Honolulu Condos

Loan Rates at 60 Year Lows!

You have to go back 60 years to find a time when interest rates were this low.  As of this morning, here is a sampling of several key rates.

• 30 year fixed rate at 4.25%  APR = 4.453%
• 15 year fixed rate at 3.75%  APR = 4.064%
• 5/1 ARM rate at 3.375%  APR = 3.838% (Actually better than 3/1 ARM)
  

The above rates are for conforming loans, which are $625K or less for single family in Hawaii.  They also assume a 60 day rate lock, and are based on an excellent credit rating.  These rates were taken from U.S.A. Bank's website.  Please refer to it for a more complete description of terms and conditions as well as other loan programs.

Rates are also incredibly low for Jumbo loans up to $10 Million.  If you are looking to refinance a Jumbo loan, call us and we will hook you up with two lenders where you will be able to compare rates.  

If you need to lower your interest rate, but cannot qualify for refinancing, then you may be eligible for a loan modification.  We are working with a reputable local attorney who will give you a free consultation and let you know whether or not you might be eligible.

If neither refinancing nor loan modifications will work, then you may wish to consider a short sale.  We have been successful in closing a number of short sales for our clients.  Let us know if you'd like to explore this avenue. Lastly, if you are looking to purchase, take advantage of these historically low interest rates, which when factored in with lower prices and motivated sellers, makes for an unbeatable combination.

Mortgage rates sink to record low, says Freddie Mac - Good for Honolulu Condo Buyers

According to "USA Today", "Mortgage rates fell this week to the lowest level on records since to 1971, giving consumers added incentive to lock in low payments for home purchases and refinanced loans.

The average rate for 30-year fixed loans sank to 4.69%, from 4.75% last week, mortgage company Freddie Mac said Thursday.

That's the lowest point since Freddie Mac began tracking rates in April 1971. The previous record of 4.71% was set in December. Rates for 15-year and five-year mortgages also hit lows.

Mortgage rates have fallen over the past two months as nervous investors have shifted money into the safety of Treasury bonds. The demand for Treasurys has caused Treasury yields to fall. And mortgage rates tend to track the yields on long-term Treasurys.

Yet the falling rates have yet to spark a home-buying boom - or energize the economy. New-home sales collapsed in May after homebuying tax credits expired. The economy also remains under pressure from high unemployment. And many people don't qualify under tightened lending rules.

"As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better," said Greg McBride, senior financial analyst with Bankrate.com.

Low rates throughout the economy also hurt one group of Americans: savers. Puny rates are especially hard on people living on fixed incomes who are earning next to nothing on their savings.

Lending activity remains sluggish. Mortgage application volume dipped 6% last week from a week earlier, according to the Mortgage Bankers Association. Refinancing activity fell 7%. And mortgage applications to buy homes slipped 1.2%.

Many Americans owe more on their mortgages than their homes are worth - often called "under water" - and can't refinance. The Obama administration has launched programs to help borrowers refinance if they owe up to 25% more than their home's value and have loans owned or guaranteed by mortgage giants Freddie Mac or Fannie Mae.

About 291,000 homeowners have participated as of March. Yet that's a small fraction of the nearly 15 million homeowners who are under water and cannot refinance, according to Moody's Economy.com. In hard-hit areas in Nevada and Florida home prices have fallen 50% or more from their highs. Record-low rates can't rescue those homeowners.

"It's not the desire to refinance; it's the ability to refinance," Chris Brown, a loan officer with Trinity Mortgage Co. in Orlando "A lot of the people who can already have."

Given the costs of refinancing, some mortgage experts say a refinancing can be worthwhile if you can shave at least 0.75 percentage point from an existing rate. Others suggest waiting until you can lower your rate at least a point.

Despite some lenders' ads, refinancing is never free. A fee normally goes to the mortgage broker or lender. There are also fees for title insurance, a new appraisal, document processing and other charges. Often, mortgage brokers or lenders create the appearance of a "no fee" mortgage by adding the costs to a total loan amount or by charging a higher interest rate.

People considering refinancing should factor in such fees. They should also calculate how many months it would take to recover them. For those who expect to stay in their home for two years or less, the fees might outweigh the savings from a lower rate.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate, even within a given day.

Rates on 15-year fixed-rate mortgages fell to an average of 4.13%. That was the lowest on records dating to September 1991. It was down from 4.2% a week earlier.

