December 23, 2015: “The Fed has raised interest rates: What do millennials need to know?” a Chicago Tribune article by Carolyn Bigda included comments from HSH.com VP Keith Gumbinger:
Home loans: As with student loans, if you have a fixed-rate mortgage you don’t have to worry about higher monthly payments.
A borrower with an adjustable rate mortgage will see payments increase almost immediately if he is out of the temporary fixed-rate period (usually the first five or seven years of the loan).
If you plan to stay in your house for several more years, now may be the time to refinance into a fixed-rate loan. If not, do the math to see if it makes sense to hold on to your ARM.
The average rate on a 5/1 ARM (meaning a variable rate loan with a five-year fixed-rate period) is 3.19 percent today, according to HSH.com, which tracks mortgage trends. A 30-year fixed-rate loan charges 4.02 percent.
“You might do better with an ARM whose fixed-rate period matches your timeframe,” said Keith Gumbinger, vice president at HSH.
December 16, 2015: “Is a Fed Rate Hike Bad News? That Depends on Your Situation”, an NBC News feature by Jean Chatzky included some context from HSH.com VP Keith Gumbinger:
Home buyer The vast majority of the Fed’s expected rate hike is already baked into lending rates, which hit 4.02 percent at the end of last week on a 30-year fixed-rate mortgage, according to HSH.com. They may go up a few basis points on Wednesday’s news, but any increase will be “minor,” says HSH’s Keith Gumbinger “as will the impact to your wallet.”
On a $250,000 mortgage, for example, the monthly payment is currently $1,196. If rates rise to 4.10 percent, the payment would rise to $1,208 (i.e. $12 more.) HSH doesn’t see rates moving higher than 4.625 percent by the end of next year. That would increase the payment to $1,285, a $90 difference. “That’s enough to kill re-fi activity,” he says. “But it shouldn’t change home buying activity.”
Credit card user
If you read your card agreement closely, you’ll notice that the interest you’re paying has a floor. For example, if your contract stipulates that you pay prime (currently 3.25 percent) plus 7 percent, with a floor of 12 percent, that means you should be paying 10.25 percent today but are actually paying 12 percent. That explains why “it could be a while before many borrowers see much by way of effect,” according to HSH’s Gumbinger.
Meantime, if you’ve got credit card debt you’re looking to pay off, a zero percent balance transfer offer is still going to be the way to go.
December 16, 2015: “How to Handle Your Finances as the Fed Raises Interest Rates “, a New York Times personal finance review by Tara Siegel Bernard featured mortgage data and quotes provided by HSH.com VP Keith Gumbinger:
Rates on 5/1 adjustable-rate mortgages – or those with a fixed rate for five years, which then adjust each year thereafter – have moved up in recent weeks but are still around 3.14 percent, according to HSH.com, which tracks the mortgage market. That compares with rates of 30-year fixed mortgages, which averaged 4.04 percent the week ending on Tuesday. (That rate includes a fee of 0.17 percent of the mortgage amount. The adjustable rate includes a fee of 0.10.)
Is it time to refinance? Homeowners with adjustable-rate mortgages who are already facing annual readjustments, or who expect to soon, should consider refinancing into a fixed rate now, financial advisers said. But borrowers with A.R.M.s who still have a fixed rate locked in for several years may want to take a wait-and-see approach. “It is not as simple as getting the fixed rate, putting it in a drawer and forgetting it,” said Keith Gumbinger, vice president of HSH.com.
Interest rates on home equity lines of credit, which are expected to rise roughly in line with the Fed’s increases, are likely to increase to about 5.5 percent on average in the next year or so. Borrowers can ask to lock in a fixed rate for their existing balance, but they will probably pay at least 6.20 percent, said Mr. Gumbinger, so it may not make sense just yet, depending on the size of your loan balance and how long you expect it will take to pay it back.
December 16, 2015: “What to Expect Now That the Fed Has Begun Raising Rates “, an AARP.com discussion by Eileen Ambrose about changes in financial markets contained some context from HSH.com VP Keith Gumbinger:
Mortgages: Rates on new 30-year fixed mortgages have more to do with inflation and economic conditions than an uptick in short-term rates by the Fed, Gumbinger explains.
Rates on new adjustable-rate mortgages will respond to the Fed’s move, although not in lockstep, Gumbinger says. If the Fed raises the rate by a quarter of a percentage point, new adjustable mortgages could rise by less than half that because lenders don’t want to deter borrowers, he says.
Adjustable-rate mortgages can carry a fixed rate for a period and then adjust annually. If your loan is scheduled to adjust, your rate will go up, too, but again, not as much, Gumbinger adds.
December 16, 2015: “Will the Fed rate hike impact you?”, a Florida Today news item by Wayne T. Price included some commentary from Keith Gumbinger, HSH.com’s VP:
Keith Gumbinger, vice president at HSH.com, said: “The economy is performing well enough that the Fed will feel confident that a small move in interest rates won’t disturb the expansion. Mortgage rates have already adjusted to the probability of a lift in the federal funds rate, so they shouldn’t move much as a result, but what the Fed has to say about the future for interest rates will be key to how much reaction we see.”
December 16, 2015: “Rate hike will signal ‘change of season’ “, a NorthJersey.com report from Richard Newman featured some interest rate data and commentary provided by HSH.com VP Keith Gumbinger:
The 12-month LIBOR (London Interbank Offered Rate), to which many home equity and credit card loans are pegged, inched up over 1 percent two weeks ago for the first time since September 2012, and the yield on the one-year Treasury bill, a popular index for making changes in adjustable-rate mortgages, recently moved up to 0.54 percent, its highest level since July 2009.
Keith Gumbinger, vice president of financial publisher HSH.com in Riverdale, said Tuesday that fixed 30-year mortgage rates, which tend to move in line with 10-year Treasury notes, rose by about 0.2 percentage point about five weeks ago and since then have hovered right around 4 percent. He predicts they will climb to about 4.5 percent in 2016. “We don’t expect a massive increase,” he said.
December 4, 2015: “Get Ahead of Rising Interest Rates “, a market update piece at Kiplinger.com by Lisa Gerstner included some data and quotes from Keith Gumbinger, HSH.com’s vice president:
HELOC borrowers who are approaching the end of an interest-only payment period could be in for a rude awakening if they have to shift to payments of interest plus principal at the same time that rates rise. Pay extra now, if you can fit it into your budget. You may be able to convert all or a portion of your variable-rate HELOC balance to a fixed-rate home equity loan. But a home equity loan recently averaged a fixed rate of 6.18%, compared with an average 5.06% on a variable-rate HELOC, according to mortgage research site HSH.com. So a switch may not be worthwhile if you can retire the debt in the next few years.
If you have a mortgage, explore the options for refinancing while rates are still scraping bottom. For prospective borrowers who are well positioned to take on a loan, now is the time to lock in a record-low rate. But don’t worry about missing the boat if you’re not ready to jump. Rate hikes will be modest and gradual, and they are starting from rock bottom. “Even if rates were to go up a point or two, we would still be in very favorable territory, historically” says HSH vice president Keith Gumbinger.
November 28, 2015: “”Getting There” – Testimonies of conquering debt”, a Washington Post personal finance column by Michelle Singletary discussed several of HSH’s unique calculators:
The person was referring to a 2013 column I wrote on refinance envy. I spelled out how you can cut the amount you’ll pay in mortgage interest and achieve savings similar to what you’d get if you refinanced to a lower interest rate. I suggested that folks go to HSH.com, which publishes mortgage and consumer loan information. The site has a prepayment refinance calculator called “PreFi,” which shows you the effective interest rate you’ll achieve when you prepay your loan. If you would like to prepay your mortgage as if you had a certain interest rate – say, a 3 percent rate – the site’s “LowerRate” prepayment calculator allows you to determine the prepayment amount you’ll need to hit that rate either by making regular monthly prepayments or a one-time, lump-sum payment.
