Another Great Article from my friend in the Mortgage Industry!

Mortgage Rate Predictions For November 2014 (FHA, VA, USDA & Conv)

CURRENT MORTGAGE RATES

Current mortgage rates continue to move lower.

According to Freddie Mac's weekly mortgage rate survey of more than one hundred banks, 30-year mortgage rates averaged 3.98% last week, marking the third week of sub-4 percent rates. The 15-year fixed rate mortgage rate averaged 3.13%.

Conventional mortgage interest rates remain near 17-month lows. VA and FHA mortgage rates are even lower.

Home buyers have benefited from low rates all year. Refinancing households are now benefiting too. There are millions of U.S. homeowners now "in the money" to refinance nationwide.

IT'S AN EXCELLENT TIME TO COMPARE TODAY'S MORTGAGE RATES. PRICING IS AS GOOD AS IT'S BEEN ALL YEAR.

MORTGAGE RATES IN NOVEMBER

Last month, mortgage rates made big gains. When October began, 30-year mortgage rates averaged 4.20%. Throughout the month, they dropped as low as 3.92% before rising slightly into November.

The rate drop through October was significant in contrast to the three months prior, when mortgage rates had barely moved at all. Rates moved more in October than they did in the prior four months combined

In November, this trend may continue.

The market is wound tight like a coil and sits ready to spring. There are a number of factors which could affect this month's mortgage rates:

More Jobs In The Economy

Last month, the September Non-Farm Payrolls report showed 248,000 net new jobs added to the economy, raising this year's running total to 2.04 million jobs added overall. Job growth has topped 200,000 in seven of the last eight months, and more than 9 million jobs have been added to the economy dating back to 2010.

Wage growth remains weak, but the jobs market is returning. As more workers are added to the economy, consumer spending tends to rise and inflation pressures tend to increase.

Furthermore, the Federal Reserve makes labor markets a focal point for future policy and stimulus. As the jobs market expands, expect the Fed to play a lesser role in holding today's mortgage rates down. 

A Rise In Inflation Rates

The Federal Reserve also watches inflation rates. As inflation rates rise, the Fed is more inclined to remove or slow its market stimulus, which can cause mortgage rates to rise.

Furthermore, inflation is the enemy of low mortgage rates. This is because inflation devalues the U.S. dollar which, in turn, devalues dollar-denominated U.S. mortgage bonds. During periods of inflation, mortgage rates tend to rise. 

Since 2012, though, inflation rates have been stable, but below the Federal Reserve's target rate of two percent. When inflation rates run too low for too long, disinflation can occur, and this can support low mortgage rates.

The Fed has taken steps to stimulate the economy and stoke inflation but, thus far, those efforts have yet to show themselves fully. Should inflation rates begin rising, mortgage rates are expected to jump. 

Geopolitical Concerns

Tensions in the Gaza Strip; between Ukraine and Russian; and, in Africa each affect this month's mortgage rates. In general, as nations move closer to war, U.S. mortgage rates improve. This is the result of an investing pattern known as a flight-to-quality.

"Flight-to-Quality" describes, during periods of economic or political uncertainty, the flow of money from risky assets toward safe ones. Investors seek safe assets to protect their principal investments, and to shield against loss.

So, because mortgage bonds are among the safest investment classes in the world, 30-year mortgage rates tend to improve when war is imminent; or, when large global economies face an uncertain future.

This is another reason mortgage rates moved lower in October. In November, rates could begin rising.

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Best Regards,

Eitan Shafshak

Mortgage Loan Officer

Tel: 702-998-9746

Cell: 702-265-2137

Fax: 702-475-3717

eshafshak@gmail.com

Great Articles about Berkshire Hathaway!

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http://www.cnbc.com/id/102081285

http://www.8newsnow.com/story/26598354/people-worried-about-jumping-into-las-vegas-housing-market

Great Article on PMI

I received this great information in an email today from one of the lenders that my clients have used in the past.  I thought it was worthy of sharing with you!

In mortgage industry, the term Private Mortgage Insurance is quite familiar to all. Potential borrowers seek help from a financial firm to own their dream home. While getting that help, people facing cash problem might have to bear the extra burden of Private mortgage insurance policy. Let us discuss the ins & outs of this policy & try to learn the benefits from the point of view of both borrowers & lenders.

What is PMI

Private mortgage Insurance or PMI is basically treated as a risk oriented insurance policy or a risk-management instrument. In case of a mortgage loan , this policy saves the interest of lender if the borrower fails to make the due payments.

