Loan rates have been at historical lows for months now, but they are beginning to creep back up.  Both national and international events shape the mortgage loan climate and this is a busy week according to Michael Mertz of Sun State Home Loans,

Last week under­scores the impor­tance of the global com­mu­nity to the future of the U.S. mort­gage mar­ket. Two of the main rea­sons why mort­gage rates increased were non-domestic.

1. Con­cerns for a full-blown North Korea/South Korea con­flict less­ened quickly
2. The like­li­hood of a speedy, $85 bil­lion bailout Ire­land increased

The two events stemmed the typ­i­cal safe-haven buy­ing pat­terns that accom­pany geo-political and eco­nomic uncer­tainty, and drive down mort­gage rates.

This week, mort­gage rates may rise again.

Today the national average is 4.40 for a 30 year fixed rate mortgage loan.  True that the rate is increasing!

This tree house is simply stunning.  I wonder if a buyer could get financing for the beauty?  From Inhabitat, we see a tree-house perched on spider legs,

The tree house’s main body rests on a structural system of seven oblique, conical shaped columns made of Siberian larch and greets visitors to the park with a taste of the innovation they’re about to see. As exciting as the tree house’s exterior is, the inside is no less interesting. The vaulted interior welcomes visitors with wallpaper depicting giant oak leaves as if the house itself were a tree.

I would definitely hang out here for a few days.

Photo from inhabitat.

The super low mortgage interest rates that buyers and refinancing home-owners have been enjoying for the last several months is beginning to change.  Mortgage rates have started climbing back up, thanks to an announcement from the Federal Reserve about a $600 billion bond-buying program designed to spur the economy.  According to MSNBC,

Mortgage buyer Freddie Mac said Thursday the average rate for 30-year fixed loans rose to 4.39 percent from 4.17 percent, the lowest level on records dating back to 1971. The 15-year loan also climbed to 3.76 percent from 3.57 percent, the lowest since that survey began in 1991.

As a result, mortgage applications have slumped.  My prediction on the housing and mortgage market:  a slow remainder of 2010 with activity resuming in March 2011.

One of the smartest people I know has been investing in gold for several years now.  He writes regularly about the benefits of buying this precious metal … and in fact said he was moving his entire retirement fund to gold.  It scared me, but doubly so now that I read this article about Four Bubbles That Have Yet to Burst.

Interestingly, the article also states what we already know – that mortgage rates will be coming up soon.

Rates will stay low as long as is needed to stimulate the housing market but rates like this will only stick around until demand starts to pick up.  When that happens, today’s bargain rates will be gone.  In other words, if you’re in the market to buy a house or refinance, get these rates while you still can!

I believe we’ll see rates start coming up this spring at the latest.

Photo by Georgio Monteforti via flickr creative commons.

Mortgage rates have dropped to the lowest level they’ve been in decades, thanks to he announcement from the Federal Reserve about a massive bond-buying program.  The program is designed to spur economic growth because as the Feds buy more bonds, it will mean extra demand which will mean lower yields.  According to the AP article published on Comcast news, “Mortgage rates tend to track those yields.”

Mortgage buyer Freddie Mac said Tuesday the average rate for 30-year fixed loans fell to 4.17 percent from 4.24 percent last week. That’s the lowest on records dating back to 1971.

The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That’s the lowest since the survey began in 1991.

Eligible buyers are sitting on the sidelines of the housing market, worried primarily about job security.  In my own household we have suffered job loss of the primary bread-winner, but when things turn around (which I am 100 percent confident they will), we plan to refinance to take advantage of these amazing rates.

Home equity loans are wonderful when home-owners need to do a little updating, fix that leak in the roof, or replace the gutter around the house.  They can get you new double-paned vinyl windows, a lovely new deck, fresh paint, new flooring, and much more.

The down side of home equity loans, along with other second-mortgages on your piece of real estate, is that if you are forced to sell in a bad market and you’re underwater, you most likely will not be approved for a short sale.  Percy D. Mitchell writes about why,

Second mortgages are also a big stumbling block on short sales, where the borrower sells the home for less than the value of the amount owed. Real-estate agents have complained for months that many of these deals fall through because the second-lien holder isn’t willing to approve the deal, or is requiring more money from the transaction.

With the massive amounts of second mortgage debt on the books of nearly every bank, it’s not surprising they will not cooperate in taking a smaller payoff.  However, a little something is better than a lot of nothing which is what a foreclosure would get them.

Think hard before you get a second mortgage because if you end up in trouble with your mortgage, your choices will be much more limited with that second lien hanging over your head.

Whether you live in a stigmatized community with a reputation for gang violence, heavy industry, or trashy bad looks, there may be pockets of really nice neighborhoods that people call home.

WalletPop has a listing of some of the safest neighborhoods in America’s Best Cities.

… the data show Los Angeles is home to the safest big city neighborhood in America, which is safer than 98% of all U.S. neighborhoods, from the smallest towns to the biggest cities. Fort Worth is home to the second safest big city neighborhood in America, safer than 93% of all U.S. neighborhoods. Surprisingly, many of the neighborhoods they discovered are substantially safer than neighborhoods in the suburbs.

While you’re reading about the safest place to live in Las Vegas (Baskin Park fyi), check out this article about people who live in tunnels underneath the city from London’s Daily Mail,

They have been there for five years, fashioning a shower out of a water cooler, hanging paintings on the walls and collating a library from abandoned books.

Their possessions, however, are carefully placed in plastic crates to stop them getting soaked by the noxious water pooling on the floor.

Again, read the whole article and look at the photos. Pretty amazing.

I love me some Zillow.com.  It provides some valuable assessment tools on what the housing market is like across the country – it even drills down to little pockets of rural America.  However, it can also be a very frightening thing for consumers to look at when it’s their only source of estimating the value of their home,

Every 3 or 6 months, I decide to do a quick review of my net worth. Yesterday was my first look in 6 months. Though personal finance gurus are divded on the subject, I consider the equity in my home as part of my net worth. And my net worth took a big hit. Over the last five years, I’ve become accustomed to the drop. After all, I’ve seen it go from the $287K price I paid to $240 in that time. This time the Zillow estimate was… $193K… Ouch!

If you want an accurate assessment of the fair market value of your home, contact your real estate agent. They will have neighborhood by neighborhood information rather than just city-wide info available.  They will also be able to tell if homes move quickly because of how rare they sell AND if your upgrades will add value.

Good luck!

When my husband and I bought our first home in 1991, we had scrimped and saved for years to have a big enough down payment to qualify for a mortgage loan.  Due to a job loss and quick ability to regain employment, we thought we jumped the final hurdle in the severance pay.  However, a few days from closing, we realized we were a thousand dollars short.

Already stretching our dollar to the limit, we did not have that final thousand.  The terrible news would have done us in on our first purchase had my brother not stepped in and offered us that final thousand.  We lived in that first home happily for 12 years before relocating to Tennessee.

Cash gifts can be a wonderful way to help buyers become new home owners.  Miranda Marquit goes over the rules of using a cash gift as a down payment on Lending Tree.com, including:

In some cases, you might also be asked to provide a gift letter. A gift letter documents the amount provided for a gift, as well as certification by all involved that the money given for the down payment is a true gift, and not to be repaid. It must be specific about the amount of the gift, and signed by all parties. (Those on the gifting side of the arrangement, can give up to $13,000 a year to an individual without having to pay the gift tax.)

I will always be grateful to my brother and although we weren’t supposed to repay him, I hope he and his wife enjoyed the car we passed on to them several years later.