THIS MIGHT BE THE VERY BEST TIME TO BUY OR SELL REAL ESTATE PROPERTY IN HISTORY!!

Why?

Significant government stimulus practices will be running out soon and could negatively affect interest rates, so time is quickly running out to get into the game!

By now you have heard the $8000 First Time Home Buyer and the $6500 Existing Home Owner Tax Credit incentives are scheduled to expire April 30, 2010. It is unlikely they will be extended again. Interest rates remain at record lows right now.

However, you may not have heard the Fed is concluding its program of purchasing mortgage-backed securities by the end of March, 2010. This less advertised “stimulus program” has effectively kept mortgage interest rates at record lows. But chances are, when this government stimulus program stops, interest rates could and probably will increase.  It is unclear right now how fast or how much rates will increase.

So if you are in the market for a new home, or want to move up, down, or out. . . give your friendly real estate agent a call. . . .  DON’T WAIT ANY LONGER. . .DO IT NOW!

Don’t Let Opportunities Slip By…

If your current home no longer suits your lifestyle, there are two reasons why this may be a great time to make a move.

Have you ever really read your credit report?  Chances are many haven’t, myself, Heather and Kristi included!  We know our credit scores and that’s about it.  What’s really in those tricky reports?  Why do creditors rely so heavily on them?   Are they that critical they can make or break your goal of home ownership?  Thankfully, there is help!  CBSHOME and Credit Advisors are hosting a free seminar to make sense of it all in “Understanding Your Credit.”  This workshop is a one hour crash course on how to understand a credit report, the importance of a budget and how to start planning today!  Find out more about these services and how to register for the FREE workshop by visiting Understanding Your Credit.

OK, you’ve found the house that works for you! Now… What do you offer???

First and foremost, have your agent prepare a market analysis on the house to give you a range of what the house could expect to sell for. Maybe that range is where the house is listed, maybe it’s higher or lower. Whatever that is, expect to probably pay close to that amount after all of your negotiations are done in most cases.

In Omaha, the average List to Sale price ratio over the last 16 months has been 96-97%. Of course you can offer whatever you wish, but if you really want the house, you may have to pay close to or over list price for it, especially if there is more than one offer in play, or if you are asking the seller to pay closing costs on your behalf.

List to Sale Price Ratio

Throughout my career, especially in the last two years, I have had several buyers who were bound and determined to make absolutely ridiculous offers simply because of the advice they have been getting. I call it the: “My Grandma’s cousin’s neighbor’s hairdresser’s Uncle Joe got HIS offer accepted!” syndrome.

You certainly can’t blame them. An excited buyer; especially a first time buyer, is getting information from ALL of the people in their lives. Well meaning friends and relatives, coworkers, any number of Internet sites, even a few ‘not-so-well-meaning’ friends or relatives. They all have the long lost relative twice removed who found that proverbial ‘needle in a haystack’ when they were looking for their house.

This summer, unfortunately, I had to let a buyer go out on their househunting quest without me. It was a nice young couple who were listening to all the wrong people. I met them at a home in the 140,000 range. I referred them to CBSHOME Mortgage and they got approved for approximately 105,000. The only houses they wanted to look at were listed between 140-150,000 and were houses in fairly good condition. They wouldn’t look at anything that needed work. This was because someone at work who literally, had an uncle Joe who got a 150,000 house (assessed value) for 105,000. Nothing I could say would change their minds about the price range they wanted to look at. I politely wished them well. Last I checked, they were still in their apartment and hadn’t gotten their ‘steal’ yet.

A side-note: There are certainly some properties in our market that come onto the market at a price that may be considered ‘a steal’. I’m not talking about those, just the ones that are priced fairly and competitively. Of course there are always those exceptions, those ‘needles in haystacks’ but trust me, they come along few and far between.

I also want to emphasize that I do work and negotiate very aggressively for the buyers I represent. But representation doesn’t JUST mean getting the lowest price. There are many more facets to properly representing a purchaser today in our market.

Please don’t let your search for a ‘steal’ keep you from finding a home that could suit ALL of your needs that you might have to pay close to a fair market value for.

And if you are “Uncle Joe”… Congrats!

The higher your credit score the better chance you have of getting a loan or credit card.  Higher credit scores even help with better interest rates on car loans and mortgages!

RISMedia.com recently published this informative article called 5 Tips to Raise Your Credit Score. We thought this information about credit was good to share.

1. Check Your Credit Report for Accuracy. You can receive a free credit report annually at annualcreditreport.com.  It’s a good idea to know your credit score before you apply for major credit.  You can also check your report for any errors.
2. Dispute Errors. If you report an error, the credit bureaus are required to investigate it and respond to you.  If there is an error make sure to report it.
3. Pay Your Bills on Time. Payment history makes up more than one-third of the typical credit score determination.
4. Pay Down Your Debts. Lenders look at how much available credit you have on cards, if you are maxed out, lenders may not loan you money.
5. Keep Credit Cards and Other Revolving Accounts Open. You may be tempted to close old accounts or accounts you are not using but this may actually hurt your credit score.

