Hidden underneath all the headlines and stories on the proposed government health plan, there are signs of encouraging news that the recession may be easing.
The first full week of August saw some positive results in economic activity, but the news of the declining unemployment rate made investors optimistic. For the first time in the past 17 months fewer job losses were posted and we saw an improved unemployment rate. July saw the lowest number of job losses all year, and the number came in much lower than anticipated. The stock market climbed upward as well. The Dow is now up almost 7% for the year.
This isn’t to say the recovery is in full swing yet, but don’t we all deserve some good news!
And, we saw another positive housing report too. Pending home sales jumped an unexpected 3.6%, when a 0.7% increase was predicted by the experts. We’ve now seen 5 consecutive months of gains in pending contracts. That’s the first time since July 2003 we’ve seen that happen! Affordable home prices and low interest rates have been driving the market upwards. Construction spending was up slightly as well, much better than the drop that was expected.
The 28 major markets the real estate experts watch saw a drop in inventory of 2.5% from June. (The average drop over the last 25 years from June to July is 1%) AND, compared with the inventory in July 2008, there was a big drop of 27%!
Mortgage interest rates are still holding at low levels as well.
At InSight Mortgage Group we’re available to answer your questions regarding new home purchase loans or refinancing your current loan. Call us, 913-642-3334 or email us at michele@wantinsight.com or dickw@wantinsight.com. Look to us for integrity and ethical handling of your financial transactions. Blessings.
Showing posts with label purchase loans. Show all posts
Showing posts with label purchase loans. Show all posts
Wednesday, August 12, 2009
Wednesday, July 1, 2009
CELEBRATING THE AMERICAN DREAM
Don’t you love sharing good news? I know I do. All the gloom and doom of today’s headlines seen on TV, the internet, or even the paper, makes us a bit sour and irritable. We look for some joy or good news to brighten our day. I hope you find encouragemnt in the housing news presented below, for you and for our country's economy. It seems especially fitting on the eve of our country's Independence celebration; home ownership is a vital component of the American Dream. Happy 4th of July.
Part of our mission at InSight Mortgage Group is to educate our clients so they can make the best financial decisions for themselves. And to help achieve our mission, we research the market trends ( especially the good news parts which get buried deep below the negative headlines) and share this information with our clients.
Encouraging news on the home front continues. Existing home sales were UP 2.4% to a 4.77 million annual rate. This is the third month in a row showing increased sales. They’re now 6.2% above their January low. Additionally, the percent increase for the last two months is the largest since April 2004. Inventory of existing home dropped to 9.6 months from April’s 10.1 supply. And, the median price of an existing home INCREASED to $173,000.
New construction homes also saw a decrease in supply from April’s 10.4 months to May’s 10.2. Inventories of new homes are now down 49% from their peak in mid-2006, and are at their lowest level since 2001! And, the Mortgage Bankers Association reported purchase loan applications UP 7.3%
A recently released report from Harvard University indicated there will be millions more echo boomers than there were boomers who first grew the housing market. The report projects household growth between 12.5 and 14.8 million in the next 10 years. This report also notes that price declines and low interest rates have brought affordability to many housing markets across the country.
Important information if you're considering a purchase or refinancing your current mortgage:
There are changes in the mortgage industry - that are government mandated - taking place now and in the near future. These would be nationwide rules, though additional requirements could be added by individual states. The intent is to increase safety for the borrower, by providing more transparency, and adding steps to help prevent deceptive lending practices. Additional steps now add time to the closing timeframe. In the past it was possible to close a loan within 30 days; now 30-45 days will become the norm, for both purchase and refinance transactions. Basically, the new appraisal process of using a third party appraisal company and more documentation requirements, along with the new Truth in Lending disclosure requirements, impacts the entire real estate and loan process.
As with many past consumer related regulatory changes, we can anticipate cost increases; (think back to the US pharmaceutical business and how health care & drug costs have risen due to regulation).
So, for buyers, critical decisions will need to be made promptly: loan application, type of loan and rate locked. Then, inspections & renegotiations if needed. Anything that can affect the closing costs, price, or date of closing need to be addressed as soon as possible or closing can be delayed.
What do these changes mean to you, if you’re purchasing a home soon or thinking of refinancing? Well, getting a loan will not be as easy, or as inexpensive, as we have known in the past. Don’t be a “fence-sitter”, get into the market now – housing is still affordable, mortgage rates are still historically low, and the cost of obtaining a mortgage is still reasonable.
