Dan Harding - Intercap Lending

https://dansmarketupdate.substack.com/p/how-much-cash-do-i-actually-need

How much cash do you actually need to buy a home?

This is one of the first questions I get from buyers, and the answer is often less than they expect. Let’s break it into two parts: your down payment and your closing costs.

First, the down payment. Conventional loans allow as little as 3% down for eligible buyers. On a $400,000 home, that’s $12,000. You may be able to use a gift from family for that money, too. And you don’t always have to be a first-time buyer to qualify for a 3% down option; it depends on the loan program and your income. singlefamily.fanniemae.com

You may have other options. If you’re eligible for a VA loan, you can typically buy with no down payment and no monthly mortgage insurance. USDA loans also offer no-down-payment financing for eligible buyers and homes in qualifying rural areas. Veterans Benefits Administration

Here in Utah, down payment assistance can help as well. Utah Housing has several options that provide a second loan to help cover the down payment and, depending on the program, some closing costs. One option defers payments on that second loan. It’s still a loan that will need to be repaid, so I’d walk you through both the cash needed at closing and the long-term cost before recommending it. utahhousingcorp.org

Then there are closing costs. These include things like title, underwriting, appraisal, and credit report fees, plus any cost to obtain a particular interest rate. As an example, on a $400,000 loan, if the rate costs 0.5% of the loan amount ($2,000) and the other fees total about $4,600, the fees would come to roughly $6,600. That’s an example, not a flat cost for every loan; the rate you choose and the details of the transaction can change it.

You’ll also see prepaid items on your closing statement. These aren’t lender fees. They include your first year of homeowners insurance, money deposited into your escrow account for future taxes and insurance, and interest from your closing date through the end of that month. On a loan around $400,000, those items might add roughly $2,500 to $3,000, depending in part on when you close and the property’s taxes and insurance.

Here’s where the negotiation can make a big difference: you can ask the seller to pay some or all of your closing costs. Whether they’ll agree depends on the home, the offer, and how much interest they’re getting from other buyers. If seller help isn’t available, we can look at whether a Utah Housing option or another loan setup gets you closer to the amount you want to bring to closing.

So, how much cash do you actually need? It could be your down payment plus closing costs, or it could be much less with the right loan program and negotiated seller credit. Give me a purchase price and the amount you’re comfortable using from savings, and I’ll show you the options side by side.

How much cash do I actually need to buy a home? This is one of the first questions I get from buyers, and the answer is often less than they expect.

Could your paycheck help you pay less mortgage interest? We have a new product that is a morgage line of credit tied to your checking account.

Your income and other deposits flow into your checking account. Those funds immediately reduce the outstanding loan balance used to calculate interest. Because interest is calculated daily, every day your money remains in the account could help lower the amount of interest you owe.

You can still use the money for groceries, utilities, transfers, debit-card purchases, and other everyday expenses. As money is spent, the loan balance increases again. The potential benefit comes from having your income working against your mortgage balance, even while it is waiting to be spent.

Check out my article:

dansmarketupdate.substack.com

When you’re trying to understand why mortgage rates move, it mostly comes down to two things. The first is the 10 year treasury. Mortgage rates tend to follow it up or down. The second is the Federal Reserve and what it says about inflation and unemployment.

This 10 year treasury is now as high as it was in 2023, when mortgage rates got to 8%. So how are rates still a smidge under 7% today? Mortgage spreads, glorious mortgage spreads!

What are mortgage spreads? It’s a mystery. Here’s the quick, nerdy technical answer… it’s the gap between the 10 year treasury yield and a 30 year fixed rate. That spread has come down over the past few years, helping keep today’s rates significantly lower than they would otherwise be. How do the mortgage spreads work? It essentially acts as a cushion so when the 10 year treasury has a huge move higher or lower, it keeps mortgage rates in a smaller range. It’s nice that you typically don’t see rates go up 0.25% in a single day.

Typically, the more chaotic the time, the higher the spread gets. Right now you may be thinking, well this is quite a crazy time, why isn’t it higher? Well, because it is mysterious. And I can’t explain it. Like why does Tylenol work? Medical science can’t completely explain it. It just does. Mortgage spreads are the Tylenol for rates and we’re grateful for them!

The Federal Reserve (Fed) meets next week and is expected to raise its rate by 0.25%. I hope they do. Why? Well, in this bizarro world where nothing makes sense, mortgage rates may improve from it. How? It’s all about perception. A rate hike would show that the Fed is serious about slowing spending and getting inflation under control. Credit cards and HELOC rates would go up, but mortgage rates could improve, even if just a pinch.

