Chance Gates' Blog

The 9.0 earthquake and subsequent tsunami that devastated Japan last week sent a ripple through the U.S. mortgage markets causing interest rates to lower this week.

“With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds, which lowered its yields and other interest rates as well,” says Frank Nothaft, Freddie Mac’s chief economist. “This allowed fixed mortgage rates to drift lower this week.”

The 15-year fixed-rate mortgage dropped below 4 percent this week, reaching its lowest level since December 2010. The 15-year mortgage rate averaged 3.97 percent this week, compared to last week’s 4.15 percent, according to Freddie Mac’s weekly mortgage rate survey.

The 30-year fixed-rate mortgage also dropped this week, averaging 4.76 percent compared to last week’s 4.88 percent. Last year at this time, 30-year mortgages averaged 4.96 percent.

The 5-year adjustable-rate mortgage also inched downward, averaging 3.57 percent compared to last week’s 3.73 percent.

Source: “30-Year Fixed-Rate Mortgage Drops Amid Japan Crisis,” Freddie Mac (March 17, 2011)

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As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.comhttp://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable For a free copy of my report   “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page http://chancegates.com/about and ask for more information on preventing foreclosures. or   to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney.

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By Paige Tepping

RISMEDIA, August 26, 2010–You wouldn’t buy a house without shopping around first, right? Then why would you commit to the loan you use to buy that house without making sure you’re getting the best deal possible? From the experts at LendingTree, here are six reasons why it’s essential to take a few minutes to browse before you borrow:

1. To get the best interest rate possible
Over the life of a $200,000, 30-year fixed rate loan, a one-tenth of a point difference in interest rate could save or cost you thousands of dollars.

2. To pay lower loan fees
Once your loan application is accepted, the lender will get back to you with a good-faith estimate (GFE), including an itemized list of all the costs associated with the loan. If there are any parts of the GFE that you don’t understand, don’t be afraid to ask the lender to explain each fee that is listed.

3. To avoid a prepayment penalty
In these transient times, it seems no one stays in their home long enough to pay down their mortgage the old fashioned way: in monthly increments over a period of decades. So you’ll want to be clear on whether the terms of your loan include a penalty if you pay off your mortgage early—either because you move or refinance.

4. To find a lender you feel comfortable with
You don’t want any surprises popping up at closing time. Get a lender who is responsive to your questions and is willing to give you the details in writing.

5. To find a lender that specializes in your situation
Recent volatility in the mortgage markets means that people with bad credit or little money for a down payment might have to look a little harder to find a lender.

6. To get the rate lock period you want
Once you’ve found the lender offering the best mortgage rate and terms, you’ll want to get a written commitment, known as a “lock” that puts in writing that the lender will make the loan to you at that the specified interest rate. The length of the lock can vary from 30-90 days, but many lenders will charge a fee for a rate commitment of longer than a month. Negotiate the lock period that is right for you, depending on when you plan to close on your new home and if interest rates are expected to creep higher during that time.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  Please feel free to use my back door to the MLS and search house available in the Reno/Sparks and all Northwest Nevada neighborhoods.  I can be reached by email @  chance at ballard-company.com or http://www.myspace.com/chancegates

Here’s some good news for the struggling US housing market: Thanks to the European debt crisis, mortgage rates are at historic lows.

The current average rate for a 30 year fixed loan is 4.87 percent, according to Bankrate.com. That’s the lowest rate for the 30 years since Bankrate started keeping track 25 years ago.

Even jumbo loan rates-loans for more than $417,000-have fallen. The 30-year fixed jumbo loan is at an average rate of 4.5 percent, down from nearly 6 percent at this time last year.

“It’s the best time in our generation to buy,” says Mark Zandi, chief economist at Moody’s. “It may be the best time in any generation. Mortgage rates are so low and with homes prices down and lots of inventory, you couldn’t pick a better time to buy or re-finance.”

Europe’s debt crisis is behind the drop. Nervous investors are flocking to the security of US Treasurys, which pushes down their yield and influences a host of consumer interest rates-including those on mortgages.

The decline is also good news for homeowners looking to refinance, particularly those who owe more on their mortgage than their house is worth.

“There’s a tremendous window on re-financing,” says Greg McBride, chief economist at Bankrate.com. “That’s particularly true for people who can take advantage of the government’s Home Affordability Refinance Program (HARP)-which allows home owners to refinance into low mortgage interest rates even if they’re property value has gone down.”

