MORTGAGE WEEK IN REVIEW
September 15th, 2008 categories: Real Estate News
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The first week of government control of Fannie Mae and Freddie Mac passed with little disruption in the mortgage market. Mortgage rates fell early in the week on the takeover news and then held at the lower rates for the rest of the week.
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Somewhat overlooked, this week’s economic data was generally favorable for mortgage markets. The August Producer Price Index (PPI) inflation data reflected the drop in oil prices and showed a large decline from July. Core PPI, which excludes food and energy prices, matched the consensus forecast with a small increase. August Retail Sales were much weaker than expected, and Jobless Claims remained at elevated levels. Mortgage investors liked the signs that inflation may have peaked and considered it favorable news for mortgage markets that the economy and labor market are displaying weakness.
The main event this week will be Tuesday’s Fed meeting. No change in rates is expected, but investors will be very eager for fresh news on the economy and financial markets. The most important economic data will be the Consumer Price Index (CPI) inflation report on Tuesday. CPI looks at the price change for those finished goods which are sold to consumers. Industrial Production, an important indicator of economic activity will come out on Monday. Housing Starts will be released on Wednesday. The
Contributed by:
Cameron M. Lewis, Beverly-Hanks Morgage Services
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Many will profit from the Fannie-Freddie failure - Will you!
September 11th, 2008 categories: Market Updates
Mortgages are in the news again today . . . but this time, the news is good! Especially for people looking to buy or refinance a home, as interest rates have dropped to the lowest levels see since April.Â
You’ve probably heard that Fannie Mae and Freddie Mac were taken over or “bailed out” by the Federal Government over the weekend. The announcement came as the government felt that both of these institutions were potentially unable to meet their obligations. These agencies must pay off maturing Bonds every month, and they do so by selling new Bonds. But during the last twelve months, investor appetite to purchase new mortgage-backed security Bonds has deteriorated. As such, it has become more difficult for Fannie and Freddie to replenish capital to fund more loans. If both Fannie and Freddie became insolvent, the housing market as well as the mortgage market would come under further pressure.Â
With the Treasury stepping in to provide a “backstop” for the mortgage giants, investors now have the confidence to purchase Mortgage Bonds. The greater interest has helped lower interest rates today.
As always, if you want to discuss this news further and what it means to you and how you can benefit, my mortgage man at Beverly-Hanks is ready and available to meet with you in person, or have a friendly phone conversation. Cameron Lewis, Mortgage Consultant, (828)258-1945 - clewis@beverly-hanks.com
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What to do when facing ARM loan reset?
September 9th, 2008 categories: Real Estate News
Through the end of this summer, over 300,000 subprime adjustable rate mortgages will “reset” from lower introductory rates to current market rates. The change in rate can equate to a tough-to-stomach bump in monthly payments, especially for loans that feature extra-low “teaser” rates.
The Refinancing Option:
Choosing to refinance has two main benefits :
Lock into a Fixed Rate - Why worry about periodic rate resets and rising mortgage rates if you don’t have to? Refinancing gives owners the chance to lock into a fixed rate for the long term.
Lower Rates - While current rates are higher than they were a few years ago, from a historical perspective they are still considered low. Most economists believe that national averages of long-term rates will hover within a point or two of 6 percent through the end of the year.
Who Qualifies for Refinancing
Tightening requirements for new home loans have to some degree extended to refinancing as well. The best candidates for refinancing are owners with good credit, income documentation and solid equity in their homes. Refinancing is typically a better option for owners who plan to stay in the home for at least several more years.
Who Doesn’t - Owners with low credit scores
In recent years some buyers were able to obtain subprime loans with credit scores in the mid 500’s. Owners who haven’t raised their credit scores into at least the mid to high 600 range will find it hard to obtain refinancing. Even scores in the high 600’s, which in the near past had been considered fairly good, are no guarantee of smooth sailing (Fannie Mae and Freddie Mac announced in the spring that borrowers with rates below 680 will need to pay a surcharge on top of the price of the loan).
