Category Archives: mortgages

Mortgage Rates….Staying Low or Rising???

I wanted to ask people out there whether they feel interest rates are going to stay around 5% or rise?  I have had so many of my buyers get great interest rates with FHA loans.  It just amazes me how long they have stayed low.  If you listen to all the lenders ho are advertising they are saying to take adavantage of these “All Time Low Rates”, because they will not be here long.  When I heard this again today on the radio, I thought to myself, who knows?  I think you have to listen to the economists to understand. 

I think for the rates to rise the Obama adminstration needs to be worried about inflation.  However some economist, “moringstar analyist” are saying we are looking at a Double Dip.  This means that we are going to see home prices fall again, because the current adminstration has not been able to create enough jobs to prevent the double dip.  There is not enough income to support any price increases.

Anybody have any comments on what you think the interest rates will do?  Just a real estate agent trying to better prepare my clients for the future.

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New Guidelines for FHA Loans

The FHA (Federal Housing Association), who currently does about 30% of the current loans in today’s market, is changing a few of their rules and fees.  Three years ago, FHA loans made  up about 2% of the loan market.  One of the reasons that the FHA makes most of the loans now is that they only require the buyer to put 3.5% down to purchase a home.  With only 3.5% down, the FHA can also ask the seller to pay up to 3% in closing costs.  The catch to these loans is that they are not cheap and they require the buyer to carry PMI (property mortgage insurance) to protect the risk of such a low down payment.

The changes are as follows:

  • Increase FHA insurance premiums
  • Increase upfront cash by the borrower
  • Focus on enforcement and lender accoutability
  • Reduce the maximum seller concessions from 6% to 3%
  • Raise the minimum FICO score to qualify

I think these could be good changes — the FHA is trying to make sure that the buyer is more strongly qualified so that we don’t end up with people buying homes that they can’t afford.  If a buyer only puts 3% down and gets 6% back in closing costs, they are basically coming up with no cash.  Buying a home takes more than just a down payment; you also need to maintain the home which, overall, is more expensive monthly than renting.

We need to take accoutablility for our expdentures…

FDIC and OneWest Bank Loan Modifications

I saw this clip the other day on the internet on how the FDIC is handling the losses on one bank…  According to this clip, the FDIC bailed out IndyMac and shut its doors back in July of 2008.  In March of 2009, the FDIC sold all the bad loans to OneWest Bank for 70% of their value and HELOC’s (helocs are lines of credit) at 50% of their value.

When watching this video, my blood begin to boil! This is the same public rip-off that we have been watching for years.  Whether we have a republican/democrat in office, it’s all the same old story! OneWest Bank is owned by private investors with ties to the US treasury department.  This means they did not have to sign up for the loan modification program that Obama passed a few months back — that program helps consumers in danger of foreclosure by modifying the terms of their loan.  OneWest Bank has no incentive to help homeowners, and in fact, it has a lot of incentive to foreclose on the homeowners. 

Here is a link to the article I am referencing:  http://www.thinkbigworksmall.com/mypage/archive/1/32274.  Please watch the video, read the blogs, and tell me what you think.  I just don’t understand how we can get the housing market back on track if we don’t get the government out of the housing market.

Mortgage Rates Remain Near Historic Lows

With interest rates remaining near 40-year lows, and reduced home pricing, it is not surprising that purchasing a home or investment property has become more affordable.

However, many economists believe that interest rates will go up in the foreseeable future. So current rates do present an opportunity for homebuyers, and despite media coverage to the opposite, home loans are being done.  

I remember when I bought my first home, I paid over 8% on my interest rate. I just refinanced my current home with a light jumbo loan and got a 5.62% rate! 

So if you think things are going to be better, don’t wait too long or you will miss a great interest rate.

 Happy Buying!

 -Catherine

 

 

 

Ignore the Headlines!

I read a great article that stated to ignore the headlines.  With the economy having all the woes of recession talk, its hard for people to decide when to buy real estate.  Historically, people who have made the most money in real estate typically buy in these times. 

If you are emotionally ready to be a homeowner, have good credit, plan to stay put for five years, and have been waiting for the perfect entry point, it’s time to get serious! You can avoid the inevitable rise in interest rates, which will wipe out your advantage.  The thing that will make home prices stop falling will probably  be the same thing that raises interest rates. 

Say you put down 20%  on a $220,000 home and get a 30 year fixed rate mortgage at 5.5%.  Your monthly principle and interest payment would be $995.  Let’s say in 12 months that same home sells for 10% less, so if the home was at $220,000 it sells for $195,000.  Remember, when the home prices start going back up,  interest rates will, too.  If your mortgage rate on $195,000 is 6% your monthly payment would be the same as the purchase at $220,000 with a 5.5% interest rate.  It saved you nothing and your payment would be the same for the next 25 years.

With that in mind, don’t forget what a great Buyer’s Market it is right now.  Sellers are continuing to negotiate and give buyers what it takes to sell their home.  When the market takes a turn this will not be the case.

Think Long Term–and get off your thumbs and get your home that you always wanted!

The Government has Stepped In!

There is a bill that is going to the senate today to assist those facing foreclosure. The bill will include an incentive property tax deduction of $1,000 for couples and $500 individuals. This is suppose to help the 28.3 million taxpayers who do not itemize on there tax returns.  The bill is also planned to give:

  • $10 billion to local housing agencies to refinance subprime loans and provide new mortgages for first time home buyers.  
  • $4 billion in grants for local governments to buy foreclosed properites.
  • $100 million to expand counseling for homeowners at risk of defaulting on thier loans.

The officials have stated that this new bill would cost taxpayers $15 to $20 billion. This bill has been written to extend a helping hand to the many homeowners who are caught in bad mortgages.  My question to you is:

Should the government get involved?  If so, how much?  Is it our government’s job to counsel and support people that over extended themselves?

 It’s a tough situation, but we need the government to invest in more jobs, not more government departments.It’s time for the banks to take care of their own financial problems.

What do you think?     Catherine BardenReal Estate Consultant(760) 815-38662146 Encinitas BlvdEncinitas, CA  92024 To search the local MLSwww.encinitasproperties.net