Category Archives: Mortgages in South Carolina

Mortgage Rates in Charleston Stay Low

CHARLESTON, SOUTH CAROLINA – Average mortgage rates on fixed mortgages fell this week and are just slightly above record lows reached earlier this year. The low rates have contributed to a modest housing recovery.

GSE Freddie Mac said Thursday that the rate on the 30-year loan declined to 3.59%, down from 3.66% last week. Five weeks ago, the rate fell to 3.49%, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage, a popular refinancing option, slipped to 2.86%. That’s down from 2.89% last week and from the record low of 2.8% five weeks ago.

Cheap mortgages are a key reason the housing market is finally started to rebound five years after the bubble burst. However, another large factor is banks are not releasing the foreclosed homes they have on their books, and are sitting on them thus reducing the inventory and increasing demand. 

Sales of newly built and previously occupied homes are well above last year’s levels. Prices have increased consistently, largely because the supply of homes has shrunk while sales have risen. And Charleston SC builder confidence is at its highest level in five years.

Still, the  Charleston housing market has a long way back to full health. Some national economists forecast that sales of previously occupied homes will rise 8% this year to about 4.6 million. That’s well below the 5.5 million annual sales considered healthy. Many people are still having difficulty qualifying for home loans or can’t afford larger down payments required by banks. If you need help with home financing in Charleston South Carolina and need advice contact me at.

Charleston SC Mortgage Rates

National overnight averages Today +/-
30 yr fixed mtg 3.54%
15 yr fixed mtg 2.89%
5/1 ARM 2.86%
$30K home equity loan 5.68%
$30K HELOC 4.58%
About these rates

Mortgage rates in Charleston SC are low because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurey’s increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.

The average fee for 30-year loans was 0.6 point, down from 0.7 point last week. The fee for 15-year loans also slipped to 0.6 point from 0.7.

The average rate on one-year adjustable rate mortgages fell to 2.63% from 2.66% last week. The fee for one-year adjustable rate loans was unchanged at 0.4 point.

The average rate on five-year adjustable rate mortgages declined to 2.78% from 2.80%. The fee held steady at 0.6 point.

Most Article Content By USAToday.com
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Home Sales Brighter, prices on rise.

Existing-home sales kept up their recovery in July, rising 2.3% as prices jumped 9.4% from a year ago, according to the Charleston Trident Association of Realtors, but the market’s progress disappointed analysts who expected more.

Smaller inventories of homes for sale let sellers push prices higher, the association said. The average price of a new home rose 9.4% to $187,300, aided by a shift in the mix of homes sold, with fewer low-end units included. “I am seeing multiple offers within in first week a nice home comes on market,” Isle of Palms Realtor, James Schiller.

Nationally, the number of homes sold rose to a seasonally adjusted annual rate of 4.47 million. The numbers missed economists’ expectations of about 4.52 million home sales, according to Drew Matus, an economist at investment bank UBS.

Mortgage interest rates have been at record lows this year while rents have been rising at faster rates,” NAR Chief Economist Lawrence Yun said in a statement. “Combined, these factors are helping to unleash a pent-up demand. However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”

Independent economists are looking for the housing market to begin slowly reversing its more than 30% slide in prices, though most do not expect substantive price gains until at least 2013 or 2014.

“It was a little below expectations but still good,” said Mike Zoller, an economist at Moody’s Analytics. He said the sharp gains in prices reflect the smaller percentage of foreclosure-related distress sales included in the numbers, as well as the shift to more higher-end home sales.

Tight credit or worries about jobs may be prompting buyers to stay on the sidelines, said Patrick Newport, an economist at IHS Global Insight. The gain in home sales was the second-smallest reported this year, he added. As long as the buyer has good credit, money to put down, and good job security getting a loan is still easy by most standards.

“These are not great numbers,” Newport said. “We have record-low mortgage rates. Something is going on.”

The economists also disputed the Realtor association’s argument that sales might be stronger if more homes were available.

Nationally, inventories of available homes work out to about six months’ worth of expected sales, Zoller said, a level he called “reasonable.” The proportion of homes that are vacant is still above 2%, Newport said, citing Census data. That’s higher than a historical norm of about 1.7%, he said. Locally,  Charleston, SC homes sales appears to be improving as inventory stays lower than normal.

The bright side is that the overhang of foreclosures are finally seeing a decline, relieving an overflow that pushed prices lower, Barclays economist Michael Gapen wrote in a note to clients. About 24% of sales were foreclosure-related, down from 29% last July, he said.

