Tuesday, December 22, 2009
Mortgage Borrowing Costs Still on the Rise
Mortgage rates continued to rise yesterday as benchmark Treasury yields moved higher and prices of mortgage backed securities fell. MBS opened the day weaker and extended losses all the way into the close, forcing most lenders to reprice for the worse. By the end of the day, the par 30 year fixed mortgage rate had climbed to 4.875% (a couple of lenders had 4.75 but only a few). Unfortunately weakness in the rates market has carried over into today...benchmark Treasury yields are still on the rise and mortgage rates continue to creep up. To remind readers, as MBS prices move lower, lenders are forced to increase consumer borrowing costs.
Tuesday, December 1, 2009
Rate Update
Best Rates
Yesterday Today
30 Yr FRM 4.72% 4.75%
15 Yr FRM 4.03% 4.06%
FHA 30 Year Fixed 4.91% 4.95%
Jumbo 30 Year Fixed 5.87% 5.92%
5/1 Yr ARM 3.82% 3.85%
Rate DisclaimerUpdated: 12/1/09 4:16 PM
National Average Mortgage Rates
Rate Points Change
30 Yr FRM 4.78% 0.7 -0.05%
15 Yr FRM 4.29% 0.6 -0.03%
1 Yr ARM 4.35% 0.7 0%
5/1 Yr ARM 4.18% 0.6 -0.07%
Source: Freddie MacUpdated: 11/25/09 2:59 PM
Yesterday Today
30 Yr FRM 4.72% 4.75%
15 Yr FRM 4.03% 4.06%
FHA 30 Year Fixed 4.91% 4.95%
Jumbo 30 Year Fixed 5.87% 5.92%
5/1 Yr ARM 3.82% 3.85%
Rate DisclaimerUpdated: 12/1/09 4:16 PM
National Average Mortgage Rates
Rate Points Change
30 Yr FRM 4.78% 0.7 -0.05%
15 Yr FRM 4.29% 0.6 -0.03%
1 Yr ARM 4.35% 0.7 0%
5/1 Yr ARM 4.18% 0.6 -0.07%
Source: Freddie MacUpdated: 11/25/09 2:59 PM
Sunday, November 15, 2009
$6500 Tax Credit For Move Up Buyers
Well, it’s here and I am so happy the government decided to help existing home owners get a little help with their next home purchase. On November 6th the Senate passed an extension on the Tax Credit bill for first time home buyers. Within that bill the government also included a Tax Credit for existing home owners. Here are some of the specific details for the $6500.00 Tax Credit.
1. The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. The buyer doesn’t have to purchase a more expensive home than his current residence.
2. The credit is good for properties under $800,000 and is equal to 10% home value maxed up to $6500.00.
3. The credit is for individuals making $125,000 and married couples limited at $225,000. There are other tax rules, so please speak with your tax expert for specific details.
4. What type of home is considered for the tax credit? Single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. However you cannot purchase from any relatives including spouse, children, parents, grandparents, etc…
5. What is the time frame that the credit is good for? The date of first occupancy must be after November 6, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April 30, 2010).
For additional information please go to this website for additional information. http://www.federalhousingtaxcredit.com/home.html
1. The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. The buyer doesn’t have to purchase a more expensive home than his current residence.
2. The credit is good for properties under $800,000 and is equal to 10% home value maxed up to $6500.00.
3. The credit is for individuals making $125,000 and married couples limited at $225,000. There are other tax rules, so please speak with your tax expert for specific details.
4. What type of home is considered for the tax credit? Single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. However you cannot purchase from any relatives including spouse, children, parents, grandparents, etc…
5. What is the time frame that the credit is good for? The date of first occupancy must be after November 6, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April 30, 2010).
For additional information please go to this website for additional information. http://www.federalhousingtaxcredit.com/home.html
Thursday, November 5, 2009
Congress Set to Expand Homebuyer Tax Credit
First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House is scheduled to vote on the bill Thursday.
Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.
"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.
The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.
Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.
"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.
The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.
Thursday, October 29, 2009
Tax Credit Proposal Is Improved & Getting Closer
There apparently is an agreement on the details of an expanded and extended credit. No vote has occurred yet. The issue is now caught up in Senate procedural matters. However, there is optimism that it will be resolved this week. The provision would still have to be passed by the House. Below are the details of the new tax credit program.
- First-time homebuyers will continue at $8,000 -- same definition as current law.
- Tax credit for “move up” purchasers will be up to $6500.