If you’d like to read the article in its entirety, you can click and view the 5 Tips to Raise Your Credit Score.

With mortgage rates at all-time lows, purchase and refinance activity is climbing.

Home sales are at their highest levels since May 2010 as home buyers take advantage of favorable economic conditions. Home prices are low, household income is rising, and rents are up in many U.S. cities.

Low rates have stoked mortgage refinance applications throughout Nebraska , too.

Last week, with 30-year fixed rate mortgage rates slipping to 3.36% nationwide, on average, more U.S. homeowners were in search of a refinance than during any one-week period since April 2009.

With loan volume high, banks are nearing their respective capacities for underwriting and approving home loans. As a mortgage applicant, therefore, you’ll want to make sure that you’re taking whatever steps necessary to ensure that your home loan closes on-time, and without hassle.

You most important responsibility? Be responsive to your lender.

When asked for paperwork and/or supporting documentation, providing a 24-hour turnaround can keep your loan “top of mind” with your underwriter. This is important because underwriters are people and, sometimes, people “forget”. The fewer times that an underwriter has to “relearn” your file and its nuances, the better your chances for a speedy approval.

A secondary benefit to being responsive to your lender is that you’ll be less likely to miss your rate lock deadline which, too often, is a costly proposition for a borrower. Even if the mortgage market has improved since your original lock date, your lender may assess rate-lock extension fees equal to up to one-half percent of your loan size.

Other tips to ensure an on-time closing include :

1. Disclose everything upfront. Your lender will find out anyway, so don’t under-disclose important facts.
2. Be accessible. Your lender will often want to contact you by phone or email. Don’t lose days playing “phone tag”.
3. When required, schedule your appraisal for as soon as possible. It’s easy to lose days to this part of the process.

And, lastly, don’t challenge an underwriter’s request for “more paperwork”. Lenders want to see as little paper as possible. They don’t ask for information that’s not required to approve your loan.

Mortgage volume is expected to remain high through the end of 2012 and into 2013. Follow these steps to help close your loan on time, and with few headaches. 

To refinance a mortgage means to pay off your existing loan and replace it with a new one.

There are many reasons why homeowners opt to refinance, from obtaining a lower interest rate, to shortening the term of the loan, to switching mortgage loan types, to tapping into home equity.

Each has its considerations.

Lower Your Mortgage Rate
Among the best reasons to refinance is to get access to lower mortgage rates. There is no “rule of thumb” that says how far rates should drop for a refinance to be sensible. Compare your closing costs to your monthly savings, and determine whether the math makes sense for your situation.

Shorten Your Loan Term
Refinancing your 30-year fixed rate mortgage to a 20-year fixed rate or a 15-year fixed rate is a sensible way to reduce your long-term mortgage costs, and to own your home sooner. As a bonus, with mortgage rates currently near all-time lows, an increase to your monthly payment from a shorter loan term may be negligible.

Convert ARM To Fixed Rate Mortgage
Homeowners with adjustable-rate mortgages may want the comfort of a fixed-rate payment. Mortgage rates for fixed-rate mortgages are often higher than for comparable ARMs so be prepared to pay more to your lender each month.

Access Equity For Projects, Debts, Or Other Reasons
Called a “cash out” refinance, Elkhorn homeowners can sometimes use home equity to retire debts, pay for renovations, or use for other purposes including education costs and retirement. Lenders place restrictions on loans of this type.

A refinanced home loan can help you reach specific financial goals or just put extra cash in your pocket each month — just make sure that there’s a clear benefit to you. Paying large closing costs for small monthly savings or negligible long-term benefit should be avoided.

Many lenders offer low- or no-closing costs options for refinancing. Be sure to ask about it.

If you are considering buying a new home and planning on an FHA loan then please take note.  On April 1, 2013 the following U.S. Department of Housing and Administration rules go into effect:  

1.   On most FHA loans the annual premium will increase by 0.10% or $100 per year for each $100,000 in loan amount.
2.   For loans greater than $625,000 with a term longer than 15 years, the increase will be 0.05%, or $50 per year for each $100,000 in loan amount.

To beat the April 1 deadline you need to apply for the FHA loan and have a case number assigned to it. To get a case number for your FHA loan you need to apply with a lender no later than March 25, 2013.

Here’s the bigger punch in the jaw: After June 1, 2013, FHA borrowers will have to continue paying annual mortgage insurance premiums for the life of the loan. Until the new rules goes into effect, the usual practice was that the FHA automatically canceled the mortgage insurance whenever a borrower reduced the balance of the loan to 78% of the original loan amount.

