Predicting what is going to happen in the mortgage industry is like trying to determine what the next Hollywood movie hit is going to be. It’s a shot in the dark and there is always at least a couple surprises. But analysts have made some predictions about the changes that are likely to occur in the mortgage industry in the upcoming year. Here are a few of their predictions.

1. Mortgage rates are going to go up. Let’s face it. Today’s mortgage rates can’t stay as low as they are forever. We’ve enjoyed a long period of historically low mortgage rates so they really have nowhere to go but up. Many analysts think the rates will hover around 5 percent in 2011 and they probably won’t reach the 6 percent mark again until next year. Even at 5 percent, you can get a great price on a new home if you qualify for the lowest rates in 2011.

2. The number of applications for refinancing will go down. In 2010, refinancing applications made up a large number of mortgage applications. In 2011 however, analysts are predicting that the number of refinancing applications will drop below the 40 percent mark. In 2012, they are expected to drop even further. The rising mortgage rates and shrinking number of qualified homeowners contribute to this drop.

3. Cash purchases of homes will be on the rise. In the last few months of 2010, cash purchases made up about 25 percent of existing home sales. Economists are predicting that number will increase in 2011, although it will probably not increase by much.

4. The demand for mortgages will drop. According to some sources, the demand for mortgages in 2011 will “decline to less than $1 trillion” because of slow economic growth and a drop in consumer confidence.

5. Getting a mortgage will still be slow and difficult. It’s difficult and time-consuming to get a mortgage today and analysts are predicting that will not change in 2011. It may take as long as 90 days to secure a mortgage and complete the entire process. Documentation and verification requirements will continue to make the process long and drawn out. But lenders and banks are being much more cautious about whom to give a loan to. If you plan on buying a home this year, start preparing your documents and other requirements today so you can get a headstart on the process.

These are just a few things to expect in general in 2011 for the mortgage industry. Of course, each individual case is different so you may or may not experience some of these things, such as the long mortgage process.

When talking about the foreclosure mess, it is easy to speak of it in such a way that we do not think about real people. But this mortgage crisis is something that does affect real people and real families. And the Ahleman family is just one of those stories.

More than two years ago, the Ahlemans found themselves in a mortgage nightmare. Robert, a construction worker and Amy, a financial services employee, missed just one payment on the mortgage for their Bensalem, Pennsylvania home. Soon after missing just the one payment, they began getting letters from the mortgage lender as well as eviction threats. And that wasn’t the worst of it. As a result of the one missed payment, the Ahlemans were incurring late fees and other financial penalties on their mortgage. This made their subsequent payments “insufficient” according to their lender. The lender stopped taking their payments because they were not sufficient and this only put the Ahlemans further behind. Their two mortgage were beginning to smother them financially and they only way they could get out from under the mess was to declare bankruptcy.

There is a good ending to the story, however. The Ahlemans have emerged from their mortgage disaster as thriftier and more educated about how the system works. According to them, they look at life “totally different now” and they are not worried about their “house being ripped from underneath” them anymore. The trouble that the Ahlemans went through occurred more than two years ago when their story was less common.

Today, the story of the Ahlemans is all too common with troubled homeowners in this economy. Everybody is debating the best way to help this crisis. People are discussing the problem in coffee shops across the country all the way up to Congress and the President of the United States. The question continues to remain this: Should homeowners who cannot afford their payments any longer be foreclosed upon en masse or should the mortgage lenders work with them to arrive at a viable solution to help keep them in their homes while making their payments more affordable?

In the case of the Ahlemans, a mortgage modification helped save their home and as well as a great deal of trouble for the lender. Unfortunately, these types of loan modifications are not the norm for today’s troubled homeowner. The mess will continue until there is an agreeable solution that everybody can be on board with.

With mortgage rates spending weeks and even months at historic lows, it is difficult to think that they could go any lower. And since the rates have been increasing slightly and steadily, it is even more difficult to think they will go lower. According to many analysts, the rates have hit bottom and are on their way back up.

