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What’s up with interest rates?!

Jul 30, 2021

When I started originating mortgages, interest rates were at 11%! Back then, FHA only did rates at .5% increments so when they finally dropped to 9.5% the world went crazy as they were so happy that rates had dropped below 10%. Most of us choose not to remember those days and history has shown that this period in time was a fluke. In fact, if you look a historical rate chart (going back to 1790) you could see that the “normal” interest rate would be around 7.5%. Most of us want to forget the late 80’s and early 90’s (some of you were not around even) and one would argue that could never happen again.


Why would I say it could never happen again?

We now have a global economy; 24 hour news and 24 hour trading so the likelihood of those super high rates would be devastating to the world economy and most likely would not happen again. (lets keep our fingers crossed that this thought is accurate and good for us)

But we are seeing a rise in rates from the low to mid 3%s. The difficulties with the low 3’s was that, that too was a fluke. The US credit rating was in jeopardy due to mortgage defaults and foreclosures. Our bond market was falling apart and our economy could not handle that. The Federal Reserve started buying mortgage backed securities (something it has never done before) and that sent the rates artificially low. This helped people keep their homes (which means the values do NOT drop and actually increased) while preserving our credit rating. Now the Fed has stopped buying these securities and is letting the market get back to normal.

The impact of the low rates has helped create the housing shortage we are experiencing. Many people bought or refinanced their home into the low rates. As rates start to get back to normal market prices, it is making people rethink the idea of moving just to move into a different home. Less people selling, less inventory. We always have first time home buyers, couples that are starting a family, getting married, job promotions and they want to purchase their first home or a move up home, but with less people selling, the house prices go up.

Interest rates are going up due to a number of things.
1) We have an improving economy. When the economy grows, stocks go up and the big investors put their money into the stock market. The bond market is competing with the stock market so interest rates have to increase to attract investors. ( I am talking about 401k funds, Insurance companies, foreign countries etc. not the investments you and I make) This is “normal” market conditions and will cause the rates to tick up.

2) Inflation. When the economy grows, so does inflation. As inflation goes up, interest rates go up.

3) The Fed is intentionally shrinking its balance sheet with bond holdings and selling them off. (they had never purchased them before and now have to get rid of them) This is putting upward pressure on the interest rates.

4) The Fed has been raising interest rates. They began in 2015 and the general consensus is the Fed will raise rates 4 times in 2018 as opposed to 3 times as originally anticipated.

Bottom line is this. If you are looking for a home, try to get your head around the fact that rates are ticking upward, but that is okay. The average mortgage is 7 years. I am not saying people move every 7 years; I am saying the average length of a mortgage. People refinance, or sell and buy a new home. You are NOT making a 30 year decision on the mortgage. If you work with the Scott Miller Team, you will be in contact with us on a regular basis and we will run the numbers so you can make a good decision on moving, refinancing, etc. If you are looking to buy a home, YES its a great time to buy. If the rates get better, we will simply refinance it or it will be time to move up. Since the interest rates cannot be controlled by us as consumers, don’t make that your factor. Buy the home that meets your financial requirements for today, in the future when you are ready for a move, you will be well situated financially for success.

As always if you have any questions please call The Scott Miller Team at Nations Lending at 612-751-7268.

