28-May-2010

Posted by : deanna

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With LIBOR Rising, is it Time to Refinance Your ARM?

Category : Loan Programs, Mortgage Rates and News

For the better part of the last 9 months, homeowners with adjusting adjustable rate mortgages have watched their mortgage rates fall.

As short-term solutions go, it’s been smart to let the mortgage adjust rather than refinance…until now. It may now be time to convert that soon-to-adjust ARM into something new.

The Math For Adjusting Mortgage Rates Is Worsening

Earlier this year, ARM’s adjusted to as low as 2.875 percent. It was a godsend to households worried their ARMs would actually go up in rate.

Today, though, that’s not happening.

Households with June-adjusting mortgages would get a 3.625 percent rate based on today’s market. And if the issues in the European market continue to exacerbate, households with ARMs could see them adjust to 5.000 percent or higher later this year.

Here’s how an adjustable rate mortgage works:

  1. The initial interest rate stays fixed for a set period of time in the beginning
  2. When the fixed period ends, the rate is recalculated based on a formula
  3. Every 12 months thereafter, the rate recalculates again based on the same formula

The adjustment formula is as follows:

Rate = Constant Rate +/- Variable

The “variable” and the “constant” will vary from ARM to ARM, but if you’ve got a conforming home loan originated after 2002, the chances are very high that your variable is the 12-month LIBOR and your constant is 2.250 percent.

In other words, to calculate your adjusting mortgage rate, just add 2.25% to LIBOR and that’s your new rate.

LIBOR Is Rising, Rising, Rising

LIBOR stands for London Interbank Offered Rate.  It’s the interest rate at which banks lend money to each other and LIBOR tends to rise and fall with the stability of the global banking system.  It spiked in 2008 after Lehman Brothers failed and it’s showing a similar pattern today as the debt crisis spreads from Greece to Spain and to the rest of Europe.  So, of course, the risk of lending amongst the banks gets larger and the LIBOR rises.  It is currently up 69 percent since February 2010.

What To Do About Your ARM

With “new” mortgage rates at their lowest levels ever, this is truly the best time to think about refinancing your adjusting ARM for a new one, or a fixed rate loan.  So, as long as you can keep your closing costs to a minimum, this may be a consideration.  You don’t want to wash out your payment savings with huge costs you’ll never recoup.

If you want to discuss a plan that’s right for you, call or email me today.

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21-May-2010

Posted by : deanna

Comments: (3)

USDA Funding Dries Up

Category : Loan Programs, Mortgage Rates and News

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The good news is that the USDA funds lasted longer than everyone expected…bad news is they are now completely exhausted.
USDA Section 502 Single Family Housing Guaranteed Loans are primarily used to help low-income borrowers purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. There is no required down payment and no monthly mortgage insurance required.
Every year USDA runs out of money for funding these loans and lending is not affected, but this year has been a little different. Due to the overwhelming demand placed on the housing market by first-time homebuyers fueled by the federal first time homebuyer tax credit and the elimination of many first time homebuyer financing programs, the USDA has seen an extraordinarily high demand for this loan product.

There is currently legislation before Congress that will bring this program back to the market and some estimate that it may be as late as October before the program comes back. So, for now, this avenue of affordable home financing to low income consumers who live in rural areas has been cut-off.

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14-May-2010

Posted by : deanna

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Charlotte, NC Named in Top 100 Places to Live

Category : Uncategorized

RelocateAmerica just released the results of their annual Top 100 Places to Live study.  This year they focused on communities positioned for recovery and future growth. They discovered communities with strong local leadership, employment opportunities, thriving community commitment, improving real estate markets, expanding green initiatives, plentiful recreational options and an overall high quality of life.

According to the study, Charlotte, NC was #7 on the list! 

Charlotte is the nation’s second largest banking center (next to Wallstreet) and home to 292 of the top Fortune 500 companies and more than 340 foreign firms.  The city is home to the number one most educated workforce and is one of the top large counties for business recruitment.

The cities accessibility to interstates and central location between the Blue Ridge Mountains and the beaches along the Atlantic make it a widely visited and desirable place to live.  Charlotte’s is also homes to some of the world’s best golf courses.

Center city has undergone tremendous growth with several large-scale projects that combine residences, shops, restaurants, and entertainment.  Charlotte real estate has a variety of communities and is the nation’s fifth largest urban region. The Charlotte mortgage and real estate market has suffered under the national housing market crisis however the market is still alive and steady

Charlotte boasts a cost of living index below the national average and has an impressive roster of professional sports teams along with the best and most varied recreational facilities available.

Charlotte’s vibrant economy is attracting corporate headquarters such as, Electrolux and Husquevarna. Major employers in the Charlotte area also include Bank of America, Duke Energy, Family Dollar, Goodrich Corporation, Lowe’s, Nucor, Sonic Automotive, SPX Corporation, Wachovia, Time Warner Cable, Continental Tire North America, Muzak, Belk, Harris Teeter, Meineke Car Care Centers, Lance, Inc., Bojangle’s, Lending Tree and Food Lion.

