Are rates as low as they can go?

Yesterday mortgage rates fell off a cliff again. They are back in the 4.375% - 4.5% range, down from 5.25%. This large drop was due to the government interaction in the bond the market. A story posted on Marketwatch.com today hints at the theory that mortgage rates might not go any lower then they are today.

“It's hard to make the case for a quantum leap below 5% given everything we are seeing now," said Nancy Vanden Houten, an economist at Stone & McCarthy Research Associates. She anticipates rates could hover between 5% and 5.25% for a while, she said in an interview Tuesday. "I think it's more or less found a bottom."

Nancy Vanden Houten might be right on this. How much lower can they really go? I’m not sure and I don’t think anyone really does. If you are in the market for a new home or looking to refinance I would suggest that in the next month you think about taking action. One thing is for sure, someday rates will go up and it will be a long time/if ever before they dip below 5% again.

Please contact me if you have any questions!

This article on Bankrate.com is a good read om why a person might consider an FHA loan or VA loan.

If you are a Veteran then the VA option might be a great choice. Not only can you buy home with no money down, but you also might be able refinance up to 100% of your property value.

If you are not a Veteran then a FHA loan might be a good option for you. These home loans allow you to take out more cash or pay off more debt then a conventional loan. In regards to purchasing a home the FHA loan only requires 3.5% down payment, rather then 5% with conventional. Although, FHA may sound like a great option, it costs a little bit more then a conventional loan.

Please have a mortgage loan officer review your personal situation to find out what product works best for you. Make sure you receive more then a single option from your loan officer, so you can compare the cost between the different types of loans and then you will be able to make an educated choice.

What to do about our foreclosure mess?

I came across a fairly good an opinion piece on the foreclosure mess. It was constructed by Fritz Pfister and can be found at this link.

I have a better idea. Instead of stealing money from responsible,
productive citizens to be redistributed, try this; waive all federal taxes for families facing default if their loans will adjust to a level
they cannot afford. These families would then be able to afford to pay for their
homes instead of sending the difference making money they have earned to D.C. to
be squandered on big government programs.

RATES ARE LOW!!

Yahoo (source) just posted another article talking about how low mortgage rates are. The catch-22 is that it’s not for all homeowners, only those who have equity and good credit scores.

If you are a person with a 700+ credit score, full-doc, w/more then 20% equity then you are eligible for outstanding mortgage rate. Please keep in mind, that paying off debt or cash-out on equity, you will be looking at a higher rate then advertise. Expect to see a .5% - 1% hit to your rate.

If you’re a person with a 640+ fico, full-doc and less then 20% equity there still might be hope for you. Currently FHA programs allow higher LTV’s and the rates are starting around 5 – 5.5%

If you’re a person who is self-employee and obtain a stated mortgage to purchase a house, as of now you’re out of luck. I do think that this product will come back, but as of now your options are limited. If you are having a hard time paying your mortgage, contact your mortgage servicer and find out if you can work out a loan mod.

The government is trying!!

The brain trusts of America are starting to think that lower interest rates on mortgages will help to solve the housing issues in America.

Not sure if this step will be a the cure all, but it will help. I personally think it is a start in the right direction. I will even go out on a limb and say that depending on unemployment rate, the housing bust might be over in late 2009/early 2010, if rates stay low for the next six months.

http://finance.yahoo.com/news/USbacked-banks-could-be-rb-13846617.html

Lowest level in 4 years!!

Mortgage rates are falling!! Not sure how long this will last, but I think rates should stay between 4.5% - 5% for the next month.

Contact us to find out what the current rates is.

DOOM n' GLOOM

It'sall about doom and gloom these days. Bloomberg is reporting today that 1 out of 10 homeowners are behind on their mortgage or in foreclosure. OUCH!


http://www.bloomberg.com/apps/news?pid=20601087&sid=a37uyBrX6dvY&refer=worldwide

A good deed

This company handed out more then a turkey this Thanksgiving!

SOURCE

Tips on how to boost your home’s value!

I still think the most cost effective way to enhance your home value is a nice fresh coat of paint. It can be done as a weekend project or you can hire a professional. Either way it will give your home a fresh look and is gentle on your budge.

