2011 Mortgage Trends

2011 Mortgage Trends: Jumbo Loans, Cash Buys


The number of mortgage applications for home purchases is expected to become a bigger part of the mortgage market in 2011 as home prices stabilize, predicts the Mortgage Bankers Association. Refinancing has mostly dominated in recent months as home owners looked to lock-in low interest rates, but experts predict refinancing to slow as new mortgage shoppers dominate.



Real estate analysts predict the other following trends in the mortgage market for 2011:



Rates on the rise. The Mortgage Bankers Association predicts mortgage rates to rise slightly in 2011 and hover around 5 percent. They expect rates to increase to about 6 percent in 2012.



Jumbo loans become more attractive. Jumbo loans (loans over $417,000 in most housing markets and above $729,750 in high-cost housing markets) are expected to pick up pace in the next few months. Jumbo loans often have higher mortgage rates than conforming loans. However, with mortgage rates on jumbo loans dropping, experts predict a hike in refinancing and purchase applications for high-end housing.



All-cash purchases. All-cash purchases represented about a quarter of all existing home purchases in the last four months of 2010, according to Lawrence Yun, chief economist of the National Association of REALTORS®. He expects all-cash purchases to continue to represent a big part of the real estate landscape in 2011.



Slow and complex mortgage loan process. The time between application and closing can take as much as 60 days and that’s not expected to get any faster, experts say. Lenders often recommend borrowers lock in a loan 60, 75, or 90 days to help ensure the loan process will be completed within that lock-in period. The industry's new levels of documentation and verification that is now required is causing lengthy delays in the loan process, experts say.

Source: “7 Mortgage Trends to Expect in 2011,” MSNBC (Jan. 10, 2011)

Emily Lee

call/text 606-499-7836

Realty Group II

broker:423-869-5111



Pending Home Sales Show Healthy Gain

Pending Home Sales Show Healthy Gain


Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of REALTORS®.



The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.



Lawrence Yun, NAR chief economist, says the improvement is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he says. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”



Pending home sales by region:



Northeast: the index rose 9.0 percent to 77.7 in February and is 18.9 percent higher than February 2009.

Midwest: jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago.

South: increased 9.2 percent to an index of 107.0, and the index is 17.5 percent higher than February 2009.

West: the index fell 4.8 percent to 98.0 but is 14.6 percent above a year ago.



Source: NAR

 
 

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EMILY LEE

606-499-7836

REALTY GROUP II

423-869-5111

7 Tips for First Time Home Buyers

1. Look up local listings to see what price range houses are going for. Follow this link to Realtor.com.



2. Check to see if you can afford a monthly payment by using a mortgage calculator. Follow this link to a mortgage calculator.



3. To see if you can afford this mortgage payment use an affordability calculator. Follow this link to an affordability calculator.



4. Find a buyers agent to represent you. You will need help you through your home search, the ins and outs of finding something in your budget that suits your needs, going through the offer, inspection and closing steps that are involved. If you don't get a buyers agent to represent you the agent is automatically working for the seller.



5. Get pre-approved!!! Never start out your search not knowing if you can even get a loan or not, this will also make your offer to a seller more appealing.



6. Start saving!!! The more earnest money you can put down on a contract the more serious your offer will seem to a seller.



7. Ask about title insurance fees, survey charges, escrow fees, and loan origination fees, all of this may be due at closing so it’s good to know ahead of time what you’ll be paying for.

Measuring The Benefits Of Home Ownership

Thinking about getting into Home Ownership???? Now is the best time to jump into this lifelong investment! With the first time homeowner’s tax credit of $8,000 and the market back on the rise…. all waiting around will get you is a larger mortgage payment…..


Why should you buy?

When you purchase a home instead of rent you are making an investment into your future, whereas with renting you are just giving someone else your money. When you own a home you can deduct your mortgage loan interest cost from you federal income taxes and your property taxes as well.


How can you get a loan if you can’t afford a large down-payment or have bad credit?

There are many federal mortgage programs that offer loans to people just like you! They offer low down payments or even 100% financing with low monthly payments.


Can you afford a mortgage payment if you’re a single parent?

YES!!! The government offers homeownership grants or special programs to single parents just like you! The key is getting with an agent and getting pre-qualified before you start your home search.


What is the first thing you should do when you’re thinking about home ownership?

Contact a local Realtor!!! They can lead you in the right direction from Step 1 until closing day. Chose a realtor who has your best interest at heart and are willing to help you work through all the steps from getting pre-qualified to choosing the right home for you. To contact me :
send me an e-mail at EmilyLeeRealty@yahoo.com or call me at (606) 499-7836


Below I have attached a link to a article that contains a wealth of information to those considering buying a home, Check it Out!

Measuring The Benefits Of Home Ownership

Mortgage Rates Hold Steady

Mortgage Rates Hold Steady

The average rate on 30-year, fixed mortgages held at 5.04 percent for the week ended Sept. 24—down from 6.09 percent a year ago, according to Freddie Mac. Interest on 30-year, fixed loans has declined in the past three weeks, according to Freddie Mac chief economist Frank Nothaft, and the Mortgage Bankers Association reported a 13 percent increase in application volume last week. Other rates performed as follows:

15-year fixed loans dipped for the week from 4.47 percent to 4.46 percent.
Five-year hybrid adjustable-rate mortgages were flat at 4.51 percent.
One-year ARMs fell from 4.58 percent to 4.52 percent.

Source: Wall Street Journal (09/25/09)