January 25, 2011 // Franchising.com // MORRIS PLAINS, N.J. – Weichert, Realtors recently received the Bronze Award in the Real Estate category of the 10th annual International iNOVA Awards competition for its website, Weichert.com. The iNOVA judges concluded that Weichert.com, one of the nation's most visited real estate sites, sufficiently surpassed the required criteria in all areas of the competition.
"We are pleased to receive yet another honor for our customer website," said Jim Weichert, president and founder of Weichert, Realtors. "An award of this degree helps validate Weichert.com as a trusted, convenient and comprehensive online source for potential home buyers and sellers."
The iNOVA Award symbolizes the energy of numerous disciplines that inspire corporate website excellence. The mission of the iNOVA Awards is to recognize and promote achievement in creative web design, originality of content and functional performance. Gold, Silver, Bronze, and Honors awards were presented to the top third scoring entries. Websites were evaluated for content, design, and technology. Preliminary judging was carried out by international panels of web developers, designers, site builders and interactive media specialists.
Last summer Weichert.com received the Interactive Media Awards (IMA) Outstanding Achievement Award, earning a score of 465 out of a total possible score of 500 points.
Weichert.com regularly attracts more than 3 million visitors each month and consistently ranks as a top site among all real estate companies for the length of time that visitors spend at the site, according to HitwiseÒ, which monitors the activity of major Web sites.
Weichert has nearly 18,000 sales associates in more than 500 company-owned and franchised sales offices in key markets throughout the U.S. A family of full-service real estate and financial services companies, Weichert helps customers buy and sell both residential and commercial real estate, and streamlines the delivery of mortgages and home and title insurance. For more information, Weichert's customer service center can be reached at 1-800-USA-SOLD or at Weichert's Web site, www.weichert.com. Each Weichert franchised office is independently owned and operated.
Friday, January 28, 2011
Monday, January 24, 2011
NC Legislature Advances New Rules for HOAs
By Matt Tomsic, Star-News, Wilmington, N.C.
Jan. 20—A General Assembly House committee approved a draft bill Wednesday that would provide more stringent rules governing how home owners associations conduct business.
Member of the House Select Committee on Home Owners Associations debated the draft legislation and added to it during its final committee meeting.
Rep. Jennifer Weiss, D-Wake, said the draft legislation should get bipartisan support when it’s introduced to the General Assembly.
“I’m hoping it will be legislation that Democrats and Republicans will work on together,” Weiss said.
She also said the legislation provides more protections for home owners who are governed by a home owners association.
The draft bill, entitled the Planned Community Act, would create additional factors HOA boards would have to consider when determining to enforce covenants; require boards to open their meetings and records; and change the lien and foreclosure process. The legislation will also require the Attorney General’s Office to collect complaints lodged against home owners associations.
If the law is enacted, home owners association board members will have to consider if the covenant or rule is inconsistent with the law, if it’s justifiable to spend association resources to punish the violator and if it’s in the association’s best interest to enforce the covenant, among other criteria, when determining whether to penalize home owners who violate covenants.
The draft bill also requires board meetings to be open and gives home owners recourse if the board ignores a request for a special meeting from 10 percent of the association’s home owners. In that case, the home owners can notify the rest of the community and hold the meeting without the board. The draft law also requires associations to keep “detailed records of receipts and expenditures,” accounting records, minutes of all meetings, financial statements and tax returns and copies of current contracts, among other records.
The board also has to make those records available after a 15-day notice from a lot owner or home owner.
The draft bill also changes the process associations can use to file liens and foreclose on a home. The bill requires assessments to be 90 days late before an association can begin the lien process, and the board must offer home owners a payment plan for past due bills. The draft bill requires the board to vote on foreclosing on a specific lot or home. The board also can’t begin foreclosure proceedings unless the debt is past due and the home owner refused to accept a payment plan.
Committee members also made changes to the draft legislation during the meeting, requiring parallel changes to be made to the Condominium Act, tasking the Attorney General’s Office with keeping and tracking home owner complaints, defining payment plans, clarifying that late fees stop when a payment plan is adopted and requiring boards to keep meetings of executive, or closed, sessions.
Weiss said she and co-chairman Rep. Bill McGee will find co-sponsors to the bill and eventually introduce it during the General Assembly’s session.
She thinks the draft bill has good transparency measures.
“We’ve got a lot of work ahead of us to keep this legislation moving forward,” Weiss said. “We’ve taken a big step with this proposal.”
