Category Archives: Credit Score Info

Why Buying a Home Still Makes Cents!

Posted by Bud Bruening
 
 
Top Reasons to Own a Home
 

There’s good reason that over half of all Americans are homeowners. Social and financial benefits are key factors when it comes to deciding to buy. Homeownership allows people to grow wealth slowly over time, to hold assets that build equity, and to bring stability into chaotic lives.

Despite these facts, homeownership rates have taken a hits since the recession in 2009. Falling home prices along with reduced access to credit has kept many would-be buyers from entering the market. According to Morgan Stanley, the current homeownership rate is around 59.2%. This is lowest rate since the Census Bureau began tracking in 1965. Has this reduction been a fear-based one?

The top benefits of homeownership haven’t changed, even in the face of a down economy. Here are the top five:

1. Savings: Be sure to check out the calculator at the end of this article. You’ll find that long-term homeownership is still a way to get big savings.

2. Tax Breaks: They’re not on the chopping block just yet. Many homeowners are still able to take the mortgage interest deduction (MID) each year, along with great rebates and credits associated with upgrades made to your home.

3. Equity: When you pay a landlord, it’s money down the drain. When you pay on a mortgage, you are paying towards owning a piece of something. You may still owe $100,000, but perhaps the home is worth $200,000. This means you have $100,000 worth of equity you’ve built up over time.

4. Budgeting: Unless you live in a rent-controlled apartment (and not many do), then each lease renewal could mean a jump in prices. A fixed-rate mortgage, however, means your monthly payment is the same amount for the life of the loan. A $1,000 a month payment on a 30-year mortgage is that same now as it will be in 30 years!

5. Security: When you own, it’s yours. You can paint, improve, and decorate. The trees and flowers are yours to enjoy — for a lifetime if you wish. Most homeowners are in neighborhoods with other homeowners, meaning more time to build relationships and friendships. Recent studies have also shown that homeowners rank themselves as healthier than their renter counterparts.  

Experts have recommended for years that if you’re planning on staying put for 5+ years, buying becomes an increasingly better deal. You have time to recoup any extra expenses found in closing costs and are now making an investment in your future through home price appreciation. Once your mortgage is paid off, you’ll have a real asset. That brings real stability.

Home affordability is at near record highs. Now is a good time to run the numbers and see if buying makes good financial sense. If it does, then you’re in store for a wealth of benefits that only homeowners can experience.

 

Bud Bruening
512 E. Winchester
Murray, Utah 84017
Ph. 801.716.5246
Cell. 801.230.3107
Like us on Facebook
Follow me on Twitter
Utah’s Lowest Mortgage Rates

Leave a comment

Filed under Credit Score Info, Market News, Mortgage Updates, Real Estate Updates

Home Prices are Up Even as Market Continues to Struggle

Posted by Bud Bruening

According to CNN – Home prices made a comeback during the second quarter, but the struggling housing market isn’t out of the woods yet.

Prices rose a substantial 3.6%, compared with the three months ended March 31. But home prices are still down 5.9% compared with the second quarter of 2010.

The rise in home prices came after three consecutive quarters of drops, as reported by the S&P/Case-Shiller national index — an influential gauge of residential real estate markets.

The year-over-year decline was a bit more than the than the drop of 4.7% that had been forecast by a consensus of experts at Briefing.com.

A separate monthly index of home prices in 20 major metro areas also reported a month-over-month gain of 1.1% for June, and a drop of 4.5% year-over year.

Bud Bruening
512 E. Winchester
Murray, Utah 84017
Ph. 801.716.5246
Cell. 801.230.3107
Like us on Facebook
Follow me on Twitter
Utah’s Lowest Mortgage Rates

Leave a comment

Filed under Credit Score Info, Market News, Mortgage Updates, Real Estate Updates

Buffett Dreams up Bank of America Deal While Bathing

First American Express, then GEICO, now Bank of America. Warren Buffett recalls how past crises created big opportunities for Berkshire Hathaway. If he’s right, Berkshire’s $5 billion investment in BofA could be one of its most promising deals ever.

Warren Buffett

A lot to smile about.

