The Mortgage and Real Estate Markets in Massachusetts, Maine and New Hampshire

Is USDA Rural Development Loan the Next FHA?

Sun, 22 Nov 2009 13:50:02 -0600

Is USDA Rural Development Loan the Next FHA?

The USDA Rural Development Loan program is suddenly gaining steam. Watch this video from USDA to learn more:

Lew Corcoran, Sr. Mortgage Consultant
Reverse Mortgages / FHA Loans / VA Loans
USDA Rural Development Loans
in Massachusetts and Florida
ActiveRain Blog / Localism / New England Properties
The Mortgage Market Watch and Interest Rate Lock Advisory

General Mortgage Loan Guideline Changes - Regarding Debt Ratios

Sat, 21 Nov 2009 17:50:08 -0600

Here is a blog post about the upcoming changes to mortgage underwriting requirements. The requirements are getting tougher, making it more difficult for people to qualify for a home mortgage.

Via Tom Burris | Texas Mortgage Dallas Mortgage FHA (DallasLoanGuy.com):

Mortgage Loan Guideline Changes

Capital Market adjustments to guidelines:

Conforming Fannie Mae & Freddie Mac Debt Ratios:

Effective on loans funding after December 12, 2009 the maximum debt ratios are as follows. References to DU 8.0 are due to the pending update to Desktop Underwriter(automated underwriting).

* DTI > 45% must be approved thru DU Version 8.0
* Fannie Mae indicated that debt ratios exceeding 45% require compensating factors. Fannie does not publish a list of compensating factors and it is unknown whether DU 8.0 will approve above 45%

FHA, VA, USDA & Bond Program Loans:

Effective with loans funding on or after December 12, 2009 the maximum debt ratios are as follows.

* Maximum DTI 50% regardless of AUS(automated underwriting) Findings.
* DTI 45% - 50% at the sole discretion of the underwriter who will require measurable compensating factors, including, but not limited to 12 months verified housing history with no late payments. Limited payment shock. Cash reserves. Possible increased down payment.

Minimum FICO on ALL LOANS will be 620..... Gov't or Conforming.
Get ready for 640+ credit score requirements as I believe the tightening will continue.

Borrowers need to prepare themselves to provide more documentation than ever before. Realtors... prepare your clients!!

Tom Burris
DallasLoanGuy.com
Dallas, TX

http://www.dallasloanguy.com/

I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!!

What Is A Reverse Mortgage?

Sat, 21 Nov 2009 16:43:00 -0600

What Is A Reverse Mortgage?
A 12 Part Series

Part 1 - Definition of a Reverse Mortgage

A reverse mortgage is a Home Equity Conversion Mortgage (HECM) - it's a special type of home loan that allows senior citizens to convert a portion of the equity in their homes into cash. Reverse mortgages are offered through the FHA (Federal Housing Administration), and is available only to homeowners or home buyers aged 62 or older.

A reverse mortgage is a safe plan that can give older Americans greater financial security. The equity that has built up in their homes over years can be paid to senior citizens. Because they are being paid from the equity in their homes, senior citizens can use the cash for whatever purpose they want. Many seniors use it to supplement social security and retirement benefits, meet unexpected medical expenses and daily living expenses, make home improvements, travel, and more.

A reverse mortgage is often used to fully pay off an existing home mortgage and thereby allow Seniors to cease making monthly mortgage payments. And, unlike a traditional home equity loan or second mortgage, no repayment is required on a reverse mortgage until the borrower(s) no longer use the home as their principal residence.

Seniors can also use a reverse mortgage to purchase a primary residence if they have cash on hand or have proceeds from the sale of another home. The cash on hand is used to pay the difference between the proceeds or a reverse mortgage and the sales price plus closing costs for the property they are purchasing.

The maximum available loan amount is a percentage of the home's value that is based on the age of the youngest homeowner. The loan does not have to be repaid until the last surviving homeowner permanently moves out of the property, sells the home, or passes away. At that time, the estate has 12 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. The estate initially has 6 months, but up to 2 3-month extensions can be granted. All remaining equity is inherited by the estate. And, the estate is not liable if the home sells for less than the balance of the reverse mortgage.

Difference Between a Home Equity Loan and a Reverse Mortgage

With a traditional second mortgage or a home equity line of credit (HELOC), you must have sufficient income, credit and equity in the home to qualify for the loan. You are also required to make monthly mortgage payments. The reverse mortgage is different from a home equity loan in that it pays you, and is available to you regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limit for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

You don't make payments, because the loan is not due as long as you live in the house, and it is your primary residence. As with all home owners, you still are required to pay your real estate taxes, homeowner's insurance, and other conventional payments such as utilities. However, with a reverse mortgage, you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."

