May Round Up: Rates Tick Down

In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 4.78 percent with an average 0.7 point for the week ending May 27, 2010, down from the previous week when it averaged 4.84 percent. Last year at this time, the 30-year FRM averaged 4.91 percent. The 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.

The 15-year FRM this week averaged 4.21 percent with an average 0.7 point , down from the previous week when it averaged 4.24 percent. A year ago at this time, the 15-year FRM averaged 4.53 percent. The 15-year FRM has not been lower since Freddie Mac started tracking the 15-year FRM in August of 1991.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent this week, with an average 0.7 point, up from the previous week when it averaged 3.91 percent. A year ago, the 5-year ARM averaged 4.82 percent.

The 1-year Treasury-indexed ARM averaged 3.95 percent this week with an average 0.6 point, down from the previous week when it averaged 4.00 percent. At this time last year, the 1-year ARM averaged 4.69 percent. The 1-year ARM has not been lower since the week ending May 27, 2004 when it averaged 3.87 percent.

"These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.

"The latest information from Freddie Mac's repeat-transactions home-price indexes also show some encouraging signs, with national metrics either slowing their descent or showing a modest rise, suggesting that the sharp downturn in national indexes since 2006 may be nearing an end. The S&P/Case-Shiller Index for the United States was up 2.0 percent year-over-year, and while the FHFA Purchase-Only Index and Freddie Mac's Conventional Mortgage Purchase-Only indexes showed declines of 3.1 percent and 1.1 percent, respectively, from first quarter of 2009 to first quarter of 2010, the FHFA's monthly U.S. index showed a pickup in values from February to March."

Do You Marry the Credit Score?

Some think that the good credit will outweigh the bad credit. Or some hear that lenders average everyone's credit scores together. If Jane has an 800 credit score and John has a 400 credit, score, their combined score would be 800 + 400 = 1200 divided by two, giving a not-so-terrible-after-all score of 600. Okay, close to terrible but certainly nothing near 400.

Of course, that's not so. In either case. Good credit doesn't erase bad credit. In fact, bad credit will kill the deal altogether. And scores aren't averaged, they're examined independently and the 400 score would render the 800 score impotent.

If a spouse or joint borrower has bad credit, and the person with good credit can qualify on her own, then leave the person with bad credit off the mortgage and simply include him on the title.

How Can You Tell If You Are In a Buyer's Market?

Markets operate on the basis of supply and demand. If you have a local market where the supply of homes is significantly greater than demand, you will have a market where home sales slow, prices stall or drop, properties are more affordable and purchasers are typically able to negotiate significant concessions from sellers. And that, in a nutshell, is a buyers market.

Today many local markets favor purchasers. No less important, interest rates are at the lower end of the scale on an historic basis, and you can do well with conservative, reasonable financing such as FHA, VA and conventional loans. Relative to the past few years, now is a good time to buy in many areas.

Buyers Often Overlook Insurance Costs

Insurance is usually the last thing people worry about when they are buying a new home. According to the Insurance Information Institute, that's a mistake, because it will be an expense a buyer will have as long as they own the property.

Here are some key issues that the institute urges every buyer to consider:

How far is the home from the fire department? A location close to the station usually means lower insurance costs.

What is the condition of the plumbing and electrical systems? Older and poorly maintained systems cost more to insure.

Does the property meet current building codes? Up-to-date properties are safer and also cheaper to insure.

What about wind damage? If insurance against windstorms is required, is private insurance available or will the buyer have to rely on a state-run program? If there a windstorm deductible, how high is it?

Is the home vulnerable to flooding? Floods aren't covered under a standard homeowner policy, although most major insurers will provide it through the National Flood Insurance program. How much the insurance costs depends on where the property is.

Is there earthquake risk? Earthquake insurance requires an endorsement or a separate policy. 


Written by Realty Times Staff, Published on Realty Times

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Going on a Financial Diet

Many Americans live on a margin, spending more than they earn, using credit to make up the difference, and saving at near invisible rates.

Living past their means, they use credit to buy houses, cars, and merchandise that many experts would suggest they really can't afford. This "good life" is great, until the person is no longer able to make their payments. And as unemployment rates hover over 9 percent (U.S. Bureau of Labor Statistics), more and more Americans are finding themselves in this predicament and subsequently facing bankruptcy, foreclosure, and even homelessness.

