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Nearly 5 million homeowners can now save money on their mortgages

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FROM CNBC NEWS: A sharp drop in interest rates last week suddenly made millions more borrowers eligible to refinance their mortgages.

With the average rate on the 30-year fixed now close to 4 percent, 4.9 million borrowers could likely qualify for a refinance that could reduce their interest rates by at least three-quarters of a percentage point, according to Black Knight, a mortgage data and analytics company. That’s a nearly 50 percent increase in the size of that population in a single week. StockSnap_6XELVX8KAN

“While this will certainly impact buying power and housing demand as we enter the spring homebuying season, it’s also had a massive impact on refinance incentive almost overnight,” Black Knight researchers said in a monthly report. “After seeing refinance volumes drop significantly in late 2018, this is a game changer for both the housing and refi markets if rates hold at this level for an extended period of time.”

 

On a $300,000 mortgage a refinance from 4.81 percent to 4.06 percent would save the homeowner about $133 per month. On a $600,000 loan, it would be twice that savings, or $267 per month.

Of course, it’s important to factor in closing costs, which would be amortized over the length of the loan. For someone not intending to stay in the home for more than a few years, a refinance might not save them much.

The dramatic interest rate drop has definitely caught consumers’ attention, especially since it was the largest one-week decline in a decade. Last November, the rate was just over 5 percent.

“Our call volume has definitely ticked up,” said Matt Weaver, a loan originator at Cross Country Mortgage in Boca Raton, Florida. “We are servicing the calls coming in, but we are also reaching out.”

austin-wehrwein-1142811-unsplashLenders lost a lot of refinancing business over the last two years as rates ticked higher. The average rate on the 30-year fixed fell to just below 3.5 percent in the summer of 2016. It then jumped, jogged a bit, but has never hit anywhere near that low since. Refinance volume fell off a cliff, and several lenders had to downsize for lack of business.

With rates coming down, borrowers can not only save money through a refinance, but more borrowers are likely to be eligible.

Appraisals have been an issue in the housing market for buyers and refinancers. Home prices inflated so quickly that some appraisals were not keeping up. Now that home prices are cooling, that is the case less often.

On the flip side, as home prices deflate, borrowers lose home equity. For those homeowners seeking a “cash-out” refinance, the amount they could tap is diminishing. While some borrowers refinance their loans just to save on the monthly payment, others refinance for a larger loan in order to get cash in hand. So-called tappable equity, which is the amount available to a borrower before hitting the required minimum 20 percent equity in a home, fell in the last quarter of 2018 for the second straight quarter, according to Black Knight.

After reaching a high of $6.06 trillion in the second quarter of 2018, tappable equity has since fallen by $348 billion, and by $229 billion in the fourth quarter alone. That caused a sharp drop last year in the amount of equity homeowners cashed out, whether through first mortgage refinances or second home equity loans. With rates now lower, that could change.coregroupsign111 (2)

“The last time rates were at this level, cash-out withdrawals as a share of available equity were more than 25 percent above where they were in Q4 2018, suggesting we could see a noticeable rebound in homeowners tapping available equity via cash-out refis in coming months given the increased rate incentive to do so,” said Ben Graboske, executive vice president of data and analytics at Black Knight.

WRITTEN BY DIANA OLICK FOR CNBC.COM

Autism Awareness Day is this Tuesday 4/2, Kicking off World Autism Month

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Every April, Autism Speaks kicks off World Autism Month beginning with UN-sanctioned World Autism Awareness Day on April 2.

Gang autism 17 (2)Joined by the international community, hundreds of thousands of landmarks, buildings and communities around the world, light blue in recognition of people living with autism. Autism-friendly events and educational activities take place all month to increase understanding and acceptance and foster worldwide support.Tricia&Jesse 22

Autism currently affects 1 in 68 children in the United States, according to newly released statistics from the Centers for Disease Control (CDC). More than 70 million people around the world are affected by the disorder. 

World Autism Awareness Day pus a spotlight on the hurdles that people with autism face every day & celebrates the unique talents of those with autism. 

This Tuesday Evening, thousands of landmarks, businesses, and communities in more than 147 countries will join to mark the Ninth annual LIGHT IT UP BLUE campaign and raise global awareness of autism spectrum disorder. 

More than 11,000 buildings are joining the campaign in a show of support World Autism Awareness Day was adopted by the United Nations in 2007 to focus on autism as a global health issue and to support, empower and enhance the well-being of people on the autism spectrum and their families. The goal is to increase knowledge about autism spectrum disorder and the importance of early diagnosis and early intervention.
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Participating landmarks include: One World Trade Center and Rockefeller Center in New York City; CN Tower in Canada, the Panama Canal, the Suez Canal in Egypt, Taipei 101 in Taiwan, Burj Khalifa in Dubai, Shanghai Tower in China, Sydney Opera House in Australia, and the ancient city of Petra in Jordan.

