Homebuilder Confidence Moves To 5-Year High

Posted on May 16, 2012 by tverani

NAHB HMI Homebuilder Confidence is on the rise once again.

After a brief dip in April, the National Association of Homebuilders reports that the Housing Market Index rose 5 points in May to 29. The increase marks the sharpest climb in homebuilder confidence on a month-to-month basis in 10 years, and raises the index to a 5-year high.

The Housing Market Index is scored from 1-100. Readings above 50 indicate favorable conditions in the single-family new home market overall. Readings below 50 indicate poor conditions.

The HMI has not been above 50 since April 2006.

The Housing Market Index itself is a composite reading as opposed to a straight-up homebuilder survey. The published HMI figure is a compilation of the results of three specific questionnaires sent to NAHB members monthly.

The survey questions are basic :

How are market conditions for the sale of new homes today?
How are market conditions for the sale of new homes in 6 months?
How is prospective buyer foot traffic?

This month, builders are reporting strong improvement across all three surveyed areas. Current home sales are up 5 points; sales expectations for the next six months are up 3 points; and buyer foot traffic is up 5 points to its highest point since 2007.

With mortgage rates low and home prices suppressed, the market for new homes is gaining momentum, a conclusion supported by the New Home Sales report which shows rising sales volume and a shrinking new home inventory nationwide.

The basics of supply-and-demand portend higher new home prices later this year — a potentially bad development for buyers of new homes in NH and nationwide. With demand for new homes rising, builders may be less likely to make sale price concessions or to offer “upgrade packages” to buyers of new homes.

If you’re shopping for new construction in or around Derry , therefore, consider moving up your time frame. Home affordability is high today. It may not be tomorrow.

There are great programs and rates available. Give me a call today to benefit from the experience of a local lender!

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

For information purposes only and is not a commitment to lend as defined by Regulation Z, Section 226.2.　 Programs, rates, terms and conditions are subject to change at any time.　 Availability dependent upon approved credit and documentation level, acceptable appraisal, and market conditions.　 Residential Mortgage Services, Inc. is a Maine Corporation headquartered at 24 Christopher Toppi Drive, South Portland, ME　 04106.　 NMLS ID# 1760; ME Supervised Lender License No. SLM2537; Licensed by the New Hampshire Banking Department, NH Mortgage Banker License No. 8816-MB; MA Mortgage Lender License No. MC1760; MA Mortgage Broker License No. MC1760; CT Mortgage Correspondent Lender License No. 14352; RI Lender License No. 20092626LL; RI Loan Broker License No. 20122931LB; NY Mortgage Banker License No. B500942; FL Mortgage Lender License No. MLD232

Home Affordability Getting A Springtime Boost From Greece

Posted on May 15, 2012 by tverani

Greece affects U.S. mortgage rates Home affordability is receiving a boost from across the Atlantic Ocean this spring.

For the third time in as many years, a weakening Eurozone is pushing May mortgage rates to new lows throughout NH and nationwide.

The story centers in Greece and begins in 2010.

2 years ago, it was uncovered that successive Greece governments had purposefully misreported the nation-state’s economic statistics in order to meet European Union standards. The fraudulent data had permitted Greek governments to spend beyond their means while hiding deficits from EU auditors.

The realization that Greece was heavy in debt with little means to repay its creditors resulted in a massive bailout from the IMF and the rest of the Eurozone nations. The terms for Greece said that, in order to receive its €110 billion aid package, Greece would be required to enact strict spending controls.

This is known as “austerity” and the deal was met with outrage by the Greek public. There’s been general social unrest ever since and, on May 6 of this year, Greece held a special “early election” to elect all 300 members to its legislature.

No party won majority in the elections.

7 different groups garnered seats in the parliament last week with anti-austerity groups faring well. It’s spurred concern that Greece will end its bid for fiscal restraint, and that Greece may choose to leave the 17-nation Eurozone.

The uncertainty surrounding Greece is helping U.S. mortgage rates to make new lows. As concerns mount for the future of Greece — and the Eurozone, in general — global investors seek safer markets for their money.

