Homeownership On The Minds Of The Millennials

It's expected that in 2013, the millennials will be helping grow the housing market. Those between the ages of 18-34 may be a large part of buyers purchasing homes. Experts point to a study by Trulia.com which found that of this age group, 43 percent are already homeowners.
The study also shows that 93 percent of the millennials currently renting plan to buy a home and 72 percent view owning a home as part of their personal American Dream.
However, some are still sitting on the fence, waiting for lower home prices and even lower mortgage rates. But experts caution that today's very low mortgage rates won't last forever and home prices in some areas are already increasing.
Whether you're a millennial or not, if you're planning to buy a home soon, here are a few tips to help you sail through your home sale.

Understand your mortgage options.A large part of why a home sale falls through has to do with the financing. Even if you have received pre-approval, that doesn't necessarily mean that the deal will close. Closing could be delayed or even rejected if you're not able to produce your required paper work in a timely fashion. Stay focused and on top of what you need by working very closely with mortgage experts. Make sure you know exactly how much cash you will need to have at the time of closing. This often is underestimated by the buyer.

Choose your home carefully.This sounds obvious but is particularly important. The way the housing market has been, many people will stay in their homes longer. So the home you buy today shouldn't be seen as an investment tool to flip quickly and make another move. Buying a home today may be the home you retire in one day. Or, at the very least, it may be a home you live in for many years. Therefore, you might consider housing that can grow with you. Never before have we seen developers offering homes that really encourage multi-generational living situations.
Today, in 21 markets throughout the country, the builder, Lennar, is offering NextGen designs to answer the demand for homes that can house more than one generation of adults. These types of properties are being marketed as a “home within a home” and they're designed to give everyone enjoyable together as well as private space.
Some of the plans that have about 3,500 square feet are already sold out in certain developments. The plans have separate front doors and mini kitchens, stackable washer and dryers, backyards that can be split or con-joined, plus a door that accesses the main home. The concept is becoming increasingly popular and for some multi-generational home buyers, it's a wonderful solution that allows them to get a larger home at an affordable price.

Know the markets.Some markets that were hit the hardest are now making a comeback. If you're not committed to a specific area and you have flexibility, then study various markets and understand that in certain areas you may be competing not only with other buyers seeking homes to live in but also investors. Investor interest is driving some markets more than others. Markets such as California, Nevada, Washington, and Washington D.C. are experiencing increased interest from investors seeking to buy and rent the properties. This is causing a decrease in inventory, (especially for the inexpensive houses) which drives up housing prices.The best advice when buying a home is to do your homework. Start early. Study the market. Get as much help as possible. Be flexible. Know all of your financial limitations. Finally, know what you must have and what you can live without.

Written by Phoebe Chongchua
December 21, 2012 

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Homeownership On The Minds Of The Millennials

It's expected that in 2013, the millennials will be helping grow the housing market. Those between the ages of 18-34 may be a large part of buyers purchasing homes. Experts point to a study by Trulia.com which found that of this age group, 43 percent are already homeowners. The study also shows that 93 percent of the millennials currently renting plan to buy a home and 72 percent view owning a home as part of their personal American Dream. However, some are still sitting on the fence, waiting for lower home prices and even lower mortgage rates. But experts caution that today's very low mortgage rates won't last forever and home prices in some areas are already increasing. Whether you're a millennial or not, if you're planning to buy a home soon, here are a few tips to help you sail through your home sale.

Understand your mortgage options. A large part of why a home sale falls through has to do with the financing. Even if you have received pre-approval, that doesn't necessarily mean that the deal will close. Closing could be delayed or even rejected if you're not able to produce your required paper work in a timely fashion. Stay focused and on top of what you need by working very closely with mortgage experts. Make sure you know exactly how much cash you will need to have at the time of closing. This often is underestimated by the buyer.

