3 Events that Affect Mortgage Interest Rates

January 20, 2021 by Cindy Steelman

Home Buying Tips in Roseville California

Given the sky-high prices of property nowadays, it’s nearly impossible to buy one without taking a home loan in Roseville. However, there are many aspects you’ll need to consider when applying for a mortgage, especially the interest rate. Although it may be a small percentage, it can often spell the difference between an affordable loan you’ll repay completely in the promised timeframe or a costly loan that almost bankrupts you. It also dictates whether you can buy a house at all. With so many details depending on interest rates, you’ll want to understand what affects this figure.

Mortgage Rates in Roseville California

Factors like your credit history and your down payment contribute to how much your interest rate will be, but other hidden elements influence it to a significant degree.

Here are three events that affect mortgage interest rates:

Presidential Elections. Uncertainty causes the stock market to fluctuate, which can affect mortgage interest rates. It also tends to follow presidential elections, as a new president from a different party can bring many changes to the economy. While elections occur every four years, the possibility of change is enough to make the stock market volatile. As such, there tends to be a drop in the stock market. Investors then start to trade in stocks for U.S. treasuries instead, causing mortgage rates to fall. Generally speaking, that’s a good time to apply for a mortgage if you’re gunning for the lowest interest rates possible, but it’s best to consult with a mortgage broker in Roseville first. When the economy recovers and does well, mortgage rates tend to increase since there are less insecurity and more confidence from investors and the general public.
Pandemics. As you have witnessed during this time, global pandemics have upset hundreds of economies and caused thousands of businesses to shutter permanently. Since uncertainty plays a crucial role in determining interest rates, it comes as no surprise that pandemics—which bring plenty of insecurity and instability to the world—also affect them. As transmission rates rise and outbreaks continue to occur in hotspots, people will feel scared and uncertain, causing rate drops. Until the situation improves and the general public has easy access to a widely available vaccine, mortgage rates are expected to stay low.
Catastrophes and Natural Disasters. When natural disasters strike, whether it’s a ravaging wildfire, a sudden earthquake, or a severe hurricane, it wreaks unspeakable damage to cities and entire states. As people spend their resources to rebuild their communities and recover their losses, it inadvertently creates an economic burden that impacts employment and many other industries. It also affects the area’s local businesses and GDP, influencing mortgage rates. A natural disaster can also interrupt normal mortgage processes, affect property sales, and disrupt the construction industry. Suppliers may no longer be able to transport construction materials. People will no longer afford new homes because of the catastrophe, and lenders may even have had to freeze loans because of the incurred damage. Any delay in funding will cost these mortgage brokers, who will be busy confirming the status of funded loans, which they cannot sell in the meantime. With so much uncertainty—which is a recurring theme—and destruction, mortgage rates are sure to drop.

Buying a Home or Refinancing with Steelman Mortgages

Uncertainty and insecurity are common factors that cause mortgage rates to decline or increase, which can be found in these notable events. If you’re hoping to get the lowest possible rates, applying for a mortgage when any of these three events occur may give you your best chance. However, it’s always best to work with a mortgage broker to make sure you’re aware of the loan’s terms and conditions! Steelman Mortgages is a mortgage broker in Roseville that makes buying a home or refinancing your mortgage a smooth, simple, and enjoyable process. We can connect you with conventional loans, FHA loans, VA loans, jumbo loans, first time home buyer loans, and many more. Find out how we can help you by contacting us at (916) 847-7263!

Fixed or Adjustable: Which Mortgage Type Is Better?

January 8, 2021 by Cindy Steelman

Choosing a mortgage can be extremely stressful and confusing, especially for a first timer. Should you go with a fixed-rate loan or one with an adjustable rate? This article aims to answer this question and help you make a decision.

However, if it is your first time to take out a mortgage, it is still best to talk to a mortgage loan specialist to ensure that you make the right decision as to which type of mortgage to get. Here is a quick summary of the types of mortgage loans available to help lay the groundwork before you talk to a mortgage specialist.

What is a fixed-rate mortgage loan?

As its name suggests, a fixed-rate mortgage is a loan that will have the same payment amount for the entire duration of the term. The amount of the monthly mortgage payments and the interest rate will not change. Usually, the loan term for fixed-rate mortgages ranges from 10 to 30 years.

The advantage of taking out a fixed-rate mortgage is that the interest rate stays the same throughout the whole term. This will enable a person to anticipate how much they will pay every time. It will allow the person to allocate a certain amount in their monthly budget for their mortgage, as it will be predictable every time.

What is an adjustable-rate mortgage?

Adjustable-rate mortgages, or ARM’s, come in varying interest rates. The unpredictable nature of adjustable-rate mortgages is caused by the interest rate. At the beginning of the loan term, the interest rate will usually be much lower than that of fixed-rate mortgages. This will usually be a way to entice borrowers to take this type of loan.

ARM’s usually have a fixed payment period of 1, 3, 5, 7, 10 years. After the fixed period the interest rate will begin to fluctuate with the market, usually the LIBOR. The ARM interest rate is tied to the LIBOR and will adjusts as the LIBOR adjusts. The adjustable period can be each month, every 6 months or once a year meaning your interest rate and your payment will change each time it is time to adjust which will be included in your Note that you sign when you take on the mortgage.

