Debra Sinick

Archive for the ‘Mortgages’ Category

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What Were The Chances of Your Seattle/Eastside Condo Selling in August, 2009?

In Bellevue Real Estate, Bellevue, WA, For Buyers, For Homeowners, For Sellers, Issaquah Real Estate, Issaquah, WA, King County Real Estate, King County, WA, Kirkland, Mortgages, Real Estate News, Redmond, Sammamish, WA, Sammamish, WA Real Estate, Seattle real estate, Woodinville, WA, Woodinville, WA Real Estate, real estate on September 15, 2009 at 10:09 am
Seattle/Eastside Condo Sales, August 2009

Seattle/Eastside Condo Sales, August 2009

(The absorption rate, the percentage of condos selling,  is the number of condos for sale in any given month divided by the actual number of condos sold that month.  So if the absorption rate or chance of selling is 10% that means out of 100 condos for sale, 10 received offers and sold.)

August, 2009                            1429 condos for sale          206 condos sold           14% chance of selling.

July, 2009                                 1441 condos for sale          203 (now 171) condos sold   14% (now 12%) chance of selling

August, 2009                            1495  condos for sale         159 condos sold         10% chance of selling.

*Adjusted from previous month’s original numbers to reflect the actual number of condos sold and closed.  Some of the sales originally reported last month failed and did not close.

More Seattle Eastside condos are selling. Numbers are more than double the figures from January and February of this year.   But still, some sales are falling apart and not closing because of inspection, financing issues and appraisal issues.

Sales don’t close for a variety of reasons: an appraisal that came in lower than the selling price, an inspection that both buyer and seller couldn’t agree upon or a lender who didn’t put the loan package together properly.  Unfortunately, there are other reasons sales fail to close, such as short sales in which a seller is selling a condo for less than is owed on the property and the bank does not agree to sell the property at the price agreed upon between the buyer and seller.

Important news for all condo buyers: FHA spot approvals will be going away.  If a unit in a  condo association could meet designated FHA guidelines and the whole complex is not approved, then an offer and approval for this spot FHA loan must be approved by the lender by October 1st, only two weeks away. FHA financing allows for a borrower to put just 3.5% down.

The absence of FHA spot approvals and the end of the $8000 first time home buyer tax credit could affect the number of condo sales in the future.

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HUD Giveth and HUD Taketh Away The $8000 First Time Home Buyer Credit for a Downpayment

In 2009 stimulus package, For Buyers, Mortgages, Real Estate News, financing, real estate on June 5, 2009 at 5:45 pm

The $8000 first time home buyer credit cannot be used towards a buyer’s downpayment.  It’s dead on arrival.  After much fanfare last month and at the “gentle” urging of the IRS,  HUD re-evaluated the potential addition to the first time home buyer program and decided against using the tax credit towards a first time buyer’s downpayment.  Last month, the media was abuzz with the proposed plan. Different people, Realtors, bloggers, writers, etc came out quickly for or against the program. I wrote a post after Shaun Donovan from HUD announced the program on the Seattle Real Estate Professional Blog.    Now it’s gone with the wind, so start saving your shekels.

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The “New and Improved” Appraisal System is New, But Not Improved

In For Buyers, For Sellers, Kirkland, Mortgages, Redmond, financing, real estate, real estate opinion on June 5, 2009 at 12:53 pm

I’m having a bad real estate day because of an appraisal and I was just about to rip my hair out until I read Kris Berg’s excellent piece which did make me laugh about the “fun” we are having with appraisals these days.  Kris has a great way of getting serious issues across to her readers, but with a light touch. The HVCC, The Home Evaluation Code of Conduct, is not a humorous situation for consumers and the real estate industry, but it’s probably better for me to laugh a little, since I really want to scream.

As of May 1st, the appraisal industry had to meet new Freddie Mac guidelines called The Home Evaluation Code of Conduct, subtitled “Enhancing The Independence of Appraisers“. The debate about the new home valuation code of conduct has been going on since it was first announced last year and is going on to this day. Before the financial meltdown, there were appraisers who needed to be run out of the appraisal business for appraising properties for exorbitant prices, but the reality is there is now a new set of problems created by these new appraisal guidelines.  The appraisals or home valuation system has not been fixed, it just has new problems.  In today’s real estate world, a request for an appraisal is sent to an independent clearing house and the next appraiser on the list is selected to do the job.  This system has been designed to “enhance the independence of appraisers,” as mentioned above.

