Blog - Wendy M. Doerzbacher

What’s Ahead For Mortgage Rates This Week – June 17th, 2024

June 17, 2024 by Wendy Doerzbacher

A welcome and unexpected data release for both the PPI and CPI shows inflation expectations coming in lower than expected. The positive news was somewhat mitigated by the hawkish FOMC rate decision that also took place during the same week. Still, there is more optimism given that the data releases in the past 30 days have shown signs of inflation coming under control. At the very least, it suggests that the Federal Reserve’s policy to keep inflation under control has been effective. As a result, lending partners have quickly cut rates again after the meeting this week.

Consumer Price Index

The cost of consumer goods and services were unchanged in May for the first time in almost two years, suggesting the resurgence in inflation earlier in the year might be petering out. The flat reading in the Consumer Price Index last month was below the forecast for a 0.1% increase, based on a poll of economists by The Wall Street Journal.

Produce Price Index

U.S. wholesale prices fell in May for the second time in three months (thanks partly to lower gas prices), perhaps another sign that the upturn in inflation earlier this year is fading. The Producer Price Index dropped 0.2% last month, the government said Thursday. Economists polled by The Wall Street Journal had forecast an increase of 0.1%.

FOMC Rate Decision

Federal Reserve Chair Jerome Powell was tight-lipped at his press conference Wednesday, having been stung previously by too much optimism. The Federal Reserve remained hawkish throughout the conference and maintained current interest rates.

Primary Mortgage Market Survey Index

15-Yr FRM rates are seeing a decrease by -0.12% with the current rate at 6.17%
30-Yr FRM rates are seeing a decrease by -0.04% with the current rate at 6.95%

MND Rate Index

30-Yr FHA rates are seeing a decrease by -0.20% for this week. Current rates at 6.44%
30-Yr VA rates are seeing a decrease by -0.20% for this week. Current rates at 6.45%

Jobless Claims

Initial Claims were reported to be 242,000 compared to the expected claims of 225,000. The prior week landed at 229,000.

What’s Ahead

The proceeding weeks for FOMC rate decisions and inflation data reports are typically light. Next week has a higher-than-expected amount of influential releases. The lineup includes Retail Sales and the official S&P Global US Manufacturing PMI numbers, giving us a clear indicator of the state of manufacturing for the U.S.

Important Tips for Paying Off Your Mortgage Early and Saving on Interest

June 14, 2024 by Wendy Doerzbacher

Are you dreaming of the day when you can declare yourself mortgage-free? Paying off your mortgage early not only liberates you from monthly payments but can also save you a significant amount in interest. While it may seem daunting, a few strategic moves can bring this goal within reach. Here are seven actionable tips to help you pay off your mortgage early and save on interest.

1. Make Biweekly Payments

Instead of sticking to the conventional monthly payment schedule, consider switching to biweekly payments. By making half of your monthly payment every two weeks, you’ll end up making 26 half-payments per year, which equals 13 full payments. This simple change can shave years off your mortgage term and save you thousands in interest.

2. Round Up Your Payments

Another easy strategy is to round up your mortgage payments. For instance, if your monthly payment is $1,456, rounding up to $1,500 can make a considerable difference over time. This small increase adds up and helps you chip away at your principal faster.

3. Make Extra Payments

Whenever possible, make extra payments towards your mortgage principal. This can be done by allocating bonuses, tax refunds, or other windfalls directly to your mortgage. By paying down the principal balance faster, you reduce the amount of interest you’ll pay over the life of the loan.

4. Refinance to a Shorter Term

If you’re in a strong financial position, refinancing your mortgage to a shorter term, such as from a 30-year to a 15-year loan, can result in significant interest savings. While your monthly payments may increase, the amount saved in interest over the loan’s duration is often substantial.

5. Reduce Your Spending and Reallocate the Savings

Analyze your budget and identify areas where you can cut back on expenses. Redirect these savings towards your mortgage payments. This could involve cutting down on dining out, canceling unused subscriptions, or finding more cost-effective ways to entertain yourself.

6. Apply Windfalls to Your Mortgage

Whenever you receive unexpected income, such as a work bonus, tax refund, or inheritance, consider putting it towards your mortgage. These lump sum payments can significantly reduce your principal balance, leading to less interest accruing over time.

7. Recast Your Mortgage

Mortgage recasting is an option worth exploring if you receive a large sum of money and want to lower your monthly payments without the need to refinance. By making a substantial principal payment, your lender recalculates your monthly payments based on the new, lower balance. This can reduce both the amount of interest you’ll pay and the length of your mortgage term.

