NV Mortgage Reno News

A pleasant spring day to all,

The rates continue to drop with the 10 year bond yield.  There is some much needed positive economic news today.  Is that recovery in sight?

Click on to http://www.thinkbigworksmall.com/mypage/archive/1/50938 for some valuable tips on eMarketing.

NV Mortgage News

Hello Tahoe and Reno area Realtors,

The 10 year bond yield has been annihilated over the course of this week, but .. . not much change in the mortgage rates has happened.  Hmmmmm!

Interesting article from Jack Guttentag below.  Our current mortgage system sure does need a wake up call.

Click on to http://www.thinkbigworksmall.com/mypage/archive/1/50570 for a little bit of inspiration today!

Support your local mortgage broker!!   Alpine Lending Group

Good day Real Estate Pros,

Although the rates went up at the end of last week, they have now come back down to the same levels as last Wednesday’s newsletter.  In spite of the Goldman Sachs hearings, consumer confidence seems to point upwards.

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Support your local mortgage broker!!

Nv Mortgage News

Hello all,

Must be spring in the Tahoe region. One day you are out digging in the dirt and the next day it is snowing.

As there is a good size drop in the 10-year bond’ yield this morning, I expect to see some declining rates come this afternoon. Per the news article below, it appears that we are set for another wave of foreclosures to hit the market. Lately there has been a discussion on how to curtail the vandalism being acted out by homeowners. These acts of destruction certainly don’t help their neighbors and their neighborhood. Supposedly the banks are filing insurance claims, then pocketing the insurance payouts, and selling the distressed properties “as is”. I haven’t verified this as truth or fiction. Have any of you heard this tale?

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Mortgage Reno
Alpine Lending Group

Hello Tahoe area Realtors,

This week started out with a BANG for interest rates due to the tremendous gains of the 10-year bond’s yield, approximately 150 basis points. Across the board rates increased by .25%. The last couple of days has brought it back down about .125%. Yet, I’ve got to chuckle about this. Monday’s rate brought 30-year money to 5.375% with no points. Frightening!!!

Support your local mortgage broker!!
Mortgage Reno

December’s sales fell to a seasonally adjusted annual rate of 342,000 from an upwardly revised November pace of 370,000, the Commerce Department said Wednesday. Economists surveyed by Thomson Reuters had forecast a pace of 370,000 for December.

The results were the weakest since March and indicated demand remains sluggish despite newly expanded tax incentives to spur sales. The report is likely to fuel concern that the housing market turnaround will falter when government support ends this spring.

Tom Brown, co-owner of Summerville, S.C.-based Crown Home Builders, was not surprised that last month was so poor for the industry as a whole. Buyers are having trouble meeting tough criteria for mortgage loans, he said. And though builders are cutting prices, the shaky economy and weak job market are keeping home shoppers away.

“People are holding on to what they have,” he said.

Housing remains one of the weakest links for the economic recovery, and is weighing on the minds of Federal Reserve officials who will issue a policy statement Wednesday afternoon at the end of a two-day meeting.

No major changes in interest rates are expected. The big question is whether Fed will revise its strategy to keep mortgage rates low. The Fed has been buying $1.25 trillion in mortgage-backed securities, but has said it will phase out the program by the end of March.

Only 374,000 homes were sold last year, down 23 percent from a year earlier and the weakest year on records dating back to 1963. December’s sales were nearly 9 percent below the same month last year. This year, the National Association of Homebuilders is forecasting more than 500,000 sales.

Even if that happens, “it hardly makes you ecstatic,” said Bernard Markstein, senior economist at the trade group, noting that the industry clocked more than 1 million sales a year from 2003 through 2006

Home sales have had a rocky recovery from their four-year slide. December’s sales pace for new homes was up 4 percent from the bottom in January 2009, but down 75 percent from the peak in July 2005.

The median sales price of $221,300 in December was down nearly 4 percent from $229,600 a year earlier, but up about 5 percent from November’s median of $210,300.

