The Federal Reserve Increases Federal Funds Rate – Here’s Why It Matters!

The Federal Reserve’s latest meeting just wrapped up, so what are the key takeaways for you?

This afternoon, the Federal Reserve increased the Federal Funds Rate by .25%. It’s critical to understand that when you might see headlines about the Fed increasing their target rates, it usually doesn’t directly impact the mortgage rate you’re able to obtain. In fact, rates for 30-year conventional mortgages have declined by more than 1% over the last few months according to major market surveys.

The Federal Reserve’s Open Market Committee implements policies that help to speed up or cool down the overall U.S. economy. Because inflation has been reported at levels above the Fed’s stated target, the Fed has been trying to slow down the economy and get inflation back under control. Their primary mechanism to do this is to raise the Fed Funds Rate – the rate that banks charge each other to lend money back and forth. When this rate increases the economy tends to slow down, which helps get inflation back in line.

Believe it or not, today’s announcement of a .25% increase in the Fed Funds Rate is actually the smallest increase the Fed has made in almost a year (since March 2022)! This means that the Fed is starting to see the light at the end of the tunnel in our current economy, and we’re likely approaching the end of the rate-hiking cycle. Lower inflation means we all have more purchasing power, and our paychecks can stretch further month-to-month!

While today’s news is positive, it can still be tricky to navigate our current market. Contact the experts at First Home Mortgage today to stay informed on your homebuying decisions!

New Conforming Loan Limits Are Here!

The results are in, and they could have an impact on your home buying journey. Effective today, homebuyers may now borrow up to $726,200 in most counties and up to $1,089,300 in higher-cost areas!

The limit on conforming loans backed by Fannie Mae and Freddie Mac is assessed annually. In September, First Home Mortgage responded to a challenging market by updating the conforming loan limit to $715,000 in most counties and allowing qualified homebuyers the opportunity to borrow above the limit while still enjoying the efficiencies of a conforming loan. Today’s announcement pushes that limit even higher to $726,200 for most borrowers.

This news follows the 2021 increase to $548,250 and the 2022 update up to $647,000. Taken together, this represents a 32% increase in just two years. Click here to see how your county compares to the surrounding region — and, as always, don’t hesitate to reach out to one of our qualified loan officers with any questions!

Author: James Baublitz, VP of Capital Markets

Three Things to Know about the Fed’s Rate Decision

The Federal Reserve just increased the Fed Funds rate .75%. What does that mean, and how does it impact the mortgage market? Here are three things to know about today’s news:

1. The Federal Reserve Influences Mortgage Rates, They Do Not Set Them

Many have the misconception that the Federal Reserve’s actions have a direct impact on mortgage rates. Many assume that if a mortgage was offered 6% this morning, it’s now 6.75% after this afternoon’s announcement. That isn’t the case, however. The Federal Reserve sets the rates banks charge each other, not the rates lenders offer borrowers. The Fed’s actions influence the overall rate environment; it doesn’t set those rates.

2. The Federal Reserve is Trying to Ease Inflation

The Federal Reserve is heavily-focused on easing inflation in the US economy. They are trying to be aggressive in their actions to stop inflation before it takes hold for the long haul. This is good news for home affordability; lower inflation helps boost borrower buying power.

3. Today’s Rate Decision is a Step in the Right Direction for the Economy

The Federal Reserve has two goals: full employment and price stability. The unemployment rate remains low at below 4%, but increasing inflation is causing problems in the US economy. The Federal Reserve’s focus on reining in inflation and today’s announcement will make a significant impact in helping to stabilize the economy as a whole.

Contact us or one of our qualified Loan Officers to learn more!

Author: James Baublitz, VP Capital Markets

Understanding the Increase in Homeowners Insurance Premiums

Have you noticed an increase in your homeowner’s insurance premiums lately—maybe significantly? If so, you are not alone. There are a number of factors that impact how high or low insurance premiums are, and there are several currently at play which have contributed to a recent rise for many homeowners.

What Drives the Increase in Homeowners Insurance Premiums?

In general, the two primary factors that impact homeowners insurance: insurance rates and inflation. There are numerous things that affect each of these factors themselves, and each of them influence insurance premiums to varying degrees. Overall, when insurance rates and inflation go up, so do homeowners insurance premiums.

How Are Insurance Rates Factored and How Do They Impact Premiums?

Homeowners insurance rates are largely connected to the frequency and severity of severe weather. This, of course, means that rates often vary from state to state as the kind of severe weather experiences from one place to another can differ considerably. The more serious and recurrent storms and other weather-related events are, the more reinsurance—which is insurance for insurance companies—rises, making it more expensive for insurers to offer insurance. These increased costs are passed onto consumers by way of higher premiums.

What Impact Does Inflation Have on Insurance Premiums?

You’re probably well aware of the recent increase in inflation as it has impacted the cost of all sorts of goods and services, but how does inflation affect insurance premiums? Not only is the overall rate of inflation notably higher than average, but the rate of inflation for building labor and material costs has spiked even higher, meaning it is more expensive to rebuild homes. Since repairing and rebuilding homes now costs more, insurance companies have to compensate for those increases by upping premiums.

