Industry News

Should you tank your credit score for a better mortgage rate? Learn more about the changes that threw everyone for a loop.

How much of a difference does one percentage point really make? It may seem insignificant, but when payments are stretched out over 30 years, the numbers add up.

The Baby Boomer generation—those born between 1946 and 1964—has always garnered a lot of attention in terms of its impact on American society, and for good reason. As the largest single generation in history, what the Boomers have done as a collective has had a significant impact on the rest of the nation. In a way, we can even thank this generation for planned communities and the rise of the suburbs as Boomers’ parents sought out new housing options for their growing families after World War II. This also meant more schools, shopping centers, and grocery stores—the earliest strip malls. As we fast forward to today, we see the country’s largest generation of all-time reaching retirement age. The oldest members of this generation turned 65 in 2011. By 2029, the youngest of this group will be 65, and the oldest will be approaching 90. This has housing industry experts worried. Scary Statistics Often, the American Dream of home ownership ends with the owners selling the home in which they raised their children, buying something smaller and less expensive, and putting the difference toward their retirement savings. Recently, a few problems, such as higher mortgage debt and lower retirement savings, have […]

Interest rates are going up. The Federal Reserve just hiked rates for the second time in 2018. And there could be two more rate hikes before the end of the year. What does this all mean for potential home buyers? Let’s start by understanding the Federal Funds rate The Federal Reserve controls the Federal Funds rate, the interest rate everybody is referring to when discussing rising rates. The Federal Funds rate is the interest rate in which banks lend to each other, not to you or me. There’s generally a minimum reserve requirement ratio a bank must keep with the Federal Reserve or in the vaults of their bank, e.g. 10% of all deposits must be held in reserves. Banks need a minimum amount in reserves to operate, much like how we need a minimum amount in our checking accounts to pay our bills. At the same time, banks are looking to profit by lending out as much money as possible at a spread. What does all this mean for homebuyers? There’s good news in that rates are still at historically low levels. Increases mean it will cost more to borrow, but higher mortgages could push buyers to go ahead […]