The way to avoid the new June 1, 2013 rule is to:

A.) find a house;

B.) apply for an FHA loan; and,

C.) get a case number for it before June 1, 2013. Most mortgage officers advise buyers to apply with a lender no later than May 24, 2013.

So if you’re serious about buying a new home the time has arrived.  Just give me a call or text me at 402-670-8775 or email me at Marie.Otis@cbshome.com.  We will tour Omaha homes until you find the one you want.

It is important to get in the habit to review your credit report each year.  Protect yourself knowing what is in your credit profile from each of the 3 bureaus -   Work on making sure the information is accurate before you need a credit card, car loan or mortgage.    Great habit -  do this the same time every year after you file your taxes - 

There are a lot of sites that tease a free credit report, and then require you to sign up for a monthly service.  The government website to obtain 1 free credit report annually without signing up for anything is:  https://www.annualcreditreport.com.   This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

Here are some basic FAQ’s regarding Credit Reports.

How often can I request a free credit report through this website?

You are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion. This free credit report can be requested through this website, by phone or by mail.

Where can I find information on disputing or correcting information in my credit file?

Please contact the nationwide consumer credit reporting company that provided the credit report Equifax – www.investigate.equifax.com Experian – www.experian.com TransUnion – www.transunion.com

Where can I find out more about identity theft?  

Please visit the Federal Trade Commission Identity Theft Center at www.ftc.gov

How do I request a “fraud alert” be placed on my file?

You have the right to ask that nationwide consumer credit reporting companies place “fraud alerts” in your file to let potential creditors and others know that you may be a victim of identity theft. A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to protect you. It also may delay your ability to obtain credit. You may place a fraud alert in your file by calling just one of the three nationwide consumer credit reporting companies. As soon as that agency processes your fraud alert, it will notify the other two, which then also must place fraud alerts in your file.

§ Equifax: 1-877-576-5734; www.alerts.equifax.com

§ Experian: 1-888-397-3742; www.experian.com/fraud

§ TransUnion: 1-800-680-7289; www.transunion.com

How can I exclude my name from nationwide consumer credit reporting company lists for unsolicited credit and insurance offers?

You may request that consumer credit reporting companies exclude your name from lists for pre-approved, unsolicited credit and insurance offers. To find out more, please call 1–888–5OPTOUT (1–888–567–8688).

Where can I find out more about credit repair?

Please visit the Federal Trade Commission Credit Repair information at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm

It is so important to have your credit in order when you are preparing to buy or sell property.  I can help you by recommending the best mortgage people to help you.  Please give me a call or text at 402-670-8775 or email me at Marie.Otis@cbshome.com.  We can work together to get you into a new home.

Last week’s economic news was mixed. Construction spending grew, but fell below the expected level. CoreLogic reported that April home prices continued to rise, but did so at their slowest growth rate in more than a year. Employment reports for private sector and government jobs indicated fewer jobs, but the national unemployment rate was steady. Here are the details:

Construction Spending, Home Price Growth Slows

Construction spending reported by the Department of Commerce reached $953.5 billion annually, and increased by 0.20 percent month-to-month against expectations of an 0.80 percent increase and the March reading of 0.60 percent growth.

According to CoreLogic, the rate of home price growth slowed to 10.50 percent year-over-year in April as compared to the 11.10 year-over-year rate of increase in April 2013. Home prices increased by 2.10 percent over March; these gains in home prices were the slowest posted in more than a year, but there was good news.

No states posted a drop in home prices, and eight states posted new record highs for home prices.

CoreLogic said that although a short supply of available homes has driven home prices up, price gains lost momentum due to affordability; CoreLogic expects home prices to increase at a slower pace and projects that home price growth will reach a pace of 6.30 percent by April 2015.

Mortgage Rates Mixed

Freddie Mac reported that mortgage rates for fixed rate mortgages rose while the average rate for a 5/1 adjustable rate mortgage fell. The average rate for a 30-year fixed rate mortgage increased by two basis points to 4.14 percent; discount points fell to an average of 0.50 percent. The average rate for a 15-year fixed rate mortgage also increased by two basis points to 3.23 percent; discount points were unchanged at 0.50 percent. Rates for a 5/1 adjustable rate mortgage averaged 2.93 percent, a drop of three basis points. Average discount points rose from 0.30 to 0.40 percent.

Jobs, Unemployment Data Suggest Economic Strength

Labor markets impact consumer decisions to buy homes; several labor-related reports released last week indicated that the economy continued to gain strength as more jobs were added and fewer workers filed jobless claims.

ADP reported that 179,000 private-sector jobs were added in May as compared to 215,000 jobs added in April. The Bureau of Labor Statistics released its Non-farm Payrolls report for May; 217,000 jobs were added as compared to projections of 210,000 jobs added and 288,000 jobs added in April.

