Primary Residential Mortgage

Mortgage markets improved last week on worries that Eurozone leaders would decline to send aid to Greece. These concerns overshadowed optimism for the U.S. economy, the result of several strong data points.

Conforming rates across Arkansas eased, giving homeowners and rate shoppers yet another chance to nab historically-low mortgage rates. FHA mortgage rates remained low, too.

According to Freddie Mac, the average 30-year fixed rate mortgage rate is now 4.11% with 0.8 discount points. For loans with zero points, expect to pay slightly higher rates.

Rate-shoppers and home buyers would do well to pay attention.

This week’s may be as good as mortgage rates get. Possibly forever. This is because the market conditions that helped rates stay low — a weak U.S. economy and uncertainty in Europe — are eroding.

The U.S. economy has posted strong jobs, spending, and confidence figures in the past 3 weeks and Eurozone leaders appear closing making a deal that will help Greece avoid a sovereign debt default.

Once markets no longer worry about these two events, rates are expected to surge.

Eurozone leads met all weekend and have chosen Wednesday, October 26, as a likely “decision date” for Greece. If that date holds, and if an agreement can be reached, U.S. mortgage bonds will sell-off and mortgage rates will rise.

The housing sector is set to release important news this week, too.

After last month’s increase in Housing Starts and steady Existing Home Sales report, Wall Street will watch for this week’s New Home Sales, Case-Shiller Index and Pending Home Sales Index. If momentum stays strong for housing, that, too, should pressure mortgage rates higher.

Mortgage rates remain near all-time lows. If you’ve yet to lock your mortgage rate, or are still shopping, consider that rates have more room to rise than to fall. The “safe play” is to execute a lock today.

The USDA (United States Department of Agriculture) mortgage program was created for low income families looking to buy a home in rural areas. This program has become more and more popular in states like Arkansas and other places in the country in recent years, because of the tightening of lender guidelines with conventional mortgage loans.

There are many benefits of a USDA Rural Housing mortgage loan, but these are the main benefits that make this program one of the best mortgage loans available.

No Down Payment Required

This mortgage program still allows you to buy a home with no money down. It’s one of the only programs still available that allows 100% financing. This is a great benefit, because you can buy a home with very little money out of pocket. This leaves more money for home improvements and savings for future repairs of anything breaking down in the home.

No PMI Required

Conventional mortgages require a PMI (Private Mortgage Insurance) payment, in addition to the regular mortgage payment, if you don’t have a down payment of at least 20%. The USDA Rural Housing program doesn’t require PMI, even if you finance 100% of the purchase price.  This is a huge benefit, since it keeps your mortgage payment low, while allowing you to qualify for a larger mortgage loan.  No one wants to pay PMI, because it’s not applied to the principal balance or the interest you pay over the life of the mortgage loan.

Low Interest Rates

Even though you don’t have to put any money down with USDA Rural Housing mortgage loans, you will still receive a lower interest rate. Depending on your situation, typically, the interest rates are not much more than 0.5% higher than conventional mortgage loans. This is a great benefit in addition to not having to come up with a down payment and not having to pay PMI. A lower interest rate will save you tens of thousands in interest payments over the life of the mortgage term.

First time homebuyers in Arkansas sometimes let the excitement of buying a home lead to some costly decisions. There are a lot of things to take into consideration when it comes to your mortgage financing, and speaking with a qualified mortgage professional should be your first step.

In the prequalification process, your total monthly debts from your credit report, along with your proposed new mortgage payment, are compared to your gross monthly income to determine if you can afford these obligations. This is called your debt to income ratio, and it is one of the main criteria for loan qualification. What’s not calculated into this equation are your other expenses. Your gas, groceries, childcare, ect. should be taken into account by you personally to make sure you can still live the same lifestyle to which you are accustomed.

This transaction is a commitment you’ll have to honor for some time, so make the smart decisions when it comes time to buy. In and around Little Rock, the mortgage lender you should use is one you can trust. Call or email dsteward@primeres.com today to discuss a mortgage loan that best fits your financial needs. We can also assist you in locating a Little Rock Real Estate agent or a agent anywhere in the state.

The economy is still struggling. Jobs are hard to come by and keep… and so is your money. People all over are doing their best to be smart with their money and make every dollar count. A Little Rock Mortgage with a low interest rate is one way to make that dollar count. New home sales were up for the month of June in comparison to May, when sales hit a record low. With that being said, while the economy is down, so are interest rates. If you have the dream to own your own home, now is the time to take advantage of these tough times. The Little Rock Real Estate market is still in good shape.  The latest homebuyers are able to capitalize during a time when interest rates are at an all time low. For homeowners that bought a home in the last few years, a refinance now can lower your mortgage payment significantly and help you cut back as well. Call today for a free pre-qualification and see if now is the time for you.

With the recent support of three Republican Senators it looks as though the Democrats will have enough votes needed to pass the financial reform bill. It is expected to have sweeping changes including changes to how local mortgage companies operate thus effecting customers who are trying to obtain a Little Rock Mortgage.

Some of the expected changes to how Arkansas Mortgage companies and Arkansas Mortgage bankers, offering home loans, operate is going to effect loan officer compensation. Many experts predict this will cause an artificial rise in interest rates. There will also be harsher limitations on loans that offer pre payment penalties and increased regulation of appraisers and appraisal companies. The bill is also expected to force Little Rock Lenders who offer higher risk loans to keep a five percent ownership in the loans.

The bill is expected to be voted on as early as this Thursday. Once passed the President will more than likely move quickly to sing it into law. It will be very intresting on how this effects the Little Rock Real Estate market.

Yesterday the Mortgage Bankers Association released the Weekly Mortgage Applications Survey for the week ending July 2. There was a total increase of 6.7 percent from the prior week. Refinance activity was up 9.2 percent, while purchase activity continues to decline, this week it was 2 percent.

All markets across the country are used in this survey including Little Rock. Due to the low Little Rock Mortgage Rates refinance activity continues to spike. The other side of that is purchase activity. Since the expiration of the First Time Home Buyer Tax Credit it has continued to sink. Purchase activity has decreased in the last eight out of nine surveys. Compared to this time last year it is a decrease of almost 35 percent. Currently refinances account for 80 percent of total mortgages.

Michael Fratantoni of the MBA said: “mortgage rates remained near record lows last week, as incoming data on the job and housing markets were weaker than anticipated. As more homeowners locked in to these low rates, the level of refinance applications increased to a new 13-month high. For the month of June, purchase applications declined almost 15 percent relative to the prior month, and were down more than 30 percent compared to April, the last month in which buyers were eligible for the tax credit.”

The decline in the purchase market is very alarming. Even with the low mortgage rates people are still not being enticed to buy homes. With unemployment continuing to be at high levels and the economy slowing people just seem to be hesitant to purchase homes. The housing market is a major factor in the overall recovery of the economy and the current state is not encouraging. The continuing decline in purchase activity is definitely concerning. Low mortgage rates alone are not enticing many people to purchase homes. Continuing high unemployment and an economy that appears to be decelerating are making potential home buyers gun-shy. Recovery in the housing market is going to be crucial to a more widespread economic recovery, and the current economic numbers are not especially encouraging. The Little Rock Real Estate market has help steady.