SEATTLE – Oct. 31, 2011 – Overall, today’s homebuyers tend to be fairly knowledgeable about the real estate market, but there are still a few points of confusion in the process, especially for buyers just entering the market. Here are the five main areas of confusion found in a survey by Zillow:
• Appreciation: About 42 percent of homebuyers believe home values will appreciate by 7 percent a year. Reality: Historically, home values in a normal market appreciate by 2 to 5 percent in a year.
• Appraisals: 56 percent of the buyers said the purpose of the appraisal was to determine if a home was in good condition. Reality: That’s the purpose of a home inspection; an appraisal estimates fair market value.
• Homeowner’s insurance: 37 percent of homebuyers think that buying homeowner’s insurance is optional. Reality: Lenders require homebuyers to purchase homeowner’s insurance if they carry a mortgage.
• Ownership: 47 percent of homebuyers said a prospective buyer owns a home after the purchase contract is signed by the seller – when the two parties reach agreement. Reality: The purchase and sales agreement is the beginning of the closing phase, but it can be a long process until they finally take ownership.
• Mortgage insurance: 41 percent of buyers think they must purchase private mortgage insurance, regardless of the amount of their downpayment. Reality: Buyers only need to purchase PMI if their downpayment is less than 20 percent of the home’s purchase price.
Source: Zillow Inc.
Monday, October 31, 2011
Friday, October 28, 2011
Rate on 30-year fixed mortgage falls to 4.10%
WASHINGTON – Oct. 28, 2011 – The average rate on the 30-year fixed mortgage was nearly unchanged for a second straight week after rising from a record low.
Freddie Mac said Thursday that the rate on the 30-year loan fell to 4.10 percent from 4.11 percent last week. Three weeks ago, it dropped to 3.94 percent. The National Bureau of Economic Research says that’s the lowest rate ever.
The average rate on the 15-year fixed mortgage was unchanged at 3.38 percent. Three weeks ago, it hit a record low of 3.26 percent.
Low rates have done little to jolt the struggling housing market. Sales remain depressed, and home prices are still dropping in many markets.
High unemployment and declining wages have made it harder for many people to qualify for loans. Most of those who can afford to refinance already have. The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures – the worst in 13 years.
Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices, and it followed a peak buying season that was the worst on records going back nearly 50 years.
Many borrowers are unable to take advantage of the low rates because they can’t meet banks’ restrictive lending standards, or are unable to scrape together a down payment.
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
The Federal Reserve has been helped push rates lower by buying longer-dated Treasurys, such as 10-year Treasury notes. Mortgage rates tend to track the yield on the 10-year note. Buying by the Fed pulls the yield lower.
Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount. The average fee for the 30-year fixed mortgage was unchanged at 0.8 point. The average fee for the 15-year loan fell to 0.7 point from 0.8 point.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
The average rate on the five-year adjustable loan rose to 3.08 percent from 3.01 percent. It hit a record low of 2.96 percent three weeks ago.
The average rate on the one-year adjustable loan fell to 2.90 percent from 2.94 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.
The average fee on the five-year adjustable loan fell to 0.5 point from 0.6 point. The average fee on the one-year adjustable loan was unchanged at 0.6 percent.
Copyright 2011 The Associated Press, Daniel Wagner (AP Business Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Freddie Mac said Thursday that the rate on the 30-year loan fell to 4.10 percent from 4.11 percent last week. Three weeks ago, it dropped to 3.94 percent. The National Bureau of Economic Research says that’s the lowest rate ever.
The average rate on the 15-year fixed mortgage was unchanged at 3.38 percent. Three weeks ago, it hit a record low of 3.26 percent.
Low rates have done little to jolt the struggling housing market. Sales remain depressed, and home prices are still dropping in many markets.
High unemployment and declining wages have made it harder for many people to qualify for loans. Most of those who can afford to refinance already have. The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures – the worst in 13 years.
Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices, and it followed a peak buying season that was the worst on records going back nearly 50 years.
Many borrowers are unable to take advantage of the low rates because they can’t meet banks’ restrictive lending standards, or are unable to scrape together a down payment.
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
The Federal Reserve has been helped push rates lower by buying longer-dated Treasurys, such as 10-year Treasury notes. Mortgage rates tend to track the yield on the 10-year note. Buying by the Fed pulls the yield lower.
Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount. The average fee for the 30-year fixed mortgage was unchanged at 0.8 point. The average fee for the 15-year loan fell to 0.7 point from 0.8 point.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
The average rate on the five-year adjustable loan rose to 3.08 percent from 3.01 percent. It hit a record low of 2.96 percent three weeks ago.
The average rate on the one-year adjustable loan fell to 2.90 percent from 2.94 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.
The average fee on the five-year adjustable loan fell to 0.5 point from 0.6 point. The average fee on the one-year adjustable loan was unchanged at 0.6 percent.
Copyright 2011 The Associated Press, Daniel Wagner (AP Business Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Wednesday, October 26, 2011
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