Now that this “new and improved system” has been in place for just over 30 days, I’ve had the good fortune to see  how it works in reality. Take the latest appraisals I’ve had on two  of my recent sales.  For those of you in the Seattle area, you’ll understand how far flung the different areas are that each appraiser had to drive to in order to complete assigned appraisals.  Appraiser #1 scheduled his appraisal late in the day for a home I’d sold in Redmond, Washington.  He had to come late in the day, because he was coming from an appraisal on Vashon Island.  Vashon Island, the last time I looked, is southwest of Seattle proper in Puget Sound, while Redmond is located east of Seattle across Lake Washington from downtown.  Between ferries, bridges, and highway travel, the appraiser may have to travel 1 1/2 hours (on a good day) between these two appraisal appointments. Appraiser #2 called to appraise a listing of mine in Kirkland, Washington, again on the eastside of Seattle.  This appraiser was coming from an appointment in Maple Valley, which is a city much further south and east of Seattle.

This map shows the location of the places the two appraisers had to go to do their job.  If you click on “view larger map”, you’ll be able to see the location of these cities.  Oh, I forgot, Vashon Island, which is in a different county, doesn’t show up on the map  because it’s so much farther south of the Seattle!  If you look for Maple Valley that, too, does not show up on this map.  Maple Valley happens to be south of Issaquah.


View Larger Map

Silly me, when I have a client who wants to look for a home on Vashon Island, I refer the client to a Realtor who knows the island.  The same goes for Maple Valley.  I could show homes in all of the far flung regions of Seattle/KIng County, but I don’t, because it’s a disservice to my clients.  I don’t know about the different school systems and how they affect the value of the homes in each of the cities, counties or islands in the area. I don’t know about the different builders in the area, the different neighborhoods, the shops, parks, etc, etc. Don’t appraisers need that same knowledge to evaluate properties?  How can appraisers know all of these areas well and give an accurate appraisal for a home? It’s a problem happening all over the country right now.

The second problem I’ve seen come up with appraisals is a little box checked by the appraiser.  As part of the appraisal report, the bank wants to know if the real estate market is appreciating, remaining stable or declining. Recently, two appraisers have checked the box labeling the Seattle/Eastside market as “declining.”  What a shock, this is a market where home prices have gone down!  I wonder who or where appraisers are checking anything but “declining” in that box.  In each case, because of this checked box,  the underwriter required a second appraisal.

The lending/appraisal industry was far from perfect before, but these “improvements have and are wreaking havoc with home prices and the entire loan process. If appraisers are not really familiar with a city or neighborhood, there is no way that the majority of appraisals will be accurate.  This could hurt consumers, both home buyers and home sellers, if properties are not accurately evaluated. The appraisal process needs an industry watch dog and stricter guidelines, but having the appraiser who’s next in line complete an appraisal in an area he/she knows nothing about dilutes the whole appraisal process. It’s a sad state of events for real estate.  I’m hoping the government will see the light and make reasonable changes to this system in the near future.

What problems have you seen since the change in real estate appraisals? My guess is the examples above are only the tip of the iceberg.

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The $8000 First Time Home Buyer Tax Credit Can Be Used Towards a Downpayment

In For Buyers, For Homeowners, For Sellers, Mortgages, financing, real estate on May 14, 2009 at 5:39 pm

The $8000 first time home buyer credit can be used for a buyer’s down payment if a buyer qualifies for the program. Washington State had passed a measure for first time home buyers to use the money towards a down payment, as did a few other states, but now it looks like it’s  a “go” everywhere.  This is great news, because in Washington State the program had not been implemented as of yet.

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a down payment.

Mr. Donovan spoke at the Realtor’s Mid-Year legislative Meetings and Trade Expo Live

According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Stay tuned.  As soon as I learn more, I’ll let you know in this blog.  Happy house hunting!

