Borrowers Opt for Shorter Loan Terms

Record-reaching low interest rates have prompted more home owners to shorten the terms of their mortgages. Thirty-four percent of refinancers changed their loan to a 20- or 15-year mortgage during the first quarter -- the highest level in seven years, Freddie Mac reports.
Mortgage companies are also reporting a higher demand for shorter-term mortgages. For example, LendingTree reports that 15-year mortgages have increased 30 percent from a year ago.
Quicken Loans recently debuted a product that allows borrowers to select the term of their mortgage. The most popular mortgage term selected is 8 years, followed by 13 years.
"Mortgage-burning parties are back," Bob Walters, chief economist for Quicken Loans, told USA Today.
Shortening the term of a mortgage can save home owners  "tens or even hundreds of thousands of dollars in interest costs," Keith Gumbinger, vice president of HSH Associates, told USA Today. Some borrowers are finding that refinancing into a shorter term may not even increase their monthly payments, since 15-year rates are so low.
However, some borrowers who want to refinance are finding they’re being shut out, experts say. Home owners who don’t have a credit score of 720 or higher or don’t have at least 20 percent in home equity may not qualify for the lowest rates. 
Source: “More Home Owners Shorten Mortgage Terms,” USA Today (Aug. 15, 2011)

Home Ownership Trumps Renting in 74% of Cities, Survey Says

Low interest rates and falling home values have made home ownership make more financial sense than renting in most major cities, according to Trulia’s Summer Rent vs. Buy Index.
Trulia found that buying a home is cheaper than renting in 74 percent of the country’s 50 largest cities. Trulia compared the cost of buying and renting a two-bedroom apartment, condo, or townhouse in the nation’s 50 largest cities.
Buying a home particularly in cities plagued by foreclosures proves to be much cheaper than renting, according to Trulia. Below are the top five places where buying beats renting by the most, as well as the few cities where renting may make more sense.
Top 5 Cities Where Buying Beats Renting
1. Las Vegas
2. Detroit
3. Mesa, Ariz.
4. Fresno, Calif.
5. Arlington, Texas
Top 5 Cities Where Renting is Cheaper Than Buying

1. New York
2. Fort Worth, Texas
3. Omaha, Neb.
4. Seattle, Wash.
5. San Francisco, Calif.
Source: “Home Ownership Beats Renting in 74 Percent of Major U.S. Cities,” Trulia (Aug. 16, 2011)
 

News On Mortgage Rates

More Seller Get Loan Modification and Seems to be Helping

In June, the Home Affordable Modification Program helped 657,044 home owners avoid foreclosure through permanent loan modifications — that’s up from 633,459 in May, according to Treasury Department statistics released Friday.

However, while the number has grown, the numbers still fall short of the initial goal to help 3 million to 4 million borrowers through HAMP, which since 2009 has reduced mortgage payments to help borrowers avoid foreclosure. For more information you can check out the Home Foreclosure Fighter program. Just Call Now: 877-846-2701

For underwater sellers, the ones who owe more on their mortgages than their home is currently worth — about 7000 have participated in a Load Modification, which is up from 4,911 last month, the Treasury Department reported late last week. For borrowers who qualified to have their loan balances reduced, they’ve seen median principal reductions of $67,751, or 30.7 percent. Many people are buying bank out property, you can give it a try free.Foreclosure.com - 7 Day FREE Trial


We continue to see a slight improvement in home prices and a decline in mortgage defaults as our foreclosure programs reach more borrowers upstream in the process,, Housing and Urban Development assistant secretary. “But we have much more work to do to help the market recover and to reach the many households there and across the nation who still face trouble."

Young Generation Hit Hard by Recession

The recession has hit the younger generation hard and is forcing them to delay many major life changes and purchases, according to a new survey. About 44 percent of Millennials — people aged 18 to 29 — say they will have to delay buying a home due to economic factors, according to a survey conducted by The Polling Co. Inc./WomanTrend.

About 75 percent say they have or will delay a major life change or purchase due to economic factors, and 30 percent say the bad economy has prompted them to delay changing jobs or cities. What’s more, nearly 25 percent say they will delay starting a family, and 18 percent say they will delay getting married. There is a great opportunity to profit from the recession. The foreclosure market can be lucrative. You can Find Foreclosures Nationwide with one click.