November 27, 2015: “Spread Your Wealth to Save Money”, a rebroadcast of a Consumer Reports feature by Tobie Stanger on how to find the a great mortgage suggested readers visit HSH.com:
For credit cards and mortgages, shop online because the market for them is national, with lots of competitors, and you don’t want to limit your options by confining your search to, say, the bank where you have a checking account. For plastic, use a comparison site like creditcards.com; for mortgages, go to hsh.com.
November 25, 2015: “No change in Fannie, Freddie loan limits, despite home price jump”, a San Francisco Chronicle article by Kathleen Pender that talked about home financing conditions for 2016 included comments from HSH.com VP Keith Gumbinger:
Home buyers who need to borrow more than the conforming-loan limit might qualify for a jumbo loan, which used to cost more than conforming loans but now costs roughly the same. Still, they will generally need a higher credit score and larger down payment to get the best rate on a jumbo loan, said Keith Gumbinger, a vice president with HSH Associates.
“It’s much easier to find a loan in the conforming market if you have only 10 percent down, even 5 percent in many places,” Gumbinger said.
Fannie and Freddie have recently introduced 3-percent-down loans, but not all lenders are willing to make them. On a jumbo loan, most lenders still require a 20 percent down payment, although some will go down to 10 percent, Gumbinger said.
Another alternative is to get a first mortgage up to the Fannie-Freddie limit and a second (a.k.a. piggyback) mortgage for up to 10 percent of the purchase price, but many lenders won’t do this, Gumbinger said.
November 12, 2015: “Mortgage rates inching up in anticipation of Fed move”, a NorthJersey.com article by Kathleen Lynn featured some commentary from Keith Gumbinger, HSH.com’s vice president:
But Keith Gumbinger of HSH.com, a publisher of mortgage information based in Riverdale, said that an increase in December is likely to have less effect on mortgage rates than the signals the Fed will give on whether rates will rise in 2016.
“What they have to say about where rates are going means more than any particular rate change,” Gumbinger said. That’s because lenders will begin adjusting mortgage rates in advance of the Fed’s moves.
Gumbinger said that once mortgage rates start rising, “there may be a spurt of activity as people move before things get more expensive.”
Gumbinger predicted that if the Fed raises rates a few times during 2016, mortgage rates will be around 4.5 percent for a 30-year, fixed-rate loan by this time next year. That’s still very low by historic standards.
October 7, 2015: “Top three home annoyances and what to do about them”, a Reuters discussion piece from Beth Pinsker included some survey results from HSH.com and some commentary from VP Keith Gumbinger:
Spending across the United States on home improvements and repairs added up to $150 billion in 2013, the last year data was available, according to the National Association of Home Builders.
“Maintenance is curable, but it costs money,” says HSH Vice President Keith Gumbinger. An editor on his staff is going through this now with a new house, endlessly painting and fixing, Gumbinger said.
“You think that’s fun up front, but after you’ve painted for the fourth time, the maintenance grates on you after a while,” he said. This article also appeared on Money.com as “Homeowners’ Top 3 Gripes”
September 15, 2015: “What a Fed rate hike will mean for your mortgage rate, savings, and credit cards”, a Yahoo News market update article by Mandi Woodruff that included some analysis from Keith Gumbinger, HSH.com vice president:
If you have an adjustable rate mortgage, there isn’t much to worry about, predicts Keith Gumbinger of HSH.com. That’s because the Fed only directly controls the short-term rate used among banks. Mortgage rates are based on Treasury-bond yields, which may or may not rise along with Fed funds. “Short-term interest rates and long-term mortgage rates have little direct relationship with one another,” Gumbinger writes. “As such, this shouldn’t give either the Fed or a consumer pause with regards to a rate change.”
If you have taken out a home equity line of credit are concerned your rate will go up with a Fed hike, you may be worrying over nothing. Gumbinger says you can expect your rate to only raise “a tad,” much in the same way as credit card rates.
September 12, 2015: “Tips to getting a mortgage in our current market” a consumer-focused syndicated story by Marilyn Kennedy Melia includes a characterization of market conditions from HSH.com VP Keith Gumbinger:
The time finally may be right to buy. All those would-be buyers who’ve been sidelined because they’re unable to secure a mortgage may find there’s now a path to homeownership.
“As we have wound our way from the financial crisis, hurdles and obstacles to accessing credit are starting to diminish,” says Keith Gumbinger of mortgage site HSH.com
September 10, 2015: “What You Can Expect When the Fed Raises Rates”an AARP.com outlook by Eileen Ambrose included some commentary from Keith Gumbinger, vice president of HSH.com:
Home equity lines of credit. Like credit cards, these usually involve a variable rate, and borrowers will see their payments rise as interest rates go up.
If you have a home equity line of credit that’s at least 10 years old, consider refinancing to lock in today’s more favorable terms before the Fed acts, recommends Keith Gumbinger, vice president of HSH.com, a mortgage information site. Rates on credit lines issued years ago are often capped at 2 or 3 percentage points above the prime rate. Current caps are typically 1 to 1.5 percentage points over prime, Gumbinger says.
Mortgages. Rates on new 30-year fixed mortgages have more to do with inflation and economic conditions than an uptick in short-term rates by the Fed, Gumbinger explains.
Rates on new adjustable-rate mortgages will respond to the Fed’s move, although not in lockstep, Gumbinger says. If the Fed raises the rate by a quarter-percentage point, adjustable mortgages could rise by less than half that because lenders don’t want to deter borrowers, he says.
Adjustable-rate mortgages can carry a fixed rate for a period and then adjust annually. If your loan is scheduled to adjust after the Fed lifts the rate, your rate will go up, too, but again, not as much, Gumbinger adds.
September 10, 2015: “Rising home prices impact economy”, a CNN informational article discussion the impact of rising home prices included some concerns expressed y HSH.com’s VP, Keith Gumbinger :
“When home prices are outstripping incomes, it will take out the marginal buyer who can qualify for a certain loan and down payment. If home prices continue to increase, those properties are no longer affordable,” said Keith Gumbinger, vice president of HSH.com.
According to Keith Gumbinger, “Home values still have a lot more room to run in many markets to get back to pre-recession levels. But in a hot market like San Francisco, where prices are rising among the fastest in the nation, residents are feeling the pressure. Existing folks can get crowded out due to rising costs, limited availability of homes or rentals that are accessible to them. That is too much. You can’t sustain that. If you think of the average worker, what are they to do?”
August 28, 2015 : “Pennsylvania tops list for most home buyer assistance programs”, a Herald-Standard advisory notifying readers about home buying assistance programs with some help from HSH.com :
Pennsylvania ranks as the number one state to offer the most types of home buying assistance programs, according to data complied by the mortgage website HSH.com
According to HSH, each state defines a first-time home buyer as someone who has never owned a home, or who has not owned a home in the past three years.
Pennsylvania offers closing-cost assistance up to $6,000 in the form of a no-interest, 10-year loan open to all borrowers at participating lenders, HSH reports.
August 25, 2015 : “Here’s the salary you have to earn to buy a home in 17 major US cities”, a Business Insider Australia informational overview informing readers some tips about getting a home in major U.S. cities with some help from HSH.com:
Mortgage website HSH.com has updated its estimate of how much annual income a household would need to buy a home in major metro areas in the US, according to second-quarter 2015 data.
