Mortgage Momentum Moves Rates Higher

The average 30-year fixed mortgage rate ticked slightly higher on a better than expected November employment report, according to the recently released Freddie Mac Primary Mortgage Market Survey®.

"The economy added 211,000 new jobs in November exceeding analysts' expectations, and the prior two months were revised higher as well,” says Sean Becketti, chief economist, Freddie Mac. “This momentum is likely to cement a decision by the Fed to begin raising interest rates this month. Following the release of the employment report, Treasuries rose 7 basis points and in response the 30-year mortgage rate ticked up two basis points to 3.95 percent."

Results show that the 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.6 point for the week ending December 10, 2015, up from last week when it averaged 3.93 percent. A year ago at this time, the 30-year FRM averaged 3.93 percent.

The 15-year FRM this week averaged 3.19 percent with an average 0.5 point, up from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 3.20 percent.

Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.03 percent this week with an average 0.5 point, up from last week when it averaged 2.99 percent. A year ago, the 5-year ARM averaged 2.98 percent.

The 1-year Treasury-indexed ARM averaged 2.64 percent this week with an average 0.2 point, up from 2.61 percent last week. At this time last year, the 1-year ARM averaged 2.40 percent. 

For more information, visit www.FreddieMac.com.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


What to Know about Title Insurance

Purchasing a home is the single largest investment most will make in their lifetime. That investment is protected by title insurance—the cost of which varies across the country. To determine title insurance policy premium costs in your area, the American Land Title Association (ALTA) recommends consulting with a local title company to get detailed information.

In order to make sure a homeowner has clear rights to a property, the title agent will review prior deeds or mortgages, divorce decrees, court judgments, delinquent taxes and child and spousal support payments, utility or other easements and more. This work is necessary to issue the insurance policy and often includes the cost of conducting a title search, examination, correcting errors, issuing the policy, and, frequently, the settlement or closing for consumers.

When comparing fees, it’s important to get detailed information about what services are included in a fee to help ensure equal comparisons. In some states, the seller pays for the owner’s title insurance policy. Some rates may or may not include other services provided by the title company, such as conducting the closing, preparing and notarizing documents and other services. When comparing one rate to another, be sure to get detailed information on what is included in that rate, so you are comparing equally.

Many choose to rely on their real estate agent or mortgage lender for a recommendation for a title company; however, it is important to remember that you have the right to shop for title insurance and to choose your own title agent or company, says the ALTA. There are many factors to consider when selecting a title insurance company, such as local expertise, service standards, market conduct and commitment to the community.

Source: ALTA

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

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Foreclosure Starts at Lowest Level in More Than 10 Years

Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 104,111 U.S. properties in November, a decrease of nearly 10 percent from the previous month and down more than 7 percent from a year ago. This news comes from RealtyTrac®'s recently released U.S. Foreclosure Market Report™ for November 2015.

The 10 percent monthly decrease in overall foreclosure activity was caused largely by a 15 percent monthly drop in foreclosure starts, with 41,208 properties starting the foreclosure process for the first time in November, the lowest monthly total since May 2005. Foreclosure starts have decreased on a monthly basis for seven of the last eight months — with the exception of a monthly increase in October — and November was the fifth consecutive month where national foreclosure starts decreased on a year-over year basis.
 
“Banks are continuing to work through the backlog of lingering foreclosures, pushing bank repossession numbers higher in the short term even as foreclosure starts drop to new lows,” said Daren Blomquist, vice president of RealtyTrac. “This also means the share of active foreclosures tied to bubble-era loans is shrinking, with 59 percent of all loans in foreclosure originated between 2004 and 2008. While that is still a disproportionate share of active foreclosures, it continues to decrease from 61 percent earlier this year and 75 percent two years ago.”
 
Bucking the national trend, there were nine states where foreclosure starts increased from a year ago, including Oklahoma (up 246 percent), Arkansas (up 180 percent), Virginia (up 39 percent), Maine (up 5 percent), and Massachusetts (up 14 percent).
 
Bank Repossessions up 35 percent Year-to-Date

There were a total of 40,329 properties repossessed by lenders (REOs) in November, up 10 percent from the previous month and up 60 percent from a year ago — the ninth consecutive month with a year-over-year increase in REOs. Through the first 11 months of 2015 there have been 410,249 completed foreclosures, up 35 percent from 303,064 REOs during the same time period in 2014.
 
