What lower US rates means for property

The US Federal Reserve’s decision to scrap interest rates hikes this year gives the Reserve Bank of Australia more scope to cut rates – and in doing so ease any transition to Labor’s negative gearing and capital gains tax changes, SQM Research managing director Louis Christopher said.

The US central bank’s decision on Wednesday to hold rates steady after it lowered its forecast for the world’s biggest economy made it more likely the RBA would make the 50 basis point-cut that many economists expect, which would reduce borrowing costs and boost demand for residential property, Mr Christopher said.

In a report modelling impacts of Labor’s planned property tax changes that prompted Treasurer Josh Frydenberg and shadow treasurer Chris Bowen to trade blows on Thursday, Mr Christopher said lower rates would reduce the hit to housing prices and also the upwards push on rents that would come from Labor’s plan to limit negative gearing to new property and to halve the capital gains tax deduction to 25 per cent.

Source: The Australian Financial Review

Time for the housing market to spring forward

 Housing may be on the mend: Home sales dipped in January, leading to concerns about the health of the broader economy.

But with the Federal Reserve likely to keep interest rates on hold for the foreseeable future, there are hopes that the housing market will start to rebound.
On Monday, the National Association of Home Builders will release its latest monthly survey of builders. Confidence rose in February thanks to a dip in mortgage rates, which have dropped along with long-term bond yields this year.
Mortgage rates have fallen even further lately thanks to the Fed, as well as concerns about China’s economy and the latest Brexit drama. The 30-year fixed rate mortgage hit 4.31% last week, the lowest level in more than a year.
“The housing market is benefiting from stock market volatility,” said Odeta Kushi, deputy chief economist with First American. “We have a ton of pent-up demand from older Millennials sitting on the sidelines waiting to be homeowners.
Lower rates should push up home sales.”
Kushi said the latest jobs report bodes well for housing, too. Even though the number of jobs added was disappointing, wages continued to rise.
And that could help people trying to save money, so they can go from living at home or renting to buying a house.
She pointed to a recent increase in home construction and housing completions as another good sign.
Supply is ampler than it had been.
“The housing market remains poised for a strong spring,” said Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association, writing in its most recent report on mortgage applications. Loan application volume rose 2.3% earlier this month.
“We are starting to see signs of more new residential construction and inventory, which increases buying opportunities for the many home shoppers who have been hampered by the ongoing lack of supply,” Kan added.
The latest MBA figures on mortgage applications will be released Wednesday.
All this could lead to a turnaround in existing home sales figures for February, which will be released by the National Association of Realtors on Friday. Sales fell 1.2% from December to January. But Kushi thinks they rebounded last month.
That should be good news for housing-related stocks too, which have already enjoyed a solid start to 2019 on hopes that the market is poised for a big comeback.
The SPDR S&P Homebuilders ETF (XHB) — which includes big builders like Lennar and Toll Brothers, as well as housing-related companies such as Roomba vacuum maker iRobot (IRBT) and appliance giant Whirlpool (WHR) — is up 17% this year.
Retailer Williams-Sonoma (WSM), which is also a member of the builder ETF, will report earnings Wednesday. Wall Street expects sales to rise 7% and profits to jump 17%.
2. Fed’s balance sheet shrinkage: The US central bank will make its latest rate decision on Wednesday at 2 pm ET, and chair Jerome Powell will speak at 2:30 pm.
No rate hike is expected, so the hot topic will be whether the Fed will hint about changes to its so-called quantitative tightening policy.
In 2017, the Fed decided the US economy was healthy enough for the central bank to start selling off assets that it gobbled up to stimulate recovery after the Great Recession.
Critics say the Fed’s decision to shrink its balance sheet has contributed to economic turbulence. The Federal Reserve has signaled it may stop or slow the offloading of $4 trillion worth of assets, which has investors excited.
3. FedEx and the economy: The company has already warned that global issues, including trade disputes and economic slowdowns, could deliver a huge blow to its bottom line this year.
FedEx (FDX) slashed its profit outlook by 7% to 10%, with the deepest cuts coming to its international business.
The firm will post a quarterly earnings update on Tuesday after the markets close. And given macroeconomic issues are still a big concern, investors will be on the lookout for how it’s impacting one of the world’s largest courier companies.
4. Nike’s Zion problem: It was the rip heard around the world when Duke basketball star Zion Williamson injured his knee after his Nike (NKE) sneaker broke during a matchup with top rival North Carolina last month.  It caused the company’s stock to dip.
Nike said it was an “isolated occurrence”, but with March Madness starting this week, another wardrobe malfunction is the last thing Nike needs.
Nevertheless, Wall Street is expecting good news from Nike when it posts earnings after the bell on Thursday. Sales are expected to rise nearly 7%.
But investors will be paying attention to anything the company says about demand in China and Europe, given the recent signs of softness in those economies.
Source: CNN Business