August 6, 2015 : “Six things you should know when getting a mortgage loan”, a Wave 3 News article informing readers tips about getting a mortgage loan with help from HSH.com’s VP, Keith Gumbinger:
“When lenders advertise their loans, they use annual percentage rates, or APRs. The APR is supposed to help you compare loans on equal terms by combing the fees and points with a year of interest charges to give you a loan’s true annual cost. However, every lender’s APR policies are different, so it can become complicated. Some include their application fee in the PAR, some don’t. So two loans from different banks may have different APRs depending on the size of the loan, whether it is adjustable or fixed, and on the lender’s requirements for mortgage and title insurance. Not many people understand the differences. We have studied it and determined that the APR is fairly meaningless, says Keith T. Gumbinger.”
August 4, 2015 : “J.P. Morgan loosens terms for jumbo mortages”, a Wall Street Journal notification article by Annamaria Andriotis regarding J.P. Morgan loosening their underwriting criteria for big mortgages with some assistance from HSH.com :
In addition to easing standards, lenders have been trying to appeal to borrowers with lower interest rates. Historically, interest rates on jumbos have been higher than on smaller mortgages. That changed last August, when for five weeks the average interest rate on 30-year fixed rates jumbos fell below the average for 30-year fixed-rate conforming mortgages, according to HSH.com.”
August 1, 2015 : “Borrowers beware! Rising interest rates return?, an Asbury Park Press advisory article by Michael L. Diamond regarding a spike in the interest rates with some information from HSH.com’s VP, Keith Gumbinger :
“It has been more than a decade since the economy was strong enough to warrant an interest-rate hike. From June 30, 2004 to June 29, 2006, the Fed increased rates at 17 consecutive meetings, said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains company that tracks interest rates.
The fed abruptly changed course when the housing bubble collapsed. And it hasn’t been compelled to move; the economy has recovered only slowly, Gumbinger said. Until now.
It’s likely to be a slow and protracted process that they hope gets to normal, a fed funds rates of just 4 percent, he said. This is going to take place over a long period of time. Should you rush out and get yourself whatever? The cost of credit is not going to change all that much.”
July 31, 2015 : “Millions of underwater homes slow economic recovery”, a Scotsman Guide article regarding the recession on how it has locked out potential buyers and borrowers with some tips from HSH.com’s VP, Keith Gumbinger :
“Locked out from traditional refinances and unwilling to put their homes on the market, underwater homeowners have largely stayed on the sidelines waiting for their home values to increase, said Keith Gumbinger.”
“Selling your home can be a problem. You can’t sell it for what you owe on your mortgage. Well, that puts you in a difficult sort of straights.”
July 23, 2015 : “States that offers help for buying a home”, a Money informational article by Ian Salisbury of state programs that assist in buying a home with help from HSH.com :
Each of the 50 states has some sort of program to help homebuyers, especially those making their first purchase, according to mortgage website HSH.com, which recently compiled data and ranked the states.
If there isn’t much on offer in your state, you should also check Web pages of county and local governments. Even states that offer relatively little help, like Hawaii and Kansas, may fill in the gap with county level programs, according to HSH.
July 22, 2015 : “Jumbo-Loan market remains strong”, a Wall Street Journal recap article by Anya Martin of the mortgage market in the first half of 2015 with the words from HSH.com and their VP, Keith Gumbinger :
While average interest rates for jumbo mortgages did not dip below those for conforming loans like they did in some weeks in 2014, they stayed historically low and did not fluctuate more than 30 basis points, or about a quarter of a percentage point, says Keith Gumbinger, vice president of HSH.com.
Over the first six months, the lowest average rate for a 30-year-fixed rate jumbo mortgage was 3.82% in April, and the highest was 4.15% for the week ending June 26, according to HSH.com
Looking ahead, interest rates are predicted to creep upward, especially if the Federal Reserve finally raises its interest rate benchmark in September-a move it has been warning to do for over a year, Mr. Gumbinger says.
Lenders don’t directly use the Fed’s rates in determining jumbo rates, but their rates tend to mirror Fed movement and even may take the lead, Mr. Gumbinger says.”If the Fed decided to move, the market will already have made a move,” he adds.
If interest rate is a big concern, refinance or purchase sooner rather than later. Also keep in mind, that a Fed move will affect ARMs and home-equity loans in their variable stages more directly, Mr. Gumbinger says.
July 16, 2015 : “Phoenix is one of the most affordable cities for sports fans”, a Phoenix Business Journal comparison of the 10 most affordable cities for sports fans with the help of HSH.com :
“Phoenix is considered one of the top 10 most affordable cities for sports fans, landing at No. 6 overall, according to the Home Story, which crunched numbers taking a look at Bleacher Report’s list of best cities to be a sports fan as well HSH.com’s list of most affordable cities in the U.S.”
July 16, 2015 : “US Mortgage rates increase”, a Business Times advisory update regarding mortgage rates for 30-year loans that featured information from HSH.com’s VP, Keith Gumbinger:
“The probability that the increase will come as soon as September helped boost mortgage rates.”
“Markets are preparing themselves for that eventuality, and that makes it harder for rates to fall.”
July 4, 2015 : “Fed rate increase could hurt borrowers”, a Los Angeles Times borrower’s advisory by Tom Petruno regarding the potential rise of rates from the Federal Reserve that included insight from HSH.com’s VP, Keith Gumbinger:
“Loan agreements made before the housing crash typically allowed borrowers to pay only interest for the first 10 years. That means those borrowers are reaching the “reset” point at which they must begin paying principal as well as interest on outstanding debt, notes Keith Gumbinger, vice president at mortgage-industry tracker HSH Associates.”
“For the relative small number of homeowners who have adjustable-rate mortgages, rising short-term interest rates would mean higher payments on the horizon. But many of those borrowers who took the risk of adjustable-rate loans have enjoyed extremely low rates since 2008 as the Fed kept short-term rates near zero. “They have been living a golden life,” Gumbinger said.”
“Even if short-term rates head higher later this year, Gumbinger notes that adjustable-rate loans may not rise immediately, depending on how the contract is written. Homeowners who don’t want to take the chance of facing rising payments should start looking now at refinancing into a fixed-rate loan.”
July 2015: “Get Cash From Your Home”, a Kiplinger’s Personal Finance consumer advisory by Pat Mertz Esswein that included some tips from HSH.com vice president Keith Gumbinger:
Shopping smart : “You’re borrowing your own money – your own equity – so you want to shop around for the best terms available,” says Keith Gumbinger, vice president of HSH.com. Start with the holder of your first mortgage and the bank where you have your savings and checking accounts. Gumbinger says that smaller lenders, such as savings and loan associations, savings banks, and credit unions, may offer slightly lower rates.
July 1, 2015: “Weekly Mortgage Rates Radar” a Nasdaq article to illustrate the current mortgage market prices with the help of HSH.com vice president Keith Gumbinger:
“The Greek debt mess is roiling markets, but we haven’t seen much effect on mortgage rates as of yet. “Our daily surveys over the last five days show that rates have been pretty flat despite a dip in influential 10-year U.S. Treasury yields. Fixed mortgage rates usually track this indicator well, but it would seem that government-backed bonds are more in favor than Mortgage-Backed Securities as investors look to get cash out of harm’s way.” said VP, Keith Gumbinger
“We may see some fallout and effect on interest rates here. For most of the last couple of years, financial troubles overseas have been the mortgage shopper’s best friend, but at least the initial indication is that the impact on rates is limited, but we’ll know more in the coming days.”
June 30, 2015: “June 2015’s Hottest Real Estate Market” a RealtyToday article to illustrate some of the best locations in the United States to move to with the help of HSH.com
“According to a report by mortgage resource site HSH.com, an annual salary of $115,510 is needed to purchase a house in San Francisco where the median home price is $682,410.”
June 25, 2015: “Current Mortgage Rates” a SelectedLoans informational article by Nick Siebert explains the current mortgage situation with features from HSH.com.
