Horizon Financial » Rate Update

Underwater? Check Out HARP Rates…

admin — Wed, 09 Feb 2011 21:28:30 +0000

According to a recent report by Zillow, 27% of all homeowners are “underwater” on their mortgage.

Being “underwater” or upside-down on your mortgage means that you owe more money on your mortgage than your home is worth.

In some markets the numbers are even uglier. More than a third of Chicago homeowners owe more on their mortgage than their homes are worth. In Atlanta over 50% of homeowners are “underwater”.

And those numbers don’t include the homeowners whose current equity is between 0% and 20%. Many people have purchased homes with a 20% down payment to avoid paying PMI (Private Mortgage Insurance) only to have their homes fall in value resulting in their inability to refinance at lower rates without paying PMI.

The surplus of existing inventory on the market, the current foreclosure moratorium, and falling prices are the reasons that home values have decreased across the country.

Some experts say that we are getting closer to the bottom. Obviously! The question is, “Just where is the bottom?”

The good news for some homeowners is that the government has extended the HARP program until June 30, 2011. HARP stands for Home Affordable Refinance Program.

You may qualify for the HARP program if you have a conventional (under $417,000) Fannie Mae or Freddie Mac mortgage and are not currently paying PMI. If that is the case, you may be able to refinance at or close to the historically low mortgage rates now available, without paying PMI, even if you owe 25% more than your home is worth. If you have two mortgages or an equity line that would have to be included in the refinance you would not qualify.

We can quickly determine whether or not you qualify for the HARP program. If you have an adjustable rate mortgage or a fixed rate mortgage with a rate that is higher than the currently available low rates, you should check to see if you qualify for the HARP program.

Posted by Terry Brunner. Terry is a Senior Loan Officer with Horizon Financial. Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org. Visit Horizon’s website at www.horizonfinancial.org

Mortgage Rates This Week – January 24, 2011

admin — Wed, 26 Jan 2011 22:46:15 +0000

Mortgage markets worsened last week in a holiday-shortened trading week.

As the body of U.S. economic data continues to show slow, steady improvement, Wall Street is becoming a net-seller of mortgage-backed bonds. As a result, conforming mortgages rates in South Carolina are rising.

This is why conforming and FHA mortgage rates rose last week in South Carolina. Existing home supplies plunged to a 2-year low in December, and unemployment claims dropped more than expected, giving hope for the U.S. economy in 2011.

This week, that trend may continue. There’s a lot of news set for release.

The biggest story of the week is Federal Open Market Committee’s 2-day meeting. Scheduled for Tuesday and Wednesday, the FOMC’s meeting is the first of its 8 scheduled meetings this year.

In it, the FOMC is expected to vote the Fed Funds Rate unchanged in its target range near 0.000 percent, but it won’t be what the Fed does that’s so important to mortgage markets — it will be what the Fed says. Wall Street will be watching the FOMC’s post-meeting press release for clues about the economy, and the central banker’s next steps. From what it reads, Wall Street will react.

This week is also heavy on housing data.

Following up on last week’s Existing Home Sales and Housing Starts figures, this week features 4 additional releases:

Case-Shiller Index (Tuesday)
Home Price Index (Tuesday)
New Home Sales (Wednesday)
Pending Home Sales (Thursday)

Strength in housing should lead mortgage rates higher as it becomes more clear that the sector is on solid ground.

Since November 3, mortgage rates have been trending higher in Mauldin and across the country. The Refi Boom is over, but low rates remain — for now. If you’ve yet to lock a mortgage rate, consider doing it soon.

Before long, rates won’t be so low.

HAVE A VERY, VERY MERRY CHRISTMAS!

admin — Thu, 23 Dec 2010 19:56:36 +0000

Rates Are Very Low…In Case You Hadn’t Noticed

admin — Thu, 28 Oct 2010 20:47:40 +0000

Mortgage rates for the last few months have been extremely low. Fixed, Adjustable, even Jumbo mortgage rates have fallen to levels never seen before.

