You're Now Reading:
Is the Fed’s Low Interest Monetary Policy Resulting in More Cash Purchases?
The Easy Way to Shop For a Mortgage Loan
Fill Out One Questionnare
Receive Multiple Offers. Save Money.
You're Now Reading:
Is the Fed’s Low Interest Monetary Policy Resulting in More Cash Purchases?
The Easy Way to Shop For a Mortgage Loan
Fill Out One Questionnare
Receive Multiple Offers. Save Money.
The Easy Way to Shop For a Mortgage Loan
Fill Out One Questionnare
Receive Multiple Offers. Save Money.
You're Now Reading:
Is the Fed’s Low Interest Monetary Policy Resulting in More Cash Purchases?
Mortgage Calculator
Mortgage Rates
Home Buying Tips
Home Selling Tips
About Mortgages
Mortgage Calculator
Mortgage Rates

March 5, 2012 (Shirley Allen)

You would think that with mortgage rates hovering near their all-time record lows for the last four months, more home buyers would be taking advantage of the low rates and finance their new home purchases instead of paying cash, but evidence points to the contrary.

One of the consequences of the Federal Reserve’s low interest monetary policy is that it also results in a low rate of return on money deposited in the various types of saving accounts available at banks.

Saving accounts can pay as low as 0.01 percent interest, while a six month Certificate of Deposit typically pays only about 0.45 percent interest and even a one-year Certificate of Deposit typically only pays around 0.75 percent interest.

With such a low rate of return on money, it has now become advantageous for some home buyers to forego today’s low mortgage rates and shop with cash according to the latest results of the monthly Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

The survey found that the percentage of current homeowners who were looking to either downsize, upsize or who were relocating, and who used cash to purchase a new principal residence, increased from 25.8 percent in October to 29.0 percent in January.

Ironically, the increase in cash purchases began to occur right around the same time period that the Federal Reserve announced that its low interest monetary policy would remain in place for the next several years.

Thomas Popik, research director for Campbell Surveys, stated, “”Both mortgage rates and certificate of deposit rates have been very low for some time now. But when the Federal Reserve explicitly said that bank rates will remain low for several more years, I think a lot of affluent homebuyers just threw in the towel and decided to use all cash.”

By contrast, cash purchases by both investors and first-time homebuyers have remained flat during that same time period. Campbell Surveys estimates that if the current rate of cash purchases remains, almost 50 percent of current homeowners will use cash to purchase homes by the end of 2012.

And more cash purchases could also have a negative effect on home prices. Recent surveys have suggested that all-cash buyers can obtain higher discounts compared to buyers who have submitted offers with mortgage financing contingencies, especially when it comes to buying distressed properties.

Additionally, in the latest survey, the HousingPulse Distressed Property Index reports that through the end of January, distressed properties accounted for 46.8 percent of home purchases using a three-month rolling average. It was the 25th consecutive month that distressed property sales had accounted for over 40 percent of all sales.

Tags: distressed properties, REO, move-in ready, damaged, foreclosure, short sales, cash purchases

Source
Campbell/Inside Mortgage Finance

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateUpdate and the offers you have received, you've found the right product and the best rate.
HOW
LOANRATEUPDATE
WORKS
Whether you're looking to refinance your current loan, purchasing a new home or looking for a home equity loan, we make it easy at LoanRateUpdate. Our questionnaire is simple and quick to use and your information is safely transmitted to us with SSL encryption. With just two minutes of your time, you could have multiple lenders competing for your business which could save you thousands.
ADVANTAGES OF USING
LOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Home Buying
Tips
Home Selling
Tips
About
Mortgages
Mortgage
Calculator
Mortgage
Rates

March 5, 2012 (Shirley Allen)

You would think that with mortgage rates hovering near their all-time record lows for the last four months, more home buyers would be taking advantage of the low rates and finance their new home purchases instead of paying cash, but evidence points to the contrary.

One of the consequences of the Federal Reserve’s low interest monetary policy is that it also results in a low rate of return on money deposited in the various types of saving accounts available at banks.

Saving accounts can pay as low as 0.01 percent interest, while a six month Certificate of Deposit typically pays only about 0.45 percent interest and even a one-year Certificate of Deposit typically only pays around 0.75 percent interest.

