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Metro Atlanta Mortgage Rate Outlook: Rates Rising?

The Metro Atlanta mortgage rate outlook this spring is creating a sense of urgency on the part of prospective home purchasers. With interest rates having edged up slightly and home prices rising continuously, many borrowers are making a beeline to apply for home loans. Their rationale is the sooner they act, the more they potentially will save – on interest rate charges and home price increases.

Interestingly, home purchasers are electing to take out adjustable rate mortgages (ARMs) in unusually high numbers in hopes they can handle the Metro Atlanta mortgage rate outlook of potentially higher rates and save money on their mortgage payments in the first few years.

 The latest Metro Atlanta mortgage rate outlook has caused some prospective home buyers and borrowers to apply for home loans before rates go even higher.

Mortgage activity has been on the rise in recent weeks, having increased nearly 3.5% from one week to the next, based on the most recent report from the Mortgage Bankers Association (MBA.) Despite the week over week increase, total mortgage volume is roughly 18% lower than it was during the same period in 2016. Experts say the lower volume has more to do with the decrease in the number of refinance applications than it does with the Metro Atlanta mortgage rate outlook. While most borrowers refinanced a year ago when interest rates were at or near record lows, there is still some refinance activity in the mortgage marketplace. The volume of refinance loans is down 34% so far this year, but mortgage lenders have seen an increase of more than 5% in recent weeks – based on consumer fears that the Metro Atlanta mortgage rate outlook might include higher interest rates moving forward.

Some analysts attribute the rush to refinance to recent remarks made by key Federal Reserve officials indicating what wound up being another interest rate increase in March. In addition, other economic factors came into play such as the recent Gross Domestic Product (GDP,) manufacturing results and inflation projections. While mortgage interest rates really are not directly tied to federal funds rates – upward or downward – a rate increase by the Federal Reserve could still make mortgage interest rates increase, only time will tell on this for sure. Fed funds rates are generally more short-term in nature, while mortgage rates are longer term, of course.

How will the Metro Atlanta mortgage rate outlook impact the usually brisk spring real estate sales season? While the true impact remains to be seen, economists say demand on the part of home buyers is still high. The problem, they contend – which is of greater concern than the prospect of higher interest rates – is affordable homes are still in short supply. The inventory shortages that occurred during much of 2016 have carried over into 2017, and don’t appear to be improving anytime soon. Since a good portion of the housing demand is on the part of millennials and first-time buyers, the inventory shortage is of major concern.

As mentioned above, one of the results of the recent Metro Atlanta mortgage rate outlook is more buyers are opting for adjustable rate mortgage solutions in an effort to save money since the ARMs offer lower interest rates for a certain time period. Statistics reported by the MBA showed that the ARM share of recent mortgage lending applications was the highest since 2014. The results simply highlight the concern borrowers have for higher interest rates, and in spite of the indications, home demand remains high going into the spring. In addition to the ARM share of applications reaching a three-year high, the average loan size for applications to purchase homes reached a high of $313,000. This is the result of two different factors. First-time buyers tend to impact the higher mortgage amounts less than buyers in the market who are moving up and buying bigger, newer and more expensive homes.

The Metro Atlanta mortgage rate outlook may have a definite impact on the spring market, however, all early indications are that due to high demand and the overall impression that interest rates – despite their slight upward tick in recent months – are still relatively low. Many borrowers remember when interest rates were in the 8%-9% range for a number of years. With that in mind, rates roughly 50% as high are veritable bargains today – in spite of the higher home prices that exist in today’s real estate market.

More first-time borrowers are going to faced with the dilemma of continuing to pay higher rents versus putting their monthly payments into paying a mortgage and building equity in a home of their own. The home participation or home ownership rate reached an all-time low in 2016, but the trend seems to be one of slight improvement during 2017. Time, as usual, will tell as first-timers decide what to do and when to do it. Housing inventory, as already cited, will determine a great deal as the market needs starter homes and more affordably priced houses to meet the demands of some of the first-time home buyers. In addition, there needs to be a larger supply of “move-up” homes for that segment of the buying public that’s ready to expand into a larger home, a better neighborhood or a newer home.

You can find more articles pertaining to the Metro Atlanta mortgage rate outlook in the "Atlanta Mortgage Info" section of articles just below Atlanta Real Estate Categories in the column to your right. Remember to also check us out by finding us on Facebook and following us on Twitter..

Metro Atlanta Mortgage Forecast: Easy Money?

The Metro Atlanta mortgage forecast – at least for the near future – is that home loans will continue to be easier to obtain than anytime in the last ten years. The Mortgage Bankers Association (MBA) recently published a report showing data that seems to suggest mortgage lenders have relaxed many of their lending regulations and standards for every type of loan – including FHA and USDA home loans – both backed by the U.S. government.

Between 2008 and 2016, it was estimated credit availability to take out mortgages tightened by close to 90%, according to an MBA report. However, today’s Metro Atlanta mortgage forecast is brighter than before, and more people are qualifying for loans than in the last decade. Officials say even those borrowers who may have been turned down for a mortgage loan a year or more ago are likely to be granted financing in today’s lending environment.

 The Metro Atlanta mortgage forecast is for mortgages to become easier to obtain than in the last 10 years.

Let’s Look at the Numbers The MBA publishes its Mortgage Availability Index (MCAI) every month in an effort to show the current mortgage lending market as a single number. The MBA obtains data from over 95 lenders nationwide, looking at loan-to-value ratios, FICO credit scores and lending limits as a measure of how much or little flexibility there are in loan guidelines.

The most recent report shows the MCAI at a fairly high 177.1 – a huge increase from what many term its benchmark index of March 2012 of 100. What this means is that mortgages are almost twice as easy to obtain as they were just five short years ago.

The Metro Atlanta mortgage forecast is for relaxed lending standards to not only continue to be a part of a mortgage lender’s loan guidelines, but they’re making an impact in other areas as well. Mortgage software company Ellie Mae just released a report showing mortgage lenders approve 77% of applicants – an increase of 6% in roughly 18 months. In addition, the MCAI rose 1.1% in only one month. The report also showed that lenders have relaxed lending requirements for loans above the national conforming loan maximum of $424,100.

