Housing Activity Improves as Low Mortgage Rates Continue

Housing activity has shown some improvement as low mortgage rates continue at historic levels. Even though reports for home sales are mixed, the numbers are coming in higher than a year ago. This past week, the National Association of Realtors reported that existing home sales fell in May by 1.5%, but were 10% higher than May, 2011.

On the other hand, new home sales were up 7.6% and hit their highest level in two years and 20% higher than last year, according to the U.S. Census bureau and the U.S. Department of Housing and Urban Development. These agencies also reported that building permits for privately owned residential construction increased 7.9% in May which is the highest level since 2008. On the down side, Housing Starts were reported as decreasing in May by 5%.

FreeRateUpdate.com's survey of wholesale and direct lenders shows that 30 year fixed mortgage rates are at 3.375%, 15 year fixed mortgage rates are at 2.750% and 5/1 adjustable mortgage rates are at 2.125%, all available with 0.7 to 1% origination fee for well qualified borrowers. Home affordability is still at its highest level, although U.S. home prices rose 0.8% in April and 3.0% over the past 12 months, according to the Federal Housing Finance Agency.

While mortgage applications fell back slightly, the Mortgage Banker's Association reported that mortgage refinance applications surged with refinance activity accounting for 81% of all applications. Refinancing through HARP (Home Affordable Refinance Program) has been very popular with underwater borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. If denied for HARP, it is important that borrowers keep looking for a lender to assist them since every lender is different.

A HARP denial is not the end of the road since what one lender turns down, another lender will welcome. The best place for obtaining a successful HARPmortgage is online where multiple lenders can be found in one place with a simple inquiry.

This week, FHA rescinded the stricter policy regarding credit defaults and collections after putting it on hold in April. This news is great especially for first time home buyers. With FHA mortgage rates remaining at the same low levels, FHA refinances are surging with the expanded FHA Streamline Refinance. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%.

The FHA Streamline Refinance is now being offered for existing FHA mortgages, that were endorsed prior to June 1, 2009, with extremely low upfront and annual mortgage insurance premiums. While this program is in effect until the end of 2013 and does not allow for cash out, it also does not require an appraisal and the ordinary verifications.

Prior to this offer of lower mortgage insurance fees, borrowers did not use the FHA streamline refinance often because FHA has higher closing costs (APR) due to the upfront mortgage insurance premium and various FHA fees. Many lenders are putting limits on the FHA streamline and extending it only to their own customers. All eligible FHA borrowers can still obtain the streamline refinance through an online inquiry where many participating lenders are readily available.

Current jumbo 30 year fixed mortgage rates are at 4.250%, jumbo 15 year fixed mortgage rates are at 3.125% and jumbo 5/1 adjustable mortgage rates are at 2.250%. Since jumbo mortgages have stricter guidelines, borrowers must have excellent credit in order to receive these low jumbo mortgage rates with 0.7 to 1% origination fee. Jumbo mortgages are not as popular as other mortgage programs, but are still necessary for higher priced homes that are above the conforming and FHA loan limits. While requirements may be tougher, these restrictions differ from lender to lender since these loans are generally held within the lender's portfolio.

As global economic growth continues to be a major concern, MBS prices (mortgage backed securities) fluctuated this week depending on the updates coming out of Europe and the U.S. Federal Reserve. Mortgage rates are affected by MBS prices and move in the opposite direction.

The Feds extended Operation Twist until the end of the year and also acknowledged that economic data has been disappointing, although they did not commit to any further quantitative easing. They again stated that the economy is expanding moderately, but employment growth has slowed in recent months. The four week average for jobless claims came in higher which was a disappointment for investors.

Europe's wide financial problems continue to be a roadblock in the global recovery. While Greece formed a coalition government after the conservative party won the election, nothing has really changed. Now Spain has requested help for its banks and Cyprus stated that it would also seek help from the Euro zone bailout funds. These issues are continuing to keep investors cautious which is ultimately keeping mortgage rates down.

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 a standard 0.7 to 1% point origination fee.

Written by Ed Ferrara
June 27, 2012 Published by Realty Times

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Bathroom Remodels Soaking Up Marketplace

There are a few places where most of us spend a lot of time in the home: the kitchen, bedroom, and bathroom. So it makes sense that bathroom remodels are saturating the renovation marketplace.

According to the National Association of Homebuilders, bathroom remodel projects have increased in the last two years, up 17 percent. In fact, they are the most common remodeling project these days.

