CHICAGO (MarketWatch) — Mortgage rates should remain low in 2012, especially in the
first half of the year, according to the predictions of several industry watchers.

“We may spend the entire year below 5%,” said Greg McBride, senior financial analyst
for Bankrate.com, referring to the average interest rate for a 30-year fixed-rate
mortgage.

Rates may even fall to new lows early this year, particularly if the European debt
crisis hits a crescendo, McBride added.

Already, rates are sitting at record lows. The 30-year fixed-rate mortgage averaged
3.91% for the week ending Jan. 5, according to Freddie Mac’s weekly survey of
conforming mortgage rates. That ties the record for the lowest rates have been in the
history of the survey. In contrast, the highest average for the mortgage was 18.63%,
set during the week ending Oct. 9, 1981, according to Freddie Mac. Read more: 30-year
fixed-rate mortgage at record low.

In general, the financial troubles in Europe, combined with the Federal Reserve’s
pledge to keep short-term rates on hold at least through 2013, will keep  mortgage
rates from rising significantly, McBride said.

Europe’s woes have caused a “flight to quality” among investors, sending their money
in the direction of U.S. bonds, which has the effect of lowering mortgage rates. The
Fed’s short-term rate policy also reduces long-term rates, since long-term rates
“reflect expectations of where short-term rates will be in the future,” he said.

Lately, consumers have been conditioned to expect low rates. Last year, the 30-year
fixed-rate conforming mortgage had its lowest annual average on record at 4.66%,
according to Bankrate.

According to Freddie Mac, the 30-year mortgage averaged 4.5% in 2011, with the
mortgage posting the lowest weekly rates on record toward the end of the year.

But whereas rates fell in the second half of 2011, they are expected to rise at
least somewhat during the second half of 2012, said Frank Nothaft, chief economist of
Freddie Mac.

“Operation Twist is scheduled to remain in effect until June,” Nothaft said. And the
intent of the Federal Reserve’s Maturity Extension Program, or “Operation Twist,” is
to push — and keep — long-term interest rates low, which means rates should stay low
for the first half of the year, he said. The Fed plan, announced in September,
involves buying long-term securities and selling $400 billion in short-term debt.

But the Fed hasn’t made a commitment on whether it will extend the program beyond
the June cutoff, Nothaft said.

An improving economy could also cause rates to rise.

Rates on a conforming 30-year fixed-rate mortgage will average 4.2% in the first
quarter of 2012, and should average 4.8% by the fourth quarter, according to Freddie
Mac’s forecast.

Meanwhile, HSH Associates, a publisher of consumer loan information, predicts
conforming, 30-year fixed-rate mortgages will remain between 3.85% and 4.85%
throughout 2012.

“Things appear to be improving domestically. The economy, employment, the housing
market are showing signs of warming,” said Keith Gumbinger, vice president at HSH.

While the troubles of 2011 will certainly carry over into the New Year, there is
expected to be at least some upward emphasis on mortgage rates “as things start to
look a little more rosy,” he said.

But those who aren’t as optimistic about the growth of the economy have different
rate forecasts. For example, Fannie Mae’s chief economist, Doug Duncan, expects rates
will stay relatively flat all year, with the 30-year fixed-rate mortgage rising to
4.1% or 4.2% at the most by the fourth quarter.

The low-rate environment means that even people who have been in the process of
improving their credit quality for the past five years may have a shot at scoring
some of the lowest mortgage rates in history — and they may add sales to the housing
market in the process, Duncan said.

Some mortgage market watchers also have a sense that lenders may be more willing to
work with borrowers with good but not great credit in the year ahead, as the housing
market and economy show some signs of improvement and lenders look to grow their
business.

“I don’t see credit becoming appreciably easier. But I think what you will see is
more lenders willing to dip their toes into the waters of 700 and 720 credit-score
consumers,” McBride said. “You may end up, as a consumer, seeing more lenders at the
table for those that have good credit scores and not just those who have great credit
scores.”

But despite continued favorable mortgage rates, don’t expect great strides in the
housing market just yet.

The economy is still weak and unemployment is still high — two strong headwinds
pushing against housing demand, even though affordability is so high, Nothaft said.

“Consumer confidence is still relatively low. And what a low reading for consumer
confidence means is that consumers are nervous about their economic well being,” he
said. “If you’re feeling ill at ease, you will be reluctant to buy something that
costs $200,000 to $300,000 and commit to monthly payments for 30 years.”

Like prospectors who once raced West to stake a claim, a wave of new solar-equipment manufacturers have been making their way to Arizona in search of the modern-day version of gold: sunshine.