Availability, as a result, has increased for nearly every type of loan offered:

  • Government mortgage availability rose 0.2% from the prior month
  • Conventional mortgage loan availability was up 2.3% from the previous month
  • Jumbo mortgage availability increased 4.7% from the prior month

Government mortgages referenced above include the three major lending programs – the FHA loan, the VA loan and the USDA mortgage.

USDA Loans Increase Government Mortgage Availability

First-time home buyers really like the little-known USDA home loan program. USDA loans require no down payment, one of only two loan products with that feature – the other being the VA loan – which is available to current or previous members of the Armed Forces. USDA loans are also known as Rural Housing Loans and eligibility requirements are based on the home’s location. Primarily, neighborhoods throughout the U.S. that are in less densely populated areas are the easiest in which to qualify. Before you assume these programs are available only to homes located “in the boonies,” consider this – the eligibility maps are 17 years old. In many areas, was characterized as “rural” in 2000 could be part of suburbia today. The Metro Atlanta mortgage forecast will continue to be impacted by USDA loans.

The Housing Market Remains Safe

Mention the increased availability of mortgage credit and some people immediately equate that with concern for another housing market crash. In their minds, the logic is easy mortgage availability was responsible for the housing crisis back in 2008 and 2009 – so, if credit becomes easy to obtain we are likely to repeat history. However, here’s something that may calm your fears. Remember the Mortgage Banker’s Association (MBA) MCAI index report discussed earlier? The MBA estimates it reached close to 900 during the bubble in late 2006. Again, the index today is just 177.1. Industry experts say the Metro Atlanta mortgage forecast is for credit availability to remain strong – and safe – because the housing market is a different animal than it was over a decade ago. Lenders are less likely to be as lax as they were in the years leading up to the housing crisis.

Lastly, mortgage lenders today are more cognizant that making good, sound mortgage loans is the foundation of the housing industry. There are more safeguards in place to prevent history from repeating itself than ever before – primarily as a result of the housing crash. Borrowers today need to have good credit – not excellent, blemish-free credit reports – but a history of paying their monthly obligations on time, over time. In addition, they need sufficient income to qualify for the monthly payments. Of course, they need to have a sufficient down payment to qualify for most mortgage loans, though not all.

Simply put, we remain optimistic with the Metro Atlanta mortgage forecast for 2017 and beyond. Here’s hoping the housing market will continue to recover to its full capacity.

You can find more articles pertaining to the Metro Atlanta mortgage forecast in the "Atlanta Mortgage Info" section of articles just below Atlanta Real Estate Categories in the column to your right. Remember to also check us out by finding us on Facebook and following us on Twitter.

Metro Atlanta Mortgage Rates: Still a Good Time to Buy a Home

Metro Atlanta mortgage rates continue to be in the news. With the recent rise in interest rates by the Federal Reserve, and the likelihood of additional increases on the horizon, the obvious question remains, “Is it still a good time to purchase a home?”

Let’s look at what’s transpired in recent months since the presidential election in November. The average interest rate for a 30-year fixed-rate mortgage increased from 3.68% to 4.2%, based on Freddie Mac's mortgage rate survey report. However, despite the increase, even a 4% rate is very low compared to historical averages. To put that into perspective, for roughly 30 years from 1971 to 2001 mortgage interest rates were above 7% most of the time. In October 1981, they peaked at 18.16%. It wasn’t until 2008, just over eight short years ago, that interest rates began to drop consistently below 6%.

Metro Atlanta mortgage rates have risen slightly since the presidential election.

While Metro Atlanta mortgage rates are expected to continue to rise slightly this year, most agree that aggregate increases will be less than 1% – meaning rates should remain below the 5% level. With that in mind, relatively speaking, mortgages will still be affordable for most home purchasers. And, as mentioned above, compared to where interest rates were just a decade ago, a 4% to 5% interest rate will seem like a bargain!

Since 2009, the Federal Reserve has purchased significant amounts of mortgage-backed securities. The recent strength of the stock market – as a result of the presidential election results – has meant those purchases have temporarily been suspended. In addition, the Fed has indicated they may raise the federal funds rate at different intervals this year. The fed funds rate is the rate at which banks loan money to each other. However, there is a loose relationship between the fed funds rate and the longer-term mortgage interest rates.

A small increase in the Fed’s actions may translate to a slight increase in mortgage rates and their monthly payments. As an example, on a $200,000 30-year fixed-rate mortgage at 4% the payment would be roughly $955 per month. At 4.5% the payment would be approximately $1,013. A 5% mortgage rate would equate to payments of roughly $1,074 per month.

As you can see, the impact of slightly higher rates isn’t really a significantly higher monthly payment. It likely would only impact those homebuyers who were watching their budgets carefully, or those that would be on the borderline of loan qualification.

A greater concern than Metro Atlanta mortgage rates seems to be the rising home prices continuing to occur throughout the U.S. The median sales price of a home in 2016 rose 5.5% from the previous year. Experts expect a 5.3% increase this year. And therein lies the real issue. The “double-whammy” of higher interest rates combined with higher sales prices may be the deterrent to may home buyers – especially first-timers.

Let’s take a look at six factors that may have more impact than interest rates on your monthly mortgage payment.

Your Credit Score
Higher credit scores translate to lower interest rates for applicants with good credit. A score of at least 740 will likely get the best rate from most mortgage lenders.

Your Down Payment
A popular misconception is that you have to have a down payment of at least 20% in order to buy a home. However, if you do have 20% to put down you can avoid having to pay private mortgage insurance (PMI), a type of insurance that protects the lender against the borrower defaulting on their mortgage payments. According to Freddie Mac, the PMI premium can run anywhere from $30-$70 per $100,000 of your mortgage amount. Naturally, with a larger down payment, the monthly payment amount is less since you’re financing a lower loan amount. That's always true, regardless of what Metro Atlanta mortgage rates do or don't do in the future.

