With home prices rising rather dramatically over the past year and interest rates rising as well, the home affordability index has begun to increase after bottoming out late last year. The index looks at a combination of home prices and interest rates relative to the median household income. In late 2012, home prices hit an affordability level not seen since the 1960’s. Atlanta was especially hard hit during the recent recession, meaning that we were even more ...Continue Reading →
Home loans can be generally placed into one of four categories; Conventional, Alt-A and Sub Prime and second mortgages/home equity lines of credit. We will briefly touch on what impacts rates for each of these types of loans.
Let’s start with the most common, conventional loans. Fannie Mae and Freddie Mac are quasi governmental agencies that set the guidelines for what is considered a conventional loan. If a loan meets Fannie or Freddie ...Continue Reading →
The mainstream mortgage market is no longer run or controlled by the banks. Wall Street has replaced the traditional bank and now pulls purse strings of this vast mortgage market via “mortgage backed securities.” A mortgage backed security (MBS) is simply a bond instrument in which anyone can invest. MBS’s are trading in the free and open market everyday just like stocks and bonds. The collateral for this investment is a group or “pool” of home mortgages just like the ...Continue Reading →