“HSH.com reported this week, that the average rate on 30-year conforming residential mortgages decreased by 2 basis points, according to the firm’s latest Weekly Mortgage Rates Radar covering the Wednesday-to-Tuesday wraparound week. HSH.com’s weekly survey also showed, that the average rate on 5/1 Hybrid ARMs also improved by 2 basis points in the said period, and it’s currently sitting at 3.06%”
June 24, 2015: “Rising Comeback for Risky Home Buyers”, a Wall Street Journal article written by Annamaria Andriotis about nonbank lenders bringing risky buyers back into the market with some insight from HSH.com.
“Last month, the Davieses closed on a $2.83 million home in Manhattan Beach, California, after making a 30% down payment. They received the mortgage from Encinitas, California-based lender Drop Mortgage, which launched last year and works mostly with applicants who have had a foreclosure or short sale.
Their interest rate is 4.375% on an adjustable-rate mortgage, which will reset in five years — nearly 1.5 percentage points higher than the average rate at the time, according to mortgage-information website HSH.com.”
June 21, 2015: “Last Chance to Lock In A Mortgage with a Low Interest Rate”, a The Motley Fool review on how significant the mortgage rate environment currently is for home buyers and refinancers.
Low rates: enhancing affordability
“Over the last 10 years, conforming 30-year fixed mortgage rates have been as high a 6.8% and as low as 3.28%. This decline to rock-bottom levels meant that on a peak-to-trough basis, buying power improved considerably — and remains very strong.”
Low interest rates boost your buying power “In order to demonstrate how lower interest rates have improved buying power, we calculated the monthly payment needed to cover a $100,000 loan in 2006 when the conforming 30-year fixed peaked at 6.8%. Using this monthly payment as a constant, we calculated the loan amount this figure would cover at different interest rates over time. In all cases moving forward, there has been a material improvement as these rates have remained below where we began.”
Income growth will be the savior
The only way to offset the rise in interest rates is with stronger income growth. Income growth can outstrip an increase in rates or even home prices. Purchasing power would also increase with income growth, and the housing market would strengthen. However, income growth has been fairly weak in the recovery to date, and this is why you’ll often hear experts and pundits expressing concern about the Fed’s eventual campaign to again lift interest rates.
As the economy recovers, the slow growth in incomes will offset rising mortgage rates somewhat, but the impact of rising rates on potential homebuyers is something that will bear weathering going forward.”
June 20, 2015: “Home Sweet Home : Charleston”, a The Post and Courier review by Jim Parker of the current housing situation in Charleston and how HSH.com’s suggestions might help you in the future.
“According to real estate site www.HSH.com, there are at least two incentives packages available in South Carolina directed at initial house hunters.
They include a first-time buyer home-ownership program that “centers on down-payment assistance in conjunction with a fixed-rate mortgage at a competitive market rate for low-to-moderate income homebuyers.” According to the online site, “Borrowers can qualify for up to $5,000 in down-payment or closing-cost assistance.” Depending on income, the money either passes on to the buyer as a repayable second mortgage loan or as a forgivable second mortgage.
Another program “provides an extended(interest) rate-lock period and allows up to one ‘float down,'(to a lower rate) to preserve affordability on a newly-constructed home.””
June 17, 2015: “Salary needed to purchase a home in Dallas”, a Dallas Business Journal review by Lance Murray of local housing prices in Dallas with assistance from HSH.com.
“With home prices rising 28 to 30 percent in North Texas in the past three years, you might be asking “how much do I need to earn to afford a home in Dallas”
According to new data released by mortgage finance company HSH.com, you would need to earn $48,715.63 a year to afford a home in Dallas, where the median-priced home is $192,500.”
June 16, 2015: “Salary you need to purchase a home in 27 major US cities”, a Business Insider informational advisory by Libby Kane with some financial help from HSH.com’s mortgage calculator.
“To comfortably buy a median-priced home in San Francisco, California, you need a household income of $140,000 a year.That’s according to calculations from mortgage website HSH.com, which regularly updates its findings according to numbers from each fiscal quarter of the year.”
June 16, 2015: “New database for down payment assistance, a Washington Post review by Michele Lerner about purchasing your home faster with help from HSH.com.
“HSH.com recently compiled a comprehensive database of financial assistance programs across all 50 states and the District for people seeking to buy their first home or repeat borrowers. Down payment assistance, closing cost assistance and low down payment loans can help buyers get into a home faster than anticipated and at a lower cost.”
June 12, 2015: “Saving interest for the next 30 years”, a Today review by Jean Chatzky of different ways to save money with some help from HSH.com.
Refinance your mortgage again
“Even if you’ve already refinanced your mortgage at the beginning of the interest rate drops, it may be worth a second look before rates head back up. It doesn’t hurt to get a few good faith estimates, which is what a lender will give you that outlines the closing costs and fees tied to the refinance. To make a refi worth it, the amount you save on your monthly payments during the time you plan to live in the home should be more than the cost to refinance — in other words, how long you plan to live in this home matters. There is a good calculator HSH.com that can help you run the numbers.
June 8, 2015: “Your Home-Equity Line of Credit payment might jump soon”, a Wall Street Journal review of the potential payment jump by Annamaria Andriotis featured solutions from Keith Gumbinger, HSH.com’s VP:
“With most Helocs, borrowers aren’t able to increase their borrowing under the credit line after 10 years have elapsed from when they signed up. One way to regain that borrowing power is to try to sign up for a new Heloc that replaces the old one.”
“Borrowers who have a primary mortgage and a Heloc may want to consider if refinancing makes sense for them. By refinancing, they can roll their mortgage and Heloc into the new primary mortgage and end up with one monthly payment on their home.
June 4, 2015: “As rates rise, does it still make sense to refinance?”, a CNBC debate over refinancing your mortgage by Kelli B. Grant which included insight from HSH.com’s VP, Keith Gumbinger:
“It’s too late to refinance if you want the absolute rock-bottom interest rates. Volatility is likely to continue in coming months as the market reacts to any indications of the Federal Reserve raising the federal funds rate. Rates may drop again slightly, but they are more likely to firm up as a move becomes more certain.”
“The situation you want to avoid is being a sitting duck for upward rate resets in future years”
“You have to pay attention. Evaluate the sensitivity of your household budget to that.”
May 28, 2015: “Middle class finds it harder to buy a home in South Florida”, a Sun-Sentinel review of local housing conditions by Donna Gehrke-White that featured some context from Keith Gumbinger, HSH.com’s VP:
“It’s good news if you are a home seller – but not if you are a buyer,” said Keith Gumbinger, a HSH.com vice president.
He blamed South Florida’s rising home prices and higher insurance costs for making the three counties less affordable for homebuyers.
Home insurance costs in Florida were up about $700 in a year, Gumbinger said, citing the latest data from the nonprofit Insurance Information Institute in New York.
May 27, 2015: “Fixed Mortgage Rates Crest, Slip Back this Week”, a CNNMoney.com market update included comments by HSH.com vice president Keith Gumbinger:
“It looks as though financial markets have completed their spring adjustment,” said Keith Gumbinger, vice president of HSH.com. “Earlier this year, many bets were placed that the Fed would be getting close to making a change to rates by now, but with the time of that change pushed into the future, those bets were unwound, helping interest rates to firm a bit.”
May 15, 2015: “Smart moves: Mortgage Tips for First-Time Buyers”, a consumer advisory by syndicated columnist Ellen James Martin contained a featured interview with HSH.com vice president Keith Gumbinger:
Keith Gumbinger, a vice president at HSH Associates, which tracks mortgage rates for consumers throughout America, said there are now fewer large banks active in the mortgage market than during the last housing boom. But many other players are returning to the market.
“Consider seeking your home loan from a credit union, a community bank or a non-bank lender. These smaller lending shops, especially the local ones, can be very competitive on pricing,” Gumbinger said.
