Rates have been relatively low over the last month. This week, they are in the news by falling to a new all time historical low.

The average 30 year rate fell from 4.75 to 4.69 this week. Two weeks ago the 30 year rate was sitting at 4.72. What’s interesting is that over the last month, when a lot of people have been talking about how rates are about to start rising, we are instead breaking records with mortgage rate lows.

We mostly concentrate on the 30 year rate because it is the most widely used mortgage product. But in addition to the 30 year rate hitting an all time low the three other major mortgage products all reached new all time lows as well. The 15 year dropped from 4.20 to 4.13. The 5 and 1 year arms dropped from 3.89 to 3.84 (5 year arm) and 3.82 to 3.77 (1-year arm). Below are rates from the weeks from May 27, 2010 to Jun 24, 2010 from our friends at Guardian Mortgage.

The following are our current on 6/28/10 for primary residences on the 30-Day Locks, assuming at least 10% equity and credit scores greater than 740.

Conventional Loans:

30yr Fixed      4.500% (0.000 discount points)  
20yr Fixed      4.375% (0.000 discount points) with 0.250 point credit     
15yr Fixed      3.875% (0.000 discount points)  
10yr Fixed      3.875% (0.000 discount points) with 0.625 point credit                             
           

Conventional ARMs:

5/1 Libor ARM (5/2/5 Caps)     4.125% (0.000 discount points)
7/1 Libor ARM (5/2/5 Caps)     4.375% (0.000 discount points)

FHA/VA (Government Loans):

30yr Fixed          4.750% (0.000 discount points) with 0.250 point credit   
20yr Fixed          4.500% (0.000 discount points)      
15yr Fixed          4.250% (0.000 discount points) with 0.500 point credit   

NEW – FHA has suspended the “Anti-Flipping” Time Rule for One Year

The FHA has waived its 90-Day “Anti-Flipping” rule for one year in an effort to absorb some of the excess inventory of properties for sale. Borrowers who are purchasing a home within 90 days after the seller has purchased the same property will not be eligible for FHA financing. However, the lender will still need to document any increase in sale price with detailed list of improvements made to the property and not all lenders/investors may approve such a transaction despite the fact that FHA now allows this timing. Quick re-sales at higher values are a red flag for fraud, so many lenders/investors may distance themselves from these transactions despite the suspension of this rule.

NEW – FHA Upfront MIP will increase to 2.25% after April 5, 2010

Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions. This is an increase from 1.75 percent on purchase and from 1.50 from FHA-to-FHA refinances.

Also, FHA is going to implement additional changes like increasing the down payment required to 10% for those with credit scores of 580 or lower, and reducing the allowed seller contribution from 6.00% to 3.00%. There is no effective date for these two changes yet, but they are expected for later this summer 2010. These changes are being made to help secure the FHA loan program – due to the FHA reserves being below the congressionally mandated amount and not to help make the loan program more attractive to buyers. FHA buyers will want to proceed with financing on the program soon, rather than later, to avoid future changes that would have a negative effect on their specific financing.

For more information contact:
Marcus McCue, Vice President / Sales, Guardian Mortgage Company, Inc.                
Office: (972) 248-4663 / Fax: (972) 248-2112 / Cell Phone: (214) 725-2788
marcusmccue@gmc-inc.com

Update (July 1, 2010) – I am happy to report that Congress has passed the bill extending the Homebuyer Tax Credit closing deadline to September 30, 2010.  The extension applies only to transactions that had ratified contracts in place as of April 30, 2010, and have not yet closed.  There will be no gap between June 30 and the date the President signs the bill into law. 

The Senate has passed a bill to give homebuyers another three months to close on their homes and receive tax credits up to $8,000. The Tax Extenders Bill would apply to homebuyers who met the April 30, 2010 deadline with a signed contract to purchase a new or existing primary residence. The amendment would extend the deadline to September 30, 2010 for homebuyers to close on their real estate transaction. The previous deadline was June 30, 2010. The bill now goes to the House of Representatives, where it is expected to pass.

The National Association of Realtors estimates that as many as 180,000 homebuyers have qualified for the tax credit and met the contract deadline of April 30, 2010, but might not be able to close their transaction by the June 30, 2010 deadline due to the sheer volume of loan applications in the pipeline.

The Real Estate market is local, local, local — city, neighborhood, and especially price range.  Depending on List Price, a home may be in a Sellers’ Market or a Buyers’ Market.  There has been a lot a press during the past year that says this is a “buyers’ market”.  That can lead to buyers making very low offers for a home they really want to buy, because they think the seller will have to accept a low offer.  If the home is at a price point that is a seller’s market, the prospective buyer may lose out because someone else’s offer is better.

 Frisco Real Estate sales information for the First Quarter 2010 shows the following:

• 518 homes sold
•  <$200,000 =  35.7% of homes sold
•  $200,000 -$300,000 = 39.7% of homes sold
• $300,000 - $400,000 = 13.5% of homes sold 
• $400,000 - $500,000 = 5.8% of homes sold
• $500,000 – $600,000 = 1.8% of homes sold
• > $600,000 = 3.5% of homes sold 
• 1245 homes are currently on the market for sale
• Homes priced under $300,000 are in a Sellers’ Market (<6 mos. inventory of homes currently for sale)
• Homes priced over $300,000 are in a Buyers’ Market (>6 mos. inventory of homes currently for sale)

All information provided by the North Texas Real Estate Information System (NTREIS).