Choose your home carefully. This sounds obvious but is particularly important. The way the housing market has been, many people will stay in their homes longer. So the home you buy today shouldn't be seen as an investment tool to flip quickly and make another move. Buying a home today may be the home you retire in one day. Or, at the very least, it may be a home you live in for many years. Therefore, you might consider housing that can grow with you. Never before have we seen developers offering homes that really encourage multi-generational living situations. Today, in 21 markets throughout the country, the builder, Lennar, is offering NextGen designs to answer the demand for homes that can house more than one generation of adults. These types of properties are being marketed as a “home within a home” and they're designed to give everyone enjoyable together as well as private space. Some of the plans that have about 3,500 square feet are already sold out in certain developments. The plans have separate front doors and mini kitchens, stackable washer and dryers, backyards that can be split or con-joined, plus a door that accesses the main home. The concept is becoming increasingly popular and for some multi-generational home buyers, it's a wonderful solution that allows them to get a larger home at an affordable price.

Know the markets. Some markets that were hit the hardest are now making a comeback. If you're not committed to a specific area and you have flexibility, then study various markets and understand that in certain areas you may be competing not only with other buyers seeking homes to live in but also investors. Investor interest is driving some markets more than others. Markets such as California, Nevada, Washington, and Washington D.C. are experiencing increased interest from investors seeking to buy and rent the properties. This is causing a decrease in inventory, (especially for the inexpensive houses) which drives up housing prices. The best advice when buying a home is to do your homework. Start early. Study the market. Get as much help as possible. Be flexible. Know all of your financial limitations. Finally, know what you must have and what you can live without.

Written by Phoebe Chongchua
December 21, 2012
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Real Estate Outlook: The Fiscal Cliff

The strongest housing market since the peak of the housing boom is expected to pick up steam, but the so-called "fiscal cliff" could cause problems. Fiserv Case-Shiller's Home Price Index projects home prices nationwide will increase by an average of only 0.3 percent from the second quarter in 2012 to the second quarter of 2013. However, by the second quarter of 2017, home prices will be moving up at an annualized rate of 3.3 percent. Home prices in 37 of the 384 metro areas are projected to increase at more than twice the nationwide annualized rate of 3.3 percent over the next five years. More than half these markets are in three states: California, Florida and Oregon. The lackluster 0.3 percent home price growth is based on Congress failing to prevent the nation from falling off a fiscal cliff. The so-called fiscal cliff is a reference to recession-like economic conditions expected without the extension of tax cuts and Congressional action on other economic stimuli. If Congress can't come to an agreement, households stand to pay, on average, an additional $2,200 a year in extra taxes. Taxpayers will feel the squeeze in their first 2013 paycheck. With more money going to taxes, Americans will have less money to spend on housing and that could stall the housing recovery. Meanwhile, Fiserv's analysis of home price trends in more than 380 markets found that the average home price rose 1.2 percent for the year ending in the second quarter 2012. That increase marked the first year-over-year increase in home prices nationwide since 2006, excluding 2010. The 2010 market enjoyed the benefits of the federal home buyer's, tax credit. Prices were up in the majority of the metro areas tracked. Leading the way were home prices in Phoenix, Arizona, up 14.5 percent; Detroit, Michigan, up 11.6 percent; San Jose, California, up 9 percent and Miami, Florida, where prices rose 6.9 percent. Even if the nation avoids falling off a fiscal cliff, Fiserv expects a small "hiccup" to slow the housing recovery. David Stiff, Fiserv's chief economist said, "In some markets, investor demand for housing will start to fade before first-time and trade-up buyer demand has ramped up enough to take its place. This will be most evident in markets with large foreclosure inventories." "In some markets, investor demand for housing will start to fade before first-time and trade-up buyer demand has ramped up enough to take its place. This will be most evident in markets with large foreclosure inventories," Stiff also said. Fiserv also reported, of the 29 markets where home prices remain more than 50 percent below peak prices, 15 are in California and 11 in Florida. However, over the next five years, home prices in 24 of these 29 markets should increase at higher rate than the projected annualized rate for the nation as a whole.


Written by Broderick Perkins
December 10, 2012
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Mortgage Rates Calm, Near Record Lows

In Freddie Mac's results of its Primary Mortgage Market Survey®, fixed mortgage rates showed little change and remained near their record lows helping to keep homebuyer affordability high and attractive to those looking to refinance.

30-year fixed-rate mortgage (FRM) averaged 3.34 percent with an average 0.7 point for the week ending December 6, 2012, up from last week when it averaged 3.32 percent. Last year at this time, the 30-year FRM averaged 3.99 percent.

