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Mortgage rates are still falling. Here are 5 big moves to make now
The past couple of years have been tough for homebuyers. Just a few years ago, it was easy to find a mortgage loan with a 3% (or lower) rate, but as buyers rushed to take advantage of the cheap borrowing environment, it fueled an uptick in demand and drove up home prices. As the mortgage rate environment shifted post-pandemic, mortgage rates climbed, significantly reducing affordability and pushing many prospective buyers to the sidelines.
It appears that there’s finally a glimmer of hope on the horizon, though. In recent weeks, mortgage rates have shown a promising downward trend. Right now, the average mortgage rate is below the 7% threshold, with 15-year mortgages averaging 6.41% and 30-year mortgages averaging 6.92% (as of July 15, 2024). This offers a welcome reprieve for potential homebuyers, even in today’s tight housing market, where inventory remains limited.
But while this shift in the mortgage landscape is positive news, navigating the homebuying process in the current market still requires careful planning and strategic moves.
Find out the best mortgage rates available to you now.
Mortgage rates are still falling. Here are 5 big moves to make now
For those looking to take advantage of the cooling mortgage rate environment, here are some key steps to consider:
Get preapproved for a mortgage loan
One of the most crucial steps to take in today’s competitive housing market is to get preapproved for a mortgage loan. This process involves a lender reviewing your financial information, including income, assets and credit history, to determine how much they’re willing to lend you. A preapproval letter not only gives you a clear idea of your budget but also demonstrates to sellers that you’re a serious and qualified buyer.
In a market where multiple offers are still common, having a preapproval can set you apart from other potential buyers. It shows sellers that you’ve already taken steps to secure financing, which can make your offer more attractive. And, the preapproval process can help you identify and address any potential issues with your credit or financial situation before making offers.
Compare your top mortgage loan offers online now.
Lock in the best rate you can find
With mortgage rates on a downward trend, this is an opportune time to lock in a favorable rate. A rate lock guarantees that the interest rate quoted by your lender will remain available to you for a specified period, which typically spans from 30 to 60 days. This can protect you from potential rate increases while you complete the homebuying process.
But don’t just lock in the first rate you’re offered. Shopping around and comparing offers from multiple lenders is crucial during the process. And, don’t hesitate to negotiate with lenders, as even a small difference in your interest rate can translate to significant savings over the life of your loan.
Consider buying points to lower your rate further
If you have some extra cash on hand and want to ensure that you’re getting the best mortgage rate possible, buying mortgage points could be a smart move in the current environment. Mortgage points, also known as discount points, are essentially prepaid interest that you can purchase upfront to lower your interest rate for the life of the loan. While it can vary, each point typically costs 1% of your loan amount and can lower your rate by about 0.25%.
Rates are still relatively high by historical standards, so buying points could provide substantial long-term savings if you plan to stay in the home for an extended period. However, it’s important to calculate the break-even point to ensure this strategy makes financial sense for your situation.
Act fast on desirable properties
While the cooling of mortgage rates is a positive development, it’s important to remember that the housing market remains competitive due to limited inventory in most markets. And, as rates continue to drop, more buyers who were previously priced out of the market may re-enter, potentially intensifying competition for available homes.
If you find a property that meets your needs and fits your budget, be prepared to act quickly. Have your finances in order, your preapproval in hand and be ready to make a competitive offer. That way, you can set yourself up for success.
Explore alternative loan options
While conventional 30-year fixed-rate mortgages are the most common, don’t overlook other loan options that might be more suitable for your situation. For example, adjustable-rate mortgages (ARMs) typically offer lower initial rates than fixed-rate mortgages. And, in a falling rate environment, an ARM could potentially save you money in the short term, with the option to refinance to a fixed-rate mortgage if rates continue to decline.
The bottom line
As mortgage rates continue to cool, it offers a window of opportunity for prospective homebuyers who have been waiting on the sidelines. And, by taking proactive steps such as securing a preapproval, locking in competitive rates, considering points purchases, acting decisively on desirable properties and exploring various loan options, you may be able to position yourself for success in today’s evolving housing market. While challenges remain, particularly in terms of inventory and overall affordability, the improving rate environment could make it easier to turn your homeownership dreams into reality.
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Social Security Fairness Act passes U.S. Senate
Legislation to expand Social Security benefits to millions of Americans passed the U.S. Senate early Saturday and is now headed to the desk of President Joe Biden, who is expected to sign the measure into law.
Senators voted 76-20 for the Social Security Fairness Act, which would eliminate two federal policies that prevent nearly 3 million people, including police officers, firefighters, postal workers, teachers and others with a public pension, from collecting their full Social Security benefits. The legislation has been decades in the making, as the Senate held its first hearings into the policies in 2003.
“The Senate finally corrects a 50-year mistake,” proclaimed Senate Majority Leader Chuck Schumer, a Democrat from New York, after senators approved the legislation at 12:15 a.m. Saturday.
