A Drop in the Mortgage Rates

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November saw the mortgage rates drop for five weeks in a row when reported. At the end of November, the 30-year fixed-rate dropped to 7.22% according to Freddie Mac.

“Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates,” said Sam Khater, Freddie Mac’s chief economist.

“The current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today’s levels,” he said.

Freddie Mac states that the average mortgage rate is based on the mortgage applications received by Freddie Mac. They believe that the rate decline is due to the mortgage rate cycles peaking. These rates have been brought down by the Fed’s historic rate hikes that have been applied the past couple of years.

“While some Federal Reserve policymakers expressed growing confidence that the existing monetary policy is sufficiently restrictive to reduce inflation to the 2% target, others emphasized the potential necessity for additional rate hikes to achieve the target over a reasonable timeframe,” said Jiayi Xu, an economist at Realtor.com.

“The good news for prospective homebuyers is that affordability is expected to turn around in 2024, though at a slower pace, through a combination of lower mortgage rates and lower prices brought about by cooling inflation and a less frenzied housing market,” Xu said.

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The Ins and Outs of Loan Origination Fees

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A loan origination fee is a one-time, upfront charge for processing a personal loan. It can also be called a sign-up fee or an upfront fee. The fee amounts to a percentage of the loan amount’s total. For example, if you have a loan for $10,000 and your origination fee is 5%, then $500 will be taken from the total amount borrowed. So you will receive less money than the actual loan. Even though you get a check for $9,500, you will still have to pay back the $10,000.

Different lenders will charge different percentages of loan origination fees which usually range from 1% to 8%. A bigger loan means a bigger loan origination fee. When you borrow $15,000, different loan origination fees can affect the costs. For example, if your origination fee is 3% you will only get $14,550 of your loan. If you need to get $15,000, you will have to borrow $15,464. If your fee is 8%, then you would have to borrow $16,305.

So why do origination fees even exist? An origination fee is the way a lender earns money off of the mortgage. It will cover administrative fees, verification or credit checks, or other processing expenses. Luckily, there are personal loans that do not have origination fees. If you choose a loan without one, you will save money on the loan’s interest, lower the cost of the loan, and you can borrow the full amount without paying more fees.

You want the best deal, so you need to find a loan where you only pay interest on the loan. To do this, contact and shop around for a lender who is right for you.

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Refinancing a Land Loan

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When refinancing a land loan a person dislikes the costs associated with refinancing and this can cause a person to pause when thinking about refinancing. This is not always the case and so it is important to understand the ins and outs of refinancing a land loan.

“Most people who’ve had a house loan or residential mortgage loan are familiar with the substantial costs to refinance their loan when rates go down. That’s because, in most cases, when you refinance a residential mortgage loan, you have to get new title work done, a new mortgage, a new appraisal, sometimes new surveys, so you can be talking thousands of dollars in fees,” says Brandon Simpson of First South Farm Credit.

Many do not know that there are other options when it comes to refinancing. If you find a lender such as First South or Farm Credit System who will not only make the loans but service them as well, you can save. Since these mortgages will not be resold into the secondary mortgage market, you can benefit from the lower rates.

This is called repricing which means you only sign two or three documents. ”In most cases, we’re not having to order new appraisals and do all of the work associated with a refinance, so you’re likely to only spend hundreds of dollars in fees versus thousands. We can do that as many times as it makes financial sense for that borrower. For example, if a borrower in today’s market is paying 8.5%, and the rates drop to 7.5% or 7.0%, we can modify the note to the lower interest rate. And… if the rates continue to drop to maybe 6.0% or lower, we can modify the note again,” explains Simpson.

Remember not all lenders will offer repricing. You need to find a lender such as First South Farm Credit that offer note modifications.

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Must-Have Legal Documents When Your Child Turns 18

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Once your child turns 18, they are adults and are “legally on their own” but you still want to be the provider and protector at this young age. Once they leave home, you want to be able to still help and provide if an accident or illness suddenly occurs.

If there is a medical emergency a health care proxy (health care agent or medical power of attorney for health care). This form will allow you as a parent to make medical decisions on your teen’s behalf. Once your teen signs a healthcare proxy, they are appointing you to act on their behalf when it comes to making medical decisions. You will want to check with the state you currently reside in to become familiar with the laws. Each state has different laws when it comes to obtaining a healthcare proxy.

Medical professionals are very familiar with HIPPA and you should be too. HIPPA stands for Health Insurance Portability and Accountability Act and it allows healthcare providers to share your teen’s medical information to you, or anyone that is on your teen list. This usually suffices in most cases when it comes to your teen’s medical records and communicating with their medical professionals.

Durable POA stands for Durable Power of Attorney which allows you as a parent to make financial decisions on your teen’s behalf. You can use this document right after it has been signed or choose to use it only if your teen becomes incapacitated. As a parent, you will be able to sign tax returns, access bank accounts, pay bills, make changes to your teen’s financial aid package or if there are tuition problems. Again, there are different variations of this form depending on what state you reside in, so double-check with your state’s laws.

Remember even though your 18-year-old child is still a child to you, under the law, they are an independent adult. Protect your child and yourself by getting these documents once they turn 18.

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Probate And A Parent’s Trust Fund

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If you’re smart, you try to plan ahead but even if you do, your heirs will end up spending time and money to go to court to settle your affairs. Many of us assume that if you have any legal document on the distribution of assets, then you are good to go.

“But sometimes you just need a little probate,” says John Ross of Ross & Shoalmire.

Many estate attorneys will have families sign both a will and a trust at the same time. A lot of times they will need both documents. Even though the trust does spell out most of the financial matters, not all are included. This means you will have to deal with probate in some sort of fashion.

Getting a good thorough trust can be a lot of time and a lot of money. Many families get a trust but do not list out every asset in the trust. “Think about a trust like it’s a bucket. It’s a great thing, as long as the bucket is completely full of your stuff. If your stuff is not all in the bucket, it’s not so great,” explains Ross. He also goes on to say that a title needs to be clear and if it is not then it will be probated.

In many cases, a client will sign a trust and feel covered, but in order to completely avoid probate they need to make sure every one of their assets goes to a beneficiary listed. If a name is forgotten or the beneficiaries have passed, the money will get locked up until the heirs go through probate court.

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