15-year FRM this week averaged 2.67 percent with an average 0.6 point, up from last week when it averaged 2.64 percent. A year ago at this time, the 15-year FRM averaged 3.27 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.69 percent this week with an average 0.6 point, down from last week when it averaged 2.72 percent. A year ago, the 5-year ARM averaged 2.93 percent.

1-year Treasury-indexed ARM averaged 2.55 percent this week with an average 0.4 point, down from last week when it averaged 2.56. At this time last year, the 1-year ARM averaged 2.80 percent. According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Mortgage rates were little changed and near record lows this week amid indicators of stronger economic growth and signs of tame inflation. Third quarter real GDP growth was revised from an initial report of 2.0 percent to 2.7 percent, nearly matching the market consensus forecast. Meanwhile, the 12-month growth rate of the core price index of consumer expenditures remained at 1.7 percent in October which is on the low end of the Federal Reserve's projection range for this year." "The housing market is aiding in this recovery. For instance, fixed residential investment added positive growth over the past six consecutive quarters and in the third quarter alone contributed 0.3 percentage points to real GDP growth. In addition, residential construction spending was up 3 percent between September and October. And, pending home sales saw a 5.2 percent increase in October to its highest reading since March 2007."

December 7, 2012, Published by Realty Times

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Mortgage Rates Low, Tips To Qualify

Mortgage rates continue to remain low despite a recent slight increase. The 30-year fixed rate increased just a bit at the end of November but that comes on the heels of setting a record low of 3.31 percent. The 30-year fixed rate is still lower than it was this time last year, when it was at 4 percent. While many people are taking advantage of the low rates and either refinancing or shopping for a home, some are finding it difficult to qualify. The tightening of credit and the increased lending restrictions have made the effort to get a new mortgage a headache for some. The good news is there are tips to help you qualify for a mortgage. Here are a few that you should consider before you head to the bank or a mortgage company. Get your finances in order. Know your financial situation. That means not only your income, spending, debt, but also your credit status. In a downturned economy many crooks are looking for ways to make a buck and they're coming up with more scams that can negatively affect your credit. Debit and credit card skimming is one way that thieves are stealing credit card numbers and then charging up expenses on the stolen account. Even if you never lost your credit/debit card, that doesn't mean you're safe. It can happen when you use the card at a store, restaurant, or other retail outlet. If your bank is on the ball, it will alert you, maybe even before you realize your card has been compromised. This is why credit reports can offer valuable information before you apply for a mortgage. Getting your credit report and reviewing it carefully provides you with the opportunity to see if there are errors or problems that need correcting. Reduce your debt. This is a tough one. A lot of people are refinancing because they're hoping to get funds back to help them do this very thing, lower their expenses and reduce what they owe. However, if you carry a high debt, you'll have trouble refinancing or getting a mortgage to buy a home. The optimal thing to do is to start conserving and looking for ways to save. It's not about how much you make, but how much you save that can help you find ways to reduce your debt. Look for expenses to cut. Many people are opting to no longer use phone landlines or even cable. If you're working a lot and you don't watch much TV, cut the line. News and other features you watch on TV can also be accessed online on your computer. Keep only what's necessary. Sustainable living and conservation are becoming very popular. Check with your local utility company to see how you can reduce power usage in your home. Start by unplugging electrical appliances that aren't in use. These appliances, when plugged into an electrical outlet and even though not in use, use electricity which translates to you having to pay more on your utility bill for energy you're not even using. Get educated. The loan terms and restrictions change all the time. Meet with qualified expert professionals to help you through the process. Just because you don't qualify today doesn't mean it will always be that way. Find out what you need and can do and start moving toward your goal. Sometimes the best thing you can do is gain knowledge. The information that you get from real estate professionals will allow you to develop a plan to achieve success. Don't give up. The difficult economy has been discouraging but situations change and more opportunity will come. Be patient. Seek advice. Stay informed. Follow your plan, even if at first it seems like a long-shot before you'll get your goal.



Written by Phoebe Chongchua
December 7, 2012
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Holiday Home Sales Tips

The holiday season can be an incredibly busy time of year. Families are traveling across town, state, and country to visit loved ones. Children are home from school, bringing with them vacation schedules.

This can be a difficult time for many sellers. They must find a balance between family time, showings, and open houses.

