Archive for tag Interest rates
January 06, 2012 at 05:39 AM · Posted under Colleen Kuchta
Like many people, we each have a Facebook profile - a place where we keep friends up to date on the daily happenings in our lives. We also have a business page on Facebook - a place where we highlight our listings & sales, and keep followers up to date on Real Estate trends.
The other day, I posted this on my personal profile: "This new year is proving to be quite promising for real estate. :D". Of course there were a couple of comments, which in turn prompted me to write this blog.
As of January 3rd, 2012 our year in Real Estate is proving to be a great one. Let's look at why I feel this way. On January 2nd, 2012 Kelly & I received no less than 8 calls/emails from Buyers looking to view houses and make offers. Not every call/email will result in a family enjoying a new home, but I have met with 3 of these Buyers and hope to help them attain their goals of home ownership.
Why do these people want to buy now? Well, it is simple: mortgage interest rates are still below 4% AND prices are incredibly low as well! Why do we feel that this year in Real Estate is going to be so promising? Our phones haven't stopped ringing, our INBOX keeps filling up, and former clients are sending their friends & family our way. What makes us so special? You are not just another transaction to us. We know how important this move is to you, and we do everything in our power to ensure it goes smoothly. We listen to your wants and needs, and help turn them into a reality. Many times we share some laughs along the way, occasionally there are tears, but no matter what happens we are there, doing everything we can to help you reach your goal.
Now back to my prediction about 2012 Real Estate. I know that we will be able to help more individuals and families attain their real estate goals this year than we have before. I know that the mortgage interest rates and low prices will play a huge part in that equation, but I also know that the way we run our business will be the best part of that equation - the part that makes memories and friends. If you are looking to make a move, and want to know that you matter then give us a call, send us an email or message us on Facebook. We are here to help! The Kuchta's, Kelly & Colleen.
Posted by: 
Colleen Kuchta
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March 02, 2011 at 09:33 AM · Posted under Lisa Rossetto-Glowacki
We often point out that a buyer should be more concerned about the COST of a home rather than the PRICE. Price obviously is a component of cost. However, unless you buy all-cash, you must also be concerned about the financing of the purchase. The price and the financing together determine the cost of a home. Today, we want to look at only the financing piece.
An opportunity exists today because of recent government involvement-- an opportunity that may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future: historically low interest rates and the ability to lock in these rates for thirty years
Interest Rates
Because of the financial crisis, the government stepped in and instituted a series of programs, which pushed mortgage interest rates to historic lows. If we look at 30-year mortgage interest rates before and after government intervention we see the impact these programs had.
According to Freddie Mac, from 2006 to the start of the financial crisis (the fall of 2008), the average rate was 6.29%. Since then, the average rate has been 4.92%.
A purchaser can still get a 30-year fixed rate mortgage at approximately 5%. However, interest rates this low may soon disappear. The government has questioned its role in supporting homeownership. In the administration’s REFORMING AMERICA’S HOUSING FINANCE MARKET: A REPORT TO CONGRESS, they are very strong in voicing their thoughts on this issue.
Our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.
Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low and moderate income homeowners and renters, and carefully designed support for market stability and crisis response…
Under our plan, private markets will be the primary source of mortgage credit and bear the burden for losses.
What are the probable results of this decision?
The Royal Bank of Scotland: “The (government) currently provides 95% of housing finance in the U.S.; any reductions of their involvement in supporting mortgages mean interest rates will have to go up to induce private lending.”
AnnaMaria Andriotis, writer for Market Watch: “In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.”
The day of a 5% rate seems to be coming to an end.
Locking in a rate for thirty years
We must also realize that having the ability to lock-in a rate for 30 years may soon be a thing of the past.
There are a growing number of people who think that our mortgage industry should imitate those of other industrial countries around the world. If we do start limiting government support for the mortgage process, the 30-year fixed rate mortgage may disappear. Other countries, like Canada, only allow a purchaser to lock in a rate for a five year term. After that, the borrower must renegotiate a new mortgage at current rates. Could that happen here?
Mark Zandi, Chief Economist of Moody’s Economics.com addressing the administration’s recent report: “A private system would likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, primarily offering adjustable-rate mortgages. Based on the experience overseas, the fixed-rate share in the U.S. would decline to an average of between 10% and 20% of the mortgage market compared with a historical average of closer to 75%.”
Bottom Line
The COST of a home is dramatically impacted by the mortgage component. Today, we can get a 5% mortgage and lock it in at 5% for the next thirty years! Both of these opportunities may disappear in the near future. You should take this into consideration if you’re looking to purchase a home
Posted by: 
Lisa Rossetto
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May 07, 2010 at 10:01 AM
As most people are aware, the $8,000 tax credit ended at midnight on April 30th. Early in the year, it seemed like it would be doom and gloom for months after that. By the end of March, beginning of April, the mood seemed to be improving, in regards to life after the tax credit!
During open houses in April, I started hearing buyers say, “yes, we’d love the tax credit, but we aren’t going to make a quick decision just to get it!” That was refreshing to hear. While I know some buyers may have bought, just to “get it done” in time, many were smart and shopped with cool heads.
WHY WOULD YOU BUY NOW, IF YOU MISSED THE TAX CREDIT? I can give you several reasons.
• Low interest rates, even though they were predicted to go up quickly and dramatically, so far they have been very good.
