Archive for the 'Mortgage News' Category
The good times may not last, though, so today marks an ideal time to lock a mortgage rate. Friday brings risk. Here’s why.
Since 2010, weak economic conditions have been a primary catalyst for low mortgage rates in San Diego County. Over the last 12 months, though, manufacturing output has been rising, consumer spending has been climbing, and business investment has increasing.
In other words, the economy is improving. However, it’s the jobs market that’s believed to be the economic recovery keystone. When jobs come back, analysts say, so does the economy.
Assuming that’s true, a recovery may already be well underway.
According to the Bureau of Labor Statistics, the U.S. jobs market has grown for 16 straight months now, adding 2.5 million net new jobs along the way. It’s one reason why the February jobs report matters so much to housing.
Rate shoppers would do well to pay attention.
Friday, at 8:30 AM ET, the government will release its Non-Farm Payrolls report for February. Wall Street expects the report to show 210,000 new jobs were created in February, a figure slightly higher than the rolling, 6-month average for job growth. This would be a positive economic indicator.
If the analysts are correct, mortgage rates are likely to rise on the news, harming home affordability.
Furthermore, affordability could be harmed by a lot if the number of net new jobs created exceeds the 210,000 tally expected. It’s not a far-fetched scenario. Wall Street’s “whispers” put the actual jobs figure somewhere between 250,000-300,000. A reading like this could cause mortgage rates to spike and would add money to a prospective monthly mortgage payment for many.
If the idea of rising mortgage rates makes you nervous, consider taking your nerves out of the equation. Call your Samuel Scott Financial Group loan officer today. Please visit www.samuelscottfg.com or call 858-259-6070.
According to Freddie Mac’s weekly mortgage rate survey, for 13 straight weeks, the average 30-year fixed rate mortgage has held below 4.000% for mortgage applicants willing to pay up to 0.8 discount points plus a full set of closing costs.
These are the lowest mortgage rates in history and now — with a bevy of loan programs for the nation’s 11 million “underwater homeowners” including HARP, the FHA Streamline Refinance, and the VA IRRRL — millions of U.S. homeowners can exploit the current mortgage rate environment.
In this 4-minute clip from NBC’s The Today Show, you’ll learn about today’s mortgage market and your refinancing opportunities in California.
The video begins by telling us that 14 million credit-worthy Americans have yet to refinance their respective mortgages, and are leaving an average of $471 in “wasted savings” on the table each month which adds up to more than $5,600 annually.
That’s a big number.
Some of the video’s other key points include :
- Refinancing is “worth the hassle” when mortgage rates are as low as they are today
- The best rates are reserved for homeowners with the highest credit scores
- Comparison shop — your current mortgage lender may not offer you the best rates
Furthermore, the video reveals the characteristics of the homeowner type most likely to benefit from a refinance. These traits include having with 20% equity in the home; have plans to live in the home for at least the next 36 months; carrying a current mortgage rate of 5 percent or higher.
It should also be added that, with a zero-closing-cost or low-closing-cost mortgage, even a small reduction in your mortgage rate can make a refinance worthwhile.
Mortgage rates are low but can’t stay low forever. If you haven’t participated in the Refi Boom, talk with a loan officer from our preferred lender; Samuel Scott Financial Group and review your mortgage options. You may be able to save hundreds of dollars per month with just modest closing costs. Here is a link to Samuel Scott and their fine team of mortgage professionals. www.samuelscottfg.com
If there is other real estate information you want, need or desire don’t hesitate to call or email us.
Published by Alex Manessis and Russ Schreier of Samuel Scott Financial Group
The recent fight for the extension of the payroll tax into 2012 year is going to have an impact on the interest rates of those looking to receive a loan from Fannie Mae or Freddie Mac. In order to budget for the payroll tax cuts, the government has turned to the government sponsored enterprises, along with the Federal Housing Administration (FHA). Both companies, overseen by the FHA, beginning April 1st, 2012, will be raising their guarantee fees by 10 basis points (or .1%).
Guarantee fees are charged by mortgage-backed security (MBS) providers (such as Fannie and Freddie) to protect against loss in defaults, to aid in the securitization process, and to act as a source of revenue and capital. These fees enable investor’s capital to be brought in from the sale of the mortgage-backed securities, which in turn lowers the risk of investors. The guarantee fees are built into the interest rate, and thus will result in a .1% raise in interest rates as of April. This translates to an additional $17 a month for the median San Diego loan of $300,000. There is also the possibility of future increases in the guarantee fee as needed, although specific details are not in place.
What does this mean for those looking to receive a loan or refinance with a Fannie, Freddie, or the FHA? This fee hike coupled with the winding down of the Federal Reserve’s “Operation Twist” this summer will work to increase interest rates in the second half of 2012. For a potential homeowner or refinancer this means that now is the ideal time to pull the trigger on purchasing a home. Rates are not just low, they are the lowest they have been in over 50 years. An increase in the interest rate from roughly 4.00% today to 4.75% on a loan for a $400,000 home would result in an additional $96.54 a month or nearly $1,150 a year. By choosing to purchase or refinance now you are likely to save your self several hundred dollars a year in interest.
It is generally accepted that by the end of this year rates will have increased and that right now is likely the lowest rates will be for the near future. Freddie Mac Chief Economist wrote last week in his “executive prospectus” piece for the loan giant that the company expects rates to increase in the second half of 2012. As a potential buyer, one should look into making a purchase or refinance now before a potential rate increase later this year.
Although good deals will still be available 6 months or a year from now, they will not be quiet as financially rewarding as they are now if rates go up. If you are interested in purchasing a home or refinancing the loan you already have contact a loan professional at Samuel Scott Financial Group.
Published by Alex Manessis and Russ Schreier of Samuel Scott Financial Group
Depending on whom you ask 2012 is expected to hold many things in store for us. Ask a politician they will talk about the upcoming elections. If you talk to an economist they will likely discuss the Euro Debt crisis. Ancient Mayans would tell us we are all doomed. When someone asks what the housing market has in store for us in 2012 the answer might surprise you, stability.
Home values in 2012 are expected to stay relatively flat during the course of the year. It would be fair to say that most markets, including San Diego County, have bottomed out and will stay relatively stable this coming year. Growth is expected to begin in 2013, but for now things should stay pretty much the same in either direction. What does this mean for San Diego County? The median home price should stay in the $350,000 to $370,000 range for the time being. The implication for home purchasers is that no longer should they wait for prices to drop further to get the home for the lowest possible price.
What about the record low interest rates that are currently anywhere from 3.75% to 4%? Will these continue into this New Year? The answer is YES. Interest rates are expected to stay low until at least mid-2013 according to the Federal Reserve’s Federal Open Market Committee. This coupled with the Euro Debt Crisis will work in conjunction to keep interest rates at about 4% for the near future.
According to many projections the economy as a whole is expected to have a year of slow, modest growth. However, this is still a positive sign after several years of economic slowdown. Household income increased 2.7% between August and November 2011 according to the Wall Street Journal, giving us another indicator of economic growth in the year to come. The unemployment rate is also expected by most to decrease (although not dramatically). These three factors will hopefully translate into a greater willingness to spend and specifically the willingness and ability to purchase a home. If the trends hold steady throughout the year we will hopefully see an uptick in purchasers.
In the second half on 2011 the number of foreclosures and notice of default spiked a bit nationwide, and San Diego County followed this trend. The implication is that this year the number of foreclosed homes hitting the market in San Diego County will increase. Although foreclosures have many downsides, one positive is that buyers have the opportunity to get a deal on homes that would previously been unavailable. This is because bank owned properties (REOs) is increasing faster than the banks can sell them off. The end result for a purchaser is that the bank is willing to short sell in order to get the foreclosed property out of inventory.
Overall the housing market is going to stay stable, which is a positive sign for those looking to purchase or refinance a home in 2012. As previously mentioned this year will see prices stay flat, historically low interest rates, an increase on the number of homes on the market, and growth (however modest) in income and the national economy. By purchasing now one can save hundreds of thousands of dollars over the life of the loan compared to a loan for the exact same house just 5 years ago. Those looking to refinance can likely save hundreds of dollars a month this year through a refinance, allowing for more disposable income for the average family (something that we can all appreciate).
2012 is likely going to shape up to be a flat stable year, but if you are in the market for a home or refinance the one you own 2012 likely holds the buyer’s market where you are most likely to find the opportunity to stabilize your own financial future. If you have questions about purchasing a home or refinancing, contact a loan professional at Samuel Scott Financial Group.
Everyone across the globe has had serious questions about the direction the economy is headed over the past 4 years. Many of the questions that first arose in 2007 and 2008 are still unanswered today. What is going to happen to the banks? Are my investments safe? What happened to Wall Street? Despite all this uncertainty, this might be the best time to buy a home in decades. Interest rates are extremely low, and the advantages of buying now outweigh the advantages of holding out for the lowest possible purchase price.
Interest Rates are at historic lows. Since 1972 the average rate on a home loan was 9%. Today if you were to obtain a loan from Freddie Mac for $500,000 you could get an interest rate of 4.5%. That is half average rate over the last four decades. (Don’t believe it? Take a look for yourself). That is worth repeating. HALF! What does this mean for the potential home buyer? Well to start, it will save the buyer a substantial amount of money on interest during the life of the loan. That current $500,000 loan from Freddie Mac would have a monthly payment of $2,533.43. If you were to obtain that same $500,000 loan at the average of 9% how much more would you spend a month? The monthly payment would be $4,023.11 or $1489.68 more than at today’s interest rate. Over the course of the loan one would save $536,284.80 in interest payments.
The counter argument to this is what if housing prices drop another ten percent? Well that home you intended to buy will drop in price by $62,500. That little “if” suddenly has become a big “IF”. Is it worth waiting on housing to prices to drop, which may or may not ever happen to save $62,500 when you could save over half a million dollars in interest? The simple answer is that although waiting could save you a small chunk of money in the present, you risk interest rates rising to what have been historical levels, causing you to pay out on a lot more money on interest over the course of the loan.
There are people out there willing to loan you money at low interest rates, even in these times of uncertain economic future. Take advantage of this and go out and purchase that dream home. Interest rates have never been more accommodating to buyers and likely have no where to go but up. Remember home loans are a long term agreement; would you rather save some money now upfront? Or a whole lot more money over the next 30 years? Make the best out of the current financial market, take advantage of the deals that come your way. You do not want to look back at 2011 fifteen or twenty years from now and say “I should have bought my home when interest rates were low,” every time you write that mortgage check out each month.