Most Content Courtesy of USA Today

Mortgage Rates Still Good

National Mortgage Rates

National overnight averages Today +/-
30 yr fixed mtg 3.62%
15 yr fixed mtg 3.03%
5/1 ARM 2.78%

In another report Thursday, Freddie Mac said average rates on fixed mortgages fell again to record lows.

US Existing Home Sales Chart

The average rate on 30-year loans fell to 3.53% from 3.56% last week. It is the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.83%, below last week’s previous record of 2.86%.

The rate on the 30-year loan has fallen to or matched record lows in 12 of the past 13 weeks. Cheaper mortgages have contributed to the modest housing recovery. Home prices are rising in most markets. Mount Pleasant SC Builders are putting up more houses than they have in nearly four years, a long-awaited recovery that could help energize the local economy.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend on other things. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

Still, many people are having difficulty qualifying for home loans or can’t afford larger down payments required by banks. And the sluggish job market could deter some from making a purchase this year.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.

The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans slipped to 0.6 point, down from 0.7 the previous week.

The average rate on one-year adjustable rate mortgages was unchanged at 2.69%. The fee for one-year adjustable rate loans also stayed the same, at 0.4 point.

The average rate on five-year adjustable rate mortgages dropped to 2.69% from 2.74% last week. The fee was unchanged at 0.6 point.

100% Financing USDA eligible communities for SC

There are only two common loan programs that offer 100% financing NO money down on the purchase of a new home.

1.) VA Loan – First thing and most obvious you must be an active duty service member in the armed forces or be a veteran, and you must be able to meet all the other criteria of eligibility for the VA Loan. Visit VA to see if you qualify.

The other way to buy a house in Charleston South Carolina with No money is by going through the USDA. You must meet the income criteria and agree to purchase a home in an approved community. See the local list below.

These are the communities in Coastal South Carolina that qualify for 100% financing through USDA as of 08/2009.* Make SURE to Check with your Loan Officer to make sure the home you are considering purchasing is a USDA eligible property.Your loan officer will let you know if you qualify for the USDA Loan based on your income and location of the property.

AUTUMN RUN

BARNNED ESTATES
BAYVIEW ACRES
BEECH HILL
BELL ACRES
BELLCREST ESTATES
BLACKBERRY CREEK
BOYLE PLANTATION
BREEZE WAY
BROOKWOOD
CAIRE YELLEAU
CARL KNIGHT
CAROLINA BAY
COTTAGE GROVE
COUNTRY CLUB ESTATES–ST. GEORGE off of US 78 & sugar hill rd
COUNTRY LANE ESTATES
CYPRESS HILL
DORCHESTER REGENCY
E. HIGHLAND ACRES
EDISTO RETREAT
EDISTO RIVER ESTATES
GAVIN ACRES
GAVIN ESTATES
GREENWOOD RANCHES
GUM BRANCH FARMS
HALF WAY CREEK ESTATE
HAMPTON ESTATES
HARTS BLUFF
HIGH MEADOW FARMS
HIGHLANDS OF LEGEND OAKS
HIGHWOODS PLANTATION
HILLSIDE FARMS
KNIGHTSVILLE FARMS
LAZY J
LEGEND OAKS PLANTATION
LEGEND OAKS
MATEEBA ESTATE
MEADOW RUN
MIDDLETON OAKS
MYERS MILL–Whitlow Blvd/isabela court
MYRANT
PD KINGHT
PLUM CREEK
POPLAR GROVE
REMINISCE
RIDGE
RIDGEVILLE FARMS
ROBERTS ROAD ESTATES
ROBINSON ACRES
ROBYNWYNN
SCOTCH RANGE
SHORT CUT ROAD
SPRUCEWOOD
SUMMERSET ACRES
SUMMERVILLE COUNTRY ESTATES
SUMMERVILLE ESTATES
SWEETBRIAR
SYLVAN ACRES
SYRR RUN
THE GLEN AT SUMMERSET
THE ROOKERY
TWIN LAKES
ULEYSEE GARVIN
W. HIGHLAND ACRES
WEST OAKS
WINTERSEAT
WIRE ROAD

Should YOU Sell Your Home NOW?