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WA State & the $8000 First Time Home Buyer Tax Credit

In 2009 stimulus package, For Buyers, Mortgages, WA real estate, financing, real estate on April 21, 2009 at 10:37 am

Will Washington State be the first state in the nation to offer a program to first time buyers to use the $8000 home buyer credit towards a down payment for a home?

Here’s a memo from Barbara Lally of the Washington State Realtors Association explaining the program that is in the works:

OLYMPIA, Wash. – The Senate Ways and Means Committee last night (Thursday) unanimously approved a measure designed to help first-time home buyers come up with a down-payment.  The committee adopted the measure as an amendment to the proposed Senate biennial operating budget.

The proposal would make the $8000 federal tax credit for first-time home buyers available at the closing of a home sale instead of when a buyer files a tax return. Home buyers would repay the $8000 after filing for and receiving a tax refund. The amendment creates a Tax Credit Advance Loan Program and authorizes the State Treasurer to deposit $25 million in a financial institution giving it the ability to open a line of credit to the State Housing Finance Commission to provide the down payment loans. The deposit would not deplete state funds, but would provide liquidity for the financial Institution to lend its own funds.

The program is the first of its kind in the nation and would work as follows:

  • The State Treasurer’s Office would make an off-setting deposit in an FDIC-insured short-term
    account with a selected financial institution. The investment would earn a low interest rate to
    stay fully insured under federal guidelines.
  • Realtors and other stakeholders back the loans with funds to provide security against losses.
  • The financial institution provides the Washington State Housing Finance Commission a line of
    credit to advance up to $8000 to qualified first-time home buyers for a down-payment.
  • Buyers repay the advance loan after filing for and receiving the tax credit.

The amendment is the result of the efforts of the Washington REALTORS®, Washington State Treasurer’s office, and Washington State Housing Finance Commission. State Treasurer James McIntire wrote the budget proviso and is helping to advance the measure through the state legislature.

State Sen. Steve Hobbs (D-Lake Stevens), who offered the amendment, said that using the $8,000 tax credit to help first-time home buyer make down payments could help jump-start the economy. Hobbs noted that home purchases have a significant impact on the retail and banking sectors of the economy and on state and local coffers. “In this recession we need to find new and innovative ways to stimulate the economy. This proviso will slow the decline of our housing market and stimulate the economy,” Hobbs told the Senate Ways and Means Committee.

“Down-payment assistance to our first-time home buyers is the key we need to unlock economic activity throughout the state,” said Greg Wright, President of the Washington Realtors. “This tax credit is new money that we can put to work now to help the housing market and ignite economic action statewide.” According to a study by the Washington Research Council, each home sale by a first-time buyer generates $11,100 in state and local tax revenue. Every 1,000 home sales generate $126 million in general economic activity, supporting 711 jobs.

Home buyer tax credit fact sheet

Home buyer tax credit fact sheet

The goal of the program is to get the money to buyers efficiently and return the federal refund quickly so that the HFC can turn it around to provide more assistance.  The funds may revolve as many as three times before the tax credit expires, reaching up to 9000 first-time homebuyers.  These “bridge loans” would expire at the same time as the federal tax credit, on November 30, 2009.  All of the bridge loan funds return to the state system by early 2010 to use for capital projects in 2010-11.

“With homes at affordable prices and interest rates at historic lows the $8,000 tax credit opens a window of opportunity that may never be seen again,” said Wright, a Chelan Realtor. “The Senate’s budget helps bring that opportunity to families throughout our state.”

Lack of a down-payment is the only barrier to home ownership for up to 50 percent of first-time home buyers, according to J. Lennox Scott, Chairman and CEO of John L. Scott Real Estate.  A recent study by the Federal Reserve Board showed that home ownership for people 35 years and younger increased by as much as 43 percent when a primary mortgage was combined with a down-payment assistance loan.


“First-time home buyers are the most critical to the recovery of the housing market and our overall economy, because their purchases set off a chain reaction of buying and selling,” Scott explained.  ”The first step toward stimulating the state housing market is making the federal tax credit available at the closing table and increasing down-payment assistance.”



(REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.)

Interestingly, a private company in a suburb of Atlanta is proposing the same thing.  The article from NuWire Investor did not have positive things to say about the program

What do you think about the possibility of using the tax credit as part of the down payment for a first time buyer?




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Consumer Confidence, Purchasing Power, The Fear Factor, and The Silver Lining

In 2009 stimulus package, For Buyers, For Homeowners, For Sellers, Mortgages, real estate on March 31, 2009 at 9:32 am
Consumer confidence, shifting values, and changes in purchasing power? Windermere Real Estate sent an email out this morning with the following charts highlighting these issues.  The information is from James Russo, Vice President of Marketing at Neilsen.    The top chart focuses on the ups and downs with consumer confidence.  We’ve seen other dips this decade with 9/11, the war in Iraq, and hurricane Katrina.  None of these dips in consumer confidence  have shown  the tumble we’ve seen since 2007.  But it’s good to balance this fear and lack of confidence with the real changes evidenced in purchasing power.  The lower chart has  positive news for consumers.  Food prices have held firm, gas prices and mortgage rates are down, not to mention the fact that home prices are also way down. Watch for spending habits to continue to evolve over the next few years.  What do you think?
March 18th, 2009 Posted in Cusumer, Nielsen News, Politics
By James Russo, Vice President, Marketing, Nielsen

With unemployment reaching 25-year highs, it is no surprise that Americans are nervous about their futures.  Over the last twelve months, confidence has nosedived as consumers worry about keeping their jobs, paying their mortgages and other bills, and their retirements.


Click to enlarge

We are on the verge of a potential fundamental shift in how consumers shop and buy that could have ramifications long past economic recovery.  They are shopping less and changing the types of products they purchase, such as shifting to store brands and focusing on necessary items such as food and cutting back on luxuries.
At the same time, however, purchasing power is actually increasing for some Americans.  Consider the facts:
  • The price of crude oil has declined 71 percent from July 2008 to February 2009 (from $133/bbl to $33/bbl), and retail gas prices have dropped 53 percent.  To fulfill annual driving needs in July 2008, consumers were spending an average of $3,045 at $4.06 a gallon; In February 2009, that figure declined to $1,440 at $1.92 a gallon – a savings of $1,605 per year.  And with the average American household owning two cars, the potential savings are even higher.
  • Food inflation has moderated since July 2008 to current levels of 2 percent.
  • While a great deal of attention has been focused on those people who had subprime mortgages and are now experiencing foreclosures on their homes, 30-year fixed mortgage rates have declined 1.30 pts during the same period, also resulting in potential savings.
  • Tax credits in the stimulus legislation passed by Congress will put an additional $672 in the average worker’s pocket.
Combine these facts with a growing sense that we may be seeing the first signs of a bottoming out and many Americans will be well-positioned to resume their spending.  However, until the fear and uncertainty about the economy dissipates, it is unlikely that they will feel confident enough to exercise their increased purchasing power.  And once they do, there is little doubt that how they spend their money is likely to be very different in how they did so in years past.  Nielsen will continue to closely monitor consumer confidence, shopping trends and other factors to enable our consumer product manufacturing and retail clients to deliver value in the short term and innovate in the long term to help ensure continued growth.
June 08
Feb 09
Change
REALITY
Crude Oil
$133
$33
-71%
* Retail Gas
$4.06
$1.92
-53%
* Food Inflation
215.3
219.7
2%
Fed Funds Rates
2%
0%
-200 basis points
30 yr fixed Mortgage Rates
6.37%
5.07%
-1.30 pts
FEAR
Unemployment
5.80%
8.10%
- 3.6 million jobs
Avg Wkly Earnings
$596.50
$608.3
2%
Equity Markets
11,378
7,062
-38%
Source: EIA, FOMC, Nielsen Strategic Planner, Bureau of Labor Statistics, cpi

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Is This a Good Time for Seattle/Eastside Buyers to Buy A Home?

In For Buyers, For Sellers, Mortgages, Seattle real estate, real estate on March 23, 2009 at 4:38 pm

Only you can decide if it’s a good time for you to buy a home.  There are lots of reasons to make a home purchase on Seattle’s Eastside, particularly if you’re a first time home buyer, according to The Seattle Times.

