Lock An Instant 13% Savings On Your Monthly Mortgage Payment
Falling mortgage rates make owning a home more affordable. Mortgage rates are directly tied to monthly mortgage payment so as mortgage rates drop, so does the cost of home-ownership.
It’s a money-saving time to buy a home in Scottsdale — or to refinance one. Mortgage rates have never been this low in history.
According to Freddie Mac, last week, the average 30-year fixed rate mortgage fell to 3.87% nationwide for borrowers willing to pay an accompanying 0.8 discount points plus closing costs. 0.8 discount points is a one-time closing cost equal to 0.8 percent of your loan size, or $800 per $100,000 borrowed.
This represents an incredible value as compared to February of last year.
It was exactly one year ago that mortgage rates begin their long slide lower. On February 11, 2011, the 30-year fixed rate mortgage reached its peak for the year, reading 5.05% in Freddie Mac’s nationwide survey. If you are among the many U.S. households that bought or refinanced a home around that time, you could choose to replace your current home loan with a new one and save close to 13% on your monthly mortgage payment.
13 percent saved on your mortgage is a noteworthy statistic.
Look at this 30-year fixed rate mortgage payment comparison over the last 12 months :
- February 2011 : $539.88 principal + interest per $100,000 borrowed
- February 2012 : $469.95 principal + interest per $100,000 borrowed
Because of falling mortgage rates, a homeowner with a $250,000 30-year fixed rate mortgage would save at least $175 per month just by refinancing into a new loan at today’s mortgage rates. That’s $2,100 in savings per year.
Even after accounting for discount points and closing costs, the “break-even point” on a mortgage like that can come relatively quickly.
We can’t predict mortgage rates so there’s no promise rates will stay like this forever. If you’re planning to buy a home or refinance one, the best way to keep your monthly payments down is to lock your rate while rates are still low.
The market looks ripe for that now.
February 7, 2012 by Eddie Knoell · Leave a Comment
What’s Ahead For Mortgage Rates This Week : February 6, 2012
Mortgage markets worsened last week as domestic job growth surprised Wall Street and the Eurozone moved yet one more step closer to reaching a lasting Greece sovereign debt solution.
Conforming mortgage rates in Arizona rose on the news, although you wouldn’t know it from looking at Freddie Mac’s weekly mortgage rate survey.
According to Freddie Mac, the average 30-year fixed rate mortgage rate fell to 3.87% last week with 0.8 discount points due at closing, plus closing costs. 1 discount point is a fee equal to one percent of your loan size.
3.87% for a 30-year fixed rate mortgage is the official, all-time low for the weekly Freddie Mac survey, conducted since the 1970s. However, because Freddie Mac gathers its results on Monday and Tuesday only, by the time the survey results were released Thursday morning, mortgage rates were already rising off their lows.
Then, Friday morning, after January’s Non-Farm Payrolls data was released, mortgage rates surged.
The January jobs report exceeded expectations in nearly every fashion possible :
- Economists expected to see 135,000 jobs created in January. The actual number was 243,000.
- Economists expected to see the Unemployment Rate at 8.5% in January. The actual number was 8.3%.
- Revisions added an additional 180,000 net new jobs to the original 2011 tally.
As compared to one year ago, there are 2.1 million more people employed in the U.S. workforce. Figures like this hint at a stronger national economy, and that tends to drive mortgage rates up.
This week, with little economic data due for release, mortgage rates are expected to move on momentum. Right now, that momentum is causing rates to rise.
If you’re shopping for a mortgage rate in Phoenix and want to know if the time is right to lock, consider that it’s impossible to time a market bottom, but simple to spot a “good deal”.
Mortgage rates remain near historical lows — it’s a good time to lock one in. Call your lender today.
February 6, 2012 by Eddie Knoell · Leave a Comment
A Simple Explanation Of The Federal Reserve Statement (January 25, 2012)
Wednesday, the Federal Reserve’s Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The Fed Funds Rate has been near zero percent since December 2008.
For the third consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote, objecting only to the language used in the Fed’s official statement.
In its press release, the Federal Reserve noted that the the U.S. economy has “expanding moderately” since its last meeting in December 2011, adding that the growth is occurring despite “slowing in global growth” — a reference to ongoing economic uncertainty within the Eurozone.
The Federal Reserve expects moderate economic expansion through the next few quarters but is wary of “strains” from global financial markets, and these three threats to the U.S. economy :
- The housing sector remains “depressed”
- The unemployment rate remains “elevated”
- Fixed business investment has “slowed”
On the positive side, the FOMC said that household spending is rising and inflation remains in-check. The group also believes that employment will gradually improve nationwide going forward.
The Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs.
Immediately following the FOMC’s statement, mortgage markets rallied, pressuring mortgage rates to fall in and around Glendale.
Mortgage rates remain near all-time lows and, for homeowners willing to pay points plus closing costs, conventional, 30-year fixed rate mortgages can be locked at below 4 percent. If you’re in the process of buying or refinancing a home in Arizona , it’s a good time to lock a mortgage rate with your lender.