REOs increased from a year ago in 41 states, led by Tennessee (up 608 percent), Mississippi (up 341 percent), Texas (298 percent), Nebraska (up 295 percent), New York (up 270 percent) and New Jersey (up 205 percent).
 
Those states that saw the most completed foreclosures for the month included Florida (6,435 REOs), Texas (3,107 REOs), California (2,567 REOs), Illinois (2,338 REOs), and Georgia (2,302 REOs).
 
Scheduled Foreclosure Auctions at Lowest Level since December 2005

A total of 36,409 U.S. properties were scheduled for foreclosure auction during the month, down 22 percent from the previous month and down 27 percent from a year ago.
 
Scheduled foreclosure auctions — which can be foreclosure starts in some states — decreased from a year ago in 31 states, including Hawaii (down 87 percent), Florida (down 58 percent), Georgia (down 48 percent), Texas (down 46 percent), Oregon (down 39 percent), Colorado (down 34 percent), and Washington (down 33 percent).
 
There were 10 states where scheduled foreclosure auctions increased annually , including New Jersey (up 82 percent), Maryland (up 6 percent), New York (up 3 percent), Massachusetts (up 39 percent), and New Mexico (up 109 percent).
 
Maryland, New Jersey, Florida, Nevada and Illinois Post Highest state Foreclosure Rates

A total of 4,631 Maryland properties had a foreclosure filing in November, down nearly 10 percent from the previous month, but still up 13 percent from a year ago — making Maryland number one in the nation for foreclosures for the second month in a row. One in every 516 Maryland housing units had a foreclosure filing in November, more than twice the national average. Foreclosure starts increased 13 percent from a year ago after six consecutive months of year-over-year decreases.
 
The state of New Jersey accounted for 6,448 properties receiving a foreclosure filing in November, a foreclosure rate of one in every 553 housing units — second highest among the states. New Jersey foreclosure activity in November decreased 15 percent from the previous month, and was down 13 percent from a year ago — the first annual decrease after eight consecutive months of increases.
 
One in every 662 Florida housing units received a foreclosure filing in November, the nation’s third highest state foreclosure rate. Florida’s foreclosure rate has ranked in the Top 5 each month in 2015.  Florida foreclosure activity decreased 13 percent from the previous month and was down 30 percent from a year ago. Florida foreclosure starts decreased annually by 36 percent, the fourth consecutive month of annual decreases. Scheduled foreclosure auctions in Florida decreased 58 percent from a year ago, the 12thconsecutive month of decreases.
 
Nevada foreclosure activity decreased 23 percent from the previous month, but increased 2 percent from a year ago, giving the state the nation’s fourth highest state foreclosure rate: one in every 771 housing units with a foreclosure filing. Nevada foreclosure starts decreased 17 percent annually, the fifth consecutive month of decreases. Scheduled foreclosure auctions decreased 12 percent annually, the fourth consecutive month of decreases. Nevada bank repossessions increased 89 percent, the eighth consecutive month of increases.
 
After two consecutive months of annual increases, Illinois foreclosure activity decreased 21 percent from the previous month in November, and the state posted the nation’s fifth highest foreclosure rate: one in every 859 housing units with a foreclosure filing.
 
Other states with foreclosure rates among the nation’s 10 highest in November were South Carolina at No. 6 (one in every 873 housing units with a foreclosure filing); Ohio at No. 7 (one in every 1,014 housing units); Georgia at No. 8 (one in every 1,083 housing units); Indiana at No. 9 (one in every 1,089 housing units); and North Carolina at No. 10 (one in every 1,139 housing units).
 
Atlantic City Posts Top Metro Foreclosure Rate for Fifth Consecutive Month

The Atlantic City, New Jersey metro area remained in the No. 1 spot among metropolitan statistical areas with a population of 200,000 or more for the fifth consecutive month in November. One in every 307 Atlantic City housing units had a foreclosure filing in November, more than four times the national average. Atlantic City maintained the top spot even though overall activity was down 16 percent from the previous month and down 6 percent from a year ago. Bank repossessions in Atlantic City increased for the ninth consecutive month.
 