With its abundant year-round sun, the Valley is quickly becoming a solar-power-producing capital.

For decades now, solar power has been widely thought to be one of the most energy-efficient sources for powering residential neighborhoods. With the latest in technology, it’s now poised to become the standard for the future.

There’s no question Valley homeowners have become increasingly reliant on air-conditioning over the last several decades to improve the comfort of their homes. Achieving that comfort comes with a whopping cost for utility services in the summer months. A quick glance at your utility bill in August can make you sweat more than the walk to the mailbox.

The major push by the government and utility companies to get homeowners to take advantage of powering their homes with solar is part of an effort to help decrease air pollution, reduce energy costs and help build a more sustainable future.

But although new advances made in solar technology can equate to huge savings on your monthly bill, the equipment to generate the power isn’t cheap.

Incentives: To encourage more homeowners to make the switch, Arizona utility companies APS and SRP in the Valley and TEP in Tucson are offering a variety of incentives and rebates.

Because each person’s economic situation and needs differ, you can find a wide variety of programs to fit your needs by calling your utility provider or taking a look at its website for more detailed information. You should also check with a tax professional on how the local, state and federal tax credits or rebates will work for you.

Here’s an example of the cost of a grid-tied photovoltaic solar system for a typical Valley family: According to the non-profit Arizona SmartPower, a 5,000-watt solar system today costs about $20,000, or $4 per watt installed.

APS is offering a 75-cent per watt rebate on such systems, and SRP offers $1 per watt, decreasing that $20,000 cost by $3,750 or $5,000.

You can also take a federal tax credit of 30 percent. And Arizona offers a tax credit of up to $1,000.

Add up all the rebates and tax credits (in the perfect scenario), and they could cover roughly half or more of the cost of a solar system.

Tack on the money you’ll save on your energy bills — about $100 a month — and your system will pay for itself in less than a decade.

Today, most photovoltaic solar panels and inverters come with a 25-year warranty.

It’s still a hefty outlay, for sure. But if you want to “go solar” and cut your utility bills, this is a good time to get a system that’s priced to sell.

Grid-tied photovoltaics: Currently the industry standard in solar electric, the technology leads the way for a number of reasons: Costs are continuing to drop rapidly while supplies are increasing; emissions are non-existent; maintenance can be minimal; PV is a clean, renewable resource that doesn’t run on fuel — or run out, for that matter — and it’s made right here in the U.S.

How it works: PV systems convert sunlight directly to electricity and operate any time the sun is shining — even better when the sun is more intense.

To get technical, the basic building block of PV technology is the solar “cell.” Multiple PV cells are connected to form a “module,” which makes up the actual solar panel that you attach to your roof or stabilized on the ground nearby.

The solar panel absorbs the direct sunlight and sends it to an inverter, which then powers your lights, appliances, computers and televisions.

Solar water heating: Up to 15 percent of your energy bill goes to heating water. But it doesn’t have to. The sun can do it for free.

When it’s time to replace your water heater, consider installing a solar version. Don’t let the price tag alone — several thousand dollars compared with several hundred for a conventional water heater — scare you off. Federal and state tax credits and utility- company rebates bring the price down considerably.

Because of the abundance of sunshine in the Valley, a solar heater can supply most of the energy your home needs for hot water.

And you need not worry if a rare rainy or cloudy day occurs, as solar water heaters come with a backup gas or electric heater that automatically kicks on when the sun takes a break.

CHICAGO (MarketWatch) — It’s tougher for just about all mortgage borrowers to get a
loan for a home purchase or refinance these days, but many self-employed business
owners are really feeling the pinch.

Take Brett Yarmie, who tried getting a mortgage from about four lenders before
finding one that would lend him money to buy a home in the Los Angeles area. That’s
despite the fact that Yarmie has owned an automotive body shop for 30 years, and this
is the third house he has bought.

“This [mortgage] was definitely the most challenging,” he said.

Banks are requiring more financial documentation from all buyers, but because of the
variability in their income streams, the finances of self-employed borrowers tend to
get a more thorough look. Personal tax returns, business tax returns and financial
statements are considered in establishing the overall viability of a borrower, said
Franco Terango, senior vice president and divisional executive at Bank of America
Home Loans.

“Lenders will use a two-year average to derive self-employed income,” said Karen
Mayfield, national mortgage sales manager at Bank of the West. But if the most recent
year’s income is the lower of the two, the lender may use that most recent year
instead, she said.

