Photo by Per Ola Wiberg through Flickr Creative Commons.

Freddie Mac reports that mortgage rates continue to remain low,

According to Freddie Mac, loan averages were mostly unchanged this past week as chief economist Frank Nothaft said “the perception of slow growth and low inflation removed any upward pressure on fixed mortgage rates this week.” The 30-year fixed rate averaged 4.37 percent for the week ended Sept. 23, flat with the previous week. Meanwhile, rates for 15-year fixed loans also were steady at 3.82 percent, the lowest since Freddie Mac started tracking it 19 years ago.

My lender friends say that business has not increased significantly in the last few months, but we will be hearing soon from a housing trend tracker who is predicting that in the second quarter of 2011, things will pick up again.  When houses start selling, rates will increase so now is the best time to take advantage of low rates.

Source: Tennessee Association of Realtors.

Photo by Diana Parkhouse via flickr creative commons.

A crisis in the financial situation of families can happen at any time.  Someone may get sick.  They may need surgery and sick time is unavailable.  Hourly workers could face a cut in the number of hours they get.  Perhaps there is a complete job loss.

Side note:  Did you know that the maximum unemployment a person can draw in Tennessee is $275 p/week (or $1100 p/month) and that to tap into COBRA, the cost is $1200 p/month?  Try not to get sick, kids.

When a family faces a financial crisis, there are steps that can be taken and mistakes according to Brip Blap.  The *most* important mistake to avoid the list in my opinion,

Giving up on positive thinking. If you are like me, you are getting killed by negativity these days. I worked in the New York financial services sector as a consultant. “I told you this was going to happen” is not something people wanted to hear from their governance consultants these days. Even if you don’t expect the best, try to promote the best.

Given the current situation at my own home, I just got a bit of great news this morning.  Good enough that I feel both a physical and emotional improvement in my outlook.  And FYI – we will not be watching the new TV series called “Outsourced.”

I’ve lived in some pretty fantastic places in my lifetime – Nashville, Tn., Lexington, Ky., Tucson, Ariz., Little Rock, Ark.  I’ve traveled to plenty of other magnificent destinations – in fact I’ve been to all but three states.  My favorite places have been Portland, Ore., Santa Fe, N.M., Burlington, Vt., and Boston, Mass.  So it was very exciting to see that at least one of these places made the Top 10 list of the “least underwater areas” – Boston!

According to MSNBC.com, there are some incredibly good places to live where real estate isn’t valued at less than what people owe,

Underwater status is defined as a homeowner owing more on their mortgage than their home could sell for on the current market.

…

These ten communities all have less than 8.4 percent underwater status among single-family homes. While several have seen home values tumble precipitously from recent-year peaks — Boston (down 16.8 percent), Cape Cod (down 22.7 percent), and Springfield, Mass (down 12 percent) — all ten of these markets have shown annualized growth over the past decade.

The list?

Pittsburgh, Tulsa, Oklahoma City, Cape Cod area, Yakima, Wash., Springfield, Mass., Lancaster, Pa., Hartford, Conn., Boston, and Utica, N.Y.

I’d give serious consideration to picking one of these cities if you have the good fortune of choosing where you want to live!

Photo of Pittsburgh by Chauncy Davis via flickr creative commons.

Refinancing mortgages is something current homeowners should definitely be considering because of historically low interest rates now available.  But there are some pitfalls to refinancing and our former Loan Shak author Miranda Marquit explores some common mistakes including,

When you refinance, you are essential getting a new mortgage to replace your old mortgage. This means fees; origination fees, administrative fees and other closing expenses.

Many people simply pay them, adding them to the cost of the loan and reducing the savings benefit of refinancing your home. Instead, shop around and compare costs between various banks and credit unions.

In the past, the most common mistake was refinancing when the value of real estate were inflated and then putting together a loan consolidation (huge credit card debt, paying off vehicles).  Then when values around the nation began to drop again, the house was suddenly underwater where the loan amount due was greater than the actual value of the house.

