WASHINGTON – Average U.S. mortgage rates rose modestly this week, a move that makes home-buying a bit less affordable. Still, rates remain near historically low levels.

Mortgage buyer Freddie Mac said Wednesday that the average rate on the 30-year loan increased to 4.29 percent from 4.22 percent last week. The average on the 15-year fixed ticked up to 3.3 percent from 3.27 percent.

Rates have risen nearly a full percentage point since May after the Federal Reserve signaled it might slow its bond purchases by the end of the year. Rates peaked at nearly 4.6 percent in August. But the Fed held off in September and most analysts expect it won’t move until next year.

The increase in mortgage rates has contributed to a slowdown in home sales over the past two months.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also was unchanged at 0.7 point.

The average rate on a one-year adjustable-rate mortgage edged down to 2.60 percent, from 2.61 percent last week. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage edged down to 2.94 percent this week, from 2.95 percent last week. The fee was unchanged at 0.5 point.

Source: http://www.buffalonews.com/business/average-mortgage-rates-rise-modestly-20131127


Follow me:

• James Clooney WS
• James Clooney Site
• James Clooney on Gather
• James Clooney - Listal
• James Clooney Blog
• James Clooney | WordPress
• James Clooney on Quora
• Jim Clooney Twitter Page
• James Clooney Mortgage
• Jim Clooney Mortgages

Mortgage markets worsened last week, moving U.S. mortgage rates higher on the whole.

Like prior weeks, market action was sharp. Rates climbed 0.25 percentage points Wednesday afternoon, which shocked thousands of unprepared mortgage rate shoppers. Markets made small improvements over the remainder of the week, but couldn't undo the damage. 

Mortgage rates have been volatile since last quarter. So, what can buyers and refinancing households expect to see this week. What will mortgage rates do next?

Freddie Mac : 30-Year Fixed Rate At 4.22%

According to government-backed Freddie Mac, last week, the average 30-year fixed rate mortgage rate slipped 13 basis points to 4.22% nationwide; with the rate available to prime borrowers willing to pay 0.7 discount points at closing.

0.7 discount points carries a cost equal to 0.7% of your loan size.

A borrower in Boston, Massachusetts, therefore, whose loan size is equal to the local Freddie Mac mortgage loan limit of $417,000 would pay $2,919 at closing in order to lock a 4.22% mortgage rate. A borrower in Orange County, California with a loan size at the local limit of $625,500 would pay $4,379. 

Borrowers opting out of discount points will pay slightly higher rates.

Freddie Mac reported rates for 15-year fixed rate mortgages lower, too. The group's survey of more than 100 mortgage lenders showed the average 15-year fixed rate mortgage rate down eight basis points to 3.27% nationwide.

Like its 30-year counterpart, the 15-year rate requires 0.7 points to be paid at closing.

There is now a 0.95 percentage point difference between the published rates of a 30-year and 15-year fixed rate mortgage -- among the largest spreads in recorded mortgage history. Borrowers using a 15-year mortgage now pay close to 70% less to own their own home than via a 30-year loan.

Read more: http://themortgagereports.com/14022/mortgage-rate-analysis-and-prediction-how-will-u-s-mortgage-rates-move-this-week
Follow me:

• James Clooney WS
• James Clooney Site
• James Clooney on Gather
• James Clooney - Listal
• James Clooney Blog
• James Clooney | WordPress
• James Clooney on Quora
• Jim Clooney Twitter Page
• James Clooney Mortgage
• Jim Clooney Mortgages

 WASHINGTON — For the growing numbers of home purchasers who care about energy efficiency, it’s the ultimate “green” goal: Lenders should recognize the net savings that energy improvements provide to property owners and take them into account when they underwrite and set the fees for mortgages.

Appraisers should also recognize the added value.

The rationale: Owners of homes that reduce energy use pay lower utility bills than owners of energy guzzlers, so why not factor these out-of-pocket savings into household debt-to-income ratios and appraised valuations?

This might permit larger mortgage amounts for energy-efficient homes and help qualify more first-time buyers for loans.

Bipartisan legislation is pending in the Senate — the Sensible Accounting to Value Energy (SAVE) Act — that would require Fannie Mae, Freddie Mac, the Federal Housing Administration and other federal mortgage players to revise their rules to better recognize and reward energy savings.