Now it’s Oct. of 2011… I originally posted this piece below in 2010 in response to this “expert” from the Wall St. Journal who claimed then that home prices would be increasing. Evidently this “expert” was wrong. To further update you as to my opinion I still feel that anyone considering selling should do so now because the housing market is probably only going to worsen.  Fast forward to 2012 and I was correct. There is a thing called shadow inventory that have yet to hit the market up to some say million new homes. What do you think will happen to home prices then?

If you have any concerns about selling your home in Charleston you better start to sell it sooner than later, because as the banks begin to trickle out their foreclosed homes, this will keep the market soft. Furthermore, rates are likely to increase in the next few years which will also deter those considering buying homes to get cold feet or be able to afford less.

(Below Written 05/2010)

It’s been a while since I have posted an opinionated piece because most of my posts are more geared toward news and information for the public and how it pertains to the industry of real estate. However in this case, I couldn’t shake this ludicrous idea by a writer at the Wall St. Journal. I have always respected the Wall St. Journal, but this one has me baffled.
I have been in the real estate industry for going on 14 years now-  (12 years in mortgage financing),  and 5 years as a real estate agent Considering most of my experience has been financially related I tend to follow those trends the most seeing as there wouldn’t be sales of real estate without money to finance them. Let’s face it, there aren’t that many people liquid enough to pay cash so truthfully it all revolves around money. Even insurance revolves around money and is a great indicator of overall economic health. Each property has to be insured, each business, each profession has to have insurance, and yes mortgages have insurance.

With that said, the piece from the Wall St. Journal by James Hagerty goes like this: U.S. home prices will begin a gradual recovery by next year, according to a survey of 92 economists and other housing analysts by MacroMarkets LLC.” They then go onto write; “The analysts surveyed by MacroMarkets on average expect home prices, as measured by the S&P/Case-Shiller national index, to rise about 12% in the five years ending Dec. 31, 2014. As of Dec. 31, that index was down about 28% from its peak level in mid-2006”. 

Obviously I am assuming that Mr. Hagerty is just going off research and information given to him by MacroMarkets and these 92 economists, but I can’t believe the editors of the Wall St. Journal let this go to print. I can’t lay all the blame on the Wall St. Journal because they are apparently getting their info from these economists. I am sure out of 92 economists they most likely have many more years then I analyzing data, but let’s look at the facts and you decide for yourself.

National Mortgage News (an industry news subscription service) sends me monthly emails about the latest data coming from multiple outlets such as: National Association of Mortgage Bankers, national appraisal companies, commercial finance institutions, etc. Remember financing/economics tell the facts about what’s really happening.  Of 11 articles 7 of them were negative, but a few are really telling.

I am just going to give you the blurb “gist” of the piece.

1.)    Residential delinquencies climbed to yet another new high at March 31 with 10.06% of all mortgagors behind on their payments, according to new figures released by the Mortgage Bankers AssociationThink about it… If delinquencies are on the rise, as they have been continuously for almost 3 years how are home prices going to go up? When people are having to short sale their homes, get foreclosed on or bank sales increase, then home prices will inevitably continue to fall.

2.)    Loan applications to buy new or existing homes plummeted 27% last week, reaching a 13-year low, according to new figures released by the Mortgage Bankers Association. If loan applications plummeted on purchases by 27%… Well you don’t have to be a rocket scientist to see that home prices aren’t going to go up if there aren’t any sales.

3.) The loan buyback plague continued on unabated in the first quarter with three seller/servicers, accounting for about three-fourths of the industry’s repurchases, according to an analysis done by National Mortgage News. Here is how this works. When I loan is originated by a company, they then sell that loan to a larger institution (usually Bank of America, US Bank, Wells Fargo, just to name a few). If those loans under perform and have too many delinquencies within the first year then the originating company has to buy that loan(s) back. Another scenario is; if the purchaser audits the file after purchasing it and doesn’t like something in the file they can also force the seller to buy it back. Why is this bad? If the buy backs are due to delinquencies then that means those home owners can’t afford their payments, or lost their job, etc. Therefore, eventually their home will have to be sold and most likely for less than they paid for it. Subsequently sending home prices down.

My last bit to this post has nothing to do with the news articles written by the National Mortgage News, but about financing, FHA, VA, and FNMA. Our government is currently at a 94% debt to income ratio and can barely pay it’s bills. Meaning the U.S. really doesn’t have money to be buying mortgages from banks, and to decrease their risk of having delinquent loans they will have to increase the amount of money buyers will be required to put down, resulting in less people that qualify to buy. Secondly, the U.S. Fed recently quit buying treasury bonds (security instruments backed by mortgages), and If little to no one is buying mortgage backed securities in large quantities then  eventually mortgage rates will increase, subsequently, making it harder for people to qualify for home purchases. The less people qualify the less sales will happen therefore sending home prices down. Simple supply and demand.