But in these tighter economic times, surveys show that homeowners aren't necessarily going for the McMansion-style bathroom, but rather something that suits their needs. Practicality is top of mind.

For sellers, this means doing all you can to position the all-important bathrooms in the best light. If you're planning to do some remodeling, at the top of the list are things like ceiling-mounted "rain" shower heads, handheld shower heads, doorless showers. The big whirlpool tubs aren't quite as popular as a bit more luxurious and spacious shower.

But even though bigger showers are popular, homeowners and buyers are highly interested in green technology and energy-saving devices. They're looking to save money on their utility bills each month.

So, be prepared for buyers to ask questions about your utility bill and what types of energy/cost-savings devices you have installed, such as a dual-flush toilet. One button flushes solids by using more water; the other button flushes liquids using less water.

Also popular, bigger is better when it comes to tile. Personally, I never really liked the small tile and it seems today the trend is moving toward larger tiles, even in small bathrooms. I think the larger tiles are easier to clean. Additionally, glazed tiles have lost their shine with consumers, unless it's the white subway-style tiles. Those are still hip.

Let there be light and plenty of it! Buyers and homeowners are drawn to warmth in the bathroom. So, the more ways to let the sun shine in, the better. Also, windows that open to air out the bathroom and reduce the chance of mold are good options.

Another bathroom remodel request these days is automatic lighting dimmers that stay on for a period of time and then turn all the way off. Leaving lights and fans on increases the energy bill. Homeowners are opting for automated ways to help save money and this remodel addition can payoff in the long run.

Another important area for buyers concerns storage space. Do you have it? And do you have any more? They want to know. Bathroom remodels are offering more counter space by eliminating two-bowl sinks to one and leaving more countertop space for storage. In two-bowl sinks, a built-in cabinet between the two is a likely choice. It provides shared space between the sinks and some useful extra storage.

Finally, separate toilet rooms or at least, have a glass-glazed wall to separate the toilet from the sink and bath/shower area. And, can you guess the top priority for the toilet room? An effective and cost-efficient fan for odor and noise elimination! Makes sense to me.


Written by Phoebe Chongchua
June 15, 2012 Published by Realty Times

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30-Year Fixed-Rate Mortgage Averages 3.66 Percent

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average mortgage rates are easing amid worsening economic indicators. Both the 30-year fixed and the 5-year ARM registered new average record lows.

30-year fixed-rate mortgage (FRM) averaged 3.66 percent with an average 0.7 point for the week ending June 21, 2012, down from last week when it averaged 3.71 percent. Last year at this time, the 30-year FRM averaged 4.50 percent.

15-year FRM this week averaged 2.95 percent with an average 0.6 point, down from last week when it averaged 2.98 percent. A year ago at this time, the 15-year FRM averaged 3.69 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.77 percent this week, with an average 0.6 point, down from last week when it averaged 2.80. A year ago, the 5-year ARM averaged 3.25 percent.

1-year Treasury-indexed ARM averaged 2.74 percent this week with an average 0.5 point, down from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 2.99 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Treasury bond yields eased somewhat this week on some worsening economic indicators bringing mortgage rates back into record low territory. Industrial production fell in two of the last three months ending in May, and below the expected market consensus forecast. In addition, consumer sentiment fell in June to its lowest level this year, according to the University of Michigan survey. In its June 20th monetary policy announcement, the Federal Reserve also noted growth in employment has slowed in recent months and household spending appears to be rising at a somewhat slower pace.

"However, there were also some positive indicators on the housing market. Construction on one-family homes rose for the third consecutive month in May to an annualized pace of 516,000. Furthermore, homebuilder confidence rose in June to its highest reading in over five years."

June 22, 2012, Published by Realty Times

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Vacation Home Market

Are you in the market to buy a vacation home? If so, you're not alone. There is a ripe and ready segment of today's market that is geared up for taking advantage of today's favorable buying conditions.

According to the latest National Association of Realtors Investment and Vacation Home Buyers Survey, vacation-home sales rose 7.0 percent in 2011. Investment property purchases were up a staggering 64.5 percent. Many of these were distressed properties being sold at steep discounts.

In comparison to the total sales, vacation-homes were 11 percent of all transactions for 2011, up a healthy 10 percent in 2010.

NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. "During the past year investors have been swooping into the market to take advantage of bargain home prices," he said. "Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property."

