WASHINGTON// 30- year mortgage rate falls to lowest level in 8 months

Rates on 30- year mortgages fell sharply this week to the lowest level in eight months, reflecting easing inflation concerns.

Mortgage giant Freddie Mac reported yesterday that 30- year, fixed-rate mortgages dipped to 6.24 percent, down from 6.33 percent last week.

Rates on 15- year, fixed-rate mortgages, a popular choice for refinancing, averaged 5.94 percent, down from 6.04 percent last week.

Five-year adjustable-rate mortgages dropped to 6.04 percent from 6.08 percent last week.

A year ago, 30- year mortgages averaged 6.33 percent while 15- year mortgages stood at 5.90 percent, one-year ARMs were at 5.20 percent and five-year ARMs were at 5.86 percent. (Read More)

Source: Baltimore Sun
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In recent years lenders have also made it easier to finance vacation homes.

“In most situations, the interest rate on a second home is the same as a primary residence,” said Doug Perry, a senior vice president at Countrywide Home Loans, one of the nation’ s biggest lenders.

“It’s an acknowledgment that people have more second homes now,” he said.

According to the Realtors’ group, of the owners who have bought vacation homes since 2003, 23 percent used the proceeds from other real estate sales to finance their purchases, and 19 percent used equity or sales proceeds from their primary residences.

When a vacation house is bought by several people — two couples, perhaps — tax deductions are simply split in line with the ownership shares, he added.

But too often couples or disparate family members do not weigh the factors that can complicate multiparty vacation home ownership, said Mr. Romano of Shelter Rock.

Among other things, if one person has a credit rating that is significantly different from those of the other prospective owners, snags can result.

Mr. Romano said that he discusses how one person’ s financial situation could affect his or her ability to carry the costs of the venture and how it could raise the borrowing cost for the whole group. (Read More)

Source: NY Times

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Nationwide, homeowners spent nearly 21 percent of their incomes on housing costs last year, up from just under 19 percent in 1999.

In Washington state, homeowners spent 22 percent of their income, or $1,454 a month, on housing costs in 2005, compared to 20.9 percent, or$1,438, in 1999, according to the Census Bureau, an increase of 1.1 percentage point.

The bureau’s figures are expressed as medians, meaning half of homeowners pay more and half pay less.

Housing costs are defined as mortgage payments, taxes, insurance and utilities.

Nationwide, median home values jumped 32 percent from 2000 to 2005, to$167,500.

For example, the government says housing costs are excessive if they top 30 percent of household income.

“Families want to become homeowners, and they are willing to spend more to get there,” said Jeffrey Lubell, executive director for the Center for Housing Policy, which advocates for affordable housing.

California stands out among the states with expensive housing costs.

It ranked No. 1 in median home value, at$477,700; No. 2 in monthly housing costs for homeowners, at$1,912; and No. 2 in monthly costs for renters, at$973.

• New Jersey had the highest monthly housing costs for homeowners, at$1,938.

• West Virginia had the least expensive monthly costs for homeowners, at$797.

• Mississippi had the least expensive median home value, at$82,700.

(Read More)

Source: The Seattle Times: Real Estate

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With brokers able to offer both private-market subprime and FHA-insured mortgages, buyers with less-than-perfect credit will be able to directly compare the FHA’s rates, fees and consumer protections with competing subprime loan offerings.

The House bill, the Expanding American Homeownership Act of 2006 (H.R. 5121), would reopen the FHA program to consumers in large parts of the country where home prices far outstrip statutory limits on maximum FHA mortgage amounts.

The Fannie Mae-Freddie Mac limits move up annually as home prices increase.

Another key change: The FHA would join the rest of the mortgage market in underwriting home buyers based on their risks of default as measured by credit scores, down-payment amounts and financial profiles.

The bill would authorize the agency to charge lower insurance premiums to applicants with lower risks of default — a standard operating procedure in the private marketplace.

The housing subcommittee, which has immediate jurisdiction over the bill, is chaired by Sen.

FHA Commissioner Brian D. Montgomery says he has full confidence in his agency’s ability to assess credit risks — something it has done for decades at no cost to the Treasury.

“We think we are on the side of the consumers,” Montgomery said in an interview following the House vote. (Read More)

Source: Washington Post

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The Balduccis put their 1951 colonial on the market in early May.

“It’s very depressing,” Ms. Balducci said, adding that at least seven houses in her neighborhood had been on the market for at least as long as theirs.

“A year ago, this house would have sold within two weeks maximum, and they would have easily gotten close to $600,000,” she said.

Median sale prices across the region have continued to rise in most places, but not at the double-digit rates the market saw in recent years.

Brokers say that after five years of through-the-roof price increases and almost frantic activity, the housing market is settling down to a new normal.

Mr. Gallagher said that in light of the changing climate, real estate agents have been pushing harder in recent months to convince sellers that they cannot expect the kind of price increases they saw in recent years.

“This year’s single-digit increases will probably translate into selective declines in home prices sometime next year,” Dr. Kamer said.  (Read More)

Source: NY Times

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