Paramount Mortgage - Lender's Blog

Be Careful Where You Get Credit Facts

As the housing market continues to heat up, many homebuyers who are considering purchasing a home may be held back by their own misconceptions about credit.

Credit facts are everywhere in the media and on the Web, but most are misleading consumers, says credit reporting expert, John Ulzheimer, president of consumer education at SmartCredit.com.

Ulzheimer has collected from the Web some of the top examples of misleading credit facts. “All of these were framed as education or advice and, unfortunately, are all horribly incorrect.”

More Homeowners Re-Entering Real Estate Market

Pending home sales rose in January, and have been above year-ago levels for the past 21 months, according to the National Association of Realtors®.

NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.5 percent to 105.9 in January and is 9.5 percent above January 2012 when it was 96.7. The January index is the highest reading since April 2010 when it hit 110.9. NAR’s data represents contracts, not closings.

Borrowers in a Rush for Low Rates, Fees

Nationwide 30-year fixed mortgage rates have climbed to their highest level of the last five weeks according to last week’s rate survey conducted by Bankrate.com.

This has spurred concern from many home refinancers and potential homebuyers who “worry the low rates won't last much longer as they try to beat the clock on rising mortgage fees and policy changes on low down payment loans,” reports Polyana da Costa, Bankrate.com.

Home Prices Show Strongest Growth in 7 Years

The median home price nationwide saw its biggest jump in seven years last quarter as for-sale inventory hit its lowest level in 12 years, according to the latest quarterly report from the National Association of Realtors.

Of 152 metro areas, 133 (87.5 percent) saw their median sales prices rise year over year in fourth-quarter 2012 compared with 120 in the third quarter and only 29 in fourth-quarter 2011.

Mortgage Burden Grows, but Federal Role Is Shrinking

The Federal Housing Administration (FHA) has played a major role supporting housing markets in the last few years, but Nick Timiraos, Wall Street Journal correspondent reports, “there are signs that the agency is beginning to cede market share back to the private sector.”

Mortgage Insurance is Tax Deductible through 2013

The American Taxpayer Relief Act of 2012, which was passed by Congress on January 1, 2013 and enacted on January 2, 2013, allows borrower-paid mortgage insurance (MI) premiums to be tax deductible for 2012 and 2013.

Lenders and investors typically require mortgage insurance for loans with down payments less than 20%. The newly enacted provision will help homeowners reduce their taxes through 2013 when they pay MI on their home loans.

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