Paying off your mortgage early and saving on interest is a feasible goal with the right strategies in place. By implementing biweekly payments, rounding up payments, making extra payments, refinancing, reducing spending, applying windfalls, and considering mortgage recasting, you can achieve financial freedom sooner than you might think. Remember, every little bit helps, and the sooner you start, the more you’ll save in the long run. Happy saving!

Fact Check Summary:

The biweekly payment strategy effectively adds one extra payment per year, reducing the loan term and interest.
Rounding up payments and making extra payments directly affect the principal, reducing interest.
Refinancing to a shorter term generally results in lower total interest paid, despite higher monthly payments.
Budget adjustments can free up additional funds to be directed toward the mortgage.
Windfalls can significantly impact the principal balance when applied to the mortgage.
Mortgage recasting is a viable option to lower monthly payments and interest without refinancing.

What Is a Mortgage Loan Servicer?

June 13, 2024 by Wendy Doerzbacher

Working through the mortgage process can be complex, and one significant yet often misunderstood aspect is the role of a mortgage loan servicer. You might be familiar with lenders, the entities that provide the funds for your home purchase, the servicer is the company you’ll interact with most frequently over the life of your loan. Understanding what a mortgage loan servicer does can help you manage your mortgage more effectively and know who to turn to with any questions or issues.

The Basics of Mortgage Loan Servicing

A mortgage loan servicer is a company responsible for managing your loan from the moment it is closed until it is paid off. They handle the day-to-day tasks associated with your mortgage, acting as a liaison between you and the lender. Here’s a detailed look at their key responsibilities:

Collecting Payments

The servicer collects your monthly mortgage payments, which typically include principal, interest, taxes, and insurance (often abbreviated as PITI). They ensure that these payments are applied correctly to your loan.

Managing Escrow Accounts

If your mortgage includes an escrow account, the servicer manages it. This account holds funds to pay your property taxes and homeowner’s insurance. The servicer ensures that these bills are paid on time, preventing any lapses in coverage or penalties.

Providing Customer Service

Mortgage loan servicers are your point of contact for any questions or issues related to your loan. They offer customer support to help you understand your mortgage statements, resolve payment issues, and provide information about your account.

Handling Delinquency and Foreclosure

If you miss payments, the servicer will reach out to discuss options and help you get back on track. In cases of prolonged delinquency, they initiate foreclosure proceedings, although they often try to work with borrowers to avoid this outcome.

Assisting with Loan Modifications and Refinancing

If you experience financial hardship, the servicer can assist with loan modifications, which may involve changing the terms of your loan to make payments more manageable. They can also guide you if you decide to refinance your mortgage.

Processing Payoffs

When you pay off your mortgage, by selling your home or refinancing with a new lender, the servicer processes the final payment and releases the lien on your property.

Why Mortgage Loan Servicers Matter

Customer Experience: A good servicer ensures a smooth and hassle-free experience. They provide timely and clear communication, making it easier for you to manage your mortgage.

Financial Health: By managing escrow accounts and ensuring timely payments of taxes and insurance, servicers help you avoid penalties and lapses in coverage that could impact your financial standing.

Support During Hardship: If you face financial difficulties, a proactive and supportive servicer can offer solutions to help you keep your home, such as loan modifications or repayment plans.

Choosing a Good Mortgage Loan Servicer

The quality of service you receive can vary significantly between servicers. Here are some tips for choosing a good one:

Reputation: Look for servicers with positive reviews and high customer satisfaction ratings. Online reviews and ratings from financial institutions can provide insights.
Communication: Ensure the servicer offers multiple communication channels (phone, email, online portal) and has a reputation for responsiveness.
Transparency: A good servicer provides clear, detailed information about your payments, escrow accounts, and any fees. They should be transparent about their processes and easy to understand.
Responsiveness: Choose a servicer known for prompt responses and efficient issue resolution. Delays in addressing concerns can lead to bigger problems down the line.

Understanding the role of a mortgage loan servicer is crucial for effective mortgage management. These companies play a key role in handling your payments, managing your escrow accounts, and providing support throughout the life of your loan. By choosing a reputable and responsive servicer, you can ensure a smoother and more secure homeownership experience. Always keep open lines of communication with your servicer and don’t hesitate to reach out to them with any questions or concerns. Your mortgage is one of the most significant financial commitments you’ll make, and having a reliable servicer can make all the difference.

What’s Ahead For Mortgage Rates This Week – June 17th, 2024

Important Tips for Paying Off Your Mortgage Early and Saving on Interest

What Is a Mortgage Loan Servicer?

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