It’s tax time again. The time of year when everyone is gathering W2s, 1099s and other financial documents from the past year to not only prepare for filing their taxes, but to determine how much can be saved through deductions and credits. Home and mortgage related expenses are one of the biggest ways to save money when filing, but we know it can be difficult and a little overwhelming to know exactly what and how you may be eligible for certain tax breaks. Since we want to help you get the most out of your tax refund, here are eight ways homeowners can benefit from the tax system. (more…)
If you’re considering purchasing a new home and applying for a mortgage, consider what lenders are looking for in qualified applicants. Understanding how your credit score is calculated can help you improve your credit and help you lock in a low rate.
Your credit score is a number based on different factors in your credit history, including:
1. Payment History. Do you make your payments on time or are you late? If you’re late, how late are those payments? Are you paying in full or only making minimum payments?
2. Amounts Owed and Available Credit Balances. Creditors look at how much installment and revolving debt you owe. But they also want to know what percentage of your available credit balance you are using.
3. Length of Credit History. How long have your credit accounts been open? Which accounts have been closed and why?
4. New Credit Accounts. Opening several new accounts can affect your length of credit history, your available balances and could negatively impact your credit score.
5. Types of Credit. Creditors like to see a variety of types of credit, including installment loans (such as auto loans), revolving loans (such as a mortgage or home equity loan), and open credit accounts (such as credit cards).
Paying your bills on time and your available balance are the two biggest factors in calculating your credit score, accounting for over 65 percent of your credit score. Handle these two things well and you’re more likely to have a higher credit score.
Although the last three only account for 35 percent of your score, if you keep applying for new lines of credit, it will affect your score. In other words, don’t go opening a bunch of credit cards!
With record low rates, now couldn’t be a better time to improve your credit to lock a rate.
See full article at Equifax Finax Blog
Mortgage rates fell this week to the lowest level on records dating to 1971, giving consumers added incentive to lock in low payments for home purchases and refinanced loans.
The average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent last week, mortgage company Freddie Mac said Thursday.
That’s the lowest point since Freddie Mac began tracking rates in April 1971. The previous record of 4.71 percent was set in December. Rates for 15-year and five-year mortgages also hit lows.
Mortgage rates have fallen over the past two months as nervous investors have shifted money into the safety of Treasury bonds. The demand for Treasurys has caused Treasury yields to fall. And mortgage rates tend to track the yields on long-term Treasurys.
“As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better,” said Greg McBride, senior financial analyst with Bankrate.com.
Low rates throughout the economy also hurt one group of Americans: savers. Puny rates are especially hard on people living on fixed incomes who are earning next to nothing on their savings.
Lending activity remains sluggish. Mortgage application volume dipped 6 percent last week from a week earlier, according to the Mortgage Bankers Association. Refinancing activity fell 7 percent. And mortgage applications to buy homes slipped 1.2 percent.
Given the costs of refinancing, some mortgage experts say a refinancing can be worthwhile if you can shave at least 0.75 percentage point from an existing rate. Others suggest waiting until you can lower your rate by at least a point.
People considering refinancing should factor in such fees. They should also calculate how many months it would take to recover them. For those who expect to stay in their home for two years or less, the fees might outweigh the savings from a lower rate.
Rates on 15-year fixed-rate mortgages fell to an average of 4.13 percent. That was the lowest on records dating to September 1991. It was down from 4.2 percent a week earlier.
Rates on five-year adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac’s records, which date back to January 2005 for such loans.
Average rates on one-year adjustable-rate mortgages fell to 3.77 percent from 3.82 percent. That was the lowest average since May 2004.
The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for 30-year, 5-year and 1-year loans. The average fee for 15-year loans was 0.6 of a point.