Next: Part 2 - Reverse Mortgage Eligibility Requirements

If you're 62 or older and are looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, to pay for healthcare expenses, or even to buy your retirement home, then consider getting a reverse mortgage. Find out how a reverse mortgage can use the equity in your home to pay you.

Home Value Update for Barnstable MA Through October 2009

Sat, 21 Nov 2009 05:16:18 -0600

Home Value Update for Barnstable MA Through October 2009

According to Trulia.com, the sale prices of single family homes have increased 18.9% in the past year through the end of October 2009. The current mean sales price of homes on the market in Barnstable, MA, is $535,000. Below is a chart of the trend of listing prices of homes for sale in Barnstable, MA, in the past year through October 2009:

Barnstable Recently Sold Homes

The $8000 first-time homebuyer tax credit has been extended, and now expires on April 30, 2010. So, there's no better time than now to buy a home in Barnstable, MA, or surrounding area. If you're looking for a home or condo to purchase in Barnstable, MA, or in the surrounding area, then try this home search.

You can still buy a home with no money down with the USDA Rural Development Home Loan program. With the FHA Mortgage program, you can purchase a home with as little as 3.5% down. When you're ready to buy a home, find out how much home or condo you can afford to purchase in Barnstable, MA, or in the surrounding area.

If you're 62 or older and are looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, or pay for healthcare expenses, then consider getting a reverse mortgage. Find out how a reverse mortgage can use the equity in your home to pay you.

The Mortgage Interest Rate Lock Advisory for Barnstable MA for November 20, 2009

Sat, 21 Nov 2009 05:13:37 -0600

The Mortgage Interest Rate Lock Advisory for Barnstable MA for November 20, 2009

Here are some of the events affecting mortgage interest rates today in Barnstable, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.72 this morning - up 1/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.84 - up 4/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be about the same in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

There are no economic reports scheduled for release today.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. Mortgage rates are currently inching upwards again. If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.

There are a couple of economic reports scheduled for release next week. Next week is also a holiday-shortened week due to Thanksgiving. Look for more details on next week's events on Monday.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Barnstable, MA.

Home Value Update for Mashpee MA Through Ocober 2009

Thu, 19 Nov 2009 12:04:33 -0600

Home Value Update for Mashpee MA Through Ocober 2009

According to Trulia.com, the sale prices of single family homes have increased 15.2% in the past year through the end of October 2009. The current mean sales price of homes on the market in Mashpee, MA, is $317,579. Below is a chart of the trend of listing prices of homes for sale in Mashpee, MA, in the past year through October 2009:

Mashpee Recently Sold Homes

The $8000 first-time homebuyer tax credit has been extended, and now expires on April 30, 2010. So, there's no better time than now to buy a home in Mashpee, MA, or surrounding area. If you're looking for a home or condo to purchase in Mashpee, MA, or in the surrounding area, then try this home search.

The Mortgage Interest Rate Lock Advisory for Mashpee MA for November 19, 2009

Thu, 19 Nov 2009 11:36:56 -0600

The Mortgage Interest Rate Lock Advisory for Mashpee MA for November 19, 2009

Here are some of the events affecting mortgage interest rates today in Mashpee, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.75 this morning - up 2/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.75 - the same as it opening. Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be about the same in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

Leading Economic Indicators (LEI) -the Conference Board reported the LEI increased 0.3% in October, slightly less that 0.4% increase analysts expected. This follows a 1.0% increases the previous months. This report attempts to predict economic activity over the next three to six months. This means that analysts are forecasting an small increase in economic activity over the next few months. However, this report usually does not have much of an impact on the mortgage market.
Jobless Claims -505,000 new claims for unemployment were filed last week - in line with estimates. This is slightly more than the 502,000 new claims filed the previous week. The 4-week average declined by 4,500 to 519,750 - the lowest since November 2008. And, continuing claims declined by 139,000 to 5.631 million. However, most of the decline in continuing claims is attributed to the expiration of unemployment benefits. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. However, this data is usually not considered to be very important to the mortgage market.
Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $1.006 trillion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

Is inflation looming around the corner? Watch this video from CNBC on today's economic reports:

What's Happening With Mortgage Interest Rates Today:

Moderate Volatility. There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. Mortgage rates are currently inching upwards again. If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Mashpee, MA.