- Must have used previous home as a principal residence for 5 of the 8 previous years.
- Income limits increased and are the same for first-time and “move up” purchasers : $125,000 for single filers/$225,000 for joint filers.
- Limitation on eligible home prices has been increased to $800,000.
- Time Frame: December 1, 2009 to April 30, 2010 plus 60 day extension if binding contract is in place by April 30, 2010
Wednesday, October 28, 2009
Rate Update
Economic data started coming in early this morning. The Mortgage Bankers’ Association released their Weekly Application Index at 7am. This index tracks the weekly change in mortgage applications at major lenders. Much like last week’s report, today’s report continues to show more weakness in the housing market. Applications for home purchases fell 5.2% and the refinance activity posted a 16.2% drop! With interest rates edging higher last week, it is not surprising to see a drop in the refinance activity. With the first time home buyer tax credit still in effect, it is troubling to have a couple weeks in a row with much less demand.
I recommend floating today.
I recommend floating today.
Tuesday, October 27, 2009
Should You Go For A Mortgage Refinance?
There are two common situations which lead people to consider refinancing their mortgage. One is to save money by taking advantage of lower interest rates. The other is to manage an unwieldy debt repayment situation. If you are currently looking out to refinance your existing mortgage here are some important points you should consider very carefully.
Maybe you have a number of small monthly repayments and these are becoming increasingly difficult to manage. You can refinance the mortgage and get a loan large enough to pay off all the small debts at once. You can then concentrate on paying a single monthly repayment. This makes things more manageable.
If you’re keen on saving money by reducing the interest burden of your current mortgage, then getting a fresh financing scheme may help you save a sizable sum of money. This works if your current mortgage is linked with the variable market rate, the current interest rate is very high and the market trend shows no inclination of climbing down. You can save a lot of money by opting out of your current mortgage and getting it refinanced. The secret is to get a fixed-rate loan with a reasonable interest rate.
Whatever the reason for refinancing, you should study all aspects of this important decision very carefully. The one thing you should understand is that while refinancing your mortgage could save you a packet, it could just as easily cost you a packet. Refinancing can hurt you in certain situations.
Refinancing is not as sweet as it looks. There are a number of fees that have to be paid for refinancing the mortgage which are not disclosed to you. It’s only after you have gone too far into the deal to turn back that you are made aware of these hidden charges. Be persistent in finding out all the nitty-gritty details about these hidden fees from people who have already taken a refinance. Deduct these fees from the total savings you expect to make. If the money saved is reduced to an insignificant amount, you might as well stay with your current plan.
When you consider refinancing, the first thing to do is to survey the market. Find out all the plans and schemes being offered by different companies. Make a comparison chart showing all the salient features and savings of each plan. Don’t restrict your survey to just your local companies. Go online and get information on various plans offered in your area.
Find out all the penalties and fees that refinancing companies may extract from you upfront. For example, there is an origination fee or points, which is taken before the refinance plan becomes operational. There might be a plan where the interest rate is slightly higher but you don’t have to pay origination fee. This may turn out to be better for you.
Refinancing is advisable if your net savings is significant. If not, you may as well keep the current mortgage going. Don’t go in for refinancing if you think you may have to move before the fresh mortgage period has time to play itself out. Such a move will require you to foreclose the fresh mortgage which entails a huge penalty!
Mortgage refinancing is a good way to save money by taking advantage of reduced interest rates. It is also a good way of dealing with a troublesome debt repayment position. But you must be aware of all the costs that are involved. Not knowing the true costs leaves you open to nasty surprises later on. Many people who went in for mortgage refinancing without proper analysis found that they had actually lost money instead of making the savings they had counted on!
Maybe you have a number of small monthly repayments and these are becoming increasingly difficult to manage. You can refinance the mortgage and get a loan large enough to pay off all the small debts at once. You can then concentrate on paying a single monthly repayment. This makes things more manageable.
If you’re keen on saving money by reducing the interest burden of your current mortgage, then getting a fresh financing scheme may help you save a sizable sum of money. This works if your current mortgage is linked with the variable market rate, the current interest rate is very high and the market trend shows no inclination of climbing down. You can save a lot of money by opting out of your current mortgage and getting it refinanced. The secret is to get a fixed-rate loan with a reasonable interest rate.
Whatever the reason for refinancing, you should study all aspects of this important decision very carefully. The one thing you should understand is that while refinancing your mortgage could save you a packet, it could just as easily cost you a packet. Refinancing can hurt you in certain situations.
