Month: July 2024

This week marks a positive shift for prospective homebuyers, as mortgage rates have stayed below the 7 percent threshold. This is the first time since February that the average 30-year fixed rate has dipped into the sub-7 range. The catalyst for this decrease is the growing optimism that the Federal Reserve might cut rates in the near future, providing a glimmer of hope for those looking to secure a mortgage. Currently, the average rate for a 30-year fixed mortgage is 6.90%, slightly down from 7.02% four weeks ago and 6.98% a year ago. For those considering a shorter-term commitment, the 15-year fixed mortgage stands at 6.24%, and the 30-year jumbo mortgage is at 6.97%. These rates include an average total of 0.28 discount and origination points, which are fees paid…

The landscape of home buying has evolved significantly, and this is particularly evident when examining down payment trends in 2024. The median down payment on a home in the U.S. during the first quarter of 2024 was $26,700, which represents about 8% of the median home purchase price at that time. This figure highlights a shift from the traditional 20% down payment that many prospective homeowners believe is necessary. The minimum down payment required for a mortgage can vary greatly, depending on the home's cost and the type of mortgage. Despite the belief that a 20% down payment is standard, many mortgages today allow for much smaller initial investments. Some loans require as little as 3% or 3.5%, and certain loans, like VA and USDA loans, have no minimum down…

For first-time homebuyers considering their mortgage options, a convertible adjustable-rate mortgage (ARM) offers a compelling combination of lower initial interest rates and monthly payments, along with the flexibility to switch to a fixed-rate mortgage later. This option can be particularly attractive for those seeking initial affordability. However, understanding the specifics of a convertible ARM is crucial to determine if it aligns with your financial needs. A convertible ARM is an adjustable-rate mortgage that includes a conversion clause, allowing borrowers to switch from an adjustable rate to a fixed rate without refinancing. This option usually becomes available after an initial fixed-rate period of five, seven, or ten years. While there is a small fee associated with this conversion, it can result in more stable and predictable monthly payments for the remainder…