Housing affordability and mortgage rates near record lows, while inventories are close to record highs
Mortgage lender experienced an over 50 percent increase in purchase loans in April compared to March
MILFORD, CT (May 3, 2010), Leading mortgage lender and broker Total Mortgage announced today that even though the first-time home buyer tax credit and repeat home buyer tax credit have expired, there are still a number of favorable market dynamics present in the housing market that continue to offer a once-in-a-lifetime opportunity for potential home buyers.
“Despite the end of the tax credit, the nationwide housing crisis is opening the door for home buyers throughout the U.S. to purchase an affordable home,” commented John Walsh, president of Total Mortgage. “This generational home buying opportunity is being created by declining housing prices, record inventories and a very favorable mortgage rate environment where a qualified borrower can lock-in a very attractive 30-year fixed interest rate currently around 5 percent.”
“This confluence of low mortgage rates and home prices comes along once in a generation,” continued Mr. Walsh. “Market conditions and Federal Reserve actions will likely cause mortgage rates to move higher within the next eight to 12 months. Therefore, qualified home buyers who are looking to become part of their local community for the long-term would do well to purchase a home while current mortgage rates are close to historical lows.”
Mr. Walsh believes that even though housing prices are very close to the bottom in most markets, there is a chance that downward pressure on home values can continue due to an increase in the housing supply. However, homes are undervalued in many markets, and according to the most recent Housing Affordability Index from the National Association of Realtors home affordability is close to historic levels.
Total Mortgage experienced an increase of more than 50 percent in purchase loans in April 2010, compared to March 2010, which was driven by borrowers buying homes before the expiring tax credits on April 30. Previously, refinance mortgage loans have been far more prevalent than purchase loans over the last three years.
“The tax credits accelerated the home buying schedules of many borrowers over the last few months,” added Mr. Walsh. “However, even though these attractive tax incentives are behind us, we believe that extremely low mortgage rates, combined with high inventories and affordable prices, make right now an excellent time to purchase a home.”
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About Total Mortgage Services Total Mortgage Services, LLC is an industry leading direct mortgage lender and mortgage broker, with over 25,000 satisfied customers, and having funded over $4 billion in mortgage loans since 1997. Licensed in over twenty states, Total Mortgage offers a variety of products and programs including fixed-rate loans, adjustable-rate loans (ARMs), jumbo mortgage rates, FHA mortgage rates, and more. For more information on Total Mortgage Services or current mortgage rates, please visit www.TotalMortgage.com.
Company Contact: Michael Kraus, Public Relations Liaison Total Mortgage Services, LLC 326 West Main Street Milford, CT 06460 203-876-2200 mkraus@totalmortgage.com
Media Contact: John Lovallo Lovallo Communications Group Telephone: 203-431-0587 Cell 203-526-6371 Email: johnlovalloirpr@sbcglobal.net
Housing affordability and mortgage rates near record lows, while inventories are close to record highs
Mortgage lender experienced an over 50 percent increase in purchase loans in April compared to March
MILFORD, CT (May 3, 2010), Leading mortgage lender and broker Total Mortgage announced today that even though the first-time home buyer tax credit and repeat home buyer tax credit have expired, there are still a number of favorable market dynamics present in the housing market that continue to offer a once-in-a-lifetime opportunity for potential home buyers.
“Despite the end of the tax credit, the nationwide housing crisis is opening the door for home buyers throughout the U.S. to purchase an affordable home,” commented John Walsh, president of Total Mortgage. “This generational home buying opportunity is being created by declining housing prices, record inventories and a very favorable mortgage rate environment where a qualified borrower can lock-in a very attractive 30-year fixed interest rate currently around 5 percent.”
“This confluence of low mortgage rates and home prices comes along once in a generation,” continued Mr. Walsh. “Market conditions and Federal Reserve actions will likely cause mortgage rates to move higher within the next eight to 12 months. Therefore, qualified home buyers who are looking to become part of their local community for the long-term would do well to purchase a home while current mortgage rates are close to historical lows.”
Mr. Walsh believes that even though housing prices are very close to the bottom in most markets, there is a chance that downward pressure on home values can continue due to an increase in the housing supply. However, homes are undervalued in many markets, and according to the most recent Housing Affordability Index from the National Association of Realtors home affordability is close to historic levels.
Total Mortgage experienced an increase of more than 50 percent in purchase loans in April 2010, compared to March 2010, which was driven by borrowers buying homes before the expiring tax credits on April 30. Previously, refinance mortgage loans have been far more prevalent than purchase loans over the last three years.
“The tax credits accelerated the home buying schedules of many borrowers over the last few months,” added Mr. Walsh. “However, even though these attractive tax incentives are behind us, we believe that extremely low mortgage rates, combined with high inventories and affordable prices, make right now an excellent time to purchase a home.”
###
About Total Mortgage Services Total Mortgage Services, LLC is an industry leading direct mortgage lender and mortgage broker, with over 25,000 satisfied customers, and having funded over $4 billion in mortgage loans since 1997. Licensed in over twenty states, Total Mortgage offers a variety of products and programs including fixed-rate loans, adjustable-rate loans (ARMs), jumbo mortgage rates, FHA mortgage rates, and more. For more information on Total Mortgage Services or current mortgage rates, please visit www.TotalMortgage.com.
