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Mortgage interest rates can be fickle. One day you lock in your interest rate and the next day you may find rates have dropped again. Should you dump your loan and try to find a better deal elsewhere?
The American Homeowners Association says the gamble might not be worth the risk, especially if it jeopardizes closing escrow on time. "Think twice before you walk away from a loan for a lower interest rate,'' said Richard Roll, president of the group.
Buying the right home at the right price isn't easy, and changing lenders in the final week or two before closing could make it impossible, the association warns.
Carefully consider whether you will you be able to get a loan approval from another lender in time for the closing and whether you really want to go through that much stress.
Even if your purchase transaction isn't near the closing date, the cost of breaking an interest-rate lock might not be worth the rewards of getting a lower interest rate because you'll forfeit your loan application fee and any other nonrefundable fees. You might have to obtain - and pay for - a second home appraisal and you'll have to redo all the paperwork, including providing verification of your employment, income and assets.
A refinance mortgage is easier to walk away from because you're not bound by a home sales contract that stipulates closing in a certain timeframe. But again, remember to calculate the loss of nonrefundable fees and the hassle of applying for another loan.
Be sure to compare points and closing costs as well as the interest rate when shopping for a loan.
Outlook still strong
Relatively low mortgage interest rates, low unemployment and high consumer confidence indicate the nation's housing markets are likely to remain strong, according to the National Association of Realtors.
David Lereah, NAR's chief economist, said the favorable economic backdrop for housing activity will continue.
"We expect the economy to gradually pick up steam during the second half of the year, yet inflation will remain tame," Lereah said. "This should boost consumer confidence and keep the housing market rolling along at strong levels. Thirty-year fixed mortgage interest rates will rise and hover in the 7.3 range during the second half of the year, a little higher than we've seen but not enough to deter overall sales."
NAR forecasts existing-home sales to rise 0.7 percent in 2001 to a total of 5.15 million, the second highest on record. New-home sales are expected to rise 4.6 percent to a record total of 918,000 units this year, and housing starts are forecast to rise 2.7 percent to a total of 1.61 million units in 2001.
The association expects the national median existing-home price this year to be $145,300, an increase of 4.6 percent over 2000, while the typical new home price is expected to be $174,300 in 2001, up 3.1 percent from last year.
NAR projects U.S. economic growth, as measured by the GDP (gross domestic product), to be 1.7 percent for 2001, rising from a projected rate of 0.7 percent in the second quarter to 3.2 percent by the end of the year. Consumer price inflation for this year should be 3.3 percent.
The association projects the unemployment rate to rise to 4.8 percent by the end of 2001. Inflation-adjusted disposable personal income is forecast to grow 2.4 percent this year.
Privacy Management
Banks and finance organizations are most likely to experience online privacy management problems, according to research firm Computer Economics and reported by Nua Publishing.
Computer Economics has created a privacy problem susceptibility index to rate sectors in terms of their likelihood of experiencing problems in relation to customer data in the next year.
Factors affecting online privacy management include the speed at which a sector is adopting e-commerce and online customer service and the level of privacy protection that has been established within the sector.
Customer privacy is considered compromised when customer data is mismanaged, when a firm's Web site or internal systems are hacked or when an organization doesn't comply with internal privacy policies or external legal requirements in relation to customer privacy.
Other sectors that ranked high in the susceptibility index include transportation, wholesale and retail. Those at the bottom of the index included health care, insurance and the federal government.
Nation's Largest Lender
Washington Mutual Inc. announced it has completed its acquisition of Fleet Mortgage Corp., which was a unit of FleetBoston Financial Corp.
As a result of the transaction, Washington Mutual becomes the nation's largest mortgage lender based on pro forma loan volume of more than $32 billion in the first quarter of this year.
Fleet Mortgage's mortgage servicing portfolio brings Washington Mutual's total servicing portfolio to nearly $456 billion as of March 31, 2001, making the company the nation's largest loan servicer.