Points
"Points" are actually percentage points of the loan amount – 1 point equals 1% of the loan amount – so, if you’re borrowing, say, $200,000, a point would be $2,000. You can pay points to lower your interest rate. Since points are prepaid, be sure you “do the math” and determine whether buying down the interest rate is the best financial decision for you at the time – and to make sure it’s saving you interest in the long run.

The Term of the Loan
While a 30-year fixed-rate mortgage loan is the most popular selection, if you can afford the increased payment it may be worth looking at a shorter term. A 15-year term will not only be issued at a lower interest rate, but you’ll save more than 50% in total interest repayments over the life of the loan. Even borrowers who opt for a 20-year or 25-year term are pleasantly surprised at the interest savings they can enjoy by paying slightly more money each month. Ask your mortgage lender for an amortization schedule with different terms for comparison and see which term fits your financial capabilities best.

Closing Costs
Closing costs and fees vary from one lender to the next. It’s worth shopping around to find the best deal on closing costs. In addition, some fees are negotiable, so ask questions and make the best deal you can. Lastly, remember who pays the closing costs is strictly between you and the seller of your home. So, be prepared to negotiate with the seller for him to pay part – or all – of the closing costs as part of the contract.

Home Sales Price
Naturally, a higher price tag for a more expensive home translates to higher monthly mortgage payments. Make sure you are looking for homes in your affordable price range. What’s the joy in buying a home if you have to struggle to make the monthly payments – even if you qualify for a higher amount? Consider selecting and buying a less expensive home, even if you have to do without certain features or extras. You’ll sleep better at night.

You can find more articles pertaining to the Metro Atlanta mortgage rates in the "Atlanta Mortgage Info" section of articles just below Atlanta Real Estate Categories in the column to your right.

Remember to also check us out by finding us on Facebook and following us on Twitter.

Metro Atlanta Mortgage Outlook: Are Rates Going to Rise?

The Metro Atlanta mortgage outlook is expected to include higher interest rates for 2017. The Federal Reserve’s recent short-term interest rate hike was both highly anticipated and expectedly minimal. And, while the fed funds interest rate has little direct correlation to longer-term mortgage interest rates, there has been – and may continue to be – a slight upward movement in rates for home loans.

Even prior to the Federal Reserve’s action, the average interest rate for conventional 30-year fixed rate mortgages increased after the recent presidential election. The rate hike saw record-low mortgage rates increase on average from a half to three-quarters of a percent. Post-election stock market activity meant investors were bullish on stocks and less interested in the bond market. Since long-term mortgage rates are more closely tied to the 10-year yield of U.S. Treasury bonds, rates rose as bond market investments declined.

The Metro Atlanta mortgage outlook of rising rates are more closely tied to the 10-year yield of U.S. Treasury bonds.

A burning question exists, however, as to whether the Metro Atlanta mortgage outlook of rising rates will really make much difference to the housing market in 2017. The reason for the question is simple:  Increasing rates, as exhibited by the Federal Reserve, are indicators of a stronger national economy – and a stronger economy historically favors the housing industry.

In addition, as one economist with Fannie Mae pointed out, “If interest rates are rising because the economy is growing more rapidly, then typically, incomes also rise, and the rising incomes offset the increase in the size of the mortgage payment…”

The unknown factor, however, tends to be largely intangible – buying a home is one of the most emotional purchases an American consumer will likely make. In a recent survey published by real estate brokerage firm Berkshire Hathaway HomeServices, 76% of existing homeowners and 79% of potential homeowners mentioned higher interest rates as a major challenge for the existing housing market. Even more significant is that each of those statistics reflect increases of 16% and 8%, respectively, from the same period of time in 2015.

The report also revealed the anxiety of a larger number of owners and prospective buyers would increase if the Metro Atlanta mortgage outlook were to include further rate increases. The lesson here is that when it comes to housing, perception is reality. Case in point:  Interest rates are still within 1% of all-time historic lows, but to many potential buyers – especially first-timers – it may not seem that way, in light of the recent attention rate increases have received.

Still, in the face of recent increases there are real estate experts who feel rates won’t climb much higher in 2017. Redfin, for example, predicts rates will likely reach no higher than 4.3% for a 30-year fixed rate mortgage. In addition, they expect an ever-improving credit market, citing large financial institutions like Bank of America, Wells Fargo, JP Morgan and Quicken, who in 2016 offered mortgage loans with just 1% – 3% down. Redfin says these and other programs will attract more millennials and first-time buyers into the U.S. housing market in 2017.

In addition, to further highlight the intangible impact the Metro Atlanta mortgage outlook may have on the home buying public, Zillow offers this recent finding. In a survey of consumer housing trends, Zillow says home purchases were more closely tied to a consumer’s overall financial health than to any interest rate changes. They found certain life events – like employment changes, promotions, job-loss, or a change in the household make-up were more impactful factors affecting a home purchase. As a result, Zillow says, while there is naturally concern over the part of prospective homebuyers about rising interest rates, they are quick to realize that by historical standards the cost of borrowing money today for a home mortgage is very low. Lastly, while rate increases may have an impact on where they buy or the size home they buy, most purchasers are committed to entering the housing market once they elect to do so.

Of concern to many experts is the affordability factor that appears to be weakening – especially among first-time home buyers. Year over year – from 2015 to 2016 – the number of available homes for the average first-time buyer dropped over 12% according to Trulia. Other Trulia findings show that while premium or higher-end homes comprise roughly 50% of available listings nationwide, starter homes – attractive to first-timers – make up only 25% of listings. In addition, first-time buyers are expected to spend roughly 39% of their monthly income to afford a home, compared to 37% in 2015.

Finally, as we analyze the Metro Atlanta mortgage outlook for 2017, one continuing concern lingers in the housing market – available inventory. Experts say the biggest obstacle facing a strong spring housing market won’t be higher interest rates, but a lack of home supply. Real estate listings throughout the U.S. fell in 2016 compared to 2015 with little sign of improving enough during 2017 to impact the spring. Sales increases, quite simply, are dependent on housing supply – and one can’t occur without the other. While the new-home market is on the rise, homebuilders have still been unable to keep up with the demand for new housing, and housing starts have been lower than usual. In addition, homeowners who would normally be selling their homes to move into larger, better or more expensive homes aren’t moving as they once did. Experts say a typical homeowner stays in their existing home twice as long as they did just 15 short years ago. Increased interest rates will likely continue this trend as consumers won't sell their homes unless they have another home to buy – and probably will be less likely to pay more for the financing than they currently pay for their lower-rate mortgages.

