In Freddie Mac's results of its Primary Mortgage Market Survey®, average fixed mortgage rates fell to a new all-time record low for the second consecutive week on mortgage securities purchases by the Federal Reserve and indicators of a weakening economy. The Federal Reserve's purchase of long-term fixed mortgage securities allowed the 15-year fixed-rate mortgage at 2.69 percent to fall below the 5-year ARM's rate at 2.72 percent. The last time the average 15-year fixed was lower than the 5-year ARM was the week ending October 15, 2009.
30-year fixed-rate mortgage (FRM) averaged 3.36 percent with an average 0.6 point for the week ending October 4, 2012, down from last week when it averaged 3.40 percent. Last year at this time, the 30-year FRM averaged 3.94 percent.
15-year FRM this week averaged 2.69 percent with an average 0.5 point, down from last week when it averaged 2.73 percent. A year ago at this time, the 15-year FRM averaged 3.26 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.72 percent this week with an average 0.6 point, up from last week when it averaged 2.71 percent. A year ago, the 5-year ARM averaged 2.96 percent.
1-year Treasury-indexed ARM averaged 2.57 percent this week with an average 0.4 point, down from last week when it averaged 2.60 percent. last week. At this time last year, the 1-year ARM averaged 2.95 percent. According to Frank Nothaft, vice president and chief economist, Freddie Mac:"Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy. The final estimate of growth in Gross Domestic Product was revised down to 1.3 percent in the second quarter, representing the slowest growth in a year. In addition, personal incomes rose only 0.1 percent in August, while July's increase was revised downward. And finally, pending home sales in August fell 2.6 percent, well below the market consensus forecast of a slight increase."
October 5, 2012
Published by Realty Times
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Buying a home is not like shopping for anything else. For some, a car, boat or other big investment might come in second. But, despite the significant importance of buying a home, many buyers still fail to have a strategy to go about determining which home they really want.
Today, there are many systems available to help buyers. There is plenty of information online from articles to sites that have calculators to determine how much home you can afford. There are even apps to store your notes, photos, and links of your favorite home so that they're accessible on your mobile devices and smartphones.
However, in this column, we're going back to the basics. I discovered a sheet that's offered by HUD. It's a good tool for buyers to use to make notes. Some buyers simply bring along a notepad and jot information down on sheets of paper. By doing this they often run the risk of not making good enough notes to decipher later when they're trying to review what they liked or didn't like. Also, without a standard form, the notes buyers take can vary drastically from home to home.
Printing out a form like the one mentioned above, or creating one based on this form, allows you to have a handy tool to put the information about the homes you view in one central place. It'll make it that much easier when you're ready to review the homes.
I suggest getting a three-ring binder and placing many copies of this form in the binder. Include blank notepaper as well. Make sure there are pockets to store loose pages, cards, etc.
As you make your way through the house-hunting process, you'll find a binder and a home buyer's checklist are invaluable. Just think about how they can help. For instance, when you're leaving work on a lunch break, you won't be searching for a notepad or the Multiple Listing Service sheet that your real estate agent sent you. Instead, have that information stored neatly inside your binder with your checklist ready to go. Grab the binder and you're on your way.
Because I am a huge fan of digital files. I would scan the information in, or if you really want to be creative, you can create a PDF that you can type in the information you want to record using an iPad while you're at the homes you are viewing. Combine that with photo-sharing sites and you have a great way to record your facts and thoughts about the home all online or in your personal computer. You can then print them out and place them in the binder.
If you're going the digital route, then you should look at some of the apps that help you imagine what a home could look like. There are some good ones, and some that are more about what you create once you've taken a photo. I like Skitch. It's an app offered in the iTunes Store and allows users to take or use photos from their own photo library and then write and draw on the photos. This way you can snap a photo of a home you're looking at and later mark up that photo with changes you would make, such as tearing down a wall or removing the wall paper. You can save the photos and your notes using another program called Evernote. This one will make sure all your digital devices have the same information including your Skitch designs.
At the very least, you owe it to yourself to have a home buyer's checklist printed and with you at all times during your house-hunting. Having one will help you stay organized when it comes time to choose which home you like best. When the homes all seem to start blending together, it will help you recall the important characteristics of each one.
