ABBA First Mortgage News

“Think bigger” all you 1st time home buyers

September 22nd, 2016

The “starter home” trend may be fading in real estate. Prior to the housing bubble, first-time buyers with average incomes would shop for a more affordable, smaller house with the idea of moving on to a larger home in a few years. Today’s first-time buyers want a home that meets their needs now and in the future. Seventy-five percent of first-time buyers say they prefer to skip the starter home and find a house that meets their long-term needs, according to a recent survey. Thirty-five percent say they even intend to stay in that home until they retire. First-time buyers nowadays tend to be higher earners, due to rising home prices and tighter housing inventories. As such, these higher earners desire fancier homes. In 2013, first-time buyers purchased homes with an average of 1,845 square feet. Meanwhile, the average home in the U.S. is just 1,819 square feet, according to BuildZoom’s analysis of data from the Census Bureau.

“So those home buyers who probably would have been looking for the lowest-end homes 10 years ago during the housing boom are today just not able to buy. And those that are able to buy are looking further upmarket,” says Issi Romem, chief economist for BuildZoom. Many first-time buyers aren’t planning to upgrade and move on in five years, like they once did. They plan to stay put. “When they do purchase, they’re planning on living there longer than buyers that we’ve seen in the past,” says Jessica Lautz, NAR’s managing director of survey research. “They’re expecting to live there 10 years.”

Source: USA Today

Are you leaving money on the table?

September 12th, 2016

Are you or is someone you know needlessly missing the action during these time of rates close to the lowest in history? You might be, if you fit this profile:

  • You’re renting, although your goal is to buy a home. You assume you can’t qualify for a home loan because today’s underwriting rules are so strict and inflexible.
  • You don’t have a lot of extra cash in the bank, and you doubt that you could scrape together enough money for a down payment.
  • Your credit scores aren’t great — just under 700 FICO — but that’s mainly because you’re young and don’t have a deep credit history.

Sound familiar? Well, here’s good news. Giant mortgage investors Fannie Mae and Freddie Mac have low-down-payment plans known as HomeReady and Home Possible Advantage. Either one could be key to your getting out of your rental apartment and buying a house or condo sooner than you think.

Call ABBA First Mortgage and talk to us about some of the new programs that might be available to you as a new home owner.  We certainly want you to take advantage of all the most beneficial money borrowing guidelines available.  Call 910-332-0650 and ask for Rich Sr.

Are home sales better today than over the last 9 years?

September 3rd, 2016

Consumers took full advantage of extremely low interest rates and continued monetary policy inaction from the Federal Reserve in July, as new home sales unexpectedly soared to their highest point since October 2007, according to a report published by the Census Bureau. Sales of new single-family homes in July clocked in at an impressive annualized rate of 654,000 – up 12.4 percent over the month and 31.3 percent over the year. Analysts had actually expected a slight downtick in sales over the month, due mostly to strong performance in June and a general shortage of new housing options on the market. “July’s surge in new home sales continues to support the sentiment that demand for homes is strong despite homebuyers facing low existing inventory,” Ralph McLaughlin, chief economist at real estate hub Trulia, wrote in a research note. Home sales were likely bolstered by interest rates that plummeted to near-record lows in July, shortly after the United Kingdom announced its Brexit vote. In the financial market chaos that ensued, investors flocked to U.S. assets that were generally considered safe from volatility, like mortgage-backed securities. Source: US News and World Report

If sales are improving, home prices and values must be going up.  THEY ARE!  If you are paying PMI and would like to refinance out of it, NOW is a great time while rates are still flirting with all time lows.  Call ABBA First Mortgage toll free at 866-676-3349 for a free consultation on how to proceed and better your financial position in life!

Mortgage rates edge higher ahead of Labor Day weekend

September 2nd, 2016

Freddie Mac says that average mortgage rates have increased in the past week following Fed Chair Janet Yellen’s speech last Friday.

The average 30-year Fixed Rate Mortgage (FRM) was 3.46 per cent in the week ending Sept.1 compared to 3.43 per cent a week earlier.  ABBA First Mortgage has maintained it’s 3.375% 30 year fixed rate for qualified borowers.

Average 15-year FRMs were up to 2.77 per cent from 2.74 per cent and 5-year ARMs averaged 2.83 per cent from 2.75 per cent.

After most of us enjoy an extended time away from the workplace over the next 3 day weekend, if mortgage financing is in the forecast for anyone, please take adantage of our new lock and float down policy whch allows for you to catch a great rate now!  Should the rate improve significantly before you close your loan, ABBA First will renegotiate the rate to a lower one for you.  Now that’s an opportunity that you can’t pass up!

Enjoy your holiday weekend from all of us here at ABBA First Mortgage.  Call us at 910-332-0650 if you have any questions!

