Two Advantages of Regional Home Lenders

May 17th, 2012

texas home loansTalk around Wall St. this week was dominated by news that banking behemoth J.P. Morgan Chase had made an investment error that will cost the company more than $2 billion dollars. The sheer commonplace of this sort of high-profile stumble by America’s big banks might make it seem less than noteworthy, but it is, in fact, an enormous loss — and a stark reminder of how fragile these supposedly “too big too fail” institutions can be.

Simply put, the big banks are losing consumer trust. And smaller, leaner institutions (like TexasLending.com) are increasingly filling the gap.

“Regional lenders like TexasLending.com will be of growing prominence as we head into the next decade” said our president and CEO, Kevin Miller, last weekend on his radio show (Saturdays on AM 570 KLIF from 1:00 p.m. to 2:00 p.m.).

Here are two ways smaller is better when it comes to home loans:

Local Knowledge = Local Empowerment

As we’ve seen most markedly throughout America’s deep economic slump, recession doesn’t hit every community with the same amount of strength. And not every community is going to recover at the same speed. Even within communities – especially within an area as large, complex and diverse as Houston, Austin or the Dallas-Ft. Worth Metroplex – housing market recoveries will vary wildly from one neighborhood to the next.

Home lenders should be able to tailor their home loan products to the peculiarities of each community and provide services that empower families there. In-depth, nuanced understanding of these variances is key for this.

Local Focus = Lower Risk

The banks’ vast, multinational spiderwebs of risk, hedged risk and spliced-and-diced risk that marked the environment before the 2008 financial crisis was simply mindboggling. A big part of the panic environment that ensued stemmed simply from the fact that no one knew the size of the crisis and exactly how many bank-owned assets and liabilities were spread around the world.

Regional lenders, however, usually don’t play that game and instead conduct banking in its more pure forms. They know their clients. They know their communities. They lend in order to empower families and businesses to buy homes, start businesses and weave societies’ strongest fabrics. They won’t go broke chasing tiny slivers of profits across the globe.

Here at TexasLending.com, we provide products like home loans in Dallas, home refinance loans in Houston and home equity loans in Austin. We’re here for you — and we will be for decades to come.

So What Happens to the Home Buyer’s Market if the Recovery Sputters?

May 8th, 2012

home buyers marketRemember all the hopeful headlines a few months ago about the (at last!) arrival of a robust recovery? Well, the past couple months – in some ways, at least – haven’t quite kept up the pace.

The economy is estimated to have added just 115,000 jobs in April, compared to roughly 250,000 on average in December, January and February. It’s a picture best described by many economists as “meh.”

According to Justin Wolfers, an economist at the University of Pennsylvania’s Wharton School:

My conclusion on the jobs report: More meh than bleh. Yet again. Not the strength you might hope for; not the weakness you might fear. […] The really good news in this report: The recovery is healthy enough that we’re now disappointed by jobs growth of +115k.

It’s not as good as people hoped a couple months ago. It’s not as bad as some people fear. It’s just sort of puttering along, not really living up to its potential but not really backsliding either.

That’s not to say there aren’t plenty of dark clouds on the horizon – e.g. the national debt, another credit bubble, a complete collapse in Europe or China, etc. – that could send us spinning back into recession. That’s also not to say a more consistently robust recovery won’t happen in the near future. The U.S. economy is enormously resilient – more so than anywhere else in world, in fact – and it looks like one of the major drags on the recovery (the shadow housing market) is finally melting away.

But let’s say the recent months’ numbers become the “new normal.” Now is likely still the best, most buyer-friendly housing market we’re going to see for a long, long time. Here’s the big reason why:

Homeownership simply can’t get much more affordable than it is right now.

Mathematically, the Fed is keeping interest rates about as low as they can get. Prices could potentially sink further, but it seems unlikely — especially if debts lead any sort of inflation. In fact, though extremely risky, such a scenario could actually goose the housing market. According to the IMF:

Inflation would push up the price of houses, meaning more people would actually have equity in their homes again. And the rising prices would bring both buyers, who’ve been waiting for prices to fall more, and sellers, who don’t want to sell at a loss, back into the market. In addition, Rogoff says, higher inflation would help debtors, by allowing them to pay back their debts with cheaper dollars.

(The opposite, and worse, scenario is “deflation” – a nightmare for any economy that even the most lethargic public servant in Washington would likely go out of their way to avoid).