Jan. 20—A General Assembly House committee approved a draft bill Wednesday that would provide more stringent rules governing how home owners associations conduct business.
Member of the House Select Committee on Home Owners Associations debated the draft legislation and added to it during its final committee meeting.
Rep. Jennifer Weiss, D-Wake, said the draft legislation should get bipartisan support when it’s introduced to the General Assembly.
“I’m hoping it will be legislation that Democrats and Republicans will work on together,” Weiss said.
She also said the legislation provides more protections for home owners who are governed by a home owners association.
The draft bill, entitled the Planned Community Act, would create additional factors HOA boards would have to consider when determining to enforce covenants; require boards to open their meetings and records; and change the lien and foreclosure process. The legislation will also require the Attorney General’s Office to collect complaints lodged against home owners associations.
If the law is enacted, home owners association board members will have to consider if the covenant or rule is inconsistent with the law, if it’s justifiable to spend association resources to punish the violator and if it’s in the association’s best interest to enforce the covenant, among other criteria, when determining whether to penalize home owners who violate covenants.
The draft bill also requires board meetings to be open and gives home owners recourse if the board ignores a request for a special meeting from 10 percent of the association’s home owners. In that case, the home owners can notify the rest of the community and hold the meeting without the board. The draft law also requires associations to keep “detailed records of receipts and expenditures,” accounting records, minutes of all meetings, financial statements and tax returns and copies of current contracts, among other records.
The board also has to make those records available after a 15-day notice from a lot owner or home owner.
The draft bill also changes the process associations can use to file liens and foreclose on a home. The bill requires assessments to be 90 days late before an association can begin the lien process, and the board must offer home owners a payment plan for past due bills. The draft bill requires the board to vote on foreclosing on a specific lot or home. The board also can’t begin foreclosure proceedings unless the debt is past due and the home owner refused to accept a payment plan.
Committee members also made changes to the draft legislation during the meeting, requiring parallel changes to be made to the Condominium Act, tasking the Attorney General’s Office with keeping and tracking home owner complaints, defining payment plans, clarifying that late fees stop when a payment plan is adopted and requiring boards to keep meetings of executive, or closed, sessions.
Weiss said she and co-chairman Rep. Bill McGee will find co-sponsors to the bill and eventually introduce it during the General Assembly’s session.
She thinks the draft bill has good transparency measures.
“We’ve got a lot of work ahead of us to keep this legislation moving forward,” Weiss said. “We’ve taken a big step with this proposal.”
Rate on 30-Year Fixed Mortgage Rising
NEW YORK—Rates on the 30-year fixed mortgages rose slightly this week, following increases in Treasury yields.
Freddie Mac says the average rate rose to 4.74 percent this week from 4.71 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year loan slipped to 4.05 percent from 4.08 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.
Rates have changed little in the new year after spiking more than half a percentage point in the last two months. Investors sold off Treasury bonds during that stretch, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.
A service of YellowBrix, Inc.
Freddie Mac says the average rate rose to 4.74 percent this week from 4.71 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year loan slipped to 4.05 percent from 4.08 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.
Rates have changed little in the new year after spiking more than half a percentage point in the last two months. Investors sold off Treasury bonds during that stretch, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.
A service of YellowBrix, Inc.
Friday, January 21, 2011
Understanding the Pre-Approval Process
By Karin Beuerlein, FrontDoor.com | Published: 1/28/2008
Loan shopping is as intricate a process as house shopping, and the terminology is often confusing. The terms "pre-qualification" and "pre-approval" sound like the same thing, but they're not. And in fact, neither pre-qualification nor pre-approval means a bank actually has to give you the loan.
Clear as mud, right? Don't worry -- the loan approval process is fairly straightforward, as long as you understand a few key points:
•Pre-qualification is the first step you can take -- but it's not mandatory. If you want a ballpark idea of how much a bank will loan you so that you can shop within your price range, pre-qualification is a quick and easy way to find out. Most banks and credit unions will do this over the phone, and your credit history will usually not be checked. A loan officer asks you about your income, assets, debts and projected down payment and then calculates what kind of loan you'd likely qualify for. The process takes just a few minutes.