Gumbinger said first-time buyers need as much lead time as possible to educate themselves on mortgage basics, to sort through alternative home loan choices and to compare lenders and rates.
As a first step, buyers can inform themselves through online resources. For instance, Gumbinger suggests that mortgage shoppers seek consumer information through his firm’s website (www.hsh.com).
Understandably, most buyers favor traditional fixed-rate mortgages. But Gumbinger said buyers who expect to stay in their new home for just a few years might also consider a so-called ‘hybrid loan,’ on which the interest rate stays firm for three to 10 years before adjusting to market levels.
“Suppose you plan to buy a small city condo where you’ll live for just a few years before getting married and moving to the suburbs. Then a hybrid loan could be a good deal because the initial rate will be lower than for the classic 30-year fixed-rate loan,” Gumbinger said.
Gumbinger said you may want to begin the rate-shopping process with the lender who tutored you on the basics. But he urges you to extend your search beyond the first lender.
“The more the merrier when it comes to rate quotes. But always remember, you’re looking for competent service along with low rates,” Gumbinger said.
May 4, 2015: “Here’s what’s driving up housing prices”, a CNNMoney story by Kathryn Vasel discussing home prices contained a expression of caution from HSH.com VP Keith Gumbinger:
If prices continue to outpace inflation and income in these areas, that can eventually become a problem.
“Price increases — even in the most desirable places — can’t continue to outstrip income growth forever,” said Keith Gumbinger, vice president of HSH.com. “At some point, no one will be able to afford a home.”
Homeowners aren’t selling: Current homeowners list their home to either trade up or downsize, opening up inventory for first-time buyers to come in. One can’t happen without the other.
“The whole train has to move at the same time,” said Gumbinger. “Homeowners who would be considering selling could still be underwater or still in too low of an equity position,” said Gumbinger.
May 1, 2015: “How to Squeeze the Most Value From Your Home”, a Time feature by Sarah Max and Daniel Bortz included some rates and comments from Keith Gumbinger, HSH.com’s vice president:
For borrowers with conventional mortgages, the Home Affordable Refinance Program (HARP) is still available and has undergone some improvements since it was introduced in 2009. If you were turned down before, it’s worth another shot, says Keith Gumbinger, vice president of HSH.com, a mortgage information provider.
Get the right renovation financing. For a project that requires a one-time loan and at a fairly predictable cost – say, a bathroom – you may want to consider a home-equity loan, says Gumbinger. The 5.9% rate isn’t all that favorable, but you have the security of its being fixed. For a larger project in which you’ll need ongoing access to funds, a home-equity line of credit can be a better option since it operates like a credit card. HELOCs are now ringing in at 4.8%. The downside is that the rate is variable, so if you won’t be able to pay the debt off in two years, it might not be your smartest choice.
April 27, 2015: “If You Want to Sell Your House This Year, Start Doing These Things Now”, a Money spring housing feature story by Sarah Max and Daniel Bortz contained a a quip from HSH.com VP Keith Gumbinger:
On the other hand, if rates go up too far, that will almost certainly dampen prices. “As a buyer’s monthly payment goes up with rising rates, something’s got to give – and that’s likely your home price,” says Keith Gumbinger, vice president of HSH, a mortgage information provider. In other words, sellers: If you snooze, you may well lose.
April 21, 2015: “Change your financial life before you ruin it”, a MarketWatch advisory piece by Vera Gibbons that featured some expertise provided by Keith Gumbinger, HSH.com’s vice president:
Home debt
The hard cap for housing-related costs (which include things like your mortgage, principle, interest, insurance, taxes, and anything else that is required for you to live in the home) that is looked at – and used as a guideline – by lenders, is 28%. We’re talking 28% of your monthly gross (pre-tax) income. So, if your gross income is $4,000/month, a lender would approve the loan if the housing expenses were less than $1,120/month ($1,120/$4,000 = 0.28). Some programs do allow for higher housing ratios, says Keith Gumbinger, vice president at HSH.com, a consumer loan information site. “In the case of FHA-backed mortgages, the so-called ‘front-end ratio’ is 31%, so ask your lender if there are any budget-stretching options available to you.’
April 20, 2015: “If You Want to Buy a Home, Here’s What You Need to Do Now”, a Money spring housing feature story by Sarah Max and Daniel Bortz included some advice from HSH.com vice president Keith Gumbinger:
Then there’s that other important factor: interest rates. Despite prognostications that they could tick up by summer, the 30-year fixed rate – recently at 3.7% – “is still within shouting distance of 60-year lows,” says Keith Gumbinger, vice president of HSH, a mortgage information provider.
Go fixed-rate, not flex. Adjustable-rate loans may look irresistibly low now – around a 3% average for a five-year and as low as 2.5% for borrowers with credit scores of 760 and higher. But you’re likely to end up paying significantly more at the reset date with rates heading upward. “It’s hard to argue against a fixed-rate loan,” Gumbinger says. The exception: Buyers who plan to stay in the home for less than 10 years may benefit from the low ARM rates in the fixed period.
April 14, 2015: “Jump in Home Loans at Wells Fargo, JPMorgan Shows Revival”, a Bloomberg look at mortgage lending conditions by Kathleen M Howley included a review from Keith Gumbinger, HSH.com’s vice president:
The nation’s biggest lenders are benefiting from low mortgage rates and an improving economy after originations in 2014 fell to their lowest level in almost two decades. This year, home sales are off to their best start since the boom years, helped by the strongest labor market since 2008.
“If you think of the massive footprints these two banks have, the results are an indication of where the mortgage market is heading,” said Keith Gumbinger, vice president of mortgage-data firm HSH.com. “The economy is continuing to get stronger and interest rates are still favorable.”
April 9, 2015: “U.S. Mortgage Rates Slip to a Two-Month Low”, a Bloomberg News market update by Prashant Gopal includes some context from HSH.com VP Keith Gumbinger:
“The soft jobs report took the wind out of the sails of interest rates to some degree, said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-data company. “Rates have been drifting lower in recent weeks because the economic news has not been that stellar.”
April 9, 2015: “Mortgage rates fall; 30-year averaging 3.66%”,a Los Angeles Times market bulletin by E. Scott Reckard included some comments from Keith Gumbinger, HSH.com’s vice president:
Keith Gumbinger, vice president of HSH.com, which tracks mortgage rates day to day, said other economic reports in recent weeks also have suggested that the economy has lost some momentum, allowing interest rates to ease.
“The employment report for March was rather weak, breaking a year-long string of solid gains in hiring,” Gumbinger wrote.
“Is this just a dim patch in an otherwise bright pattern, or is it something more? It’s hard to know with any certainty, but it should give the Federal Reserve something to consider as it pertains to the timing of any interest rate increase.”
April 7, 2015: “Consider Cash When Buying a Vacation Home Overseas”, a Wall Street Journal “Jumbo Jungle” article by Anya Martin included some interest-rate data provided by HSH.com:
When buying their Mediterranean-style villa in Dominical, a popular surfing destination on the Pacific, the Atlanta couple approached a Costa Rican bank and were offered a mortgage with an above 7% interest rate. At that time, April 2014, average rates for a 30-year fixed-rate jumbo mortgage in the U.S. were 4.45%, according to HSH.com, a mortgage-information website.
April 6, 2015: “New lower down-payment option for 1st-time buyers Getting Started”, an Insurance News article on changing mortgage conditions by Carolyn Bigda featured some commentary from HSH.com vice president Keith Gumbinger:
All of which means to say that although some mortgages will require a lower down payment, first-time buyers still face several other hurdles to owning a home.
“The loans may expand opportunities at the margin, but I don’t think they will have a massive impact on the marketplace,” said Keith Gumbinger, vice president of HSH.com, which keeps tabs on home lending trends.