Linda Pardue

 2010 Tax Value

Watch for your 2010 Tax Value Form in the mail because this is the time to review your home’s appraised value.  A Comparative Market Analysis (CMA) prepared for you by a Realtor will provide you with the facts to determine whether or not you have a case for protesting the tax valuation. 

If it looks like you have a case, the CMA will give you detailed information to support your protest.  If you disagree with the proposed value of your property, you have until May 31, 2010 to file a protest with your County Appraisal District’s ARB (Appraisal Review Board).  

 County Appraisal Districts 

 Collin County Appraisal District                       

469-742-9200

www.collincad.org

Denton County Appraisal District

940-349-3800

www.dentoncad.com

Dallas Central Appraisal District

214-631-0910

www.dallascad.org

Market Snapshot

You may also get information about homes currently on the market or sold recently by signing up for Market Snapshot for your neighborhood. 

Linda Pardue

linda@parduegroup.com

Did you know that a 1/2% change in interest rate is approximately equal to a 5% change in sales price?

 This powerful statement may help you make the decision to get off the fence when it comes to buying a new home.  Buyers and sellers need to realize the importance of the relationship of interest rates to monthly payments.  We have enjoyed rates in the 5% range for much longer than anyone could have predicted.  Those rates will not last forever.  The following example, from Get Off the Fence by Pat Zaby, is a good illustration of how this works.  

Change in Interest vs. Reduced Sales Price

 Purchase Price     $200,000
Interest Rate                    5%    
Term                            30 yrs    
Payment                $1,073.64
                  
1/2% Increase in Rate =  $1,135.58  Payment
5% Increase in Price    = $1,127.33  Payment

A 1/2% change in interest rates is approximately equal to 5% change in price.
 
1% Increase in Rate    = $1,199.10  Payment
10% Increase in Price = $1,181.01  Payment
A 1% change in interest rates is approximately equal to 10% change in price. 

Waiting to see if prices come down could be counter productive if interest rates increase. 

NOTE:   Sign up for market updates  to get information on homes for sale or recently sold in a specific neighborhood. You can sign up as a seller and/or buyer, as many times as you want, and you can choose to get market information on more than one neighborhood.  You may choose to have the report(s) emailed to you either monthly or semi-monthly.

If you purchased a home in 2009, it is time to file for your Homestead Exemption.  This will result in a savings on real estate taxes for your home.  The rule is that you must live in the home on January 1st of the year you file for the exemption.    This exemption must be filed between January 1st and April 1st, 2010.  By clicking on the links below for Collin or Denton County, you may obtain the form online and complete it.  Then print, sign, and mail.

 http://www.collincad.org/HS_application.pdf

 http://www.dentoncad.com/docs/forms/2010/homestead.pdf

 If you have any questions, please don’t hesitate to contact me.   I hope you are enjoying your new home!

 Linda Pardue

Pardue Group / Keller Williams Realty

Just a reminder that Congress extended the Home Buyer Tax Credit until April 30, 2010 (must close by June 30, 2010).   In 2009, about 50% of all home sales in the United States were first-time home buyers – making the dream of homeownership a reality.

To stimulate even more home sales, Congress expanded the Tax Credit to include Subsequent Purchasers — existing homeowners who qualify and want to purchase another home. 

Remember these are “tax credits” not “tax deductions”.  The full amout of the tax credit is deducted from income taxes you owe.  If you owe less than the amount of the Tax Credit, you will receive a check for the difference once you have filed your return.   See Form 5405, First-Time Homebuyer Credit, for more details.

The basic details are as follows:

EXTENDED — First Time Homebuyer Tax Credits

• $8,000 tax credit ($4,000 for married couples filing separate)
• Must not have owned a property in the last three years

NEW – Tax Credit for Subsequent Purchasers

• $6,500 tax credit ($3,250 for married couples filing separate)
• Must have lived in current home as a principal residence consecutively for 5 of the of the previous 8 years

For Both Groups

• The Tax Credit applies to all loans closed between 11/6/09 and 6/30/10, as long as the binding contract is signed by April 30, 2010.
• Income limits are $125,000 (single) and $225,000 (married couples) with $20K phase out
• Purchase Price Limit is $800,000
• Buyer need not repay the tax credit if he/she occupies the home for three years or more.  However, if the property is sold during this three-year period, the full amount of the tax credit will be recouped on the sale.

If you qualify and plan to take advantage of these Tax Credits, it is not too early to start looking for your new home.  Mortgage rates are near their lowest levels in history, affordability is at an all-time high, and there is an excellent selection of homes available. These three factors make it an extraordinary time to buy – and April 30^th will be here before you know it.

Linda Pardue

Pardue Group / Keller Williams Realty

linda@parduegroup.com

Welcome to the FSM Real Estate Blog.  My goal for this blog is to provide useful information about the real estate market.   Everywhere I go people ask me “How is real estate?”  My answer usually is something like, “It’s picking up” — because it is.  However, I probably should say, “Well – it depends” – because it really does depend.  Real estate is local, local, and local – by city, by neighborhood, and especially by price range.

 For most people, their home and any other real estate investments they have are an important part of their financial future, and everyone wants to keep an eye on how their investments are doing. 

 I hope you will join in the discussion here, as well as make suggestions for topics that are important to you and that you would like to see discussed in future blogs.

Linda Pardue

Pardue Group / Keller Williams Realty

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