Journalist Laura Rowley, wrote for Yahoo! Personal Finance earlier this year, "Almost half of Americans reported having trouble keeping up with monthly expenses and bills, according to a 2009 survey on by FINRA Investor Education Foundation. Nearly one-quarter reported overdrawing their checking accounts."

Americans are saving at an alarmingly low rate. According to the Bureau of Economic Statistics (BEA), "Personal saving as a percentage of disposable personal income was 4.0 percent in May." This is up only 0.2 percent from the month earlier.

Are you one of the millions who need to put your debt on a diet?

It's a hot topic these days. So hot, in fact, that talk show giants, like Oprah Winfrey have featured series on how to reduce debt, increase your savings, and secure your own future.

This financial restructuring just might help you save your home one day. Take a moment to look over these tips.

1. Credit Cards: Financial expert Suze Orman said it best, "You must pay more than the minimum payment every month, as much more as you possibly can. If you owe a credit card company $5000 at 18 percent interest and all you do is pay the minimum each month it will take you over 30 years to pay it off." Call your card companies and try to negotiate a better rate, as well. Pay off the cards with the higher interest rates first.

2. Emergency Fund: In today's economy it is important to be prepared for long stretches of unemployment. Each household should have an emergency fund equal to eight months worth of bills. This means if your expenses for one month equal $3,000, you should have at least $24,000 in savings. Laura Rowley reports, "Only 49 percent of FINRA respondents reported that they had set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency."

3. Wants Versus Needs: The best way to start saving more, is to start spending less. In this country we have created of tradition of expecting bigger and better. It may be time to examine your lifestyle and to be realistic about what you can really afford. And that doesn't mean what payment you can afford, but what you can actually afford to buy.

4. Increase Your Income: There may be extra ways for you to have cash coming in, including selling off unneeded items. If your debts are large, you may consider taking on a second or part-time job. If you are a stay at home parent, perhaps you have skills that will allow you to work part time from your house, such as design work or even baby-sitting.

5. Plan for the future. Many Americans have no retirement savings. Consider changing your priorities from "plenty now" to "enough for the future." Exchange the morning Starbucks for savings bonds and IRAs.

Overall, it's about restructuring how you approach life. The saying, "Money can't buy you happiness," couldn't be more true. You may be surprised that exchanging weekend shopping trips and dinner out for family game nights and home-cooked meals may be a welcome change in your family. 


Written by Carla Hill
June 29, 2010 , Published on Realty Times 

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A Wish List for a Dream Home

Your real estate agent may not be your fairy godmother, but they have powers to grant you many of your home buying wishes.

Your first step in finding your dream home? You must develop a strong image in your mind, and a sound list for your agent, of what you want of your dream home.

To make this process a little less daunting, consider these categories:

Location: It has been lauded for years as the most important factor when it comes to the saleability and pricing of home, and it's a good place to start when compiling your wish list. Do you want a short commute to work? Are you looking for a waterfront property? Do you want to be near family? Is there a particular neighborhood you want to make home? These are all important questions that will help your agent narrow their search for your dream home.

Neighborhood: If you are looking for a family home, then you need to research the local schools. Is there a particular school district you want to be in, or perhaps to stay in? Are you wanting a neighborhood within walking distance to shops and restaurants? Or perhaps you prefer something more quiet, or on a cul-de-sac.

Home Styles: Do you prefer large, open floorplans and Modern architecture? Or are you a fan of cozy and functional Country style plans? A Tudor style home is exemplified by tall, narrow windows with small panes and a reminiscence of Medieval looks. Or how about Victorian style homes, which feature elaborate details on the exterior and interior of the home?

Home Features: Not every buyer is seeking the same features. What is it that you desire most? Fireplaces, guest bathrooms, an open floor plan, formal dining, a media room, covered porches, a screened porch, a large finished garage, or a pool? The same concept goes for decorative features, including flooring preferences, crown molding, and exterior siding.

Condition: Are you on the lookout for a fixer-upper? Some buyers thrive on the challenge of restoring a former beauty to its original glory. Or are you the type that wishes for new construction, so you can put your own mark on the property? Also consider the idea of townhomes and condos, which can afford the homeowner even more freedom from maintenance.

Use these categories as a starting point for creating your own wish list. And then pass it on to your own fairy godmother! 


Written by Carla Hill
July 13, 2010 

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Final Walk-Through Tips

There will come a time during your home buying process when you'll need to do a final walk-through of the home before closing.

