10/03/2019
Oct. 3, 2019
Rising home prices and conservative borrowing have today’s Americans sitting on more home equity than ever before. Yet, despite a record amount of potential cash available, not all homeowners are rushing to take advantage of the opportunity to tap into their home’s equity. Why? After recovering from the last recession, many have shifted their perception and view their home equity as a nest egg rather than a bank account.
However, for those who currently carry high-interest debt, inexpensively accessing their equity may substantially help improve their household finances. With rates still close to all-time lows, this fall could mark a perfect time for some to refinance, potentially reducing mortgage payments and providing the funds to pay off expensive debt or make home improvements.
• Equity increased by 4.8% annually at the end of the second quarter. This is a collective gain of nearly $428 billion.
• Adjusted per borrower, the average homeowner gained $4,900 in equity just last year.
• From the first half of the year, the number of mortgaged residential properties in a negative equity position fell 7% to 2 million homes or 3.8% of all mortgaged properties.
Source: CoreLogic Report
After the Trump administration’s meeting earlier this week, it was decided that mortgage giants Fannie Mae and Freddie Mac, which have been under government control for more than a decade, will be permitted to retain a combined $45 billion worth of earnings, after holding only small capital cushions of $3 billion each for seven years.
For the last decade, Fannie and Freddie sent a large amount of their profits to the Treasury Department in an effort to repay taxpayers for the bailout during the financial crisis.
Sources:
https://www.americanbanker.com/news/fannie-mae-freddie-mac-will-retain-45-billion-in-capital-in-first-step-toward-privatization
https://www.washingtonpost.com/business/2019/09/30/trump-administration-takes-critical-step-toward-releasing-fannie-mae-freddie-mac-government-control/
Mortgage rates continue holding steady as we head into October. The 30-year fixed mortgage rate averaged 3.64% for the week ending September 26, a slight drop from 3.73% prior week. By contrast, mortgage rates stood at 4.72% a year ago, over a full percentage higher than today. The historic low for 30-year rates was 3.31% in November 2012.
If you or your clients are in the market for a purchase or refinance, this fall may be a favorable time to apply for one and save on interest. Don’t forget to ask me about loanDepot’s mello smartloan™ and how it could help facilitate a faster, more secure, stress-free mortgage process.
Sources: http://www.freddiemac.com/pmms/
If you have any questions, contact me anytime! I can help your clients explore the best mortgage option for both purchase and refinancing.
Leo Rodriguez
NMLS # 410140
Loan Consultant
2901 SW 149th Ave Ste 100
Miramar, FL 33027-4152
Office: (954) 334-4254
Cell: (305) 766-2551
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