Economic Revolutions: Boomers to Millennials

The Baby Boomers and the Millennials are two special generations. Their influence is worthy of evaluation especially because it is likely you will be interacting with both groups in some way in your daily life. Whether you work for a Baby Boomer or you’re trying to have a positive relationship with your kids (or grandkids), the trends and ideologies of these two groups of people are driving our social and economic structure.  Why? The Numbers – 82 million Millennials (born 1981 to 2001) and 77 million Boomers (born 1946 to 1964).

Baby Boomers were the generation that pushed revolutionary ideas in marriage, relationships, civil rights and social commentary. Millennials are the first generation to have computers in the home and classrooms, to have cell phones, instant messaging and hundreds of cable channels. The ease at which they use technology is the greatest difference between Millennials and every other generation.

What is Happening to Mortgage Rates?

Mortgage Rates continued their move higher, as financial markets adjust to the price of the “new perceived” realities of the presidential election. The average 30yr fixed rate has surged .5% higher.  The last time rates moved in this manner was in mid-2013.

What is the concern about the new perceived realities? Markets are repricing based on a Trump presidency and GOP-controlled congress. The problem is that markets have to “guess” as to the future outcome of the policies that Trump might enact as well, as the extent to which the legislative and executive branches will work collaboratively with his policies. Unfortunately, most of the best guesses are not good for US bonds. Higher spending, lower taxes, protectionist trade policies, and deregulation policies all add up to inflation. Inflation is the enemy of low interest rates.

Fortunately, this repricing of rates is likely to be short-lived. Unfortunately, that doesn't mean rates will simply come surging back to previous levels although we have clearly seen this happen in the past. We are looking at an actual feeling of increased risk (as opposed to just a reaction to the election). It would take a new motivation for the repricing to occur in a more positive direction. Until then, a lowering in rates isn't out of the question. Indeed, that can happen as a corrective move but there's no guarantee of its size or that rates may continue to move higher before it happens.

Working with a mortgage professional that offers many options will help you to acquire the best rate for your needs. Keep in mind that the rates today are still great. Do not let this increase stop you from the purchase of a home.

About the Author..

Toni F. Ryan | NMLS#230507

Senior Loan Officer | Synergy One Lending

Toni F. Ryan has over 20 years experience in mortgage lending - both on the wholesale and retail levels. She believes that education is key to making the best decision for YOU! She shares her insight into the lending world here and encourages your feedback. Don't forget to connect on Facebook!

Toni F. Ryan on Google+

Life After Bankruptcy, Foreclosure & Short Sale

A common questions many home buyers have today is, “How long do I have to wait before obtaining financing after a bankruptcy, foreclosure or short sale?”

Below is an overview based on credit issue:

Bankruptcy 

Conventional
• Ch. 7 or 11: 2 years with extenuating circumstance*, 4 year without and re-established credit
• CH 13 – 2 years from discharge date or 4 years from dismissal date

FHA
• Ch. 7: 2 years from discharge date with re-established credit – no delinquencies for 2 years
• Ch. 13: 1 year of the payout date must elapse and satisfactory payment performance with permission from the court to enter into a mortgage

VA
•  Ch. 7: 2 years from discharge date with re-established credit – no delinquencies for 2 years
• Ch. 13: 1 year of the payout date must elapse and satisfactory payment performance with permission from the court to enter into a mortgage

Understanding Advertised Mortgage Rates in California

Photo Credit: Pixabay

Ads for home loan offerings are everywhere. Online, on TV, driving down the street, or listening to the radio, mortgage loans are probably the most common advertisement.

Lowest Rates Offered...are Lures

Banks and mortgage companies promise that they will do whatever they can to offer homeowners the lowest mortgage payment. It is important to understand the rate market and that it is constantly changing   daily and often hourly.  When you see an ad from a bank or mortgage lender that offers a lower rate, or gives you one solid payment figure based on a certain loan amount, you should be skeptical. In fact, most banks and lenders usually offer rates to just bring you in the door, though you may never actually be offered the advertised rate.

Is a Reverse Mortgage Right For Me?

Photo Credit: istockphoto.com

Have you asked yourself this question? The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program. This plan enables a homeowner 62 years of age or older to withdraw some of the equity in their home.  The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements or purchase a home with NO monthly payment.

How does a Reverse Mortgage Work?

Basically, the equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing. This usually requires a 35 to 40% down payment but the senior will not have a monthly pinciple and interest payment and will not be tying up as much liquid cash as when they purchase a home for all cash.