How Much Should You Expect To Pay In Mortgage Closing Costs?
Aug 19th
How much does a mortgage cost? The answer depends on where you live. But no matter which your locale, chances are strong that you’ll pay more for a mortgage in 2010 as compared to 2009.
According to Bankrate.com and its annual Closing Cost Survey, a typical $200,000, purchase mortgage now carries an average $3,741 in closing costs — up nearly 37 percent from last year.
As defined by Bankrate.com, “closing costs” is defined as the sum of two numbers. The first group is labeled “origination charges”, a category that includes such items as underwriting fees, application fees and processing fees. These fees are paid directly to the loan originator’s company at the time of closing.
The second grouping of costs is labeled “third-party fees”. Third-party fees include appraisals, credit reports, settlement fees and title searches — items paid in connection with the loan, but not paid to the lending bank or broker.
It’s unclear why closing costs appear to have escalated into 2010, but Bankrate.com suggest that recently-enacted federal lending laws are a culprit:
- The new law requires loan officers to be accountable to a Good Faith Estimate’s accuracy. Bankrate.com’s prior-year surveys may have been “understated”, therefore, because of a lack of accountability.
- The cost of federal compliance is high, and banks may be passing on compliance costs to consumers
Please let me know if you have any questions about closing costs and give me a call today at 704.728.6286. Geoff
38 reasons to purchase a home in 2010!
Aug 16th
Many people are on the fence about purchasing a home. It’s understandable as unemployment remains high and many people are worried about the economy and whether or not they are going to be able to reach their long term financial goals in these uncertain times.
Let’s also not forget that there is always opportunity in times of uncertainty. There are some incredible values on homes that are in foreclosure or going through a short sale.
I also sometimes feel like broken record in telling our clients how low mortgage rates are in relation to previous years. Well, I came up with 38 reasons why it’s better to purchase a home in 2010 than ever before……..
30 year Average Fixed Rates
REASON #1 1972 7.38%
REASON #2 1973 8.04%
REASON #3 1974 9.19%
REASON #4 1975 9.04%
REASON #5 1976 8.87%
REASON #6 1977 8.84%
REASON #7 1978 9.64%
REASON #8 1979 11.19%
REASON #9 1980 13.77%
REASON #10 1981 16.63%
REASON #11 1982 16.08%
REASON #12 1983 13.23%
REASON #13 1984 13.87%
REASON #14 1985 12.42%
REASON #15 1986 10.18%
REASON #16 1987 10.20%
REASON #17 1988 10.34%
REASON #18 1989 10.32%
REASON #19 1990 10.13%
REASON #20 1991 9.25%
REASON #21 1992 8.40%
REASON #22 1993 7.33%
REASON #23 1994 8.36%
REASON #24 1995 7.96%
REASON #25 1996 7.81%
REASON #26 1997 7.60%
REASON #27 1998 6.94%
REASON #28 1999 7.43%
REASON #29 2000 8.06%
REASON #30 2001 6.97%
REASON #31 2002 6.54%
REASON #32 2003 5.82%
REASON #33 2004 5.84%
REASON #34 2005 5.87%
REASON #35 2006 6.41%
REASON #36 2007 6.34%
REASON #37 2008 6.04%
REASON #38 2009 5.04%
TODAY’s Average 30 year fix rate in 2010….. 4.25%
(4.40% APR)!!! Please contact me today to get pre-approved.
How Big Is The Foreclosure Market? It Depends On Where You Live, Of Course.
Aug 12th
Foreclosure filings rose 4 percent nationwide last month versus June, according to foreclosure-tracking firm RealtyTrac.com. For the 17th straight month, total filings topped 300,000.
A foreclosure filing is defined as default notice, scheduled auction, or bank repossession.
As with most months, just a handful of states dominated foreclosure activity nationwide.
- California : 14.9 percent of all activity
- Florida : 11.6 percent of all activity
- Arizona : 6.4 percent of all activity
- Michigan : 6.2 percent of all activity
- Georgia : 6.1 percent of all activity
- Texas : 4.9 percent of all activity
Together, these 6 states represent just 30 percent of the overall U.S. population.
The other 44 states (and Washington D.C.) were home to the remaining 49.0%.
Despite this imbalance, though, in all markets, foreclosures and REO are making a profound impact on pricing and product. “Distressed” homes now represent 32 percent of the overall resale market nationwide, according to the National Association of Realtors®.
Buying a foreclosed home can make for a terrific “deal”, but buying in the REO market is decidedly different from buying a non-foreclosed property.
As 3 examples:
- Buying bank-owned homes can take 120 days to close.
- Foreclosures aren’t always listed for sale publicly. Some inventory is privately-held.
- Bank-owned homes are often sold “as is”. There may be defects that render the homes mortgage-ineligible.