Fortune — Early on Wednesday morning, August 24th, Warren Buffett was soaking in the bathtub at his red-brick, white-columned house in Omaha, musing about how he’d made some of his best buys when investors bailed on solid companies suffering a highly-publicized storm. He correctly predicted they’d work through the trouble, and made billions when they recovered. From the tub, Buffett recalled two such occasions.

The first was the Great Salad-Oil Scandal. In the early 1960s, a commodities mogul was taking out big loans secured by what he claimed were giant inventories of salad oil stored in warehouses owned by American Express in Bayonne, New Jersey. As it turned out, the tanks contained mostly water, with salad oil floating on the top for disguise. Shares of AmEx dropped 50%. Buffett pounced, and multiplied his investment five-fold in five years.

The second crisis-driven opportunity came in 1976, when the stock of GEICO collapsed to $2 a share from a previous high of $61. The once conservative insurer had lost its way by underpricing its policies in pursuit of reckless growth, and scrimping on reserves. Once again, Buffett reckoned that GEICO would thrive if its new management restored its low-cost, low-risk strategy. Berkshire Hathaway boosted its holdings as others fled, and by 1996 had accumulated 51% of its stock. That year, Berkshire purchased the remaining shares at $71 for $2.3 billion — 35 times what he paid in the crisis, and a price that now looks like a terrific bargain.

Thirty-five years later, Buffett thought he saw the same pattern in the big company investors reviled more than any other: Bank of America (BAC).

Buffett didn’t even have CEO Brian Moynihan’s phone number, and asked his administrative assistant to find it. When he reached Moynihan at the environmentally-friendly Bank of America Tower in midtown Manhattan, Buffett proposed a deal that was relatively light on dividends, and heavy on warrants that would produce enormous gains if BofA recovers. Moynihan, an experienced dealmaker from his days making acquisitions for Fleet, wanted near-total secrecy. He declined to bring in investment bankers, didn’t consult with lieutenants, and initially discussed the deal only with his chairman, former DuPont CEO Chad Holliday.

Can Brian Moynihan fix America’s biggest bank?

The board voted by phone early Thursday morning. The $5 Billion dollar deal had taken just 24 hours, a pace that could only happen in Buffett-Land. Berkshire Hathaway will receive a 6% dividend, and the right to buy 700 million shares at a price of $7.14. BofA’s shares are already trading over that level.

Fund managers and analysts fear that Bank of America needs to raise lots of additional capital by selling stock, at extremely low prices. They believe the bank lacks the financial strength to cover its big exposure to troubled mortgages. The TV talking heads, disappointed investors, and even investment bankers within BofA who get bonuses in stock and are watching it collapse, take a dim view of its future and Moynihan’s leadership. In the current news cycle, the relentlessly negative tilt about Bank of America now rivals the talk about the European debt crisis.

Buffett takes a different view: Berkshire wouldn’t have invested in BofA if it needed his money. The Berkshire chairman reckons that the bank would work through its current problems, and that the underlying banking business will prove highly profitable.

It’s interesting that it took a dynamo to pull GEICO out of its ditch — an Irish-American executive named Jack Byrne who combined excellent analytical skills with flamboyant salesmanship­­ who would heave his hat into the headquarters’ atrium every morning and rally the troops like Knute Rockne. The financial press and most of Wall Street thought Byrne would fail, and he proved them wrong.

Berkshire’s BofA investment is clearly an endorsement for Moynihan, just as it was a vote for Byrne. And if Moynihan’s claim that BofA will earn as much as $25 billion in a few years proves correct, Berkshire’s profits will exceed $10 billion.

It all started with memories of a salad oil scandal that spooked investors half a century ago.

Many investors see the housing crisis as a similar investment opportunity. The housing industry will recover, the question is when and where? We are already seeing different areas moving at record paces and home values increasing in key locations. The key to taking advantage is buying while home prices and interest rates are low. This could not be a better time to buy Real Estate. Unless you have Buffett’s money and can afford to buy banks.

Bud Bruening
512 E. Winchester
Murray, Utah 84017
Ph. 801.716.5246
Cell. 801.230.3107
Like us on Facebook
Follow me on Twitter
Utah’s Lowest Mortgage Rates

Leave a comment

Filed under Credit Score Info, Market News, Mortgage Updates, Real Estate Updates

eBay announces BIG expansion in Draper Utah

ebay

Posted by Bud Bruening – Utah’s Lowest Mortgage Rates

eBay and the Utah Governors Office of Economic Development (GOED)announced today that they will be expanding and building a new state-of-the-art facility in Draper, Utah.