The FOMC’s next scheduled meeting is a one-day event slated for March 13, 2012.
January 25, 2012 by Eddie Knoell · Leave a Comment
Arizona home sold 1/21/2012 – 1/24/2012
Phoenix Arizona has 4,231 active listings as of 1/24/2012. Active listings total $1,122,034,240 in volume. For the past month, Phoenix’s average list price for sale has been $225,898 . In the last 3 days, 81 new listings came on the market, 93 homes have changed to pending, and 25 homes have successfully been sold and closed escrow. The average sale price in Phoenix for the last month was $175,513 . The average days it took to sell a home in Phoenix was 55 days. The Average Interest Rate in Phoenix Arizona today is 4.000% and the principal and interest payment for a borrower putting 20% down would be $670.34 per month.
January 24, 2012 by Eddie Knoell · Leave a Comment
Arizona Update on HARP 2 program
Update regarding the Arizona HARP version 2 program (we’re calling it the HARP-2)
Click here to read about the details on the HARP-2 program
HARP-2 has been available since Decemeber 1st 2011, but only at 10% capacity. The most anticipated feature, which is the ‘no-appraisal required/no max loan to value’ is still not yet available. At this time, we still need appraisals on everything if the loan to value is less than 125%. We are being told by Fannie Mae and Freddie Mac that the full features of HARP-2 will be available March 17th 2012.
Go to http://www.fanniemae.com/loanlookup/to see if Fannie Mae owns your note. Go to https://www.freddiemac.com/corporate/ to see if Freddie Mac owns your note.
Fill out the form below so I can put you on my contact list.
January 9, 2012 by Eddie Knoell · Leave a Comment
Arizona Home Buyers can still use FHA loans on flipped homes
Arizona Home Buyers can still use FHA loans on recently flipped homes. HUD has confirmed thaty they have extended the FHA anti-flipping waiver for another year. Homes that have been purchased less than 90 days ago and are on the market for sale are eligible for FHA financing until December 12th 2012.
This anti-flipping waiver has been a big hit for Arizona home buyers, allowing them to purchase homes that were recently acquired by investors and individuals at the court steps through the foreclosure process.
Here is the HUD release if you wish to read it.
January 3, 2012 by Eddie Knoell · Leave a Comment
Throughout the U.S., average home values were down in the month of October 2011
Arizona Homeowners, Take What You Will from National Reports
Yesterday, the findings in the Case-Shiller Index report were substantiated by the government: throughout the U.S., average home values were down in the month of October.
The Federal Home Finance Agency’s (FHFA) Home Price Index (HPI) reveals that home values have slipped 0.2%. This is the second time since April that home values have depreciated.
In the month of September and October, the Case-Shiller Index 20-City Composite registered a decline of 0.7%.
Arizona homeowners may infer from the data that the housing industry is not looking up. This may be a true indication in the long run. That said, for us to make an informed conclusion, we have to factor in the index’s weaknesses.
In total, there are three weaknesses and they cannot be ignored. As we take an in-depth look at them, it becomes increasingly evident that the HPI may not be of much relevance to home purchasers and owners in states such as Alhambra.
First of all, the HPI only takes into consideration the values of the homes that have Fannie Mae or Freddie Mac mortgages. Homes with FHA approved mortgages are not considered.
Four years ago, this would not have impacted the findings. That is because the FHA only accounted for 4% of the existing homes. This year, this number has grown exponentially, and FHA covers more than one-third of all homes. This is a sizable number of homes, and all of which are left out in the HPI.
Next weakness of the HPI is that it does not include new home sales and cash purchases; only home resales with mortgages are surveyed in the index. New home sales is a burgeoning category, and cash sales reached 29% in October this year.
The last weakness is that the HPI has a buffer time of two months. The latest report, published in December, reveals findings for the month of October. We’re already approaching the New Year, and industry trends are slated for change. Existing Home Sales and New Home Sales are on the ascent, Housing Starts show favorable numbers and homebuilders are positive the market is looking up. To round things off, the Pending Home Sales Index indicates the year will end off on a strong note.
All in all, the HPI fails to factor in these trends, and instead reports on past industry performance.
Therefore, home buyers or sellers in Arizona should consult their property agent to get timely and more accurate information.
Its last peak was registered in April 2007, and this month the HPI is off by 18.3%.
December 29, 2011 by Eddie Knoell · Leave a Comment
Arizona Mortgage Payments/Mo reduced by 12% since February 2011
Low Arizona mortgage rates: What should you do now?
There is a direct correlation between mortgage rates and housing costs: a decline in the former will almost inevitably lead to a decrease in the latter. As far as market trends go, this is your time to refinance your house or purchase a new asset. Never before have mortgage payments been so affordable.
Data from Freddie Mac reveals that the 30-year fixed rate mortgage rate has hit a new low: it is at 3.94% with 0.8 discount points. What this means is that to enjoy the 3.94%, home purchasers in Arizona will have to foot a charge of 0.8% of the loan as well as factor in the usual closing costs.
A week earlier, this mortgage rate was 3.99% with 0.7 discount points.