If you are finding this holiday season particularly problematic, then keep reading.
Just as your time for showings is limited, so is the time potential buyers have for touring your home. This means that if you are serious about moving your home in this season's market you must be willing to be flexible with your time. Making your home readily available may mean more showings or a faster sale.

You must put the needs of your family and children first, of course, but there should be room for compromise. Consider allowing other family members to host large meals and functions to lighten the load on your home's schedule this year.

You can also plan fun activities for the whole family to participate in while your home is being shown. Take the kids to see the latest holiday movie. Go out for yogurt or ice cream. If the showing is during the evening hours you can take a tour of neighborhood lights!
Also, do not let listing your home for sale deter you from celebrating the holidays this season. Feel free to maintain family traditions, but consider the effect your decorations will have on buyers. While you should feel free to have a tree and lights, it would be wise to keep everything tasteful and in moderation.

You may come across the random buyer that hates the holidays, but most people are not offended by someone else's beliefs. You'll find buyers are tolerant of most everything ... except tacky overdone decorations!

If you are unsure what constitutes tacky, then refer to popular home decor magazines for pictures and examples of what is acceptable.

Selling a home is about about putting the best foot forward. So, in addition to making it available to buyers and decorating tastefully, it's important to consider how your home will appear in wintertime photography.

Great photography is key when posting pictures to the MLS. This is your home's first impression, but the snow, ice, and dreariness of winter months can be a little boring.
Take your time to stage the best pictures possible. Take advantage of sunny days glistening across snowy banks. Let the charm of your living room shine with a perfectly trimmed tree.
Buyers also love to see how your home looks throughout the seasons. Talk to your Realtor about including pictures of your home when your yard is bursting with Springtime blooms or when your pool is full of sparkling blue water.

The holidays can be a wonderful time for families, but with a few compromises you can also make a sale during this special time!

Written by Carla Hill
November 19, 2012 

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Keeping Mortgage Rates Low Spurs Housing Market Recovery

The housing market has returned to life this year as improvements continue to be seen in a variety of sectors. With the third quarter behind us, consumer attitudes have changed for the better as shown by the Thomson Reuters/University of Michigan preliminary reading of consumer sentiment which came in at 84.9, the highest level in five years.

Through this survey, consumers revealed a better outlook towards employment and the overall economy. The release of the Department of Treasury and the Housing and Urban Development October Edition of the Obama Administration Housing Scorecard shows that the Federal Housing Finance Agency's housing price index posted the largest annual gain in five years. Along with this, new home sales are at the fastest pace since April 2010. Because of these gains, the scorecard indicates that 1.3 million additional are now above water with their mortgages.  Mortgage rates have been consistently low throughout the year and should continue to do so now that QE3 is in place and active. With QE3, the Feds are purchasing $40 billion worth of mortgage backed securities each month so that mortgage rates will remain low in order to allow consumers to re-enter the housing market at affordable levels. According to FreeRateUpdate.com's survey of wholesale and direct lenders, mortgage rates continue to remain low with 30 year fixed mortgage rates as low as 3.000%, 15 year fixed mortgage rates as low as 2.250% and 5/1 adjustable rates as low as 1.875%. Borrowers must have good credit to receive these lowest mortgage rates available. While home purchase loans and traditional mortgage refinances require complete documentation, verification by the lender and an appraisal, HARP 2.0 requirements are different. HARP 2.0 is the non-traditional refinance for borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. This program does not have loan to value caps and does not require an appraisal, in most cases, as it's main purpose is to help underwater borrowers.  While some borrowers may no longer be underwater, they may still be eligible for HARP 2.0 as long as the loan to value is no less than a minimum of 80%. HARP has proven to be a great program that helps homeowners gain back equity at a faster pace. With so many homeowners still eligible for HARP 2.0, our online form is available for submission and will return a response almost immediately.  There is no doubt that the Federal Housing Administration (FHA) has been a major player in the housing market recovery. For many consumers, FHA is the only means of obtaining a mortgage in today's environment. FHA's role in housing has increased since the housing crisis of several years ago and is still a favorite with first time home buyers. Continuing to have flexible credit guidelines, multiple mortgage programs and low down payment requirements has allowed many consumers the opportunity to become homeowners even at a time when credit is tight.  FHA mortgage rates are at historical levels with FHA 30 year fixed mortgage rates as low as 2.750%, FHA 15 year fixed mortgage rates as low as 2.250% and FHA 5/1 adjustable mortgage rates as low as 2.250%. Although FHA closing costs (APR) are high due to various FHA fees and the upfront mortgage insurance premium, FHA allows these costs to be added to the mortgage amount in most cases. Allowable seller concessions can also be used to help pay closing costs.  Many homeowners have used the FHA streamline refinance this year to trade their higher rate mortgages to lower mortgage rates. This program does not require an appraisal, credit or any other documentation, but does require a good mortgage payment record with no late payments for the previous year.  Homeowners who have loans that were endorsed prior to June 1, 2009 can use the FHA streamline and also get lower upfront and annual mortgage insurance premiums which make this refinance move even more affordable. Borrowers can find out more information about this program through our online form which does not require a social security number when submitting. For the past week, jumbo mortgage rates remained the same. Jumbo 30 year fixed mortgage rates are as low as 3.250%, jumbo 15 year fixed mortgage rates are as low as 2.750% and jumbo 5/1 adjustable mortgage rates are as low as 2.125%. Excellent credit is required in order to obtain jumbo mortgages with these lowest jumbo mortgage rates.  As housing recovers, the jumbo mortgage market is becoming more competitive. Although guidelines are strict, some lenders will be flexible with well qualified borrowers. The second half of this year has seen an increase in high end property sales as borrowers are reacting to rising home prices. Jumbo mortgage borrowers should do their homework and shop around in order to receive the lowest jumbo mortgage rates and best available terms.  The elections last week created several days of volatility in markets. Stock slid down and MBS (mortgage backed securities) rose. Mortgage rates are affected by MBS prices and move in the opposite direction. The Commerce Department reported that exports from the U.S. rose to a record in September and contributed to an unexpected decline in the trade deficit which helped to boost the U.S. economy at the end of the third quarter. Unemployment claims fell by 8,000 for the week ending November 3rd, according to the Labor Department. Now that the election is over, the fiscal cliff will be the main topic influencing investor decisions until a compromise or solution is in place.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.