  • There are some wonderful choices.   In King County alone, there are over 13,000 properties available to pick from.  On the eastside, there are 3500+ homes and 1200+ condos available to purchase.  ( I have some great homes listed to buy among those 3500+!)
  • There are more homes available to buy for under $500,000 (and even under $300,000) than there have been in years.
  • 61% of the Seattle/Eastside  homes are now selling for under $500,000.
  • There are ready, willing, and able sellers who want to sell their homes.  Many sellers understand the current real estate market and are pricing their homes to get them sold.

Interest rates are just plain fabulous.  Bloomberg News recently compared the current interest rates to the rates available during WWII!

The Federal Tax Credit for First Time Home Buyers or Those Who Have Not Owned a Home over the last three years is a terrific bonus.

  • Until the end of November 2009, first time home buyers may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.  Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction, which only reduces your taxable income.
  • The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.  Buyers will have to repay the credit if they sell their homes within three years.

The above is all great news during times in which there hasn’t been a lot of good news to report.  Making the decision to buy is a very personal one and doesn’t work for everyone.  Some people have layoff concerns, as an example, and are hesitant to make a purchase.  For some, waiting it out on the sidelines is the best thing to do.

Are Seattle/Eastside home prices at the bottom yet? We probably won’t know until after we get there, but prices are back to 2005 levels. The areas of the country with deeper home price cuts than Seattle’s Eastside are areas in which the economy is struggling even more than we see here.  But for those who have secure jobs, good income,  great credit scores, and plan to stay in a home for 3-5 years, this is a terrific time to buy a home.

What do you think?

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Final Thoughts on Real Estate & the Stimulus Plan-Some Things to Consider

In For Buyers, For Homeowners, For Sellers, Mortgages, Real Estate News, real estate on February 16, 2009 at 4:25 am

Most of the real estate commentary I’ve seen on the stimulus plan focuses on buying a home, mortgage rates, and mitigating disclosures.   Here’s some  of the highlights and other things to think about from final real estate version:

  • Everyone now knows the tax credit will be $8000 with no payback required.  It’s only available to first time buyers or those who haven’t been home owners for the past three years.  The credit is available for homes purchased before December 1, 2009.  I’m wondering if a buyer has to close on the home purchase before December 1st or have an accepted offer by that date.  If the home sale must be closed by the first of December, then buyers need to be buying no later than the end of October to make sure they close on time.  Does anyone have the answer and know whether it is an accepted purchase agreement or does the home sale need to be closed?
  • Did you know if you use tax credit, you must stay in your home for three years or you would have to repay the credit?  I like this idea because it helps to keep home ownership more like it used to be:  buying a home to live in, rather than as a quick investment.
  • Government backed loan limits will be $729,950 in areas with expensive homes. This should mean the Seattle/Eastside, but have not heard.  Does anyone else know if this means us?
  • There’s more than $50 billion designated for foreclosure mitigation, some of which will come from last year’s TARP money. It’s about time more is done to stem the tide of foreclosures.

In reading the summary of the stimulus plan I found this section, which I think is important for all homeowners.   The quote below is taken from a summary of the plan released by lawmakers.  You can find the  summary of the plan’s key points in this Inman News article.

Tax Credits for Energy-Efficient Improvements to Existing Homes. The bill would extend the tax credits for improvements to energy-efficient existing homes through 2010. Under current law, individuals are allowed a tax credit equal to ten percent (10%) of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during the taxable year. This tax credit is capped at $50 for any advanced main air circulating fan, $150 for any qualified natural gas, propane, oil furnace or hot water boiler, and $300 for any item of energy-efficient building property. For 2009 and 2010, the bill would increase the amount of the tax credit to thirty percent (30%) of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements during the taxable year. The bill would also eliminate the property-by-property dollar caps on this tax credit and provide an aggregate $1,500 cap on all property qualifying for the credit. The bill would update the energy-efficiency standards of the property qualifying for the credit.