So it’s still a simply extraordinary time to buy a new home.

For example, as we’ve mentioned recently, housing applications are soaring here at TexasLending.com – up 300 percent since January. And we’re ready and eager to lend. We’ve got a slew of Dallas home loans, Austin home loans, and Houston home loans ready to help you take advantage of this historic buying opportunity.

Home Prices Hit 12-Year Low, But Interest Rates Make Today Time to Buy

May 1st, 2012

Ahhh — the year 2000. Optimism abounded (the biggest fear dominating headlines was the Y2K millennium bug). The Internet was just beginning to open up doors of possibility never before imagined. The Dallas Cowboys were polishing their newly awarded “team of the decade” honors.

And, well, it was apparently a terrible time to take out a new home purchase loan in Texas.

Looking back today, the year 2000 is an extraordinarily helpful indicator showing just how affordable buying a home has become today in cities like Dallas, Houston and Austin. According to the Case-Shiller Monthly Home Price Index, home prices across America have fallen to levels not seen since the turn of the millennium.

home prices 12 year low

But the real difference in affordability lies in home interest rates. Just take a look at the difference in some of the numbers:

  • In 2000, interest rates on 30-year fixed-rate mortgages averaged 8.5 percent.
  • Today, 30-year fixed-rate mortgages can be had for less than 4 percent (currently, rates are going for approximately 3.6 percent).
  • In 2000, interest on a 30-year-fixed $100,000 loan would cost more than $8,500 (or $23 per month).
  • Today, interest on a 30-year-fixed $100,000 loan costs less than $4,000 (or just $11 per month).

In other words, the result of an up-and-down decade marked by both soaring home prices and a historic housing bust, currently at least, is a historic, unprecedented, no-seriously-now-is-the-time-to-buy buyer’s market.

Prices simply can’t get much lower. Neither can home interest rates, whether for Dallas home loans, Austin home loans or Houston home loans (the same principle applies to, say, Dallas home equity loans or Austin home refinance loans). Interest rates seem like they’ll stay chained to the rock bottom for the foreseeable future, but prices, taxes and fees all seem ripe to rise soon.

So give usa call if you’re in the market for, say, a Houston home refinance loan, Dallas home purchase loan or Austin home equity loan. Now is the time to buy.

Mortgage Applications Leaping in Texas (But Higher Fees Ahead)

April 24th, 2012

texas home mortgage loan applications increaseLast week, we mentioned that home purchase contracts have increased an astounding 300 percent here at TexasLending.com since January. From that angle, the news just keeps get better.

According to our CEO, Kevin C. Miller:

“TexasLending.com is happy to announce our home purchase applications are up 400% since January. We attribute the growth to our focus on the future of the mortgage business which is home purchases. Plus it helps being in the great state of Texas where things are happening in many parts of the economy” said Miller last Saturday during his weekend radio show.  (Tune in to AM 570 KLIF each Saturday between 1 p.m. and 2 p.m. to hear shrewd home loan advice from  Kevin plus his thoughts on the state of the mortgage industry and housing market in Texas and beyond).

This is unquestionably great news. On the flip side, however, we keep seeing signs that the cost of buying a home is soon going to rise.

Some of it is simple supply and demand: After years of over-supply, we’re actually facing housing supply shortages in some areas. This, naturally, will cause prices to rise in those areas. Other cost increases are policy-related: Home interest rates can’t stay this low forever. And, already, we’re seeing different cash-strapped governments looking to housing as a source of additional revenues.

For example, the Federal Housing Administration (FHA) recently increased some of its mortgage insurance fees. Similarly, the City of Austin is now considering either raising local property taxes or boosting construction fees in order to keep up with the city’s rapid growth.

So it’s a good idea to start the home loan process soon — while buying a home is still amazingly cheap — if your family is considering buying this summer. Here at TexasLending.com, we’re ready for you. We’ve got Dallas home loans, Austin home loans and Houston home loans of all shapes and sizes — home purchase loans for every need.

A Robust Lone Star Housing Recovery After All?

April 17th, 2012

Texas housing recoveryWhile there’s glimmers of housing market hope popping up all over America, this has been especially true lately in the Lone Star State. Spend any amount of time here and you quickly see why:

  • Texas is a place of abundant land and affordable homes.
  • Texas is home to robust industries that can sustain high levels of employment.
  • Texas is beautiful, friendly and notorious for developing robust communities.

