The Long-Term Trendline For Existing Home Sales Points To A Housing Recovery

The Long-Term Trendline For Existing Home Sales Points To A Housing Recovery

The housing market continues to surprise.  Last week, the latest good news came in the form of the monthly Existing Home Sales report.
An "existing home" is a home sold by an existing owner as opposed to a developer.  It's non-new construction property.
The data on Existing Home Sales was noteworthy for its trends:

1. Sales volume rose over four straight months for the first time in 5 years
2. Sales volume rose year-to-year for the first time in 4 years
3. Median home prices fell for the first time since April

Furthermore, first-time home buyers and buyers of "distressed" homes accounted for nearly one-third of the market activity each.
But, before we declare a bottom in housing, it's important that we remember the First Rule of Real Estate -- All Real Estate Is Local.
The Existing Home Sales report is not neighborhood-specific.  It lumps cities like San Diego and Saint Paul into a giant sample set and fails to account for regional differences in real estate, let alone neighborhood ones.
This is the primary reason why on-the-ground real estate agents are better sources for a market pulse versus a report from a national trade group.  The national group can't know the happenings of every street and every home in a market.
That said, however, the national data isn't completely useless. 
Looking at the long-term patterns in the Existing Home Sales report, we can infer that ample supplies, low mortgage rates and tax credits are spurring home sales in a lot of U.S. markets.
Eventually, this will lead home prices higher.

MortgageMonday.com says Loan Modification Might Not Be an Option

A Mortgage Modification Might Not Be an Option

All the news and TV is filled with loan modification offers about President Obama’s Making Home Affordable plan, and in a nation where over 3 million people are past due on their mortgage payments, a solution to their woes is something worth talking about. Loan modification is being pitched as a way to help troubled homeowners reverse their progression toward a short sale or foreclosure.

While loan modification may be a perfect recourse for some, it should be noted that not all homeowners will qualify for a loan modification and even then, some who do would be better served pursuing a different option.

In order to qualify for a loan modification your mortgage must have originated before January 1, 2009, you must live in the home, your monthly mortgage payment must be more than 31% of your pretax income, you must prove financial hardship, and the amount you owe on your home cannot exceed $729,750. If you do qualify for loan modification, your loan servicer will reduce the interest rate on your mortgage until your monthly payments drop below the 31% threshold. This new interest rate can go as low as 2% but if that is not enough to get below 31% they may extend the life of the loan or offer to defer a portion of the amount you owe until the loan matures. Call us we are the experts! MortgageMonday.com

Home Prices Keep Rising, Rising, Rising

Home Prices Keep Rising, Rising, Rising

18 of 20 markets tracked by the Case-Shiller Index showed rising home values in June. It's the 5th consecutive month with strong numbers and the best showing for the benchmark housing index since home values began deflating in 2006.

Some would argue it's a sign that housing has finally bottomed out. Even Case-Shiller representatives acknowledge that home prices are "on an upswing".

Despite the Case-Shiller Index's popularity with economists and the press, though, it's falls short of being a perfect housing indicator. As examples:

1. Its data is reported with a 2-month lag
2. Its sample set includes just 20 U.S. cities
3. Real estate isn't a "national" market -- it's local

Nevertheless, flaws aside, Case-Shiller is still important. It helps identify broader trends in housing and many people believe the housing is the keystone of the economy right now.

This is why June's Case-Shiller Index gives cause for hope. The nascent housing recovery has a long road ahead but June's Case-Shiller data shows that we're heading in the right direction.

Get Pre-approved soon! A Housing Recovery is here!

The Trendline For Existing Home Sales Points To A Housing Recovery

The housing market continues to surprise. Last week, the latest good news came in the form of the monthly Existing Home Sales report says Peter Bright, President of Capital City Mortgage Investments, Inc. of Atlanta, Georgia.

An "existing home" is a home sold by an existing owner as opposed to a developer. It's non-new construction property.

The data on Existing Home Sales was noteworthy for its trends:

1. Sales volume rose over four straight months for the first time in 5 years
2. Sales volume rose year-to-year for the first time in 4 years
3. Median home prices fell for the first time since April

Furthermore, first-time home buyers and buyers of "distressed" homes accounted for nearly one-third of the market activity each.

