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Do You Like Low Interest Rates?
May 9, 2017 /Interest Rates Unchanged After The Fed's Wednesday Meeting After its meeting this Wednesday, the Fed voted to leave interest rates unchanged, keeping its benchmark rates at 0.75-1.00%. The decision was a response to the economy’s slow .7% growth in the year’s first quarter. Much of this slowing growth can be attributed to the transition period following the presidential election, so the Fed remains optimistic for future economic growth. In that case, two more rate increases are expected by the end of the year. The next rate hike is expected to occur in June as long as the economy continues to grow, while many experts expect a second increase to occur in September. Overall, the decision seems to have had a very slight indirect effect on mortgage rates. As of Thursday, the average 30-year FRM was down about 1 basis point, hovering around 4.02%, while the average 15-year ARM and remained around 3.27%. And, though rates are always changing, many experts don’t expect them to increase dramatically between now until the end of the year. Many economists expect the 30-year FRM to fall between 4.2-4.5% at the end of 2017. For some, these rates might seem to be way too high.…Read more
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Rain, rain, (Don’t) Go Away
April 28, 2017 /I don’t know if you’ve noticed, but Seattle’s had quite a lot of rain recently. For the second year in a row, Seattle has broken a century-plus record for rainfall, enduring almost 50 inches of rain since the beginning of October. Usually, the city gets just over 30 inches by this time, so it would be an understatement to suggest that it’s been moist lately. In fact, the whole of Western Washington seems to have been caught in the deluge. Quillayute in Clallam County, for instance, has received more than 100 inches of rain since the beginning of October, or more than 10 feet. To put that number in perspective, if you were to clone me (because why not?) and perch my double on top of my shoulders, our combined height would be only slightly taller than the amount of rain that’s fallen in Quillayute. Some of you (all the transplants from California, I expect) might balk at this veritable monsoon. However, I’ll take the opportunity to be bold and suggest that life in Seattle is at its finest when experienced under a constant curtain of drizzle. I’ve already written about how much I love rain in Seattle, so I…Read more
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Neighborhood Profile: Capitol Hill
March 17, 2017 /For some, going home means retiring to a quiet corner to enjoy a predictable evening away from the city’s stressors. For others, going home means embarking on an eclectic adventure full of new surprises and opportunities. If you’re a member of the latter camp, then Seattle’s Capitol Hill might be the perfect place to call home. Capitol Hill is indisputably one of the Emerald City’s most important cultural hubs, and residents of the hip urban neighborhood can enjoy a vast and diverse assortment of restaurants, bars, and art galleries. In fact, there’s so much to do in Capitol Hill, even longtime natives of the area are still likely to enjoy new experiences and fresh surprises. If you’re looking for some of Seattle’s best restaurants, Capitol Hill is certainly the place to start. The neighborhood serves up many different kinds of cuisine, so even the pickiest eater can find something to munch on. Stateside uses seasonal ingredients to serve traditional Vietnamese cuisine with an innovative French twist. If you’re looking for something a little more traditional, Poquitos boasts some of the best Mexican food in the city, while Bateau offers delicious farm-to-table ingredients fresh from their farm on Whidbey Island. Or,…Read more
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How Paying Off A Mortgage Builds Wealth
March 10, 2017 /Few homeowners are likely to say that they enjoy making monthly mortgage payments. Fulfilling an essential financial duty might be satisfying in the same way that cleaning one’s room or emptying the dishwasher is satisfying, but few people are likely to relish the act of paying off a mortgage. Which is strange, because most people enjoy receiving checks in the mail. While paying for a mortgage and receiving a paycheck aren’t quite the same, the comparison highlights an important feature of owning a home and having a mortgage: both are far better at building wealth than renting. The classic argument for this idea is that, while rent checks pay for a physical space that the renter will never own, a mortgage payment finances a piece of property that will one day be owned completely by the occupant. However, while this reasoning is perfectly sound, it also misses a key factor in a mortgage’s wealth-building power: mortgage payments contribute to building home equity, while rent payments do not. Let’s say, for example, that you’ve just bought a $250,000 house using a 30-year FRM. The beauty of this loan is that, no matter what the market does in the three decades following…Read more
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How I Got The Gumption: The FHA 203K Loan
March 3, 2017 /Sometimes, renovations can cause even the mildest mannered homeowner to panic. After all, home improvements can be costly and stressful. However, when Pickett Street’s very own Margaret Smith, Director of Operations, decided to purchase a vacant, bank owned fixer-upper, the FHA 203K Loan presented her with an opportunity that turned the process into a dream come true. Margaret bought her duplex in south Everett near Paine Field in August 2014. It was a bank owned property, meaning nobody had been living there for over a year. The previous owners had gone into foreclosure, so the home sat there vacant, lacking love and attention. The upstairs unit was a 3 bed, 1 bath layout that Margaret planned to rent out. It needed a new bathroom, new washer and dryer, a fresh coat of paint on the laundry room walls, and an all-around thorough scrubbing. The bottom unit was a 2 bed, 1 bath layout that was perfect for Margaret and a roommate. That 2 bed unit also needed a new bathroom, new kitchen and new vinyl wood flooring (which also needed to be leveled). The bottom half of the duplex’s exterior required a new paint job, and some general TLC. The…Read more
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Landmarks of Washington State: The Fremont Troll
February 20, 2017 /When my parents told me we were going to see the troll under the bridge, I was a little worried. For one thing, I was five years old, the age when one still imagines that monsters live under the bed. Also, I’d originally been told that we were going to the beach: as recent transplants from New Jersey, my parents failed to realize that Washingtonians don’t visit any kind of seaside locale outside of August, and so they’d promised to drive the family to Alki Beach on February 15th, 1995. You can imagine my dismay when we arrived and found a grey waste of fog and mist hovering over the steely edge of the Puget Sound. As I recall, my tiny Hawaiian shirt, flip-flops, and white tube socks (essentially the miniature version of a middle-aged man’s attire during a vacation to Miami) were particularly unsuitable for the situation. Since there was little point building sandcastles in 30 degree weather, my parents came up with a backup activity: visiting the Fremont Troll. Though the Fremont Troll has become a major Seattle landmark, back then it was a relatively new addition to the city. The troll (which, for no apparent reason, I’ve…Read more