Written by Ed Ferrara
November 14, 2012

 

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Housing Bringing People Together: Collective Homeownership Viable Option

Some of us who had roommates in college swore we'd never do it again. Then again, living alone can get lonely and expensive. Collective homeownership comes to the rescue.
It's more than just investing in something; people who are collectively buying homes together are sharing their investment–everyone under the same roof. It may seem odd for adults who are not in intimate relationships to be collaborating on such large investments but in this economy, it's becoming a viable and sensible option.

Mortgage rates are still very low, housing prices have dropped, , and rent is going up. Those who are opting for collective homeownership see it like this: if we can live together in a rental, why not own it? Collectively buying a property can open up many more opportunities, because if you have, say, four qualified people on the loan, you can borrow so much more.

However, the upside doesn't come without a downside, or, at least, a let's-be-cautious side. Just like in a business, collectively owning property means greater income to afford more but it also means more issues to handle. If it's two couples collectively buying the home, you have to be prepared for having something go wrong like a divorce. Also, you have to understand exactly who is responsible for which areas of the home and property. There must be complete understanding of each other's finances and ability to pay. You have to be prepared to address the point in time when someone wants to sell or someone dies.

Then there's the social side of the collective homeownership. Will you really live all under one roof or will you search for a property that has another unit on the property or attached like a duplex? This situation, at least, gives a little more privacy. Another vital consideration is how this will affect your long-term relationship. Yes, it's like moving in with your significant other, but times three or however many are in on the collective homeownership.

For some people, owning a home has become so out of reach that the collective homeownership may be the only viable solution. But it's important to think this through very carefully.

Be sure to have an attorney draft up an agreement. When you go into business with a partner, you must have some legal guidelines that include what happens when it ends–the professional relationship or the business. The same is true with collective homeownership. Don't think just because you're such great friends today, that there won't come a time when you need or want to part.

The more clearly the details of the agreement are spelled out, the less you have to argue over or, worse, take legal action, in the future. But before you even get to this phase, do the math. Study the market. Get expert help from an experienced real estate agent. Spend a lot of time talking about what you want in a home, your vision, and where you want to live with your potential new housemates. Creating a mutual understanding and having a whole lot of patience, tolerance, compatibility, and a compromising spirit will go a long way to having harmony in collective homeownership.

