How to Use Your Home Equity Thoughtfully



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Missed Opportunities Are Far More Likely

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If you've been sitting on the sidelines, waiting for mortgage rates to drop back below 4% before making a move, it's time for a reality check. While we all loved the historically low rates of 2020 and 2021, those numbers were driven by extraordinary global circumstances, not typical market trends. And expecting them to return any time soon could lead to missed opportunities that may cost you far more in the long run. During the height of the pandemic, global economic uncertainty prompted aggressive action from the Federal Reserve, which helped drive mortgage rates to record lows. In January 2021, the 30-year fixed rate bottomed out at 2.65%, the lowest in Freddie Mac's recorded history, which dates back to 1971. But that wasn't a normal market. It was a response to an emergency. Looking at the big picture, the average 30-year mortgage rate over the last 60+ years has hovered around 7.74%. Even today's rates, currently in the mid 6% range, are below that ...
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Addressing the Buyer Agent's Fee

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Traditionally in the U.S. housing market, the seller has offered the buyer's broker and agent a share in the commission specified in the listing agreement between the seller and the listing broker and agent.   In a settlement between the National Association of REALTORS�, beginning on August 17, 2024, buyers will have to sign an agreement with their buyer's agent specifying what services will be available and the fee the buyer's agent is charging. Many sellers may continue to offer compensation to the buyer's broker and agent, maintaining the traditional practice of the seller paying both sides of the commission. However, when no offer of compensation is made, there are several distinct alternative ways to facilitate the buyer agent's fee, as well as a myriad of variations to suit different scenarios. In an instance where the seller doesn't offer compensation to buyer agents regarding a property you're interested in, there are several options to c...
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VA Allows Buyer-paid Broker Fees

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The U.S. Department of Veterans Affairs, known as VA, issued a policy change that now allows payment to buyer brokers on VA loans.   They will be subject to certain safeguards, such as the requirement that all buyer-broker fees charged to veterans "must be reasonable and customary within local markets."   The circular is effective Aug. 10, 2024, and is valid until rescinded. The VA also clarified that veterans can still ask sellers to cover these fees which in most cases will be negotiated in the offer to purchase agreement.   As the practicality of the settlement of the lawsuit becomes clearer, VA is expected to issue a permanent policy. This change in policy will protect veterans in situations where there is competition for a particular property and the seller might select another offer because those buyers were paying their own buyer's agent fee.   Prior to this policy change, veterans were not allowed to pay, "under any circumstances, b...
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