Home Value Update for Falmouth MA Through Ocober 2009

Wed, 18 Nov 2009 12:19:54 -0600

Home Value Update for Falmouth MA Through Ocober 2009

According to Trulia.com, the sale prices of single family homes have increased 14.4% in the past year through the end of October 2009. The current mean sales price of homes on the market in Falmouth, MA, is $452,500. Below is a chart of the trend of listing prices of homes for sale in Falmouth, MA, in the past year through October 2009:

Falmouth Recently Sold Homes

The $8000 first-time homebuyer tax credit has been extended, and now expires on April 30, 2010. So, there's no better time than now to buy a home in Falmouth, MA, or surrounding area. If you're looking for a home or condo to purchase in Falmouth, MA, or in the surrounding area, then try this home search.

The Mortgage Interest Rate Lock Advisory for Falmouth MA for November 18, 2009

Wed, 18 Nov 2009 12:13:26 -0600

The Mortgage Interest Rate Lock Advisory for Falmouth MA for November 18, 2009

Here are some of the events affecting mortgage interest rates today in Falmouth, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.69 this morning - down 2/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.72 - up 1/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be about the same in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

Consumer Price Index (CPI) for October - there was a 0.3% increase in the overall reading, and a 0.2% increase in the core data reading - slightly better than expected. Analysts expected to see a 0.2% increase in the overall reading, and a 0.1% increase in the core data reading. The core date was driven up mostly by the prices of cars and light trucks. Similar to the Producer Price Index (PPI), this report measures inflationary pressures at the consumer level of the economy. While the report revealed slightly stronger than expected readings, it did not have much of an impact on the mortgage market or mortgage interest rates this morning.
Housing Starts for October - there were 529,000 housing starts in October - a 10.9% decline from the previous month - and is much less than the 600,000 that was expected. It's also the lowest level since April of this year. While this report provides an indication of strength in the housing sector, it usually does not have a noticeable impact on the mortgage market or mortgage interest rates.

In other news, Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc. and a former research director at the Federal Reserve Bank of Atlanta, talks about housing starts and consumer sentiment. Watch this video from Bloomberg:

What's Happening With Mortgage Interest Rates Today:

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Falmouth, MA.

Changes to the FHA Streamline Refinance Program

Wed, 18 Nov 2009 04:51:01 -0600

Changes to the FHA Streamline Refinance Program

The requirements for FHA streamline refinances have changed. The new rules went into effect on November 17, 2009.

Under the new FHA streamline refinance guidelines, homeowners who want to refinance their FHA mortgage have to meet tougher eligibility requirements:

At the time of loan application, the borrower must have made at least 6 payments on the FHA mortgage being refinanced.
For mortgages with less than a 12 months payment history, the borrower must have made all mortgage payments within the month due.
For mortgages with a 12 months payment history or greater, the borrower must have:
- Experienced no more than one 30 day late payment in the preceding 12 months, and
- Made all mortgage payments within the month due for the three months prior to the date of loan application.

There is also a "tangible net benefit" requirement. A "tangible net benefit" is defined as:

A reduction in the total mortgage payment (principal, interest, taxes and insurances, homeowners' association fees, ground rents, special assessments and all subordinate liens)
- The new total mortgage payment must be at least 5% lower than the total mortgage payment for the mortgage being refinanced.
Refinancing from an adjustable rate mortgage (ARM) to a fixed rate mortgage, or
Reducing the term of the mortgage.

FHA Streamline Refinance applicants must now show evidence of income and employment, plus proof of cash required to close.

If there is more than one mortgage property, there is now a maximum combined loan-to-value (CLTV). If subordinate financing is remaining in place, the maximum CLTV ratio is now 125%.

For streamline refinance transactions WITHOUT an appraisal, the CLTV is based on the ORIGINAL appraised value of the property.
For streamline refinance transactions WITH an appraisal, the CLTV is based on the NEW appraised value.

In areas of declining home values, this may render refinancing impossible.

Mortgage rates are low right now. If you're a homeowner and you have an FHA mortgage, it may be prudent to explore the possibility of an FHA Streamline Refinance.

Home Value Update for Sandwich MA Through Ocober 2009

Tue, 17 Nov 2009 14:48:00 -0600

Home Value Update for Sandwich MA Through Ocober 2009

According to Trulia.com, the sale prices of single family homes have declined 13.2% in the past year through the end of October 2009. The current mean sales price of homes on the market in Sandwich, MA, is $292,000. Below is a chart of the trend of listing prices of homes for sale in Sandwich, MA, in the past year through October 2009:

Sandwich Recently Sold Homes

The $8000 first-time homebuyer tax credit has been extended, and now expires on April 30, 2010. So, there's no better time than now to buy a home in Sandwich, MA, or surrounding area. If you're looking for a home or condo to purchase in Sandwich, MA, or in the surrounding area, then try this home search.

