Rent vs. Buy Decision More Than A Question of Affordability

Provided By Realty Times

Years ago, growing up with her parents in a single-family home in a Chicago suburb, Clarissa Mankus was infused with the American Dream

When it was time to leave the nest a few years back, Mankus purchased a condo, but homeownership quickly became her albatross, according to a story by Bill Glauber in the Milwaukee Journal Sentinel.
The Gen-Yer had tuition debt to pay and that meant being mobile, independent and ready to hit the road at any time.

After a few months as a homeowner, she unloaded the condo, moved in to a rental with a friend and regained control of her life, Glauber writes.

For a growing number of those seeking shelter, the affordability component of the rent-vs.-buy comparison takes a back to seat to finding housing that accommodates their lifestyle.
"For decades, Americans have scrimped and saved in order to buy that starter house and begin accruing equity. But do the same benefits of home ownership apply in every situation?" asks Dima Deych Marketing Director at Mayo Group, a Boston, MA-based real estate investment, development and management company.

Apparently not.

Deych says there are a host of considerations beyond affordability shelter seekers should consider before they buy or rent.

Location.Just as location is a factor in buying, where you rent is also key.

Buying a house in or near the downtown district of a large city is often more expensive than a suburban home. Because of the growth of the urban infill movement as well as space constraints that gave rise to high-density living years ago, apartments can be more readily available.

"Urban settings are seeing an influx of people who want to be able to live near work and the cultural attractions that you find in a big city," says John McGrail, CEO of Mayo Group.

Ease of relocation. A short-term or month-to-month rental contract is a lot easier to unload than it is to sell a property. What's more, if you sell a property too soon, given the time it takes to accrue equity these days, you could sell at a big loss.

If you are on a career track, planning to move back to your home town to be with family, or just need the flexibility to relocate, buying may not be for you.

Square footage. If you are on the go, career-wise, or just don't spend much time at home, are outdoorsy and travel frequently, a studio apartment or place to sleep may be all you need. If you don't spend much time in your house, a large space will be a waste of space and money.

Job security concerns. Without job security, you need the flexibility to relocate. A homeowner's worst nightmare is losing a job and not being able to quickly find another or being forced to relocate to find another job. In both cases, paying the mortgage or selling the home could be tough.

Defaulting on your mortgage can lead to foreclosure, wrecked credit and high blood pressure. If your employment is shaky, now's not the time to buy. Jobs are tough to come by.

The economy. The soft economy could impact your employment opportunities. It has also prompted lenders to tighten credit. Take a hard look at the local economy where you would like to buy. Renting in a recovering economy can give you time to save for a down payment and put yourself in the best position to buy.

Poor credit. If your credit is trashed, lenders won't approve a mortgage for you. A year or two renting and careful credit use can give you time to boost your credit score and position yourself as a strong homebuyer.

Maintenance. The best homeowners are do-it-yourselfers who don't have to call the plumber every time the sink stops up. In an apartment complex, even a single-family home you might rent, the landlord or property owner direct, or through the building manager or the superintendent, is typically responsible for maintenance.

Your relationship. If your relationship is young or on shaky ground, think about the consequences of buying a home with someone who may be out of the picture weeks, months or even years from now. If you're dependent on two incomes to make the mortgage payments, if there could be a court fight over assets if you split, renting is probably a better deal.

When you share assets in marriage or other relationships a prenuptial or other agreement also may be a good idea.

Getting an Offer

Provided By Realty Times

Have you ever wondered what it takes to get more showings and to finally seal the deal? If your home has been lingering on the market for months, you might be asking yourself just that question.

This question is more than just idle curiosity. When and how quickly you sell your home can mean the difference between buying the dream home before it's scooped up and avoiding carrying two mortgages.

There is an old adage used in real estate that says, “location, location, location.” While location is important for certain reasons (close to schools, crime levels, neighborhood appearance), there is something is far more important when it comes to making a deal. The new adage should be “price, price, price.”

You can sell any home if it's priced to sell. Pricing right is about more than just pricing along with the competition. Sometimes it means listing at a lower price to make your home more attractive. Of course no one is willing to let someone just walk away with their home, but in a strong buyers market like we have today you must be realistic about what price will truly entice a buyer.

Experts say that if you overprice a home at the start you're making a big mistake. Buyers look for new listings. They'll pass right over your home if it doesn't compare to the competition. They could also see your price reduction laster on as a sign that you are willing to go even lower on your price.
This is not to say you shouldn't do a price reduction. If you already have your home on the market then you should consider if a price reduction will bring in buyers. An overpriced home will never sell in today's market. There are simply too many other good deals out there.

