Mortgage Rates Climb to Highest Level in a Year


Mortgage Rates Climb to Highest Level in a Year

Fixed-rate mortgages soared higher this week, reaching their highest averages in a year, Freddie Mac reports in its weekly mortgage market survey.

The 30-year fixed-rate mortgage — the most popular choice among home buyers — has climbed nearly half a percentage point since the beginning of this month — from 3.35 percent to 3.81 percent this week.

“Fixed mortgage rates followed long-term government bond yields higher, following a growing market sentiment that the Federal Reserve may lessen its accommodative policy stance,” says Frank Nothaft, Freddie Mac’s chief economist. “Improving economic data may have encouraged those views.”

Despite the uptick, mortgage rates remain low by historical standards, Freddie Mac reports.

The mortgage giant reports the following national averages with mortgage rates for the week ending May 30:

  • 30-year fixed-rate mortgages: averaged 3.81 percent, with an average 0.8 point,      rising from last week’s 3.59 percent average. A year ago at this time,      30-year rates averaged 3.75 percent.
  • 15-year fixed-rate mortgages: averaged 2.98 percent, with an average 0.7 point,      rising from last week’s 2.77 percent average. Last year at this time,      15-year rates averaged 2.97 percent.
  • 5-year adjustable-rate mortgages: averaged 2.66 percent, with an average 0.5 point,  also up from last week’s average of 2.63 percent. Last year at this time,      5-year ARMs averaged 2.84 percent.
  • 1-year ARMs: averaged      2.54 percent, with an average 0.5 point, dropping from last week’s 2.55      percent average. A year ago, 1-year ARMs averaged 2.75 percent.

If you are thinking of buying or selling, talk to a REALTOR who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to call me at 615 417-8182 or email me at RolandLow1@gmail.com.

Also – to find the home of your dreams or for information on real estate visit www.GreaterNashvilleRealEstate.info or www.SpringHillRealEstate.info.

Roland

Source: Freddie Mac

 

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Home Prices Jump 10.9%, Largest Annual Gain in 7 Years


Home Prices Jump 10.9%, Largest Annual Gain in 7 Years

Home prices in March rose by 10.9% from a year earlier, the largest such gain in nearly seven years, according to an index tracking home prices in 20 U.S. cities released Tuesday.

The Standard & Poor’s Case-Shiller index showed that all 20 cities had posted year-over-year growth for the third straight month, the latest sign of how tight inventories and growing housing demand have led to a surge in home prices after several years of painful declines.

If you are thinking of buying or selling, talk to a REALTOR who can give you the information you need to make an informed decision.

As always, if I help with any of your real estate needs, please feel free to call or text me at 615-417-8182 or email me at RolandLow1@gmail.com.

Roland

 

Source: Wall Street Journal

Mortgages: What You Don’t Know Can Hurt You


Mortgages: What You Don’t Know Can Hurt You

The housing market is heating up, yet many house hunters are not prepared to take on the biggest purchases of their lives.

When it comes to mortgages, homebuyers answered basic questions about terms, how to choose a lender and financing wrong nearly one-third of the time, according to an April survey of more than 1,000 current and prospective homeowners by real estate website Zillow.

Among the survey’s findings, 31% of buyers don’t think it’s possible to get a mortgage for less than 5% down; 34% don’t know what the term “annual percentage rate” (APR) means and one in four believe you must close with the lender that pre-approves your mortgage.

“All too often buyers focus on negotiating a lower home price and ignore the importance of finding the right loan,” said Erin Lantz, director of mortgages for Zillow. “Buyers should always shop multiple lenders and compare rates and fees and read lender reviews in order to find the best loan for their situation.”

One example: 34% of respondents believe lenders are required by law to charge the same fees to all clients for credit reports, appraisals and the like. That’s wrong. Fees vary from bank to bank and can often be negotiated.

But it’s hard to compare those deals if you don’t understand what mortgage terms, like “annual percentage rate,” mean. The APR factors into fees, upfront points, origination and underwriting fees and other costs that borrowers use to compare the actual cost of loans.

Such knowledge gaps can have long-term consequences. About 34% of first-time homebuyers think they need a down payment of at least 5% to make a home purchase, but loans insured by the Federal Housing Administration can require as little as 3.5% down.

And 24% of buyers believe the best mortgage deals are available through the banks where they currently have their savings and checking accounts, but often competing lenders can undercut those banks by large margins.

“If a homebuyer can lower their interest rate by even half a percentage point, they can not only increase their purchasing power, but save thousands of dollars over the life of the loan,” said Lantz.

For every $100,000 borrowed, a half percentage point lower rate would reduce payments by $28 a month on a 30-year, fixed rate loan. That adds up to more than $10,000 over 30 years. Or borrowers could choose to add that $28 savings to each monthly payment. That would shorten the term of the mortgage from 30 years to just over 27 and save $6,500 in interest paid.

Another costly mistake: Many house hunters go shopping with financing in place because it enables them to act more quickly if they see a home they want. But 26% of buyers believe that once they’re pre-approved, they’re obligated to close the deal with those loans, according to the survey. In reality, there’s no obligation. If buyers see better terms available they should take them.

Existing homeowners can also be guilty of ignorance. Some 20% of homeowners surveyed didn’t know that underwater mortgages — those in which borrowers owe more than their homes are worth — can be refinanced into lower rate loans.

Finally, the survey found that nearly a third of homeowners are unaware that if they go through a foreclosure or short sale, they may not have to wait the full seven years it takes for their credit score to recover and they can buy a home again.

In reality, some homeowners who do short sales can obtain financing to buy another home in as little as two years.

The Consumer Financial Protection Bureau is hoping to make it easier for homebuyers with simplified mortgage forms that help them compare terms and costs and by creating new rules that will protect homeowners from getting into loans they can’t afford.

If you are thinking of buying or selling talk to a REALTOR who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please don’t hesitate to text or call me at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland

source: CNN Money