Mortgage Interest Rates are HIGHER!

December 8, 2010 By Leave a Comment

Mortgage Interest Rates have gotten higher, not lower as the Fed said it was hoping would happen with this latest round of activity.

So, when you look at the Mortgage Banker’s of America’s (MBA) refinance index (looks at refinance activity on a month over month basis) and the the 30 year fixed rate mortgage interest rate that’s printed each week from the Freddie Mac Primary Mortgage Market Survey®… the following release of information from the MBA is not surprising.

The Refinance Index decreased 1.4 percent from the previous week. This is the fourth weekly decrease for the Refinance Index which reached its lowest level since June 2010.

December mortgage rates are currently hovering for a 30 year fixed mortgage at above 4.75% APR. Although mortgage rates haven’t risen very far – and are still below 5% – it takes lower and lower rates to get people to refi (at least lower than recent purchase rates).

With 30 year mortgage rates now about 0.75% above the lows in October, this is the end of the recent surge in refinance activity – unless rates drop sharply again.  It also seems unlikey to “excite” any buyers out there looking for a bargain.

The Fed Stated Policy is for mortgage Interest rates to be LOW with the QEII policy… we’re waiting… and waiting… for that to happen.  When and IF rates head lower – I’m hoping buyers realize this could be the last opportunity they get!

If you have questions about mortgage interest rates, and qualifying for a mortgage in NC, please call Steve and Eleanor Thorne, NC Mortgage Loan Experts 919-649-5058.  We have the best mortgage rates available.

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Profile of 2009 – 2010 First Time Home Buyer

November 9, 2010 By Leave a Comment

The National Association of Realtors released information about First Time Home Buyers last week that showed some interesting trends!

  • 93 percent of those surveyed in 2009 – 2010 reported that they purchased using one of the first-time buyer tax credits. (Who’s surprised??? Nope, we’re not surprised either!)
  • Ninety-five percent chose a fixed-rate mortgage.
  • The median age of first-time buyers was 30 and the median income was $59,900. (This part was a little surprising!) The typical first-time buyer purchased a 1,540 square foot home costing $152,000 (bet they were keeping their total payments under the $1000 mark)
  • First-time buyers who made a downpayment used a variety of sources: 74 percent used savings, 38 percent received a gift (or a loan) from a friend or relative, (READ:  their parents) Eight percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds.
  • Women accounted for 1 in 5 purchases, and single Males made the largest leap in the survey ever – which was attributed to the tax [Read more...]

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More People Refinance to 15 Year Mortgage

September 29, 2010 By Leave a Comment

With mortgage interest rates being in the low 4′s for a 30 year rate, more people are considering refinancing.  A larger than expected number of those folks are asking for 15 year mortgage. This week, the rates offered by lenders on 15-year fixed-rate loans averaged 3.82 percent, Freddie Mac reported.

Why is that?  Well the customers we talk to tell us that they are not getting much of a return on their other investments… and they don’t see Social Security payments as a way to make their mortgage payments!

Baby boomers nearing retirement, who may recall 13 and 14 percent mortgage rates when inflation peaked in the early 1980s, are especially drawn to the 15-year loans!

According to Freddie Mac, 22 percent of homeowners who refinanced their mortgages in the second quarter lowered their principal balance by paying cash at the closing. That was up from 19 percent in the first quarter, and was the third-highest “cash-in” level since Freddie Mac began tracking it in 1985.  Many of those types of statistics are coming from areas where people have Equity Lines and with the Equity Line, they don’t qualify to refinance.

Fortunately for those of us in the Raleigh / Cary market, we don’t really have the home appraisal problems many of our friends in the rest of the country have! Raleigh/Cary was recently named the top area to experience APPRECIATING values in the next year.

If you are considering a Refinance of your mortgage loan, please call Steve and Eleanor Thorne, 919-649-5058 Professional Mortgage Planners in North Carolina.  We offer the best mortgage rates and the lowest fees available.

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What if Mortgage Rates Went to Zero? Would You Buy Then?

September 28, 2010 By Leave a Comment

I am a self proclaimed economics junkie, nerd, enthusiast. I got really excited looking at some recent information about the Economy and Interest rates!

A survey done by CNBC of  leading market participants indicates that THEY believe the Federal Reserve will boost it’s balance sheet by about a half a TRILLION dollars in the next six months.

If you are like one of my friends, you are scratching your head going, “and I care about this because….?” Well you care about this because if the Fed does this – a likely benefactor would be LOWER Mortgage Rates.

