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Michael

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Refinance Volume Continues Upward Trend

Conventional refinances continue to be hot in 2012.  Regardless of the value of their homes, owners are taking advantage of historically low-interest rates.

Information taken from Mortgage News Daily –

Refinancing through Freddie Mae and Fannie Mae jumped sharply in August as homeowners continued to take advantage of record low rates. The two government sponsored enterprises (GSEs) refinanced 420,021 loans during the month, up from 356,091 in July. 138,678 of the loans were refinanced through Freddie Mac and 281,343 through Fannie Mae. So far in 2012 there have been 2,945,844 refinances completed through the two GSEs.

Loans through the Home Affordable Refinance Program HARP also increased, but only slightly, from a combined total of 96,371 in July to 98,900. There have been 1.64 million HARP refinancings since the program began in April 2009. In late 2011 the Federal Housing Finance Agency (FHFA) announced “enhancements” to the program in hopes of encouraging more refinancing of homes that were underwater with their mortgages. Since the first of 2012 618,217 homeowners have taken advantage of the revised program…

Do you need to refinance your current mortgage?

 

Low Home Appraisals Are Still A Problem

A couple of weeks ago, I posted an article about the dominance of refinances in the mortgage market (see here).

This trend is likely to continue, at least for the near term, as housing values continue to delay, cancel, and generally drag down home purchases.

Here’s Why…

The National Association of Realtors (NAR) conducted a survey of its members in September.  The results indicated that 65% of agents claimed no problems, but 35% experienced delays and cancellations of their deals due to low values.  See related article here.

Although 35% is less than 65%….35 is still a large number when you consider the sheer number of real estate purchases that are transacted (attempted to transact) on a daily/monthly basis.  35% is enough to keep the housing market from a full recovery.

Why are refinances able to work then?

Government programs such as HARP and FHA Streamlines allow homeowners with little (or no) equity in their homes to refinance to a lower rate.  These programs are popular right now, and make up a large portion of the total refinances been underwritten.

The idea behind these refi programs, is to help struggling homeowners make their payments on time, by allowing then to reduce their monthly obligation to a more affordable one.

This helps to limit foreclosures and short sales, which only further the downward spiral of lower property values.

Do you have an opinion on this?  Post it here.

3 Refinance Trends in 2012 – Likely to Continue

Remember the days of the ‘cash out refi’?  When homeowners eager to make a large purchase, consolidate debt, or splurge on a big vacation, would pull money (equity) out of their homes through a refinance.

Those days seem to be gone.

Consider these 3 recent trends as reported by Freddie Mac:

1) Homeowners are trading in their 30 year fixed rates for shorter terms.  This move shaves years off the mortgage and saves 10’s of thousands in interest owed to the bank.

2) Almost 84% of homeowners either brought money to the table to pay down their balance, or kept their balance the same when they refinanced.  With so much uncertainty remaining in the housing market, those who were able to refinance, didn’t take any chances, and sought to improve their equity position – or at least not worsen it.

3) The average rate was reduced by 28% through refinancing.  This is the biggest drop in 27 years, since Freddie Mac began tracking this type of data.

Still facing economic pressures, homeowners who were able to better their position by increasing equity, saving money, and eliminating long-term debt, did so through refinancing.

Have you refinanced your mortgage this year?  Please leave a comment.

 

Mortgage Rates Continue to Drop

A percent sign. (Photo credit: Wikipedia)

Interest rates across the board continue their downward plunge into record low territory. 

30-year fixed-rate mortgage (FRM) averaged 3.36 percent with an average 0.6 point for the week ending October 4, 2012, down from last week when it averaged 3.40 percent. Last year at this time, the 30-year FRM averaged 3.94 percent.

15-year FRM this week averaged 2.69 percent with an average 0.5 point, down from last week when it averaged 2.73 percent. A year ago at this time, the 15-year FRM averaged 3.26 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.72 percent this week with an average 0.6 point, up from last week when it averaged 2.71 percent. A year ago, the 5-year ARM averaged 2.96 percent.

1-year Treasury-indexed ARM averaged 2.57 percent this week with an average 0.4 point, down from last week when it averaged 2.60 percent. last week. At this time last year, the 1-year ARM averaged 2.95 percent.