April 5, 2015: “Revisiting ‘Subprime’ Mortgages”, a New York Times market analysis column by Lisa Prevost included a characterization of market conditions from Keith Gumbinger, HSH.com’s vice president:
Keith T. Gumbinger, the vice president of HSH.com, a financial publisher, noted that these borrowers must, like prime borrowers, meet the proof of ability-to-pay requirements put in place by regulators after the mortgage crisis. And that, along with the banning of many of the riskier mortgage products, makes this version of subprime quite different from the last go-round, he said. “The fact is,” he added, “it’s a necessary component of the marketplace. And it serves a function after coming out of a pretty severe recession.”
March 18, 2015: “Tips for Borrowing After Bankruptcy”, a Wall Street Journal a review of mortgage and credit conditions by Anya Martin featured some mortgage rate data from HSH.com:
By comparison, jumbo borrowers with excellent credit can get a 30-year, fixed-rate loan for as low as 4.02%; the same borrower could get a five -year, adjustable-rate jumbo averaging at 3.05% for the week ending March 13, according to HSH.com, a mortgage-information website.
March 17, 2015: “Home Buyers Should Act Before Rates Increase”, a NorthJersey.com/Bergen Record consumer call to action by Nancy Kearney with market analysis by Keith Gumbinger, HSH.com’s vice president:
In the summer or fall, there is a likelihood that rates will be higher than now if the economy continues to grow at a reasonable pace, said Keith Gumbinger, vice president of HSH.com, a mortgage information website.
“We’re expecting mortgage rates will drift higher in 2015. The high-water mark was 4.63 in 2014, and we’re well below that now,” Gumbinger said, citing HSH.com’s own survey data.
It “will probably be difficult to get past the peak of 2014” this year, he said.
Gumbinger said there is not as strong a correlation as one might think between Fed rate increases and a rise in mortgage rates. As the Fed moves interest rates, a growing economy will usually lift price levels, he said. “Rising price levels will usually lift long-term mortgage rates,” he said.
It’s likely that if longer term interest rates move up, they will do so before the Fed raises interest rates, Gumbinger said.
“The economy is growing, affordability is still very strong, low mortgage rates are still in place, people continue to build their financial portfolios — there’s reason for optimism,” Gumbinger said.
March 13, 2015: “Getting The Right Mortgage”,a wide-ranging Wall Street Journal article by AnnaMaria Andriotis included a number of quotes from HSH.com vice president Keith Gumbinger:
Yet since the housing downturn, few lenders offer this type of “bridge financing,” says Keith Gumbinger, vice president at mortgage-information website HSH.com. In addition, borrowers generally need to have at least 20% equity in the existing home. The loans can require repayment in six or 12 months, he says.
But getting the mortgage on your new home could be more difficult if your debt load is high. Many lenders require that monthly debt payments amount to no more than 43% of a borrower’s monthly pretax income, Mr. Gumbinger says.
Refinancing
For a refinancing to make financial sense, you likely will need to lower your interest rate by at least one percentage point, says Mr. Gumbinger, of HSH.com. Refis can work with a smaller drop for borrowers with a jumbo mortgage, he says.
Look into closing costs, as well. Those can equal about 2% of the loan amount, Mr. Gumbinger says. Then figure out how much time you will need to pay the mortgage with the lower interest rate to recoup the closing costs.
Consider a borrower who got a 30-year fixed-rate mortgage of $400,000 in August 2013 with an interest rate of 4.69%. If the borrower refinanced now and got an interest rate of 3.87% on a similar mortgage, he or she would end up with a monthly mortgage payment of $1,833, or about $239 less a month, according to Mr. Gumbinger.
March 13, 2015: “Loans For Building A Dream Home”, a Wall Street Journal piece by AnnaMaria Andriotis included a quip about mortgage costs from HSH.com VP Keith Gumbinger:
Closing costs can equal about 2% of the loan amount, says Keith Gumbinger, vice president at mortgage-information website HSH.com, so borrowers can save thousands of dollars.
March 12, 2015: “Pittsburgh Houses Most Affordable In Country”, a CBS-TVa look at local housing conditions by Jon Delano featured a couple of quotes about affordability from HSH.com VP Keith Gumbinger:
While San Francisco is the most expensive metro area in the United States, says Keith Gumbinger, “Pittsburgh came out as number one in affordability in our most recent updated survey.”
Gumbinger with HSH.com says Pittsburgh leads the nation when it comes to how little money a homeowner must earn to buy a median-priced home.
“You don’t necessarily have to be extraordinarily wealthy to get an opportunity at home ownership,” Gumbinger told KDKA money editor Jon Delano.
March 8, 2015: “For cash-flush tech workers, San Francisco housing still a challenge”, a CNET.com a review of local housing market conditions by
Rochelle Garner featured a quote from Keith Gumbinger, HSH.com’s vice president:
“Affordability improved pretty much everywhere, largely because of unexpectedly low mortgage rates,” said Keith Gumbinger, vice president of HSH.com, which factored in housing prices, a standard 20 percent down payment and mortgage rates to find home buyers’ minimum qualifying salaries across 27 metropolitan areas. “The American Dream is not dead,” said HSH’s Gumbinger. Except in San Francisco, that is.
February 27, 2015: “Why big banks are losing out to nonbank lenders in mortgages”, a San Francisco Chronicle market review by Kathleen Pender cited HSH.com VP Keith Gumbinger:
Keith Gumbinger, a vice president with HSH Associates, says it’s hard to generalize about who has the best rates. “It depends on the product, and how well they are pursuing your particular stratification of the market.”
However, he points out that the cost structures for lenders can be very different. Nonbanks generally don’t have big branch networks or “big glassy towers downtown.” Instead they do business mostly over the phone and online.
“The potential for a lower cost is there,” Gumbinger says. “But that doesn’t mean they will pass all of those savings, or any of those savings, on to you.”
February 27, 2015: “A better way to tap home equity”, a Wall Street Journal look at pricing trends in the home equity space by AnnaMaria Andriotis contained data from HSH’s surveys provided by HSH.com Keith Gumbinger:
Nearly 9% of Helocs offered in January had a fixed introductory rate, up from 7% a year ago and 1% in January 2010, according to survey data from home-loan information website HSH.com
In fact, interest rates on Helocs can spike even higher. Most adjustable-rate mortgages cap the increase in the interest rate at five or six percentage points over the life of the loan. By contrast, the interest rate on most Helocs can rise as high as 18%, far above the average rate of 5.13% as of January, according to HSH.com, though that would happen only if interest rates in general rose far above current levels.
The interest rate on home-equity loans, though, tends to be higher. The average rate on such a loan was 6.25% in January, compared with 5.13% on Helocs, according to HSH.com.
February 24, 2015: “New home sales data cloud the housing picture”, a National Mortgage Professional discussion on home affordability by Phil Hall included some context provided by Keith Gumbinger, HSH.com’s vice president:
Still, more than half of the 27 metros required a salary of more than $50,000 to cover a home purchase. And for the more affordable cities, the quality of the property that can be achieved at relatively low prices is not defined.
“That’s always an open question,” said Keith Gumbinger, vice president at HSH.com, noting that the data provided by the National Association of Realtors (NAR) for this report did not go into that level of depth and scope. “The Realtors don’t report this specifically – they don’t provide that level of granularity” about the kinds of homes in the mix.
As for the pricier markets – San Francisco, San Diego, Los Angeles, New York and Boston are the five most expensive – Gumbinger admitted that residents that cannot meet the higher salary requirements for those cities face more than a few obstacles.
February 22, 2015: “Fed’s action won’t necessarily boost mortgage rates”, a forward-looking NorthJersey.com/Bergen Record article by Nancy Kearney with an interest rate outlook from HSH.com VP Keith Gumbinger:
In the summer or fall, there is a likelihood that rates will be higher than now if the economy continues to grow at a reasonable pace, said Keith Gumbinger, vice president of HSH.com, a mortgage information website.