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10-May-2010

Posted by : deanna

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Do’s and Dont’s During The Mortgage Process

Category : mortgage process

Tags: , , ,

My goal is to make sure the loan process is as effortless and stress-free as possible for my clients. For this reason, I’ve put together a list of Do’s and Dont’s during the loan process:

- DO continue making your mortgage or rent payments
- DO stay current on all existing accounts
- DO keep working at your current employer
- DO keep your same insurance company
- DO call us if you have any questions

- DON’T make a major purchase (cars, boats, jewelry, appliances, etc.)
- DON’T apply for new credit (even if you see “pre-approved”)
- DON’T open a new credit card
- DON’T transfer any balances from once account to another
- DON’T pay off charge offs or collections without a discussion with your lender first
- DON’T buy any furniture on credit
- DON’T close any credit card accounts
- DON’T change bank accounts
- DON’T max out or over charge on your credit card accounts
- DON’T consolidate your debt onto 1 or 2 credit cards
- DON’T take out a new loan
- DON’T finance any elective medical procedures
- DON’T payoff any loans or credit cards without discussing it with your lender first.

There are any number of things that could make your “pre-approved” mortgage become a “denied” mortgage.  Don’t let this happen to you!

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28-Apr-2010

Posted by : deanna

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The Tax Credit is Ending….What’s Next?

Category : Loan Programs

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The Tax Credit is ending, so what’s next ?

203k Renovation Loans in Charlotte

Well, we need to figure out how to help sell more homes after the tax credit expires and give everyone new tools to move homes that need a little TLC! I am happy to announce that New American Mortgage offers FHA 203K’s! Only a handful of lenders are able to do these loans so you might ask.. what exactly is an FHA 203K?

The FHA 203(k) is a loan available to owner-occupants (not investors or second homes) of homes that are in need of repairs (to meet minimum property standards set forth by HUD), or homes that are to be updated by the new buyer.

One single loan is given to the buyer, this loan will cover both the purchase and the proposed improvements. The maximum loan amount will be determined by the home’s after improved value. The maximum loan amount for FHA loans in the Charlotte area is $303,750. All the repairs are performed after the loan is closed. The seller is never responsible for the repairs; all homes sold under this program can be sold “As is.” If the repairs are under 35K, it’s eligible for the 203K streamline product which expedites the process. Please plan on 45 days to close these loans.

Please let me know if you have any further questions about the 203K program.  I’m happy to help!

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26-Apr-2010

Posted by : admin

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Charlotte Area Home Sales on the Rise

Category : Charlotte Real Estate News

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Charlotte-area home sales were up 13.7 percent last month from a year ago, and they rose 36 percent from February, according to the Charlotte Regional Realtor Association.

The number of closings in March totaled 1,900, jumping from 1,671 a year earlier and 1,397 in February, the association says, citing Carolina Multiple Listing Services, Inc. data.

Pending contracts reported in March were also up, rising 23.2 percent from March 2009 and up 27.8 percent from February levels.

Many real estatel professionals attribute the increase in real estate activity, in part, to the federal government’s first-time home-buyer tax credit that expires at the end of April.  But, then what?

The average sales price in March was $197,564, up 3.2 percent from a year ago and 3.3 percent above February’s average.  The number of days on market has also fallen by about 9 days.

It will be interesting to watch how the market proceeds once the tax credits expire.  One would hope that the upward trend will continue, thus confirming all of our hopes…that the market is finally making it’s recovery!

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08-Apr-2010

Posted by : deanna

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Mortgage Rates for the Next 7 Days (April 8th)

Category : Mortgage Rates and News

Tags: ,

Don’t be in a hurry to lock a mortgage rate, but don’t be careless, either. Markets are favorable but can change in an instant. You don’t want to be on the wrong side of that gamble. It can mean the difference between saving 1/8 percent or losing it.

You’re probably going to want your loan officer to help you with timing so be sure to ask.

I expect mortgage rates to decrease.

Last week was an overreaction. Rates will most likely ease lower in the near-term.

Last week saw 5 straight days of mortgage market losses. Rates shot higher. Now, we get the correction.

Last Week, Why Did Rates Rise So Much?
A lot transpired last week that directly impacted mortgage rates.

First, the Federal Reserve stopped buying new mortgage-backed securities. This was not a surprise by any means — the Fed had been announced a March 31 end date for month, but after all the short coverings had come and gone, mortgage markets traded worse ahead of the expected supply-demand imbalance.

Lower bond prices yield higher mortgage rates.

Better-than-expected data on the economy helped push rates north, too. Auto sales were way up, the Case-Shiller showed strength in housing, and the jobs report was nearly nearly as bad as it looked on the surface.

Furthermore, because of Spring Break, trading volume was thin and that magnified the jumps in pricing.

Overall, mortgage pricing shed 103 basis points, roughly equal to a 0.375% rise in rates.

Why Are Rates Coming Back Down?
Lucky for rate shoppers, mortgage markets over-reacted (like they always do). This week is the bounce-back.

Trading volume is back to normal levels, Wall Street is grabbing some profits, and mortgage pricing is improving. Plus, helping rates fall even further, debt concerns are re-emerging in Greece and it’s driving the same type of safe haven buying that dropped 30-year fixed rates to near 5.000 percent in early-March.

Rates won’t come all the way down to 5, but they will be lower seven days from now.

Your Mortgage Rate Strategy For The Week
Don’t be in a hurry to lock a mortgage rate, but don’t be careless, either. Markets are favorable but can change in an instant. You don’t want to be on the wrong side of that gamble. It can mean the difference between saving 1/8 percent or losing it.

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