Yes, interest rates have jumped up to the highest level since April 2012. The good news, although it is a little hard to focus on right now, is that rates have moved higher in reaction to the continued good economic news coming from various sources, not the least of which is housing and jobs - and no inflation. That may change, but if more borrowers qualify, or fewer homes are underwater, that is not a bad thing. Another good thing is continued stirring in the jumbo market. JPMorgan Chase & Co. is planning its second sale of U.S. home-loan securities without government backing, That helps here in the Bay Area where house prices are higher than the US Norm. It is a start! Maybe at some point we'll remember that Europe still has major problems (why is the market ignoring them?) and rates will slide back down, but until then. These higher rates shouldn't affect the purchase market too much, or will it slow it down? Is that actually a good thing? Don't get frightened rates are still screaming good.
The Dow Jones Industrial Average has passed the 15,000 mark. But is that really reason to celebrate? If that isn't enough for you how about the Sharks won the first round in a sweep!
The sentiment on Wall Street may be that our long national fiscal nightmare is finally over, but the stock market is just one barometer of prosperity, many economists and consumer experts argue. The problems that have plagued the United States in recent years — declining household income, surging prices for many key goods and services, low interest rates for savings — remain very much in place. So be careful.. But you know and I know that people are ready to buy. Let's just be smart about it and make sure we help them make the best decision.
The mortgage market has been very very quite this week. Rates have risen a little on all the good economic news. Loan parameters seem to have stabilized (not getting any tougher). Word is some loosening guidelines might be right around the corner. So hold onto your britch's!
Lending is one thing, but what about those 100% equity, all-cash folks? Has the percentage of homeowners who are free-and-clear changed over time? In 1940, 55% of the people owned their homes outright. By 1980, this share dropped to 35%. leveling out into the following decades. Then census data shows 33% of homeowners free and clear in 2010, and Zillow's Negative Equity 2012 Q3 data shows 29% of homeowners are free-and-clear on their homes.
OK, so work the deal guys, great for listings! Ever heard of seller carry-backs? (they can generate income for the seller, and some tax advantages you know.) Lets get creative guys, need more listings.
The biggest economic report this week will be Friday's release of first quarter GDP, the broadest measure of economic growth. We have Durable Goods and Jobless Claims reports out also. Regardless rates are GREAT and loans are getting closed..
BELIEVE IT OR NOT MINIMUM DOWN LOAN BUYERS ARE GETTING ACCEPTED. Gotta get creative. Between the lender and the agent we must all work together to put the buyer in the best light of the seller.
So the last couple weeks I mentioned FHA and VA to help those borrower are Vets. But other than Vets, borrowers with very little money to work with in the past have used FHA. Great way to go if needed. But to be Honest unless their credit scores are lower or a unique circumstance, FHA with all the increases is very expensive what to go.
Conventional loans are the game now. It is about 90% of my business. ( 1 year ago it was the other way around.)
Up to $417,000 we can do 3% down. Yes condo’s too.
10% down over $417,000 to $625,500.
We even have 80/10/10 loans again (piggybacks)
But did you know: the lender or the borrower can pay upfront premium for Mortgage Insurance?
Therefore eliminating the monthly PMI. Yes the rate will be a bit higher or the borrower would have to come in with more money. But 3% down with no Mortgage Insurance? Savings can be huge! No refi needed down the road when rates are higher, might even help qualify.
Landmark Mortgage Group is a division of Opes Advisors and licensed by the CA Dept. of Real Estate, Real Estate Broker license 01458652 and NMLS 235584. Equal Opportunity Lender.