If we go back a few years, we can see what happens when the Fed waits too long to respond to inflation. This happened in 2021 when inflation was going up each month and their view was it was transitory and they weren’t overly concerned about it. By the time the Fed decided to start raising rates in March 2022, inflation had significant momentum, eventually peaking at 9.1% and mortgage rates followed, rising from around 3% to 7% during 2022.

That was a crazy year! We don’t want that. We want the Fed to act carefully and help keep inflation in check, paving a way for mortgage rates to eventually come down a bit.

I know there’s a lot of uncertainty right now, but it’s not all doom and gloom. Homes are still being bought and sold, and opportunities are still out there. If you’re thinking about buying, selling, or refinancing, I’m happy to look at your specific situation and help you decide whether it makes sense, not simply whether rates are up or down.

Thank you for reading!

https://dansmarketupdate.substack.com/p/should-i-buy-a-home-now-or-wait-for?r=agffw&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true

Should I buy a home now or wait for rates to come down? Mortgage rates have been hovering around 6.625% all week.

Mortgage rates moved slightly higher this week after Fed Chair Warsh said he would support rate hikes if inflation remains high. The good news is his willingness to prioritize the Fed’s inflation mandate may help build credibility with the market moving forward.

The Iran conflict, tariffs, and inflation concerns are already heavily priced into today’s rates. It would likely take continued bad news for rates to move higher, while any positive economic or conflict development would help bring them down. For now, I think rates stay near where they are.

The graph below shows how the housing market is hanging in there in Utah. Single family inventory is now over 11,000 homes, the highest level since 2018. Homes are taking longer to sell, with the median days on market now at 63, and 43% of listings have done a price reduction.

That creates real opportunities for buyers. There are more homes to choose from, sellers are becoming more flexible, and buyers generally have more negotiating power than they’ve had in years.

If you have friends, family, or a co-worker considering buying, selling, or refinancing a home in the next year, even if they’re not ready quite yet, I’m happy to go through the numbers with them and would take great care of them. We can look at what they may qualify for, what the payment would be, and what it would take to get into the right home.

Thanks for reading!

It’s been another relatively quiet week, with mortgage rates holding steady.

Rates improved for a moment after the Treasury announced plans to increase its purchases of longer term Treasury bonds. The goal there is to improve the bond market and help bring down long term interest rates.

That improvement didn’t last long, though, as oil prices began climbing again with the ongoing conflict with Iran. Diesel prices have gone up 50% since the war began, which could add to inflation because diesel is used in most freight transportation. Higher shipping costs eventually work their way into the prices of nearly everything we buy.

There is currently a 32% chance of a Fed rate hike in September. Next week brings two important reports, Wednesday’s PCE inflation report, which is the Fed’s preferred inflation measure, and Friday’s revision to employment numbers from April 2025 through March 2026.

Because the employment data is older, it may not move mortgage rates much, but it should give us a clearer picture of the job market. Then, on September 4, we’ll receive the August jobs report, which is the biggest factor in the Fed’s September decision on rates.

Through all the craziness this year, mortgage rates and home sales have really hung in there. Nationally, July existing home sales were 0.7% higher than a year ago. Utah sales were down 1.9% from last July, but are still 2.8% higher year to date.

The housing market may not be booming, but people are still buying and selling. Whether it’s a good time for you depends less on the headlines and more on your finances, your plans and the payment you’re comfortable with.

If you’re considering buying, selling or refinancing, I’d love to help you understand your options and see what the numbers could look like. Thanks for reading!

Dan

It’s been a relatively quiet week for mortgage rates. Both inflation reports came in slightly better than expected. The Consumer Price Index rose 0.1% in July, lowering the year over year number from 3.5% to 3.4%. The Producer Price Index was flat, versus the expected 0.2% increase, and fell from 5.5% to 4.7% year over year.

For the Federal Reserve, it continues to come down to jobs and inflation. After last Friday’s weak employment report and this week’s encouraging inflation data, it’s becoming harder to justify raising the federal funds rate next month. Markets currently put the odds of a hike at 32%.

With that said, it’s easy to become focused on outside forces. Some buyers are waiting for lower rates, lower prices, or for an analyst to declare that the perfect time to buy has arrived.

But is it a good time to buy?

The honest answer depends much more on your personal situation than on the latest headline. Are you financially ready? Is your income stable? Do you plan to stay in the home long enough? Can you comfortably afford the payment? Would owning improve your life?

It will be your home, your finances, and your life.

