Posts on Jan 1970

Mortgage markets moved across a wide range last week before, ultimately, finishing unchanged. The bailout of Greece both dominated headlines and dictated market direction.

Mortgage markets moved across a wide range last week before, ultimately, finishing unchanged. The bailout of Greece both dominated headlines and dictated market direction.

It was a wild ride for rate shoppers.

Early in the week, mortgage rates spiked. Eurozone leaders expressed optimism that a deal for Greece’s solvency would be made, rhetoric to which Wall Street responded selling mortgage bonds.

When markets closed Wednesday, conforming mortgage rates in Arizona were at their highest levels since September.

However, when markets opened Thursday, rates began to reverse lower. Investors deemed the details of the Greece fuzzy, and, once again, sought safety in the U.S. mortgage bond market.

As such, rates fell through Friday afternoon, closing the week precisely where they started.

This week’s market action figures to be similarly busy. In addition to Friday’s release of the October Non-Farm Payrolls data, the Federal Open Market Committee starts a 2-day meeting Tuesday.

It’s the FOMC’s 7th scheduled meeting of the year.

The FOMC is the Federal Reserve’s monetary policy-setting group. It does not set mortgage rates for citizens of Phoenix , but it can exert an influence. For example, if the FOMC votes to increase the size of its Operation Twist, mortgage rates may respond favorably, causing rates to fall.

Conversely, if the FOMC scales back the size of its program because of inflationary concerns or otherwise, mortgage rates should rise.

The Federal Open Market Committee meeting ends at 2:15 PM ET Wednesday and mortgage rates are typically volatile in the hours surrounding the group’s adjournment. If you’re floating a mortgage rate or deciding whether to lock, keep this date and time in mind.

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The Government’s Revamped HARP Program For Underwater Homeowners

The Federal Home Finance Agency announced big changes to its Home Affordable Refinance Program Monday. More commonly called HARP, the Home Affordable Refinance Program is meant to give “underwater homeowners” opportunity to refinance.

With average, 30-year fixed rate mortgages still hovering near 4.000 percent, there are more than a million homeowners in Phoenix and nationwide who stand to benefit from the program overhaul.

To qualify for the re-released HARP program, you must meet 4 basic criteria :

  1. Your existing home loan must be guaranteed by Fannie Mae or Freddie Mac
  2. Your home must be a 1- to 4-unit property
  3. You must have a perfect mortgage payment history going back 6 months
  4. You may not have had more than one 30-day late payment on your mortgage going back 12 months 

Most notable about the new HARP refinance program, though, is that the government is waiving loan-to-value requirements on a HARP loans. Homeowners’ participation in the program  are no longer restricted by their home’s appraised value. In fact, the new HARP doesn’t even require an appraisal, in most instances.

With the new HARP program, underwater mortgages can be refinanced without LTV limit or penalty.

According to the government’s press release, pricing considerations for the new HARP program will be released on or before November 15, 2011; and lenders are expected to be offering the program as of December 1, 2011.

If you think you may be eligible, first confirm that either Fannie Mae or Freddie Mac is backing your loan. Both groups provide a simple, online lookup.

If your loan cannot be located on either of these two sites, your current mortgage is not backed by Fannie Mae or Freddie Mac, and is not HARP-eligible.

The FHFA’s official press release contains an FAQ section. In it, you’ll find minimum qualification standards, as well as information related to condominiums and to mortgage insurance.

The HARP program is meant to help a wide group of homeowners, but each applicant’s situation is unique. For specific HARP questions, be sure to talk with a loan officer. 

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What’s Ahead For Mortgage Rates This Week : October 24, 2011

Mortgage markets improved last week on worries that Eurozone leaders would decline to send aid to Greece. These concerns overshadowed optimism for the U.S. economy, the result of several strong data points.

Conforming rates across AZ eased, giving homeowners and rate shoppers yet another chance to nab historically-low mortgage rates. FHA mortgage rates remained low, too.

According to Freddie Mac, the average 30-year fixed rate mortgage rate is now 4.11% with 0.8 discount points. For loans with zero points, expect to pay slightly higher rates. 

Rate-shoppers and home buyers would do well to pay attention.

This week’s may be as good as mortgage rates get. Possibly forever. This is because the market conditions that helped rates stay low — a weak U.S. economy and uncertainty in Europe — are eroding.

