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.
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.
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.
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.
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.
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.
It is interesting to note how so many buyers and investors at large experience a total blackout when it comes to the transaction fees related to buying property. When you get to the point of buying a house, the devil is in the detail. You need to be aware of the amount of money you will spend throughout the entire buying process. Apart from the sale price, there are other real estate transaction fees you should keep in mind: mortgage fees, paying for a lawyer, and taxes related to property. Not forgetting to mention the hidden costs you might not be aware of.
These pointers will help you make the right decision when the time to buy a house comes. In turn, you will make the right investment decision knowingly. What fees should you keep in your mind when buying property in Kenya?
You Have to Get a Lawyer
The importance of getting a lawyer is like having oxygen: you can’t do without one. Lawyers in Kenya are regulated by an Act of Law known as the Advocates Remuneration Order. Sometimes, the fees that the lawyers charge are regulated by ethical principles and rules. The general rule of thumb is that the buyer will pay for these fees because the transaction benefits him. The Seller will also pay his Advocate such fees for representation, the initial due diligence process and drafting.
The percentage fees range from 1%-2% of the purchase price but the minimum payable is Kshs. 35,000. If the price on the purchase is low, the costs are higher. The converse is true; if the purchase amount is high, the costs will be low. You should note that it is illegal for your Advocate to charge you lower fees. Therefore, refrain from bargaining too much.
Who Does the Property Belong To?
Before you buy any property, you need to do a title search to know the rightful owner of the land. A title search will also help you know if the title has been charged, if it has a caveat or if there are any outstanding land rates to it. Performing a title search is a digital process offered by the government through the eCiziten platform. A title search costs Kshs. 500.
How Much Mortgage Will You Pay?
If you purchase property on mortgage, you will the capital with an interest rate capped at 14% p.a together with the ancillary costs which vary depending on the financier. You will pay evaluation costs which are approximately 0.2% of the assessment and 1% commitment fee to the bank. The duty payable for a mortgage is 0.1% of the mortgage amount.
Stamp All Your Documents
Once the Agreement for Sale is executed, the Seller’s Advocates will present it for stamping with duty at Kshs. 200/- for the original and Kshs. 20/- for each counterpart at the lands office. This fee is vital because in the event of a dispute, the court of law won’t accept any documents which haven’t been stamped.
Taxes Must Be Paid
Stamp Duty: In Kenya, this rate varies depending on the location of the property. Agricultural lands are charged 2% while land in urban areas is charged at 4%. If the property is registered as a company and the transfer is by way of shares rather than a title, then the stamp duty will be 1%. As a buyer, you will need an authorization slip from KRA to show that you have paid.
Capital Gains Tax: This is the final tax in the buying process which is usually at 5% of the value of the net gain. This is the excess amount of the transfer over the cost of the property which was adjusted.
Extra Costs Will Come Up
Depending on the firm and the development, other costs you will incur as a buyer include registration costs, valuation costs, proportionate cost of incorporation of the management company and the cost of transfer of reversionary interests.
More costs include electricity meter connection costs, water meter connection costs, purchaser’s share of reversionary transfer, cost of purchase of share in the management company, advance service charge which ranges from 3-6 months plus one (1) month’s service charge, secretarial charges and fees for filing return of allotments, notice of change of directors and Annual Returns.
Buying a house is a huge investment. You need to make sure that you follow each step correctly without any hiccups. Keeping these costs in mind will help you budget appropriately without denting your pocket.
The Federal Capital Territory Administration has inaugurated the remodelled Maitama ultra-modern market in Kubwa, a satellite town in FCT, two years after the project took off.
The N4bn market which was constructed by H & I Construction Limited, consisted of 1,467 shops, warehouses and cold rooms of various sizes.
Speaking during the ceremony, the Chairman, Bwari Area Council, Mr Musa Dikko, explained that the idea of building the market was conceived about 10 years ago.
He commended the contractor for delivering the project within two years.
Director of H & I Construction Limited, Mr Rabiu Sa’id, said that facilities in the new market include generous parking space, a police station, bank, and 50 toilets located at strategic locations in the market.
He disclosed that his firm would soon commence the remodelling of Mpape Market in conjunction with Bwari Area Council, adding that the modernisation of the Utako /Jabi Motor Park and Utako Market would take-off in two weeks.
Sa’id said, “We will also commission the first phase of the modernisation of Utako Market in FCT in about two weeks from now, while on the same day, we will perform the ground-breaking ceremony of the modernisation of the Utako/Jabi Motor Park, Abuja.