The Mortgage Interest Rate Lock Advisory for Sandwich MA for November 17, 2009

Tue, 17 Nov 2009 11:33:01 -0600

The Mortgage Interest Rate Lock Advisory for Sandwich MA for November 17, 2009

Here are some of the events affecting mortgage interest rates today in Sandwich, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.75 this morning - down 4/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.94 - up 6/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be 0.0% - 0.125% better in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

Producer Price Index (PPI) for October - the overall PPI reading is up 0.3% mostly due to higher energy costs, and follows a 0.6% decline the previous month. However, the core PPI reading declined 0.6% mostly due to declines in the prices of cars and light trucks, and follows a 0.1% decline the previous month. Analysts expected to see a 0.5% increase in the overall reading, and a 0.1% increase in the core data reading.

The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are monitored - the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Even though the report revealed weaker than expected readings, it had almost no impact on the mortgage market or mortgage interest rates this morning.
Industrial Production Report for October - industrial production is up 0.1%, less than the 0.4% increase that was expected, and is less than the 0.7% increase the previous month. The capacity utilization rate (factory usage) remained at 70.7%, inline with expectations. This report provides us with a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. However, this report usually does not have much of an impact on the mortgage market.

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Overall, the first three days of the week will be the most important with the release of the Retail Sales Report, the Producer Price Index and the Consumer Price Index reports.

There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. While there's still some room for MBS prices to tick higher, it's better to have locked when you should have floated than it is to float when you should have locked.

If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Sandwich, MA.

The Mortgage Interest Rate Lock Advisory for Bourne MA for November 16, 2009

Mon, 16 Nov 2009 11:15:48 -0600

The Mortgage Interest Rate Lock Advisory for Bourne MA for November 16, 2009

Here are some of the events affecting mortgage interest rates today in Bourne, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.84 this morning - up 1/32 from Friday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.84 - the same as its opening. Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be the same in price this morning as compared to Friday's close.

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Recent Activity in Mortgage Backed Securities:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

Retail Sales Report for October - released by the Commerce Department this report measures consumer spending which is considered important as it makes up two-thirds of the economy. The report revealed a 1.4% increase in retails sales in October, up significantly from the 1.5% decline in September. Analysts expected the report to show a 0.9% rise in spending in October. The increase in retail sales is largely attributed to a 7.9% increase in auto sales after a 14.3% decline the previous month. If auto sales are excluded, retail sales improved only 0.2% which follows a 0.4% increase the previous month. Today's retail sales report had no impact on the mortgage market today.

In other news, Ben Bernanke, Chairman of the Federal Reserve, is speaking to the Economic Club of New York today.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, the first three days of the week will be the most important with the release of the Retail Sales Report, the Producer Price Index and the Consumer Price Index reports.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get the best available mortgage interest rates for your situation in Bourne, MA!

The Mortgage Market Watch for the Week of November 16, 2009

Mon, 16 Nov 2009 10:30:26 -0600

The Mortgage Market Watch for the Week of November 16, 2009

Events Affecting the Mortgage Market This Week:

Economic Reports to be Released This Week:

There are six economic reports scheduled for release this week. We could see volatility in the financial markets which could affect mortgage interest rates.

Monday, November 16th:

Retail Sales Report for October - released by the Commerce Department this report measures consumer spending which is considered important as it makes up two-thirds of the economy. Analysts expect the report to show a 0.9% rise in spending in October, a significant increase over the 1.5% decline in September. If the report reveals a larger than expected increase in consumer spending, it would be considered negative news for the mortgage market because large increases in spending fuels an economic recovery and raises inflation concerns in the marketplace, and mortgage interest rates could increase.

Tuesday, November 17th:

Producer Price Index (PPI) for October - the PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are monitored - the overall reading and the core data reading. Analysts are expecting to see a 0.5% increase in the overall reading, and a 0.1% increase in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If the report reveals stronger than expected readings, this will increase concerns about inflationary pressures, and mortgage interest rates could increase.
Industrial Production Report for October - this report provides us with a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Analysts are expecting to see a 0.4% increase in production. While stronger than expected increases of production would be considered bad news for the mortgage market, this report usually does not have much of an impact on mortgage interest rates.