Written by Phoebe Chongchua
November 9, 2012 

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Quiz: What Home Am I?

Are you looking to get in the housing market? It's a great time to buy, with historically low interest rates and affordability rates.
Where does one start? Are you a country mouse or a city mouse? Your own personality and desires should be your guide. There are homeowners who avoid yard maintenance at all costs. Others love the privacy of a country property.
Choosing the right home for your particular needs and temperament is crucial in today's market, where staying in a home long term is the best way to build equity.
Take this quiz for fun to find out what “home” best fits your own personality.
1. My idea perfect weekend night includes:

A) walking to my favorite restaurant before catching the latest and greatest band at my favorite club.B) an entertaining evening on the patio chatting with neighbors passing by.
C) a home-cooked meal with the family before stargazing and making s'mores on a crackling bonfire.
D) picking the kids up from soccer practice before heading over to the new restaurant in town for a family night out.

2. I love landscaping that is:

A) non-existent. I love the stunning architecture of a downtown landscape.B) maintained by someone else! I love the look of lush plants and perfect flower beds, but I simply don't have the time or energy to plant them myself.
C) ever-evolving. I like taking on a new project, even if that means building a new flower bed from scratch. Sometimes nature provides it's own landscaping.
D) neat and orderly. Landscaping should be an accent to a well-kept house.

3. How important is it to be near your favorite shops and restaurants?

A) I like being near the center of town.B) Incredibly important and that I'm near mass transit. Walkability is key for me.
C) Not as important. I'm okay staying in most nights.
D) Important. I want to be within driving distance to my favorite haunts.

4. Do you have concerns about cost?

A) My life outside of the home is just as important as in the home, so I need extra cash for my hobbies and other pursuits.B) I need a home that comes with perks, such as a pool, fitness center, and parking.
C) I'm willing to live further away from city center in order to have more space.
D) I'm willing to pay a little more for a home within an active community..

5. When it comes to home projects:

A) I don't mind doing a little remodeling, especially if it means putting my mark on something old.B) I don't want to worry about any maintenance or repairs.
C) the more the better! I love building and working on my own property.
D) I'm okay with regular maintenance, but don't want to take on huge remodeling projects.

If you answered mostly A's, you're a city slicker if we ever saw one! You love the convenience of a walkable neighborhood, close to restaurants, theaters, and other raucous entertainment.
If you answered mostly B's, you're destined to be a condo dweller. Condominiums means less yearly maintenance and worry for today's homeowner. They can be great ways to afford extra amenities, such as security, concierge, fitness centers, and even green spaces. Plus, you'll have the opportunity to meet lots of neighbors.
If you answered mostly C's, you're a country mouse. You crave the peace, quiet, and privacy that a country life can afford you. You don't mind living a little further away from life's necessities or having a more untamed yard and property. It's all about being close to nature.
If you answered mostly D's, you love the beautiful uniformity of suburban living. Who doesn't love manicured lawns and master-planned shopping. Suburban living can mean more space than your downtown dwelling friends, but with a close proximity to good schools, great restaurants, and plenty of family entertainment.

Written by Carla Hill
November 8, 2012 

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Current Mortgage Rates Remain Low as Economy Shows Growth

