[schema type="organization" orgtype="LocalBusiness" url="http://4salebydonna.com" name="Real Estate Agent Donna Baker" description="Real Estate Agent showing homes for sale and available real estate in Monrovia, Pasadena, Arcadia the San Gabriel Valley in Southern California." city="Monrovia" state="Ca" postalcode="91016" email="donna@4salebydonna.com " phone="(626) 408-7766 "]

Last Week’s Call to Action: Buy the Home of Your Dreams

The question posed in last week’s Realtor.com article was certainly scary enough: “Is It Last Call for Low Mortgage Rates?” If you have been putting off getting ready to buy your next Monrovia home, it could well have been a potent call to action. For the normally staid Realtor, it was an unusually pointed dispatch.

The article’s opening line, “All good things come to an end…” is what many Monrovia home loan rate watchers have known to be true enough—yet for years now, when it comes to the financial benefits that accompany low mortgage interest rates, the prospects for losing the resultant buying power has seemed to be a distant threat. But although by historical standards, Monrovia mortgage interest rates are still relatively favorable, the drift is clear: that advantage is rapidly slipping away.

“After hitting historic lows,” author Chris Parker writes, “average mortgage rates” have already climbed to peaks not seen since 2014. Even more alarming for prospects preparing to buy Monrovia homes, there is ample reason to suspect more hikes are on the way.

After referencing new Federal Reserve Chairman Powell’s expectation that the Fed will “gradually” increase rates, the article raised the immediacy quotient several notches. According to the author, “it is expected” that there will be no fewer than three rate hikes this year—possibly even beginning “this month.” The suggestion that it is “unlikely” that rates will go into “the double digits” may have been meant to be reassuring—but for those with long memories, probably accomplished the opposite.

Still, amid the abundance of disquieting data points, a few moderating notes could be found. A Freddie Mac economist was quoted as saying that “the levels of 10 years ago” (mid-5% to mid-6%) aren’t likely to be reached because “too much has shifted economically.” And, “it’s important to note that mortgage rates are still low.”

For those planning to buy Monrovia homes this season, the message was clear: locking in a mortgage rate sooner rather than later is undoubtedly the better part of wisdom. A corollary would also be that it’s high time to locate your future Monrovia home—which also makes it high time to give me a call!          

FICO Influences Monrovia Mortgage Loan Decisions

Whether you are about to embark on your first Monrovia home search or your umpteenth, unless you’ve managed to save enough to make you a cash buyer, soon you’ll need to secure a mortgage loan from a bank or other lending institution.

To understand what lies behind any home loan decision, just do what any good business negotiator does: put yourself in the other guy’s (or gal’s) shoes. Getting a yes (and a low interest rate) from Monrovia’s lenders starts with demonstrating a history of responsible debt handling. That’s been made easy by the major credit information gathering agencies, who’ve been collecting data since your first credit application. Those bits and pieces are compiled and analyzed by the Fair Isaac Company (“FICO”). Monrovia lenders rely heavily on their FICO credit score to gauge the level of risk projected for any Monrovia mortgage loan you might seek.

FICO has a good thing going. Nine out of ten U.S. credit decisions use FICO scores—which enables FICO to sell more than 27 million every day. The exact way FICO calculates their scores (and there are a variety of different ones) is a heavily guarded secret—but we do know the five components that go into each of them:

  1. Payment history – hopefully, on time!
  2. Utilization – percentage of available credit currently borrowed.
  3. Length – amount of time each account has been open together with the most recent charge or payment.

The reasoning behind those three is pretty obvious; they make up 80% of how FICO scores are weighted. The last two are not so self-evident, yet each contributes 10%—and that can be decisive:

  1. New credit.
  2. Credit mix.

Number 4—New credit—registers how many new accounts have been opened or applied for within the last six to 12 months. It’s a negative factor because it might reflect an urgent need for credit help—an added risk factor. To get the best terms for Monrovia mortgages, refrain from opening a bunch of other accounts.

The last factor—Credit mix—rewards borrowers who have a variety of credit account types. If you’ve got some credit card accounts, that’s just one type of credit. Add in a car or appliance loan, and even if you have never taken out a mortgage loan, those other two types give you a good “mix.” Because managing revolving lines of credit differs from managing installment accounts, from a lender’s point of view, a mix of responsible credit usage is preferable.

 I’m here to help clarify the many ins and outs of searching for and securing the Monrovia house you’re hoping to find—or selling the one you’ve grown out of. I hope you’ll call me