“We’re expecting mortgage rates will drift higher in 2015. The high-water mark was 4.63 in 2014, and we’re well below that now,” Gumbinger said, citing HSH.com’s own survey data. It “will probably be difficult to get past the peak of 2014” this year, he said.
Gumbinger said there is not as strong a correlation as one might think between Fed rate increases and a rise in mortgage rates. As the Fed moves interest rates, a growing economy will usually lift price levels, he said. “Rising price levels will usually lift long-term mortgage rates,” he said.
It’s likely that if longer term interest rates move up, they will do so before the Fed raises interest rates, Gumbinger said.
“Inventory levels are definitely something that would curtail sales,” Gumbinger said. “You may say, ‘Sure it’s a great time to get out there.’ Affordability is still pretty strong, but if there’s nothing to buy, there’s nothing to buy.” Gumbinger found a number of indicators pointing to a positive market for this year.
February 12, 2015: “Mortgage rates rise from 20-month low”, a Bloomberg market update by Prashant Gopal contained a quip from HSH.com VP Keith Gumbinger:
“To pray for lower interest rates is to hope for some economic malaise,” Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-data company, said in a telephone interview Wednesday. “The reality is we’re probably better off if the rates are up” and the economy is strengthening.
February 5, 2015 “Banks Reward Loyal Customers With Better Rates”, a Wall Street Journal review of “relationship” perks by AnnaMaria Andriotis that featured some home equity data from HSH.com surveys:
That could result in an interest rate of 2.625% to 7.625% on a home-equity loan. In many cases, that could be a good deal – interest rates on home-equity loans averaged 6.25% in January, according to home-loan information website HSH.com.
February 4, 2015: “Tapping Home Equity to play the market””, a Wall Street Journal Jumbo Jungle piece discussing the risks and rewards of using your home’s equity by Anya Martin included some home equity survey data provided by HSH.com vice president Keith Gumbinger:
Over the past five years, the total return for the S&P 500, including dividends, averages out to 15.45% a year. Meanwhile, average annual interest rates on a home-equity line dropped from 5.41% in 2010 to 5.05% in 2014, according to HSH.com. Given that math, a $100,000 home-equity line held for the past five years would have cost a borrower $25,980, but invested in the S&P 500, that money could have more than doubled to $205,102.
Borrowers can dip into home equity either as a line, which can be paid off and then used again, or a loan, which is a set amount at a fixed rate. Home-equity loan rates in 2014 averaged about a point higher at 6.12%, according to Keith Gumbinger, vice president of HSH.com, which tracks mortgage and home-equity product rates.
February 2, 2015: “The Case for Refinancing Your Mortgage – Now”, a Time consumer-focused piece on the urgency to refinance your mortgage by Kate Ashford included some advice from HSH.com vice president Keith Gumbinger:
Alternately, refinance for 30 years and use your monthly savings to prepay your mortgage, suggests HSH’s Keith Gumbinger: “That could accomplish what you want, and if things get a little pinched you don’t have to send in the prepayment.”
Refinancing into another 30-year loan at 3.8% will save you $390 per month, but you’ll essentially break even on the total cost – and you’ve added a another decade of payments. (Try an online refinancing calculator to see how much you might save.)
January 26, 2015: “Bargain interest rates for metro homeowners at an end”, a Detroit Free Press discussion of both the consequences of and the recent changes to the Home Affordable Mortgage Program (HAMP) by Susan Tompor that included facts provided by HSH.com VP Keith Gumbinger:
Late last year, the Treasury and the U.S. Department of Housing and Urban Development said another $5,000 would be added in the sixth year of the modification.
Keith Gumbinger, vice president for HSH.com, a mortgage information website, said taking $10,000 off a mortgage balance would help hold down payments and the pain.
The added equity means that HAMP borrowers could also move closer to being able to cancel their mortgage insurance.
January 22, 2015: “Down Payments Get Smaller”, a Wall Street Journal look at changing mortgage underwriting standards by AnnaMaria Andriotis that included context on costs provided by Keith Gumbinger, HSH.com’s vice president:
That comes out to $190 a month. The same borrower with a down payment of just under 10% would incur a fee of at least 0.43%, or $143 a month.
Before signing up, borrowers should find out if they will incur these costs, and for how long. They should consider asking their lender if they can stop paying this fee when they reach at least a 20% equity stake in the home through a mix of home-price appreciation and amortization, for example, says Keith Gumbinger, vice president at mortgage-information website HSH.com.
January 19, 2015: “Prospects for housing market looking brighter”, a Chicago Tribune one-on-one discussion about HSH.com’s 2015 Outlook between HSH.com VP Keith Gumbinger and Mary Umberger:
First-time homebuyers and would-be buyers with scuffed credit histories may find more doors opening to them in the real estate market in the coming year, according to a leading mortgage-industry analyst.
Keith Gumbinger is vice president of HSH Associates, an independent mortgage-industry publisher in Riverdale, N.J., that tracks rates, trends and lending policies. In his annual outlook at HSH.com, he sounded an optimistic note for an industry that’s still trying to regain its post-recession footing.
In an edited interview, he explained how he sees lending standards, wage improvement and just plain consumer confidence coming together to help create a stabilizing effect on the overall housing marketplace.
(Four other questions & answers appeared in the story.)
January 18, 2015: “Falling mortgage rates spur surge in home loan applications”, a Los Angeles Times market update by Andrew Khouri that included comments from HSH.com vice president Keith Gumbinger:
But as the U.S. economy improves, rates could trend higher, though not significantly, said Keith Gumbinger, vice president of HSH.com, which tracks mortgage rates. “We started 2014 in the 4.6% range. It may be a struggle to even get to that level this year,” he said.
January 16, 2015: “This Is The Dumbest Reason You’re Losing Money”, a Time article reporting on an HSH.com survey about American financial habits by Martha C. White that included context provided by HSH.com vice president Keith Gumbinger:
This means we’re leaving money on the table in a big way. “Given that most credit cards are variable-rate, a rising interest rate environment would tend to be more costly over time, so there is even a greater benefit to retiring balances as quickly as possible,” says HSH.com vice president Keith Gumbinger. When the prime rate goes up, so will your monthly rate, even if you haven’t added to your overall balance.
“As far as mortgage refinancing goes, it’s a matter of opportunism,” Gumbinger says. “At the moment, fixed mortgage rates are at about 20-month lows, and very close to as much as 60-year lows.” While there are more variables to consider when refinancing, such as if your credit is good enough to qualify for the lowest rate, how much equity you have in your home and whether or not you plan to stay in that home for a while longer, Gumbinger says the opportunity for greater savings — and month-to-month cash flow — can make refinancing worth it under the right circumstances.
January 15, 2015: “The home buyer mistake that could cost you thousands of dollars”, a Washington Postdiscussion of a recent CFPB study about mortgage-shopping habits by Jonnelle Marte with some analysis provided by Ketih Gumbinger, HSH.com’s vice president:
Even a difference of 0.25 percentage points on a similar loan could add up to an additional $10,000 in interest charges over 30 years, estimates Keith Gumbinger, vice president of HSH.com, a mortgage information website. “That’s $10,000 more toward your retirement,” Gumbinger said. “That fills the gas tank a lot over the years, too.”
Ask how long it might take to close a loan like the one you’re seeking because timing issues and delays can sometimes cause you to lose the sale, Gumbinger said. “The responsibility for getting the best deal falls squarely on you.”
