YELLEN TO ALLOW RATE HIKE BY YEARS END

From USA TODAY 

Federal Reserve Chair Janet Yellen told economists gathered Thursday that the conditions she sees now would allow the U.S. central bank to boost short-term interest rates this year.

Investors have been nervously awaiting the Federal Reserve's move to start hiking rates for the first time in years. The move toward higher rates would lift U.S. short-term interest rates above their current levels at near zero. Yellen's remarks where made at a lecture at the University of Massachusetts' Department of Economics.

Financial markets have been struggling to deal with the pressures that appear at odds with each other. Higher interest rates, historically, have created a headwind for stocks and caused returns to take a hit. However, the apparently reluctance of the Fed to boost rates is stoking worries the economic slowdown in Asia is more of a macro concern than long believed.

TY  LAFFOON 

No Hiking!!: Fed keeps benchmark rate near zero..... Ty Laffoon

Today the Fed stated NO HIKING !!!

Citing global economic weakness and financial market turmoil, the Federal Reserve agreed Thursday to keep its benchmark interest rate near zero despite the rapidly improving U.S. labor market.
But Fed policymakers' forecast indicates they still expect to bump up the federal funds rate this year for the first time in nearly a decade, with meetings scheduled for October and December. Their projections, however, show they expect to raise it even more gradually over the long-term than they previously signaled.
Richmond Fed chief Jeffrey Lacker was the lone dissenter.

USA TODAY

Fed statement of Sept. 17, 2015

The decision capped the most dramatic run-up to a Fed meeting in recent memory, with economists split on whether the central bank would raise its key rate, which has been near zero since the 2008 financial crisis and affects borrowing costs for consumers and businesses across the economy.
In a statement after a two-day meeting, the Fed said, "Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near-term."


This USA TODAY article shared  by Ty Laffoon
Fed policymakers now expect just one rate hike this year that would push the funds rate to 0.375% from the current 0.125%, according to their median forecast. They also expect a slower rise, with the benchmark rate increasing to 1.375% by the end of 2016 and 2.625% by the end of 2017, down from its previous estimates of 1.65% and 2.875%, respectively. The Fed also now expects its longer run normal rate to be 3.5%, below its previous 3.75% forecast.
The central bank said "the labor market continued to improve, with solid job gains and declining unemployment." It said consumer spending and business investment have advanced moderately while the housing market "has improved further." But amid the overseas troubles, it said exports have been "soft."
With the U.S. economy rebounding more strongly in the second quarter after a slowdown early in the year, the Fed raised its median forecast for economic growth this year to 2.1% from 1.9% in June. But after the recent global and market troubles, it lowered its projection for 2016 to 2.3% from 2.5% in June.

Ty Laffoon
And with the 5.1% unemployment rate already below the Fed's previous year-end forecast, it now expects the jobless rate to be 5% by the end of 2015, down from its June estimate of 5.3%.It expects unemployment to fall to 4.8% by the end of 2016, below its June forecast 5.1%.
Yet the central bank also expects a more modest rise in inflation, providing it more leeway to nudge up rates gently. It slightly lowered its inflation forecast to 1.7% in 2016 and 1.9% in 2017, leaving it below its 2% annual target even in two years.
Supporting the case for a Fed move is a 5.1% unemployment rate that's already at the central bank's long-run target, average monthly job gains of 212,000 this year and healthy economic growth of 3.7% at an annual rate in the second quarter.
Waiting until later in the year or early 2016 might force the Fed to hoist rates more rapidly when currently meager inflation eventually heats up, a move that could destabilize markets.
But recent news of China's economic slowdown, and the resulting turmoil in global and U.S. stocks, prompted Fed officials to temper expectations for a rate hike this week. New York Fed President William Dudley said last month the case for an imminent move had become "less compelling."
Investors were placing just 23% odds on the Fed increasing rates this week, according to the futures market.
The Fed likely wants to assess how the recent U.S. market selloff affects the economy and if the volatility reflects more weakness abroad than economic reports indicate, Barclays Capital said before the meeting. While U.S. exports to China comprise less than 1% of the nation's gross domestic product, Chinese trade with other countries could have stronger ripple effects on the economy.
Fed officials are also hesitant to further roil already fragile markets, according to Barclays. And they've said the risk of moving prematurely and derailing the six-year-old recovery outweighs the hazards of acting late and having to hike rates more sharply to keep pace with inflation.
For now, at least, annual inflation remains well below the Fed's 2% target. The Labor Department said this week its consumer price index fell 0.1% in August because of tumbling gasoline prices. And while the Fed expects oil and gas prices to rebound, a measure of inflation that excludes food and energy costs and is more closely watched by the Fed edged up just 0.1%, at least partly because the strong dollar is holding down import prices for consumers.
Fed Chair Janet Yellen has said she doesn't need to see inflation accelerate to raise rates, but must be confident it will drift toward the Fed's 2% target over the medium term. Some economists say the 5.1% unemployment rate already heralds a coming surge in wages and prices as employers compete for fewer available workers.
But annual pay growth has been stuck near a sluggish 2% pace, possibly reflecting an excess labor supply that includes part-time workers who prefer full-time jobs and discouraged Americans resuming job searches after years on the sidelines. If that's the case, the Fed may want to keep rates low longer to stimulate the economy so more of those workers can find full-time jobs.
Before the release of the Fed's statement to reporters, a coalition of worker advocacy groups called Fed Up gathered outside holding signs such as, "Whose recovery?" and chanting, "Don't raise the interest rates!"
"The Fed should not make a decision to slow down the economy without hearing from the people it will affect," said Ady Barkan, the head of the group


