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Month: March 2013

Lack of quality homes for sale causing problems

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Minneapolis, MN:  Who would have thought we would be saying this, but strong demand for housing is now running into supply problems, according to the National Association of Realtors® (NAR), and what I see and hear from my mortgage clients everyday.
real1Homes For Sale:
The lack of quality supply in homes for sale, especially in the under $150,000 price range in the Minneapolis / St Paul area if very evident with the number of clients unable to find a home that doesn’t need a lot of repair.  Any home in good condition, and priced right for today’s market is selling very fast, with multiple offers, and within just days of being put on the market. Home buyers need to be pre-approved, and ready to immediately offer full price.
Nationally, signed purchase agreements  in February and NAR’s Pending Home Sales Index slipped 0.4 percent from the previous month.

The Index, an indicator of future home sales, dropped to 104.8 from a revised 105.2 in January, but is still at a recent high, second only to April 2010 when it reached 110.9 shortly before the end a government home buyer tax credit program.  The index was 8.4 percent higher than a year earlier when it was 96.6 and February marked the 22nd month that contract activity increased on an annual basis.

On a regional basis the Index declined 2.5 percent in the Northeast but was 6.8 percent higher than a year earlier at 82.8.  The Midwest was up 0.4 percent month over month to 103.6 and 13.2 percent year over year.  Pending home sales in the South slipped 0.3 percent to an index of 118.8 in February but are 12.1 percent above February 2012.  In the West the index increased 0.1 percent in February to 101.4 but is 0.8 percent below a year ago.

The National Association of Realtors expects existing-home sales to rise about 7 percent in 2013 to approximately 5 million sales, which is near the current level of activity.  The volume of home sales appears to be leveling off with the quality inventory problems, and the leveling of the index means little change is likely in the pace of sales over the next couple months.

Because of limited inventory of quality homes,  NAR also expects the median existing home price to increase about 7 percent, while they expect mortgage nterest rates to slowly move up to closer to 4% by the end of the year.

Mortgage Rates for week ending March 16th, 2013

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Minneapolis, MN: Freddie Mac yesterday the results of its Primary Mortgage Market Survey(R) (PMMS®), showing average fixed mortgage rates rising this week on stronger signs of jobs growth and consumer spending. ir-2The 30-year fixed averaged 3.63 percent, its highest reading since the week of August 23, 2012. The 30-year fixed hit its average all-time record low of 3.31 percent the week of November 21, 2012.

News Facts

  • 30-year fixed-rate mortgage rates averaged 3.63 percent with an average 0.8 point for the week ending March 14, 2013, up from last week when it averaged 3.52 percent. Last year at this time, the 30-year FRM averaged 3.92 percent.
  • 15-year fixed rate mortgages this week averaged 2.79 percent with an average 0.8 point, up from last week when it averaged 2.76 percent. A year ago at this time, the 15-year FRM averaged 3.16 percent.
  • 5-year adjustable rate mortgages (ARM) averaged 2.61 percent this week with an average 0.6 point, down from last week when it averaged 2.63 percent. A year ago, the 5-year ARM averaged 2.83 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Fixed mortgage rates rose this week on stronger signs of jobs growth and consumer spending. The economy added 236,000 new workers in February which helped push down the unemployment rate to 7.7 percent. This helped offset the effects of the payroll tax holiday expiration and led to a 1.1 percent increase in retail sales, which was well above the market consensus forecast.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.

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Freddie Mac’s survey is the average of loans bought from lenders * last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s best MN and WI mortgage interest rates.

First time home buyer tip

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Minneapolis, MN:  As we start to enter the spring home buying season here in Minnesota, I have one big tip for first time home buyers.

welcome2_FTHB_1Buying now makes sense. If you have OK credit, a little bit of money for down payment, and you’ve been successfully renting for a year or two, you are ready to buy now. With the combination of affordable housing prices and low mortgage rates, there has never been a better time to become a home owner.

First Time Home Buyer Tip: Talk to a Loan Officer FIRST.