Nigeria signs US $10m housing construction deal

Nigeria has signed a US $10m deal with United Kingdom-based Iconic City Limited for the  development of a 3.8ha land in Alakia, Ibadan, the Oyo State capital, into a residential housing estate.Group Managing Director and Chief Executive Officer, of Odu’a Investment Company Limited, Mr. Adewale Raji who signed the deal with the UK firm said the agreement aims at curbing housing deficit in the country.

“The housing deficit in the country is over 22 million. Investment in housing remains an important and profitable venture, especially when affordability is considered,”said Mr. Adewale Raji.

“The initiative was hinged on the Federal Government’s Economic Recovery and Growth Plan which had human capital development as one of its cardinal objectives with housing provision as key factor in achieving that goal,” he added.

Westlink Iconic Estate

The proposed residential housing estate dubbed “Westlink Iconic Estate” will be a medium density luxury estate consisting 124 households. The housing products are 60 units of three-bedroom apartments, 42 units of four-bedroom terrace houses, 14 units of five-bedroom semi-detached duplexes, eight units of six-bedroom fully detached duplexes and 36 commercial and business units.

Mr Adewale Raji affirmed that housing types will vary to allow for different market segmentation subscribers. Construction of the project is scheduled for completion in 2years.

Mr Adewale Raji also quoted that the partnership was going to give his firm the opportunity to utilize its professional experience ranging from training, working to build a world class mixed luxury residential estate in Ibadan.

Source: Constructionreviewonline

Australian housing market on track for biggest downturn since GFC

Australia’s housing market is on track to experience a slump bigger than both the global financial crisis and the 1980s recession.

National dwelling (houses and units) values slumped by 6.8 per cent since their peak in October 2017, driven mainly by sharp falls in Sydney (-13.2 per cent) and Melbourne (-9.6 per cent), according to new analysis by property data company CoreLogic.

If prices continue to fall at current rates, within one month this downturn will be the largest since 1982/83 when Australia – along with most of the developed world – was in the grip of a crippling recession.

Some downturns are big, and some are small,” said Geoff White, head of real estate at CoreLogic.

“Usually, it’s driven by economic conditions, but in this case it’s more about credit.

We’ve come off a brilliant period where we’ve seen strong growth – but the key is when things go up quite radically, they can go down quite radically. In many cases the growth over the last five years has been unstable and we’re seeing a reaction to that now.”

A key trigger for the downturn is that lending standards have tightened and banks are more cautious to provide credit to prospective home buyers, particularly investors.

Graph showing the housing market downturns The Australian housing market is on track to experience its biggest slump in decades. Source: CoreLogic

 

During the GFC, banks were still prepared to approve loans, as the federal government’s bank guarantee – where the government underwrote the banks to boost confidence – kept credit flowing, while the first homebuyer grant stoked demand.

The tightening of lending standards – especially to property investors – coupled with increased stamp duty for foreign investors, have combined to cause the sharp market decline.

While the current downturn is dramatic, house prices over the longer term still show a positive trend – over the last 20 years the median house price has seen a 275 per cent increase, according to CoreLogic data.

“We’ve had a GFC, we’ve had recessions and yet we’ve still seen the market rise,” Mr White said. “It will always dip and dive, and it depends on the severity.

“This time the economy, across Australia in most major centres, has been performing well. Unemployment is low, inflation is low, interest rates aren’t high. There are great periods of growth and there will be falls.”

Confidence is key

But one commentator argues that economic conditions this time around should make homeowners feel more confident than they may have been during the GFC and the ’80s recession.

Not only is the economy strong enough to weather the storm, but Deloitte partner Nicki Hutley told The New Daily their analysis shows that wages are going up “albeit slowly” and people are still spending.

“When people say it’s the biggest downturn, it was preceded by the biggest upturn.

“In Sydney, for instance, we had houses going up 75 per cent, so for the bulk of people who brought in last five years they’re still ahead of the game,” she said.