SOURCE

Real Estate down 17% in Sept!!

SOURCE
SOURCE

The latest Case-Shiller home price index released Tuesday by Standard & Poor's shows prices falling at an annual rate of more than 17% in September across the country, with all 20 markets tracked by the index showing declines from August and to September of 2007.

Home prices on a national level are down 17% in September. Please keep in mind that not all homes are declining in value. Unlike other investments, real estate is based on the local market value rather then the national value.

At the same time, when looking at the big picture, it looks a little scary

The FED is buying mortgages

The FED is going to purchase trouble mortgage assets, which it hopes will ease lending and help put a bottom on home prices. With this announcement mortgage rates have dropped dramatically this past week.

“The rate reduction is exactly what the Fed intended: "This action is being
taken to reduce the cost and increase the availability of credit for the
purchase of houses, which in turn should support housing markets and foster
improved conditions in financial markets more generally," the central bank said
in its announcement."

SOURCE

Is that home a steal or overpriced?

This article courtesy of bankrate.com provides you with a simple formula to determine if the home you are looking at is overpriced or not. They use the price/rent ratio, which might help you figure out if the home your scoping out is a good deal or not.

The one true thing, I've seen in all my years of Real Estate is never just take the Realtors word for it. Always do your homework and ask for multiple options, unless it’s a specific type of house in a specific neighborhood, then your pretty much stuck.


SOURCE

Could we see 1% at the FED?

Rumors are starting to surface about the FED lowering the rate to 1%!! Not sure if this is true or not, but I think that it will be a good idea.

Will it affect mortgage rates? Not sure, most of the time when the FED lowers the rate, mortgage rates go up in the short term and lower in the long term. This time I expect the opposite to be true and you will see mortgage rates hit an all time low, before they start to climb back up. Either way, 2009 should produce a really wild market.

Story from Marketwatch

Up 71% and no it’s not your home value or 401K

Foreclosures are up 71% this quarter. That is an astonishing number. The article mentions that some of the hot spots are AZ, CA, and FL.

This quarter and next should be the end of the major spikes in foreclosures. Lending standards have been tighten for quite some time now and high LTV and risky loans have not been made for over a year.

Another stat that I read last year, was that in Oct. 2008 is the month when the most sub-prime ARMs come due and start to adjust. That means that the wave of bad sub-prime deals should be working it’s way through the system. I do also think that our government will step in after the election and help to curb some of these foreclosures.

Story

Real Estate is all about location…

Not all areas are on the decline in the US. This article posted on Yahoo, shows that some areas are still gaining values while others plunge.

Some of the areas where real estate is keeping value is Seattle, Des Moines, Denver and a few others.

The truth is that every city has pockets where Real Estate is still in demand. Do your homework before you buy it will help you to lower your risk.

Click here for the story

Fastest Selling Zip codes

This is a list of ten fastest selling Zip codes in America compiled by Business Week.

Click here for the story

Reverse Mortgages 101

Great article on reverse mortgage basics for people that are over the age of 62. These mortgages due have some upside, but they come with some costs. I suggest reading this before you either take this option or are shopping these types of loans. Remember knowledge is power!

Click Here

1.5% is the new FED rate...

The FED has now cut the rate to 1.5%!! Cheaper money was the theme all day on Wall Street.

How will this effect you? HELOCS, will be cheaper to obtain, because they are tied to the prime. Fix mortgages on the other hand, it might not effect too much.

Fixed mortgage rates have been going up all day today and I suspect they will do so for the next few days. At the same time, mortgage rates are really low right now. They are around 5.5% par and that is historically low.

Read more on bankrate.com

Up 7.4%!!

Things might be looking up in the Real Estate market. In the news today, existing home sales are up 7.4%.

In order for home values to stabilize, the huge inventory of existing homes will need to be reduced. Once we are able to obtain a more balanced market, then home prices will follow and stabilize.



Read the story here!!!

Rates are falling!!!!

Mortgage rates dipped today to 5.625% APR!!

If you are in the market, rates are really really really good. These will not last, so make sure you get top of it ASAP.

If you have any questions about current rates, please contact us!!