ABBA First Mortgage News

Once again-To buy or to rent?

November 25th, 2015

On average, homeowners in America can expect to spend 15% of their income on a mortgage.

Zillow found that most renters that reside in some of the nation’s largest cities are setting aside around 30% of their monthly income just to pay their rent.

Despite this, the report also noted that those opting for homeownership are experiencing troubles of their own, with saving for a 20% or 10% down payment becoming gradually harder for first time buyers.

First-time buyers and millennials, the report suggested, are looking into other creative ways to come up with the down payment for their mortgages. In 2014, 13% of home purchases were made possible due to loans or gifts from family or friends for the down payment.

“In general, paying a mortgage is more affordable than renting, and has been for some time. Unfortunately, many current renters aren’t able to realize the savings that come with homeownership because as home values and rents keep rising, it’s getting increasingly difficult to clear the down payment hurdle,” said Svenja Gudell, Zillow chief economist.

Gudell explained that down payments can represent savings of considerable value when put against rents. She also warned that down payments are moving targets, and as home values rise, so will down payments, prompting renters to pay more and leave less for their savings.

“Using a smaller down payment is an option, but often comes with the added cost of mortgage insurance. Knowing this, it’s no wonder that many current renters are waiting longer to buy a home and are turning to alternate sources, including friends and family, to help them scrape together a down payment,” she explained.

So what is the answer to the question- to buy or to rent? Having a home to call your own is a privilege that only those that have met certain criteria can take advantage of.  If you’ve worked hard to keep your credit clean and your scores reflect that, it is amazing how far a bank will go to help you make your dream a reality.  Give ABBA First Mortgage a call at 866-676-3349 to speak to a loan specialist that can assist you in finding the right program tailor made just for you.  If it can be done, we will work towards that goal with you, exhausting all possibilities.

How’s TRID going so far?

November 20th, 2015

Originators and homeowners alike, across the country, have been grappling with TRID-related delays.  These delays have been an issue for originators, but it’s a problem that is out of their hands, according to one professional.

“The biggest TRID frustration is between closers on the lenders side and paralegals in the attorneys’ offices, and they are the reason for delays in getting the closing documents out,” said one loan originator.   The closing document (CD) has to go out three days prior to close, which means attorneys can no longer make last minute changes.  One solution may be for the closer and the paralegal to have more open communication between them with quicker responses, which will lead to less closing confusion, lower stress and minimize any delays.  This may improve the time frame that it takes to bring mortgage transactions to fruition more rapidly.

The TILA-RESPA Integrated Disclosure was implemented on October 3. The purpose of the new rule is to ensure clients have adequate time to review closing documents.  But that extra review time has also resulted in delays.  “It’s definitely affecting closings and it’s not helping the homeowner at all”, according to one lending professional.  ABBA First is working with banks, attorneys, and clients to pick up the pace and close loans within the timeframe allotted to them.  Call us today for great rates, low closing costs, and excellent service.

Feds are ready to raise rates in December

November 18th, 2015

Federal Reserve officials talked up recent data on the U.S. economy and said it reinforced the case for raising interest rates, though they stopped short of committing to liftoff at their next meeting on Dec. 15-16.

“I’m comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions,” Atlanta Fed President Dennis Lockhart told a conference in New York on Wednesday. ”Given my reading of current conditions and my outlook views, I believe it will soon be appropriate to begin a new policy phase.”

Investors are betting that the central bank next month will lift rates for the first time since 2006 following a solid U.S. employment report Nov. 6, ending a seven-year period of holding the benchmark federal funds rate near zero.

We want all borrowers to be aware of this and consider the possibility of moving forward with your decisions of mortgage financing or refinancing.  Rates may go up even further once the definite decision is made to raise the lending rates.

Will rates go up next month?

November 17th, 2015

Most analysts are saying that this is it. December will be the first time that the Federal Reserve Board will raise rates since 2006. The markets, at least for now, seem to agree. Rates have moved up across the board since the release of the jobs report showing a gain of over 250,000 jobs last month. It seems everyone has jumped on the bandwagon and some have started discussing when the second rate increase will come.

We say, not so fast. We believe if the Fed were voting today, rates would go up. But the Fed does not meet for a month. That is a lot of time for the picture to change. We have another employment report to be released before the meeting and this report will contain revisions to last month’s data. There will be a slew of additional data released and in the past few months, data has been mixed at best. One should remember that the economy grew by less than two percent last quarter according to the first reading and this reading will be revised as well before the Fed meets.

Bottom line? There is a lot of data to be released in the next 30 days. If those reports are as strong as the jobs data, the decision regarding a rate increase will be a fait accompli, or done deal. If the data comes in mixed, the Fed’s increase is probable. But, if it swings the other way, the Fed may not move at all. In addition, there is always the possibility of an intervening variable such as an international crisis which could put the decision on hold. For now, the markets seem to have made up their mind that it is on the way.


New home purchase applications fall

November 16th, 2015

There was a drop in the level of mortgage applications for new home purchases in October according to data from the Mortgage Bankers’ Association’s Builder Application Survey. The month-over-month drop of 8% does not include any adjustments for typical seasonal patterns.

However the longer-term picture appears better: “On top of normal seasonal slowdown, the October decline in mortgage applications to builder affiliates was likely amplified by some applications being pulled forward into September ahead of the implementation of the Know Before You Owe Rule on October 3,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “Despite the decrease, our estimate of new single-family housing sales for October was up more than 7% from a year ago.”