“The second phase of Garki Market modernisation will also be done in conjunction with Abuja Market Management Ltd before the second quarter of this year.”
Sai’d further said the company had built a new palace for the district head of Kubwa, noting that work had also commenced on the construction of a new town hall for the community.
Source: Adelani Adepegegba
The draft amendments has proposed raising the CAR to 15% in a staggered manner by March 2022, while suggested a higher cap on borrowing.
KOLKATA: National Housing Bank (NHB) is planning to raise long term capital requirement for housing finance companies (HFCs) to guard against their liquidity and solvency risks.
The housing regulator has proposed to raise their capital adequacy ratio to 13% by March 2020 from 12% now as a fallout of the IL&FS-led crisis which forced several specialised home loan lenders, especially the smaller one, to slow down business to preserve liquidity.
The draft amendments has proposed raising the CAR to 15% in a staggered manner by March 2022, while suggested a higher cap on borrowing.
“HFCs are exposed to risks arising out of counterparty failures, funding risks and risks pertaining to liquidity and solvency as any other financial sector player. There is thus a need for a review of the regulatory framework of HFCs,’ NHB said in a note to stakeholders.
Most of the bigger HFCs carry sufficient capital to meet the proposed norm, experts tracking the sector said.
NHB has sought comments on the proposals by March 31.
The regulator also wanted to reduce borrowing limits for HFCs in graded way. It proposed the cap on borrowing at 14 time of net-owned fund by March 2020, 13 time of NOF by March 2021 and 12 times by March 2022.
“This was not unexpected following the IL&FS crisis. The regulatory restriction will now shape how much leverage housing finance company or NBFCs can take. This may impact smaller HFCs or those with high leverage ratio,” HDFCNSE 0.20 % chief executive officer Keki Mistry told ET.
He however said that HDFC would not be impacted for the next seven/eight years the the nation’s largest housing finance company has about 19% CAR and as far as leveraging is concerned, its debt-equity ratio was 4.7 times as on December.
“Most of the HFCs would be able to meet the revised norms on CRAR, as most of the HFCs which are nearing 15-16% CRAR and would have adequate cushion to raise Tier II capital and shore up the CRAR, if required.” said Supreeta Nijjar, ICRA’s head for financial sector ratings.
“Also, the capital adequacy for HFCs is supported by the lower risk weights on smaller ticket size home loans which is the growth area for most HFCs,” she said.
The yields have gone up as compared to last year and this has also translated into a good growth in our net interest income also, said Vinay Shah, MD & CEO, LIC HousingNSE 1.15 %, in an interview with ET Now.
Given the heightened liquidity concerns over the past couple of months, how do you assess the entire situation vis-à-vis what we saw in October?
The liquidity position as compared to October-November has eased quite a lot. We are finding that it has eased both in the short tenure as well as longer tenures funds. But in October also, getting money was not a problem for our company as being a AAA rated company we are getting money though at slightly higher rates. Now it has eased substantially. Every year during the second fortnight of March, there is some tightening because of advance tax payments and other things but that is an annual thing. Now the position is fairly good.
Calculated spreads have also declined. What led to this decline and especially the decline that one has seen in the yields for LIC Housing Finance?
On the contrary our spreads have been stable. Last year starting April onwards till the 1st of January, we increased our lending rates by 70 bps and this has been transferred to whole of our back book. About 80-85% of the book is on floating basis. We have had similar spreads and we did not have much of decline as far as the spreads go.
Can you just tell us what the outlook is on your borrowing mix change? Given the high proportion of NCDs, how do you see borrowing costs in your spreads shaping up?
Borrowing cost have gone up from last year levels. We have to see if going ahead, the rates remain stable. There has also been some benefit from the RBI repo rate decrease also. If the rates remain stable, the margins would be at the same level or they may improve also. The yields have gone up as compared to last year and this has also translated into a good growth in our net interest income also.
There has also been sharp increase in the builder loan growth despite high delinquencies. What is the rationale for this high growth given the high stress scenario in real estate?
During current year, builder growth looks very high. The main reason is that we are operating at a very small base and out of about 246 odd accounts which we are servicing, four or five accounts constitute the major chunk of the delinquent NPAs.
