Refinance House With Bad Credit

Tuesday, April 20, 2010

Mortgage demand near six-month low as rates jump

Discover What Is The Perfect Business
According to Robert Kiyosaki of Rich Dad Poor Dad

Refinance House With Bad Credit

Click this now to the Perfect Global Business Video

NEW YORK (Reuters) - Demand for U.S. mortgages held last week near six-month lows as the highest long-term borrowing costs since August stifled refinancing, a Mortgage Bankers Association survey showed on Wednesday.

Average 30-year mortgage rates jumped 0.10 percentage point to 5.18 percent in the January 1 week, up more than a half percentage point from the record low in March, driving down refinance requests to levels last seen in early August.

The rate was last higher in late August at 5.24 percent.

"Mortgage rates are going to be on an upward trajectory throughout the year and increase significantly, which means refinance volume is going to drop significantly," said Michael Lea, director of the Corky McMillin Center for Real Estate at San Diego State University.

Total mortgage applications eked out a 0.5 percent rise in the January 1 week after slumping nearly 23 percent in the Christmas week to the lowest level since late June.

When total demand for home loans has been at its highest last year it was due to a surge in refinancing rather than for home purchases. The highest unemployment rate in more than a quarter century and record foreclosures has kept many consumers from making such a major commitment.

The industry group reported two weeks of loan demand on Wednesday, as its offices were closed between the Christmas and New Year's holidays.

"We're not out of the woods in terms of housing," said Lea.

Demand will drop in the second half of 2010 after an expanded home buyer tax credit ends, and as loan defaults and foreclosures mount, he said.

"I don't see the current programs being that effective in terms of alleviating that problem," he said. "If that continues it will provide downward pressure on housing prices and the economy overall."

The mortgage industry group's refinance index dropped 1.6 percent in the January 1 week to 1,976.9 after tumbling more than 30 percent the prior week. At its 2009 peak, the refinance index topped 7,400 last January.

The purchase loan index rose 3.6 percent to 212.1 in the January 1 week after a 4.0 percent drop the prior week.

The tax credit is not the only government support to the fragile housing market that will peel off in the spring.

The Federal Reserve by March 31 will have bought more than $1.4 trillion in mortgage-related securities, aiming to hold down borrowing costs and revive housing as well as the economy.

Those purchases end soon before the tax credit also expires. Borrowers qualified for the $8,000 first-time buyer credit and $6,500 move-up buyer credit must sign contracts by April 30 and close on loans by the end of June.

A tenuous housing rebound may not have enough impetus on its own to then withstand the giant obstacles of double-digit unemployment and record foreclosures, economists have said.

By Lynn Adler

Labels: borrowing costs, Mortgage demand, refinancing, U.S. mortgages

Search The Web

Proceed now to Online Accounting Classes | Refinance House Bad Credit | Home Shopping Online

Business Marketing by Aredconsult
0 Comments

Saturday, April 17, 2010

Make Money in 2010: Your Home

Discover What Is The Perfect Business
According to Robert Kiyosaki of Rich Dad Poor Dad

Refinance House With Bad Credit

Click this now to the Perfect Global Business Video

Prices should stabilize at last, but rebuilding your equity will take time.

After three years of slumping house prices, the end of the real estate bust may finally be in sight. Home sales are rising, inventories are shrinking, and most economists believe values nationwide will hit bottom in the second half of the year -- but not before falling another 5% to 10% first.

Prices after that should stay mostly flat until 2012. "Next year will clearly be better than this year," says Mike Larson, a real estate analyst at Weiss Research. "Prices may drop a little more, but the lion's share of the damage is behind us."

One positive byproduct of the 30% plunge in prices since the 2006 peak: Houses are now more affordable than at any time in the past two decades, according to the National Association of Home Builders -- good news for anyone looking to buy.

Then too, mortgage rates, now at 5.15%, should stay low for the first few months, thanks in part to the Federal Reserve's ongoing purchase of mortgage-backed securities. But if the economy really picks up steam and inflation fears resurface in the second half of the year, rates could rise as high as 5.25% to 6.5%.

If you hope to sell your home or rebuild lost equity, there's new hope. One plus is that Congress has recently extended the first-time homebuyer credit, and even expanded it to include those with higher incomes and current homeowners.

But with layoffs high, defaults should remain problematic, hitting wealthy areas even harder next year, says Joshua Shapiro, chief U.S. economist at MFR, a consulting firm. In fact, 30% of recent foreclosures were on higher-priced homes -- nearly double the 2006 rate.

Wild card: If the Fed stops buying mortgage securities in March as planned and private investors don't step up, rates could spike to 6% or higher sooner and faster than expected, slowing demand and pushing prices down.

Signs to watch: Steady growth in single-family housing permits (track it at census.gov) indicates that builders believe buyers are returning to the market.

The Action Plan

Buyers: Make your move now. Have you been on the sidelines waiting for prices to go lower before house shopping and bidding in earnest? Don't hold off much longer.