Yes; there may be some tiny bits of data compared to the rock bottom days of a year or two ago that might lead economists to believe the trend is for prices to go higher, and yes home sales might have been increasing over the last couple months. However, the increase in home sales is due to one reason and one alone. The home buyer tax credit was about to expire so those people that were otherwise too afraid to purchase finally had reason to. Now that the credit is gone, so goes the buyers.

The overall picture in my opinion is not good, not good at all. As a whole the real estate market is posed to continue to slide, and as the U.S. economy continues to flounder the housing outlook is sure to follow. I am not a pessimist by nature so don’t get me wrong. Yes, everyone should stay positive and believe we can make a change for the better. Believe me I want nothing more than to be wrong, but being realistic is something I am, and the facts point me in that direction.

Follow up: Again I am not sure where the 92 economists where getting their info from..Latest from the Case-Shiller index on 05/25/2010

“The housing market may be in better shape than this time last year, but, when you look at recent trends there are signs of some renewed weakening in home prices,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “In the past several months we have seen some relatively weak reports across many of the markets we cover.”

A separate Case-Shiller index that is released quarterly and covers the U.S. showed home prices fell a seasonally adjusted 1.3% in the first quarter of the year compared to the fourth quarter of 2009.

If you are thinking about selling your home in Charleston, Mount Pleasant, Isle of Palms, Sullivans Island, Daniel Island, Folly Beach or the surrounding areas please contact me and I will gladly meet with you to discuss your options.

How to buy a house with NO money down

USDA Loans: A True 100% Home Loan

With the USDA loan program, no down payment is required and you are able to finance up to 102% of the property’s appraised value. With the elimination of the down payment assistance programs in late 2008, the USDA loan program is one of the only 100% loan programs available.

USDA Loans: No Up Front or Monthly Mortgage Insurance

With the USDA loan program, there is no up front or monthly mortgage insurance required. With the FHA loan program, you have both up front mortgage insurance premium and monthly mortgage insurance as well.

With no mortgage insurance required, the USDA loan program can save you hundreds (possibly even thousands) of dollars each year that mortgage insurance would cost with a different type of loan.

USDA Loans: No Credit Score Required

For the USDA loan program, officially, there is no credit score required… but unofficially, the minimum credit score that you will need to get approved by an investor is 620. This is relatively recent and may change back to the official answer — but for now, you need a 620 mid FICO score to qualify for the USDA loan program.

USDA Loans: No Loan Limit

The USDA loan program will allow you to finance “as much as you can afford”. There is no official loan limit with the USDA loan program, but the amount of money that you can borrow depends on your ability to repay the loan.

USDA Loans: Seller Concessions Are Allowed

With the USDA loan program, you can get the seller to pay as many of your closing costs as you can. There are no limits on “seller concessions” so negotiate the best deal that you can! Many loan programs limit the amount of seller concessions that you can have, but the USDA loan program doesn’t put a limit on them.

The USDA loan program is a great option for people who are looking to buy a house with little or no money down. The only “bad” thing about the USDA loan program? The only thing that I can think of is that you will have to find a property that can qualify – and sometimes you may have to drive a ways to get there.

HOW TO QUALIFY FOR A USDA LOAN

1.) Call Me to get a pre-qualification – Apply ONLINE HERE.

2.)  See which communities qualify for USDA HERE.

Rules for financing investment homes

Reserve requirements vary depending on the number of financed properties owned (including primary residence):

1-4 financed properties 0wned:

  • 2 months of reserves on the subject property if it’s a second home.
  • 6 months reserves on subj. property if it’s an investment property plus 2 months reserves on each other second home or investment property.

5-10 financed properties owned:

  • 2 months of reserves on the subject property if it’s a second home.
  • 6 months of reserves on the subject property if it’s an investment property plus 6 months reserves on each other financed second home or investment property.

Note: Freddie Mac’s guidelines are *currently* 6 months PITI.

Other underwriting changes for investment properties include:

  • 70% LTV for purchase of 1-unit and 70% for 2-4 units.
  • 720 minimum low-mid credit score.
  • No history bankruptcy or foreclosure in the past 7 years.
  • Rental income must be documented with two years tax returns.
  • Borrowers required to sign form 4506 (which you can expect on ALL loans these days–including owner occupied).

