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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Mortgage Update 10-05-2010 (L-O-W)

October 5, 2010 by Leave a Comment

As you might know, I work with my husband, Steve.  Occasionally, I sit in his office waiting to talk to him – while he’s on the phone with a customer.  Today, I listened as he explained where mortgage interest rates are, and what the best interest rate was for the customer on the other end.

Have you ever bought tires?  Well, you know how when you are looking for tires there’s all these ads that say that tires are $25 each?  When you get in the tire shop, and the guy starts adding for valve stems, alignment, balancing… rebuilding tire pressure sensors and pretty soon the tires for YOUR car are $45 a piece.

Well, that’s kinda’ how I look at mortgage rates today. In general, rates are around 4.25%. You can get lower with a little more cost – or you can get a little higher rate with fewer costs.”

I thought that was pretty clever! It made me wonder though, how low COULD I really get a mortgage loan? Let’s say the seller is willing to pay closing costs, and I can pay a 1% origination fee and .25% in a discount fee.  If that was the case – what could I do??

On a conventional loan you could get a 30 year fixed rate today at 3.875% (with great credit and a 20% equity gap an APR of 4.064 refinance or purchase)

A 15 year mortgage interest rate is even lower!

On a Government loan (FHA or VA) you could get a 4.0% mortgage loan (4.562 APR) 30 year fixed rate!

If you get that 3.875% rate – does that mean you are getting the lowest possible rate? Someone said, getting the best mortgage rate takes research and LUCK.  I believe that’s true.  Mortgage interest rates don’t just change daily – they change by the HOUR, sometimes 2 or 3 times within 30 minutes!  You could research rates right now, and call back in the morning – and find a difference of an 1/8th or more!

The real purpose in researching all of this is (especially if you are shopping for a refinance) finding a loan officer that has YOUR best interest at heart.  You want to work with someone who is going to ask you important questions, like:

  • How long do you expect to live in your home?
  • Do you have a second mortgage or an equity line on the home?
  • What are the financial changes your family is going to experience in the next 3 – 5 years? (do you have children going to college, someone getting married, expect to have new children in your family/)
  • What is your debt and spending situation?  Have you been saving for retirement?

Besides the best mortgage interest rate, you are looking for a realistic idea of what it will cost to refinance your mortgage loan. If one person quotes you title insurance of $300 and another quotes title insurance of $378… well ask the $378 guy why his is higher.  Chances are, he’s given you an EXACT number, and the $300 guy gave you a “guestimate” on the cost to refinance your mortgage loan.  If one person quoted you $700 for hazard insurance and you know yours is $633 a year, tell them!

The insurance, title, recording, attorney, taxes appraisal, credit fees are generally NOT fees a loan officer has ANY control over.

The bottom line here is this… work with the loan officer that has your best interest in mind. If one person charges you $700 in fees and saves you $115 a month in your mortgage payment when you are refinancing your mortgage loan, I’d be happy!

BUT… if the loan officer asks the RIGHT QUESTIONS, and saves you $280,000 with a refinance on your mortgage loan by giving you a shorter term, or pays off consumer debt… THAT’s something to stand up and dance for, do a Whoot! Whoot! and tell your friends about!

If you are considering a REFINANCE, or the purchase of a home - call Steve and Eleanor Thorne, 919-649-5058 we have the best mortgage interest rates and the lowest fees available! If rates were at ZERO, would that make you want to buy?

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More People Refinance to 15 Year Mortgage

September 29, 2010 by 1 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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Is It Time To Refinance?

September 18, 2010 by Leave a Comment

Many of the people we are talking with WANT to refinance – but they figure it’s probably not worth it. Generally those sentiments run from two different camps, either the homeowner is concerned that they have no equity in the home to refinance (and don’t want to pay closing costs out of pocket), or they just figure they have a pretty good rate now, and don’t see a big difference from 5.75 to “whatever the mortgage rates are down to now.”

So let’s talk about what you SHOULD consider with a refinance…

The most fundamental consideration in whether a homeowner should refinance an existing mortgage is the break-even point, which means how soon the cost of the refinance will be recaptured through lower monthly payments. In general, most homeowners are looking for a three year recapture period.  If you are not going to recouperate in that time period… it might not make sense. [Read more...]

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Mortgage Interest Rates September 17, 2010 Update

September 17, 2010 by Leave a Comment

If you are considering a home purchase or a refinance, you are probably doing your best to follow the direction of mortgage interest rates. Well, rates on 30-year mortgages climbed for the second straight week, even though they are pretty close to the lowest level in decades.

The average rate for 30-year fixed loans this week was 4.37 percent, mortgage buyer Freddie Mac said Thursday. That’s up from 4.35 percent a week earlier and 4.32 percent the previous week, which was the lowest level on records dating back to 1971.

The average rate on 15-year fixed loans dropped to 3.82 percent. That was the lowest on records dating back to 1991 and was down from 3.83 percent last week.

For mortgage rates to move lower – we need more bad news in regards to the Economy… Rates have been at or near the lowest level in decades since spring as investors worried about the state of the economy and then moved money into safe Treasury bonds.  That lowered the bond yields, which mortgage rates tend to track.

But recent economic data have given investors less reason to worry. First-time claims for jobless benefits have fallen in three of the past four weeks. And in August retail sales rose modestly and factory output grew for the 12th time in 14 months. The CPI numbers out today indicate that we have little to any chance of Inflation, generally seen as good news.  The “Zero” inflation status allows some room for the Fed to make some slight moves at it’s meeting next week, allowing the Fed Balance Sheet to grow.

