Tuesday, April 15, 2014

Qualified mortgages could make it harder to get a loan

Just about everyone in banking, finance and real estate has heard about the new lending laws from the Consumer Financial Protection Bureau that took effect in January. A result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, these new rules are designed to protect lenders and borrowers, and ultimately the national economy, from another economic crisis like the one we experienced in 2010.

read more: http://www.bizjournals.com/nashville/blog/2014/04/qualified-mortgages-could-make-it-harder-to-get-a.html

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Friday, April 11, 2014

U.S. Fixed Mortgage Rates Fall in Latest Week

 Average fixed mortgage rates in the U.S. fell in the latest week, according to mortgage-finance company Freddie Mac (FMCC), as investors watch for signals about how the spring homebuying season will play out this year.

"Mortgage rates eased a bit following the decline in 10-year Treasury yields," Freddie Mac Chief Economist Frank Nothaft noted in a statement Thursday. The U.S. economy also added fewer than expected jobs during March, though February figures were revised higher. Meanwhile, the unemployment rate held steady, Mr. Nothaft said.

Rates have wavered recently as markets watch for further signals on the Federal Reserve's bond-buying program and the U.S. economy.

For the week ended Thursday, the 30-year fixed-rate mortgage averaged 4.34%, compared with 4.41% a week earlier and 3.43% a year earlier. Rates on 15-year fixed-rate mortgages averaged 3.38%, compared with 3.47% the previous week and 2.65% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARMs, on average, were 3.09%, compared with 3.12% the previous week and 2.62% a year earlier. One-year Treasury-indexed ARM rates on average were 2.41%, compared with 2.45% the previous week and 2.62% a year earlier.

source: http://online.wsj.com/article/BT-CO-20140410-706422.html

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    Thursday, April 10, 2014

    5 Alternatives to the 30-Year Mortgage

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    5 Alternatives to the 30-Year Mortgage
    If you’re veering from the traditional home loan, here are some of your options.
    Man drawing a house on a whiteboard

    Homebuyers have several options outside of the standard 30-year mortgage, including paying in cash and taking out a 50-year fixed-rate mortgage.
    By Geoff Williams April 9, 2014 Leave a Comment SHARE

    If you're buying a house, chances are you'll take out a 30-year fixed-rate mortgage. It's the most popular home financing option, according to Freddie Mac, the government-sponsored entity that works to help homeowners get mortgages. In the last couple of years, those who took out home loans overwhelmingly chose the 30-year fixed-rate mortgage: It accounted for 85 of the home-purchase loan market in 2012, according to Freddie Mac, and 90 percent in the first half of 2013.

    Even if you're planning to go this traditional route, it's nice to know what you could do instead. Here are some alternatives to the 30-year fixed-rate mortgage.

    [Read: Before You Buy, Try That Mortgage on for Size.]

    Paying in cash. Most homeowners can't afford to do this, so don't feel bad if the cash option isn't for you. But it seems remiss not to mention it. In Las Vegas, where there's been upheaval in the housing market with many foreclosed homes, cash buyers accounted for 43 percent of the home sales in March, according to the Greater Las Vegas Association of Realtors.

    "In fact, over one-third of U.S. home sales in 2013 were all-cash deals," says Spencer Llewellyn, founder and executive director of Loans101 Interactive Media LLC. Its website, Loans101.com, offers educational mortgage information.

    While you mull that statistic over and wonder where you went wrong since you aren't sitting on a few hundred thousand dollars, Llewellyn adds: "The lion's share of all-cash deals are completed by investors because of the view that home values have reached a bottom and have tremendous upside potential."

    While paying for a house in cash is an alluring option, it’s important to make sure you have plenty of excess money to draw upon if there's an emergency.

    15-year fixed-rate mortgage. If you aren't going to get a 30-year fixed-rate mortgage, this is the next best alternative, according to many mortgage experts. The downside is that you'll have higher monthly payments than with a 30-year mortgage, but the upside is that you'll pay off the house faster.

    That, and "you are building equity at a much faster rate, and if need be, you can take out another loan on the equity you have already invested in your property," says Pej Barlavi, CEO of Barlavi Realty LLC in New York City.

    The best type of homeowner for this mortgage is a "borrower who plans on keeping their home for a long time and wants to save a large amount of interest they pay to their lender," Llewellyn says.

    "Fifteen-year mortgages commonly come with an interest rate that's 1 to 1.5 percent lower than a comparable 30-year loan, saving [you] tens of thousands of dollars over the life of the loan," Llewellyn says.

    read more: http://money.usnews.com/money/personal-finance/articles/2014/04/09/5-alternatives-to-the-30-year-mortgage

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    Monday, April 7, 2014

    Second-home activity recovering from crisis, Fannie Mae says

    After being severely punished by the financial crisis, second-home activity is on the rise.
    That’s according to a new report from Fannie Mae’s David Kopita, who took a look at the phenomenon.
    Kopita said the uneven economic recovery has benefited the second-home buyer, who tends to be older, to earn more and to make a larger down payment. “The recovery in financial markets has allowed many second-home buyers … to sell some of their assets to buy second homes or use dividend payments from these assets to cover second-home mortgage expenses,” the report said.

