Conforming mortgage rates continue to drop.

For the second straight week, the 30-year fixed rate mortgage fell to a new, all-time low nationwide. According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage rate dropped 1 basis point to 3.83% this week for borrowers willing to pay 0.7 discount points plus a full set of closing costs.

The 15-year fixed rate mortgage also set a mortgage rate record, registering 3.05% with an accompanying 0.7 discount plus closing costs.

Discount points are a one-time, up-front closing cost, based on loan size. 0.7 discount points is equal to 0.7% of the borrowed amount. A home buyer in Boynton Beach opening a $200,000 mortgage and paying 0.7 discount points, therefore, would be subject to a one-time $1,400 fee paid at closing.

Borrowers wanting to avoid paying discount points can expect higher mortgage rates than Freddie Mac’s reported national average.

Falling mortgage rates are nothing new throughout Florida. Since peaking in February 2011, mortgage rates of all types have been in steady decline. The 30-year fixed rate mortgage has shed 122 basis points since that date, falling from 5.05%; the 15-year fixed rate mortgage has shed 124 basis points, falling from 4.29%.

Low mortgage rates give today’s home buyers additional purchasing power, stretching home affordability to new heights.

Low rates also help existing homeowners to lower monthly mortgage payments. For example, as compared to mortgage rates just 15 months ago, homeowners refinancing into today’s 30-year fixed rate mortgage stand to save 13.4 percent on their respective mortgage payments. 

A comparison :

• February 2011 : $539.88 principal + interest per $100,000 borrowed
• May 2012 : $467.67 principal + interest per $100,000 borrowed

A homeowner with a $300,000 mortgage at February 2011 30-year fixed rate mortgage rates would save $2,600 annually with a refinance to this week’s low rates. Even accounting for discount points and closing costs, the “break-even point” on savings like that comes relatively quickly.

Mortgage rates can’t be predicted so there’s no guarantee of low rates forever. If today’s rates meet your budget, consider locking something in. Speak with your loan officer about your options.

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The economic recovery continues nationwide, but the recovery’s an uneven one.

Some metropolitan areas are faring very well this year, posting measurable gains in both employment and housing. Other metropolitan areas, by contrast, are struggling.

To help identify those markets in which growth is occurring, the National Association of Homebuilders created the Improving Market Index, a metric analyzing three separate, independently-collected data series “indicative of improving economic health”.

The IMI’s three collected data series are :

1. Employment Growth (as published by the Bureau of Labor Statistics)
2. Home Price Growth (as published by Freddie Mac)
3. Single-Family Housing Growth (as published by the Census Bureau)

A metropolitan area is considered to be “improving” if all three indicators show growth at least six months after the respective area’s most recent trough, or “bottoming out”.

In May, there are exactly 100 U.S. markets that qualify for the NAHB’s Improving Market Index, down from 101 last month but higher by more than 800% from the reading in September 2011, the index’s inaugural release.

17 areas were added to the Improving Market Index list this month including Phoenix, Arizona; Ann Arbor, Michigan; and Bend, Oregon. 18 areas were removed from the May IMI.

83 metropolitan areas remained from April.

There is little actionable information in the Improving Markets Index but the report does a good job of highlighting how “real estate markets” can’t be summarized on a national level and remain relevant to everyday home buyers and sellers across Florida and nationwide. For example, Fort Collins, Colorado is listed as an Improving Market. However, Greeley, Colorado — located just 30 miles away — was just downgraded from the same list. 

Home values and economies vary by region, by state, by city, by neighborhood, and even by street.

The complete Improving Markets Index can be viewed at the NAHB website but for the best read of what’s happening in your neighborhood, talk to a local real estate agent.

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Is your mortgage scheduled to adjust this season? You may want to let it. This year’s ARM-holding homeowners in FL are finding out that an adjusting mortgage may be the simplest way to get access to today’s low mortgage rates — without paying the closing costs.

Currently, conventional adjustable-rate mortgages are adjusting to near 3.00 percent.

If your home is financed via an adjustable-rate mortgage, you’re likely cognizant of your loan’s life-cycle. At first, your ARM’s initial mortgage rate is agreed upon between you and your lender, a rate that both parties agree will remain in place from anywhere from one to 10 years, with periods of five and seven years being most common.