"The addition of Fleet Mortgage adds further scale to our already strong mortgage lending and servicing capabilities," said Kerry Killinger, Washington Mutual's chairman, president and CEO. "Fleet's impressive correspondent and wholesale teams extend Washington Mutual's position in these distribution channels, enabling us to serve an even greater number of customers nationwide."
Under the terms of the agreement, Washington Mutual paid a premium of $60 million more than the agreed-upon fair-market value of Fleet Mortgage's equity.
Fleet retains ownership of its processing center in the Northeast and its retail origination and consumer direct channels. The company will deliver the loans from those channels to Washington Mutual through a preferred correspondent agreement.
Sun, Slots and Seniors
Las Vegas has long been a favorite destination for seniors, particularly those living in California, who visit the gambling Mecca by the thousands each year.
But some recent data is showing seniors are staying longer than the usual 48-hour turnaround trip: they're retiring in droves to the Nevada city.
Much of the area's success is due to developer Del Webb, which is breaking sales records at its third active adult community in the Las Vegas market area.
Called "Anthem," the community includes the active adult Sun City Anthem and was chosen in a recent survey as the sixth top-selling master planned community in the United States last year.
The survey, released by Chevy Chase, Md.-based Robert Charles Lesser & Co., an independent real estate advisory firm, determines the rankings by the number of homes sold, interviews, historical rankings and new sales information. The top spot in last year's survey was claimed by Summerlin, which includes Sun City Summerlin, Del Webb's first active adult community in Las Vegas.
Anthem is Del Webb's third success story in Nevada. In 1998, even Del Webb officials were shocked when almost 8,000 homes at Summerlin sold out in no time flat. That success was repeated at Sun City McDonald Ranch in Henderson, just outside Vegas, which recently sold the last of 2,500 homes.
Del Webb's success caught the attention of Pulte Homes, which is acquiring the Sun City developer in a transaction valued at $800 million.
The success of Nevada retirement communities doesn't surprise National Association of Home Builders economist Paul Emrath, whose seven-year forecast released in 1999 showed that Nevada would rank first on the list of retirement locations for seniors age 55-64. The state ranked second for seniors 65-74 years old and fourth for the oldest seniors.
The first question most people ask upon learning this information is: "What about the heat?" News reports of senior citizens expiring during heat waves are all too common, and in climates much cooler than Nevada's.
The intense heat isn't as much of a factor as one would suppose, said Jim Bond, senior sales manager at Sun City Anthem.
"It's not quite the issue it used to be because people spend so much of their time in air-conditioning here," he said.
According to the Las Vegas Chamber of Commerce, one- third of the people living in Southern Nevada are over 55.
The majority of people retiring to Anthem are Nevada residents, with the next largest group coming from nearby California, said Bond. However, most of the Nevada residents who retire to Sun Cities relocated to Nevada within the last 10 years from such states as California, Arizona, New York and Illinois.
Seniors are choosing the Las Vegas area for many reasons, said Bond, not the least of which is the lack of a state income tax. Property taxes are also lower than in most states.
The dry climate is believed to be good for arthritis, and many people find that they aren't plagued by allergies in Nevada, added Bond.
Del Webb's Sun Cities offer a country club atmosphere with golf, tennis, clubs and landscaped gated grounds. Sun City Anthem features a 75,000 sq. ft. recreational facility that includes indoor and outdoor swimming pools, a fitness center and a restaurant.
Las Vegas is a huge draw, too, Bond added. He said the city has "become much more extravagant" with its destination hotels and world-class restaurants.
The success of the communities caused nearby Henderson to grow from 65,000 people in 1990 to 167,000 people in 1999, according to Lesser & Co.
Emrath said the NAHB's seven-year forecast and Del Webb's success in Nevada demonstrate the importance of having an attractive housing product for seniors.
"You can generate a market in most places (for retirement communities) just by the number of people growing old there," he said. "But if you want to attract a flow from out of state, you have to offer a pretty good product."
"People emphasize where' so much," said the researcher. "But statistics show they should be more concerned with the what,' as in the product."
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