Shared by Ty Laffoon
ty@primemortgageloans.net

Top 5 Reverse Mortgage Myths and Facts from Ty Laffoon

Top 5 Reverse Mortgage Myths and Facts

Your Reverse Mortgage Guide to a Profitable Niche Market

Myth 1 The lender owns the home. You will retain the title and ownership during the life of the loan, as long as you continue to live in the home, maintain your home and pay your property taxes and homeowners insurance. Myth 2 The home must be free and clear of any existing mortgages. Actually, many borrowers use the reverse mortgage loan to pay off an existing mortgage and eliminate monthly mortgage payments. Myth 3 Once loan proceeds are received, you pay taxes on them. Reverse mortgage loan proceeds are tax-free. Money you receive from refinancing your home, regardless of the type of loan is not taxable. If you are on a low income government subsidy, check with the appropriate agency for any impact on your eligibility. Myth 4 There are restrictions on how the proceeds may be used. The cash proceeds from the reverse mortgage loan can be used for any reason. Many borrowers use it to supplement their retirement income, delay receiving social security benefits, pay off debt, pay for medical expenses, remodel their home, or help their adult children. Myth 5 Only low income seniors need reverse mortgages. Many affluent senior borrowers with high dollar homes and healthy retirement assets are using reverse mortgage loans as part of their financial and estate planning. We work closely with financial professionals and estate attorneys to protect your estate and enhance your overall quality and enjoyment of life. Forward from Ty Laffoon

Ty Laffoon is now doing Reverse Mortgages

Looking to get a Reserve Mortgage?  Give us a call so we can get you more information on the program .We will get you the highest quality counseling available before we move forward .

A Reverse Mortgage or Home Equity Conversion Mortgage (HECM) is a special type of home loan for older homeowners that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner’s insurance. Reverse mortgages allow elders to access the home equity they have built up in their homes now, and defer payment of the loan until they die, sell, or move out of the home. Because there are no required mortgage payments on a reverse mortgage, the interest is added to the loan balance each month. The rising loan balance can eventually grow to exceed the value of the home, particularly in times of declining home values or if the borrower continues to live in the home for many years.

  However, the borrower (or the borrower’s estate) is generally not required to repay any additional loan balance in excess of the value of the home.^[1] Specific rules for reverse mortgage transactions vary depending on the laws of the jurisdiction.

   In a conventional mortgage, the homeowner makes a monthly payment to the lender. After each payment, the homeowner's equity increases by the amount of the principal included in the payment. In a reverse mortgage, a homeowner is not required to make monthly payments. If payments are not made, interest is added to the loan's balance.^[1] Although the "rising loan balance can eventually grow to exceed the value of the home," "the borrower (or the borrower’s estate) is generally not required to repay any additional loan balance in excess of the value of the home."^[1] In Canada, the loan balance cannot exceed the fair market value of the home by law.


  Regulators and academics have given mixed commentary on the reverse mortgage market. Some economists argue that reverse mortgages allow the elderly to smooth out their income and consumption patterns over time, and thus may provide welfare benefits.^[2][3] However, regulatory authorities, such as the Consumer Financial Protection Bureau, argue that reverse mortgages are "complex products and difficult for consumers to understand," especially in light of "misleading advertising," low-quality counseling, and "risk of fraud and other scams."^[1] Moreover, the Bureau claims that many consumers do not use reverse mortgages for the positive, consumption-smoothing purposes advanced by economists.^[1] In Canada, the borrower must seek independent legal advice before being approved for a reverse mortgage.

Ty Laffoon

Business Development Manager

Prime Mortgage Loans

1660 Hotel Circle North Suite 716

San Diego , Ca.  92108

Office   619-630-0396

Cell       619-767-8687

Fax       619.363.9997

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Ty Laffoon

Business Development Manager

Prime Mortgage Loans

1660 Hotel Circle North Suite 716

San Diego , Ca.  92108

Office   619-630-0396

Cell       619-767-8687

Fax       619.363.9997

ty@primemortgageloans.net

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Feds meet on rates next week

This week's Federal Reserve meeting is shaping up to be the most dramatic in recent memory, with economists divided on whether the central bank will raise its benchmark interest rate for the first time in nearly a decade.

A hike would mark the beginning of the end of an extraordinary era of Fed easy money since the 2008 financial crisis that has kept borrowing costs historically low for consumers and businesses, and underpinned the six-year bull market. The Fed meets Wednesday and Thursday.

Of 19 economists and investment strategists surveyed by Action Economics on Friday, 11, or 58%, predict the Fed will delay the move after recent turmoil in financial markets — a share that has risen steadily over the past two weeks.

"You could add more volatility and more hesitation and fright to markets that are already fearful," says Diane Swonk, chief economist of Mesirow Financial.

Ty Laffoon   


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Bidding wars return to home market

They  have been searching for a house in the Denver area for four months at prices up to $275,000. They made offers on six homes—and were outbid on each one.

“When we first started looking, you had to pay $10,000 over” list price to win the bidding, Ms. D said. “Then, as the weeks went by, it went up to $20,000. And now it’s up to $30,000 and $40,000.”

Ms. D , a 28-year-old office coordinator, said she and her husband, a 30-year-old merchandiser, hope that as the market slows down this winter, “people will put a halt on being so crazy.”

Bidding wars, a hallmark of last decade’s housing boom, are making a comeback in a number of metro areas across the U.S. But while the earlier wars reflected enthusiasm fueled by easy-money mortgages, the current froth stems from a market short of homes for sale.

The reasons for the scant supply are myriad, including a much-slower-than-expected recovery in home construction. Yet an equally significant problem is that millions of people aren’t listing their homes for sale because they suspect they can’t qualify for a new mortgage, can’t afford the costs associated with a sale or fear that they won’t prevail in the scrum for the few houses available.

At the end of May, there were 2.3 million existing U.S. homes for sale, enough supply to last 5.1 months at the current sales pace. That is below the six to seven months of supply that the National Association of Realtors says is needed for a balanced market.

But in more than one-third of the 300 largest metropolitan areas tracked by Realtor.com, homes listed for sale in June had been on the market for a median of less than two months. A low median figure indicates rapid turnover in inventory as demand for homes exceeds supply.