The bill’s passage is “a monumental victory for millions of public service workers who have been denied the full benefits they’ve rightfully earned,” said Shannon Benton, executive director for the Senior Citizens League, which advocates for retirees and which has long pushed for the expansion of Social Security benefits. “This legislation finally restores fairness to the system and ensures the hard work of teachers, first responders and countless public employees is truly recognized.”
The vote came down to the wire, as the Senate looked to wrap up its current session. Senators rejected four amendments and a budgetary point of order late Friday night that would have derailed the measure, given the small window of time left to pass it.
Vice President-elect JD Vance of Ohio was among the 24 Republican senators to join 49 Democrats to advance the measure in an initial procedural vote that took place Wednesday.
“Social Security is a bedrock of our middle class. You pay into it for 40 quarters, you earned it, it should be there when you retire,” Ohio Senator Sherrod Brown, a Democrat who lost his seat in the November election, told the chamber ahead of Wednesday’s vote. “All these workers are asking for is for what they earned.”
What is the Social Security Fairness Act?
The Social Security Fairness Act would repeal two federal policies — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — that reduce Social Security payments to nearly 3 million retirees.
That includes those who also collect pensions from state and federal jobs that aren’t covered by Social Security, including teachers, police officers and U.S. postal workers. The bill would also end a second provision that reduces Social Security benefits for those workers’ surviving spouses and family members. The WEP impacts about 2 million Social Security beneficiaries and the GPO nearly 800,000 retirees.
The measure, which passed the House in November, had 62 cosponsors when it was introduced in the Senate last year. Yet the bill’s bipartisan support eroded in recent days, with some Republican lawmakers voicing doubts due to its cost. According to the Congressional Budget Office, the proposed legislation would add a projected $195 billion to federal deficits over a decade.
Without Senate approval, the bill’s fate would have ended with the current session of Congress and would have needed to be re-introduced in the next Congress.
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12/20: CBS Evening News – CBS News
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Saturday is the winter solstice and 2024’s shortest day. Here’s what to know about the official start of winter.
The 2024 winter solstice, the shortest day of the year, happens on Saturday, Dec. 21, in the Northern Hemisphere. The celestial event signifies the first day of winter, astronomically.
What is the winter solstice?
The winter solstice is the day each year that has the shortest period of daylight between sunrise and sunset, and therefore the longest night. It happens when the sun is directly above the Tropic of Capricorn, a line of latitude that circles the globe south of the equator, the National Weather Service explains.
The farther north you are, the shorter the day will be, and in the Arctic Circle, the sun won’t rise at all.
How is the day of the winter solstice determined?
The winter solstice occurs because of the Earth’s tilt as it rotates around the sun.
When the Northern Hemisphere tilts away from the sun, the nights last longer. The longest night happens on the solstice because the hemisphere is in its furthest position from the sun. That occurs each year on Dec. 21 or 22.
This year, it falls on Dec. 21 at 4:21 a.m ET, to be precise.
On the summer solstice, when the northern tilt is closest to the sun, we have the longest day, usually June 20 or 21.
The solstices are not always exactly on the 21st every year because the earth’s rotation around the sun is 365.25 days, instead of 365 even.
Will days start getting longer after the winter solstice?
Yes. Each day after the solstice, we get one minute more of sunlight. It doesn’t sound like much, but after just two months, or around 60 days, we’ll be seeing about an hour more of sunlight.
When will winter officially be over in 2025?
The meteorological winter ends on March 20, 2025. Then, spring will last until June 20, when the summer solstice arrives.
How is the winter solstice celebrated around the world?
Nations and cultures around the world have celebrated the solstice since ancient times with varying rituals and traditions. The influence of those solstice traditions can still be seen in our celebrations of holidays like Christmas and Hanukkah, Britannica notes.
The ancient Roman Saturnalia festival celebrated the end of the planting season and has close ties with modern-day Christmas. It honored Saturn, the god of harvest and farming. The multiple-day affair had lots of food, games and celebrations. Presents were given to children and the poor, and slaves were allowed to stop working.
Gatherings are held every year at Stonehenge, a monumental circle of massive stones in England that dates back about 5,000 years. The origins of Stonehenge are shrouded in mystery, but it was built to align with the sun on solstice days.
The Hopi, a Native American tribe in the northern Arizona area, celebrate the winter solstice with dancing, purification and sometimes gift-giving. A sacred ritual known as the Soyal Ceremony marks the annual milestone.
In Peru, people honor the return of the sun god on the winter solstice. The ancient tradition would be to hold sacrificial ceremonies, but today, people hold mock sacrifices to celebrate. Because Peru is in the Southern Hemisphere, their winter solstice happens in June, when the Northern Hemisphere is marking its summer solstice.
Scandinavia celebrates St. Lucia’s Day, a festival of lights.
The “arrival of winter,” or Dong Zhi, is a Chinese festival where family gathers to celebrate the year so far. Traditional foods include tang yuan, sweet rice balls with a black sesame filling. It’s believed to have its origins in post-harvest celebrations.
Researchers stationed in in Antarctica even have their own traditions, which may include an icy plunge into the polar waters. They celebrate “midwinter” with festive meals, movies and sometimes homemade gifts.