2 Common Mortgage Delays for Home Buyers Purchase

A last-minute problem with financing can quickly delay a closing on a home sale. Here are two of the most common financing problems that can surface:

  • Failure to disclose key financial information. One of the biggest reasons for a financial issue is the failure of the buyer to disclose key financial information, The New York Times reports. Buyers who are not forthright about their financial circumstances can face a delay. Lenders will quickly find borrowers who are behind on child support obligations or real estate taxes, for example.
  • Running up credit as a mortgage application is pending. Buyers may go out and purchase new furniture or a car prior to closing on a home, but doing so, could cause them a delay to the closing of their home sale. Lenders will recheck borrowers’ credit right before the closing date. If new debt obligations suddenly appear, that can be a red flag to a lender. Prior to making any large purchases prior to closing, borrowers should check with their lender, says Douglas Rotella, an executive vice president and loan originator with HomeBridge Financial Services.

Source: “How Mortgage Problems Unravel Home Deals,” The New York Times (Aug. 14, 2015)

Higher Loan Interest Rates Stifle Mortgage Demand

The 30-year fixed-rate mortgage rose above 4 percent last week, prompting home owners to stall in refinancing their loans, which sent overall mortgage applications down, the Mortgage Bankers Association reports.

An index reflecting demand for mortgage applications – both for refinancing and home purchases – dropped 1.6 percent on a seasonally adjusted basis for the week ending May 22, MBA reports. Still, volume is higher than a year ago, but demand has dropped 10 percent in the last four weeks.

“Mortgage rates continued to climb last week due to stronger home sales, rising inflation, and further signals that the Fed is likely to raise their target rate this year,” says Michael Fratantoni, with MBA. “Refinance volume dropped to its lowest level since January.”

Source: “Mortgage Applications Drop 1.6% as Refinancing Stalls,” CNBC (May 27, 2015)

Home Loan Demand Dips As ‘Interest Rates Rise’

A sharp rise in mortgage rates dampened mortgage application volume last week, the Mortgage Bankers Association reports. Total mortgage application volume for both refinancings and home purchases fell 3.5 percent on a seasonally adjusted basis for the week ending May 8. Still, volume is 14 percent higher than a year earlier.

Broken out, applications for refinancings attributed to most of the drop in loan demand last week. Refinancing applications fell 6 percent week-over-week and have fallen 16 percent in the past four weeks alone, MBA reports. Applications for home purchases, which are viewed as a leading indicator of future home sales, mostly held steady last week, down just 0.2 percent from the previous week. Applications for home purchases are 12 percent higher than a year earlier.

MBA reports that the 30-year fixed-rate mortgage rose to 4 percent last week; it had averaged 3.93 percent the week prior.

Source: “Weekly Mortgage Applications Fall 3.5% as Rates Rise,” CNBC (May 13, 2015)

Home Buyers Took a Break During the Holidays

Mortgage applications dropped sharply during the holidays, plunging 9.1 percent for the week ending Jan. 2 compared to two weeks earlier, according to the Mortgage Bankers Association’s mortgage activity index. The index reflects adjustments for New Year’s Day and Christmas Day when banks are closed.

Applications for refinancings dropped 12 percent from two weeks ago, while mortgage applications for home purchases, viewed as a leading gauge activity, dropped 5 percent.

“Beyond the seasonal slowdown, purchase application volume remains about 8 percent below last year’s level, indicating that home buyers are still cautious,” says the MBA’s chief economist, Mike Fratantoni.

Home shoppers have been slow to jump into the housing market, despite low mortgage rates. The 30-year fixed-rate mortgage fell to 4.01 percent for the week ending Jan. 2, according to the MBA. Lower bond yields this week are pushing rates even lower, with the average 30-year fixed-rate mortgage now a full quarter point lower than average rates available in the second half of December, the MBA notes.

Source: “Weekly Mortgage Applications Fall Sharply Over Holidays,” CNBC (Jan. 7, 2015)

Mortgage Applications Take Surprising Turn

Loan demand was on the rise last week, posting a strong rebound that was driven mostly by applications to purchase a home, the Mortgage Bankers Association reports in its seasonally adjusted weekly mortgage market survey, reflecting the week ending Nov. 14. The increase in demand came despite interest rates mostly staying flat for the week.

Total application volume, reflecting applications for home purchases and refinances, climbed nearly 5 percent. Refinance applications rose 1 percent week-to-week, while applications for home purchases, viewed as a gauge of future buying activity, surged 12 percent. It was the highest level for purchase applications since July, the MBA reports.

“The MBA and other data are showing strength in the market for new homes, likely reflecting the boost from continued job growth in recent months,” says Michael Fratantoni, the MBA’s chief economist.

Meanwhile, the 30-year fixed-rate mortgage declined slightly last week to 4.18 percent from 4.19 percent the week prior, the MBA reports.

Source: “Weekly Mortgage Applications Jump Unexpectedly,” CNBC (Nov. 19, 2014)

Lower Rates Give Loan Demand Slight Boost

After several weeks of drops in interest rates, mortgage applications finally got a modest lift as refinancers and home buyers took advantage of the dip, CNBC reports.

The Mortgage Bankers Association’s weekly mortgage market index showed that total mortgage application volume rose 2.8 percent during the week ending Aug. 22 compared to a week earlier.

Broken out, applications for refinancings increased 3 percent last week but remain 25 percent below a year ago — even when mortgage rates were higher, MBA reports. Home-purchase mortgage applications also rose 3 percent during the week and remain 11 percent below its rate last year at this time.

The 30-year fixed-rate mortgage fell to 4.28 percent during the week from 4.29 percent the prior week, MBA reports.

Source: “U.S. Mortgage Volume Ekes Out Gain on Tiny Drop in Rates,” CNBC (Aug. 27, 2014)

Home Mortgage Applications Surge 23%

Record-low mortgage rates sparked a wave in mortgage applications for home purchase and refinancings last week, increasing more than 20 percent in a week, the Mortgage Bankers Association reports. 

for the week ending Jan. 13, mortgage applications for refinancing applications jumped 26.4 percent while home purchase applications, a future gauge for home buying, increased 10.3 percent.  

“With mortgage rates reaching new lows, refinance volume jumped,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement. “Purchase activity also increased as buyers returned to the market after the holiday season.”

Freddie Mac reported that 30-year fixed-rate mortgage averaged a record low of 3.89 percent for the week ending Jan. 12. For six consecutive weeks, 30-year fixed-rate mortgages — the most popular choice among home buyers — has averaged below 4 percent. 

Source: “Mortgage Applications Surge on Refinancing Demand,” Reuters (Jan. 18, 2012)

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