But, before we declare a bottom in housing, it's important that we remember the First Rule of Real Estate -- All Real Estate Is Local.

The Existing Home Sales report is not neighborhood-specific. It lumps cities like San Diego and Saint Paul into a giant sample set and fails to account for regional differences in real estate, let alone neighborhood ones.

This is the primary reason why on-the-ground real estate agents are better sources for a market pulse versus a report from a national trade group. The national group can't know the happenings of every street and every home in a market.

That said, however, the national data isn't completely useless.

Looking at the long-term patterns in the Existing Home Sales report, we can infer that ample supplies, low mortgage rates and tax credits are spurring home sales in a lot of U.S. markets.

Eventually, this will lead home prices higher. So get Approved today a ATL LOANS.COM

A look ahead Mortgage Rates This Week : August 24, 2009

What's Ahead For Mortgage Rates This Week : August 24, 2009

Posted: 24 Aug 2009 07:45 AM PDT

Mortgage markets finished the week unchanged last week but don't let that make you think the markets were flat. It was a bumpy five days and rates were volatile.

Friday was the worst day of the week by far.

An all-day deterioration, sparked by better-than-expected housing data, caused mortgage rates to tack on a quarter-percent by the noon hour and markets never recovered.

Rates closed out at their worst levels of the week and the unfavorable momentum figures to carry into this week's trading, too.

There are two major reasons why rates could rise higher this week:

1. Fed Chairman Bernanke said Friday that the near-term growth prospects "appear good". Comments like this draw money from bond issues to the stock market -- a move that's bad for rates.
2. Crude oil hit a 10-month high, a potentially inflationary development. Inflation often leads mortgage rates higher.

Furthermore, rate shoppers should take note that this week will feature the release of two key housing reports -- the Case-Shiller Index (Tuesday) and the New Homes Sales report (Wednesday). Both have handily beat expectations in recent months and should that trend continues, mortgage rates would likely rise because of renewed economic optimism.

What's good for the economy, lately, has tended to be bad for rates.

Whether you're shopping for a new home or looking to refinance an existing one, be wary of the ever-changing mortgage market. Rates move quickly and without warning. However, they tend to rise faster than they fall.

If you know you will need a rate lock this week or next, consider locking in at the first sign of trouble. Once rates spike, they likely won't be so quick to fall. see us ATLloans.com to help with all your mortgage concerns

Why Free Credit Reports Are Worth What They Cost

Why Free Credit Reports Are Worth What They Cost

The ubiquity of "free" credit reporting services like FreeCreditReport.com, TrueCredit.com, and AnnualCreditReport.com have helped breed a new generation of credit-aware Americans.

Because credit ratings have more importance to everyday life than in years past, this is a welcome development. For example:

• Lenders use credit ratings to determine borrowing rates
• Insurers use credit ratings to determine premiums
• Employers use credit ratings to make hiring decision

Unfortunately for Americans, though, not all credit reports are created equal. And when it comes to actually applying for credit in the form of a new credit card or mortgage, the free reports are worth precisely what they cost.

This is one reason why home buyers should have their credit reviewed by a mortgage lender as soon as possible in the home buying process -- the free reports offered by the major credit bureaus may be misleading and incomplete.

Free credit reports are useful for identifying identity theft and reviewing active accounts but do very little to help a potential creditor gauge your creditworthiness.

As the chart shows us, each industry's creditors has a way they like to do business and that way is the "standard" way.

See us at MortgageMonday.com to help you today!

STOP! Before You Open That Store Charge Card To Save 15 Percent...

STOP! Before You Open That Store Charge Card To Save 15 Percent...

During the holiday season, retailers bombard shoppers with at-the-register offers to "open a charge card and save 15%".

It's an immediate money-saver, but for Americans in the market for a new home loan, taking advantage of the in-store savings could be a long-term loser.

This is because new credit card applications are damaging to credit scores. According to myFICO.com, "new credit" accounts for 10 percent of a credit score; recent applications may signal weakness in a borrower's profile.