This means you need to price your home at the bottom end of what is a realistic price for your market and for you.

Aside from price there are also a few other issues you, the seller, need to consider.

First, you should be willing to accommodate buyers with showings. This means if they want to come during an evening or weekend you should be flexible! Your prospective buyers may have difficult schedules, but today's market means you have to work with a buyer, making showings easy and convenient for them.

Next, stage your home. Before you have a single showing you must be sure to take the proper steps in staging. A messy, dirty, or cluttered home will turn off many buyers. They will see your home for its problems instead of its potential.

Finally, have a financial game plan ahead of time. This means knowing what sort of offers you are willing to accept and not. Buyers don't like to sit around for days awaiting your response. What is your true bottom line?

Selling your home in a strong buyers market is full of its challenges to be sure, but getting an offer and closing the deal in today's market is possible. Just be sure to price your home correctly!

Are your clients sharing too much information?

Provided By Texas Association of Realtors
Shared By Jeannie Bauer

Thirty seconds of Internet research can reveal a lot about a person. If that person happens to be a buyer or seller in a real estate transaction, such a search could also reveal motivations and other personal details that you won’t find in any contract or addendum—details that could hurt his negotiating position.

Buyers could post photos of a listing on Facebook along with comments about how desperate they are to have their offer accepted. Sellers might tweet about how they can’t wait to move away from a certain neighbor.

If the other parties in a transaction or their agent sees these posts, your clients’ negotiating position could be weakened, costing them money or even killing a deal. Tell your clients to keep their real estate transactions off social media channels. It doesn’t take much effort to Google someone’s name.

Real Estate Outlook: Home Inspections

Provided By Realty Times

What does your home inspection cover? And who is liable if a problem develops down the road? We'll answer these questions in today's outlook.

You need an inspection on any property you are buying, regardless if it's old or new construction. An inspection is like a check-up for your house.

What repairs will need to addressed now and what might need to be addressed later down the road? This is what you have answered during an inspection.

Having an inspection done prior to signing a contract allows you to negotiate your findings into the deal. Does the roof need replaced? The seller may give an allowance to pay for the repairs. If you don't ask, you'll never know!

Perhaps you've fallen in love with a fixer-upper and are dreaming of doing the repairs yourself. If the inspection discovers hidden damage and costs, you'll be given the option to keep looking for a more suitable house.

Keep in mind, however, that simply because a house needs repairs doesn't mean you shouldn't purchase it.

Nearly every house will have a list of repairs that need to be done to get it "shipshape." It is your decision to choose how much you are willing to spend and how much work you are willing to do.
A home inspection varies, depending on what type of property you are interested in.

According to the American Society of Home Inspectors (ASHI), "the standard home inspector's report will cover the condition of the home's heating system; central air conditioning system (temperature permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components."

There are limits, however, to what a home inspection will cover. They aren't required to identify conditions that are concealed or are considered latent defects.

That means if personal property, plants, snow, or debris is covering an issue, the home inspector isn't require to move those items to inspect it and isn't liable if he misses it. They aren't required to make determinations on systems that aren't readily accessible.

And they aren't required to note the presence of potentially hazardous plants and animals. That includes "wood destroying organisms" or even molds.

This means you should find a home inspector that you trust. The ASHI recommends you choose from their list of licensed professionals. "ASHI members know houses, ensuring that you can find a home inspector. They are trained to objectively communicate to you, the home inspection buyer, what the house has to say. ASHI members have demonstrated technical proficiency and report-writing skills, and they have committed to continuing education in order to achieve and maintain their member status."

Having a trusted inspector means that most every problem that can be identified, will be. And inspection is about peace of mind, and a good inspector gives you that.

Ask The HOA Expert

Provided By Realty Times

Question: Our board is discussing a possible rule preventing minors from entering the sauna without adult supervision. In light of Fair Housing regulations regarding the discrimination of minors, is this advisable?

Answer: What is the board's goal, health and safety or to reduce vandalism? Typically, young children (under 8) should not be in the sauna for health safety reasons. Ask the sauna manufacturers about health and safety guidelines and let the board post them. Coming up with some random policy may indeed get challenged under Fair Housing guidelines. If found guilty, the penalties are severe so the board should not do anything that would attract this kind of challenge or attention. Safety guidelines, though, are reasonable.