In summary, the Metro Atlanta mortgage outlook seems to be less about rising rates and move about other factors – some that are intangible like financial well-being – and others that are more practical like home inventory and new- and existing-home supply from which to choose.

You can find more articles pertaining to the Metro Atlanta mortgage outlook in the "Atlanta Mortgage Info" section of articles just below Atlanta Real Estate Categories in the column to your right.

Remember to also check us out by finding us on Facebook and following us on Twitter.

Rising Mortgage Rates Could Hurt Metro Atlanta Housing

The Metro Atlanta housing and economic outlook for 2017 seems to be filled with nagging questions about how gradually increasing interest rates may affect the continued improvement of the housing market. While interest rates have edged slightly upward in the last several weeks – most notably in response to the stock market's post-election gain – home mortgage rates are still comparatively low. But for how much longer? An extended period of rising rates may paralyze homeowners with low rate mortgages who would otherwise potentially be in the market to buy bigger or newer homes. Economists call such market conditions "rate lock," which could take a toll on housing demand during 2017.

Metro Atlanta housing could be affected by rising interest rates.

The past Metro Atlanta housing outlook has enjoyed a seven-year run of near record low mortgage interest rates. That has encouraged homebuying and has increased home values dramatically since the housing crash of nearly a decade ago. Yet, the aforementioned increase in mortgage rates since the election has real estate professionals and prospective homebuyers a little on edge. Higher interest rates, of course, translate to higher monthly mortgage payments. That can cause existing homeowners to stay in their homes a little longer rather than trading up. As one real estate professional put it, "It doesn't take much to turn off the faucet in this market because inventory is so low and prices have gone up so quickly." The most recent mortgage interest rate increase boosted the monthly cost of owning a typical home in United States by slightly more than $70 per month. That equates to roughly $26,000 over the term of a 30-year fixed rate mortgage loan. While $70 per month is not a substantial amount, it probably has already had an impact on marginal borrowers concerned about additional expenses. Experts fear another half-point rate increase could impact even the more qualified borrowers.

In addition to the affordability aspect and the psychological impact that a higher monthly payment may have on a family purchasing a home, mortgage qualification may also become an issue. The Metro Atlanta housing market has already seen some households who spend 35% or more of its income on mortgage payments. Most experts recommend that debt-to-income ratios fall between the 30% to 33% range. As interest rates rise, the debt-to-income ratio will be strained causing some lenders to reconsider whether a borrower may qualify or not.

According to CoreLogic, Inc., roughly 66% of homeowners in the United States who have mortgages enjoy rates less than 4.5%. Economists say rates would probably need to increase above 5% before homeowners face the "rate lock" dilemma mentioned earlier. And that's where the concern begins to form. Because of the strengthening U.S. economy, the Federal Reserve will likely increase short-term interest rates this month. While the rates on Fed funds have no direct correlation to mortgage interest rates, an increase by the Federal Reserve would likely send a message that interest rates in general will likely rise – even if only slightly. Home mortgage interest rates are more closely tied to the yields on U.S. Treasury bonds. Those yields usually rise during inflationary periods, and while economists predict mortgage rates will increase in 2017, nobody really owns the proverbial "crystal ball."

Interest rates have risen largely due to the improved economy. In addition, investors are gambling that increased government infrastructure spending along with resultant tax cuts will continue to accelerate growth. The underlying hope is that the additional growth will spur increased wage growth, and higher wages should offset the increases in higher mortgage payments. However, one economist warns that since so many American homeowners have low rates on their mortgages, it could result in an ironic disincentive by encouraging homeowners to pursue employment in other cities if it means their mortgage payments will be higher.

So, what does all this mean for the Metro Atlanta housing outlook moving forward? If history is any indication, rising interest rates can impact the economy quickly and dramatically. Mortgage interest rates in 2013 increased almost a full percentage point to 4.5% on the heels of investor predictions the Federal Reserve would decrease its bond buying program. The result was a decline of 8% on the sales of previously owned homes over the next six months. In addition, sales price increases dropped from an average of 9% to roughly 5%. Therefore, if 2013 is any indication the market could potentially experience a cooldown in home prices.

Of course, it remains to be seen what affect increased interest rates – if they do occur – will have on the Metro Atlanta housing market and the resulting economic outlook. However, one thing to remember is that even interest rates in the 5% range still are relatively low when compared to other times in American history. Naturally, home prices continue to rise, meaning mortgage loan amounts are higher than ever before. However, going forward there is light at the end of the tunnel when it comes to home affordability. History has proven more times than not that even in the face of housing challenges home affordability is a luxury still readily available to most Americans. Whether it's more affordable mortgage products with more favorable terms and conditions or more affordable housing units entering the market, the bottom line is that housing is too big a piece of the U.S. and world economy to be adversely affected for long.

We've weathered such storms before and with the exception of the housing crash of a decade ago, the industry has rebounded steadily and has learned from its mistakes. Time will tell if the slight interest rate increases will lead to a slowdown of the housing recovery, or if it will provide the impetus for creative lending, improved mortgage products, more affordable housing and sufficient motivation for first-time homebuyers to buy. While the challenges can be daunting, the industry remains hopeful that only slight interest rate increases will occur, resulting in minor fallout that can be absorbed by the market through greater home inventory and a continued steady demand.

You can find more articles pertaining to the Metro Atlanta housing outlook in the "Atlanta Economy" section of articles just below Atlanta Real Estate Categories in the column to your right.

Remember to also check us out by finding us on Facebook and following us on Twitter.

