Monthly Archives: April 2006
Cheap Homeowner Loan
Posted April 30, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceA Guide to Finding Cheap Homeowner Loans
If you’re actively looking for cheap homeowner loans, there are several things that you should take into consideration to make sure that you get the best loan for your money.
Before taking one of the loans offered to you, you should take the time to understand how cheap homeowner loans work, make sure that you’ve explored all of your loan options, and shop around for the best loan rate that you’re eligible for.
Are cheap homeowner loans available to most people, regardless of their credit history? So long as they have enough equity in their house.
Defining Equity
A key factor in finding cheap homeowner loans is equity. If you’re not sure exactly what equity is or how it influences your loan, then you’re not alone. Though it’s a common term, there are a lot of people who don’t really understand exactly what equity means.
At its most basic, equity is the value of the portion of your house that you actually “own”. The part that’s already been paid for against the mortgage.
The more mortgage payments you’ve made, then the more equity you have, and the more equity you have the more it’s worth for a loan.
Equity is used as the collateral for cheap homeowner loans, both determining the amount that you can borrow and guaranteeing that the lender will get their money back even if you’re not able to repay the loan.
The more equity you have, the lower the interest rate you’ll be charged? which means that you’ll pay less for your loan in the long run.
Exploring Loan Options
A variety of loan options exist for cheap homeowner loans, and you should explore all of them to make sure that you get the best deal that you can.
Traditional lenders such as banks and finance companies offer cheap homeowner loans and should be visited in order to get loan rate quotes before deciding upon a single lender.
Another option that has been growing in popularity recently is that of online lenders who can offer you low interest rates and flexible terms from the privacy and convenience of your own home computer.
These lenders have lower overhead and can usually offer lower rates and better terms than some physical lenders if you have sufficient home equity.
Shopping for the Best Loan
Before committing to a one of the cheap homeowner loans that you’re offered, make sure to explore your other options.
You might miss out on a better loan offer by rushing into a decision, and the extra time that it takes to get loan quotes from a variety of banks, finance companies, and websites can pay off in the long run by saving you hundreds or even thousands with a lower interest rate.
Finding the best cheap homeowner loans can take a little bit of time, but in the end, it’s time well spent.
For more information please visit <a href="http://www.444.net">http://www.444.net</a>.
No Comments | Tags:Learn To Read A Lender Rate Sheet & Beat Mortgage Brokers At Their Own Game!
Posted April 26, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceLearn To Read A Lender Rate Sheet & Beat Mortgage Brokers At Their Own Game!
By Rob K. Blake - The Mortgage Insider
Understanding how to price out a loan by reading our Bank Rate Sheets is really quite easy though it may seem intimidating at first. All of our lenders furnish us with rate sheets on a daily basis via the internet or by fax. We follow the rates several times a day in order to properly quote and/or lock the best available rate and term to our customers. When reviewing the rate sheet, we also determine which rate will NOT create a rebate from the lender known as a Yield Spread Premium. We believe upping your rate to make additional revenue over the 1% origination fee is deceptive, dishonest, and a bad business practiceâ¦believe me
otherâs donât hold that opinion.
Letâs use the rate sheet data below to demonstrate how we determine the rate that we quote to our borrowers. We will also show you using the corresponding HSH Survey data how other Brokers and Banks are making enormous undisclosed profits in the form of Yield Spread Premium.
This data was collected from a real Wholesale Lenderâs (Ampro Mortgage ) Rate sheet dated 03/10/2006. You can confirm the HSH data is real as well by visiting HSH.com.
30 Year Fixed
Rate 15 Day 30 Day 45 Day
5.750% 1.350 1.475 1.600
5.875% 0.611 0.736 0.861
6.000% 0.039 0.164 1.826
6.125% (0.392) (0.267) (0.142)
6.250% (0.773) (0.648) (0.523)
6.375% (1.180) (1.055) (0.930)
6.500% (1.623) (1.498) (1.373)
6.625% (2.029) (1.904) (1.773)
6..750% (2.280) (2.155) (2.030)
HSH ASSOCIATES The Nation’s Largest Publisher of Mortgage
The Nation’s Mortgage Market: Average Rates for Residential Mortgages Week ending March 10, 2006
Owner-occupied 1-4 Family and Condos: Previously Occupied Homes Source: HSH Associates
SURVEY CONVENTIONAL MORTGAGES
15 Yr 30 Yr
National Ave. 6.15% 6.51%
In our example, we will quote our borrower a 30 year rate that carries a lock period of 30 days. If we are seeking to earn only a 1.0% origination fee and NO yield spread premium (back end fee), we will quote the rate of 6.000%. According to the rate sheet, 6.000% actually costs .164% Discount payable to the Lender not Integrity First Mortgage. On this rate sheet, 6.000% is as close to âpar pricingâ as we can get. As you can see the next higher rate, 6.125% creates .267% of Yield Spread Premium and thatâs not good. (YSPâs are shown in (.267) parenthesis). So with this example letâs look at the costs for a loan at
6.00% with us.
