homesmillbrae.com » Fixed Rate Mortgage

How Does the Fed Help My House, My Mortgage?

Sat, 15 Sep 2012 11:04:44 +0000

For those of you who expected to wake up to a 30-year fixed rate mortgage below 3 percent, you may as well go back to sleep.

Yes, rates moved down, 0.125 percent, according to several sources, but that was not as low as some had predicted. Remember, we hit the low of 3.49 percent in July, but then we jumped back into the mid to high threes. (Read More: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)

“Short term, people who are thinking about moving really need to lock in,” says Craig Strent of Maryland-based Apex Home Loans. He is concerned that the strong consumer sentiment number that came in today could cause the Federal Reserve to pull back on its buying in the future. “When this thing turns, it’s going to be fast. Just pulling back a little sends a message,” adds Strent.

But others argue that the housing market is still on such shaky ground that that’s unlikely to happen. Mortgage applications to purchase a home have declined five of the last six months, according to Diane Swonk of Mesirow Financial.

“I think that this will be a trillion dollar commitment from the Fed,” said Swonk on CNBC’s “Squawk on the Street.” “Home values appreciating, that’s something very important in this economy getting more legs and moving forward more rapidly.” (You can watch the interview here.)

So say mortgage rates could dip lower than the latest record, perhaps to around 3.25 percent. How does that help me? Does it boost my home price? (Read More: Will Fed’s Mortgage Buying Juice the Housing Recovery?)

On the one hand, lower mortgage rates give potential buyers more purchasing power. “A 0.125 percent drop in rates adds 1.5 percent to your maximum purchase price (given all the other fees),” according to Dan Green at Waterstone Mortgage. “Assuming a mortgage payment of $1500, that’s the difference between $404,800 and $411,000-ish.” So that is how much more house you can buy. If people can buy more house, then perhaps home prices will rise.

But as we’ve noted so many times before, the great low rate doesn’t mean anything if you can’t qualify, if you don’t have the down payment or credit scores to get it.

“Instead, the underlying improvement in housing demand is still very reliant on cash buyers and investors,” notes Paul Diggle of Capital Economics, who does not believe mortgage rates will fall dramatically. “Admittedly, low bond yields and savings rates more generally are probably playing a part in the strength of investor demand for housing.”

Lower rates could cause a boost in refinances, but so many have already refied at record low rates that it would take a pretty large drop to lure more in, given the fees and hassle involved. And of course negative equity keeps millions of potential refinancers out of the game. The government’s refinance program for underwater borrowers (HARP) has helped over half a million borrowers get lower rates since the beginning of this year, but unless you have a Fannie Mae or Freddie Mac
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There is a push by Democrats in Congress to expand the government’s refi program, and lower mortgage rates could help more Republicans come on board, but that is unlikely to happen before election day. (Read More: Wealthiest Counties Rake In Government-Backed Mortgages)

“To ensure as many voters as possible can benefit from this, we believe there will be another push to enact HARP expansion legislation during the lame duck session that will start after the election,” says Jaret Seiberg of Guggenheim Partners. “Lower mortgage rates only matter if people can refinance and plow that extra cash into the economy. Given that as many as a quarter of borrowers may be underwater, the HARP is the way to translate the Federal Reserve’s effort into economic stimulus.”

It is hard to say now just how low rates will go and just who will be able to benefit from lower mortgage rates. In today’s tricky housing recovery, so dependent on investors and so sensitive to a still-swollen pipeline of foreclosed properties and delinquent loans, mortgage rates are just one piece of the recovery puzzle.

Sector Watch – Nation’s Biggest Mortgage Lenders:

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/47260576?__source=RSS*blog*&par=RSS

This week in Real Estate

Sat, 19 May 2012 10:22:18 +0000

“When droves of newly wealthy individuals suddenly rush to a low-inventory market at the same time, it can drastically impact the market,” Hebron wrote.

For all the latest news on Facebook’s first day of trading, see MarketWatch’s special report on the company’s initial public offering.

Read more real-estate news in this week’s pages, including why lenders are asking borrowers for a mountain of paperwork when they apply for a loan, the latest on record-low mortgage rates and a Realty QA about a landlord who refuses to address a renter’s noisy neighbors.

