What Causes Rates to Fluctuate?

An interest rate is a percentage of the amount of a loan paid for the use of money for a specified time. More simply put, it is the rate of interest charged on your mortgage loan. Interest rates are volatile, meaning they can fluctuate sharply and regularly. There are many elements that affect your mortgage interest rate, some are caused from your personal and financial information, and other reasons are more universal, deriving from economic and governmental factors. Interest rates are always changing, and it is possible to see different rates while you are looking for your home.

It is common to see mortgage rates fall when the stock market declines, and vice versa; it depends on the reason for the movement. Most of the time, the cause is shifting expectations for economic growth based on newly released data. Stronger growth is good for stocks, but it raises the outlook for future inflation, so it is negative for mortgage rates, and the reverse is true as well.

Inflation may be a cause for fluctuating interest rates. The Consumer Price Index (CPI), a widely followed monthly report that looks at the price change for goods and services, measures inflation rates. It is calculated by taking price changes for each item of goods and services and averaging them. Changes in the index are used to assess price changes associated with the cost of living. Inflation causes higher prices for everything, including home loans. Lower inflation is positive for mortgage rates.

Mortgage interest rates are very susceptible to economic activity. For this reason, jobs reports, Consumer Price Index, Gross Domestic Product, Home Sales, Consumer Confidence, and other data on the economic calendar can move mortgage rates significantly.

Your credit score will be a factor in determining your mortgage interest rate as well. Your lender will determine your likeliness to pay back the loan by reviewing your credit score. The higher your credit score, the more likely you are to repay the loan, making you a candidate for a lower interest rate. On the other hand, if you have poor credit history and your score is below average, your interest rate will likely be a bit higher. The good news is there are ways to improve your credit. A simple start is to pay your bills on time, all the time.

Since rates can fluctuate, it is a good idea to lock in your rate when rates are low, and you are ready to purchase. A rate lock can protect you from rising interest rates while you are searching for a home. Once your rate is locked, it cannot change for a specified amount of time, even if interest rates increase. Interest rates are a hot topic and tough to track; get in touch with one of our loan officers to learn more about interests rates and the current market.

 

A Touch of Hocus-Pocus

Time to dress up your lawn! Halloween is right around the corner, so break out your most spook-tacular decorations! Getting into the holiday spirit and decorating can be a fun activity for the entire family. Whether you want to keep it simple with a few pumpkins, or totally transform your entire yard, let your imagination run wild. Here are a few festive themes to get you started.

Spooky Spiders 

Think cobwebs, giant spiders and more cobwebs! Drape some cobwebs through the branches of trees and over bushes. Hang them from your front porch and near your front door to spook some trick-or-treaters! Add spiders of all sizes throughout the cobwebs. Scatter them across the lawn for an extra hairy look.

Creepy Cemetery

Turn your yard into a hauntingly scary graveyard. Include tombstones, skeletons and bones. Add a fog machine for an eerie setting. Feeling extra creative? Add an entryway with a chilling cemetery name at the front of your lawn. If you have leaves falling from the trees in your yard, don’t bother raking them. An unkempt look makes a cemetery even more unnerving.

Magical Movies

Have a favorite Halloween-themed or scary movie? Now is the time to re-create the movie set! If you are a Harry Potter fan, decorate your yard like Hagrid’s pumpkin patch or turn your house into a Hogwarts replica. More into The Haunted Mansion? This one is pretty self-explanatory. Turn your house into a neglected-looking manor; add in a sound machine producing scary ghost noises and creaking doors.

Simple Spirit

Minimum effort can sometimes have maximum effect! Keep it simple and line your porch with pumpkins and lanterns. If you don’t like the mess of carving pumpkins, paint on some fun designs or bling them out with some glitter. Sparkle always adds a magical touch!

Big & Bulky

Inflatable decorations are an easy way to jazz up your lawn, and it won’t take too much effort to set up. You can find just about any type of inflatable, from pumpkins to witches and ghosts to spiders. Don’t limit yourself to one inflatable, go over-the-top and get 4 or 5, if they fit on your lawn.

There is no such thing as too much, or too little decoration; Halloween is a time to be creative. So put on your thinking cap (or witch hat, whichever you prefer) and get to decorating! Soon you will have the best dressed lawn in the neighborhood.

What is Homebuyer Education, and Why Do You Need It?

