susanduddy@gmail.com • www.susanduddyrealestate.com
Get your $10,000 State Tax Credit Before It's Too late!
Let me know how I can assist you with your
Santa Clarita and San Fernando Real Estate needs.
I am here to help you in buying foreclosures,investment properties ,facilitate a short-sale , regular sale or listing and selling your home!
From My Mortgage Lender : September 3,2010
On the first Friday of each month, the Bureau of Labor Statistics releases Non-Farm Payrolls data for the month prior. The data is more commonly called “the jobs report” and it’s a major factor in setting mortgage rates for homeowners everywhere. Especially today, considering the economy.
This is because, although it’s believed that the recession of 2009 is over, there’s emerging talk of new recession starting.
Support for the argument is mixed:
- Job growth has been slow, but planned layoffs touch a 10-year low
- Consumer confidence is down, but beating expectations
- Consumer spending is weak, but not declining
In other words, the economy could go in either direction in the latter half of 2010 and the jobs market may be the key. More working Americans means more paychecks earned, more taxes paid, and more money spent; plus, the confidence to purchase a “big ticket” items such as a home.
Jobs growth can provide tremendous support for housing, too.
Today, though, jobs growth was “fair”. According to the government, 54,000 jobs were lost in August, but that reflects the departure of 114,000 Census workers. The private sector (i.e. non-government jobs), by contrast, added 67,000.
In addition, net new jobs was revised higher for June and July by a total of 123,000. That’s a good-sized number, too.
Right now, Wall Street is reacting with enthusiasm, bidding up stocks at the expense of bonds — including mortgage-backed bonds. This is causing mortgage rates to rise. Rates should be higher by about 1/8 percent this morning.
This is because, although it’s believed that the recession of 2009 is over, there’s emerging talk of new recession starting.
Support for the argument is mixed:
- Job growth has been slow, but planned layoffs touch a 10-year low
- Consumer confidence is down, but beating expectations
- Consumer spending is weak, but not declining
In other words, the economy could go in either direction in the latter half of 2010 and the jobs market may be the key. More working Americans means more paychecks earned, more taxes paid, and more money spent; plus, the confidence to purchase a “big ticket” items such as a home.
Jobs growth can provide tremendous support for housing, too.
Today, though, jobs growth was “fair”. According to the government, 54,000 jobs were lost in August, but that reflects the departure of 114,000 Census workers. The private sector (i.e. non-government jobs), by contrast, added 67,000.
In addition, net new jobs was revised higher for June and July by a total of 123,000. That’s a good-sized number, too.
Right now, Wall Street is reacting with enthusiasm, bidding up stocks at the expense of bonds — including mortgage-backed bonds. This is causing mortgage rates to rise. Rates should be higher by about 1/8 percent this morning.
Mortgage rates are down 0.75 percent since mid-April.
Premiums Start October 4, 2010
For the second time this year, the FHA is modifying mortgage insurance.
Should You Refinance Your ARM, Or Let It Adjust Lower?
Beginning with FHA case numbers issued on or after October 4, 2010, the FHA is changing its upfront and annual mortgage insurance premium structure.
Under the new terms, assuming a 30-year fixed rate FHA mortgage with at least 5 percent equity:
- Upfront MIP drops to 1.000% of the amount borrowed from 2.250%
- Annual MIP increases to 0.850% of the amount borrowed from 0.500%
For homeowners , this switch in MIP decreases the upfront cost of an FHA-insured mortgage, but increases the loan’s long-term costs.
Using a $100,000 mortgage as an example, upfront MIP falls to $1,000 from $2,250; monthly MIP jumps to $70.83 from $41.67. The FHA expects the change will yield an additional $300 million in premiums monthly.
The update is a huge win for the FHA whose reserve funds are self-proclaimed to be “perilously low”. The extra monies should help recapitalize and stabilize the government group.
The FHA is on pace to back 1.7 million loans this year.
For the majority of refinancing FHA homeowners and home buyers, the MIP change is neither good nor bad — the borrowing landscape will just looks a bit different. Yes, loans will cost more to carry each month, but also they’ll be less expensive to procure. It’s a trade-off and you can apply math formulas to solve for the best time to apply FHA.
It may be wise to get your FHA case number before October 4, for example, depending on your time frame in the home and the expected life of the mortgage. Or, it may be better to wait until after October 4 to apply.
If you’re unsure of how the new FHA mortgage premiums will impact your mortgage, be sure to call or email your loan officer for help.
NOTE : The FHA originally announced an implementation date of September 7. It was subsequently amended to October 4, 2010.
If your adjustable rate mortgage is due to adjust this year, don’t go rushing to replace it just yet. Your soon-to-adjust mortgage rate may actually go lower. It’s related to the math behind the ARM.
Conventional, adjustable-rate mortgages share a common life cycle:
-
There’s a “starter period” in which the interest rate remains fixed
-
There’s an initial adjustment period after the starter period called the “first adjustment”
-
There’s a subsequent annual adjustment until the loan’s term expires — usually at Year 30.
The starter period will vary from 1 to 10 years, but at the point of first adjustment, conventional ARMs become the same. A homeowner’s new, adjusted mortgage rate is determined by the sum of some constant, and a variable. The constant is most often 2.25% and the variable is most often the 12-month LIBOR.
As a formula, the math looks like this:
(Adjusted Mortgage Rates) = (12-Month LIBOR) + (2.250 Percent)
LIBOR is an acronym standing for London Interbank Offered Rate. It’s the rate at which banks borrow money from each other and, lately, LIBOR has been low. As a result, adjusting mortgage rates have been low, too.
Last year, 5-year ARMs were adjusting to 6 percent or higher. Today, they’re adjusting to 3.375%.
Based on the math, it may be wise to just let your ARM adjust this year. Or, depending on how long you plan to stay in your home, consider a refinance to a new ARM. Starter rates on today’s adjustable rate mortgages are exceptionally low, as are the rates for fixed rate loans.
Either way, talk to your loan officer about making a plan. With mortgage rates as low as they’ve ever been in history, homeowners have some interesting options. Just don’t wait too long. LIBOR — and mortgage rates in general — are known to change quickly.
More Real Estate Notes :The excellent Santa Clarita School district plus the low percentage of foreclosures in Santa Clarita has helped Valencia and neighboring homeowners to hold on to their equity.To get monthly Santa Clarita Real Estate or San Fernando reports sent to you , call me at (818) 322-9333 or email me at soduddy1@hotmail.com.
My Professional Affiliations : Member of the Southland Regional Association of Realtors (SRAR).
Member of
Member of the National Association of Realtors (NAR).
Member of the
Member in Associations and Multiple Listing Services throughout
CLICK for Helpful LINKS:
1.www.inman.com/news
2.www.dataquick.com/news.asp
3.www.gasbuddy.com
4.www.eventful.com
5.www.Walkscore.com
6.http://santaclaritaguide.com
7.www.santa-clarita.com
Click for Easy Loan Qualify : http://myprospectmortgage.com/bwoolley
Click for Daily Mortgage News : www.mortgagenewsdaily.com/
Ask me about these FREE REPORTS: "Options and Help for Avoiding Foreclosure" and "Getting Top Dollar for your Home"
