Negative Equity continues being a Serious Concern Despite Year Over Year Decline!

Negative Equity continues being a Serious Concern Despite Year Over Year Decline!

HARP-Refinance

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.

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Mortgage Rates slightly higher

Mortgage Rates slightly higher

Finding-a-refinance-rate-for-your-homeMortgage rates are higher today, leaving September as one of only 3 months this year with noticeable upward movement.

And today was an exception to that recent trend, but it’s tempered by the fact that yesterday’s gains were the best of the month.

The only downside is that the most prevalently-quoted conforming 30yr fixed rate for top tier borrowers remains 4.25% whereas it would have likely moved to 4.125% if rate went the other direction today.

These movement considerations may be small scale compared to what lies ahead.  Several big tickets events are coming up in the second half of this week and they stand a good chance to increase the level of volatility.

Why to check on your Interest Rate & APR

Why to check on your Interest Rate & APR

Financial institutions provide considerable information and guidance on mortgage loans and interest rates that apply to these. But it is you who makes the final decision for the best possible loan. Mortgage interest rates change constantly and daily, depending on various and diverse economic, national and international factors.

Finding-a-refinance-rate-for-your-home

The current national interest rate is generally published in various mass media such as the financial section of newspapers, websites, etc.  This information not only helps you know the current interest but also to analyze how interest presented by a certain time.

Keep in mind that,  your monthly payment will be reflected accordingly to the interest rate  you get on a home loan. Remember that these are the loan payments and do not include any other amount as is the property tax, homeowner’s insurance, loan insurance (PMI) if the payment is less engaging 20 percent of the value house, the cost of association if it is a condo, among others.

It is important to not confuse the effective rate of basic interest (Interest Rate) with the annual interest rate (APR), which is calculated according to the cost of your loan and not just the total amount of the amount financed, as in the interest for cash.  Ask if the interest rate is fixed or adjustable. Note that variable interest rates may increase and thus also their allowance.

However, the total cost of a mortgage includes more than just the basic rate of interest or effective. These costs include origination fees; discount points, miscellaneous expenses, etc. and other terms and conditions that could affect the final cost of your mortgage.  In most loans, lenders offer mortgages with several combinations of points and interest rates. Generally, the lower the interest rate, more points could pay before closing. Interest rates affect your monthly mortgage payment, while points affect the amount of cash that must be at closing.

Make sure to understand all terms of the mortgage you choose, so you do not get surprises along the way.  Mortgages are complex financial transactions, and lenders are committed to explain the pros and cons to homebuyers about the various programs and interest rates they offer.