Source: Freddie Mac

Are you taking advantage of these low rates?  Please comment.

 

Top 3 Most Stressful Life Experiences

The top 3 most stressful life events as rated by Americans:

1. Death
2. Divorce
3. Moving

Moving? Really?

Yep.  It seems everyone dreads the process.  Reasons given for cause of stress include:

• Deciding when and where to move
• Worrying about how much the bank will lend
• Finding the right home
• Negotiating, contracts, inspections
• What actually happens at closing

When we don’t know something, it causes fear and stress.  Most people go through the home buying/moving process without really understanding what takes place.

Like facing that Algebra exam you didn’t study for, going into a major purchase (like a house) without preparing can elevate your anxiety levels to ‘off the chart’ status.

The Solution

Arm yourself with a good team and knowledge of the process.

Finding and working with good mortgage and real estate professional(s) will greatly increase your chances of a successful transaction.  Select carefully, find people who you can work with for the next few months (it may take even longer).

Get the knowledge before you start.  This should be the first step.  There are several books and eBooks (mine included) written by experts that will give you an idea of what to expect.

The more you know…the better you’ll feel!

Will this remove all stress from the home buying process?  Probably not.  But working with good people, and knowing what to expect will go a long way to make you feel better and more confident as you purchase your new home.

Please add a comment here…

 

Refinances Dominate Market

I read an interesting article this morning, about mortgage loan market share (I know, who really thinks that is interesting).  What struck me was the actual number of refis taking place vs. purchases.

The current number is 81.2% of all mortgage loan applications are for refis.

I realize that homeowners are taking advantage of all time low rates, and that makes perfect sense.  But where are the buyers?

I’ve seen several reports (written recently) telling the tale of rising property values, and increased home sales (albeit in certain markets).

Are these reports accurate?  Are they true?

The most recent numbers (see article mentioned) show a nationwide purchase market that has declined since 2008 (slightly flattening in the last 2 years), and a refi market that spikes and plummets – directly correlated with rates.  Right now, refis are spiking as mortgage rates are at all time lows.

Buyers are obviously not ready to pull the trigger just yet.

Some economists believe that housing will pull us out the doldrums.  They claim that every new house sold creates something like 7 new jobs.

But is this a realistic expectation?

Aren’t buyers (or potential buyers) waiting for a more stable economy?  Can we expect people to make a huge investment/commitment in a new home, when they feel uncertain about their income or job?

Yes, the housing market is a huge part of our country’s GDP.  It is a large driver in our economy.  But until people can feel good about their jobs and income again, I don’t see the purchase of housing leading us out.

Do you have an opinion about this?  Please leave a comment.

 

What to Look for During Your Final Walkthrough

English: (Photo credit: Wikipedia)

This step is a must! Do not let yourself become distracted by furniture placement just yet.

Final walk-through are not a home inspection. This is not a time to begin negotiations with the seller to do repairs, nor is it a contingency. A final walk-through is a “viewing” performed anywhere from a few hours to five days before closing, and its primary purpose is to make certain that the property is in the condition you agreed to buy, and that any agreed-upon repairs were made and nothing has gone wrong with the home since you last looked at it.

What should you look for on your final walk-through?

• Turn on and off every light fixture

• Check electrical outlets

• Run water & look under sinks for leaks

• Test all appliances

• Check garage door openers

• Open and close all doors

• Flush toilets

• Inspect ceilings, wall and floors

• Run garbage disposal and exhaust fans

• Test heating and air conditioning

• Open and close windows

• Make sure all debris is removed from the home

I provide helpful tips on the walk-through process, as well as, the entire buying process in my eBook: Home In 10 Steps.  Get your copy here.

Is there anything else that you should look for during a walk-through?  Please leave a comment!

5 Reasons to Buy a Home Now

investment property atlanta

by The KCM Crew

Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:

Supply Is Shrinking

With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

Price Increases Are on the Horizon

Prices will bounce along the bottom this winter. However, projections call for appreciation after that. Several studies and surveys call for price increases over the next few years starting in 2013. One such survey shows that prices will increase over 10% by 2016.

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Time Off

I will be traveling for the next couple of weeks, and taking lots of pictures to share.  See you when I get back!