October's economic reports were released this past week and revealed some surprising good news for the economy. From jobs to property values, the results were in the positive zone leading up to the elections. Particularly important was the end of month jobs report. According to the Labor Department, the U.S. economy added 171,000 new jobs in October which was better than the forecast of 125,000.
At the same time, there was an increase of 84,000 more jobs created in August and September than previously reported. However, as more people are re-entering the labor force and looking for work, the unemployment rate did increase to 7.9%. Jobless claims for the week ending October 27th fell by 9,000 to 363,000. Third quarter worker productivity was also up at at 1.9% annual rate, according to the Labor Department.
Consumer Confidence in October increased to the highest level in more than four years, according to the Conference Board. The S&P/Case-Shiller index showed that August property values in 20 cities rose 2% from August of 2011 and was the largest increase in two years, as well as, the biggest year to year gain since July of 2010. Construction Spending also rose 0.6% in September to the highest level in almost three years, according to the Commerce Department. Between jobs and housing, the economy's growth appears to be keeping on track while current mortgage rates remain low.
According to FreeRateUpdate.com's survey of wholesale and direct lenders, mortgage rates remained unchanged and shows that 30 year fixed mortgage rates are as low as 3.000%, 15 year fixed mortgage rates are as low as 2.250% and 5/1 adjustable rates are as low as 1.875%. Good credit and qualifications are required in order to obtain these lowest mortgage rates available. Home purchase loans and traditional mortgage refinances still require full documentation, an appraisal and verifications done by the lender. HARP 2.0 is still available and does not require the same loan protocol.
HARP 2.0 is for borrowers who have conforming mortgages that were sold to Fannie Mae and Freddie Mac prior to June 1, 2009. In most cases, HARP does not require an appraisal and other documentation to receive an approval, but this depends on the lender, lender overlays and details of the mortgage application. HARP loan applications have been up in volume for most of this year, especially after loan to value caps were removed with HARP 2.0. This has and continues to help more borrowers become eligible for approval for refinancing to lower mortgage rates. Finding HARP 2.0 lenders is easy when using the online form which will return a response almost instantly.
FHA's Single Family Outlook for August, 2012 was released this past week. The report showed that for the month of August, 90,880 single family refinance applications were submitted which is more than three times the number of applications for the year 2011. The report also showed that 71,428 purchase loans were FHA endorsed in August with 55,617 for first time home buyers. FHA loans continue to be popular with first time home buyers because of the low down payment, easier credit qualifying guidelines and low FHA mortgage rates.
Current FHA 30 year fixed mortgage rates are as low as 2.750%, FHA 15 year fixed mortgage rates are as low as 2.250% and FHA 5/1 adjustable mortgage rates are as low as 2.250%. Even though FHA closing costs (APR) are high, which is due to the upfront mortgage insurance premium and other FHA fees, borrowers still use FHA mortgages because their down payment requirements, credit guidelines and overall benefits are consumer friendly.
The FHA streamline refinance is a popular FHA mortgage product that does not require an appraisal provided the borrower does not take cash out. For the month of August, 42,607 FHA refinance transactions from prior FHA mortgages were endorsed and 7,894 from conventional conversions. FHA streamline refinances from prior FHA cases totaled 92.8%. The FHA streamline has drastically reduced upfront and annual mortgage insurance premiums for borrowers who have loans that were endorsed prior to June 1, 2009. This program has continued to be very popular during the second half of this year as it gives FHA mortgage holders the opportunity to refinance to the lowest FHA mortgage rates in history.
Areas, such as California, are seeing more activity with home purchases recently. Many of these locations require jumbo mortgages because the necessary financing for a purchase loan is above the conforming and FHA loan limits. Jumbo mortgage rates have remained competitive with jumbo 30 year fixed mortgage rates as low as 3.250%, jumbo 15 year fixed mortgage rates as low as 2.750% and jumbo 5/1 adjustable mortgage rates as low as 2.125%. Borrowers must have excellent credit in order to receive the lowest jumbo mortgage rates available. Having strict guidelines, full documentation that will be verified is necessary. With increased competition in this market, borrowers should shop around in order to get the best jumbo mortgage rates and terms.
MBS prices affect mortgage rates which move in the opposite direction. Usually it is the release of economic data that will create movement in MBS prices, although this has not been the case recently. Even with positive data, MBS prices haven't moved enough to cause any significant swing in average mortgage rates. The Institute for Supply Management reported that Chicago PMI Manufacturing rose to 49.9 which was below expectations of 51.0. Anything below 50 indicates contraction. Factory Orders increased 4.8% in September as compared to August, according to the Commerce Department.
This was the largest rise in orders for manufactured goods in 18 months, since March of 2011. The Institute for Supply Management's non-manufacturing index fell to 54.2 in October from 55.1 in September, which was below expectations. Any measure above 50 is a signal of expansion in industries that make up approximately 90% of the economy. The Euro Zone reported that general unemployment rose to 11.%. For the first time in three months, China's manufacturing expanded as output and orders increased.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.

Written by Ed Ferrara
November 7, 2012 

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First-Time Real Estate Investment Strategy

With home ownership more tenuous now than in previous years, more and more Americans are living in rental properties, and that means investing in a rental property can be a lucrative venture.