Here are some of the numbers reported as the latest rates:

* For a 30-year fixed rate mortgage, qualifying homebuyers can expect to get a percentage rate of 4.81 percent. That’s a slight drop from the previous week’s 4.83 percent. Even so, the 4.81 percent is a little higher than the lower rates from a few weeks ago.

* Homebuyers searching for a deal on 15-year fixed rates can also expect a slightly lower rate than last week as well. Last week’s mortgage rates for a 15 year fixed mortgage were at 4.17 percent, but they dropped by about 0.02 percent to 4.15 percent this week.

Even though those numbers are lower compared to the previous week, mortgage rates overall barely changed when compared to the significant increases they have experienced over the last few weeks. However, many banks and lenders are still giving out lower rates for some buyers who show proof of qualifying credit scores and ample down payments. Also, these current rates are much lower than they were at the beginning of 2010, which is great news if you are able to take advantage of them.

Another good thing in the mortgage market is that home sales are up despite the increasing mortgage rates. It seems like the rates might be stabilizing which is leading to an upward trend in home sales. In November alone, existing home sales were up by more than five percent which has shown a trend in sales since July.

There are two other factors that are helping the upswing in the sales of existing homes. One thing, of course, is the lowered prices in the last couple years. Many homeowners want to get out from under their current mortgage and they will lower the price beyond its actual market value. Banks also want to get many foreclosed homes off their books. The creation of jobs across the country has also contributed to the increase in home sales.

It looks like there is some good news in the mortgage industry. Hopefully these good things will continue in the near future and lead to an upswing in the economy.

If you want to take advantage of today’s low mortgage rates to buy a second home in which to retire, now is the time to do it before those rates start going up too much. But before rushing into a purchase of a second home, there are several things you should consider before making your final decision on which one to buy. Here are three major considerations to ponder before making that down payment.

1. Would you rather live in a community or a neighborhood?
There are retirement communities popping up all over the place because they are becoming more and more popular. These are like neighborhoods but they are more close-knit and they often offer a variety of services that retired people enjoy within the community. For example, some retirement communities have on-site doctors that are available to treat the needs of the residents in the community. Some communities offer classes and other programs for the residents to learn a new craft or just pass some time throughout the day. Neighborhoods, on the other hand, are typically more spread out and they generally do not have these types of things for residents.

2. Will the house still be ideal in 10 or 20 years?
When buying a home that you want to live in during your retirement years, it is important to consider how your health is going to be for that period of time. Does the house have stairs that you may not be able to climb as you continue to age? Are the doorways large enough to fit a wheelchair through in case you or your spouse becomes confined to a wheelchair? Is the yard going to be too big for you to care for in 10 or 20 years? These are all things you should consider about the home before you make your final decision on one.

3. How far do you want to be from your family?
If you move to another home after you retire, are you going to still be close to your family? As you get older, you will probably depend on them more than you do now and if you live too far away, it is going to be a burden for them to come to your home to help care for you. Also, you will want to see your grandkids as often as possible, too. The closer you live to your family, the more often you will be able to see them as they grow up.

These are just a few questions you should ask yourself when deciding on a home to live in after you retire. For many, the retirement years are the best years of their life. But choosing the right home is one of the most important factors involved in that feeling.

The analysts have been saying it for months and we’ve been talking about it for the past few weeks. The most recent reports of mortgage rates show that they have been steadily increasing and they are currently at five-month highs. Some are saying the reason for the spike is due to the government’s plan that could extend tax cuts for a couple years. Here are some numbers to give you an idea of the average rates:

* For 30-year fixed rates, the percentage jumped from 4.46 percent to 4.61 percent this week. This is the fourth week in a row that mortgage rates for this product have increased according to Freddie Mac.

* For a 15-year fixed rate loan, mortgage rates went from 3.81 percent last week to 3.96 percent this week.

* Rates for a five-year adjustable rate mortgage went from 3.49 percent last week to 3.6 percent this week. That’s not much of an increase, but it is still an increase. The same is true for one-year adjustable rate mortgages. They went from 3.25 percent last week to 3.27 percent this week. Again, that’s not much of a jump but it is still indicative of mortgage rates increasing across the board.