30 Jul, 2021
Since the mortgage market crashed, there have been a LOT of changes. Many of the changes were good and have made the industry better. However, some of the changes have made it challenging for some buyers to obtain a home mortgage The “speciality” loan have gone away, . . . . or have they. We have the ability to broker loans and have many programs that most lenders do not offer. DO NOT qualify yourself, if you are not sure what loan options are available for you, call me at  The Scott Miller Team at Nations Lending  at 612-751-7268 or Scott.miller@nationslending.com and let us find the right loan for you
30 Jul, 2021
One of the biggest benefits received by our customers is working with our team. We have two people (that you see) available, at no extra cost, to serve our clients. I would like to introduce to you Nancy Rymer. Nancy has over 35 years in the mortgage industry. She has processed, underwritten, originated and managed departments throughout her career. Her experience and knowledge is a HUGE asset to our team and for our customers as she can see issues before they happen. Nancy makes the mortgage process go very smooth as she prevents the delays BEFORE they happen. We would love to show you the difference our team makes in the mortgage process. Call The Scott Miller Team at Nations Lending at 612-751-7268 or email Scott.miller@nationslending.com
30 Jul, 2021
We have all heard that your home is the biggest purchase you will make. For most, that is true. However, how did you pick the right mortgage that helps you financially? Did you pick the term of the loan based on what your friends and family suggested? Do they have a complete understanding of your financial picture? Do they know what your long term goals are? Do they know your income and what you are spending or how you are saving? If the answer is no, then do you have the right mortgage? Financing the biggest purchase of your life is as important as how much you spend on that purchase. Did you put a lot of money down? Do you have other debt that would have been better to pay off rather than put money down? I don’t know the answer either, until we have discussed your goals and intentions and then make a recommendation on the best loan programs to help you reach those goals. Most people will discuss ANYTHING with their friends and family but most people keep their financial decisions private. These financial decisions are the most important as they can help us reach or fall short of our financial goals. At the Scott Miller Team, we discuss with our customers what their goals are and what they are trying to obtain. We then make suggestions for different ways to reach those goals. I am NOT saying we change their minds, rather we stimulate thought so our customers KNOW they made an educated decision and are on the financial path they intended. If this conversation intrigues you, reach out to  The Scott Miller Team at Nations Lending  at 612-751-7268 Scott.miller@nationslending.com. We can and will help! PS: even call us just for a mortgage review. Maybe you have the best loan and just want confirmation of that!!
30 Jul, 2021
I discussed this about a month ago, however, we have had a lot of comments and responses so I thought I should talk about it again. This is the reason to work with a person, a professional in the Real Estate industry. Yes both a Realtor and Me, (the lender) Selling your home in this market seems pretty easy as long as it is priced correctly and looks well kept. The scary piece is “what if I sell my current home and cannot find another home I want”. Obviously with a family this can be a very stressful situation. However, we are working with our applicants with a strategy on purpose that will ease this frustration and take these fears away. We structure the new loan so the customer has the loan they want and need for their financial situation. We work with them and their Realtor to design a marketing plan to sell their current home so they can insure they do not end up homeless or in a financial situation that causes stress on the family. Call  The Scott Miller Team at Nations Lending  at 612-751-7268 or Scott.miller@nationslending.com and let us show you the easy way to buy and sell in this market.
30 Jul, 2021
Let’s face it, many of us have had a “hiccup” on our credit. Maybe we were young and made a decision to not pay someone to show them and now it seems it will never go away. Or you ran into a bigger issue and maybe had to file for bankruptcy or even had a home foreclosed. You do NOT need perfect credit to buy a home. You do NOT need to wait 10 years after something “bad” happened. We help many people improve their credit or show them that it really isn’t that bad and get them into a house now. So if you are wondering about your credit (or if you know it is great) let us show you how you can get into a home as quickly as possible. Call  The Scott Miller Team at Nations Lending  at 612-751-7268
30 Jul, 2021
Interest rates are doing great and now may be the time to consider refinancing. You could take advantage of the rates and pay off other debt, you could simply reduce your current payment or get money out for fun! Call or email me to discuss your options. Call Scott Miller at 612-751-7268 or email Scott.miller@nationslending.com
30 Jul, 2021
Let’s face it, we all know someone who is going through a family change. It could be a divorce, or the death of a loved one or on the brighter note, the addition of a new family member. Sometimes the owning of real estate can add to the stress of this change.  The Scott Miller Team at Nations Lending  is here to help reduce or eliminate this stress. Watch our little video blog and if you know of a person we can help please have them reach out to us at 612-751-7268 or email at Scott.miller@nationslending.com
30 Jul, 2021
There is a myth that many people believe they need 20% for a down payment on a loan for a home. That simply is not true. MHFA (Minnesota Housing Finance Agency) allows for ALL home buyers (first time and repeat buyers) to qualify for up to $15,000 in down payment assistance. There are income limits for this financing but most buyers will qualify. To find information about this please contact me at 612-751-7268 or email at Scott.miller@nationslending.com Lets start the discussion to get you and those people you know into a home!!
30 Jul, 2021