“eBay has been a valuable, visible Utah company for more than a decade,” said Governor Gary R. Herbert. “This agreement will bring new operating units and new jobs to the State. When world-class companies like eBay pledge partnership with Utah, it is a vote of confidence in the economic growth and stability that we are currently enjoying.”

eBay, the world’s largest online marketplace announced plans to create up to 2,200 new jobs in Utah over the next 20 years. All of the incented jobs will exceed 125% of the county’s average wage including full benefits.

This could prove to be a big boost for businesses in Draper as well as its Real Estate market. eBay will be expanding its workforce by over 2,480 Utah employees at an average salary that will exceed 125% of the Salt Lake County average wage. If eBay meets these hiring goals it will result in $127,186,975 in new state tax revenue over the 20-year project timeline.

These new employees will need places to live, dine and spots for entertainment. Over the next several years the City of Draper , Utah will see some big benefits from eBay and it’s expansion.

 

 

Bud Bruening
512 E. Winchester
Murray, Utah 84017
Ph. 801.716.5246
Cell. 801.230.3107
Like us on Facebook
Follow me on Twitter
www.mymtgsolution.com
Utah’s Lowest Mortgage Rates

Leave a comment

Filed under Credit Score Info, Market News, Mortgage Updates, Real Estate Updates

It’s Official, It’s Now Cheaper to Buy a Home Rather than Rent!

Posted by Bud Bruening – Utah’s Lowest Mortgage Rates
 
HOMEOWNERSHIP BEATS RENTING IN 74 PERCENT OF MAJOR U.S. CITIES
Trulia Releases Summer Rent vs. Buy Index, Revealing Housing Market Rebound in Miami and Continued Setbacks in Detroit, Fresno and Sacramento

SAN FRANCISCO, August 16, 2011 – Trulia today released its Summer 2011 Rent vs. Buy Index, which compares the cost of buying and renting a two-bedroom apartment, condominium or townhouse in America’s 50 largest cities based on population.

 

Homeownership Affordability Remains High
Based on current market conditions, buying a home
is cheaper than renting in 74 percent of major U.S. cities. Meanwhile, it is clearly better to rent in New York, Fort Worth, Omaha, Seattle, San Francisco and Kansas City. In between both sides of the rent versus buy spectrum, there is a grey area. Depending on personal circumstances, such as one’s tax bracket, it may make more sense to buy a home in Oakland, Austin, San Jose, Memphis, Boston, Los Angeles and Portland, even though it is still relatively cheaper to rent.

Top Five Cities Where Buying Beats Renting

#

City

State

Price:Rent Ratio

1

Las Vegas

NV

6

2

Detroit

MI

7

3

Mesa

AZ

7

4

Fresno

CA

7

5

Arlington

TX

8

Top Five Cities Where Renting is Cheaper than Buying

#

City

State

Price:Rent Ratio

1

New York

NY

36

2

Fort Worth

TX

32

3

Omaha

NE

27

4

Seattle

WA

24

5

San Francisco

CA

24

NOTE: The price-to-rent ratio is the median listing price divided by the annualized median rent. Ratios that are 15 and under indicate buying is less expensive than renting, while ratios that are 20 or higher indicate renting is less expensive than buying.

 

Housing Market Rebounds and Setbacks in Foreclosure Hotspots

Buying a home in cities flooded with foreclosures continues to be considerably cheaper than renting, but this may be poised to change in the coming months. In Miami, for example, it is still less expensive to buy, but a mini-buying boom created by foreign investors and foreclosure freezes have caused its price-to-rent ratio to jump by 112 percent from 6 in January to 13 in July. Meanwhile, recent job gains in the auto industry have not countered Detroit’s falling home prices. For now, the city has experienced a setback since January with its price-to-rent ratio dipping 39 percent. Las Vegas, on the other hand, continues to be the best place to buy instead of rent for the past six months.