Perfectly timing the housing market is nearly impossible. Only years later can we look back and identify the Best time to buy. But we don’t get to make decisions with hindsight. We make them in real time and move forward.

By then, the question may no longer matter. Instead of wondering whether it was the perfect time to buy, you may be deciding how to improve the backyard or where to put the pizza oven you’ve always wanted.

That’s why time in the market often matters more than timing the market. Over the years, a home becomes more than an investment. It’s where you put down roots and create memories. Meanwhile, you’re also paying down the loan and benefiting from long term appreciation.

That doesn’t mean everyone should buy right now. It means the decision should be based on whether buying makes sense for you and not on predictions about what rates or home prices might do next.

If you’re wondering what your options look like and simply want to have a conversation, I’d be happy to talk it through with you. Understanding your best next step and having a plan to get where you want to go is incredibly valuable.

✅ Conventional 30-Year Fixed: 6.375% (6.462% APR)
✅ FHA 30-Year Fixed: 5.875% (6.640% APR)
✅ VA 30-Year Fixed: 5.625% (5.961% APR)
✅ Jumbo 30-Year Fixed: 6.25% (6.355% APR)
✅ Investment Property 30-Year Fixed: 6.75% (6.804% APR)

I hope you had a great 4th of July weekend.

Mortgage rates are a little worse over the past week. While most of the employment reports last week pointed to a strong job market, last Thursday’s jobs report came in weaker than expected. It showed fewer new jobs than economists had forecast, and previous months were revised lower as well.

Why does that matter? The job market is one of the biggest factors the Federal Reserve watches when deciding where interest rates are going. Earlier this year, financial markets expected the Fed to cut rates a couple of times. But then the job market started showing more growth and inflation was ticking up higher, and that was before the conflict with Iran poured gas (no pun intended) on the inflation fire. So, the market went from expecting Fed rate cuts to Fed rate hikes!

Now that the conflict is mostly over and oil prices are back down to levels before the war started, there’s been some thought that mortgage rates would drop, but it hasn’t happened yet and doesn’t seem likely because mortgage rates didn’t skyrocket during the conflict and inflation continues to be a problem. Inflation should start coming back down, but it takes time. So, what to watch closely now are the job reports.

If future jobs reports continue to show weaker numbers, we may get through the year with no Fed rate hikes and keep a stable, calm mortgage rate environment. That’s my hope.

If you're thinking about buying a home this year, don't feel like you have to perfectly time interest rates. The right home and the right monthly payment matter much more than trying to catch the absolute lowest rate.

Let me know if you have any questions or if I can do anything for you. Thank you!

✅ Conventional 30-Year Fixed: 6.375% (6.461% APR)
✅ FHA 30-Year Fixed: 5.875% (6.595% APR)
✅ VA 30-Year Fixed: 5.625% (5.878% APR)
✅ Jumbo 30-Year Fixed: 6.5% (6.597% APR)
✅ Investment Property 30-Year Fixed: 6.75% (6.832% APR)

Hey there! Mortgage rates moved higher today after financial markets reacted to ongoing inflation concerns and continued uncertainty surrounding the conflict in Iran and global oil supply.

The short version is this: inflation is still running hotter than the Federal Reserve would like, and the economy remains strong enough that the Fed is not expected to cut rates anytime soon.

So yes, rates are a little worse this week.

What’s interesting, though, is that they are still much lower than they could be by now. Back in 2023, mortgage rates briefly touched 8%. The benchmark for mortgage rates is the 10 year treasury. That was at 5% back then. Today, it is at 4.6%. And yet most mortgage rates are still sitting in the mid-6% range.

One reason for that is something called mortgage spreads, the difference between a 30 year mortgage rate and this 10 year treasury. The improved mortgage spreads have quietly helped keep mortgage rates lower than they otherwise would be this year.

The good news is that buyers today are still in a much better position than many realize.

Housing inventory has improved, sellers are more negotiable, and buyers often have more leverage right now. Buyers actively looking today may eventually realize this was a better window of opportunity than it felt like in the moment.

As always, every situation is different depending on credit score, down payment, loan size, and property type. If you want to go through the numbers for your own situation, let me know.

Have a great weekend!

Jim and his wife are such great people, and this transaction threw just about every curve ball imaginable at them along the way. There were delays, builder issues, and plenty of stressful moments, but they stayed patient and kept pushing forward.

Honestly, these are the situations I love helping with most. Complex deals can be daunting, but there’s nothing more rewarding than helping good people finally get into the home they’ve worked so hard for.

I'm really grateful for their trust and for the kind words!