New weekly jobless claims were reported at 312,000 as compared to expectations of 311,000 new jobless claims and the previous week’s 304,000 new claims. The four-week rolling average of weekly jobless claims fell by 2250 new claims to 310,250; this was the lowest reading since June 2007, and was 10 percent lower than the reading for the same week in April 2013 and was 17 percent lower than for the same week in 2012.

Another sign of economic growth was reported last week. Continuing jobless claims dropped to a seasonally-adjusted annual rate of 2.60 million for the week ended May 24; this was the lowest reading reported since October 2007.

The national unemployment rate for May matched April’s reading of 6.30 percent, and was lower than projections of 6.40 percent for May. The Federal Open Market Committee of the Federal Reserve (FOMC) has repeatedly cited an unemployment rate of 6.50 percent as a benchmark indication of economic recovery; it appears likely that the Fed may continue its tapering of asset purchases as it winds down its quantitative easing program.

What’s Ahead

This week’s scheduled economic news includes Retail Sales, Retail Sales without vehicle sales, and the Producer Price Index. Freddie Mac mortgage rates and Weekly Jobless Claims will be released Thursday, and the University of Michigan will release its Consumer Sentiment Index on Friday.

Last week’s economic news was quiet in the housing sector, but retail sales and employment-related reports provided indications of less consumer spending and reduced consumer confidence.

On Monday, James Bullard, St. Louis Fed President, commented that inflation appears to be rising. Although not a voting member of the Fed’s Open Market Committee (FOMC), inflation has been a topic of concern to the FOMC in recent years. Mr. Bullard had previously noted that inflation was stable.

His remarks set the stage for this week’s FOMC meeting and press conference by Fed Chair Janet Yellen. Analysts expect the Fed to continue tapering its asset purchases as it winds down its quantitative easing program.

Labor related reports were mixed last week. Job openings in April rose to 4.46 million in April; this was the highest reading since September 2007 and exceeded the March reading of 4.17 million job openings in March.

More good news came from the U.S. Labor Department, which 4.71 million hires in April. This was the highest rate of hiring since June 2008 and represented a year-over-year increase of 6.00 percent. At the start of the recession at the end of 2007, about 5 million job openings were reported.

Mortgage Rates, New Jobless Claims Rise

Weekly jobless claims were reported at 317,000 as compared to expectations of 310,000 new jobless claims and the prior week’s reading of 312,000 new jobless claims. The four-week rolling average of new jobless claims rose by 4,750 new claims for a total of 315,250. The four-week gauge of jobless claims evens out weekly volatility and is viewed by analysts as a better indicator of labor market trends.

Mortgage rates were higher according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose by six basis points to 4.20 percent; discount points rose from 0.50 to 0.60 percent.

The average rate for a 15-year mortgage rose by eight basis points to 3.32 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage rose from last week’s reading of 2.93 percent to 3.05 percent. Discount points were unchanged at 0.40 percent.

The Fed’s quantitative easing program was implemented to control long-term interest rates, including mortgage rates. Gradual tapering of this program is allowing mortgage rates to rise. Other influences include investor concerns over recent decisions made by the European Central Bank.

Consumer sentiment slipped slightly for June according to the University of Michigan Consumer Sentiment Index. June’s reading was 81.20 as compared to an expected reading of 82.80 and May’s reading of 81.50.

What’s Ahead

Next week’s scheduled economic news includes the NAHB Housing Market Index for June and Housing Starts for May. These readings are important indicators for housing supplies, as a lack of builder confidence can translate to fewer housing starts. Housing markets were impacted by high demand for homes against low inventories of available homes during 2013 and into 2014.

Also noteworthy is the FOMC post-meeting statement and Fed Chair Janet Yellen’s press conference. The FOMC sets the Federal Reserve’s monetary policy and is expected to announce further tapering of the Fed’s quantitative easing program. It will be interesting to learn the Fed’s perspective on inflation, which has been stuck below the Fed’s target level of two percent.

Friday’s release of Leading Economic Indicators for May round out this week’s economic reports.

Last week’s scheduled economic news included the National Association of Home Builders/Wells Fargo Housing Market Index, Housing Starts and Building Permits. The Fed’s Federal Open Market Committee (FOMC) issued its usual statement at the conclusion of its meeting, and Fed Chair Janet Yellen also gave a press conference.

Home Builder Confidence Improves, but Housing Starts Slow

NAHB released its Housing Market Index report, which reached its highest reading in five months. The index moved up from 45 to 49; a reading of 50 indicates that more builders are confident about housing market conditions than those who are not. David Crowe, NAHB chief economist, said that builder confidence is in line with consumer confidence; he noted that consumers are waiting for a stronger economic recovery before buying homes and that builders didn’t want to build more homes than markets would bear.