The tax credits for energy efficient home improvements ties into this week’s NPR’s Sunday edition interview with The New York Time’s economic reporter, David Leonhardt. He had some great ideas to rethink how we spend our money.   He thinks spending should be considered in tandem with future savings, not just with consumption.  Investing in a more energy efficient furnace, as an example, would create future savings in your energy bill.  Most of his suggestions centered on the cost of acquiring an item vs. the  future savings benefit.  A better furnace could cost more money in the beginning, but give a larger payback on monthly heating bills.

It’s unfortunate the home buyer tax credit was reduced.  Fewer homes may sell as a result.  However, cuts did need to be made in different parts of the plan to get it passed.  I like the incentive for making energy efficient changes to a home.  I’m hoping it will get  more people to think to make a change as a long term payback.

What are your thoughts about the stimulus plan?

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More on The 2009 Stimulus Plan, Real Estate, and Mortgages

In 2009 stimulus package, For Buyers, For Sellers, Mortgages, Real Estate News, financing, real estate on February 6, 2009 at 10:49 am

I  wrote about the 2009 Stimulus Plan and its proposed benefits to real estate, and here’s the latest update as of February 5th, 2009.  Some thoughts from David Espo for the Senate proposal regarding the tax credit:


“The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break for the purchase of new homes only.”

When I looked back at David Espo’s remark about the “tax break for the purchase of new homes only,”  I  wonder if he meant to say the original tax credit is for new home buyers, those who had not owned a home for three years.

There’s discussion now with the Senate proposal for the credit apply to all homes and buyers.  I’m still not clear on this, so if you heard something please jump in.

Here’s a link to an article from the Kentucky Herald regarding the Senate’s proposed tax credit.

The Wall Street Journal had an interesting discussion.  Most people thought the tax credit would encourage them to buy a home.

There’s a lot of discussion as to whether the housing industry is the linchpin to getting the economy back on track.  Helping to move unsold homes and get people into  homes that are so much better priced than in the recent past, is a good thing.  The country has to start from somewhere to get the economy moving.  I would much rather see tax money go to home buyers than bank executives with no accountability.

Hopefully, the new stimulus package will have clearer guidelines and expectations of those who receive any money or tax incentives.   Incentives, whether it’s for housing or some other commodity will  help get people moving, literally and figuratively.

What do you think of the $15,000 home buyer credit?

The Latest Mortgage News- January 9th, 2008

In For Buyers, For Homeowners, For Sellers, Mortgages, financing, real estate on January 9, 2009 at 1:57 pm

Guest Post from Steve Tedrow of Windermere Mortgage Services LLC/East:

The government has initiated their buying of mortgage backed securities as part of their recent plan.  This has been received very favorably in the markets and has caused interest rates to start dropping again.  30 year fixed rate conforming loans are back into the 4.625-4.75% range. Hopefully, as conditions begin to improve, we will see investors start to get back in the market for jumbo loans so those rates will come down as well.


The experts I listen most closely to are predicting an improved year over last year.  The Fed and the Treasury will continue to add lots of stimulus to our economy (like buying billions and billions of dollars of mortgage backed securities).  The improvement will obviously take a little time. We shouldn’t expect any rate cuts since there is nothing to cut.  When we do see a rate hike, that should be a welcome sign since it should be a sign of an improving economy.


One certainty is that there will continue to be extreme volatility in stocks, bonds, and mortgage rates. Their prediction for mortgages rates this year will be in the 4.5 – 5% range (unless there are any special government sponsored programs).


Conforming rates are the lowest they have been in decades.


And for an interesting news item for today…..


In a historic move, the Bank of England lowered their benchmark interest rate by .50% to 1.5%.  Now get this – the benchmark rate has NEVER been this low since King William III founded the central bank in 1694 to fund a war against Louis XIV’s France.  The rate began at 6% and fell no lower than 4% throughout the 18th century.  It touched 2% several times in the second half of the 19th century.  The central bank held it at that level throughout the Great Depression and World War II until 1951.  These sure are historic times.


Steve Tedrow
Branch Manager/Mortgage Consultant
Windermere Mortgage Services LLC/East
phone (425) 576-5461
cell (206) 920-1012

stevetedrow@msn.com

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Is This The Time for You To Buy?