Rates on five-year adjustable-rate mortgages averaged 3.84%, down from 3.89% a week earlier. That was also the lowest on Freddie Mac's records, which date back to January 2005 for such loans.

Average rates on one-year adjustable-rate mortgages fell to 3.77% from 3.82%. That was the lowest average since May 2004.

The rates do not include add-on fees known as points. One point is equal to 1% of the total loan amount.

The nationwide fee for loans in Freddie Mac's survey averaged 0.7 a point for 30-year, 5-year and 1-year loans. The average fee for 15-year loans was 0.6 of a point."

Finding the Right Lender for Your Honolulu Condo Purchase

When you are ready to make a Honolulu Condo purchase, one of the first steps is to find a lender.  There are a few options to consider such as banks, mortgage brokers and internet lenders.  All offer different financing options.  To choose the lender that's right for you, it's important to understand the pros and cons of each.

Banks, such as First Hawaiian and Bank of Hawaii, offer the safety and security of federal regulation.  In addition, if you have been with a particular bank for a while and have a good working relationship, you may qualify for a better rate.  The downside of choosing a bank is that they may not offer the best rates.

Mortgage Brokers, such as Pacific Access Mortgage, have access to many different money sources and will shop around to find the best rates.  One possible disadvantage of working with a mortgage broker is they may charge higher loan origination fees (points).

Internet lenders, such as Lending Tree and E*Trade, allow you to shop for the most competitive rates available online.  The downside of internet lending, and this is HUGE in Hawaii, is that it is all on you.  You are responsible for all of the research involved and there is little personal communication.  BEWARE, many internet lenders are not familiar with Hawaiian property and the way business is conducted in Hawaii, so they may not be able to grant the loan conditions initially promised.

At the time of writing this blog, mortgage rates are below 5%; near their historic lows.  If you are employed and can afford it, today's interest rates represent a tremendous opportunity to buy a home or investment property.  But first, do your research and find the lender that's right for you.

Mortgage For Your Honolulu Real Estate, Consider FHA First - by Guest Writer

Tim O'leary, with Wells Fargo Home Mortgage of Hawaii, is someone I consider a friend, as well as someone who I believe offers a high quality level of service and loan product.  He has graciously offered to contribute an article from time to time about, of all things, mortgages, lending and related subjects.  Please enjoy his first contribution:

In 1965, the Department of Housing & Urban Development, HUD was formed.  Under HUD operated & operates today as the Federal Housing Authority, known as the FHA.  HUD's goal, through the FHA, was to increase homeownership across America.  It was a major breakthrough in lending allowing potential home buyers to put as little as 5% down payment and lenders would be willing to lend money with the assurance that the federal government would ‘insure' the loan to difference in the event a borrower would default on a loan. 

With today's financial uncertainties, FHA has been the ‘darling' of mortgage lending.  Conventional lending woes created through the many problems at Fannie Mae & Freddie Mac, has made traditional lending much more restrictive.  Below is a comparison of FHA and Conventional mortgages.

Down Payment

FHA- as low as 3.5% down

Conventional- 10% down

Credit Scores

FHA- as low as 620 without pricing additions.

Conventional-  Minimum of 680 and ‘Pricing Tiers' beginning at 739 scores.

Funds for closing requirements

FHA- entire down payment may be a gift

Conventional- Borrower must have a minimum of 5% of their own funds in the transaction

Mortgage Insurance

FHA - 96.5% financing uses a factor of .52% & charges 1.75 Premium for a Single Family which can be financed, making it tax deductible.

Conventional - No upfront Premium, but a much higher monthly factor which increases your long-term monthly payments

Refinance Streamline Program

FHA- Allows for a Streamline Refinance without an appraisal.

Conventional- dependent on if it a Fannie Mae loan, or a Freddie Mac loan, different restrictions apply.  Guidelines can be much more restrictive.

If an FHA loan meets your needs, in general, it is a better mortgage to get.  If it doesn't, I can still get you conventionally financed, but realize it will take more work.

Here is Tim O'Leary's Contact Information:

Tim O'Leary
Private Mortgage Banker
Wells Fargo Home Mortgage of Hawaii, LLC
MAC M2204-092
1357 Kapiolani Blvd Suite 910
Honolulu, HI 96814
808.952.5054 Tel
808.227.1199 Cell
866.967.9082 Fax
Tim.O'Leary@wellsfargo.com
http://www.homeloans.com/tim-oleary1

And, of course, if your looking for current Honolulu Condos for Sale, please get in touch with us any time.