RECORD LOW interest rates

Record Lows for Mortgage Interest Rates
Have we reached the bottom?

The reason why Donald Trump is so successful and has made millions in real estate is because he has followed one simple mantra throughout his life, "Buy LOW. Sell HIGH." As for Buyer purchasing power, this IS the bottom of the Real Estate market. And, yes, I'm aware that you may have heard this before, but please read on...

The 30-year fixed mortgage rate fell to a new low of 4.54% this week. Last week at this time it was at 4.56%. On average over the last year, it has been hovering around 5.25%.

The 15-year fixed loan rate also hit a record low to 4%. A week ago at this time it was 4.03%, compared to this time last year, which was 4.69%.

The five-year adjustable-rate mortgage is averaging 3.76%. It was at 3.79% last week and 4.75% a year ago. One-year ARMs averaged around 3.64%, which was down from 3.7% last week and was 4.80% a year ago.

Everyone who is studying the economy is saying the same thing, "Interest rates are getting ready to climb." I realize the public has been desensitized by the media's constant declaration that "With interest rates at historic lows, NOW is the best time to buy!". However; I will tell you that in my expert opinion, I also believe that interest rates will soon be on the rise (within the next 3 months or so - just enough time to find your perfect home & lock in your interest rate) and will rise quickly. I also believe they will not come back down for quite some time.

So, these are the facts Mr. & Mrs. potential Buyer's:

1. Lending regulations are getting tighter, requiring more and more of your money up front and out of pocket as the days go by. The ability to even qualify is getting tougher as well.
2. With foreclosures, short sales, and REO's at an all time high, properties are selling cheaper than ever before. You can buy an amazing house for less than you've been able to in years.
3. Interest rates ARE at their lowest TODAY and will soon be upward bound.

You may not have the first-time buyer incentives anymore, but with the reasons I've stated above, you don't need them. (Besides of which, I offer a guarantee to my Buyers anyway: "I'll save you AT LEAST $8,000 or I'll GIVE you my commission!")

I would strongly urge you, if you have been considering a home purchase, for your sake, get off the fence my friend. If you don't, you may still have some advantages to your home purchase later but NOTHING LIKE YOU COULD TODAY. We all want our money to go as far as it possibly can. Now is the time to invest in your economic future - for yourself and/or your family. If you don't purchase a home within the next couple of months, you will be kicking yourself that you missed "The Bottom" for Buyers and now you can't afford the car you wanted too or the size of house you really needed.

If you have questions about this or any other Real Estate matter, feel free to contact me. You can also find great resources, tools and information on our website.

Natalie Flaming
Realtor - Broker Associate
Email: Natalie@TheVIPofOKC.com
http://www.TheVIPofOKC.com

HUD Proposes to Reduce Seller Concessions

HUD is proposing to lower the seller concessions to an FHA buyer from 6% to 3%. This will adversely affect buyers and an already struggling Real Estate housing recovery effort.

What is a seller concession? On an FHA loan of say $150,000 a buyer can request that a seller pay up to 6% of their allowable closing costs, which equates to $9,000. Now, of course, a seller is not required to pay 6% of a buyers closing costs but it is a negotiable part of the contract that often times determines if a buyer will in fact be able to afford all of the upfront costs. To reduce this to 3% means a buyer may request only up to $4,500. On the larger loans, this may be enough to cover all of the closing costs a buyer has. Where it will affect consumers most are the smaller sales prices. For example, on an $80,000 sales price, 3% would be $2,400, which will not be enough to cover everything.

The "typical" first time home buyer will now have to come up with not only the 3.5% down payment that FHA now requires (this was recently increased by HUD from 3% to 3.5% in an effort to strengthen the FHA loans), which on the same $150,000 sales price would be $5,250, but now will have to have the additional that would not be covered. A lot of times a thousand dollars is the difference between a buyer being able to buy a home and a seller being able to sell. The closing costs being paid do not even affect the terms of the loan. If the home value is there to make the concession, should the buyer be allowed to negotiate for it and should the seller be able to make the choice to concede to it?

The following is HUD's proposal in full.


HUD No. 10-150
Lemar Wooley
(202) 708-0685 FOR RELEASE
Thursday
July 15, 2010
HUD SEEKS PUBLIC COMMENT ON THREE INITIATIVES TO BOOST FHA CAPITAL RESERVES
New measures will help FHA control risk, continue supporting housing recovery
WASHINGTON – Federal Housing Administration (FHA) Commissioner David Stevens today unveiled three specific policy changes to strengthen the FHA’s capital reserves while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The U.S. Department of Housing and Urban Development today published a Notice, seeking public comment on three specific measures to reduce financial risk and preserve affordable mortgage financing for responsible consumers.

In addition to earlier steps taken to manage its risks and to boost reserves, FHA is proposing to update the combination of credit and down payment requirements for new borrowers; reduce seller concessions from six to three percent; and tighten underwriting standards for manually underwritten mortgage loans.

“These are the latest in a series of changes to allow the FHA to manage its risk better while continuing to support the nation’s housing recovery,” said Stevens. “By protecting FHA’s capital reserves, we can continue providing affordable, responsible mortgage products and will remain the nation’s largest source of home purchase financing for underserved communities.”

