FHA as an Option to Purchase

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During the market downturn, FHA became the darling of buyers.  It has gone thru some changes these past years and now as the credit market is easing up, there are more options that make FHA loans not as desirable.  Here are some of the reasons why:
All FHA buyers are required to get mortgage insurance (MI) no matter how large their down payment.
Currently, all FHA buyers must pay an Up Front Fee of 1.75% of the loan amount.
Most FHA buyers also must pay an MI annual fee of 1.35% of the loan amount (divided into 12 payments).
This annual MI jumps to 1.55% if the loan amount is over $625,500 and under $729,750.
The above rates apply when LTVs are at 96.5%. If LTVs drop below 95%, the MI rates drop by only 0.05%.
Most FHA Loans:
Up Front MI:     1.75%
Annual MI:        1.35%
Annual MI:        1.55% (Loan Amount above $625,500).
FHA MI is very high and permanent but necessary to insure much more flexible FHA loans that are often the only option for many borrowers.  Some of the other options making a come back are 80/10/10 loans that have no MI and the buyer is putting down 10% with a 10% interest only second. 5% conventional, but you still have to pay MI, but not the FHA fee.  This is where it becomes important to discuss your options with a mortgage broker and see what makes the most sense for you and your finances.

‘Tis the Season for Real Estate!

holiday home
Rates have edged up over the last week. Ironically, incoming Fed Chairperson, Janet Yellen, has been making comments about keeping rates low (and not tapering). Her comments have been bolstering the stock market, however, and moving money from bonds to stocks. This has the unintended consequence of pushing interest rates higher, as the demand for bonds diminishes.
If you have been on the fence thinking about buying or selling, now may be the time before the spring selling cycle goes into full bloom.  Cyclically the holidays are a slower period of time and we traditionally don’t see much activity until after Superbowl Sunday.  As a seller, if you don’t want to your home to be vying for the buyers attention because 3 more in your neighborhood go on the market the same week as you or as a buyer don’t want a higher interest rate then now thru January is a great time.

“The New Norm is There is no Norm”- Kristin Comments on Market Trends for KPIX Channel 5

In the following clip, Kristin shares her views on recent changes in the Real Estate market and her predictions for the future.

Bay Area Housing Market Cools Slightly As Prices Rise « CBS San Francisco.

 

 

 

 

 

Walnut Creek Market Update August 7, 2013

Agents are beginning to realize they can’t list a property a big percentage over the last sold comparison.   Buyers are still paying over the ask price and appraisals are coming in at the value offered.  Over the next few months as inventory increases, we will see these two lines closer together.

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I don’t think the media has caught on yet, but the market continues to shift and we are seeing more inventory on the market and less number of multiple offers.  Very interesting to note how much the sales dropped in May and look at how much more inventory we currently have.  It takes a while for the market to catch up, but I suspect we will see more price reductions and a leveling out of the amount sold over list price.

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Kristin’s Intentional Truth Market Update – July 2013

      Interest rates are going up, however it is still the best time to buy a house as outlined in the graph below.  With a 4.5% rate, 27% of your monthly payment goes to principle, whereas at a 7% rate, only 9% goes towards equity. (*Freddie Mac 30 year).  Walnut Creek’s inventory increased May-June from 95 to 125 homes a 32% jump.  During the same period the median listing price in Walnut Creek decreased 5%. What does this mean in the next few months? Most likely we will see a more level playing field that doesn’t favor the seller as it has in the past year. Please see the comparative market analysis below for what is going on in our own Parkmead area.

 

Price
Rate*
Principle & Interest
2002
600,000
6.99
3,987.79
Today
600,000
4.40
3,004.57
Monthly Savings
983.22

 

New Listings in the Parkmead Area!

parkemead1

2057 Magnolia Way

A custom home with amazing views and a fabulous deck. It was previously listed last year for $2,350,000 and now on the market for $2,099,000. There are many appealing aspects to this property including a great deck, grassy areas and a large driveway. Beautiful finishes, but not exactly kid friendly as the backyard is situated on a down slope. The biggest issue is how do you price this house? There are not too many comparisons close by as it is surrounded by older $700,000-$900,00 homes, yet it is a fantastic location and ever so close to downtown Walnut Creek. What are your thoughts???

parkemead21730 Poplar Drive

Can it command a $839k price?

There is no garage as it was converted into a master bedroom. However, the living space is all on one level, it is updated and larger than it looks – 5 bedrooms with a nice deck and a garden area.

I say yes, it will sell for this price and possibly higher. 5 bedrooms and walking distance to Parkmead Elementary? Absolutely!

 

Market Overview

pulling out hair

Here is what is going on in our market. I was to show a home on Saturday. I tried to make an appt. on Friday, however the seller was to busy getting the house ready for the Open House and said no. I checked the status on Saturday before I was to meet my clients and the home was already pending, even though the agent stated they were looking at offers on Tuesday. This is the second time in 2 weeks. I complained to the agent and he said the seller was so overwhelmed with the amount of people calling, they accepted an over asking offer with no contingencies! Crazy market, sellers take advantage of it!

Housing Trends Jan. 2013

Is the improving housing market likely to continue into 2013?  Most signs are pointing in this direction as homes are selling at a relatively brisk pace, time on market has decreased, continued decline in distressed properties, and we are seeing multiple offers on home price correctly priced for their condition.

The fiscal cliff was avoided after a last-minute deal was passed in Washington and  the Mortgage Forgiveness Debt Relief Act has been extended through 2013. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure.

What does all this mean for home loan rates?  There is still uncertainty as how Congress will address the debt ceiling and if the Fed will stop sooner than initially planned their rounds of bond buying known as Quantitative Easing.  After hearing this news, the bond market and rates went up slightly.  As long as there is uncertainty in the markets investors will most likely continue to see our bond market as a safe haven for their money as noted in the weekly economic suumary from Bank of America.  Rates are still low and are likely to inch up some this year, however it is still a great time to refinance or buy.    If you need a referral for some great lenders, please contact me via my site.