By product type:

Conventional loans composed 67.2% of loan applications

FHA loans composed 19.2%

RHS/USDA loans composed 1.0%

VA loans composed 12.7%

The average loan size of new homes decreased from $324,884 in September to $320,881 in October.  As rates are poised to increase in the near future, ABBA First hopes to be a part of your buying and financing decision.  Please call us to make this happen for you!

A positive rate reversal on the way?

November 13th, 2015

After nearly two weeks of a straight daily decline in rates, we seem to have been blessed with a day where the market has turned around and is showing signs of improvement. Since October 28th which marked the bginning of this deterioration in mortgage rates, there was no betterment in sight and it seemed as if rates would continue to worsen until such time that the Federal Reserve would meet in December and follow through with their anticipated rate hike.  However, we have an improving market today (at 1:00PM) which may spur some prospective borrowers on the fence to move forward with their financing needs.  My suggestion is to lock in your rates while the going is good (today) for we do NOT know what tomorrow holds.  However, we do know who holds our tomorrow, and for that, we will always be grateful.

This past weeks rates ending 11/6

November 7th, 2015

Rates on home loans rose in reaction to the Fed’s statement after their most recent meeting. Freddie Mac announced that for the week ending November 5, 30-year fixed rates rose to 3.87% from 3.76% the week before. The average for 15-year loans increased to 3.09%. A year ago, 30-year fixed rates were at 4.02%, close, but still higher than today’s levels. ABBA First continues to offer lower than market rates to their deserving borrowers.  With no points or paying points that you will be able to take advantage of a lower rate (you choose), as this company leads the way to bring you a truly competitive low rate.  We want you to take advantage of the best possible mortgage program that meets your needs!  Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.
FYI- Recent commentary suggests interest rates may rise in the near future. Federal Reserve Board chairperson, Janet Yellen, referred to a December rate hike as a ‘live possibility’ if incoming information supports it. The October jobs report which was released this past Friday is one crucial factor influencing the FOMC’s decision.

What a difference a week makes

November 6th, 2015

There is now a 70% chance of an interest rate rise next month.  With the announcement of more jobs created, a lower jobless rate, and the treasuries tumbling due to this data, the Federal Reserve will most likely raise the rates in December.  In anticipation of this possibility, mortgage lenders have already begun raising the interest rates therefore avoiding any type of “spike” in rates to the borrowers.  If the rate are raised gradually, there will be less of a market meltdown when the time is actually upon us.  ABBA First strongly reccomends that you as a home owner or first time home buyer, should take advantage of the rates available now prior to the higher rates expected in the near future.

Improving rates

October 27th, 2015
  • ABBA First offers lower than market averages once again.
  • Rates on home loans eased down in the past week.
  • Freddie Mac announced that for the week ending October 22, 30-year fixed rates fell to 3.79% from 3.82% the week before.
  • The average for 15-year loans decreased as well to 2.98%.
  • Adjustables were higher, with the average for one-year adjustables rising to 2.62% and five-year adjustables up one tick to 2.89%.
  • A year ago, 30-year fixed rates were at 3.92%, close, but still higher than today’s levels.
  • Attributed to Sean Becketti, chief economist, Freddie Mac — “Following Federal Reserve Governor Daniel Tarullo’s remarks last week Treasury yields dipped. In response, 30-year fixed rates fell 3 basis points this week to 3.79 percent. The housing market continues to benefit from low rates on home loans, with housing starts for September beating expectations and the NAHB’s Housing Market index registering a ten year high in October.”

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

Cool comparison between baseball and the mortgage industry

October 26th, 2015

They both seemed down and out just a few years ago, but both the market and the New York Mets are back … and better than ever.  In a Reuters Breakingviews, legal writer, Reynolds Holding draws an interesting comparison between the economy, so dependent on the recovering health of the housing market, and the National League pennant winners. But the same comparison can be drawn between the Mets and the housing market.

“Like corporate America, the Mets were sizzling in 2006, coming within an inning of their fifth appearance in Major League Baseball’s finals,” Reynolds writes. “The bottom dropped out in 2009 – more than a year after the great recession hit – and the team struggled through losing seasons until 2015.”  Reynolds blames misguided signings and a fraud perpetrated by Bernie Madoff that benefitted Mets owners, their families and businesses for the once great club’s fall from grace in the late aughts.  The Mets, of course, swept the cursed Chicago Cubs last Wednesday to restore the club to its former glory.  As for the housing market, the bottom fell out in the mid-2000s – much of the blame falling on faulty mortgages and fraudulent activity.

Today, however, signs of a recovered market are impossible to ignore – especially when looking at the most recently released stats.  U.S. home sales rose to their highest monthly pace since February 2007 this past September.  The National Association of Realtors said last week sales had increased 4.7% to an annual rate of 5.55 million units.  And underwater properties are on the decline as well.  According to stats released by RealtyTrac Thursday, the number of seriously underwater properties dropped 525,000 in Q3 from the previous quarter.  More impressively, underwater homes were down 1.2 million year-over-year.  So brokers looking for a team to rout for in the World Series may have to look no further than the New York Mets.

(by Justin da Rosa-Mortgage Professional America)