In For Buyers, For Sellers, Mortgages, financing, real estate, real estate opinion on December 17, 2008 at 10:50 am

Guest Post  written by Steve Tedrow, Windermere Mortgage

While the mortgage market continues to generate a lot of chatter in both the media and in Washington, interest rates are currently near or at all-time lows. If you or anyone you know are looking to take advantage of these low rates, let me explain why now is the time to act.

Lately there has been talk about the 4.5% 30-year fixed rate mortgage. Will it become a reality though? Right now, no one really knows. Homeowners who could benefit from a lower interest rate need to know that even if 4.5% becomes a reality from Washington’s actions, it would only be available to home buyers, not homeowners seeking to better their rate. If you need to refinance, you will be left out.

You also may have heard about Hope for Homeowners, which is a program approved by legislators to help distressed homeowners. However, regardless of its best intentions, the program has not been embraced by investors, and it is not available to many it could help.

The bottom line is, the Fed announced recently that they are going to buy up to $600 billion in mortgage-backed securities. This has already driven rates to historical lows. In January, the SEC is meeting and information may be released that could have a significant bearing on rates, potentially for the worse.

Waiting to obtain the best rate is only possible for those with loan applications already in process. Interest rates are incredibly volatile and fluctuations that used to take months are now occurring in just days or even hours. If you don’t have an application in process, you could lose out.

We are already seeing lender backlog due to low interest rates. In 2003, with rates at these same low levels, we saw some lenders taking up to 90 days to close a loan.

Home loan rates are currently in the high 4% range. Home values are significantly lower than  their high peak several years ago.  If you–or friends and family members you know–are contemplating seeking financing, now is the time to act.

With a first time home buyer tax credit of up to $7,500 and low money down programs available for many people today, now is a great time to buy a home.

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New Tax Credit Can Benefit Many First Time Home Buyers

In For Buyers, Mortgages, Real Estate News, Real Estate Tips, financing, real estate on August 25, 2008 at 9:08 am

I asked Steve Tedrow of Windermere Mortgage Services to give his opinion, along with some of the facts, about the new tax credits available to first time home buyers.  The program is part of The Federal Housing and Economic Recovery Act of 2008.  Here’s what Steve said:

“I think first time homebuyers need to take a serious look at the new tax credit available to them.  This could be very beneficial to many people.  Any individual earning less than $75,000 per year or couple earning less than $150,000 per year can take advantage of the $7,500 credit.  A tax credit means that once you calculate your final tax liability, you reduce that amount by $7,500.  So, if you would have owed $1,500, then you deduct the $7,500 and would receive a tax refund of $6,000.

Some people complain that this is actually a tax free loan since the credit needs to be paid back over 15 years (or when the house sells).  But their analysis would be short-sighted unless they realize that the tax benefits of home ownership are normally much greater than the $500 per year which would get repaid.

For many people, it is difficult to come up with a down payment.  Consider this….a 3% down payment on a $250,000 condo is $7,500.  People should consider borrowing from their 401k or against another asset in the short term, knowing that the loan could be repaid at tax time.

If you are a first time homebuyer, I recommend you take a serious look at the tax credit.  It could be the key to many for getting into their first home.  There are many extraordinary housing deals in the marketplace right now.  Take advantage of those deals before interest rates go up and erode your buying power.”

Steve Tedrow

Windermere Mortgage Services

(425) 576-5461

 

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Attention Home Shoppers! A Few Mortgage/Financing Updates

In For Buyers, For Sellers, Mortgages, Real Estate News, financing, real estate on May 14, 2008 at 7:51 am

Attention all home buyers!  Here’s a brief update on some changes in financing I heard about from Steve Tedrow of Windermere Mortgage:

Conforming Jumbo loan rate is now at 5.25% for a 5/1 ARM, only 1/8% higher than conventional, non-jumbo loan. Fixed jumbo rates are at 5.875%

Limited or no documentation loans are dead and gone.

Credit scores need to be above 700 for almost all of today’s loans.

Financing regs and requirements are changing from moment to moment, so check with a lender you trust for the very latest information.