Weekly Recap (01/10/11-01/15/11)by Tim Manni
Shopping for and buying a home is an extremely emotional experience. The long-term commitment that your mortgage presents, coupled with the fact that buyers tend to consider their house their home, a place to raise a family perhaps, makes the investment into a property about more than just numbers and figures. You really want to make sure the house you’re buying is the right one for you.
Part of the completion of this emotional and financial investment is understanding your home’s history. What occurred and who lived in your home before you, could easily make or break your decision of whether or not to buy.
“Landing a mortgage in 2011 is going to be a bruiser,” writes HSH.com contributing writer Kerry Hannon. “The recession may be over, but mortgage lenders, still feeling the sting of foreclosures, strategic defaults (walk aways) and underwater homeowners are not letting down their guard.”
Revamped scoring models from both FICO and VantageScore are designed to focus more on a borrower’s recent credit history as opposed to their long-term history.
Last year was a record-setting year, one of highs and lows. Mortgage rates bottomed out to multi-generational lows, and foreclosures soared to a new record high. RealtyTrac — the leading online marketplace of foreclosure properties — reports today that 3,825,637 foreclosure filings were sent to 2,871,891 properties, an increase of nearly 2 percent from 2009.
It could have been worse
Back in November I speculated that the robo-signing scandal, which caused foreclosure filings to decrease in October, would lead to an increase of foreclosures during the holiday season. What we didn’t know back in November was just how far the robo-signing scandal set back foreclosure filings.
James J. Saccacio, chief executive officer of RealtyTrac, explains that the foreclosures which I expected to hit the market at the end of last year are now expected to hit the market in early 2011.
The good news is that certain tax advantages remain in place for energy-efficient home improvements. The bad news is that the tax breaks are smaller and there are some catches that may prevent you from qualifying at all.
While the bulk of the energy-efficient credits expired at the end of 2010, a bill passed back in December allowed for certain tax breaks to remain in effect:
The tax law passed in December extends a federal tax credit through 2011 for people who make their homes more energy efficient. The catch: The government reduced the credit to pre-2009 levels. This means that taxpayers will be able to get a maximum $500 lifetime credit for up to 10% of costs of making their home more efficient. That’s down drastically from the maximum $1,500 credit that covered up to 30% of expenses which taxpayers could claim in tax years 2009 and 2010. (Now and then, you’d have to spend at least $5,000 to get the maximum credit.)
How many bedrooms are in your home–two, three? Does your home still use window units or do you have central air? If your home has one bathroom, you probably wish you had two, but is that standard? What about your mortgage rate–how does it stack up against the national average? Are you paying too much in interest each month?
In a quest to find out which characteristics make up the average American home (and its financing), HSH.com looked at the most recent HUD-U.S. Census Bureau American Housing Survey to understand the most common traits in American houses.
What is the “average house” and how does your home compare?
HSH.com’s overall mortgage tracker — our weekly Fixed-Rate Mortgage Indicator (FRMI) — found that the overall average rate for 30-year fixed-rate mortgages slipped back by seven basis points (.07%) during the first week of 2011, ending HSH.com’s national survey at 5.12%, the lowest average rate since early December. FHA-backed offers, so crucial to first-time homebuyers and low-equity refinancers, decreased by five basis points to start 2011 at 4.77%, better than a half-percentage point lower than they began 2010. The overall average rate for 5/1 Hybrid ARMs revisited a level seen two weeks ago with an average rate of 3.89%. HSH.com’s FRMI and other public data series includes rates for conforming, jumbo, and most recently the GSE’s “high-limit” conforming products and so cover much of the mortgage-borrowing public.