Buying is More Affordable than Renting in 100 Largest Metros

Despite rising home prices, today’s low mortgage rates have kept homeownership from becoming more expensive than renting both nationally and in each of the 100 largest housing markets, according to a recent study done by Trulia. In fact, mortgage rates would need to rise to 10.6 percent for renting to become cheaper than buying nationally – and rates haven’t been that high since 1989. In New York Metro area the tipping point is 7.2 percent. Looking at homes for sale and for rent on Trulia between December 2013 and January 2014, this study compares the average cost of renting and owning for all homes on the market within a metro, factoring in all cost components including transaction costs, taxes, and opportunity costs.

Click to enlarge.  Above illustrates how mortgage rates, tax deductions, and number of years in the home can affect the rent vs. buy decision.  Click here to view the  interactive Rent vs. Buy Map.

New regulations mean more disclosures...more documentation

500-page mortgage applications are the new normal

Independent smaller lenders are more flexible, close faster and provide better service.

Smaller Lenders Take Bigger Bite of Mortgage Market

DAILY REAL ESTATE NEWS | TUESDAY, DECEMBER 10, 2013

Rising mortgage rates and tighter underwriting standards are prompting some borrowers to seek smaller lenders for a mortgage. 

Smaller banks and non-bank lenders’ share of the mortgage market is increasing, rising to 60 percent in the third quarter compared to 39 percent in 2009, according to data from Inside Mortgage Finance. 

Meanwhile, larger lenders have gradually pulled back on their lending: Only five of the top 20 single-family mortgage originators in 2006 remain active in today’s market, according to Fannie Mae. 

"If you're buying a house, our advice is to find a local lender that's reputable," Eric Egenhoefer, president of Waterstone Mortgage, a subsidiary of Milwaukee-based WaterStone Bank, told CNBC. "An independent company in general is more nimble, can get to a closing faster, and provides better service."

Customers may not find the lowest mortgage rates at smaller banks, but some say it's easier to get in touch with a loan officer, and they provide better service. 

Even larger lenders are taking note of the shift. Wells Fargo, the nation’s largest lender, has overhauled its Web site to give consumers a “smaller-bank” feel. 

"The lending space for Wells Fargo mortgage feels much more like a local community bank than a giant bank with a call center," Franklin Codel, head of Wells Fargo's mortgage production, told CNBC. "Most consumers are looking for a personal relationship with someone who can help them through the process, and not just looking for the lowest rate if it doesn't come with a reasonable amount of service."

Here's a great article from Forbes magazine:  Secrets of a mortgage loan officer

Goes over the difference between a loan officer at a bank or an independent loan officer...

" A loan officer at a bank or a credit union is typically just the smiling face of the institution—the officer’s job is to accept an application that the borrower has filled out, and then hand it off to the underwriting department."

"An independent loan originator, on the other hand, typically renders more service to the borrower, including things like advising the client about the best loans available for their purposes, gathering documentation throughout the process, ordering the appraisal and communicating directly with the underwriter to ensure that the loan gets approved."

"Mortgage rates available at an independent loan originator, whether it’s a broker or a small banker, won’t be higher than those offered through a big bank. In fact, in many cases, the rates are somewhat lower, partly because independent mortgage brokers typically have more loan sources available to them compared to the big banks, which usually just have a handful of loan products to offer prospective homeowners."