Daily Money Tip: Mortgages: Rates may rise; U.S. rules tighten

Posted: February 19, 2014

Houses are often our biggest investments. Know that borrowing rates for those wanting to take out mortgages will likely creep higher this year.

Currently, a 30-year fixed mortgage costs 4.32 percent, while an adjustable rate costs 3.46 percent.

In addition, refinancing won't be as easy as it has been. Tighter mortgage rules that took effect Jan. 10 limit people from taking out a mortgage or refinancing an existing one if it puts their overall household borrowing at more than 43 percent of income, according to Brian Simon, of New Penn Financial mortgage brokers in Plymouth Meeting.

"We could see a slight pop in rates" later in the year, as well, Simon says.

The Federal Reserve has continued its bond-buying purchases to help suppress interest rates, although it is "tapering" back on the program as planned, according to last week's testimony from new Fed chair Janet Yellen.

"Still," Simon notes, "the housing market and the economy are important to the president," and the White House would like to see this sector continue recovering.

The new mortgage rules in 2014 aren't set in stone. The debt cap, for instance, includes common forms of debt that count toward the total, including student loans, most fees and points related to a home purchase, and property taxes. But the bank can be flexible if it's justified. Points and fees cannot exceed 3 percent, and adjustable-rate mortgages are restricted to mostly sophisticated borrowers.

For more information about the new mortgage rules, visit the Consumer Financial Protection Bureau's website, www.consumerfinance.gov, and click on "Law and Regulation," or call 855-411-2372.

In-home care rates

In 2015, there will be a change in what's called "companion care" wage laws. Home health-care agencies that pay employees an hourly wage have so far not been required to pay overtime rates beyond 40 hours a week. Starting next year, that changes, says Stephanie Breedlove, vice president of Care.com's Homepay, a payroll company for in-home care providers.

"Starting next year, they'll be paid time-and-a-half on the 41st hour," Breedlove says.

Care.com (symbol: CRCM) recently went public and is one of the new national chains of home health-care agencies and referral services.

For an average of what Philadelphia-area caregivers are paid, you can visit the Care.com website and punch in your zip code. Currently, Breedlove says, a full-time nanny or elder-care provider is earning $13 to $16 an hour (on the books).



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