Ms Hutley stresses that the drop-off in investor lending is nowhere near the extent of what happened around the GFC and that “things are going in our favour”.

“The biggest risk to Australia is not internal but external – China is the biggest risk at the moment, but even there the government is acting to bolster the economy through fiscal stimulus.

“I’m far less worried about internal [circumstances]. We’ve got good employment rates, there’s income growth, it’s slow but it’s growing and that helps consumption. Thing are going in our favour.”

Source: New Daily

Buyers finally get the upper hand in hottest U.S. housing markets

The real estate frenzies in West Coast cities have become the stuff of lore: buyers jostling at open houses, homes getting offers sight unseen, bids coming in hundreds of thousands of dollars over asking.

That’s all over now.

Just ask Kelly Randall, an Amazon employee who listed her renovated Seattle condo for $539,000 — a bargain compared with the $615,000 her friend got last year for a smaller place in the same building. Almost four months and four price cuts later, Randall’s still waiting for an offer.

“My timing sucks,” she said. “It’s a little frustrating.”

For the first time in years, the U.S. is entering its key spring house-hunting season with buyers holding the upper hand. Nowhere is the shift more pronounced than in once-hot areas such as Seattle, San Francisco and Denver, where bidding wars are vanishing, time-on-market is climbing and prices are flattening, or even falling. These western cities, the center of the recent housing boom, are now leading the slowdown.

The reasons are varied, from last year’s spike in mortgage rates to volatility in technology stocks. But the simplest explanation is that years of soaring values have put housing in many areas out of reach to all but the most affluent buyers. In many parts of the West, home prices have more than doubled from the recession while incomes have climbed far less.

“There’s a huge disparity,” said Lawrence Yun, chief economist of the National Association of Realtors. “People can’t catch up.”

With prices slipping and more inventory coming up for the busiest time for home selling, buyers who have the means will have a new opportunity to enter the market. Sellers, meanwhile, face a “reality check,” Yun said.

“This is what it looks like when the pendulum starts to go the other way,” said Felipe Chacon, a housing economist at Trulia.

Seattle is a prime example of the reversal. The area’s median single-family home price doubled since 2012 to $560,000, fueled by an Amazon-led tech boom that brought in a flood of highly paid workers. Houses regularly sold within a week, sometimes garnering 10 or more offers, with buyers waiving home inspections and financing contingencies.

Now, the tables are turning. The median single-family home prices in King County, which includes Seattle, fell 3 percent on a price-per-square foot basis in January, the first annual decline since 2012, according to brokerage Redfin. Roughly a sixth of the metro area’s listings had price cuts in the 12 months through January, twice the previous year’s rate, Trulia data show.

It may just be a brief respite after years of mania. Seattle’s economy and hiring remain strong, and housing is still tight compared with other parts of the country. Home sales have started to pick up from a tepid fall and winter, real estate agents say.

But there’s no question the house hunt has become easier for people such as Hector Perez, who moved to Seattle last year for an Amazon job and had heard horror stories about the crazy market. The Texas transplant and his wife, Kate, were pleasantly surprised when they zeroed in on a new home in the Queen Anne neighborhood that had been on the market for more than half a year.

Already, about $160,000 had been knocked off of the initial list price of almost $1.4 million. When the seller asked if they could do an inspection in five days, the couple said they were traveling and threatened to walk if they couldn’t get 10.

“It was a bit of a risk, but they came back and said, ‘OK,”‘ Perez said. “We had a little bit of leverage that we didn’t think we’d have.”

The invisible hand of Amazon may once again be playing a role in the market. There are concerns that the company, which occupies about a fifth of Seattle’s prime office space, may be slowing its growth in the city. Last month, the tech giant said it doesn’t plan to move into the space it leased in a new 37-story tower being built downtown. Amazon, which still has thousands of positions open in the city, declined to comment.

The broad cooling indicates that there are greater forces at play than a single company or industry. Home sales in January were at 11-year lows in both Southern California and the San Francisco Bay area, CoreLogic Inc. reported. Prices in both the Portland, Oregon, and Denver areas fell this year for the first time since 2012, according to local multiple listings services.