Why lenders prefer PMI

When a person applies for home loan, the lender first evaluates the financial condition of that person very specifically. If the person can’t afford the downpayment for at least 20% or do not have enough equity, then he is required to pay PMI along with the monthly payments. Usually, lenders ask borrowers to buy PMI for loans that are more than 80% of LTV or loan-to-value ratio.

The risk for the lender becomes greater when the percentage of the downpayment reduces. PMI allows the borrower to pay the downpayment as low as 3% and as high as 19.99%. Homebuyers with low cash in hand will be benefited by this process as they don’t have to gather a huge amount for obtaining the mortgage. PMI can be paid monthly or at closing (lender specific) till the home equity touches the risk free level.

Despite of the easy obtainable facility, borrower must also know some facts. They are paying a policy premium (PMI) which offers zero protection to them. This policy is mainly beneficial for the lenders as it is protecting the lender’s investment , not the property.

Types of mortgage insurance (MI) & who needs it

Home buyers with less than 20% downpayment in hand are required to purchase PMI.

There are the types of MI -:

a) Bought from Government – MI purchased from government & specifically designed for special loans like Federal Housing Administration (FHA), Veterans Administration (VA) etc.

b) Bought from private sectors – MI purchased from private sectors is called PMI. Typically PMI is meant for conventional loans only.

c) Lender paid – Mortgage insurance paid by the lender is called Lender Paid Mortgage Insurance(LPMI). Lender added up the cost of MI with interest rate. This is tax-deductible as it is financed by lender through interest payments.

Depending on the payment frequency, MI also can be categorized into the following segments :

a) Annual – Policy premium can be paid once a year. It can also be paid at closing only in 1′st year of the loan term.

b) Monthly – Generally the premium is payable in monthly basis. Upfront cost is lower but the monthly premiums are comparatively higher than others.

c) Single-premium – In this case, 3% to 5% of the loan amount is payable at closing. Policy must be remain in force till the loan is refinanced or equity reaches to 78% of the loan amount. Refund will be made for unused premiums.

The cost & payment method of PMI

The cost of PMI depends upon various factors. Notably, The amount of the loan is the main factor. The higher it is, the premium will also be high. The downpayment amount & credit score play a significant role in PMI cost determination. The cost increases gradually as both the said factors are lowered. Fixed rate mortgage has lower cost rather than adjustable rate mortgage. We can list up the factors as given below :

1)Credit score
2)Type of the property (primary, second or investment property)
3)Downpayment size
4)Term of the loan
5)Loan-to-value ratio(LTV)
6)Loan type (fixed or adjustable)
7)Loan amount
8)Lender’s preference of policy cover

Most homebuyers add up PMI premiums with monthly mortgage payments. The lender then pays the premium from the escrow account.

Cancellation of PMI

After making the monthly payments on time, when the equity value reaches 22% , the borrower can stop paying PMI. The lender must be notified about this along with a proof. An independent appraiser can be hired to get the report. At the time of this process, it is required to have the payment history that is void of 30 days/60 days delinquencies within 1year/2year of the cancellation request.

How to avoid PMI

Considering different aspects of PMI, the borrower who don’t like to obtain the option may choose some other steps to avoid it. These alternatives are :

·         Look out for the VA loan option if you are a veteran. VA loans do not come up with PMI.

·         Get help from family members like parents & submit 20% or more as downpayment.

·         Choose to pay higher rate of interest. The excess amount from the monthly payment will be divided between the planned term of occupancy.

·         Look out for special offers from the banks. These offers may be available to the special professional persons like doctors, teachers or lawyers.

·         Choose combination loan that consists of first mortgage 80%, second mortgage 10% & down payment as low as 10%.

The PMI has its own unique advantages too. PMI helps to obtain mortgage with lower downpayment and this is it’s primary advantage. Lenders & insurers have flexible loan plans for local communities which is obtainable to the low income people. Lenders & insurers provide consultation which helps the new home buyers to predict the possible monthly payments. Aside from this, PMI also have tax savings opportunity on the annual tax returns. Easier cancellation process gives the chance to build co-ordination between borrower & the lender. Either of the two parties can inform the other about the increasing home equity.

After considering the above given advantages PMI has to offer, the prospective home buyer can find a breathing space in this competitive mortgage market.