According to the latest figures from the Department of Commerce, May housing starts fell to 1.00 million from April’s reading of 1.07 million on a seasonally adjusted annual basis, and missed the consensus reading of 1.02 million. Building permits issued in May fell by 6.40 percent to 991,000 permits issued for single and multi-family construction. In recent months, permits for single family homes have fallen, while permits for multi-family units are increasing. This concerns economists as single-family homes generate sales of retail goods including furniture and home improvement supplies, while multi-family housing is often occupied by renters and yields fewer home related purchases.

Warmer weather was expected to add to the pace of housing starts, but this did not occur during May.

Fed Reduces Asset Purchases, Mortgage Rates 

FOMC members reduced the Fed’s monthly asset purchases by $10 billion, for a monthly volume of $35 billion in Treasury securities and MBS. The meeting minutes noted FOMC concerns that inflation has not yet reached the committee’s benchmark of 2.00 percent inflation as a benchmark of economic recovery.

The minutes reflected FOMC’s position that it will maintain the target federal funds rate at between 0.00 and 0.25 percent for a considerable period after the asset purchases under the current quantitative easing program have ended. While analysts previously associated “considerable period” with a time frame of six months, Fed Chair Yellen stated during her press conference that there was no formula for determining the Fed’s actions; she emphasized that the Fed and FOMC would monitor a wide range of economic indicators, economic reports and developments in support of any decisions to change current monetary policy.

In response to a question about tight credit, Chair Yellen cited banks’ reluctance to lend to all but those with “pristine” credit scores as a factor contributing to slower recovery in the housing sector.

Mortgage Rates, Jobless Claims

Freddie Mac reported lower mortgage rates on Thursday. The reading for a 30-year fixed rate mortgage was 4.17 percent, a decline of three basis points. Discount points were also lower at 0.50 percent. The average rate for a 15-year fixed rate mortgage was lower by one basis point at 3.30 percent; discount points were unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell to 3.00 percent from last week’s reading of 3.05 percent. Discount points were unchanged at 0.40 percent.

New jobless claims were higher than expected at 312,000; analysts had predicted a reading of 310,000 against the prior week’s reading of 318,000 new jobless claims.

No economic reports were released Friday.

What’s Ahead

This week’s economic calendar includes several housing-related reports. Existing home sales, the Case-Shiller Housing Market Index and New Home Sales will be released along with multiple consumer-related reports and weekly updates for mortgage rates and new jobless claims.

Getting pre-approved for a mortgage loan is an integral part of having the ability to purchase a home in today’s society.

With most home prices well above what the majority of us have in the bank, getting approved for a mortgage can be the deal maker or breaker when it comes to purchasing a piece of property. Therefore, getting rejected for a mortgage can feel like a huge loss.

The first thing to realize, however, is that there are action steps you can take to get to “yes.” Here’s what to do if you’re turned down for a mortgage or other home financing.

Shop Around: Don’t Take “No” The First Time

If you get a “no” from your bank the first time around, don’t be fooled into thinking that everyone will give you the same answer.

Instead, be sure to shop around your mortgage with different banks, and opt to speak to a mortgage broker to leverage all of your options.

When looking at several different lenders, you’ll have a much higher chance of getting a yes since every lender adheres to different rules and restrictions. Though you may end up with a mortgage with a slightly higher interest rate, you’re likely to get approved for a mortgage or other home financing.

Ask Friends: Get A Co-Signer

If your “no” was the result of bad credit history or a low credit score, perhaps you should consider asking for the help of friends and family. Sometimes bringing a co-signer in on the deal who has better credit history and a higher credit score will change the response of your bank or lender significantly, and suddenly you’ll find yourself hearing the sought-after “y” word.

Ask Questions: Fix The Problem

If you’ve sought out several different banks and lenders, and still find yourself with rejected mortgage applications, be sure to understand why the “no” came in the first place. If it’s an issue of your credit history, which can’t be appeased with a co-signor, you may need to put in the time in order to correct some of your credit issues.

Other common reasons why people are rejected for a mortgage include unrealistic borrowing expectations, i.e. applying for a mortgage that is too high for you to satisfy, as well as an unreliable employment history or a general lack of credit history. Speak with your mortgage professional to determine the reason, and if shopping around or bringing in a co-signor doesn’t transform the “no” to a “yes,” seek to fix the problem instead.

Though it can be a daunting task to apply for a mortgage after you’ve been rejected, ensuring that you arrive at that ultimate “yes” is something you need to undertake in order to purchase a home and reach that next milestone in your life.

Having trusted professionals on your side is something that will surely ease the tension on all things involved in purchasing a home, including getting approved for a mortgage. For more information on how to get past “no” when searching for a home, call your trusted real estate professional today.

Last week brought several economic and housing sector reports including Existing Home Sales, Case-Shiller and FHFA home prices for April, as well as New Home Sales. Freddie Mac’s weekly mortgage rates survey and the weekly report on new jobless claims were released on Thursday, and Consumer Sentiment for June rounded out the week on Friday.

Existing Home Sales Stronger than Expected! 