Wednesday, November 18th:

Consumer Price Index (CPI) for October - similar to the Producer Price Index (PPI), this report measures inflationary pressures at the consumer level of the economy. Analysts are expecting to see a 0.2% increase in the overall reading, and a 0.1% increase in the core data reading. If the report reveals stronger than expected readings, this will increase concerns about inflationary pressures, and mortgage interest rates could increase.
Housing Starts for October - this report provides an indication of strength in the housing sector, but usually does not have a noticeable impact on mortgage rates. Analysts are expecting the report to reveal 600,000 new housing starts in October. However, this report usually does not have much of an impact on the mortgage market.

Thursday, November 19th:

Leading Economic Indicators (LEI) - released by the Conference Board, this report attempts to predict economic activity over the next three to six months. Analysts are expecting to see a 0.4% increase in the index. This means that analysts are forecasting an increase in economic activity over the next few months. However, this report usually does not have much of an impact on the mortgage market.
Jobless Claims - New claims for unemployment are tabulated each week to show the number of individuals who filed for unemployment insurance for the first time. Analysts are predicting that 504,000 new claims for unemployment will have been filed last week. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. However, this data is usually not considered to be very important to the mortgage market.
Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $1.006 trillion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

Friday, November 20th:

There are no economic reports scheduled for release today.

How do Economic Data Releases Affect Mortgage Interest Rates?

One of the most important things for you to know when deciding when to lock in the interest rate on your mortgage is knowing what economic data is going to be released - and when - and how it may impact the mortgage market and mortgage interest rates.

While an in depth review of an economic event can help you make an informed decision, understanding the nuances of a release can't help you if you don't know when it's happening. Economic data releases are important because they provide a snapshot of what's happening in the economy. They also provide a foreshadowing of any upcoming market volatility. It's just as important to know when these data releases are happening as knowing what effect these releases can have on the mortgage market.

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Recent Activity in Mortgage Backed Securities:

Remember - as the prices of mortgage backed securities goes up, the yields come down - and mortgage interest rates come down with it. Conversely, as the prices of mortgage backed securities goes down, the yields go up - and so do mortgage interest rates.

Mortgage Interest Rate Outlook:

Frequently Asked Question: FHA / MIP / VA Funding Fee

Sun, 15 Nov 2009 22:29:32 -0600

Frequently Asked Question: FHA / MIP / VA Funding Fee

Q: Q: I am going over our Closing Costs Worksheet (for our preapproval) and I see "FHA/MIP/VA Funding Fee". What is this? Is this something that has to be paid at closing or can it be added into the loan?

A: FHA has a one-time upfront mortgage insurance premium (UFMIP) of 1.75% of the mortgage amount. If you are doing an FHA loan, you can either pay the UFMIP out of pocket or roll it into the mortgage. If you are doing a 15 year mortgage with less than 10% down or a 30 year mortgage regardless of the amount down, there is also a monthly mortgage insurance premium.

VA has a one-time funding fee that varies in amount, and depends on the type of veteran, the type of transactions, and whether or not it's a first time use. If you are doing a VA loan, you can either pay the VA Funding Fee out of pocket or roll it into the mortgage. With VA loans, there's no monthly mortgage insurance premium.

USDA has a one-time funding fee of 2.0% of the mortgage amount. If you are doing an USDA loan, you can either pay the funding fee out of pocket or roll it into the mortgage provided that the house appraises for at least 2% more than the purchase price or its value. With USDA loans, there's no monthly mortgage insurance premium.

If you are not doing an FHA or VA or USDA, then there is no funding fee or upfront mortgage insurance premium.

The Mortgage Interest Rate Lock Advisory for Worcester MA for November 13, 2009

Fri, 13 Nov 2009 11:02:39 -0600

The Mortgage Interest Rate Lock Advisory for Worcester MA for November 13, 2009

Here are some of the events affecting mortgage interest rates today in Worcester, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.50 this morning - the same as yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.63 - up 4/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be 0.125% - 0.375% better in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

Goods and Services Trade Balance Report for September - the trade deficit is up significantly. The trade balance in September was -$36.5 billion, and is much more than the $30.7 billion deficit the previous month. While the report affects the value of the U.S. dollar, it's usually is not a major influence on the mortgage market or mortgage interest rates.
Preliminary Reading of the University of Michigan's Index of Consumer Sentiment for November - consumer sentiment declined 4.6 points from 70.6 to 66.0 in October. A declining sentiment means consumers are less optimistic about their own financial situations and are less likely to make large purchases in the near future. That is helping drive prices of mortgage backed securities up and mortgage interest rates down this morning.