Autism Speaks is the world’s leading autism science and advocacy organization. Its Light It Up Blue campaign marks the start of Autism Awareness Month in April. Dignitaries from around the world will also mark the occasion by gathering at the United Nations for a panel discussion on autism.

You can read more about the Light It Up Blue campaign here:
https://www.autismspeaks.org/
 

The annual Autism Speaks Los Angeles Walk will Take place Sat, 4/27 at the Pasadena Rose bowl. To Participate, donate and more Info click here: 
https://act.autismspeaks.org/site/SPageServer/?NONCE_TOKEN=470B1693722A076AB7436AE5A4D8256B&pagename=walk_homepage

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HOUSING MARKET: As it Shifts to Favor Buyers, Affordability Remains the Biggest Hurdle

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FROM REALTOR.COM: The recent slowdown in the housing market has been a boon for buyers. Since last summer, more properties have come onto the market; mortgage interest rates have dropped; and the rate of home price appreciation, once in the double digits, is waning. But that still doesn’t help the many would-be buyers on a tight budget.

Affordability is still the biggest hurdle to homeownership, with nearly half of aspiring buyers looking for residences costing $200,000 or less, according to a recent realtor.com® survey. That may be wishful thinking—the national median home price was about a third more, at $295,000 as of March 1. And home prices are still up 7% year over year.
2400GramercyPlace.0007“The Spring home buying season is an improvement over last year from an inventory perspective nationwide, but would-be buyers still face challenges,” Chief Economist Danielle Hale of realtor.com said in a statement. “This year, shoppers are going to be grappling with their budgets, rather than competition from a horde of other buyers.”

Unfortunately, the lower end of the market is also the tightest. The number of homes at or below $200,000 actually declined 7% from this time last year. Ouch. Nationally, inventory is up 6% overall, with the high-end segment ($750,000 and up) seeing the largest surge of homes going up for sale, with an 11% annual increase.

But the decline in entry-level houses for sale could explain why the largest group of buyers surveyed has been scouring the market for seven months or more. An additional 26% have been looking for four to six months, while 34% have been searching for only three months or less.

And the balance of power clearly has shifted away from sellers. With more homes to choose from, just 17% of home shoppers plan to submit offers over the asking price. That’s down from 26% last year.

Plus, mortgage rates have fallen to just 4.28% on 30-year fixed-rate loans from 4.45% a year ago. This means buyers get a break with lower monthly mortgage interest payments.rawpixel-1053187-unsplash

“More homes on the market and lower mortgage rates will help offset some difficulties associated with price gains, but affordability will remain the primary challenge for shoppers, particularly in lower price segments,” Hale said.

Written By Clare Trapasso for REALTOR.COM
Photo by Naassom Azevedo on Unsplash

5 Unwritten Etiquette Rules Home Buyers Might Not Even Realize Are a Big Deal

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FROM REALTOR.COM: If you’re looking to buy a house, you’re probably eager and excited. That’s fine, but just keep in mind that in this heightened emotional state, it’s easy to get swept up in the moment and behave, well, not perfectly.leslie-jones-1415633-unsplash

This can lead to trouble since, just like anything else, buying a home comes with its own set of rules. Some may be fairly obvious, since they’re outlined in all that real estate paperwork you’ll soon be signing. But some of these rules are the unwritten, etiquette-based kind. And if you break ‘em, it could still stop a real estate deal in its tracks.

Worried you might not be aware of all the things you might do that could inadvertently rub home sellers or real estate agents the wrong way? Then heed these five etiquette rules that many home buyers might all too easily overlook.

Rule 1: See a house online you love? Don’t call the listing agent

When you’re looking for a house and find a place that looks like it could be The One, it can be tempting to jump the gun and call the listing agent immediately. But stop right there.

The reason? The proper channels of communication dictate that you should ask your own buyer’s agent to reach out to the listing agent, who will, in turn, let the home sellers know of your interest. We know it sounds like a long game of telephone, but it’s necessary for a number of reasons. Namely, it means both buyer and seller have an agent looking out for their distinct interests, facilitating the deal. 

“You’re not going to get a better deal by going directly to the listing agent,” explains Matt Van Winkle, owner of Re/Max Northwest Realtors, in Seattle. “They represent the seller and are just trying to get the seller the best price.”

There is a caveat to this rule, says Kerron Stokes, a real estate agent with Re/Max Leaders, in Colorado: “If you are not represented and if you do not have an agent, then feel free to call the seller’s agent,” Stokes says. “But if you are a buyer, you should get an agent, as they can best represent your interests.

Rule 2: Don’t ask your agent to show you homes until you sign a buyer-broker agreement

We get it, signing legal documents is scary. But here’s the thing: If you’re not ready to commit to your real estate agent, you’re not ready to get serious about buying a home.