Good news came from the National Association of REALTORS® Existing Home Sales report for May, which reported 4.89 million previously owned homes sold on a seasonally-adjusted annual basis. Analysts had projected a seasonally-adjusted annual figure of 4.75 million existing homes sold based on April’s reading of 4.65 million existing homes sold; April’s reading was later adjusted to 4.66 million. May’s reading represented a monthly increase of 4.90 percent over April’s reading and was the second consecutive monthly increase in previously owned home sales.

The median sales price for existing homes sold in May was $213,400, which represented a 5.10 percent increase year-over-year.

May’s reading for existing home sales was the highest in seven months, and mortgage rates trended down during May, but strict lending standards were cited as a significant obstacle to first-time homebuyers.

Federal Reserve Chair Janet Yellen recently said in a press conference that mortgage lenders “need more clarity” as to their potential liability for failed mortgages. Mortgage lenders and loan servicing companies can be required to repurchase defaulted loans or to reimburse Fannie Mae and Freddie Mac for losses associated with mortgage defaults and foreclosures.

Case-Shiller, FHFA Report Slower Pace for Home Price Growth

The S&P Case-Shiller Home Price Index and FHFA’s House Price Index for April documented slowing rates of home price growth. Case-Shiller reported a 10.80 percent year-over-year growth in home prices for April, and FHFA reported a year-over-year gain of 5.90 percent rate of appreciation for home sales associated with mortgages owned by Fannie Mae and Freddie Mac.

Analysts noted that home price growth is leveling out after last year’s steep appreciation in home prices. While homeowners may disagree, economists say that a slower rate of home price growth can actually bode well for housing markets. More buyers can afford a home, which adds stability to housing markets. First-time buyers provide a foundation for home sales; if they cannot buy homes, then homeowners can’t sell existing homes and buy new homes. A slower but consistent rate of home price growth allows homeowners to build home equity, but won’t likely lead to housing “bubble.”

New Home Sales Blast Past Expectations, Mortgage Rates Fall

The U.S. Department of Commerce reported that new home sales for May reached a six-year high with a reading of 504,000 new homes sold on an annual basis. April’s reading exceeded expectations of 440,000 new homes sold as well as April’s adjusted reading of 425,000 new homes sold. The month-to-month increase in new home sales from April to May was the largest monthly increase in home sales in 22 years.

Although analysts caution that month-to-month seasonally-adjusted sales reports are volatile, this uptick in new home sales may help bolster builder confidence in housing markets. May prices for new homes also rose with the median home price at $282,000. This reading represents a year-over-year increase of 6.0 percent for new home prices.

The Northeast led regional results for new home sales with its reading of 54.50 percent; The West reported an increase of 34.00 percent. New home prices in the Southeast rose at an annual rate of 14.20 percent, and the Midwest region reported a 1.40 percent increase in new home prices. While analysts characterized the Northeast region’s May reading as exaggerated, overall results for new home prices indicate a comeback for new home prices.

Freddie Mac put some icing on the good news cake with its weekly mortgage rates report. Average rates for a 30-year fixed rate mortgage dropped to 4.14 percent with discount points lowered to 0.50 percent. The average rate for a 15-year fixed rate mortgage fell by eight basis points to 3.22 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.98 percent with discount points lower at 0.40 percent.

Thursday’s Weekly Jobless Claims Report reading fell by 2000 new claims to a seasonally adjusted reading of 312,000 new claims filed. Analysts had expected a reading of 310,000 new jobless claims. 214,000 per month have been added to the economy from January to May 2014.

Positive economic developments were not lost on consumers. The Consumer Sentiment Index for June posted a reading of 82.5 against an expected reading of 81.9 and May’s reading of 81.2.

This Week’s News

Scheduled economic news includes Pending Home Sales, Construction Spending, the ADP Employment report, and the Non-farm Payrolls Report. The National Unemployment Rate report along with Freddie Mac’s PMMS and Weekly Jobless Claims round out the week. No news is scheduled for Friday’s Independence Day holiday.

Last week’s economic news was mixed, but economic reports for Non-Farm Payrolls and the National Unemployment rate suggest a strengthening labor sector. Pending Home Sales surpassed expectations in May and conversely, construction spending was lower than expected. Here are the details.

Pending Home Sales Reach Highest Level in Eight Months

The National Association of REALTORS® reported that pending home sales in May rose by 6.10 percent over April’s reading. May’s reading was 5.20 percent lower than for May 2013. The index reading for May reached 103.9 as compared to April’s index reading of 97.9. Results for all regions were positive for May:

- Northeast: 8.80%

- West 7.60%

- Midwest 6.30%

- South 4.40%

An index reading of 100 for pending home sales is equal to average contract activity in 2001; pending home sales are a gauge of upcoming closings and mortgage activity.