Then, after the initial “teaser rate” expires, the mortgage’s mortgage rate adjusts according to a pre-determined formula — one that’s also agreed upon at closing. The loan is then subject to an identical mortgage rate adjustment every 12 months thereafter until the loan is paid in full.

The most common conforming mortgage adjustment formula is to add 2.25 percent to the then-current 12-month LIBOR rate.

Today’s 12-month LIBOR is 1.05% so, as a real-life example, an adjustable-rate mortgage that’s leaving its teaser rate period this week would adjust to 3.30%.

If you’re a homeowner who took a 7-year ARM in 2005, or a 5-year ARM in 2007, your newly-adjusted mortgage rate should be roughly 2 percent lower than your initial teaser rate. On a $250,000 mortgage, a 2 percent mortgage rate reduction yields $298 in monthly savings.

Therefore, if you have an adjustable-rate mortgage that’s due to reset, don’t rush to refinance it. For at least one more year, you can benefit from low mortgage rates and low payments.

As for next year’s adjustment, however, that’s anyone’s guess.

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Despite several big-name banks pulling the product from their respective home loan offerings, reverse mortgages remain a popular mortgage choice among homeowners aged 62 or over.

A reverse mortgage is exactly what it sounds like — a mortgage in reverse. Rather than borrow a fixed amount of money then pay that loan balance down to zero as with a “forward” mortgage, a reverse mortgage starts at a given loan balance and works its way up as scheduled payments are added to the existing loan balance.

This 4-minute piece from NBC’s The Today Show highlights a few pros and cons of reverse mortgages, and the reasons why you may want to consider one, including :

• No mortgage payments are ever due on your home
• There is no credit check required for a reverse mortgage
• There is no income requirement to qualify for a reverse mortgage

There are some basic qualification standards for the reverse mortgage program including a requirement that all borrowers on title must be 62 years of age or older; and that the subject property be a primary residence. Loan fees can also be higher than with a conventional-type mortgage.

If you meet the qualification standards, though, with a reverse mortgage, you have flexibility in how your home equity is distributed to you. You can receive a lump-sum payment, elect for monthly installments over time, create a line of credit, or a combination of all three. 

Like all mortgages, reverse mortgages are complex instruments. That’s one reason why all reverse mortgage borrowers are required to attend counseling — the government wants you to be certain that you understand the nuances of the reverse mortgage program.

Your lender will want you to understand the program, too.

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If you’re actively preparing to list your home for sale, resist the temptation to make major home improvements. Nationwide, home improvement projects recoup just 58 cents on the dollar, says Remodeling Magazine.

Rather, for a better return on your time and money, focus on the minor projects instead. It’s the smaller projects in Boynton Beach that tend to have a bigger, long-term payoff.

So, how do you determine which projects are the “smaller ones”? It’s obvious when you think like a buyer.

Consider : Home buyers don’t always notice when your home is in working order. In fact, they expect it to be that way. What they do notice, however, is when things are “broken”. When a buyer sees torn screens in your windows or burnt out light bulbs, it makes him wonder what else in the home has not been cared for.

This is one reason why — especially during warmer months — it’s sensible to hire an exterminator prior to selling your home. If a prospective buyer uncovers bugs in your bathroom, it can leave a lasting, negative impression — one that won’t likely lead to a purchase contrast.

So, with “small repairs” in mind, here are 5 simple projects that you can tackle in a weekend, and that will help your home show better. Each is low-cost and high-impact:

1. Repair or remove torn screen doors
2. Fix all leaky faucets and toilets
3. Touch up holes and cracks in paint, interior and exterior
4. Apply a lubricant to squeaky doors and cabinets
5. Get “clutter” into storage and physically out of the way

In addition, you’ll want to pull weeds from your yard, seed any bare spots you find, and lay down fresh mulch, where appropriate.

You won’t need to spend big bucks to get your home ready for sale but the time spent on repairs will have a pay-off in the end. Homes that show better often sell much faster, and at higher prices.

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Planning to close on your home at the end of May? Plan ahead. Memorial Day is coming and the holiday may delay your closing.

Memorial Day marks the unofficial start of summer and the 3-day Memorial Day weekend is a popular vacation time in real estate-related industries.

Real estate agents tend to take time off because fewer of their clients are actively home shopping on a holiday weekend; mortgage lenders are closed because banks don’t operate on a federal holiday; and, title agents are often away from the office because the former two groups aren’t working.