“Be prepared to sign a buyer’s agreement so that your buyer’s agent knows you are serious and ready to go,” Stokes says. “From a consumer protection standpoint, it’s a very good thing for all involved.”

A buyer-broker agreement is a legal contract that defines the relationship between the buyer (that’s you) and your real estate agent. The agreement is good for both parties, since it outlines exactly what services the broker is going to provide. A buyer-broker agreement is also a way to let your real estate agent know that you’re committed to working with this pro to find your home.

And, if the relationship doesn’t end up working out, you can always end the agreement and find another agent to work with. It’s poor etiquette to work with more than one real estate agent at a time, and the buyer-broker agreement shows your agent that you’re not doing that.

“Remember that buyer’s agents are only paid if they close a deal—they aren’t paid for their time,” Van Winkle says. As such, “it’s wrong to call another agent just because yours is unavailable or on vacation.”

Rule 3: Don’t make an offer without mortgage pre-approvalaustin-wehrwein-1142811-unsplash

A mortgage pre-approval letter is a letter from a lender saying it will provide you with financing to buy a home up to a certain loan amount. It makes everyone’s lives easier since it provides proof of how much home you can afford to buyers and agents—and that you can put your money where your mouth is with an offer. Without it, your offer is an empty promise.

“If you want to compete against other buyers for a home, you won’t be able to do that without that pre-approval letter,” says Bill Golden, a longtime real estate agent with Re/Max Metro Atlanta Cityside.

Rule 4: Don’t be late to home showings—or bail entirely

If you have an appointment with your agent to view a home, treat it like a priority. If you’re going to be late or can’t make it, call your agent and let him know.

“If you don’t respect my time, then we don’t have a good working relationship,” Golden says. “Usually, I will have set up appointments to see several homes, and if you’re late or don’t show, I have to try to rearrange all of the showings, which may not be possible on short notice.”

Rule 5: Don’t pretend you’re ready to buy if you know you’re really not

tumblr_inline_p8q8j1LPNz1spdp8g_500This one might sound like a no-brainer, but it’s such a big part of real estate etiquette it’s worth driving home: Don’t pretend that you’re ready to buy if you aren’t. Don’t enlist the services of a buyer’s agent if you know you’re still in the fact-finding and “just looking” phase of your home search.

So go to open houses. Window-shop. Just be upfront with everyone about where you are in the process. Don’t pretend you’re ready to buy just because you want to be taken seriously. Real estate agents work on commission, so don’t wantonly take their attention away from actual, paying clients and potentially costing them sales, which is a serious thing. Got it?

WRITTEN BY KAYLEIGH ROBERTS FOR REALTOR.COM
Photo by Austin Wehrwein on Unsplash
Photo by Leslie Jones on Unsplash

 

Are You a Homeowner? Here’s How Much More Equity You’ve Gained

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FROM CNBC.COM: Strong demand for housing last year kept home prices surging, and that means more homeowners are now sitting on more cash in the form of home equity.

Collectively, homeowners with mortgages saw their equity increase by just over 8 percent in 2018, according to CoreLogic. That is from a combination of home value gains and borrowers paying down their mortgages. It adds up to roughly $678 billion in additional wealth over the last year — or about $9,700 per homeowner.

Of course all real estate is local, and so were the gains. Homeowners in Western states saw the biggest annual increases in home equity, with Nevada homeowners now about $29,000 richer. Idaho homeowners gained close to $27,000 and Californians just short of $20,000. Washington state, New York and Florida homes also saw big equity gains. There were, however, some losses. Homeowners in North Dakota, Louisiana and Connecticut saw their equity drop. 

Rising equity usually fuels the remodeling market, as people tap that extra cash to do home remodels or upgrades. Home remodeling was very strong last year, not just because of rising equity, but because homebuilders are putting up fewer homes, meaning more people are staying in older homes longer and repairing or upgrading.rawpixel-1137301-unsplash

“The increase in home equity over the past several years provides homeowners with the means to finance home remodels and repairs,” said Frank Martell, president and CEO of CoreLogic. “With rates still ultra-low by historical standards, home-equity loans provide a low-cost method to finance home-improvement spending. These expenditures are expected to rise 5 percent in 2019.”

Increasing equity also helped more homeowners rise above water on their mortgages. The number of underwater properties fell 14 percent last year, as 351,000 borrowers no longer owe more on their loans than their homes are worth. There are still 2.2 million homes in a negative equity position.

“Our forecast for the CoreLogic Home Price Index predicts there will be a a 4.5 percent increase in our national index from December 2018 to the end of 2019,” said Frank Nothaft, chief economist at CoreLogic. “If all homes experience this gain, this would lift about 350,000 homeowners from being underwater and restore positive equity.”StockSnap_L9VZ6SOGBB

Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, according to CoreLogic. Just 4.2 percent of homes are currently still underwater.

WRITTEN BY DIANA OLICK FOR CNBC.COM

 


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