Question: Our master association governing documents have always had a restriction concerning logos on vehicles, especially trucks and vans. However, variations on such logos have gotten more complex and hard to define. For example, law enforcement and governmental vehicles are usually exempted. Then there are medical supply vans that presume to have emergency calls, etc.

Historically, we have required magnetic flexible covers over logo signage, or vehicular covers, if the vehicle is not stored in the garage. Do you have any advice regarding logo signage?

Answer: How about full body vehicle decals? Yes, this issue has gotten very complex. Parking restrictions are usually intended to control the number of commercial vehicles parking in the HOA like vans, trucks and delivery vehicles used strictly for business purposes. Since vehicle advertising has changed a lot, the board should be more lenient when a personal vehicle is being used (real estate agent, insurance agent, etc.) with a small decal or magnetic sign. Having to cover up all vestiges of signage large or small is a losing battle. Focus on strictly commercial vehicles.

Question: We live in a building built in 1939 and converted to a condo in 1987. The building has never been well maintained and needs renovation to the roof and walls, lobby and hallways at a cost $450,000. Many of us paid high prices for our units and we want to upgrade the building to a high quality standard. What financing alternatives are available?

Answer: The most expedient way to raise money is by special assessment, where each member pays a proportionate share of costs according to guidelines in the governing documents. But before you consider this, the board should order a professional reserve study which takes into consideration the cost and timing of all common element repairs, not just the ones you list. Reserve studies take into consideration all such repairs over a 30 year projection period. PRA (Professional Reserve Analyst) members of the Association of Professional Reserve Analysts carry the highest credential available to perform this work. See www.apra-usa.com for a list of PRA members.

While borrowing money is an option, it carries a higher interest rate, short term pay-back and will significantly raise the monthly assessments to all member that participate. It is usually much more cost effective to have individual members fund their own share of the costs by whatever means available and leave the HOA out of the banking business.

Question: Our property manager is also a leasing agent for several unit owners in our homeowner association. The board has given full authority for the manager to handle HOA maintenance requests. Does the manager have a conflict of interest between the HOA and landlords?

Answer: As long as the manager is providing leasing only services that comply with HOA guidelines and is careful to enforce all applicable HOA rules on the tenants, there is no conflict of interest. The role you describe is very common in HOAs where there are many second homes. It is important to have a local agent overseeing the rentals and the HOA manager is often the best fit.

An 'Outside the Box' Buyer

Provided By Realty Times

Are you in the market to buy, but are limited by certain financial restrictions? You're not alone. The recent recession of 2009 has left a mark on the bank accounts and labor markets of today.

Today's market is considered a "buyers market". What does this mean? It means that certain factors (inventory levels, home prices, days on markets, and supply versus demand) give buyers more leverage at the negotiating tables.

In today's buyers market, there are lots of sellers who will be willing to go a more non-traditional route with a sale. They are ready to move on and are eager to find a buyer.
Sometimes it takes thinking outside the box to get the results we want. It's a great time to buy. Affordability is at a generational high and interest rates remain remarkably low, but if you have limited savings or a less than stellar credit report you might find yourself unable to enter the ranks of homeowner.

In cases such as these, it's a good idea to explore your options. It's time to think outside the box.
First, be sure to talk to your close family to see if anyone would be willing to help out. This could come in the form of a downpayment gift, a friendly loan for closing costs, or even a more financially stable relative offering to be your "lender." Family loans almost always come with exceptionally low or non-existent interest rates.

These people know you best. Your credit report might say you're high risk, but they know and trust you'll make this kind of payment on time.

They might even be willing to share in a "shared appreciation" or "shared equity" set up. This means they are part owners of the property. Their name is on the mortgage. When the time comes down the road to sell or tap into that equity, they are there for a payday. It's an investment opportunity.
Next, check out what downpayment assistance programs might be available in your area, state, or even on a national level. Search online and ask your local real estate professional for tips on who to call and where to look. Additionally, be sure to visit www.hud.gov for tips and programs available through the federal government.

Finally, talk to the seller about their thoughts on non-traditional sales. This might come in the form of a lease with the option to buy. You lease the home and pay a specific dollar amount each month. In essence the seller becomes your landlord.

This gives you time to save up money for the down payment. You could arrange to buy the home in a year or several years down the road. If the seller is generous they may even put that monthly "rent" payment towards the final amount of the home.

If they aren't interested in this option, see if they would be willing to serve as the lender for your home. You make payments to the seller instead of a bank. This will generally only work if the seller is in a financial position to wait to get their money.