The advantage of this type of mortgage is that your interest rate can be lower but that depends on what is going on with rates at the time. Another advantage is to take a lower payment for a short amount of time know that you will sell or refinance the property during the lower interest rate and payment time. These loans usually have a balloon payment due at the end of the time period.

Making Your Choice

It is important to consider your financial situation before making your decision as to which type of loan to get. If you like to stick to a budget, the predictability of a fixed-rate mortgage will suit you. However, if you are ready to take a calculated risk for some of your monthly interest rates to be cheaper than others, you may want to consider an adjustable-rate mortgage.

However, choosing a mortgage should not only be dependent on the interest rate. This is why it is a good idea to consult with a mortgage specialist before making your decision.

Mortgage Loan Experts: Steelman Mortgages

Now that you have been armed with the knowledge about mortgage loans, you are better able to make informed decisions about which type of mortgage to get. It is unwise to make the decision based on what an acquaintance, friend, or family member did when they took out their own mortgage. Keep in mind that each person or family has different needs. It is vital to analyze your own needs first, as well as how you will be paying for your mortgage before you make a decision.

If you are still confused about which type of mortgage may benefit you the most, you have the option of contacting a mortgage loans company to get more information about these loans. The specialists who work at these companies will be happy to discuss the specifics of each type of loan with you and help you make the best choice.

Whether you are looking for more information on mortgage loans, or if you are ready to take one out, Steelman Mortgages can lend you a hand. Interested parties can call (916) 847-7263 to get help with their mortgage in Roseville today!

Budgeting for Your First Home Down Payment

November 26, 2020 by Cindy Steelman

Owning a home is one of the biggest milestones in adulthood that many people hope to achieve, but it can be difficult if you don’t have the right financial support to afford the downpayment. Therefore having the right budget plan in place can help you reach your homeownership in a reasonable amount of time. A better downpayment will mean lower monthly payments toward your mortgage and allow you more flexibility with housing prices when you search for your home. First time home buyers in Roseville should aim for a comprehensive budgeting process for a more successful home purchase.

How Much is Required to Buy a Home?

Although many people begin saving for their homes early on, most don’t know exactly how much will be required to buy it. Downpayments aren’t constant across the board since they will vary depending on the purchase price but putting more down initially will save you plenty in the long run. Figuring out from the very start how much is required will give you a much better idea of what you can and can’t afford, especially given the lifestyle you want to lead.

The question is, how do you know how much to budget for your downpayment? A good rule of thumb is to save up to 20% of the purchasing price. For instance, if your dream home is worth $300,000, then you should have at least $60,000 tucked away for the initial payment.

Don’t Forget Other Costs

While the down payment is no doubt one of the most important costs that come with purchasing a new home, it’s crucial to take into account other fees as well, such as mortgage costs, escrow and title fees, and home inspection fees. Allot two to three percent of your purchase price to these fees. If you are not able to save it yourself there are several other options to consider. 1) You can request the seller to help pay for them when you make your initial offer for their home (the seller has to agree); 2) At times, if the interest rates are right, you can take a higher interest rate and get a credit from the bank to cover some or all of them (Roseville mortgage broker can help you with this); or 3) You can accept a gift from a relative to help cover some or all of them.

Planning Your Budget for Your Home Purchase

Settling on a budget first requires you to decide on the purchase cost you’ll aim for and the amount you want to save. After that, you must decide when you want to purchase your home so that you can set a target amount to save up per month to reach your goal. Once you’ve figured out this amount, you can begin finding ways to achieve it.

Outlining Your Final Monthly Budget

The amount you need to save per month should be factored into your monthly income and expenses. When calculating your income per month, make sure to consider the net amount, meaning the income you make after you’ve deducted the non-negotiables; such as household expenses, retirement pay, insurance, and bills. Saving more money to reach your purchase goal may be challenging, but it’s not impossible.

On the other hand, expenses can be treated as an opportunity because you have more control over them. Cutting out extras like your daily coffee and eating lunch out will save you plenty in the long run and can add to your goals of saving up for your home. Even your fixed expenses like rent or loans (car, personal, or student) can have a workaround. For instance, you could choose to rent out a cheaper apartment or sell your car for a cheaper option with a lower monthly payment.

Lastly, consider making adjustments to your home purchase goals. Explore different options for home loans in Roseville and be a little bit more flexible with your decisions so that you can achieve your dream home sooner rather than later!

Buying a Home in Roseville with Steelman Mortgages

Knowing where to start with budgeting for your home’s down payment can be confusing. Yet, taking it to step by step and remembering to account for all income and expenses is one way to ensure that you plan your finances accordingly to reach this ultimate goal. With the help of the right mortgage company in Roseville, you can achieve your dream home in no time.

Here at Steelman Mortgages, you’ll find one of the best mortgage lenders in Roseville, CA. We provide a simple and enjoyable process to provide answers to all your mortgage questions. To apply for a fast and easy mortgage, contact us today at (916) 847-7263!