Those include big markets like San Francisco, with a median time on market of 27 days, and Dallas at 38 days, as well as smaller markets like Vallejo, Calif., at 26 days and Kennewick, Wash., at 36 days.

The tightest market in June was Santa Rosa, Calif., a relatively affordable Bay Area suburb, where the median time a home was on the market was 24 days.

In those markets with limited supply, bidding wars tend to push prices higher, creating price bubbles. According to Realtor.com, the $580,000 median listing price in Santa Rosa is up nearly 10% from a year ago. That handily outpaces the national average increase in resale prices, which the National Association of Realtors calculates at 7.9%. Realtor.com is operated by Move Inc., which like The Wall Street Journal is owned by News Corp.

The low supply of homes reflects a reluctance or inability of owners to sell their current house or apartment and trade up to their next, often larger, one. Some remain skittish about the economy, their own finances or their ability to qualify for a mortgage. Others can’t sell because they are underwater, meaning they owe more on their mortgages than the homes are worth.

Even though U.S. home prices are up 31% in the past five years, 15.4% of homes—an estimated 7.9 million—remained underwater in the first quarter, according to real estate website Zillow. The long term average is 3% to 5%, Zillow says. These owners can’t sell unless they have thousands, sometimes tens of thousands, of dollars on hand to pay the shortfall on their old mortgage and finance costs of selling and moving.

Another pressure on housing inventories is growth in U.S. household formation. The U.S. added roughly 1.5 million households in the first quarter from a year earlier, though almost all were formed by renters.

Some economists say renters will add demand to the housing market as steep rent increases prompt them to purchase. Apartment rents have risen nearly 16% nationwide since 2010, according to real-estate research firm Reis Inc.

Meanwhile, at least 2.6 million homes have been taken out of the market since 2008 after investors purchased them and converted them to rentals, according to Stephen Kim, a housing analyst at the U.S. unit of Barclays PLC.

“Today’s seller is tomorrow’s buyer, and people aren’t selling mainly because they don’t have anything to move to or they can’t afford what they find,” said Nela R, chief   “We’re in this vicious cycle of low inventory, and there isn’t a short-term fix. Everyone thought the buyers would take a long time to recover from the downturn. But it’s not just the buyers, it’s the sellers.”

Earlier this year, Car, a 39-year-old  specialist, considered selling her, Ore., townhome, appraised at $400,000. But she changed her mind out of concern that she wouldn’t be able to find another home.

Feds to hike rates

Citing an improving economy, the Federal Reserve signaled Wednesday it's on track to raise historically low interest rates as early as September, but that rates are likely to climb more gradually than it previously anticipated.


In a statement after a two-day meeting, Fed policymakers didn't explicitly state when they plan to boost the central bank's benchmark rate for the first time since 2006. Although Fed officials have said they expect to act this year, the statement reiterated that the precise timing will depend on the economy's performance in coming months.

"It would be wrong if we were to provide you a road map," Fed Chair Janet Yellen said at a news conference after the statement was released.
Ty Laffoon

But Fed policymakers continue to expect the federal funds rate to rise from 0.125% to 0.625% by the end of the year, in line with their median estimate in March. Economists have said there almost certainly would have to be two rate hikes to reach that level, with the first likely coming in September.

USA TODAY

Full text of June 17 Fed statement

But debate among the officials on the timing of the first rate increase is becoming more heated. Seven of the 17 policymakers now expect no more than one rate hike this year, up from three in March.That suggests the initial bump in rates could slip past September, says Michael Gapen, chief U.S. economist of Barclays Capital.

The Fed depicted an economy that largely has emerged from a first-quarter slump. Its statement said "economic activity has been expanding moderately after having changed little during the first quarter." It added that job gains have "picked up," household spending has been "moderate" and housing "has shown some improvement" — all upgrades over its previous assessment in March.

And it said slack in the labor market, such as the large ranks of the long-term unemployed and part-time workers who prefer full-time jobs, "diminished somewhat."

Fed officials, though, reiterated that they will hike rates only after seeing continued improvement in the labor market and being "reasonably confident" that unusually low inflation will head toward their annual 2% target by next year. The central bank's key interest rate has been near zero since the 2008 financial crisis.

"My colleagues and I would like to see more decisive evidence that a moderate pace of economic growth will be sustained," Yellen said.

But she said there are signs inflation could soon edge up, providing the Fed more a more solid basis to boost rates. "There has been some progress in the sense that energy prices appear to have stabilized," she said. Low oil prices that have held down inflation have risen in recent months.

Yellen also said, "The dollar has largely stabilized." A strong greenback has been the other big factor holding down inflation, making imports cheaper for U.S. consumers.

At the same time, policymakers lowered their forecast for the benchmark rate from 1.875% to 1.625% at the end of 2016, and from 3.125% to 2.875% in 2017, suggesting they expect a more gradual rise.

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We have a new program that allows you to get a loan , even if you had a Shortsale or Foreclosure. You don't have to wait 4 or 7 years to get a loan. Call now for more info

Ty Laffoon

Business Development Manager

Prime Mortgage Loans

1660 Hotel Circle North Suite 716

San Diego , Ca.  92108

Office   619-630-0396

Cell       619-767-8687

Fax       619-573-6492

ty@primemortgageloans.net

The Federal Reserve lowered its economic outlook ,BUT may hike rates in June

The Federal Reserve lowered its economic outlook Wednesday but forecast improved growth in the months ahead, leaving open a possibility of an interest rate hike as soon as its June meeting.

In a statement after a two-day meeting, the Fed gave no clear signal of when it plans to raise its benchmark interest rate for the first time since 2006 but policymakers have indicated they expect to act this year.

USA TODAY

Full text of April 29, 2015, Fed statement

The Fed said economic growth "slowed during the winter months, in part reflecting transitory factors." Unusually cold weather, for example, chilled economic activity. The Fed said it expects the economy to rebound and grow at a moderate pace in coming months.