There are options out there no matter your situation. Be sure to research the options and decide which path is right for you.

Are You Taking the Necessary Steps to Fully Protect Your Investment Properties, Your Community and Your Residents?

Provided By Realty Times

Apartment and Condo Community crime rates are on the rise, as developments without adequate security measures, and properly researched tenants are falling victim to on-property offenses. Simple safety measures and precautions can be taken to ensure that your neighbors and residents are safer in their homes, and that your Property Managers have all of the information needed when making leasing decisions.

Some items to consider are: does your property have security cameras? If not, is the area outside well-lit? If the entrance is not gated, and there is not money in the budget to do so, how are the individual locks kept up-to-date? Do managers hold community meetings to provide information on how residents can protect themselves and their families? Using your community to help report suspicious activity, and follow their instincts can be greatly beneficial. Make sure your property is working with a Crime Free Program (http://www.crime-free-association.org/) and that your managers communicate with Police Departments in their area.
Other items to be aware of:

• Watch out for gross inconsistencies in their application
• Watch out for Friday afternoon applicants who say they must move in that very weekend
• Create a Guest Visitation Policy
• Maintain the community’s common areas
• Know your residents
• House Rules - i.e.: curfew, laundry room and pool operating hours

Community meetings to educate the residents prove extremely beneficial in bringing awareness to the families affected by on-property crime. Communication is key, as well as being properly informed. Certain screening services also work closely with local Police Departments to issue alerts in neighborhoods, and send out Amber and Silver Alerts to Property Managers.

The International Crime Free Association’s Multi-Housing Division was created in 1992 in an effort to prevent crime on properties. Local Police Officers work together with Property Managers and Owners to help educate on proper crime prevention techniques; such as how to properly screen applicants, design changes that can discourage crime, and offer manager and community awareness training. In most cases Police Officers are more likely to recommend renting from a property that has completed and implemented the program, as they know it is more likely to be a safe alternative.
Even if your property is located in what you deem to be a safe neighborhood, it only takes one bad egg to commit a crime that can ruin the reputation of your community. Many crimes committed may not even be from the tenants themselves, but from unauthorized guests or roommates. Proxy renters are also an issue, as they are renters with excellent credit whose name is used on the lease, application and documents, but who rent on behalf of someone who does not want their name on a lease, such as drug dealers, sex offenders and sex traffickers. Remember that any process put in place should be applied across the board with every applicant, not just the ones that you think might be problematic.

After protecting the safety of everyone involved in your property, other issues to consider that are the outcome of on-property crimes are: decline in property values, the costs of from a bad resident (repair, eviction) and the loss of valued residents. Remember – communication, education, and shared information are all key aspects of making your investment property as safe as possible for everyone who lives and works there. There are socially responsible companies out there who want to help protect communities, and your investments.

Porch Perfection: Welcomes Buyers Instantly

Provided By Realty Times

When the weather turns warmer front porches across the country are put to use again. However, not all porches or front entryways are put to "good" use. Sometimes over the cold winter months they've taken a beating and are badly in need of repair. Other times they're used as storage for overflow from the garage, basement, or house and that is not a welcoming sight for buyers.

In real estate we talk about the importance of a few key elements to help sell your home: location, pricing, and curb appeal. These are some of the highest influential factors that buyers consider. The reasons are obvious. Location is vital to most buyers, pricing is critical (especially in today's marketplace), and curb appeal gets buyers off the street and inside to view your home.
So, it simply makes sense that after a long winter or a period of non-use, front porches might need some maintenance. This doesn't have to be the kind of work that takes weeks to do nor does it have to be extremely costly.

Creating and maintaining porch perfection is about the little things that you do. In fact, some simple repairs, replacements, and re-arranging can brighten up and refresh a worn out porch.

Start by looking at your porch with a critical eye. If you have been storing items on your porch that should have a home elsewhere, move them now. If you have old carpets, beat up or discolored mats, toss them out and replace them. Look at the lighting on your porch. Is it just one tiny bulb? Perhaps an inexpensive lighting system would brighten the porch, creating a more enticing and safer entryway.

Examine the hardware. Are the door handles corroded? Are they hard to turn to open the door? Think of it this way, if the door hardware looks worn and the doors are banged up, the impression is that this home is not well maintained on the outside and the inside. Some buyers won't go any further. If the home looks messy from the outside, all they will see is the front of your door. See your home the way you would if you were seeing it for the first time, just as the buyers are.