These investment buyers are pulling out the cash as they look into buying these rental properties. Forty-nine percent of investment buyers paid cash in 2011. Forty-two percent of vacation-home buyers did the same.

"Clearly we're looking at investors with financial resources who see real estate as a good investment and who aren't hesitant to use cash," Yun said. "Of buyers who financed their purchase with a mortgage, large downpayments were typical. The median downpayment for both investment- and vacation-home buyers in 2011 was 27 percent."

What types of buyers are scooping up today's vacation homes? The NAR survey said lifestyle factors are the leading motivator. These homes are more likely found in suburban and rural areas.

The median vacation-home price was down 19.1 percent from 2010 to $121,300. The NAR reports, "The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years."

Additionally, 16 percent of vacation buyers bought the property for a family member (such as a child going attending school), friend, or relative to use.

Regionally, 42 percent of vacation home were purchased in the South, 30 percent in the West, 15 percent in the Northeast, and 12 percent in the Midwest.


Written by Carla Hill
June 19, 2012 Published by Realty Times

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No Need To Rush To Buy

Interest rates are at record lows, housing is more affordable than it has been in nearly a decade and multiple offers are in the air.

Kiplinger.com recently reported the monthly cost of owning a home is far cheaper than renting, given the recent spikes in rent. At current mortgage rates, home prices would have to rise by 35 percent to tip the scales.

It appears the housing recovery is afoot, but that rush-to-buy-before-the-bargains-are-gone mentality may be misplaced.

The slow-growth economy is on hold until after the election and or until after the Euro Zone gets its act together. The Federal Reserve hasn't backed off on keeping benchmark rates low until 2014. And, given labor market uncertainty, your job might not be a sure thing.

It could be a better idea to hold off, make sure your job is solid, save your ducats for a larger down payment, clean up your credit and still get a better deal months, maybe even a year down the road.

Your local market could be the major factor.

"National trends mask pronounced differences across local housing markets," according to the May 2012 Real Estate Trend Data from Realtor.com.

Realtor.com also says inventories are way down, by more than 20 percent, as some buyers are rushing to capitalize on the young recovery.

But that's generating some nasty bidding wars in hot cities. Can you compete?

Kiplinger says taking time to consider when you should buy should include time to consider these factors.

Down payment. Sure you can get a Federal Housing Administration (FHA) loan or other funny money with 3.5 percent down, but those figures that say buying is a better deal than renting are based on putting 20 percent down.

But with less than 20 percent down, don't expect to cash in on record low interest rates and you'll have to pay for ever more expensive mortgage insurance.

Kiplinger says if you don't have the savings or don't plan on staying put for at least five years, fugedaboudit it. Keep saving your money.

Job security. The Euro Zone economy, America's biggest trade partner, remains uncertain. Unemployment here is still above 8 percent and the recovery is one of the most shallow on record. Another recession isn't out of the question.

Are you sure you've got the tenure to keep your job through another recession, should it occur? You've seen what happens to home owners during a recession. Downsizing is a lot easier if you are a renter.

Timing. Will you have to buy miles away from family and friends, just to afford that home? Or will you have to move soon after you buy? Remember, while home ownership comes with some pretty hefty tax breaks and can be a great investment tool, it also can be an anchor. If you are unsatisfied or uncertain about your job, considering a family, or have other plans that work against you being stuck in one place, wait.


Written by Broderick Perkins
June 21, 2012, Published by Realty Times

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Real Estate Outlook: New Home Sales Rise 3.3 Percent

New home sales rose during the month of April. This 3.3 percent rise reported by HUD and the U.S. Census Bureau is consistent with predictions of sustained growth through the rest of the year.

On a regional basis, new-home sales rose 7.7 percent in the Northeast, 28.2 percent in the Midwest and 27.5 percent in the West in April. The South was the only region to post a decline for the month, of 10.6 percent.

"The increase in April sales activity is in line with other important housing measures that have shown continued, gradual improvement from the first quarter as more consumers look to take advantage of today's low interest rates and affordable home prices," noted National Association of Home Builders (NAHB) Chairman Barry Rutenberg, a home builder from Gainesville, Fla. "In markets where demand is rising, we could be seeing a faster pace of recovery if not for persistently tight lending conditions that are slowing both the building and buying of new homes."

Inventory for new homes is now at a 5.1-month supply -- slim by historic standards.