Rate: 6.000%, $200,000 Mortgage Loan x 1.0% Broker Origination Fee + 0.164 Discount = $200,000 x 1.164% = $2,328.00
Now letâs show how everyone else does it! First realize that banks and brokers donât usually quote you
the rate youâll close withâ¦they âbait and switchâ with low-ball rates and artificially lowered closing costs
to get you to apply with them. Then on closing day, the rates and costs are higher than you expected, but
they claim their Good Faith Estimate was in deed just thatâ¦an estimate. Youâve got the moving van idling
in parking lot, so you sign. They count on the fact youâve been painted into a corner and have but one
optionâ¦sign.
How do I know this to be true? One reason is 15 years of asking folks, âHow did your last loan goâ¦any surprises at closing?â About 85% of those folks answer âYesâ is that one. Second, every closing exit poll conducted by Fannie Mae and Freddie Mac show the same results. But the most compelling reason is up above on HSH Survey data. It shows for the week ending Mar 10, 2006, the National Average interest rate on CLOSED Loans was 6.51%! (NOTE: HSH has an agreement with their 2000+ survey participants to give them closed loan rates, not âlobby ratesâ or advertised teaser rates.) I guarantee you that all those folks didnât sign a Good Faith Estimate at application showing them 6.5% because thatâs not the rate thatâs been all over the news, radio ads, and the internet over the prior 4-6 weeks when these folks were applying. The loan officer for the bank or broker could very easily advertise in the lobby 6% and have them sign at 6.5%…everyone would balk at that. So they show them 6.00%, get them to sign, and then sometime during processing or just at the closing, the borrower is informed his rate had to be adjusted upward. They will get very creative on explaining all the reasons why that had to happen, but suffice it to say, the real reason is they needed the extra revenue that the Yield Spread Premium creates at 6.5%. So with this rate sheet data, letâs look at what they made.
Rate: 6.500%, $200,000 Mortgage Loan x 1.0% Broker Origination Fee +1.498 YSP = $200,000 x
2.498% = $4,996.00
The banks and brokers canât forgo the Yield Spread Premium overcharging because at the very least it DOUBLES their income for each loan!
Armed with this “insider information” you’ll be able to beat Mortgage Brokers and Banks at their own game!
———————————————————————————————————————————-
Rob K. Blake, author of Mortgage Secrets Exposed!and host of the Mortgage Insider Radio show has more help for beligered and confused mortgage consumers at his website http://www.themortgageinsider.net/Home4 or email him for more tips at info@themortgageinsider.net
———————————————————————————————————————————-
Rob K. Blake, author of the book, Mortgage Secrets Exposed! and host of the radio show, The Mortgage Insiders has been teaching mortgage consumers for 15 years on how to avoid all the rip-offs artists laying in wait. Get more tips, tricks, and tactics aimed at turning the tables in your favor at his website http://www.themortgageinsider.net/Home4.
No Comments | Tags:ARM vs Fixed-rate Mortgages
Posted April 25, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceThe mortgage market is constantly changing, and smart consumers keep a close eye on those changes to determine the most strategic time to apply for a mortgage. At this point, the difference in interest rates between an adjustable-rate mortgage (ARM) and a fixed-rate loan has narrowed significantly. Therefore, more applicants are opting for a fixed-rate mortgage when purchasing a home. And an increasing number of homeowners are refinancing their existing ARM with a new fixed-rate mortgage.
âThe most recent economic indicators show that inflation is, indeed, being held in check,â said Freddie Macâs Frank Nothaft. âThat news allowed long-term mortgage rates to drift a little lower in recent weeks. Shorter-term rates, however, rose in reaction to comments by Chairman Bernanke, of the Federal Reserve Board, that hinted at continuing rate hikes this year. The housing industry remains fundamentally fit as we continue to progress into the spring home buying season,â Nothaft said.