"The market will remain tilted in favor of the buyer over the next year, but that power will gradually be reduced as conditions in the housing market improve," says Larson at Weiss Research. You'll have plenty of homes to choose from as foreclosures continue to pile up and more homeowners list their houses in an improving market. Be sure to keep a close eye on mortgage rates. If they rise sharply as the Fed's mortgage buyback program draws to a close, act quickly to lock in a low fixed rate.

Anyone looking to buy or invest in a lower-priced, entry-level home should expect competition. Put down as much cash as possible (many investors are offering to make all-cash deals); come in below the listing price and there's a good chance you'll lose to another bidder.

But demand is much softer for middle- to top-tier homes, particularly those priced above $500,000. The supply is greater too, so you'll be in a stronger bargaining position. Offer at least 10% below what comparable homes have sold for lately (your realtor can supply this info). That way you won't take a hit if prices of higher-end homes fall another 10% or more, which is very likely, Shapiro says.

Sellers: Postpone listing your home, if possible. Sellers next year will be unloading property at what's likely to be the very bottom. Ouch. Hold out for a few more years, so you'll compete against fewer foreclosures, increasing the chances your home will fetch a higher price.

Delaying your sale isn't an option? Act fast before prices drop further. To expedite a sale, don't try to compete on price with foreclosures and short sales (when the bank allows owners to sell for less than they owe on their mortgage); most of the time, you can't win. Instead play up your home's strengths. Foreclosures typically need a lot of work, and short sales can take months. So make necessary repairs, throw in a paint job and new carpeting since buyers may be short on cash after the down payment, and offer a fast and flexible closing date. That will attract people willing to pay more for a home that's in move-in condition and a deal they can close quickly.

Owners: Look into refinancing, and rein in spending on home improvements. You're a prime candidate for refinancing if you have an adjustable-rate mortgage and will be in your home for at least five years. There's no reason to wait; you won't get a better deal than you will now.

As for fixing up the place, now's not the time to spend serious money; since prices aren't likely to snap back soon, you won't see much of a return on your investment. Focus on lower-cost cosmetic fixes, like painting and landscaping, and basic projects that improve functionality and design, such as adding molding or doing a basic bathroom remodel.

by Amanda Gengler, provided by CNNMoney.com

Labels: entry-level home, house prices, mortgage rates, refinancing

Search The Web

Proceed now to Online Accounting Classes | Refinance House Bad Credit | Home Shopping Online

Business Marketing by Aredconsult
0 Comments

Wednesday, April 14, 2010

Gov't unveils plan to shrink some home loans

Discover What Is The Perfect Business
According to Robert Kiyosaki of Rich Dad Poor Dad

Refinance House With Bad Credit

Click this now to the Perfect Global Business Video

WASHINGTON (AP) - After months of criticism that it hasn't done enough to prevent foreclosures, the Obama administration is expected to announce Friday a plan to reduce the amount some troubled borrowers owe on their home loans.

The effort will let people who owe more on their mortgages than their properties are worth get new loans backed by the Federal Housing Administration, people briefed on the plan said. It would be funded by $14 billion from the administration's existing $75 billion foreclosure-prevention program.

The people briefed on the plan asked Thursday that they not be identified because the details had not yet been announced.

The plan will also require the more than 100 mortgage companies participating in the administration's existing foreclosure prevention program to consider slashing the amount borrowers owe. They will get incentive payments if they do so.

It also will include three to six months of temporary aid for borrowers who have lost their jobs.

And there will be additional payments designed to give banks an incentive to reduce payments or eliminate second mortgages such as home equity loans - a problem that has blocked many loan modifications.

The changes "will better assist responsible homeowners who have been affected by the economic crisis through no fault of their own," an administration official said.

To date, the administration's $75 billion foreclosure-prevention program has been a disappointment. Critics have complained the program does little to encourage banks to cut borrowers' principal balances on their primary loans. Nearly one in every three homeowners with a mortgage are "under water" - they owe more than their property is worth - according to Moody's Economy.com.

An expansion of the foreclosure-prevention program has long been expected because only 170,000 homeowners have completed the process out of 1.1 million who began it over the past year.

The program is designed to lower borrowers' monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms up to 40 years. To complete the program, homeowners need to go through a three month trial period and provide proof of their income, plus a letter documenting their financial hardship.

Though $75 billion in funding is available to the more than 100 lenders who have signed up, only a tiny fraction has been spent. Lenders had received $58 million in incentive payments as of last month, according to the Government Accountability Office.

Meanwhile, one long-delayed piece of the government effort is getting off the ground.

Citigroup Inc. on Thursday joined the government's program to modify second mortgages such as home equity loans. With Citi on board, now four big owners of second mortgages have joined. The others are Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co.

By ALAN ZIBEL, AP Real Estate Writer, AP Business Writer Daniel Wagner in Washington and Stevenson Jacobs in New York contributed to this report.

Labels: Federal Housing Administration, home equity loans, home loans