In our Columbia SC Real Estate News for September 2015 we look at "Columbia SC Mortgage Rates after the Stock Selloffs" last week, "Changes That May Affect Those Closing on a Columbia SC Home This Fall", and we say goodbye to this Newsletter Category at our Blog:
Columbia SC Mortgage Rates Fall After Stock Selloff
Columbia SC Mortgage rates fell last week after market turmoil sent the yield on a 10-year Treasury briefly below 2 percent.
Freddie Mac says a 30-year fixed-rate Columbia SC mortgage averaged 3.84 percent tin the week ending August 27, down from 3.93 percent the previous week, and the lowest since May. A year ago, 30-year rates averaged 4.1 percent.
This is the fifth straight week that 30-year rates have stayed below 4 percent. A 15-year fix averaged 3.06 percent, down from 3.15 percent last week. A one-year adjustable rate mortgage averaged 2.62 percent, unchanged from last week.
"Events in China generated eye-catching volatility in equity markets worldwide over the past week," according to Freddie Mac chief economist Sean Becketti. "Interest rates rocked up and down — although to a lesser extend than equities — as investors alternated between flights to quality and bargain hunting among beaten-down stocks."
Freddie Mac expects 30-year Columbia SC mortgage rates to remain subdued in the short-to-medium term.
A separate report last week showed home sales continue to gain. The National Association of Realtors says pending sales of existing homes in July were up 7.4 percent from a year ago, to the third highest level this year.
Let's look at what this means, along with what a change in RESPA procedures may mean for anyone buying a Columbia SC home this fall…
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Buying a Columbia SC Home? Changes Are Coming
If you're buying a Columbia SC home this fall, get ready for a change in the TILA/RESPA Integrated Disclosure rule, which includes the acronym that may end all acronyms: Truth in Lending Act/Real Estate Settlement Procedures Act. (You may also see the acronym TRID refer to this as well.)
What the heck are we talking about?
The changes to the process of getting a Columbia SC mortgage are significant, especially for those real estate professionals who have been working in the residential side of the business for quite some time.
The first major change is in the paperwork. The existing Truth-In-Lending statement is getting merged (somewhat) with the existing HUD-1 settlement statement.
What does this mean for most home buyers?
Closing agents, title companies and closing attorneys will now deliver a “Closing Disclosure” to the borrower. The Closing Disclosure is a five-page form that combines many aspects of the Truth-in-Lending form and the old HUD-1 settlement statement (also affectionately known as the RESPA statement).
In addition to the Closing Disclosure that is given to the borrower and not to the seller, the buyer and seller will sign a Settlement Statement. This new settlement statement has a very different look than the old HUD-1 settlement statement. Since most buyers and sellers found the old HUD-1 form to be fairly incomprehensible, you’d hope that a redesign would make it more clear where the cash is coming from and going to in the closing.
Unfortunately, it doesn't appear that the new form will strike most buyers and sellers as much of an improvement. The key to clarity in the closing of real estate transactions is the person working with the buyer/borrower at the closing. And that brings us to the next new issue coming down the line.
The government has always had a rule that requires lenders to give you the closing cost disclosure in the form of the HUD-1 one day before closing. But frequently, the HUD-1 has been given to borrowers on the actual day of the closing or late on the day before closing. The borrower then has little time to review the closing statement and understand it before going to closing on their new home.
The government is trying to fix the timing issue, hence, the new timing requirement that will come on October 1.
The new rules will require lenders to give a borrower three days to review the Closing Disclosure, and that must be at least three days before closing. In other words, about seven days before closing, a lender must send the disclosure to the borrower. The borrower would then have three days to sit and review the disclosure and the closing could occur three days after the end of that first three-day period.
There is a bit of confusion in the industry relating to the impact the change will have on the timing requirements, on the calculation of certain fees (in particular owner’s and lender’s title insurance policies) and whether other last minute changes to the Closing Disclosure would require a new three-day disclosure period and push closings out at the last minute. This will play out in real time during hundreds, or even thousands of closings set for the end of September and into the beginning of October — and that’s what’s making everyone in the real estate business so nervous.
We’ll all be watching to see what the regulators come up with for Oct. 1.
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Our Final (Official) Columbia SC Real Estate Newsletter
This will be the final issue of our "Columbia SC Real Estate Newsletter." We keep this website completely updated every couple of days throughout each and every month, and therefore, retiring what is categorized as a "Newsletter" doesn't really mean much, other than the fact that we'll continue to bring you the most up to date news we possibly can, only itemized more in our other categories to your right.
We made the decision to dissolve the "Columbia SC Real Estate Newsletters" category in lieu of making the information we include in the newsletters easier for you to find in the specific categories for which they have covered in the past.
For example, instead of being buried in a library of past newsletters, articles we included in this issue will now be expanded on further and listed in the category for which it most applies. This month, the two articles above would fall under the Columbia SC Mortgage Info and Columbia SC Real Estate categories to your right, so it will make our news easier for you to find and look back on.
We hope you will continue to enjoy the information we provide for you here at our website/blog, and find that by us breaking these stories down and into the categories they would fall under, it will make finding the information you want much easier.
If you think waiting to buy a Columbia SC home until rates or home prices go back down is the smart way to go, you may be waiting for a long time.
With interest rates going up and home prices on the rise, you may think that it might not be the best time to buy a Columbia SC home or even refinance the one you've got. But experts disagree. Should you buy now, or later?
