A Glimmer of Hope for Homebuyers as Mortgage Rates Dip Slightly

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This week, the real estate market received a small but significant reprieve as mortgage rates experienced a slight decrease, offering a window of opportunity for prospective homebuyers. The 30-year fixed-rate mortgage averaged 6.88%, a minor drop from 6.94% the previous week, as reported by Freddie Mac. This time last year, the average was slightly lower at 6.73%.

According to Sam Khater, Freddie Mac’s chief economist, the dip in rates has promptly impacted buyer behavior, with an increase in applications marking the first rise in six weeks. This uptick demonstrates that buyer interest remains highly responsive to rate fluctuations.

In Austin, Texas, homes recently listed for sale are already seeing increased attention, reflecting a broader trend as more individuals are drawn to the market by the reduced borrowing costs. The Mortgage Bankers Association noted that overall mortgage applications surged by 9.7% in the week ending March 1, with specific gains in home purchase loans and refinancing applications.

This resurgence in buyer activity comes as a relief during a period marked by high rates and low inventory, conditions that have rendered the housing market one of the least affordable in decades. However, the landscape is beginning to shift with the onset of the spring selling season traditionally bringing more homes to the market.

Recent data from Redfin indicates a significant 13% year-over-year increase in new listings during the four weeks ending February 25, the most substantial rise in nearly three years. This increase has stabilized the total inventory of homes for sale, which had not seen growth for the past nine months.

The uptick in new listings is not confined to a single region but is observed across 70% of the country’s metro areas, according to Bright MLS. Lisa Sturtevant, chief economist at Bright MLS, notes that the current market dynamics defy traditional expectations that lower mortgage rates are necessary to stimulate selling. Instead, personal life changes such as marriages, births, or the need to be closer to family are now the primary drivers behind many home sales.

As the market heads further into 2024, the trajectory of mortgage rates will likely continue to be influenced by broader economic indicators. Federal Reserve Chair Jerome Powell, in recent congressional testimony, indicated a cautious approach towards rate cuts, suggesting that any significant changes would be closely tied to ongoing economic performances, including job growth.

With the February jobs report looming, which could provide further clues about the economic landscape, both buyers and sellers are advised to stay informed and be ready to act, as the housing market remains a critical reflection of broader economic trends.

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Demystifying Credit Scores for First-Time Homebuyers: Navigating Today’s Market

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Purchasing your first home can seem like a daunting task, especially in a market characterized by housing shortages and sinking affordability unseen since 1984. Many potential first-time buyers may mistakenly believe that only those with impeccable credit scores and substantial incomes can achieve homeownership in such a challenging environment.

However, this common assumption is more myth than reality. Understanding the true landscape of mortgage approval requirements can reveal a different, more accessible path to owning a home than many realize.

Credit Score Misconceptions

Contrary to popular belief, the threshold for credit scores required to secure a mortgage is often much lower than expected. While individual bank requirements vary, the general baseline for a conventional mortgage starts around a credit score of 620, as outlined by QuickenLoans. Remarkably, securing a home loan with a score in the 500s is still within the realm of possibility.

This is encouraging news, particularly when considering that the average U.S. consumer boasts a credit score of 714, according to Experian’s analysis of FICO data. This figure sits comfortably above the conventional mortgage requirement, categorizing the average American’s credit health as “good.”

The True Impact of Credit Scores

While a higher credit score does indeed improve one’s chances of receiving better interest rates, it’s crucial to note that creditworthiness alone does not guarantee housing affordability. High credit scores cannot compensate for insufficient income or lack of savings, which are equally vital in securing a mortgage.

For those whose scores fall below the 620 mark, all is not lost. Alternative financing options exist, such as Federal Housing Administration (FHA) loans, U.S. Department of Veterans Affairs (VA) loans, and U.S. Department of Agriculture (USDA) loans, catering specifically to different borrower needs and situations. These loans can accommodate individuals with lower credit scores, albeit typically at higher interest rates, reflecting the increased risk to lenders.

Navigating Mortgage Rates with Varied Credit Scores

The relationship between credit scores and mortgage rates is direct: the higher the score, the lower the rate. FICO data illustrates this with an example: a borrower with an exceptional credit score can secure a significantly lower rate compared to someone with a score in the lower 600s. This difference can amount to substantial savings over the lifespan of a loan.

Improving Your Credit Score: Steps to Take

Before embarking on the home-buying journey, prospective buyers should consider actions to enhance their credit scores. Regularly reviewing credit reports for inaccuracies, engaging with a debt management firm, or saving for a larger down payment can all contribute to a better credit standing. Additionally, enlisting a co-signer can provide a viable path forward for those struggling to meet credit requirements independently.

