Update on 30 Year Mortgage Rate News

Based on Freddie Mac's weekly survey, mortgage rates rose this week, with the average rate on 30-year fixed mortgages climbing above 5%.

Freddie Mac's chief economist said 30 year fixed mortgage rates followed long term bond yields higher as data about the real estate market's recovery remained uncertain.

Demand for real estate, after showing signs of strength in earlier months, has dropped in recently mostly because of the job market. Sales of new homes unexpectedly hit a record low in January.

30 year fixed mortgage rates averaged 5.05% for the week ended Thursday, up from last week's 4.93% average. 15 year fixed mortgage rates were 4.4%, up from 4.33% last week.

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Mortgage Refinance or Home Equity Loan Offers Cooling Off Period

After you sign documents for a mortgage refinance or home equity loan, you can still cancel the loan if you change your mind. 

The law says that lenders must give 3 business days to cancel a mortgage, without any penalty. You have the right to rescind until midnight of the third business day, including Saturday, but not Sunday.

When you sign mortgage loan documents, the lender gives you copies of the right of rescission notice. If you decide to cancel your home mortgage, the notice must be signed and delivered to the lender within the 3 day rescission period.

The right of rescission law does not apply to a home purchase mortgage, or a loan for investment, rental, or vacation real estate. It only applies to a refinance, home equity loan, or second mortgage on an owner occupied principal residence.

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Mortgage News Brief

Our government is supporting a basically insolvent mortgage banking system. Because of the relatively low number of home sales that have generated losses, the outstanding national mortgage debt has not changed much. The problem is that home values backing these mortgages have dropped substantially.

Banks have been unloading toxic mortgages onto the government, who is supporting home prices with the hope of managing the mortgage market long enough that the losses will not engulf the system before the real estate market rebounds. Hopefully, these efforts to stabilize housing will not create a second price bubble.

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Reducing Mortgage Closing Costs When Buying Real Estate

Some real estate buyers have found a way to reduce costs on the purchase of a home.

With internet access buyers can be more active in researching and viewing homes for sale, which has the potential of savings thousands of dollars.

Accessing real estate listings online, which used to be only available to agents, now gives home buyers the option to negotiate a cash rebate from their agent.

Some real estate agents are willing to split their sales commission in order to save more of their time and effort on a transaction. Before a buyer makes an offer on a home, an agreement can be made with an agent to represent them in exchange for a share of the commission, which is paid by the home seller at the close of escrow.

How much of a rebate a buyer can get depends on two variables: the share of the commission negotiated with the agent, and the sales price of the home purchase.
A typical commission paid by a home seller to a buyer's agent is 3%. If the sales price of a home is $400,000, and the buyer negotiates a 50% share of a 3% commission, that would be a rebate to the buyer of $6,000.

A rebate can be used to pay mortgage closing costs, providing there are no restrictions from the mortgage lender, or state laws that regulate real estate transactions. There are a few states that do not allow buyers to receive cash rebates.

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Review of Real Estate & Mortgage News for Orange County

Review of Real Estate and Mortgage News

According to UCLA economists,here is a forecast of the Orange County, CA housing market:

* From 2011 to 2015, O.C. home prices will increase by 2.5% to 8.7% a year. The median home price, at $406,481 this year, is projected to top $500,000 by 2011 and to be above $600,000 in 2015.

* Foreclosures are expected to rise again early this year, but won’t derail the recovery.

* Home building this year will fall to 1,912 units, the lowest number in records dating back to 1946.

* Home building will pick up by 2012, rising above 11,000 units a year — levels not seen since 2002. In 2013, UCLA projects that housing starts will total 12,537.

* Mortgage interest rates will remain low. Southern California rates likely will be below 6% through 2015, the forecast said.

* Commercial real estate will be hampered by high unemployment through 2010, with recovery not expected until around 2011.

* Office vacancies — currently at 18% to 20% — will start to drop in 2010, but lease rates won’t resume going up until 2011.

* Retail sales are expected to start picking up in late 2010, aided by the recovery in the housing market.

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FHA Mortgage Fees May Increase

News about FHA says they are in the process of asking congress to raise the annual insurance fee on FHA mortgage loans.

If granted, mortgage insurance rates for an FHA loan would increase from the current limit of .55% to a new limit of .85%.

The rate change would raise monthly mortgage payments by about $25 for each $100,000 loan increment.

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