Best Time to Buy a Columbia SC Home is Now
One huge reason to consider now as the best time to buy a Columbia SC home is mortgage rates. They're still around all-time lows now, but the interest rate for a 30-year fixed mortgage is expected to go up to 5 percent by the start of the fourth quarter this year and 5.3 percent by the end of 2015. That's according to a recent forecast by the Mortgage Bankers Association (MBA).
Just a quarter of a point higher interest rate can mean about $100 more each month on a homeowner's loan. For a lot of families, that can be the difference between being able to afford to buy a Columbia SC home or not.
The good news is, credit score requirements for borrowers taking out mortgages to buy a Columbia SC home are easing.
Summer is still the most popular time to sell or buy even for people without children. And it's not just because the weather is nicer. People just know there are more listings on the market during the spring and summer. But from a buyer's perspective, there is more competition from other buyers.
It is a significant purchase to buy a Columbia SC home, but it's still cheaper than renting if you have the means to come up with the down payment and closing costs. Buying with a 30-year fixed rate mortgage of 4.5 percent is 38 percent cheaper than renting in most places. But as mortgage rates rise, that gap will narrow, unless greedy landlords decide to keep jacking up rents to match the interest rate increases.
Get lots of tips and advice for buying a Columbia SC home at our Columbia SC Home Buying Tips section of articles to your right just below our Columbia SC Real Estate Categories.
We also post tips on Facebook and Twitter. Follow us there for many other tips on buying a Columbia SC home as well.
The costs of delaying or forgoing buying a Columbia SC home in today's market have become very high. This projection is according to the inaugural Opportunity Cost Report released by Realtor.com. With interest rates and home prices expected to rise within the next year, consumers could end up costing themselves more by putting off buying a Columbia SC home.
The report used data on current median existing home prices, rents, local Columbia SC mortgage rates, and estimates of property tax, and insurance rates. It also factored in maintenance costs, costs of selling, forecasts for mortgage rates, home prices, and rents over a 30-year time period.
Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of the projected increase in mortgage rates and continuing price appreciation. The problem is, and has been for some time, inventory is low, which has many would-be home buyers – especially first timers – standing on the sidelines and missing out on potentially material financial gains.
Buying a Columbia SC Home: The Cost of Waiting
The estimated wealth an average home buyer would accrue over a 30-year period when buying a Columbia SC home totals $217,726. The report noted the penalty of waiting one year to buy is $18,672, while the penalty of waiting three years to buy is $54,879. Data shows that those buying a Columbia SC home see sizable financial benefits compared to lifetime renters.
This analysis looked solely at the financial reasons for buying a Columbia SC home, based on assumptions about rising mortgage rates and changes in home values. It's important to remember that the decision for buying a Columbia SC home is deeply personal. Potential buyers need to consider factors such as upcoming life events, job security, and potential relocation, in addition to financial benefits, because they too can have a significant impact on ownership.
Get more information as it pertains to buying a Columbia SC home in our section on Columbia SC Home Buying Tips to your right under Columbia SC Real Estate Categories.
Remember, we post tips daily to Twitter, and also on our Facebook Page. We'd love for you to check us out there too.
When you start thinking about buying a Columbia SC home, there are all kinds of financial tips about what to do and when. Things like where to buy, how to get the best mortgage rate, how to save on this and that. Heck, there's even a ton of information advising you why it's best not to even think about buying a Columbia SC home.
There's no arguing the fact that buying a Columbia SC home is the biggest purchase you'll probably ever make, which is why it's especially important to take a number of post-sale steps to make sure you protect your largest financial investment ever.
Steps to Take AFTER Buying a Columbia SC Home
The first thing you should do after buying a Columbia SC home is re-key or change all the locks on the doors and windows of your new home. You may also want to consider installing deadbolts where there are none. This may not seem like a financial issue, it will quickly become one if you have to replace a whole house worth of stolen or damaged items resulting from a burglary because someone still had a key to your new home.
Next, you should review your insurance coverage to make sure it stays up to date with your needs.
Whether you are first-time home buyer, or moving up and buying a Columbia SC home that is bigger than your previous home, it's important to adjust your life insurance coverage to cover any new mortgage debt. As a general rule of thumb, life insurance should cover 10 years of income plus any large debts or upcoming expenses. In the case of buying a Columbia SC home, that would include the mortgage, but also could include residual debts or a child's college costs.
If you put less than 20 percent down when buying your new home, you're likely having to pay private mortgage insurance. PMI rates are usually 1 percent of your loan balance, which can translate into thousands of dollars a year, depending on the size of your mortgage. This is money you never recoup, and even worse, represents real risk if the value of your home decreases.
You might want to think about pausing any 401(k) or retirement contributions and defer them towards paying down your loan. The faster you can get below that 20 percent loan-to-value ratio, the sooner you can drop the PMI.
After buying a Columbia SC home and taking possession, you also take the financial responsibility for anything that goes wrong. Home inspection or not, things do break down, and there will be general maintenance to keep your home's value from going down. Sure up your emergency savings to cover these repairs and maintenance so you don't have to use credit cards when something breaks down.
Buying a Columbia SC home is a time of excitement and hope for the future, but there are some issues you need to consider, like, what happens if you were to unexpectedly pass away? Now is a good time to review your will or trust to make sure your new home is a part of those documents and that your beneficiaries are updated and complete.
A good habit to get into after buying a home is doing a yearly review on the fiscal impact your house is having on your life and take any measures needed to make sure it's as positive and cost effective as possible.
Find more articles pertaining to buying a Columbia SC home under our Columbia SC Home Buying Tips to your right under Columbia SC Real Estate Categories. Remember, we post tips daily to Twitter, and also on our Facebook Page. We'd love you to check us out there too.