If you have an interest in buying REO, consider talking with a real estate agent first. Even the negotiation process is different as compared to a non-distressed sale. It helps to have an experienced professional representing your interests.
A Simple Explanation Of The Federal Reserve Statement (August 10, 2010 Edition)
Aug 10th
Today, in its first meeting in 6 weeks, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged.
The Fed Fund Rate remains at a historical low, within a prescribed target range of 0.000-0.250 percent.
In its press release, the FOMC said that, since June, the pace of economic recovery “has slowed”. Household spending is increasing but remains restrained because of high levels of unemployment, falling home values, and restrictive credit.
Today’s statement shows less economic optimism as compared to the prior year’s worth of FOMC statements dating back to June 2009. The Fed is looking for growth to be “more modest in the near-term” than its previous expectations.
Weaknesses aside, the Fed highlighted strengths in the economy, too:
- Growth is ongoing on a national level
- Inflation levels remain exceedingly low
- Business spending is rising
As expected, the Fed re-affirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period”.
There were no surprises in the Fed’s statement so, as a result, the mortgage market’s reaction to the release has been neutral. Mortgage rates in Carolinas are unchanged this afternoon.
The FOMC’s next meeting is scheduled for September 21, 2010.
The Fed Is Meeting Today. Should You Float Or Lock Your Mortgage Rate?
Aug 10th
The Federal Open Market Committee holds a one-day meeting today, its fifth scheduled meeting of the year, and sixth overall since January.
The FOMC is the government’s monetary policy-setting arm and the group’s primary tool for that purpose is an interest rate called the Fed Funds Rate.
The Fed Funds Rate is the prescribed rate at which banks borrow money from each other and, since December 16, 2008, the Federal Reserve has voted to keep the benchmark rate within a target range of 0.000-0.250 percent.
It’s the lowest Fed Funds Rate in history.
Because the Fed Funds Rate is near zero, it’s accommodative of economic growth, spurring businesses and consumers to borrow money on the cheap. This, in turn, fosters economic growth within a U.S. economy that is somewhat tentative and facing headwinds.
The Fed has said over and again that it will hold the Fed Funds Rate “exceptionally low” for as long as conditions warrant. It’s expect that the Fed will reiterate that message in today’s post-meeting press release.
However, just because the Fed Funds Rate won’t be changing today, that doesn’t mean that mortgage rates won’t. Mortgage rates are not set by the Federal Reserve; open markets make mortgage rates.
Mortgage rates in Carolinas tend to be volatile when the Fed is meeting. This is because the Fed’s press release highlights strengths and weaknesses in the economy and, depending on how Wall Street views those remarks, bond markets can undulate and mortgage rates are based on the price of mortgage-backed bonds.
When Ben Bernanke & Co. speak, Wall Street listens.
The Fed’s press release today will be dissected and analyzed. Talk of higher-than-expected inflation, or better-than-expected growth should have a negative effect on rates. Talk of an economic slowdown may help rates to fall.
Either way, we can’t be certain what the Fed will say or do this afternoon so if you’re floating a rate right now and wondering whether the time is right to lock, the safe choice is to lock before 2:15 PM ET today.
What’s Ahead For Mortgage Rates This Week : August 9, 2010
Aug 8th
Mortgage markets improved again last week on softer-than-expected economic data, punctuated by Friday morning’s weak jobs report. Conforming mortgage rates in Carolinas dropped on the news.
Mortgage rates have been on an extended rally dating back to mid-April.
This week, there’s a lot of data and news due for release, the most influential to markets of which is the Federal Open Market Committee’s scheduled policy meeting.
8 times annually, the FOMC meets to discuss the nation’s monetary policy with respect to the current and projected U.S. economic conditions. Sometimes the FOMC takes action on the economy. Other times, it does not.
Either way, Fed meetings are market movers and it’s a gamble to float a mortgage rate ahead of an FOMC get-together.
There’s other’s stories to watch this week, too. Each has the ability to change mortgage rates.
- Tuesday : FOMC meeting; Consumer Confidence data
- Thursday : Jobless Claims
- Friday : Retail Sales; Consumer Price Index
It’s a busy week on Wall Street, to be sure, and rate shoppers would do well to pay attention. Not only can the FOMC meeting change mortgage rates for every product in every market, but it can also change the outlook for mortgage rates going forward.
Rates are at an all-time low and low rates can’t last forever. We’re in the middle of a Refi Boom today and, soon, the boom will be over.
If you haven’t spoken to a loan officer about refinancing your home, or locking a mortgage rate, your best time to make the call is prior to the FOMC’s Tuesday afternoon adjournment at 2:15 PM ET. Mortgage rates will get jumpy leading up to the meeting, and will most certainly be volatile afterward.