What Does It All Mean?

Insurance premiums are up nearly across the board due to heightened costs for insurance companies resulting from more severe and frequent weather events and increasing inflation. That said, these factors are not going to rise at the same rate nationwide, so the level at which you experience an increase largely varies on where your home is located. The bottom line is homeowners insurance premiums must go up in order to ensure you are fully protected and covered in the case of a total loss. While it can be frustrating to experience higher insurance rates, it is a small price to pay in the grand scheme of things should something happen to your home; it is better to be safe than sorry.

If you are interested in buying a new home or refinancing your current home, contact one of our experienced Loan Officers today to learn more about your mortgage options.

The Federal Housing Authority Announces Update to Student Loan Policies

Understanding which home loan program is the most beneficial for you when purchasing or refinancing a property is key to making a successful loan choice. Our loan officers are up to date on the best programs and newest guidelines and are here to educate you on your most advantageous options.

If you have current or past student loan payments, the Federal Housing Administration’s (FHA) updated policy could be great news for you! The Federal Housing Administration (FHA) helps buyers with low incomes and low down payments who may not qualify for conventional mortgages.  FHA insures the loans, giving lenders the confidence to provide financing to people who otherwise would not qualify.

Effective now, monthly student loan debt may be excluded from your debt-to-income ratio ( DTI) when the program, creditor, or student loan servicer indicates that the full loan balance has been forgiven, canceled, discharged, or otherwise paid in full.

For outstanding student loans, regardless of payment status, to calculate monthly obligations:

  • Use the payment amount reported on the credit report or the actual documented payment (when payment is above zero), or
  • Use .5 % of the outstanding loan balance, when the monthly payment reported on the credit report is zero.

What does this mean for borrowers with student loans?

This new update allows student loan debt to be calculated at 0.5% of the loan balance if the payment is not reported on the credit report when determining loan eligibility. This may give more purchasing power to some buyers with existing student loan debt.

For more information about these beneficial changes, contact one of our experienced loan officers today!

New Conforming Loan Limits for 2021


The Federal Housing Finance Agency has announced the Fannie Mae and Freddie Mac conforming loan limits for mortgages for 2021.

Each year, the baseline conforming loan limit is adjusted accordingly with the change in the average U.S. home price. House prices during the third quarters of 2019 and 2020 have increased by 7.42 percent on average; therefore, the Federal Housing Finance Agency is increasing 2021’s maximum conforming loan limit by the same percentage. This marks the fifth year in a row that there has been a limit increase by the FHFA. The baseline loan limit has increased by $131,250 since 2016.

The limit is different in some places known as high-cost areas. These are areas in which 115 percent of the local median home value is higher than the baseline conforming loan limit. The Housing and Economic Recovery Act establishes the maximum loan limit in those areas while also setting a ceiling on that limit which is 150 percent of the baseline loan limit. The new ceiling loan limit in most high-cost areas for 2021 will be $822,375, which is 150 percent of $548,250.

Here at First Home Mortgage, we continue to provide the highest level of customer service while adhering to social distancing guidelines. Our innovative communication technologies allow us to exceed your expectations while keeping everyone as safe as possible.

If you are considering purchasing or refinancing a home, please contact one of our Loan Officers today!

Low Housing Inventory Leads to an Increase in Bidding Wars

Many changes are facing home buyers currently house hunting during the Coronavirus pandemic – most notably housing inventory. State and county restrictions directed towards protecting our health have led to new methods of interacting with realtors, loan officers, and home sellers. Virtual tours and meetings abound, and open houses are limited and require additional precautions. One of the most surprising impacts, however, is the very real shortage of available homes on the market. While demand for homes has declined, supply has declined much more drastically, leading to an unprecedented percentage of bidding wars.

According to Bloomberg, roughly 40% of homes received multiple offers, with the number jumping to 60% in some major cities. Bidding wars are most common in entry-level homes and decline in homes priced over $1 million.

A CNBC article states that home listings nationwide were down 29% in May compared to this time last year. This is thought to be due to the seller’s concerns over having others tour their home during the pandemic. Even with limited options on the market, many home buyers are seeing this as an opportune time to move, as mortgage interest rates continue to hit historic lows. Some experts also conjecture that increased time at home due to the pandemic restrictions are causing people to look for properties with more interior and exterior living space, driving even more buyers to the market.

In these conditions, it is more important than ever to work with experienced professionals to help find the right home and loan for you. It is important to know as soon as new properties become available so that you can have the chance to view them and decide if you want to put in an offer before they sell. Acting quickly on a home you want to purchase is imperative right now and becoming pre-qualified before house hunting can allow you to get your offer in on your dream home as soon as you find it.

To learn more about your loan options and discuss pre-qualification, please contact one of our experienced loan officers today!


Four Signs You Should Refinance Your Mortgage

With mortgage rates still hovering around all-time lows, it might be a good time to consider refinancing your mortgage to snag a lower rate. Refinancing can reduce your monthly payment and total interest costs. Even if your home loan is as recent as last year, it still may be worth replacing. Here are 4 signs it’s time to refinance!