Written by Phoebe Chongchua
October 5, 2012
Thinking about Buying or Selling?Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Buying a home is like searching for a mate. You'll go on many first dates and in the end, the one that has most but maybe not all of the characteristics that you want, will win your heart.
However, first-time buyers and sometimes even serial homebuyers are disappointed by how long the process takes. Yet they may not understand how their expectations, beliefs, and lack of action may be causing the delay in finding the right home.
Here are five pitfalls that buyers can fall into that cause them to let the right home slip by.
Seeing a home "as-is". I don't mean that buyers should not view homes on the market that are listed for sale "as-is"; rather I mean not being able to see beyond the "as-is" home. In other words, some buyers walk into a home and are immediately turned off by something as simple as the color of paint which can be easily changed, or maybe it's the carpet or wallpaper. Regardless, when buyers see the home "as-is" without the ability to envision it differently, they do themselves a huge disservice and fall into a pitfall of thinking that the home is not right simply because of the condition they are currently seeing it in.
Not working with an expert agent. Buyers can weed through the paper and click around the Web looking for open houses and listings but a quality agent can help identify the best-suited properties much faster. An expert agent also often knows about other listings that are about to come on the market and would not be in the paper or on the Web yet. It's worth it to spend time interviewing agents to find the right one who can help you find the right home. If you fall into the pitfall of trying to do everything on your own, you're likely going to miss seeing some of the houses that might offer the best match for your wants and needs.
Letting the important things slide. We've all done this when making an expensive purchase. We compromise on something that is important simply because it's less expensive. Later we regret it. Whether it's a new car, new house, or flat screen TV, when you're making large purchases, you need to know which things are important and non-negotiable and then stick to that list. Of course, there may be some small, less important things that you'll compromise on, but if you compromise on something big that is important to you, you're likely going to be disappointed down the road.There is a reason you were searching for a three-bedroom home. So, for instance, when you fall in love with that quaint, cozy two-bedroom home, remember that you had specific reasons for needing an additional bedroom. If you've clearly defined your living needs and wants before you begin house hunting, you'll have guidelines to keep you on track.
You might find that the smaller home has a secondary unit on the property and, while it's not a third bedroom, it will suit your needs. So, yes, be flexible and think of the possibilities, but do remember your list of what you originally deemed important. The tendency is to get caught up in the moment, either because a home is so charming or because it appears to be such a good deal that you start to say, "Well, I can make-do without that." Maybe you can...but you'd better be certain before you close escrow.
Living strictly in the moment. Most of the time I write about practicing living in the moment because so many of us lead hectic lives. But when you're buying a home, you'd better be thinking about the future. What's good for you today will likely need to be good for you for many years to come. So, do your homework to find the right home. Work with your agent to find out how the neighborhood is changing. What future plans are there for the community? Pay attention to the congestion of an area and to the types of retail shops and restaurants that are coming into the community...then compare that to your future plans. You can't always know what lies ahead but many times you can see what types of projects have been proposed for undeveloped land in the area.
Skipping an inspection. I've written a lot about this one. Inspections are critical. They're the equivalent of taking a car you want to buy to your car repair shop for a look before you buy. Just like you don't want to end up with a lemon for a car, you don't want a home that has too many and too costly repairs needed. Inspections give you a "health" check of the home. They let you know what you're in for should you buy the home. You'll be glad you have a report to help validate your reasons for wanting to purchase this home over others.Avoiding these pitfalls will help you more quickly find the right home and the right investment for your future.
Written by Phoebe Chongchua
September 28, 2012
Thinking about Buying or Selling?Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Are you staying put for at least three years? Savvy financial experts recommend you buy versus rent!
A new analysis by Zillow, a real estate information marketplace, providing vital information about homes, real estate listings and mortgages, reveals that the "break-even horizon" in more than 200 metros and 7,500 U.S. cities is three years (or less!). This is great news for wary buyers who have been fearful of declining home values in many cities.
These hard-hit cities are making a come back. The report found that in some of these areas the break-even horizon was less than two years!