More than 125 local Realtor multiple-listing services across the country are helping out by including so-called “green fields” in their online listing information.

The green fields allow sellers, buyers, realty agents and appraisers to describe energy improvements or special certifications that a property offers, such as Energy Star appliances.

Thousands of appraisers are undergoing “green valuation” training, and the country’s largest association in that field, the Appraisal Institute, has created a comprehensive “green addendum” that can be used to translate energy-conservation improvements into higher property valuations.

But there’s just been another milestone on the way to seeing green in real estate: A major American private mortgage-insurance company plans to jump into green lending and is gearing up to offer a version of what it already provides to buyers in Canada — cost savings to energy conservers.

Adam Johnston, chief appraiser for Genworth Mortgage Insurance, says his company is determined to incorporate energy savings and green valuations into its underwriting.

This is becoming more feasible, he said, because of advances such as the green appraisal addendum, more accurate MLS listing data, and growing acceptance of energy-efficiency standards for homes.

In Canada, Genworth offers buyers a 10 percent “energy-efficient refund” of their mortgage insurance premiums, a break on debt-to-income ratio calculations in underwriting, and online access to discounts on a wide variety of commonly purchased household items.

Here’s an example. On a $300,000 mortgage with a 5 percent down payment, the insurance premium comes to $8,250. You pay that if you’re buying a house that doesn’t qualify on energy-conservation standards.

But if the home you’re buying meets national or provincial energy-efficiency guidelines, you may qualify for an $825 refund and have your monthly savings on heating factored into your debt-service ratios.

Your lender might also approve you for a larger mortgage amount if you need it.

To get the benefits on an existing property, the house must be certified as either 20 percent more efficient than Canada’s Model National Energy Code for Buildings, or 5 percent more efficient than any applicable provincial standards, whichever is greater.

In an interview, Johnston said that while there’s no specific starting date yet for Genworth to begin offering mortgage-insurance breaks on green-certified homes, it’s coming.

By necessity, insurers such as Genworth are highly sensitive to a variety of borrower risk factors, and now they have statistical evidence that people who buy homes with significant energy-saving components present lower risks for lenders and insurers.

A national study tracking payments on 71,000 home loans found that mortgages on energy-efficient properties are 32 percent less likely to default.

Funded by the Institute for Market Transformation and conducted by researchers at the University of North Carolina, the study controlled for other factors that might explain payment performance, including income, home values, credit scores and local utility costs.

Other, subtler factors could be at work — for example, are buyers who care about energy conservation and utility payments inherently more likely to care about keeping current on their mortgage? Who knows?

Bottom line: Though this country is years behind Canada in recognizing and valuing home-energy efficiency, there are now determined efforts under way in the appraisal, lending, building and realty brokerage industries — even in Congress — to catch up, sooner rather than later.

Source: http://seattletimes.com/html/businesstechnology/2022288284_bizharney24xml.html?prmid=4917

Follow me:

• James Clooney WS
• James Clooney Site
• James Clooney on Gather
• James Clooney - Listal
• James Clooney Blog
• James Clooney | WordPress
• James Clooney on Quora
• Jim Clooney Twitter Page
• James Clooney Mortgage
• Jim Clooney Mortgages

The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 2.3% in the group’s seasonally adjusted composite index, following a drop of 1.8% for the previous week. Mortgage loan rates increased slightly on two loan types while one was unchanged and the fourth fell slightly.

Changes in both applications and mortgage rates continue to be relatively small. In the past couple of years, refinancing often picked up the slack in mortgage lending, but with the lending market coming off record lows, homeowners who were going to refinance have already done so, and the rest are either waiting for rates to fall or for their homes to increase in value enough to make a refinance worth it.

The seasonally adjusted purchase index increased by 6% from last week’s report. On an unadjusted basis, the composite index decreased by 13% week-over-week. The unadjusted purchase index decreased by 8% for the week, and is 3% lower year-over-year. This marks the eighth week in a row that the year-over-year unadjusted purchase index is lower than or equal to its level of a year ago.

The MBA’s refinance index decreased by 7% after dropping by 2% in the previous week. The share of refinancings fell by two points, totaling 64% of all applications. Adjustable rate mortgage loans account for 7% of all applications, unchanged from the prior week.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage increased from 4.44% to 4.46%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.48% to 4.47%. The average interest rate for a 15-year fixed-rate mortgage remained unchanged at 3.52%.

