Housing Survey: Americans from Various Demographic Groups Dream of Homeownership

According to Fannie Mae, majority of Americans are still hoping that in the near future they can live in their own homes. The National Housing Survey’s latest quarterly report shows that many Americans from different demographic groups still believes that homeownership is better than renting it. They are optimistic that the economic growth will create more jobs, lower interest rates and stabilize house prizes thus enabling them to purchase a house in the future.

The main factors that motivate renters to own a house is the quality and safety of local schools. For most African-Americans and Hispanics homeownership symbolizes success. But they have observed that what makes it difficult to obtain a mortgage are poor credit, complicated process involved, and economic crisis. Another observation that they have is that African-Americans and Hispanics could not get mortgage easily regardless of their income level.

Other factors that play important role in getting a house mortgage are educational level, income stability and credit history. Groups with higher educational levels are more likely to obtain a mortgage compared to those who completed lower levels.

Many Americans are saying that due to lack of home loan information, they lose confidence in owning a home in the future. Because of this negative behavior, the homeownership rate has decreased over the last several years. In addition, the belief that safety is the primary reason why many are longing to have their own homes has dropped to 63% in the last three months of 2011. On the contrary, those with educational attainment and more than sufficient income believe that buying a house is a good and safe investment.

The National Housing Survey, in the last quarter of 2011, conducted interviews among 3,000 Americans. The interview was focused on the Americans attitudes between owning and renting a home, belief on owning a home as a safe investment, financial capacity to purchase a home, assessment on the U.S. support on housing programs and on the overall outlook on the economy. The survey was done by Penn Schoen Berland and Fannie Mae’s combined effort.

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Commercial Mortgages Slowing Down

According to reports last week by Mortgage Bankers Association, despite the credit crisis and recession, loans from commercial real estate have held up better compared to loans from banks and thrifts.

In the previous year, banks and thrifts charged off 0.8% of commercial mortgages and 0.7% of multifamily mortgages as bad debt.

The charge-off rate was almost one-half of the rates for all loans and leases held by banks and thrifts, which is 1.5%.

According to Jamie Woodwell, vice president of the commercial real estate research, for the banking sector or economy as a whole, commercial mortgages have showed to be neither ‘the next shoe to drop’ nor a ‘ticking time bomb’.

At the last part of 2011, commercial loans and multifamily loans by banks and thrifts had a delinquency rate of 3.5%, which is a decrease from the highest rate in quarter three of 2010 of 4.4%. On the other hand, residential mortgages had a delinquency rate of 7.7% in the last part of 2011.

As said by Jim Chynoweth, managing director of CBRE’s Albuquerque, vacancy rates were kept from elevating by the lack of new construction and it came to the extent that there were sudden rises in commercial mortgage default. Moreover, this was said to be the worst of commercial and multifamily mortgage defaults.

Other main investor groups in commercial and multifamily real estate had the following delinquency rates:

From 0.3% in the first half of 2010, only 0.2% of loans by insurance firms were two months or more late on payments.

From 9% in quarter two of 2011, only 8.6% of loans maintained in commercial mortgage-backed securities were a month or more delayed on payments.

From 0.4% in quarter one of 2011, only 0.2% of multifamily loans by Freddie Mac were two months or more late on payments.

From 0.8% in the first half of 2010, only 0.6% of multifamily loans held by Fannie Mae were two months or more delayed on payments.

Check Your Credit Rating Before Getting a Mortgage

Tara Lynn Wagner said that it is very essential for you to determine your credit score before securing a mortgage loan if you want to avoid paying more money.

Most people especially women know their Social Security number, their weight but when you ask them about their credit scores, they are not aware of it.

CEO Amanda Steinberg, founder of Dailyworth.com, said that loans are needed to buy a vehicle or a house because it is quite impossible to obtain them in cash. But in order to get the best term, it is important that consumers should know their credit scores before securing a mortgage. She said that it might cost you to pay tens of thousands dollars more if you do not check your credit rating before securing a mortgage.

To illustrate her point she cited this example. There were two women who wanted to secure a mortgage amounting to $200,000. The first woman was Susie. Susie’s credit score was 740 points. Her high rating qualified Susie to get a 30-year mortgage at 3.9 % interest. She was paying $953 per month. The second woman was Jane. Jane had a credit score of 640 points. She was also granted a 30-year mortgage at 4.75 % and paid $1,043 monthly. The total difference in the payments of two women for 30 years was more or less $35,000.  This is quite big, says Steinberg. The big difference was the result of the credit scores of Susie and Jane.

