DEAN GRAZIOSI: DEAN GRAZIOSI REAL ESTATE

You searched for months for that perfect first home to buy.  You and your realtor looked at everything from foreclosures to new construction.  Finally you found the one that made you say “I could live here the rest of my life.”  You put in your offer and it was accepted.   After the initial joy wears off you realize you need to get your ducks in a row so you can close.  Below are 5 tips that if followed will help you on the road to a smooth and on-time closing.

 

Get All Back-up Ready for your Mortgage Company.

 

While you were searching for your home your mortgage company most likely provided you with a list of items you will need to give them before you can close.  Grab that list and start gathering everything you need.  That list will include things like recent tax returns, pay check stubs, identification and recent bank statements.   As you gather them get them to the mortgage provider so they can look them over and make sure they are what they need. 

 

Get Your Inspection Done

 

Most offers can be rescinded in the first few days if something is found to be fundamentally wrong with your future home.   A good realtor will have someone they recommend you don’t have to use that inspector, but often times it is good to use someone your realtor is familiar with because they know they can trust them.

 

No big purchases

 

Most mortgage companies will require you to have enough money in your bank accounts to cover the down payment as well as a month or two of mortgage payments.  Even after you have shown them your recent bank statements it is a good idea not to spend much money because they may ask to look again the day of closing.  If you need to purchase something for the new home wait until after closing. 

 

Don’t Use Credit Cards

 

Don’t use your credit cards for anything until after you are completely closed.  Using your credit cards can affect your overall credit score which could lead to your mortgage provider raising tour interest rate or worse.  Most mortgage companies will run your credit report the day of the closing to make sure you are still within the window of acceptance.  Anything you need should wait until after the closing.

 

Don’t Take Any New Lines of Credit or Open New Loans

 

It may be tempting to take a new line of credit to purchase the new floors you need for your new home, but wait until after the closing has been completed.  Opening a new line of credit or getting a new installment loan can lower your credit score and also increase your liabilities.  Both of which can cause your mortgage company to cancel the loan or raise your interest rates.  Anything you need for the new home should wait until you have completed closing. 

The Mortgage Bankers Association is a national association that represents persons and corporate entities in the real estate finance industry.  With 280,000 persons spread throughout every community in the U.S. the association provides reputable information about national and regional trends, rates and activity across numerous real estate finance markets.

 

On September 16, 2009, the organization released its Weekly Mortgage Applications Survey for the week ending September 11, 2009.  Adjustments were made to reflect the Labor Day holiday.  The news continued a recent downward trend. 

 

The Market Composite Index, which measures mortgage loan application volume, fell 8.6% from the previous week on a seasonally adjusted rate.  On an unadjusted scale, the weekly volume dropped 18.3% and was down 18.7% in year-over-year comparisons.

 

One aspect of the real estate funding activity that remains strong is the refinance component.  The Refinance Index decreased 7.4% from the previous week but the four-week moving average for refinance applications is up 5.2%.  Borrowers are seeking to renegotiate lower interest rate loans and to capitalize on the federally backed modification loans.

 

Refinance applications accounted for 61% of all real estate funding activity during the week and marked a 1.2% increase over the previous week.  With real estate values appearing to stabilize and with government initiatives showing strong support for refinancing, refinance activity is significantly busier than last year.

 

Applications for Adjustable Rate Mortgages (ARM) were also on the rise.  The number of ARM applicants rose from 5.8% to 6.0% of total finance applications processed last week. 

 

The interest on 30-year fixed rate mortgages with an 80 percent loan to value ratio rose slightly to 5.08%.  Points related to these loans fell to 0.98% from 1.23%.

 

15-year term loans for fixed rate mortgages decreased to 4.41% from 4.45% the week before.  Points on 15-year fixed rates loans fell to 1.12% from 1.13& previously.  These points include the origination fee.

 

The weekly survey covers 50 percent of all U.S. retail residential mortgage applications.  The survey has been conducted since 1990.  Participants include mortgage bankers, commercial banks and thrifts.  The base period for all indexes is March 16, 1990.   

 

The Mortgage Bankers Association (MBA) maintains headquarters in Washington, D.C.  The group is charged with ensuring the continued strength of the nation’s residential and commercial real estate markets.  As such, reports and surveys distributed by the MBA have influence on various markets throughout the financial sector.

 

One goal of the NMBA is to extend the opportunity of affordable homeownership throughout the nation.  The MBA promotes fair and ethical lending practices.  The association sponsors numerous ongoing educational programs for members and affiliates.  Membership in the MBA includes more than 2,400 companies from all aspects of the real estate finance including mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits and life insurance companies.

 

 

The Mortgage Bankers Association released favorable data regarding August mortgage applications and applications for refinancing.  As interest rates fell to the lowest levels since May, consumers rushed to capitalize on the downturn.  In August,  the 30-year fixed interest rates hit their lowest point in three months.

 

Applications for refinancing climbed as did the number of applications for new mortgages.  As of September 4, 2009 the Mortgage Bankers Association (MBA) said its seasonally adjusted index of mortgage applications, which includes both new application and refinance applications, increased 17.0%, the biggest jump since may 2i9, 2009.

 

Many of the new applications are believed to be sparked by first homebuyers seeking to beat the November 30^th closing deadline fore the 2009 tax credit.  A spokesperson for the Charlotte, North Carolina, based Lending Tree, said that purchasers were not upsizing but were taking advantage of lower prices and lower interest rates to either refinance or purchase their first home.

 

It appears that the low end of the real estate market is busy.  It is believed that there is a substantial inventory of existing homes waiting to come on the market.  Some real estate experts project 12 months of housing inventory is waiting in the wings.

 

With interest rates at record lows and with excess supply, the conditions could not be more favorable for real estate investment.  Interest rates on 30-year fixed mortgages dipped 0.13 percent to 5.02%.  The all-time low was set in March at 4.61%.  Fixed 15-year interest rates averaged 4.45% down from the 4.57% rate the week before.

 

The four-week moving average of mortgage applications was up 7%.  With Congress reconvening this week, the National Association of Realtors and other real estate and mortgage groups will be asserting pressure for the passage of an expanded 2010 tax credit.  The industry is lobbying hard for passage of the bill, which will serve as a credit for all real estate acquisitions.

 

The climate is strong for the real estate investor.  Real estate agencies indicate a upswing in pending sales.  Prices have begun to stabilize and investors who want to stay ahead of the curve are buying now.