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Last month's Consumer Price Index (CPI) news was positive, as it showed that prices cooled to 2.9% last month (on a 12-month basis), down from 3% in June. This is the first time the CPI dipped beneath 3% since March 2021, and strongly suggests that the Federal Reserve will proceed with a rate cut later this month. Mortgage interest rates also show signs of falling, which has already encouraged some homeowners to refinance their existing mortgages.
Home Financing
Refinancing Basics
Since mortgage interest rates have been falling during the past few weeks, homeowners are checking out their refinancing options. Refinancing replaces your current mortgage with a new one, which means you have the freedom to do more than apply for a lower rate. For example, you can consider changing your loan's term or going for a cash-out refinance.
However, refinancing's not for everyone, even if rates now are lower than when your mortgage was finalized. Here are some things to consider before you apply.
Do you have a stable income? Job stability and a reliable income stream means it'll be easier and less stressful for you to handle new mortgage payments.
What's your credit like? The higher your score, the better your chances for better loan terms. Higher scores may secure you lower interest rates and a better loan-to-value ratio.
How much equity do you have? The value you've built up in your home (the amount repaid on your mortgage, plus increases in appraised value) affects both the refinance rates you can secure and the loan options available to you. High equity numbers usually translate to more favorable terms.
Selling soon? If you're planning to sell your house within a year or two, you may not benefit, depending on the up-front costs involved with a refinance.
Source: moneygeek.com
Insurance
Does Your Homeowner's Insurance Need Revising?
When you buy homeowners insurance, you'll probably see several sections, including one called personal property coverage. This is coverage for what's inside your house, such as your furniture, clothes, electronics, and similar. However, many of us don't check to see how much our policy will pay in case our home is damaged in a fashion that also damages or destroys our possessions.
Here are some examples of coverage.
- Jewelry and watches may not have coverage over $1,500.
- If you keep sums of cash in your home, this limit could be $500 or less.
- If you have firearms, these limits may not be over $2,000.
If you've set up a remote office, you may have no coverage for your computer, monitors or printer because it's classified as business property.
If you're wondering why insurance companies are making these types of assumptions, it's because not all homeowners have these items. Also, lower payments for property helps make homeowners insurance more affordable.
Here are some ways you can make sure that you can replace the possessions that mean the most to you.
- Ask to have your personal property coverage increased. Go for a scheduled items, or "personal articles floater" policy.
- Both allow higher limits than the ones described above, and you may be able to add protection for damage and/or loss as well.
No matter what you own, it's always a good idea to periodically review your homeowner's policy when it's time to renew, or if you plan to buy (or have inherited) items that you'll want to protect.
Source: kiplinger.com
In the News
NAR's New Commission Guidelines Debut
You may have recently heard about a legal settlement finalized by the National Association of REALTORS® (NAR) regarding commissions paid by home sellers.
This resulted in changes between the way real estate agents document their services to home sellers and buyers, together with how commission payments are structured.
Here are the basics:
- If you're buying a home with the help of an agent, you'll need to sign a written agreement before you view a home, either in person or a live virtual tour. This ensures you understand what services will be provided to you, together with the costs of these services.
- You will not need to sign a written agreement if you're chatting to an agent at an Open House or asking about their services.
- While real estate agents' compensation paid by home buyers and sellers is still fully negotiable, agents are not allowed to use open-ended methods to calculate compensation. For example, an agent's compensation cannot be defined as:
- a percentage or hourly rate, or
- based on an amount a seller may offer to a buyer.
- Buyers can still accept concessions from home sellers, such as offers to pay closing costs.
- When finding an agent to work with, ask questions about their services, compensation and these written agreements.
If you'd like more details about these changes, NAR has prepared separate web pages for buyers and sellers.
Click here if you're buying a home.
Click here if you're selling a home.
Source: nar.realtor
Credit and Consumer Finance
Why Shoppers Are Choosing Private Label Brands
You probably see them each time you shop for groceries: similar items with different names and lower price tags. From Target's Good & Gather to Whole Foods Market's 365, private label grocery products are becoming more popular.
A June 2024 report found that more than half of all U.S. grocery shoppers bought more private brand goods in 2024, compared to 28% who chose name brands.
Private label brands, aka store brands or generic brands, are less expensive than name brands while being nearly identical, right down to the ingredients. Since grocery prices have been hard-hit by inflation, it's one reason private label brands are becoming more popular...but it's not the only reason.
Another reason shoppers are choosing private labels is expanded choices, from the everyday (paper towels, toilet paper) to the special (vegan and gluten-free foods).
A few more surprises: the largest private label retailers aren't the largest stores. Number One is Aldi (founded in Germany in 1961), followed by Trader Joe's (also owned by Aldi) and the members-only warehouse Costco.
As far as major retailers go, Walmart also made it into the top 10, with Target just outside. But that could change soon since both rolled out new private label, low-priced lines this year. Walmart's bettergoods private label offers more than 300 food items, while Target dealworthy includes around 400 basics that usually ring up at $10 or less.
Source: empower.com
Did You Know?
You May Qualify for Down Payment Assistance
Down payment assistance can help you buy your next home years sooner than if you were saving on your own. Almost every state has its own down payment aid and/or grant program, with over 2,000 programs currently in place. Both first-time and repeat homebuyers may qualify.
Don't want to miss out? Connect with your local APM Loan Advisor here. There are hundreds of programs and they will work hard to find the best fit for you!