Metro Atlanta Mortgage Loan Payment Tips in Bad Times

You took out your Metro Atlanta mortgage loan a few years back when both you and your spouse were working and things were going pretty well financially. In fact, that’s the reason you bought your first home. Since then, the economy has slowed considerably and your employer has downsized. Over time – which was an almost guaranteed addition to your budget for a few years – is now a thing of the past thanks to the company’s new management. While your income has dropped considerably, your obligations continued – especially those to your Metro Atlanta mortgage loan institution. So, what do you do? What can you do? Let’s take a look at how an honest, proactive and direct approach with your creditors can work to your benefit when times get tough.

Worried about your Metro Atlanta mortgage loan?

Be honest.
Most credit counselors, financial experts and creditors say the best possible thing you can do is to contact them in writing as soon as you experience a hardship affecting your ability to pay your mortgage. You may not want to divulge your entire situation to the mortgage company – they may not want to hear that you will never be able to make another payment, for example – but in all seriousness, be open and honest about your current status.

Don’t procrastinate.
The best course of action is to take charge and let your creditors know immediately, or at least sooner rather than later. The longer you hold off doing so the worse your situation will likely become. If you procrastinate too long, the outcome can be removed from the hands of people that may be able to help and transferred to the proverbial “home office” or some other nebulous entity who thrives on red tape and double-speak. Remember this: Don’t make the erroneous assumption that you are out of options and your creditors won’t work with you. Most will, but you’ll never know until you ask them.

Do your homework.
If you’re a homeowner and have already missed a payment on your Metro Atlanta mortgage loan, seek assistance from your lender as soon as possible. There are laws now called the “rules restricting dual tracking.” Dual tracking is the process whereby a mortgage loan servicer (the arm of the mortgage company who’s responsible for collecting your payment and accounting for it each month) forecloses on a home while simultaneously entertaining a mortgage loan modification by the borrower. The Consumer Financial Protection Bureau (CFPB) wrote the law in 2013 to prohibit lenders from dual tracking within a 120-day period after a mortgage loan default. The rule allows greater protection for borrowers going into, or already in, the throes of foreclosure proceedings. Plus, the law has teeth – violators are subject to damages, and that may give borrowers necessary leverage for favorable consideration in a foreclosure lawsuit – if and when it that time comes.

Explore all available options.
Metro Atlanta mortgage loan experts say there may be programs available in some states that will make mortgage payments for homeowners. In 2010, the Hardest Hit Fund (HHF) was designed to assist borrowers struggling to make their monthly payments. The assistance was created in an effort to stave off foreclosure and return economic stability into some neighborhoods. While not available in every state, the states that do provide the HHF assistance concentrate their efforts on two groups of homeowners: Those who are unemployed and are looking for a new job, and borrowers who are “underwater” on their mortgage. These homeowners owe more on their mortgage loan than their home is worth.

Be realistic in your expectations.
As mentioned above, most creditors will try to work with you in times of hardship. However, they don’t have to. Just because you've called your mortgage lender and have been honest about your financial situation, they aren't required to provide you leniency – especially if there are extenuating circumstances such as chronic or recurring delinquencies, or other strikes against your credit report. Just remember that all you can do is ask for assistance – what the lender may or may not do is up to them. You signed a note and mortgage promising the lending institution you’d repay them each month, every month and on time.

Take the bull by the horns.
Be proactive with your financial problems – even if you think they are just temporary. By not doing anything or ignoring your situation with a creditor – especially a Metro Atlanta mortgage loan company – the lender may assume you don’t care about your financial responsibility or your promise to repay the money they loaned you. We’re talking about your home, here, so the last thing you want your mortgage company to think is that you don’t care about losing your home.

Since the housing crash of less than a decade ago, mortgage lenders have become more willing and able to work with borrowers who become delinquent, but it’s also a proverbial “two-way street.” The lenders should know if you need and want help, and if they aren't aware of that, they naturally assume the worst and take the necessary steps allowed them by law to recover their collateral.

The worst thing you can do.

The very worst thing you can do is to do none of the suggestions mentioned above. One of more of them can hamper or eventually cripple your chances for a successful outcome if you fall behind in your payments. By law, mortgage companies can’t and don’t wait “forever” before they begin certain procedures designed to protect the lending institution from their borrowers defaulting on their mortgage loans. Remember, most all mortgage lenders are regulated and overseen by the federal government. As such, banks and other lending institutions have policies and practices that are nearly always uniformly followed – if that bank or lending institution wants to remain in compliance with the federal guidelines. Most do, of course, because failure to do so will result in fines, penalties and – in severe cases – shutdowns or forced acquisitions. No lending institution's board of directors wants that to occur.

You can find more articles pertaining to Metro Atlanta mortgage loans in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post daily tips, many of them related to Metro Atlanta mortgages, on Facebook and Twitter and would love for you to follow us there, too.

Metro Atlanta Reverse Mortgage: Questions and Answers

If you’ve paid attention to the Metro Atlanta mortgage industry, no doubt you’ve seen and heard all sorts of ads for a Metro Atlanta reverse mortgage. Just exactly what is a reverse mortgage, you ask? A Metro Atlanta reverse mortgage enables a homeowner to extract the equity in his home to use as monthly income. These mortgage instruments can sometimes be attractive options for senior citizens and retirees. The reason? There are no monthly mortgage payments. As long as the homeowner continues to pay real estate taxes and home insurance – and maintains the property in good condition – the repayment of the mortgage doesn't commence until the owner dies, transfers ownership, or no longer lives in the home.

A Metro Atlanta reverse mortgage, however, may not be for everybody. There are other alternatives to consider – especially if you’re thinking about tapping into your home's equity to help pay living expenses during your retirement years. Let’s take a look at a few options.

A Metro Atlanta reverse mortgage enables a homeowner to extract the equity in his home to use as monthly income.

Refinancing your existing mortgage.

Refinancing can be a viable alternative to a reverse mortgage. With interest rates at or near all-time lows, from a pure rate standpoint you’ll likely have a much lower rate than you currently have. In addition, being able to extract cash from the equity you’ve built up in your home – especially as home values have risen in the last few years – is an excellent way to borrow cheaply. Another big advantage to refinancing versus taking out a Metro Atlanta reverse mortgage is you're maintaining the control of your biggest asset – and that’s important if you want to leave the property to family members or other heirs.

