Mortgage Market Guide Chairman and CEO, Barry Habib, recently spoke on Fox Business News about the state of the housing market. Barry offered some valuable insight that I believe is worth sharing.
Click here to view:
http://video.foxbusiness.com/v/4210331/making-sense-of-the-housing-numbers
Barry tells us that this is a "market of opportunity". Due to a variety of economic factors across the globe, our mortgage rates continue to bounce off of all-time lows. Couple that with aggressive home prices and the incentives to buy are hard to resist.
Of course, you have to qualify for the loan and lenders have tightened up their guidelines so some will be left out. Some would say this is an "over-correction" but others would argue that reasonable lending standards are being employed. Personally, I'd like to see programs offered again for the borrower with excellent credit and equity in the home without having to fully document their income. The self-employed are a segment of our borrowing population that have been left out in the cold since the Mortgage Meltdown and I believe there are ways to include them.
Barry reminds us that real estate markets are highly localized and that factors such as the local economy and housing inventory will play a part in the "deal" you can get on a new home and how quickly you can expect it to appreciate. This may not be the time to expect big returns on a six month flip but if you are looking to stay in a home for several years the returns could be quite healthy.
Eventually the Fed will have to take their foot of the gas and when they do we can expect these rates to climb back up. So, if you are in position to buy or if you think you'll be in your current home for a few more years and wish to improve your terms, now is the time to seek advice.
Opportunity is knocking. Make sure you answer the door.
Please share this with anyone you know and care about who may be considering a purchase or refinance of their own. They will thank you.
Thursday, July 22, 2010
Tuesday, May 18, 2010
I Keep Holdin' On
We are pleasantly surprised by the fact that our mortgage rates are still so low. As you'll note in my previous posts, we've been expecting rates to rise since the Fed's purchasing of Mortgage Backed Securities ended in March, however we're now seeing rates as low as they've ever been, thanks in large part to the economic turmoil in Greece, Portugal and other countries, which are having a negative impact on the Euro. Once again this has driven investors toward our safe haven U. S. bond market, driving up the bond price and lowering our mortgage rates.
The homebuyer tax credit is gone, but there are still lots of homes for sale and those sellers don't have the tax credit to use as an incentive any longer. Those who are able to are more likely to incent buyers with lower prices.
Super-low interest rates and lower prices = great opportunity. No strings attached. No government intervention. Just the market working to let you know that now could be a great time to buy (or to refinance if you've still not done so).
While these rates have been holding on, they won't forever. Inflationary pressures and a rebounding economy are both around the corner and will both be bringing these rates up to more traditional levels soon.
Please share this message with anyone you know and care about who is considering that home purchase or who has not yet refinanced and I'll answer any and all of their questions.
I can be reached at 615-627-4869 or at twiggins@affsmortgage.com. Thank you.
The homebuyer tax credit is gone, but there are still lots of homes for sale and those sellers don't have the tax credit to use as an incentive any longer. Those who are able to are more likely to incent buyers with lower prices.
Super-low interest rates and lower prices = great opportunity. No strings attached. No government intervention. Just the market working to let you know that now could be a great time to buy (or to refinance if you've still not done so).
While these rates have been holding on, they won't forever. Inflationary pressures and a rebounding economy are both around the corner and will both be bringing these rates up to more traditional levels soon.
Please share this message with anyone you know and care about who is considering that home purchase or who has not yet refinanced and I'll answer any and all of their questions.
I can be reached at 615-627-4869 or at twiggins@affsmortgage.com. Thank you.
Wednesday, March 31, 2010
Thank You, Fed. Now what?
On behalf of the American homeowner, I'd like to say, "Thank You" to our Federal Reserve for buying $1.25 Trillion in Mortgage Backed Securities over the last year and a half. Their intervention has helped keep mortgage interest rates at all-time lows, allowing homeowners to refinance into more affordable mortgages and allowing homebuyers to achieve the dream of homeownership with less strain on their budget in an economy that requires a more discriminating look at how we spend.
The Fed's program of purchasing has ended. Now the big question is about to be answered. What will rates do now that the Fed isn't buying these bonds? My research tells me that most experts agree that rates will go up. With less demand for these bonds, prices will be forced down and mortgage rates will be forced up. We expect to see an initial spike in rates, which may be tempered as less mortgages get written. At the very least we expect an increase in volatility.
