Florida homes for sale

Controversial Rate Checker Tool Tweaked

OD_BloggerUnder strong criticism from the Mortgage Bankers Association and other industry trade groups, the Consumer Financial Protection Bureau made tweaks to its controversial Rate Checker consumer tool.

But MBA President and CEO David Stevens said the tweaks do nothing to resolve “fundamental flaws” with the tool and continue to provide “misleading” information to consumers. 

On January 13, the CFPB unveiled this new borrower education tool on its website (Click Here for Rate Checker) ostensibly to help consumers be better informed of rates and other costs when shopping for a home loan. CFPB said this Rate Checker tool will allow consumers to “see what interest rates people with similar financial situations have been offered.”

The tool uses a credit score, state; property location and a down payment percentage to generate an estimate for a borrower of rates available.

The website which indicates rate information for the rate checker is provided by a private firm who collect data from “actual lenders and is updated every business day.” “When the imprimatur of the government is associated with particular data, the public assumes the data are complete and accurate. However, the lenders’ rates incorporated in the tool include only a mix of large banks, regional banks and credit unions. Notably, rates from independent mortgage banks do not appear to be included in the data. Similarly, discount points, origination fees and mortgage insurance are not included, yet are a significant part of the cost of residential finance–and are critical for any website that purports to be a comprehensive borrower decision tool.” 

Source: Mortgage Bankers Association

 

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Home sales dipped in June

National Association of Realtors’ data shows existing home sales fell 1.2% in June. In spite of the slip, NAR chief  economist Lawrence Yun said there is still market momentum, even as interest rates climb.

The nations tight housing stock rose by 1.9 percent in June to 2.19 million equivalent to 5.2 months supply, still well below the 6 months supply considered a normal healthy market.  Due in part to the limited inventory of existing properties for sale many single family homes are selling above asking price and there is strong expectation of continued increase in home prices. In spite of the rosy picture pointing to higher prices and continued recovery, there are signs of concern.

First time homebuyers accounted for only 29 percent of  home buyers in June 2013 compared with 32 percent in June 2012. Low inventories of available homes, combined with rising home prices and interest rates plus tight mortgage qualification conditions are definitely limiting the number of first time homebuyers entering the housing market.

To sustain what is still a fragile housing  recovery, interest rates and rising home prices must be normalized to enable the entry of more first time home buyers into the market place.  First time homebuyers are the engine that drive the housing market, without them there is only stagnation.

Distressed homes,  foreclosures and short sales accounted for 15 percent of June sales down from May’s 18 percent recording the lowest market share since monthly tracking began in October 2008. The average sale price of foreclosures and short sales in June was 14.5 percent below market price. The declining  number of foreclosures and short sales within the market place will be another factor contributing  to the upwards pressure on home prices.

The national median existing single-family home price was $214,700 in June, which is 13.2 percent above a year ago. The national average mortgage rate of a 30 year fixed rate conventional loan is presently 4.375% up from 3.375 in May.  So how will this 1 percent rise in interest rate affect homebuyers?

One percent rise in interest rate cost homebuyers an additional  $57 for every $100,000 borrowed. Homebuyers buying an existing single family home at the national median price of $214,700, using a conventional loan with 5% down payment at a rate of 4.375%,  would have monthly payments of $1,018.37 P&I approximately $117 more than in May before the rate increase.  

The past months rapid increase in mortgage rates could delay many first time buyers entry into the housing market in this slow recovering economy.  

 

Pending Foreclosures Presents Risk to Florida Housing Recovery

Florida housing recovery continues to pick up steam as consumers confidence in the economy grows. According to major home price indexes, prices have increased about 9 percent over the past 6 months.  Combined with the reduction of downward pressure on home values due to declining REOs and Foreclosure inventories, the prospects for continued price increase is encouraging.  However, there could still be some stormy winds ahead.

Florida, one of the hardest hit states during the housing crisis still has a backlog of over 377,000 old foreclosure filings in the state federal courts thru 2012.  There are also reports, that one in every five mortgages in the state of Florida is in some form of delinquency.  Should the recent settlement between the Federal Reserve/Comptroller and  mortgage servicers ending the robo-signing scandal increase the pace of foreclosures over the next 12 months, there could be a cool off in Florida home prices.

Find Florida Foreclosures First

Orlando Housing Market Report August 2012

The supply of unsold homes is beginning to diminish. Foreclosures are selling quickly in most places, especially in the lower price ranges that are attractive to first-time buyers.

 

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FICO® Score

Let’s Talk About FICO® Score

FICO® (Fair Isaac & Company) credit scoring system is used by Experian to compile credit profiles and assign credit scores used to evaluate consumers credit worthiness. Although there are 2 additional credit scoring systems used by Trans union and Equifax, FICO® is the best known and is considered synonymous with credit scores.

Your FICO® score will be a major factor in determining the monthly payments on your home purchase, so let have a look at some of the factors used in calculating your score. 

    1. Payment history: is probably the most important factor used in calculating FICO® scores. Information relating to bankruptcy, foreclosures, collections and late payments will be evaluated.   The most recent 2 years history has the greatest impact.
    2. Access to credit: the number of open credit lines and the balances on those lines are also important factors. It is better to have a few strong lines with balances at or below 60% of the maximum credit limit.
    3. Quality and credit type: some of the accounts evaluated by credit bureaus during the calculation of credit scores are mortgages, car payments, student loans, credit lines, credit cards plus any other accounts reported to the credit bureaus (rental payment history is in the process of been added as an evaluated account).  Both open and closed accounts are evaluated with seasoned accounts (accounts with payments of 12 months or more) given higher relevance.

FICO® scores ranging from 620 to 740 and above are considered acceptable by most Mortgage Lenders.  Scores above 740 often qualify for the best interest rates.  Contact a Mortgage Professional for assistance in improving your FICO® score.