Economic update for the week ending November 10, 2018

Crude Oil  $59.87   -   Gold  $1,210.30    -    Silver  $14.13    -     EUR/USD  $1.13

Stock markets finished higher for a second straight week -  Stocks markets have gained 5% in the last two weeks. That has made up about 1/2 of October’s drop. We are now just 5% below the all-time highs set in September. The Dow Jones Industrial Average closed the week at 25,989.30, up from 25,270.23 last week. It is up 5.1% year to date. The S&P 500 closed the week at 2,781.01, up from 2,723.06 last week. It’s up 4.0% year to date. The NASDAQ closed the week at 7,406.90, up from 7,356.99 last week. It’s up 7.3% year to date.

Treasury Bond Yields slightly lower this week -  The 10 year Treasury bond closed the week yielding 3.19%, down from 3.22% last week. The 30 year Treasury bond yield ended the week at 3.40%, down from 3.46% last week. We watch Treasury bond yields because mortgage rates follow bond yields.

Mortgage rates were higher this week -  The November 8, 2018 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 4.94%, up from 4.83% last week. The 15 year fixed was 4.33%, up from 4.23% last week. The 5 year ARM was 4.14%, up from 4.04% last week.

How long does it take to build credit history? -  If you ever plan to buy a house, establishing a track record of past payments is essential, because it proves to mortgage lenders that you've paid people back. Which means they'll be more apt to loan you money for a home. Still, if you have no credit history, because you're young or just never bothered, here's the straight dope. Done right, it can take as little as six months. Done wrong? It can take several years. So if you're in a rush to establish credit to buy a home, you'll want to know the right way to go about it! Heed this advice to learn what to do.

  1. How long does it take to build credit? -  At a minimum, you need to open at least one credit card in your name. From there, you just need to make a purchase using the card, and then make a payment. Once you've made your payment, your creditor will report your payment to one or more of the major credit bureaus (TransUnion, Equifax, and Experian). Typically, it takes at least three to six months of activity before a credit score can be calculated. Once you've established credit, you still have some work to do. Credit histories are scored based on performance, much like the grades you got in school. Healthy credit behavior, like on-time payments and staying well below your credit limit, lead to a higher credit score. What's more, there are two types of scores. VantageScores and FICO scores. Some mortgage lenders may look at a VantageScore, but FHA lenders are required to use FICO scores. After opening their first credit account and beginning to make timely payments, it will take at least three months for the person to generate a VantageScore, and six months to have enough information to create a FICO score. And the longer you demonstrate good credit behavior, the higher your score can climb from there. In other words, a couple of on-time payments is nice, but years and years of on-time payments is far more impressive, and reflected in your score accordingly. In fact, the length of your credit history can count for as much as 15% of your credit score.
  2. What credit score do you need to get a mortgage? -  Your initial credit score when building credit will typically be in the 660s, which is considered on the low end of fair (fair scores range from 650 to 699). It could be just enough to buy a house with some lenders, but not all, because lenders vary regarding the minimum credit score they will accept. You should also know that while a fair score may get you a mortgage, it won't qualify you for the best mortgage. In terms of interest rates and other deals. To get better mortgage rates, you will need a good score (700 to 759) or an excellent score (760 or higher). Unfortunately, achieving these scores will take, you guessed it! more time.
  3. How to speed up the credit building process -  To establish a payment history, use your card reasonably. Make payments on time (or early, if possible). Setting up automatic payments can help. I recommends keeping your balance below 30% of your credit limit and, ideally, paying it off in full each month. These simple steps will eventually push your score from fair to good to excellent, allowing you to get the best rates for your mortgage. Here are some other ways to speed up the credit building process and ensure your credit history and score get off to a good start.

Also know that when it comes to mortgages, your credit score is just one piece of a larger puzzle. According to Lynch, your lender will also look at your employment history, how long you’ve lived at your current residence, and your credit references.