The Philly Pretzel

Philadelphia housing remains at near-record affordability levels, and prospective home buyers stand to benefit from the lowest mortgage rates in decades, as well as advantageous home prices. Housing is approximately 60% more affordable now than during the height of the market.
Mortgage rates once again set new record lows in early October to 4.19% and remained below 4.3% throughout the month. These historically low rates contributed to real savings for buyers. Furthermore, the longer the buyer owns the home, the greater the savings they will realize. As economic activity gains momentum, rates will rise to keep inflation at an acceptable level.
BTW the historical 30 year average for a 30 year fixed mortgage is 8.9%

John Paulson, a multimillionaire hedge fund manager, declared recently in Forbes that today’s record-low interest rates made this the best time to buy homes in fifty years. “If you don’t own a home, buy one,” Paulson said. “If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.”   Paulson it should be noted was among the few to accurately predict the subprime collapse.

Buyers who choose to wait until prices come down more are gambling that interest rates will hold steady or drop. The truth is even a 10 percent drop in home prices is nullified by a 1 percent increase in interest rates. The figure below illustrates how this works for a $250,000 home purchase and the relative likelihood of each scenario.

**A 1% increase in mortgage rates is ten times more likely to happen than a 10% drop in home prices.

**A 1% rate increase more than offsets a 10% reduction in home prices.

**When interest rates fall by 1%, the total interest paid is almost three times more than the interest savings from a 10% drop in home prices.

**The probability of both happening at the same time is ridiculously small, and homeowners would still pay 15 % more in interest over the life of the loan.

For those who can afford to buy, trade up, or invest, our current market presents a lifetime opportunity.

FIND YOUR PHILLY HOME

posted by janice SEARCH the Philadelphia MLS. No Registration Required!

 This is the perfect loan for the Philadelphia home buyer who wants to buy a fixer-upper and turn it into their dream home.  

The FHA 203(k) Rehabilitation Loan allows a homeowner to buy a home, in any condition, and finance the repairs / improvements to the property. These loans can be done with either a purchase of a new home or a refinance of the borrower’s existing home.

There are two types of FHA 203(k) loans:

Streamline 203(k) -  Repairs and improvements that do not exceed $35,000.

Full 203 (k) -  Anything exceeding $35,000 in repairs and improvements.

Certain repairs, regardless of their dollar value must be done under a full 203 (k) – for instance any structural repairs/remodeling.

The minimum amount of the loan is $5,000 and there is no maximum amount.

What repairs/remodeling items are allowed?

Most improvements are eligible provided they add value and are permanently affixed to the foundation.

Improvements to detached structures and luxury items are not allowed.

On a Streamline 203(k) – major remodeling and room additions are not eligible.

What is the maximum I can borrow?

On a purchase transaction, the amount is 96.5% of the loan-to-value.

On a refinance transaction, the amount is 97.5% of the loan-to-value.

In no circumstance, can the loan amount be greater than the maximum allowable FHA mortgage amount for the geographic area.

How is loan-to-value determined?

The loan-to-value is based on the lesser of:

The sales price or “as os” appraised value plus borrower paid repairs OR

110% of the “as completed” appraised value.

On a full 203(k), you can even finance up to 6 months of mortgage payments while the home is being renovated as long as the home is determined to be uninhabitable.

Rates are generally about .25% higher, these loans take longer to close and of course there is more paperwork involved. Not all lenders are able to do these loans. In fact many loan officers will not do these loans as they are quite specialized and involve more time and attention.

Think this loan might be for you? Give us a call and we will be glad to get you started.

posted by janice       SEARCH the Philadelphia MLS. No Registration Required!

Mortgage bond prices rose last week helping mortgage interest rates improve slightly. We started the week on a positive note with rates falling amid tame inflation readings.

While there is growing and well-warranted concern that continuing to keep rates low will lead to inflation down the road…and remember, inflation is the arch enemy of bonds and home loan rates…it does appear that inflation is subdued at present. Last week’s reports showed that the Producer Price Index (PPI), which gauges inflation at the wholesale level, was reported well below expectations and at the largest monthly decline since July 2009. Meanwhile, the Consumer Price Index (CPI), which measures inflation at the consumer level, came in just below expectations for February.

Todays Mortgage Rates:

30 Yr Fixed – 4.75% (1 point) / 4.95% (0 points)

15 Yr Fixed – 4.25% (0 points) /

5 yr ARM – 3.5% (.5 point) / 3.75% (0 points)

7 yr ARM – 3.75% (.5 point) / 4% (0 points)

FHA 30 Yr Fixed – 4.75% (.25 point) / 4.875% (0 points)

FHA 5Yr ARM – 3.625% (1 point) / 4% (0 points)

Investment – 5.125% (.5 point) / 5.25% (0 points) 25% down payment required

*Rates are based on 80% loan to value unless noted and 720+ credit score (with the exception of FHA) *Income and Asset verification required and must meet DTI guidelines *This is not a commitment to lend and other conditions may apply

 
Technorati: philly mortgage, mortgage market, carina marchese, center city mortgage company

APPLY FOR A MORTGAGE ONLINE

Brought to you by our favorite mortgage broker:

Carina Marchese
Center City Mortgage
267.238.5785

email Carina for today’s rate

“IT AIN’T OVER TIL IT’S OVER.” Yogi Berra.

And whether you find those words deeply wise or simply puzzling…The Fed has told us repeatedly that their massive purchasing program of Mortgage Backed Securities is just about over – and this translates to home loan rates rising in the near future. As you can see in the chart below, the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen.

This is very important because as the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power will wane. And those who can take advantage of currently low home loan rates do not wait, as the clock on these historically low rates is ticking.

Todays Mortgage Rates:

30 Yr Fixed – 4.75% (1 point) / 5% (0 points)

15 Yr Fixed – 4.25% (1 point) / 4.375% (0 points)

5 yr ARM – 3.625% (1 point) / 3.875% (0 points)

7 yr ARM – 3.875% (1 point) / 4.25% (0 points)

FHA 30 Yr Fixed – 4.75% (1 point) / 4.875% (0 points)

FHA 5Yr ARM – 3.875% (1 point) / 4.125% (0 points)

Investment – 5.3755% (0 point) / 5.5% (0 points) 25% down payment required

*Rates are based on 80% loan to value unless noted and 720+ credit score (with the exception of FHA) *Income and Asset verification required and must meet DTI guidelines *This is not a commitment to lend and other conditions may apply

Technorati: philly mortgage, mortgage market, carina marchese, center city mortgage company

APPLY FOR A MORTGAGE ONLINE

Brought to you by our favorite mortgage broker:

Carina Marchese
Center City Mortgage
267.238.5785

email Carina for today’s rate