Some economists have said that if Fed policymakers blamed the economy's recent sluggishness on short-lived factors, such as the cold weather, a June rate increase would still be at least a possibility. Such a move, however, would require a dramatic upswing in growth.

The Fed's statement noted that job growth "moderated" and household spending declined in recent weeks, though inflation-adjusted incomes "rose strongly, partly reflecting earlier declines in energy prices."

Business investment, however, "softened" and exports declined, the statement said. The Fed added that inflation continued to run below the Fed's target, "partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports." Fed policymakers said they expect inflation "to rise gradually toward 2% over the medium-term as the labor market improves further and the transitory effects" of low energy and import prices dissipate.

The government said Wednesday morning that the economy grew just 0.2% at an annual rate in the first quarter, down from 2.2% in the October-December period and below the modest 1% pace expected by economists.

Meanwhile, inflation remains well below the Fed's annual 2% target, with the government reporting that the Fed's preferred measure, which excludes food and energy costs, rose 0.9% last quarter. That's the smallest increase since 2010.

And employers added just 126,000 jobs in March, compared to average monthly gains of 269,000 the prior 12 months.

The Fed reiterated Wednesday that it will bump up its federal funds rate "when it has seen further improvement in the labor market and is reasonably confident that inflation will move back" to the Fed's 2% target "over the medium-term."

The central bank has kept its benchmark interest rate near zero since the 2008 financial crisis, but with the economic recovery now almost six years old, the central bank has been preparing financial markets and consumers for a return to normal interest rate policy. Last month, the Fed dropped a pledge to be patient as it considers boosting the rate, signaling that it could make the move as early as June.

Many economists say the Fed is unlikely to act until September at the earliest so it can assess whether the economy is regaining the momentum it had built last year. That timetable is consistent with Fed policymakers' median forecast in March as well as with recent speeches by Fed policymakers, including Fed Chair Janet Yellen.

Fed officials have advocated caution as the economy continues to battle headwinds from the recession, such as wary lenders and a large pool of discouraged workers who have stopped looking for jobs.

Further clouding the picture in recent months was unusually cold weather that kept many shoppers at home and a now-settled labor dispute at West Coast ports that hampered shipments to and from factories. The impact of those events is already fading.

Other forces, though, could persist several months. A strong dollar is making U.S. manufacturers' exports less competitive abroad, while oil companies have slashed investment in response to lower crude prices.

Many economists predict that low gasoline prices and faster wage gains – a byproduct of the near-normal 5.5% unemployment rate -- will spur increased consumer spending, powering the economy to a solid 3% expansion this year.

Ty Laffoon sent this from USA Today

4 Simple Ways to Pay Off Your Mortgage Early from Ty Laffoon

4 Simple Ways to Pay Off Your Mortgage Early

 There’s no place like home when it comes to breaking the bank. Buying a home is the biggest purchase most of us will make in life. It starts with signing on the dotted line, which is typically followed by decades of mortgage payments. Interest expenses alone can result in homeowners paying hundreds of thousands of dollars over the life of a loan. However, a variety of strategies are available for those seeking to reduce the shelf life of a mortgage.

Should you pay off your mortgage early? While the decision may be more difficult in recent years due to record low rates, many homeowners believe there is no better feeling than being debt-free. Better returns on your money may be found elsewhere, and you lose liquidity by having your money tied up in a house, but reducing interest expenses on your debt is a guaranteed return.

 It’s the sense that a paid-off house means you’re safe and secure. I think the emotional security is one of the biggest advantages to paying off your mortgage early. The financial benefits are there, but the emotional benefit of saying you have an asset that won’t be taken away if the market experiences a downturn is a main advantage.

Nonetheless, before you start unshackling yourself from a mortgage, it’s generally recommended that you pay off higher-interest debt such as credit cards, build an emergency fund of at least three months’ worth of living expenses, and contribute enough to a 401(k) plan to at least receive any employer match available.

Aside from refinancing into a shorter-term loan, let’s take a look at four simple ways from Prime Mortgage Loans to pay off your mortgage early.

1. Make biweekly payments

While you will likely need to talk to your lender about setting up this method, a biweekly plan is the simplest way to shorten your mortgage without a significant budget increase. This plan can reduce your mortgage commitment by about four years by paying half of your regular payment every other week instead of just once a month. This leads to you making 26 biweekly payments every year, which is the equivalent of 13 monthly mortgage payments. The 13th payment is applied to the principal, allowing you to skip ahead on the amortization schedule.

  Instead of setting up biweekly payments with your lender or a third party, you could simply add one-twelfth of your regular mortgage payment to your regular payment. This will also result in 13 payments per year.

 

2. Refinance and reinvest

Low rates not only provide an incentive for you to refinance, but they also make it possible to refinance and pay off your loan early. If you refinance a 30-year mortgage on a home bought five years ago for $300,000 and 10% down, you could save roughly $300 per month, according to Prime Mortgage Loans. The refinance will set your payoff clock back from 25 years to 30 years, but if you apply the $300 savings toward your new loan each month, you’ll shave 9.5 years off your new mortgage.

Refinancing can be a headache in today’s banking environment, but the costs may be worth the hassle if you can commit to reinvesting the savings toward the new loan. Start by contacting your current mortgage lender to see what rates are available to you and shop around with online services such as Prime Mortgage Loans to ensure you are receiving a competitive rate. Refinancing also costs money, so you need to run the numbers and make sure it makes fiscal sense for you.

3. Increase monthly payments

This is perhaps the most appealing method for those with significant room in the budget — you throw as much extra $$$ at the mortgage as you feel is reasonable. Prime Mortgage Loans explains the numbers: “If you paid $200 extra per month on your 30-year fixed loan on a home purchase of $300,000 with 10% down, you’d pay off your loan six years and eight months years early. If you paid $300 extra per month, you’d pay off your loan eight years and 11 months early. And if you paid $400 extra per month, you’d save pay off your loan 10 years and 10 months early.”