"Across most of the country, historic levels of affordability make buying a home a better decision than ever, especially considering rents have risen more than 5 percent over the past year," said Stan Humphries, Zillow Chief Economist. "This is the first analysis of metros and cities that presents the buy versus rent decision in an intuitive way, by telling consumers how long they must live in the home before buying breaks even with renting financially. It's much more understandable, and therefore useful, than the abstract notion of a simple ratio of prices to rents. If we want consumers to act on market information, we have to align it with how they think about the issue and make it straight-forward to grasp."
This analysis took into account the full picture of homeownership: downpayment, mortgage, transaction costs, property taxes, utilities, maintenance, tax deductions, and adjustments for inflation and forecasted home values. It also figured rental payments, utilities, and rental price appreciation.
This sunny outlook is not the case in all areas, however. A local real estate professional should be able to tell you the course of your local market and whether or not home values are once again on the rise. There may even be differences from one local community to the next. For example, in Mill Valley, Calif., just north of San Francisco, a homeowner can break even after 8.8 years, while in similarly-priced Menlo Park, south of the city, they must live in the home for 14.1 years.
It all depends on the area. The Miami-Ft. Lauderdale metro is among the most favorable for buying, with homeowners breaking even after only 1.6 years of living in the home. However, in the San Jose metro, where home values are among the highest in the nation, a buyer must commit to living in their home for 8.3 years before they will break even.
Zillow reports "Metros where it takes more than five years to reach the breakeven point accounted for 7 percent of the 224 metros covered by the report. The metros with the longest breakeven horizons are San Jose, Calif. (8.3 years), Oak Harbor, Wash. (7.2 years), Santa Cruz, Calif. (7.1 years), San Luis Obispo, Calif. (6.3 years) and Salinas, Calif. (6.3 years). The metros with the shortest breakeven horizon are Memphis, Tenn., Miami-Ft. Lauderdale, Fla., Salisbury, Md., Red Bluff, Calif., Mobile, Ala., Tampa, Fla. and Fernley, Nev. (all tied at 1.6 years)."
Written by Carla Hill
September 27, 2012
Thinking about Buying or Selling?Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
The housing market recovery continues its pace as shown in the latest report from the National Association of Realtors. According to the report, existing home sales rose 7.8% on a seasonally adjusted basis during the month of August and was 9.3% higher than August, 2011. Single family home sales increased 8% while condominium and co-op sales increased 6.1%.
The price of homes also increased with the median home price of all housing types up 9.5%. Housing inventory was up 2.9%, a 6.1 month supply, at the end of August according to the report. While investor purchases stood at 18%, first time home buyers accounted for 31% of existing home purchases for the month. Favorable buying conditions, which includes the continued low mortgage rates still in place, is adding strength to this sector of the economy.
FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates remained firm this past week with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%. These low mortgage rates are available with 0.7 to 1% origination fee for borrowers who have good credit.
Normal documentation for conforming mortgages, both home purchase loans and traditional mortgage refinances, requires proof of income, employment and assets. In some cases, additional information will be requested by the lender after examination of the loan file. Since mortgage rates are expected to remain low, consumers who are interested in a home purchase should take the necessary steps now to improve their credit scores as soon as possible while home prices are still affordable.
The latest Mortgage Banker's Association Weekly Mortgage Application Survey for the week ending September 14th showed that the Refinance Index increased 1% from the previous week and accounted for 81% of all applications. Refinance applications for HARP accounted for 22%. HARP is a non-traditional refinance program that is currently available for existing homeowners who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009.
When this program was updated to HARP 2.0, loan to value caps were removed which is making it possible for deeply underwater borrowers to refinance to lower mortgage rates. However, the minimum loan to value is 80% and is something that lawmakers have proposed changing in the near future so that everyone could refinance with this streamline process. While HARP does have guidelines to follow, an appraisal is not necessary in most cases. This program is in effect until the end of 2013 which gives eligible borrowers plenty of time to qualify. To receive more information about HARP or other mortgage programs, the online form is available and will returned a response almost immediately.
