Category: News

The Federal Reserve's recent decision to cut interest rates has brought a sense of cautious optimism to the housing market and broader economy. On Thursday, the Fed reduced its key benchmark borrowing rate by a quarter percentage point, bringing the target range to 4.75-5.0%. This marks the second consecutive rate cut, following a similar reduction in September, indicating a measured shift in monetary policy aimed at supporting economic growth. While the Fed's rate cuts influence various consumer lending products, their effect on mortgage rates isn't always direct. Mortgage rates tend to follow the 10-year Treasury yield more closely, which responds to a variety of economic factors. However, the recent Fed action has contributed to a modest downward trend in mortgage rates. The average 30-year mortgage rate has eased to 6.50%…

Refinancing to a 15-year mortgage is an option many homeowners consider when interest rates drop. This type of refinance allows you to pay off your mortgage faster, potentially saving on long-term interest costs. While the appeal of faster equity-building and reduced interest is strong, refinancing to a shorter term does come with trade-offs. Here’s what to consider if you’re thinking about making the switch. Before making the leap, it’s essential to assess several key factors. First, check if you’ve held your current mortgage long enough to refinance; lenders often require a set period before allowing this, known as “seasoning.” Another critical aspect is your financial comfort with the potential increase in monthly payments. Refinancing to a 15-year loan from a 30-year loan can significantly raise your monthly payment, even if…

A zombie mortgage is a haunting financial surprise that can emerge years after a homeowner thought their mortgage was fully paid off or discharged. This second mortgage, often linked to loans from the early 2000s housing bubble, resurfaces with demands for repayment, even though the borrower believed it was settled. Many of these loans were part of "piggyback" financing, where a borrower took out a first mortgage for 80% of their home’s value and a second mortgage for the remaining 20%. Over time, confusion around modifications and loan terms has led some homeowners to mistakenly believe the second mortgage was forgiven or discharged, only for it to rise again—hence the term "zombie mortgage." Zombie mortgages tend to resurface when market conditions improve, and investors seek to collect on old debts.…

When it comes to mortgage rates, the Federal Reserve plays an influential but indirect role. The Fed doesn’t set mortgage rates directly, but its decisions around interest rates significantly impact the financial landscape, including the cost of borrowing to buy a home. Understanding the Fed’s role in monetary policy is key to grasping how mortgage rates fluctuate and what might drive up or lower the rate on your home loan. The Federal Reserve primarily influences short-term borrowing costs by setting the federal funds rate, which is the interest rate banks charge each other for overnight loans. When the Fed raises or lowers this rate, it affects the broader economy by influencing rates on credit cards, car loans, and home equity lines of credit. While fixed mortgage rates aren’t directly tied…

My Answer and 3 Proven Ways to Grow Your Net Worth In the past week, I’ve had several meetings with clients, and one question has come up repeatedly: “Should I focus on paying down my home as quickly as possible?” My answer is almost always no, though I offer a cautious “it depends” in certain cases. More often than not, I encourage my clients to invest their money instead. Many of my clients don’t have a financial advisor and feel uncertain about where to start when it comes to investing. If you’ve ever felt the same way, this post is for you. Please note: I am not a financial advisor (anymore), and this is not formal financial advice. Instead, it’s a guide based on strategies I have personally used—ones that…

The recent 0.50 basis point Fed rate cut has set the mortgage market buzzing, and we’ve been flooded with calls and emails from clients wanting to know their refinancing options. If you own an investment home with a mortgage rate between 7% and 8.5%, this post is specifically for you. For Investment Homes – Hold Off for Now We can refinance your investment home and likely bring your rate down to around 6.99%. However, refinancing comes with costs—typically between $3,000 and $6,000. My advice: wait. Here’s why: The Fed is expected to cut rates again on November 7 and December 18. These cuts will likely lower the 10-year Treasury yield, which directly influences mortgage rates. As a result, the spread between the 10-year yield and 30-year mortgage rates will shrink.…

Mortgage rates have dropped once again, offering a unique opportunity for both homebuyers and current homeowners, with rates at their lowest rate in over 18 months. For homeowners, this may be the perfect time to consider refinancing—replacing their existing mortgage with one that has a lower interest rate. If you’ve been holding off on refinancing due to high rates, now could be your chance to lock in savings. In recent years, refinancing activity plummeted as rates surged from 3 percent during the pandemic to as high as 8 percent in late 2023. However, with rates starting to dip, some homeowners who took out mortgages during the rate hike may find it beneficial to refinance now. For homeowners with adjustable-rate mortgages or those locked into higher rates, the current market conditions…

As a savvy homeowner or potential buyer, keeping an eye on interest rates and understanding how they might evolve can significantly impact your mortgage strategy. With the Federal Reserve expected to cut rates over the next few years, many people are wondering when the right time is to refinance. In this post, we’ll examine the historical relationship between Fed rate cuts, mortgage rates, and the 10-year Treasury yield, and why refinancing now—and potentially again every six months—may be your best financial move.   Historical Context: Fed Rate Cuts and Mortgage Rates The Federal Reserve’s actions have historically influenced mortgage rates, but not always in a direct or immediate way. Mortgage rates tend to follow long-term bond yields, especially the 10-year Treasury yield, more closely than the Fed’s short-term rate changes.…

When you’re in the process of refinancing your home, you expect a smooth, straightforward experience. Unfortunately, the moment your credit is pulled for a legitimate mortgage application, your information can become a target for unwanted solicitations. This is due to what’s called credit trigger leads, and they can put you at risk of being overwhelmed by aggressive and often unscrupulous mortgage lenders who want to hijack your refinance. What Are Credit Trigger Leads? Credit trigger leads are generated when a credit inquiry is made—such as when you apply for a mortgage refinance. Once your credit is pulled, credit bureaus like Equifax, TransUnion, and Experian sell your information to various businesses, including mortgage lenders. These companies are notified that you’re likely looking for a new mortgage and see this as an…

While it’s true that mortgage debt can feel like a burden in retirement, it’s important to remember that your home remains a valuable asset. According to a recent study from the Michigan Retirement and Disability Research Center, many retirees with mortgages still have the potential to thrive financially—it just requires some thoughtful planning. For those who find their mortgage payments manageable, there’s no need to worry. If you love your home and your mortgage fits within your retirement budget, there’s no reason to change a thing. The idea of paying off your mortgage before retirement has long been a goal, but times are changing. Today, many people are buying homes later in life or taking advantage of low interest rates to refinance. This means more retirees are entering their golden…