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Five Tax Breaks for Homeowners
February 10, 2017 /Now that it’s February, most of us have probably emerged from our flabbergasted holiday stupors and (with the help of a strong cup of coffee), finally achieved normalcy just in time for tax season. However, before you panic and begin overturning couch cushions to find the receipts you foolishly lost back in September, it’s useful to remember that plenty of helpful tax breaks exist for homeowners. Tax breaks for homeowners vary widely according to each person’s unique situation. Even so, it helps to be aware of the general options available for homeowners looking to save money during the tax season. Read on to learn more about how your home can help you save money when it comes time to file. Deductions for Mortgage Interest The interest American homeowners pay on a mortgage is tax deductible. For those who are married and filing jointly, it’s possible to deduct your interest payments for mortgages totaling as much as $1 million. Additionally, private mortgage insurance payments are deductible for those homeowners who took on a mortgage after 2006. Overall, these tax breaks make a big difference when it comes to alleviating the financial burden of homeownership. In fact, in 2011 American homeowners benefited…Read more
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No Need to Fear the Downpayment
February 3, 2017 /New homeowners are liable to get nervous when it comes to applying for a mortgage. Many people have trouble sifting through the real estate terminology and the legal requirements of buying a home. However, if there was one aspect of buying a home that makes people the most nervous, it’s probably the downpayment. If making a downpayment is stressing you out, you should know there are many ways to obtain downpayment assistance, or even secure a mortgage without any downpayment at all. So, if you’re a buyer who wants to make a very low down payment or avoid one altogether and maintain maximum liquidity, check out some of the options outlined below. State Bond Loans In general, State Bond Loans help buyers secure a loan at below-market interest rates. The exact rates offered through State Bond Loans vary, but they generally increase long-term affordability and decrease monthly home payments. These bonds are available through local housing agencies, which sell tax-exempt mortgage revenue bonds and then use the income from these sales to offer below-market rate loans to buyers. This type of loan looks a little different depending on the state you’re living in. The Washington State Housing Finance Commission is the organization…Read more
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Who’s Afraid of the FHA?
January 12, 2017 /At the beginning of the week, the Federal Housing Administration announced it will decrease its annual mortgage insurance premiums by .25% annually or from .85% to .6% per year. This measure will go into effect for new mortgages closing or starting disbursement on or after January 27, 2017. This is the first reduction in insurance premiums since January 2015, when the FHA reduced premiums by 50 basis points. While this decrease might seem modest, experts estimate that it is likely to save consumers hundreds of dollars each year. For instance, with this reduction a homeowner with a $200,000, 30-year fixed rate mortgage can expect to save about $500 annually. Looking at the larger picture, it’s expected that the reduction in insurance premiums will in total save $5 million for about 1 million borrowers. The announcement arrived on the heels of the FHA’s fourth straight year of economic health. In fact, since 2012 the FHA has reportedly increased its assets by over $40 billion. With such successful economic growth, the FHA has determined that offering lower prices to borrowers is fiscally responsible. The FHA’s decision further cements its importance for prospective homeowners. Since the Great Recession, FHA loans have been vital…Read more
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Education = Power.
December 2, 2016 /Mortgage Rates on the Rise as Equities Recover As expected, mortgage rates climbed during Thanksgiving week as equities recovered based on speculation of economic expansion. In fact, these market conditions led the Dow Jones Industrial Average to record highs. In general, with election season fading into the rearview mirror and with Trump beginning to assemble the foundations for his political team, it’s expected that markets will return to a sense of normalcy after their initial uncertainty. That’s not to say that we won’t see any more volatility; in fact, market experts expect that, even if things are settling down now, we should expect a few more market surprises in the foreseeable future. Any political concerns aside, it’s important to note that mortgage rates are increasing, just as this blog has predicted on numerous occasions. More specifically, just before Halloween, the average 30-year APOR was about 3.52%. By the end of the first week in November, that rate had recorded a modest increase and risen to 3.58%, while it rose again the following week to 3.61%. By the end of Thanksgiving week, the average 30-year APOR had increased to about 3.98%. Likewise, MarketWatch estimates that the average 30-year FRM has…Read more
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2016 Election: Why you should buy a home now
October 28, 2016 /No matter what side of the electorate you find yourself on, most of us can agree that the United States is approaching a transitional period. In times of transition, people can resort to a fight or flight mentality that occasionally reaches unneeded proportions (remember the Y2K craze? Guess y’all didn’t need to dig bomb shelters and stock up on canned goods after all). However, if you’re anticipating the coming election with some unease, it might help to consider how the election will affect the average mortgage rate. I suggest this consideration might help because, historically, elections have not had dramatic effects on mortgage rates. Of course, there is always a certain level of uncertainty during election years that tends to affect the economy. By extension, there are often mortgage rate fluctuations during the time immediately following an election. Don’t let that prospect worry you, though: remember that mortgage rates are in a constant state of change, and a permanently stable mortgage rate would be strange. In that case, we shouldn’t view mortgage rate fluctuations during election season much differently than other mortgage rate fluctuations. But don’t take my word for it; check out some examples of mortgage rate changes…Read more