FHA loans continue to be popular with first time home buyers, especially since credit qualifying is much more flexible. Applicants may also find that FHA mortgage rates have been lower than conforming mortgage rates in recent months which is not always the case. 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%. These purchase loans require a low down payment of 3.5% with credit scores as low as 580 and 10% with scores down to 500, although some lenders do have their own requirements also known as overlays.
FHA is known to have higher closing costs (APR) due to various FHA fees and the upfront mortgage insurance premium, although these are usually added to the loan amount or paid through seller concessions. Gaining in popularity is the FHA streamline refinance with no cash out which does not require any documentation or an appraisal. Borrowers who have FHA loans that were endorsed prior to June 1, 2009 can obtain the FHA streamline with a reduced upfront mortgage insurance premium of .01% and annual mortgage insurance premium of .55%. These reductions are available until the end of 2013 which gives borrowers plenty of time to submit an application. The online form is available for submission and does not require a social security number or other detailed personal information.
Decreasing .125%, jumbo 30 year fixed mortgage rates are now at 3.875%, which is an extremely low rate for this type of mortgage. Jumbo 15 year fixed mortgage rates are at 3.125% and jumbo 5/1 adjustable mortgage rates are at 2.250%. A history of excellent credit is required in order to obtain these lowest jumbo mortgage rates with 0.7 to 1% origination fee. Jumbo mortgages have been on the increase in recent months as the high end housing market has shown serious improvements. While guidelines for these mortgages are known to be stricter, borrowers are usually well qualified to meet the standards. For this reason, lenders are willing to accept the risk because there is also a lot of profitability surrounding these loans. According to Inside Mortgage Finance, originations for non-agency jumbo mortgages for the first two quarters of 2012 were 35.8% above 2011.
MBS prices (mortgage backed securities) affect mortgage rates which move in the opposite direction. Last week's movement of MBS was not enough to cause any major mortgage rate changes. Jobless claims were reported as 383,000 which was above expectations. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, builder confidence for September rose to 40 which is now the fifth consecutive month of increases and the highest since June, 2006. The strength and growth of the global economy is still a major concern to investors especially as Europe's crisis continues to drag on.
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
September 26, 2012
Thinking about Buying or Selling?Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Buying a home is both exciting and sometimes stressful...whether you're a first-time homebuyer or an expert at it. The key to reducing the stress and successfully finding the home that matches your wants, needs, and budget is to have a home-buying strategy.
A home-buying strategy serves to keep you focused, in line with your goals, and on financial track. It can function much like a marketing strategy does for a company. It contains the important tasks, outlines your objectives in buying a home, your must-haves in a home, your financial budget, your move-in timeframe, location, desires, and more.
It may sound like a lot of work but if you take the time to put together a home-buying strategy and then share it with your real estate agent, you'll find that the clear goals you have will bring you closer to finding exactly what you're looking for and, likely, in a shorter period of time.
Putting together your home-buying strategy: In previous columns, I've written about getting organized for your move by organizing a binder that holds your vital paperwork and any materials that you'll immediately need during the moving process.
Organizing your home-buying strategy works in a similar way. You'll start by taking inventory of the home you currently live in. This gives you the opportunity to note both the pros and cons. Write it all down. Then write down your must-haves, would-love-to-haves, and absolutely-nots. You can write a list on notebook paper and place it in a three-ring binder and share it with your agent. In today's digital era there are many highly useful tools and apps to help you with house hunting. The creative and social website, pinterest.com is wonderful for saving website links and photos to various boards that you organize in categories. Even if you keep digital files, also keep the binder handy as your agent will give you lots of paperwork and having it all in one place will be a big relief when it comes time to find a particular document.
Seek out financing. Do this before you start to physically go out and look for homes. Sure, seeing lots of different homes can be fun (for some people) but seeing homes that you don't qualify for is a lesson in frustration for all. Be realistic and be informed by getting the information you need from a mortgage broker who can get you pre-qualified.
Create categories in your binder. Separate sections with tabs and label them things like: budget, favorites, neighborhood, comps. This is where you will place the notes you take during your house hunting. The "budget" section clearly has the defined price point that you are comfortable with. Surprisingly, some buyers start their shopping without giving careful consideration to this and they wind up frustrated because they're not certain how much home they can afford. The "budget" section also includes other expenses that go along with owning a home such as amount of savings for household repairs and, perhaps, new home furnishings.