Even thought the improving economic outlook may have prompted some investors to pull their money out of the bond market and put it back into stocks.

But it hasn’t helped the housing market, nor have low mortgage rates. Home sales plummeted this summer and economists don’t expect that to change until the unemployment rate falls significantly and credit becomes more accessible to potential buyers. Applications for new home loans fell by nearly 9 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday.

Meanwhile, foreclosures are surging. Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis, foreclosure listing firm RealtyTrac Inc. said Thursday.  In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.

In all, it’s going to take a Congress and the “new” bank regulators deciding on a course of action that is consistent to – coupled with JOBS to fix the housing problem.  One of my competitors said this week in a Rotary Meeting their Economist expect rates to go to 2% by the end of the year.  Really?  I’m not seeing it.  If this is true… we are in a WORLD of trouble!

To calculate average mortgage rates, Freddie Mac collects rates from lenders around the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.55 percent, down from 3.56 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.4 percent from 3.46 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for 30-year and 1-year mortgages. The average fee was 0.6 of a point for 15-year and 5-year mortgages.

If you are considering a purchase or a refinance in NC – call Steve and Eleanor Thorne.  We have the best rates and the lowest fees available, and we are WATCHING the economic conditions… not just repeating what someone else is saying!

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Housing Prices and Bank Regulation

September 13, 2010 by Leave a Comment

The Basel III (Bank Regulation) requirements were discussed in exhausted terms this weekend, and there are many questions left unanswered. These details are important as we know that Banks are being forced to write off billions of dollars in loans to properties that are now vacant due to foreclosures.

An article in the WSJ today highlights this point:

Even though mortgage defaults kept mounting, housing markets began to stabilize early last year as low prices and government interventions broke the downward spiral. Policy makers spurred demand for homes by holding down mortgage rates, offering tax credits for buyers, and extending low-down-payment loans through the Federal Housing Administration.

The government also attacked the supply problem. Regulators relaxed mark-to-market accounting rules, giving banks more flexibility in valuing certain real-estate assets and removing some of the impetus for banks to quickly foreclose.

How BIG is the next “wave” of foreclosures?  Well, Moody’s believes that U.S. banks have already written off about two-thirds of the bad loans they’re likely to face through 2011, and that bank asset quality issues are past the peak. The agency estimated that 68 percent of residential mortgage losses have been taken, but only 49 percent of commercial real estate losses. Banks have already been setting aside less each month in reserves, indicating that they think they are ready for next round.

The BASEL III requirements that came out this weekend seem to be in favor of Big Banks – which I guess makes sense if you are betting that BofA (for instance) will be one of the banks that has to write off more as they liquidate property.  The regulators seem to be (JMHO)  on a see-saw unable to decide which way to pressure ”influence” bank action.

We are watching how banks manage the foreclosed homes they own because, unlike home owners, banks often are much quicker to slash prices to unload properties as quickly as possible.

In the Triangle, we don’t have a market with prices already way too high – and we  don’t have a HUGE number of foreclosure that other areas have. Charlotte, though, is one of the markets that could be hurt according to the WSJ.

By those metrics, prices are actually undervalued in markets that have already seen huge declines, such as Las Vegas, Phoenix and Los Angeles. But Moody’s data show that prices remain “significantly overvalued” elsewhere, including Boston; New York; Seattle; Orange County, Calif., and Charlotte, N.C. Markets in both camps face supply imbalances that will pressure prices for years.

As Housing Markets are seen falling, this will also effect mortgage lending practices… meaning that “falling markets” generally have a tougher set of rules and restrictions than those that are stable.

As for mortgage interest rates – we believe we’ve seen the bottom of this cycle. Mortgage rates are up almost a quarter of a percent in interest from 10 days ago – but still really, really, really CHEAP.

If you are considering a home purchase – you need the advice of people who are watching the market! We work with some of the most talented Real Estate Agents in the Country!  Call Steve and Eleanor Thorne, 919-649-5058 for more information!

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Raleigh NC Top Public School Recognition

August 20, 2010 by 2 Comments

“Yep, just another reason to move to Raleigh!” is what one friend wrote on Facebook after seeing that Raleigh was named the Top Public School System for Large Populations over 300,000 by Great Schools. Also in the Top Five School Systems the report lists Colorado Springs, Mesa Arizona, Honolulu and Virginia Beach.

We live in this school district. While the report correctly states that:

[Wake County Public School System is ]home to three high schools that offer the demanding, well-respected International Baccalaureate program. In fact, the entire district is focused on college prep; more than 90% of students plan to continue some form of higher education, with well more than half heading off to four-year colleges.

The competitive Academic environment can not be overstated at some schools.  Our daughter attends Green Home High School, where a grade point average of 3.5 is in the middle to lower half for the class!

Having great schools, with dedicated teachers, and parents who truly care about education will continue to help Raleigh / Cary be top destinations for businesses looking to expand.  As noted in the report:

Overall, Raleigh has survived the economic recession and real estate crash and is already growing again. Many families point to the wide cultural diversity — museums, sports, extracurricular offerings and camps, options in education and worship, dining, and more — that makes it a great place to live.

We Agree! We”grew up” in the Triangle, live in the Cary / Raleigh area, and enjoy sharing information with folks relocating here!

If you are considering a home purchase in Raleigh or Cary, NC call Steve and Eleanor Thorne 919-649-5058. We have programs specifically for those who are relocating, and we have the best mortgage rates available.

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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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