December 09, 2014 Improving consumer attitudes are driving a more positive fourth-quarter outlook for the national housing market. Fannie Mae's October National Housing Survey revealed the economy's steady but unspectacular growth has continued to create a dynamic favoring sellers, whose property values have appreciated but are not likely to accrue significantly greater value anytime soon. Prospective buyers, on the other hand, are faced with limited inventory in many areas but are steadily gaining confidence from an improving job market and gradual average wage gains. The government-sponsored enterprise's survey revealed the share of consumer respondents who expect their financial situations to improve over the next 12 months increased, while the number of people who feel it's a good time to sell a home surged upward. As a Mortgage News Daily report noted, there was a downward shift in the the number of respondents who felt it was a good time to buy a house in October, perhaps as a result of the Federal Reserve concluding its bond-buying program. Sixty-five percent of Fannie Mae survey participants still feel it's a favorable buyers market, down from 68 percent in September. And while the former figure still represents a healthy segment of the consumer population, the month-over-month decrease may be a harbinger of perceptions to come. As the Fed inches closer to eventually adjusting the key funds rate - potentially as soon as the second quarter of 2015 - mortgage interest rates are expected to rise. That will likely compromise buyer affordability in the broad sense, as many market participants have snatched up historically low borrowing costs in 2014. Even if, as many analysts have predicted, the average 30-year fixed-rate mortgage climbs only to 4.5 percent by mid-2015, it's reasonable to expect more returns like those seen in Fannie's October survey going forward. In other words, there's a sense that buyers should move sooner rather than later so they can optimize their investment. Appreciation rates subsiding On the other hand, fewer survey respondents reported an expectation for home prices to rise over the coming 12 months, with 44 percent of participants expressing that sentiment. And though only 7 percent of respondents anticipate home values will decline nationally, prospective buyers worried about rising rates may find some relief in the fact that appreciation rates seem to have plateaued during the second half of 2014. "Consumers are growing more optimistic about the housing market in the face of broader improvement in economic sentiment," said Doug Duncan, Fannie's senior vice president and chief economist. "The share of consumers who expect their personal finances to get better is near its highest level since the survey's inception, while those expecting their finances to get worse reached a survey low. Home price expectations rose significantly this month, largely reversing the dip witnessed over the past four months, and the share of consumers who think it's a good time to sell a home reached another survey high." Duncan also noted a more stable balance between buyers' and sellers' attitudes, which could portend healthier rates of home sales activity in 2015. Sales figures have been uneven for much of the past year, thanks to demand levels exceeding supply in a lot of local markets. That has encouraged the exaggerated appreciation seen in places such as the Bay Area, Boston, New York and Seattle, and - along with tight standards for mortgage credit approval - served to box out a number of would-be buyers. "The narrowing gap between home buying and home selling sentiment may foreshadow increased housing inventory levels and a better balance of housing supply and demand," Duncan said. "These results may help drive a healthier housing market in 2015." What about sales rates? As far as the economy's trajectory on a macro level, consumer opinions remain mixed. The central bank's continued moves toward scaling back stimulus have been based on progress toward stated employment and inflation goals, so there's an impression things have improved since the beginning of the year. Yet some of the public remains skeptical, it seems, as the number of respondents expressing a belief the economy is on the right track remained at 40 percent - unchanged from September. The latest data from the Mortgage Bankers Association, meanwhile, stated new home purchase applications increased in October, up an eye-opening 8 percent from September. A third-quarter report from the trade group also revealed mortgage delinquencies were down and home retention rates generally continued to improve. Both reports indicate consumers are better managing their household finances and gaining renewed confidence from the macroeconomic momentum. MBA President Mike Fratantoni surmised the increased application volume was in part due to three consecutive strong jobs reports. More than 200,000 jobs were added by nonfarm payroll employers each month in August, September and October, bringing the national unemployment rate to 5.8 percent.