The contract interest rate for a 5/1 adjustable rate mortgage loan rose from 3.11% to 3.12%.

Source: http://247wallst.com/housing/2013/11/20/mortgage-loan-rates-inch-up-applications-for-new-loans-continue-to-slip/

WJBK) - January 2014 is bringing some significant changes to the housing industry.

Here today to tell us what's going on and how these changes are going to impact homebuyers is Hale Walker, the co-founder and senior vice president of Port Huron-based Michigan Mutual, Inc.

1. What are the looming changes that could impact the mortgage environment?

    The Consumer Financial Protection Bureau (CFPB), the regulatory agency that was established in 2010 by the Dodd-Frank Act after the housing crisis, is implementing new rules on January 10, 2014 that are designed to protect homebuyers from risky mortgages and ensure they are getting the best, most fair mortgage loans.
    While these changes overall are a huge step in the right direction, there will be some shifts on the horizon for both lenders and homebuyers.

2. The new rules:

    The major new regulation is the Qualified Mortgage rule.
    In order for Freddie Mac or Fannie Mae to purchase the mortgage from a bank or lender, it must be a Qualified Mortgage.
    In order to be deemed a Qualified Mortgage, the loan has to meet a rigorous set of standards set forth by the Bureau, and must not include risky or harmful features that have been built into loans in years past.
        There will be no excessive upfront points and fees during the processing and closing time periods.
        For most loans, the points and fees charged will not be allowed to exceed 3% of the total loan amount.
        There will also be no toxic loan features, such as interest-only payments, no balloon loans and no terms greater than 30 years.
    This is all designed to protect the homebuyer and ensure they are getting safe, responsible and transparent mortgage loans.

3. Lenders will also need to take a close look at a homebuyer's ability to repay the mortgage loan.

    Under homebuyer to determine whether the loan they are applying for is the right fit for them. These include:
        Income and assets
        Employment history
        Credit history
        Debt obligations, including things like alimony or child support if applicable.
    These are all standard items that lenders have already been closely examining, but there is a new part of this rule that will change the process and impact what loans homebuyers qualify for.
        Debt-to-income ratio, the amount of money you make each month in relation to the amount of debts you must pay off each month, will pay a large role in the process.
            Under the new rule, a homebuyer's total debt cannot exceed 43% of their total income.
            This is designed to prevent homebuyers from taking on mortgage loans they cannot afford.

4. What does this all mean for consumers?

    It's going to have a major impact on homebuyers.
    For some income brackets, or for those with unstable employment history, qualifying for a mortgage may become a little trickier in 2014.
    This is why homebuyers should seek out a certified, trusted mortgage partner to help navigate them through the process. It will be something that individuals will need to be educated about to ensure they are making the right decision for their goals.
        Lenders have been preparing for these new rules for nearly a year, and are well-versed in all of the complexities, and what it takes to help homebuyers qualify for the loan they want and get them into their dream home.
        A great mortgage partner will work with you to get your records in order and get you the best loan possible.

Source: http://www.myfoxdetroit.com/story/23996900/money-monday-new-tough-rules-for-mortgages-begin-in-jan-2014

Follow me:

• James Clooney WS
• James Clooney Site
• James Clooney on Gather
• James Clooney - Listal
• James Clooney Blog
• James Clooney | WordPress
• James Clooney on Quora
• Jim Clooney Twitter Page
• James Clooney Mortgage
• Jim Clooney Mortgages

WASHINGTON (AP) — Average U.S. rates on fixed mortgages rose slightly last week but remained near historically low levels.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan increased to 4.16% from 4.10% last week, which was the lowest level in four months. The average on the 15-year fixed mortgage rose to 3.27% from 3.20%.

Rates have been falling since September when the Federal Reserve surprised investors by continuing to buy $85 billion a month in bonds. The purchases are intended to keep long-term interest rates low.

Slower hiring in recent months has many analysts predicting that the Fed will maintain the current pace of the bond purchases into early next year, which should keep mortgage rates low for the time being.

The recent drop in mortgage rates could help boost home sales, which slowed in September after rates reached their highest averages in two years.

The decline in sales has also affected price gains. Real estate data provider CoreLogic said Tuesday that a measure of U.S. home prices rose only slightly in September from August, a sign that prices are leveling off after big gains earlier this year.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage rose to 0.8 point from 0.7 point. The fee for a 15-year loan was unchanged at 0.7 point.