HARP, which was due to end at the end of this June, now runs through June of 2011.

“Think of the benefits if you buy or refinance now,” says McBride. “Locking in now at the lower rates means more more bang for the buck and more breathing room for homeowners when it comes to payments.”

But the decline in rates probably won’t last long, analysts say. So homeowners need to move fast.

“I think they won’t last much longer than a month or two at the best,” says Lawrence Yun, chief economist at the National Association of Realtors. “I can see them going up to 5.5 percent by the end of June if not sooner.

Read more at http://finance.yahoo.com/

As a Reno/Sparks real estate professional; I encourage all questions and comments, on the Reno/Sparks real estate market or any of the articles posted in this blog.  I can be reached by email at chance@ballard-company.com

RISMEDIA, May 17, 2010–(MCT)–If you’re in debt as we head into summer, it’s time to start thinking about snowflakes.

The idea of “snowflaking” is to make small debt payments, often on a credit card balance, more than once a month.

These snowflakes become part of your debt snowball, a technique by which you pay the minimum monthly payments on all debts except one that you focus on. As you pay off that debt, apply all the money you were paying on it to your next debt, which pays off that one faster, and so on. It creates a snowball effect, as if a snowball was gaining speed and rolling downhill.

The benefit of using snowflakes and a snowball is becoming debt-free quicker and paying far less interest. You’ll even be motivated and help your credit score. This is one time when “throwing money at the problem” works.

Here’s how to use snowflakes, also called micropayments, and why those in debt should consider it:

—Call your card company: Most allow you to make many payments in a month for free. Call the phone number on the back of the card and ask about your issuer’s policy. “The majority of the major issuers will allow you to do this,” said Bill Hardekopf, founder of credit card comparison site LowCards.com.

—Use regular snowflakes: Set up additional automatic payments to your credit card company. For example, if you get paychecks weekly or biweekly, make payment on the payday. One painless strategy is to pay half your usual amount biweekly. This amounts to 13 monthly payments in a year, instead of 12. “And all of that extra payment goes to pay off the balance. It doesn’t go to interest,” Hardekopf said. “So, your balance will come down faster.”

—Use irregular snowflakes: Hardcore snowflakers make many small payments in a month. If you skip a $9.46 lunch out at work, ship that amount to your credit card company. Work two hours of overtime or get a tax refund? Slap it against the debt. The point is to immediately make a payment with extra money or cash you saved.

Besides erasing debt quicker, snowflaking makes sense for other reasons.

—You’ll save on interest: Most credit card companies assess interest daily on unpaid balances. So paying early saves weeks of interest charges. Month after month, savings add up. And the quicker you get rid of the debt, the less interest you pay.

—You’ll gain motivation: Making more payments forces you to think about your debts more often and gives you a more frequent thrill from seeing balances dwindle. If you want more motivation, focus the extra payments on debts smallest to largest. That allows you to pay off a few quickly, which can be a big emotional boost, like losing a few pounds in the first week of a diet. If you’re more the mathematical type, pay off debts from highest interest rate to lowest.

“If you feel, ‘Hey, I’m cutting into this,’ you can gain momentum psychologically,” Hardekopf said. “You might think, ‘I’ll skip going to dinner this week and take that 20 bucks and tack it onto my credit card payment.’ “

—You’ll improve your credit score: For those who carry balances, paying off debt quicker improves their credit score quicker. You might avoid late payments because you’re more focused on the debt. Multiple payments can also help those who don’t carry balances. Your credit scores are partly calculated on how much of your available credit you’re using at any time. If you use $4,500 of a $5,000 available limit, you’re penalized by credit-scoring models regardless of whether you pay the balance at month’s end. By making multiple payments, you reduce your credit-usage ratio, which accounts for 30 percent of your FICO score.

As a Reno/Sparks Nevada real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  I can be reached by email chance@ballard-company.com

RISMEDIA, March 24, 2010—Buying a home is one of the biggest decisions an individual can make. So it’s understandable that one considering a home purchase may take their time to avoid rushing into such a large financial commitment. However, several factors might leave prospective home buyers who don’t purchase a property now wishing they had taken action sooner.

“Current market conditions have created a perfect storm of sorts that has made it an ideal time to purchase for first-time and trade-up buyers alike,” said James M. Weichert, president and founder of Weichert, Realtors. “Those who have the means and the desire to buy now but don’t, aren’t likely to see such a great opportunity again anytime soon.”