Unless you have refinanced in the last few months, it wouldn’t hurt to see if you can improve your mortgage situation. You may be able to do a “No Cost” loan and reduce the term of your mortgage by several years with a payment that is the same or lower than your current payment.

But be forewarned, if you do decide to refinance, be prepared for a longer than normal loan process. Loans that took less than 30 days to complete several months ago, are now taking 30 to 60 days to complete. But it is certainly worth the wait if you can save some money and improve your current situation.

Time To Refinance? Rates Down 1% Since April 2010.

admin — Fri, 22 Oct 2010 19:00:19 +0000

30-year fixed mortgage rates rose last week, marking the first time in a month that rates failed to fall week-to-week.

The data sources from Freddie Mac, one of the government’s major mortgage securitizers and a sister entity to Fannie Mae. Each week, Freddie Mac collects mortgage rate data from more than 120 lenders nationwide and publishes the results in a report called the Primary Mortgage Market Survey.

According to this week’s PMMS, the 30-year fixed rate rose 0.02% and now averages 4.21% nationally. The average accompanying cost is 0.8 points.

1 point is equal to 1 percent of the loan size.

Note, though, that these are just averages. Just as real estate markets are local, mortgage rates can be, too. As an illustration, look how this week’s rates break down by region:

Northeast : 4.22 with 0.8 points
Southeast : 4.30 with 0.8 points
N. Central : 4.19 with 0.8 points
Southeast : 4.23 with 0.7 points
West : 4.17 with 1.0 points

The rate-and-fee combination you’d get in your home state of South Carolina , in other words, is different from the rate-and-fee combination you’d get if you lived somewhere else. In the West, rates are low and fees are high; in the Southeast, it’s the opposite.

The good news is that, as a rate shopper, you can have it whichever way you prefer. If getting the absolute lowest mortgage rate is worth the extra cost to you, have your loan officer structure to structure your loan as such. Or, if you prefer higher rates and lower costs, you can go that route, too.

Banks offer multiple mortgage set-ups to meet every type of budget and, with rates down 1.00% since April 8, there’s good cause to call your loan officer about a mortgage refinance. See what set-up will work best for you.

Posted by Scott Fowler. Scott can be reached at SFowler@HorizonFinancial.org or call toll free 877-627-9211 x 104. www.ScottFowlerTeam.com.

admin — Tue, 28 Sep 2010 14:37:47 +0000

How To Reduce Your Closing Costs

The good thing about closing costs is that they’re negotiable, in some respects. You can’t avoid paying underwriting fees or taxes to the government, for example, but you can arrange to have loan costs paid on your behalf.

It’s called a “zero-cost mortgage”.

A zero-cost mortgage is exactly what it sounds like — it’s a mortgage in which all closing costs are paid by the lender instead of the borrower. Loan sizes don’t increase and nothing is “rolled in”. It’s a true no-cost loan. However, there is a trade-off. In order to have your closing costs waived in full, you’ll be asked to accept a higher mortgage rate than the “market” rate.

For larger loan sizes, the bump to interest rate is usually about a quarter-percent; for smaller sizes, it’s about a half.

Zero-cost mortgages are excellent in a falling interest rate environment because they limit costs to zero, and because they offer an immediate payback. Not every bank or lender will offer them, though. Horizon Financial, Inc. does.

If you’d like to see the math on a zero-cost mortgage, call or email me. I’m happy to talk to you about it.

Posted by Bob Dangelo, a senior Loan Officer with over 20 years mortgage lending experience. You can reach Bob toll free at Horizon Financial (877) 627-9211 ext 110 in Greenville, SC 864-527-8900 ext 110 or email at bdangelo@horizonfinancial.org.

ARMs…the Good, the Bad, and the Ugly

admin — Fri, 09 Jul 2010 17:47:37 +0000

Adjustable rate mortgages or ARMs can be a wonderful mortgage tool or they can be downright ugly.