The average rate on a one-year adjustable-rate mortgage fell to 2.61 percent from to 2.64 percent. The fee remained at 0.5 point.

The average rate on a five-year adjustable mortgage was steady at 2.96 percent. The fee edged up to 0.5 point from 0.4 point

Source:  http://www.usatoday.com/story/money/personalfinance/2013/11/07/mortgage-rates/3465703/

Follow me:

• James Clooney | Carbonmade.com
• James Clooney - Magnt
• James Clooney on Gather
• James Clooney - Listal
• James Clooney Blog
• James Clooney | WordPress
• James Clooney on Quora
• Jim Clooney Twitter Page
• James Clooney Mortgage
• Jim Clooney Mortgages

 If you’re buying a home anytime soon, here’s some contrarian advice: Don’t take out a fixed-rate mortgage. If you do, you’re likely to pay more than you need to.

Instead, it often makes more sense to choose a floating-rate note, also known as an adjustable-rate mortgage. Even on a small mortgage, over time you’ll save thousands of dollars. If you use the extra cash to pay down the loan, you’ll save even more. 

 Such loans come in and out of fashion for a couple of reasons, says Frank Nothaft, chief economist at Freddie Mac. When rates on fixed loans are perceived to be low, borrowers tend to shun ARMs. When the difference between fixed and floating rates is small, again people tend to shun ARMs. Floating-rate notes are considered riskier than fixed-rate mortgages because the monthly payment can jump higher. A so-called one-year ARM typically will reset each year based on fluctuations in the interest rate on the one-year Treasury security or the interbank cost of borrowing known as Libor. Other common ARMs reset each year after an initial fixed period of three, five or seven years.

Fixed-rate mortgages do make sense for some people. For instance, if your budget is so tight that even a small increase in your monthly payment would break the bank, a fixed-rate mortgage makes sense. A fixed rate would also make sense if you will keep your new home for a long time, like 30 years.

More from WSJ: The Art of Protecting Fine Art

But for many people, ARMs come out ahead. Those people need to close their ears to the deafening sound of the ARM naysayers, like one financial planner I heard from: “You have got to be kidding. I guess a bad idea never dies. Don’t Americans ever learn?” I’ve withheld the name because I don’t want to embarrass him.

It’s true: Many people have been burned by ARMs. But as long as you are smart about it---more on that later---that financial adviser is wrong.

Costly Insurance

The main reason an adjustable rate will be cheaper is this: You almost certainly won’t be in your new house or apartment for the next 30 years, the typical life of a fixed-rate mortgage. Most people move every eight to 10 years, says Scott Buchta, head of fixed-income strategy at New York-based brokerage firm Brean Capital LLC. And even if you do stay longer than that, your mortgage won’t survive 30 years if you refinance at some point.

That’s important because the main reason the rate on a 30-year, fixed mortgage is higher than floating rates is that the lender assumes you will take the full 30 years to pay it back. That puts the lender at risk of losing money on the loan if borrowing costs go up during that term. So the lender charges you more.

For that higher interest rate, you get a form of insurance: the security of knowing what your payments will be for the life of the loan. You can sleep better at night, knowing that if interest rates shoot higher, it won’t hurt you. But if you close out the loan in, say, 10 years---by moving or refinancing---you’ve paid too much for that insurance, because you were paying as though you needed 30 years of it.

Here’s an example of how much that can cost you. If you took out a 30-year mortgage in January 2003 the average fixed rate was 5.92%, according to Freddie Mac. Ten years of interest and principal payments on a $200,000 mortgage would have cost you $142,660. But if you went with a one-year ARM, which kicked off at 3.99%, according to Freddie Mac, after resetting each year the total cost would have been $119,181. That’s a savings of $23,479.

Yes, the interest rate on the ARM jumped as high as 5.47% in that 10-year stretch---still lower than the rate you would have gotten if you had gone with a fixed mortgage---but it also fell as low as 2.76%. Rates for floating vs. fixed mortgages have followed a similar pattern since the widespread introduction of ARMs in the early 1980s.

The savings noted above could have been even higher. If you take the cash you save this way and put it toward paying down the principal, you’ll save two ways: You will shorten the life of the loan. And when the rate is reset each year, the new payment is based on the principal outstanding at that point, not on the amount you originally borrowed, so whatever rate you are charged will be applied to a smaller amount of debt.