Meanwhile, conforming mortgage lenders make rate adjustments for low credit scoring applicants. As an example, a home buyer with a 20 downpayment and a 715 credit score would face an interest rate adjustment of 0.125%.

Below 700, the adjustments are even worse.

It's okay to take advantage of in-store savings during the holiday season, but be aware of how it may impact your credit score. If you're not applying for a new home loan in the next six months, chances are that you'll be alright.

But, if you will need a new home loan, consider whether saving 15 percent on a $200 purchase is worth it if the long-term cost is paying an extra 0.125 percent on your new mortgage.

From The IRS : The First-Time Homebuyer Credit Form

From The IRS : The First-Time Homebuyer Credit Form

As part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 -- better known as the First-Time Homebuyer Credit Form.

True to tax code standards, the 10-field form is accompanied by 3 pages of instructions.

Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit.

For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time home buyer".

In addition, Form 5405 highlights the math behind the tax credit. In general, the First-Time Homebuyer Credit is equal to the lesser of:

• $8,000 for homes bought in 2009
• 10 percent of the home's purchase price

Married couples filing separately are entitled to half of the expected credit, and homes sold within 3 years are subject to a credit repayment in the year the home ceases to be the "main home".

Form 5405 is a comprehensive reference. However, be sure to check with your accountant for specific questions about your personal returns and how the First-Time Homebuyer Credit may impact your finances. There is no substitute for professional, paid advice.

Sharing Your Credit Card Balances Can Lower Your Mortgage Rates

Sharing Your Credit Card Balances Can Lower Your Mortgage Rates

Typically, higher credit scores get lower mortgage rates and access to a wider array of mortgage products.

Extent of Indebtedness comprises 30% of a credit score and is the second largest component in the credit scoring model. In plain-speak, Extent of Indebtedness is: "How close is this person to maxing out his cards?"

The ideal percentage of credit balance to credit limit is around 35%. Anything over 70% can be hazardous.

If you are close to your credit limit on one or more cards, you can "trick" the agencies into improving your scores by moving high balances to other, "under-used" cards.

For example, let five cards at 10% of their credit limit receive portions of the balance from a 70% card.

"But my 70% card has a 2.9% introductory rate; the other cards are at 18% or more! What a waste."

That's okay -- just keep this advice in context. If you aren't applying for a home loan in the coming months, there are fewer reasons to try to boost your score and no reason to shift to your balance. I don't recommend increasing your cost of credit solely for a higher credit score.

However, if you need to get your scores up quickly, sharing credit card balances among all your cards -- even if the rate of payment is much higher -- can result in substantial savings on a mortgage month over month.

Are You Inadvertently Merging Your Credit Score With A Stranger?

A 2004 study showed that 4 out of 5 credit reports contained at least one error.

The errors were of various types with different implications. A quarter of the errors, for example, were of the "serious" nature; errors that could lead to a credit denial because of a false-reporting delinquency or collection.

A much larger source of credit scoring errors, though, was related to misreported personal data.

More than half of the mistakes on credit reports were found to be related to erroneous name spellings, incorrect social security numbers, and/or wrong addresses.

These types of demographical errors can damage credit scores in not-so-obvious ways:

1. The strong credit report of a "Jr." may mix with the weak credit report of a "Sr.", or vice versa
2. Credit accounts demonstrating strong payment histories may be omitted
3. Derogatory credit of like-named people can "merge"

To limit demographical errors, a person should apply for new credit using a consistent form of their name, and then use that form on every new application.

John A. Smith, Jr., for example, should always apply for credit using the name "John A. Smith, Jr.".

Short-cutting an application with "John Smith" can lead to a "mixed" credit report that combines the tradelines of multiple John Smiths. Especially because there is a John Smith, Sr., who likely lived at the same address at one time, and who may have a similar social security number.

Credit agencies do not discern between two similar sets of demographic data very well.

In the four years since the original study, it's not likely that the 80% error rate has improved, but by limiting demographical errors in our own histories, we can reduce the frequency and severity of the problem.