How much money does it take to buy a home? You may be surprised at how many people do NOT know their down payment options and believe they need to put 20% or more as a down payment for the purchase of a home. That down payment amount is only the benchmark for a conventional home loan that would NOT require mortgage insurance. Zero Down Payment Loan Programs. (NO money down) There are two programs that have no down payment requirement at all. Yes you are reading this correctly, 0 down. VA home loans. First thanks to the Veteran and their families for their service and commitment to our country. We truly appreciate it at  The Scott Miller Team at Nations Lending  . VA home loans do NOT require a down payment. In fact, there are certain fees that that the VA does NOT allow the lender to charge. We waive those charges, some lenders pass those fees to the seller which makes the offer more difficult to get accepted. We simply drop the fees as we want the Veteran to have the best chance buying their house. Another way to use the VA home loan benefits is the spouse of a deceased Veteran. Many people do not realize that these home buying benefits are available to the spouse if the Veteran has passed. This is an excellent way for a person to buy a home with 0 down! Call  The Scott Miller Team at Nations Lending  at 612-751-7268 for details. USDA Rural Development Loan This is another loan that does NOT require a down payment. However, there are specific areas that this loan is available and there are income limits on this loan. We use the USDA website to verify the address of the home and then the income is determined by the number of people in the household. The areas where this loan is available is not a direct city or line that we can simply tell you the areas. For example, there are parts of Monticello that are eligible and parts that are not. The people with the USDA are continually updating the website so the best thing to do is to call  The Scott Miller Team at Nations Lending  to see if you qualify for this loan at 612-751-7268. This loan actually allows the buyer to finance up to 2% of the closing costs into the loan which can greatly reduce the amount of money needed for the loan. The USDA loan has no down payment required and you can finance some or all of your closing costs. Actually an excellent way for a buyer to finance a home looking in the rural areas. Minnesota Housing and Finance Agency  The Scott Miller Team at Nations Lending  is an award winning lender each quarter with Minnesota Housing (MHFA) This loan used to be referred to as the first time home buyers loan. However, you do NOT need to be a first time home buyer to use this financing. This is an income based loan (meaning there are income limits based on the number of people in the home) and it has down payment assistance. There are two ways to receive the down payment assistance, determined by household income. There is the assistance with no monthly payment and no interest accrued until you sell the home or the first mortgage is paid off. The other type of assistance has a small monthly payment for 10 years. The only cash requirement for the buyer is that the buyer must demonstrate they have at least $1000 into the transaction. This $1000 has to be the borrowers own funds. It cannot come as a gift from a relative or be part of the down payment assistance. As you can see, there are many ways to purchase a home with minimal investment from the buyer. The key to knowing which program is available to you and which program meets your family’s financial needs is to call  The Scott Miller Team at Nations Lending  at 612-751-7268 and meet with us to see how easy it is for you to purchase a home and not spend all your savings!
30 Jul, 2021
If you are one of the many home buyers you have experienced the “sellers market”. This is when there are more buyers and fewer homes in the marketplace and it creates a HIGH demand for most homes for sale. Those of you in the market know this can be very frustrating. How was the sellers market created? As I said in my last blog, this was caused by the unusually low interest rates we experienced a few years ago when the Federal Reserve was buying mortgage backed securities. It was necessary to save the US economy and housing market with this action, however, we are now seeing the consequences of that move. Families that have a low interest rate in the 3’s are not just moving to move and buy a new home as the rates have moved up almost 1.5% or higher depending on their down payment and their credit score. Bank foreclosures have decreased. Banks had an unusually large inventory due to mortgage foreclosures between 2006 – 2012 and they have now sold them off. Dirt, yes, dirt. We are not creating more dirt, so new construction is limited to where there are open lots. Yes this area is growing faster than any other market, but usually you pay a premium for a lot that is in a populated area or you have to move a little further away from the areas you like as we cannot create new dirt. How can I buy a home in this market? First of all, RELAX. We cannot control the market conditions. You will always find a home that you are able to buy and reach your goals of home ownership. You will be able to benefit from appreciation and enjoy the lifestyle that homeownership offers. Here are some tips to help you in a sellers market. Work With A Good Realtor Look at our website and see the agents we recommend! Having a Realtor that is looking out for your best interests will give you an edge. Realtors are constantly networking with other agents and they will know about homes that are coming on the market BEFORE they are on the market. If one of these homes fits your needs, you will have a better chance at making a competitive offer BEFORE the home is eligible for other home buyers. Check Our Website For Homes Coming To The Market  The Scott Miller Team at Nations Lending  markets with many of the top agents in the Twin Cities area and we have asked them to put the homes they will be listing soon. Usually our Realtors will meet with potential sellers and make suggestions to the seller on how to make the home “show” well in the marketplace. Our agents have put these on the website under homes coming to the market. Reach out to us for an introduction to those agents with those houses coming soon as the seller may decide to sell to you before they have to list the home and have strangers walking thru their home day and night and weekends. It could be a win-win for everybody. Get Pre-Approved Call  The Scott Miller Team at Nations Lending  at 612-751-7268 and get preapproved or go to our website and click on our secure link When you do make an offer you want it to be as strong as possible. Not only will we clearly explain all your options to you we will call the listing agent when you make an offer (without sharing your personal financial info) we will talk about what a strong buyer you are and let them know the loan will close, on time and the sellers have nothing to worry about by accepting your offer.  The Scott Miller Team at Nations Lending  has 2 full time loan officers that are available all day every day, so we will make that call when you are buying your home whenever it is best for you. Take advantage of our service and experience and put it to work for you. Be Prepared To Move Quickly Work with your Realtor on the areas you are looking at so when a home becomes available you are able to move quickly. Ask your agent what do you need to do to make yourself the best buyer and improve the chances of your offer being accepted. Be Prepared After meeting with  The Scott Miller Team at Nations Lending  and clearly understanding the best loan options that work for you financially and working with one of our Recommended Realtors, this teamwork will put you in the best position to purchase a home and successfully get your offer accepted! Then sit back and enjoy your new home!
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