Specifically, Weichert offered three reasons why those who aren’t under contract to purchase a new home by April 30, 2010 might regret it.

1. They won’t receive a sizeable amount of money from Uncle Sam.

For the past two years, the federal government has offered a home buyer tax credit to help stimulate the economy. But that financial incentive is set to expire soon. First-time buyers who aren’t under contract to purchase a home by April 30, 2010 will leave the $8,000 that is available to them through the tax credit on the table. Meanwhile, repeat buyers will miss out on the opportunity to collect up to $6,500 from the government.

2. They might not lock-in on the historically-low interest rates.

Thanks to measures taken by the Federal Reserve including the purchasing of mortgage-backed securities, interest rates have remained historically-low for several years. With the economy beginning to show signs of recovery, it is widely believed that the government will soon put an end to these stimulus efforts.

If that happens, many economists believe we will begin to see a sharp increase in interest rates which could result in a much higher monthly payment for those who wait. For example, an interest rate increase of 1% on a 30-year fixed mortgage of $300,000 could cost a buyer $188 more a month or $67,000 more over the span of the entire loan.

3. They might miss out on record home price affordability.

Home price affordability is at its most optimal level in decades. As a result, those who wait to buy will likely pay more for the home they purchase than what that same home would cost right now. In fact, home prices have already begun to rise slightly in some markets. Instead of getting a better bargain, waiting to buy a home might net buyers a higher purchase price, less appreciation and less house for their buck.

“There is no time to waste for anyone who wants to take advantage of this great buying opportunity. Particularly for those who have a home to sell first,” added Weichert. “If you are prone to saying ‘what if’ and wondering what could have been, you will thank yourself down the road for buying now.”

For more information, visit www.weichert.com.

As a Reno-Sparks real estate consultant I welcome any questions or comments on the Reno-Sparks real estate market or any articles I post.  I can be reached at chance@ballad-company.com

RISMEDIA, February 23, 2010—(MCT)—Credit card issuers are now going to have to play by a whole new set of rules that are considered consumer-friendly—but will also cut into some of their traditional sources of revenue.

Don’t expect those companies to take that lying down. Card issuers are expected to spend the next year experimenting with new products and fees—as well as higher interest rates—testing just how much consumers are willing to shell out.

The Credit Card Accountability Responsibility and Disclosure Act, signed into law in May, is a sweeping overhaul of the card industry and includes provisions to help reduce the amount of interest consumers pay. The bulk of reforms are set to take effect February 22, 2010.

As card issuers prepared for the new rules in recent months, many have raised interest rates on customers—to the dismay of consumer advocates. At the same time, the weak economy and fears of rising defaults caused card companies to cancel accounts and lower credit limits on anyone who appeared risky.

The CARD Act will help many vulnerable consumers. “The biggest winners are consumers who have been taken the most advantage of,” says Josh Frank, senior researcher with the Center for Responsible Lending. These are cardholders who carry balances and have seen their interest rates jump or card terms change for no apparent reason or because they accidentally triggered a late fee, he says.

Consumers who are good managers of credit, though, might be unhappy to find that card issuers may be passing on higher interest rates and fees to them.

Here’s what the next year in credit cards might look like:

Up, up and away: The CARD Act doesn’t prevent issuers from raising interest rates, although there are more restrictions on when and how they can do so. Because card issuers can’t quickly raise rates or change terms on their riskiest customers, they will charge higher interest rates across the board to protect against potential losses, banking experts say. Synovate, which tracks card solicitations, found that offers in the fourth quarter of last year carried an average rate of 13.5%, up from 11.47% a year earlier.

Charge or else: “A lot of the talk around the industry is trying to figure out some of the fees that are going to come,” says Anuj Shahani of Synovate. He says one of the most anticipated: the inactivity fee. Card companies say it costs them money to maintain accounts, and they are starting to slap a fee on unprofitable customers who rarely use their cards.

Welcome back, annual fees: Once common, annual fees now usually appear only on subprime and high-end reward cards, Shahani says. But card issuers are eyeing a revival. Synovate reports that 35% of card offers in the fourth quarter carried an annual fee, the largest percentage in a decade. A year earlier, 23% had annual fees.

Fees for not knowing your limits: Issuers have typically covered customers going over their credit line, but often for a steep price of $35. The CARD Act doesn’t allow over-the-limit fees unless customers opt to have their overcharges covered. Many card issuers are working 24/7 to develop opt-in policies, Brauneis says. Consumer advocates expect a big promotional push by banks to get customers to sign up for this service. Don’t take the bait. “I can’t think of many consumers for whom it would be worth it,” Frank says.

