Two encouraging bits of real estate news brightened my morning today.

First, pending home sales, based on contracts signed in August, jumped unexpectedly to the highest level since June 2007. According to Lawrence Yun, chief economist for the National Association of Realtors, this improvement was a result of improved affordability and lower interest rates.

In addition, the Mortgage Bankers Association reported that mortgage applications increased 2.2 percent last week due to lower home loan rates.

More pending home sales and loan applications mean more closed business. Paired with the expectation of freer credit moving forward and the $7,500 buyer tax credit, this is all promising news for the real estate industry.

"It pays to ask" and it also pays to tell. Pick up the phone and share this news with your prospects and clients. Let them know that now is the time to buy.

Let's move this market, 

Credit Update!

Do not believe everything you hear on the NEWS! You are witnessing a POLITICAL tug of war right now.

I have had several of my business partners (Agents) call and ask me if it is getting harder to lend money…here is the bottom-line, you can pass this information off to your clients & prospects if you wish.

FHA is financing 97% of the purchase price. SunTrust is STILL financing 95% second home. The Mortgage Insurance companies have put higher credit score requirements in place, but the biggest challenge would be on 2^nd home and investor properties with most of what I have been seeing for second homes credit scores being over 680…NO PROBLEM… otherwise we FHA for lower scores on primary home, and get a better rate anyway.

THE SKY IS NOT FALLING!

• USDA & VA is lending 100%. For information on Rural Development, feel free to call me. You will be surprised to know how much of our area qualifies for that product.

• Fannie & Freddie…Like I said, we still do 95% financing on both Primary & Second home

• Jumbo Money…Still available and strong.

I saw a report the other day that showed that the national sale price had only dropped 2.2% over the last couple months. (CNBC) That is great news, and shows a potential bottom.

courtesy of ed bucchino

Inflation has been rising about 3% for the past 3 years, some of the highest in a decade, and the past five months has averaged about 4%. Interest rates are on the rise because of future fears of inflation. With real estate conditions the way they are with a housing surplus, low prices, and currently low mortgage rates now looks like a fairly good time to buy. If the outlook by consumers is the fear that inflation is on a higher than normal increase, their investments which may possibly be the sources of mortgage funds are not as attractive. Mortgage funds can start to decline. Less funds with all else equal will cause more competition for these funds. This along with some other factors can increase mortgage rates. If you had been thinking about buying or, especially if you have a place in mind, now might be the time to seriously consider. Contact a Weichert Myrtle Beach realtor about market conditions, mortgage options, and real estate advice. Use Southern Coast's Myrtle Beach Property Search to find the perfect Myrtle Beach or North Myrtle Beach condo or home.

Before signing off on that loan for your next home make sure you do your homework. It could save you $50,000, $100,000 or even more. There are many different types of loans and you should consider your options with a specialist. A Weichert Myrtle Beach realtor can provide exceptional advice or refer you to a mortgage loan specialist through their vast network of corporate partners.

Let’s say that you want to purchase a $300,000 North Myrtle Beach Condo. You have $60,000 for a down payment, therefore need $240,000. For simplicity of this example there are no loan fees, insurances, or points. (But remember that they add to the total cost of the loan in the real world) You get a fixed rate loan at today’s rate of 6.375%. A fixed rate loan remains the same for the life of the loan versus an adjustable rate loan which fluctuates with the market. You can imagine the pros and cons of each.

You are tempted to get a 30 year loan for about $1,497.29 a month versus the $2,074.21 a month for a 15 year loan. With a simple amortized loan like these a large percentage of your monthly payments goes towards interest in the beginning. For the first month of your 15 year loan $1,275.00 of your $2,074.21 goes to interest while $799.21 goes towards the principle. At the 60th month, end of year 5, $981.70 goes towards interest and $1,092.51 towards principle. You have half of the loan paid in year 10. After 15 years the total cost of the loan, including the down payment, amounts to $433,355.05.

For the first month of your 30 year loan $1,275.00 of your $1,497.29 payment goes towards interest while $222.29 goes to principle. At the 228th month, end of year 19, $757.23 goes towards interest and $740.06 to principle. You have half the principle paid in year 22. At the end of 30 years your total mortgage cost is $599,022.06. That’s a difference of about $160,000.

This is just a guide to help you realize the importance of evaluating the real cost of mortgage loans. This example did not take into consideration other investments you may have, future inflation, refinancing, personal matters, and the criteria listed above.