4. Consider one-time loan payments

If you can’t commit to regular extra payments, contributing large cash infusions along the way can still reduce your mortgage’s life span. For example, using the same $300,000 purchase price with 10% down scenario, throwing $10,000 toward your loan in year three could save you nearly $16,000 in interest and pay off your mortgage one year and eight months early. Or, if you came into $25,000 in year five and put that toward your mortgage, you could save more than $32,000 in interest and pay off your loan three years and 10 months early.

Ty Laffoon    619-630-0396

ty@primemortgageloans.net

5 mistakes homeowners make when selling their home

Eighty-three percent of people view their home as a good financial investment, a 2014 survey by the National Association of Realtors (NAR) found. Not only is their home the biggest single asset most people own, but it's also filled with memories — the average seller has lived in his house for a decade, according to the NAR. So it's no wonder that when it comes time to sell property, people can get a little emotional.
Yet if people actually want to get a return on their investment in their home, they need to be smart about how they approach selling it. Letting emotions, not logic, drive decisions means you're more likely to make mistakes that can make it difficult to find a buyer or force you into accepting a lower offer than you would like.
BUYING A HOME: 5 ways to negotiate a deal
CREDIT: What's the minimum score you need to buy a house?
MORTGAGE DEBT: 4 simple ways to pay it off early
The good news for sellers is that the market is tight. That's pushing home prices higher across the country, and the number of homes being sold is also up. The typical seller receives 97% of his final asking price, and his home was on the market for about a month, says the NAR.
But those numbers don't mean that every homeowner sells his property quickly or gets the price he wants. You can increase your chances of a successful real estate transaction if you avoid these five mistakes when listing your home.
1. Not being realistic about your home's value
What you think your home is worth and the price you can actually sell it for are often two very different numbers. "Nobody cares what you paid for it," one frustrated home seller told the Wall Street Journal. He'd bought a home for $325,000 and spent another $150,000 on renovations, but the property eventually sold for $83,000 less than he originally paid for it.
Even in markets where inventory is tight, sellers need to be careful not to get too greedy when picking a listing price. Properties that are overpriced at the outset tend to eventually sell at a lower price than they would have if they'd been appropriately priced in the first place. Choose a reasonable price based on factors like how much comparable properties are selling for and the home's appraised value. If you're not getting any interest, adjust your strategy. "No offers within a 30-day period means the price is too high," real estate agent Djana Morris wrote in The Washington Post.
2. Not making your home look its best
By now, we've all watched enough HGTV shows to know that good staging and curb appeal help to sell homes. "At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues," said Chris Polychron, president of the NAR, in a statement about the value of home staging. More elaborate staging, such as repainting with neutral colors, sprucing up landscaping, or purchasing new furniture can also help. Overall, professionally staged homes can sell five to seven times faster than non-staged homes, according to the Real Estate Staging Association.
3. Refusing to negotiate
You should start by setting a fair and reasonable price for your home, but you also need to build in some wiggle room, especially if you need to sell quickly. Many buyers will start with an offer well below your asking price, particularly if they think it's a buyer's market. Naturally, their goal is to pay as little as possible for the home they want. Plus, many people want to feel like they've snagged a deal on what may be the biggest purchase of their lives.
You can make your buyers happy while also getting the price you need by being willing to accept slightly less than asking price for your home. Alternatively, you might agree to concessions like paying the closing costs, throwing in appliances, or making certain repairs to the property in order to sweeten the deal. Working with an experienced agent can help you negotiate the tricky dance of getting the price you want without scaring off a buyer.

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4. Hiding the truth about your home
Sellers who want to be rid of their property quickly may be tempted to try to hide problems with the home from prospective buyers. But trying to cover up serious flaws, like foundation problems, leaky roofs, or mold, could come back to haunt you later. If you aren't up front about your home's issues, the buyer may well discover them during the home inspection. At that point, they'll probably either back out of the deal or ask you to cover the costs of fixing the problem. If the issues are serious and are discovered after the sale goes through, you could end up caught in a messy, protracted legal battle.
Real estate site Zillow recommends being upfront with both your listing agent and your buyer about potential issues with the home. Price your home appropriately given its condition and document the problems you're aware of and have your buyer sign off on them. Full disclosure is the best way to avoid a lawsuit.

Qualify Now!! http://pbsd.primemortgageloans.net  Ty Laffoon

5. Not having a backup plan
In a perfect world, you're able to smoothly navigate the transition between selling your current home and buying a new one. In reality, things rarely go as planned. Savvy sellers have contingency plans in place to avoid either getting stuck with two mortgages at once or not having a place to live, or to protect them if a deal falls through.  Ty Laffoon
Some people insert clauses into their contracts that make it clear that they won't move forward with the sale unless they are able to purchase a new home. You may also want to be prepared to find temporary housing, like a rental or staying with family, in case your home sells quickly. If you must move before your home sells, make sure you've budgeted to afford the carrying costs of the old home. Finally, if there are multiple people interested in your home, you may be able to accept backup offers, which involve agreeing to sell to a second buyer if the first one backs out.

Feds may still raise rates in June

Several Federal Reserve policymakers said last month the central bank is likely to raise its benchmark interest rate in June but "others" said the move will probably occur "later in the year," according to minutes of the Fed's March 17-18 meeting.
The report is consistent with Fed policymakers' forecasts, released after the mid-March meeting, that indicate the first bump in rates since 2006 is unlikely before September as the Fed awaits signs of a pickup in anemic inflation.

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Still, the minutes, which provide a more detailed window into Fed officials' debates at the gathering, suggest they haven't ruled out a June rate increase.
The minutes also offer a rough blueprint for the signals that could indicate an acceleration in inflation is coming – thus making a rate increase viable -- including a more stable dollar.
The policymakers who anticipate the Fed will pull the trigger later in the year said low oil prices and a strong dollar that makes imports cheaper for US consumers "will continue to weigh on inflation in the near term," according to the meeting minutes.

