Utah Mortgage Consumers are paying the price

Unfortunately Mortgage consumers are again, having to pay the price of the recent economic crisis.  As part of ongoing efforts to strengthen the FHA capital reserves, and to help push private money back into mortgages, the FHA came out with a new premium structure for FHA-insured mortgage loans increasing its annual mortgage insurance premium (MIP) by a quarter of a percentage point (.25) on all 30- and 15-year loans starting in mid-April. (The upfront MIP will remain unchanged at 1.0 percent.) The increase adds $30 to the average borrower's payment and in total is estimated to add $3 billion annually to the FHA's Mutual Mortgage Insurance Fund. It is the second increase since October.

Also HUD has just revised their "Net Tangible Benefit" to consumers when trying to do a streamline refinance.  They will now require a total of a 5% reduction of principle, interest, and the annual mortgage insurance premium or refinancing from an Arm to a fixed rate mortgage.  Keep in mind the new streamline refinance will require the annual premium listed above.

Will home prices fall or rise in 2011?

Here is a great article that talks about the overall picture on what drives a housing market.

What drives a housing market?

"According to the local MLS the median sales price of a home in Salt Lake County peaked in the third quarter of 2007 at $256,000.  Prices then drifted down over the next three years to $230,000 in second quarter 2010. However, the rate of price decline has narrowed substantially in the past two quarters. 
Prices will likely be unchanged through the first two quarters of 2011 with perhaps slight gains in the third and fourth quarters.  Continued price pressure from foreclosures and short sales will prevent upward movement in prices in 2011.  In the end, any meaningful rise in home prices depends on a pick-up in housing demand, which will require an improvement in the job market, higher levels of household growth and fewer foreclosures.  These conditions will gradually be satisfied over the next few years but in the meantime housing prices are likely to remain stable, with more downside risk than upside potential. (2.1.11) "

Not Everyone Should by a house.

The home's changing role in family finances

We'd all like to live the american dream by purchasing a home.  The simple fact is, not everyone should be buying a home.

Here are some factors to consider when making a move. Reasons to rent: 

• Staying five years or less.

• Low upkeep costs.

• A way to try a neighborhood before buying.

• Security deposit and upfront rental fees are much lower than a mortgage down payment and closing costs.

• No risk of foreclosure.

• No property taxes. And no home insurance, although you need personal property insurance.

Reasons to buy: 

• Mortgage rates are still low, and in many cities home prices are a bargain. (It now is more affordable to buy than rent a two-bedroom home in 72% of the nation's 50 largest cities, says Trulia.com, a real estate search engine.)

• Tax benefit in the mortgage interest deduction.

• Equity will start building when the market rebounds.

• Intangible benefits, such as a place to raise a family. The ability to paint and make other changes unless bound by home association rules.

Is your Loan Officer Legally giving you advice?

"According to the Utah Division of Real Estate, 2010 began with 9,027 mortgage licensees. Only 5,200 of those licensees transitioned onto the database by the May 31, 2010, deadline. Of the 5,200 licensees in the system, only 2,000 have requested renewal and met requirements."

http://www.standard.net/topics/business/2011/01/23/unlicensed-mortgage-brokers-get-boot

I'm a Licensed Associate Lending Manager here in the state of Utah. I take great pride in running an honest business, and educating each and every client on how to improve their overall quality of life through home ownership. This article simply shows you we're going through a cleansing process in our industry which is well overdue.

Please reach out to me if you have any lending questions, and or real estate needs.

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