Posted on 07/14/2010 5:27:25 AM PDT by Rational Thought
Demand for loans to purchase U.S. homes sunk to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates, the Mortgage Bankers Association said on Wednesday.
Requests for loans to buy homes dropped 3.1 percent in the week ended July 9, after adjusting for the Independence Day holiday, to the lowest level since December 1996, the industry group said.
Refinancing applications fell 2.9 percent, and the mortgage market index that reflects total loan demand also fell 2.9 percent.
Average 30-year mortgage rates edged up 0.01 percentage point to 4.69 percent, but were near the record low of 4.61 percent set in March 2009, based on MBA records dating back to 1990.
Rock-bottom borrowing costs are helping borrowers with pristine credit to buy and those who still have equity in their homes to refinance. But high unemployment and foreclosures remain major hurdles, and worries that prices could dip further are also keeping many potential buyers on the sidelines.
(Excerpt) Read more at cnbc.com ...
Maybe I should get her to recheck. Maybe her underwriter is not up to the minute with guidelines. I know I had to educate an underwriter once on “build on your lot” loans. She didn’t know the appraised equity counted as the down payment.
Funny, the DemoncRats are completely silent about considering tax cuts, somthing that has been repeatedly proven effective and what the majority of Americans are demanding.
I just checked with my Savings & Loan about refinancing my home north of Sacramento, from a rate of 5.25% to 4.125%. This would save me $125 per month. Not suck equity out, just get a new loan in the same amount with the lower current rate.
Closing costs are a gargantuan $3,500 dollars.
With closing costs, I would still save about $50 per month during the 10 years I expect to be in my home.
Screw them. I will cut off my nose to spite my face and stayin in the current loan just to deprive them of the gargantuan refinaning fees.
I think it is obscene that I am charged 2% of my total loan amount to process a couple of hours worth of paper. What a butt-reaming scam this gouging practice is. At least they could give me a kiss first.
Closing costs and real estate commissions are highway robbery, pure and simple. They are obscene amounts for the product delivered. Absolute avarice.
Get this, I can refinance my car for NO FEES whatsoever. What is the difference between the 2, besides an appraisal to insure the house’s current value.
It is flat absurd to charge $3,500 dollars just to provide a loan for real property. This is flat usury.
How do lenders justify the exhorbitant closing costs on a home loan? Can you educate me?
When I went to refinance I was told there were no points and no origination fees, yet the closing costs were going to be almost $3,500.
Is this 100 hours of work at $35.00 per hour? 50 hours of work at $70.00 per hour? 10 hours of work at $350.00 per hour? I am at a loss to understand how or why I can refinance a car for only a $15.00 DMV fee and no fee whatsoever on the $30,000 car loan, yet refinancing my $165,000 home loan requires a $3,500 closing cost.
I am flummoxed.
Any light you can shed on the NEED for a #3,500 closing cost for a $165,000 home loan would be deeply appreciated. I realize there is an appraisal fee. I realize there is a notary public that has to be paid.
I can see a $1,000 fee being reasonable. I cannot see a $3,500 fee being reasonable.
What am I missing unless the lenders are simply skimming $2,000+++ in profit on the transaction? It makes me furious to think I can take advantage of the exceptionally low current home loan rates, but only if I pay what I perceive to be an “extortion” fee.
Any help teaching me why a $3,500 closing cost is necessary and how it is itemized would be very deeply appreciated by me.
Isn't that a type of subsidy?
Without a point it is about $1,800 here. 400 of that is appraisal, 315 for my closing company, and $150 in title.
We only keep about $650 of that.
The lender needs new title and appraisal to make sure everything is current.
Liens could have been file since the last closing; values could have dropped on the appraised end of things.
I know other areas have higher title costs; some states charge fees on refinances.
There are some no fee options out there if going back through the same lender; but the rate is higher.
It’s all just a racket by the real estate financing industry to prey upon unsuspecting customers who innocently think it can never be otherwise. I’m all for just staying in a loan if it means enriching a title company and bank for doing little more than pushing a pencil for a few minutes - oh, and those “courier” fees.
<p.
Real estate agents are the same, wanting 6% of the sale price of a home for doing a few hours of work.
$1,800 sounds high but not unreasonable. The $3,500 I have been told sounds most unreasonable. I wish I was in your state and could have you work the loan.
I think I will hit up some banks and attempt to negotiate a lower rate. If the cost to you is around $1,200 then it sounds to me like my lender is keeing $2,300 on the deal. That is outrageous. Maybe there costs are somewhat higher, but there is no way your costs can be $1,200 while those by my lender in California can be $2,800 (so they get their $700 profit).
I feel so taken advantage of just thinking about this. This makes me feel bitter at the lenders charging such high fees and making such high profits at the expense of people who are just trying to take advantage of current rates. This really stinks to high heaven.
Thanks. I’m betting her UW is wrong.
Thank you very much for your insightful response. It was informative.
It’s not a VA requirement so if they insist you would want to find another lender.
Any major lender can do a VA loan; you don’t even have to be in the same state to do them.
I misunderstood. The loan can’t be more than the original loan. By rolling in the closing costs it made it go over. Bottom line it wasn’t worth the investment. However, I’ve lowered the principle a little so it might work after all. We’re working on it.
I’ve been watching 30 + properties in the Triangle Area of NC for well over a month, watching to buy one. They keep listing more and more, but not a one of the properties in the upper end of the range has sold. They say they have 13 months in inventory right now and it is building. Love this buyer’s market when I am buying. I’m holding off until I see the market turn or there is just the right home that I can’t let go by!!!!
Interesting note: Thew number of short sale and forclosure listings is huge. The banks are not forclosing on many of the upper end homes as they can’t afford to take the losses on their income statements.
Problem is on the upper end homes there were no tax credits for the people who qualify to buy the homes due to income limitation phaseout.
Short sales take too long with no assurance the bank will except your offer.
Talked to my l.o. It was her mortgage company policy. It’s changed and we’re back in the process of refinancing. Thanks for your help.
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