So, what does this mean to you? That depends on your situation:
- the homeowner: if you haven't refinanced out of your Adustable or High-Rate loan, this could be your last chance. Qualifying is still a challenge for many, but if you qualify, it is worth one last look.
- the prospective home buyer: with rates still hovering near all-time lows, homebuyer tax incentives and low home prices this is the perfect opportunity to buy whether you are a first timer or even if you are looking to trade up (or down).
- the real estate professional: while we know that people will continue to buy homes at higher rates and without tax incentives, it is our responsibility to let the people know that TIME IS OF THE ESSENCE if they want to take advantage of these opportunities. All good things must come to an end and unfortunately we may very well see the end staring us in the face. Think of how grateful your buyers will be when they see how you encouraged them to act and others are accepting higher rates, paying higher prices and NOT receiving tax credits.
Now that rates are subject to increased volatility, I'll be posting more regularly, commenting on how the market will react without the Fed's support. Stay tuned and hold on to your hat!
The Fed's program of purchasing has ended. Now the big question is about to be answered. What will rates do now that the Fed isn't buying these bonds? My research tells me that most experts agree that rates will go up. With less demand for these bonds, prices will be forced down and mortgage rates will be forced up. We expect to see an initial spike in rates, which may be tempered as less mortgages get written. At the very least we expect an increase in volatility.
So, what does this mean to you? That depends on your situation:
- the homeowner: if you haven't refinanced out of your Adustable or High-Rate loan, this could be your last chance. Qualifying is still a challenge for many, but if you qualify, it is worth one last look.
- the prospective home buyer: with rates still hovering near all-time lows, homebuyer tax incentives and low home prices this is the perfect opportunity to buy whether you are a first timer or even if you are looking to trade up (or down).
- the real estate professional: while we know that people will continue to buy homes at higher rates and without tax incentives, it is our responsibility to let the people know that TIME IS OF THE ESSENCE if they want to take advantage of these opportunities. All good things must come to an end and unfortunately we may very well see the end staring us in the face. Think of how grateful your buyers will be when they see how you encouraged them to act and others are accepting higher rates, paying higher prices and NOT receiving tax credits.
Now that rates are subject to increased volatility, I'll be posting more regularly, commenting on how the market will react without the Fed's support. Stay tuned and hold on to your hat!
Friday, February 5, 2010
What Affects Interest Rates?
Our friends at Mortgage Market Guide have shared with us a wonderfully informative video about mortgage interest rates:
click her to watch video
The tools that they reference in their video are what I watch all day long. I'm streaming live bond market updates and am alerted via email, text and on the cell phone of movement in the market that will cause lenders to reprice for the worse (or better).
Is your lender doing this?
Rates are still great but won't be for long, so if you or someone you know is considering a refinance or purchase, please call now to research your specific options.
- what causes them to go up or down?
- why they are so volatile?
- why they've been so low this past year?
- why they likely won't be so low after the first quarter?
click her to watch video
The tools that they reference in their video are what I watch all day long. I'm streaming live bond market updates and am alerted via email, text and on the cell phone of movement in the market that will cause lenders to reprice for the worse (or better).
Is your lender doing this?
Rates are still great but won't be for long, so if you or someone you know is considering a refinance or purchase, please call now to research your specific options.
Wednesday, January 20, 2010
Yet Another Reason to Buy or Refinance Now - FHA Changes
As if there wern't enough reasons to be considering a home purchase or refinance, FHA has added further incentive with their announcement today.
click here to read full announcement:
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-016
Due to the increased popularity of FHA in the absence of alternative loan products, they must address their capital ratio. They have chosen to increase the Up Front Mortgage Insurance Premium, reduce seller contributions and are making other changes that will increase their capital and reduce default risks. Here are the changes that matter most to consumers and real estate professionals:
click here to read full announcement:
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-016
Due to the increased popularity of FHA in the absence of alternative loan products, they must address their capital ratio. They have chosen to increase the Up Front Mortgage Insurance Premium, reduce seller contributions and are making other changes that will increase their capital and reduce default risks. Here are the changes that matter most to consumers and real estate professionals:
- A .50% increase in the Up Front Mortgage Insurance Premium (UFMIP) from 1.75% to 2.25% that will go into effect in the Spring of 2010. This increases the total amount financed and makes for a higher payment.
