Mortgage Rates End Week Unchanged With Light Volume And Treasury Auctions Dominating Activity

31 12 2010

Treasury auctions dominated mortgage rates this week. Light trading volume during the final week of the year made the  reaction to news was often larger than usual. Despite the volatility, though, two strong Treasury auctions roughly offset one very weak auction, and mortgage rates ended the week nearly unchanged.

During 2010, mortgage rates dropped to record low levels, before moving higher over the final two months of the year. The primary reason for the recent increase in mortgage rates has been stronger economic growth, and the reports released this week continued the trend. The Chicago PMI manufacturing index jumped to the highest level since 1988, far exceeding the consensus forecast. Weekly Jobless Claims unexpectedly fell below 400K to the lowest level since July 2008. Pending Home Sales, a leading indicator for the housing market, also beat the consensus with an increase of 4%.

The National Association of Realtors (NAR) released their forecast for next year. Overall, they see a steady improvement from 2010. The NAR projects that existing home sales will increase 8% in 2011. New Home Sales are expected to rise 24%, and Housing Starts will increase 21%. According to the NAR, “All the indicator trends are pointing to a gradual housing recovery.” Supporting the NAR forecast, mortgage rates will start 2011 at the lowest level to begin any year in decades.


Real Estate Appraisals: Computerized Real Estate Appraisals Have Been Criticized As Producing Low Home Valuations

30 12 2010

“…criticism is being leveled at computerized real-estate appraisals, which depend on models that use prices from home sales and other data to determine the value of a house. Because of the volatility in the housing market, they are underestimating prices, some homeowners, real-estate agents and fee appraisers say…”

Lenders use computerized appraisals primarily for home-equity loans, preapprovals for mortgage refinancing, loan modifications and mortgage originations of less than $250,000. Automated appraisals are cheaper and faster than in-person appraisals. They run as little as $20, whereas appraisals done by people can cost hundreds of dollars.

The computerized models are used as a check on in-person appraisals, which often were too generous during the housing boom, according to federal banking regulators and state attorneys general. The regulators said banks often held sway over appraisers, encouraging them to value homes at certain prices in exchange for future business. In the wake of the housing bust, regulators imposed tough new rules, prohibiting banks from picking individual appraisers for individual properties.

“The selling point was that [computerized appraisals] were faster and not prone to bank pressure,” says Steven Kane, a Colorado commercial and residential appraiser who is the author of two books on how to apply automated valuation models.

Computerized appraisals calculate a home’s value by using an index derived from historical repeat-sales data, or sales records of homes with similar property characteristics, such as square footage and the number of bedrooms and baths. In-person appraisals don’t incorporate as much transactional data as a computer model.

For more:

FHA 203k Renovation Loans: Basic Costs, Fees And Loan-To-Value Calculations

29 12 2010

The Approval Process For An FHA 203k Renovation Loan Is Very Similar To A Standard FHA Loan With The Added Security Of A HUD-Approved Consultant

29 12 2010

The approval process for an FHA 203k Renovation Loan is very similar to standard FHA loans. HUD requires the prospective homebuyer or homeowner to meet with a HUD-approved consultant, who reviews “required vs. desired” improvements and then prepares a “work write-up”. The consultant is a very valuable part of the transaction as they interface with the contractor and insure that required work is performed.

FHA 203k Renovation Loans Can Be Used To Enlarge A Master Bathroom, Create An Upstairs Enterainment Room And Adding A Downstairs Bedroom

28 12 2010

Enlarging The Master Bathroom

Knocking through into a spare bedroom or unused office to get extra space. It is pointless missing out on a luxurious bathroom just because you may need the spare bedroom once in a blue moon. A full service contractor who is both the builder and plumber can save money on this type of project.

Upstairs Entertainment Room 

Convert a spare room into an entertainment room by knocking out a wall to create more space. Interior Designerss will be able to complete the whole job for you and it could really improve home life.

Add A Downstairs Bedroom

 A large room downstairs that is not being fully utilised can be converted into a bedroom allowing a small room upstairs to become an office or study.

FHA 203k Renovation Loan Volume Has More Than Tripled Since 2007 As Home Equity Lines Of Credit For Home Improvements Have All But Disappeared For Homeowners

27 12 2010

FHA 203k Home Renovation Mortgage Basics: An Overview Of The FHA 203k Standard And Streamline Loans

27 12 2010