The U.S. economy has posted strong jobs, spending, and confidence figures in the past 3 weeks and Eurozone leaders appear closing making a deal that will help Greece avoid a sovereign debt default.

Once markets no longer worry about these two events, rates are expected to surge.

Eurozone leads met all weekend and have chosen Wednesday, October 26, as a likely “decision date” for Greece. If that date holds, and if an agreement can be reached, U.S. mortgage bonds will sell-off and mortgage rates will rise.

The housing sector is set to release important news this week, too.

After last month’s increase in Housing Starts and steady Existing Home Sales report, Wall Street will watch for this week’s New Home Sales, Case-Shiller Index and Pending Home Sales Index. If momentum stays strong for housing, that, too, should pressure mortgage rates higher.

Mortgage rates remain near all-time lows. If you’ve yet to lock your mortgage rate, or are still shopping, consider that rates have more room to rise than to fall. The “safe play” is to execute a lock today.

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Despite 18% Contract Failure Rate, Home Resales Stay Strong

Despite fewer homes for sale nationwide, the number of home resales remains steady.

According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, September’s Existing Home Sales eased by 150,000 units, falling to 4.91 million units nationwide.

An “existing home” is a home that’s been previously occupied and, despite last month’s drop, September’s sales volume remains the second-highest on record since April 2011.

This statistic is noteworthy for two reasons :

  1. There are 9.9% fewer homes available for sale as compared to 12 months ago
  2. Contract “failures” are twice as high as compared to September 2010, now averaging 18 percent nationwide

A contract failure is typically the result of homes not appraising for the purchase price; mortgage denials in the underwriting process; and, insurmountable home inspection issues.

Because sales volume is steady, we can infer that more buyers are “in the market” than the final sales tallies would have us believe. This notion is also evident in the Existing Home Supply data.

In September, the number of homes for sale fell by 69,000 nationwide. At the current pace of sales, it would take 8.5 months to “sell out” the complete national inventory. This is more than 2 months faster as compared to September 2010 — a major improvement for the housing market and a sign that home prices should rise soon.

Today’s Phoenix market exemplifies Supply and Demand. Demand for homes is holding steady as home inventories fall. This creates pressure for home buyers to make offers, and multiple bidding situations become more common. Negotiation leverage shifts to the sellers and the result is that buyers pay higher prices for homes.

Thankfully, mortgage rates remain low. 

Freddie Mac reports that the 30-year fixed rate mortgage ticked lower this week, averaging 4.11% nationwide with 0.8 discount points. This means that mortgage payments are lower by $46 per $100,000 borrowed as compared to the high-point of the year.

You may pay more for a new home, in other words, but you’ll pay a lot less to finance it.

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What’s Ahead For Mortgage Rates This Week : October 16, 2011

Mortgage bonds suffered through another tough week last week as rising optimism that Eurozone leaders will “rescue” Greece plus stronger-than-expected economic data in the U.S. led bonds lower for the second straight week.

Conforming and FHA mortgage rates in AZ moved sharply higher. After reaching an all-time low just two weeks ago, 30-year fixed mortgage rates are now at a 2-month high.

There were several big stories in the mortgage bond market last week. Each was bad for consumer mortgage rates.

The first big story was tied to Greece. As meetings continue between Eurozone leader and rhetoric heats up, it’s becoming increasingly clear that Greece will receive its next wave of debtor aid. The planned rescue of Greece is undoing the safe haven buying that characterized the mid-summer financial markets. 

With investors more willing to take risks, mortgage bonds are selling off, and rates are rising.

The next big story was the release of the Federal Reserve’s September meeting minutes. The central bank’s meeting recap showed that the Fed considered additional stimulus beyond its Operation Twist, even as inflationary pressures are increasing. Because inflation lowers the value of outstanding mortgage bonds, rates climbed post-release.

Lastly, last week we learned that the U.S. consumer will not be deterred. Retail Sales grew 1.1 percent in September — much more than Wall Street’s expectation. This, too, caused a mortgage bond sell-off and led to a late-Friday surge in rates.