Call or email us at 913-642-3334; michele@wantinsight.com or dickw@wantinsight.com for the most current information on rates and programs to best suit your individual needs. Blessings
Part of our mission at InSight Mortgage Group is to educate our clients so they can make the best financial decisions for themselves. And to help achieve our mission, we research the market trends ( especially the good news parts which get buried deep below the negative headlines) and share this information with our clients.
Encouraging news on the home front continues. Existing home sales were UP 2.4% to a 4.77 million annual rate. This is the third month in a row showing increased sales. They’re now 6.2% above their January low. Additionally, the percent increase for the last two months is the largest since April 2004. Inventory of existing home dropped to 9.6 months from April’s 10.1 supply. And, the median price of an existing home INCREASED to $173,000.
New construction homes also saw a decrease in supply from April’s 10.4 months to May’s 10.2. Inventories of new homes are now down 49% from their peak in mid-2006, and are at their lowest level since 2001! And, the Mortgage Bankers Association reported purchase loan applications UP 7.3%
A recently released report from Harvard University indicated there will be millions more echo boomers than there were boomers who first grew the housing market. The report projects household growth between 12.5 and 14.8 million in the next 10 years. This report also notes that price declines and low interest rates have brought affordability to many housing markets across the country.
Important information if you're considering a purchase or refinancing your current mortgage:
There are changes in the mortgage industry - that are government mandated - taking place now and in the near future. These would be nationwide rules, though additional requirements could be added by individual states. The intent is to increase safety for the borrower, by providing more transparency, and adding steps to help prevent deceptive lending practices. Additional steps now add time to the closing timeframe. In the past it was possible to close a loan within 30 days; now 30-45 days will become the norm, for both purchase and refinance transactions. Basically, the new appraisal process of using a third party appraisal company and more documentation requirements, along with the new Truth in Lending disclosure requirements, impacts the entire real estate and loan process.
As with many past consumer related regulatory changes, we can anticipate cost increases; (think back to the US pharmaceutical business and how health care & drug costs have risen due to regulation).
So, for buyers, critical decisions will need to be made promptly: loan application, type of loan and rate locked. Then, inspections & renegotiations if needed. Anything that can affect the closing costs, price, or date of closing need to be addressed as soon as possible or closing can be delayed.
What do these changes mean to you, if you’re purchasing a home soon or thinking of refinancing? Well, getting a loan will not be as easy, or as inexpensive, as we have known in the past. Don’t be a “fence-sitter”, get into the market now – housing is still affordable, mortgage rates are still historically low, and the cost of obtaining a mortgage is still reasonable.
Call or email us at 913-642-3334; michele@wantinsight.com or dickw@wantinsight.com for the most current information on rates and programs to best suit your individual needs. Blessings
Friday, January 23, 2009
SOONER THAN LATER
I just received an email from a highly respected colleague in the mortgage business, someone I’ve worked with for many years. He had just left a meeting with his account rep at a national lender we both work with and he passed on some very interesting points for consideration. In turn, I think that my clients could benefit from these comments.
“As you know, rates were driven down when the government committed to purchase $300 billion in loans from FNMA & FHLMC. That money has been used up and they have added more on top of that. But they (various sources in the government) have also said that the current plan is for the government is to stop purchasing mortgages in June and let market driven forces do what they may. If that happens, rates could go back to the 6% to 6.25% range that they were in before the government purchase program began.
In the meantime, there is still a lot of interest by the government to keep rates low in order to stimulate the housing market. That may mean that government purchases of mortgages may continue beyond June. HOWEVER, the issue then is lender capacity. Industry experts estimate that there is $5 trillion dollars worth of loans that would benefit by a refinance at 5% interest rate. If the rate goes to 4.75%, that number goes to $7 trillion, and at 4.5% the number goes to $12 trillion. That sounds like a lot of business for brokers but lenders currently do not have the capacity to handle it. The highest annual loan volume ever was $4 trillion in 2003! At that time there were about 100 direct lenders and another 200 pass through companies to handle the volume. Now the number of lending companies is much smaller. And these remaining lenders have laid off a large percentage of their staff. They could rehire, but most will not do that if they think the volume will drop later this year if the rates go back up. So, the conclusion many in the business have reached, is that even if the government pumps in money to buy more mortgages (which would keep rates down), lenders may not give a corresponding rate decrease because they are already overwhelmed and want to restrict volume.