    Another boost has come from the slow recovery in home prices in Florida, one of the most popular states for second homes. “Given the relatively gradual recovery in Florida and the fact that it accounts for the largest share of second-home mortgage originations at 17% since 1998, second-home buyers have an opportunity to buy in Florida at a bargain price. Furthermore, because prices of financial assets have recovered more quickly than home prices, second-home buyers have a near-term opportunity to deploy some of their financial wealth to acquire homes at comparative bargain prices,” the report said.

    source: http://blogs.marketwatch.com/capitolreport/2014/04/07/second-home-activity-recovering-from-crisis-fannie-mae-says/

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    Wednesday, April 2, 2014

    ARMs and the Plan: Why We Got an Adjustable-Rate Mortgage

    I've been obsessing over whether to buy or rent an apartment over the last several months. But after renting for eight years, my wife and I finally decided that buying an apartment in New York City made sense for us.

    When we started the process, I assumed that if Jenn and I did buy, we would just get a 30-year fixed rate mortgage. That's the loan type I'd always heard about -- the one whose rates are discussed in the news media, the one mentioned by friends who had bought.

    Though the Fed recently said it was going to hold rates low "for some time," there's really nowhere for rates to go but up in the future. So it seemed natural to want to lock in today's attractive rates for a long period of time. On top of that, the alternative -- adjustable rate mortgages -- have gotten a lot of negative press for their role in the recent financial crisis. Their low initial interest rates lured subprime borrowers into taking out mortgages that they later found themselves unable to either refinance or repay.

    After taking a long look at all of the factors and our own situation, we decided to go with a 7-year adjustable rate mortgage. That's right, we chose the much-maligned ARM -- and here's why.

    read more: http://www.dailyfinance.com/2014/04/01/arms-adjustable-rate-mortgages-good-choice/

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    Tuesday, April 1, 2014

    Mortgage rates move higher following Federal Reserve meeting

    Fixed mortgage rates moved higher last week, according to the latest data released Thursday by Freddie Mac.

    The increase was anticipated after the Federal Reserve seemed to signal last week that it could begin raising interest rates sooner than expected.

    The 30-year fixed-rate average climbed to 4.4 percent with an average 0.6 point. It was 4.32 percent a week ago and 3.57 percent a year ago.

    The 15-year fixed-rate average jumped to 3.42 percent with an average 0.6 point. It was 3.32 percent a week ago and 2.76 percent a year ago.

    Hybrid adjustable rate mortgages were mixed. The five-year ARM average rose to 3.1 percent with an average 0.5 point. It was 3.02 percent a week ago and 2.68 percent a year ago.

    The one-year ARM average dropped to 2.44 percent with an average 0.4 point. It was 2.49 percent a week ago.

    “Mortgage rates rose following the uptick on the 10-year Treasury note after comments by the Federal Reserve Board Chair Janet Yellen indicated a possible increase in interest rates as soon as early 2015,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “Also, the [Standard & Poor’s]/Case-Shiller 20-city composite house price index rose 13.2 percent over the 12-months ending in January 2014.”

    read more: http://www.washingtonpost.com/blogs/where-we-live/wp/2014/03/27/mortgage-rates-move-higher-following-federal-reserve-meeting/

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    Monday, March 31, 2014

    Home Sales in U.S. Poised to Surge With Spring: Mortgages

    Donna Cicerone and her husband Paul want to put their three-bedroom home in Milton, Massachusetts, on the market. First, they have to find a house to buy.

    The Cicerones live in the Boston area, where all but three weekends this year have had snow, sleet or rain. Bad weather has forced them to cancel house-hunting plans half a dozen times, they said. When they have found a house they liked amid a limited supply of properties, they’ve been outbid.

    “The moment we sign a contract to buy, we’re putting our house on the market,” said Donna Cicerone. “We feel like we’re missing an opportunity because everyone says there are lots of buyers, but there’s nothing we can do.”

    Frustrated shoppers and would-be sellers like the Cicerones are setting the pace for the housing market’s spring selling season, the March through June period when more than half of U.S. home sales take place. The market’s getting a late start this year because so much of the country has been in the grips of bad weather, said Dean Maki, chief U.S. economist for Barclays PLC in New York.

    “There aren’t many people who want to drive around looking for homes in a blizzard, and there aren’t many sellers who can put their homes on the market unless they have some place to move to,” Maki said. “We’ve seen sales take a hit so far, lagging where they usually are, but we think the next few months will make up for it.”

    read more: http://www.bloomberg.com/news/2014-03-31/home-sales-in-u-s-poised-to-surge-with-spring-mortgages.html

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