In the Bay Area, San Francisco’s market may get a boost as the pending initial public offerings of Lyft Inc., Uber Technologies Inc. and Pinterest Inc. mint millionaires, according to Patrick Carlisle, chief market analyst in the region for the brokerage Compass. But in Silicon Valley, there’s been a dramatic slowdown, he said. Santa Clara County — home of Google and Apple Inc. — saw its median house price fall 1 percent in the fourth quarter to $1.25 million, after a 27 percent surge a year earlier.

“Santa Clara was unbelievably hot,” Carlisle said. “But there has been a reaction to the high prices. When you add in last year’s rise in interest rates and the fact that their stock portfolio dropped, suddenly it made people a lot more cautious.”

Caution was apparent on a recent sunny Saturday morning in Northwest Seattle’s Whittier Heights neighborhood as Ruslan Polyak propped up an open house sign by the front door of a yellow townhouse. Recognizing the market’s slowdown, he had listed it last month for $810,000, even though an identical unit sold last spring for $835,000, almost $100,000 above asking, he said.

Negotiations are welcome, he told a buyer attending the open house: “My client’s super reasonable.”

Later that day, Polyak cut the price to $787,000.

Randall, the Amazon employee, is waiting for her condo to sell so she can buy a new town home she signed a contract to purchase in November. In a sign of the market’s softness, the builder is working with her, reducing the agreed-upon price as she’s had to lower her own asking price. It’s now $480,000, a $59,000 reduction from the original listing.

Her agent, Bill Jones with Every Door Real Estate, said the changing market isn’t all bad: “I don’t mind not having to compete with 12 other people to win a client a house.”

Source: SALTLAKETRIBUNE

New housing bill threatens Nigeria’s financial sector, economy

Ten percent of the profit before tax of Nigerian banks, insurance companies and pension fund administrators could go into a National Housing Fund promoted by lawmakers, according to an exclusive document seen by BusinessDay.

The so-called National Housing Fund (Establishment) Act, 2018 was secretly passed by the Senate on November 6, 2018, following its passage by the House of Representatives on July 17, 2018.

An approval by the presidency is all that stands in the way of the secret Act, which managed to elude private sector lobby groups, from becoming law, after it quietly made it through the National Assembly in 2018.

“When you put such a financial strain on private companies, they are forced to cut costs by sacking staff and freezing new investments,” a senior business person who did not want to be named said.

“This regulation will be poorly timed as it is happening when other countries are lowering corporate tax rates to incentivise investments,” the person said.

The levy will probably see some of the companies pass on the cost to consumers, thereby triggering a surge in inflation.

A race to cut spiralling operation costs created by the new levy could also force companies to lay off staff while barricading new investments in the economy.

That would be a tough blow to take on an economy still recovering from a contraction in 2016.

“Buhari has a chance to be the hero here if he refuses to assent to the Bill, but given his welfarist ideology, that may not happen,” a company CEO said on condition of anonymity.

The Act repeals the National Housing Fund Act Cap. N45, Laws of the Federal Republic of Nigeria, 2004 to provide for additional sources of funding for effective financing of housing development in Nigeria and was sponsored by Ahmad Kaita (APC, Katsina North).

The Act provides among others for every commercial or merchant bank, insurance company, and Pension Fund Administrator (PFA) to invest 10 percent of its profit before tax (PBT) into the Fund at an interest rate of 1 percent above the interest rate payable on current accounts of banks.

The Fund will also forcibly collect contributions from Nigerians, both in the public and private sectors, manufacturers and importers.

The Federal Government is to contribute to the Fund at its discretion.

Employees and self-employed Nigerians, who earn above the minimum wage, must contribute 2.5 percent of their monthly salaries to the Fund. Manufacturers and importers are also to contribute 2.5 percent to the Fund.

There’s also a levy on locally-produced and imported cement, which will be 2.5 percent ex-factory price before transportation cost for each bag of 50 kilogramme or its equivalent in bulk.

In the end, this levy may not be restricted to cement alone, as the Act provides that the President, by an executive order, could add, delete, amend or substitute consumer goods, services or products and approve rates for the levy as and when he thinks fit in the circumstance.

The Federal Mortgage Bank will manage the pooled funds, Section 15 (1) of the Act provides.
“The proceeds from the fund will be used to finance the housing sector of the economy through wholesale mortgage lending to primary mortgage banks,” section 15 (2) of the Act reads.

The failings of the former National Housing Fund and the track record of similar funds managed by government cast a cloud over how efficiently the new Fund will be managed and the chances that it achieves the primary objective for which it was created.