Along that same line, lenders may actually take steps to further reduce volume by adding more restrictions or continuing to increase fees. One particular restriction may be extra fees for refinances vs purchases. That would allow lower rates for purchases but reduce volume for refinances. (Note: this is speculation on the part of the loan company rep and is not an official position by this national lender!)
The conclusion is that people should refinance now rather than wait.
They may want 4.5%, but if 5.25 works for them, they should at least get the process started. Then, they could watch rates and lock if it gets lower, OR, they could accept the current rate and just feel good that they improved their current position.”
I feel that if the information above is at all accurate, you will want to do something sooner than later. Please contact me by phone or email, michele@wantinsight.com or 913-642-3334.
“As you know, rates were driven down when the government committed to purchase $300 billion in loans from FNMA & FHLMC. That money has been used up and they have added more on top of that. But they (various sources in the government) have also said that the current plan is for the government is to stop purchasing mortgages in June and let market driven forces do what they may. If that happens, rates could go back to the 6% to 6.25% range that they were in before the government purchase program began.
In the meantime, there is still a lot of interest by the government to keep rates low in order to stimulate the housing market. That may mean that government purchases of mortgages may continue beyond June. HOWEVER, the issue then is lender capacity. Industry experts estimate that there is $5 trillion dollars worth of loans that would benefit by a refinance at 5% interest rate. If the rate goes to 4.75%, that number goes to $7 trillion, and at 4.5% the number goes to $12 trillion. That sounds like a lot of business for brokers but lenders currently do not have the capacity to handle it. The highest annual loan volume ever was $4 trillion in 2003! At that time there were about 100 direct lenders and another 200 pass through companies to handle the volume. Now the number of lending companies is much smaller. And these remaining lenders have laid off a large percentage of their staff. They could rehire, but most will not do that if they think the volume will drop later this year if the rates go back up. So, the conclusion many in the business have reached, is that even if the government pumps in money to buy more mortgages (which would keep rates down), lenders may not give a corresponding rate decrease because they are already overwhelmed and want to restrict volume.
Along that same line, lenders may actually take steps to further reduce volume by adding more restrictions or continuing to increase fees. One particular restriction may be extra fees for refinances vs purchases. That would allow lower rates for purchases but reduce volume for refinances. (Note: this is speculation on the part of the loan company rep and is not an official position by this national lender!)
The conclusion is that people should refinance now rather than wait.
They may want 4.5%, but if 5.25 works for them, they should at least get the process started. Then, they could watch rates and lock if it gets lower, OR, they could accept the current rate and just feel good that they improved their current position.”
I feel that if the information above is at all accurate, you will want to do something sooner than later. Please contact me by phone or email, michele@wantinsight.com or 913-642-3334.
Tuesday, December 2, 2008
SHARP DECLINE IN MORTGAGE RATES FUEL HISTORIC LEVEL OF RATE LOCKS
On Wednesday, November 26, Secretary Paulson announced that the Fed will purchase up to $100 Billion in direct debt of Fannnie Mae, Freddie Mac and Federal Home Loan Banks and buy up to $500 Billion of Mortgage-Backed Securities.
With this news, the spread between Treasury bonds and mortgage-back securities narrowed significantly and fueled a sharp decline in mortgage rates.
So many customers who had been on the sidelines got into the game and locked their rates on refi's and new purchases. So much so, that many lenders announced that they reached recording breaking milestones!
Don't be a benchwarmer, get in the game now while rates remain historically low. Mortgage funds are available; we have a variety of programs to suit your specific needs. Call Michele at 913-642-3334 or email me at michele@wantinsight.com for the most current loan information.
Michele "MAC" A. Cole
913-642-3334
www.wantinsight.com
With this news, the spread between Treasury bonds and mortgage-back securities narrowed significantly and fueled a sharp decline in mortgage rates.
So many customers who had been on the sidelines got into the game and locked their rates on refi's and new purchases. So much so, that many lenders announced that they reached recording breaking milestones!
Don't be a benchwarmer, get in the game now while rates remain historically low. Mortgage funds are available; we have a variety of programs to suit your specific needs. Call Michele at 913-642-3334 or email me at michele@wantinsight.com for the most current loan information.
Michele "MAC" A. Cole
913-642-3334
www.wantinsight.com
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