Greenville SC:   There has been a -6.3% decline this past year in the Zillow Home Value Index and the Index has shown a pretty consistant 0.5% approximate drop each month, which is a little concerning, but on the positive side, there has been better news with the Total homes sold this year.  Though the last full month on record in October 2009 the number of homes sold in the city of Greenville was only 63 (not a great number and close to the 5 year low back in February 2009), the numbers really have been better for most of the last few months.   In July and September, we almost hit 100 houses sold in Greenville (96 and 98, respectively).  Overall, the last 6 months have shown improvement compared to the previous 6 months.  Perhaps because of the Home Buyer’s Tax Credits being offered by the IRS.

Anderson SC:  Anderson has shown similar trends as Greenville.  Anderson’s one year change of the Zillow Home Value Index has been -4.6%, not very good.  On the otherhand, the total homes sold in Anderson has shown some signs of life the last few months.  The last month in October fell to an unimpressive 23 homes sold, but the 2 previous months hit a yearly high of 30 and 32 in August and September and overall has shown some promise of recovery.

Spartanburg SC:  The city of Spartanburg SC has actually shown the most promise of the bigger Upstate SC cities as far as its housing numbers are concerned.  The Zillow Home Value Index has actually increased (+8.6%) the last year.  Also the number of homes sold has recovered from it’s low point early this year (January, only 23 homes sold) to double on several occasions (it sits at 46 in the last October 2009 report and hit 52 in July).  All good signs.

Other smaller cities showing promise:  Greer SC: (+2.7% Zillow Home Value Index for the last year) and got to a 1 year high in homes sold in July at 46 homes, but has shown some recent sluggishness (dropped to the 30’s the last 3 months, 31 in October 2009).   Pickens SC: Pickens, though small, has shown some growth through our statistics.  The ZHV Index has gone up +11.5% the last year (very strong).

Overall, compared to many housing markets across the United States, the Upstate of South Carolina looks relatively strong.  Hopefully these trends of “acceptable losses” or some slight increases of home values can continue into the new year.  Let’s hope 2010 starts a general housing recovery, but that, of course, remains to be seen.

-Gary Schoenholz – Loan Officer Manager – www.GaryTheMortgageExpert.com 864-979-1111 cell phone, call for free mortgage rate quotes.

Low Mortgage Rates

Many residents of South Carolina and North Carolina and of the Southeast are refinancing or purchasing right now to take advantage of very low mortgage rates. Often people see low rates advertised, but when they call, the rates are higher, sometimes they are even lower than advertised. Why? Really there are several factors that can affect your new mortgage rate.

Most of the mortgage rates for Fannie Mae or Freddie Mac bank loans are under 5%, but FHA loans (best for purchasing) are generally a little over 5%. Why is FHA rates higher? This is simply due to the type of loan and the pricing that generates directly from the FHA that is higher due to the higher risk for FHA loans for default or foreclosure (this is also why there is higher mortgage insurance costs for FHA).

Mortgage term can affect rate. Shorter terms are generally lower rates. 21 to 30 year loans are priced similar. 16 to 20 year is slightly better than 30 year (maybe 1/8% better). 15 year mortgage or shorter term can be much lower than 30 year. As much as 3/8% to ½% lower, but of course, the shorter the mortgage term, the higher the payment. On the positive side, the lower rate and term means you can save many, many $1,000’s of dollars over the life of the loan in interest (sometimes as much as $50,000., $100,000., or more). In some cases there is even a 1/8% less rate for a 10 year mortgage versus the already low 15 year fixed mortgage.

Closing costs can also affect rates. If you want very low closing costs, that is great, but you will pay more for your mortgage rate. This makes sense if you think about it. The banks have to make money on a mortgage somehow, so if there is little or no closing costs, banks can make up money by having a higher rate. At higher rates, Fannie Mae, Freddie Mac, FHA, and VA all pay banks and lenders more money at a higher rate. Of course the lower closing costs are nice, but the higher rate will mean a higher mortgage payment. Many customer select a very low rate so they can have a greatly reduced mortgage payment. This is good, but this can come with 1% or higher origination or discount fees. For many people, this makes sense, especially if you plan on living in this home a long time. The longer you keep the mortgage, the more beneficial it is to have paid higher closing costs for a lower rate. The best thing is to analyze the numbers with a skilled and experienced loan officer to see which is most beneficial for you.