Your current rate is over 4%

Freddie Mac’s weekly survey revealed that last month’s average rate for a 30-year mortgage was holding at 3.29%. Last year, the typical rate was falling around 4.1% for the same 30-year mortgage. A study recently done by LendingTree has discovered that borrowers that refinanced a home loan taken out in early 2019 can save $60 a month for every $100,000 borrowed. Over the life of the loan that added up to almost $20,000 in interest savings!

Your credit is in good shape

It is no secret that the better your credit score, the better chance you have on landing a low interest rate. Credit scores can range anywhere between 300 to 850 with 800 and higher considered “exceptional” and 740-799 considered “very good.” If your credit score falls in the exceptional or very good range, you are in a better position to refinance and get a lower rate.

However, if your credit score could use some improvement, here are some quick tips:

  • Pay off credit card debt and lower your credit utilization (this is the percentage of available credit you’re using).
  • Don’t close old credit cards you’re not using. As long as you’re not being charged annual fees, this can help lower your credit utilization which will in turn raise your credit score!
  • Check for errors on your credit reports. If any errors are found, alert the credit bureau so that the issue can be resolved and removed from your reports.

Cash out your equity

A cash out refinance may be right for you if you are ready to cash out on built up equity on the home. Homeowners choose to cash out in order to pay for education, additional home improvements, eliminate other debt, or start a new business. However, if you choose a cash-out refinance it is important that you can keep up with the payments in the event the home improvements do not add value, or the new business fails.

You plan to stay in your home for a long time

Due to closing costs, it can take months or in some cases years to break even and begin the actual savings. If you are moving or selling soon, refinancing may not be a great idea. But if you plan to stay in your home, a refinance can truly save you money in the long run.

Get in touch with a Loan Officer today to find out if refinancing is right for you!




No Contact House Hunting

Amid rising Covid-19 cases and in consideration of the health and safety of agents and clients, Bright MLS has temporarily loosened its restrictions on home listings which previously required properties to be shown in person in order to stay on the market. If you are a future homebuyer or have been perusing listings you may have noticed a rising increase in homes with virtual options, such as virtual walk-throughs and virtual open houses. With the current situation of the world today, real estate agents are forced to get creative when it comes to keeping business up. Some have even decided to live-stream tours of homes, allowing prospective buyers to sit back and watch while asking questions in real-time. Some agents are still offering in-person showings as well. However, extra precautions are in place such as sanitizing in between clients and limiting the number of people in a home at one time.

Other aspects of the home-buying process have updated procedures as well to incorporate social distancing and respect the recommended self-quarantining. Home inspections and settlements are two areas in which precautions are being put in place. Recently, inspectors are advised to be the only ones at the property while inspecting. Filming and taking photos of their inspection are ways they are ensuring clients are receiving the information they need and still being very much a part of the process. Now when it comes time to sign the paperwork and close on your new home you may find the room a bit emptier than expected. Realtors are now being asked to not be present during the settlement process and those that need to sign paperwork or present documents are being brought in separately to do so.

No doubt the current situation we are facing as a globe is drastically changing our everyday lives. But when it comes to buying a home, having a dedicated Realtor and Loan Officer in your court can make what seems like an impossible task at a time like this, very realistic. Due to technology and social media, you don’t have to put off your dreams of purchasing a home any longer!

Contact one of our Loan Officers today!

Which Renovations Have the Highest Impact on Your Home’s Value?

Remodeling your home is a wonderful way to make it your own when you first move in, or to update the space as your needs and styles change over time. Since home renovations can be pricey, balancing your budget and wish list can be tricky. Fortunately, there are lots of projects that can make you love your home even more, while also boosting its value. Increasing your home’s overall value increases your equity! This means that not only will you see a return on your investment when you sell your home, but you’ll also have a lower loan to value ratio while you live in it, which can impact your options when refinancing, and even potentially eliminate the need for a mortgage insurance.

The “2019 Cost Vs Value Report” (, revealed which home renovations will give you the highest percentage of return on investment, and what they cost on average. According to the study, the top five renovations that provide the biggest bang for your buck are:

1. Garage door replacement

• Average out-of-pocket: $3,611
• Average return on investment: $3,520
• Percentage of cost recouped: 97.5%

2. Manufactured stone veneer

• Average out-of-pocket: $8,907
• Average return on investment: $8,449
• Percentage of cost recouped: 94.9%

3. Minor Kitchen Remodel

• Average out-of-pocket: $22.507
• Average return on investment: $18,123
• Percentage of cost recouped: 80.5%

4. Deck addition (wood)

• Average out-of-pocket: $13,333
• Average return on investment: $10,083
• Percentage of cost recouped: 75.6%

5. Siding Replacement

• Average out-of-pocket: $16,036
• Average return on investment: $12,119
• Percentage of cost recouped: $75.6%

Renovating your home can be a wonderful way to boost your enjoyment and your equity! Find more information from this study, including how project costs and values were calculated, at

Thinking about purchasing a fixer-upper, or refinancing to free up funds for your home renovation? Contact one of our Loan Officers today!

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