To read more about the “Facebook effect” on San Francisco real estate, check out The Basis Point blog.

—Amy Hoak, Real Estate writer

Mortgage borrowers face litany of questions
As a home buyer or a candidate for refinancing, you’d expect to submit recent pay stubs and bank-account statements when applying for a mortgage loan. But a copy of your college transcripts? Or a decade-old divorce decree?Read more: Mortgage borrowers face litany of questions.

Landlord refuses to address noisy neighbor
In a recent column, you mentioned dispossessed homeowners sliding “all the way to the bottom of the ladder” to an apartment. Describes me perfectly!Read more: Landlord refuses to address noisy neighbor.

Another record low for fixed-rate mortgages
Fixed-rate mortgage rates hit yet another set of record lows this week, with the 30-year fixed-rate mortgage averaging 3.79% in Freddie Mac’s weekly survey of conforming mortgage rates.Read more: Another record low for fixed-rate mortgages.

Foreclosure activity drops in April
The number of foreclosure filings in April fell to the lowest monthly total since July 2007, according to RealtyTrac’s most recent report, released Thursday.Read more: Foreclosure activity drops in April.

Skip the dorm, buy your kid a condo
Low real-estate prices—and sweet tax breaks—may make buying a condo preferable to student housing.Read more: Skip the dorm, buy your kid a condo.

Is now the time to buy your first house?

Article source: http://articles.marketwatch.com/2012-05-18/finance/31758589_1_fixed-rate-mortgages-mortgage-rates-mortgage-delinquencies

Burlingame REALTOR Mary Ann Teixeira Says Fixed Rate Dip Below 4% May Motivate …

Tue, 04 Oct 2011 02:26:43 +0000

With 30-year fixed mortgages rates still dropping, this is a great time to refinance-but is it a good time to buy? Mary Ann Teixeira believes these rock-bottom mortgage rates should be enticing to potential home buyers, especially renters.

Burlingame, CA (PRWEB) October 03, 2011

This past week, the 30-year fixed-rate mortgage rate dropped below 4% with a point (1%) fee. When calculated on the Wells Fargo website, a $400,000 loan qualified for a 30-year fixed interest rate of just 3.875%. Burlingame REALTOR Mary Ann Teixeira says refinancing higher interest loans is a no-brainer, but the decision to purchase a new home requires a more calculated risk/reward analysis.

Teixeira has talked to many buyers who are both hesitant and wary about their next move in this persistently unstable market. The big fear they express is over whether housing devaluations will continue. If they purchase a new home, they may suffer investment losses if home prices continue to slide.

The real answer, according to Teixeira, is simple and obvious: no one really knows what the future holds. But based on what is on the market now and the fact that buyers can lock up an incredibly low interest long-term loan now, prospective buyers should at least take a hard look, especially if they are currently renting.

“Just think about it-if you borrow $400,000 using a 30-year home loan at a 3.5% interest rate, your monthly payment is going to be about $1,796. This brings monthly mortgage payments to parity with rents,” said Teixeira.

“Renters in the Bay Area who have the financial means to buy should investigate this option if they are able to retain the property as their primary residence for at least five years. If they don’t buy, they will have contributed approximately $108,000 towards their landlord’s wealth over those five years. If they do buy, they will have grown equity in real property and enjoyed the benefits of lower taxes and homeownership.”

For additional information about low rates on 30-year fixed-rate mortgages, reasons to use a Bay Area real estate agent or San Francisco Bay Area Peninsula real estate and relocation, call Mary Ann Teixeira at (650) 241-0318, or visit her website at www.maryannt.com.

About Mary Ann Teixeira

Mary Ann Teixeira is a licensed REALTOR with McGuire Real Estate in Burlingame, California who specializes in relocation services, homes for sale and luxury homes. She is a seasoned buyer’s agent who serves the San Francisco Bay Area Peninsula communities of Atherton, Burlingame, Cupertino, Hillsborough, Los Altos, Los Altos Hills, Los Gatos, Menlo Park, Mountain View, Palo Alto, Portola Valley, Redwood City, San Carlos, San Jose, San Mateo, Santa Clara and Woodside.

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For the original version on PRWeb visit: www.prweb.com/releases/prwebbay_area/real_estate/prweb8848336.htm

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/03/prweb8848336.DTL