Why Your “Dear Seller” Letter May Be Met With A “Dear John”

June 10, 2008

Several years ago, when homes sometimes sold within hours, prospective buyers often drafted “Dear Seller” letters, an accompanying personal note to help purchase offers stand out in a multiple-bid situation. Today, some buyers are writing a different kind of letter to win a seller’s favor — a letter explaining why the buyer’s offer is so […]

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Looking Back And Looking Ahead : June 9, 2008

June 9, 2008

There was no rest for the mortgage-rate weary last week. As mortgage bonds sold off early in the week, sharp rate hikes followed. A steady stream of better-than-expected economic reports had re-ignited inflation fears, drawing money from the bond market. On Friday, however, the money flow reversed on a triple threat to the U.S. economy: The […]

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Why It’s Good News For Home Buyers When Unemployment Rates Surge

June 6, 2008

On the first Friday of every month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called the “jobs report”, today’s 2-page analysis of May 2008 shows that the economy shed jobs and that unemployment surged. This is terrific news for home affordability. That may sound counter-intuitive, so let’s dig deeper into the […]

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What Happens When Bernanke Says “Inflation” 55 Times In 5 Pages Of Text

June 5, 2008

Mortgage rates are a big deal when you’re buying a home. With even the slighest uptick in rates, 30 years of mortgage payments can get substantially more expensive and one of the most substantial threats to mortgage rates is an economic event called inflation. Inflation’s influence on mortgage rates is so large that markets can get jarred […]

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The Proper Way To Give And Receive Gifts For Downpayments

June 4, 2008

When a home buyer is gifted cash for a downpayment, there is a right way and a wrong way to receive the funds. The right way includes: Completing an acceptable gift letter Documenting the withdrawal of funds with receipts Documenting the deposit of funds with receipts The wrong way is to ignore the rules that mortgage lenders […]

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Did You Know : The Lifespan Of A Mortgage Approval

June 3, 2008

Mortgage approvals don’t last forever. A conforming mortgage approval from Fannie Mae or Freddie Mac has a shelf-life of 120 days. After 120 days, the approval expires and a mortgage applicant must re-submit his application for consideration. In addition, a mortgage approval can “expire” within the 120-day period for other reasons: Change of job status or […]

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Looking Back And Looking Ahead : June 2, 2008

June 2, 2008

Mortgage rates rocketed higher last week, stunning active home buyers and mortgage rate shoppers. Some conforming mortgage rates rose by as much as three-quarters of a percent before Friday’s closing. Even in a year in which mortgage rates have been extremely volatile, last week’s spike was a large one. The main driver of last week’s […]

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The Impact Of Falling Oil Prices On Mortgage Rates

May 30, 2008

Falling oil prices is one reason why mortgage rates are dropping for the first time in 6 days. Oil is off $9 per barrel from last week, a shift that correlates to $0.23 per gallon of unleaded gas, roughly. This drop is good news for both home buyers and “rate shoppers” — high gas prices […]

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18 of 20 Real Estate Markets Show Signs Of Improvement

May 29, 2008

The monthly Case-Shiller Housing Price Index is a popular and often-quoted measurement of the housing market’s health.  The chart above is sourced from its report published yesterday. In 18 of the 20 largest metropolitan areas, home values declined at a slower pace than in the previously measured month.  The report also showed that national home prices […]

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Why It Will Be Easier To Get A Mortgage Approval Today Than Monday

May 29, 2008

Mortgage financier Fannie Mae is toughening its mortgage application decision-making process effective Monday, June 2, 2008. The new guidelines will force many Americans to face higher mortgage rates, higher loan fees, or to be shut out from “prime” mortgage rates altogether. The new “mortgage rules” include the following changes: Higher income levels required for basic approvals […]

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Looking Back And Looking Ahead : May 27, 2008

May 27, 2008

The market optimism that had pushed mortgage rates lower since late-March reversed last week on ever-rising oil prices and a bleak outlook from the Federal Reserve. When gas prices reached $3.93 Friday, it re-ignited inflation concerns and inflation, you’ll remember, is the enemy of mortgage rates. As expected, mortgage rates spiked into Friday’s market close. […]

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How Spiking Oil Prices Have Mortgage Rates In Tow

May 23, 2008

High oil prices are derailing the mortgage market this week, taking an almost-vertical path higher. Since mid-February, prices are up by 50 percent. Rising oil prices can be a threat the U.S. economy because with every extra dollar that Americans pay to energy companies, there is less money available for every other company that makes […]

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How We Know That Prime Rate Will Likely Rise Before It Falls

May 22, 2008

Three weeks after adjourning, Federal Reserve officials release detailed minutes of their most recent meeting. The April 30, 2008 minutes were released Wednesday and it affirmed traders’ beliefs that the Federal Reserve will not be in a hurry to lower the Fed Funds Rate again. This is bad news for two groups of people whose […]

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Simple Real Estate Definitions : Loan-to-Value

May 21, 2008

Loan-to-value is a math formula that represents the relationship between how much a home is “worth” and how much money is borrowed against it. Loan-to-value is often abbreviated as “LTV” and is one of the many factors that lenders consider when underwriting a mortgage application. The math formula is straightforward: In the LTV equation, Loan […]

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Did You Ask: “Has There Been A Mortgage Rate Reprice In The Last Hour?”

May 20, 2008

Yesterday, several mortgage lenders issued three separate “rate sheets” in response to the changing mortgage market. It was the fourth time in the last 6 trading days that mortgage lenders issued multiple rate sheets in a day, and continued the trend that started in mid-January. The yo-yo nature of mortgage rates underscores the importance of making […]

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Looking Back And Looking Ahead : May 19, 2008

May 19, 2008

Optimism ruled the markets last week — optimism about employment, optimism about housing, and optimism about inflation. Mortgage rates edged lower overall. Despite the positive sentiment from Wall Street, consumer confidence in the economy reached a 28-year low. This is a normal divergence because investors live in the “future” of markets while Americans live in the […]

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Smart Money Magazine Says Renters Have Lame Excuses

May 16, 2008

It’s not often that a mainstream media publication taunts renters into buying homes, but that’s exactly what Smart Money does in its latest issue. The Smart Money Web site “lead-in” reads 5 (Lame) Excuses for Not Buying a Home.  That’s a forceful title! It’s unfortunate that renters could feel antagonized by the author’s tone because […]

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What Mortgage Fraud Looks Like

May 15, 2008

According to the FBI 2007 Mortgage Fraud Report, more than 46,000 cases of suspected mortgage fraud were reported last year.  This led to bank losses exceeding $813 million. If you’re looking for reasons why mortgage underwriting is measurably more difficult in 2008 — add “mortgage fraud” to the list.  Lenders now perform extra scrutiny on each […]

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The “Inevitable” Recession That Never Was

May 15, 2008

Retail Sales measures total receipts at stores that sell tangible “things” and — aside from weak demand for automobiles and automobile parts — Retail Sales displayed surprising strength in April. So much strength, in fact, that many experts are changing their predictions about the U.S. economy’s fate. Several months ago, most pundits declared that a economic […]

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How Far Will Your Salary Go In A Different City?

May 13, 2008

Just like real estate markets differ from town to town, so does the Cost of Living. Courtesy of CNNMoney, this helpful calculator measures the change in living expenses a person would face when moving between any two major cities in America. The key expenses compared are: Groceries Housing Utilities Transportation Healthcare The comparison data is […]

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