But what’s supposed to be a 3-day weekend is actually a 4.5-day one. This is because many people leaving for a Memorial Day vacation will not go to work on the Friday before the holiday, and then getting back into the “work groove” on Tuesday can be a half-day affair.

Therefore, if you’re under contract to buy a home in Boca Raton , or to sell one; or if you have a refinance in progress that’s expected to close at month-end, there are some steps you should take to get pro-active with your closing. If you’re going to lose 4-and-a-half days at the end of the month, you’ll want to try to make those days up while the month is still young.

Here are 3 quick tips to speed up your closing and approval.

First, get your homeowners insurance policy picked out. Do your comparison shopping, select an insurer, and then prepay your first year of insurance, effective your closing date. Pay by check and not credit card, if possible, to avoid harming your credit score.

Provide your proof of payment to your lender immediately.

Next, if you’re using a Power of Attorney, have your documents signed by all interested parties and submit them to your lender for review. Don’t assume that your attorney’s Power of Attorney documents will be acceptable to a bank — banks require specific verbiage. If the documents are rejected, make the requested fixes and resubmit.

Banks do not compromise on Power of Attorney letters.

And, lastly, if you’re accepting gifts or using retirement funds for your downpayment, be sure to have your paperwork reviewed and on file with your lender as soon as possible. Do not wait to withdraw funds until just before closing, either. Have everything in the proper checking account at least one week in advance, and ready for your closing.

There are other steps you can take, too, to make sure your end-of-May closing goes smoothly and they all amount to “preparedness”.

When you’re asked for paperwork, provide it quickly. When you’re asked to sign a document, sign it on the same day. When you’re needed to attend a home inspection or an appraisal, do it during your first available opening.

Just leave as little as possible to the “last minute”, and everything should go well.

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Been shopping for a mortgage rate? You may want to lock something down. Tomorrow morning, mortgage rates are expected to change. Unfortunately, we don’t know in which direction they’ll move. 

It’s a risky time for Florida home buyers to be without a locked mortgage rate.

The action begins at 8:30 A.M. ET Friday. This is when the government’s Bureau of Labor Statistics releases its April Non-Farm Payrolls report.

The monthly Non-Farm Payrolls report is more commonly known as “the jobs report” and provides a sector-by-sector breakdown of the U.S. employment situation, including changes in the Unemployment Rate.

In March 2012, the government reported 120,000 net new jobs created — half the number created during the month prior, and the third straight month of declining job creation. The Unemployment Rate fell one-tenth of one percent to 8.2%.

For April, economists expect to see 160,000 net new jobs created, and no change in the national Unemployment Rate.

Based on the accuracy of those predictions, mortgage rates in Boca Raton are subject to change. If the actual number of jobs created in April exceeds economist expectations, mortgage rates should rise. Conversely, if the actual number of jobs created falls short, mortgage rates should drop.

Job growth’s link to mortgage rates is straight-forward. Jobs are an economic growth engine and mortgage rates are based economic expectation. Therefore, as the number of people entering the U.S. workforce increases, so do Wall Street’s growth projections for the economy. When that happens — especially in a recovering economy such as this one – mortgage rates tend to rise.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has created jobs for 18 straight months, a winning streak that has added 2.9 million people to the U.S. workforce. If that winning streak continues and expectations are beat, mortgage rates are likely to rise off their all-time lows, harming home affordability in Palm Beach Gardens, among other areas.

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Home prices started the year on an upswing.

According to the Federal Home Finance Agency’s Home Price Index, home prices rose by a seasonally-adjusted 0.3 percent between January and February 2012. The index is up 0.4% over the past year, offering a counter-story to the Case-Shiller Index’s assertion that home values are sinking.

Last week, Standard & Poor’s Case-Shiller Index said home values had dropped more than 3 percent in the prior 12 months.

As a home buyer or seller in Delray Beach , data showing “rising home values” or “falling home values” may be of interest to you, but we can’t forget that most home valuation trackers — including both the government’s Home Price Index and the private sector Case-Shiller Index — have a severe, built-in flaw.

Both used “aged” data. Today, the calendar reads May. Yet, we’re still discussing February’s housing data.