The U.S. mortgage-backed bond market is one such market.

With the implied backing of the U.S. government, mortgage-backed bonds are viewed as nearly risk-less and investors clamor for safety of principal during uncertain times. The boost in demand drives bond prices up and bond yields down, resulting in lower mortgage rates for home buyers and refinancing households of Londonderry.

So long as Greece struggles to form its government and flirts with a sovereign debt default, mortgage rates should continue to face downward pressure. U.S. rates may not fall week after week, but analysts expect any rise in rates to be muted.

There’s more to choosing a lender than just getting a rate quote. Working with a lender who understands the effects of the global economy on your local mortgage rate is important.

For more information, call me today!

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

What’s Ahead For Mortgage Rates This Week : May 14, 2012

Posted on May 14, 2012 by tverani

Homebuilder Confidence Mortgage markets worsened slightly last week as positive U.S. economic news overshadowed growing concerns for the Eurozone’s future. Political and economic issues continue to weigh on Greece and Spain, and it’s still unknown how France’s new President will change that nation’s fiscal direction.

Conforming mortgage rates in NH edged higher on the week overall.

Last week was light on economic data, but the figures released suggest an improving U.S. economy.

For example, the Bureau of Labor Statistics reported 3.7 million job openings nationwide this past March, marking the highest amount since July 2008. Voluntary separations (i.e. “quit jobs”) increased, too — also at levels not seen since 2008.

Voluntary separations may hint at labor market improvement because employees rarely leave a steady-paying job without the prospect of a new job ahead. Furthermore, the four-week moving average of first-time unemployment claims fell for the first time in a month.

The jobs market is one of two key sectors expected to lead the economy forward this year.

The other is housing and, this week, there will be two key housing reports for Wall Street to review. The first is Tuesday’s homebuilder confidence survey from the National Association of Homebuilders. The second is Wednesday’s Housing Starts data for April.

Mortgage rates may also be affected by the Tuesday release of the Retail Sales report and Consumer Price Index report; and, by the Federal Reserve’s Wednesday release of the FOMC Minutes from its last meeting.

For home buyers and mortgage rate shoppers, mortgage rates remain at all-time lows.

However, low mortgage rates may not last much longer — especially if the Eurozone can reverse course on its ailing economies.

Mortgage rates remain volatile and sensitive to changes in market conditions. If today’s mortgage rates fit your budget, consider locking in.

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

Using a Gift to Purchase a Home

Posted on May 9, 2012 by tverani

This week tip is about “gift money”. In today’s market, we see a lot of buyers receiving gifts from family members to help with the purchase of a home. It is important to understand that gift money must be managed and documented properly in order for it to be acceptable for mortgage underwriting.

If a borrower is receiving a gift, the donor must be willing to provide some documentation to verify that the money is “in deed” a gift, and is not expected to be paid back. This includes the completion of a gift letter, and a “paper trail” for the gift funds. The paper trail can sometimes be as simple as a copy of a cancelled check, or bank statements showing a transfer.

In addition, the amount of the gift can be limited based upon the loan program. Most government loans allow unlimited gift money. However, conventional loans are a bit different. For example, on a conventional loan, most borrowers will need at least a 5% down-payment, from their own funds, before they can use additional gift funds. An exception to this rule is if the borrower received a full 20% down payment gift.

Also note, that gift funds are generally not acceptable to be used a “reserves”.

NH Housing Finance Authority loans require the borrower to have a minimum of 1% of their own money before using gift funds.

Un-sourced funds always cause a problem. If you have been saving “cash at home”, you should speak with your lender before doing anything with that money. If we can’t “trace it”, we can’t use it!

Working together with a knowledgeable and thorough lender is the key to creating a successful and less stressful transaction. I welcome the opportunity to assist you with the financing of your new home! Please feel free to call or e-mail me anytime, I’m ready and available to help.

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

Have a great week!

With LIBOR Low, Don’t Rush To Refinance Your ARM

Posted on May 9, 2012 by tverani

Pending ARM Adjustment

Is your mortgage scheduled to adjust this season? You may want to let it. This year’s ARM-holding homeowners in NH are finding out that an adjusting mortgage may be the simplest way to get access to today’s low mortgage rates — without paying the closing costs.

