Mortgages: What you need to know in 2009

With all the doom and gloom over housing, you might be surprised to know that this is a fantastic time to get a mortgage. Not if you have poor credit, to be sure. But you can get a great deal on a 30-year, fixed-rate, conforming loan these days if you have a solid FICO score, a manageable debt burden, and proof positive of a reliable income.

You have to go back to around 1961 to find a time when 30-year mortgages had rates this low, according to Keith Gumbinger, a vice-president at financial publisher HSH Associates in Pompton Plains, N.J. For that, thank the U.S. government, which is trying to jump-start the stalled housing market by buying up mortgage-backed securities. On Dec. 31, Freddie Mac reported that average rates on 30-year fixed mortgages dropped to 5.1 percent for the week, down about 1.3 percentage points since late October and the lowest since its survey began in 1971.

Rates are probably headed even lower in 2009, raising the question of whether you should borrow now or wait for a better deal. The (read more here) 

Mortgage rates rise after record five-week run

Rates on a 30-year mortgage rate rose to 5.12 percent

Rates on 30-year mortgages rose above 5 percent this week, ending a five-week run at record low levels, Freddie Mac reported Thursday.

Mortgage rates have been in decline since the Federal Reserve said in late November it would buy up to $500 billion in mortgage-backed securities to get banks to lend more money in hopes of bolstering the troubled U.S. housing market.

Freddie Mac reported Thursday that average rates on 30-year fixed mortgages rose to 5.12 percent this week from a record low of 4.96 percent established last week. At this time last year, the 30-year fixed rate mortgage averaged 5.48 percent. (read more here)

Housing Market Oulook - Indiana Univ Profs (PDF article)

Jeffrey D. Fisher: Director, Benecki Center for Real Estate Studies; Charles H. and Barbara F. Dunn Professor of Finance and Real Estate, Kelley School of Business, Indiana University Bloomington

...the housing industry has taken the blunt of the blame for the financial crisis and the current economic recession. Certainly, the unprecedented growth of subprime mortgages made to people who really couldn’t aff ord a home was a major cause of the problems. It is questionable, at best, whether or not these mortgages were sound loans even when home prices were rising...

Read more and get the PDF here (housing market outlook 2009).

Educated Buyers are our best asset at THP.

Mortgage Applications Decrease In Latest MBA Weekly Survey

WASHINGTON, D.C. (January 7, 2009) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 2, 2009.  The Market Composite Index, a measure of mortgage loan application volume, was 1143.8, a decrease of 8.2 percent on a seasonally adjusted basis from 1245.7 one week earlier.  This week’s results included an adjustment to account for the shortened week due to the New Year’s Day holiday. On an unadjusted basis, the Index decreased 8.9 percent compared with the previous week and was up 28.3 percent compared with the same week one year earlier.

The Refinance Index decreased 12.3 percent to 5904.5 from 6733.8 the previous week and the seasonally adjusted Purchase Index increased 7.3 percent to 344.2 from 320.9 one week earlier.  The seasonally adjusted Conventional Purchase Index increased 2.3 percent while the Government Purchase Index (largely FHA) increased 19.2 percent.
 
The four week moving average for the seasonally adjusted Market Index is up 7.9 percent. The four week moving average is up 3.6 percent for the Purchase Index, while this average is up 9.3 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 79.8 percent of total applications from 82.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 0.9 percent from 0.8 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.07 percent from 5.03 percent, with points decreasing to 1.16 from 1.24 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.67 percent from 4.79 percent, with points decreasing to 1.16 from 1.26 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased to 5.90 percent from 6.15 percent, with points decreasing to 0.31 from 0.44 (including the origination fee) for 80 percent LTV loans.

Source

Senior Housing Industry Outlook & Trends For 2009

Want to know what we think are going to be senior housing trends in 2009?  We looked into the magic, crystal ball and here is a preview of 10 topics and issues that may be hot in 2009….we will be addressing these further over the next month or so: 

1.  When will housing prices find a bottom and how long can seniors wait to sell their homes before migrating to other senior housing options:  Without some kind of drastic government intervention, look for this issue to drag at least for the first six to nine months of 2009.

2.  Reverse mortgages for home purchases.  Effective January 2009 a reverse mortgage product that allows seniors to simultaneously purchase a home and obtain a reverse mortgage will be announced.  Look for lenders to implement later in the spring and for real estate agents to use this as a means to get seniors to downsize their living spaces.