Lastly, there are some underwriting factors that can affect your mortgage rate. Factors such as your credit score, the amount of equity in your home, loan size, if you are refinancing a mortgage only or getting cash out for bills or other purpose. Generally the higher your credit score, the better your rate. You are best to have a middle credit score of 740 or higher. When scores get below 740 and especially 700, your rate can go up greatly, or even cause your mortgage application to be denied. The amount of equity in your home is very important. If the total of all mortgages (including HELOC’s) are less than 60% of your appraised home value (or 60% LTV, Loan To Value), this gives you the best chance at a lower rate and improves you chances of mortgage underwriting approval. If you get over 80% LTV, rates can be higher and you will be required to pay for mortgage insurance. Sometimes, a customer rate can increase during the loan process because the appraised value comes in lower than expected. This is why it is important to estimate your home value as accurately as possible (consider that in some areas, home values are dropping, especially higher priced homes). Loan size can definitely affect your mortgage rate. Smaller loan amounts under $100,000., means a higher rate. Rates under $60,000. can be significantly higher. Loan amount between $250,000 to $417,000. generally have the lowest rate. Over $417,000 is a jumbo loan, and rates generally are higher like the very small amounts are higher. Lastly, cash out loans have a higher risk than straight refinance loans, so they are priced with a higher rate with higher LTV’s. The higher the LTV, the higher the rates on cash out mortgages, especially the higher you go over 60% LTV.

If you are looking for a mortgage right now or have a mortgage rate over 5%, than call or email me right now. Now is the time to take advantage of historically low mortgage rates.

www.GarytheMortgageExpert.com

-Gary Schoenholz – Loan Officer Manager – 15 years experience, 1000 loans closed.

Call my cell phone today- 864-979-1111. 

Lower Mortgage Rates

117,394 signatures collected and printed as of 11-16-2009
97,234 of the signatures are confirmed as valid unique petition signers
The 20,160 non-verified signatures collected were not counted in the formal total but were included in the printing for the following reasons.

1. A large percentage of them are believed to be valid but some information was missing.
2. Though thousands of them appeared to be duplicate signatures they contained new horror stories of HVCC victims.  Many Real Estate professionals appeared to be trying to submit fresh stories of how their most recent clients were directly harmed by HVCC.  We felt those stories were relevant and worth including, especially since the new victims listed could be contacted through the signer listed.
3. A few of the duplicates appeared to be a previous signer attempting to update their signature with formal authorization to pass their information along to the press/media since that feature was added to the petition several weeks after it was launched.

39.6% of the petition signers were mortgage originators
29.8% of the petition signers were real estate professionals
17.4% of the petition signers indicated they worked in some other facet of the industry
The remainder of the petition signers were primarily homeowners or potential home buyers

Polls – In addition to the petition itself, we have conducted a number of online surveys to real estate industry professionals regarding HVCC.  Each poll question was preceded by an emphatic plea to respond with accurate and verifiable data only.  Even so, we acknowledge that the polls were not conducted in a scientific and controlled manner so the results may not be 100% accurate, but the story they tell is still very revealing.

How did your last “purchase” HVCC appraisal compare to the contract price?
533 – A. At or above purchase price.
151 – B. Low – but less than 3%
224 – C. Low – Between 3% and 6%
262 – D. Low – Between 6% and 10%
278 – E. Low – Between 10% and 20%
170 – F. Low – More than 20%

How could we best stabilize home prices?
407 – A. Extend the $8,000 tax credit.
144 – B. Increase high balance conforming limit to $1MM.
257 – C. Bring back Seller Funded Down Payment Assistance.
1025 – D. End HVCC.

How many of your transactions have died due to HVCC?
128 – A. 0
152 – B. 1
187 – C. 2
794 – D. 3 or more

Do you think HVCC could kill Fannie Mae?
208 – A. Yes. FHA is easier, so less FNMA loans will get done.
96 – B. No. As long as they need help, the Fed’s will give it.
35 – C. I’m not sure, but I’d like to see some real data on it.
54 – D. I’m not sure, but given the choice – I’ll go FHA every day.
94 – E. Both C and D.

Posted by: Mike Owens, Partner/Mortgage Planner Horizon Financial, Inc.   Mike can be reached at 864 907-2678 or by e-mail at MOwens@HorizonFinancial.org

NAR chief economist Larry Yun said “faulty valuations are causing contracts to fall thru because buyers can’t get loans”.    Yun also stated “lenders are using appraisers who are not familiar with a neighborhood and compare traditional homes with distressed or discounted sales”.    

Another complaint of HVCC is the added cost to borrowers.     Fees are higher, processing times are extended due to slow turnaround time, and the appraisals are not portable to different lenders.    The lack of portability means a borrower cannot shop for the best deal because they would have to pay for multiple appraisals for each lender.     Let’s hope that HR 3044 passes quickly so that the ailing housing market can find traction and consumers can take advantage of historically low rates.

Posted by Mike Owens.  Mike is a Partner with Horizon Financial and can be reached at 864 907 2678 or at mowens@horizonfinancial.org