•Pre-approval is more involved and usually requires an appointment. In this step, the lending institution gathers all the information it requires to offer you a loan, and your credit report will be checked; you may be charged a fee for this at the time of the appointment. You'll need to bring some items with you to document your identity and your assets:
1.A copy of your most recent bank statements (this includes your daily checking account as well as any money market, savings or other accounts)
2.Your most recent W-2 (or entire tax return if you're self-employed)
3.Proof of IRAs or retirement accounts and their current balances
4.Ditto for any stocks or mutual funds you own outside of retirement accounts
5.Your driver's license
6.The most recent month's paystub(s) from your job
7.An application fee (this depends on the lender)
•The result of the pre-approval process is the good faith estimate. At the end of the pre-approval process, if the bank looks you over and likes what it sees, you'll receive what's called a good faith estimate (GFE), which is a brief document spelling out the likely terms of the loan, including the interest rate, loan type (fixed-rate, adjustable and so on) and closing costs.
•The pre-approval step may be a bit time-consuming, but you'll need to complete it with a few lenders in order to comparison-shop. Without a GFE, you can't truly compare terms among lenders. And it pays to compare -- for a loan as large as a mortgage, little things like the interest rate make a big difference. To negotiate for a great interest rate, reduced closing costs, or lender-paid private mortgage insurance, you have to make lenders compete with each other. (Lining up GFEs is also a good way to spot lenders who charge unnecessary fees.) So don't just accept the first offer you get -- make sure it's a good one by soliciting several in a short time period. Don't worry about nicking your credit score with several loan applications, because credit scoring recognizes multiple checks in quick succession as part of the loan-shopping process and does not penalize you.
•Pre-approval does not mean the bank guarantees you the loan. It just means that you're approved to get loan -- unless something goes wrong. Commitment to the loan generally comes after the bank has had the house in question appraised to make sure the price you're paying isn't higher than the home's market value. This protects them in case you default on the loan, which would leave them in the red even if they evicted you and sold the property. Banks also check to make sure the home has a clear title and that you've insured it for replacement value.
Loan shopping is as intricate a process as house shopping, and the terminology is often confusing. The terms "pre-qualification" and "pre-approval" sound like the same thing, but they're not. And in fact, neither pre-qualification nor pre-approval means a bank actually has to give you the loan.
Clear as mud, right? Don't worry -- the loan approval process is fairly straightforward, as long as you understand a few key points:
•Pre-qualification is the first step you can take -- but it's not mandatory. If you want a ballpark idea of how much a bank will loan you so that you can shop within your price range, pre-qualification is a quick and easy way to find out. Most banks and credit unions will do this over the phone, and your credit history will usually not be checked. A loan officer asks you about your income, assets, debts and projected down payment and then calculates what kind of loan you'd likely qualify for. The process takes just a few minutes.
•Pre-approval is more involved and usually requires an appointment. In this step, the lending institution gathers all the information it requires to offer you a loan, and your credit report will be checked; you may be charged a fee for this at the time of the appointment. You'll need to bring some items with you to document your identity and your assets:
1.A copy of your most recent bank statements (this includes your daily checking account as well as any money market, savings or other accounts)
2.Your most recent W-2 (or entire tax return if you're self-employed)
3.Proof of IRAs or retirement accounts and their current balances
4.Ditto for any stocks or mutual funds you own outside of retirement accounts
5.Your driver's license
6.The most recent month's paystub(s) from your job
7.An application fee (this depends on the lender)
•The result of the pre-approval process is the good faith estimate. At the end of the pre-approval process, if the bank looks you over and likes what it sees, you'll receive what's called a good faith estimate (GFE), which is a brief document spelling out the likely terms of the loan, including the interest rate, loan type (fixed-rate, adjustable and so on) and closing costs.
•The pre-approval step may be a bit time-consuming, but you'll need to complete it with a few lenders in order to comparison-shop. Without a GFE, you can't truly compare terms among lenders. And it pays to compare -- for a loan as large as a mortgage, little things like the interest rate make a big difference. To negotiate for a great interest rate, reduced closing costs, or lender-paid private mortgage insurance, you have to make lenders compete with each other. (Lining up GFEs is also a good way to spot lenders who charge unnecessary fees.) So don't just accept the first offer you get -- make sure it's a good one by soliciting several in a short time period. Don't worry about nicking your credit score with several loan applications, because credit scoring recognizes multiple checks in quick succession as part of the loan-shopping process and does not penalize you.