• Great inventory is still out there
• Lower prices than we’ve seen in years
• WHEDA is back, and FHA is as busy as ever! MORTGAGE MONEY IS AVAILABLE!
• A HOUSE IS MORE THAN AN INVESTMENT! It is a place you bring your new baby home to, entertain friends at a backyard BBQ, celebrate the holidays, and go home to at the end of a long work day! It is a safe, warm welcoming place you call HOME
Our first 4 months of this year have produced some interesting numbers. New inventory is up 20%, and sales are up 40%! That shows that the inventory is starting to head towards a balanced market. So if you are a buyer, it is good to buy now, before the rates go up and the market swings out of buyers favor.
For a list of homes in the City or Suburbs of Greater Milwaukee, call or email Pat Tasker at ptasker@shorewest.com You too can make a good buy if you act now. The stock market proved yesterday it is not for the faint of heart. But real estate over the long haul has proven that it is a good investment.
Posted by: 
Pat Tasker
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April 02, 2010 at 02:27 PM · Posted under Lisa Rossetto-Glowacki
As a Realtor, this is a question I receive on a regular basis.
Sharing a line of thinking from Dean Hartman, Chief Planning Officer of Continental Homes loans and a 25 year veteran in mortgage lending, he sites the following facts and his opinion:
Thanks, Dean! As a Realtor, this translates simply to Buy Today!
Posted by:
Lisa Rossetto
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February 15, 2010 at 11:29 AM
If you haven’t already heard the $8,000 first time buyer tax credit was extended and a current homeowner tax credit of $6,500 was added. To take advantage of either credit you must have an accepted offer by April 30, 2010 and close no later than June 30, 2010. Ask me for more details to see if you qualify (414.416.0704 or mkoch@shorewest.com).
In addition to the credits, many buyers, first time or thereafter, are realizing that this real estate market is a great opportunity to take advantage of low sale prices and historically low interest rates. Many economic experts are telling us that after the tax credit deadline, we could see interest rates take a sizeable jump higher. Most are predicting at least 6%.
So, what exactly are we getting at here? Well, for starters, the Wisconsin housing market is predicted to return to 2006 pricing levels between 2014 and 2017. That is a long way away. If you have thought about a move between now and then, consider this example:
You are comfortable paying $1300 per month (principle & interest only) on a 30 year mortgage for a new home. Monthly Payment: $1300 @ today’s interest rate of 5.25% = the loan amount of $235,420 or a $244,000 purchase price with 3.5% down.
VS.
Monthly Payment: $1300 @ 6.25% = the loan amount of $211,135 or a $219,000 purchase price with 3.5% down.
Here’s the conclusion: If rates jump up even by 1%, it just lowered the price of the home you can purchase by $25,000!
What if you have a house to sell?
The news is really the same - if you can sell now and you want to move before 2016, now is the time!
Could you make more money on your house if you wait? Possibly, but consider this example:
Sell a $200,000 home in today’s market and buy a home with a loan amount of $250,000 vs. the projected scenario for the same properties in the 2016 market.
TODAY
| Sale Proceeds |
New Loan Amount |
Monthly Payment |
| $0 |
$250,000 |
$1380.51 at 5.25% |
VS.
Waiting until 2016
| Sale Proceeds |
New Loan Amount |
Monthly Payment |
| $15,000 |
$265,000* |
$1631.65 at 6.25% |
*$265,000 using the proceeds of $15,000 from sale of current home to purchase a $280,000 home.
Remember, if your home price increases, so do the prices of the homes you want to buy.
Here’s the conclusion: Even if you wait for your home to increase so you can get more money when you sell to put down on a new one, you will still pay a higher mortgage payment each month because the interest rate will be higher.
We realize that this can be very confusing, but felt that it was really important for all of you to know. We would be happy to talk with you further about your particular situation to see what makes sense for you. Just give us a call at 414.416.0704!
Posted by:
Mickey Koch
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December 21, 2009 at 02:32 PM
If Paul Revere were alive today, he’d be shouting from his saddle (OK, maybe he’d Twitter from his Lazy Boy), “Higher interest rates are coming. Higher interest rates are coming.”
For much of 2009 the Federal Reserve has been buying mortgage-backed securities to the tune of more than $1 trillion. This aggressive buying program has helped keep mortgage interest rates hovering around 5 percent for 30-year money.
The Fed has set aside another $163 billion for purchases between now and the end of March. This pace of purchases is substantially less than earlier in the year. Once March 30, 2010 arrives, the buying by the Fed is scheduled to stop.
Everything I’ve been reading says to expect rates to start creeping up after the first of the year. Many experts are predicting 30-year mortgage rates of about 6 percent by April.
What does that mean to you as a home purchaser? Say you are buying a $300,000 home with 20 percent down. Monthly principal and interest at 4.875 percent on a 30 year mortgage is $1,270.10. That same loan at 6 percent will cost $1,438.92 per month.
Looking at it from a different angle, that $168 per month savings actually increases your buying power by almost $32,000.
So, the big question is, “what are you waiting for?”
Inventory of available homes is good and Uncle Sam is willing to chip in tax credits of $6,500 to $8,000. Housing prices are down but appear to be stabilizing and interest rates are incredibly low with most predicting an increase on the horizon. I’d say now is the time to buy that new home.
Posted by:
Steve Bauman
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