The only time a consolidation loan should be considered is if there is serious equity in the house.  You don’t want to be paying for your truck for 30 years, after all!

Brip Blap‘s Steve recently linked to a post by Free from Broke about why they chose a 30-year mortgage over a 15-year payoff plan.  The reasoning is sound, especially when you consider the low rates offered now by even 30-year mortgages,

With rates so low we wanted to make sure our rate would be locked in and wouldn’t go up in future years.  We fully expect to stay here for a LOOONG time.  Way we see it, there’s nowhere for rates to go but up in the long run.  We don’t want to wake up one day and realize we have a high rate.  The stability of always having the same mortgage payment over the life of the loan also attracted us to a 30-year fixed.

In addition, the buyers have an option to pre-pay the mortgage off with no penalty.  So they are taking advantage of both the ability to keep the payments lower than they’d be with a 15-year mortgage in case of emergency (job loss, medical issues) or pay it early should nothing untoward happen.

When my family relocated seven yeas ago, we had to leave behind our small, friendly, hometown credit union for another bank in a bigger city.  It was hard to pick which bank to use, but after some research my husband found a regional bank that we agreed to use.  Since then, the bank has changed hands and names a couple of times and this alarms us to the point we are considering another change.

So what do you look for and how do you pick another bank to use?

First, find one that is convenience to use.  Is it near your house?  Is there a branch near your job?  Do not find one that will take you more than 10 or 15 minutes to get to.

Do you prefer a one-on-one relationship with your banker or the anonymity provided by a larger bank?  The number of branches located in your area should be an easy indicator of the size of the bank.

Go online and review web sites.  These will disclose the different types of accounts available – from low-interest to monthly fees.

Remember that your needs may change as you encounter changes in your life (loss of job? illness?).  Find out if there is any flexibility if you need to change the kind of account you have open?

Finally, talk to friends and family or future colleagues and see who they use.   Do they have good relationships with any bankers or tellers?  Do they have horror stories?

Good luck!

Photo from Flickr Creative Commons.

For this rainy (where I am, anyway) Friday afternoon, there’s nothing better to do than to stop for a minute and watch a video that might help you sell your house!

Happy weekend!

While an organizing tip may not seem applicable to a post on Loan Shak, missing an important notice in the mail can really hurt a home owner.  While sorting through endless stacks of mail from people offering to refinance your home or offers of life insurance through your mortgage company, sometimes little notices like the non-receipt of your escrow payment for home-owners insurance can’t be missed.

This is a lesson well-learned by Lynnae at Being Frugal,

I almost dropped the letter in the recycle bin on my way into the house. Instead, I opened it, just to make sure it was nothing.  … I pretty much stopped breathing as I realized the letter was saying our homeowners insurance premium had not been paid out of escrow. We were at that time without insurance.

So a tip: go through all your mail every single week.  It may be a pain, but try to at least scan all mail from your lender, insurer, and bank.

Photo by Editor B through Flickr Creative Commons.

While many of us thought the housing market had hit the bottom at this time last year, this third year of surviving the harshness of this market is taking a toll on real estate agents.  Just yesterday a site listed real estate as one of the worst jobs – and possibly nonrecoverable industries – in the nation today.  Other industries included construction and newspapers.

While these jobs are in serious jeopardy, there was good news on the mortgage front.  Although MSNBC reports that the pace of home buying has risen, perhaps the headline should be that mortgages refinances have increased.

Lower borrowing costs should translate into more consumer spending but the economic impact would be greater if more home owners met the criteria.

“Lower interest rates have spurred another round of refinancing activity and that should bode well for consumption spending,” said Michael Gapen, senior U.S. economist at Barclays Capital in New York.

“Longer term, however, the housing market still faces significant headwinds and one of those main headwinds is the fact that not every homeowner can access these lower mortgage rates,” he added.

That people are no longer qualified to refinance is definitely one of the biggest impacts on the lending industry (along with the housing market).  What do you predict?  How long will the housing recession continue?  A few months? Year? Several years?