Housing Matters, FHA, & MIP Deductions

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In early January a sharp decline in interest rates, coupled with buzzing announcements to reductions on popular federally-insured home loans, resulted in both purchase and refinance volume at their highest in six years, according to a CNBC report.

After rates dropped in the first full week of the year, total home loan applications almost doubled in the week following. By mid-month, purchase applications were two percent higher than the same time last year, and demand for refinances was at its highest in eight months. According to a Wall Street Journal report, rates on the popular 30 year fixed home loan were at their lowest since May 2013.

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Big Housing Announcements
The housing industry was already the talk of the town after the President announced cuts to mortgage insurance premiums on new government-insured Federal Housing Administration (FHA) loans. The reductions will result in more affordable monthly housing payments and provide new opportunities for as many as 2 million borrowers over the next three years.

In other mortgage insurance news, legislation was again passed which makes any payments on mortgage insurance premiums in 2014 tax deductible.

If the housing market continues on its strong start to 2015, we can be sure to see strong and sustained income growth and a significant move upward in the industry!

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The Bottom Line
Continued low rates and higher demand for popular first-timer home loans may drive up housing activity. This could be just the time you’ve been waiting for to buy or sell a home.

If you have any questions regarding housing please feel free to contact me. Now is a great time to explore your next real estate transaction.

Tori Denton, REALTOR®

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What’s the difference between Home Price and Home Cost??

The Difference Between A Home’s Cost vs. Price | Keeping Current Matters

As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

There are many factors that influence the ‘cost’ of a home.

Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home.

The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen in 2015?

A nationwide panel of over one hundred economists, real estate experts and investment & market strategists project that home values will appreciate by almost 4% by the end of 2015.

Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.5% by the end of 2015.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Cost of Waiting | Keeping Current Matters

As you can see the as homes appreciate and rates increase the principal and interest payment also increases.

If you are considering buying or selling your home in this market – it’s time you spoke to a real estate professional.

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To discuss this topic further please feel free to contact me!


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