With such a low rate of return on money, it has now become advantageous for some home buyers to forego today’s low mortgage rates and shop with cash according to the latest results of the monthly Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

The survey found that the percentage of current homeowners who were looking to either downsize, upsize or who were relocating, and who used cash to purchase a new principal residence, increased from 25.8 percent in October to 29.0 percent in January.

Ironically, the increase in cash purchases began to occur right around the same time period that the Federal Reserve announced that its low interest monetary policy would remain in place for the next several years.

Thomas Popik, research director for Campbell Surveys, stated, “”Both mortgage rates and certificate of deposit rates have been very low for some time now. But when the Federal Reserve explicitly said that bank rates will remain low for several more years, I think a lot of affluent homebuyers just threw in the towel and decided to use all cash.”

By contrast, cash purchases by both investors and first-time homebuyers have remained flat during that same time period. Campbell Surveys estimates that if the current rate of cash purchases remains, almost 50 percent of current homeowners will use cash to purchase homes by the end of 2012.

And more cash purchases could also have a negative effect on home prices. Recent surveys have suggested that all-cash buyers can obtain higher discounts compared to buyers who have submitted offers with mortgage financing contingencies, especially when it comes to buying distressed properties.

Additionally, in the latest survey, the HousingPulse Distressed Property Index reports that through the end of January, distressed properties accounted for 46.8 percent of home purchases using a three-month rolling average. It was the 25th consecutive month that distressed property sales had accounted for over 40 percent of all sales.

Tags: distressed properties, REO, move-in ready, damaged, foreclosure, short sales, cash purchases

Source
Campbell/Inside Mortgage Finance

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateUpdate and the offers you have received, you've found the right product and the best rate.
HOW
LOANRATEUPDATE
WORKS
Whether you're looking to refinance your current loan, purchasing a new home or looking for a home equity loan, we make it easy at LoanRateUpdate. Our questionnaire is simple and quick to use and your information is safely transmitted to us with SSL encryption. With just two minutes of your time, you could have multiple lenders competing for your business which could save you thousands.
ADVANTAGES OF USING
LOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.

March 5, 2012 (Shirley Allen)

You would think that with mortgage rates hovering near their all-time record lows for the last four months, more home buyers would be taking advantage of the low rates and finance their new home purchases instead of paying cash, but evidence points to the contrary.

One of the consequences of the Federal Reserve’s low interest monetary policy is that it also results in a low rate of return on money deposited in the various types of saving accounts available at banks.

Saving accounts can pay as low as 0.01 percent interest, while a six month Certificate of Deposit typically pays only about 0.45 percent interest and even a one-year Certificate of Deposit typically only pays around 0.75 percent interest.

With such a low rate of return on money, it has now become advantageous for some home buyers to forego today’s low mortgage rates and shop with cash according to the latest results of the monthly Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

The survey found that the percentage of current homeowners who were looking to either downsize, upsize or who were relocating, and who used cash to purchase a new principal residence, increased from 25.8 percent in October to 29.0 percent in January.

Ironically, the increase in cash purchases began to occur right around the same time period that the Federal Reserve announced that its low interest monetary policy would remain in place for the next several years.

Thomas Popik, research director for Campbell Surveys, stated, “”Both mortgage rates and certificate of deposit rates have been very low for some time now. But when the Federal Reserve explicitly said that bank rates will remain low for several more years, I think a lot of affluent homebuyers just threw in the towel and decided to use all cash.”

By contrast, cash purchases by both investors and first-time homebuyers have remained flat during that same time period. Campbell Surveys estimates that if the current rate of cash purchases remains, almost 50 percent of current homeowners will use cash to purchase homes by the end of 2012.

And more cash purchases could also have a negative effect on home prices. Recent surveys have suggested that all-cash buyers can obtain higher discounts compared to buyers who have submitted offers with mortgage financing contingencies, especially when it comes to buying distressed properties.

Additionally, in the latest survey, the HousingPulse Distressed Property Index reports that through the end of January, distressed properties accounted for 46.8 percent of home purchases using a three-month rolling average. It was the 25th consecutive month that distressed property sales had accounted for over 40 percent of all sales.

Tags: distressed properties, REO, move-in ready, damaged, foreclosure, short sales, cash purchases

Source
Campbell/Inside Mortgage Finance

Home Buying Tips
Home Selling Tips
About
Mortgages
HOW
LOANRATEUPDATE
WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateUpdate and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.