Secondly, the full book of our builder loan portfolio is only about 6%. In the NPAs also I see resolution coming in most of them. It may take some time in between but we are very sure that the resolutions will come. The comforting fact is that there is the underlying security that we have. Recently in Q2, we had made one recovery wherein we recovered the full principal and not only that the major part of the interest.
There has been some signs of struggling growth in home loans. When can we expect a pickup?
The real estate sector in the last two-three years has faced many challenges starting from demonetisation, RERA, GST followed by liquidity crunch in Q3. But of late, things are picking up. We expect better growth throughout the country because of two reasons – one is the lowering of the GST rates on under construction projects and the number two is the continuity of housing subsidy which the government has now extended till March 2020.
I expect a good pickup there. The market sentiment is improving and going ahead, I would still see a growth rate of around 15% in housing loan disbursements.
Housing Minister Majid Al-Hogail: The private sector’s contribution to mortgage financing did not exceed 35 percent in the past whereas it has reached 100 percent today
ABUJA INTERNATIONAL HOUSING SHOW – THE LARGEST BUILDING AND CONSTRUCTION EXPO IN AFRICA CLICK HERE TO READ MORE
RIYADH: The second edition of the Saudi Housing Finance Conference concluded in Riyadh on Wednesday.
Housing Minister Majid Al-Hogail stressed that the mortgage finance sector in the Kingdom will play a significant role in increasing the ownership rate, reaching 70 percent by 2030.
He emphasized that the mortgage finance sector is undergoing significant growth; last January, more than 9,000 housing finance contracts worth more than SR4.7 billion ($1.25 billion) were signed.
He said: “The private sector’s contribution to mortgage financing did not exceed 35 percent in the past whereas it has reached 100 percent today. We also aspire for the investments in the mortgage finance sector to reach SR60 billion this year, which will facilitate ownership, benefiting from the available financing facilities for citizens.”
He noted the policies of the housing program where 16 government agencies work together to overcome obstacles that prevent their initiatives giving citizens the ability to own houses, especially policies related to financing and housing support.
Many financial experts say owning rather than renting a home is a good way to build wealth.
If you’re in that camp, there’s some good news: Personal finance website LendingTree found that in many desirable U.S. cities — including Miami, Dallas, Denver and Las Vegas — the area’s median monthly mortgage payment is less than the median monthly rent.
Overall, the analysis found that 20 out of the 50 metro areas looked at had lower median monthly mortgage payments than rent. Four of the top 10 are in Florida, where low wages and too few rental units are major factors in Florida’s “rent affordability crisis,” according to LendingTree.
It’s important to note that LendingTree’s analysis did not take into account down payments, saving for which can be one of the biggest obstacles aspiring homeowners face. As CNBC reported based on a 2018 analysis by HotPads, “for the average renter buying the median-priced home in America, it will take about 6½ years to save for a 20 percent mortgage down payment.”
But if you’re planning or looking to buy, here are the US metro areas that boast cheaper median monthly mortgage payments than median monthly rent payments, according to LendingTree:
10. Charlotte, North Carolina
Median rent: $1,121
Median mortgage: $1,037
Difference between rent and mortgage: $84
9. Riverside, California
Median rent: $1,369
Median mortgage: $1,280
Difference between rent and mortgage: $89
8. Jacksonville, Florida
Median rent: $1,140
Median mortgage: $1,048
Difference between rent and mortgage: $91
7. Washington, D.C.
Median rent: $1,819
Median mortgage: $1,727
Difference between rent and mortgage: $92
6. Las Vegas, Nevada
Median rent: $1,198
Median mortgage: $1,102
Difference between rent and mortgage: $96
5. Denver, Colorado
Median rent: $1,362
Median mortgage: $1,252
Difference between rent and mortgage: $110
4. Tampa, Florida
Median rent: $1,192
Median mortgage: $1,072
Difference between rent and mortgage: $120
3. Virginia Beach, Virginia
Median rent: $1,318
Median mortgage: $1,163
Difference between rent and mortgage: $155
2. Orlando, Florida
Median rent: $1,263
Median mortgage: $1,036
Difference between rent and mortgage: $227
1. Miami, Florida
Median rent: $1,477
Median mortgage: $1,215
Difference between rent and mortgage: $262
Other cool cities that have a lower monthly median mortgage payment include Houston, Phoenix, Salt Lake City, Atlanta, San Antonio, Austin, Memphis and Dallas.
LendingTree used U.S. Census Bureau data to determine the median cost to own and rent in the nation’s 50 largest metro statistical areas.
BY Sarah Berger