A rise in sales is always good news in this post-recession economy. The National Association of Home Builders (NAHB) is committed to showing current and future homeowners the opportunities which homeownership brings. That is why the month of June is National Homeownership Month.

"Anyone thinking of buying a home shouldn't wait any longer," added NAHB Chairman Barry Rutenber. "Housing markets around the country are improving, home prices have stabilized, there is a great selection of available homes for sale, and interest rates are at near historic low levels."

You can read more information about homeownership, threats to the American Dream, current housing proposals, and mortgage information atProtectHomeownership.com -- run by the NAHB.

"Homeownership remains a core value to American families," said Rutenberg. "Even more important than the financial advantages of homeownership, is that first and foremost, a home is where your family can relax, spend quality time together and build lifelong memories."

A recent NAHB study (January 2012) found that despite a still struggling economy, the dream of homeownership is alive. The study found that 96 percent of homeowners are happy they own. That is a big statement considering the number of underwater owners. Nearly seven out of 10 American adults who are not currently home owners said it was a goal of theirs to buy a home.

Will we continue to see improving sales and housing growth? Lawrence Yun, National Association of Realtors chief economist, said new jobs are the key. "Ongoing job creation, which is at a higher level this year, is fueling an underlying demand for commercial real estate space, assisted by a steady increase in consumer spending," he said. "The pattern shows gradually declining commercial vacancy rates, with consequential but generally modest rent growth."


Written by Carla Hill
June 18, 2012

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Before You Sell

Deciding to put your home on the market can bring on a wide range of emotions. You may feel excitement at the prospect of moving on or moving up. Some sellers feel anticipation about what the future holds and about what kind of deals buyers may bring to the table.

On the opposite end of the spectrum you may be feeling sadness or even regret. That's because selling your house can feel a lot life selling your home. Any and all of these emotional responses are normal! In order to stick to your guns and to keep on the sunnier side of the selling process it's important to do five key things before you sell. Feeling prepared and in control of a situation is paramount in feeling good about your decision.

Here are the five pre-selling tips:

Organize Paperwork: You most likely have papers regarding any home warranties. Prospective buyers are going to want to have these. Having them ready for viewing is a great selling point. You might also consider putting together a list of current contacts for pool maintenance, lawn care, and even repair work companies.

Get an Inspection: Even almost new homes can have hidden damage. Most every buyer in today's market will be getting an inspection. Beat them to the punch and have your own inspection performed so that you are not surprised come negotiation time.

Perform Repairs/Get Estimates: Having your own inspection gives you the time to identify problem areas and either repair them or get estimates to have ready for prospective buyers. They'll love how organized and up-front you are!

Get Organized: Start packing as soon as you decide to list your home. Removing or packing away some of your personal belonging has two great benefits. First, it allows your home some breathing room to be staged and cleaned for showings (see #5). Buyers want to be able to see the house, not your stuff. Second, it starts the process of moving on. As you pack up your stuff you'll find that the house will feel less and less familiar, which can be great for letting go of attachment.

Stage: This means it's time to amp up your curb appeal for starters. Trim trees and shrubs and pick up any debris from your yard. Keep you lawn in showing ready state all year around. You should also consider staging outdoor areas with freshly potted flowers, comfy chairs, and even outdoor accessories, such as lanterns, throws, and dinnerware.

You may wonder what these very practical tasks have to do with emotions, but the truth is they are so inextricably linked! Our experiences dictate our emotions. So, take the time to prepare for the selling process. Dot all your i's and cross all your t's and then sit back and enjoy your journey into a new stage of life!


Written by Carla Hill
June 14, 2012

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An 'Outside the Box' Buyer

Are you in the market to buy, but are limited by certain financial restrictions? You're not alone. The recent recession of 2009 has left a mark on the bank accounts and labor markets of today.

Today's market is considered a "buyers market". What does this mean? It means that certain factors (inventory levels, home prices, days on markets, and supply versus demand) give buyers more leverage at the negotiating tables.

In today's buyers market there are lots of sellers who will be willing to go a more non-traditional route with a sale. They are ready to move on and are eager to find a buyer.

Sometimes it takes thinking outside the box to get the results we want. It's a great time to buy. Affordability is at a generational high and interest rates remain remarkably low, but if you have limited savings or a less than stellar credit report you might find yourself unable to enter the ranks of homeowner.

In cases such as these it's a good idea to explore your options. It's time to think outside the box.

