Focus on Possible Government Shutdown: 5 Things to Know for the Week

The threat of a government shutdown looms as lawmakers reconvene Monday afternoon. Late Sunday, Congress showed no signs of an agreeable measure to thwart off a shutdown, possibly the first such occasion since 1996.

• On Monday, AIG Bank will cease operations for retail deposit accounts. All existing accounts will be closed automatically. The bank had notified customers of the move in late July and all account transactions were no longer processed starting Sept. 13, in preparation of the account closures. AIG Bank is undergoing a transition from a traditional savings bank to a trust-only thrift.
• As the last quarter of the year arrives, certain cash back credit cards will begin offering bonus cash back on new categories. Chase Freedom, Citi Dividend, Discover It and U.S. Bank Cash+ card members will have to enroll for the quarter’s new categories that earn 5% cash back.
• For the government, the fiscal year begins Oct. 1, when the government may shut down because of divided policies on spending. A House bill was passed last week that would prevent a government shutdown, but it would delay the activation of the Affordable Care Act by one year. The Senate is likely to reject that bill. If there is a government shutdown, Americans can expect national parks and museums to close but postal service will be unaffected.
• On Tuesday, each state’s health insurance exchange will go live as part of President Obama’s Affordable Care Act. Through March 2014, people can begin signing up for health care coverage. The Obama administration does not expect a major flood of enrollments in the initial weeks of availability. The President said that the exchanges will open, even in the event of a government shutdown.
• The U.S. Bureaus of Labor Statistics will release the next jobs report on Friday. In recent months, the unemployment rate has dropped steadily to 7.3 percent in August. Since the Federal Reserve is using the jobless rate as the economic indicator to determine when it’ll raise interest rates, a decline rate is a good sign for savers. The central bank plans to hike rates when the unemployment rate drops to 6.5 percent.
• Steven Banass
  Director of Quality Control
  truerate partners
  350 Pfingsten Suite 103 l Northbrook, IL l 60062
  Click to Call me Direct!
  www.trueratepartners.com

Mortgage Rates Fall to New 2-Month Lows

Mortgage Rates Fall to New 2-Month Lows

September 24, 2013

Mortgage rates were lower yet again, making for an astonishing 10th consecutive day without rates moving higher.  In the 13 days of rate sheets since the September 6th jobs report, rates have only risen once.  After only being able to claim 6-week lows yesterday, today's rate sheets are the best in at least 2 months (very close to 3 months).   Conforming, 30yr Fixed rates are now down to 4.375% for most efficient combination of closing costs and rate (best-execution) though several lenders have attractive buydowns to 4.25%.

With each passing day, we have more and more confirmation that the FOMC announcement and most recent Employment Situation Report marked and confirmed at least a short term turning point for interest rates.  This is the consolidation/correction that we'd been hoping for, and we're now a day or two into it. 

The future path of rates is fairly uncomplicated at the moment.  Markets are comfortable treating early September rates as near term highs as long as the economic data doesn't surprise to the upside.  That means that the fate of rates is tied to the economic reports that come out most mornings.  Stronger data will gradually persuade investors that the Fed will reduce the pace of bond buying sooner than later.

On some small scale, that was a risk this morning, but Consumer Confidence came in slightly weaker than forecast, and rates continued to improve. We'll face similar risks with tomorrow's data, but it will  either take a concerted effort from several reports or a strong Employment Situation report on Oct 4 to completely dash the dreams of this low-rate rebellion.  Between now and then we'll likely see some ups and downs, as opposed to the exclusively flat-to-sideways bias we've had since Sep 6th

Contact me today!

Steven Banass

Director of Quality Control

truerate partners

350 Pfingsten Suite 103 l Northbrook, IL l 60062

Click to Call me Direct!

www.trueratepartners.com

6 Homes Compared: What Can $200,000 Get You?

Saving up for a home that costs $200,000 isn't easy! Depending on the home’s location, you can live like a prince… or a pauper.

Two hundred thousand spent in different cities in the U.S. can get you drastically different properties. One of the homes in our slideshow comes with four beds and four bathrooms — another home comes with just one bathroom. That’s right, one bathroom, not even a bedroom!

Regardless of the property you decide to purchase, you’ll need to choose a payment plan and mortgage. Mortgage options will also vary from state to state.

Check out what $200,000 can get you these days…

Steven Banass

Director of Quality Control

truerate partners

350 Pfingsten Suite 103 l Northbrook, IL l 60062

Click to Call me Direct!

www.trueratepartners.com

6 Mortgage Mistakes to Avoid

Usually, buying a home and getting a mortgage can be an easy task if you get trusted advice from a real estate professional. You can end up getting a great deal on a mortgage or end up paying more than you really afford. But, with a major purchase such as a home, hasty decisions can end up costing hundreds of thousands of dollars in the long run.

Prospective mortgage borrowers have to take their time to cover all their bases, including must-do’s such as reviewing credit reports from all credit bureaus and shopping around for low mortgage rates.

These are some common mortgage mistakes that have tripped up many consumers and how you can avoid them:

Steven Banass

Director of Quality Control

truerate partners

350 Pfingsten Suite 103 l Northbrook, IL l 60062

Click to Call me Direct!

www.trueratepartners.com

What Exactly Is a Rent-to-Own Home?