Just a few additional points to consider if you’re leaning toward refinancing your mortgage:  You can search online for mortgage payment calculators that will show you what your new payment will be. Plus, you can adjust the payment based on a variety of rates and terms to give you a better idea of what to expect. If you’re like most older homeowners and have owned your house for a long time, your monthly mortgage payments are comprised of a larger portion of principle and less interest. By refinancing – even at a lower interest rate – of course, you’re adding greater debt by increasing the existing loan amount by whatever equity you want to borrow. The bottom line is this, compare your payments and make sure you understand your total repayment amount. Refinancing may or may not be the best alternative and depends on a number of factors. Consult your mortgage lender, your financial advisor, or your accountant before you make the final decision.

Lastly, don’t forget the closing costs. As is the case with most refinances, you’ll have to pay closing costs that will be deducted from the equity proceeds of the new mortgage. Be sure you allow for them so you can receive the full amount you want to borrow. Your mortgage lender will give you an estimate of the closing costs you can expect to incur as part of the mortgage lending application process.

Home equity line of credit (HELOC) or a home equity loan.

Other viable alternatives to a reverse mortgage are either a HELOC or a home equity loan. In either case, compared to a reverse mortgage the fees are usually lower. Again, as with a straight refinance, choosing one of these alternatives also keeps your home under your complete control.

Let’s look at the difference between a home equity loan and a HELOC. As for the interest, the borrower pays regularly scheduled interest payments during the loan’s term. The biggest difference between the HELOC and a home equity loan comes at the end of the HELOC term. The borrower must then pay the remaining principal and interest owed – in full – either by refinancing, extending the terms of the loan or paying the loan off entirely.

A home equity loan provides you a lump sum secured by the remaining equity (or value) in your home. It requires normal regular interest payments each month. Metro Atlanta reverse mortgage lending experts say if you’re considering a reverse mortgage but want to leave your home to your children or other heirs, a home equity loan would be a better option.

A HELOC has been described as an “equity credit card.” It allows the homeowner to borrow up to an established credit limit during the term of the loan. The borrower repays certain portions of the principal at various times throughout the loan’s term. As the principal is reduced, your borrowing power increases (to the pre-determined limit) just like a credit card.

Flexibility is one of a HELOC’s biggest advantages, as it  can provide a source of money to be used in emergencies – only if and when you need it.

Consider downsizing.

Of course, selling your home and moving into something smaller is always an alternative to a Metro Atlanta reverse mortgage – especially for retirees or those approaching retirement. The biggest advantage to downsizing is you can get all the equity in your home in one lump sum as the proceeds from the closing of the sale.

Should you elect to keep your home in the family, selling it to a child or other family member is a possibility. In addition, if you can afford it and if it makes sense financially, you can even consider owner financing by having your child pay you the monthly mortgage principal and interest payments. This is especially a good option if your child or family member doesn't have any credit established or needs down payment assistance. But remember this, family or not, if you choose to take the place of a Metro Atlanta mortgage lender, do everything by the book. Have the required legal documentation in place with you as the mortgage holder and your family member or child as the borrower signing the note for the amount they owe. A real estate attorney can assist you in handling the preparation of the necessary documents and the closing of the sales transaction.

You can find more articles pertaining to a Metro Atlanta reverse mortgage in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

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Metro Atlanta Mortgage Refinancing: Are You Missing Out?

The Metro Atlanta mortgage refinancing market has enjoyed months of near-record low interest rates. The rates have stayed so low for so long that many borrowers assumed home mortgage interest rates will be low “forever.” And for good reason. At the first sign of rising interest rates – regardless of how slight the expected increase – the global money markets seemed to force them downward again. Even the rumblings of a Federal Reserve increase in fed funds rates did little to change the feelings of some borrowers who watched mortgage rates remain low throughout the peak home buying months.

The majority of borrowers refinanced in the past year or so while interest rates were low. Surprisingly, however, more than 10% of borrowers throughout the nation have yet to refinance. Of the ones who haven’t refinanced their mortgages, most have home loans with rates at 5% or higher. The average rate of those borrowers in the Metro Atlanta mortgage refinancing arena who have actually refinanced is roughly 3.5%.

Is now the best to consider Metro Atlanta mortgage refinancing?

For technicality’s sake, experts say almost 25% of borrowers have mortgages with rates higher than 5%, but many of those homeowners cannot refinance their loans. According to CoreLogic here are the reasons why they haven’t – or are unable to – refinance to save money. For one thing, roughly half of the existing mortgages with higher rates that haven’t been refinanced are delinquent or have experienced a delinquency during the loan period. Because of that, most lenders consider the risk of granting them a new mortgage – even at a lower interest rate – too high.

In addition, existing mortgages held as part of private-label securities portfolios are generally more difficult to refinance than government-backed loans. As a result of the changes made in the aftermath of the housing crash of nearly a decade ago, the U.S. government offered refinance programs designed to be more streamlined. Those programs included a large number of borrowers who were underwater at the time – borrowers who owed more on their homes than they were worth. Again, to be technical the resulting share of borrowers not taking advantage of the interest savings is roughly 13%. Why haven’t that 13% refinanced when they could have? Let’s take a quick look.

The reluctance of the rest of the 13% of borrowers that haven’t refinanced is likely due to the remaining balance on their higher-rate mortgages. A CoreLogic spokesperson speculated that “small balances may not be worth refinancing… the savings would be too low.” And the speculation is probably spot on. Consider this: CoreLogic found that borrowers eligible to refinance with old rates above 7% have an average remaining mortgage balance of only $53,000. Borrowers with rates between 5%-7% had roughly $100,000 remaining on their principal balance. With the closing costs involved in a refinance – even with an existing lender – the question those borrowers need to ask themselves is, “Would refinancing a relatively low balance save me any money?” Closing costs for a refinance can often run 2%-3% of the loan amount, depending on whether points are involved. Let’s take a look and see if the savings are worth the effort.