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Although job growth has accelerated substantially the past year, wage growth has been sluggish and inflation remains well below the Fed's annual 2% target. The economy's mixed messages present a quandary as Fed officials consider hoisting rates that have been near zero since the 2008 financial crisis.
Fed Chair Janet Yellen said policymakers don't need to see wage growth or inflation accelerate to raise rates but must be "reasonably confident" inflation will gain momentum in the near-term. She also said she would be uncomfortable raising rates if inflation were to weaken further.
At the March meeting, Fed officials provided a more detailed scenario for increasing rates. They said further improvement in the labor market, stabilizing energy prices and "a leveling out of the foreign exchange value of the dollar were all seen as helpful in establishing confidence that inflation would turn up," the minutes say. 
At the meeting, the Fed dropped a pledge to be "patient" as it considers raising its benchmark interest rate, which has been near zero since the 2008 financial crisis.
But the Fed also downgraded its economic outlook and said it will hike rates only when the labor market improves further and policymakers are confident inflation will pick up from unusually feeble levels.
Since the meeting, several central bank policymakers, including Fed Chair Janet Yellen, have said they're inclined to boost rates this year. But they also voiced a preference for waiting longer to act and hoisting rates gradually to avoid derailing the recovery and to give the recession-scarred economy more time to recover.

Forward of Article by Ty Laffoon

There are 5 main factors that determine your FICO score

There are 5 main factors that determine your FICO score:

Payment history. If your credit score was a pie, the biggest piece would belong to payment history. It accounts for 35% of your score. That means making on-time or late payments on all your credit accounts can really make or break you.

Debt balance. The next piece is how much debt you owe -- it makes up 30% of your score. Credit companies really like people who use less than 30% of their available debt limit. That means if you’ve got three credit cards with a total credit line of $10,000, you don’t want to ever carry a balance of more than $3,000 at once.

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Length of credit history. 15% of your score is determined by how old your credit history is -- in general the older your accounts are, the better it is for your score.  But  even people who haven't been using credit long can have high scores, depending on how good the rest of their credit report is, according to FICO.

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New credit applications. Applying for new credit takes up 10% of the pie. If you apply for new credit every other month, that sends a red flag to credit bureaus.

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Types of credit. As for the types of credit you have, this constitutes another 10% of your score. It’s better to have low levels of revolving debt like credit cards and more kinds of non-revolving debt like a car loan or student debt. It just makes you look less risky.

Ty Laffoon

Yellen is going to raise rates.......

From USATODAY

Federal Reserve Chair Janet Yellen said Friday the central bank will raise interest rates only gradually because of persistent slack in the labor market, the risks of another economic downturn and vestiges of the Great Recession.

She said that although the Fed doesn't need inflation to pick up before raising its benchmark rate, a further significant weakening of inflation or wage growth would make her "uncomfortable" with a rate hike.


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"I generally anticipate that a rather gradual rise in the federal funds rate will be appropriate over the next few years," Yellen said in a speech at the San Francisco Fed.

The Fed's key rate has hovered near zero since the financial crisis of 2008 despite unemployment reaching a near-normal 5.5%, down from 10% in 2009.

Last week, the Fed dropped an assurance to be patient as it considers an initial rate hike, but it suggested it's in no hurry to act. Its projections show the first hike is likely in September, and rates will rise about a percentage point each year, about half the pace of previous rate-hike cycles.

Yellen said traditional economic rules that say interest rates should be higher don't apply because "appreciable slack still remains in the labor market." For example, the ranks of part-time workers who prefer full-time jobs remains high, and many discouraged workers aren't even looking for work.

Yellen cited studies that show the economy may grow more slowly in coming years because of more limited productivity gains from technological advances.

Another reason to boost rates gradually, she said, is that if growth were to falter, the Fed would be hard-pressed to respond because its benchmark rate is near zero. Also, she said, the Fed might be reluctant to resume bond purchases to hold down long-term rates because its balance sheet is already bloated.

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She said the effects of the recession have been so severe they've held back business investment, limited firm formation and prompted workers to leave the labor force.

"Some of these effects might be reversed in a tight labor market, yielding long-term benefits associated with a more productive economy," Yellen said.

As a result, she said, the Fed could allow the unemployment rate to decline "for a time somewhat below estimates of its long-run sustainable level."

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Yellen said the Fed won't wait until wage growth or inflation pick up before raising rates. The decline of unions and technological changes probably have slowed wage growth long-term, she said.

She added, "I would be uncomfortable raising the federal funds rate if readings on wage growth, core consumer prices and other indicators of underlying inflation pressures were to weaken."

Yellen echoed remarks this week by Fed Vice Chairman Stanley Fischer that rate increases won't follow a predictable course, as they often did in the past.

"Rather, the actual path of the policy will evolve as economic conditions evolve, and policy tightening could speed up, slow down, pause or even reverse course, depending on actual and expected developments in real activity and inflation," she said


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Ty Laffoon

Get your FICO higher by paying more than the minimum

TransUnion, one of the three major credit reporting agencies, has made several changes in the last few years to the credit reports it provides consumers, in addition to developing a new credit score to help lenders better evaluate potential borrowers.

If you've requested your TransUnion credit report recently (you get free credit reports every year through AnnualCreditReport.com), you may have noticed there are a lot of details in it about how you manage your account. The new report format — part of their new CreditVision suite of tools — includes up to 30 months of account history and 82 months of payment performance data. The CreditVision New Account Risk Score uses all that data to generate scores ranging from 300 to 850. About 26.5 million consumers who are not scoreable using what TransUnion calls "traditional scoring models" have CreditVision scores, and 3 million of them fall into the prime or super prime categories, aka good or excellent credit.

These figures come from an internal analysis of TransUnion consumer credit files, in which the same reports were used to generate a CreditVision New Account Risk Score and a VantageScore 1.0. More than 23 million U.S. consumers would have super prime credit scores under the new model, because the score takes a more detailed look at the data, the credit bureau claims.