Foreclosure activity in November increased 32 percent from a year ago in Trenton, New Jersey, and the metro area posted the nation’s second highest foreclosure rate: one in every 346 housing units with a foreclosure filing. Scheduled foreclosure auctions increased annually in Trenton for the seventh consecutive month, and bank repossessions increased annually for the 10th consecutive month.
 
Foreclosure activity increased 9 percent from a year ago in Ocala, Florida, and the metro area posted the nation’s third highest metro foreclosure rate: one in every 449 housing units with a foreclosure filing).
 
Other metro areas with foreclosure rates in the top 10 highest were Baltimore, Md. at No. 4 (one in every 482 housing units with a foreclosure filing), Reading, Penn. at No. 5 (one in every 502), Tampa, Fla. at No. 6 (one in every 512), Columbia, S.C. at No. 7 (one in every 523), Fayetteville, N.C. at No. 8 (one in every 536), Jacksonville, Fla. at No. 9 (one in every 552), and Daytona Beach, Fla. at No. 10 (one in every 567).

For more information, click here.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

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Q: Which Is Better, a 15-year or 30-year Loan?

A: The 15-year mortgage offers you a chance to save thousands of dollars over the life of the loan. This is because the interest rate is typically lower and amortization is half that of the 30-year loan, which means that the total interest paid on the 15-year note, as compared to a 30-year note, is significantly less because of the shorter borrowing period.

Put another way, a 15-year loan accrues principal much more quickly than a 30-year loan, so you get to own your house in half the time.

However, because you are building equity faster and paying down the loan sooner, a 15-year mortgage requires higher monthly payments.

Get a lender to help you calculate the overall savings of the 15-year loan versus the 30-year mortgage. In the end, though, base your decision on your circumstances and overall financial plan, such as whether you are nearing retirement age and also will have to shell out college expenses for children, in which case a 15-year loan may not be for you.  Remember that your spending habits, budget, and financial goals should all be considered before making a final decision.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

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Mortgage Rates Drop Third Week in a Row

The average 30-year fixed mortgage rate declined for the third consecutive week, according to the recently released Freddie Mac Primary Mortgage Market Survey® (PMMS®).

"Treasury yields ticked down 3 basis points after weak manufacturing data,” says Sean Becketti, chief economist, Freddie Mac. “In response, the 30-year mortgage rate dropped 2 basis points to 3.93 percent. After the survey closed, Yellen implied that the economy is ready for a rate hike in December. However, all eyes remain on this Friday's jobs report, the last significant release prior to the FOMC's meeting."

The 30-year fixed-rate mortgage (FRM) averaged 3.93 percent with an average 0.6 point for the week ending December 3, 2015, down from the last week when it averaged 3.95 percent. A year ago at this time, the 30-year FRM averaged 3.89 percent.

Survey results show the 15-year FRM averaged 3.16 percent with an average 0.5 point, down from the last week when it averaged 3.18 percent. A year ago at this time, the 15-year FRM averaged 3.10 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.99 percent  with an average 0.5 point, down from the last week when it averaged 3.01 percent. A year ago, the 5-year ARM averaged 2.94 percent.

Results show the 1-year Treasury-indexed ARM averaged 2.61 percent with an average 0.3 point, up from 2.59 percent. At this time last year, the 1-year ARM averaged 2.41 percent.

For more information, visit www.freddiemac.com

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


From Campus to Closing Costs: A College Grad’s Guide to Home Buying

By Terri Engels

You’ve packed up your dorm room, thrown your Frisbee into storage, and have bid adieu to those cumbersome textbooks. College has culminated, so what now? This exciting time in a young person’s life is ruled by one question: what’s next? For many, that answer takes quite a while to define.

Many millennials are open to moving back to their parents’ houses after college. But for some, moving home may not be a viable option or, at the very least, seems an undesirable path post-college. This is leading recent college grads to a fork in the road: should I rent or should I buy? With renting costs continuing to rise, many recent graduates are deciding on the latter.
 
So, as a recent college graduate, what do you need to know when buying your first home?
 
What does the future hold?
It can be very daunting to map out the next ten years of your life just as your tassel has been moved to the left. Impulsive decisions should be left in the dorm room and recent grads need to plan where and what they will be doing before considering buying property. Thinking like a real estate investor rather than making emotional or rash decisions can help guide the thought process.
 