The quick answer is, it depends on the original mortgage amount. For example, a borrower with an original loan balance of $400,000 can reduce his monthly mortgage payment substantially since the original payment was much higher. If that borrower is refinancing a $100,000 remaining balance, the closing costs are going to be comparatively lower. Conversely, a borrower with an original loan amount of $150,000 who currently owes $75,000 won't enjoy a significant savings on the remaining amount of interest – especially after factoring in the closing costs. In addition, many borrowers simply don't like the idea of extending the term of their loan. A borrower who’s 12 years into an original 15-year mortgage may just want to pay it off as planned instead of recasting the loan term to another 15-year term by refinancing.

As usual, each case is different, so it’s a good idea to talk to a Metro Atlanta mortgage refinancing professional. Here’s why:

Your mortgage lender can provide you with the remaining balance on your existing mortgage at the original interest rate. In turn, using the original amortization schedule – updated to reflect any principal only payments – the lender can estimate the amount of interest you’ll pay over the remaining life of the loan. Naturally, the calculation is based on the assumption that you won’t pay off or otherwise alter the loan's principle balance. Then, using current interest rates, the lender will determine what a typical refinance will cost in terms of monthly payment versus your existing mortgage payment. The interest portion of the payment when amortized over the new term will give the lender the total amount of interest you’d pay if you refinanced – again, barring any future changes to the principal amount. By simply comparing those two amounts, the lender can determine the interest cost savings. However, that’s not the end of the analysis. As mentioned, the costs of closing the loan have to be figured into the equation to determine the net savings, if any.

Closing costs, though not as high as on a new loan origination to purchase a home, can still be substantial. Though it may seem unnecessary, the lender is required to ensure the home's value is sufficient for the loan amount to be granted. Therefore, either a new appraisal (or, in some cases, an update to the existing appraisal) is required. In addition, you can expect to pay a loan origination fee and an updated title search fee. A new credit report and normal court recording costs will also be required. You may have to pay for an updated termite inspection and a home inspection. After all those costs are taken into consideration, then and only then can your Metro Atlanta mortgage refinancing lender give you an estimate on the cost savings to refinance and an opinion as to whether it makes financial sense. From there, only you can make the decision.

You can find more articles pertaining to Metro Atlanta mortgage refinancing and the overall mortgage market in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post daily tips, many of them related to Metro Atlanta mortgages, on Facebook and Twitter and would love for you to follow us there, too.

Metro Atlanta Mortgages – What Will Slightly Higher Rates Mean?

Interest rates recently rose slightly, raising the question of what affect they will have on Metro Atlanta mortgages. Rates increased for the first time in more than two months, creating a sell-off in the U.S. Treasury bond market. Mortgage interest rates have traditionally been tied loosely to the 10-year Treasury bond yield. While the increase in interest rates was only .125% (1/8th of a percentage point) the uptick was enough to adversely affect stocks in the nation’s homebuilding industry.

Despite the impact the interest rate increase had on Wall Street, its relationship to Metro Atlanta mortgages is expected to be minimal. Let’s take a look at the various forms the rate rise will likely have throughout the nation. Historically, a slight uptick in interest rates – if anything – has signaled the end of rate drops, causing prospective home purchasers to finally make a move to buy before rates go even higher. When rates are low and could be expected by some to inch even lower, potential homebuyers often wait in the wings for rates to get even better before they decide to buy.

A mortgage industry spokesperson said that when rates move upward – even the slightest amount upward – there is always room for concern. He called the interest rate increase “a serious threat to low, stable mortgage rates until proven otherwise.” Mortgage interest rates have been at near-record lows for most of the summer, so it’s likely that a movement upward has raised more than a few industry eyebrows – especially among those in the business of making Metro Atlanta mortgages.

Regardless of the amount of the increase, the simple truth is that higher mortgage rates add to the already-expensive cost of home buying. As mentioned, the rate rise could push some homebuyers into action as they scramble to buy before their costs rise. In addition, higher interest rates may startle some sellers into cutting their asking prices in an effort to offset the news. It’s one of the few ways sellers can combat the chance of losing interested buyers.

What it means for homeowners with existing Metro Atlanta mortgages is this:

It may finally be the time to refinance. Despite interest rates being low for months, experts say there are hundreds of thousands of borrowers who have procrastinated or otherwise not refinanced.

If the Federal Reserve decides to raise its funds rate at their next meeting, mortgage rates still may not move much higher. Remember, when the Fed made its first increase last December, mortgage interest rates only increased slightly and then leveled off just as quickly. Industry insiders familiar with Metro Atlanta mortgages say the longer-term rates such as 10-year U.S. Treasury yields and mortgage interest rates do tend to move with expectations of Federal Reserve rate increases – not the Fed’s actual decision to hike rates. The experts use December 2015 as their most notable example. The Fed increased their rate slightly and mortgage rates dropped. Why? Because the market had spent much of the preceding period in anticipation of a rate hike by the Federal Reserve. In this scenario, the threat or expectation of an interest rate increase caused less concern than when the actual increase occurred. Therefore, the market adapted ahead of time to whatever interest rate changes were headed its way.

Let’s assume rates on Metro Atlanta mortgages rise slightly in the expectation of a Fed rate increase. Historically, there has been a remote chance that mortgage rates would move a full point upward. Need more reassurance? Mortgage rates have only increased by .5% (or half a percentage point) 14 times in the past 45 years, according to a report issued by John Burns Real Estate Consulting. The firm further predicts rates will stay below 4% through 2018. Burns had this to say about the effects that interest rate increases on Metro Atlanta mortgages will have on various segments of housing. “Historically, they have hammered builder stocks, hurt new home sales bad, hurt existing home sales a little, and had very little impact on home prices unless there was a recession too,” noted Burns. “My conclusion is that investors are right to punish the stocks, but often punish them too hard.”

In addition, most experts say that even if rates were to make another move upward, the housing market has bigger issues to worry about. Supply is still a major consideration, and the lack of homes for sale continues to move home prices higher and higher, adversely affecting affordability for most Americans – a problem that is more severe than slightly higher mortgage interest rates. While homebuilders work hard to increase production, they are doing so in the face of rising costs for developable land and higher labor costs. Plus, intrusive construction regulations and restrictions have made homebuilding more challenging than ever.

