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Mortgage News in the Carolinas
Are You Wasting $471 Per Month On Your Mortgage?
074 days
by Geoff Brown
in Mortgage Rates
According to Freddie Mac’s weekly mortgage rate survey, for 13 straight weeks, the average 30-year fixed rate mortgage has held below 4.000% for mortgage applicants willing to pay up to 0.8 discount points plus a full set of closing costs.
These are the lowest mortgage rates in history and now — with a bevy of loan programs for the nation’s 11 million “underwater homeowners” including HARP, the FHA Streamline Refinance, and the VA IRRRL — millions of U.S. homeowners can exploit the current mortgage rate environment.
In this 4-minute clip from NBC’s The Today Show, you’ll learn about today’s mortgage market and your refinancing opportunities in Carolinas.
The video begins by telling us that 14 million credit-worthy Americans have yet to refinance their respective mortgages, and are leaving an average of $471 in “wasted savings” on the table each month which adds up to more than $5,600 annually.
That’s a big number.
Some of the video’s other key points include :
- Refinancing is “worth the hassle” when mortgage rates are as low as they are today
- The best rates are reserved for homeowners with the highest credit scores
- Comparison shop — your current mortgage lender may not offer you the best rates
Furthermore, the video reveals the characteristics of the homeowner type most likely to benefit from a refinance. These traits include having with 20% equity in the home; have plans to live in the home for at least the next 36 months; carrying a current mortgage rate of 5 percent or higher.
It should also be added that, with a zero-closing-cost or low-closing-cost mortgage, even a small reduction in your mortgage rate can make a refinance worthwhile.
Mortgage rates are low but can’t stay low forever. If you haven’t participated in the Refi Boom, talk with a loan officer and review your mortgage options. You may be able to save hundreds of dollars per month with just modest closing costs.
FHA To Raise Mortgage Insurance Premiums April 1, 2012
079 days
Beginning April 1, 2012, the FHA is once again raising mortgage insurance premiums (MIP) on its newly-insured borrowers throughout Charlotte and the country.
It’s the FHA’s fourth such increase in the last two years.
Beginning April 1, 2012, upfront mortgage insurance premiums will be higher by 75 basis points, or 0.75%; and annual mortgage insurance premiums will be higher by 10 basis points per year, or 0.10%.
For borrowers with a loan size of $200,000, the new MIP will add $1,500 in one-time loan costs, plus an on-going, annual $200 increase in total mortgage insurance premiums paid.
All new FHA loans are subject to the increase — purchases and refinances.
The FHA is increasing its mortgage insurance premiums because, as an entity, the FHA is insuring a much larger percentage of the U.S. mortgage market than ever before.
In 2006, the FHA insured 2 percent of all purchase-money mortgages. In 2011, that figure jumped to 18 percent. Unfortunately, as the FHA has insured more loans, it’s number of loans in default have climbed, too, forcing the FHA to boost its reserves.
Beginning April 1, 2012, the new FHA annual mortgage insurance premium schedule is as follows :
- 15-year loan term, loan-to-value > 90% : 0.60% MIP per year
- 15-year loan term, loan-to-value <= 90% : 0.35% MIP per year
- 30-year loan term, loan-to-value > 95% : 1.25% MIP per year
- 30-year loan term, loan-to-value <= 95% : 1.20% MIP per year
In order to calculate what your FHA annual mortgage insurance premium would be on a monthly basis, multiply your beginning loan size by your insurance premium in the chart above, then divide by 12.
In addition, for loans over $625,500, beginning June 1, 2012, there is an additional 25 basis point increase to annual MIP.
To avoid paying the new FHA mortgage insurance premiums, start your FHA mortgage application today. Existing FHA-insured homeowners will not be affected by the change.
Mortgage insurance premiums will not rise for loans already made.
New Home Supply Falls To 5.6 Months
082 days
by Geoff Brown
in Housing Analysis
The new construction market rolls on.
As foreshadowed by February’s Homebuilder Confidence survey, which rose to a 4-year high, the Census Bureau reports new homes are selling more quickly than builders have built them, lowering the national “home supply” to levels not seen since 2006.
A “new home” is a home that is considered new construction and, at the current pace of sales, the nation’s entire new home inventory of 151,000 homes would be sold in 5.6 months.
Anything less than 6.0-month supply is thought to connote a “sellers’ market”.
321,000 new homes were sold last month on a seasonally-adjusted, annualized basis. 7 of 10 new homes sold for less than $300,000.
The South Region continues to account for the majority of new construction sales, posting a 59% market share in January. South Region sales were up 9 percent as compared to December. The other 3 regions turned in mixed results.
- Northeast Region : +11.1% from December 2011
- Midwest Region : -24.5% from December 2011
- West Region : -10.6% from December 2011
Unfortunately, the Census Bureau’s New Home Sales data could be wrong.
Although New Home Sales were said to fall by about one percent nationally from December to January, the government’s monthly report was footnoted with a ±16.6% margin of error. This means that the actual New Home Sales reading may have been as high as +15%, or as low as -18%.
Because the range of values includes positive and negative values, the January New Home Sales data is of “zero confidence”. However, that’s not to say that it should be ignored. The aforementioned homebuilder confidence survey shows builders optimistic for the future, and a bevy of home sale data since October 2011 suggests a market in recovery.
If you’re in the market for new construction in Charlotte , therefore, consider going into contract sooner rather than later. Home prices remain low and mortgage rates do, too — a terrific combination for today’s buyers.
In a few months, the landscape may look different.
Federal Reserve Wary Of European Spillover
086 days
by Geoff Brown
in Federal Reserve
The Federal Reserve has released the minutes from its 2-day meeting January 24-25, 2012.
The Fed Minutes is a summary of the conversations and debates that shape our nation’s monetary policy. It receives less attention than the Fed’s more well-known, post-meeting press release, but the Fed Minutes is every bit as important.
To rate shoppers in Charlotte , for example, the Fed Minutes can provide clues about whether mortgage rates will generally rise or fall in the coming months.
The most recent Fed Minutes reveals a central bank divided on the future of the U.S. economy. The minutes show some Fed members in favor of new, immediate market stimulus. It shows others in favor of terminating the stimulus that’s already in place.
The Fed’s debate centered on the topic of inflation, and the pressures that a prolonged, near-zero Fed Funds Rate can place on the economy. Ultimately, the Fed did nothing, neither adding new stimulus nor removing that which is already in place.
It did, however, communicate a plan to keep the benchmark Fed Funds Rate rate “exceptionally low” through late-2014, at least.
The Fed Minutes included the following notes, too :
- On employment : Unemployment rates will “decline only gradually” in 2012
- On housing : The market is “held down” by the “large overhang” of distressed homes
- On inflation : Consumer prices have remained “flat”
Furthermore, the Fed expressed optimism regarding European financial markets, noting that market sentiment “appeared to brighten a bit”. Nonetheless, “spillovers” remain possible and the threat continues to weigh on markets.
Mortgage rates are slightly worse since the Fed Minutes were released.
The Federal Reserve’s next scheduled meeting is March 13, 2012 — its second of 8 scheduled meetings this year.