Increase in townhomes likely as a more affordable option for buyers

August 27th, 2016

In an effort to create more affordable housing options for entry-level buyers, home builders are increasingly turning to townhomes. In recent years, builders focused on constructing higher-end homes. Less than 20 percent of newly built single-family homes were priced below $200,000, and the size of a new home grew to an average of 2,700 square feet, according to Census Bureau data. The National Association of Home Builders say that rising regulatory costs – up about 30 percent over the past 5 years – means that it is more expensive to build a house today. As such, first-time home buyers have mostly been priced out of the new-home market. But builders think townhomes may change that. These homes tend to be smaller (the average size was 1,983 square feet, according to 2015 Census data). Townhouse starts totaled 94,000 in the last four quarters ending with the first quarter of 2016 – a 29 percent increase over the prior year, estimates Robert Dietz, chief economist for NAHB. In fact, the growth rate exceeds the total single-family building market, Dietz notes. “These trends will continue,” Dietz says. “As regulatory cost impacts persist and millennials enter the for-sale market, the cost of construction and the growing demand for medium-density housing in walkable neighborhoods in inner and outer suburbs will support townhouse development growth.” Source: Builder

No change for mortgage rates but Yellen could change that

August 26th, 2016

Average rates for a 30-year fixed rate mortgage were unchanged in the week ending August 25 at 3.43 per cent.  ABBA First Mortgage offered rates as low as 3.25 per cent.

Data from Freddie Mac shows that an average 15-year FRM was also unchanged from a week earlier at 2.74 per cent while a 5-year ARM was slightly higher at 2.75 per cent, up from 2.74 per cent.

Fed chair Janet Yellen is speaking at Jackson Hole Friday and is expected to give some indication on the pace of interest rate increases which is likely to impact on mortgage rates over the coming week.

“This marks the ninth consecutive week that mortgage rates have been below 3.5 percent. Markets are erring on the side of caution ahead of the second estimate for second-quarter GDP and Fed Chair Janet Yellen’s speech on Friday,” commented Freddie Mac chief economist Sean Becketti.

While rates are still low and before a market change is made that will affect the long term mortgage rates, set the table with ABBA First Mortgage and allow us to offer you the lowest rate available for you and your needs from more than 12 lenders in the wholesale market.   Call us toll free at 866-676-3349 and ask for Rich at extension 101.

What happened last week?

August 23rd, 2016
  • Rates fell slightly in the past week.
  • For the week ending August 18, Freddie Mac announced that 30-year fixed rates decreased to 3.43% from 3.45% the week before.
  • The average for 15-year loans eased down to 2.74% and the average for five-year adjustables rose slightly to 2.76%.
  • A year ago, 30-year fixed rates were at 3.93%, exactly one-half of one percent higher than today’s levels.
  • Attributed to Sean Becketti, Chief Economist, Freddie Mac — “Ahead of the release of the FOMC minutes for July, 10-year Treasury yields were little changed from the prior week. The 30-year fixed-rate home loan fell 2 basis points to 3.43 percent this week, erasing last week’s uptick. For eight consecutive weeks, rates on home loans have ranged between 3.41 and 3.48 percent. Inflation is not adding any upward pressure on interest rates as the Bureau of Labor Statistics reported that the Consumer Price Index was unchanged in July.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Roller coaster for mortgage rates going up!

August 19th, 2016

Rates Currently Trending:  Higher

Mortgage rates are moving higher today.  The MBS market improved by +14 bps yesterday. This was enough to slightly improve mortgage rates or fees.   However, mortgage rates are headed higher this morning wiping out all of the improvement from yesterday and then some. The market experienced moderate to low volatility yesterday.

 

Today’s Mortgage Rate Forecast:  Higher

Fed: Non-Voting member S.F. Fed President John Williams came out in support of raising rates. He said “In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later,” and “An earlier start to raising rates would allow a smoother, more gradual process of normalization.”

 

It’s all about perception- believing that  rates will eventually come back down and when they do, you’ll be able to catch them at the bottom.  If rates are lower next week, then you GUESSED right!  But in actuality, according to professionals in this business that have a much better read of global economics, oil prices, unemployment, etc., they are predicting a rate increase, “preferably sooner rather than later”.  If they have their way, rates will continue to go up.  Please act now and apply online with ABBA First to catch the rates where they are now before further deterioration and possible regret on your part for not having moved more quickly when prompted.  Call toll free 866-676-3349 ext 101 and ABBA First will work with you and for you to obtain the best financing for your needs. By the way if rates improve signficantly during your loan process, ABBA First will renegotiate your rate for you and offer you a better one than what you originally locked in your rate at!  A free “float down”!  Call soon or apply online by copying and pasting in your browerser:     http://www.abbafirst.com/online-mortgage-application.php

Buyers should beware! (Part 2 of 2)

August 19th, 2016

HOME BUYERS READING THIS ARTICLE: STOP. Think about this for just a minute. A home builder or for that matter any corporation, is not going to give you those concessions (closing costs or extra fancy upgrades) out of the goodness of their heart. What any corporation does is the corporation increases your price.