Currently, conventional adjustable-rate mortgages are adjusting to near 3.00 percent.

If your home is financed via an adjustable-rate mortgage, you’re likely cognizant of your loan’s life-cycle. At first, your ARM’s initial mortgage rate is agreed upon between you and your lender, a rate that both parties agree will remain in place from anywhere from one to 10 years, with periods of five and seven years being most common.

Then, after the initial “teaser rate” expires, the mortgage’s mortgage rate adjusts according to a pre-determined formula — one that’s also agreed upon at closing. The loan is then subject to an identical mortgage rate adjustment every 12 months thereafter until the loan is paid in full.

The most common conforming mortgage adjustment formula is to add 2.25 percent to the then-current 12-month LIBOR rate.

Today’s 12-month LIBOR is 1.05% so, as a real-life example, an adjustable-rate mortgage that’s leaving its teaser rate period this week would adjust to 3.30%.

If you’re a homeowner who took a 7-year ARM in 2005, or a 5-year ARM in 2007, your newly-adjusted mortgage rate should be roughly 2 percent lower than your initial teaser rate. On a $250,000 mortgage, a 2 percent mortgage rate reduction yields $298 in monthly savings.

Therefore, if you have an adjustable-rate mortgage that’s due to reset, don’t rush to refinance it. For at least one more year, you can benefit from low mortgage rates and low payments.

As for next year’s adjustment, however, that’s anyone’s guess.

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

Reverse Mortgages : Pros And Cons

Posted on May 8, 2012 by tverani

http://www.youtube.com/watch?v=S9oQ4XfG7JY

Despite several big-name banks pulling the product from their respective home loan offerings, reverse mortgages remain a popular mortgage choice among homeowners aged 62 or over.

A reverse mortgage is exactly what it sounds like — a mortgage in reverse. Rather than borrow a fixed amount of money then pay that loan balance down to zero as with a “forward” mortgage, a reverse mortgage starts at a given loan balance and works its way up as scheduled payments are added to the existing loan balance.

This 4-minute piece from NBC’s The Today Show highlights a few pros and cons of reverse mortgages, and the reasons why you may want to consider one, including :

No mortgage payments are ever due on your home
There is no credit check required for a reverse mortgage
There is no income requirement to qualify for a reverse mortgage

There are some basic qualification standards for the reverse mortgage program including a requirement that all borrowers on title must be 62 years of age or older; and that the subject property be a primary residence. Loan fees can also be higher than with a conventional-type mortgage.

If you meet the qualification standards, though, with a reverse mortgage, you have flexibility in how your home equity is distributed to you. You can receive a lump-sum payment, elect for monthly installments over time, create a line of credit, or a combination of all three.

Like all mortgages, reverse mortgages are complex instruments. That’s one reason why all reverse mortgage borrowers are required to attend counseling — the government wants you to be certain that you understand the nuances of the reverse mortgage program.

Your lender will want you to understand the program, too. If you are considering your options with a reverse mortgage, give me a call. I’m happy to help you begin to understand the program and help you determine if it may help you meet your financial goals.

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

Planning For A Memorial Day Closing

Posted on May 4, 2012 by tverani

Memorial Day Closings Planning to close on your home at the end of May? Plan ahead. Memorial Day is coming and the holiday may delay your closing.

Memorial Day marks the unofficial start of summer and the 3-day Memorial Day weekend is a popular vacation time in real estate-related industries.

Real estate agents tend to take time off because fewer of their clients are actively home shopping on a holiday weekend; mortgage lenders are closed because banks don’t operate on a federal holiday; and, title agents are often away from the office because the former two groups aren’t working.

But what’s supposed to be a 3-day weekend is actually a 4.5-day one. This is because many people leaving for a Memorial Day vacation will not go to work on the Friday before the holiday, and then getting back into the “work groove” on Tuesday can be a half-day affair.

