Rehoboth Beach Real Estate Blog - Mortgages & Credit Scores

When Does a Reverse Mortgage Make Sense?

Everyone sees those TV commercials featuring sincere celebrities pitching reverse mortgages. If you are 62 or older, chances are you’re also subjected to glossy mailers (and even DVDs!) that show up in your mailbox at regular intervals.

Latest stats show that approximately 83% of baby boomers plan to stay in their homes during retirement. That may be why some Coastal Delaware homeowners who have built equity in their homes may be paying attention.

You can’t blame them if they have one overriding question -- is this some kind of scam?

Essentially, a reverse mortgage is just one way to tap into a home’s equity regardless of the owner’s credit score or income. Under a reverse mortgage, borrowers receive a monthly payment, line of credit, or lump sum.…

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What's Ahead For Mortgage Rates This Week : January 14, 2013

Mortgage rates rose last week nationwide during a week of sparse economic news. Thursday's weekly jobless claims report showed 371,000 new claims, which was 1,000 fewer jobless claims than for the prior week. Wall Street expectations of 365,000 new jobless claims turned out to be too optimistic.

The semi-quarterly statement released Thursday by the European Central Bank (ECB) announced that the region's inflation remains below its 2 percent ceiling as established by central banker. Economic weakness in the Eurozone is expected to persist into 2013 with signs of recovery becoming evident toward the end of this year.

ECB cited financial and structural reforms as essential to economic recovery, and noted that national governments within the Eurozone have…

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What's Ahead For Mortgage Rates This Week : January 8, 2013

Mortgage rates in Rehoboth Beach rose during the first week of 2013.

The fiscal cliff crisis was resolved prior to the market's opening Wednesday, when legislators voted to approve a deal. While many tax cuts were extended for taxpayers earning less than $450,000 annually, other facets of the fiscal cliff issue are yet to be addressed, including budget cuts for federal government agencies.

Investors were surprised to learn that the Fed may end its third round of quantitative easing (QE3) sometimes in 2013. The FOMC meeting minutes for December 2012 suggested that Fed support for its QE3 program has waned as the economy has improved.

First-time jobless claims increased for the week ending December 29, 2012 to 372,000 from the prior week's 350,000,…

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Post-Fiscal Cliff, Mortgage Markets Turn Attention To Jobs Data

Mortgage rates moved higher Wednesday up congressional leaders voted to avoid the "Fiscal Cliff".

Mortgage-backed securities (MBS) fell as investors bid up stock prices. Confidence among investors and consumers typically causes mortgage rates to rise. That's what happened Wednesday. For Thursday and Friday, expect jobs data to dictate where Coastal Delaware mortgage rates are headed.

The Federal Reserve has said that the national Unemployment Rate will dictate future monetary policy, with the central banker planning to raise the Fed Funds Rate from its target range near zero percent once joblessness falls to 6.5%. Currently, the jobless rate is 7.7 percent. As the jobs market improves, equity markets should follow, causing mortgage rates to -- again…

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What's Ahead For Mortgage Rates This Week : December 31, 2012

Mortgage bonds improved last week, pushing mortgage rates lower in Delaware and nationwide. Positive economic news and strong housing data was trumped by ongoing Fiscal Cliff discussions on Capitol Hill.

The "Fiscal Cliff" is meant to represent January 1, 2013 -- the date on which mandatory spending cuts are enacted by Congress and on which tax rates increases for many U.S. taxpayers.

Some analysts believe that if these two events are to occur simultaneously, it would derail the current U.S. economic expansion and revert the economy back into recession. That concern has spurred a flight-to-quality which has benefited mortgage bonds and, therefore, U.S. mortgage rates.

For example, last week, Freddie Mac reported the average 30-year fixed rate…

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What's Ahead for Mortgage Rates This Week: December 24, 2012

Mortgage markets worsened last week amid ongoing discussions budget and tax conversations in Washington, D.C., and the release of key housing and economic data.

Mortgage rates in Coastal Delaware climbed.

Freddie Mac reported the average 30-year fixed rate mortgage rate at 3.37 percent nationwide for borrowers willing to pay an accompanying 0.7 discount points at closing, plus closing costs -- an increase of 0.05 percentage points from the week prior.

The average 15-year fixed rate mortgage rate was listed at 2.65 percent nationwide with an accompanying 0.7 discount points plus a full set of closing costs.

With certain government funding and tax reductions set to expire December 31, legislators appear unlikely to avoid what's been called the…

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Coastal Delaware Good Faith Estimate: It’s Part of the Deal

When you plan on getting a mortgage in Rehoboth Beach anytime this winter, you’re fairly certain to run into something known as the GFE. It’s the acronym for ‘Good Faith Estimate’-- and despite the reassuring name, the federal government decided they had better make it mandatory (to me, the opposite of having much faith at all). 

The GFE has a new format dictated by the federal Real Estate Settlement Procedures Act which requires lenders to provide an estimate of the charges and fees due at closing. Lenders have three days to make it available.

The GFE looks like a bill. It features a list of fees and charges denoted by three-digit codes. It is grouped into sections to make it more readable, and although at first glance the resulting grid looks overly…

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Six Mortgage Tips for the Self-Employed

It's no secret that mortgage lenders are requiring more information from potential borrowers than they did prior to the 2008 financial meltdown. But for self-employed borrowers, qualifying for that mortgage loan is particularly difficult. In the past, self-employed business owners were easily approved for stated-income mortgages – or, loans that didn't require tax documents or bank records to verify income.

But because of more stringent lending policies, self-employed individuals in particular can expect far more scrutiny than in the past. In particular, lenders are looking for proof of stability, or a pattern of income. Fair or not, the self-employed are not considered as "safe" a bet as someone on an established salary.

Simply stated, lenders want…

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Short Sales Outnumber Foreclosure Sales For Third Straight Quarter

Foreclosure-tracker RealtyTrac reports falling foreclosure sales nationwide as banks get better at selling homes via short sale.
In its Q3 2012 report, RealtyTrac says that 193,059 homes in some stage of foreclosure were sold, accounting for 19% of all residential home sales. In addition, pre-foreclosure sales -- also known as "short sales" -- climbed 22% on a year-over-year basis.

For the first time since 2007, the number of short sales outnumbered the number of homes sold in foreclosure over three consecutive quarters.

The average price of a short sale home fell by 5 percent as compared to a year ago which may reflect an eagerness on the part of mortgage lenders to dispose of distressed properties before they fall into foreclosure. Foreclosures can…

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Simple Explanation Of The Federal Reserve Statement (December 12 , 2012)

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday.
For the tenth consecutive meeting, the FOMC vote was nearly unanimous. Richmond Federal Reserve President Jeffrey Lacker was the lone dissenter in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008.
In its press release, the Federal Reserve noted that, since its last meeting in late-October, the U.S. economy has expanded "at a moderate pace" despite "weather-related disruptions". It also acknowledged that "strains in global financial markets" remain a threat to U.S. economic growth.
This comment is in direct reference to the Eurozone, its sovereign debt concerns, and its nation's…

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