4 Important Steps to Prepare for Homeownership By: Delvin Davis When a lot of consumers think of purchasing a home they think of the emotional side of ownership. While imagining where you will create milestone feel-good memories are important we can sometimes neglect the true cost aspects of preparing for such a large financial obligation. The following is a brief overview of what you can do today to ensure that you are in the best position possible to reap the many benefits of homeownership. Step 1: Obtain a good credit rating Every sport uses statistics to measure the performance ability of each individual participant to distinguish between success and failure. Consumer credit allows lenders to do the same thing by looking at your past performance, and your current situation. This enables banks, lenders, and financial service companies to get a uniform mathematical probability rating on how you will perform in the future. I've personally always liked to look at credit as your own personal score-card that validates your ability to repay people on time. It increases and decreases based on your performance, and the better you preform the more likely credit will be extended with the most favorable terms. Obtain a copy of your credit report for FREE Knowledge is power, and to obtain credible information is to be empowered. To obtain a good credit rating you must first become educated on your current credit situation. Since credit weights so important in today's economy the Fair Trade Commission (FTC) has designed a website were consumers can pull their own credit profile for FREE annually in order to monitor, evaluate, and dispute items listed on your personal credit report. http://annualcreditreport.com Validate Credit Information The next step would be to validate the debts and liabilities listed and dispute any inaccuracies listed on your report, and provide each credit repository or bureau documentation supporting the disputed item. Mistakes happen, and this will go a long way to improving your scores over a 3 to 6 months’ time period to ensure that you aren't being punished by inaccuracies listed on your credit profile. Pay Bills On-time The next and by far the most important thing you will need to do is to pay all bills and liabilities on time all-the-time to improve your performance levels. This is the greatest fundamental key to having a great credit rating. The credit bureau's measure credit by several categories (How many accounts are open, How much debt you have compared to your income, Request for new credit inquiries) the list goes on and on, but this category is 50% - 60% of decision matrix of their scoring system. Again, if you pay your bills on time every month your credit worthiness will improve. There are many myths that exist about credit and what constitutes a credit-worthy buyer, but if you know your credit history, pay all bills on time, and manage your current debts you will be strongly positioned to obtain the very best available financing lenders and banks have to offer. Step 2: Establish your home buying budget There are thousands of helpful websites, counseling services, and tools available to help you obtain a mortgage, but not a lot of information to help prepare homeowners for maintaining their home, and what to avoid the months following the purchase. This is why the next in step is to create a monthly home buying budget. Decreasing your Debt-to-Income Ratios Increases your CAMPACITY to repay While paying you bills on-time is the key to creating an excellent credit profile the management of debt ratios is also a deciding factor when lenders and banks receive your loan application. Debt-to-Income or capacity to repay is the difference between how much monthly debt you have paid out in comparison how much income you have going in. All lenders are different, but most mortgage guidelines today require a total debt ratio under 43% to be approved for a mortgage loan. This means you want to payoff smallest bills, and limit large financial commitments the months prior to obtaining a home loan. Once you review your FREE credit report you will be able to capture a snapshot of all your monthly liabilities, and begin working on reducing your monthly outgoing expenses. Check out Bills.com which offers articles, tools and solutions help people save time, money, and stress by addressing the everyday money issues faced by most of us... all for FREE! http://www.bills.com/ Step 3: Save money for a down payment, moving expenses, and the unknown In the world of credit finance the best terms, rates, and programs are available to those who have the most vested interested into the property. Whenever a lender reviews your asset portfolio they are going to first determine if you have enough money for a down payment, and secondly review how many months of cash reserves you will have to continue making payments once the loan is closed. Simply put lenders want to ensure that you will be financially suitable to continue to maintain the mortgage even when the unexpected happens. Bankrate.com offers a FREE Budgeting toolkit to help consumers create good habits to maximize savings in today’s economy. http://www.bankrate.com/finance/financial-literacy/budgeting-tools-tips-and-work-sheets.aspx Step 4: Pre-qualify for a home loan After you evaluate your credit profile, develop a monthly budget, and save for your down payment and reserves you will need to contact a mortgage professional who is licensed to do business in your state to be pre-qualified for your home loan prior to meeting with your realtor or making an offer on a property. When considering mortgage financing options researching a loan officer to validate your application is very important. The qualifications and experience of this individual will ultimately determine how much home you can afford, what programs you qualify for, and how much the financing of the property will cost. After the housing meltdown in the late 2000’s federal regulators created a system to ensure that there were minimum licensing requirements would be instituted for organizations, and individuals who originated mortgages moving forward. This system is called the Nationwide Mortgage Licensing System (NMLS). NMLS ensures that all loan companies meet state and federal standards for initial and ongoing educational, credit, assets, and bond requirements for the mortgage lending industry. Both the companies that lend, and the individuals who originate mortgages are assigned a Unique Identifier that’s posted on all correspondence not limited to websites, advertisements, and loan documentation. You will want to acquire both the individuals and the companies NMLS number, and go type this information into the register that will give you access to their active status, and any complaints made through state agencies about their origination activities. You can access the NMLS website for FREE at http://www.nmlsconsumeraccess.org/. You are now well on your way to making your Real Estate purchase dreams a realty. Happy House Hunting!!!! FREE Tools and Resources Receive FREE Annual Credit Report http://annualcreditreport.com Bills.com – FREE Online Budgeting Tools and Resources http://www.bills.com/ Bankrate.com – FREE Budgeting Toolkit http://www.bankrate.com/finance/financial-literacy/budgeting-tools-tips-and-work-sheets.aspx Nationwide License Mortgage System (Consumer Access) – Research Mortgage Professionals http://www.nmlsconsumeraccess.org/