#

City

State

Price:Rent Ratio

July 2011

Price:Rent Ratio

January 2011

% Change

1

Miami

FL

13

6

112%

2

Phoenix

AZ

8

8

1%

3

Las Vegas

NV

6

6

-7%

4

Tucson

AZ

13

14

-10%

5

Mesa

AZ

7

8

-11%

6

Sacramento

CA

8

13

-17%

7

Fresno

CA

7

11

-32%

8

Detroit

MI

7

12

-39%

PRE-APPROVED QUOTES

  • “While recent stock market volatility on top of the slow economic recovery makes homebuyers nervous, it has not destroyed the American dream of homeownership. However, prospective homebuyers, who are ready and qualified to buy, face an uphill battle despite falling home prices and record-low mortgage rates,” said Ken Shuman, Head of Communications at Trulia. “Today, many banks are actually less enthusiastic about approving residential mortgage applications, which has dragged out the home buying process. Until a middle ground on lending practices can be met, many highly-qualified buyers may be forced to be renters by choice for now.”

  • “Many aspiring homeowners are on the fence about renting and buying in today’s market. Should they take advantage of falling home prices and low borrowing costs, or should they continue to rent until the economy stabilizes?” said Ken Shuman, Head of Communications at Trulia. “Price alone should never be the sole factor in deciding to purchase a home. Instead, buyers should first ask themselves if they plan to live in the home for at least seven-to-10 years, could make monthly payments on the house, and have enough cash in the bank for a down payment and an additional six to eight months worth of mortgage payments. If you can answer ‘yes’ to each of these questions, then the cost of buying a home definitely outweighs renting in most cities.”

 

METHODOLOGY
Trulia calculated the price-to-rent ratios for the 50 largest U.S. cities using the median list price compared with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of July 1, 2011. To view the complete methodology including sample price-to-rent ratio calculation, interpretation key for the ratio and definitions, click
here.

 

The Mortgage Solutions Team in Utah has that resources you need to get you the very best Mortgage Programs and lowest  Mortgage Rate available. If you are looking to Purchase a home or Refinance your existing home, give us a call. We work one on one with our clients and tailor a mortgage program to fit your needs. We create solutions for all your Mortgage needs.

 

 

 

Bud Bruening
512 E. Winchester
Murray, Utah 84017
Ph. 801.716.5246
Cell. 801.230.3107
Like us on Facebook
Follow me on Twitter
www.mymtgsolution.com
Utah’s Lowest Mortgage Rates

Leave a comment

Filed under Credit Score Info, Market News, Mortgage Updates, Real Estate Updates

Utah Mortgage Rates Hit Record Lows….. Actual Record Lows, not just the fluff you’ve heard on the T.V. and Radio for the past 4 years either.

15300065

I saw this article on KSL.com and had to share with you. The average rate on a 30-year fixed mortgage has fallen to its lowest level on records dating to 1971.

The rate on the most popular mortgage dipped to 4.15 percent from 4.32 percent a week ago, Freddie Mac said Thursday. Its previous low of 4.17 percent was reached in November.

The last time long-term rates were lower was in the 1950s, when 30-year loans weren’t widely available. Most long-term home loans lasted 20 or 25 years.

Few expect record-low rates to energize the depressed home market. Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. Yet prices and sales remain unhealthy and are holding back the overall economy.

Five years ago, the average 30-year fixed rate was near 6.5 percent. In 2000, it exceeded 8 percent.

Most homeowners are paying rates more than a full percentage point higher than the current average. The average rate on all outstanding mortgages is 5.3 percent, Freddie Mac said, citing data from the Bureau of Economic Analysis.

After previous recessions, housing accounted for 15 percent to 20 percent of overall economic growth. This time, in 2009 and 2010, housing contributed just 4 percent to the economy.

“The housing market is not going to turn around because of this, because it isn’t the mortgage rate that matters,” said Joel Naroff, head of Naroff Economic Advisors. Naroff blamed the “horrendous” process of qualifying for a mortgage despite tougher lending standards. He said trying to sell a home in many markets is just as difficult.

Many would-be buyers can’t take advantage of the low rates. The unemployment rate is 9.1 percent, few Americans are getting raises and many are struggling to shrink their debt loads.