ARMs typically come in flavors such as the 3/1, 5/1, 7/1 or 10/1. The first number is the number of years that the initial interest rate is fixed. The second number means that after the initial fixed rate period ends, the interest rate can change once a year.

ARMs have caps, typically 5/2/5. The first number means that the interest rate can go up 5% in the first adjustment after the fixed rate period. The second number means that the interest rate can go up a maximum of 2% per year after the initial adjustment. The third number means that the interest rate can only go as high as 5% over the initial fixed rate.

So, if you have a 5/1 ARM with 5/2/5 caps and an initial fixed rate of 4%, the interest rate could go up to 9% at the very first adjustment after 5 years. But if the ARM rate only went up to 6% after the first adjustment, the rate could only increase by 2% in the second adjustment to 8%. And the rate could never go above 9%.

ARMs can be a great mortgage tool if you are planning to pay off your mortgage or move within the fixed rate time frame. Rates on 5/1 ARMs are below 4% at this moment.

If you are not planning to move or pay off your mortgage within the fixed rate time frame, ARMs can pose a big risk. With the U.S. Government spending money as fast as they can print it, mortgage rates are going to go up in the near future. And rates are probably going to go up dramatically. If you are in an adjustable rate mortgage and are not planning to move or pay off the mortgage, it would probably be wise to refinance into a fixed rate mortgage while rates are low.

And now for the ugly. If you have an Option ARM and have been paying the minimum payment, you probably have a negative amortization loan, meaning that the amount of principle that you owe is increasing every month. You are either underwater or sinking fast. Refinance if you can, as soon as you can.

Happy Fourth Of July!

admin — Fri, 02 Jul 2010 19:28:31 +0000

South Carolina Mortgages and Mortgage Rates

admin — Fri, 18 Jun 2010 15:22:09 +0000

Having chosen South Carolina as your home, you’re now ready to find the cheapest first, second, or refinance mortgage rates available. The process of finding and comparing low-cost mortgages can be summarized into the following steps:

Learn the options.
Know the rates of interest.
Determine your budget.
Collect quotes.
Compare your offers.

Horizon Financial is here to help. Our content is informative, and our information is accurate. You can request free quotes online, crunch numbers on the mortgage calculators, or calling Horizon Financial directly. Take advantage by using our thorough South Carolina broker/lender mortgage loan programs knowledge to get the mortgage loan that is right for your situation. Whether you are just starting to research or have a written offer on your dream home, we have Conventional, FHA, VA & USDA Rural Housing expects ready to assist with your hassle free options.

Greed, Fear and Mortgage Rates

admin — Mon, 17 May 2010 21:38:45 +0000

The stock and bond markets of Wall Street are driven by unemotional numbers like profits, P/E ratios, return on investment, etc. But they are also driven by emotions.

A New York broker once said, “Downtown, there are two emotions: Fear and Greed. The rest is bull*$x&.”

Greed as in the late 1990’s when investors jumped to buy any stock that ended with a “.com”. Of course that bubble exploded in 2000.

Fear as in the last week when the debt problems of Greece and Portugal and maybe Spain caught the attention of the investment community. Will these problems spread to France and Germany? Will the debt crisis affect the United States? Are Europe’s biggest banks facing insurmountable strains? Will the crisis have a negative impact on China’s exports to Europe? What are the implications for the LIBOR?

The anxiety in the investment community has led both institutional and retail investors to flee the stock market and shift their funds to gold, bonds and money markets.

When money is poured into bonds the price of bonds goes up. As the price of bonds goes up the yield or interest rate on those bonds goes down. As a result mortgage rates have fallen dramatically. The 15 year fixed rate is at its all time low. And the 30 year fixed rate is close to its all time low.

If you have an adjustable rate mortgage or can benefit by refinancing, this may just be the time to pull the trigger.