Real Estate Market Trends Category

Fixed Mortgage Rates Continue Finding New Record Lows

Fixed Mortgage Rates Continue Finding New Record Lows


Now is a great time to either buy a home or move up! Rates are at an all time low.


Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates continuing to find new all-time record lows amid recent data showing less consumer spending and a contraction in the manufacturing industry. The average 30-year fixed-rate mortgage has matched or hit a new record low in 10 of the last 11 weeks. The 1-year ARM also averaged a new record low this week.


According to survey results, the 30-year fixed-rate mortgage (FRM) averaged 3.62 percent with an average 0.8 point for the week ending July 5, 2012, down from last week when it averaged 3.66 percent. Last year at this time, the 30-year FRM averaged 4.60 percent.


Additionally, the 15-year FRM this week averaged 2.89 percent with an average 0.7 point, down from last week when it averaged 2.94 percent. A year ago at this time, the 15-year FRM averaged 3.75 percent.


The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent this week, with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 3.30 percent.


The 1-year Treasury-indexed ARM averaged 2.68 percent this week with an average 0.5 point, down from last week when it averaged 2.74 percent. At this time last year, the 1-year ARM averaged 3.01 percent.


“Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week and allowed fixed mortgage rates to hit new all-time record lows,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “Growth in personal expenditures was revised downward to an annualized rate of 2.5 percent in the final GDP estimates for the first quarter of the year. In addition, monthly consumer spending in April was revised from a 0.3 percent gain to 0.1 percent and was unchanged in May. Finally, the Institute for Supply Management reported that manufacturing shrank in June, the first decline since July 2009.”




Basic Principles of all Mortgage Loans

  • The home is used as security to back up the loan. A lender can force sale of the home if the borrower defaults by failing to make scheduled payments.
  • The larger the loan compared to the value of the home, the more risky for the lender and, often, the more expensive the loan will be.
  • Interest earned by the lender always is equal to the periodic interest rate times the outstanding principle balance of the loan. The periodic interest rate is the annual interest rate divided by the number of payments in the year (usually one per month).
  • The required payment usually is a bit larger than the interest due so that some of the loan principal is repaid with each payment. This process is called Amortization and is why most mortgage loans can be retired when all the monthly payments have been made.

All mortgage loans have one of the following features:

  • Fixed payment and fixed interest rate – fixed rate mortgages
  • Fixed rate but variable payment – graduated payment mortgages
  • Variable rate and variable payment – adjustable rate mortgages

As you learn more about the types of financing available, you will notice that some loans appear to have more favorable terms. That may indicate that those loans are, indeed, bargains (and it does pay to shop around), but usually it means that those loans could have some feature that is less appealing to borrowers. For example, shorter-term loans often have slightly lower interest rates compared to longer-term loans. However, the monthly payment for the same amount of principal may be higher because of the shorter term. Variable rate loans usually have much lower interest rates to compensate for the risk the borrower accepts that interest rates will rise in the future.

If you are looking to buy or sell a home call me today! I can help!


Tips on How to Rebound From A Foreclosure| League City, TX

Tips on How to Rebound From A Foreclosure| League City, TX

Many homeowners facing foreclosure find themselves wanting to buy again and they want to purchase fast. Unfortunately most loan programs have a three year plus waiting period after a borrower loses their home to a foreclosure. This can be frustrating to a previous home owner who just wants their sense of stability back.

There are tips on how to recover from a foreclosure and following these tips will help you deal with the outcome of the foreclosure process.

1. Deal with the pain
Going through a foreclosure is an emotional process that must be dealt with. Being angry with the bank is not going to move anything into a positive light. The acceptance of what has happened and why it has happened will help you move forward and make rational decisions not just emotional ones.

2. Take in the loss
Individuals and couples should take time out to acknowledge what has happened, and distill and discuss mistakes that were made and insights you’ve gained so that you can avoid repeating them in the future. It’s a meaningful method for progressing past grief and repositioning yourself to make smarter decisions about your money and your mortgage for the rest of your life.

3. Avoid rebound purchasing
Trying to replace our losses on the rebound, be it after a breakup or after a foreclosure, is how people end up repeating their mistakes. Making new, unsustainable mortgage commitments and chronically overspending or over borrowing is no different from your friend who keeps repeating the same old dysfunctional relationship patterns, year after year.

4. Try to fix and heal your financial woes
Get your debt paid down or off. Change your spending habits and your overall relationship with money. Get your taxes current and paid. Save some money. Create the habit of paying every bill on time every time. Eliminate unnecessary monthly expenses.

If you are faced with foreclosure and would like to discuss your options, give me a call today! I can Help!

Home Owner’s Insurance Rising?

Home Owner’s Insurance Rising?

You go to the mailbox open the mail and there it is. The bill for your home owners insurance and you are in disbelief. Across the country, state boards of insurance, are authorizing increase in rates in the neighborhood of ten percent, but as high as twenty percent in states like Florida. The rate hikes are due to the insurance company’s goal, of having enough funds for paying out claims in the future. Whether it’s wildfires in Texas, hurricanes on the east coast, or earthquakes in California, insurance companies have paid out large numbers of claims in the past five years. So what can you do to keep your homeowners insurance at a minimum?

Shop Around
This may seem obvious, but most consumers check with one, perhaps two sources to secure homeowners insurance. Obtain three different quotes, with similar coverage, and you will likely see a difference in costs.

Raise Your Deductible
The deductible is the amount of money the homeowner pays towards a loss, when they make a claim. Ask your insurance representative, for a quote with a $500 deductible and a one $1,000 deductible, to compare the difference.

Make Your Home Disaster Proof
While there is no way to make your home completely disaster proof, there are some steps you can take to make it stronger. In hurricane areas, that may be adding storm shutters or windows. In earthquake prone regions, you may want to look in to retrofitting your home to save on premiums.

Use The Same Insurance Company For Auto And Home
Most insurance companies will offer a discount for customers who insure their home and cars together. If you choose to shop around, make sure to ask your insurance company for quotes on every vehicle in you own, and your home.

Ask your insurance company representative how to lower your rate. More specifically, ask how they reward consumers with lower premiums. Good credit scores is an increasing factor in insurance quotes. Security alarms also provide discounts from most insurance providers. Perhaps you are retired or belong to a professional group that entitles you to a discount.
No one wants an increase in insurance, particularly in a tough economy. But use these tips for potential ways to save, so you don’t get shocked when that policy comes up for renewal.

Call me for more tips on how to lower your Home Owner’s Insurance