Brexit 1 Month Later: The Impact on Mortgage Rates

Just over a month ago, the United Kingdom decided to withdraw from the European Union in a decision commonly known as Brexit. At that time there was a lot of speculation on how that decision would impact the U.S. residential mortgage market. Today, we want to look at the impact of the first 30 days.

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Most believed that the Brexit decision would drive mortgage rates down and keep them down for some time. As CoreLogic reported:

 “First-time buyers can count on continued low mortgage rates to help with affordability issues. Similarly, re-setting adjustable rate loans will have less of a rate shock, and in some cases may even go down.”

What has actually happened?

Initially, rates did fall. However, Freddie Mac has reported that rates have stabilized and have actually increased marginally each of the last two weeks. This prompted Freddie Mac Chief Economist Sean Beckett to say:

“Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their near-record 30-year mortgage rate lows.”

And, Capital Economics Property Economist Matthew Pointon believes rates will continue to increase:

“Given we expect Brexit will have a minimal impact on the U.S. economy, we see no reason to change our forecast for mortgage rates to reach 3.85% by the end of this year, and 5.0% by the middle of 2018.”

We will continue to follow the effect of Brexit on the U.S. housing market. But for now, it appears the impact is not as dramatic as some thought it could be.

We understand home buyer's and sellers will still buy and sell homes in South Florida no matter what happens with Brexit.  Jay Cermak, Top Fort Lauderdale Real Estate Agent with Keller Williams Realty is here to help with all of your South Florida and Fort Lauderdale Real Estate Needs!  Call or Text 954.235.3589 and schedule a FREE Real Estate consultation today!

Slaying Myths About Home Buying

When it comes to buying a home there are a lot of myths out there.  Some people heard things that their parents heard 30+ years ago.  And those parents heard from their grandparents...and so on and so forth.

Buying a home today is easier than it's been in almost a decade.  Not so easy you just need a pulse to get a mortgage like in 2005.  However the requirements and down payments along with the interest rates are must more ​in line with today's home buyers.

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Whether you are waiting to sell your home to move up or down to another home, even Home Sellers are held back by limited beliefs about buying a home.  

Studying the Real Estate Market it's clear that there needs to be more focus on educating the consumers about the home buying process so that we can keep the real estate market moving in the U.S.  

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First Time Home Buyers need those lower priced homes, and the lower priced home owners need to move into their next "Move-up" home thats larger and more expensive.  ​

The Most recent reports from National Association of Realtors, Ellie Mae, Rent.com, and Freddie Mac reported the following information about buying a home.  Low Down payments, Low Interest Rates and You don't need a perfect credit score to buy a home.​

If you are considering selling your home to move up or down.....If you are waiting on buying a home because you think you need better credit or more money to put down on a home....Schedule a FREE Real Estate Consultation Today!  Learn about the current Real Estate Market, Buying/Selling Process and a Needs Analysis to help you and your family reach their real estate goals.​

Contact Jay Cermak, Top Fort Lauderdale Real Estate Consultant with Keller Williams Realty at 954.235.3589!

Rents Skyrocket at Highest Rate in almost a Decade

The Consumer Price Index (CPI) was released by the Labor Department last week. An analysis by Market Watch revealed the cost of rent was 3.8% higher than a year ago for the second straight month in June. That’s the strongest yearly price gain since 2007.

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This coincides with a report released earlier this month in which AxioMetricsannounced that rents are continuing to increase in 2016. The report revealed:

• There was a 3.7% increase in effective rents in the second quarter of 2016 as compared to the same period last year.
• That the effective rent growth this quarter compared to last quarter was 2.3%.

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• Annual effective rent growth was positive in 49 of the top 50 markets, based on number of units. Only Houston was negative, at -1.4%, as the fallout from energy-industry job losses and excess construction continues.

Here is a graph to illustrate the rate of increase over the last several years:

Bottom Line

With rents continuing to rise and mortgage interest rates still at historic lows, meet with a local real estate professional who can help determine if you could turn your monthly rental cost into a home of your own.

Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation.

3 Crucial Questions Most Home Buyers Don’t Know the Answer To…DO YOU?

Whether you are considering the purchase of your first home or trading up to the home your family frequently fantasizes about, there are three crucial questions you must know the answer to:

1. What is the minimum down payment required to purchase a home?

2. What is the minimum FICO score required to qualify for a mortgage?

3. What is the maximum Back-End DTI Ratio allowed?

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A survey conducted by Fannie Mae revealed startling information: most Americans don’t know the answer to these three crucially important questions. Here is a graphic showing the results of the survey:

The percentages are quite disturbing but can explain why so many people believe they are not eligible to purchase a home whether it is a first home or a trade-up home. Here are the actually requirements as per Fannie Mae:

Bottom Line

If you are considering purchasing a home, make sure you are aware of all your options before moving forward and Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation to discuss the real estate market, navigate you through the buying process and to represent you when buying a house.

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Would You Qualify for a Mortgage Now?

The widespread myth that perfect credit and large down payments are necessary to buy a home are holding many potential home buyers on the sidelines. According to Ellie Mae’s latest Origination Report, the average FICO score for all closed loans in May was 724, far lower than the 750 or 800 that many buyers believe to be true.

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Below is a graph of the distribution of FICO scores of approved loans in May (the latest available data):

Looking at the chart above, it becomes obvious that not only do you not need a 750+ credit score, but 54.9% of approved loans actually had a score between 600 and 749.

More and more experts are speaking up about the fact that if potential buyers realized they could be approved for a mortgage with a credit score at, or above, 600, the distribution in the chart above would shift further to the left.

Ellie Mae’s Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage: 

“The high median credit score is due to many millennials believing they won’t qualify with the score they have - and are therefore waiting to apply for a mortgage until they have the score they think they need.” (emphasis added)

CoreLogic’s latest MarketPulse Report agrees that the median FICO score does not always tell the whole story:

“The observed decline in originations could be a result of potential applicants being either too cautious or discouraged from applying, more so than tight underwriting as the culprit in lower mortgage activity.”

It’s not just millennials who believe high credit scores and large down payments are needed. Many current homeowners are delaying moving on to a home that better fits their current needs due to a belief that they would not qualify for a mortgage today.

So what does this all mean?

Moe put it this way:

“Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy.”

Bottom Line

If you are one of the many Americans who has always thought homeownership was out of their reach, meet with a local real estate professional who can help you start the process of being pre-qualified to see if you are able to buy now!

Schedule a FREE Home Buyer's Consultation with Jay Cermak Top Fort Lauderdale Real Estate Agent with The Edwards Real Estate Group at Keller Williams Realty!  Call or Text 954.235.3589