Owners With Little Equity - To protect their investments, many lenders have been increasing the amount of equity an owner must have in their home. Many buyers may have purchased their homes with little or no money down, or perhaps opted for an interest only loan. In either case the amount of equity in the home may be below lender’s acceptable levels. Homes that have either not appreciated or that have lost some value will be even harder to refinance.
How to Survive the Reset
Consolidate other debt - Consider seeing a credit counselor if you have multiple sources of high-interest debt in addition to your home loan. You may be able to re-structure these into one lower-interest loan, enabling you to more easily make the higher home-loan payments
Cut expenses - While it may not be in our nature, we can often make do with less. Look first for monthly expenses that qualify as luxuries (cable or satellite TV, high-speed internet, etc.). Cut down on meals away from home and look for other ways to shave unnecessary spending from your budget.
Start an Extra Savings Account - Even if you can afford to make payments after an initial reset, the best way to prepare for potential rate increases in the future or unforeseen circumstances is to start setting aside a little additional money, just in case.
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Fall 2008 Color Forecast for the Blue Ridge Mountains
September 5th, 2008 categories: Area Attractions
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As I sit here writing this post, it’s an absolutely ideal day weather-wise and I’m looking out over a very green view that still looks like we’re in the middle of summer! Well, that’s certain to change in just a few short weeks and it’s good news for color hunters this year.
Foliage experts are reporting favorable conditions for beautiful, spectacular color for this 2008 Fall season. In fact, it could be the brightest leaf color show in recent history! According to Dr. Gary Walker, a biology professor at Appalachian State University, we are still in drought conditions in the western part of the state (which is suprisingly good for fall color), although there was enough rainfall this spring to keep the trees healthy. “Slight drought tends to improve the vibrancy of leaf color in the fall, so we should see spots of very nice color this year,” said Dr. Kathy Gould Mathews, assistant biology professor at Western Carolina University. “A sharp cooling of temperatures in September and October would really cause the colors to burst, as this stimulates anthocyanin (red pigment) production.”Â
With elevations that range from 1,500 feet in the valleys to 6,684 at Mount Mitchell, the highest peak east of the Mississippi River, the Asheville area is a fall leaf kaleidoscope from late September through early November as the foliage color beginning at the highest elevations slowly creeps down the mountainsides. Color hunters hoping to find the perfect “peak”? time for fall foliage are surprised to learn that Western North Carolina boasts one of the most extended fall foliage seasons in the nation due to varying elevations, microclimates and nearly 100 species of deciduous trees.
To help you locate the perfect autumn vista, weekly fall color reports for the mountains of Western North Carolina are posted by the Asheville Convention & Visitors Bureau at FallintheMountains.com and a toll-free hotline 800-257-1300. ENJOY!
ps - Photo taken by my good neighbor and retired Superintendant of the Blue Ridge Parkway - Dan Brown!
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Capital Gains formula
September 3rd, 2008 categories: Interesting Tidbits
Here is the formula used to calculate the capital gains tax on a home that is now being occupied as a primary residence, but was previously non-owner occupied:
CAPITAL GAINS EXCLUSIONÂ =Â PROFIT FROM SALE OF HOMEÂ Â * NUMBER OF DAYS THE HOME WAS PRIMARY vs NUMBER OF DAYS THE HOME WAS OWNED.
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8 Quick Fixes to Increase Value
August 25th, 2008 categories: Sellers
I’m asked all the time what a seller can do to help sell their home faster. Sometimes they listen to me and implement the changes, sometimes they don’t - to their detriment. With buyers scarcer, sellers must up the ante to convince them that their property offers what many want most â top value for dollar expended. Here are eight fast fixes:
1. Buff up curb appeal. Youâve heard it before, but itâs critical to get buyers to want to look on the inside. Be objective. View listings from the street. Check the condition of the landscaping, paint, roof, shutters, front door, knocker, windows, house number, and even how window treatments look from the outside. Add something specialâsuch as big flower pots or an antique bench â to help viewers remember house A from B.