As with any real estate investment, a rental investment requires careful research, but the rewards can pay off.

There are many considerations before taking the plunge.

If you don’t have prior experience investing in a rental property, you’ll need to start by asking yourself a few key questions.

Money matters

First, consider your financial situation.

• What kind of down payment can you make and how much can you afford as a monthly mortgage payment?
• How much will you need to earn in rental income in order to keep up those monthly payments?
• Do you have enough of a cushion to handle vacancies that result in periods of no income?

It’s a good idea to get pre-approved for an investment property loan, and then secure the services of a real estate agent to help you find the type of property you seek.

Location matters

You’ll want to invest in an area where renters will want to live. Consider proximity to transportation, shopping, and schools, as well as the area crime rate – the same sorts of considerations you would make if you were buying a home for yourself.

Next, you need to decide what kind of property interests you.

Are you in the market for a single- or multi-family dwelling? Condos? An apartment complex? A high-turnover vacation (weekly or short-term) rental?

Once you decide on the type of property, you’ll also want to think about whether you’re prepared to invest money (and time) in a fixer-upper that may need repairs or even renovations.

If not buy a property that is ready to go with few necessary up-front fixes.

You’ll also need to think about how much rent is reasonable to charge based on the area and the amenities the property offers – laundry facilities, bedrooms, condition (new or in-need-updates), etc.

Management matters

Are you able to manage the building or should you hire a property manager for a fee?

If the property is distant, a property manager is paramount. Secure the services of a property management company or individual who lives in the area and can monitor the property, help with checking in, handled cleaning and maintenance, and provide other necessary services and upkeep.

It’s essential that you have a qualified inspection of any investment property to check for any hidden problems in the plumbing, electrical system, or structural components that could come back to haunt not only you but your tenants.

When you calculate your monthly expenses you’ll have to figure in maintenance costs as well as vacancies that don’t produce rental income, and other unforeseen difficulties with tenants such as late or unpaid rent.

Include the cost to attract renters.

Marketing matters

How will you attract renters to the property and keep them in order to cut down on long-tern vacancies? Understanding the rental market in your area will be critical to determining your potential vacancy rate and marketing effort. Implement a thorough screening process to weed out any prospective tenants who aren’t likely to honor the terms of the rental agreement.

Once you’re mulled over all these considerations, it’s time to find the right property and make an offer. Your real estate agent can help you with this process.

It’s always best to engage an agent who has rental properties they currently own in the area where you plan to invest.

The agent should be extremely knowledgeable about the rental market in the area.

If you haven’t invested in a rental property before, it might be best to get your feet wet by starting small. If you’re successful and start to make some income off that property, you can always broaden your investments to include larger properties.

Do your homework and learn the ins and outs of maintaining a rental property and you’ll discover that renting can be a lucrative business.

Published by Realty Times

Written by Jim Lowenstern
October 30, 2012 

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Mortgage Rates Continue To Hover Near Record Lows

In Freddie Mac's results of its Primary Mortgage Market Survey®, fixed mortgage rates moved slightly lower while continuing to remain near their all-time lows this week amid signs of a growing economy and low inflation.

30-year fixed-rate mortgage (FRM) averaged 3.39 percent with an average 0.7 point for the week ending November 1, 2012, down from last week when it averaged 3.41 percent. Last year at this time, the 30-year FRM averaged 4.00 percent. 

15-year FRM this week averaged 2.70 percent with an average 0.7 point, down from last week when it averaged 2.72 percent. A year ago at this time, the 15-year FRM averaged 3.31 percent. 

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.74 percent this week with an average 0.6 point, down from last week when it averaged 2.75 percent. A year ago, the 5-year ARM averaged 2.96 percent.

1-year Treasury-indexed ARM averaged 2.58 percent this week with an average 0.4 point, down from last week when it averaged 2.59 percent last week. At this time last year, the 1-year ARM averaged 2.88 percent.  According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Mortgage rates remained relatively unchanged this week on signs of a growing economy and low inflation. The economy grew 2.0 percent in the third quarter with residential fixed investment contributing 0.3 percentage points to growth. The core price index of personal consumer expenditures grew 1.7 percent between September 2011 and 2012 and was within the Federal Reserve's preferred target range."

November 2, 2012 Published by Realty Times

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