Add some appealing decor. There are a couple of rules that apply when it comes to staging an area. The rule of three is to group similar or items that go well together in groups of three. The eye is drawn to this type of formation. Symmetry also works well and is very easy to create. It gives a feeling of balance. Place potted flowers on both sides of the walkway to the porch. Add ready-made containers filled with colorful flowers. This creates an instantaneous warm welcome for buyers.
Even if you can't or don't want to renovate your front porch, you can add small amounts of molding (just like on the inside of your home). This can create beautiful lines and enhance the architecture.
One of my favorite additions is an outdoor water feature. Even just small fountains can make buyers feel relaxed as they enter your home. The sound of water soothes and can also help reduce the sound of other unwanted surrounding noise.

Remember, the front porch is one of the first areas buyers will see; so make it leave a positive memorable impression.

Financial To Do List

Provided By Realty Times

Many of today's renters are looking for ways they can make the transition to homeowner. It's a great goal and dream to have! Homeownership comes with a long list of benefits. Studies have revealed that homeowners can expect high levels of stability and security, increased high school graduation rates, and an overall feeling of health and well-being.

Additionally, owning a home is a way to build long-term wealth. Renting is a one way road for your money. It goes out, but never comes back. When you own, though, you are paying towards an asset. You build equity over time and are also in line for some great tax credits, deductions, and rebates.
In order to get into the game, however, you must have all your financial ducks in a row.
Homeownership is a large financial responsibility that isn't about risk taking. It's about saving money and changing your lifestyle in a way that will be positive before and after you purchase your home. Spending habits may need to change! If nothing else, you need to keep cloth tabs on purchases.
There are some incredible deals to be had on the market today. Interest rates are still near historic lows and should linger there for some time in the future. Home prices have adjusted back down to pre-boom pricing in many areas. So, in order to get your finances in order and join the ranks of homeowners, consider following this to do list.

Fix that Credit Report/Score: You've been amassing a credit report for years now, ever since you started being a consumer. Your credit report is like a lender report card. It tells a lender what your spending habits have been (do you have lots of credit cards, how long do you keep loans open), what you owe, and if you pay things on time.

All of these factors come together to make a credit score. This number ranges from 300 to 850 and the higher the score the more likely you'll be approved for a loan and at a lower rate.
You should be sure to check out your credit report for errors and also as an honest look at what your spending really looks like. Changing spending habits now can translate to a higher score down the road.

Audit your Expenses: You may think that you keep your spending in check, but until you track one month's spending you won't know the complete story. Keep track of all your spending for four weeks and evaluate this list at the end of the tracking period. Do you overspend on clothes, shopping, or dining out? Where do you have room for improvement?

Create a Budget: Saving for a home and running a home are about keeping your expenses in check. By creating by a budget you give yourself a game plan that all members of the household can refer to. Allot money for food, monthly bills, gas, dining out, and the other categories you think are important.

Make Saving a Priority: When you're creating that budget you should be keeping savings in the back of your head. You should strive to save at least 10 percent of each payment if not more. This money will later be used for #5 on this list.

Consider Downpayments and Closing Costs: You'll need to put down at least 20% of the purchase price of a home as a downpayment. How much this will be depends entirely on the total cost of your home. You'll also need money for closing costs, such as inspections, PMI, and land surveys.

Getting finances in order for a home purchase means taking an honest look at your spending and then revising your habits in order to save more and spend less. If you owe money or have blotches on your credit report, now is the time to make corrections. You can do it! Buying a home is a wonderful experience and sure to go well if your finances are healthy and ready for the purchase.

Move up or Stay Put?

Provided By Realty Times

Between price reductions and record low interest rates, many homeowners are asking themselves if now is a good time to move up.

Buying under today's conditions can mean getting more home for less buck. You'll pay a smaller amount of interest over time and can snag that dream home for a fraction of it's boom era price. Additionally, with the large number of distressed homes on the market, you may even find a home at a steep 10 to 20 percent discount.

Before you start mentally decorating that dream home, however, you should consider what “moving up” means for you. For some buyers, moving up means a better neighborhood. For others it means a bigger home with more space or amenities.

Here are five questions every buyer should consider before making the move.
First, where do you stand on equity? In simple terms, equity is the difference between what you owe and what your home is worth. You might already know this amount, but if you don't, you can always call your lender to get more details.

Despite recent declines in home prices -- and some areas have had steeper declines than others -- if you've lived in your home for over five years you may have built a substantial amount of equity. Equity gives you some wiggle room during the selling process. You can rest a bit easier that you will sell for a profit instead of a loss.