2. Enrich with color. Paintâs cheap, but forget the adage that it must be white or neutral. Just donât let sellers get too avant-garde with jarring pinks, oranges, and purples. Recommend soft colors that say âwelcome,â lead the eye from room to room, and flatter skin tones. Think soft yellows and pale greens. Tint ceilings a lighter shade.
3. Upgrade the kitchen and bathroom. These make-or-break rooms can spur a sale. But besides making each squeaky clean and clutter-free, update the pulls, sinks, and faucets. In a kitchen, add one cool appliance, such as an espresso maker. In the bathroom, hang a flat-screen TV to mimic a hotel. Room service, anyone?
4. Add old-world patina. Install crown molding at least six to nine inches in depth, proportional to the roomâs size, and architecturally compatible. For ceilings nine feet high or higher, add dentil detailing, small tooth-shaped blocks used as a repeating ornament. Itâs all in the details, after all.
5. Screen hardwood floors. Buyers favor wood over carpet, but refinishing is costly and time-consuming. Screening cuts dust, time, and expense. What it entails: a light sanding, not a full stripping of color or polyurethane, then a coat of finish.
6. Clean out, organize closets. Get sortingâorganize your piles into âdonât need,â âhavenât worn,â and âkeep.â Closets must be only half-full so buyers can visualize fitting their stuff in.
7. Update window treatments. Buyers want light and views, not dated, fancy-schmancy drapes that darken. To diffuse light and add privacy, consider energy-efficient shades and blinds.
8. Hire a home inspector. Do a preemptive strike, since busy home owners seek maintenance-free living. Fix problems before you list the home and then display receipts and wait for buyers to offer kudos to sellers for being so responsible.
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Mortgage Week In Review
August 21st, 2008 categories: Market Updates
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The week’s headline economic report showed that inflation rose far more than expected in July, yet mortgage rates barely reacted and ended the week essentially unchanged. The July Consumer Price Index (CPI), the most widely watched inflation indicator, rose at the fastest annual rate since 1991. The core rate, which excludes the volatile food and energy components, rose at a 2.5% annual rate. The Fed’s perceived comfort level for core inflation is between 1.5% and 2.0%.Mortgage rates usually move higher after an unexpected increase in inflation. This time they did not. Investors have started to expect that inflation levels will diminish later in the year and point to a couple of factors. First, slower economic growth in major global markets will reduce demand for goods and energy. In addition, a stronger US dollar will lower the cost of imported goods.
Even the Fed’s Stern, noted for his vigilant anti-inflation stance, stated that he expects inflation to come down after the third quarter. To summarize, economic weakness at home and abroad, a stronger dollar, and a decline in oil prices offer hope that future inflation levels will be lower.
The Economic Calendar will be very light next week. The Producer Price Index (PPI) will come out on Tuesday. PPI focuses on the increase in prices of “intermediate” goods used by companies to produce finished products. Housing Starts will also be released on Tuesday. Leading Indicators and the Philadelphia Fed index will come out on Thursday.
Copyright @ 2008 MBSQuoteline
Cameron M Lewis
Beverly-Hanks Mortgage Services
Residential & Commercial Financing
828-258-1945 Office
828-231-4909
828-254-7202 Fax
877-293-5946 Toll Free
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How are the Asheville area selling prices doing? Part 2
August 18th, 2008 categories: Market Updates
I wear an “Ask Me” button every day in addition to my Beverly-Hanks name tag in an effort to give people an avenue to ask me the “big” question, “How’s the market doing here in Asheville”. In general, we are faring a heck of a lot better than the rest of the nation, still down a bit, but notice that as an average over 6 counties we are down only 6.6%. Here is a snapshot look at Buncombe County and a few of our surrounding counties for the 2nd Quarter of 2008 - April thru June.Â
AVERAGE HOME SELLING PRICE
COUNTYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2008Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2007Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â %change
Buncombe                                272,714                                 288,880                          -5.6%
Haywood                                 223,745                                 238,758                           -6.3%
Henderson                             230,654                                 253,519                             -9%
Madison                                  236,164                                  236,943                            -0.3%
Polk                                          301,214                                   309,932                           -2.8%
Transylvania                          281,940                                  337,839                          -16.5%
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AVERAGEÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 253,724Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 271,588Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -6.6%
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Mortgage Week In Review
August 11th, 2008 categories: Mortgage Reviews
Mortgage Week In Review
In the housing sector, the June Pending Home Sales index rose 5% from May. Pending Home Sales are a leading indicator of future housing market activity, so the next Existing and New Home Sales reports may show increases. In addition, the chief economist of the National Association of Realtors (NAR) expects the recently passed Housing Bill to stimulate the housing market later in the year.