•Pre-approval does not mean the bank guarantees you the loan. It just means that you're approved to get loan -- unless something goes wrong. Commitment to the loan generally comes after the bank has had the house in question appraised to make sure the price you're paying isn't higher than the home's market value. This protects them in case you default on the loan, which would leave them in the red even if they evicted you and sold the property. Banks also check to make sure the home has a clear title and that you've insured it for replacement value.
Friday, January 14, 2011
Thursday, January 6, 2011
Wednesday, January 5, 2011
Americans Still in Love with Home Ownership in 2011
WASHINGTON (December 27, 2010)—2010 has been a year of real estate contrasts. The market has seen a gradual stabilization of sales and prices, yet challenges facing the nation have led some to question the value of home ownership for families, communities, and the country.
“People are passionate about the American dream of home ownership, and this passion underscores how important home ownership is to our nation,” said NATIONAL ASSOCIATION OF REALTORS® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Owning a home has long-standing government support in this country because home ownership benefits individuals and families, strengthens our communities, and is integral to our economy.“
In the first half of the year, the extended $8,000 first-time home buyer tax credit and expanded home $6,500 tax credit for repeat buyers helped encourage sales and stabilize home prices. Home buyers in 2010 have also benefited from historic affordability levels, with the combination of record low mortgage rates coupled with rising household incomes. The NAR Housing Affordability Index currently shows that a median-income family with a down payment of 20% has 184.2% of the income required to purchase a median-priced home.
“Low interest rates mean real money for today’s home buyers,” said Phipps. “Buyers who purchased a median-priced home five years ago with an FHA mortgage requiring a 3% down payment would have a monthly mortgage payment of $1,650. With today’s interest rates and median home prices, that same buyer would pay $1,150 per month—a $500 savings. That’s a savings of $6,000 per year.”
Despite record affordability and buyer incentives, rising foreclosure rates and concerns about proper foreclosure procedures led some to question whether owning a home was a good personal decision.
“Home ownership didn’t create the foreclosure crisis—Wall Street greed and irresponsible lending practices did,” said Phipps. “The decision to own a home is a very personal one, but over the long term, owning a home is one of the best ways to build long-term wealth, in addition to providing numerous social benefits that include reduced crime rates, improved childhood education, and increased stability. After all, a fixed-rate mortgage might last 15 to 30 years; renting is forever.”
Government support of programs and initiatives that encourage home ownership have also been called into question. The deductibility of mortgage interest is one example, with critics suggesting that the mortgage interest deduction primarily benefits the wealthy, while in fact, the MID benefits primarily middle- and lower income families—almost two-thirds of those who claim the MID are middle-income earners. Sixty-five percent of families who claim the MID earn less than $100,000 per year, and 91% who claim the benefit earn less than $200,000 annually.
“The ability to deduct the interest paid on a mortgage can mean significant savings at tax time,” said Phipps. “For example, a family who bought a home this year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4%, could save nearly $3,500 in federal taxes when they file next year. That’s money they could use to pay down other debts, supplement their children’s college savings account, or put into savings themselves.”
Despite current economic challenges, most Americans still aspire to the dream of home ownership.
According to a survey conducted earlier in the year by Bankrate.com, 90% of respondents said they had no regrets buying their current home. And just this month, a Fannie Mae survey found that most Americans—both those who currently own their homes and those who rent—strongly aspire to own a home and to maintain home ownership.
Source: NAR
“People are passionate about the American dream of home ownership, and this passion underscores how important home ownership is to our nation,” said NATIONAL ASSOCIATION OF REALTORS® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Owning a home has long-standing government support in this country because home ownership benefits individuals and families, strengthens our communities, and is integral to our economy.“
In the first half of the year, the extended $8,000 first-time home buyer tax credit and expanded home $6,500 tax credit for repeat buyers helped encourage sales and stabilize home prices. Home buyers in 2010 have also benefited from historic affordability levels, with the combination of record low mortgage rates coupled with rising household incomes. The NAR Housing Affordability Index currently shows that a median-income family with a down payment of 20% has 184.2% of the income required to purchase a median-priced home.
“Low interest rates mean real money for today’s home buyers,” said Phipps. “Buyers who purchased a median-priced home five years ago with an FHA mortgage requiring a 3% down payment would have a monthly mortgage payment of $1,650. With today’s interest rates and median home prices, that same buyer would pay $1,150 per month—a $500 savings. That’s a savings of $6,000 per year.”
Despite record affordability and buyer incentives, rising foreclosure rates and concerns about proper foreclosure procedures led some to question whether owning a home was a good personal decision.