What's New?
Charlie Wise, vice president in TransUnion's Innovative Solutions Group, explained it as a difference between what he called static credit report data and dynamic credit report data. Here's what that difference means:
When a potential lender (or you) requests your credit report or credit score, the result is a snapshot of your accounts as your creditors most recently reported them to credit bureaus, potentially including credit card balances, loan status, whether or not you've made payments on time, collection accounts and any number of other things that are reported to credit bureaus.

By comparison, there are more details in the CreditVision history. CreditVision data includes more than if you paid your credit card bill on time, it includes how much you paid; rather than just seeing your current balances, a potential lender can see whether the balances are growing or if you're paying them down. They can see if you make minimum payments, pay the full statement balance or pay something in between. These data points — if your lender furnishes them to TransUnion, which it may not as this is a pretty new feature — show trends that may be more helpful in a lender's decision-making process than merely looking at your account balances at a single moment in time.

That's the idea, anyway — that more specific data can help lenders understand you better as a potential borrower by looking at your spending and payment patterns. Generally, you want to use less than 30% of your available credit. Traditional scoring models don't specifically factor in whether you pay the balance in full or not, rather, they focus on what percentage of your available credit you're using and if you're paying on time. With the CreditVision score, showing your ability to regularly pay a large balance may lessen the impact of using a high percentage of your available credit. That could have a serious impact on the credit score of someone who spends within their means but has low-limit credit cards.

Lending to be easier in 2015 It may be time for you to purchase a home .Ty Laffoon

Mortgage rates are hovering at levels unimaginable a generation ago. But for many would-be home buyers, a low-rate loan had been tantalizingly out of reach, denied by tight-fisted lenders still skittish from the housing bust.

That’s finally changing. Now, thanks to rising home prices, less-stringent down-payment requirements and new rules that limit lenders’ liability when loans that meet certain criteria go bad, borrowers should encounter fewer obstacles getting a mortgage. No one wants to go back to the days of too-easy credit. But a little loosening will provide a shot in the arm for the sluggish housing market as it opens the door to buyers who have been shut out of the market and provides more options for all borrowers. 

It’s still true that whether you’re buying your first home or trading up, the stronger your qualifications, the lower the interest rate you’ll be able to lock in. Borrowers with a credit score of 740 or more and a down payment (or equity, in a refinance) of at least 25% will get the best rates. You don’t have to meet those benchmarks, but if you don’t, you could see—in the worst case—as much as 3.25 percentage points tacked on to your rate.

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The down-payment hurdle

First-time home buyers usually find that accumulating a down payment is their toughest challenge. The same goes for many current homeowners who lost most of their equity in the housing bust. A popular misconception is that you must put down at least 20%. Usually, you’ll need much less. For a loan of $417,000 or less that is backed by Fannie Mae or Freddie Mac (called a conforming loan), you’ll need just 5% for a fixed-rate mortgage or 10% for an adjustable-rate loan. For “high balance,” or “conforming jumbo,” loans of up to $625,500 in high-cost markets, you must ante up at least 10% and meet slightly higher credit-score requirements.

Non-conforming jumbo loans of more than $625,500 are more widely available than before, with lenders offering them at rates comparable to conforming loans, says Guy Cecala, publisher of Inside Mortgage Finance. Because lenders keep these mortgages on their own books rather than sell them to Fannie Mae or Freddie Mac, the loans require higher credit scores than for conforming mortgages and at least a 10% to 15% down payment, says Ramez Fahmy, a branch manager with Caliber Home Loans, in Bethesda, Md.

After home prices tumbled, your only option for a low-down-payment loan was an FHA mortgage, which requires just 3.5% down (and a minimum credit score of 580). But borrowers must pay for FHA mortgage insurance—an up-front premium of 1.75% of the loan amount and an annual premium of 0.85% of the loan. (Read more on Kiplinger.com: 5 things home improvement reality shows don't tell you)

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Fannie Mae and Freddie Mac recently resurrected loan programs that allow just 3% down on a fixed-rate mortgage. For Fannie Mae’s program, at least one borrower must be a first-time home buyer. Fannie’s program launched in December 2014, and Freddie’s will be available to borrowers whose loans settle on or after March 23, 2015. Big banks aren’t rushing to offer the program, while smaller, nonbank mortgage lenders seem eager to sign on, says Cecala. Borrowers who qualify will save money on interest and mortgage insurance compared with FHA loans.

If you do put down less than 20%, you must pay for private mortgage insurance (PMI), which protects the lender if you default. The more you put down and the higher your credit score, the less coverage you’ll need and the lower the cost of PMI. The annual cost for a 5%-down loan runs from 0.54% to 1.52% of the loan balance, according to a recent report by Wallet Hub, a financial information site. When your equity reaches 20%, you can ask the lender to cancel the PMI; at 22%, the lender must automatically cancel it.
You can reduce the down payment and avoid PMI with a so-called piggyback loan—an 80% first mortgage, a 15% second mortgage and 5% down. This kind of loan is especially useful if you haven’t yet sold your previous home but you have enough cash to put 5% down and you can afford to pay the mortgage on both homes temporarily. You can pay off the second mortgage (and pay down your new loan) when your previous home sells.

You won’t need a down payment (or mortgage insurance) if you’re a vet who qualifies for a Veterans Affairs home loan, but you will have to pay an up-front “funding fee” of up to 3.3% of the loan amount. Rural Development Guaranteed Loans from the U.S. Department of Agriculture also allow qualified, low-income borrowers in selected areas to buy with nothing down, although they will pay an up-front guarantee fee (rolled into the loan amount) and an annual fee.
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The ARM alternative

Over the past several years, most borrowers gladly locked in low fixed rates. But you can trim your rate further with an adjustable-rate mortgage. If you do, choose a hybrid ARM, which features an initial fixed-rate period followed by adjustments after set periods of time. Match the fixed-rate period to the time you expect to own your home and you won’t have to worry about the rate adjustments. You’ll find hybrid ARMs with fixed-rate periods of three, five, seven and 10 years. In early January, the average rate on a 5/1 ARM was 3.1% and the rate on a 10/1 ARM was 3.5%, compared with the 30-year fixed rate of 3.9%, according to HSH.com, which tracks rates. Some versions adjust every five years or even every 15 years.

