Freddie Mac

Mortgage News Key Mortgage Rate Sink To 49-Week Low



Mortgage News 
Key Mortgage Rate Sink To 49-Week Low

By Polyana da Costa – Bankrate.com

Mortgage rates defied the odds and edged lower for the fifth consecutive week, even as some economic reports show that the U.S. economy is growing.

The benchmark 30-year fixed-rate mortgage fell to 4.25 percent from 4.29 percent the previous week, according to the Bankrate.com national survey of large lenders. One year ago, that rate stood at 3.99 percent. Four weeks ago, it was 4.44 percent. The mortgages in this week’s survey had an average total of 0.34 discount and origination points.

This is the lowest level the 30-year rate has reached since June 19, when it was 4.12 percent.

  • The benchmark 15-year fixed-rate mortgage fell to 3.35 percent from 3.38 percent last week.
  • The benchmark 5/1 adjustable-rate mortgage rose to 3.24 percent from 3.21 percent. The benchmark 30-year fixed-rate jumbo fell to 4.29 percent from 4.31 percent.

MA. Pending Sales Increase Hits 15 Straight Months in July!


Newton, MA.  Realtor, Newtonmasshomesforsale.com, best Newton, MA. Realtor

Mass. Pending sales increases hits 15 straight months in July

Today we released our July pending home sales numbers and for the 15th straight month, single-family and condominium pending sales have gone up.  On a month-to-month basis pending sales have ticked down from June . This is the 2nd straight month-to-month decrease.

Link to release: July 2012 Pending Home Sales

Here are the highlights:

  • Single-family pending home sales were up 33.58% compared to July 2011
  • Single-family month-to-month pending home sales were down 8.52% from June 2012
  • Condo pending home sales were up 29.87% compared to July 2011
  • Condo pending month-to-month home sales were down 11.78% from June 2012

The Difference Between a Short Sale and a Foreclosure


newtonmasshomesforsale.com

 

This week, we are looking at the advantages of a short sale over a foreclosure from five different perspectives: the Sellers’, the Neighborhoods’, the Banks’, Prices and the Children. – The KCM Crew

Real estate professionals are handling an increasing number of distressed properties. Which is a better alternative for the seller – short sale or foreclosure? Here are the advantages of doing a short sale:

It allows a more dignified exit from the home.

In a foreclosure, an official eventually comes to the home and tells the occupants to leave – immediately. In a short sale, the seller knows the closing date and can prepare in advance for the move. In many cases, their neighbors, friends and family needn’t even know of their financial difficulties.

The seller could possibly avoid a deficiency judgment.

In almost all distressed sales, the bank can legally go after the seller for the difference between the loan amount and the selling price (known as a deficiency judgment). Most banks will release the seller from this obligation in a short sale process.

A short sale has less of a negative impact on their credit report.

Once a short sale is completed, the sellers begin to clean-up their credit report. The timeline can be much longer as a foreclosure proceeds through the process.

(For more on this go to: Short Sale vs. Foreclosure: A Short Sale Always Wins)

The seller can return to homeownership more quickly.

If a family allows the house to go to foreclosure, it may take 5-7 years to again qualify for a mortgage. In the case of a short sale, the timetable can be 2-4 years.

There is a ticking clock on tax relief.

There is currently legislation, the Mortgage Forgiveness Relief Act of 2007, ensuring that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven. This legislation is set to expire at the end of the year.

Newton Real Estate Market’s Biggest Problem—Lack of Inventory!


Newton, MA. Realtor, Buyer/Seller Agent Newton, MA.  Newtonmasshomesforsale.com

Summer 2012 Real Estate Trends

You may have already heard these from many sources,Case Schiller Index, WSJ, but here is another article highlighting the 5 Real Estate trends (some good, some bad) to look out for this summer:
Newton has only 130 single families listed for sale and 166 are under agreement.  A steady market is  between 200 and 215 active listings, this is a supply and demand business.  When Under Agreements outpace current inventory we are in an accelerating market.  There are MANY buyers out there.  I put a Brookline condo on the market last week and more than 6o people came to the open house…we had 4 offers by Monday and it is under agreement.  Houses in good, crisp condition sell for a premium and houses with deferred maintenance  sell at a discount.  If electric, boiler, roof, and plumbing need updating buyers will discount for that.  If you can afford to fix the infrastructure of the house–by all means do it!