So it should be no surprise that home sales are absolutely surging here in Texas. This past weekend, our CEO, Kevin C. Miller, discussed on his radio show (broadcast each Saturday on AM 570 KLIF from 1-2 p.m) about the fact that home purchase contracts are up a whopping 300 percent since January at TexasLending.com.

It’s not just us. In North Texas alone, sales of existing homes are up 13 percent compared to a year ago while overall sales increased by 16 percent, according to The Fort Worth Star-Telegram. Meanwhile, finished vacant housing dropped from 3,314 to 3,070 during the first three months of 2012 – representing a healthy 2.5-month supply – according to D Magazine, citing statistics from Dallas-based Residential Strategies Inc.

“With the solid results most homebuilders have been experiencing this spring, our expectation is that the increase in start activity will continue to manifest itself in the second quarter of 2012 as well,” said RSI principal, Ted Wilson. […] “Many builders have shared with RSI their intention of pushing prices higher this spring. Much of this decision is borne by the reality that the next generation of lots is trending higher in price.”

Altogether, the picture looks pretty optimistic for the home ownership here in the great state of Texas. Even Forbes Magazine noticed, listing Austin as the second and Fort Worth as the fifth best cities for investing in a home.

The downside of a home-buying boom is that the cost of buying a home here is likely to increase significantly – especially considering that new fees from the Federal Housing Administration are now being added on. So if your family has plans to begin looking for a new home in the near future, do so soon.

Here at Texas Lending, we’ll be ready for you with a full arsenal of Austin home loans, Dallas home loans and Houston home loans. Contact us to get the process started.

The Shadow Market’s Impact on Home Prices

April 10th, 2012

shadow inventory housing marketThe number of homes available has been — thankfully — falling, which means that home prices appear primed to rise again. But for the past couple years, a big aspect hindering a full recovery is what’s called “the shadow inventory” — unsold homes that are not even yet on the market.

The shadow inventory is caused by many things, including homeowners choosing to wait until prices recover before putting their homes up for sale, bank-owned foreclosed-upon properties being held off the market, or “underwater” homeowners for whom a foreclosure appears likely.

According to Loansafe:

“The problem with the shadow inventory is, no one really knows how large it is,” said Doug Holmes, an agent with Carolina One Real Estate who analyzes sales market statistics for CharlestonRealEstateStats.com.

The reason the industry is so intently focused on the number of homes up for sale and the looming shadow inventory go to simple supply and demand.

“The shadow inventory overhang is a large impediment to the improvement in the housing market because it puts downward pressure on home prices, which hurts home sales and building activity while encouraging strategic defaults,” said Mark Fleming, chief economist for Santa Ana, Calif.-based CoreLogic.

From a pure market perspective, this could create a situation where prices begin to rise and then quickly plateau or even fall again. If home prices rise, a slew of homeowners may decide that it’s finally time to sell — essentially flooding the market and pushing prices back down again.

Economists have long said that we’d need to go through this type of market jumpiness before reaching a full, sustained recovery. And the effect is similar to unemployment numbers: Statistics only officially count people actively looking for work. So when unemployment numbers begin to fall following a recession, many folks will decide its time to begin looking for work and rejoin the official ranks of the unemployed, causing statistics to balloon temporarily.

But if home prices rise primarily because of added fees or taxes (as we’ve mentioned in previous weeks. See Home Prices Fall to 2002 Levels: Buyer’s Market PersistsandFHA Mortgage Insurance Fees To Increase), the effect likely won’t be as strong.

Although even then, there could be an illusory stimulus — i.e. the same reason why products are listed as $19.99 instead of $20 (or the $21.60 price that includes sales tax). Decisions to buy something or sell something are more heavily influenced by the sticker price than the post-sale bottom line. So if home sticker prices around the neighborhood begin to rise, other potential home-sellers might take note and begin considering whether or not its time for a sale – even if an additional slice of the sale price will end up in Washington.

All this is to say: expect plenty of ups and downs and stops, stalls and starts in the coming months. But right now prices are low. Very, very low. And home interest rates (as well as home refinance rates and home equity rates) are very low as well.

So if you’ve been wondering when it will be time to buy, it’s a good idea to do so now. There may be additional troughs ahead, but it won’t get any better than this current buyer’s market.