First, be sure to talk to your close family to see if anyone would be willing to help out. This could come in the form of a downpayment gift, a friendly loan for closing costs, or even a more financially stable relative offering to be your "lender." Family loans almost always come with exceptionally low or non-existent interest rates.

These people know you best. Your credit report might say you're high risk, but they know and trust you'll make this kind of payment on time.

They might even be willing to share in a "shared appreciation" or "shared equity" set up. This means they are part owners of the property. Their name is on the mortgage. When the time comes down the road to sell or tap into that equity, they are there for a payday. It's an investment opportunity.

Next, check out what downpayment assistance programs might be available in your area, state, or even on a national level. Search online and ask your local real estate professional for tips on who to call and where to look. Additionally, be sure to visit www.hud.gov for tips and programs available through the federal government.

Finally, talk to the seller about their thoughts on non-traditional sales. This might come in the form of a lease with the option to buy. You lease the home and pay a specific dollar amount each month. In essence the seller becomes your landlord.

This gives you time to save up money for the downpayment. You could arrange to buy the home then in a year or several years down the road. If the seller is generous they may even put that monthly "rent" payment towards the final amount of the home.

If they aren't interested in this option, see if they would be willing to serve as the lender for your home. You make payments to the seller instead of a bank. This will generally only work if the seller is in a financial position to wait to get their money.

There are options out there no matter your situation. Be sure to research the options and decide which path is right for you.


Written by Carla Hill
June 13, 2012, Published by Realty Times

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Future of the forest: Lake Tahoe plan could set Sierra precedent, officials say

LAKE TAHOE — A wide-ranging plan to manage more than 150,000 acres of forest surrounding Lake Tahoe could be precedent-setting for the entire Sierra Nevada range, according to a coalition of conservation groups.

The U.S. Forest Service Lake Tahoe Basin Management on Friday released the draft environmental document for an update to its forest plan. The existing plan has not been updated since 1988. Once passed, the proposed plan will guide management of Lake Tahoe forests for 15 years.

“We've developed four alternatives that we believe reflect what we've heard to date about how we can best manage National Forest System lands in the Lake Tahoe Basin,” Nancy Gibson, forest supervisor for the Lake Tahoe Basin Management Unit, said in a Friday statement. “Now we're encouraging the public to take a look at these alternatives and tell us what measures they prefer and why.”

Each alternative differs in how it addresses watershed health, forest health, hazardous fuels, wildlife habitat, recreation and access to national forest land. The alternatives will be available for review and comment until Aug. 30.

In a separate statement from a coalition of eight environmental groups, Sarah Matsumoto, senior representative with the Sierra Club, said the plan is an opportunity to take a 21st Century approach to forest management.

“Many eyes will be watching the Lake Tahoe Basin forest plan process, as it will be the first out of the gate for forest planning throughout the Sierra region,” Matsumoto said. “It is also positioned to set precedent for a series of upcoming forest plans in the Sierra, stretching from Sequoia National Forest in the south all the way to the Oregon border.”

Restoring forest ecology, protecting watersheds, safeguarding old growth forests and conserving wildlife habitat are all priorities for the groups in their examination of the plan.

Meaningfully addressing the impacts of climate change, like including protected corridors for animals to move to higher elevations, also needs to be addressed in the plan, according to the statement.

A “key component” conservationists hope to see in the plan is a recommendation to protect the Upper Truckee River and its tributaries in the Meiss Meadows area as a Wild and Scenic River, according to the statement.

Some Alpine County residents near the river have expressed concern that the designation could limit activities on their properties.

The final environmental document for the forest plan is expected to be complete in late 2012.

More information on the forest plan is available by calling Matt Dickinson at 530-543-2683 or Denise Downie at 530-543-2769. Documents relating to the plan are also posted at tinyurl.com/tahoeforestplan.

By Adam Jensen
Tahoe Daily Tribune

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Record-Setting Low Fixed Mortgage Rates Persist

Freddie Mac released the results of its Primary Mortgage Market Survey®, showing average fixed mortgage rates falling to new all-time record lows for the sixth consecutive week amid weak economic and job data helping to keep homebuyer affordability high.

30-year fixed-rate mortgage (FRM) averaged 3.67 percent with an average 0.7 point for the week ending June 7, 2012, down from last week when it averaged 3.75 percent. Last year at this time, the 30-year FRM averaged 4.49 percent.