Bring along a small camera, video recorder or your smartphone to capture your own quick snapshots that you can print out and put in the "favorites" section of your binder. For the "neighborhood" section, be sure to take a few photos of parks or other areas in the community that make this neighborhood and location a good potential match. Again, there are apps that can also do this on your computer but I find both the use of a physical binder and digital tools to be the most effective. Sometimes you just need to see and hold the photo or papers in your hand.
In the "comps" section, you'll place the comps that you receive from your agent. Sometimes buyers will toss this information away thinking they'll remember the details. However, it's best to keep any comps you receive to review it again later when you're making your ultimate choice. Yes, there is lots of paperwork but it serves a good purpose.
Having all that paperwork and your digital apps at your finger tips will provide you with a solid and effective home-buying strategy that allows you to focus on finding the home you're looking for rather than searching for papers and photos you've misplaced. Also, later when you're contemplating, referencing the photos and notes that you've taken will help tip the scale and help you choose the home that's right for you.
Written by Phoebe Chongchua
August 31, 2012
Thinking about Buying or Selling?Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Selling their home can feel like they're cutting off their right arm for some sellers. They feel a sense of loss, and go on an emotional ride that takes them plummeting into the uncertainty of a move and another new home. Even if there's excitement building about the new place, leaving behind their home and its memories can cause some turmoil.
While having deep emotions about the home you lived in, for a short or long while, is normal, it can cause a lot of trouble if you unleash your emotions during the process of the marketing and sale of your home.
Telling sellers to detach to sell their home is like telling the kid whose cat has a litter to stay emotionally reserved from the kittens. You lived in the house, cared for it, and now you're being told to detach from it. Sure, some sellers are ready to take the leap into the new home and they couldn't be any more detached. But especially families who have raised their children and watched many firsts happen in their home, stay a little more connected. These are the sellers that often put a greater value on their home simply because they have a strong emotional attachment.
Selling a home is a business transaction and likely the largest financial commitment many buyers will ever make. So understanding how to not get caught up in the emotional turmoil will help you keep your home as a real estate transaction, not an emotional roller coaster ride.
First make sure you price your home based on comps of other homes sold in the area. Sounds sensible but a lot of times, emotions come into play causing sellers to overprice their home. Instead, turn to a reliable and expert real estate agent for advice and guidance. Pricing your home to sell is critical. Homes for sale usually get the most traffic in the first two weeks of being listed. If you price it too high, you'll turn off potential buyers.
Often sellers base their home value on an emotional feeling they have about their beloved home or the fact that they paid top dollar for the home. However, in today's market, a home that was purchased at the peak might not fully recoup that price.
Give buyers space. There's a term for parents who tend to over-parent. It's called helicopter parenting–appropriately named because these parents hover over their children and essentially smother them. This could apply to sellers who tend to linger while buyers are viewing their home. This makes buyers uneasy. Often they feel like they have to cut short their visit to the home. They don't feel comfortable to talk openly about the things they like or don't like about the home in the presence of the owners. The lesson here is don't hover.
Consider all offers. Sometimes there is a tendency to turn away the initial offers because sellers think they might not be asking enough since the offers came in so quickly. Yes, it's a catch-22. Sellers want to sell but when the early offers come they're a bit uncertain. Be diligent and review all offers with your agent. You never know which one will be satisfactory until you see all of them.
Emotionally detach. Remember, when you're selling your home it's just a product to a potential buyer. They will see the things you loved about your home but they also will see the things they don't love about it and they'll share those things with their agent. So, it's likely you'll hear criticism about your home. They may criticize the very things you love. Here's where you detach and let the criticism wash over you. If you need to take action, such as repairing something, do it. If it's just a matter of opinion, don't become emotionally caught up in it. This isn't personal...it's business. Sometimes that's hard to remember because with real estate, the home we buy is, in the end, our personal sanctuary but at the time of the sale–it's business. Keep the emotions out of it and detach to sell your home.
Written by Phoebe Chongchua
September 21, 2012
Thinking about Buying or Selling?Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