Furthermore, many down payment assistance programs are available, offering relief based on geographic location or income levels. These programs can be invaluable resources for first-time buyers facing financial hurdles.

The road to homeownership is not exclusively reserved for those with flawless credit histories. By understanding the real criteria for mortgage approval and exploring all available resources, aspiring homeowners can navigate the current market more effectively. Remember, your credit score is a snapshot in time – with the right strategies, it can be improved, opening the door to your future home. Don’t let misconceptions deter you; take control of your financial future and explore the possibilities that await.

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Co-Owning a Home

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Purchasing a home is an exciting adventure and can be a big financial and legal investment. This can be a big step if you are single but you can always share the responsibilities with someone else to ease the financial obligations of home ownership.

Co-ownership is a great way to do this, but you want to make sure you are purchasing a home with the right person. Make sure this is a person that you can see yourself co-owning with. YOu do not want to depend on a co-owner who will miss mortgage payments.

When you are choosing a co-owner, ask about their credit score, this can have an impact on getting a home loan. Also, discuss any debt they owe because you want to have a good debt-to-income ratio. Make sure your partner has savings to help cover upfront costs.

Before taking this step, make sure you look at the advantages and disadvantages of co-owning a home. Some advantages include pooled resources, more money for a down payment and companionship. Some disadvantages are financial risk and unequal responsibilities.

When you do decide to buy a home with someone else, you will want to choose the best type of homeownership for your situation. Tenants in common means that each buyer will have an equal share of the same property. As the buyers, you can determine what each share is. For example, you can split the shares 50/50 or unequal shares like 70/30. You can sell even if your partner does not want to sell in a TIC.

Another option is Joint Tenants with Right of Survivorship. In a JTWROS deed each owner has an equal interest: 50/50 for two owners or one-third interest for three owners. This means that if one of the joint tenants passes away, their share will go equally to the remaining owners. This is usually the best option when close family members are purchasing a property together.

Tenants by the Entirety TBE means there is joint tenancy with the right of survivorship. This means that each owner owns one percent of the property. This is usually what is used by married couples.

When you do figure out which deed you will use, then you can also get a co-ownership agreement that will lay out the rights and responsibilities of each owner. This will help manage any conflict. You will want to include:
-Expectations regarding the use of the property
-Expectations of other owners
-Expenses (include property taxes)
-Division of household duties
-Overnight guests
-Pets
-Furniture

Homeownership is a great live event, but you need to make sure you do it the right way. Before making a commitment to this significant investment, contact a local real estate attorney who can help you with the process.

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Covington’s Tammany Gras

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Mardi Gras 2024 in Covington will now follow a Lundi Gras tradition from over a hundred years ago. This year a new krewe will be added which is named Krewe of Bogue Falaya. The theme will be “School Daze in a Mardia Gras Haze” with a reception at the Covington Trailhead.

“It perfectly embodies Covington’s Mardi Gras traditions and its rich historical background,” said Kellie Osbon, a member of the Covington Business Association and krewe member who attended the announcement. There will be three parades that will be followed up with the Tammany Gras celebration. This will be located at the Covington Trailhead on New Hampshire Street.

Krewe of Bogue Falaya which includes 600 members will have 20 traditional floats. There will also be marching bands, horse groups, Saints Superfans, dancing groups and other marching organizations.

The first grand marshal will be Grayhawk Perkins who is from Mandeville. He is a tribal storyteller, performer, musiciana nd educator. He has been a staple to the northshore for over 25 years. There is a new logo for the group and the floats will include art history, shop class, mythology and music.

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What To Know About Beneficiary Planning

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When it comes to assets, who would get them if you were to die? This is handled by assigning a beneficiary.  A beneficiary is a person or entity you choose to receive anything that’s left in your retirement account when you pass away. This means if you name a beneficiary, then you make sure your funds and assets go to them if you are no longer living.

There are different types of beneficiaries. A primary beneficiary can be a person, a charitable organization, a trust or an estate. There can be more than one primary beneficiary. The allocations just have to total 100%. Contingent beneficiaries are those who receive your assets if all of your primary beneficiaries are not living. Then there are “per stirpes” designations which are added to the primary beneficiaries. An example of this is if you have an IRA and you have two kids and they are equal beneficiaries per stirpes. If you pass away and one of your kids has three children and passes, then their kids would get their half.

Naming a beneficiary is very important. If you need help, you can always contact professionals in the industry who can direct you in the right path.

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