"Before college grads think about buying a home, they should have both a stable job and firm plans to live in the neighborhood for at least the next five years,” says Brian Davis, VP of ezLandlordForms. “If a recent grad is cemented and secure in their current location then they should talk to several mortgage lenders (starting with their bank) about their loan qualifications.”

What should recent college grads see as red flags in their future? For example, do you plan to go back to school? If so, then buying a home right after undergraduate studies isn’t smart. Another factor is where you want to live. Many recent college graduates will gravitate to hip, chic areas where property values are through the roof. You have to ask yourself if you can afford an area like that and if not, whether you would be happy in a less desirable part of town.

Buying your first home is a huge decision, so all the factors together can become overwhelming. However, if you are mentally prepared to take the journey then you need to be certain that your wallet can handle the weight as well.

Plan, Plan, Plan
Before you even think of picking up a pen and inking a deal for a mortgage, it’s important to be aware of your financial standing. With technology essentially being ingrained in a young person’s DNA, budgeting has never been easier. There are a slew of apps for smart phones that are tailor-made for budgeting and planning your finances. These can enable you to see what you may be able to afford and when.

In addition to knowing the precise state of your finances, it is important to know your credit score. Just hearing these words alone can send people into a panic, but for an easy way to check it visit AnnualCreditReport.com. This is the only site that’s federally mandated and an authorized source for a free credit report. Be wary of any other sites that promise to run your credit for free.

Once you know your score you can decide what next steps to take. If it’s too low to even apply for a home loan (anything below 580), it’s time to get your credit in order. You should open up a credit card and pay it on time, stay on top of your student loans, and make sure you don’t have any lingering past due debt.

Many new buyers also don’t factor in the hidden costs of buying their first home. As well as the down payment on the property (which has proven tricky for recent grads to raise due to student loans), there are also appraisal charges, closing costs, taxes, insurance and property inspection fees.

Much like school itself, the best thing a recent college graduate can do is their homework. Thankfully, you can get a hand by partnering up with a team of professionals. As long as you think with a clear head and have a healthy financial standing, you could soon be hanging that fancy diploma in your very own home.

This post was originally published on RISMedia's blog, Housecall. Check the blog daily for winning real estate tips and trends for you and your clients.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


Q: How Can I Finance Work Needed for Home Repairs?

A: According to the Millennial Housing Commission created by Congress, few lenders are willing to administer home improvement loans. Most prefer to make home equity loans or unsecured consumer loans because they are easier to manage.  Home improvement loans usually require inspections and irregular draws on the loan amount as work is completed, which forces regional or national lenders to find local partners to provide oversight.

Financing repairs and improvements with home equity is okay for most homeowners, but it difficult for many first-time buyers.  They have lower-incomes, smaller savings, and have made lower down payments on their homes than first-time buyers a decade ago.  So they have little equity to borrow against.  Unfortunately, it is often lower cost older homes purchased by first-time buyers that need the most work.

Unless you have a cash reserve, you will have to shop around for the best borrowing terms.  In addition to the options listed above, you can ask relatives for a loan.  Borrow against your whole life insurance policy. Refinance your existing mortgage.  Get a second mortgage.  Contact the government about home improvement programs.  And – only as a last resort – borrow from a finance agency, which generally tend to charge higher rates.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


Raising Appraisal Limits Could Hurt Consumers

More than 80 percent of bank appraisers think reducing the number of loans requiring an appraisal could increase risk to borrowers, according to a survey of its professionals released today by the nation’s largest professional association of real estate appraisers.

The Appraisal Institute’s research also showed that nearly 90 percent of chief appraisers and appraisal managers surveyed think raising the threshold level of loans that require an appraisal could increase risk to lenders.

Overall, more than three-fourths of chief appraisers and appraisal managers surveyed disagree with raising the $250,000 threshold for real estate financial transactions, and nearly nine out of 10 disagree with raising the $1 million threshold level for certain business loans.

The nation’s banking regulatory agencies—the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Federal Reserve—on Dec. 2 completed a year-long series of public meetings as part of a review of federal banking regulations. That review is required every 10 years by the federal Economic Growth and Regulatory Paperwork Reduction Act of 1996.