Today’s ARMs have built-in safeguards that protect borrowers against features that fueled the mortgage meltdown—such as exploding rates at the first adjustment and minimum-payment options that allowed the loan principal to grow. Lenders must inform you up front what your new payment will be after the first adjustment if your rate rises to the loan’s cap (which should be no more than two percentage points). If the ARM has a fixed rate for five or fewer years, lenders must qualify you for the loan based on the payment amount that would result if the interest rate rose to the cap on the first adjustment.

Ty Laffoon

Shop smart
About six months before you want to buy a home, pull your credit score, review your credit report and dispute any errors in it. You can also use the time to pay down debt, beef up savings and gather documents. “The last thing you want is to find your dream home and not qualify for a large-enough mortgage,” says Bob Walters, chief economist for Quicken Loans. To get an idea of what you can afford, user.
Before you tour homes, get preapproved for a mortgage by a local lender that sellers and their agents will recognize (your agent can recommend one). A preapproval letter printed on the lender’s letterhead and submitted with your purchase offer assures sellers that your finances are up to snuff and you can close the deal. If there are multiple offers, that may help lift yours above the others.
As soon as you have a ratified purchase contract (if not before), track down the best rate. Try different types of lenders, including the one that preapproved your mortgage, your bank and your credit union (check membership qualifications if you don’t already belong to one). Or contact a mortgage broker, who represents multiple lenders . You may get the best rate from a nonbank mortgage lender, whether it’s a brick-and-mortar operation or an online lender such as a Prime Mortgage Loans.. If one lender turns you down—say, because you have a ding on your credit history, a small down payment or you’re buying a fixer-upper—another one may welcome your business. (Read more on Kiplinger.com: 10 cheapest cities you'll want to live in)
To compare apples to apples, ask lenders for their “par rate,” with no fees or points (a point is prepaid interest that “buys down” the interest rate by about one-eighth to one-fourth of a percentage point), plus an estimate of closing costs. Or tell the lender the amount you have budgeted for closing costs and ask what the corresponding rate will be, says Walters. Lenders can estimate the interest rate for which you’ll qualify only until you have a contract for a home and you file a loan application. After that, they’ll issue a formal good-faith estimate.

The national average cost to close on a $200,000 mortgage in 2014 was $2,539, including the cost of an appraisal, according to Bankrate.com. Costs have risen for the past two years as lenders ramp up to meet new regulations. (Visit Bankrate.com to see what average closing costs are in your state.)
Which is better—a lower rate or lower closing costs? It depends on how long you plan to keep the loan. If you expect to be transferred to another city by your employer within, say, five years, then a no-cost loan with a higher interest rate is a great loan, says Josh Moffitt, president of Silverton Mortgage, in Atlanta, because you may not have time to offset higher up-front closing costs with lower mortgage payments.
Try to get a sense of whether a lender will provide the handholding you need, especially if you’re a first-time buyer. Ask the lenders on your short list whether they can close within the time demanded by your purchase contract. “Is chasing that eighth of a percentage point worth it when you go to a lender no one has heard of and 30 days later you’re paying fees to delay the closing date, or you lose the house because you can’t close on time?” asks Walters. Some lenders, including Discover Home Loans, advertise a “closing guarantee.” If they fail to close on time, they’ll pay you from $500 to $1,000.
You may not have to deal with paper until you close on the loan, which most states require to be done in person. However, the process can be as personal as you want it to be. “We have loan officers who will go to a person’s home and take an application over dinner,” says Moffitt.
Vetting the deal
Before a lender can approve your loan, it must document the amount and source of your down payment, closing costs, income, assets and more. At the very least, a lender will request two pay stubs, two months of bank statements and two years of W-2 forms.
The list will be longer if you have income that doesn’t show up on a W-2—say, from self-employment or alimony—or income that’s inconsistent, such as commissions or bonuses. In that case, a lender may ask you for several months of bank- and investment-account statements to verify your assets, two years of tax-return transcripts from the IRS, or a year-to-date profit-and-loss statement and balance sheet prepared and signed by your accountant.

As a lender scrutinizes your file, it may ask for more documentation, especially to explain any gaps in employment or inconsistent income. For gift money, you may need to provide documentation for the source of the funds for the gift—perhaps a copy of the gifter’s bank statement. (Loan programs may have different rules about the percentage of your own money versus gift money allowed.) To do your part to get to closing on time, don’t do anything that would change your credit profile, such as taking on new debt or paying a bill late.

The lender will hire a real estate appraiser to determine whether the purchase price on which you and the seller have agreed is supported by recent sales of comparable homes in the area. If the appraised value is less than the sum of your loan amount and down payment, someone—you or the seller—must make up the difference with more money.

You or your lender can rebut a valuation that comes in lower than the purchase price—say, if it appears that a relevant comparable sale has been overlooked. After the housing bust, deals often fell through because the appraised value fell short of the purchase price, but recent appraisals ordered by Quicken Loans have come in higher, on average, than homeowners thought they would.

You could still save on a refi

If you have equity in your home and haven’t bothered to refinance at today’s low rates, it’s not too late to save. You don’t necessarily have to reduce your rate a lot. The question is whether you will stay in your home long enough to recoup the closing costs with savings on your monthly payments 

To refinance an existing mortgage with a conforming loan backed by Fannie Mae or Freddie Mac (and roll your closing costs into the loan), you’ll need a minimum of 5% equity for a fixed rate and 10% equity for an ARM. With a maximum debt-to-income ratio of 36%, lenders may require a minimum credit score of 660 if you have less than 25% equity.