Such delays by the younger generation has started to affect household formation. Many young professionals are moving back in with their parents to curb costs, which has caused household to grow in recent years after facing decades of declines. If information is needed regarding a loan modification you can Call Now: 877-846-2701

"The impact of the poor economy, in human terms, has been devastating. This is especially true for young Americans, whose lives have been interrupted and dreams put on hold due to the lack of economic opportunity," says Paul T. Conway, president of Generation Opportunity.

Will the S&P Downgrade Affect Interest Rates?

Standard & Poor downgraded the U.S.'s credit rating on Friday, despite Congress reaching a deal in the final hours on the debt ceiling crisis last week. And now many of your customers may be asking: What does this mean for interest rates?

“The impact on your wallet of the Standard & Poor's downgrade of the nation's credit rating is similar to what would happen if your own credit score declined:The fact is more insurance and better coverage is important. You can Call Now: 877-639-0067

The cost of borrowing money is likely to go up,” the Washington Post explained in the after the decision.to downgraded the U.S.'s top-notch AAA credit rating for the first time in history, moving it down to AA+; the rating reflects a downgrade in S&;P’s confidence in the U.S. government’s ability to repay its debts over time. It’s not clear, however, whether S&P’s downgrade will instantly effect rates, analysts say. At the same time, why worry? Take advantage of Daily deals on the city's best stuff only from Groupon. Restaurants, spas, events & more, 50%-90% off!

The 10-year Treasury note is considered the basis for all other interest rates. And “the downgrade could increase the yields on those bonds, forcing the government to spend more to borrow the same amount of money,” the Washington Post article notes. If you need information on loan modifications simply Call Now: 877-846-2701 “Many consumer loans, such as mortgages, are linked to the yield on Treasurys and therefore would also rise.”

Mortgage Forecast

Santander reported a 21% decrease in gross lending between the first half of 2010 and H1 2011, a fall in £2.6bn. Barclays reported £7.6bn in gross mortgage lending for the first half of 2011, down on the £8.5bn it did in the first six months of 2010, a 10.6% decrease.Save 10% on select bathroom faucets at eFaucets.com. Use Coupon Save10 at Checkout.

Northern Rock reported gross mortgage lending of £1.5bn, down 25% from the £2bn reported in the first half of 2011.

The Council of Mortgage Lenders revised its gross mortgage lending forecast in June from £135 to £140bn for the year which the Association of Mortgage Intermediaries deemed as “unlikely to be achievable”. Mortgage Introducer spoke to various sources on whether the CML, in light of recent half-year results, would downgrade their forecast or remain true to their current prediction.

A spokeswoman at Barclays, said: “Despite experiencing a decrease in gross mortgage lending for H1 2011, our figures remain on plan and significantly above our stock share. H1 2011 saw the return of more lenders and aggressive competition in the market which has impacted lending figures.

“The CML’s figures may have been slightly optimistic due to the stagnant economy and lack of base rate movement so far this year. As this is now expected to continue throughout 2011, Barclays expects gross mortgage lending for 2011 to be broadly in line with that of 2010.”Moving Made Easy!

David Sheppard, managing director of Perception Finance, said: “On the basis that the market has had a bounce in the last month and a half, the CML will look to hold steady on their forecast for now.

“Primarily of course the forecast is lending over the course of the whole year and not just a couple of months. Whilst there might be some lenders where the lending volumes have declined, there are also going to be lenders where their lending volumes have increased within that time frame.

“Of course Santander was a very heavy player in the past year. If you’re comparing like for like with the lenders now in the market and being more aggressive, Santander and Barclays’ volumes are clearly going to go down whereas other lenders want a larger piece of the pie than they had before.

“There’s more competition now for that business. Even on our own figures, last year a very high percentage of all mortgage lending was placed with Santander, whereas this year it has been more balanced across all lenders. And, if anything, Santander has actually slipped down the order a little bit because of the fact that there are other lenders who want to compete more.

“Another factor is that Santander isn’t really in the Buy-to-let market which is another part of the market which has enhanced of late.

“While Barclays does buy-to-let mortgages, it is not overly competitive in that regard. So where buy-to-let is showing some recovery, those lenders that aren’t in that market will also see their percentages drop.Home Bargains! Sign up for your Free 7-day trial at RealtyTrac.”

 Source: Yuan Phoon