Refinancing is not as sweet as it looks. There are a number of fees that have to be paid for refinancing the mortgage which are not disclosed to you. It’s only after you have gone too far into the deal to turn back that you are made aware of these hidden charges. Be persistent in finding out all the nitty-gritty details about these hidden fees from people who have already taken a refinance. Deduct these fees from the total savings you expect to make. If the money saved is reduced to an insignificant amount, you might as well stay with your current plan.
When you consider refinancing, the first thing to do is to survey the market. Find out all the plans and schemes being offered by different companies. Make a comparison chart showing all the salient features and savings of each plan. Don’t restrict your survey to just your local companies. Go online and get information on various plans offered in your area.
Find out all the penalties and fees that refinancing companies may extract from you upfront. For example, there is an origination fee or points, which is taken before the refinance plan becomes operational. There might be a plan where the interest rate is slightly higher but you don’t have to pay origination fee. This may turn out to be better for you.
Refinancing is advisable if your net savings is significant. If not, you may as well keep the current mortgage going. Don’t go in for refinancing if you think you may have to move before the fresh mortgage period has time to play itself out. Such a move will require you to foreclose the fresh mortgage which entails a huge penalty!
Mortgage refinancing is a good way to save money by taking advantage of reduced interest rates. It is also a good way of dealing with a troublesome debt repayment position. But you must be aware of all the costs that are involved. Not knowing the true costs leaves you open to nasty surprises later on. Many people who went in for mortgage refinancing without proper analysis found that they had actually lost money instead of making the savings they had counted on!
Monday, October 26, 2009
First Time Home Buyer Tax Credit $8,000
On Monday, October 5th, the White House came very close to endorsing an extension for the First Time Homebuyer Tax Credit. The White House Press Secretary said it had been a very successful program and is on a “short-list” of measures being considered to help further bolster the economy in its recovery. The likely-hood for an extension of the Tax Credit has been significantly improved (as much as 90% likely to pass). There has been no indication of the Tax Credit being revised that would increase the credit above the already available $8000 limit or offered beyond first-time homebuyers within the qualifying guidelines.
What does this mean?
Unless the Tax Credit provision is made a “stand-alone” bill or attached to an existing bill, a continuation in the program may mean there would be a lapse in availability for First Time Homebuyers, possibly in early December - since tax bills usually move at the end of the year (late December).
It is speculated that a steep drop in home prices may unravel as the current First Time Homebuyer Tax Credit is left to expire December 1st, further denying economic recovery.
If extended, the $8000 Tax Credit program would cost the government approximately $1 billion for each month it is extended as talks are in place that would determine how long it will be extended.
Further details on the possible extension of the First Time Homebuyer Tax Credit will be published when they become available.
What does this mean?
Unless the Tax Credit provision is made a “stand-alone” bill or attached to an existing bill, a continuation in the program may mean there would be a lapse in availability for First Time Homebuyers, possibly in early December - since tax bills usually move at the end of the year (late December).
It is speculated that a steep drop in home prices may unravel as the current First Time Homebuyer Tax Credit is left to expire December 1st, further denying economic recovery.
If extended, the $8000 Tax Credit program would cost the government approximately $1 billion for each month it is extended as talks are in place that would determine how long it will be extended.
Further details on the possible extension of the First Time Homebuyer Tax Credit will be published when they become available.
National Average Rate Update
Today rates are rising because the Treasury Department will auction $123 billion in debt this week.That said, one might ask...Record Treasury debt has been a constant for ten months, rates haven't backed up this much in any of those instance.
Sunday, October 25, 2009
National Averages and Rate Update
30 Yr FRM 5.00% Up 0.08%
15 Yr FRM 4.43% Up 0.06%
1 Yr ARM 4.54% Down 0.06%
5/1 Yr ARM 4.40% Up 0.02%
Rates are up today as we got positive news from Existing Home sales, they were up to 5.57m. Most importantly inventory shrunk to 7.8 month supply, down from 10.1 in April. Bonds have broken thru important support levels, and this is will increase rates even more.
15 Yr FRM 4.43% Up 0.06%
1 Yr ARM 4.54% Down 0.06%
5/1 Yr ARM 4.40% Up 0.02%
Rates are up today as we got positive news from Existing Home sales, they were up to 5.57m. Most importantly inventory shrunk to 7.8 month supply, down from 10.1 in April. Bonds have broken thru important support levels, and this is will increase rates even more.
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