Joe Metzler How about some historical perspective and history lesson on assumable loans? 
I recently received this note: “FHA and VA had assumable loans back in the day. All you did was sign the assumption form and pay $300 or transfer everything. The original borrower was not released from liability, and the vet did not regain VA eligibility until that loan paid off.
In the past…
Minneapolis, MN: Mortgage rates jumped up at their fastest pace in two months after this weeks employment report, which showed that more jobs than anticipated were created in April. Anytime we see good economic news, it tends to cause long-term mortgage interest rates to move higher.
Not only were April’s numbers good, the report also revised March’s numbers higher – which combined, added to the increase in mortgage interest rates.
While this all sounds like doom and gloom for anyone looking to buy a new home, or refinance their existing mortgage to save money – it just means that for a perfect customer, a 30-year fixed rate is back up to about 3.50%… Hardly terrible news!
While we never know what mortgage interest rates will do, today’s rates are awesome. There is very little room for downward improvement, and lots of room to move up. I suggest locking in these great low rates, and never look back.
Mortgage Rates Hit 2013 Lows, Big Week Ahead
Minneapolis, MN: According to a recent information from EllieMae, the average mortgage customer today has the following status:
Where do you fit?
Do NOT let this fool you. I was rather shocked to read this information. That doesn’t sound like my average customer!
Best advice? Contact a local licensed mortgage professional. Provide them with a full application, and let them determine if you qualify for a mortgage loan with your credit score, your income, and your down payment size.
St Paul, MN: The median price of a home in the Twin Cities rose 18.9 percent in the past year and stood at $192,557 in March, according to a study by an online real estate website.
The study, released Thursday, April 25, reflects a well-documented shortage of homes for sale in the Twin Cities, which has contributed to an increase in prices.
St Paul, MN: The latest report from the Minnesota Association of Realtors shows what we mortgage lenders already knew… That lower quality inventory is sparking higher prices across the state, but primarily in the Minneapolis / St Paul area.
The report for March showed the lowest number of homes currently on the market, at 11,784, since 2005. The report also shows the highest March average price for homes in four years, at $155,000 statewide.
The low inventory, combined with increased consumer confidence, and historically low mortgage rates, has created bidding wars on many properties, with the homes selling quickly, and ABOVE asking price. This goes against the grain of what many home buyers think, that they can still make low ball offer on homes. For the most part, low ball offers are a thing of the past.
More homes are expected to come on the market as we finally get some spring weather, but expect the fury of multiple offers on great, well priced homes to continue.
Your best bet to make a successful competitive offer is to be fully Pre-Approved, from a LOCAL reputable lender, and to be working with experienced knowledgeable real estate agents.
Minneapolis, MN: As mortgage rates continue to hover near the all-time historic low rates that we saw last November (2012), the nation’s overall economic outlook has seemed to improve.
In November 2012, rates fell down to levels that had not been seen since 1971. While current rates are not at all-time lows, they are just slightly above those rates, and at levels that have not been seen since January.
The low mortgage rates are helping to stimulate the recovery of the housing market. They low rates have helped to increase home sales and home refinances. Many current homeowners have taken advantage of the low rates by refinancing their home loans, freeing up money to be spent elsewhere.
While the Federal Reserve plans to continue to keep mortgage rates low through the purchase of mortgage-backed security bonds, mortgage rates are not likely to stay this low forever. CNN Money expects that as the economy continues to improve over the course of the year, mortgage rates will begin to rise this fall – but just slightly.
Taking advantage of mortgage rates while they remain low is essential. First time home buyers can afford to purchase a property that is on average 20 percent more expensive than they were when mortgage rates were in the 4-5 percentile range. Refinancing to shorter term can also help buyers pay off their home in less time and lower their monthly mortgage payments.
More mortgage lenders are offering conventional loans with down payments well below the 20% or higher levels of recent years.In another sign of the housing market’s brightening outlook, more home buyers are discovering conventional loans with down payments well below the 20% or higher levels of recent years.
Until recently, many borrowers had to go through a government guaranteed loan program, such as the Federal Housing Administration (FHA Loans) or the Department of Veterans Affairs (VA Loans), to get a mortgage with less than a 10% down payment.
Minneapolis, MN: The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program (HARP 2.0) by two years. The program was to expire at the end of 2013, but will NOW expire December 31, 2015.
The program is being extended so more underwater homeowners can benefit from refinancing to today’s low mortgage interest rates. Already, some 2 million plus homeowners have successfully refinanced their homes using the HARP 2 refinance program.
FHHA also announced they will be launching a nationwide campaign to inform homeowners about HARP refinances, and eligibility requirements.
LEARN MORE about the HARP Refinance Program
To be eligible for a HARP refinance homeowners must meet the following basic criteria:
If your current loan is an FHA Loan, or a VA Loan, you also have refinance options if your home is underwater with a FHA Streamline Refinance, or a VA IRRRL Streamline Refinance.
Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates edging down for the second consecutive week following weak employment reports. The average 30-year fixed-rate mortgage at 3.43 percent this week remains near its 65-year record low and continues to provide support for the housing recovery.
News Facts
Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
“Mortgage rates fell further this week following a lackluster employment report for March. The economy added just 88,000 net new jobs last month, about one-third as many as February and the fewest since June 2012. In addition, approximately 496,000 people left the workforce causing the unemployment rate to fall to 7.6 percent. Further, average hourly earnings were unchanged in March, indicating income growth remains tepid.”
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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.
Minneapolis, MN: The spring real estate market is is upon us. The past few years have been tough in the real estate market, but like a roller-coaster, the market has plenty of ups and downs. So where is the market today? Can you make a lowball offer anymore?
As a general rule of thumb, it’s a bad idea for potential home buyers to make a low offer in the spring market, as multiple offers and increased sales activity mean sellers are more confident in rejecting your offer. In some cases, though, you might still be able to get away with making a low offer, depending on the specifics in your area and the home you’re considering.
Remember – all real estate is local. In the Minneapolis / St Paul area, good inventory is low. Any home priced under $200,000 in good condition is going fast with multiple offers.
Inventory: Inventory is a huge factor in whether you can get away with making a low offer. If there’s a surplus of inventory in your region, homes will sit on the market significantly longer, and sellers may be willing to entertain lower offers. If inventory is scarce or in high demand, though, sellers are probably getting multiple offers, so your low offer is likely to quickly be rejected.
Prices: If homes are selling in your region, at what price point are they selling? It’s possible for a real estate market to be brisk, but a home that’s priced higher may sit on the market for months while the homes around it sell quickly. Evaluate the prices at which homes are selling, and if you’re willing to take a risk, make an offer on the home that is comparable to other sales. This is more likely to be successful if a seller had originally priced a home high to begin with.
Mortgage rates: With current mortgage rates hovering at history lows, more people are able to afford homes, hence more people are in the market. More people, more competition.
Phychological Warfare: We all feel the need to “win”. You want to win with your lower price, and the seller wants to win with their higher price. Don’t let emotions and personality interfere.
Also consider overall payment before being stubborn causes you to lose your dream house. At a 3.50% interest rate, $5000 more in purchase price is just $22.50 more a month. Talked to your Loan Officer, or review the overall mortgage payment with a mortgage payment calculator.
St Paul, MN: It is that time of year – and the spring housing market is off to a great start. Good inventory is low , so if you put your home up for sale, you might find that it is quickly scooped up by an eager buyer. As a home buyer, you might have to settle for a great home that doesn’t match all of your wish list items, and even then, may be in a multiple bid situation with other house-hungry buyers.
Not every home is perfect – and most buyers will do a home inspection BEFORE finalizing a purchase agreement. So what on an inspection is a deal breaker?
Common Deal Breakers
No home is perfect, but certain types of problems are serious enough to send buyers packing and force a seller who thinks he has a deal to renegotiate the selling price.
Assessing What’s A Deal Breaker
Most of the repairs mentioned can cost a few thousand dollars – enough to make a buyer reassess whether to continue with the sale. While remodeling an outdated bathroom or upgrading the flooring does not have to be done immediately, the new owner must have serious problems fixed immediately to make the house safe for occupancy.
Some mortgage loan programs, particularly FHA, may not be willing to fund the loan if certain defects are not fixed BEFORE you can buy the house.
Handling Deal Breakers If You’re A Buyer Or A Seller
For buyers, finding problems like this on a home inspection means that unless you can negotiate repair costs with the seller, you will have to make repairs out-of-pocket if you stick with the deal. Many buyers, especially first-time buyers, cannot absorb a hit of several thousand dollars after buying a home. Even if you love the home and are feeling pressured to move, financial realities may make you reconsider whether you can afford a particular house, no matter how much you love it. House love can turn to hate very quickly if your dream home turns out to be a money pit. Before finalizing your home purchase, always be sure to have a home inspection done
For sellers, the possibility of unknown costly defects underscores the importance of having your home inspected before the house goes on the market. If the inspector finds a major flaw, you must disclose it, but you can list the house. “as-is” if you are unable to make repairs. Upgrading the electrical system or fixing other costly issues may net you a better selling price, but in any case, a pre-listing inspection will save you the grief of having to make repairs or lower the price after the buyer’s home inspection is complete.
Mortgage Interest Rates Hit a One Month Low.
Is it time to lock?
Minneapolis, MN: Mortgage rates improved at their fastest pace in a week, bringing most lenders’ rate sheet offerings to their best levels since the first few days of March.
Homes For Sale: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.
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. The 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
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.
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.
Buying 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.