The Fed’s Message

Volume 13 Issue 7 July 2018

W

e now have had some

time to deci-

pher the

Federal

Reserve Board's statement

after their meeting last

week. The tone of the

message can be described

as hawkish. The Fed used

words that were a bit

stronger with regard to the

economy and the future of interest rates.

For example, economic growth was

described as solid, rather than moderate

as in their previous missives. This

growth is being supported by a pick-up

in household spending and a decline in

unemployment.

Though they are still using the term

"gradual increases" to describe

their rate hikes, the statement

pointed to the members' opin-

ion that two more rate increases

were in the cards for this year.

In other words, the pace of

gradual increases seems to be

accelerating.

The Fed no longer is worried

that inflation is below their 2.0% target

rate because inflation is now close to

their short-term target and the focus

appears to be shifting on the side of

keeping inflation from moving higher

from here.

In This Issue P2 Pre-listing Inspection || P2 What To Do With Hard To Sell Homes

P3 The Feds Message || P4 Skipping the Starter Home

Did You Know… Homebuyers with a lower credit score can wind up paying $21,000 more than a buyer with an excellent credit score. Nationally, data shows that a borrower with an "excellent" score could get a home loan with rate approximately 0.6% lower than a borrower with a "fair" credit score. The borrower with the "fair" credit score would thus spend $700 more per year for the typical home. In pricier housing markets, the extra dollars paid would be significantly greater. Source: Zillow

Selected Interest Rates

June 21, 2018 30 Year Mortgages——–4.57%

2017 High (May 24 %

2017 Low (Jan 4)———–—3.95%

15 Year Mortgages——-4.04%

5/1 Hybrid ARMs——–—–3.83%

10 Year Treasuries—–—–2.90%

Sources—Fed Reserve, Freddie Mac

Note: Average rates do not include fees

and points. Information is provided for

indicating trends only and should not be

used for comparison purposes.

Continued on Page 3

THIS NEWSLETTER IS BROUGHT TO YOU BY:

What To Do With…

E

ven in the best real estate markets, some homes are harder to sell. Perhaps they

are unique, have a hard to reach location or there is another feature which is not appealing. Whatever the reason, there are many things you can do in order to promote a hard to sell home.

First, make sure your real estate agent is doing everything they can to promote your property. With a home that is not selling, it is hard for the agent not to decrease his/her promotional efforts due to budget constraints and general discourage-ment. There are many things you can insist the agent do as part of his/her role as the listing agent–

• Hold an open house on the week-end.

• Hold a “broker-open” to intro-duce the property to other agents.

• Include the house in his/her regu-lar advertising efforts, including the web and social media.

• Make sure the agent has call-capture technology (an 800 num-ber that can track callers) so that the listing sign is encouraging those who pass by to call and get more information.

Second, offer special financing. You can continue lowering the price, but

a special loan program may cost you less and actually attract more browsers. One such alternative is buying down the interest rate. This may be combined with of-fering to pay the closing costs for a potential buyer.

If all else fails, you can rent the property. You may not be thrilled with the prospect of becoming a landlord. However, this may not only help you with your cash-flow, but also put you in a position to sell the house later when the home is more marketable. There are many factors you should consider before you make a move to rent. These considerations include:

• Cash flow–will the rent cover the mortgage and what happens if the property is vacant for a few months?

• Tax ramifications. Tax benefits for renting may not be available for those in higher income brack-ets. You also may be subject to capital gains when you sell in the future.

• You will need to screen potential renters and keep up maintenance

Page Two

“…foreclosure is

always the last resort...”

F

or homeowners consider-

ing a move, some experts

are recommending they

get a home maintenance

inspection before they list their

home for sale. Such an inspection

can provide a full picture of any

repairs that need to be performed

before they become negotiating

points in a transaction. A home

maintenance inspection is similar

to a home inspection that is done

by buyers, says Frank Lesh, presi-

dent of the American Society of

Home Inspectors.

A licensed inspector can check on

the main systems of the home, such

as the roof, foundation, HVAC,

electrical, and plumbing. An in-

spector may be able to spot small

problems before they become big-

ger issues. They can also advise

clients on the regular maintenance

tasks they should be doing on their

home to keep everything in tip-top

shape. The report details anything

the inspector finds, which can

serve as a to-do list to address, if

they so choose. “Every three to

five years, you should have a home

inspector come out and do a

maintenance inspec-tion,” advises

Lesh. “Like changing your furnace

filter, you should do it before it

gets so bad [that it becomes] a

problem.”... Source: realtor.com®

Pre-listing

Inspection

Page Three

on the property. For some, that means hiring a property manager.

• If you have equity in the property, you may need a home equity loan to access this equity if you need a down payment for another pur-chase.

• Your insurance coverage will have to be updated.

In addition, you may consider refinancing your home to lower the payments or move out of an adjusta-ble rate mortgage. This can be done in order to help you stay in the prop-erty or to take cash out to finance another purchase if you are going to rent the property. Keep in mind that some loan programs may not let you

refinance a home that recently has been or is currently for sale. We recommend you check with your loan officer before attempting such strategy.

There is one last issue. What if you can’t sell and are unable to rent or refinance? Foreclosure is always the last resort. If you are having trouble making your payments, we recom-mend you talk with your present lender as quickly as possible—

before you become late with payments. The lender may be able to help in a few ways. Certainly, putting you in a new mortgage or modifying your loan is less costly for them than having to sell your property within the foreclosure process...

...Hard To Sell Homes

©2018, All rights reserved

The Hershman Group www.originationpro.com

1-800/581-5678

The Fed’s

Message

Continued from Page 1

“…We can’t

forsee any of

these…”

While the markets seem to find the

path ahead inevitable, we must re-

mind our readers that there is al-

ways the possibility of intervening

events which could cause the Fed to

change their course. In the past we

have seen natural disasters, political

upheaval, strikes, terrorist incidents

and more.

We can't foresee any of these and

everyone hopes they don't happen.

However, we need to understand

that predictions are just that. No one

can ordain the future. And that is

what makes the markets and life

very interesting….

Skipping the Starter Home

Address Correction Requested

In This Issue:

The Feds Message

B

ecause of improved standards for utilizing new and existing public

records, the three major credit reporting companies are now exclud-

ing all tax liens from credit reports. That means some scores will

head higher. Credit scores, notably those from FICO, one of the

largest credit scoring companies, generally range from 300 to 850. Credit

reporting and scores play a key role in most Americans' daily life. The process

can determine the interest rate a consumer is going to pay for credit cards, car

loans and home loans — or whether they will get a loan at all.

The new rules come following a study by the Consumer Financial Protection

Bureau that found problems with credit reporting and recommended changes to

help consumers. Last July, credit reporting companies removed nearly 100% of

civil judgment data and about 50% of tax lien data from credit reports.

Effective mid-April, the rest has been removed. LexisNexis Risk Solutions

predicts that about 11% of the population will have a judgment or lien removed

from their credit file. Once that information is stripped out, credit scores may

go up by as much as 30 points overall, LexisNexis found. Other industry

groups have said these changes will have less of an impact...

Source: CNBC