Data that is two-plus months old is of little value to everyday buyers and sellers wanting to know the “right now” of housing. And, even then, characterizing the data as “two-plus months old” may be a stretch. This is because the home values used in the Home Price index and the Case-Shiller Index are collected from actual transactions, but at the time of closing.

Considering that most purchases require 45-60 days to close, we can know that when we look at the Home Price Index and Case-Shiller Index reports for February, what we’re really seeing is a snapshot of the housing market as it existed two-plus month plus 60 days ago.

Data that’s 5 months old is of little relevance to today’s buyers and sellers. Today’s market is driven by today’s economics.

The Home Price Index is a useful gauge for economists and law-makers. It highlights long-term trends in housing which can be helpful in allocating resources to a particular project or policy. For home buyers and seller throughout Florida , though, it’s much less useful. Real-time data is what matters to you.

For that, talk to a real estate professional.

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Despite an improving U.S. economy, the nation’s banks remain cautious about what they will lend, and to whom.

Last quarter, by a margin of 3-to-2, more banks tightened residential mortgage lending standards for “prime borrowers” than did loosen them.

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio. The insight comes from the Federal Reserve’s quarterly survey of its member banks.

Last quarter, of the 54 responding banks :

• 0 banks tightened mortgage guidelines considerably
• 3 banks tightened mortgage guidelines somewhat
• 49 banks left guidelines basically unchanged
• 2 banks eased mortgage guidelines somewhat
• 0 banks eased mortgage guidelines considerably

By contrast, in the quarter prior, not a single surveyed bank reported tighter residential mortgage guidelines. The period from January-March was a step backwards, therefore, for the fledgling U.S. housing market.

Overall, getting approved for a mortgage is tougher than it used to be. Banks enforce higher minimum credit score standards; ask for larger downpayment/equity positions; and require higher monthly income relative to monthly debt obligations.

It’s one reason why the homeownership rate is at its lowest point since 1997.

Another reason why homeownership rates may be down is that prospective home buyers believe the hurdles of today’s mortgage approval process may be impassably high. That’s untrue.

There are many U.S. homeowners and renters — even here in Delray Beach — that were approved for a home loan last quarter — prime borrowers or otherwise. Some had excellent credit, some had modest credit. Some had high income, some had moderate income. Many, however, took advantage of low-downpayment mortgage options such as the FHA’s 3.5% downpayment program, and the VA’s 100% mortgage program for military veterans.

Despite a general tightening in mortgage standards, loans are still available and banks remain eager to lend.

It is harder to get approved today as compared to 5 years ago, but for those that try and succeed, the reward is access to the lowest mortgage rates in a lifetime. Mortgage rates throughout Florida continue to push home affordability to all-time highs.

If you’re in the market to buy a new a home or refinance one, your timing is excellent.

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Regardless of your hometown’s climate, outdoor gas grill cooking can be a four-season endeavor. Just remembe to keep your grill clean.

According to Weber’s annual GrillWatch Survey, less than 40% of grill owners clean their equipment with any bit of frequency, and 6 percent admit they’ve never cleaned their grill at all.

There are three main reasons to keep a clean grill. The first is that a clean, well-maintained grill will have a longer useful life than a dirty, sloppy one. Grills can be expensive and it’s often less costly to maintain them than to replace them.

The second reason to keep a clean grill is for sanitary reasons. Over time — especially when exposed to the elements — a grill’s finish can deteriorate and/or retained cooked foodstuffs. This can create a breeding ground for germs and disease.

And, lastly, a clean grill helps cooked foods taste better.

So, whether you’ve cleaned your equipment recently or never at all, it’s always a good time to freshen up your grill. Here’s how to do it, quickly :

1. Remove the grates. Soak them in soapy water. Scrub foodstuffs using a wire brush. Allow to dry.
2. Remove loose debris from bottom of grill.
3. Using soapy solution, scrub grill’s surfaces, grill pans, and grease trays. Don’t forget the lid.
4. Clean outside of grill with mild soap solution, treating rust areas with cooking oil.
5. Look for broken, cracked or faulty equipment, specifically burners and ignitors. Replace as necessary.

Then, as a last step, re-assemble your grill and turn its burners to high for 10 minutes. This will burn off excess water in the grill and help to sanitize it.

Cleaning a gas grill is a 20-30 minute process. The results, however, are long-lasting. 

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