More? Please follow this link.

Fannie Mae, Freddie Mac - A Look Ahead

Here is some recent news about the outlook for F. Mae and F. Mac (link).

Fannie Mae and Freddie Mac: A Look Ahead

As everyone reading this magazine knows, the apartment industry has been affected by credit and liquidity problems. But multifamily mortgage finance has been shielded from the worst of the banking and mortgage meltdown. What's behind this phenomenon? Simply put, Fannie Mae and Freddie Mac.

The two firms have been critical in continuing to provide mortgage debt to apartment firms during the current economic crisis—just as they did during previous economic storms, including the 1998 Russian financial crisis and the 2001-2002 downturn. 

As lawmakers and regulators begin to recast the Government Sponsored Enterprises (GSEs), National Multi Housing Council (NMHC) is making sure they understand the differences between the single-family and the multifamily market—and why those differences require different regulatory approaches. 

Multifamily firms have several sources of mortgage capital other than the GSEs, including insurance companies, banks and even HUD. Still, for various reasons, Fannie and Freddie have been the most reliable source of debt to the full spectrum of apartment owners. 

Banks and insurance companies are major providers of mortgage capital, but they have more restrictive loan terms, are more selective in their investments and tend to lend for shorter terms. Banks are further limited by regulatory restrictions, and insurance companies continually reset their commercial real estate investment strategies. 

More...

7 things to know about mortgage rates in 2009

It wasn't too long ago that mortgage rates were expected to move sharply higher in the coming months thanks to rattled investors and mounting inflation. But while falling home prices and jittery financial markets have done little to assuage investor fears, a number of recent developments have combined to create a decidedly optimistic mortgage-rate outlook for 2009. "The preponderance of forces that would typically operate on mortgage rates — the economic backdrop, the inflation backdrop and, in this case, government policy — are all pointing towards lower interest rates," says Mike Larson, a real-estate analyst at Weiss Research.

Rates have already become increasingly attractive. The average national rate for 30-year fixed mortgages fell to 5.57% in the week of Dec. 5, from 6.61% just seven weeks earlier, according to HSH Associates. Here's a look at where mortgage rates are headed in the new year, the forces that will be influencing them, and how consumers can take advantage of the trends.

Read more here.

Hendricks Mortgage can help you find the best mortgage rates, based on your credit history, the current market, and what your housing needs will be when you are ready to buy.

9 housing-market head winds for 2009

With home prices having dropped a painful 21% from their 2006 peaks, property owners everywhere could use a splash of good news in their New Year's Eve cocktails. But as a nasty recession is now part of the picture, the chances of an aggressive housing-market rebound in 2009 are dim. "A lasting recovery in the housing market?" says Mike Larson, a real-estate analyst at Weiss Research. "I don't see it in the cards until the back end of the year -- if that."

Let THP and Hendricks Mortgage help find your perfect home in this challenging economy. Here's a look at the factors that will be weighing down the housing market in 2009:

1. Recession
After months of speculation, the National Bureau of Economic Research made it official in early December 2008, announcing that the U.S. economy entered into a recession in December...

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New Home Discussion Group on Google Groups

Check out the new home discussion group on Google Groups.

We will discuss anything from builders to resale, mortgage rate to refinancing, the housing market to the rebounding economy.

Fed cuts key rate to as low as zero - one week ago today

WASHINGTON - The Federal Reserve, urgently rewriting its playbook to fight a deepening recession, cut its benchmark interest rate to as low as zero Tuesday, a surprisingly strong step that should make it cheaper for Americans to borrow on credit cards and pay their mortgages.

Wells Fargo, Wachovia and U.S. Bancorp immediately lowered their prime lending rates from 4 percent to 3.25 percent, and other banks will probably follow suit. Economists cautioned, though, that people frightened by the economy and worried about their own jobs may not feel like taking on more debt.

The Fed's action was unprecedented in the central bank's 95-year history, and Wall Street embraced it. The Dow Jones industrials, which had been up about 120 points ahead of the Fed announcement, finished the day up nearly 360, a gain of more than 4 percent.

For the first time, the Fed created a target range for its funds rate, putting it at zero to 0.25 percent. That was a dramatic reduction from the previous rate, which was an already low 1 percent. The federal funds rate is the interest that banks charge each other for overnight loans.