Don’t forget that there is a significant price hit of 0.75% to fee from Fannie and Freddie with investment properties on top of the credit score/loan to value adds (LLPA). Seller contribution is limited to 2% of the sales price with investment property.

Underwriters will be very strict on investment properties in today’s real estate climate so be prepared.

If you are thinking of buying investment property contact me and we can discuss your options before we go house hunting.

The ABCs of Short Sales

This information is from the National Association of Realtors. Hopefully it helps you.

What is a short sale?

A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.

Why is the number of short sales rising?

Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.

A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.

What challenges have short sales presented for REALTORS®?

The rapid increase in the number of short sales, and the short sales process itself present a number of challenges for REALTORS®. Major challenges include:

  1. Limited experience
    Many REALTORS® are new to the short sales process; a difficulty which is compounded by many lenders’ lack of sufficient and experienced staff to process short sales. Even if the REALTORS® are experienced, most servicers are under-staffed and still not adequately trained, making negotiating a short sale particularly difficult.
  2. Absence of a uniform process and application
    Currently, both short-sales documents and processes are lender-specific, making it very difficult and time-consuming for REALTORS® to become knowledgeable and efficient in facilitating these transactions. 
  3. Multiple lenders
    When more than one lender is involved, the negotiations are much more difficult. Second lien holders often hold up the transaction to exert the largest possible payment, in exchange for releasing their lien, even though in foreclosure they will get nothing.

As a result of these challenges our members have reported difficulties with: unresponsive lenders; lost documents that require multiple submissions, inaccurate or unrealistic home value assessments, and long processing delays, which cause buyers to walk away.

What is being done to address or eliminate these challenges?

On May 14, 2009, the Obama Administration announced its upcoming Foreclosure Alternatives Program. Among other things, the new program:

  • Establishes financial incentives for servicers, sellers, and second lien holders to encourage the completion of short-sale transactions.
  • Requires that a timeline, of no fewer than 90 days, be set to allow a homeowner to sell a home, without threat of foreclosure action.
  • Requires the short sale agreement to specify reasonable and customary real estate commissions and costs to be deducted from the sales prices. (The servicer must agree not to negotiate a lower commission after receiving an offer.)
  • Will provide standardized documents, including short-sale agreements and offer acceptance letters.

The Foreclosure Alternatives Program is anticipated to launch in late July.

For more information on all the short-sales provisions included in the program, see NAR’s Short Sales Incentive Summary and the government’s Foreclosure Alternative Program fact sheet (PDF 44K).

Loan Modifications become a mess

More than 9% of 45 million U.S. mortgages, or about four million loans, were delinquent in the first quarter of 2009, according to the Mortgage Bankers Association. That is the highest level since the group started tracking such data in 1972. As of the end of April, though, just 518,155 home loans had been modified, says Hope Now, a coalition of mortgage companies, investors and housing counselors.

Getting a mortgage modified can take months, slowed by thin staffing and mountains of paperwork. With so many loans bundled and sold to investors, it’s sometimes hard to figure out who even owns them. The new federal program requires borrowers to meet slightly different requirements than bank programs do, meaning banks need to navigate two procedures.

Chase’s mortgage business collects monthly payments and handles other chores on $1.5 trillion of mortgages. It owns about a fifth of those loans, having sold the rest to investors. Since October, the bank says it has prevented about 180,000 foreclosures, mostly through mortgage modifications. An additional 15,000 loans modified by the bank follow the guidelines set by the White House plan.

Roughly 3,500 Chase employees are trying to restructure troubled mortgages, and 1,000 counselors have been added this year to cope with demand. Chase has opened 24 walk-in offices around the U.S. where borrowers can seek face-to-face assistance.

Help Wanted

To Read the rest of this article by the Wall St. Journal click Here.

How can you improve your credit score?

creditScore It’s virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can’t “on the spot.” But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made “consumer-originating” credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what’s on them, and smart consumers shop around for the best mortgage and car loans.

Unsolicited credit card solicitations in the mail don’t count against your credit report, so don’t worry.

The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It’s never a good idea to take on more credit than you can handle.

Late payments work against you. It’s extremely important to pay bills on time, even if it’s only the monthly payment.

Don’t “max out” your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.

It’s said that by carefully managing your credit, it’s possible to add as much as 50 points per year to your score.

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