Fortunately, mortgage interest rates are still at historic low levels, while home prices continue to rise. An increasing number of applicants are applying for 35 and 40 year term mortgages as a means of reducing their monthly payments while staying with a fixed-rate loan. This also makes it easier to qualify for a needed mortgage.
The concern about an ARM loanâs increasing interest rates and payments in future months and years is understandable. Many recent applicants are seeking more peace of mind by applying for a fixed-rate loan when purchasing a home or refinancing their mortgage.
Copyright 2006 TheLow Quote.com
Syndicated real estate columnist and feature writer
Mortgage / Real Estate Update Report
www.TheLowQuote.com
More California Homeowners Turn To Pay Option ARM Loans When Refinancing
Posted April 22, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceMore and more California home owners are turning to a Pay Option adjustable rate mortgage (ARM) loan when refinancing to cash out or to lower monthly payments.
This increase of people refinancing in California using a Pay Option home loan is because the program gives the homeowner the choice to make one of four different payments every month.
For immediate assistance on a California Pay Option Home Loan please call 1-866-398-4664
Or go to http://www.goldmedalmortgage.com
The Pay Option ARM refinance home loan is a relatively new product that allows you four payment options each month:
1. 15 year payment- Pay your home loan off and build equity faster as well as save thousands of dollars in interest;
2. 30 year payment- This option will let you know how much to pay to have your home free and clear in the standard thirty years;
3. Interest only option- This option allows you to pay only the interest portion of your monthly payment so you can increase monthly cash flow;
4. 1% Minimum payment-This option allows you to pay your mortgage at a 1% rate of interest for maximum savings.
All types of borrowers are taking advantage of a Pay Option refinance, but the two most common are self-employed/commissioned borrowers and those that with a current financial position where they need the absolute lowest payment.
Pay Option ARM mortgage loans are ideal for the self-employed, Generally the self-employed have fluctuating income and this program allows a mortgage payment that is consistent with cash flow.
For instance a self-employed California contractor who is busy during the spring and summer, but due to weather conditions in the winter business slows down. When business is going well the contractor can make a fully amortized payment but when business is slow he can take advantage of the new low deferred interest payment. It gives him great flexibility to make the mortgage payment he wants depending on his monthly cash flow situation.
In addition to refinancing those looking to buy a new home or even a first time home buyer and want the lowest possible monthly payment.
Although the California Pay Option Refinance Loan is the absolute best adjustable rate mortgage ( ARM ) product currently available borrowers should remember to use the program to their advantage. If they only make a minimum deferred payment then the deferred interest will be added to their principal balance at the end of 5 years.
For immediate assistance on a California Pay Option Home Loan please call Goldmedalmortgage.com at 1-866-398-4664 Or go to http://www.goldmedalmortgage.com
Full service home mortgage loan company. Products include refinance, home improvement, debt consolidation, and revers mortgages.
No Comments | Tags:Mortgage Calculators Confusion!
Posted April 20, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceWhen you first start using a mortgage calculator such as Karl Jeacle’s Graphing calculator, you might easily get confused, especially if you are new to the world of buying property. The sliding scales on this calculator aren’t what some people are used to seeing.
Most people are used to typing their numbers into boxes with familiar features. But don’t be dazzled only by the graph, boxes are still available further down the page so that you can use numbers instead of the scales. Using Karl Jeacle’s mortgage calculator against one on a different website can give you different a different feel for what looks like the same set of figures.
It’s all to do with the basic programming that has developed around mortgage calculator. Some mortgage calculators are very basic, they input very simple basic numbers and a few calculations take place in the program behind the scenes on your computer. They give you suggested figures that, although not perhaps 100% accurate, will give an approximate idea of what the property will cost you.
There are other factors that need to be taken into account when a mortgage is computed, such as your age and state of health for example. Many basic mortgage calculators won’t take this into account, but some more sophisticated programs can. These will give a more accurate analysis of the mortgage situation you would face as it will have more information about you personally. The more the mortgage calculator knows about you, and the property, the more detailed and accurate the answers it gives will be.
This is another reason why sliding scales such as Karl Jeacle’s Graphing calculator might not work for some people. Sliding scales are often better for approximation rather than specific numbers. Perhaps 48 instead of 50 is “almost” right, but it’s not going to create the most accurate analysis and the hard figures you need to figure out your budget and finances. The various colors on this mortgage calculator are also a little less clear than straight forward numbers.