Second, what is the state of your financial situation? Some jobs are more stable than others. You do not want to take on a new financial burden if you fear that there may be downsizing at your company. Are you a two income household? What would happen if one of you were to lose your job? Can you really afford to move up? This means having at least 20 percent to put down, being able to pay off your current mortgage, and not having to lay a finger on your retirement funds to make the new purchase.

Third, are you willing to move during a market that is still seeing home price declines. Yes, you might be able to get into your dream home, but will be you also might see your new home's value decline in the months and years to come.

Fourth, what is pricing like for your current neighborhood? You may wish to get a comprehensive market analysis to find out the current value of your home as well as the specifics on your neighborhood competition.

Finally, what is your real reason for wanting to move? Are you an empty nester wanting to simplify life by downsizing to a smaller home, condo, or townhome? Are multiple generations living under the same roof? Are you wanting to move to a newer neighborhood? Consider what it is that you really want.

Does moving up make sense for you at this moment in time? While there are some great deals to be had, it has to make good financial sense right now.

BANK OF AMERICA BUYS BACK FLAWED LOANS

Provided By RECON TAMU

Bank of America will pay $330 million to buy back home loans from Freddie Mac on reports the loans were flawed.
The Charlotte, N.C.-based bank agreed to repurchase the loans “because the valuation method used at origination did not meet the investor’s technical requirements.” Dan Frahm of Bank of America claims the flaws have been corrected and that payments on most of the purchased loans are current.

It is unknown whether a similar buyback is planned with Fannie Mae.

Bank of America and Freddie Mac announced a $1.28 billion settlement back in January 2011 as a result of faulty loans sold by Countrywide. Its backlog of refund requests for bad loans reached $16.1 billion in first quarter 2012, causing Fannie Mae to cease accepting Bank of America loans.

Rates Hit All-Time Record Lows, Again

Provided By Realty Times

In Freddie Mac's results of its Primary Mortgage Market Survey®, fixed mortgage rates followed bond yields lower to new all-time record lows. The 30-year fixed averaged 3.75 percent setting a new all-time record low for the fifth consecutive week. The 15-year fixed averaged an unprecedented 2.97 percent bringing three of the four benchmark mortgage rates below 3 percent for the first time in Freddie Mac’s weekly survey.

30-year fixed-rate mortgage (FRM) averaged 3.75 percent with an average 0.8 point for the week ending May 31, 2012, down from last week when it averaged 3.78 percent. Last year at this time, the 30-year FRM averaged 4.55 percent.

15-year FRM this week averaged 2.97 percent with an average 0.7 point, down changed from last week when it averaged 3.04 percent. A year ago at this time, the 15-year FRM averaged 3.74 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.84 percent this week, with an average 0.6 point, up from last week when it averaged 2.83. A year ago, the 5-year ARM averaged 3.41 percent.

1-year Treasury-indexed ARM averaged 2.75 percent this week with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 3.13 percent.According to Frank Nothaft, vice president and chief economist, Freddie Mac:
"Market concerns over tensions in the Eurozone led to a decline in long-term Treasury bond yields helping to bring fixed mortgage rates to new record lows this week. Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower which translates into nearly $1,200 less in annual payments on a $200,000 loan. Meanwhile, the S&P/Case-Shiller 20-city composite home price index (not seasonally adjusted) showed annual home-value gains in March in seven cities and a monthly gain in 12 cities."

FHFA: Average interest rate for 30-year mortgage inches up

Provided By Housing Wire

The Federal Housing Finance Agency reports the average interest rate on a conventional, 30-year fixed-rate mortgage of $417,000 or less grew 9-basis points to 4.21% in April.

The interest rate reported by FHFA is determined 30 to 45 days before a loan closes. Therefore, the latest rates reflect market conditions that prevailed in mid- to late-March, but on transactions closing in late April.

The contract rate on the composite of all fixed and adjustable-rate mortgages hit 3.93% in April, up 4-basis points from 3.89% in March — though the FHFA cautioned there is "insufficient sample size" for ARMs.

Meanwhile, the effective interest rate, which shows the amortization of initial fees and charges, hit 4.03% in April, up 10-basis points from 3.93% in March.

Initial fees and charges in April represented 0.9% of the loan balance, which is down 3-basis points from March.

The average term for a mortgage is unchanged at 27.3 years. The average loan-to-price ratio is 75.3%, up 0.5%.

The average loan amount was $256,200 in April, up $9,100 from $247,100 in March.

Want to learn more about lending and what you qualify for? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com!