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The Mortgage Interest Rate Lock Advisory for Wellfleet MA for December 2, 2009

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

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.0% MBS coupon opened at 99.81 this morning - up 2/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.0% coupon:

The FNMA 30-Year 4.0% MBS coupon fell 22/32 yesterday, and is currently trading at 99.66 - down 5/32 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 0.125% - 0.375% worse 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 4.0% coupon over the past 30 days:

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

• Beige Book Report - this report, which will be released at 2 PM this afternoon, is named after the color of its cover, details economic conditions by region. Released two weeks ahead of the Federal Open Market Committee (FOMC) meetings, it is heavily relied on by the Feds when determining interest rate policy. The results can affect the mortgage market and mortgage interest rates if it shows any significant surprises.

In other news, the ADP report revealed 169,000 jobs were lost in November. This follows a loss of 203,000 jobs in October.

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Overall, we may see sizable movement in mortgage interest rates this week. I suspect it will be a fairly active week for the mortgage market and mortgage interest rates. The most important day of the week will be Friday with the release of the Employment Situation Report. This report will probably be the key to rates moving lower or higher for the week. If it reveals stronger than expected results, we may see mortgage interest rates spike higher - possibly erasing any gains from the week.

There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. Mortgage interest rates are at historic lows. 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
• Lock 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 Wellfleet, MA.

What Is A Reverse Mortgage? (Part 8)
A 12 Part Series

Part 8 - Using Reverse Mortgage to Purchase a Home

Reverse mortgages are now available to Seniors who would like to buy a new home. Under HUD's "HECM for Purchase Program," Seniors can use a reverse mortgage to buy a home if:

• The youngest homeowner is age 62 or older
• The purchased home will be their primary residence
• The purchased home will be occupied within 60 days of closing
• No mortgage loan other than the reverse mortgage can be used to buy the purchased home
• The difference between the purchase price of the home and the reverse mortgage proceeds must be paid in cash or from the sale of an existing home

Definition

HUD's formal definition of the program, from the HUD Mortgagee Letter on October 10, 2008, is:

"The HECM for Purchase is a real estate purchase where title to the property is transferred to the HECM mortgagor, which the mortgagor will occupy as a principal residence, and, at the time of closing, the HECM first and second liens will be the only liens against the property. HECM mortgagors must occupy the property within 60 days from the date of closing. Lenders are required to ensure all outstanding or unpaid obligations incurred by the prospective mortgagor, in connection with the HECM transaction, are satisfied at closing."

Example A (Selling an Existing Home)

• Bob Jones is 62 years of age and currently lives in a Chicago, IL, in a home that he has lived in for 10 years. The home was recently sold for $250,000. He still owes $50,000 on his 30-year mortgage, so he has $200,000 in home equity.
• Bob wants to move to Tampa, FL, and has found a home that is for sale for $300,000.
• If Bob applies the $200,000 from the proceeds of the sale of his home in Chicago to buy the $300,000 Tampa property, he will be short $100,000. So he decides to use a "HECM for Purchase Mortgage" (reverse mortgage) to make up the $100,000 difference.
• At age 62, Bob is eligible to borrow approximately $165,000 on the $300,000 Tampa property with the HECM 250 program.
• Bob buys the Tampa property using $200,000 from the sale of his Chicago home and by borrowing $100,000 from the HECM for Purchase Program (reverse mortgage), and keeps $65,000 left over in the reverse mortgage credit line.
• Bob now owns his $300,000 home and has no mortgage payments.

Example B (Paying Cash)

• Mary Smith is 70 and lives in St. Paul, MN. She is currently renting but wants to buy a new home. She has saved up $100,000 towards buying her new home.
• The house Mary wants to buy is on the market for $250,000, so Mary is short $150,000.
• Mary decides to take out a HECM for Purchase mortgage (reverse mortgage). At her age, she can borrow approximately $150,000 on a $250,000 home.
• Taking the full $150,000 from the HECM for Purchase program and $100,000 from her savings, Mary is able to buy the home.
• Mary now owns her $250,000 home and has no mortgage payments.

Qualifications

Special restrictions:

If the homeowner is using cash (instead of using the proceeds from the sale of an existing home) to make up the difference, that cash must be "seasoned" ("in the bank") for at least 60 days.

• Cash from a gift is not acceptable.
• To prove that the homeowner has "eligible funds" for the closing, any of the following documents can be provided:
  • Letter of Verification of Deposit from the bank
  • Proof of liquidation of retirement assets
  • Deed of sale
  • HUD1 statement from the sale of the previous home

The property being financed with a reverse mortgage must be the primary residence, and may be a:

• Single family residence, or may be a 2-, 3-, or 4-Unit home,
• Townhouse, or a
• Condominium

The home must be fully completed (with certificate of occupancy or equivalent). Land contracts are acceptable.