Industry players, who are worried that the provisions of the Bill overrule carefully-crafted regulatory guidelines that guarantee the safety of depositors’ funds sitting in the banks and pension funds, were critical of the Act and warned it would have dire consequences on the economy and investor confidence.

Boniface Okezie, national coordinator, Progressive Shareholders Association of Nigeria (PSAN), calls the Act a “fraud”.

“How can we be talking about extorting companies to fund something without seeking their consent,” Okezie said.

“This is unacceptable. Companies should not comply; rather they should rely on the provision of the Companies and Allied Matters Act (CAMA),” Okezie added. There are severe punishments for defaulters.

In the event that a company fails to pay the levy 60 days after it was due, it warrants a demand notice to be accompanied by a penalty of an additional 2 percent levy on the 10 percent that should have been paid.

If payment drags for another 60 days after the demand notice, the company pays a flat rate of N100 million and the CEO of the company risks spending three years in jail in addition to a personal fine, separate from the company fine, of N10 million.

In the case of importers, a two-month delay is all that is required before the importer is slammed with a N100 million fine, which the Bill says is the minimum.

A fine of N10 million could be slapped on individuals who fail to make their contributions as and when due.

The banks are expected to pay the levy to the Central Bank while the insurance companies and pension funds will pay to the National Insurance Commission and National Pension Commission, respectively.

For manufacturers and importers, the levy will be collected by the tax authority, the Federal Inland Revenue Service.

Sources say some private sector interest groups are planning to engage the Presidency with a view to stopping the implementation of the Bill which, they say, is inimical to the private sector and the economy at large.

The equities market would be directly affected if this Bill becomes law as investors worried about the impact the levy could have on company profitability may dump stocks at a frantic pace.

The document obtained by BusinessDay was signed February 19 by Mohammed Ataba Sani-Omolori, a clerk at the National Assembly.
Shareholders of companies, particularly the banks, insurance companies and PFAs, have kicked back.

Issues ranging from accountability to accessibility were raised and they advised their companies’ Boards of Directors not to approve any form of contribution into the Fund.

“The Act does not make sense because the contributors won’t have control over the Fund. Why do we scare investors? I don’t think it is good idea as it will scare away investors, so it must be jettisoned,” Sunny Nwosu, national coordinator emeritus, Independent Shareholders Association of Nigeria (ISAN), told BusinessDay on phone.

Moses Igbrude, publicity secretary, ISAN, said, “You can’t make companies to contribute to the NHF without letting them have access to it. President Buhari should not sign it.

The shareholders own the companies and we need to ask the companies whether they were represented at the public hearing on the Bill before its passage at the National Assembly.

If they were represented, they will need to explain to shareholders the benefits and who manages the funds.”

Attempts to reach the chairman, Senate Committee on Housing and Urban Development, Barnabas Gemade (APC, Benue), proved abortive as he did not pick his calls.

However, a member of the committee, Matthew Uroghide (PDP, Edo), told BusinessDay on Tuesday that he would check on the Bill before commenting on it.

“When I am in the office, I will go through the Bill before commenting on it. I will be in the office by next week,” he said in a telephone interview.

Source: BusinessDayNg

Pakistan prime minister Imran launches low cost housing finance scheme

Dubai: The Pakistan government will provide 90 per cent housing finance to deserving people as part of Prime Minister Imran Khan’s flagship project to construct five million houses in the country.

Imran has launched a low-cost finance scheme to kick-start his much publicised affordable housing project for the poor. The project, he said, would also help economic activities through the creation of jobs and promote 40 industries connected to construction sector. During his election campaign, Imran had promised to build five million housing units to overcome the shortage of affordable housing in the country.

 

Speaking at a ceremony in Islamabad, Imran said that a huge segment of Pakistan’s population is cash-starved and could not afford to build houses, and that’s why the government is stepping in to help.

 

Housing units costing less than Rs3 million (Dh80,000) would be funded under the scheme. The banks would provide loan up to Rs2.7 million — 90 per cent of the total amount — under the scheme.

The banks and other financial institutions are being incentivised to extend loans for the scheme. Special segments, including widows, orphans, transgenders, martyrs’ families and people living in war-against-terror hit areas would be given priority under the house financing scheme.

The new housing units could neither be rented out nor sold by the owners. The low-cost financing would be made available to at least 100,000 housing units at the mark-up rate of 5 per cent for 12.5 years.