5 Housing Trends in Summer 2012

  • Inventory-continues to be an issue in certain markets, like ours!
  • Steady Home Prices-most experts predict 3% in home prices over next 18 months
  • Interest Rates-will continue to hover around 4%
  • HARP-is helping borrowers qualify
  • Appraisals-issues will continue throughout summer
What does this mean?  Now is the right time to sell-and to buy-there is no guarantee how long these circumstances will last, don’t waste time at the beach-get in the house hunt!(If you have not reviewed your mortgage rate in the past few months it may make sense to look again, fixed rates are well under 4% for most situations, be sure to tell your friends too) –
*Summer 2012 should be very busy with little vacation time for those of us in the industry!

Real Estate Negotiating Tips


Newton Mass Homes for Sale

1. Go first. Many people hate to be first to toss out a figure because they think they might miss out on an opportunity. (”If I offer $10k and he would have been happy with $5k I’ll spend a lot more than I have to.”) Occasionally that might happen, but it makes more sense to go into a negotiation assuming the other party is smart and has a reasonable sense of the value of whatever they want to buy or sell. Making the first offer lets you set the “anchor” for negotiations to follow. Studies like this one show that when a seller makes the first offer the final price is typically higher than if the buyer made the first offer. Why? The buyer’s first offer will always be low, which sets a lower anchor. In negotiations, anchors matter.

2. Be quiet. When we’re nervous we tend to talk a lot and therefore miss a lot. Let silence be your friend. If you make an offer and the seller says, “No way,” don’t respond immediately. To fill the silence the seller will give reasons why your offer is too low… and in the process may give you information you wouldn’t have received otherwise. Stay relatively quiet, listen, and when you do speak, ask open-ended questions. You can’t meet in the middle (or, hopefully well to your side of the middle) unless you know what the other party really needs. Give them time to tell you.

3. Know what you want. You should always know what you need — and what you’re willing to spend or pay. If you don’t have a clue about the cost of a particular service, don’t expect the other party to educate you; that puts even the most ethical person in an awkward position. At the least have a sense of the market price for the product or service you want to purchase. Then you can adjust your offer based on the quality and quantity you will actually receive.

4. Assume the best case. High expectations typically lead to high outcomes. Ask for what you want, and go into the negotiation assuming you’ll get it. Why not? You can’t receive if you don’t ask. My wife is the eternal negotiation optimist; she always assumes she can make a deal on her terms. And she almost always does — because she confidently asks for what she wants.

5. Avoid setting ranges. Service buyers often ask for estimates in ranges: “I know you don’t have all the information you need, but based on what I’ve told you, what’s a ballpark figure?” Ranges create anchors too. If you don’t have enough information to provide a solid estimate, don’t. And never say, “Well, somewhere between $10k and $20k…” because the buyer will naturally want the final cost to be as close to $10k as possible, even if what you’re asked to provide should cost well over $20k.

6. Only make concessions for a reason. Say a buyer asks you to cut your price, saying, “All I can afford is $500.” Make sure you get something in return. Say, “For $500 I can do X and Y,” and take Z off the table. Every concession should involve a trade-off of some kind; otherwise your price was simply too high to begin with. Use the same logic if you’re buying; the classic home negotiation move is to ask for, say, all the appliances and fixtures when you counter at a higher number. Always ask for something in return, and don’t be afraid to ask for things you don’t really want early on so you have items you’ll be happy to take back off the table later.

7. Never be Harry Truman. Truman kept a sign that said “The buck stops here” on his desk to remind him that his was usually the final decision. In negotiations it’s tempting to say you have the final word and ultimate authority (especially if that’s true.) Don’t. To avoid getting cornered or pressured, always have a reason to step away and get the okay from another person, even if that other person is you.

8. Make time your friend. Never, ever rush. Never see a negotiation as something to wrap up as soon as possible. A negotiation is an investment in time, and most people don’t want to lose their investments, so the more time the other person has in a deal the more they’ll want to close the deal — and the more they will voluntarily give up in order to get you to say yes.

9. Ignore face value. Negotiating is a little like being on Survivor; in the spirit of the “game,” many people feel it’s okay to be less than forthcoming or honest. Don’t assume everything you hear is true. Statements like, “I can’t go a penny lower,” are more likely to be negotiating tactics than truths. Listen, but toss a few grains of salt onto what you hear. Look closely for what lies under the posturing and positioning.