CoreLogic Home Price Index Reflects Slower Price Gains

National home prices rose by 1.40 percent in May and 10 states posted new month-to-month highs, while year-over-year reading slipped from 10.00 percent in April to 8.80 percent in May. Home prices remain about 13.50 percent lower than their 2006 peak.

The overall rate of construction spending slowed in May to an increase of 0.10 percent from April’s reading of 0.80 percent and against expectations of 0.70 percent. Residential construction spending dropped by 1.50 percent in May.

Freddie Mac’s weekly survey of average mortgage rates brought good news as the rate for a 30-year fixed rate mortgage dropped by two basis points to 4.12 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.22 percent, as was the average rate for a 5/1 adjustable rate mortgage at 2.98 percent. Discount points were unchanged at 0.50 percent for a 30-year fixed rate mortgage and 15-year fixed rate mortgages. Discount rates rose from 0.30 to 0.40 percent for 5/1 adjustable rate mortgages.

Jobs Up, Unemployment Rate Lower

ADP payrolls, which measures private-sector job growth, reported 281,000 new jobs in June as compared to a reading of 179,000 new private-sector jobs in May. The Bureau of Labor Statistics’ Non-Farm Payrolls report for June surpassed expectations of 215,000 jobs added with an increase of 288,000 jobs against May’s reading of 224,000 jobs added.

The national unemployment rate fell to 6.10 percent against predictions of 6.30 percent and May’s reading of 6.30 percent. 

No news was released on Friday, which was a national holiday.

What’s Ahead

This week’s scheduled economic is lean with no events set for Monday. Job Openings, the minutes from the most recent FOMC meeting, along with regularly scheduled weekly reports on mortgage rates and new jobless claims round out the week’s economic news.

As if homeowners who are facing foreclosure don’t have enough to worry about, a multitude of loan modification scam artists have invaded the internet, public files and even foreclosure notices in newspapers in hopes of targeting their next victim. By identifying the top three modification scams and learning how to avoid them, at-risk homeowners can protect themselves (and their homes).

Never Pay For Mortgage Modification Assistance

Many desperate homeowners fall victim to scam artists who offer to provide them with assistance in the loan modification process for an exorbitant fee. Many times the scam artist who promises to provide assistance will require that the homeowner pay the fee upfront, after which they will provide very little assistance or simply take the money and run. Consumers should be aware that assistance and counseling services are offered for free through a number of reputable HUD approved counseling agencies.

Avoid Transferring The Deed

One popular scam that at-risk homeowners often face is the property deed scam in which scam artists promise to purchase the home in question, agreeing to let the desperate homeowner rent it out. They suggest that turning over the deed to a borrower with a better credit rating will offer additional financing opportunities, thus preventing the loss of the home. The scammer often promises to sell the home back to the homeowner, but in reality has no intention of doing so.

Many times the scam artist will sell the home to another buyer. In some instances, the crook will collect any processing fees, take the title to the home and any equity, and then leave the home to default. It is a good idea for consumers who are approached with a property deed scam to report it to the FTC.

Ignore Unrealistic Promises

Mortgage modification scammers often make promises to do such things as negotiate a solution to the foreclosure more quickly, process mortgage payments for the consumer while the negotiation is being worked out, or even guarantee a loan modification. Since the actual lender is the only one who can agree to a loan modification, and this solution requires additional processing time, overnight fixes are almost always scams. Additionally, consumers should never make mortgage payments to anyone other than their lender.

So, you’re ready to buy a home? You’ve grown accustomed to the renting lifestyle, but are ready to move into your own space. Maybe you are starting a family, moving in with a significant other or just want more stability. But the time has come for you to set roots and check this life milestone off your bucket list.

There are several steps to take before making this leap, but surely your first item should be securing a loan. According to Bankrate.com, it is much more difficult to secure a loan today than it was 10 years ago. This is due to several factors but many stem from repercussions of the Great Recession in 2008. Many millennials, consumers between the age of 18 and 34, came of age during the recession and saw first-hand what could potentially happen if the housing market takes a wrong turn. Debt, instability and financial dependence have kept these young adults from entering into the home-buying market. Now the future looks more hopeful now than ever before. According to research conducted by the National Association of Realtors, millennials accounted for 32 percent of all home purchases in 2014.

Unfortunately, that does not make securing a loan any easier. By following a few simple steps, you can be prepared for any questions your lender may ask.

1. Know your credit score

It’s always important to be aware of changes in your credit score. Lenders will inevitably ask for your credit score and reasons for any dips in your past history. Make sure you are prepared to answer these questions. It also never hurts to double check that your credit score is correct.

2. Know how much you can borrow

It’s easy to get carried away when considering lending. However, it is important to be realistic. Your lender will expect you to have some idea of how much you can borrow. According to MortgageCalculator.org, the formula is incredibly simple. First, write down your monthly income before any deductions. Next, multiply this number by .28. This number will be very close to what your lender will consider allowing you to borrow.