There are a number of economic reports scheduled for release next week. Watch for more information on Monday.

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Overall, activity in the stock markets will continue to be volatile which in will have an impact on trading of mortgage backed securities.

Yesterday, the 4.5% mortgage backed security (MBS) coupon closed at 101.50. That is within 100 basis points of the highest price that the 4.5 MBS coupon has been at this year - it was at 102.50 back on March 18th.

Currently, the 4.5 MBS coupon is within 31 basis points of the highest price in the last 3 months. The highest price of the 4.5% MBS coupon in the last 3 months was 101.94, and that was back on October 7th.

What that means to you is the pricing of the MBS coupon is not likely to go much higher.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Worcester, MA.

The Mortgage Interest Rate Lock Advisory for Brewster MA for November 12 2009

Thu, 12 Nov 2009 09:53:25 -0600

The Mortgage Interest Rate Lock Advisory for Brewster MA for November 12 2009

Here are some of the events affecting mortgage interest rates today in Brewster, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.12 this morning - down 3/32 from Tuesday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.28 - up 5/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. Yesterday was "roll-over" day, so I expect that mortgage interest rates will be about the same in price this morning as compared to Tuesday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

There are no economic reports scheduled for release today.
Jobless Claims - there were 502,000 new claims for unemployment last week, the lowest since January, 10,000 less than predicted, and 12,000 less than the upwardly adjusted new claims that were filed the previous week. The 4-week average declined for the 9th straight week by 4,500 to 519,750. And continuing claims for unemployment declined for the 7th straight week by 139,000 to 5.631 million. However, the decline in continuing claims is most likely attributed to the expiration of unemployment benefits. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. However, this data is usually not considered to be very important to the mortgage market and had no impact on mortgage interest rates this morning.
Fed's MBS Purchase Program - the results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $993 billion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

In other news, the Treasury will auctioning $16 billion in 30-Year Bonds today. If the Treasury auctions are met with a strong demand from investors, we should see higher prices for mortgage backed securities and lower mortgage interest rates. However, if we see a lackluster demand, we should see lower prices for mortgage backed securities and higher mortgage interest rates.

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Overall, the single most important day this week will be Friday with the release of the Employment Situation Report. Activity in the stock markets will continue to be volatile which in will have an impact on trading of mortgage backed securities. If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Brewster, MA.

Frequently Asked Question: Can I Use My Father's VA Loan Eligibility to Buy a House?

Thu, 12 Nov 2009 09:50:52 -0600

Frequently Asked Question: Can I Use My Father's VA Loan Eligibility to Buy a House?

Q: My dad has not used his VA Loan. Can he transfer that loan to me to use to buy a house?

A: No. Children of an eligible veteran are not eligible for the VA home loan benefit. However, the unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the VA home loan benefit. In addition, a surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, is also eligible for the VA home loan benefit.

Frequently Asked Question: Mortgage After a Bankruptcy

Wed, 11 Nov 2009 04:57:27 -0600

Frequently Asked Question: Mortgage After a Bankruptcy

Q: I filed a personal Chapter 7 bankruptcy in October of 2008. The bankruptcy was discharged in January of 2009. Since then, I have gotten back on my feet and been able to save quite a bit of money. My lease on my apartment is running out and I'd looking to capitalize on the great houses available in the area. My father has a bunch of cash and net worth as well a perfect credit. My question is can I go and get a mortgage at this point with my father to cosign, or would he have to buy it himself and "rent" the property to me until I could purchase it on my own. The other mitigating factor in all this is that all the foreclosures in this area are held up in land court, and despite my discharge happening in January, the mortgage company has still not assumed my old condo and auctioned it off.

A: A person who has had a Chapter 7 bankruptcy (liquidation) must wait until at least two years have elapsed since the date of the discharge of the bankruptcy before he or she can qualify for an FHA mortgage. In addition, you must re-establish good credit and demonstrate a documented ability to responsibly manage your financial affairs. Basically, this means you can not have any late payments on any accounts since the discharge of the bankruptcy.

It is possible to get a mortgage before the two years have elapsed, but not less than 12 months, provided you can show that the bankruptcy was caused by extenuating circumstances that were beyond your control. An example of an extenuating circumstance would be you had extensive medical bills, and you were out of work during hospitalization thus unable to pay your bills due to no income. Loss of job, a failed business venture and divorce situations do not qualify as extenuating circumstances.

It appears that you will also have a foreclosure on your credit report. There is a minimum 3 year wait after a foreclosure before you can qualify for a mortgage, even if the foreclosure was included in the bankruptcy.