10. Give the other person room. People get defensive or attack when they feel trapped, and neither helps a negotiation move forward. Push too hard and take away every option and the other party may have no choice but to walk away. You don’t want that, because you should…

11. Forget about winning and losing. Negotiating can feel like a game but it’s not. No one should win or lose. The best negotiations leave both parties feeling they received something of value. That’s how you want a negotiation to end up, because a negotiation should…

12. Create a relationship. Take, but don’t take too much. Give. but don’t give too much. Establishing a long-term business relationship should always be your goal.

And when you’ve finalized the deal, say thanks — and mean it.

5 REASONS YOU SHOULD CONSIDER SELLING YOUR HOUSE NOW!


NEWTON AND BROOKLINE HAVE BELOW AVERAGE INVENTORY…..and….

If you plan on moving anytime in 2011, you should strongly consider selling your house now rather than waiting. Here are five reasons why:

1.) This is when your house will get the most exposure

The spring, and particularly the month of May, is when most buyers enter the real estate market. This surge of buyers dramatically increases the exposure for your house . The best chance of getting quality offers (perhaps even multiple offers) is RIGHT NOW!

2.) Foreclosures and short sales will increase in about 90 days

The good news is that the number of people paying their mortgage on time is increasing. This will lead to less distressed property sales later this year and throughout 2012. The not-so-good news is that there is still a large inventory of existing foreclosures and short sales that will still be coming to market.

As an example, LPS reported in their latest Mortgage Monitor that:

  • There are still twice as many loans going 90+ days delinquent as are starting foreclosure
  • There are almost three times the number of foreclosure starts as there are foreclosure sales
  • Distressed property inventory levels are almost 45 times the rate of monthly foreclosure sales

This means that there is a backlog of properties which will start coming to the market in about 90 days as banks clear up their paperwork challenges. These properties sell at dramatic discounts. They will be your competition. Both Fannie Mae and Freddie Mac have recently discussed the magnitude of this challenge.

3.) Interest rates have risen over the last six months

Interest rates have stabilized recently. However, in the last six months, interest rates have climbed over 1/2%. Every time the rates increase 1/4%, approximately 250,000 buyers are eliminated from qualifying for a mortgage. In an environment of volatile rates, waiting could mean that there will be fewer buyers eligible to purchase your house. It also could mean that you will pay a higher rate on the next home you buy.

4.) Qualifying for a mortgage is about to get even more difficult

Besides increasing rates, there are other factors that will hinder a buyer’s ability to qualify for a mortgage as we move forward. Lending standards have been getting tighter over the last year. And as the government debates the new proposed guidelines (QRM), banks are gearing up for even more stringent standards.

Morgan Stanley recently stated:

“Recent developments in issues such as GSE reform, Dodd-Frank securitization rules, and foreclosure settlement issues suggest a tighter and more expensive environment for mortgage credit.” 

This may impact any potential purchaser for your property and may also impact your next purchase.

5.) It’s time to get on with your life

Probably the most important reason to sell is so you can get on with your life. You placed your home on the market for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you decided to move in the first place. Are these reasons still important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.

Bottom Line

If you plan to sell this year, the reasons above prove that selling now makes more sense than waiting to later in the year. Sit with a real estate professional in your area today to fully understand your best option.

WSJ REPORTS MORTGAGE RATES EDGE HIGHER


Mortgage rates mostly edged higher in the latest week, with the average on 30-year fixed-rate mortgages rising slightly to 4.87%, according to Freddie Mac’s weekly survey.

Mortgage rates generally track U.S. bond yields, which move inversely to Treasury prices. Rates have climbed this year after slumping most of last year when prices rallies on economic uncertainty.

Freddie Chief Economist Frank Nothaft noted that rates were little changed after what he called “an encouraging employment report” from the Bureau of Labor Statistics.

The 30-year fixed-rate mortgage averaged 4.87% in the week ended Thursday, up from 4.86% the prior week but down from 5.21% a year earlier. Rates on 15-year fixed-rate mortgages were 4.1%, up from 4.09% the previous week but down from 4.52% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.72%, up from the prior week’s 3.7% but down from 4.25% a year earlier. One-year Treasury-indexed ARMs were 3.22%, down from 3.26% and 4.14%, respectively.

To obtain the rates, the five-year ARMs required payment of an average 0.6 point and the others required an average 0.7 point. A point is 1% of the mortgage amount, charged as prepaid interest.