Next week, the Trade Balance will come out on Tuesday. Retail Sales is scheduled for Wednesday. Consumers account for about 70% of economic activity, and this report is a major indicator of spending levels by consumers. The Consumer Price Index (CPI) inflation data will be released on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. Industrial Production, an important indicator of economic activity will come out on Friday. Consumer Sentiment and the
Courtesy of Xinnix and MBS Quoteline
Copyright @ 2008 MBSQuoteline
Cameron M Lewis
Beverly-Hanks Mortgage Services
Residential & Commercial Financing
828-258-1945 Office
877-293-5946 Toll Free
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Is the Asheville Housing Market ready to bounce?
August 7th, 2008 categories: Market Updates
 Calling all Buyers!!! Please read this article - The Moon and Stars are in alignment here in Asheville to make your move. If you’ve been on the sidelines waiting for the right time to buy, “The Time” is here . . . don’t lose out.
 Fed Stands Still - Time to Make Your Move
The Federal Reserve held the line on Tuesday-leaving the Fed Funds Rate at 2.00% for the third straight meeting. The decision, however, was anything but cut-and-dry.
Earlier in the week, the Personal Consumption Expenditure data indicated that inflation climbed 0.8% overall in June, which is the highest inflation jump in 27 years. In addition, the report indicated that inflation now sits at 2.3%-above the Fed’s desired range of 1-2%.
Although the Fed ultimately left interest rates unchanged, inflation obviously remains a concern and the recent rise may lead to an interest rate hike by the Fed in the near future.
What Does This Mean to You?
Many experts believe the housing market is nearing the bottom and may even be set to bounce back up. For now, home prices remain low, personal incomes are high, and interest rates are still very attractive.
If you’ve been weighing your options and waiting to see how things shake out, this is the ideal time to act-especially when you consider the new Housing and Economic Recovery Act benefits for home buyers:
Tax credits. First-time home buyers who purchase their primary residence between April 9, 2008 and July 1, 2009 are eligible for up to $7,500 in tax credit, as long as they haven’t owned a home in the last three years. The credit is actually a generous interest-free loan, so we’ll have to talk about some income parameters and payback terms. But if you’re a new home buyer - or know someone who is renting or in the market to buy - this is a huge benefit that we should discuss.
Lower rates for larger loans. In the past, mortgages of $417,000 or more have been considered “jumbo” loans that were more expensive to finance. Thanks to recent provisions, however, those jumbo loans were able to qualify for better financing rates in some parts of the country. Although those provisions were set to expire, they are being extended-with a minor change to the maximum amount eligible. This is great news that may save you a ton of cash, so call me to find out how this impacts our area, and if it could help you.
Down Payment Assistance…going, going, not gone yet. Another provision of the legislation eliminates some down payment assistance programs later this year…but they are still available right now, and depending on your circumstances, we may be able to take advantage of them to double your benefit as a home buyer.
Bottom line…now may be the ideal time to put together a purchase strategy based on your unique situation.
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 Call today to discuss your situation and set up a time to talk.
Cameron Lewis
Mortgage Consultant
Beverly-Hanks Mortgage Services
Phone: (828)258-1945
Fax:(828)254-7202
clewis@beverly-hanks.com
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