Financial Updates in 140 Characters or Less?

"Mortgage Rates Move Lower Following Weak Jobs Report: 30yr 4.49%, 15yr 3.68% - new 2011 lows: http://bit.ly/kk8IvF"

This quote from Freddie Mac wasn't found in a press release or news item - it was recently tweeted by @FreddieMac. Followed by 2171 other Twitter users, Freddie Mac uses the social media platform to broadcast market updates, release news about the corporation, and even communicate with consumers.

Freddie Mac is certainly not alone in the financial industry as it gets its feet wet in the social media world - banks, mortgage lenders, investment brokerages, credit unions, and even the Federal Reserve Banks (see @ChicagoFed, @philadelphiafed, etc.) are getting into the game. Social media and major financial players might not be the most natural pairing. When you think of someone blasting out tweets you are probably not thinking of a banker in a suit and tie, but as more and more people embrace social media and communicate through these channels it becomes increasingly important for organizations to put out there information wherever their desired audience might want to find it.

I'm certainly not going to predict that @HUDMidatlantic (the official Twitter page for HUD Region 3) or @WellsFargo (which has an impressive 8516 followers as of 6/9/11) is going to rival Justin Bieber or Lady Gaga in terms of followers, but it's great that the latest financial news is a part of the conversation.

And of course, if you want to be updated on the latest at ForTheBestRate.com you can follow us @4TheBestRate.

Lawmakers Propose Restrictions On Lenders Making Loans With Less Than 20% Down

In an effort to avoid a future repeat of the housing meltdown we are currently experiencing legislators have suggested many changes and restrictions to mortgage lending. One proposal that has drawn criticism from both the lending industry and consumer advocates is that which would require lenders to keep 5% of the value of the loans they make with less than 20% down on their books, rather than selling them to investors on the secondary market.

As reported by the New York Times on June 1st, 2011, the American Bankers Association and civil rights groups such as the N.A.A.C.P. are among those opposing this legislation. The concern is that requiring a 20% down payment could restrict home ownership to the wealthy who are able to come up with the cash needed to purchase a home.

In the past few decades we have placed a lot of importance on homeownership in this country. As taxpayers we have invested a lot of money into helping as many as possible achieve this part of the American dream. As families and individuals we worked hard to purchase and maintain homes.

Still, there are downsides to a high rate of homeownership - particularly when times are tougher economically. The population is less mobile, meaning it's not as easy to pick up and move where the jobs are when so much of the workforce owns homes. The other side of that argument is that a less transient population may lead to more stablilty and pride in our communities.

Whether it's better or worse for the country and the overall ecomony for more people to own their own homes is certainly up for debate. It will be interesting to see how this proposed legislation affects the current real estate market. If it looks like it could get passed it might inspire home buyers who were on the fence to buy now while they can still purchase a home with a low down payment. Those who can afford to do so may also be inclined to invest in real estate in anticipation of greater demand for rental properties.

Why Choose An Adjustable Rate Mortgage?

Fixed rate loans are overwhelmingly more popular than the other mortgage options out there. Freddie Mac reported in the Quarterly Product Transition Report for the first quarter of 2011 that more than 95% of refinance mortgages had a fixed rate.

But there are still borrowers out there electing to purchase or refinance a property with other programs such as an adjustable rate mortgage (or ARM). Is this ever a good idea? Isn't the security of a fixed rate important after we've seen so much turmoil in the real estate and mortgage markets in the past few years?

There are still scenarios in which it makes sense to at least consider a loan such as a 5 year adjustable rate mortgage, 3 year arm, or 7 year arm.

Someone who knows they will only own a home for a couple of years might do well to take advantage of the lower interest rates available on adjustable rate mortgages, rather than pay a higher rate 30 year fixed rate loan only to pay off the mortgage in full in year two or three of the mortgage when the property is sold.

The difference in rate between a 30 Year Fixed mortgage and a 5/1 ARM can be significant. For example, on 6/9/11 CapWest Mortgage advertised a 4.375% note rate (4.591% APR, $1600 in Fees in the APR) for a 30 year fixed rate mortgage and 2.625% (2.820% APR, $1600 in Fees in the APR) for the 5 year adjustable rate loan. (These rates advertised for a Kansas mortgage.) On a $200,000 loan that's a difference in payment of $174.65 per month. Can you think of anything you could do with an extra $174 and change every month? My guess that most of us can!

Of course there is risk associated with taking on an ARM. What if plans change for our hypothetical homeowner and he or she doesn't sell the property? If rates adjust higher at the end of the fixed rate period they could end up paying more each month.

All this isn't to say that there is anything wrong with a good old fixed rate mortgage products - it's extremely popular for a reason. It's just good to know that there are additional options out there and when it might be appropriate to consider them.

Charlotte Real Estate Price Reductions

In this market if you're looking to buy a new home you're looking for a deal. The Charlotte, North Carolina real estate agents on the Talk Charlotte Team make it easier by showcasing those listings that have reduced asking prices. You can check their website every three days for the latest data.

Rate Update - A Look At Today's Kansas Mortgage Rates

Here is a sampling of current mortgage rates advertised in different online mortgage rate tables showcasing lenders and brokers serving Kansas. Please keep in mind that interest rates are subject to change and the various publishers highlighted in the post have varying guidelines which the mortgage companies must adhere to when determining which borrowers will qualify. Please visit the pulblishers' web site for details.

30 Year Mortgage Rates Pulled from ForTheBestRate.com
Stonegate Mortgage    4.582% APR, 4.375% Note Rate, $805 fees, 2 points
AIMLoan.com             4.459% APR, 4.375% Note Rate, $1975 fees, 0 points
Quicken Loans           4.617% APR, 4.375% Note Rate, $1600 fees, 2 points

15 Year Mortgage Rates Pulled from Yahoo Real Estate
Aurora Bank               3.794% APR, 3.750% Note Rate, $596 fees, 0 points
American Financial Resources 3.750% APR, 3.750% Note Rate, $0 fees, 0 points  
AIMLoan.com             3.645% APR, 3.500% Note Rate, $1975 fees, 0 points

5/1 ARM Rates Pulled from BurlingtonMortgage.biz
Quicken Loans           3.133% APR, 2.990% Note Rate, $1600 fees, 1 point
AIMLoan.com             2.701% APR, 2.625% Note Rate, $1975 fees, 0 points


Mortgage rates are subject to change without notice. You will need to visit the various publishers' web sites in order to review their pricing criteria and then reach out to the individual mortgage companies for personalized quotes. Keep in mind that the mortgage rates only illustrate a "snapshot" or the various rates and closing costs listed on the rate tables. There may very well be better terms available from other competing companies.