Contact us to learn more about our Dallas home loan, Austin home loan or Houston home loan options today.

Home Prices Fall to 2002 Levels: Buyer’s Market Persists

April 3rd, 2012

home prices fallHome prices still haven’t quite hit bottom, according to a slew of statistics released this week. In fact, in January, the S&P/Case-Shiller home price index of 20 major markets fell to levels that we haven’t seen in almost a decade.

According to CNN Money:

Home prices dropped for the fifth consecutive month in January, reaching their lowest point since the end of 2002. Home prices have fallen a whopping 34.4% from the peak set in July 2006.

Housing market indicators have sent confusing signals so far this year, with existing home sales and new home sales down month-over-month in February, but up year-over-year.

Potential homebuyers lack confidence in the market, according to Michael Feder, CEO of Radar Logic, an analytics company that produces daily spot prices for real estate. A big problem looming is a massive number of potential foreclosures.

On the other hand, home builders have turned more bullish and are gearing up for more new construction. Mortgage rates are also still very favorable and the economy is getting better with hiring on the rise.

“On a good note applications for home purchases in Texas, especially with TexasLending.com are on the rise,” says TexasLending.com CEO and Founder Kevin C. Miller on his weekly radio show (airing Saturdays on AM 570 KLIF from 1:00 p.m. to 2:00 p.m.). New home construction permits are also increasing.

Rising home purchase numbers usually means that home values will soon rise as well. But for a variety of reasons, home prices seem determined to be the last indicator in this economy to return to a more normal strength. As we mentioned a couple weeks ago, new charges from the U.S. Department of Housing and Urban Development (HUD) expected to go into effect on April 9 will further suppress home prices, as at least a small percentage of what families can afford to spend on a home will instead go to the government.

In the meantime, low home prices mean its still a simply extraordinary time to buy a home. It’s bad news for folks stuck with a home they can’t sell. But if the time is right to buy for your family, give us a call soon to get the Dallas home loan, Austin home loan, or Houston home loan process started. With fees, fluctuating interest rates and future market uncertainty ahead, it’s a good idea to lock in these low prices and low interest rates while you still can.

Home Sales Still Slow (And Cheap… For Now)

March 27th, 2012

home sales downDespite continued welcome growth in employment, manufacturing, and a host of other economic indicators, new home sales and pending home sales actually fell between January and February 2012 – the second consecutive month with a decrease.

According to CNN:

New home sales fell in February, dashing construction industry hopes that the long-overdue housing recovery may be finally arriving. The Census Bureau reported Friday that new homes sold at an annualized pace of 313,000 during the month, adjusted for seasonal factors. That was a 1.6% decline compared with January’s 318,000 sales but 11.4% above last February’s 281,000. Sales fell short of the 323,000 that analysts had expected. There was a bit of good news for home builders in the report. The median price of new houses sold jumped to $233,700, well above the $217,000 median recorded in January.

It’s unclear why this is, but it demonstrates how we’ve still got a long way to go until housing is back to normal. Most economists have long predicted that a housing recovery would both lag behind – and hinder – a broader economic recovery. In fact, guessing when housing will (or did) hit bottom seems to becoming a favorite topic to debate in economic circles (check out this Planet Money story about a 14-year-old girl in Florida who bought a home for $12,000)

Furthermore, one of the big problems – the huge glut of available homes on the market – actually appears to be disappearing. This is good news for construction workers and homebuilders, as new home construction should be in demand again soon (indeed, although new home starts also dropped in February, new permits increased). But it also means the unprecedented buyer’s market we’ve seen over the past few years might be beginning to close a bit. Add on new and expected mortgage fees coming out of Washington D.C., and it means it’s not going to stay quite so cheap to buy a new home.

However, as long as home prices stay low, interest rates are likely to stay low as well, meaning that the window isn’t closing quite yet – or at least no rapidly. So if the time is right for your family to consider buying, we encourage you to do so soon. Here at TexasLending.com, we’re proud to offer some of the lowest home mortgage rates and most affordable home refinance loans and home equity loans.

FHA Mortgage Insurance Fees To Increase

March 21st, 2012

FHA mortgage insurance feesIt’s simply a great time to buy a home here in Texas – and a great time to take out, say, a Dallas home loan, Houston home loan, or Austin home loan. But it’s not going to stay this way forever – and some of the impacts on home affordability will likely come from the government.