Pricier balancing acts: The standard fee for transferring a balance from one card to another used to be around 3% of the amount transferred, not to exceed $75 or so. But that fee has been going up to 4% and 5% in the past year, and the dollar cap has disappeared. So you can end up paying hundreds of dollars on a transfer. Consumer advocates expect issuers to continue pitching balance transfers to collect the lucrative fees. If you’re tempted to transfer to another card for a lower rate, make sure you know the terms. Card reforms require that promotional rates must last at least six months, so check what your rate will jump to after that.

Skimpier rewards fro some: Card issuers last year watered down rewards, such as reducing points on purchases or trimming cash-back awards. That dilution is expected to continue on basic cards. But issuers will be launching richer reward programs to compete for the most profitable customers: good credit risks who carry a balance, pay interest and occasionally trigger fees.

New law, new products: Issuers have introduced new cards in the past six months, and they say these products have been in the works for a long time. But many seem designed in the spirit of the CARD Act, which aims to make card rules clearer and turn us into better money managers.

(c) 2010, The Baltimore Sun.

Distributed by McClatchy-Tribune Information Services.

As credit card companies continue to hike rates and continually change the terms and conditions of your account, it is crucial for credit card users to make the most of their credit. The following tips will help you get on track to using your credit card wisely.

1. Pay on time. Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. A good credit record leads to a higher credit score, which helps you qualify for lower interest rates. Know the date your payment is due. If your bill is due at an inconvenient time of the month- for example, if it’s due on the 10th and you get paid on the 15th- contact your credit card company to see if they will change your billing cycle to fit your cash flow.

2. Stay below your credit limit. If you go over your credit limit on your card, your card issuer could charge a fee and increase your interest rate to a higher penalty rate. To avoid this, keep a record of your spending or check your balance online. Also, be aware that some merchants (for example, hotel and car rental companies) put a “hold” on your credit card based on their estimate of the amount you will charge. This can reduce your available credit until the final charge is processed.

3. Avoid unnecessary fees. Credit card companies not only charge late payment and over-the-limit fees, but also fees for cash advances, transferring balances, and having a payment returned. Some companies charge a fee when you pay your bill by phone. Pay attention to the transactions that trigger these fees. If you need a cash advance, withdraw enough so that you don’t have to take a second cash advance and incur a second fee later in the month. Read your credit card agreement to learn more about the fees that your credit card company charges.

4. Pay more than the minimum payment. If you can’t pay your balance in full each month, try to pay as much of the total as you can. Over time, you’ll pay less in interest charges- money that you will be able to spend on other things, and you’ll pay off your balance sooner.

5. Watch for changes in the terms of your account. Credit card companies can change the terms and conditions of your account. They will send you advance notices about changes in fees, interest rates, billing, and other features. By reading these “change in terms” notices, you can decide whether you want to change the way you use the card. For example, if cash advance fees increase, you may decide to use a different card for cash advances. If you have a card with a variable rate or if you have an introductory rate that is ending, be aware that credit card companies are not required to send you a notice about raising your interest rate. Interest rates are listed on your monthly bill. Read your bill carefully and take note of any changes.

For more information, visit www.federalreserve.gov.

Qualification Guidelines

• A first-time homebuyer is someone who has not owned or co-owned their own residence within the past three years. If purchasing in a Targeted Area there are no restrictions on former home ownership.

• Total gross household income must fall within the Maximum Income Limits set by NHD.

• The purchase price of the residence you wish to buy may not exceed the Maximum Purchase Price Limits for the area in which it’s located.

• Assets, including without limitation, may not exceed 50 percent of the purchase price of the residence being purchased, unless disabled or elderly and such assets are the primary source of income. There is a lower asset test for down-payment loans — maximum $5,000.

• Income must support the repayment of the loan pursuant to the underwriting criteria applied by FHA, VA, RHS, or Fannie Mae, as applicable.

• Credit must meet the underwriting criteria applied by FHA, VA, RHS, or Fannie Mae, as applicable.
  
• Successfully completes a HUD approved in-person 6 to 8 hour Homebuyer Counseling Course.

As a Reno/Sparks real estate consultant I always welcome any comments or questions on the Reno/Sparks real estate or any of the articles I posted.  You can email me directly at  chance at ballard-company.com