So why even mention Karl Jeacle’s mortgage calculator? Even though it won’t give you precise numbers, and no calculator does, the graphics give you a feel for just how much that mortgage is really costing you. You can see for yourself, graphically, how adding a little bit to your monthly mortgage payment makes a large difference down the road.
Using a variety of different mortgage calculators gives you a good overall feel for how a mortgage on a particular property would affect your budget.
But, make sure that you know what their figures are based on. For example, the mortgage calculator may not ask you for a mortgage term, but somewhere on the calculator site there may be a note to say that calculations are based on 30 year mortgages.
The same could be true about interest rates. While some mortgage calculators ask you to input the interest rate, others assume an “approximate” rate. Mortgage calculators linked to specific lenders could take the interest rate automatically from the lenders financial pages so they are the current default rate and not able to be altered even if you have perfect credit.
Use one calculator at first to pin down your basic options and figures. Then test those numbers out on a variety of mortgage calculators to get the best feel for how your new mortgage will affect your finances and change your life.
For More Information on Mortgage Calculators, please visit: <a href="http://www.greatpublications.com/Mortgage%20Calculator%20Clues.htm" title="http://www.greatpublications.com/Mortgage%20Calculator%20Clues.htm" target="_blank">http://www.greatpublications.com/Mortgage%20Calculator%20Clues.htm</a>
No Comments | Tags:What You Should Know About A Reverse Mortgage
Posted April 19, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceGetting older without much hope of attaining a strong financial situation can be stressful. But there are ways to to overcome shortcomings in your finances, one being the reverse mortgage.
The first question that needs to be answered is “what is a reverse mortgage?” A reverse mortgage is a specific type of loan used by older homeowners who have built up some equity in their home. It is a method of acquiring cash from their home, manufactured home, town home or condominium. By using this type of borrowing method senior citizens can come up with money that they can use any way they want without the need to pay it back during their lifetime. If these elderly Americans can qualify they can turn their home equity into money.
If older American homeowners are struggling with their finances they can apply for this type of loan which can be used to pay off debts, increase their monthly income or for other things. This monetary influx will allow these senior citizens an opportunity to get out from under their current debt or to increase their monthly income which can be used for their daily expenses. They can start enjoying their life to the fullest by coming up with the additional cash they need. The money can be used to get out of financial trouble, home improvements, traveling and for other expenditures. This extra cash may be used for luxuries they have always wanted, but could never afford.
The purpose of a reverse mortgage is to allow senior citizens the opportunity to receive the extra cash they require without the necessity of having to sell their house. The cash they get can provide them with the additional financial security they require and also give them a chance at enjoying their remaining years by reducing their money worries. There are several ways to receive this money including regular monthly payments, a lump sum or even as a credit line. A line of credit is the most common method people use to receive money from a reverse mortgage. Some retired persons get their money by using a combination of these methods. It’s possible to receive monthly payments while also getting a big chunk of money up front too.
The term reverse mortgage is a simple way of “reversing” a mortgage. Rather than being forced to make monthly payments by taking out a home loan people can actually receive monthly payments themselves. It’s a method for retired homeowners to increase their comfort of living by taking advantage of the equity they have built up in their home. The loan amount depends on many factors including the value of their residence, how old they are, how much equity is in the home along with other factors.
To qualify for a reverse mortgage the applicant must be 62 years of age or older. They must also own a home (single family residence), manufactured home built on or after June 1976, town home or condominium. And of course they must have a certain amount of home equity. It is not necessary to have the house paid off completely, but there must be equity in it. In other words you can still qualify for a reverse mortgage even if you have an outstanding mortgage loan.
The loan cannot exceed the home’s value, but there are no monthly income requirements and no medical prerequisites for qualification. There are few requirements, one of which is that the applicant must first meet with an approved counselor to discuss the loan or other possible options for their situation. Other than that there are very few requirements.
If you would like more <a href="http://www.my-reverse-mortgage.com">reverse mortgage information</a> you can visit My Reverse Mortgage, an online source for <a href="http://www.my-reverse-mortgage.com">reverse mortgage lenders</a>.
No Comments | Tags:Mortgage Length ? Calculating Which Is Best
Posted April 11, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceFor many people, purchasing a home is one of the largest and most important investments they will make after their education. It is important to make sure you choose the right mortgage, one you will be able to pay off within a reasonable amount of time. You also want to make sure you choose a mortgage which has the right length of time.