Take, for example, an expected increase in insurance fees by the Federal Housing Administration.

According to Bloomberg:

The Federal Housing Administration plans to increase the cost of up-front mortgage insurance premiums by 75 basis points beginning April 1, FHA Acting Commissioner Carol Galante said today in a call with reporters.

The increase will apply to new 30-year loans, Galante said. The 75 basis point increase will be in addition to a 35 basis point increase in the annual premium on loans above $729,750 that was announced earlier this month as part of the agency’s 2013 budget. For smaller loans, the increase announced today will be on top of a 10 basis-point increase on annual premiums for smaller loans.

“This will surely drop the affordability of home purchases,” our CEO, Kevin Miller, said recently on KLIF Radio’s Mortgage Hour (which airs each Saturday on AM 570 from 1:00 p.m. to 2:00 p.m. in Dallas).

As we’ve mentioned previously here at Texas Lending Today, even though we’re still enjoying an unprecedented buyer’s window, the next few years are likely to be pretty messy. The housing market recovery will not happen evenly (it’ll look different in Houston, Dallas and Austin – as well as different within different neighborhoods in each city). And with massive government debts that need to be paid, you can expect Washington to look to housing from time to time for additional sources of revenue.

At TexasLending.com, we’ll continue to do everything we can to make home-ownership as affordable as possible for Texas families. And with some of the lowest home purchase loan and home refinance rates anywhere, we can help insulate you from decisions made in Washington.

So if it’s the right time to buy, apply now before these sorts of fees kick in. We’re determined to help all families here in Texas to live the American dream.

Home Loan Advice for Turbulent Times

March 12th, 2012

Headlines this week were dominated by yet another encouraging nationwide employment report. According to the Labor Department, the economy added approximately 227,000 jobs in February, and an 61,000 more jobs in January than was previously thought (each month’s report features revised numbers from previous months as the picture clears).

But recoveries are messy things, and there’s no reason to expect a smooth return to full economic health without ups and downs.

For example, here in Dallas, new statistics show that the number of Dallas-area homeowners who are underwater on their home mortgages — i.e. folks who owe more on their homes than their homes are actually worth — actually rose in 2011.

According to the Dallas Morning News:

By the end of 2011, about 93,000 Dallas-area homeowners were upside down on their mortgages, according to CoreLogic. This is up one-tenth of a percent from fourth quarter 2010, when the negative equity rate was 12.2 percent.

Despite the increase, the negative equity share is better than in 2009, when nearly 30 percent of Dallas-area homes were not worth the remaining mortgage balance. Dallas is faring better than other parts of the country. Nationally, 22.8 percent of homes with a mortgage were in negative equity by the end of 2011, or about 10.7 million properties.

Statewide, Texas has the tenth lowest negative equity rate, with 10.2 percent of homes valued less than their mortgages. At 61 percent, Nevada had the highest negative equity rate, followed by Arizona (48 percent) and Florida (44 percent).

This isn’t entirely incongruous with the improving numbers elsewhere in the economy. As we’ve mentioned several times here at Texas Lending Today, housing is still the primary drag on the economy. With enormous numbers of unsold homes on the market, home values aren’t going to rise quickly – which means that many families might find themselves underwater for the first time even while overall economic numbers are improving. There’s no way around it – housing is just going to take a long time to sort out.

“Due to the government increasing regulations on housing, tightening credit on housing, and increasing taxes on housing (which by the way will be paid by the homeowner),while spending more money on their end this will cause home values to continue to fall for years to come. The good news is that will cause the economy to continue to struggle so rates may stay low for a while” commented our CEO Kevin  Miller.

And – as the Dallas Morning News story points out – Texas cities like Dallas, Houston and Austin are doing much better than many parts of the country. So for many folks, now is a great time to consider a Dallas home loan, Austin home loan, or Houston home loan. For other folks, frustrating times still might be ahead.

Either way, contact us with any questions about home loan options and home refinance options in these chaotic times. We’re here to help.

 
 

Texas Mortgage Banker  TexasLending.com is an Equal Housing Lender
4100 Alpha Road, ste. 400 Dallas, TX 75244 - Phone: 972-387-4600
© Copyright 2012 TexasLending.com      Entries (RSS) and Comments (RSS).