Real Estate News in a Flash
More Homeowners Refinancing into Shorter-Term Mortgages. A new study recently revealed that many homeowners are refinancing into shorter term loans. The advantage is that the mortgage will be paid off in a short time, which is appealing to those who face retirement in the next 10-15 years. Some rates are as low as 2.99 or 3%, with 7-10 year terms. The trick of course is that you must have equity in your home to be able to qualify for a refi, and then must be able to afford the higher payments. This trend shows that home ownership is still very much desired, which is a good sign.
Home Insurance Premiums are on the Rise. While home prices are falling across the U.S. those who plan to buy need to be aware that home insurance is on the rise. Some of the largest insurance companies have indicated they have or will be raising rates. This is partly due to the slew of natural disasters our country has experienced recently, such as the hurricanes and tornadoes in the mid-western states, floods in the south, and earthquakes/tsunami in Japan and elsewhere. Different areas will experience different increases, depending on risk factors.
Great Opportunities Abound for Buyers/Investors. Housing prices have dropped slightly and will likely continue to do so, due in part to the large distressed property inventory that will continue to grow for at least a year or two. Mortgage rates are still low and buyers can get a LOT more for their money right now, so it is a great time to take advantage before mortgage rates do rise.
Mortgage Delinquencies Increasing/Foreclosures Down. Although the number of new foreclosures went down in the last quarter, the number of homeowners who are delinquent in paying their mortgages increased slightly. This is an indicator that there will be a new wave of foreclosures and short sales to come, and that prices will continue to decrease until that inventory is cleared out. Great news for buyers, not such great news for sellers (unless they have equity in their homes). Foreclosures comprised 45% of home sales in California in the first quarter.
California is Expanding Foreclosure Investigations. The state of California has been expanding probes into loan servicers and applying pressure. The Attorney General is looking into robo-signing claims in an attempt to enforce restitution and prevent bad lending practices from happening in the future. A mortgage fraud task force has been comprised of 25 individuals will be targeting 3 specific areas: corporate fraud, fraudulent lending practices, and scams aimed at troubled homeowners facing foreclosures. Other states, such as Illinois and New York, are also expanding investigatory procedures.