Around a week before you close, take the time to visit your "new" home again. When you're there, check to be sure that the terms of your contract have been met, and that the condition of the property has not changed significantly since talks began.

As your reference guide, be sure to bring your purchase contract with you for this walk-through. This will help you look for little details, without having to remember each item.

What are things you should be on the lookout for?

1. Major appliances: Be sure that any items that were to remain in the home are still there, and that they are in good working order.

2. Major systems: Do the air conditioning, heat, and plumbing still function?

3. Walls and floors: Has any damage occurred to the floors or walls during the sellers move? Were rugs, artwork, or carpets covering water damage that was not disclosed?

4. Repairs: As part of your purchase contract, the seller may have been required to make specific repairs. Be sure that these have been completed, or that the seller has a written timeline for when the repairs will be done.

5. Screens and Storm Windows: If it is the season for these items to be in storage, be sure they have been left behind and that they are in good shape.

6. Remotes: Garage doors, alarms, sound systems, and the like all use remotes, some of which can be very expensive. If any of these components were part of your agreement, be sure they have been kept with the house.

7. Cleanliness: The home should have been cleaned and all debris removed. You don't want to spend the first week living in your new home cleaning up other people's junk.

8. Landscaping: It may seem ridiculous, but yes, some sellers may try to run off with your shrubs and plants. Refer back to your contract to see what should have stayed. If plants were taken, let your agent handle the situation.

9. Fixtures: Light fixtures, curtains, and other items that were agreed upon should still be in the home. If they are not, let your agent address the conflict.

10. Exterior: Has there been any damage to the home since your inspection or first visit? If there have been storm with high winds or hail, be sure to visually inspect the exterior of the house for damage. Once you have signed on that dotted line, the house is yours. Hail damage and all.

Closing time can be very hectic. Be sure to make time for your final walk-through. It's a smart way to bring to completion a long, but joyous, process. 


Written by Carla Hill
July 27, 2010 

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Call Alvin's Team Today! 877-651-7810 
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Browsing For Housing Requires On-line, Off-line Smarts

Nearly nine out of 10 home buyers can't be wrong -- browsing for housing online puts listings at their fingertips, speeds the home-buying process, and comes with an educational bonus.

"More informed buyers, improve the transaction process," says Douglas de Jager, co-founder of DotHomes.com one of the newer online listing services on the block.

The California Association of Realtors (CAR) reports that 84 percent of home buyers use the internet as a significant part of the home buying process, according to its 2009 Survey of California Homebuyers.

"There is so much more information made available to us online, when you go to the actual home, it's just a validation process for what you've seen online," de Jager adds.

But transforming digital digs into a real home of your dreams isn't just aboutbandwidth and educational content.

Using the Internet to buy a home comes with the same prerequisite necessary for any buyer -- get financing locked down first.

Certainly, the Internet can help with financing too. There are numerous mortgage comparison sites, virtually every lender is online and finance and credit information portals abound.

A home buyer with an approved mortgage -- obtained online or off -- has a negotiating edge and the financial boundaries necessary to help keep focused on a home that's truly affordable.

Only then is it time to surf for shelter.

DotHomes.com, a listing site with Google-like search features, offers these tips to help you get the most out of your online home shopping experience.

• Leverage the broker. Brokers and real estate agents are the housing market's matchmakers. They use local expertise to connect buyers and sellers. They've honed online tools to help you research, browse and focus your online search. The tools put you in touch with all the information and resources the listing agent or broker has to offer -- broker blogs, emailed updates tailored to your search, market reports tailored to your market, how-tos and other information.

• Search in real-time. Get property listings and other information electronically "fed" to you via RSS (really simple syndication) feeds, email alerts and Web updates. Electronic updates are an adjunct to your own time spent online. Alerts keep you abreast of the newest listings and reduce your need to manually check the Web again and again for updates. That's especially true when you are on the go, say driving from open house to open house. Blackberries, iPhones and other smart phones keep you connected to your search.

• Search "fresh." Avoid fringe listing sites that don't update frequently and are far removed from the original online broker's listing. If you don't, you'll miss out on listing changes and updates like new pricing information, new photos, open house dates and the like. Web sites that don't link to the original listing, lock you away from updates. Nothing is more frustrating than to find online what you consider your dream home only to soon discover that the listing was sold, removed from the market or otherwise changed beyond your requirements -- but not removed from an Internet server.