The following types of properties are ineligible for a reverse mortgage:

• Cooperatives
• Homes without a Certificate of Occupancy or its equivalent
• Boarding houses
• Bed and breakfast establishments
• Existing manufactured homes built before June 15, 1976
• Existing manufactured homes built after June 15, 1976 that fail to conform to the manufactured home construction safety standards or lack a permanent foundation

What if the home needs repairs? Most repairs aren't critical, but major ones have to be taken care of before the transaction can close:

• Critical health and safety and structural integrity issues must be repaired
• Repairs must be completed by the seller prior to closing
• The buyer can not pay for any repairs before they own the home
• The repairs must be included in the purchase agreement

Costs

With a HECM for Purchase, all of the normal costs associated with selling and buying homes are applicable as well as the normal reverse mortgage fees.

Next: Part 9 - Reverse Mortgage Counseling

Part 1 - Definition of a Reverse Mortgage
Part 2 - Reverse Mortgage Eligibility Requirements
Part 3 - Myths and Frequently Asked Questions of Reverse Mortgages
Part 4 - Pros and Cons of a Reverse Mortgage
Part 5 - Reverse Mortgages, Income and Taxes
Part 6 - Outliving the Reverse Mortgage
Part 7 - Loan Limits and Distribution of Money of Reverse Mortgages

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 Eastham MA Through October 2009

According to Trulia.com, the sale prices of single family homes in Eastham, MA have decreased 19.5% in the past year through the end of October 2009.

The current mean sales price of homes on the market in Eastham, MA, is $365,000. Below is a chart of the trend of listing prices of homes for sale in Eastham, MA, in the past year through October 2009:

Eastham 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 Eastham, MA, or surrounding area. If you're looking for a home or condo to purchase in Eastham, 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 Eastham, 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 Eastham MA for December 1, 2009

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

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.0% MBS coupon opened at 100.19 this morning - down 7/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.0% coupon:

The FNMA 30-Year 4.0% MBS coupon is currently trading at 100.13 - down 2/32 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 0.0% - 0.25% worse 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 4.0% coupon over the past 30 days:

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

• Institute for Supply Management (ISM) Manufacturing Index for November -the reading came in at 53.6, less than 55.0 reading that analysts expected. The reading was 55.7 in October. This index surveys more than 300 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories to gauge their sentiment. A reading above 50 means that more manufacturing executives felt business improved during the month than those who felt it had worsened. A lower than expected reading will indicate a waning sentiment in the manufacturing sector, and makes a broader economic recovery less likely. This had almost no affect on mortgage interest rates this morning.

In other news, pending home sales is up for the 9th straight month. Pending home sales was up 3.7% in October, but is less than the 6.0% increase in September. Year-to-year pending home sales is up 31.8%.

Watch this video fromCNBC to learn more about pending home sales:

Construction spending was flat in October, after declining a revised 1.6% in September. Year-to-year construction spending is down 14.4%

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Overall, we may see sizable movement in mortgage interest rates this week. I suspect it will be a fairly active week for the mortgage market and mortgage interest rates. The most important day of the week will be Friday with the release of the Employment Situation Report. This report will probably be the key to rates moving lower or higher for the week. If it reveals stronger than expected results, we may see mortgage interest rates spike higher - possibly erasing any gains from the week.

There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. Mortgage interest rates are at historic lows. 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
• Lock 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 Eastham, MA.

What Is A Reverse Mortgage? (Part 7)
A 12 Part Series

Part 7 - Loan Limits and Distribution of Money of Reverse Mortgages

The maximum loan amount that is available through a reverse mortgage depends on five factors:

• the age(s) of the homeowner(s) - the older, the better;
• the current interest rate - the lower, the better;
• the appraised value of the home - the higher, the better;
• the remaining mortgage balance (if any) - the lower, the better; and
• location - which you can't do anything about.

Distribution of Money from a Reverse Mortgage

There are several ways to homeowners can receive the proceeds of a reverse mortgage. Homeowners can mix and match as needed.

You have five options:

• Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
• Term - equal monthly payments for a fixed period of months selected.
• Line of Credit - unscheduled payments or installments at times and in amounts of your choosing until the line of credit is exhausted.
• Modified Tenure - combination of line of credit with monthly payments for as long as you remain in the home.
• Modified Term - combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

Next - Part 8 - Using a Reverse Mortgage to Purchase a Home

Part 1 - Definition of a Reverse Mortgage
Part 2 - Reverse Mortgage Eligibility Requirements
Part 3 - Myths and Frequently Asked Questions of Reverse Mortgages
Part 4 - Pros and Cons of a Reverse Mortgage
Part 5 - Reverse Mortgages, Income and Taxes
Part 6 - Outliving the Reverse Mortgage

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.