But what if interest rates suddenly shoot higher? Should you be worried that the rate of, say, 2.75% you can get on a one-year ARM will suddenly jump into the double digits at some point because of an inflation-fueled spike in interest rates like the one the U.S. experienced in the years around 1980? No. Because ARMs come with rate caps. Typically, an ARM has a lifetime cap of five or six percentage points above the initial rate, and a two-point limit for each reset.

Being Smart About It

The biggest caveat: Don’t overreach. That’s how a lot of people have gotten into trouble.

“People shouldn’t use adjustables to stretch too far on a new purchase or refinancing,” says Larry Luxenberg, a financial adviser in New City, N.Y. The lower initial interest rate on an ARM might tempt you to borrow more than you could with a fixed-rate mortgage---to stretch, as Mr. Luxenberg puts it---but that can backfire if an upward adjustment in the interest rate busts your monthly budget. If you can’t handle an upward adjustment, you’ve borrowed too much.

There’s a simple way to guard against that kind of trouble. Work out how much your housing budget is (excluding taxes and insurance) and how much that allows you to borrow at current fixed rates. Then borrow no more than that amount. 

Source: http://www.marketwatch.com/story/when-to-go-for-a-flexible-rate-mortgage-2013-11-13



Follow me:

• James Clooney | Carbonmade.com
• James Clooney - Magnt
• James Clooney on Gather
• James Clooney - Listal
• James Clooney Blog
• James Clooney | WordPress
• James Clooney on Quora
• Jim Clooney Twitter Page
• James Clooney Mortgage
• Jim Clooney Mortgages

Rich homebuyers can now get mortgages cheaper than pretty much everyone else.

In an unusual twist, lenders are offering rates on jumbo mortgages that are more than a quarter of a percentage point lower than those on the conforming loans backed by Fannie Mae and Freddie Mac. The government-run agencies require conforming loans to be below $417,000, unless they are for homes in high-cost areas like New York or Los Angeles,where the limit is $625,500.

Jumbo loans exceed those dollar limits and, historically, banks charge higher rates on them -- about 0.25 percentage points more -- than they do for conforming loans, according to the Mortgage Bankers Association. But over the past couple of months, the tables have turned.

This week, Wells Fargo (WFC, Fortune 500) advertised a 30-year jumbo mortgage at a rate of 4.125%, significantly lower than the 4.5% rate it is offering for a 30-year, fixed-rate conforming loan. US Bank (USB, Fortune 500) is offering a jumbo for 3.875% this week compared with 4.25% for a conforming loan. And Chase's (JPM, Fortune 500) jumbos have been running a quarter of a percentage point below conventional mortgages, as have TD Bank's (TD).

"Never in my memory have jumbos been such a bargain," said Peter Grabel, a loan officer at Luxury Mortgage Corp. in Stamford, Ct., with 13 years on the job.

One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can "cross sell them other products, like brokerage services," he said.

That works especially well in these days of strict underwriting standards, according to Keith Gumbinger, a mortgage expert with HSH.com.

"Borrowers have to open up their whole financial picture to lenders," he said. "They can see where there's value, which they might be able to sell against."

Once a wealthy client takes out one of these low-rate loans, they are likely to stick around. "With rates as low as they are, borrowers are never going to refinance the loans. Those affluent clients will stay on the bank's books forever," said Gumbinger.

Jumbo loans have also gotten comparatively cheaper. As the Federal Housing Finance Agency (FHFA), which regulates Fannie and Freddie, seeks to boost the two agencies' reserves against losses from mortgage defaults, it has raised fees and other costs for borrowers, according to Terry Francisco, a Bank of America spokesman.

Since Fannie and Freddie don't back jumbo mortgages, those fees don't apply and therefore aren't passed on to borrowers. 

Read More: http://money.cnn.com/2013/11/12/real_estate/jumbo-mortgages/
Follow me:

• James Clooney | Carbonmade.com
• James Clooney - Magnt
• James Clooney on Gather
• James Clooney - Listal
• James Clooney Blog
• James Clooney | WordPress
• James Clooney on Quora
• Jim Clooney Twitter Page
• James Clooney Mortgage
• Jim Clooney Mortgages