12
Nov
By First Rate Financial Group
Financial Reports

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

Major inflation reports are scheduled for the coming week, including both the Consumer Price Index (CPI) and Producer Price Index (PPI). Based on recent data from the Personal Consumption Expenditures (PCE) Index and GDP estimates, the inflation data is expected to align with forecasts. The Federal Reserve has maintained a cautious (hawkish) stance, with expectations that current interest rates will stay steady following the recent rate decision. However, inflation is now nearing the Fed’s target rate, and the prospect of a ‘soft landing’ for the economy appears within reach. This optimistic outlook suggests potential rate cuts may be on the horizon.

Federal Reserve Rate Decision

In the face of slowing inflation and strong consumer spending, the Federal Reserve announced that it will keep the interest rate steady, holding the benchmark borrowing rate to a range of 5.2% to 5.5%.

Consumer Credit

By the numbers: U.S. consumer borrowing in September rose by only 1.4%, with most of the increase attributed to student loans, as Americans reduced their use of credit cards. Consumer credit rose by $6.0 billion in September, according to Federal Reserve data. Economists had forecasted a larger increase of $13 billion, based on a Wall Street Journal survey.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates are seeing an increase of 0.01% with the current rate at 6.00%
• 30-Yr FRM rates are seeing an increase of 0.07% with the current rate at 6.79%

MND Rate Index

• 30-Yr FHA rates are seeing a decrease of -0.17% for this week. Current rates at 6.40%
• 30-Yr VA rates are seeing a decrease of -0.15% for this week. Current rates at 6.43%

Jobless Claims

Initial Claims were reported to be 221,000 compared to the expected claims of 220,000. The prior week landed at 218,000.

What’s Ahead

Consumer Price Index and Producer Price Index inflation ahead. There are no other influential reports on the schedule.

11
Nov
By First Rate Financial Group
Holidays

Supporting Veterans on Their Path to Homeownership And Honoring Our Heroes

As we take time to honor Veterans Day, we extend our deepest respect and gratitude to the brave men and women who have served our country in uniform. Veterans Day is more than a day of remembrance; it is a chance to reflect on the sacrifices made by those who have protected the freedoms we cherish and to recognize the resilience, dedication, and strength they embody.

For us in the mortgage industry, this day holds special meaning. Many veterans and their families have sacrificed so much to ensure the security of others. It is our privilege and duty to provide support that makes a difference in their lives—whether through tailored loan options like VA loans, guidance on homeownership, or simply listening and understanding their unique needs.

On this Veterans Day, we reaffirm our commitment to serving those who have served us. We encourage everyone to join us in expressing appreciation for our nation’s veterans—not just today but every day. Let us stand together in gratitude and continue to support their journey to achieving the American dream of homeownership.

Thank you, veterans, for your service, courage, and the legacy you continue to inspire.

08
Nov
By First Rate Financial Group
Mortagage Tips

How Mortgages Compare To Other Loans

Planning to buy a home, finance a car, or cover unexpected expenses? Many loan options exist to help you achieve your financial goals, but choosing the right one can be challenging. Here’s a breakdown of the most popular types of loans, their unique characteristics, and what you need to know to make the best choice for your financial future.

Different Types of Loans

There are several types of loans, each designed to meet different needs:

  • Mortgages: Secured loans used for purchasing real estate. Mortgages typically come with lower interest rates and extended terms (15–30 years) because they use the property itself as collateral.
  • Personal Loans: Unsecured loans commonly used for expenses like debt consolidation, home improvements, or travel. Personal loans usually carry higher interest rates and shorter terms (1–7 years) because they don’t require collateral.
  • Car Loans: Secured loans for purchasing vehicles. Like mortgages, car loans use the vehicle as collateral, often resulting in lower interest rates than unsecured loans, with terms of 3–8 years.


What Makes Mortgages Unique?

A mortgage is specifically designed for real estate purchases and typically has a longer term (15–30 years) than other loans. Unlike personal or car loans, a mortgage uses the property being purchased as collateral. This results in lower interest rates but involves a more detailed application process and a larger financial commitment. Mortgages are the go-to option for anyone looking to own property.

Types of Mortgages

There are several mortgage options available, each with different benefits:

  1. Fixed-Rate Mortgages (FRMs):
    • Interest rate remains the same throughout the loan term, offering stable monthly payments.
    • Ideal for long-term homeowners.
  2. Adjustable-Rate Mortgages (ARMs):
    • Interest rate starts lower but fluctuates based on market conditions.
    • Suitable for short-term homeowners or those planning to refinance.
  3. Conventional vs. Government-Backed Mortgages:
    • Conventional Loans: Not government-backed, follow Fannie Mae and Freddie Mac guidelines, and require good credit.
    • Government-Backed Loans: (FHA, VA, USDA) Easier to qualify for, often with lower credit requirements, making them accessible to first-time buyers or veterans.

How Personal Loans Differ from Mortgages

Personal loans are versatile and can be used for almost any purpose. Unlike mortgages, they’re unsecured, meaning no property or assets are required as collateral. While they’re easy to get, they’re less suited for major purchases like real estate due to shorter terms and higher interest rates. Personal loans are often used for debt consolidation, home improvements, or covering unexpected expenses.

Key Features of Personal Loans

  • Unsecured: No collateral required, increasing accessibility but often resulting in higher interest rates.
  • Flexible Use: Can be used for almost any expense, from medical bills to vacations.
  • Quick Approval: Typically faster to approve than mortgages, with some lenders offering same-day approval.
  • Fixed Interest Rates: Most personal loans have fixed interest rates and predictable payments.
  • Flexible Loan Terms: Allows borrowers to choose a repayment schedule that fits their financial goals.

How Car Loans Differ from Mortgages

Car loans share one similarity with mortgages: collateral. However, they’re specifically for vehicles, with lower loan amounts and shorter terms. Car loans use the vehicle itself as security, typically resulting in lower interest rates than unsecured loans but higher rates than mortgages.

Key Features of Car Loans

  • Depreciation: Vehicles lose value over time, so it’s important to consider a car’s depreciation rate before taking out a loan.
  • Secured Loan: The vehicle serves as collateral, which generally lowers the interest rate.
  • Interest Rates: Rates depend on credit score, down payment, loan term, and the vehicle’s age and type.

Understanding Loan Types

Choosing the right loan starts with understanding how each loan type works, including its purpose, terms, and impact on your finances. When considering a loan, factor in how much interest you’ll pay, how it will affect your credit score, and how it aligns with your long-term financial goals.

To ensure a smart financial decision, consider consulting a loan officer who can help navigate your options and align your choice with your financial goals. Whether it’s your first mortgage or an unsecured personal loan, make sure you understand the terms and requirements before signing.