Menu
A new article from TIME offers some helpful advice on how to obtain your credit score. There are still some mysteries in the world of credit scores, which financial institutions use to determine whether to give a person a loan and how much to charge for it. But the biggest unknown – what is your score? – has been solved.
While consumers could get their credit reports for years at no charge, their scores were not available, or they had to pay for them. In the past year, however, more than 60 million Americans suddenly were able to get either their FICO score, provided by the Fair Isaac Corp, or their VantageScore, from a system developed by the credit reporting bureaus.
Among the other financial institutions giving out scores each month are Ally, Chase, Bank of America , Barclays, Discover, and USAA.
The push for open access came from both market forces and the U.S. government. The hope is that consumers with ready access to their scores will make smarter financial choices, like not paying bills late.
So far, so good. “The anecdotal evidence we’re seeing from both lenders and consumers indicates people who know their FICO Scores tend to develop healthier credit habits than people who don’t know their scores,” says FICO spokesman Jeff Scott.
How do solar panels affect the value of a home? This article from The New York Times highlights a study conducted by the Lawrence Berkeley National Laboratory in California, finding that buyers are willing to pay more for homes with rooftop solar panels.
The new research, sponsored by the Department of Energy, may strengthen the case for factoring the value of sustainable features into home appraisals. Researchers found that buyers were willing to pay a premium of $15,000 for a home with the average-size solar photovoltaic system (3.6 kilowatts, or 3,600 watts), compared with a similar home without one. Put another way, that translates to about four additional dollars per watt of solar power.
More homeowners have been installing these systems as the cost of solar technology has dropped over the last decade. As of mid-2014, more than a half-million homes had solar systems, according to the report.
Real estate agents, appraisers and lenders are still trying to catch up with the technology, along with other energy-saving features, in terms of calculating their effect on home values — or lack thereof — in any given market.
According to a new study from the Lusk Center for Real Estate at the University of Southern California, new household formation – one of the key drivers of the demand for housing in the U.S. – has recovered from the widespread job losses that came with the recession. The study was highlighted in an article from DS News.
The study found that household formations consistently return to their previous levels in about three years regardless of whether employment has recovered at the same rate during that time.
The researchers found in their study that household formations in the U.S. fell to almost zero during the recession’s peak years of 2008 to 2010, but then played three years of catch-up and have now recovered to pre-recession levels of about one million per year.
Is Friday the best day of the week to close on your mortgage? It’s certainly the most popular closing day of the week. And on a monthly basis, the end of the month is the most popular time to close. But according to this article from The New York Times, there aren’t necessarily any financial advantages in closing on a home at the end of the week, or the end of the month.
Borrowers schedule closings at the end of the week or month for various reasons, practical and otherwise. If they have been renting, they may time the closing to coincide with the end of their lease, said Matt Hackett, the underwriting and operations manager at Equity Now, a direct mortgage lender in New York. And closing on a Friday gives home buyers the weekend to move.
However, Mr. Hackett said that midweek closings typically allow for a better deal from movers.
And frequently, a false assumption underlies the preference for end-of-month closings, said Michael Moskowitz, the president of Equity Now.
“People think that closing at the end of the month means they won’t pay an extra month of interest somehow,” Mr. Moskowitz said. “That is totally fallacious.”
According to a monthly survey of home builders conducted by Zelman Associates, a housing research firm, the spring new home selling season is off to a strong start. By many accounts, buyers of newly built homes came out in force last month.
Respondents in Zelman’s January survey reported that total orders for new homes increased by 32% in January from a year earlier, an improvement from the 27% year-over-year pace in December.
Zelman described January’s seasonally adjusted order pace as “the highest level of the recovery.” In addition, 45% of Zelman’s respondents reported better than expected customer-traffic counts in January, the highest percentage since Zelman began posing that question monthly in January 2014.
“It’s a pretty good time to be a home buyer,” said Alan Ratner, a senior analyst for Zelman. He attributes the January increase to the improving economy, stronger job growth, low mortgage rates and a slight loosening of mortgage-qualification guidelines.
A new report from CNN Money outlines how lower FHA monthly insurance premiums and the lowering of minimum down payment requirements by Fannie Mae and Freddie Mac are making it easier to become a homeowner.
Borrowers who have steady income and good credit, but not much money in the bank, will find that it recently became easier to buy a home. Down payment requirements, which rose after the subprime mortgage crisis, are easing again as lenders and mortgage backers try to draw in new buyers.
The Federal Housing Administration has long backed loans for borrowers with lower credit scores and with down payments as low as 3.5%, but until this year it also required hefty insurance payments.
FHA monthly insurance premiums dropped dramatically at the beginning of 2015. The change, from 1.35% to only 0.85%, will make FHA loans a better choice for some borrowers after years of prohibitively high premiums.
At the end of 2014, Fannie Mae and Freddie Mac announced plans to slash minimum down payments from 5% to 3%.
According to recent studies highlighted by the National Association of Home Builders, the desire to own a home remains strong for Millennials. Despite data showing that the age group is delaying household formation, they remain a key demographic in the housing market, and the pent-up demand is expected to translate into housing growth in the coming years.
A recent study of “Boomerang Millennials” who move out of their parents’ home only to move back in may have important implications for this key demographic and what it means for the housing market.
The NAHB examined recent research conducted by Judith Dey and Charles Pierret using data from the National Longitudinal Study of Youth 1997. The examination found higher incidence of “re-launch” for Millennials with a Bachelor’s degree compared to those with a lower education attainment and higher incidence of “re-launch” for Millennials from higher parental income household compared to lower parental income households. A “re-launch” occurs when a young adult moves out, returns to the parental household, and then leaves again.
This informative article from U.S. News highlights 10 terms that homebuyers should know – especially first-time homebuyers who are new to the process.
For example, if you have a “fixed-rate mortgage,” your monthly mortgage payment won’t change much over the years. An “adjustable-rate mortgage,” also known as an ARM, is essentially the opposite of a fixed-rate mortgage. You’ll have a fixed rate for several years, maybe five or 10, and then the interest rate adjusts according to the fully indexed interest rate, often the prime rate, which is what banks charge their most creditworthy customers. So while your interest rate and payments will likely be lower in the beginning than those of the homeowner with the fixed-rate mortgage, hope that interest rates remain low throughout the life of your loan. As interest rates climb, so too will your own interest rate and monthly payments.
A new article from CBS MoneyWatch highlights some of the current positive signs of the housing rebound, and how many economists expect the strong rebound to continue throughout 2015.
Most economists agree that the U.S. housing market is continuing to rebound after the economy suffered its worse decline since the Great Depression. But they vary widely in their expectations for how strong that rebound will be.
Andres Carvacho-Burgos, an economist at MoodysEconomy.com, is one of the more optimistic observers.
He expects existing-home sales to jump 20 percent this year, more than double the forecast of economists at the National Association of Realtors and Barclay’s Bank, which both see existing-home sales gaining in the single digits.
Behind his bullishness are his expectations for strong household disposable income growth, bolstered by a jump in household formation. Moreover, Carvacho-Burgos is among the many economists who don’t see the Federal Reserve raising interest rates from their historically low levels until 2016.
