Carolina First Mortgage Blog

THE TIME TO BUY IS NOW!

The upside of it all is that today's home buyers have an unprecedented amount of negotiation leverage with the sellers.  Want a lower sales price? Just ask for it.  Need your closing costs paid for? Put it in your offer letter.  Want to close in 30 days?  The world is your oyster.

A look at the recent statistics, though, suggests the market is morphing.

• Sales of new homes are rising at the fastest clip in a decade
• The supply of existing homes is falling month-by-month
• Home buyer activity continues to surge

Furthermore, home prices are no longer falling in many U.S. markets.

So, all this to say, if it hasn't happened already, home buyers are about to lose their upper-hand with their sellers.  And when they do, buying a home won't be nearly the "deal" it may feel like today.  Especially once mortgage rates head back up and the $8,000 First-Time Home Buyer Tax Credit meets its December 1 expiration date.

After all that, home sellers will be back in the proverbial driver seat, moving homes for more money and with fewer concessions.  Indeed, housing data suggests that this is happening in some markets already.

They say today's housing market is a Buyer's Market.  Well, it's only a buyer's market if you actually buy.

If you are interested in purchasing a house, please call me for a pre approval.  This is the first step in the process.  This will help you narrow your search by knowing the range of houses to look at.  Also, a buyer with a pre approval letter in their hand is considered a serious buyer worthy of the best offer from a seller.

Bob Bacon

Carolina First Mortgage

(803) 451-4800

www.carolinafirstmortgage.com

HR 1728

I was disturbed by reading the following article.  http://www.housingwire.com/2009/03/27/new-bill-cracks-down-on-predatory-lending/

If passed this bill would hurt home owners and home buyers by effectively eliminating competition and allowing less choices for consumers.

Yield Spread Premium

Yield Spread Premiums (YSP) are funds paid to brokers and lenders by the funding company, outside of closing.  These monies are derived from an agreement between the buyer and home owner.  The home owner will accept an interest rate that is slightly higher than the par rate.  By doing this the home owner can offset some of the upfront money for closing costs they would have to bring to closing.  They effectively finance some or all of their closing costs over the life of the loan.

Why would eliminating YSP be bad?

By eliminating the yield spread consumers would have to bring more cash to closing on a purchase.  This would eliminate a portion of home buyers due to lack of funds.  Many home buyers have already been eliminated by the credit standards being tightened and the credit crunch.  They have also been hurt by extremely slow turn times by the lenders by having to pay for re-lock after re-lock.  I have heard horror stories of loans taking 6 months to close on a squeaky clean borrowers.  Eliminating yield spread will all but destroy the mortgage broker industry.  Mortgage brokers depend on YSP as an income stream for about 50% of their funds.  By eliminating the mortgage brokers would allow the banks to operate without competition.  Also, it would give consumers less choices.  Since when does less competition and choices equal a better deal for the consumer?

Bob Bacon

Carolina First Mortgage

bob@carolinafirstmortgage.com