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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Selling?
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877-651-7810
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