Therefore, if you’re under contract to buy a home in Derry , or to sell one; or if you have a refinance in progress that’s expected to close at month-end, there are some steps you should take to get pro-active with your closing. If you’re going to lose 4-and-a-half days at the end of the month, you’ll want to try to make those days up while the month is still young.

Here are 3 quick tips to speed up your closing and approval.

First, get your homeowners insurance policy picked out. Do your comparison shopping, select an insurer, and then prepay your first year of insurance, effective your closing date. Pay by check and not credit card, if possible, to avoid harming your credit score.

Provide your proof of payment to your lender immediately.

Next, if you’re using a Power of Attorney, have your documents signed by all interested parties and submit them to your lender for review. Don’t assume that your attorney’s Power of Attorney documents will be acceptable to a bank — banks require specific verbiage. If the documents are rejected, make the requested fixes and resubmit.

Banks do not compromise on Power of Attorney letters.

And, lastly, if you’re accepting gifts or using retirement funds for your downpayment, be sure to have your paperwork reviewed and on file with your lender as soon as possible. Do not wait to withdraw funds until just before closing, either. Have everything in the proper checking account at least one week in advance, and ready for your closing.

There are other steps you can take, too, to make sure your end-of-May closing goes smoothly and they all amount to “preparedness”.

When you’re asked for paperwork, provide it quickly. When you’re asked to sign a document, sign it on the same day. When you’re needed to attend a home inspection or an appraisal, do it during your first available opening.

Just leave as little as possible to the “last minute”, and everything should go well.

If you’ve bought a home recently, and would like to close this month–give me a call. We can still accomdate May closings!

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

A Simple Explanation Of The Federal Reserve Statement (April 25, 2012)

Posted on April 25, 2012 by tverani

Putting the FOMC statement in plain English The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday.

For the fifth consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.

The Fed Funds Rate has been near zero percent since December 2008. It is expected to remain near-zero through 2014, at least.

In its press release, the Federal Reserve noted that the U.S. economy has been “expanding moderately” since the FOMC’s last meeting in March. Beyond the next few quarters, the Fed expects growth to “pick up gradually”.

This key phrase will likely be repeated by the press. It suggests that the economy is no longer contracting; instead moving along a path of slow, consistent expansion.

In addition, the Fed acknowledged that “strains in global financial markets” continue to pose “significant downside risks” to long-term U.S. economic outlook. This is in reference to the sovereign debt concerns of Greece, Spain and Italy, and the potential for a broader European economic slowdown.

The Fed’s statement included the following notes :

The housing sector remains “depressed”
Labor conditions have “improved in recent months”
Household spending has “continued to advance”

Also, with respect to inflation, the Fed said that the higher oil and gasoline prices from earlier this year will affect inflation “only temporarily”, and that inflation rates will return to stable levels soon.

At its meeting, the Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs. The Fed re-affirmed its intentions to hold the Fed Funds Rate at “exceptionally low” levels through late-2014, and to buy mortgage-backed bonds in the open market.

Immediately following the FOMC’s statement, mortgage markets improved slightly, pressuring mortgage rates lower in Manchester and nationwide.

The FOMC’s next scheduled meeting is a two-day event slated for June 19-20, 2012.

If you are in need of assistance with mortgage financing, give me a call!

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

New Home Sales Revised Higher In February; Slip 7% In March

Posted on April 25, 2012 by tverani

New Home Sales 2011-2012 Sales of new homes ticked lower in March, unexpectedly.

Based on Census Bureau data, the number of new, single-family homes sold in March slipped 7 percent from February — the largest one-month drop in more than a year.

On a seasonally-adjusted, annualized basis, buyers in NH and nationwide purchased 328,000 newly-built homes last month. The decrease in sales from February to March can be attributed, in part, though, to a massive upward revision in February’s figures.

Last month, the Census Bureau had reported 313,000 new home sales in February on a seasonally-adjusted, annualized basis. This month, those sales were re-measured to be 353,000 — an increase of 13 percent.

January’s sales were revised higher, too.

The long-term trend in the market for new homes remains “up”. This is no more apparent than when we look at the available new home inventory.