In conclusion, nobody likes to see interest rate increases – especially among Metro Atlanta mortgages – but the resulting impact will probably only hurt the housing industry minimally, at best. Interest rates have been very low for a long time, and there’s little reason to think that increases – even if they do occur – will be large enough to make a difference in the housing market. The additional principal and interest payment that even a 1% increase would have is less likely to prevent buyers from staying put in their existing homes or for renters to continue to pay rent at ever-increasing rates. Simply put, as is the case with many movements in the marketplace – interest rates among them – the effects vary from situation to situation and market to market. Furthermore, for purchasers who have their eye on moving out or moving up, home prices are far more likely to get their attention than small increases in rates affecting Metro Atlanta mortgages.

You can find more articles pertaining to Metro Atlanta mortgages and the overall mortgage market in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to Metro Atlanta mortgages, on Facebook and Twitter and would love for you to follow us there as well.

5 Ways Technology Affects the Metro Atlanta Mortgage Business

Technology and the digital age has certainly made an impact on the Metro Atlanta mortgage business. While roughly 90% of prospective homeowners search online for a home, less than 10% of mortgage lenders offer a comprehensive digital mortgage experience.  Now, mortgage lenders are starting to enter the 21st Century by gradually reinventing the mortgage process. Here are some ways in which important improvements are occurring.

Metro Atlanta Mortgage Business – Ushering in Technology

Some mortgage lenders still subject their prospective borrowers to the golden age of copiers, scanners and faxes to assemble and deliver loan application information and financial paperwork. And while the Metro Atlanta mortgage business has largely been overlooked when it comes to technological advances, it does appear that is changing. Here are the top five ways technology is changing the home mortgage lending process for lending institutions and borrowers.

The Metro Atlanta mortgage business is slowing adapting to technology as a part of the mortgage process.

A better borrower experience.The mortgage lending process from application to closing is, by its very nature, information driven. Some loan files can exceed 500 pages. In an effort to save time, much of the information required by lenders in the Metro Atlanta mortgage business is available digitally, and applicants can provided bank account information, tax forms and pay stubs online. This not only streamlines the application process for homebuyers, but it also makes the collection and verification steps easier for the lending institution. Since the financial data is independently verified from its source, mortgage lenders are able to more readily confirm that the information is accurate and current, thus saving time in their review and analysis.

In addition, some financial technology companies are offering mobile experiences for prospective borrowers. The mobile apps give the borrowers unique access to the mortgage lending process. The accessibility enables borrowers to stay on top of their documentation needs and requirements, ultimately giving them a better, more satisfying user experience.

Increased transparency. Since applicants don’t have access to their mortgage lenders’ internal systems, they rarely know where they stand during the loan application process. They are then forced to rely on the loan officers to communicate various requirements or updates via phone or email. Some innovative Metro Atlanta mortgage lenders are now providing information portals for prospective borrowers to be able to see the same information the loan officers do. This improvement in transparency allows borrowers to obtain a complete list of required documentation ahead of time – and to know where they stand with respect to any additional information required. This innovation enables both parties to work together for the common goal of assembling the information in order to get the loan approved and closed in a timely manner.

Making the mortgage process painless. A normal turnaround time for a borrower to receive an underwritten loan approval from a mortgage lender is about 18 days. Overall, it could take roughly 50 days to complete the loan process. Comparatively speaking, in a totally digital world where online shoppers can order an item and get it overnight, 50 days seems like forever.

Technology is helping introduce the mortgage lending process to the modern world. Using a workable combination of intuitive design and direct connectivity, loan applicants are now able to contribute to the process and receive up-to-date assistance from the lending institutions. This makes the borrowers more in control of their own destiny, as well as participating in more of a “team approach” to getting their loan approved.

Digital compliance. Following the housing crash of less than a decade ago, federal regulations required lenders to follow certain lending practices and give their borrowers more disclosure information early in the mortgage loan process. The regulations are designed to allow mortgage lenders to adhere to strict guidelines while limiting negative impact on the borrower experience.

New developments in technology have enabled lenders to automatically send the production and delivery of electronic disclosure information at certain points in time during the mortgage application process. In addition, the natural creation of a digital “paper trail” for audibility and accountability is an offshoot of the new technology.

Money-saving advantages. It’s estimated that it costs around $8,000 for a lender to complete a mortgage from start to finish. Much of that cost is for employees to perform routine, manual tasks such as translating required documentation into email form, as well as the physical tracking of various items on paper documents and forms. In turn, such work inefficiencies are passed through to the borrowers by way of higher fees and other processing or closing costs. Using modern technology can automate manual work and reduce these costs. In addition, lenders are able to increase their efficiency and productivity – passing the cost savings on to their customers.

The advent of workable technological advances in the Metro Atlanta mortgage business creates faster and more simplified lending interactions. Best of all, the digital “revolution” will likely continue to impact the mortgage industry and improve the borrower experience. While mortgage lending will probably never be a “one-click” process, it can continue to be better, faster and less costly. When you stop and think about it, the digital world has basically spoiled us all. We want – and often expect – goods and services almost immediately. From the digital delivery to a movie or television program on demand, to the ease of online banking, our society has come to expect speed and convenience. It’s only natural that we’d expect the same speed and delivery of improvements in the Metro Atlanta mortgage business. In addition, mortgage lenders want it, too. That’s why we will continue to anticipate and expect further advances that will make the home buying and home financing process a better experience for all parties involved.

You can find more articles pertaining to the Metro Atlanta mortgage business in the Atlanta Mortgage Info section of our site below Atlanta Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to the Metro Atlanta mortgage business, on Facebook and Twitter and would love for you to follow us there as well.

About Brant Meadows

We specialize in Metro Atlanta real estate for sale. Brant Meadows has been helping families buy homes for more than 16 years. Home Hunters Realty of Atlanta, Georgia, is an exclusive buyer's agency serving home buyers only.

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