The length of your mortgage should depend on your financial circumstances. It should also depend on your future goals. How much can you afford to pay each month on a mortgage while still maintaining a healthy amount of savings? Being able to save a reasonable amount of money each month will protect you in the event of an emergency. You will also want to save money for the education of your children and your retirement. These are things you will want to take into consideration when choosing the length of your mortgage.
Most mortgages have a length of 15 or 30 years. While some companies do offer 20 year mortgages, the interest rates for 15 and 30 year mortgages are fixed. Because of this they are used more often than mortgages which last 20 years. If you choose to take a 15 year mortgage, your monthly payments will be much higher. This will mean that you will have less income available to save. A 30 year mortgage will give you lower monthly payments, and will allow you to save more money than you would save with a shorter mortgage.
It is important to weigh the advantages and disadvantages of both options before making a decision. Long term loans will give your more disposable income to spend on whatever you wish. They are flexible, and will also allow you to invest money. You can pay more money on the mortgage when you have it available so that the total amount can be reduced. You are also given tax benefits by the government because you are paying interest for a long period of time. These loans are also the easiest to be approved for.
At the same time, long term mortgages also have higher interest rates. Because you are paying a large amount on the interest, you will pay more money in the long term. It also takes a long time to build up equity in the home. Long term loans also require long term commitments. You will want to make sure you have stable employment.
Short term mortgages are able to be paid off much faster. They have much lower interest rates and equity can be built up very quickly. Because the interest rate is low you will pay less over the long term when compared to a long term mortgage. At the same time, your purchasing power will be low and you will not have many tax benefits. Short term mortgage loans are also hard to get approved for. These loans tend to have higher monthly payments.
Whether you decide to get a short term loan or a long term one, you will be able to refinance to change the length of the mortgage. If you decide a few years after setting up a 30 year mortgage that you earn enough to pay it off much faster, you can refinance the mortgage for a shorter length of time. If you have a short term loan and it is difficult to make the monthly payments, you can refinance it to a 30 year mortgage.
The most important thing is to sit down and figure out which option suits you best. You should look at your current income, how stable it is, and how much you will have left over after paying the mortgage every month. You should choose a home which evenly matches your level of income.
Joseph Kenny writes for various sites including <a href="http://www.ukpersonalloanstore.co.uk/">http://www.ukpersonalloanstore.co.uk/</a> who offer <a href="http://www.ukpersonalloanstore.co.uk/secured_loans.html">secured loans comparison</a> online.
No Comments | Tags:Compare Mortgage Rates For Refinancing ? Choosing The Best Refinance Mortgage Option
Posted April 6, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceWhen refinancing a mortgage loan, homeowners have several options. There are numerous reasons for refinancing an existing mortgage. The past five years have witnessed low mortgage rates. However, low rates will not remain forever.
Before interest rates begin to climb, homeowners should take advantage of their refinancing option.
Which Home Mortgage Lender to Choose?
Many financial lending institutions offer mortgage refinancing. If hoping to secure a good refi loan, it may be practical to use a refinancing specialist. Mortgage specialists are able to address all your concerns. Moreover, they can offer expert advice on which type of mortgage refinancing to choose.
Homeowners who are satisfied with their existing mortgage lender may consider obtaining a new mortgage with the same lender. However, using the same lender is not required. In fact, even if your mortgage lenders offer a good refi loan rate, it helps to obtain additional quotes and compare the different offers.
What are Your Refi Loan Options?
When refinancing a mortgage loan, homeowners have several loan options. Usually, homeowners refinance to lock in a low fixed rate. This way, mortgage payments remain predictable. Many select adjustable rate mortgages below of their low introductory rate. If homeowners choose a mortgage loan with an adjustable rate (ARM), they should anticipate changing rates. If rates falls, ARM?s pose little threat. However, if rates increase, so does the mortgage payment.
Homeowners should also select an ideal term when refinancing a mortgage loan. For example, will they extend the loan term by refinancing for another 30 years, or choose a shorter term and refinance for 15 years.
Cash-out Refinancing Loan Options
Because the average consumer debt is approximately $8,000, excluding auto loans and student loans, many homeowners choose refinancing as a method of reducing their debts. Cash-out refinancing, which entails borrowing from your home?s equity, is perfect for consolidating debts and financing other large expenses such as home improvements.