And in a tough economy, many small-business owners aren’t posting their best
numbers. “You have almost a perfect storm, in the sense that tougher underwriting
guidelines resulting from the housing bust are coming around the same time that a lot
of business owners have posted their worst years on record,” said Greg McBride,
senior financial analyst for Bankrate.com.

Another rub: Small-business owners are typically knowledgeable about tax deductions
and credits that will reduce the amount of income tax they need to pay, Mayfield
said. But reducing the amount of taxable income on your tax returns means you’re
showing the lender that you have less income to qualify for a loan as well.

All of the above is shutting self-employed borrowers out of the mortgage market to a
greater extent, McBride said. That can hold true for refinancers and home buyers
alike — unless they have loads of equity in their home or can pony up a large down
payment.

But making a large down payment may not be a small-business owner’s preference,
especially if he or she is simultaneously trying to keep a business above water.

There are ways self-employed borrowers can increase their chances of getting a home
loan, however. Here are a few tips:

1. Look for lenders with experience

———————————————————————–

Rather than asking only for rate information, ask whether the lender has a history
of working with self-employed borrowers, Mayfield said.

Borrowers should “focus more on finding a lender that will understand their
situation,” she said. “There are many, many institutions and lenders out there. Some
individual loan officers aren’t going to be able to think out of the box or come up
with solutions that someone next door would be able to.”

2. Consider portfolio lenders

———————————————————————–

Portfolio lenders have more flexibility in originating loans because they don’t have
to sell the loan to Freddie Mac or Fannie Mae. Instead, such lenders hold the loan on
their books, and that makes a big difference in their ability to help self-employed
borrowers, Terango said.

Many portfolio lenders will offer competitive pricing just as they would for
standard, conforming mortgages, Mayfield said. The cost of the loan largely depends
on the amount of risk the lender is taking on by approving and holding the mortgage.

Self-employed borrowers also may want to consider credit unions, many of which also
keep a good portion of loans on their books, said Steve Rick, senior economist for
the Credit Union National Association, a trade association for credit unions.

3. Boost income

———————————————————————–

Someone experienced with helping self-employed borrowers may be able to come up with
other ways to make the mortgage work.

“We’ve had people do amended [tax] returns. We will look at a loan application again
if they have sent in amended returns to the government,” Mayfield said. Sometimes by
rethinking deductions and credits on income taxes, a borrower can increase his
qualifying income. Of course, with this strategy, the borrower would also face a new
tax bill.

Another possible solution: buying an immediate annuity.

With this insurance product, a person invests a lump sum and, in return, gets a
guaranteed revenue stream. It’s important that the payments begin immediately so they
can be counted as a consistent income stream, Mayfield said.

But keep in mind that an annuity comes with costs of its own, including the fact
that you lose control over the money, and when you die your heirs typically don’t
inherit the annuity. You should consult with an accountant or financial adviser
before taking this route

Pending home sales rose 7.3 percent in November to the highest level since April 2010, according to the National Association of Realtors.

The District-based association also revised higher its pending home sales data for October, showing a gain of 10.4 percent the previous month.

“Housing affordability conditions are at a record high and there is pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high,” said NAR chief economist Lawrence Yun. “Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage.”

Pending home sales in the south, which includes the Washington area, rose 4.3 percent last month, and were up 8.7 percent from year-ago levels.

Freddie Mac reported Thursday that 30-year fixed-rate mortgages remained below 4 percent for the ninth consecutive week this week, contributing to an increase in buyer activity.

1. Pulte Homes
2. D.R. Horton
3. Meritage Homes Corp
4. Shea Homes
5. Blanford Homes
6. Fulton Homes
7. Taylor Morrison
8. K. Hovnanian Homes
9. Richmond American
10. KB Home

*Based on new homes built between July 1, 2010 and June 30, 2011

Source: Business Journal Research

Energy efficiency, personalized flexibility, fresh product and strategic location — these are the focal points of Arizona’s home builders as they seek to overcome economic struggles and direct consumer attention toward newly designed communities.

Home builders help generate income and jobs for local residents, as well as revenue for local governments. In a single year, the local impact of building 100 single-family homes in a typical metro area amounts to $21.1 million in local income, $2.2 million in taxes or other revenue for local government, and about 325 jobs, according to the National Association of Home Builders  .. .

The emergence of a renewed housing market within the current economic environment, however, has limited the impact of the industry and challenged builders to rethink the needs of today’s potential home buyers.

Greg Burger, founder of RL Brown, a home-building services company, said builders seeing success today are those that dramatically cut their costs, targeted amenities specifically based on demographics, and continued to create value that could compete with the low prices found in Arizona’s resale market.

“The players that are here today have really made successful adjustments in their product to be able to attract consumers in spite of the conditions of the economy,” Burger said.