For the next 30 days, HUD is seeking public comment on the following policy changes, each of which are designed to mitigate risk to the Mutual Mortgage Insurance Fund while promoting sustainable homeownership for FHA borrowers:

1. Update the combination of credit and down payment requirements for new borrowers. New borrowers seeking FHA-insured financing will be required to have a minimum FICO score of 580 to qualify for FHA’s flagship 3.5 percent down payment program. New borrowers with credit scores of less than a 580 will be required to make a cash investment of at least 10 percent. Borrowers with credit scores of less than 500 will no longer qualify for an FHA-insured mortgage.
2. Reduce allowable seller concessions from six to three percent. Allowing sellers to contribute up to six percent of the home’s sales price to offset a buyer’s costs exposes the FHA to excess risk by potentially driving up the cost of the home beyond its appraised value. Reducing seller concessions to three percent will bring FHA into conformity with industry standards.
3. Tighten underwriting standards for manually underwritten loans. When using compensating factors in the underwriting process, lenders will be required to consider those factors which are the best predictive indicators of loan performance, such as the borrower’s credit history, loan-to-value (LTV) percentage, debt-to income ratio, and cash reserves.


To submit your thoughts on what reducing seller concessions will do to a housing industry that doesn’t seem to have enough buyers go to: HUD Seller Concession Feedback

(If the link above does not open properly, copy and paste this address into your browser: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480b1a605)

You can also call your elected “representatives” to let them know how parts of this proposed rule will have a negative impact for the consumer and small business.

If you have any questions about this or any other Real Estate matter, feel free to call or email me.


Natalie Flaming
Realtor - Broker Associate
Metro First Realty
Direct: 405.412.5452
Natalie@TheVIPofOKC.com
www.TheVIPofOKC.com

The scoop on Short Sales

Sometimes a homeowner may need to sell their home because they are relocating, their financial status has changed and they can no longer afford their home, or for other various reasons. Short sales can be an alternative to foreclosure. In the case of a short sale, the seller is allowed to sell the home for less than they owe on it because the bank has agreed to take a certain loss on their loan. The stipulation; however, is that the bank has final say on the terms of the sale. So, when a buyer makes an offer to purchase, not only will the seller have to accept the offer but the bank will as well. In these economic times, many banks are not prepared to handle them. Sure short sales have been around for a long time, but these days there are unprecidented amounts of owners seeking this remedy. The average time it can take just to get a bank to accept an offer for purchase ranges from 3 to 6 months, and sometimes even longer. Then, of course, a buyer will still need to go through the process of inspections, any repair requests, etc. Any changes to the contract that affect the bottom line will then also need to be approved by the bank. It can be a very long and difficult process. For those who are willing to wait it out, most times it can result in a staisfying investment. Whether buying or selling, navigating through a successful short sale is no easy task. This is definately a scenario in which you need an experienced Realtor capable of handling all of the paperwork and communication to get the job done. If you are considering a short sale, send us an email or give us a call. We'll be happy to walk you through the process and answer any questions you may have.

The VIP Team
Natalie Flaming
Realtor - Broker Associate
Metro First Realty
405.412.5452
www.TheVIPofOKC.com

Recovery In Process, But Challenges Remain

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According to David H. Stevens, assistant secretary of the U.S. Department of Housing and Urban Development and FHA commissioner, we can credit increased home buyer demand, brought about by the home buyer tax credits, and the federal government’s purchase of mortgage-backed securities for helping to restore consumer confidence and get the economy moving.

“Home prices and sales are beginning to recover, inventories are down, private capital is beginning to re-emerge, investor confidence is coming back, and the job market is showing signs of improvement. These all show renewed confidence in the housing market. We need to finish the job now and make the housing recovery sustainable and keep the economy on the right track,” Stevens said.

Despite the signs of improving stability, Stevens said that the housing market continues to face challenges, mainly from unemployment and home owners with negative equity. “These issues need to be dealt with responsibly, we need solutions to help the most severely distressed home owners—those most in need and at risk—and when we can’t help them we need to make the transition as smooth as possible.”

For more expert Real Estate advice, resources, and tools, visit our no-hassle website at: www.TheVIPofOKC.com

Tax Credits Have Been Expensive and Effective

As the home buyer tax credits near their end on April 30th, National analysts are surmising that the incentive program was both expensive and successful.

The Treasury Department estimates that the tax credits helped 1.8 million people buy homes, however critics point out that two-thirds of the $12.6 billion in credits through the end of February went to people who would have purchased a home anyway.

Sen. Johnny Isakson, a Republican from Georgia, who worked as a real estate practitioner for 30 years and pushed through the 2010 extension and expansion of the program, says: “It’s true that a lot of people who got the credit might have bought without it, but they might have bought in 2012 or 2013. This got them to buy in 2009 and 2010, when we needed to shore things up.” So, where does that leave us for the 2011, 2012 & 2013 markets? Hopefully, with the improvement in the overall economy and unemployment on the decline there will be a whole new set of buyers in the marketplace.

Economist Mark Zandi agrees. “The tax credit helped to stanch the price declines, which had substantial benefit for the entire economy," he says. "The home is still the largest asset on most people’s balance sheet, so when prices are falling, nothing works for most families.”

Contributing Sources: The New York Times, David Kocieniewski (04/26/2010)

For more information on previous entries for "Today's Market", please visit The VIP Blog on the official site: http://www.TheVIPofOKC.com/myblog.