A Seller Held Second May Get Your Listing Sold Quicker
December 28, 2009
Tip of the week: For houses outside of the FHA loan limit. Seller held second mortgages may be a great way for sellers with large amounts of equity to sell their homes to more people. The second mortgages will improve the monthly cash flow for buyers and therefore open up the number of buyers that can buy your sellers home.
This is a great way for "move down sellers" to get most of their equity out of the house if they are having trouble selling. Fannie and Freddie allow these types of loans, they must be balloon in less than 5-years and in most cases buyers will want 10-years before it is callable.
We can help to structure this for your client and show your client the difference in payment between PMI and no PMI. This seller held second can be put into MLS and may attract additional buyers. In this competitive market sellers need all the advantages they can get.
Economic News: The PPI inflation report was higher than expected, but the more closely watched CPI report was right on target, remaining at low levels. Economic troubles in some developing nations produced a flight to safer assets, which helped mortgage markets late in the week.
As expected, the Fed held the fed funds rate steady and made no indication that it will raise this rate any time soon. Its statement contained no surprises. Of note, it described improvement in the job market since the last FOMC meeting, as the "deterioration in the labor market is abating." The Fed expects inflation to remain low. Finally, the statement reminded investors that the $1.25 trillion mortgage-backed securities purchase program will conclude at the end of the first quarter of 2010. Mortgage investors were generally pleased that there was no unfavorable le news from the Fed meeting.
Rates saw a sharp move up over the past 10-days then stabilized. This week will be a slow trading week. Expect the stock market to drive rates up – if the market is up and down if the market is down.
Have a wonderful New Year celebration and we will see you in 2010 if not sooner.
The Valeo-Croy Team - (704) 366-7711
Todd Croy - NMLO license #91428
Deanna Valeo - NMLO license #91421
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@ The Valeo-Croy Team, we are here for you.
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