Mortgage rates inched up again last month, hitting their highest point in almost four years, according to the latest survey by Freddie Mac.
The rate for 30-year fixed loans averaged 6.53 percent. It hasn't been that high since July 2002, when it averaged 6.54 percent. Last year at this time, the rate on 30-year mortgages was 5.8 percent.
The average cost of adjustable rate mortgages also has been moving up ever so slightly in recent weeks. But in relation to where ARM rates were a year ago, the overall increase is much higher. And as a result, fewer people are opting for these shorter-term loans.
One-year Treasury-indexed adjustables averaged 5.63 percent in the latest Freddie Mac survey, up from 4.26 percent just one year ago. Five-year hybrid adjustables, which averaged 6.16 percent at the end of April, were 5.22 percent 12 months ago.
"Even though lenders are offering greater interest rate discounts on ARMs, the interest rate savings has declined relative to fixed-rate mortgages," said Freddie Mac's chief economist, Frank Nothaft. "The ARM share of applications dipped to 32 percent in March from 35 percent in November 2005, according to our survey. If the Fed continues to raise short-term rates, the ARM share will likely decline further."
By the way, when reading these numbers, be sure to add the cost of fees and points to get an idea of the true cost of obtaining financing. In the latest survey, points range from 0.6 to 0.9 percent, depending on the loan product. (A point is 1 percent of the mortgage amount.)
Sooner or Later, It Had to Happen
First there were five-year loans. Next, the Federal Housing Administration was created in 1934 to pioneer the 30-year mortgage. Then last year, several lenders reprised the concept of a mortgage with a 40-year term, an old idea whose time might have finally come. And now, a Toronto mortgage firm has come up with what it calls North America's first 50-year amortization program.
The loan is aimed at non-prime, high-ratio borrowers who could chose a 50-year term in five-year increments, according to Boyd Sousanna, president and chief executive offer of the Reliant Home Warranty Corp.
No word on whether the loan is or will be available in the United States. But we'll keep you posted.
Meanwhile, Donald Trump, seeking to capitalize on his name in the same manner as Martha Stewart has made hay with hers, has formed a mortgage company -- called Trump Mortgage, naturally -- with a mission statement of seeking "a safe environment" for both residential and commercial lending. The company will specialize in educating customers, before during and after the originating process.
The business will be run by Donald Trump Jr. -- son of the celebrity businessman. Martha Stewart, by the way, is lending her name and design skills to K.B. Home, one of the country's largest builders.
Realty Agents, Hollywood-Style
The entertainment business just loves to portray people who earn their livelihoods in the real estate industry as a gaggle of quacks waddling after a fast buck. But not in "The Unit," a CBS prime-time thriller about the missions impossible of a clandestine group of Army Ranger who answer only to the President.
In the show, "Unit" leader Jonas Blane (played by Dennis Haysbert, the first-black president assassinated in Fox Broadcasting's "24" action-drama series season opener this year) is married to Molly Blane, who happens to be a real estate agent -- and a darn good one.
She empowers the wives of other Unit members with a joint real estate purchase that helps keep them busy managing the property instead of wringing their hands over the fateful day a uniformed officer will show up with bad news about their husbands.
The National Association of Realtors recently chided ABC Good Morning America's series, "Tricks of the Trade, Confessions of A Realtor," as "very inaccurate, grossly misleading and unfair depiction" of real estate agents. "ABC has done a terrible disservice by airing this segment. The network should demonstrate its own interest in ethical behavior by giving equal time to the truth about Realtors," the 1.2 million-member NAR proclaimed.
NAR should now applaud "The Unit" and other positive entertainment media portrayals of the industry. Every profession has its bad actors, so to speak, but most agents are much more like Molly.
Reminder: It Can't Be Done!
We continue to get dozens of e-mails from folks who say they can remove negative items from our credit records. So it's time once again to set the record straight: It can't be done, at least not legally.
These guys can work the system to get negative items off the books, all right. But the bad stuff comes right back again in 30-60 days. The only way to erase them for good is to work them off, and that can take months. So if you are interested in boosting your credit score to obtain as low a loan rate as possible, get to work right away, either on your own or in consultation with a legitimate credit counselor.
It also can take a long time to correct mistakes in your credit history, so ask for a free copy of your report from each of the three major credit repositories -- Experian, Trans Union and Equifax -- and get busy making whatever fixes are necessary.
Fastest Growing Counties
Flagler, the Florida county between Daytona Beach and Jacksonville, was the fastest growing county in the country for the second year in a row, according to the latest population estimates from the Census Bureau.
Flagler recorded a 10.7 gain in population between July 1, 2004 and July 1, 2005. The county, which now has a population of 76,000, also led the nation with a 53 percent increase in residents since the 2000 Census.
Lyon County, Nev., near Carson City was the second fastest growing county with a 9.6 percent gain.
Other big gainers were: Kendall County, Ill., up 9.4 percent; Rockwell, Tex., 7.74 percent; Washington, Utah, 7.66 percent; Nye, Nev., 7.4 percent; Pinal, Ariz., 6.9 percent; Loudoun, Va., 6.8 percent; King George, Va.., 6.7 percent, and Caroline, Va., 6.5 percent.
The big losers during the 12-month period ended July 1 were Chattahooche and Liberty Counties, Ga., which saw their population's decline by 6.2 percent and 4.9 percent, respectively.