Company Contact: Michael Kraus, Public Relations Liaison Total Mortgage Services, LLC 326 West Main Street Milford, CT 06460 203-876-2200 mkraus@totalmortgage.com
Media Contact: John Lovallo Lovallo Communications Group Telephone: 203-431-0587 Cell 203-526-6371 Email: johnlovalloirpr@sbcglobal.net
Freddie Mac announced today that they intend on buying back an undetermined number of delinquent mortgage loans contained in securities that have previously been sold to investors. Mindful not to disclose the amount in which they will spend, Freddie Mac did reveal that the mortgage loans they are prepared to repurchase are from borrowers who are delinquent on their monthly mortgage payments by 120 days or more. However, analysts believe the unpaid principal balance on such loans is estimated to be nearly $70 billion.
Freddie Mac, and sister company Fannie Mae, are government-sponsored enterprises that guarantee the mortgage securities they sell. Freddie Mac's latest initiative to buy back the troubled loans is believed to be cheaper than actually guaranteeing the overdue payments. Under the Bush administration, Freddie Mac and Fannie Mae were effectively functioning under a cap of $400 billion to repurchase delinquent mortgage loans. Last year, the Obama administration lifted that cap and pledged to shield the agencies from unlimited losses through 2012, essentially yielding more latitude in buying back troubled mortgage loans.
In addition, Freddie Mac believes the repurchasing of the delinquent mortgage loans and adding them to their existing portfolio will assist in maintaining its capital, and will ultimately reduce the total drawn on the U.S. Treasury that is necessary to maintain operations. In a letter sent to Congress last week, Edward DeMarco, the Acting Director of the Federal Housing Finance Agency, stated, "It is my expectation that any net additions to their retained mortgage portfolios would be related to this activity."
Despite the current economic climate, there are a myriad of reasons to become a homeowner right now. Interest rates and mortgage rates are historically low. Home values may have hit their low point, as St. Louis Federal Reserve President James Bullard recently noted housing prices have "by and large" stabilized. There may never be a better opportunity to refinance or invest in a new home.
In case you needed further motivation to explore the option of home-ownership, the government is offering many incentive programs to potential home buyers. We have mentioned the $8000 First-Time Home Buyer Credit and the $6500 "move up" tax credits in this space before.
One lesser known program is the Closing Cost Assistance and Appliance Incentive for Fannie Mae Homes. Fannie Mae owns thousands of foreclosed and forfeited homes that are listed on Homepath.com. In an effort to reduce their portfolio, any purchaser of a Homepath.com home is eligible to receive 3.5% of the final sales price to be applied to closing costs, the purchase of Whirlpool appliances through Fannie Mae, or a mix of closing costs and appliances.
In order to be eligible for the program, the home buyer must be an owner-occupant, and the offer on the house must have been accepted after January 28, 2010, and closing on the house must occur prior to May 1, 2010.
Fannie Mae also offers special financing for homes purchased from Homepath.com. The required minimum down payment is only 3%. Mortgages can be fixed or adjustable and typically no mortgage insurance is required. Many people with imperfect credit will still be approved.
If you are in the market for a fixer-upper or a house at a deep discount, now is a great time to take advantage of the many incentives Fannie Mae is offering. Total Mortgage is a fully approved FHA lender and can handle all your mortgage needs. Contact us today online or at 1-877-868-2503.
Prior to the November 30, 2009 deadline, Congress not only extended the $8,000 first-time homebuyer tax credit to June 30, 2010 - with a signed purchase agreement dated no later than April 30, 2010 - but they also implemented a new $6,500 move-up homebuyer tax credit. However, it has been some time since I've read anything about either of the tax credits. It seems as if the enthusiasm and zeal for the programs have been lost, despite current mortgage rates remaining historically low for an unprecedented period of time.
The vast majority of homeowners who are eligible to refinance their existing mortgage loans are either currently in the process now, or have already done so. Nevertheless, there are still many homeowners who can benefit from refinancing by taking advantage of today's incredibly low current mortgage rates. In addition, it has been said time and time again that now is the time to buy a home if you've been considering homeownership. "The time is now" adage really can't be overstated at this point as the clock ticks toward the expiration of the tax credits.
Furthermore, analysts are predicting that current mortgage rates will spike to 6% even before the tax credits expire as the Federal Reserve completes its commitment to purchase $1.25 trillion in mortgage-backed securities by March 31, 2010. That's three full months before the expiration of the tax credits. The tax credits will be of little benefit if rates increase that sharply. Therefore, locking in now will allow you to take advantage of both low current mortgage rates in addition to unparalleled tax credit opportunities.
For answers to your tax credit questions, click here or call 877-868-2503 and speak to a licensed mortgage professional.
Total Mortgage Services, LLC (http://www.TotalMortgage.com) is an industry leading direct mortgage lender and mortgage broker, having funded over $4 billion in mortgage loans since 1997.
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