15-year FRM this week averaged 2.94 percent with an average 0.7 point, down from last week when it averaged 2.97 percent. A year ago at this time, the 15-year FRM averaged 3.68 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.84 percent this week, with an average 0.7 point, the same as last week. A year ago, the 5-year ARM averaged 3.28 percent.

1-year Treasury-indexed ARM averaged 2.79 percent this week with an average 0.4 point, up from last week when it averaged 2.75 percent. At this time last year, the 1-year ARM averaged 2.95 percent.

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

"Fixed mortgage rates reached new record lows for the sixth consecutive week as long-term Treasury bond yields declined further following downwardly revised economic growth and job creation data. Gross domestic product rose 1.9 percent in the first quarter, after originally being reported as 2.2 percent, led by gains in inventories, more government cutbacks and the slowest increase in corporate profits in over three years. In addition, the economy added 69,000 jobs in May, less than half of the market consensus forecast and revisions subtracted a total of 49,000 workers in March and April. Lastly, the unemployment rate ticked up from 8.1 percent in April to 8.2 percent."


June 8, 2012, Published by Realty Times

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The Scoop on Closing Costs

Are you a buyer preparing to close on a house? Now is a good time to refresh yourself on the most common closing costs.

There are more expenses to buying a house than just the monthly mortgage payment. More than likely you'll need to come up with some cold, hard cash in order to finalize the deal.

Here's some common closing costs to consider:

Down Payment: Due to today's economic climate most buyers will need to put down at least 20 percent. This makes good financial sense. If you can't afford to put 20 percent down then you probably can't afford to buy this particular house.

Loan Origination: This is what the lender charges you to underwrite the loan, meaning what they charge for their time and all the paperwork they need to do.

Points: You'll often see that different lenders have different "rates" and different "points" they charge. Buy paying points you can receive a lower interest rate, but this means more cash at closing.

Credit Score: You can access your credit report for free at annualcreditreport.com, however, in order to see your credit "score" -- the magic number that lenders use to determine your interest rate -- you'll need to pay a small fee.

Home Inspection: You want to be sure, no matter if the house is new or old, that you get a home inspection by a qualified inspector. You may love the house and the price, but if you find out that a big ticket item needs replaced you will be able to renegotiate the price or decide to change your tune on buying the home. A typical inspection will run you from around $300 to $500.

Private Mortgage Insurance (PMI): This is what a lender charges if you are putting less than 20 percent down on the cost of the home. It usually runs about .5 to 1 percent of the total cost of the loan and is simply a safeguard to protect the lender should you default.

Other Small Fees: Insurance escrow, property tax escrow, notary feeds, land surveys, deed recording, etc. Be sure to ask your real estate agent which will apply to your contract and what the expected costs will be.

Congratulations on the decision to buy. Owning a home can be a wonderfully fulfilling experience. Just be sure you're ready for the closing costs coming your way!


Written by Carla Hill
June 5, 2012

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Rates Hit All-Time Record Lows, Again

In Freddie Mac's results of its Primary Mortgage Market Survey®, fixed mortgage rates followed bond yields lower to new all-time record lows. The 30-year fixed averaged 3.75 percent setting a new all-time record low for the fifth consecutive week. The 15-year fixed averaged an unprecedented 2.97 percent bringing three of the four benchmark mortgage rates below 3 percent for the first time in Freddie Mac’s weekly survey.

30-year fixed-rate mortgage (FRM) averaged 3.75 percent with an average 0.8 point for the week ending May 31, 2012, down from last week when it averaged 3.78 percent. Last year at this time, the 30-year FRM averaged 4.55 percent.

15-year FRM this week averaged 2.97 percent with an average 0.7 point, down changed from last week when it averaged 3.04 percent. A year ago at this time, the 15-year FRM averaged 3.74 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.84 percent this week, with an average 0.6 point, up from last week when it averaged 2.83. A year ago, the 5-year ARM averaged 3.41 percent.

1-year Treasury-indexed ARM averaged 2.75 percent this week with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 3.13 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Market concerns over tensions in the Eurozone led to a decline in long-term Treasury bond yields helping to bring fixed mortgage rates to new record lows this week. Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower which translates into nearly $1,200 less in annual payments on a $200,000 loan. Meanwhile, the S&P/Case-Shiller 20-city composite home price index (not seasonally adjusted) showed annual home-value gains in March in seven cities and a monthly gain in 12 cities."


June 1, 2012, Published by Realty Times

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