If you plan on having your father purchase the property, allowing you to rent it from him until such time as you are able to purchase the property directly might run you into an "identity-of-interest" situation. An identity-of-interest is defined as a sales transaction between parties with family relationships or business relationships. In these cases, the maximum you will be able to borrow or finance is 85% of the purchase price of the home (85% LTV).

However, maximum financing above 85% LTV is permissible under the following circumstances:

A family member purchases another family member's home as a principal residence. If a property is sold from one family member to another and is not the seller's primary residence, the maximum mortgage is the lesser of either:
- 85% of the appraised value, or
- The appropriate LTV ratio percentage applied to the sales price, plus or minus required adjustments.
The 85 percent limit may be waived if the family member has been a tenant in the property for at least six months immediately predating the sales contract. A lease or other written evidence must be submitted to verify occupancy.
An employee of a builder purchases one of the builder's new homes or models as a principal residence.
A current tenant purchases the property that he or she has rented for at least six months immediately predating the sales contract. (A lease or other written evidence must be submitted to verify occupancy.)
A corporation transfers an employee to another location, purchases that employee's home, and then sells the home to another employee.

So long as you rent the property from your father for at least 6 months, and so long as a lease is provided along with evidence of the renting of the property (copies of canceled checks, utilities are in your name, not your father's, etc.), you will be able to finance up to 96.5% of the purchase price or value of the home.

Frequently Asked Question: Can I Get a Mortgage If I Declared Bankruptcy?

Wed, 11 Nov 2009 04:50:40 -0600

Frequently Asked Question: Can I Get a Mortgage If I Declared Bankruptcy?

Q: Can I get a loan if I declared bankruptcy 1 year ago?

A: It depends on the type of bankruptcy.

If you had a Chapter 7 bankruptcy (liquidation), you must wait a minimum 2 years from the date of discharge before you can get a mortgage. If you have extenuating circumstances, that wait can be reduced to 1 year. An example of an extenuating circumstance would be you have extensive medical bills and were laid up without an income because of debilitating illness or injury. Loss of job, failed business ventures and divorces do not qualify as extenuating circumstances.

If you had a Chapter 13 bankruptcy (reorganization), you must have made at least 12 monthy payments and need the permission of the bankruptcy court or trustee before you can a mortgage.

In both cases, you must have reestablished credit and no late payments on any accounts since the bankruptcy.

Frequently Asked Question: Do I Have to Set Up an Escrow Account with an FHA Mortgage?

Wed, 11 Nov 2009 04:46:49 -0600

Frequently Asked Question: Do I Have to Set Up an Escrow Account with an FHA Mortgage?

Q: I was told that with an FHA loan, I have to pay everything to the escrow company. Is that true? I read an article that said some lenders charge a monthly escrow fee that can be avoided by paying taxes, insurance and principle/interest separately. But because I'm doing an FHA loan, I don't have a choice.

A: You are required to establish an escrow account for property taxes and homeowner's insurance premiums with all FHA mortgages. There's no provision to waive escrow accounts. There's also no fee for establishing or maintaining such an account. However, a minimum 2 month's reserves for taxes and insurance must be in the escrow account at all times.

The Mortgage Interest Rate Lock Advisory for Hyannis MA for November 10, 2009

Tue, 10 Nov 2009 11:31:15 -0600

The Mortgage Interest Rate Lock Advisory for Hyannis MA for November 10, 2009

Here are some of the events affecting mortgage interest rates today in Hyannis, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.03 this morning - down 14/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Ima

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

There are no economic reports scheduled for release today.

In other news, the Treasury will auctioning $25 billion in 10-Year Notes today. If the Treasury auctions are met with a strong demand from investors, we should see higher prices for mortgage backed securities and lower mortgage interest rates. However, if we see a lackluster demand, we should see lower prices for mortgage backed securities and higher mortgage interest rates.

Three speakers from the Federal Reserve will today speak about their outlooks on the economy. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, will speak to the Urban Land Institute conference in Atlanta.

Janet Yellen, president of the Federal Reserve Bank of San Francisco, will speak to the Lambda Alpha International in Phoenix.

Richard Fisher, president of the Federal Reserve Bank of Dallas, will speak to the Austin Headliners Club in Austin.

What's Happening With Mortgage Interest Rates Today:

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Hyannis, MA.

