Homegate Direct Realty Blog» Milwaukee Mortgage Info

Mortgage Rates Go Even Lower As Debt Ceiling Increase Signed – Milwaukee Real Estate

Tim Vertz — Wed, 03 Aug 2011 21:31:19 +0000

It’s already a buyer’s market out there in Wisconsin real estate for the Milwaukee and Green Bay markets. Now is the time to buy as we’re seeing mortgage rates flirt with all time lows in the last couple of days since the debt ceiling increase was signed. The average thirty year fixed rate has now gone to 4.45% while the 15 year fixed has gone to an all-time low of 3.52%.

Even today, we’re seeing some mortgage lenders in the Milwaukee and Green Bay area offer a 30 year fixed rate with no points at 4.125%!

With rates so incredibly low and housing prices 30% off their peak – there’s never been a better time to buy. For the best mortgage rates in your area – check out bankrate.com.

Interest Rates, Home Prices and Buying Power

Tim Vertz — Mon, 20 Sep 2010 14:06:33 +0000

Most everyone realizes mortgage rates are low and home prices have come off historical highs. But how much do those factors contribute to buying power?

First, consider interest rates. An indicative 30-year fixed rate today is 4.375%. For every $1,000 borrowed, you’ll pay principal and interest of $4.99 monthly. At 5%, that figure increases to $5.36. At 6%, it jumps to $6.00.

A $200,000 home with a 20% down payment ($160,000 loan) carries with it a Principal and Interest payment of $798.85 at 4.375%. At 6.00%, that figure jumps by $160 to $959.28 a month, or nearly $2,000 a year in additional housing expense. That figure will grow as home prices begin a modest improvement upward in the future. A 5% increase in home prices translates to $500 a year in additional expense.

Mortgage rates and home prices also directly affect:

Mortgage qualifications. Underwriting requirements today typically cap the borrower’s debt-to-income ratio at 45%. Simply put, borrowing less at a lower rate allows more borrowers to qualify.

Down payment funds required. As prices increase, so does the required down payment.

The cost of mortgage insurance (MI) for those with less than 20% down. MI is calculated on the loan amount. As prices increase, loan amounts increase, raising the cost of monthly mortgage insurance.

Thank you to Great Midwest Bank for contributing this article.

Associated Mortgage Program to Aid Unemployed

Tim Vertz — Fri, 08 May 2009 20:33:31 +0000

Milwaukee Business Journal (WI) (05/06/09)

Green Bay-based Associated Bank recently enhanced its mortgage modification program to defer up to 12 months of payments for unemployed mortgage holders. This new extended component is designed to help borrowers who are not covered by the government’s Homeowners Affordability and Stability Plan. To be eligible for the initiative, borrowers must have their first mortgage with Associated Bank, be receiving unemployment benefits and be actively seeking new employment. President and COO Lisa Binder commented, “This program gives these homeowners hope by helping them keep their homes without draining their personal savings they need for other expenses, or other assets they will need for their long-term financial security once they find new employment.” Borrowers must make a minimum monthly escrow payment of one-twelfth their property taxes and homeowners insurance during the deferment period. Additionally, they must provide proof of receipt of unemployment insurance benefits every three months throughout the period in order to maintain eligibility.

Mortgage Rates at 4.5%? Could be great news for the Milwaukee Real Estate Market

Tim Vertz — Wed, 14 Jan 2009 19:32:12 +0000

Homeowners may soon enjoy mortgage rates as low as 4.5 percent if the Treasury Department has its way. According to The Wall Street Journal’s on-line edition, the department is discussing a plan that would use Freddie Mac and Fannie Mae to push banks to make mortgages available at more than a full percentage point below the current levels for a 30 year fixed rate mortgage.

The plan under review might lower rates to the 4.5 percent range and would be in addition to a program wherein the Federal Reserve will purchase up to $600 billion of debt either issued or backed by Freddie Mac, Fannie Mae, Ginnie Mae, and the Federal Home Loan Banks. That program is already having an effect on mortgage rates, which have dropped and caused investors to pay more attention to the stocks of banks and homebuilders.

Probably in response to the earlier new program and the lower rates, mortgage applications jumped a record 112.1 percent as seasonally adjusted over the previous week, according to the Mortgage Bankers Association. The Journal reported that the government would encourage banks to issue new mortgage loans at lower rates by offering to purchase securities backed by the loans at a price equivalent to the 4.5 percent rate, funding the program by issuing Treasury debt at 3 percent.
Source: The Wall Street Journal, Mortgage News Daily