Throughout 2011, mortgage rates in Arizona have seen a constant decrease. It registered a peak in early February, but it has since declined by 12.2% for principal + interest payment on a 30-year fixed rate mortgage.
Here is a cross reference between mortgage payments per a loan of $100k, without factoring in individual tax-and-insurance escrow:
Mid Feb 2011 : $539.88
Mid Dec 2011: $473.96
Homeowners should rejoice in this information and take action right now. A refinance would translate to savings of at least $10,000 over the span of your loan —you will get to reap more savings if you choose the 15-year mortgage program.
Freddie Mac has also released this information: the 15-year mortgage has hit a new low: 3.21 percent with 0.8 discount points.
Those looking to purchase a home will find this a perfect time to seize the opportunity.
Since Arizona Mortgage Rates are directly correlated to your monthly housing costs, a low mortgage rate would mean a more affordable home. The thing is, the industry is steadily on the mend. The supply of properties is decreasing although the demand has increased. The economy is also recovering.
This means that home prices will go up in the new year, as will housing payments. Hence, if you’re looking to purchase a home at the most affordable pricing, do so before the market fully recovers.
December 20, 2011 by Eddie Knoell · 1 Comment
November 2011 Foreclosure and Bank Repossessions Fall
Foreclosure and Bank Repossessions are primarily rounded up in a few states
RealtyTrac has released this data: November’s foreclosure filings fell 3 percent from October’s reading, and against November 2010’s reading it was a 14 percent dip.
In a couple of U.S. states, foreclosure rate remains high.
“Foreclosure filing” encapsulates all the steps and entire procedures of foreclosure: default notices, scheduled home auctions as well as bank repossessions.
In November, just six states contribute to more than 50% of all bank repossessions in the U.S.
Percentage of bank repossessions by state:
- California : 14.8%
- Florida : 12.7%
- Texas : 7.0%
- Georgia : 6.9%
- Arizona : 6.7%
- Michigan : 6.3%
Last month, South Dakota registered the least number of bank repossessions, coming in with just five. North Dakato (with one of the lowest unemployment rates in the country due to mining boom), only account for 0.009% of REO in the U.S., in a month when bank repossessions hit a 44-month trough.
What does this REO decline mean for Arizona’s home buyers? The outlook is not too positive; there is a spike in demand for distressed properties as they are going at cheap and discounted prices.
The National Association of REALTORS® released a statement that distressed properties attribute to over a quarter of all home sales in October 2011. The low number of available bank-owned homes also meant that there were fewer chances for property transactions. This is further punctuated by the fact that the housing market is showing signs of a recovery.
If purchasing a foreclosed unit from a bank is on your agenda, you will be well served to carefully scrutinize the trends and market. Prices follow a supply and demand curve; when the former falls, expect prices throughout Arizona to increase. This would in turn impact REO properties, as their value would depreciate.
Therefore, before agreeing to sign a contract, consult a professional Arizona Realtor. You can do your own research on foreclosure data, but to be on the safe side, before you make any commitment always run it by your agent.
December 19, 2011 by Eddie Knoell · Leave a Comment
Which one to choose: a 15 or 30 year Fixed Rate Arizona Mortgage?
Which one to choose: a 15 or 30 year Fixed Rate Arizona Mortgage?
Arizona: Even though 30-year fixed rate mortgage rates look superbly attractive as they have troughed, 15-year fixed rate mortgage rates are lower than before, averaging 3.27% nationwide with an accompanying 0.8 discount points. One discount point is a closing point tantamount to one percent of your loan amount. These numbers are taken from Freddie Mac’s weekly survey.
This current number is just 0.01% higher than the lowest rate as registered in October 2011.
Hence, if you have been toying with the idea of getting a 15-year fixed rate, there is no better time than now to consult your financial institution.
One advantage that this mortgage offers is that you can save a huge sum of money on your long-term interest costs, as compared to a 30-year fixed rate. Of course, this option takes a lot out of your monthly pay check, and hence is not suitable for all homeowners.
Going by current mortgage rates, for a $100,000 loan:
- 15 – year fixed rate mortgage : $704 principal & interest per month
- 30 – year fixed rate mortgage : $477 principal & interest per month
From this data, it is obvious that applicants pay close to twice the amount every month when they choose to go with a 15-year fixed rate mortgage. However, to look at it in a long term perspective, the homeowner also stands to benefit from this mortgage because he can expect savings of up to $45,000 for a $100,000 loan.
$45,000 is not an insignificant amount; in fact for many of us this is our annual salary. This money could also be used to pay off other expenses such as college tuition, renovation works or be used for investment purposes.
However, not everyone should take up this mortgage.
It can be financially worrying to have to make such a high payment every month. Also, once you sign a 15-year loan term you are locked in for good; unless you get a refinance —and refinances are expensive— your lender will not allow you to change to a 30-year mortgage rate.
Hence, you must exercise great prudence before deciding to apply for a 15-year fixed rate loan. High rewards, sure, but such loans also present high risks.
December 15, 2011 by Eddie Knoell · Leave a Comment
