Mortgage & Real Estate Tips and News "Better Informed & Educated Moving Forward"

Long Term Mortgage Rates Hit All-Time Low 

Mortgage rates fell for the 8^th straight week in the week ended December 24, establishing a new low for Freddie Mac's Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage (FRM) averaged 5.14 percent with 0.8 point, down from last week when it averaged 5.19 percent with 0.7 point in fees.  This is 98 basis points lower than the rate during the same week in 2007 and the lowest rate recorded since Freddie Mac first conducted the survey in 1971.

The 15-year FRM had an average contract interest rate of 4.91 percent, down a single basis point from last week.  Fees and points were unchanged at 0.7.  This was the lowest rate for the 15-year FRM since April 1, 2004 when it was 4.84 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) had an average interest rate of 5.49 percent with 0.6 point.  One week ago it averaged 5.60 percent with 0.6 point.

"Interest rates on 30-year fixed-rate mortgages eased for the eighth straight week and set another record low since Freddie Mac's survey began in 1971," according to Frank Nothaft, Freddie Mac vice president and chief economist.  "Real GDP growth fell 0.5 percent in the third quarter of the year, pulled down by the largest drop in consumer spending since the second quarter of 1980.  The market consensus calls for an even larger decline in the last three months of the year.

"The housing market, meanwhile, continues to contract.  Existing home sales (excluding condominiums and co-ops) fell 8.6 percent in November to 4.0 million houses (annualized) in November, representing the slowest pace since July 1997.  Moreover, the median sales price fell 12.8 percent from November 2007, the largest 12-month decline since records began in January 1968, according to the National Association of Realtors®"

Earlier in the week Fannie Mae posted its fixed and adjustable rate yields for the week ended December 19.  The 30-year FRM averaged 4.260 percent compared to 4.69 a week earlier.  The 15-year FRM average was 4.180, down from 4.520 a week earlier, and FHA/VA mortgages dropped from 6.09 to 5.410 over the week.

Please Call Tom Purcell at (714) 921-0887 for more Info

Why Invest in a Home?

Even in today's environment, there are many great reasons to buy a home: the pride of ownership, the freedom of owning your own "space", and the comfort of moving out of a cramped apartment, to name a few. But what makes home ownership a good investment?

Although we have seen a dramatic drop in home prices, there is current data to support that home sales may be on the increase in the next quarter and that the "bottom" on prices is here, Now.  Over time, as sales increase and the number of homes on the market start to decrease, the value of the homes have historically gone up.

Your wealth increases each time you make a monthly mortgage payment.  Of course, the interest (Consult your tax advisor for tax benefits on interest write offs) belongs to the institution that made the loan, but the principal portion of the payment belongs to you, and it accumulates—like a savings account—over time. Your accumulated principal plus the appreciated value of the property is commonly referred to as your home equity, or the amount you actually own.  But even what you owe on a house has its advantages, such as a possible mortgage-interest deduction on your taxes!  Talk to your tax specialists to learn more.

Beyond the numbers, there's no other long term investment that you can enjoying living in and has historically been of greater value and wealth creation than owning a home.  Whether you're giving your children enough space to grow or you simply want a place that you can transform into your own, Pinnacle Mortgage Group in Anaheim Hills, CA  can help make home-ownership a reality. It's time to get "back in the game".  Visit  www.lowratesonline.net for information on our current rates or to apply online.