The radical action underscores the breathtaking deterioration in the U.S. economy and the stability of the financial system this fall, and even since Fed policymakers last gathered in late October.

More...

Fed rate cut smells of fear

The announcement by the Federal Reserve Board that it has cut its benchmark overnight federal funds rate, the rate at which banks lend to one another, to a "target range" of between one-quarter percent and zero is both an acknowledgment of reality and a sign of panic. Since banks, even in the wake of huge infusions of capital from both the Treasury and the Fed, aren't lending much to each other, anyway, the effective interest rate was already close to zero.

By setting its "target" rate at close to zero, the Fed essentially made public that, for the foreseeable future, the traditional method the Fed uses to try to pump up a flagging economy - lowering interest rates to loosen the credit markets - won't work.

Read more of the article here.

The signs of a housing turnaround

Signs of Housing Turnaround

Buy your 1st home in a year...with this plan.

Buy your first home in a year

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Rush To Refinance -- Or Hold Off?

With mortgage rates at their lowest levels in decades, many homeowners are racing to lenders, seeking to refinance.

But is that the right move?

On The Early Show Friday, Whitney Tilson, founder and managing partner of Tilson Mutual Funds, said now's a great time, but it may pay to be patient and wait a little longer.

Tilson pointed out that mortgage rates have "crashed. Just in the past seven weeks, they've been declining every week. ... For a 30-year fixed rate orange, they've declined to five-point-two percent, which is a 50-year low. That's great news. It's about the only good news in the housing market right now."



So, is now the time to re-fi?

"It's sort of like trying to time the stock market, I suppose," Tilson observed.

He pointed out that a proposal "floating around in Congress" could, if backed by the incoming Obama administration and OK'd by lawmakers, send rates even lower, to the neighborhood of four-and-a-half percent.

"That's the dilemma: Do you grab the 50-year low rate right now or wait a few weeks and you might get a chance to refinance at an even lower rate?"

The answer, he explained, could lie in your circumstances.

Read more here...

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U.S. MBA’s Mortgage Applications Index Rose 2.9% Last Week

U.S. MBA’s Mortgage Applications Index Rose 2.9% Last Week

Mortgage applications in the U.S. increased 2.9 percent last week as more homeowners refinanced to take advantage of lower interest rates.

The Mortgage Bankers Association’s index of applications to buy a home or refinance a loan rose to 841.4 from a revised 817.7 a week earlier. The group’s refinancing index increased 6.5 percent, while the purchase gauge dropped 4.5 percent.

Declining mortgage rates, brought on by Federal Reserve actions to purchase mortgage-backed debt, are making it more attractive for existing loan holders to refinance. Even so, the faltering economy continues to discourage home purchases.

“Sales have pretty much flattened out all year,” Richard DeKaser, senior economist at National City Corp. in Cleveland, said before the report. “It’s still a bad market. A broader- based rebound remains far in the future.”

The refinancing gauge rose to 4156 from 3901.9 the prior week, while the purchase index fell to 286.1 from 299.6.

The Fed yesterday cut its target federal funds rate to a range of zero percent to 0.25 percent and said it will do whatever is necessary to ease the recession.

“Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,” the Federal Open Market Committee said in a statement.

Fed’s Debt Purchases...

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Videos to help understand the housing process.

Seven steps to purchasing a THP home - Step 1

In this video you will be able to find out the first step in purchasing a home with T.H. Properties, a Harleysville, PA homebuilder.

30-Year Mortgage Rates Sink to Lowest on Record

Interest rates on 30-year fixed rate mortgages dipped to their lowest level in at least 37 years after the Federal Reserve this week reaffirmed its commitment to a program designed to loosen consumer lending, according to a closely watched weekly survey released yesterday.

The average rate fell to 5.19 percent, down from 5.47 percent the previous week and 6.14 percent at the same time last year, according to mortgage financier Freddie Mac, which polled lenders the first three days of this week. The rate is the lowest since the firm started tracking such data in April 1971.

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Record low mortgage rates...so what?

What does it mean for me...?



Further new home-buying help.

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President Bush signs the rescue bill for the automakers...

President Bush has signed a rescue bill which will provide billions for struggling automakers GM and Chrysler. Alexis Christoforous reports from the New York Stock Exchange.

Hendricks Mortgage - check for rates!

Tresury, mortgage rates fall.