Home Value Update for Medford MA Through Ocober 2009

Mon, 09 Nov 2009 12:34:32 -0600

Home Value Update for Medford MA Through Ocober 2009

According to Trulia.com, the sale prices of single family homes have increased 0.1% in the past year through the end of October 2009. The current mean sale price of homes for sale on the market in Medford, MA, is $324,888. Below is a chart of the trend of listing prices of homes for sale in Medford, MA, in the past year through October 2009:

Medford Recently Sold Homes

The $8000 first-time homebuyer's tax credit has been extended, and now expires on April 30, 2010. So, there's no better time than now to buy a home in Medford, MA, or surrounding area. If you're looking for a home or condo to purchase in Medford, MA, or in the surrounding area, then try this home search.

You can still buy a home with no money down with the USDA Rural Development Home Loan program. With the FHA Mortgage program, you can purchase a home with as little as 3.5% down. When you're ready to buy a home, find out how much home or condo you can afford to purchase in Medford, MA, or in the surrounding area.

The Mortgage Interest Rate Lock Advisory for Medford MA for November 9, 2009

Mon, 09 Nov 2009 09:54:37 -0600

The Mortgage Interest Rate Lock Advisory for Medford MA for November 9, 2009

Here are some of the events affecting mortgage interest rates today in Medford, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.16 this morning - down 4/32 from Friday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.34 - up 2/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be the same in price this morning as compared to Friday's close.

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Recent Activity in Mortgage Backed Securities:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

There are no economic reports scheduled for release today.

In other news, the Treasury will auctioning $40 billion in 3-Year Notes today. If the Treasury auctions are met with a strong demand from investors, we should see higher prices for mortgage backed securities and lower mortgage interest rates. However, if we see a lackluster demand, we should see lower prices for mortgage backed securities and higher mortgage interest rates.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, because of the lack of economic reports this week, the Treasury auctions and the stock markets will most likely be the dominant influence on the trading of mortgage backed securities. If the stock markets rally this week, we will probably see funds shift from mortgage backed securities and into stocks. That will drive prices of mortgage backed securities downward and lead to rising mortgage interest rates. If, on the other hand, stocks fall from current levels, that would make mortgage backed securities more attractive to investors and lead to lower mortgage interest rates.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

Lock if my closing was taking place within the next 7 days
Float if my closing was taking place between 8 and 30 days
Float if my closing was taking place between 31 and 45 days
Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get the best available mortgage interest rates for your situation in Medford, MA!

The Mortgage Market Watch for the Week of November 9, 2009

Mon, 09 Nov 2009 05:58:20 -0600

The Mortgage Market Watch for the Week of November 9, 2009

Events Affecting the Mortgage Market This Week:

There are three Treasury Note and Bond auctions this week that may influence mortgage rates - $40 billion in 3-Year Notes on Monday, $25 billion in 10-Year Notes on Tuesday, and $16 billion in 30-year Bonds on Thursday. The 10-year sale is the more important one as it will provide us with an indication for demand of mortgage backed securities. If the Treasury auctions are met with a strong demand from investors, we should see higher prices for mortgage backed securities and lower mortgage interest rates. However, if we see a lackluster demand, we should see lower prices for mortgage backed securities and higher mortgage interest rates.

Economic Reports to be Released This Week:

There are only two economic reports scheduled for release this week, but neither of them is considered to be highly important to the mortgage market.

Monday, November 9th:

There are no economic reports scheduled for release today.

Tuesday, November 10th:

There are no economic reports scheduled for release today.

Wednesday, November 11th:

There are no economic reports scheduled for release today.
The stock and bond markets are closed in observance of Veterans Day.

Thursday, November 12th:

There are no economic reports scheduled for release today.
Jobless Claims - New claims for unemployment are tabulated each week to show the number of individuals who filed for unemployment insurance for the first time. Analysts are predicting that 512,000 new claims for unemployment will have been filed last week. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. However, this data is usually not considered to be very important to the mortgage market.
Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $993 billion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

Friday, November 13th:

Goods and Services Trade Balance Report for September - This report provides a measure of the size of the U.S. trade deficit. While the report affects the value of the U.S. dollar, it's usually is not a major influence on the mortgage market or mortgage interest rates.
Preliminary Reading of the University of Michigan's Index of Consumer Sentiment for November - This index measures consumer sentiment, which provides us with an indication of the consumer's willingness to spend. Because consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely. The index is expected to show a reading of 71.0, up from the final reading of 70.6 for October. A rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. That could potentially drive prices of mortgage backed securities down and mortgage interest rates up.

How do Economic Data Releases Affect Mortgage Interest Rates?

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Recent Activity in Mortgage Backed Securities:

Mortgage Interest Rate Outlook: