With today’s improvement, the most prevalently-quoted conventional 30yr fixed loan for top tier borrowers falls back to 3.75%. Some lenders will remain at 3.875% today, but many feel that those lenders held back from passing on the full effect of the market movement not an uncommon occurrence after a volatile swing like today’s.
While the percentage of homes in the United States with negative equity has declined substantially since the fourth quarter of 2013, they experienced a slight increase quarter-over-quarter in Q4 2014, according to CoreLogic‘s Q4 2014 Equity Report released last Tuesday.
CoreLogic reported that 10.8 percent of all residential homes were underwater in Q4, this is about 5.4 million properties approximately, which was down from 13.3 percent in the same quarter a year earlier. The Q4 total was up slightly from the 10.3 percent that was reported for Q3 2014 – an increase of 3.3 percent.
Despite the year-over-year decline in the percentage of underwater residential properties, negative equity remains a serious issue, according to Anand Nallathambi, president and CEO of CoreLogic. For the full year of 2014, 1.2 million borrowers regained equity – but nearly five and a half million properties remained in negative equity as of the end of the year after approximately 172,000 homes slipped into negative equity from the third quarter to the fourth quarter in 2014.
Approximately 10 million of the nearly 50 million residential properties with a mortgage in the United States, which is about 20 percent of these properties have less than 20 percent equity, a condition known as under-equitied.
It’s not wise to make any huge purchases or move your money around three to six months before buying a home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible.
If you open new credit cards, amass too much debt or buy a lot of big ticket items, you’re going to have a hard time getting a loan.
Falling interest rates precipitated a major refinancing rally according to the Mortgage Bankers Association’s (MBA’s) Refinance Index. The MBA’s Refinance Index is a weekly measurement put together by the Mortgage Bankers Association, and the National Real Estate Finance Industry Association.
Strong job growth, coupled with low mortgage rates, should reflect now the increase in home sales and purchase originations. Great time for purchases but even better for refinancing.
Federal Housing Finance Agency has been working towards a plan to open what many we see as underwriting standards that are too restrictive.
Mortgage giants Fannie Mae and Freddie Mac, their regulator and lenders are close to an agreement that could greatly expand mortgage credit while helping lenders protect themselves from charges of making bad loans, according to people familiar with the matter.
If the agreement is completed, lenders may be more willing to lend to borrowers with lower credit scores and smaller down payments.
Now that lenders are starting to remove some of the credit overlays, it is time to improve the growth of homeownership in the country
We expect FHFA to report the steps to further move and clarify lender liability and support the return of the 97% LTV product at the GSEs, Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac have recouped tens of billions of dollars in penalties from lenders in recent years over claims that the lenders made underwriting mistakes on loans they sold to the mortgage giants.
However, Lenders have blamed those penalties for tight credit conditions and for prompting them to make loans only to borrowers with near-pristine credit.
We hope these initiatives will have a meaningful impact on the mortgage market, and we can see positive changes in the direction of the mortgages industry after years of tightening credit issues.
Next Tuesday will see the existing home sales report for September, on Thursday the FHFA purchase-only house price index for August, and Friday the new home sales report.
Mortgage rates are historically low, and many owners have the opportunity to take advantage, but not all owners pay close attention to these numbers.
You have the opportunity to investigate the possibility of refinancing through HARP or stream line if your loan is FHA to take advantage of the historic rates.
You can analyze what financial options give you the best interest rate and most convenient terms according to your personal situation, and you do this by comparing these rates from various financial institutions through the Good Faith Estimate. This simple action prompts banks to be more competitive and offer rates lower while they.
Mortgage rates are closely linked to the action of the Federal Reserve – Fed and the economy, so it’s important that you analyze your financial situation to see if you could take advantage of the today historic rates, before they take off.
Let me explain with numbers in this example:
Balance of mortgage: $ 200,000 –
§ Interest @6.5% Monthly Payment $ 1,440.
§ Interest @3.75% Monthly Payment $ 1,014.
§ Total Savings Monthly $ 426.
§ Total Savings Per Year $5,112.
§ 30 Years Total Savings $153.360.
Check your mortgage payments, interest rate, balance and the pending term of the life on your loan, so you can determine if refinancing is best for you. The Government Program HARP that does not require evaluation of the value of the property, conventional and FHA Streamline Refinance are great choices to consider allowing substantial savings.
Don’t Miss It Out!
As the saying goes, “You don’t get a second chance to make a first impression.” While curb appeal gets buyers in the door, sellers who want to move their homes quickly need to take other steps.
The strategy varies by neighborhood and market conditions, but staging a house to appeal to the maximum number of buyers can make difference in how fast the home sells.
If you have a limited budget, here are some tips that can make your house to sell for a top dollar:
- Add color to you landscape by either replacing flower beds or potted flowers, along with fresh sod.
- Replacing light fixtures and plumbing fixtures will give your home a modern touch for a minimal investment.
- Consider removing popcorn ceilings; however you need to be careful because popcorn ceilings of pre-1979 homes are likely to contain asbestos, and you need someone licensed to remove it.
- Remove window treatments, unless they are current and high-end. That cuts the risk of turning off would-be buyers who don’t share your taste, and uncovered windows that will let more light into the rooms.
- If you’re using your dining or a bedroom as an office for example, turn it back to their original use.
- Replace dirty or worn carpet, you’re better off removing the carpet if there are hardwood floors underneath.
- Unclutter your house by packing away items that you will not use on an every day basis. You want the new family to envision themselves living in the home.
- A deep cleaning before you put your home on the market is a must, so everything shines.
- Repaint all rooms in neutral colors. A fresh coat of paint also makes the house look newer and more modern.
With a few simple, low-cost tweaks, you can significantly enhance your house’s curb appeal. Focus on low cost improvements. Since every dollar counts, devote your time in renovations that’ll bring you a return.
Highest level of home equity loans since June 2009. A total of 797,865 home equity lines of credit were originated nationwide, up 20.6% from a year ago and the highest level since the 12 months ending June 2009, according to RealtyTrac.
The report also shows HELOC originations accounted for 15.4% of all loan originations nationwide during the first eight months of 2014, the highest percentage since 2008.
“This recent rise in HELOC originations indicates that an increasing number of homeowners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” said Daren Blomquist.
Among the nation’s 50 largest metropolitan statistical areas with HELOC data available, 49 posted year-over-year increases in HELOC originations in the 12 months ending in June 2014.
Metro areas with the biggest year-over-year increase in HELOC originations were Riverside-San Bernardino in Southern California (87.7% increase), Las Vegas (85.1% increase), Cincinnati (81.0% increase), Sacramento (65.1% increase), and Phoenix (60.1% increase).
Mortgage Rates put on quite the show today after Fed minutes announcement, resulting in the lowest rates we have seen since June 2013.
Today’s improvement was all about the Fed. Investors who trade securities that dictate mortgages, were concerned about last month’s Fed Announcement that could it justify a higher move in rates. That speculation contributed to the increases in rates seen in the first half of September.
After the 2pm release today, bonds-including the mortgage-backed-securities that dictate mortgage rates-moved to their best levels of the year. After beginning of this morning in a more conservative stance, most lenders released new rates sheets reflecting the market improvements.
Fannie Mae is set to raise the benchmark interest rate for its Standard Modification program. Fannie Mae will raise its required interest rate for standard modifications from 4.375% to 4.5%. The rate was lowered from 4.5% to 4.375% on Sept. 15, but will now rise again in one week. Fannie Mae announced the change on Tuesday in an email sent to its servicers.
When the program began in Jan. 2012, Fannie’s benchmark interest rate was 4.625%. Fannie lowered the interest rate to 4.25% in Sept. 2012, before dropping it to 4% on Dec. 1, 2012.
“Fannie Mae Standard Modification interest rate is not determined on a preset schedule,” Fannie said in the note to its servicers. “The interest rate is subject to periodic adjustments based on an evaluation of prevailing market conditions.”
Fannie also noted that any loan modification requests that were approved at the previous rate are not eligible to be resubmitted for approval under the new modification rule