He said builders have tested theories and designed new floor plans, all to meet the needs of today’s buyers.

“Higher-end communities with great locations and amenities have seen continued success in the past few years, which clearly demonstrates that value will always be most important,” he said.

by Justin Mchood.
Nov 11th, 2011

Nowadays – 2011 – most home buyers start their home search online. This is unlike how our parents and grandparents did it. Today, we have access to homes for sale on the Internet and we can get mortgage rates in just a few clicks with our mouse. In our parents day they had to contact a real estate agent to show them paper copies of homes for sale and they had to go down to the bank to physically speak with the local banker. With this said, here is a brief list of some of the steps you might consider taking if you are looking at buying a home.

Determine your financial position first. Believe it or not, buying a home doesn’t start with a real estate agent, it starts with conversations with mortgage lenders. You must determine what kind of loan program you can qualify for and what home price you can afford. Are you going to take advantage of low VA rates as a VET or use a 203K rehab loan from FHA? Are you going to pay points or how much down payment will you need? How does your credit look?

Determine a wish list for your home. It helps to determine what you want in a home before you start looking. You waste a lot of time looking at homes that don’t fit your needs – it can also be frustrating sorting through homes that are in your price range but don’t have what you want or need. Also, by putting together a list of things you want in your home you can help your real estate agent (once you pick one) get right to the types of homes best suited for you.

Do some snooping. With the Internet making home searches so easy, take some time to start looking around to see what’s out there. You need a real estate agent a lot less than you used to when it comes to looking at homes for sale.

Pick a real estate agent. There are a lot of steps to buying a home and real estate agents walk people through the home buyer process all the time. You don’t want to miss something as it may end of costing you a bunch of money and time. Once you get a sense of what, where, when etc. it’s time to hook up with a real estate agent. You’ll want to get an agent to represent you with submitting purchase offers and negotiating.

MEDIA CONTACT:

Megan Greuling

(704)943-8208

Megan.Greuling@tree.com

FOR IMMEDIATE RELEASE

LendingTree Weekly Mortgage Rate Pulse Announces Top Ten Lenders Based on Customer Reviews
LendingTree customers review and rate their lender experience, smaller online lenders top the list

CHARLOTTE, NC (November 30, 2011) – Average mortgage rates remained flat week-over-week  according to the LendingTree Weekly Mortgage Rate Pulse, which tracks the lowest and average mortgage rates offered by lenders on the LendingTree network. LendingTree also today announced the “Top Ten Lenders” on its network, based on customer reviews. These lenders have provided customers with exceptional customer service combined with the lowest mortgage rates available.

On November 29, average mortgage rates offered by LendingTree network lenders were 4.30 percent (4.58% APR) for 30-year fixed mortgages, 3.59 percent (4.03% APR) for 15-year fixed mortgages and 3.24 percent (3.51% APR) for 5/1 adjustable rate mortgages (ARM), showing little change from the previous week.

On the same day, the lowest mortgage rates offered by lenders on the LendingTree network remained flat week-over-week at 3.75 percent (3.88% APR) for a 30-year fixed mortgage, 3.00 percent (3.23% APR) for a 15-year fixed mortgage and 2.50 percent (3.03% APR) for a 5/1 ARM.
Top Ten LendingTree Network Lenders
(Based on Q3 LendingTree Customer Ratings and reviews)

1.       Great Western Financial Services, Inc.

2.       LSI Mortgage Plus

3.       Affinity Mortgage, LLC

4.       HomePlus Mortgage

5.       Royal United Mortgage

6.       First Preferred Mortgage

7.       FirstSouth Mortgage, LLC

8.       Community Home Lending

9.       Southwest Direct Mortgage, LLC

10.   Fairway Independent Mortgage Corporation
“With 377 lenders on the LendingTree network, these top-rated lenders best exemplify diligence and excellent customer service,” says Mark Fowler, senior vice president at LendingTree.  “At LendingTree, we strive to act as a consumer advocate and serve as a partner for borrowers in the loan process.  LendingTree is privileged to have an unparalleled network of lenders to help us achieve this goal.”

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — As another year of the housing downturn ends, some are wondering if it finally is more advantageous to buy instead of rent, given discounted home prices and mortgage rates near historical lows.

The answer not only depends on where you live, but also your personal finances, the stability of your job and what you expect for home prices and rental rates in the years ahead.

Historically, renting has been the better choice, according to recent research.

Renting was the better move about 75% of the time, according to “Lessons from over 30 years of buy versus rent decisions: Is the American Dream always wise?,” a paper scheduled for publication next year.