“Home ownership didn’t create the foreclosure crisis—Wall Street greed and irresponsible lending practices did,” said Phipps. “The decision to own a home is a very personal one, but over the long term, owning a home is one of the best ways to build long-term wealth, in addition to providing numerous social benefits that include reduced crime rates, improved childhood education, and increased stability. After all, a fixed-rate mortgage might last 15 to 30 years; renting is forever.”
Government support of programs and initiatives that encourage home ownership have also been called into question. The deductibility of mortgage interest is one example, with critics suggesting that the mortgage interest deduction primarily benefits the wealthy, while in fact, the MID benefits primarily middle- and lower income families—almost two-thirds of those who claim the MID are middle-income earners. Sixty-five percent of families who claim the MID earn less than $100,000 per year, and 91% who claim the benefit earn less than $200,000 annually.
“The ability to deduct the interest paid on a mortgage can mean significant savings at tax time,” said Phipps. “For example, a family who bought a home this year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4%, could save nearly $3,500 in federal taxes when they file next year. That’s money they could use to pay down other debts, supplement their children’s college savings account, or put into savings themselves.”
Despite current economic challenges, most Americans still aspire to the dream of home ownership.
According to a survey conducted earlier in the year by Bankrate.com, 90% of respondents said they had no regrets buying their current home. And just this month, a Fannie Mae survey found that most Americans—both those who currently own their homes and those who rent—strongly aspire to own a home and to maintain home ownership.
Source: NAR
Tuesday, January 4, 2011
414 Brook Avenue Open Sunday, January 9, 2 - 4 p.m.
Please join us for a tour of this beautiful 4 bedroom, 2 1/2 bath home in Mountain Brook Estates! Open Sunday, January 9, 2 - 4 p.m. Questions? Please call Debbie Little at 704.506.6943. See you there!
Tax Benefits of Homeownership
The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
10 Ways to Prepare for Homeownership
1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process. Call Weichert, REALTORS – Craven & Company at 704.788.1122 for all your real estate needs!
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process. Call Weichert, REALTORS – Craven & Company at 704.788.1122 for all your real estate needs!
Could Rising Mortgage Rates Spur Housing Rush?
Mortgage rates have been rising ever since November 2010, when lows of 4.42 percent were reported. Bankrate.com recently reported a rise to 5.02 percent in 30-year fixed rate loans, which is the second time in three weeks rates have crossed the 5 percent mark--many experts say signaling the end to the 4 percent mortgage rate era.
Forecasters predict mortgage rates to hover in the 5-6 percent range in 2011.
Yet, some industry experts say the rise in mortgage rates may stimulate a sluggish housing market.
The rising rates create an urgency for potential buyers. They’ll have more incentive to buy soon before mortgage rates go any higher.
After all, higher interest rates mean buyers will pay more for their mortgages. Greg McBride, chief economist at Bankrate.com, told CNNMoney.com that when rates rise 4.25 percent to 5 percent, it takes away 9 percent of the purchasing power of buyers.
Lawrence Yun, chief economist of the National Association of REALTORS®, doesn't foresee a moderate hike in mortgage rates as a negative for the industry. Instead, he says the real mortgage challenge is getting lenders to approve creditworthy buyers for a loan.
"It's less about rates than it is about underwriting standards ... If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy," Yun said.
Source: “Kiss 4% Mortgage Rates Goodbye,” CNNMoney.com (Dec. 30, 2010)
Forecasters predict mortgage rates to hover in the 5-6 percent range in 2011.
Yet, some industry experts say the rise in mortgage rates may stimulate a sluggish housing market.
The rising rates create an urgency for potential buyers. They’ll have more incentive to buy soon before mortgage rates go any higher.
After all, higher interest rates mean buyers will pay more for their mortgages. Greg McBride, chief economist at Bankrate.com, told CNNMoney.com that when rates rise 4.25 percent to 5 percent, it takes away 9 percent of the purchasing power of buyers.
Lawrence Yun, chief economist of the National Association of REALTORS®, doesn't foresee a moderate hike in mortgage rates as a negative for the industry. Instead, he says the real mortgage challenge is getting lenders to approve creditworthy buyers for a loan.
"It's less about rates than it is about underwriting standards ... If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy," Yun said.
Source: “Kiss 4% Mortgage Rates Goodbye,” CNNMoney.com (Dec. 30, 2010)
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