Imran said the low-cost housing project was a component of the PTI government’s planning for poverty alleviation.

The prime minister appreciated State Bank of Pakistan Governor Tariq Bajwa for launching the financing facility for the low-cost housing project at low interest rates, besides providing cash loan facility to small growers and small- and medium-sized enterprises (SME) sector.

Currently, the house financing facility in Pakistan is just 0.2 per cent while it is 10 per cent in India, 30 per cent in Malaysia and 80 per cent in the United Kingdom and the United States.

Imran also appreciated the steps to include the people of erstwhile Federally Administered Tribal Areas — who had suffered a lot due to war on terrorism — transgender and under-privileged segments of the society in the scheme.

Speaking on the occasion, Finance Minister Asad Umar said it was in the PTI’s manifesto to provide all possible facilities to the downtrodden.

He said, currently Pakistan has a backlog of 10 million housing units and bank financing is a must to achieve the target of constructing five-million low-cost houses. Umar said housing schemes for the federal government employees would also be launched in 12 cities.

Source: Gulf News

Is it okay to apply with more than one mortgage lender at the same time?

U.S. mortgage rates reversed course this week, after a downward trend, according to Freddie Mac.

The 30-year fixed mortgage averaged 4.41 percent for the week ending March 7, up from 4.35 percent the previous week. A year ago, mortgage rates stood at 4.46 percent.

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Low mortgage rates help propel U.S. home sales and the refinance market.

“While mortgage rates very modestly rose to 4.41 percent this week, they remain below year-ago levels for the fourth week in a row,” said Sam Khater, Freddie Mac’s chief economist. “In late 2018, mortgage rates rose over a full percentage point from the prior year, which was one of the main reasons that weakness in home sales continued into early 2019. However, the impact of recent lower rates and a strong labor market has led to a rise in purchase mortgage demand as we start the spring homebuying season.”

 

Favorable rates also have been helping Dayton-area home sales.

Local home sales began 2019 on a strong note with a 5 percent uptick in January transactions, according to Dayton Realtors.

The historic low for 30-year rates was 3.31 percent in November 2012.

Is it okay to apply with more than one mortgage lender at the same time?

Two-timing your mortgage lender?
When shopping for a mortgage, you’ll compare mortgage rates, select a provider and start your application. But should you apply with more than one mortgage lender? There are several reasons that it might make sense to do so:

To make sure that you can secure at least one mortgage approval
You want to have a couple of offers to get the best mortgage rate
You may discover that you don’t like your lender
Here’s more about the pros, cons and ethics of applying with more than one mortgage lender.

Why you should apply with more than one mortgage lender
Okay, you should shop for mortgage financing because you don’t want to leave money on the table – especially your money. Got it. But there are other reasons to scour the market for the best deals.

Will you be approved?
Different lenders have different standards. You might not qualify with Acme Mortgage – but you may qualify with AAA Home Loans. Not all mortgage applications succeed. According to Ellie Mae’s January 2019 Origination Insights report, “Closing rates for all loans increased to 75.0 in January. Refinance closing rates increased to 69.5 percent in January, while purchase closing rates increased to 78.1 percent in January.”

At first, it may seem odd that you can get approved by some lenders but not by others. After all, isn’t a VA loan from one lender the same as another? And the same with FHA financing and conforming mortgages that must meet Fannie Mae and Freddie Mac standards?

Related: Turned down for a mortgage? Here’s what to do next

In each case, the basic loan requirements are the same, but lenders may impose additional qualification requirements. They call these added requirements overlays. And they are very common.

The VA, for example, explains that it has “no minimum credit score requirement. Instead, VA requires a lender to review the entire loan profile.” While the VA does not have a credit score requirement, a lender who offers VA financing might. One lender may accept VA borrowers with a 640 credit score while another requires 660.

The right program
If you’re concerned about mortgage approval because of your credit rating or debt-to-income ratio, you may gravitate toward FHA financing. FHA home loan programs are known to be more flexible. However, the mortgage insurance for these loans can be considerably more expensive than that required for a Fannie Mae or Freddie Mac mortgage.

You may, in that case, want to apply for both programs. if you get the Fannie Mae loan, and it turns out to be less expensive, congratulations. And if not, you still have the FHA loan to fall back on. Kind of like college applicants going after their dream school but also applying to a “safety school” in case they don’t get into their preferred institution.