- Proposed shift in some of the premium increase from the UFMIP to the Annual MIP, which will have less impact on the consumer as it is spread over the life of the loan. We are unsure when this change will take place. While it is meant to soften the blow, payments will be more nonetheless.
- Reduce allowable seller contributions from 6% to 3%, which is more in line with industry standards. This will go into effect in the early summer. I've never had an instance where 6% contriubitions were needed, but on smaller transactions, we've had use for 4% from the seller. This new limit could impact the borrower's ability to get the lowest rate or require additional funds from the buyer at closing.
- New requirement of a minimum 580 credit score to qualify for FHA's 3.5% down payment program. Borrowers with scores below 580 must put down at least 10%. This is not much of a factor as just about every reputable lender requires a 620 (some require 640) score for their FHA loans.
The bottom line is that rates are great and tax incentives are in place for first timers as well as repeat buyers. Rates are predicted to go up once the Fed's buying of Mortgage Backed Securities ceases. We are looking at rates of 6% and higher this year! To receive the tax credit for your purchase you must be under contract by the end of April and close no later than June.
Of course the Fed may choose to continue buying Mortgage Backed Securities and the tax credit could be extended further but those are pretty big "ifs".
If you, or someone you know, is considering a purchase or simply wants to review their refinance opportunities, this would be a very good time to look into it.
Friday, November 6, 2009
Tax Credit for Homebuyers - Extended and Expanded
11/6/2009 - President Obama just signed a bill to extend the tax credit for first-time homebuyers through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time. To learn what the new tax credit means to you, please take a look at the concise overview below.
TAX CREDIT OVERVIEW: Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
Tax Credit Versus Tax Deduction
It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
------------------------
Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.
In addition, you may be able to benefit from additional housing related provisions, including the following:
------------------------
Tax Incentives to Spur Energy Savings and Green Jobs
This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings
This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing
This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance
This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
As always, if you have any questions about your specific situation or would like to discuss how you may benefit from this program, please call or email me. I’ll be happy to sit down with you.
TAX CREDIT OVERVIEW: Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
Tax Credit Versus Tax Deduction
It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
------------------------
Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.
In addition, you may be able to benefit from additional housing related provisions, including the following:
------------------------
Tax Incentives to Spur Energy Savings and Green Jobs
This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings
This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing
This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance
This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
As always, if you have any questions about your specific situation or would like to discuss how you may benefit from this program, please call or email me. I’ll be happy to sit down with you.
Friday, October 2, 2009
Third Time's A Charm
With as many refinance transactions that have occurred since December of '08 I sometimes wonder if there is anyone left who didn't do it when they had the chance. I know, though, that there are a lot of people who have not yet taken advantage of the lower rates we've experienced this year because they were holding out for something even better or were just too plain busy.
Well, the writing is on the wall and this could be our "last call". As I mentioned in my last post about the Fed's comments from their most recent meeting, we are expecting rates to start going up as they curb their buying of the mortgage backed securities (MBS). Without their high-level purchases we can expect a lot more volatility in the bond market which will directly impact the mortgage rates we're able to offer. As the program phases out at the end of the first quarter of 2010 we should see 30 year fixed rates back into the 6% range. While historically speaking a 6% rate is great, opportunities to refinance into lower rates are running out.
The chart below shows activity in the bond market over the last year (Remember, the higher the price for the bond, the lower the mortgage interest rate. They work inversely of each other). You can see where it all began back in December 2008 when the Fed announced they would be buying up billions in mortgage backed securities. That got another boost in Spring, when most of these refinances took place and now we've found ourselves again at these same record pricing. So, perhaps the third time will be the charm for those who haven't acted yet.
Of course, these great rates also mean that this is a good time to buy a home. I've been beating that drum for awhile as we've discussed the first time home buyer tax credit and affordable home prices. We are hoping for an extension and expansion of that program to include ALL buyers but still have no official word. You can count on me to provide you with the facts as they become available.
Meanwhile, should you or anyone you know still be thinking about restructuring their mortgage, primarily to take advantage of these super-low rates while they are available, please call and I'll give honest advice as to whether there is a benefit. It would be my honor to be of assistance.
For more information on these great opportunities click on this link for my monthly "Views You Can Use" newsletter.
Subscribe to:
Posts (Atom)