A rent-to-own home, also known as a lease-to-own or lease-purchase home, is a house that is up for sell, but instead of selling directly, the seller will allow the buyer to pay rent on the home with an option for purchase.

The length of this transaction is usually between one and three years. In order to better understand how a rent-to-own option works, think of it in as a car lease for your house. As the buyer, you pay a rent, a rent premium, and an option fee in order to reduce the down payment for the house later.

This type of agreement can be mutually beneficial for both parties; however, it can also come with some hefty disadvantages.

Why use rent-to-own?

Why would a seller want to use a rent-to-own option? At a time when the housing market is stagnant, it may be the best option for a seller instead of paying two mortgages. A rent-to-own is advantageous for the seller as it allows them to make income on their house through the buyer’s rent payment. It also allows both parties time to develop their credit.

For buyers, this option enables them to enter an agreement to purchase a home when they currently do not have enough money for a down payment. Paying the rent premiums and the option fee will reduce the amount needed for a down payment on the home.

The purchase price, length of rent-to-own agreement, option fee, and rent premium are negotiable between the seller and buyer.

Purchase price and option fee

Before signing any contracts, it is usually best for both parties to consult or hire a real estate agent. Once the purchase price is put in place, it is set for the duration of the contract. Whether housing prices rise or fall, both parties must abide by the set purchase price. The option fee is a one-time upfront payment and the rent premium is a fixed monthly payment.

The option fee is usually between 1 and 5 percent. The option fee and the rent premiums are credited to the buying of the home and the seller takes in the rest of the rent as income.

What to be aware of

If at the end of the option period (the length of the agreement) the buyer decides not to buy, then the seller keeps the option fee and rent premiums as income. For example, if the parties agree to a price of $100,000, the option fee and rent premium total $5,000 when the option is exercised. From the standpoint of the lender, the price is $95,000 and a 5 percent down payment requirement would call for a down payment of $4,750 instead of $5,000.

One thing a buyer should seriously consider before entering into a rent-to-own agreement is whether or not they will qualify for a mortgage in three years. Although this is a great option for those who do not have good credit or a down payment ready at the present, it could be a lose-lose if the buyer’s credit or income doesn't fall within good standing later.

Be on the look out for a later article on the advantages/disadvantages for both parties in a rent-to-own agreement. If you would rather own, Use our How much Home do I qualify for tool.

Steven Banass

Director of Quality Control

truerate partners

350 Pfingsten Suite 103 l Northbrook, IL l 60062

Click to Call me Direct!

www.trueratepartners.com

7 Ways to Sell Your House Quickly and Make More Money

The housing game can be very profitable for one who wants to sell their house quickly and for more money. Of course there is no guarantee that your house will sell, but if you make your house stand out among all the rest in your market it can help you close faster and make the most money from the sale.

Offering different kinds of perks in addition to staging your house can attract potential buyers. These are a few techniques you can use to get the best offer closest to your asking price.

1. Seek professional help

It’s sometimes easy to overlook the obvious. The best thing a homeowner can do is find the best real estate agent for them. If you’re unsure of how to go about shopping for the best agent consider going to open houses, get referrals or go online.

Sites like Realtor.com and RealEstateAgent.com are a good start to look for the best agent.

But of course this is all fruitless unless you get the Mortgage with the lowest fees, rate and closing costs. See how much home you qualify here.

2. Warranty

You can offer a home warranty that you can pay for up to a year, and can be a bonus and give peace of mind to the future homeowner. Purchase a good policy that will run you a few hundred dollars. This is a great investment and a great incentive for the buyer.

3. Accept less in earnest money

An earnest money deposit shows the seller that a buyer is serious about buying a home. This money is usually held jointly by both the buyer and seller in an escrow account. If you decide to go this route, you may get a buyer who may be contemplating on their decision to buy the home by lowering the earnest money cost.

4. Clutter and more clutter

It’s a no-brainer that you have to clean out the house and make it look more like a comfy bed and breakfast instead of a crowded house. Toss out old knick-knacks and furniture that takes up a lot of space or consider donating it to the Salvation Army. Clear out the garage also as this is sometimes used as a storage space.

5. Make the inside and outside appealing

Keep the lawn manicured by having it mowed and trim shrubs. Replace the front door mat with a new welcome mat. Place small plants or pottery around the front door. If your house is online, this will be the first thing a potential buyer will see, so make it presentable.

6. Pay closing costs

Offer to pay some of the closing costs and have a professional agent look over your list and have it appraised for what will be covered. This can be a great perk, since the buyer wants to pay minimal closing costs.

7. Homeowner dues

If a new home buyer isn’t privy to what homeowner’s insurance is, or they can’t afford to pay the additional cost during closing, you can offer to pay the dues for one year. This can be seen as a sign of good will and faith on the buyer’s part.

Steven Banass

Director of Quality Control

truerate partners

350 Pfingsten Suite 103 l Northbrook, IL l 60062

DIRECT:  (224)-374-1470

www.trueratepartners.com