Most people do it wrong. They start looking at homes on the internet. Then they contact a Real Estate Agent and start looking at homes. Seems logical, but wouldn’t it make more sense to know if you can even get a loan, how much you can afford, what down payment is required, and what purchase prices you can qualify for first?

With that knowledge in hand, now you can start looking for homes you know you can afford, and what the payments, and loan programs would look like for you.

I feel bad when people have already found a dream home, only to be told for various reasons they cannot buy it. Don’t let this happen to you.  Get pre-approved with a local mortgage broker BEFORE talking to a Realtor.

Not only does it make sense, but your Real Estate Agent will appreciate that fact you are pre-approved so they can immediately focus on providing the best service to you without slowing things down while you get approved. Or, worse yet, having to completely refocus the search because of newly discovered information from a mortgage lender.

Mortgages for Self-employed about to be even harder to obtain

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If you’re self-employed or own a small business, getting a mortgage will become a whole lot harder soon.

Beginning in January, new lending rules go into effect that might make it more difficult for a small-business owner or self-employed individual to buy a house or refinance an existing mortgage.

READ THE FULL STORY at Deleware Online

 

What is your home worth? Find out for free…

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banner_ad_appraisalWhat’s the value of your home? (MN & WI Only)

Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT always reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, everyone has lost value.

But things are changing, average home values the past 12 months in the Minneapolis / St Paul, MN area have risen on average 14.1%.  So what your home is worth today?

There are many sites that claim to give you are idea, including Zillow, Trulia, and more. It is also a well known fact those sites have very questionable data, giving values that range from close, to crazy far off. The big problem is, where is the data they use coming from and how accurate is it?

We have a different tool to answer the estimated appraised value of your home question. Our system uses the Freddie Mac Home Price Index ( FMHPI ). FMHPI is calculated using a repeat-transactions methodology. Repeat transactions indexes measure price appreciation while holding constant property type and location, by comparing the price of the same property over two or more transactions. The change in price of a given property measures the underlying rate of appreciation because basic factors such as physical location, climate, housing type, etc., are constant between transactions. Averages of appreciation rates for different geographic areas and time periods are calculated using statistical regressions and the index values are derived from these averages

While the estimate may not be the actual or appraised value of your property, this can be a much more useful too than Zillow to gauge fluctuations and trends in your market which affect your home’s value.

Want to check your homes value? Simple click the link below! (MN and WI homes only)

FREE HOME VALUE ESTIMATE

 

De-Bunking 3 Mortgage Myths

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I hear things all the time, that as a Minnesota Based Mortgage Loan Officer, drive me crazy.  Here are a few things that seem to be high on the need to be de-bunked list.

Myth #1 – Banks are not lending.
NOT TRUE:  We are very busy! Mortgage companies continue to see a record number of home buyers applying and qualifying for mortgage loans, and refinance loans are still popular with our current low mortgage rates.  BAD credit loans are not available, so I suppose if you are a bad credit customer, yes, banks are not lending to you.

qualifyMyth #2 – APR & Interest Rates are the same thing / Shop by APR
NOT TRUE: The interest rate is the price you pay to borrow money. APR (annual percentage rate) includes other fees that you may have financed into your mortgage loan, like closing costs and mortgage insurance. Don’t be fooled when shopping for a mortgage. When the rate is below everyone else, you are likely paying higher closing costs and discount points to “buy” that rate. Paying discount points is a personal decision based current cash flow,  time in the property, loan-to-value, and more. Talk to your Minnesota mortgage lender to determine what financing options are best for your specific situation.

Myth #3 – You can be pre-approved for a mortgage without submitting documents.
NOTE TRUE: If you’ve been told you that are pre-approved for a mortgage loan, but you never sent W2’s, pay stubs, bank statements, etc to the lender, YOU ARE NOT PRE-APPROVED, regardless of what they tell you.

First Time Home Buyers, Get Pre-Approved BEFORE you talk to a Realtor
First Time Home Buyers, Get Pre-Approved BEFORE you talk to a Realtor