting the improvement in rates. At the same time, look at the homebuilder optimism as a sign that the worst is behind us as it relates to rates and inflation. There are many great opportunities to be had with more coming. Better days are ahead.


Source: Mortgage Market Guide

Housing News


Choosing the Best Mortgage for Your Goals


You've found the perfect home, and now you need to figure out how to pay for it. Consider these steps to choose the best mortgage for your goals:


Determine your budget. Do some budgeting to determine how much home you can afford. A good rule of thumb is to keep your mortgage payments under 30% of your take-home income. Use an online mortgage calculator so you get an idea of potential repayments.


Know the different types of mortgages. Various types of mortgages are available, so talk to your loan officer about which is best for you. You may qualify for a conventional mortgage if you have good credit and a 3% down payment or higher. Other types of mortgages include:


Consider terms. When choosing a mortgage, consider its terms. For example, a fixed-rate mortgage may have a higher initial interest rate, but it won't change over the course of the loan. Adjustable-rate mortgages (ARMs) have fixed rates for a specific period, and then they can fluctuate based on the market. An ARM with lower rates may be a good option if you plan to move before the fixed term ends whereas a higher fixed rate might work better if you plan to stay in your home longer.


Compare mortgage types. Like with any type of loan, finding the right mortgage is important. Get quotes from your loan officer for two or three mortgage types so you can compare them side-by-side. Comparing loan options that fit your budget and goals is key when choosing the right mortgage for you.


For most people, a new home is one of the biggest purchases they'll ever make. Do your homework and work with a qualified loan officer to choose a mortgage that works for you.


Sources: Investopedia.com, Nerdwallet.com, Bankrate.com

Home Improvement


How To Use Wallpaper To Upgrade Your Décor


Wallpaper can instantly add color, texture, and interest to any space. Whether you plan to transform an entire room or add a pop of pizzazz, here are some ideas to upgrade your décor with wallpaper:


Create a feature wall. A feature wall is one of the most popular choices for wallpaper. Choose a fun print and apply the paper in an area where you want to add some flair. This option works well on walls with natural focal points, like an entry table or a fireplace.


Wallpaper the ceiling. May seem different but using wallpaper on the ceiling creates a dramatic effect in a room, especially if you choose a bold print. Make sure you have a smooth ceiling, since bumps can be especially noticeable when wallpaper draws the eye upward.


Use wallpaper to accent furniture. If you're not ready to commit to a full wall or the ceiling, you can use wallpaper on furniture. For example, you can wallpaper the back of a bookshelf or use it to line dresser drawers. This subtle change will make you smile every time you see it.


Frame wallpaper for art. For an unexpected twist on traditional wallpaper, frame it and hang it as artwork. This can be a great way to use leftover wallpaper. You can also use wallpaper samples to create artwork if you don't want to pay for an entire roll.


Wallpaper can make a visual statement in your home. Use these suggestions to take a space from bland and boring to bright and beautiful.


Sources: Homesandgardens.com, Thespruce.com, Housedigest.com

Q&A


Do You Need a Credit Score for a Mortgage?


QUESTION: Can you get a mortgage with no credit score?


ANSWER: Yes, you can get a mortgage even if you don't have a credit score, though it may be more difficult. If you've never borrowed money before, you won't have a credit score. In this case, you can complete a manual underwriting process.



During a manual underwriting process, a lender uses multiple factors to determine your ability to repay a loan, such as your income, employment, and expenses. After reviewing your financial history, an underwriter makes a decision about your creditworthiness.


Here are some tips to secure a mortgage with no credit score:


Have documentation. An underwriter will ask for various forms of documentation. Make sure you can verify your income for the past one to two years. Also, have statements showing your payments for common expenses, like rent, utilities, and insurance.


Use a co-borrower. A co-borrower is someone who will be on your mortgage and take responsibility for repayments if you can't make them. If you have a family member or close friend with a credit history who's willing to be on your mortgage, it can increase your chances of being approved.


Make a substantial down payment. If you can make a large down payment, the lender takes on less risk in approving your loan. A good goal is to save 20% of the home price so you can show your financial responsibility.


It's not impossible to get a mortgage if you've never borrowed money before. Speak with your loan officer for more details about the options you have for getting a mortgage with no credit score.

Source: Ramseysolutions.com


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