Best Regards,

Eitan Shafshak

Mortgage Loan Officer

Tel: 702-998-9746

Current Market Report

The Current Las Vegas Market

Closed sales for Year-To-Date 2014 remain 12% behind last year as we enter into October. The median sales price of an SFR improved a mere .8% to $201,600 while the average closed sales price dropped 4.5% to $239,185.   It’s also taking longer to close escrows as the days on market (DOM) continues to increase.  The average DOM for short sales increased to 169 days compared to 156 last month.

Overpricing Overview – October

It’s again time to address the overpricing issue head on! The average listing price of an available SFR Equity home is nearly $160,000 more than the average closed sales price. The average listing price of all available equity properties dipped to $411,926 compared to the average listing price of $337,704 for new listings. This market continues to carry a large number of older, very overpriced listings in inventory that do not have a prayer of selling anytime soon.

Current inventory levels increased to 3.5 months for SFR and 3.8 months for condos and townhouses.  That means that a seller and listing agent will most likely only get one shot at pricing a new listing correctly. A year or so ago a seller might be tempted to list their home a few thousand dollars high and then “nibble” the price down over the next few days or weeks. Do NOT try that today!! It will most likely result in exposing the home to the correct buyers who will not respond to the over pricing. Then, once the price drops and corrections have been made – those buyers will probably no longer be available as they will have moved on to competing, but properly priced homes. Some communities may be better or worse due to supply and demand – which must be taken into consideration. However, do you really want to play Russian roulette with your listing? Or, is it better to price it to sell from Day One?

Overpriced housing markets---heading for a bubble?

Take a look at this short video about the top 5 overpriced housing markets...are we one of them?

Top 5 Overpriced Housing Markets

Excerpt from "The Las Vegas Market Letter" dated September 22, 2014

Here is a quick snippet from a market update letter for the Las Vegas area.  Statistics are just that, however, there is some very good information in this excerpt for both buyers and sellers!  To access the whole letter, there is a fee but it can be found at www.HomeBuildersResearch.com under the reports tab. 

The median price of the resale closings in August was $174,000, a year to year INCREASE of $9,000

 

or 5.4 percent. If we segment the August resale transactions by product type, the median price of the

single family homes was $188,850, and the median price of the condo/townhomes was $91,000.

 

On September 16th, there were 12,663 total SFR listings in the metropolitan area. There were 7,783

available without an accepted offer. There were only 295 REO and 1,027 short sales listings available

without an accepted offer.

 

Brokers have told us there are plenty of people LOOKING at homes, but many won’t sign a purchase

contract. This suggests that there is a healthy dose of price resistance taking place. We also recently

talked to a broker we have known for 25 years, who stated she felt that many sellers in her target submarket

in Henderson were overpriced. Consumers have become very discretionary in their buying, and

will not pay for overpriced homes. We were also told that a broker for one of the largest real estate

 

companies instructed his agents that the market has changed, and it has become a “buyers’ market”, and

it would be prudent if many of his agents should start re-evaluating their business plan and make

adjustments. 

Fall is a great time to List and Sell your home!

As Fall approaches and our desert cools off a feeling of excitement fills the air.  Buyers are more willing to trek around the Valley looking at homes to settle into before the holiday season hits.  If you have been considering selling your home, now is a great time to contact me and request a complimentary market analysis of your home's value.  Across the Las Vegas Valley, we have seen many zip codes have double digit increases in the past 12 months.  Many homeowners who were once under water are experiencing equity they didn't think possible. 

Give me a call today and let's take a look at what your home may be worth and if now is the right time for you to sell.

Las Vegas Real Estate Market Report 3/12/14

This is the latest Las Vegas Real Estate Market Report for the week,

data is obtained from the Greater Las Vegas Association of Realtors MLS.

Single Family Residence (SFR)                                   

Available – 6,487 (+7, Last Week 6,480)

Under Contract – 7,111 (+147, Last Week 6,964)

Days of Supply – 28 (+0, Last Week 28)

Short Sales – 4,951 (-27, Last Week 4,978)

                                     

Condominiums and Town Homes (CONDO/TH)                               

Available – 1,835 (+30, Last Week 1,805)

Under Contract – 1,242 (+36, Last Week 1,206)

Days of Supply – 45 (+0, Last Week 45)

Short Sales – 986 (+2, Last Week 984)

                                    

Combined SFR + CONDO/TH                                

Available – 8,322 (+37, Last Week 8,285)

Under Contract – 8,353 (+183, Last Week 8,170)

Days of Supply – 30 (-1, Last Week 31)

Short Sales – 5,937 (-25, Last Week 5,962)