What about the best rate?
Everyone wants to get the best mortgage rate and terms. That said, a little caution is in order.

The “best rate” depends on a lot of factors. The best rate for Ms. Green may be different from the best rate for Mr. Johnson. This can happen because Ms. Green has a better credit score, is putting more down, has bigger savings and is financing with a fixed-rate loan instead of an ARM. In addition, mortgage rates are always in flux; they change constantly.

Mortgage shoppers need to look for a lender who can deliver the best rate available for the borrower at the time of application. You can’t know the best available rate without checking among several lenders.

What about costs?
In addition to an interest rate, you need to look at loan costs. Some lenders simply charge more or less than others, even when rates are identical. Check the annual percentage rate (APR) on the official Loan Estimate form to compare lender costs.

Float or lock?
Some borrowers prefer to lock-in a rate because they know such interest pricing will be available to them at closing. Others prefer to let rates float, to get whatever’s available at closing.

There are several alternatives.

First, lock with one lender and float with another.

Second, speak with several lenders and lock rate offers that have a “float down” feature. This generally means that if the rate falls at least .125 percent or .25 percent before closing you can get the lower rate. Make sure you know the details of the float down arrangement, they can differ among lenders.

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Is it unfair to shop around?
It is sometimes argued that by shopping around you are forcing loan officers to work for free. The opportunity to present a mortgage offer is how lenders make their money, it’s a risk that comes with the business. Alternatively, if you HAD to accept the first mortgage offer you got, you might well get a bad rate and terms.

However, making two lenders do all the work associated with loan origination and then finally choosing one at closing time is not usually worth doing.

For one thing, you’d have to pay for two appraisals, two credit reports, and perhaps other fees. And it will likely make you feel uneasy because there’s a big difference between getting pre-qualified with a lender, which may take a few minutes, and making them go through an entire origination over several weeks for free.

When to shop
If you want to shop among mortgage lenders, ask each to send an official Loan Estimate form for your consideration. This standard form shows what the lender is offering and can be compared with other offers. You are not required to accept an offer – but realize that if you let a good offer pass, it may not be available again.

Alternatively, you can have a broker shop for you. Retail loan officers work for one lender, while mortgage brokers look for financing among many lenders. For some borrowers, the lending process may be made faster and more understandable by working with a mortgage broker, someone familiar with the marketplace and how it works.

If you’re going to check with several mortgage sources, it makes sense to include a mortgage broker in the mix.

Number of mortgage loans in Kazakhstan increased 19 percent in 2018

ASTANA – The number of home loans issued in Kazakhstan grew 18.9 percent in 2018 over 2017. The total portfolio of loans issued grew by 3 percent in the same time period.

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The mortgage loans grew 1.8 percent and reached 1.3 trillion tenge (US$3.44 billion) in just December 2018, according to a report by ranking.kz. In December 2018, Astana and Almaty saw 25.5 percent and 26 percent growth respectively. More rural areas saw growth of approximately 3 percent. The Kostanai Region had a 5.8 percent increase (40.6 billion tenge or US$107.31 million), the Aktobe Region had 3.3 percent (to 73.7 billion tenge or US $194.8 million) and the West Kazakhstan Region had 3 percent (44.9 billion tenge or US$118.68 million).

The Zhilstroysberbank (House Construction Savings Bank) of Kazakhstan (HCSBK) remains the biggest issuer of the loans for the purchase of housing in the system of housing savings. The share of financial institution loans from the country’s mortgage portfolio was 51.4 percent in 2018 against 42.4 percent in 2017.

In response to a high demand for bank services in the West Kazakhstan Region, the HCSBK opened a new branch in Uralsk in December. To date, 68,600 residents of the region, that is, every tenth citizen, are saving up for future housing. The amount of savings has already reached 34.6 billion tenge (US$91.45 million). The branch issued 11,700 loans (59 billion tenge or 155.94 million).

Since the launch of Nurly Zher state programme in the end of 2016, in the West Kazakhstan Region, 1,200 apartments were sold for approximately 10 billion tenge (US$26.43 million). In 2018, 480 apartments for 3.7 billion tenge (US$9.78 million) were sold. This year, the state programme plans to commission another 1,100 apartments with a total area of ​​62,400 square metres.

In addition, the commissioned volume of housing in square metres has been growing steadily year by year and reached 12.5 million square metres in 2018, against 11.2 million square metres in 2017.

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