At the close of March, just 144,000 new homes were available for purchase, down 2,000 from the month prior and representing the most sparse new home housing supply since at least 1993, the year that the Census Bureau starting tracking such data.

At the current pace of sales, the new home housing stock would be sold out in 5.3 months. A six-month supply is believed to represent a market in balance.

For new home buyers in Londonderry , March’s New Home Sales report does not represent a housing market pull-back. It may represent opportunity, however.

From October 2011 to February 2012, housing data was uniformly strong. Home sales were higher, home supplies were lower, and confidence was rising. In March, it was the reverse. This is normal because growth is rarely linear.

In any market, it’s a few steps forward and a single step back, and housing is likely showing a similar pattern. With mortgage rates still low and builder confidence down, it’s a terrific time to shop new construction.

There are deals to be found for buyers who seek them out. In addition, there are loan programs available to help qualified borrowers lacking large down-payments. Call me today to discuss your options in financing the BUILDING the home of your dreams!

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

The Fed Starts A 2-Day Meeting Today. Make A Strategy.

Posted on April 24, 2012 by tverani

Fed Funds Rate vs Mortgage Rates 1990-2012

The Federal Open Market Committee begins a 2-day meeting today in the nation’s capitol. It’s the group’s third of 8 scheduled meetings this year. Mortgage rates are expected to change upon the Fed’s adjournment.

Led by Chairman Ben Bernanke, the FOMC is a 12-person, Federal Reserve sub-committee. The FOMC is the group within the Fed which votes on U.S. monetary policy. “Making monetary policy” can mean a lot of things, and the action for which the FOMC is most well-known is its setting of the Fed Funds Funds.

The Fed Funds Rate is the overnight interest rate at which banks borrow money from each other. It’s one of many interest rates set by the Fed.

However, one series of interest rates not set by the Fed is mortgage rates. Instead, mortgage rates are based on the prices of mortgage-backed bonds and bonds are bought and sold on Wall Street.

There is little historical correlation between the Fed Funds Rate and the common, 30-year fixed rate mortgage rate.

As the chart at top shows, since 1990, the Fed Funds Rate and the 30-year fixed rate mortgage rate have followed different paths. Sometimes, they’ve moved in the same direction. Sometimes, they’ve moved in opposite directions.

They’ve been separated by as much as 5.29 percent at times, and have been as near to each other as 0.52 percent.

Today, that spread is roughly 3.65 percent. It’s expected to change beginning 12:30 PM ET Wednesday. That’s when the FOMC will adjourn from its meeting and release its public statement to the markets.

The FOMC is expected to announce no change in the Fed Funds Rate, holding the benchmark rate within in its current target range of 0.000-0.250%. However, how mortgage rates in and around Londonderry respond will depend on the verbiage of the FOMC statement.

In general, if the Fed acknowledges that the U.S. economy as in expansion; growing from job growth and consumer spending, mortgage rates are expected to rise. If the Fed shows concern about domestic and global economic growth, mortgage rates are expected to fall.

Any time that mortgage markets are expected to move, a safe play is to stop shopping your rate and start locking it. Today may be one of those times.

Feel free to call me anytime to get more information about mortgage financing!

Tammy Verani
Senior Loan Consultant
NMLS #237643
(603) 232-9617 Direct

tverani@rmsmortgage.com
www.LoansByTammy.com

Residential Mortgage Services, Inc
NMLS #1760
Licensed by the State of New Hampshire Banking Department

tammyverani

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Author Archives: tverani

Homebuilder Confidence Moves To 5-Year High

Home Affordability Getting A Springtime Boost From Greece

What’s Ahead For Mortgage Rates This Week : May 14, 2012

Using a Gift to Purchase a Home

With LIBOR Low, Don’t Rush To Refinance Your ARM

Reverse Mortgages : Pros And Cons

Planning For A Memorial Day Closing

A Simple Explanation Of The Federal Reserve Statement (April 25, 2012)

New Home Sales Revised Higher In February; Slip 7% In March

The Fed Starts A 2-Day Meeting Today. Make A Strategy.

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