Whether you are buying a car, or a home the concept is the same… And builders do this too, for a very good reason. Builders must compete with each other’s new construction plats and older, existing homes. To get you to emotionally connect with their product, they offer something: 3 percent of the sales price for you to spend on closing costs, for example.

So here’s how it’s done:

The cost of the home has been raised by…how much would you guess?

Is your guess 3%? You are smart. But the builders are smarter. Here’s why: When that transaction closes, in the next few months, appraisers are going to use YOUR sold home as a future sales comparison in their appraisals. Now appraisers are supposed to check to see if there were any sales concessions in closed comps. Some appraisers check the multiple listing service which may or may not have that field in their software. Some appraisers call the builder’s real estate agent to check on pricing concessions but there is no rule that requires that Realtor to return the appraiser’s calls. So, sometimes the appraiser knows and sometimes he/she does not know about the slightly increased sales price. So the 3 percent higher sales prices not only support future sales, they support future sales at a value that is 3 percent higher than today’s sale. And the next future new construction sale is also 3 percent higher than yours. Builders love this because it helps sell more homes! At a higher price! So you end up financing more because your realtor and or the builder did not have YOUR best interest in mind. Ok, here is the ounce of prevention – don’t think with your heart, reason it out with your mind. Is it financially wise to finance, over the life of the loan, your closing costs or upgrades in the form of an increased purchase price? What you may want to consider

– Make the offer for an amount MINUS whatever the builder/ seller is

offering. So if the list price is $350,000 and the builder is offering 3% (10,500) but the buyer must

use the builder’s preferred lender, then the offer will be $339,500 with the home buyer using the home buyer’s preferred lender.

ABBA First Mortgage works closely with your realtors to ensure your purchase agreement is written with your finances and interest in mind.

Because it is not the Realtor’s job to advise and educate on matters relating to the loan. The Realtor will never go this far (OR SHOULD NOT GO THAT FAR) and it can be argued that it is unethical for realtors to advise in areas beyond the Realtor’s expertise. So by default, the education and comparison math must be done by the LO in advance.

When you find yourself in this situation trust your independent Loan Officer to be looking out for you. We don’t have a vested interest in any other company. We are invested in you!

Please note that italics are inserted by Maureen Biagini of ABBA First Mortgage, Inc.*.

Buyers should beware (Part 1 of 2)

August 17th, 2016

My mother taught me that an ounce of prevention is worth a pound of cure. Perhaps you have heard that too. Well I believe it is worth knowing that your realtor and or builder may not be fully aware that their decision to direct you to their lender may actually cost you more money in the long run. A short term choice with long term consequences…The following information is excerpted from an article by Jillayne Schlicke CEO of CE Forward, Inc. and the Executive Director of National Association of Mortgage Fiduciaries on Ethics in Mortgage Lending.

Question: Is it legal for a builder to offer something to the home buyer such as extra funds to use for closing costs, or extra upgrades to the subject property, but then take those extras off the table IF the home buyer refuses to use the builder’s affiliated lender?

Answer: Yes the above is legal.

*Yes, RESPA says it is legal, but is it ethical? Is it right? Is it in the BEST INTEREST of the buyers?

One of the main hallmarks of RESPA is to keep settlement costs low to the consumer, so more people could afford to become homeowners. So a builder having partial or full interest in a mortgage company was, and to some extent, still is seen as being “in the best interest of the consumer” while supporting the real estate industry’s desire for more profits. Affiliated business arrangements are legal and there are many rules involved in these including a mandatory disclosure form provided to the consumer. The reason why the builder can offer concessions (or credits toward closing costs) and then take those concessions away if the buyer chooses a different lender is because it is seen as being in the consumer’s best interest to have the option to use an affiliated company. (However, exercising this option more often than not costs you, the consumer more money in the long run.) There is one important rule regarding builders and their affiliated mortgage companies: IF the home buyer decides to select a lender that is NOT affiliated with the builder, the builder CAN take away the concessions but the builder cannot charge more for the home. I’m assuming the home buyer has been given the affiliated business arrangement disclosure form, so the home buyer then becomes informed about the shared business interests of the lender and the builder. We have disclosure forms for a reason and if the consumer decides to ignore it, then the consumer doesn’t get to complain later when the consumer learns that he/she has possibly been overcharged (or didn’t get the best mortgage financing).

Please note that italics are inserted by Maureen Biagini of ABBA First Mortgage, Inc.*.

“Buyers should beware” Part 2 of 2  tomorrow-