• Refine your search. Don't get overwhelmed. With so many listings on the market, both traditional listings and distressed properties, quickly navigating them all is a chore. Use online tools and Web sites that allow you to refine your property search. If you are looking for a house on a particular street, search the street. If you need a pet friendly condo, ask. Whether you know exactly what you want or are just starting to figure it out, be specific with search terms like "new roof," "three-car garage," "established landscaping," "new kitchen appliances," etc. to find the property with the features you need.

Along with the well known national listing Web sites from trade groups, large private listing portals and real estate companies, the local multiple listing service's (MLS) public access portal are among the best places to search on line because they use standard formatting and strict guidelines about adding and removing listings in a timely manner.

• Screen home movies. A picture is worth a thousand words, but a video, a virtual open house, looks like a million bucks. Kodak moments can help you get a two-dimensional feel for a property, but virtual tours add a third dimension. Videos offer a much better sense of the proportions and the feel of a property. They can also play the starring role -- as a sort of 24-hour open house -- on a Web site or blog dedicated to the listing.

Here's another browsing for housing bonus: If you buy a home with its own Web site and virtual tour, you can ask the seller to gift the Web site or blog to you! 


Written by Broderick Perkins
March 18, 2010 Published on Realty Times

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Mortgage Basics

Points, fees, and adjustable rates. If you are brand new to the home buying arena, then mortgage terminology can be as foreign as reading Greek.

The famous quote by Sir Francis Bacon rings true for all prospective buyers, "Knowledge is power." Use the following glossary of terms to help you raise your own awareness.

Underwriting: This lender process is used to determine how much of a risk you and your mortgage would be to their company. An underwriter will evaluate such things as your credit, available collateral, as well as your employment and current debts.

Points: Broken into two categories, discount and origination, this term refers to a fee paid when obtaining a mortgage.

• Discount -- These fees are tax deductible. You can assume to pay 1% of the total loan amount for each point. Paying points can reduce your final interest rate.

• Origination -- Less popular with buyers, as they offer no real benefit to the borrower, these points are fees paid to the lender or loan officer in exchange for their job of evaluating and processing your mortgage loan. These points are not tax deductible.

Fixed Rate: Your interest rate will remain the same throughout the life of the loan.

Adjustable Rate: Your interest rate is adjusted periodically. There also may be a penalty for paying off the loan before its maturation date.

Amortization: The decrease in the principle owed on a home, as it decreases over the life of the loan.

Down Payment: A portion of your total home cost that is paid up-front. It can result in a smaller monthly payment and a lower principle balance.

Good Faith Estimate: RESPA requires the lender to provide a borrower with an estimate of the fees that will be due at closing. They must provide this within three days of taking your application.

Escrow: Your funds are held in an escrow account by a third party until the closing of your transaction.

Refinancing: There may come a time during the life of your loan that you will wish to refinance. Perhaps you want to take advantage of lower interest rates or to consolidate debt. If you are eligible, in great credit standing, you may be able to do just that.

For more information the mortgage process, be sure to talk with a lender or your real estate agent. 


Written by Carla Hill
July 19, 2010 Published on Realty Times

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Another Week of Record Low Mortgage Rates

Uncertainty in the global economy has kept mortgage rates at record lows for over a month. This week mortgage-backed securities prices, which drive mortgage rates their opposite, have again posted gains as investors continue to favor safer bets, helping mortgage rates.

30-year fixed mortgage rates remain at 4.25% for well-qualified consumers willing to pay 1 point origination. 15-year fixed mortgage rates are at 3.625%.

FHA mortgage rates mirror those of conforming mortgages for the most part. Today's FHA 30-year fixed-rate is solid at 4.25% with low risk of a sudden jump. A 30-year fixed FHA loan with an interest rate of 4.25% at 1 point origination will have a higher APR then that of an identical conforming mortgage because of MI and other FHA fees charged exclusively on FHA loans.

30-year fixed jumbo mortgage rates are all the way down to 5.125%, after being in the high 5's for most of the first half of 2010.

Wells Fargo is advertising a 30-year fixed-rate of 4.5% with an APR of 4.686 on their website, down from last week.

All rates mentioned in this article are verified by FreeRateUpdate.com who researches over 2 dozen wholesale lenders' rate sheets for brokers on a daily basis. 

Written by Ed Ferrara
July 21, 2010, Published on Realty Times

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