“As part of its mission to serve the public interest, the Appraisal Institute continues to oppose any changes to the threshold levels,” says Appraisal Institute President M. Lance Coyle, MAI, SRA. “Appraisals serve a vital role in risk mitigation, and lenders and borrowers benefit from the role appraisals play.”

The Appraisal Institute previously has provided its recommendations to the regulatory agencies, including:

  • Cautioning against an increase of the appraisal threshold levels to the federal bank regulatory agencies during the official EGRPRA comment period in 2014.
  • Educating Congressional oversight committees on the importance of the current appraisal threshold levels during regulatory oversight hearings in 2015.
  • Attending all of the Economic Growth and Regulatory Paperwork Reduction Act outreach meetings held in 2015, encouraging bank regulatory agencies to maintain the current threshold levels and putting more resources toward educating examined banks about existing exemptions to appraisal requirements.

The federal agencies are expected to produce a joint report to Congress in 2016 and potentially to undertake regulatory changes thereafter.

Click here to see a summary of the Appraisal Institute’s research.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


How Can You Prepare for a Pre-Listing Home Inspection?

By John Voket

If an inspector is coming to look at your home before you list it, you may have a few questions tumbling around: what will a home inspector be looking at and how can you possibly prepare for a home inspection?

For insight and answers, we turned to the National Association of Home Inspectors, Inc. According to the site, there are many of thing you can do before your pre-listing inspection, and most tasks can be done with little or no cost; many are regular maintenance items for a home. The top tasks are as follows:

  • Remove grade or mulch from contact with siding. Six (6) or more inches of clearance is preferred.
  • Divert all water away from the house; i.e. downspouts, sump pump, condensation drains, etc. Grade should slope away from the structure. Clean out basement entry drains.
  • Paint all weathered exterior wood and caulk around trim, chimney, windows and doors.
  • Seal asphalt driveways, if cracking, and point up masonry chimney caps.
  • Clean or replace HVAC filter. Clean dirty air returns and plenum.
  • Test all smoke detectors to ensure they are in safe working condition.
  • Have the chimney, fireplace or wood stove cleaned and provide the buyer with a copy of the cleaning record.
  • Ensure that all doors and windows are in proper operating condition, including repairing or replacing any cracked window panes.
  • Ensure that all plumbing fixtures (toilet, tub, shower, and sinks) are in proper working conditions. Check for and fix any leaks. Caulk around fixtures if necessary.
  • Install GFCI receptacles near all water sources.
  • Check to ensure that the crawlspace is dry and install a proper vapor barrier if necessary. Remove any visible moisture from a crawlspace.
  • Check that bath vents are properly vented and in working condition.
  • Remove paints, solvents, gas, etc., from crawlspace, basement, attic, porch, etc.
  • Have clear access to attic, crawlspace, heating system, garage and other areas that will need to be inspected.
  • If the house is vacant, make sure that all utilities are turned on, including water, electric, water heater, furnace, air condition and breaks in the main panel.
  • Most importantly, NAHI says don’t do quick cheap repairs – you may raise questions that will unfairly cause great concern to buyers and inspectors.

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.


Mortgage Applications Teeter 0.2 Percent

Mortgage applications decreased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 27, 2015. This week's results included an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 32 percent compared with the previous week.  The Refinance Index decreased 6 percent from the previous week.  The seasonally adjusted Purchase Index increased 8 percent from one week earlier. The unadjusted Purchase Index decreased 28 percent compared with the previous week and was 30 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 56.6 percent of total applications from 58.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1 percent of total applications.

The FHA share of total applications decreased to 13.2 percent from 13.7 percent the week prior. The VA share of total applications increased to 11.3 percent from 11.0 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.12 percent from 4.14 percent, with points increasing to 0.50 from  0.49 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) remained unchanged at 3.99 percent, with points increasing to 0.33 from 0.30 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.89 percent from 3.87 percent, with points remaining unchanged at 0.49 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.36 percent from 3.39 percent, with points increasing to 0.44 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.11 percent from 3.19 percent, with points increasing to 0.44 from 0.38 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week. 

For more information, visit www.mba.org

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact me at 866-977-7623.

Reprinted with permission from RISMedia. ©2015. All rights reserved.