Markets should open worse this morning, pressuring rates higher yet again. However, there’s plenty of data this week for which rate shoppers should be watching :

  • Tuesday : Producer Price Index; Housing Market Index
  • Wednesday : Consumer Price Index; Housing Starts
  • Thursday : Existing Home Sales

In addition, there are 8 Fed speakers this week. Each can move markets.

Despite rising rates, mortgage rates remain low nationwide. If you’ve been shopping for a rate, it’s not too late to lock in. Talk to your loan officer and make a plan to get locked, and get closed. 

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Should I Refinance My Home?

With mortgage rates at all-time lows, you may be asking “Is now a good time to refinance?”. This short interview from NBC’s The Today Show offers good insight.

Refinancing a mortgage is about more than just “low rates”. For example, there are costs associated with giving a new mortgage and even with the average, 30-year fixed rate mortgage near 4 percent, the costs of a such a move can outweigh the benefits — both in the short- and long-term.

The video originally ran in September when mortgage rates averaged 4.09%. Rates are different today, but the offered advice remains relevant.

Some of the key points raised include :

  • The lowest rates come with the highest costs. Consider a slightly higher-rate option from your bank.
  • Falling home values may make it harder to qualify for a refinance in the future. Your best time to act may be now.
  • If you’re many years into a 30-year loan, you can consider switching to a 15-year mortgage to avoid “resetting” your term.

And, lastly, the interviewee makes a strong point that your refinance should save you enough money to make paying the closing costs “worth it”. Make sure the break-even point on your closing costs versus your monthly savings occurs within a reasonable time frame.

At 4 minutes, the The Today Show video is short, but dense with quality information. For follow-up on whether a refinance makes sense for your situation, be sure to talk with your loan officer.

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What’s Ahead For Mortgage Rates This Week : October 3, 2011

Mortgage markets deteriorated last week as optimism for a Greek rescue package increased, and as U.S. consumers showed that, despite falling income levels, spending will not be slowed.

As reported by the government, household income dropped in August, falling 0.1 percent and marking the first monthly dip since 2009. Yet, consumer spending still rose, tacking on 0.1 percent. Consumer spending accounts for 70 percent of the U.S. economy.

In addition, last week Eurozone leaders approved a funding increase for the European “bailout fund”. The additional funding raises the probability that Greece will avoid default on its sovereign debt, and that other nations including Italy, Spain, Ireland and Portugal will avoid similar default scenarios.

The moves drew money away from mortgage markets, causing rates to rise.

Conforming mortgage rates in Arizona climbed last week, stymying would-be refinancers in search of the lowest mortgage rates in 60 years. Nationally, fixed rate mortgages were higher by as much as 0.25%.

This week, rates may continue climbing.

First, European leaders are expected to finalize the details of a Greek aid package, a move that would reverse the “safe haven” bid which has played a large role in keeping U.S. mortgage rates lows.

Second, the jobs report is due.

Economists are expecting 65,000 net new jobs in September and a slight increase in the Unemployment Rate. A deviation from either consensus expectation should cause mortgage rates to move. 

If it’s shown that more than 65,000 jobs were created last month, mortgage rates should rise on the prospect of a recovering economy. To the contrary, though, if it’s shown that fewer than 65,000 jobs were created, mortgage rates should fall.

The jobs report will be released Friday morning, 8:30 AM ET.

If you’re shopping for a mortgage right now, be aware that rates could move in either direction, but there’s a lot more room for rates to rise than to fall. The “safe” course of action is to lock a rate today.

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Safari Drive Home of the Week

Safari Drive is offering a new “Home of the Week”!   This home is our gorgeous model on the 3th floor that has a beautiful view facing West with city and mountain views. This model is a custom designed single level floor plan. Very spacious with almost 1,500 sq. ft.,  2 bedrooms, 2.5 baths, and a nice open floorplan. Two balconies make it a great place to entertain and dine al fresco. Custom backsplash in the kitchen, California Closets in bedrooms, and dual master suites makes this a perfect get-away home. This home can also be sold fully furnished to make it an easy turn-key home.

This model was priced at $579,500 and just for this week we are offering it to you at $499,500 

Contact me if you are interested in setting up a showing of this Home of the week at the 

Safari Drive, or if you would like a full list of available units at the Safari Drive. 

safari1 Safari Drive Home of the Week

safari2 Safari Drive Home of the Weeksafari3 224x300 Safari Drive Home of the Week

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