These increasing rates are following a seven month streak of decreases which have had many people excited about investing in properties and even purchasing their first home. But the extension of the tax cuts is something that many investors are looking at as a sign that the economy could receive a boost next year. Between the tax cuts, extending unemployment benefits and other things swirling around in the economy, many analysts are expecting at least a small turnaround financially.

Some analysts are expecting new home buyers to hurry up and purchase homes now before the mortgage rates go up any higher. “Once people see this might actually be the bottom, they go for it,” said Paul Dales, an economist at Capital Economics Ltd. One sign that he may be on to something is the fact that mortgage loan applications increased by nearly two percent for the week that ended on December 3. That was the third straight week that the number of applications increased. What’s going to be next for the mortgage industry? Only time will tell.

The rate of mortgage delinquencies right now stands at about 6.2 percent. That number is quite high, but it is understandable when you consider the current economic climate. Some experts, however, are saying that the figure may drop in 2011.

TransUnion, one of the leading credit bureaus in the nation, released data earlier this week that states the rate of mortgage delinquencies may reach 4.98 percent by the end of 2011. In 2009, this level reached its peak at almost 7 percent. That was when mortgage lenders began to tighten its restrictions on offering credit to buyers who had dings on their credit or other factors that disqualified them from borrowing money to by a home.

However, with that good news comes some bad news. TransUnion also states that the number of homeowners who have fallen at least 60 days overdue on their mortgage payment will still be higher than it has been in the past. That number is expected to rise from 1.5 percent to 2 percent, which will be the highest it has been since the bureau began tracking these numbers in 1971.

Steve Chaouki, a group vice president of TransUnion’s financial services, says that the falling rate of delinquencies is a good sign for the mortgage industry. And while things are looking up, Chaouki says that the industry has a long way to go before being “out of the woods.”

In addition to mortgage delinquency rates falling, TransUnion’s data also predicts that credit card delinquencies are going to fall but at a slower rate. By the end of 2010, about 0.75 percent of credit card holders are going to be at least 90 days delinquent on one or more of their credit cards. By the end of 2011, that rate is expected to drop to 0.67 percent. Part of the reason that credit card companies have lower rates of delinquencies is because they can control their losses better than the mortgage companies can. For one thing, they can reduce the credit lines of their riskier customers, which is something mortgage lenders cannot do.

Things are really starting to look up for the mortgage industry these days after a tough few years. But there is still a long way to go.

After months of enjoying drops and plateaus with mortgage rates, it is somewhat disconcerting to see that those rates are beginning to rise once again. We have seen those mortgage rates drop as low as they have ever been so we really can’t complain about how they have inched up steadily over the last couple weeks. Here are the average mortgage rates as they stand right now.

* The average mortgage rate for a 30-year fixed rate loan went from 4.40 percent last week to 4.46 percent this week. It was only three weeks ago when the average rate for a 30-year fixed mortgage stood at 4.17 percent. That number is the lowest it has been since the early 1970s.

* For a 15-year fixed rate loan, the average rate went from 3.77 percent last week to 3.81 percent this week. A month ago, the rate for a 15-year fixed mortgage was 3.57 percent. That was the lowest that figure has been since 1991 when the survey started.


* Adjustable rate mortgages also increased slightly over the past week. For a 5/1 ARM this week, you can expect to pay an average of 3.1 percent. That’s nearly one-tenth of an increase over last week’s average figure or 3.01 percent.


On the bright side, however, Freddie Mac says that these mortgage rates are going to stay fairly low throughout the year and well into 2011. While rates for a 30-year fixed rate may increase slightly, they should still stay below 5 percent according to one of the mortgage giant’s leading economists. He also stated that rates for an adjustable mortgage are likely to stay below 4 percent throughout 2010 and much of 2011. Along with this good news, the economist for Freddie Mac also believes the housing market is going to get better in 2011 with more home sales throughout the year even though those sales figures will bottom out during the first part of 2011.