Mortgage Market News and Rate Survey

Mortgage rates inched up this week, despite the Fed’s latest efforts to hold rates low. Some experts worry that as investors gain confidence in the economy, rates may keep climbing. Others say there’s still plenty of bad economic news to keep rates at the bottom

The Fed isn’t as optimistic about the economy, and it’s determined to keep rates low.

“While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated,” read the Federal Open Market Committee’s statement on Wednesday. “Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.”

The Fed says it will keep the key federal funds rate near zero until late 2014. Previously, it had committed to keeping the rate low until mid-2013. While the federal funds rate isn’t directly tied to mortgage rates, it influences their direction.

It also will continue to reinvest in long-term securities and mortgage-backed securities, which is another way to keep rates low.

RATEFORECAST
Jan 27th
Will rates rise or remain relatively unchanged this week?
Industry experts and analysts provide their insights.

 31% of respondents expect rates to fall in the coming weeks  
44% predict a further increase in mortgage rates while the remaining 
25% forecast that mortgage rates will remain more or less unchanged

How Property Taxes Impact Your Closing

Especially at this time of year, homeowners question how property tax certifications and payments will impact their closing. We’ve summarized this information to refresh you on the process in Colorado.

Counties assess and certify mill levies and tax amounts annually on real property. This process is typically completed the end of December or early in January. Tax notifications are sent out in January, and property owners have two options for payment. First, they may divide the amount into two installments with the first half of taxes due by February 28th and balance by June 15th. Second, they may pay the full amount on or before April 30th.

How does this affect your closing?
Depending on the time of year in which you close, there are several ways in which taxes will be accounted for at closing. One item found on settlement statements is a proration between buyer and seller. Since we pay taxes in arrears, the seller credits the buyer for the portion of the current year in which they have owned the property.

If the closing takes place early in the year before counties have certified mill levies, the closing agent will typically escrow 125% of the prior year’s tax amount (or use the most recent assessed value if higher). Escrows are held until the certified amount is available, taxes are then paid, and any excess amount is refunded to the seller. If the certified amount is available at closing, that amount will be collected and paid upon closing on the seller settlement.

If a lender is involved in the purchase early in the calendar year, they may request a different means of paying taxes other than in entirety by the seller on the HUD-1. Ultimately, the seller will either pay or credit the full amount due to the buyer on the settlement statement with varying line item descriptions.

What happens when tax payments have been sent to the county but not yet processed?
Tax escrows may be collected and held by the closing agent until the treasurer’s office is able to verify payments have posted for the property. Counties may take a few days to post payments near due dates because of the heavy volume. Once verification is received from the treasurer’s office, any excess escrows are returned to the seller.

On occasion, both the lender and closing agent may submit payments to the treasurer’s office particularly near due dates. If this occurs, then either the lender or closing agent will return the tax escrow to the seller after they receive funds from the treasurer. When closings happen near due dates, it may cause additional delay in refunds due to the high volume of payments being processed.

What is the owner’s responsibility in paying property taxes?
Failure to receive a tax notice does not relieve an owner’s responsibility for paying taxes on time. If you are purchasing a property near year end, please note that your tax statement could be delayed to correct for the new ownership. Closing agents and lenders are not liable for such tax payments, it is solely the responsibility of the property owner.

If you need help Buying or Selling a property, don’t hesitate to contact Terry Robinson & the Early-Group, your Mountain Area Specialists!  303.748.3838 or email info@early-group.com

There is a website that lists the names and contact information, including websites, for the Colorado County Treasurer’s offices. Click this link to be connected…

http://www.e-ccta.org/CCTA_home_page.htm

Rates Remain Low but Higher Loan Fees May Change That

Mortgage rates are expected to remain low for now, but borrowers will face higher loan fees, which will translate into slightly higher interest rates or points for borrowers. That’s because the guarantee fee on loans that can be sold to Fannie Mae and Freddie Mac is set to increase by a minimum of 10 basis points.  The hike doesn’t take effect until April 1st, but lenders have already started to pass the extra cost on to borrowers.

 

The slightly higher costs should not have a major impact on the demand for mortgage loans because rates will remain attractive, Walsh says, owner of a mortgage company in CT.

 

 “Still, I don’t like anything that takes steam out of the purchase market,” he says. “This country desperately needs the housing market to get back on its feet. That’s why the Fed is trying to keep rates artificially low.”

 

The Fed says it will keep the key federal funds rate near zero until mid-2013 and continues to reinvest in long-term securities to help keep rates low.

 

But Congress has pushed rates in the opposite direction. The Fannie and Freddie hikes resulted from the extension of the payroll tax cut, passed in late December. The tax cut, which allows workers to take home a larger share of their pay, was extended for another two months. Congress mandated Fannie and Freddie to raise their fees to make up for the nearly $36 billion cost of the extension.

 

RATEFORECAST
Jan 12th, 2012

Will rates rise or remain relatively unchanged this week?
Industry experts and analysts provide their insights.
·       6% of respondents expect rates to fall in the coming weeks  
·       47% predict a further increase in mortgage rates while the remaining  
·       47% forecast that mortgage rates will remain more or less unchanged

 

Keys for Buying and Selling when the Market is Slow

It’s a whole new world for home sellers. So, how do you make your house stand out so it will sell when sales are slow?
Price your home correctly. When mortgage rates are low and buyers are chasing too few houses for sale, sellers can ask high prices and get them. Even when houses are overpriced for the market, sellers are likely to receive some offers, as buyers are often desperate to find a home that meets their needs.
But, when things are slow, pricing is absolutely critical. Instead of pricing your home aggressively high or low, you should consider pricing your home no higher than the middle of the range for homes comparable to yours. And if you need to sell your home quickly, consider pricing your home in the bottom 25 percent of comparable homes. Why? With few buyers chasing many homes, you need to quickly get the attention of those who are serious about buying. If your home is priced too high, you many never get buyers to even consider looking at your home.

As real estate professionals, we strive to keep in touch with my clients and provide them with information that I hope they will find useful. This Blog gives us an opportunity to let you know about the state of the market and current trends. It may even touch on ways that you could enhance your home’s value. I hope the market data  will help you with understanding real estate today and help you with your real estate decisions. If you have any questions, please do not hesitate to contact us.

Terry Robinson & The Early-Group
303.816.7516
info@early-group.com