January 11, 2015: “Silver lining as yields fall: Time to refinance”, a CNBC.com article by Kelli B. Grant that appeared in USA Today with data and comments from Keith Gumbinger, HSH.com’s vice president:
Mortgage rates have been on the decline. For the week ending Tuesday, the average rate for a conforming 30-year, fixed-rate mortgage was 3.83%, down from 3.96% a week earlier, according to mortgage data site HSH.com. Rates for a conforming 5/1 adjustable-rate mortgage averaged 3.12%, down from 3.17%.
“Rates are not only lower than they were expected to be when we closed out 2014, but in recent days have dropped further,” said Keith Gumbinger, vice president at HSH.com. The break for homeowners comes from investor concerns about falling oil prices and deflation, he said. That has pushed bond yields lower, allowing mortgage interest rates to slip.
The rule of thumb is that refinancing is worth it if you can drop your rate by at least one percent or otherwise cut a deal that lets you recoup the costs in money saved within a year or two. But there’s some flexibility in that assessment. The longer you plan to stay in your home, the less of a rate break there needs to be for you to benefit from refinancing, said Gumbinger. “There’s really only one direction for rates to go from here,” he said.
January 11, 2015: “So Your Life Is About to Change”, a Wall Street Sunday Journal feature by Andrea Coombes included some advice from HSH.com VP Keith Gumbinger:
You can go to AnnualCreditReport.com for a report from each of the three credit-reporting companies. Doing this early “gives you time to fix anything,” says Keith Gumbinger, vice president at HSH.com, a mortgage data researcher. Next, use an online calculator, such as at HSH.com, to see how much house you can afford.
Save for closing costs, which now average about $2,500 nationwide, according to Bankrate.com, and for taxes and home insurance. (Amounts will vary widely; ask your real-estate agent for an estimate.)
Another potential cost: mortgage insurance. Generally, borrowers with a down payment of less than 20% will have to pay mortgage insurance. Visit HSH.com’s down-payment calculator to see how saving for a higher down payment can reduce or eliminate that premium.
January 8, 2015: “Mortgage rates hit 20-month low as 30-year loans fall”, a Los Angeles Times market update by E. Scott Reckard contained a quip by HSH.com VP Keith Gumbinger.
“As has been the case, global uncertainty continues to be the friend of the American homebuyer and homeowner,” said Keith Gumbinger, vice president of HSH.com, a research firm that also tracks mortgage rates.
January 8, 2015: “How It Can Be a Buyer’s, Seller’s Housing Market at the Same Time”, a Mainstreet.com 2015 forecast piece by Jeff Brown drew heavily from HSH.com’s 2015 Outlook, authored by HSH.com vice president Keith Gumbinger:
Odds are, rates will rise a tad but stay pretty low, says Keith Gumbinger, long-time market watcher for HSH, the housing and mortgage data firm. Generally, he predicts only modest changes in the housing and mortgage markets in 2015.
The worst case, he says, is 2015 ending with mortgage rates as high as 4.75% for the 30-year, fixed mortgage, compared with just over 4% last week. On a percentage basis, that would be quite a jump, but 4.75% is still low by historical standards. In fact, the rate touched 4.75% last time.
“We do expect the [Federal Reserve] to begin to raise rates in 2015, but cautiously and in small steps, at least to start,” Gumbinger says. “The Fed would like to get interest rates somewhat closer to normal as soon as it realistically can so that it has some space to fight economic weakness without again resorting to unconventional tools such as QE.” Quantitative easing helped keep rates low.
The Federal Reserve, Gumbinger says, may start to raise short-term rates later in 2015. But he thinks the process will be slow and have more effect on adjustable-rate loans than fixed-rate ones. Some other countries that have not recovered economically as well as the U.S. are likely to adopt policies to keep interest rates low, dampening any upward pressure here, Gumbinger predicts.
Another favorable forecast for buyers and sellers: Lenders may ease standards for mortgage approvals. The government has cleared up some confusion about when lenders will be required to buy back government-backed loans that have failed, allowing lenders to be less conservative, Gumbinger says.
Though he doesn’t mention this, falling default and foreclosure rates have probably eased lenders’ worries, allowing them to take a bit more risk. And if an improving economy increases the number of mortgage applicants, lenders will want to make as many loans as they can.
What about home prices?
“Although we expect that existing-home prices will be supported by firm demand, they will probably average something below a 5% year-over-year gain for 2015,” Gumbinger says.
That’s not bad given the long-term average is around 3% a year, but it does mark a slowing of gains after a brisk post-recession rebound. A key factor in the slowdown, Gumbinger says, is the sluggish pace of wage gains. Home prices, he notes, simply cannot continuously go up faster than wages, else more and more homes become too expensive for the average buyer.
January 8, 2015: “U.S. Mortgage rates fall with 30-year at a 19-month low”, a Bloomberg Businessweek market update by Prashant Gopal included HSH.com vp Keith Gumbinger’s characterization of the happenings in the mortgage market:
“The dip is sizable,” Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage-data company, said in a telephone interview. “Troubles beyond our borders have been, over the last few years, the friend of the American homebuyer.”
January 8, 2015: “Business News Roundup”, a San Francisco Chronicle market update by Chronicle News Services that included a similar quote from HSH.com vice president Keith Gumbinger:
“As has been the case, global uncertainty continues to be the friend of the American home buyer and homeowner,” said Keith Gumbinger, vice president of HSH.com, a research firm that also tracks mortgage rates.
January 7, 2015: “FHA to lower insurance premiums on mortgages”, a NorthJersey.com/Bergen Record article by Kathleen Lynn included a characterization of FHA market changes from HSH.com vice president Keith Gumbinger:
“It will make homeownership possible for a slightly expanded group of homebuyers,” Keith Gumbinger, vice-president at the Riverdale-based mortgage information publisher HSH.com.
Gumbinger said the FHA probably was responding to pressure from the National Association of Realtors and other groups that promote homeownership, as well as to an announcement last month by Fannie Mae and Freddie Mac that they will back certain mortgages requiring only a 3 percent down payment. The two mortgage finance companies require a 5-percent minimum down payment on most of the products they guarantee.
With the Fannie Mae and Freddie Mac offerings, “FHA stands to lose part of its business,” Gumbinger said. Lowering the annual insurance premium, he said, “is a way to better compete for that group of borrowers.”
January 6, 2015: “Mortgage Rates Back at 2013 Lows”, a Wall Street Journal market update by AnnaMaria Andriotis that included some reasoning from HSH.com vice president Keith Gumbinger:
Interest rates have been declining amid concerns over weak oil prices and upcoming elections in Greece, says Keith Gumbinger, a vice president at HSH.com. “We’re refocusing on the troubles that really haven’t gone anywhere,” he says.
Tumbling rates could give a boost to mortgage originations. Lenders generally report increases in refinancing activity when mortgage rate drop. Lower rates could also provide a jolt to the purchase market by helping borrowers to afford homes they otherwise might not be able to get.
Rates on other types of mortgages are also down. Average rates on 15-year fixed-rate mortgages fell to 3.21% as of noon Tuesday, according to HSH.com. That’s the lowest since June 2013, and down from 3.26% last week.
Also falling are rates on jumbo mortgages, which exceed $417,000 in most parts of the country or $625,500 in pricier markets like New York and San Francisco. They hit 3.78% as of noon on 30-year fixed-rate jumbos, falling back down to where they were in April 2013. On 15-year fixed-rate jumbos, rates fell back to March 2013 levels, at 3.30%.
January 6, 2015: “Interest-Only Loans Set the Bar High”, a Wall Street Journal Jumbo Jungle feature by Anya Martin included an outlook for rates provided by HSH.com vice president Keith Gumbinger:
Interest rates for all mortgages remained low in 2014 but are expected to rise this year, says Keith Gumbinger, vice president at HSH.com. If lenders do raise rates, interest-only loans likely would become even more desirable for some borrowers, Mr. Cecala says. “The payment would be higher, but still more attractive when compared with a fully amortizing mortgage rate,” he adds.