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With rates for 30-year mortgages hovering below 4 percent since last October, all kinds of homeowners are trying to get their monthly mortgages reduced, say lenders and mortgage experts.

Along with months of record-breaking low interest rates, other factors are driving the refinancing boom: a competitive lending market and changes in some federal refinancing programs for struggling homeowners.  It’s prompted many established homeowners with old-school, high-interest mortgages to decide it’s time to refi.

  • To determine whether you should refinance, look at how long you plan to be in your current home and whether the upfront costs outweigh the monthly savings.  Generally the primary reasons for refinancing a mortgage are to:
    • Lower monthly mortgage payments.
    • Eliminate the unpredictability of an adjustable-rate mortgage by switching to a fixed rate.
    • Free up home equity cash for home improvements, college costs or other expenses.
    • Shorten the loan term, say from a 30- to a 15-year mortgage, which can save thousands in interest payments.
  • It pays to compare quotes from several lenders because they offer different rates and fees. Start with your current lender or sit down with a local loan originator. You can also do refinance comparisons online, using mortgage calculators at sites like Bankrate.com or those of individual banks and lenders.
  • If you’re a struggling homeowner, ask your lender about changes in the federal Home Affordable Refinance Program and FHA refinance programs that have made refinancing options more plentiful.

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A new study shows that in more than three-fourths of 200 metro areas in the U.S., home owners would “break even” financially by owning a home after three years or less than if they opted to rent instead.

The recent study by Zillow factors in home ownership costs — including down payments, closing costs, mortgage payments, property taxes, utilities, and maintenance costs — and compares it to the costs of renting. The study supports other recent findings that show with rents are on the rise nationwide that home ownership is becoming increasingly affordable with record low mortgage rates and falling home values.

“Historic levels of affordability make buying a home a better decision than ever, especially considering rents have risen more than 5 percent over the past year,” says Stan Humphries, Zillow’s chief economist.

Zillow found that even in some markets, such as Miami, a person buying a home would only have to stay in that home for about 1.6 years for it to prove better than renting one there, due to the rising costs of renting in the city. Tampa, Fla., and Memphis, Tenn., also were found to be some of the top cities where owning a home trumps renting by the most, according to Zillow.

Meanwhile, San Jose, Calif., home owners have the longest time until they reach a “break even” point on their homes. Home owners there would have to wait 8.3 years before their home purchase would trump renting, according to the Zillow study.

Source: “Buying Beats Renting in Most Cities,” CNNMoney (Aug. 2, 2012)

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For all your real estate needs
Email or call today:

John J. O’Dell Realtor® GRI
Civil Engineer
General Contractor
(530) 263-1091
Email jodell@nevadacounty.com

DRE#00669941

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While many large financial institutions are facing backlogs of mortgage applications as more homeowners take advantage of low interest rates and the government-sponsored Home Affordable Refinance Program (HARP), borrowers looking to accelerate the refinancing process are finding some relief from brokerages and community banks that are not servicing HARP loans.

  • HARP borrowers typically refinance with the banks that originally serviced their loans, because those banks already have their information and, according to the Mortgage Bankers Association, “There’s potential for it to be a less painful process.”
  • Still, tighter lending standards precipitated by the mortgage crisis have made for an arduous application process.
  • Mortgage brokers are reporting an increase in business from those looking to streamline the process.  According to one broker, a benefit of working with a mortgage broker is that they have direct contact with the banks and can keep track of the application as it goes through many hands at the bank.
  • Borrowers also might want to consider refinancing with a community bank, especially those that do not service HARP-eligible borrowers and are able to respond quicker to non-HARP refinance requests.

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For all your real estate needs
Email or call today:

John J. O’Dell Realtor® GRI
Civil Engineer
General Contractor
(530) 263-1091
Email jodell@nevadacounty.com

DRE#00669941

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Daily Real Estate News | Thursday, June 28, 2012

The number of home owners with severely delinquent mortgages — 90-plus days past due or in foreclosure — fell 37 percent in May compared to its peak in January 2010, according to a new report out by Equifax. Seventy percent of those delinquencies are loans opened between 2005 through 2007, Equifax notes in its May National Consumer Credit Trends Report.

“That severe mortgage delinquencies are trending downward is not surprising given generally improving economic conditions,” says Amy Crew Cutts, Equifax chief economist. “What is surprising is that even with the foreclosure moratoriums and the slow resolution of foreclosure backlogs, the downward trend has been a steady, consistent drumbeat of recovery. If this pace continues, we expect the volume of severely delinquent mortgage balances to return to mid-2007 levels by the end of 2014.”

According to the report, severely delinquent non-agency loans have seen the largest drops. Non-agency severely delinquent loans fell 45 percent in May to $320 million compared to its peak in January 2010 of $580 million. Meanwhile, agency-sourced mortgages — those that are backed by Fannie Mae, Freddie Mac, the Federal Housing Administration, and Veterans Administration — declined 9 percent in May to $130 billion compared to its peak in January 2010 of $142 billion.

The report also showed that mortgage write-offs have dropped 28 percent in May from their peak in 2010. Also, home mortgage balances have fallen 12.5 percent to $8.6 trillion compared to its record-setting $9.8 trillion reached in October 2008.

Source: Equifax

For all your real estate needs
Email or call today:

John J. O’Dell Realtor® GRI
Civil Engineer
General Contractor
(530) 263-1091
Email jodell@nevadacounty.com

DRE#00669941

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