The Fed stopped buying mortgages in March, and rates didn’t skyrocket… but they just are not going below certain thresholds. The idea is that the Federal Reserve will have to come back into the market in some fashion, and when they do, mortgage rates will likely go lower.

But HOW low will they go?  And would a rate at, or near zero, have first time home buyers running to buy like the next $8000 Tax Credit?

“The difference between a 4.5% and a 3.5% mortgage isn’t that great. If we were at 10% and rates fell to 5%,” that drop would attract much more borrower interest. “When you’re talking about incremental declines in interest rates, it does add some [demand] but not as much as you’d think.”

Mr. Bernanke is scheduled to speak this Thursday and there will be even more people listening to his “tone” to see if there’s any hint about deflation and the Federal Reserve”s Balance Sheet. If the CNBC poll is correct, we could get below the current stale mate.  Either way, though, mortgage rates are at the historical low point and that’s only ONE of the reasons people are buying in the Raleigh / Cary real estate market!

To find out what you can qualify to purchase in NC, call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.  We have the best rates and the lowest fees for mortgage loans in NC Do you think we need a new tax credit?  Read this

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Chapel Hill Named One of the Best Places to Live for Singles

September 16, 2010 By 1 Comment

Rounding out the Top 10 Best Places to Live if you are Rich and Single is Chapel Hill North Carolina! The list, put together by CNN Money this summer, focuses most of it’s attention on California – naming Newport Beach, Irvine, Milpitas (must admit I’m not familiar with that one), Sunyvale, Mountain View and Santa Clara tops for that STATE… six of the ten best places to live if you are Rich and Single are in California? Seriously?

And then there’s a couple in MA and one in Georgia… and then Chapel Hill.  With a population of over 53,000 – a little over 50% of the residents are single! (who saw that one coming?)

Who doesn’t love a little southern charm? This college town has a lively nightlife, rowdy Tar Heel games and home-style cooking for singles of all ages to enjoy. Mingle with eligible bachelors and bachelorettes on bar-lined Franklin Street, or take a date to Crook’s Corner for some nationally-acclaimed grits and banana pudding. Cheering on your favorite U.N.C. team is also a surefire way to take the edge off a first date. And if you’re into music, find someone who will rock your world at nearby Cat’s Cradle, a small venue where local bands perform alongside big acts like The Counting Crows, John Mayer and Iggy Pop. –B.E.

The Triangle has also been listed as one of the Most Likely to see Real Estate Appreciation in the near future! Why is that?  Because we have jobs, and all of the colleges and Universities around here help insulate us from recessions.

And… if you’re a single parent (and maybe not rich) we have tons of programs that will help you too!  Click here for more details!

If you are considering a move to North Carolina, call Steve and Eleanor Thorne, 919-649-5058.  We have the best mortgage rates available, and the lowest fees!

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Does Obama Know Something We Don’t About the Economy?

September 3, 2010 By Leave a Comment

I read a TON of Economic Newsletters, watch CNBC, and Congressional hearings… I’m an economic junkie who misses Louis Rukeyser!  I’m always looking to see if I can figure out which way rates are headed.

So when the President came on the news this week to announce that the war in Iraq was over, and the pundits started asking why it was only a 15 minute address – I was kinda’ let down, because I had also been expecting that he would take this chance to give folks a “Positive Message” when it comes to the markets.

Without that Presidential Guidance, I’m back to the Economic Numbers for insight.  And here’s what they are telling me:

  • “… the public is no longer investing in stocks, but rather in bonds.  So far this year through July, bond mutual funds have attracted $224.4bn in net inflows including reinvested dividends.  ” — Ed Yardeni, September 1, 2010.” Which means a Consumer Spending spree is not going to get the Economy going.
  • “The Fed terminated the purchases of $1.25 trillion in GSE mortgages and mortgage-related paper in March.  Simultaneously, the housing-purchases credit subsidy ceased in April.  Housing went into relapse, as most economists expected.  Simply put, subsidize something and you get more of it; remove the subsidy and you find that you have borrowed economic activity from the future, and now you get less of it.” Cumberland Advisors  Which means ANOTHER Tax Credit is not going to get the Economy going.
  • Case Shiller Numbers indicate that the Housing PRICEs actually went UP during the 2nd quarter.  “While some may see these price gains from the trough as a sign of bouncing along the bottom, most experts believe home prices nationally will fall again, but not necessarily immediately.”  Which means the Housing Market is not going to get the Economy going.
  • Private sector employment decreased by 10,000 from July to August on a seasonally adjusted basis…  and today’s non-farm payroll job’s numbers showed 54,000 jobs lost in August (many of those from the Census Jobs that are gone).  So there’s not a surge of Employment to get the Economy going.