The catch: Renters need to invest all the money they saved.

“We find that if people don’t invest the money, actually about 90% of the time, you’re better off buying,” said Eli Beracha of East Carolina University, who co-authored the paper with Ken H. Johnson of Florida International University.

That’s because for many Americans, their home has become a sort of forced savings account, allowing them to build savings through home equity.

That said, the case for buying a home is getting more compelling for many, according to the report, especially as monthly mortgage payments become more competitive with rental payments.

Here are six considerations for those weighing a decision to buy or rent.

1. Examine the housing market

One metric that housing analysts will look at to gauge housing affordability is the price-to-rent ratio. To calculate the ratio, the purchase price of a house is divided by 12 times the monthly rent of a comparable home, said Stan Humphries, chief economist for real-estate website Zillow.com.

Hard-hit markets like Detroit and Las Vegas have low median price-to-rent ratios of 5.6 and 8.1, respectively, according to Zillow data. At the other end of the list, it’s still expensive to buy in New York and Honolulu, with ratios of 16.1 and 17.6, respectively.

“There is no rent ratio that is the magic number,” said Christina Aragon, Rent.com’s director of strategy and consumer insights. But in general, “the higher the ratio is above 20, the more you’d need to see a spike in housing values to justify the price that you’re paying today. If the ratio is below 15, it might make sense to consider buying rather than renting,” she adds.

2. Consider additional costs

Remember, if you choose to buy a home, your mortgage payment may be the biggest cost each month — but it’s not the only one.

There are insurance and taxes to pay, as well as regular maintenance costs, said Richard Green, director of the University of Southern California’s Lusk Center for Real Estate.

3. Look into the future

After taking stock of what the housing market is like today, you have to do some predicting about what the local economy, including the housing market, will look like in the future, Aragon said.

Are jobs coming into the area, or are they leaving town? Is there enough demand for housing that prices will rise over the time you will live there?

Right now, housing prices are still falling, and rental prices are rising in many parts of the country. Nationwide, home prices were down 4.4% in September, compared with September 2010, Humphries said. Prices may drop another 3% to 5% before bottoming, he adds.

But rent isn’t getting cheaper. By the end of the year, rents will have risen 4% to 5% in 2011, he adds.

4. Look into your personal future, too

Before buying, decide how long you plan to live in the home. If you plan to stay there for 10 years, a drop in value a year after you move in could be balanced out by many more years of price appreciation.

If you plan to live in the home less than five years, you may be better off signing a lease, Humphries said.

5. Consider your personal finances

Assess whether you have the down payment — and if that down payment would wipe out savings you might need for a rainy day, Aragon said. “Does having that burden of a mortgage mean you can’t do things that are important for your lifestyle like take a vacation or go out to dinner?,” she asked.

These days more than ever, potential homeowners need to consider the stability of their jobs before they take on a mortgage. Also being able to move when you have an opportunity to advance your career may be a compelling reason to rent.

6. Think about opportunity costs

Shelling out 20% for a down payment has its consequences. That money — as well as any money you save by renting instead of buying — could be diverted to another investment vehicle.

“The down payment that you’ve lost might have been in the bank earning interest or in a brokerage account,” said Johnson, who added that if you’re a great saver, you might be better off renting.

“We were extremely lucky this was one of the buildings that was left when the market collapsed, it was in foreclosure and really unlike any of the other buildings in downtown Phoenix that were in that state, this had a superb location,” said David Newcombe, a Phoenix realtor.

These high-end digs were built five or six years ago as Phoenix was pumping money into the downtown area, but at the same time, the housing market was stalling out. They were expensive and hardly anyone was buying or renting.

Recently, new developers came in to rescue the units and gave them a whole new lease on life. Units that were selling for $695,000 are now going for $370,000. In one building, all 126 condos are spoken for.

“You have this small period of time right now where you can come in and you can buy below replacement cost. This is a once in a generation opportunity,” said Phoenix real estate expert Keith Mishkin.

But the picture is not as rosy around the country. Government statistics show sales are down about one percent from last year. But at the same time, building permits are up a whopping 17 percent from 2010.

These developers insist the key to success for them is offering people a place to live in the heart of a thriving city.

“Nationally, the trend is toward urban living, you know people have raised their kids, or they’ve taken part in the suburban lifestyle and they’re looking for a more urban community,” said Phoenix realtor Joe Morales.

And what that urban community in Phoenix now offers due to recent investments include brand new infrastructure, educational opportunities, business, light rail, shopping and restaurants.

For the people here in the valley of the sun, that’s all part of our road to recovery.