There are three steps to take before taking a mortgage. First is to check your credit score. Then, if it is excellent maintain it. Finally, if it is not good, do something to improve it.

Steinberg says that aside from paying their dues on time, the consumers have to control their spending habits because the credit companies are checking their spending to determine their credit scores.

She further added that consumers have to spend only about 20% of the available credit or they should not go beyond 90% of the available credit.

Various Forms of Assistance for Responsible Homeowners

The latest effort of the Obama administration to assist the housing market is aimed at homeowners with solid credit and is making on-time payments on their mortgages but is unable to refinance because they own underwater homes in falling markets.

President Obama is set to announce his plan in Nevada, a primary state that he hopes to win in 2012. Since the peak of the housing market bust, the prices of home in Nevada fell by 53%. In the metro area of Las Vegas, the prices decreased by 59%. It has been reported that there has been no refinancing activity for borrowers who are underwater in the area. The president’s plan is designed to change this.

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A series of changes that will lighten the load of responsible borrowers at the moment will be announced. This is to help them take advantage of the good mortgage rates at present. According to the new regulations, homeowners with good credit who has missed a payment for a period of one year can still be considered as a responsible current borrower.

The advice of the administration officials is that the homeowners will no longer be requested to get an appraisal or required to undergo a full credit check. According to the official, if the payments have been current, it is already the lender who owns the risk. They also plan to get rid of the so called risk based fees that are currently charged on bad credit homeowners. This will raise the benefits of refinancing and eliminate hassle.

The administration official informs the CNN that they have been working out and coordinating the issue with FHFA and the banks. Then, the FHFA will contemplate on the proper guidelines and inform banks about them by November 15. Homeowners can start applying for the refinancing until after the 15th of November.

Between the present days until the 15th, the FHFA can think of including another category of homeowners in the plan. It is possible that the changes will be extended to bad credit homeowners who have home equities and have been current in their payments.

A government official shares that plans are continuously made to address the larger housing problems that affect the entire market. These will be announced in the future.

Previously, the administration already announced the forbearance for homeowners for up to one year if they lost their jobs. This allows homeowners to delay mortgage payments while unemployed.

Related articles

• Refi plan: If homeowners win, someone else loses (sfgate.com)

Various Forms of Assistance for Responsible Homeowners

The latest effort of the Obama administration to assist the housing market is aimed at homeowners with solid credit and is making on-time payments on their mortgages but is unable to refinance because they own underwater homes in falling markets.

President Obama is set to announce his plan in Nevada, a primary state that he hopes to win in 2012. Since the peak of the housing market bust, the prices of home in Nevada fell by 53%. In the metro area of Las Vegas, the prices decreased by 59%. It has been reported that there has been no refinancing activity for borrowers who are underwater in the area. The president’s plan is designed to change this.

A series of changes that will lighten the load of responsible borrowers at the moment will be announced. This is to help them take advantage of the good mortgage rates at present. According to the new regulations, homeowners with good credit who has missed a payment for a period of one year can still be considered as a responsible current borrower.

Image via Wikipedia

The advice of the administration officials is that the homeowners will no longer be requested to get an appraisal or required to undergo a full credit check. According to the official, if the payments have been current, it is already the lender who owns the risk. They also plan to get rid of the so called risk based fees that are currently charged on bad credit homeowners. This will raise the benefits of refinancing and eliminate hassle.

The administration official informs the CNN that they have been working out and coordinating the issue with FHFA and the banks. Then, the FHFA will contemplate on the proper guidelines and inform banks about them by November 15. Homeowners can start applying for the refinancing until after the 15th of November.

Between the present days until the 15th, the FHFA can think of including another category of homeowners in the plan. It is possible that the changes will be extended to bad credit homeowners who have home equities and have been current in their payments.

A government official shares that plans are continuously made to address the larger housing problems that affect the entire market. These will be announced in the future.

Previously, the administration already announced the forbearance for homeowners for up to one year if they lost their jobs. This allows homeowners to delay mortgage payments while unemployed.

Related articles

• U.S. throws lifeline to underwater homeowners – Reuters (news.google.com)
• Refinancing plan for US mortgages (bbc.co.uk)