So was it just that the President didn’t have any positive news… or does he know something we don’t know? One of my favorite charts is the Four Bad Bears.

Permission from D Short

As you look at this chart – this “Bear” looks just like the other three. Maybe we ARE heading into a little dip – but it’s not really that’s alarming!  When you stop just looking at the headlines, and you look at the long term trend… things are not sky rocketing up, but they don’t look that bad! We are going to have a slowly improving picture!

Mortgage Interest Rates typically get LOWER when there’s BAD NEWS in the Economy… and they go UP when there’s good news. Believe it or not – the last three days we’ve had higher rates!  The Dow is Happy!

That’s not good news if you are waiting to Refinance!  NOW is probably the time to do it!

If you are considering a Refinance, call Steve and Eleanor Thorne, 919-649-5058  We have the best rates available, we offer FHA Streamline Refinances, Conventional financing, USDA Home Loans and VA Mortgage Loans!

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First Time Home Buyer Raleigh NC FAQs

August 14, 2010 By 1 Comment

We work with a TON of First Time Home Buyer’s, and we often find that they need the same basic information to avoid costly mistakes:

- I’m paying $1250 a month in Rent, can I keep my house payments at that same dollar amount? Great News!  When you buy a house, you can get a raise!  (for more info click here).

-  Can I buy a house if I’ve had some credit Boo-Boos? Okay this is tricky – but the answer is YES!  It’s just a matter of how long it will take to get your scores up to 620 (OR 580 if you qualify for NC Housing Finance Agency Money!).  We have a TON of information on Credit Scores, and how to get them higher!  Click here! [Read more...]

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No Cost Refinance Cary Raleigh NC

July 29, 2010 By Leave a Comment

When mortgage interest rates fall at least one percent below your current mortgage interest rate, it might be time to check on a refinance. In today’s market, people who are refinancing are primarily in one of two groups.  There are ways to refinance with no cost out of pocket, and / or without adding to your balance.  There are trade-offs to everything, so it’s important to understand what your motivation is.

Everyone is trying to save every penny in this economy… and so for some homeowners,  getting the absolute lowest mortgage payment is the most important motivating factor. This is especially true when families are concerned about a potential layoff.  Some of the ways to minimize your mortgage payment might be:

  • Refinancing to a lower rate
  • Consolidating other balances into your mortgage (paying off $15,000 in credit card debt by increasing your balance could save you over $650 a MONTH!)
  • Removing PMI by doing a 80-10-10 mortgage
  • Checking your escrow account and in some cases not including the escrow in your monthly mortgage payment.

For other customers, the concern is reducing the principal balance as quickly as possible.  Look at this example:

Purchased home in August 2007 with 30 year mortgage at 5.75% fixed rate

Refinance in August of 2010 with 20 year mortgage at 4.875% fixed rate

Difference in payment is $22 a month… cost to you is @ $6500 (added to the mortgage balance) and the SAVINGS going to a 20 year from a 30 year is a total of $166,883 in interest!

There are costs associated with refinancing your home.  In order to get a “No Cost” refinance, you are either:

  • Adding to your mortgage balance
  • Getting a slightly higher rate so that the Lender is paying the closing costs

Those are the only options.  We will be glad to calculate the best option for you!  Please call Steve and Eleanor Thorne, Professional Mortgage Planners, 919-649-5058.  We offer the Best Mortgage Rates in Raleigh and Cary NC

If you want more information about a 4.25% (4.375% APR)  mortgage Interest Rate, click here.

For information on VA Streamline Refinances click here

For information on FHA Non-Owner Occupied Refinance click here

For information on FHA Owner Occupied Streamline Refinance click here

For information on USDA Home Loan Refinances click here

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Income Qualifications FHA Mortgage Loans in NC

July 29, 2010 By 2 Comments

FHA Mortgage Loans are generally easier to qualify for than a more Conventional Home Loan from Fannie Mae or Freddie Mac.  

Specific income qualifications we use to qualify borrowers for mortgage Loans:

  •  FHA allows us to “count” part time income if you have more than an 18 month history of working 2 jobs. 

We can also count tips, as long as you report them! 

Many people in North Carolina working in the IT field are working on long term contracts, they are not actually the employee of the company where their office is.  If you’ve been working on contract for over 18 months we can generally get the loan approved (takes some extra work!).

If you are laid off every year at the same time, we can still get your loan approved.  We just got a loan approved for a guy who works at a local University in their food services department.  Every year, right after graduation in May, he’s laid off.  In August, he is rehired.  He’s done this for 5 years.  Once he receives his August paycheck (in a few weeks) we will be able to close his loan!  We could count his unemployment AND his regular income from the University / State to qualify him!