Banks are also insisting on higher credit scores and larger down payments for first-time buyers. Many repeat buyers have too little equity invested in their homes to qualify for loans. Others are too nervous about the economy or their job security to invest in a home.

The average rate on a 15-year fixed mortgage, which is popular for refinancing, fell to 3.36 percent, also a record low. It’s the third straight week of record lows for the popular refinancing option. Freddie Mac’s records date to 1991, but analysts believe the new low on the 15-year mortgage is the lowest ever.

Borrowers who qualify have rushed to refinance and take advantage of the low rates. Refinancing accounted for 70 percent of mortgage applications in the first half of the year, Freddie Mac said. Refinances  tend to provide less benefit to the economy than home purchases do.

Mortgage rates typically track the yield on the 10-year Treasury note. Economic fears have drawn investors to the safety of Treasuries, driving down the yield on the 10-year note to barely above 2 percent. That has helped lower mortgage rates.

The Federal Reserve offered a dim outlook of the economy last week, saying it expects growth will stay weak for two more years. As a result, the Fed said it expects to keep short-term rates near zero through mid-2013.

Roughly 14 million Americans remain unemployed. And the economy isn’t creating enough jobs to rapidly trim that figure. The economy grew at an annual rate of just 0.8 percent in the first six months of this year, the slowest such pace since the recession officially ended more than two years ago. In June, consumers cut spending for the first time in 20 months.

Fewer Americans bought previously occupied homes in July for the third time in four months, the National Association of Realtors said Thursday in a separate report. It said sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes. That’s far below the 6 million that economists say must be sold to sustain a healthy housing market.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage fell to 3.08 percent, its lowest level on records dating to January 2005. Last week’s reading of 3.13 percent also was a record low. The week before was, too.

The average for one-year adjustable-rate loans fell to 2.86 percent, the lowest on records going back to 1984. Last week’s average of 2.89 also set a record.

As always, for questions regarding mortgage refinances and home loan purchases in Utah give the Mortgage Solutions Team a call. We offer mortgage advice and free mortgage rate quotes.

 

Bud Bruening
512 E. Winchester
Murray, Utah 84017
Ph. 801.716.5246
Cell. 801.230.3107
Like us on Facebook
Follow me on Twitter
www.mymtgsolution.com
Utah’s Lowest Mortgage Rates

Leave a comment

Filed under Credit Score Info, Market News, Mortgage Updates, Real Estate Updates

Analysts expect mortgage rates to remain low for time being

Posted by Bud Bruening Tuesday, August 9th,
Analysts expect mortgage rates are likely to remain low as long as the U.S. is battling a sluggish economy, but the nation could see a slight uptick in rates if Treasury yields edge higher, according to one financial analyst. Greg McBride said it’s unlikely mortgage rates will be an impediment for well-qualified borrowers, because the “weak economy will keep a lid on mortgage rates.” “Mortgage rates are well below 5%. Even with the downgrade, I expect mortgage rates are going to stay below 5% as long as everyone is consumed by economic worries,” he said.

While Standard and Poor’s downgrade of the U.S. debt rating riled financial markets Monday, McBride said mortgage rates are effected more by the overall health of the economy, which is in a state of distress over weak employment data and abysmal consumer confidence. “The downgrade didn’t tell us anything we didn’t already know, we’ve had a barrage of poor economic data and that’s really put the economy front and center,” McBride said.

Mortgage Rates continue to remain at very low levels with all of the poor economic news this week. If you are upside down on your home, have less than perfect credit, there are still options available. Mortgage rates are being driven by all the poor economic news but are also affected by economic speculation. Any news both positive or negative could have a direct impact on your mortgage rate. To ensure that you get the very best mortgage rate in Utah, give the Mortgage Solutions Team a call. We are a local Utah Mortgage company offering free mortgage rate quotes and other valuable Utah mortgage information. Give us a call to find out what we can do do for you.

Bud Bruening
512 E. Winchester
Murray, Utah 84017
Ph. 801.716.5246
Cell. 801.230.3107
Like us on Facebook
Follow me on Twitter
www.mymtgsolution.com
Utah’s Lowest Mortgage Rates

Leave a comment

Filed under Credit Score Info, Market News, Mortgage Updates, Real Estate Updates