Homebuyer education, also called housing or pre-purchase counseling, helps homebuyers prepare for the process of purchasing a home and the challenges of being a new homeowner. Some loan programs, like the Maryland Mortgage Program (MMP), require homebuyer education courses.

Recently, the Maryland Mortgage Program has made updates to their homebuyer education requirements to simplify and standardize the process. Effective for MMP reservations dated on or after October 1, 2018, the following will be implemented:

  • Homebuyer education may be taken online or in person, individually or with a group, as long as the class has been approved by HUD, Fannie Mae or Freddie Mac.
  • For Baltimore City and Baltimore County, the above flexibility will apply, but the homebuyer education must be completed prior to signing the sales contract.

The homebuying process is complex and if you are a first-time homebuyer (someone who has never owned a home, or has not owned a primary residence in the last 3 years) it can be a little confusing. This is why homebuyer education courses are so important. They help new homebuyers understand the process and what to anticipate as a homeowner. Below are some of the topics you can expect to learn about during your pre-purchase counseling.

  • Process of purchasing a home- You will be given an overview of the entire homebuying process, from application to closing, exploring each step more in-depth.
  • Budgeting- Buying a home will be one of the biggest purchases you will make, so knowing how to afford your mortgage and budget for extra expenses will be covered.
  • Shopping for a mortgage- Different types of home loans will be reviewed and what you will need for pre-approval. Your credit score, and ways to raise and improve it, will also be covered as a topic since this can help determine which type of mortgage and rate you qualify for.
  • How to maintain a home- Upkeep and regular maintenance of your home lowers the risk of major problems down the road; it is essential to know how to maintain your home and the budget you should keep for maintenance.

Even if you aren’t a first-time homebuyer, taking a homebuyer education course can be beneficial, since the mortgage industry is always changing and new programs are emerging. Additional one-on-one homebuyer counseling is available, and it is sometimes required, depending on the state/county you are purchasing in or loan program you are using. It’s better to have more information than not enough, especially when it comes to buying a home. Please reach out to any one of our loan officers if you have questions.

Trending Home Features: Love It or Leave It

Home decorating trends are constantly changing and it’s hard to keep up with every new fad that emerges. Floral prints may be popping up everywhere at the moment, but those millennial pink kitchen appliances you bought at the beginning of the year are “so out” now! So, which trends should you follow and which should you leave in 2018? The lists below showcase a few timeless home trends that will never go out of style and a few short-lived trends that may only be popular for a short period of time. So, which trends will stand the test of time?

Timeless Classics

Neutral paint colors. It’s always a safe bet to choose a neutral color palette for your home. Neutral wall colors and floors will allow you to decorate more boldly and add personality to each room. You can incorporate trendy pieces into the room without going overboard, and you can easily switch it out for something new once you no longer love it. A neutral setting with bold accents is always a good choice.

Clawfoot tub. Relaxation, elegance and luxury are what come to mind when you hear this term, and those are some reasons the clawfoot tub hasn’t gone out of style. This type of bathtub has a classic design and will fit with any type of décor, making it a lasting piece in your home.

Open concept. An open concept living space has become increasingly popular over the last decade or so, and it seems to have staying power; more homebuyers are searching for homes that give an open floor plan. This type of floor plan can make a small space feel larger, and it is also a convenient layout for entertaining.

Short Lived

Statement floors. Gone are the days with “Plain-Jane” beige carpet and simple hardwood floors. A new trend has recently emerged and it is daring! Statement floors have become popular in the last few years, and for good reason; it can add adventure and a fun twist to any room. Unfortunately, a bold floor doesn’t work for everyone, so try not to get swept up in this trend.

Velvet furnishings. Another trend that screams luxury and comfort, but like so many other home design fads, this one likely won’t last. Household items such as couches and curtains have followed the velvet craze, but have started to vanish recently. Fashion and style are big components of this trend, but opting for a more traditional look may save you from a design faux-pas.

Bold Wallpaper. It’s everywhere these days! Flip through a home design magazine or scroll through Pinterest and you will see bright, bold wallpaper. It can add so much drama and excitement to a space, but if it is overdone, it can be overwhelming. While this trend can be a thrilling addition to your home, it’s best to stick with the neutral colors since some prints and colors will go out of style soon.

Decorating your home can be a lot of fun, and a lot of work. There is no need to rush redecorating when the next big trend surfaces, so be sure to take your time and only include items in your home that work for you. Just because something is on trend doesn’t mean it’s your style! You can only make your house a home if it is filled with the things you love.

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