3. Know what type of loan you’re looking for

There are several types of loans, but there are a few that are most typical. It’s important to approach your lender with knowledge about the type of loan you would like. First, there are fixed or adjustable rate loans. With fixed-rate loans your interest rate remains the same for entire life of the loan. Your monthly payment remains the same as long as you are paying it off. With adjustable-rate loans the interest rate has the ability to change. For example, the 5/1 ARM loan, has a fixed-rate for the first five years then transforms into an adjustable-rate loan, which changes every year.

Two other types of loans are government-insured and conventional loans. Government-insured loans refer to those that are backed by the government. For example, VA loans are loans given to those who have served in the military. If a borrower defaults, the government will re-pay the lender the defaulted amount. There are also government-insured loans that benefit those who live in rural areas. These are referred to as USDA or RHS loans. To qualify for these types of loans you must have low or modest income. A conventional loan is one that is the standard fixed or adjusted-rate loan that is not insured by the government.

Applying for a loan can be scary, however, armed with the right questions and information it can become a much easier experience. Research prior to having a conversation with your lender will prove to be incredibly helpful. As always, if you have any questions you should also reach out to your REALTOR at CBSHOME.

If you are considering buying a house, chances are you’ve thought long and hard about how you will fund this venture. If you’re living paycheck to paycheck and considering buying your first house, saving can seem daunting. According to Trulia, it is advised to put down at least 20 percent up front. This is where the amount of money you’ve been able to save becomes crucial to the size and price of home you can afford. Cutting back here and there can make saving much easier.

Creating a saving plan is a great way to get started planning for your dream home.

1. The first step, as always, is to decide how much money you need to save and create a plan. Writing it down makes the number concrete and reminds you of your ultimate goal. Setting up an auto-transfer to a fund dedicated solely to housing can ensure you are putting money away correctly.

2. Next, make cuts where it is easiest such as on cable or your high-speed Internet. Switching to Netflix or an item like Roku or a cable streaming service allows you to cut money without losing entertainment.

3. Speaking of entertainment, it’s not ideal, but cutting back on entertainment dollars will have immediate effects on your wallet and savings. According to Bloomberg and the Commerce Department, Americans are spending more in restaurants than in the grocery stores.. This means that restaurants are getting an increased share of wallet. Choosing to make lists and visit the grocery store will keep you from over-spending.

4. Jeff Reeves, editor of InvestorPlace.com suggests saving all “windfall” money such as tax returns or bonuses. While it may seem tempting to splurge on a new set of golf clubs, keeping your end goal in mind will help you put this money away.

Your real-estate agent at CBSHOME can also help you determine how much you should be saving relative to your dream home. Don’t be afraid to ask as many questions as needed. Our real-estate agents are here to help, if they don’t know the answer they can certainly direct you to someone who does!

More and more millennials are stepping into the home ownership realm. If you fall into this group of individuals planning on stepping out on your own, you may be looking for a place to start.

So, when you first step out into the market as a homebuyer, where exactly is the starting line? What are some steps you need to take? Well, the first step really should come as no surprise yet all too often it is pushed down the list. Before anything else, you must calculate a budget. Determining what you can spend will make everything else in the process far easier and more efficient.

Since your budget will be referred to throughout the entire home buying process, it is imperative that you are accurate in your calculations.

The first step is identifying the mortgage calculator software in which you will trust throughout the process. Multiple mortgage calculator apps exist in which you can simply plug in numbers. Spend some time getting comfortable with the different softwares and determine your favorite. Of course, if you’d rather determine your budget on your own, without any fancy application, you can certainly do that instead. We’ll return to the calculator later on, but being comfortable with it early on is a good first step.

When it comes to actually calculating your budget, you should first determine your household’s after-tax income. It’s important to be sure you are factoring in the income of every member of the home who will be contributing to payments to get the most accurate budget possible. You can determine these numbers by reviewing pay stubs or talking to your HR manager to get a truly accurate number.

The next step is to determine your household’s expenses in your current living situation. Monthly expenses like electric bills, car insurance and gas should all be factors in your budget. Once you have your complete list put together, comb through it and determine what is absolutely necessary and what is not, like your weekend budget. If you are not currently keeping track of these expenses, review credit card payments and online bank statements to see where you stand. Remember, this budget should be as accurate as possible. It’s also important to estimate what sort of expenses may come with your new house. Understanding to the best of your ability what bills will change and what will remain the same, will make the entire process easier.

Now, we’ll return the mortgage calculator we established as our first step. Spend some time with the calculator by adjusting the different monthly payments and interest rates. Figure out your ideal purchase price paired with a realistic interest rate. Since rates fluctuate throughout the day, plug in rates up to 1.5% point differentiation of the current rates of your geographic location and your loan type to be sure you can afford interest rates within the range. Once you’ve figured out what you can afford on your own, you can then take necessary steps to apply for a loan and move closer to become a first time homeowner.