America lowers rates

Mortgage rates in the US since the beginning of the year are down - contrary to the predictions of experts. Even with the continuation of the trend of strong growth in prices on the US housing is not going to happen, experts say.

According to the latest weekly report, the mortgage agency Freddie Mac, now the average rate on mortgages in the United States for 30 years is 4.23%, for 15 years - 3.33%. The downward trend in mortgage rates was clearly manifested from the beginning of the year: mortgage rates closer to the level of November 2013, when they accounted for 4.29%.

For comparison, at the beginning of this year, rates on loans for 30 years were 4.53 and 3.35% for 15 years. Active growth mortgage rates began in May - while the average mortgage rate for 30 years amounted to 3.35%, just like in the beginning of the year (3.34% in January).

Rising mortgage rates began after the Fed announced the possibility of folding programs to stimulate the mortgage market, a policy known as quantitative easing QE3.

According to analysts portal themortgagereports.com, the first reason for lower rates is that the US economy shows a slowdown. In addition, labor market indicators and consumer sector were worse than predicted by experts. For example, late last year, the unemployment rate remained at a high level - 6.7%, while the return to full employment could take two years.

In theory, the reduction of QE3 quantitative easing program should lead to an increase in mortgage interest rates. However, now there is the reverse situation: the program began to decline, and rates began to decline. The most likely reason for this situation, experts believe investor interest in US bonds. International investors buying US bonds at a faster pace than the Fed can release them to the market, analysts say portal themortgagereports.com.

At the same time, experts stress, this situation is not new.

A similar situation occurred when QE ended in 2009 when QE2 ended two years later. At the same time during the action programs mortgage rates are at record low levels - around 3%.

The possibility of continuing downward trend in interest rates will not lead to an increase in housing prices. "Prices" will not grow as they grow up in the spring of last year, "- said Jed Kolko, chief economist at Trulia Inc. (TRLA), an online service for the acquisition of real estate. The pace of price growth could slow. According to various estimates, the average growth in house prices was about 13% in 2013. In the third quarter of 2013, according to Freddie Mac, the rise in prices on an annualized basis was 8.48% in the previous quarter - 7.57%. According to the company Freddie Mac, in 2014. The housing market recovery is continuing at a steady pace. The increase in prices is projected at 5%.

The pace of sales will vary depending on the market - on the individual local markets, they can remain at a low level.

Although in general, even raising mortgage rates did not have a negative impact on the number of sales transactions. The number of homes sold in the secondary market reached the level of 2006. According to experts, it shows that the real estate market began to adjust to the increasing rates. The number of transactions at the end of the year increased in November was concluded 444 thousand. Transactions for the purchase of new housing, whereas the previous month - 354 thousand.

The documents which are necessary for the application

1. An application for a mortgage showing revenues, expenses, assets and liabilities, jobs, housing and places. They are really interested in the last two places of habitation, and the last two places of work. Assets of them somehow not very interested in, and the list of debts and expenses they have received from the credit bureaus.

2. Tax returns for the last two years

3. The last two months of bank statements. They had several times to update.

4. Two recent reports about wages,

5. A copy of driver's license

6. Proof that the time to pay for housing the last 12 months (copies of checks or a letter from hoyaina housing)

During consideration of the application (where it took 30 days), has asked further explanation of large deposits in the accounts. Where's the money?

In addition, before the closing of the transaction, the bank made a valuation sovstvennosti (at my expense) and inspection of property boundaries (also at my expense). In addition, before the closing of the transaction it is necessary to purchase insurance on the house, and get a commitment from the title of the titular company that insures property rights.

NA costs for mortgages:

Origination Charges (a fee for the services of the bank) $ 34.50

Evaluation sotimosti $ 390

The credit report from the credit bureaus $ 10

Certificate of property that is not in the flood zone $ 11

Services cover the company $ 685

Title insurance for the owner $ 2900.00

Title insurance for the bank $ 685.00

Gosudartvennuyu registration fee $ 185.00

Transfer tax (transfer taxes) $ 2,293.50

The fee for electronic filing system $ 27.50

Study property boundaries $ 395.00

Total: $ 7616.50

Terms of mortgage:

The amount of loans $ 417.000, it is necessary to pay at least 20% of the appraised value of the property of their savings. Interest on mortgage 2.875% fixed for 7 years, and after 7 years it will change each year, depending on the 1 godichnocho LIBOR. There is an upper limit - the percentage can rise above 8.875%. Restrictions or charges for early payment is not. The body of the loan by calculating the pogashetsya uniform payments for a period of 30 years. That is, consider how much you have to pay per month (for the interest and principal amount of the loan) to 30 years to pay it. In this particular case, the minimum monthly payment will be $ 1730.11 for 7 years, and then every year will change in greater and in the smaller side, depending on the amount of debt and the interest rate.