Using Rental Income to qualify for a FHA mortgage Loan can be tricky – if this is the situation you are in, please click here for details.

One of the first questions we will ask when we speak with you… is how much of your total income you feel comfortable spending on housing. This ratio of Gross Income to Housing Expense helps the lender decide whether you can comfortably afford a home.

When you are qualifying for a loan, a we will use your gross income. That means all the money you earn before taxes, including overtime, commissions, dividends and any other sources. Again, we are looking for the income BEFORE insurance and any money goes out to 401K. If you receive Social Security or Pension income – we will gross that income UP for qualifying!

Your total monthly housing expense as a percentage of your monthly income is called the housing expense (a.k.a.: front-end) ratio. FHA wants a ratio of about 29% of your income to your house payment (including the mortgage, property taxes, mortgage insurance, hazard insurance and any Home Owner Association Dues).

Calculate what your new monthly mortgage payment should be by using the formula:

Gross Monthly Income multiplied by 29% = Maximum TOTAL Mortgage Payment.

Especially in situations when someone is just entering the job market the 29% of gross income just doesn’t “buy” the house of your dreams!  That’s one of the benefits of easier qualifying guidelines for FHA home loans! To qualify, you’re allowed to spend up to 34% of your income on your house payment, as long as everything else in your application shows that you can handle the “stretch.” (READ, as long as you don’t have a ton of other payments, like a $500 car payment!) 

Another thing the FHA Mortgage Underwriter will look at in considering your loan for approval is the difference in your housing expense now to the expense you’ll have if you buy a home. The smaller the increase, the stronger your application looks. So if you are paying $1000 now and your new payment will be $1400, that’s probably okay if your housing ratio is not too high.  If you are paying $1000 a month now, and your new payment is going to $1800… and you have a fairly high housing ratio… we are going to look and see that you have been SAVING money every month at $1000.  We can use that information as a reason to make the loan!

If you have questions about qualifying for a FHA Mortgage Loan in NC, and you are looking for the BEST Mortgage Rates – please call Steve and Elaenor Thorne, 919-649-5058.  We are Professional Mortgage Planners with over 20 years of experience closing FHA Home Loans in NC!

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Mortgage Rates for NC 6-25-2010

June 25, 2010 By Leave a Comment

“There was a 7-year Treasury Note auction yesterday that was a little bit stronger than expected. Despite that encouraging news, Mortgage backed securities fell…”  So, what the heck does that mean??  Looking at this chart of the 10 Year Treasury Bond (which is really our Government Bonds that people and Institutions purchase… you can see that we are at or near as low as we were a couple of weeks ago.  Mortgages trade on the Bond Market – and are called MBS (Mortgage Backed Securites).  Currently – 30 year mortgages follow the 10 yr TBill “pattern.”  When the TBills go up… rates go up – when they go down GENERALLY rates will go down.

When the Mortgage Backed Securities are “off” or “down” – you’d think rates would be DOWN… but NO!  That’s trader talk for rates are moving HIGHER!  Are you confused yet?

The News and Observer (our local paper) ran a huge story today that rates are at their lowest point and you should refinance… well, they are “almost” at their lowest point.  We actually were lower for a couple of days at the end of May… but it’s still a good time to consider a refinance if your rate is adjustable, or you’re at 6% or higher.

So which direction are mortgage loan rates in North Carolina headed?  Data today started off with the GDP report.  Real GDP was reported at 2.7%, just below expectations of 3.0% and the GDP Price Index was reported at 1.1%, just above the 1.0% expected.  Overall, a fairly benign report.

Consumer Sentiment was released as well this morning and was reported at 76.0, slightly above expectations of 75.5 and up from the 75.5 in the last report.  Some Economist believe that this rise in Consumer Sentiment means that the high levels of Jobless Claims may be a result of some “special factor” (like the Gulf Oil)  and not due to actual deterioration in the labor market.  That kind of thinking aims at a continued economic recovery and a better jobs picture than has been presented with its respective data.

What does this mean for North Carolina Mortgage Rates? Mortgage rates have been trading in a “range.”  Although the day to day movement is very volatile… the long-term outlook is not perfect for even lower mortgage rates, so you really need to watch the 10 year TBill (look at the chart – every time we hit this low mark we pop back up!).  We hit a mark below 4.5% for just about 48 hours.  If that’s the mortgage interest rate you are looking for – call us, and get on our Rate Watch List.  We’ll call you when (if) we hit “your” rate!

Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058 North Carolina Mortgage Lenders.

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