Before applying for a refinancing, homeowners should do their research and familiarize themselves with the refi process. For example, refinancing involves paying closing fees. Thus, homeowners ought to have a cash reserve or select a mortgage loan that includes the option of wrapping the closing fees into the principle balance.
Try using <a href="http://www.abcloanguide.com">www.abcloanguide.com</a> for a list of <a href="http://www.abcloanguide.com/refinance.shtml">Recommended Low Rate Refinance Mortgage Lenders</a> online. Their recommended lenders are reputable and have competitive rates.
No Comments | Tags:Adverse Credit Mortgages - Home Buying Tips
Posted April 6, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceBad credit mortgage loans are available to individuals with bankruptcies, foreclosures, repo’s, low credit ratings, etc. Unfortunately, having a negative credit rating means a higher mortgage rate and a limited choice of lenders. Still, there are numerous home loans to choose between. Thus, homebuyers with bad credit can easily qualify for a mortgage.
Who are Mortgage Brokers?
If buying a home with bad credit, a mortgage broker is your best friend. Without using a broker, selecting the right mortgage loan is time consuming. This would entail contacting several private lenders, and inquiring about their mortgage loan requirements. Because a large number of traditional lenders favor home buyers with down payments and high credit scores, persons with bad credit will not be eligible for most bank or credit union loan.
A better use of time would involve contacting a broker once the decision has been made to buy a home. Mortgage brokers have associations with several types of lenders, including an extensive selection of sub prime or bad credit mortgage lenders. Consequently, brokers are capable of quickly matching homebuyers with suitable loan programs.
How to Apply for Mortgage Loans
Homebuyers have the choice of using a local mortgage broker or an online broker. Both will have access to a large database of mortgage loans. However, applying online is much easier and convenient.
Online broker sites offer no-obligation mortgage quotes. Based on the information included, such as credit rating, income, desired loan amount, and debts, the broker will sort through various mortgage lenders, and remit a quote. On average, homebuyers will receive at least three quotes from different lenders.
Increase Chances of Getting a Better Rate
Homebuyers with a low credit rating should not expect the best mortgage rate. Of course, there are ways to improve your odds of obtaining a low rate mortgage. At least twelve months before applying for a mortgage loan, make an effort to boost your credit rating.
Most of the time, this can be accomplished by simply paying bills on time and reducing debts. Other approaches to raising credit score involves keeping credit accounts opened, limiting the number of credit inquires, and paying off high interest credit cards.
Try using <a href="http://www.abcloanguide.com">www.abcloanguide.com</a> for a list of <a href="http://www.abcloanguide.com/lessthanperfectcredit.shtml"> Recommended Poor Credit Mortgage Lenders</a> online. Their recommended lenders are reputable and have competitive rates.
No Comments | Tags:Home Selling Market in Transition
Posted April 5, 2006 – 9:00 pm in: Foreclosure, Mortgage rates, Mortgage recovery, rating agencies, refinanceThe home selling market is in a state of transition. For months, economists have been saying the housing market was about to change course â” from a sellersâ market to a buyersâ market, and possibly from a value bubble to a bust. However, statistics and indicators do not currently point to a definitive direction to be taken by the market, according to a report issued by Freddie Mac, one of the nationâs primary buyers of existing home mortgages.
The Home Price Index for the fourth quarter of last year, released in March, showed an annual growth in home value at about 13 percent. Housing starts in January reached 2.28 million units, the highest pace since 1973. There are no signals of a cooling housing market here, the report stated. However, sales of both new and existing for-sale homes fell significantly in January, and inventories of existing single-family homes and condos rose to their highest levels since 1999. These contradictory statistics are signs of a probable slow-down.
âIt may be some time before we see definite trends in the national housing market, especially as measured by changes in home prices,â the Freddie Mac report stated. âPrices tend to be `stickyâ on the way down as sellers will leave a home on the market longer or offer non-price concessions to buyers. The prevalence and types of seller concessions are difficult to measure. But we believe the housing market crested during the third quarter of last year and that single-digit growth in home values will occur nationally as this year progresses.â
The report pointed out that fixed-rate mortgage rates are still historically low and a wide variety of mortgage products are available. That means the capital market is well positioned to support homebuyers. âWhen the smoke clears, we expect to find that the housing market has decelerated to a more normal level of active, but certainly not crashed,â the report concluded.
Copyright 2006 TheRefinancePro.com
Syndicated real estate columnist and feature writer
Mortgage / Real Estate Update Report
www.TheRefinancePro.com