Last week included a few interesting takes on where things are at in the housing market. We first got the news that purchase mortgage applications last week were at their highest level since May, UP 6.3% over the week before. It's nice to see buying interest starting to rebound after the tax credit expiration. But we do have a bit of a way to go, as last week's number was still 38.8% below where it was a year ago, according to the Mortgage Bankers Association.
One source of new buyers for sure is the huge number of people for whom homes are now way more affordable. For families making the national median income, the share of homes they can afford stayed above 70% for the sixth quarter in a row as tracked by the Housing Opportunity Index (HOI). The National Association of Home Builders, which co-sponsors the HOI, said this affordability was the result of low home prices and favorable mortgage rates. The NAHB chairman commented, "Homeownership is within reach of more households than it has been for almost a generation...with house prices starting to stabilize, conditions are beginning to draw homebuyers back into the market..."
>> Review of Last Week
SQUEAKING UP... We had just four days of trading last week for investors to show us how they feel about the economic prospects going forward. Coming back from Labor Day, stocks sank on Tuesday, with the Dow 147 points down. But during the next three days, traders slowly pushed prices back up enough that all three major stock indexes squeaked into positive territory for the second week in a row. And the Dow remains UP for the year.
Monday, September 13, 2010
Sunday, September 5, 2010
Old vs New GFE
I couldn't talk long enough about the constant roll out of new guidelines affecting home loans on a daily basis. Its certainly an interesting way to start a week knowing what you know today may be little use to anyone tomorrow! The good new is that everyone is becoming more comfortable with the technicals that have become the new standards resulting from the financial reform act. Some of the better points here are old vs new. Here is one of my favorites.
Old Good Faith Estimate vs. The New Good Faith Estimate
The Old was a general list of fees that varied in style, size, shape, definition of terms, costs etc. A constantly moving target that had no responsibility other than to give you an idea of what the loan terms and costs possibly could be. The lender was under no obligation to disclose any change in terms, costs, points or fees and buyers were often shocked at closing with little or no options but to close and bear it.
Move over Old and in with the New. The new is actually a very clear and standard form which gives the the precise costs in one lump sum, broken down between lender charges and title/escrow charges. It must be exact and can not change in any way once disclosed or unless there is a changed circumstance affecting either the costs or the rate. These changes are very specific and the home buyer must be informed a minimum of three working days prior to closing of the loan. The catch here is that lenders can opt to disclose fees from a title/escrow company that the buyer would never use. Since the new laws require most title fees to be shown as the buyers responsibility even if the seller is paying them, the title services can be chosen by the buyer. Choosing to close some place other than the one listed on the Service Providers list on the Good Faith Estimate does not hold the lender responsible to the fees of the selected company. If choosing the title company listed on the GFE then each fee calculated in the title services total must be within a tolerance of 10%. Hallelujah! I'm a huge fan of the new process and how the consumer is given the access to his loan costs upfront. Additionally, the GFE explains important details, like Pre-Payment Penalties, escrow account, interest rate, fixed or ARM, if payment can change etc.
The best part of all this is that you can ask lender A for a quote and see that his fees are x all in, you are now able to compare x to lender B's x and C's and...Well you get the picture. Comparing title/escrow fees is not really what this is all about. Often times you must close where the contract in a home purchase situation requires you too. Title fees vary slightly between each provider and their total fees, as is the lenders are now wrapped into one big number. Yes!
The only thing the New GFE does not show is your payment. Really? Who wasn't thinking? OK, Ill go for it and ask my Loan Officer to calculate it for me or even better go to homeloanapproval.com and use the payment calculator. Its fun!
Home buying, It's not what it used to be but just a whole lot clearer!
homeloanapproval.com
Old Good Faith Estimate vs. The New Good Faith Estimate
The Old was a general list of fees that varied in style, size, shape, definition of terms, costs etc. A constantly moving target that had no responsibility other than to give you an idea of what the loan terms and costs possibly could be. The lender was under no obligation to disclose any change in terms, costs, points or fees and buyers were often shocked at closing with little or no options but to close and bear it.
Move over Old and in with the New. The new is actually a very clear and standard form which gives the the precise costs in one lump sum, broken down between lender charges and title/escrow charges. It must be exact and can not change in any way once disclosed or unless there is a changed circumstance affecting either the costs or the rate. These changes are very specific and the home buyer must be informed a minimum of three working days prior to closing of the loan. The catch here is that lenders can opt to disclose fees from a title/escrow company that the buyer would never use. Since the new laws require most title fees to be shown as the buyers responsibility even if the seller is paying them, the title services can be chosen by the buyer. Choosing to close some place other than the one listed on the Service Providers list on the Good Faith Estimate does not hold the lender responsible to the fees of the selected company. If choosing the title company listed on the GFE then each fee calculated in the title services total must be within a tolerance of 10%. Hallelujah! I'm a huge fan of the new process and how the consumer is given the access to his loan costs upfront. Additionally, the GFE explains important details, like Pre-Payment Penalties, escrow account, interest rate, fixed or ARM, if payment can change etc.
The best part of all this is that you can ask lender A for a quote and see that his fees are x all in, you are now able to compare x to lender B's x and C's and...Well you get the picture. Comparing title/escrow fees is not really what this is all about. Often times you must close where the contract in a home purchase situation requires you too. Title fees vary slightly between each provider and their total fees, as is the lenders are now wrapped into one big number. Yes!
The only thing the New GFE does not show is your payment. Really? Who wasn't thinking? OK, Ill go for it and ask my Loan Officer to calculate it for me or even better go to homeloanapproval.com and use the payment calculator. Its fun!
Home buying, It's not what it used to be but just a whole lot clearer!
homeloanapproval.com
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