New home sales varied widely across the country. Sales of new homes plummeted by 41 percent in the Midwest and fell by 7 percent in the south. But they skyrocketed 43 percent in the Northeast and rose 5 percent in the West.

“You have some builders that are still struggling while others are doing well,” said Brad Hunter, chief economist with Brad Hunter, chief economist with Metrostudy, a real estate research and consulting firm.

Any housing recovery this year is likely to be slow and labored. Experts forecast sales of new and previously occupied homes to weaken after tax credits for homebuyers expire in April.

So far, the housing recovery has been fueled mainly by hundreds of billions in federal spending that has pushed down mortgage rates and propped up demand. Congress decided last year to extend a tax credit of up to $8,000 for first-time buyers until the end of April. Homeowners who have lived in their current properties for at least five years can claim a tax credit of up to $6,500 if they relocate.

There were 231,000 new homes for sale at the end of December, down about 2 percent from November and the lowest inventory level since April 1971. But at the current lackluster sales pace, that still represents 8 months of supply — above a healthy level of around 6 or 7 months.

John Freer, president of Riverworks Inc., a custom home builder in Missoula, Mont. who builds environmentally sustainable homes, said traffic and sales have been picking up. Along with the tax credit, he said, “I think people are a little bit more optimistic than they were last year.”

AP Real Estate Writers Alex Veiga and Adrian Sainz contributed to this report from Los Angeles and Miami.

These days, not much. Ideally, you would have enough cash for a 20% down payment, closing costs equal to about 3% to 5% of the purchase price, and enough left over to cover two or three months of monthly housing expenses. That gives you a big chunk of equity in your house upfront and makes the lender happy — something that usually translates into a better deal. The trouble is, coming up with that much cash can be all but impossible for many first-time buyers. After all, we’re talking $40,000 on a $150,000 loan or $70,000 on a $250,000 mortgage.

The good news is that lenders over the last couple of years have become increasingly willing to finance as much as 95% or even 97% of a home. The reason: They can now unload the risk of such loans onto somebody else. To limit their exposure, many lenders regularly sell their loans to the Federal National Mortgage Association (Fannie Mae), which then bundles them into securities which are eventually sold to investors. It used to be that Fannie Mae only would buy loans for 80% financing. But it recently standardized the lending criteria for 97% financing and will now buy these loans, making lenders much more willing to provide them to you. It’s now common for first-time buyers to put down only 5%, or $7,500 on a $150,000 loan.

While this sounds enticing, remember that puny down payments have their price. First of all, you start with very little equity in your home. Also, if you don’t have 20% to put down, you’ll probably have to ante up for mortgage insurance (which protects the bank against default and can top $1,000 a year if you put 5% down on a $200,000 loan).

If you are buying in an urban area or have low to moderate income, look into programs offered by your city or state that provide below-market loans with little or no down payment required. If you’re really cash-strapped, you can get 100% financing by “piggy-backing” a second loan equal to 20% of the purchase price on top of your 80% loan. But that 20% second mortgage will come at a much higher rate.

Lenders use specific criteria to determine if you qualify for a loan and the amount you can qualify for. You will need to contact the mortgage lender to determine whether you can qualify for a loan, the types of loan products that are best for you, and many other things.

There are many factors that go into the bank’s decision, from how long you’ve been at your job to how many credit cards you carry. The most important thing lenders look at, however, is your ability to meet your obligation to them, which is a function of your income and debt levels.

To gauge your ability to pay, lenders look at a pair of numbers called the “housing ratio” and the “total-obligation ratio.”

They’re not as daunting as they sound. The first is just the percentage of your gross monthly income that you’ll need to spend on housing expenses after you buy the new home. It includes your mortgage payment, taxes, insurance and maintenance. Lenders will want to see a ratio of 28% or lower. The total-obligation ratio, meanwhile, is the portion of your income that goes to covering both your housing expenses and any other obligations, such as credit cards, car loans and child support. There, your lender will want to see a ratio of 36% or lower. Both of these ratios are often negotiable upward.