I should add that everything happens on the phone, and all documents are poisoned by emailu. I personally do not need to go anywhere.

10 myths about mortgages in the US

Credit system is complex, and it realizes not everyone. Even in the US where the mortgage market is well developed, there are many uncertainties. It is believed that people are buying houses and apartments on average every five or seven years, and do not seek to delve into the essence of credit. To clarify the situation, analysts Zillow compiled a list of the most common misconceptions associated with a mortgage in the US.

 1. Loan interest reflects the real cost of mortgages

In fact, the real cost of the mortgage interest rate is expressed on an annualized basis (annual percentage rate, APR). It includes loan interest, fee for loan processing, mortgage insurance (if required) and other charges. However, this rate does not reflect the cost of homeowner's insurance policy. APR is usually higher than the cost of borrowing, so when choosing a mortgage program should pay attention primarily on it to get a more accurate idea of ​​the real cost of mortgages.

2. Mortgage rates are revised only once a day

Interest rates on various types of loans can vary within a day, sometimes dramatically. It is necessary to carefully choose from a variety of offers - just so you can find the most convenient option.

3. All credit institutions are obliged by law to charge the same fees for valuation of the assets and credit

In fact, no such law. Some banks cancel such charges to make rates more competitive. In contrast, there are organizations that overstate prices. Therefore, when looking for the best deal is to compare the hidden costs in different banks.

4. The borrower is obliged to take out a mortgage from that bank, which was signed a preliminary agreement

At the conclusion of a conditional preliminary agreement (pre-approval) estimated amount of the loan that the bank is ready to provide. Usually at this stage it is also checked income and credit history of the borrower's future. However, the latter does not have to continue to be a customer of the bank, which signed a preliminary agreement. It is necessary to get at least three variants of credit before finally take out a mortgage.

5. The best offer you can get in the bank, where there is a current account

Some banks do make discounts for regular customers, but it is unlikely that you will be given lower rates because you have opened an account there. Always is chosen from proposals of several banks.

6. If the loan takes the wife, when determining the rate of their credit histories play an equally decisive role

When the spouses together take a mortgage, banks seek a credit score of three major agencies: Equifax, Experian and TransUnion. Those calculate the average score of the ratings of both spouses, and use the lowest of the two, to determine the cost of borrowing. This means that the greater role played by the spouse having the worst credit history. It does not matter which of the two is primary and secondary borrower.

7. It is impossible to get a loan with a down payment of less than 5%

Many mistaken, believing that to get a loan have to invest 10, 15 or even 20% of the property value. However, FHA (Federal Housing Administration, FHA), you can get a loan, making only 3.5% as a down payment. Similar programs operate in the Department of Veterans Affairs (Department of Veterans Affairs, VA) and USDA (United States Department of Agriculture, USDA).

8. Those whose homes were seized for the debts will have to wait seven years before taking a new loan

Those who had to go through a short sale for a period, you can get a new loan in 2-4 years, depending on the size of the down payment and loan type. In case of a foreclosure waiting period longer - 3-7 years. But even those who have enough money, will not be able to establish a good credit history for just a couple of years.

9. When the negative difference between the cost of providing and credit debt refinancing prohibited

Today, millions of American owners of the amount of debt exceeds the value of the property. For them, there are two programs, one of which, Home Affordable Refinance Program (HARP), is available to those who give guarantees on loans Fannie Mae or Freddie Mac. The second program, FHA Streamline Refinance, designed to help debtors, loans which insures the Federal Housing Administration.

10. Refinance mortgages can be only once in 12 months

Under the refinancing loan repayment is understood in the same bank with the help of a loan from another bank, where the lower interest rates. If the loan guarantees allow Fannie Mae or Freddie Mac (and the majority of these loans), to refinance a mortgage at any time. It is only necessary to consider the difference between the current lending rate of the borrower and the new lending rate should allow to raise enough funds to cover the monthly cost of refinancing in two years.